As filed with the Securities and Exchange Commission on ________________, 1995
Registration No. 33-
==============================================================================
Draft 4/5/95, 10:50 a.m.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MidSouth Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 6711 72-1020809
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
(318) 237-8343
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
<TABLE>
<C> <C> <C>
Copy to: C. R. Cloutier Copy to:
ANTHONY J. CORRERO, III P. O. Box 3745 ALAN JACOBS
Correro, Fishman & Casteix, L.L.P. Lafayette, Louisiana 70502 McGlinchey Stafford Lang
47th Floor (318) 237-8343 A Law Corporation
201 St. Charles Avenue (Name, address, including 2777 Stemmon Freeway
New Orleans, Louisiana 70170-4700 zip code, and telephones Suite 925
number, including area code, Dallas, Texas 75207
of agent for service)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
Upon the date of the shareholders' meeting of Sugarland Bancshares, Inc.
described in this registration statement.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, please check
the following box.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Each Number of Offering Aggregate
Class of Securities Shares Price Per Offering Amount of
to be Registered to be Share<FN1> Price<FN1> Registration Fee<FN1>
Registered
__________________________________________________________________________________________
<S> <C> <C> <C> <C>
Series A Cumulative
Convertible Preferred
Stock 187,286 $ 11.25 $ 2,106,968 $726.54
Common Stock, no par
value <FN2> 187,286 - - -
__________________________________________________________________________________________
</TABLE>
<FN1> Calculated in accordance with Rule 457(f)(2), based on the
aggregate book value as of December 31, 1994 of the shares of
Common Stock of Sugarland Bancshares, Inc. to be converted in
connection with the mergers described in this registration
statement.
<FN2> Consists of shares that may be issued upon conversion of
the Preferred Stock registered hereby.
The registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
==========================================================================
<PAGE>
MIDSOUTH BANCORP, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Item of Form S-4 Location in Prospectus
A. Information About the Transaction
<C> <C>
1. Forepart of Registration Statement Cover Page
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Inside Cover; Table of Contents
Pages of Prospectus
3. Risk Factors, Ratio of Earnings to *
Fixed Charges and Other Information
4. Terms of Transaction Summary; The Plan
5. Pro Forma Financial Information MidSouth Bancorp, Inc. Pro Forma
Condensed Combined Financial Statements
(Unaudited)
6. Material Contacts with the Company *
Being Acquired
7. Additional Information Required for *
Reoffering by Persons and Parties
Deemed to be Underwriters
8. Interests of Named Experts and *
Counsel
9. Disclosure of Commission Position *
on Indemnification for Securities Act
Liability
B. Information About the Registrant
10.Information with Respect to S-3 *
Registrants
11.Incorporation of Certain Information *
by Reference
12.Information with Respect to S-2 or Information About MidSouth
S-3 Registrants
13.Incorporation of Certain Information Information About MidSouth
by Reference
14.Information with Respect to Registrants *
other than S-2 or S-3 Registrants
C. Information About the Company Being Acquired
15.Information with Respect to S-3 *
Companies
16.Information with Respect to S-2 or *
S-3 Companies
17.Information with Respect to Information about Sugarland
Companies other than S-2 or S-3
Companies
D. Voting and Management Information
18.Information if Proxies, Consents or
Authorizations are to be Solicited
(1) Date, Time and Place Introductory Statement-General
Information
(2) Revocability of Proxy Introductory Statement-Solicitation, Voting
and Revocation of Proxies
(3) Dissenters' Rights of Dissenters' Rights
Appraisal
(4) Persons Making Solicitation Introductory Statement-General
(5) Interests of Certain Persons in Summary - Interests of Certain Persons in the
Matters to be Acted Upon; Mergers; The Plan - Interests of Certain
Voting Securities and Principal Persons in the Mergers; The Plan - Employee
Holders Thereof Benefits; Information About Sugarland -
Security Ownership of Principal Shareholders
and Management; Security Ownership of Management
and Certain Beneficial Owners of MidSouth
(6) Vote Required for Approval Introductory Statement-Shares Entitled to
Vote; Quorum; Vote Required
(7) Directors and Executive Officers; Information About Sugarland;
Executive Compensation; Certain Information About MidSouth;
Relationships and Related Election of Directors of MidSouth;
Transactions Security Ownership of Management and
Certain Beneficial Owners of MidSouth;
Executive Compensation and Certain
Transactions
19.Information if Proxies, Consents or *
Authorizations are not to be Solicited or
in an Exchange Offer
</TABLE>
* Not applicable or answer is in the negative.
<PAGE>
SUGARLAND BANCSHARES, INC.
1527 W. Main Street
Jeanerette, Louisiana 70544
___________ , 1995
Dear Shareholder:
You are cordially invited to attend a Special
Meeting of Shareholders of Sugarland Bancshares, Inc.
("Sugarland") to be held on ______________________,
1995 at _________ ___.m., local time at Sugarland's
main office, 1527 W. Main Street, Jeanerette,
Louisiana.
At the meeting, you will be asked to consider and
vote upon a proposal to approve an Agreement and Plan
of Merger and related merger agreement (collectively,
the "Plan") pursuant to which, among other things,
Sugarland State Bank (the "Bank"), the banking
subsidiary of Sugarland, will be merged into MidSouth
National Bank ("MidSouth Bank"), the wholly-owned
subsidiary of MidSouth Bancorp, Inc. ("MidSouth"), and
Sugarland will merge into MidSouth (the "Holding
Company Merger"). The terms of the Plan provide that,
on the effective date of the Holding Company Merger,
each outstanding share of common stock of Sugarland
will be converted into one share of MidSouth preferred
stock as more fully described in the attached Joint
Proxy Statement and Prospectus. You are urged
carefully to read the Joint Proxy Statement and
Prospectus in its entirety for a more complete
description of the terms of the Plan and the proposed
Mergers.
The Plan has been approved by your Board of
Directors. The Board believes, based on its own
analysis and the opinion of Sugarland's financial
advisor (all of which are described in the accompanying
Joint Proxy Statement and Prospectus), that the
proposed mergers are in the best interest of
Sugarland's shareholders. After consummation of the
proposed mergers, you, as a new shareholder of
MidSouth, will own convertible preferred stock in
MidSouth, which is intended to be publicly traded on
the American Stock Exchange Emerging Company
Marketplace. As a result of the mergers, the combined
entities, through MidSouth, will be better able to
offer a broad range of banking services to its
customers and to compete more effectively with holding
companies and other financial institutions in the
changing economic and legal environment facing all
financial institutions.
The Board of Directors recommends that you vote FOR
the Plan and urges you to execute the enclosed proxy
and return it promptly in the accompanying envelope.
Very truly yours,
D. J. Tranchina
President
<PAGE>
SUGARLAND BANCSHARES, INC.
1527 W. Main Street
Jeanerette, Louisiana 70544
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON ____________, 1995
Jeanerette, Louisiana
______________, 1995
A Special Meeting of Shareholders of Sugarland
Bancshares, Inc. ("Sugarland") will be held on
___________, 1995 at__________ _____.m. local time at
Sugarland's main office, 1527 W. Main Street,
Jeanerette, Louisiana, to vote upon the following
matters:
1. A proposal to approve an Agreement and Plan of
Merger and related merger agreement (collectively, the
"Plan") pursuant to which, among other things: (a)
Sugarland State Bank, the subsidiary of Sugarland, will
be merged into MidSouth National Bank, the wholly-owned
subsidiary of MidSouth Bancorp, Inc. ("MidSouth"), (b)
Sugarland will be merged into MidSouth and (c) on the
effective date of the merger of MidSouth and Sugarland,
each outstanding share of common stock of Sugarland
will be converted into one share of MidSouth Series A
Cumulative Convertible Preferred Stock as determined in
accordance with the terms of the Plan.
2. Such other matters as may properly come before the
Special Meeting and any adjournment thereof.
Only shareholders of record at the close of business
on __________________________, 1995 are entitled to
notice of and to vote at the Special Meeting.
Dissenting shareholders who comply with the
procedural requirements of the Business Corporation Law
of Louisiana will be entitled to receive payment of the
fair cash value of their shares if the merger of
MidSouth and Sugarland is effected upon approval by
less than eighty percent (80%) of the total voting
power of Sugarland.
Your vote is important regardless of the number of
shares you own. Whether or not you plan to attend the
special meeting, please mark, date and sign the
enclosed proxy and return it promptly in the enclosed
stamped envelope. Your proxy may be revoked by
appropriate notice to Sugarland's Secretary, or by
execution and delivery of a later-dated proxy, at any
time prior to the voting thereof. If you attend the
Special Meeting, you may withdraw your proxy and vote
in person.
BY ORDER OF THE BOARD OF DIRECTORS
__________________________________
Ronald R. Hebert, Sr., Secretary
<PAGE>
MIDSOUTH BANCORP, INC.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
______________, 1995
Dear Shareholder:
You are invited to attend the annual meeting of
shareholders of MidSouth Bancorp, Inc. ("MidSouth") to
be held on ____________________________, 1995 at 2:00
p.m., local time at MidSouth's main office, 102
Versailles Boulevard, Versailles Centre, Lafayette,
Louisiana.
At the meeting, you will be asked (i) to elect
directors of MidSouth and (ii) to approve the issuance
of up to 187,286 shares of MidSouth Series A
Cumulative, Convertible Preferred Stock (the "Preferred
Stock") in connection with an Agreement and Plan of
Merger and related merger agreement (collectively, the
"Plan") pursuant to which, among other things,
Sugarland State Bank, the subsidiary of Sugarland
Bancshares, Inc. ("Sugarland"), will merge into
MidSouth National Bank ("MidSouth Bank"), the wholly-
owned subsidiary of MidSouth, and Sugarland will merge
into MidSouth the ("Holding Company Merger"). The
terms of the Plan provide that, on the effective date
of the Holding Company Merger, each outstanding share
of common stock of Sugarland will be converted into one
share of MidSouth Preferred Stock as more fully
described in the attached Joint Proxy Statement and
Prospectus. You are urged carefully to read the Joint
Proxy Statement and Prospectus in its entirety for a
more complete description of the terms of the Plan and
the proposed mergers.
The Plan has been approved unanimously by your Board
of Directors. The Board believes that the proposed
mergers are in the best interest of MidSouth's
shareholders. As a result of the proposed mergers,
through MidSouth Bank, MidSouth will be able to compete
more effectively with holding companies and other
financial institutions in the changing economic and
legal environment facing all financial institutions.
The Board of Directors recommends that you vote FOR
the issuance of the Preferred Stock and urges you to
execute the enclosed proxy and return it promptly in
the accompanying envelope.
Very truly yours,
C.R. Cloutier
President
<PAGE>
MIDSOUTH BANCORP, INC.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON ____________, 1995
Lafayette, Louisiana
______________, 1995
The annual meeting of shareholders of MidSouth
Bancorp, Inc. ("MidSouth") will be held on ___________,
1995 at 2:00 p.m. local time at MidSouth's main
office, 102 Versailles Boulevard, Versailles Centre,
Lafayette, Louisiana, to vote upon the following
matters:
1.The election of directors of MidSouth.
2. The issuance of up to 187,286 shares of MidSouth
Series A Cumulative, Convertible Preferred Stock (the
"Preferred Stock") in connection with an Agreement and
Plan of Merger and related merger agreement
(collectively, the "Plan") pursuant to which, among
other things: (a) Sugarland State Bank, the subsidiary
of Sugarland Bancshares, Inc. ("Sugarland"), will merge
into MidSouth National Bank, the wholly-owned
subsidiary of MidSouth, (b) Sugarland will merge into
MidSouth and (c) on the effective date of the merger of
MidSouth and Sugarland, each outstanding share of
common stock of Sugarland will be converted into one
share of Preferred Stock as determined in accordance
with the terms of the Plan.
3. Such other matters as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record at the close of business
on ___________________________, 1995 are entitled to
notice of and to vote at the annual meeting.
Your vote is important regardless of the number of
shares you own. Whether or not you plan to attend the
annual meeting, please mark, date and sign the enclosed
proxy and return it promptly in the enclosed stamped
envelope. Your proxy may be revoked by appropriate
notice to MidSouth's Secretary at any time prior to the
voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
___________________________________
Karen L. Hail, Secretary
<PAGE>
PROSPECTUS
MIDSOUTH BANCORP, INC.
Series A Cumulative Convertible Preferred Stock
_____________________
JOINT PROXY STATEMENT
MidSouth Bancorp, Inc.
Annual Meeting of Shareholders to be held ______________, 1995
Sugarland Bancshares, Inc.
Special Meeting of Shareholders to be held _____________, 1995
MidSouth Bancorp, Inc. ("MidSouth") has filed a
Registration Statement pursuant to the Securities Act
of 1933 (the "Securities Act") covering up to 187,286
shares of Cumulative, Convertible Preferred Stock,
Series A, of MidSouth (the "Preferred Stock") which may
be issued in connection with a proposed merger of
Sugarland Bancshares, Inc. ("Sugarland") into MidSouth.
This document constitutes the Joint Proxy Statement of
MidSouth and Sugarland in connection with the
transactions described herein and a Prospectus of
MidSouth with respect to the shares of MidSouth
Preferred Stock to be issued if the merger is
consummated.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
JOINT PROXY STATEMENT AND PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________________
No person has been authorized to give any
information or to make any representations other than
those contained in this Joint Proxy Statement and
Prospectus, and, if given or made, such information or
representations must not be relied upon as having been
authorized by MidSouth or Sugarland. This Joint Proxy
Statement and Prospectus shall not constitute an offer
by MidSouth to sell or the solicitation of an offer by
MidSouth to buy, nor shall there be any sale of the
securities offered by this Joint Proxy Statement and
Prospectus in any state in which, or to any person to
whom, it would be unlawful prior to registration or
qualification under the laws of such state for MidSouth
to make such an offer or solicitation. Neither the
delivery of this Joint Proxy Statement and Prospectus
nor any sale made hereunder shall, under any
circumstances, create any implication that there has
been no change in the affairs of MidSouth or Sugarland
since the date hereof.
___________________
This Joint Proxy Statement and Prospectus is dated
__________, 1995.
<PAGE>
AVAILABLE INFORMATION
MidSouth is subject to the informational
requirements of the Securities Exchange Act of 1934 and
in accordance therewith is required to file reports and
other information with the Securities and Exchange
Commission (the "Commission"). Such reports, together
with proxy statements and other information filed by
MidSouth, can be inspected at and copies thereof may be
obtained at prescribed rates from, the public reference
facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and
from the Commission's Regional Offices at 7 World Trade
Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661.
MidSouth has filed with the Commission a
Registration Statement on Form S-4 ("Registration
Statement") under the Securities Act with respect to
the Preferred Stock offered by this Joint Proxy
Statement and Prospectus. This Joint Proxy Statement
and Prospectus does not contain all of the information
set forth in the Registration Statement or the exhibits
thereto. Statements contained in this Joint Proxy
Statement and Prospectus as to the contents of any
documents are necessarily summaries of the documents,
and each statement is qualified in its entirety by
reference to the copy of the applicable document filed
with the Commission. For further information with
respect to MidSouth, reference is made to the
Registration Statement, including the exhibits thereto.
As more fully set forth under the heading captioned
"Information about MidSouth" elsewhere herein, certain
information with respect to MidSouth has been
incorporated by reference into this Joint Proxy
Statement and Prospectus. In addition, the Agreement
and Plan of Merger and related merger agreement
described in this Joint Proxy Statement and Prospectus
has been incorporated herein by reference. MidSouth
hereby undertakes to provide without charge to each
person to whom a copy of this Joint Proxy Statement and
Prospectus has been delivered, upon the written or oral
request of such person, a copy of any or all of the
information or documents which have been incorporated
by reference herein, other than exhibits to such
documents. Requests for such copies should be directed
to C.R. Cloutier, President, MidSouth Bancorp, Inc.,
102 Versailles Boulevard, Versailles Centre, Lafayette,
Louisiana 70501, telephone (318) 237-8343. In order to
ensure timely delivery of the documents, any request
should be made by ______________, 1995.
<PAGE>
TABLE OF CONTENTS
SUMMARY Page
The Companies ..................................... i
The Banks ......................................... i
The Meetings ...................................... i
Purpose of the Meetings; Vote Required ............ ii
Reasons for the Plan; Recommendation of the
Companies' Boards of Directors .................. iii
Opinion of Chaffe & Associates, Inc. .............. iv
Conversion of Sugarland Common Stock .............. iv
Description of MidSouth Preferred Stock ........... iv
Exchange of Certificates .......................... vi
Conditions to Consummation of the Mergers ......... vi
Waiver, Amendment and Termination ................. vii
Interests of Certain Persons in the Mergers ....... viii
Joinder of Shareholders ........................... viii
Employee Benefits ................................. ix
Certain Federal Income Tax Consequences ........... ix
Dissenters' Rights ................................ ix
Selected Financial Data of Sugarland .............. x
Selected Financial Data of MidSouth ............... xi
Comparative Per Share Data (Unaudited) ............ xii
Market Prices and Dividends ....................... xiii
INTRODUCTORY STATEMENT ....................................... 1.
General ........................................... 1.
Purpose of the Meetings ........................... 1.
Shares Entitled to Vote; Quorum; Vote Required .... 2.
Solicitation, Voting and Revocation of Proxies .... 3.
THE PLAN ..................................................... 4.
General ........................................... 4.
Background of and Reasons for the Plan ............ 4.
Opinion of Chaffe & Associates, Inc. .............. 6.
Conversion of Sugarland Common Stock .............. 10.
Effective Date .................................... 11.
Exchange of Certificates .......................... 11.
Regulatory Approvals and Other Conditions of the
Mergers .......................................... 12.
Conduct of Business Prior to the Effective
Date ............................................. 13.
Waiver, Amendment and Termination ................. 14.
Interests of Certain Persons in the Mergers ....... 15.
Joinder of Shareholders ........................... 16.
Employee Benefits ................................. 17.
Expenses .......................................... 17.
Status Under Federal Securities Laws; Certain
Restrictions on Resales .......................... 17.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES ...................... 18.
DISSENTERS' RIGHTS ........................................... 19.
INFORMATION ABOUT SUGARLAND .................................. 21.
Description of the Business ....................... 21.
Competition ....................................... 22.
Property .......................................... 23.
Employees ......................................... 23.
Market Prices and Dividends ....................... 23.
Legal Proceedings ................................. 24.
Security Ownership of Principal
Shareholders and Management ..................... 24.
SUGARLAND MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ................ 26.
INFORMATION ABOUT MIDSOUTH ................................... 40.
COMPARATIVE RIGHTS OF SHAREHOLDERS ........................... 40.
Preferred Stock ................................... 40.
Directors ......................................... 41.
Business Combinations ............................. 41.
Special Meetings of Shareholders .................. 42.
Bylaws ............................................ 42.
Vote Required for Shareholder Action .............. 42.
Limitation of Personal Liability and
Indemnification of Directors and Officers ....... 43.
RIGHTS AND PREFERENCES OF MIDSOUTH PREFERRED STOCK ........... 43.
Dividend Rights ................................... 43.
Redemption Rights ................................. 45.
Conversion Rights ................................. 45.
Voting Rights ..................................... 45.
Liquidation Rights ................................ 46.
Preemptive Rights ................................. 46.
PRO FORMA FINANCIAL STATEMENTS ............................... 46.
ELECTION OF DIRECTORS OF MIDSOUTH ............................ 52.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS OF MIDSOUTH ........................ 55.
Security Ownership of Management .................. 55.
Security Ownership of Certain Beneficial
Owners .......................................... 57.
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS .............. 58.
Summary Compensation Table ........................ 58.
Option Exercises and Holdings ..................... 59.
Employment and Severance Contracts ................ 59.
Certain Transactions .............................. 59.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS ............. 60.
SHAREHOLDER PROPOSALS ........................................ 60.
LEGAL MATTERS ................................................ 60.
EXPERTS ...................................................... 60.
OTHER MATTERS ................................................ 60.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
OF SUGARLAND ................................................. F-1
SUGARLAND BANCSHARES, INC. CONSOLIDATED FINANCIAL
STATEMENTS ................................................... F-2
Appendix A - Fairness Opinion of Chaffe & Associates, Inc.
Appendix B - Form of Provisions of Articles of
Incorporation of MidSouth Relating to the
Preferred Stock
<PAGE>
SUMMARY
The following summary is necessarily incomplete
and is qualified in its entirety by the more detailed
information appearing elsewhere herein, the appendices
hereto and the documents incorporated herein by
reference. Shareholders are urged to read carefully
all such material.
As of the date of this Joint Proxy Statement and
Prospectus, Sugarland Bancshares, Inc. owns 99.8% of
the outstanding stock of Sugarland State Bank and is in
the process of acquiring the remaining .2%. See "The
Plan-General."
The Companies
MidSouth Bancorp, Inc., a Louisiana corporation
("MidSouth") is a one bank holding company that owns
all of the outstanding stock of MidSouth National Bank
("MidSouth Bank"). At December 31, 1994, MidSouth had
total consolidated assets of approximately $104 million
and shareholders' equity of approximately $5.4 million.
MidSouth's principal executive offices are at 102
Versailles Boulevard, Versailles Centre, Lafayette,
Louisiana 70501, and its telephone number is (318)
237-8343. See "Information About MidSouth."
Sugarland Bancshares, Inc., a Louisiana
corporation ("Sugarland"), is a one bank holding
company that owns 99.8% of the outstanding stock of
Sugarland State Bank (the "Bank"). At December 31,
1994, Sugarland had total consolidated assets of
approximately $17.5 million and shareholders' equity of
approximately $2.1 million. Sugarland's principal
executive offices are at 1527 W. Main Street,
Jeanerette, Louisiana 70544, and its telephone number
is (318) 276-6307. See "Information About Sugarland."
MidSouth and Sugarland are collectively referred
to herein as the "Companies."
The Banks
MidSouth Bank is a full service commercial bank
offering consumer and commercial banking services in
Lafayette, Iberia, Jefferson Davis and St. Martin
Parishes. At December 31, 1994, MidSouth Bank had
total assets of approximately $104 million and total
deposits of approximately $96 million. In addition to
its main banking facility in Lafayette, Louisiana,
MidSouth Bank operates full service branches in Breaux
Bridge, Cecilia and Jennings, Louisiana, and also
operates four ATM machines, three in Lafayette and one
in Breaux Bridge.
The Bank, a Louisiana state chartered bank, is a
full service commercial bank offering consumer and
commercial banking services in Iberia Parish. At
December 31, 1994, the Bank had total assets of
approximately $17.5 million and total deposits of
approximately $15.3 million. In addition to its main
banking facility in Jeanerette, Louisiana, the Bank
operates a full service branch in New Iberia,
Louisiana.
MidSouth Bank and the Bank are collectively
referred to herein as the "Banks."
The Meetings
The annual meeting of the shareholders of
MidSouth and a special meeting of the shareholders of
Sugarland will be held on __________ , 1995 and ______,
1995, respectively, at the time and place set forth
in the accompanying Notice of Annual Meeting of
Shareholders of MidSouth (the "Annual Meeting") and
Notice of Special Meeting of Shareholders of Sugarland
(the "Special Meeting") (the Annual Meeting and the
Special Meeting are collectively referred to herein as
the "Meetings"). Only record holders of the common
stock (the "MidSouth Common Stock") of MidSouth at the
close of business on ___________________________, 1995
are entitled to notice of and to vote at the Annual
Meeting. Only record holders of the common stock (the
"Sugarland Common Stock") of Sugarland at the close of
business on ______________, 1995 are entitled to notice
of and to vote at the Special Meeting. On the
respective record dates, there were 736,375 shares of
MidSouth Common Stock outstanding and 187,286 shares of
Sugarland Common Stock outstanding, each of which is
entitled to one vote on each matter properly to come
before the Meeting of the respective Company.
Purpose of the Meetings; Vote Required
The purpose of the Special Meeting is to vote
upon a proposal to approve an Agreement and Plan of
Merger and related merger agreement (collectively, the
"Plan"), pursuant to which the Bank will be merged into
MidSouth Bank (the "Bank Merger"), and Sugarland will
be merged into MidSouth (the "Holding Company Merger"
which, together with the Bank Merger, are collectively
called the "Mergers"), and on the effective date of the
Holding Company Merger, each outstanding share of
Sugarland Common Stock will be converted into one share
of Cumulative Convertible Preferred Stock, Series A, of
MidSouth (the "Preferred Stock"), in accordance with
the terms of the Plan. As a result of the Mergers the
business and properties of the Bank will become the
business and properties of MidSouth Bank, the business
and properties of Sugarland will become the business
and properties of MidSouth, and shareholders of
Sugarland will receive the consideration described
below under "Conversion of Sugarland Common Stock." See
"Introductory Statement - Purpose of the Meetings."
The purpose of the Annual Meeting is to vote upon
a proposal to approve the issuance up to 187,286 shares
of the Preferred Stock of MidSouth to be issued to
shareholders of Sugarland in exchange for their
Sugarland Common Stock in connection with the Mergers.
Shareholders of MidSouth, in addition to voting on the
Plan, will also elect directors. See "Introductory
Statement - Purpose of the Meetings."
The Plan must be approved by the shareholders of
Sugarland by the affirmative vote of two-thirds of the
voting power present, in person or by proxy, at the
Special Meeting. Directors, executive officers and
certain principal shareholders of Sugarland
beneficially owning an aggregate of 89,956 shares, or
approximately 48.03% of the outstanding Sugarland
Common Stock, have executed agreements pursuant to
which, among other things, they agreed, subject to
certain conditions, to vote in favor of approval of the
Plan.
Approval of the Plan by the shareholders of
MidSouth is not required under either the Louisiana
Business Corporation Law (the "LBCL") or the Articles
of Incorporation of MidSouth. However, under the rules
of the American Stock Exchange Emerging Company Market
(the "AMEX") on which the MidSouth Common Stock is
listed, shareholders of MidSouth are required to
approve the issuance of the Preferred Stock to be
exchanged for the Sugarland Common Stock in connection
with the Mergers. The proposal to issue the Preferred
Stock must be approved by the affirmative vote of a
majority of the votes cast at the Annual Meeting. The
directors and executive officers of MidSouth owning an
aggregate of 306,616 shares, or approximately 42.9% of
the outstanding MidSouth Common Stock, have informed
MidSouth that they intend to vote their shares in favor
of issuance of the Preferred Stock.
See "Introductory Statement - Shares Entitled to
Vote; Quorum; Vote Required."
Reasons for the Plan; Recommendation of the Companies'
Boards of Directors
The Board of Directors of Sugarland believes that
approval of the Plan is in the best interest of
Sugarland and its shareholders and recommends that its
shareholders vote "FOR" the approval of the Plan. The
Board of Directors of Sugarland believes that the terms
of the Plan will provide significant value to all
Sugarland shareholders and enable them to participate
in opportunities for growth that Sugarland's Board of
Directors believes the Mergers make possible. In
recommending the Plan to Sugarland's shareholders,
Sugarland's Board of Directors considered, among other
factors, the financial terms of the Plan; the
likelihood and potential adverse impact of increased
competition for Sugarland in its market area if
Sugarland remains independent; the ability of the
combined Companies and Banks to compete in the relevant
banking markets; the market price of MidSouth Common
Stock; the business, financial condition, results of
operation and prospects of MidSouth, MidSouth Bank,
Sugarland and the Bank; the respective dividend
policies of MidSouth and Sugarland; and the federal
income tax consequences of the Plan to Sugarland's
shareholders, to the extent MidSouth Preferred Stock is
received in the Holding Company Merger.
The Board of Directors of MidSouth believes that
approval of the issuance of the Preferred Stock is in
the best interest of MidSouth and its shareholders. In
addition to the financial terms, among the factors
considered by the Board in recommending the issuance of
the Preferred Stock were (i) the increased competitive
advantages available to MidSouth and MidSouth Bank
through the combined capital of the Banks and the
economies of scale created as a result of the Mergers,
and (ii) the increased market share and additional
markets available to MidSouth and MidSouth Bank as a
result of the Mergers.
The financial and other terms of the Plan were
arrived at through arm's length negotiations between
representatives of the Companies. Determination of the
consideration to be received by Sugarland's
shareholders was based upon various factors considered
by the Boards of Directors of MidSouth and Sugarland,
including primarily the comparative financial
condition, historical results of operations, current
business and future prospects of the Companies and the
Banks, and the desirability of combining the financial
and managerial resources of the Banks to pursue
available consumer and commercial banking business in
Lafayette, Jefferson Davis, Iberia and St. Martin
parishes.
The Boards of Directors of the Companies have
approved the Plan. The Board of Directors of Sugarland
recommends that its shareholders vote FOR approval of
the Plan, and the Board of Directors of MidSouth
recommends that its shareholders vote FOR the issuance
of the Preferred Stock. See "The Plan - Background of
and Reasons for the Plan."
Opinion of Chaffe & Associates, Inc.
Chaffe & Associates, Inc. ("Chaffe") was engaged
as an independent financial expert to render an opinion
as to the fairness to Sugarland and its shareholders
from a financial point of view of the consideration to
be received by Sugarland's shareholders pursuant to the
provisions of the Plan. Chaffe was selected because of
its experience, reputation and expertise in the
financial services industry. A copy of the opinion
delivered by Chaffe dated December 30, 1994 is attached
as Appendix A and should be read in its entirety. The
opinion concludes that, as of December 30, l994, and
based on and subject to the assumptions made, the
factors considered, the review undertaken and the
limitations stated, the proposed Exchange Ratio (as
defined in the opinion) is fair to Sugarland and its
shareholders from a financial point of view. The
opinion does not constitute a recommendation to any
shareholder on how to vote at the Special Meeting. See
"The Plan - Opinion of Chaffe & Associates, Inc." for
further information regarding, among other things, the
selection of Chaffe and its compensation arrangement in
connection with the Plan.
Conversion of Sugarland Common Stock
Under the terms of the Plan, on the date the
Holding Company Merger becomes effective (the
"Effective Date"), and assuming no Sugarland
shareholders perfect dissenters' rights, each
outstanding share of Sugarland Common Stock will be
converted into a number of shares of MidSouth Preferred
Stock equal to the quotient of 187,286 divided by the
number of outstanding shares of Sugarland Common Stock
on the Effective Date. Currently, there are 187,286
shares of Sugarland Common Stock outstanding.
Accordingly, assuming no change in the number of
outstanding shares of Sugarland, each share of Common
Stock of Sugarland will be converted into one share of
MidSouth Preferred Stock. See "The Plan - Conversion
of Sugarland Common Stock." In lieu of the issuance of
any fractional share of Preferred Stock to which a
holder of Sugarland Common Stock may be entitled, each
shareholder of Sugarland, upon surrender of the
certificate or certificates which immediately prior to
the Effective Date represented Sugarland Common Stock
held by such shareholder, will be entitled to receive a
cash payment (without interest) equal to such
fractional share multiplied by $14.25. See "The Plan-
Conversion of Sugarland Common Stock."
Description of MidSouth Preferred Stock
Dividend Rights. Cash dividends on shares of
MidSouth Preferred Stock are cumulative from the date
of issuance of such shares and are payable when, as and
if declared by the MidSouth Board of Directors, out of
funds legally available therefor, at an annual rate
(except in certain cases with respect to dividends due
in 1995) fixed on December 31 of each year for the
ensuing calendar year, and equal to the yield for
Government Bonds and Notes maturing in December of the
following year, as published in the Treasury Bonds,
Notes and Bills Section of the last issue of the Wall
Street Journal published each year, plus 1% per annum;
provided that the annual dividend rate will in no case
be greater than 10% nor less than 6%; and provided
further that the annual dividend rate will be fixed at
10% from and after the tenth anniversary of the date of
issuance of the Preferred Stock. If more than one
yield is shown for December maturities, the average
will be applied, and if no yield is quoted for December
maturities, the yield for the next earlier available
month will be applied.
On the basis of the foregoing, from the date of
issuance of the Preferred Stock through December 31,
1995, the annual dividend rate will be 8.28%.
Dividends payable on the Preferred Stock will be
paid on the first day of January, April, July and
October of each year, provided that the initial
dividend will be payable on the first day of January,
April, July or October that is at least 91 days from
the date of original issuance of the Preferred Stock
and will be in an amount, at the applicable dividend
rate, based on the number of days between the date of
original issuance and the dividend payment date minus
90 days.
The aggregate amount of the initial dividend
payable to holders of Preferred Stock (A) will be
increased by the amount by which certain expenses of
Sugarland related to the Plan are less than $110,000
(the "Additional Amount"), or (B) will be reduced by
the amount by which certain expenses (as defined in the
Articles) exceed $110,000 (the "Subtracted Amount").
In any case in which the Additional Amount is greater
than the dividend that would have been paid for the 90
excluded days set forth or in which the Subtracted
Amount is greater than the amount otherwise payable
under this paragraph, such excess will be deducted from
the amount otherwise payable on the next succeeding
dividend payment date.
If any quarterly dividend is not paid when due,
the unpaid amount will bear interest at a rate of 10%
per annum until paid. See "Rights and Preferences of
MidSouth Preferred Stock-Dividend Rights."
Redemption. On or after the fifth anniversary of
the date of issuance of the Preferred Stock, MidSouth
may, at its option, redeem the whole, or from time to
time, any part of the Preferred Stock at a redemption
price per share payable in cash in an amount equal to
the sum of (i) $14.25, (ii) all accrued and unpaid
dividends on the Preferred Stock to the date fixed for
redemption, whether or not earned or declared and (iii)
interest accrued to the date of redemption on all
accrued and unpaid dividends on the Preferred Stock, if
any. See "Rights and Preferences of MidSouth Preferred
Stock-Redemption Rights."
Conversion. At their option, holders of the
shares of MidSouth Preferred Stock may convert such
stock into shares of MidSouth Common Stock at a
conversion rate of one share of common stock for each
share of Preferred Stock converted at any time prior to
redemption of the Preferred Stock. The conversion rate
is subject to adjustment from time to time as further
provided in MidSouth's Articles of Incorporation. See
"Rights and Preferences of MidSouth Preferred Stock-
Conversion Rights."
Voting Rights. Except as otherwise required by
law or in MidSouth's Articles of Incorporation, holders
of MidSouth Preferred Stock are not entitled to any
vote on any matter, including but not limited to any
merger, consolidation or transfer of assets, or
statutory share exchange, and to notice of any meeting
of shareholders of MidSouth. If at any time MidSouth
falls in arrears in the payment of dividends on the
Preferred Stock for two consecutive quarterly dividend
periods, the number of directors constituting the full
Board of Directors of MidSouth shall be automatically
increased by two, and the holders of the Preferred
Stock, voting separately as a single class, will be
entitled to elect two directors of MidSouth to fill the
two created directorships, at a special meeting called
for the purpose, and thereafter at each shareholders
meeting held for the purpose of electing directors of
MidSouth, so long as there continues to be any
arrearage in the payment of dividends on the Preferred
Stock for any past quarterly dividend period or of
interest on such accumulated and unpaid dividends.
When all accumulated and unpaid dividends on the
Preferred Stock for all past quarterly dividend
periods, and the interest thereon, have been paid in
full, the right of the holders of the Preferred Stock
to elect directors will cease, the number of the
directors of MidSouth shall automatically be reduced by
two, and the term of office of all directors elected by
the shareholders of the Preferred Stock will
immediately terminate. See "Rights and Preferences of
MidSouth Preferred Stock-Voting Rights."
Liquidation Preference. The liquidation
preference of the Preferred Stock will be $14.25 per
share, plus an amount equal to accrued and unpaid
dividends and accrued interest thereon. See "Rights
and Preferences of MidSouth Preferred Stock -
Liquidation Rights."
Exchange of Certificates
Upon consummation of the Mergers, a letter of
transmittal, together with instructions for the
exchange of certificates representing shares of
Sugarland Common Stock for certificates representing
shares of MidSouth Preferred Stock, will be mailed to
each person who was a shareholder of record of
Sugarland on the Effective Date. Shareholders are
requested not to send in their Sugarland Common Stock
certificates until they have received a letter of
transmittal and further written instructions.
Sugarland shareholders who cannot locate their
certificates are urged to contact promptly Ronald R.
Hebert, Sr., Sugarland Bancshares, Inc., 1527 W. Main
Street, Jeanerette, Louisiana 70544, telephone number
(318) 276-6307. A new certificate will be issued to
replace the lost certificate(s) only upon execution by
the shareholder of an affidavit certifying that his
certificate(s) cannot be located and an agreement to
indemnify Sugarland and MidSouth, as its successor,
against any claim that may be made against Sugarland or
MidSouth, as its successor, by the owner of the
certificate(s) alleged to have been lost or destroyed.
Sugarland or MidSouth, as its successor, may also
require the shareholder to post a bond in such sum as
is sufficient to support the shareholder's agreement to
indemnify Sugarland and MidSouth. See "The Plan -
Exchange of Certificates."
Conditions to Consummation of the Mergers
In addition to approval by the shareholders of
MidSouth and Sugarland, consummation of the Mergers is
conditioned upon (i) the accuracy on the date of
closing of the representations and warranties and the
compliance with covenants made in the Plan by each
party, and the absence of any material adverse change
in the financial condition, results of operations,
business or prospects of the other party's consolidated
group; (ii) the receipt of required regulatory
approvals; (iii) the receipt of assurances from the
Board of Governors of the Federal Reserve System
("FRB") or delegated authority satisfactory to
MidSouth, that the Preferred Stock will be treated as
Tier 1 Capital of MidSouth for the purpose of capital
adequacy guidelines of the FRB and (iv) certain other
conditions. The Plan further provides that if MidSouth
does not receive assurance from the FRB that the
Preferred Stock will be treated as Tier 1 Capital due
to any term or provision of the Preferred Stock,
MidSouth shall propose a revision of such form or
provision so as to cause the Preferred Stock to be
treated as Tier 1 Capital, and Sugarland shall have 15
days from the receipt of such proposal to accept it and
permit this condition to be met. As of the date of the
Joint Proxy Statement and Prospectus, MidSouth had
received such assurances. The Companies intend to
consummate the Mergers as soon as practicable after all
of the conditions to the Mergers have been met or
waived. See "The Plan - Regulatory Approvals and Other
Conditions of the Mergers."
On January 25, 1995, MidSouth filed an
application seeking prior approval of the Bank Merger
from the Office of the Comptroller of the Currency (the
"OCC") and by letter dated January 30, 1995 requested a
waiver of approval of the Holding Company Merger from
the FRB. MidSouth received the approval from the OCC
on March 22, 1995 and the waiver from the FRB on March
17, 1995; however, there is no assurance that the other
conditions to consummation of the Mergers will be
satisfied. See "The Plan - Regulatory Approvals and
Other Conditions of the Mergers."
Waiver, Amendment and Termination
The Plan provides that each of the parties to the
Plan may waive any of the conditions to its obligation
to consummate the Mergers other than approval by
shareholders, the receipt of all necessary regulatory
approvals and the satisfaction of all requirements
prescribed by law for consummation of the Mergers.
The Plan may be amended at any time before or
after its approval by Sugarland's shareholders by the
mutual agreement of the Boards of Directors of the
parties to the Plan; provided that, under the LBCL, any
amendment made subsequent to such shareholder approval
may not alter the amount or type of shares into which
Sugarland Common Stock will be converted, or alter any
term or condition of the Plan in a manner that would
adversely affect any Sugarland shareholder.
The Plan may be terminated at any time prior to
the Effective Date by (i) the mutual consent of the
Boards of Directors of MidSouth and Sugarland; (ii) the
Board of Directors of either MidSouth or Sugarland in
the event of a material breach by the other or its
subsidiary of any representation, warranty or covenant
in the Plan which cannot be cured by the earlier of ten
days after written notice of such breach or June 30,
1995; (iii) the Board of Directors of either MidSouth
or Sugarland if by June 30, 1995, all the conditions to
closing required by the Plan have not been met or
waived, cannot be met or the Mergers have not occurred;
(iv) the Board of Directors of MidSouth if, at the time
of the closing, the number of shares of Sugarland
Common Stock as to which holders thereof are legally
entitled to assert dissenters' rights exceeds five
percent of the total number of shares of Sugarland
Common Stock outstanding on the Closing Date; (v) the
Board of Directors of MidSouth if Sugarland's Board of
Directors (A) withdraws, modifies or changes its
recommendation to its shareholders of the Plan or
resolves to do so, (B) recommends to its shareholders
(i) any other merger, consolidation, share exchange,
business combination or other similar transaction, (ii)
any sale, lease, transfer or other disposition of all
or substantially all of the assets of Sugarland or the
Bank or (iii) any acquisition by any person or group of
the beneficial ownership of thirty-three and one-third
percent or more of any class of Sugarland's capital
stock or (C) makes any announcement of an intention or
agreement to do any of the foregoing. See "The Plan -
Waiver, Amendment and Termination."
Interests of Certain Persons in the Mergers
MidSouth and MidSouth Bank have agreed that,
subject to certain conditions, they will indemnify each
person who served as an officer or director of
Sugarland or the Bank at any time from December 31,
1992, and who has executed a Joinder of Shareholders,
from and against all damages, liabilities, judgments
and claims and related expenses based upon or arising
out of such person's service in such capacity to the
same extent as he would have been indemnified under the
applicable Articles of Incorporation or Bylaws of
Sugarland or the Bank, as appropriate, as they were in
effect on December 28, 1994. The aggregate amount of
indemnification payments required to be made by
MidSouth and MidSouth Bank to such persons is $1.2
million and any claim for such indemnification must be
submitted in writing to the Chief Executive Officer of
MidSouth prior to December 28, 1999.
The Plan also provides for indemnification of
Sugarland's and the Bank's officers, directors and
controlling persons from and against any claims arising
out of or based on an untrue statement or omission of a
material fact required to be stated in the Registration
Statement, of which this Joint Proxy Statement and
Prospectus forms a part. This indemnification does not
apply to statements made in reliance on information
furnished to MidSouth by Sugarland.
Joinder of Shareholders
It is anticipated that MidSouth or MidSouth Bank
will enter into employment contracts providing for
employment following the Mergers of one or more
executive officers of the Bank, including Mr. D.J.
Tranchina, the President and a director of Sugarland
and the Bank. The terms of any such employment
contracts have not yet been determined.
As a condition to the consummation of the
Mergers, each director and executive officer of
Sugarland and each shareholder who beneficially owns 5%
or more of the outstanding shares of Sugarland Common
Stock has executed an individual agreement pursuant to
which such shareholder has agreed (i) to vote as a
shareholder in favor of the Plan and against any other
proposal relating to the sale or disposition of the
Bank or Sugarland unless MidSouth or MidSouth Bank is
in breach or default, in any material respect, with
regard to any covenant, representation, or warranty as
to it contained in the Plan to an extent that would
permit Sugarland to terminate the Plan pursuant to the
terms thereof; (ii) not to transfer any shares of
Sugarland Common Stock, except under certain conditions
and with respect to transfers by operation of law;
(iii) prior to the Effective Date or until termination
of the Plan, and except to the extent required to
discharge properly his fiduciary duties as a director
of Sugarland, not to solicit, encourage, initiate or
participate in any negotiations or discussions
concerning the acquisition of all or a substantial
portion of the assets of, or of a substantial equity
interest in, or any business combination with Sugarland
or the Bank without the prior approval of the Chief
Executive Officer of MidSouth or his designee, and to
notify MidSouth immediately if any such proposal or
inquiries are received by him; (iv) to release MidSouth
and MidSouth Bank from any indemnification obligations
that either of them may have to indemnify him in his
capacity as an officer, director or employee of
Sugarland or the Bank except as set forth in the Plan;
(v) not to assume a significant proprietary position
with or serve as a director, officer or employee of, or
advisor to, a financial institution that competes in
Iberia and Lafayette Parishes with the business of Bank
as continued by MidSouth Bank for a period of two years
following the Effective Date; and (vi) not to trade in
MidSouth Common Stock until the Effective Time of the
Holding Company Merger or until the Plan has been
terminated. See "The Plan - Joinder of Shareholders."
Employee Benefits
Pursuant to the Plan, MidSouth has agreed that,
from and after the Effective Date, MidSouth and
MidSouth Bank will offer to all persons who were
employees of Sugarland or the Bank immediately prior to
the Effective Date and who become employees of MidSouth
or MidSouth Bank following the Mergers, the same
employee benefits as are offered by MidSouth or
MidSouth Bank, as the case may be, to its employees,
except that there will not be a waiting period for
coverage under any of its plans, and no employee of
Sugarland or the Bank who is an active employee on the
Effective Date will be denied benefits under such plans
for a pre-existing condition. Full credit will be
given for prior service by such employees with
Sugarland or the Bank for eligibility and vesting
purposes under all of MidSouth's and MidSouth Bank's
benefit plans and policies. All benefits accrued
through the Effective Date under the benefit plans of
Sugarland or the Bank will be paid by MidSouth or
MidSouth Bank as the case may be to the extent such
benefits are not otherwise provided to such employees
through the benefit plans of MidSouth or MidSouth Bank,
as the case may be. MidSouth and MidSouth Bank are not
obligated to continue any employee benefit or ERISA
plans maintained by Sugarland or the Bank prior to the
Effective Date. See "The Plan - Employee Benefits."
Certain Federal Income Tax Consequences
Consummation of the Mergers is conditioned upon
receipt by the Companies of an opinion from Deloitte &
Touche LLP to the effect that, among other things, each
of the Mergers will qualify as a tax-free
reorganization under applicable law, and that each
Sugarland shareholder who receives MidSouth Preferred
Stock pursuant to the Holding Company Merger will not
recognize gain or loss except with respect to the
receipt of cash (i) in lieu of fractional shares of
MidSouth Common Stock, or (ii) pursuant to the exercise
of dissenters' rights. Because of the complexity of
the tax laws, each shareholder should consult his tax
advisor concerning the applicable federal, state and
local income tax consequences of the Mergers. See
"Certain Federal Income Tax Consequences."
Dissenters' Rights
Under certain conditions, and by complying with
the specific procedures required by statute and
described herein, shareholders of Sugarland will have
the right to dissent from the Holding Company Merger,
in which event, if the Holding Company Merger is
consummated, they will be entitled to receive in cash
the fair value of their shares of Sugarland Common
Stock. See "Dissenters' Rights." Shareholders of
MidSouth will not have dissenters' rights.
Selected Financial Data of Sugarland
The following selected financial data of
Sugarland with respect to each year in the five-year
period ended December 31, 1994, has been derived from
Sugarland's consolidated financial statements and
should be read in conjunction with Sugarland's
consolidated financial statements, the notes thereto
and "Sugarland Management's Discussion and Analysis of
Financial Condition and Results of Operations"
appearing elsewhere in this Joint Proxy Statement and
Prospectus.
<TABLE>
<CAPTION>
(In thousands of dollars, except per share data)
Years Ended December 31,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Average Balance Sheet
Data:
Total assets $ 17,188 $ 18,037 $ 17,125 $ 15,967 $ 15,117
Earning assets 14,715 15,625 14,563 13,544 12,862
Loans (net of unearned 8,296 8,22l 8,102 8,008 6,872
discount)
Deposits 15,005 15,900 15,093 14,053 13,293
Shareholders' equity 2,120 2,056 1,932 1,840 1,746
Income Statement Data:
Total interest income $ 1,219 $ 1,268 $ 1,295 $ 1,381 $ 1,357
Net interest income 853 860 793 716 638
Provision for possible -- -- -- -- --
loan losses
Net income 162 188 137 121 114
Per Share Data:
Net income $ 0.87 $ 1.01 $ 0.73 $ 0.64 $ 0.61
Cash dividends -- .20 .18 .15 .15
Book value (period end) 11.25 11.30 10.51 10.00 9.51
Selected Ratios:
Net income as a percent 0.94% 1.04% 0.80% 0.76% 0.75%
of average total assets
Net income as a percent 7.64% 9.14% 7.09% 6.58% 6.53%
of average equity
Average equity as a 12.33% 11.40% 11.28% 11.52% 11.55%
percent of average
assets
</TABLE>
Selected Financial Data of MidSouth
The following selected financial data with respect to
each of the fiscal years in the five-year period ended
December 31, 1994, has been derived from MidSouth's
consolidated financial statements and should be read in
conjunction with MidSouth's 1994 Annual Report on Form
10-KSB, which has been incorporated by reference in
this Joint Proxy Statement and Prospectus.
<TABLE>
<CAPTION>
(In thousands of dollars, except per share data)
Years Ended December 31
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Average Balance
Sheet Data:
Total assets $ 101,547 $ 86,482 $ 82,296 $ 82,296 $ 82,456
Earning assets 93,047 78,750 75,432 74,859 74,148
Loans and leases 55,60l 45,l24 39,95l 4l,956 44,984
Securities 33,7l6 28,655 32,ll2 27,l28 25,069
Deposits 94,l64 80,466 77,667 78,6l0 77,659
Long-term debt<FN1> 1,196 786 954 983 1,039
Shareholders' equity 5,443 4,267 2,887 l,973 2,790
Income Statement
Data:
Total interest $ 7,388 $ 6,371 $ 6,683 $ 7,698 $ 8,300
income
Net interest income 5,412 4,567 4,272 3,958 4,00l
Provision for loan
losses 210 306 365 518 2,318
Other income
(exclusive of
securities
transactions) 1,422 1,161 1,046 1,000 1,012
Operating expense 4,882 4,653 4,106 4,103 4,301
Net income 1,142 1,245 905 44l (1,685)
Per Share Data:
Earnings per share<FN2> $ 1.61 $ 1.93 $ l.46 $ 0.8l ($ 3.23)
Cash dividends N/A N/A N/A N/A N/A
Book value 7.53 8.15 5.73 4.21 3.16
(period ended)
High stock price<FN3> 12.50 9.52 N/A N/A N/A
Low stock price<FN3> 8.75 8.81 N/A N/A N/A
Key ratios:
Net income as a 1.12% 1.13% 1.10% .54% (2.03%)
percent of average
total assets<FN4>
Net income as a 20.98% 22.88% 31.33% 22.35% (60.44%)
percent of average
equity<FN4>
Net interest margin 5.81% 5.80% 5.66% 5.30% 5.43%
Allowance for loan
losses to loans and
leases 1.45% 1.66% 2.09% 2.14% 3.11%
Leverage ratio 6.45% 5.94% 5.06% 3.84% 2.78
Dividend payout N/A N/A N/A N/A N/A
ratio
</TABLE>
Notes:
<FN1> Actual figures have been provided for long-
term debt obligations which include an ESOP borrowing
and, in 1994, FHLB borrowings.
<FN2> Earnings per share have been adjusted for a 5%
stock dividend paid by the Company on February 18,
1994.
<FN3> No market price information is available for
the years 1992, 1991 and 1990.
<FN4> Exclusive of income taxes, extraordinary item and
cumulative effect of accounting change for the year
ended December 31, 1993.
Comparative Per Share Data (Unaudited)
The following table presents certain information
for MidSouth and Sugarland on an historical, unaudited
pro forma combined and unaudited pro forma equivalent
basis. The unaudited pro forma combined information is
based upon the historical financial condition and
results of operations of the Companies and adjustments
directly attributable to the proposed Holding Company
Merger based on estimates derived from information
currently available. They do not purport to be
indicative of the results that would actually have been
obtained if the Holding Company Merger had been in
effect on the date or for the periods indicated below,
or the results that may be obtained in the future.
<TABLE>
<CAPTION>
Comparative Per Share Data
(unaudited) December 31,
1994
Historical Pro Forma Sugarland
MidSouth Sugarland Combined Equivalent
<S> <C> <C> <C> <C>
Primary earnings per common $1.61 $0.87 $1.48 $1.48
share
Fully diluted earnings per - - 1.42 1.42
common share
Dividends declared per common share - - - -
Book value per common share $7.53 $11.25 $8.92 8.92<FN2>
</TABLE>
______________________
<FN1> Pro forma equivalent amounts are calculated by
multiplying the combined pro forma amount by l.0,
the number of shares of MidSouth Preferred Stock
that each holder of Sugarland Common Stock will receive
for each share of his Sugarland Common Stock upon
consummation of the Mergers and assuming that each
share of Preferred Stock has been converted into
MidSouth Common Stock.
<FN2> Based on common shares outstanding and assuming
conversion of MidSouth Preferred Stock into MidSouth
Common Stock.
Market Prices and Dividends
The Plan provides that MidSouth will use its best
efforts to cause the MidSouth Preferred Stock be listed
for trading on the AMEX. Any such listing would not be
effective until the Preferred Stock is issued, and
there can be no assurance as to what the initial price
of the Preferred Stock will be if and when listed.
The holders of shares of the Preferred Stock have
the right to convert all or any part of the Preferred
Stock into shares of MidSouth Common Stock at the
conversion rate of one share of MidSouth Common Stock
for each share of Preferred Stock converted, subject to
the effect of antidilution provisions in MidSouth's
Articles of Incorporation. On December 27, 1994, the
day preceding the date that the Companies entered into
the Plan, the closing sales price for a share of
MidSouth Common Stock, as quoted on the AMEX, was
$11.25. On ____________, 1995, the closing sales price
for a share of MidSouth Common Stock was _________. No
assurance can be given as to the market price of
MidSouth Common Stock on the Effective Date.
Sugarland Common Stock is not actively traded,
and there is no established trading market for the
stock. There are no bid or asked prices available for
Sugarland Common Stock. See "Information About
Sugarland - Market Prices and Dividends."
<PAGE>
INTRODUCTORY STATEMENT
General
This Joint Proxy Statement and Prospectus is
furnished to the shareholders of Sugarland Bancshares,
Inc. ("Sugarland") and MidSouth Bancorp, Inc.
("MidSouth") in connection with the solicitation of
proxies on behalf of the respective Boards of Directors
of Sugarland and MidSouth for use at a special meeting
of the shareholders of Sugarland (the "Special
Meeting") and the annual meeting of the shareholders of
MidSouth (the "Annual Meeting," which collectively with
the Special Meeting are referred to herein as the
"Meetings") to be held on the dates and at the times
and places specified in the accompanying Notice of
Special Meeting of Shareholders of Sugarland and Notice
of Annual Meeting of Shareholders of MidSouth, or any
adjournments thereof. Sugarland and MidSouth
(collectively, the "Companies") have each supplied all
information included herein with respect to it and its
subsidiary.
As of the date of this Joint Proxy Statement
and Prospectus, Sugarland owns 99.8% of the outstanding
common stock of Sugarland State Bank (the "Bank"). The
Board of Directors of the Bank, and Sugarland as the
Bank's 99.8% shareholder, have indicated that they
intend to cause the Bank to effect a reverse stock
split prior to consummation of the Mergers for the
purpose of acquiring ownership of 100% of the Bank's
common stock. As a result of the reverse stock split,
each existing 125 shares of Bank common stock will be
converted into one share of the Bank's post-reverse
stock split common stock ("New Bank Stock"), cash will
be paid in lieu of the issuance of fractional shares of
New Bank Stock and the Bank will become a wholly-owned
subsidiary of Sugarland, which is the only Bank
stockholder currently owning in excess of 100 shares of
Bank common stock.
This Joint Proxy Statement and Prospectus was
mailed to shareholders of Sugarland on approximately
_________________, 1995, and to shareholders of
MidSouth on approximately ______________, 1995.
Purpose of the Meetings
The purpose of the Special Meeting is to
consider and vote upon a proposal to approve an
Agreement and Plan of Merger between MidSouth and
Sugarland and a related Agreement of Merger between
MidSouth National Bank ("MidSouth Bank") and the Bank
(the "Bank Merger Agreement," which collectively with
the Agreement and Plan of Merger, is referred to as the
"Plan"). Pursuant to the Plan, the Bank will be merged
into MidSouth Bank (the "Bank Merger") and Sugarland
will be merged into MidSouth (the "Holding Company
Merger," which, collectively with the Bank Merger, are
referred to as the "Mergers") with the result that the
business and properties of Sugarland will become the
business and properties of MidSouth and, except for
shares of Sugarland's common stock to which dissenters'
rights have been perfected, each outstanding share of
Sugarland common stock ("Sugarland Common Stock") will
be converted into one share of Series A Cumulative
Convertible Preferred Stock of MidSouth (the "Preferred
Stock") as described under the caption "The Plan -
Conversion of Sugarland Common Stock."
The purpose of the Annual Meeting is, among
other things, to elect directors of MidSouth and to
consider and vote upon a proposal to approve the
issuance of up to 187,286 shares of Preferred Stock of
MidSouth to be issued to shareholders of Sugarland in
exchange for their Sugarland Common Stock in connection
with the Mergers. See "Election of Directors of
MidSouth."
Shares Entitled to Vote; Quorum; Vote Required
Only holders of record of MidSouth's common
stock ("MidSouth Common Stock") at the close of
business on ______________, 1995 are entitled to notice
of and to vote at the Annual Meeting. On that date
there were 736,375 shares of MidSouth Common Stock
outstanding, each of which is entitled to one vote on
each matter properly brought before the Annual Meeting.
Only holders of record of Sugarland Common Stock at the
close of business on _____________, 1995 are entitled
to notice of and to vote at the Special Meeting. On
that date there were 187,286 shares of Sugarland Common
Stock outstanding, each of which is entitled to one
vote on each matter properly brought before the Special
Meeting.
With respect to any matter properly brought
before the Meetings, the presence at the Meetings, in
person or by proxy, of the holders of a majority of the
outstanding shares of the respective Companies' common
stock is necessary to constitute a quorum.
The Plan must be approved by the shareholders
of Sugarland by the affirmative vote of two-thirds of
the voting power present, in person or by proxy, at the
Special Meeting. An abstention will have the effect of
a vote against the Plan. However, unless the Plan is
approved by the holders of at least 80% of the
Sugarland Common Stock, dissenters' rights will apply
and an abstention will cause a shareholder otherwise
entitled to dissenters' rights to forfeit any claim to
such rights. See "Dissenters' Rights." If brokers who
do not receive instructions from beneficial owners as
to granting or withholding of proxies may not or do not
exercise discretionary power to grant a proxy with
respect to such shares (a "broker non-vote") on a
proposal, including the proposal to approve the Plan,
shares not voted on such proposal will be counted as
not present with respect to the proposal.
Under the Louisiana Business Corporation Law
(the "LBCL") and the Articles of Incorporation of
MidSouth, the shareholders of MidSouth are not required
to approve the Mergers. However, under the rules of
the American Stock Exchange Emerging Company Market
(the "AMEX") on which MidSouth Common Stock is listed,
shareholder approval is required for the issuance of
the Preferred Stock. The issuance of the Preferred
Stock must be approved by the affirmative vote a
majority of the votes cast at the Annual Meeting.
Abstentions and broker non-votes will not be counted in
the determination of the total number of votes cast.
Directors, executive officers and certain
principal shareholders of Sugarland beneficially owning
an aggregate of 89,956 shares, or approximately 48.03%
of the outstanding Sugarland Common Stock, have
executed agreements pursuant to which they have agreed,
among other things, to vote in favor of the Plan. The
directors and executive officers of MidSouth owning an
aggregate of 306,616 shares, or approximately 42.9% of
the outstanding MidSouth Common Stock, have informed
MidSouth that they intend to approve the issuance of
the Preferred Stock.
Solicitation, Voting and Revocation of Proxies
In addition to soliciting proxies by mail,
directors, officers and employees of the Companies,
without receiving additional compensation therefor, may
solicit proxies by telephone and in person.
Arrangements will also be made with brokerage firms and
other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of
shares of the Companies' stock, and the Companies will
reimburse such parties for reasonable out-of-pocket
expenses incurred in connection therewith. The cost to
Sugarland of soliciting proxies is being paid for by
Sugarland, and the cost to MidSouth of soliciting
proxies is being paid for by MidSouth.
The proxies that accompany this Joint Proxy
Statement and Prospectus permit each holder of record
of the Companies' common stock on the applicable record
date to vote on all matters that properly come before
the Special Meeting or Annual Meeting. When a share-
holder of Sugarland specifies his choice on the proxy
with respect to the proposal to approve the Plan, the
shares represented by the proxy will be voted in
accordance with such specification. If no such speci-
fication is made, the shares represented by an executed
proxy will be voted in favor of the proposal to approve
the Plan. If a shareholder of Sugarland does not sign
and return a proxy and specify on the proxy an
instruction to vote against the Plan, he will not be
able to exercise dissenters' rights with respect to the
Holding Company Merger unless he attends the Special
Meeting in person and votes against the Plan, and gives
written notice of his dissent from the Plan at or prior
to the Special Meeting. See "Dissenters' Rights." A
shareholder of Sugarland may revoke his proxy by (i)
giving written notice of revocation to Ronald R.
Hebert, Sr., Secretary, Sugarland Bancshares, Inc.,
1527 W. Main Street, Jeanerette, Louisiana 70544; or
(ii) executing and delivering to Sugarland at any time
before its exercise a later dated proxy or (iii)
attending the Special Meeting and voting in person.
Where a Shareholder of MidSouth specifies his
choice on the proxy with respect to the approval of the
issuance of the Preferred Stock, the shares represented
by proxy will be voted in accordance with such
specification. If no such specification is made, the
shares represented by an executed proxy will be voted
in favor of the issuance of the Preferred Stock and in
favor of the election of the Directors of MidSouth
named in the proxy. An abstention or broker non-vote
will not be counted in the determination of the total
number of votes cast. A shareholder of MidSouth may
revoke his proxy by (i) giving written notice of
revocation to Karen L. Hail, Secretary, MidSouth
Bancorp, Inc., 102 Versailles Boulevard, Versailles
Centre, Lafayette, Louisiana 70501; or (ii) executing
and delivering to MidSouth at any time before its exer-
cise a later dated proxy or (iii) attending the Annual
Meeting and voting in person.
No matters are expected to be considered at the
Special Meeting other than the proposal to approve the
Plan, and no matters are expected to be considered at
the Annual Meeting other than the proposal to approve
the issuance of the Preferred Stock and the election of
directors of MidSouth. If any other matters should
properly come before either of the meetings, it is
intended that proxies in the form accompanying this
Joint Proxy Statement and Prospectus will be voted on
all such matters in accordance with the judgment of the
person(s) voting such proxies.
THE PLAN
General
The transactions contemplated by the Plan are to
be effected in accordance with the terms and conditions
set forth in the Plan, which is incorporated herein by
reference. The following
brief description does not purport to be complete and
is qualified in its entirety by reference to the Plan.
For information concerning obtaining a copy of the
Plan, see "Available Information."
The ultimate result of the transactions
contemplated by the Plan will be that the business and
properties of the Bank will become the business and
properties of MidSouth Bank, the business and
properties of Sugarland will become the business and
properties of MidSouth, and the shareholders of
Sugarland will become shareholders of Preferred Stock
of MidSouth. The steps taken to achieve this result
involve the following transactions: (i) the Bank will
be merged into MidSouth Bank and the separate existence
of the Bank will cease; (ii) Sugarland will be merged
into MidSouth and the separate existence of Sugarland
will cease; and (iii) shareholders of Sugarland will
receive the consideration described below under the
heading "The Plan - Conversion of Sugarland Common
Stock."
Background of and Reasons for the Plan
Background. In 1987, C.R. Cloutier, President of
MidSouth and MidSouth Bank, and D.J. Tranchina,
President of Sugarland and the Bank, first discussed
generally the possibility of a business combination
between the Companies and the Banks. After preliminary
discussions, the Companies and the Banks each
determined not to pursue a business combination at that
time. In September 1993, Messrs. Cloutier and
Tranchina again discussed in general terms the
possibility of a business combination between the
Companies and the Banks and expressed interest in
exploring fully such a transaction.
On April 13, 1994, Will G. Charbonnet, Sr.,
Chairman of the Board of MidSouth and MidSouth Bank,
and Mr. Cloutier presented to Sugarland's Board of
Directors a written proposal to merge the Companies and
the Banks. Representatives of the Companies and the
Banks continued to discuss the terms of a business
combination. On May 26, 1994, Sugarland retained
Chaffe & Associates, Inc. ("Chaffe") as its financial
advisor in connection with a possible business
combination with MidSouth, and on August 19, 1994, the
Companies agreed to a confidentiality agreement and
exchanged certain confidential information concerning
their respective companies as a means of exploring
further a business combination between the Companies.
Over the next several months, the Companies
exchanged drafts of a proposed merger agreement and
engaged in detailed negotiations concerning the terms
of the proposed Mergers. On December 8, 1994, the
Boards of Directors of Sugarland and the Bank held a
special joint meeting to consider the proposed Mergers.
At the meeting, Sugarland's Board of Directors,
management and legal and financial advisors reviewed
the background of, and rationale for, the proposed
Mergers, the terms of the Plan, the potential risks and
benefits of the Mergers and the financial and
evaluation analyses of the transaction. Chaffe
delivered its opinion to Sugarland's Board of
Directors, subsequently confirmed in writing, that the
exchange ratio in the proposed merger of Sugarland and
MidSouth was fair to Sugarland's shareholders, from a
financial point of view, as of such date. On December
14, 1994, MidSouth's Board of Directors met and
approved the proposed Mergers and the Plan.
Reasons for the Plan. The Board of Directors of
Sugarland believes that approval of the Plan is in the
best interest of Sugarland and its shareholders. In
reaching its decision to recommend the Plan,
Sugarland's Board of Directors consulted with its
financial and other advisors, as well as with
Sugarland's management, and considered a number of
factors, including but not limited to the following:
(a)The business, financial condition, results of
operations and prospects of each of MidSouth and
Sugarland;
(b)The market for the Bank's services and the
likelihood that the Bank would continue to face
competitive pressures in its market area from banks and
other financial institutions with greater financial
resources capable of offering a broad array of
financial services and operating on a narrower profit
margin than the Bank;
(c)The amount and type of consideration to be received
by Sugarland's shareholders pursuant to the Plan;
(d)The market price of MidSouth Common Stock;
(e)The respective dividend policies of MidSouth and
Sugarland;
(f)Each of the Mergers is expected to qualify as a tax-
free reorganization so that neither Sugarland nor its
shareholders (except to the extent that cash is
received in respect of their shares) will recognize any
gain in the transaction (see "Certain Federal Income
Tax Consequences"); and
(g)The opinion received from Chaffe that the proposed
Exchange Ratio (as defined in such opinion) is fair to
Sugarland and its shareholders from a financial point
of view (see "Opinion of Chaffe & Associates, Inc.").
Sugarland's Board did not assign any specific or
relative weight to the foregoing factors in its
consideration of the Plan. Sugarland's Board of
Directors believes that the Plan provides significant
value to all Sugarland shareholders and will enable
them to participate in opportunities for growth that
Sugarland's Board of Directors believes the Mergers
make possible.
The Board of Directors of MidSouth believes that
the Mergers are in the best interests of MidSouth and
its shareholders. In addition to the financial terms,
among the factors considered by the Board in approving
the Plan were (i) the increased competitive advantages
available to MidSouth Bank through the combined capital
of the Banks and the economies of scale created as a
result of the Mergers and (ii) the increased market
share and additional markets available to MidSouth as a
result of the Mergers.
The financial and other terms of the Plan were
arrived at through arm's length negotiations between
representatives of the Companies. Determination of the
consideration to be received by Sugarland's
shareholders in exchange for their stock was based upon
various factors considered by the Boards of the
Companies, including primarily the comparative
financial condition, historical results of operations,
current business and future prospects of the Companies
and the Banks, the market price and historical earnings
per share of the common stock of the Companies, and the
desirability of combining the financial and managerial
resources of MidSouth Bank and the Bank to pursue
available consumer and commercial banking business in
Lafayette, Jefferson, Iberia and St. Martin Parishes
and surrounding areas.
The Board of Directors of Sugarland approved the
Plan and recommends that its shareholders vote FOR
approval of the Plan. The Board of Directors of
MidSouth unanimously approved the Plan and recommends
that its shareholders approve the issuance of the
Preferred Stock.
Opinion of Chaffe & Associates, Inc.
General.Pursuant to an engagement letter dated as
of May 26, 1994 (the "Engagement Letter"), Sugarland
retained Chaffe to act as its financial advisor in
connection with its evaluation of a possible business
combination with MidSouth, including providing certain
analyses of the financial terms of the Mergers. Chaffe
is a recognized investment banking firm and is
experienced in the securities industry, in investment
analysis and appraisal and in related corporate finance
and investment banking activities, including mergers
and acquisitions, corporate recapitalizations and
valuations for estate, corporate and other purposes.
It regularly is retained to perform similar services
for other banks and bank holding companies. Sugarland
selected Chaffe as its financial advisor on the basis
of its experience and expertise in transactions similar
to the Mergers and its reputation in the banking and
investment communities.
In connection with its engagement as Sugarland's
financial advisor with respect to the Mergers, Chaffe
was instructed to evaluate the fairness to Sugarland
shareholders, from a financial point of view, of the
Exchange Ratio (as defined in Chaffe's opinion) in the
Mergers. Sugarland did not place any limitations on the
scope or manner of Chaffe's investigations and review,
and instructed Chaffe to conduct such investigations as
it deemed appropriate for purposes of its evaluation.
Chaffe was also engaged to provide a valuation of
Sugarland Common Stock and to advise Sugarland in its
negotiations with MidSouth concerning the consideration
to be received by Sugarland's shareholders pursuant to
the Plan. Such consideration was determined by
Sugarland and MidSouth in their negotiation of the
terms of the Plan.
At July 13 and August 10, 1994 meetings of
Sugarland's Board of Directors, Chaffe made
presentations and presented reports to the Board
concerning the proposed Merger. On December 30, 1994,
Chaffe delivered its written opinion that, based upon
and subject to the assumptions made, the factors
considered, the review undertaken and the limitations
stated in such opinion and such other matters as Chaffe
considered relevant, the Exchange Ratio in the Holding
Company Merger was fair to Sugarland and its
shareholders from a financial point of view, as of the
date of such written opinion. The full text of
Chaffe's written opinion to the Sugarland Board of
Directors, which sets forth the assumptions made,
matters considered, and limitations of the review by
Chaffe, is attached hereto as Appendix A and is
incorporated herein by reference. The opinion should
be read carefully and in its entirety in connection
with this Joint Proxy Statement and Prospectus. The
following summary of Chaffe's opinion is qualified in
its entirety by reference to the full text of the
opinion. Chaffe's opinion is addressed to the
Sugarland Board of Directors only and does not
constitute a recommendation to any shareholder of
Sugarland as to how such shareholder should vote at the
Special Meeting.
In connection with rendering its December 30, 1994
opinion, Chaffe reviewed materials relating to the
Mergers and the financial and operating condition of the
Companies, including, among other information: (i) the
Plan; (ii) Sugarland's audited financial statements and
other data for recent years and interim periods through
September 30, 1994; (iii) the Bank's 1994 budget; (iv)
MidSouth's audited financial statements and other data
for recent years and interim periods through September
30, 1994; and (v) statistical and financial information
for Sugarland and MidSouth and for comparable companies
derived from various statistical services, as well as
certain publicly available information and analyses
relating to them. In addition, Chaffe reviewed certain
historical market information for Sugarland Common
Stock, for which no independent trading market exists,
and certain historical market prices and trading
volumes of MidSouth Common Stock on the AMEX. In
reporting such information to Sugarland's Board of
Directors, Chaffe noted that although there is an
independent market for MidSouth Common Stock and there
is expected to be an independent market for the
Preferred Stock, such stocks are or will be,
respectively, thinly traded.
Set forth below is a brief summary of selected
analyses performed by Chaffe in connection with its
opinion and the reports presented by Chaffe to the
Sugarland Board of Directors on July 13, 1994 and
August 10, 1994 in connection therewith. The summary
set forth below does not purport to be a complete
description of the analyses performed by Chaffe.
Chaffe's opinion was based on economic, market and
other conditions existing as of the date of its
opinion, and Chaffe expressed no opinion on the tax
consequences of the Plan or the effect
of any tax consequences on the value received by the
holders of Sugarland Common Stock in the Mergers.
Analysis of the Companies. Chaffe analyzed the
historical performance of Sugarland and MidSouth, and
considered the current financial condition, results of
operations and prospects of each. Chaffe analyzed
information and data provided by the management of each
of Sugarland and MidSouth concerning such company's
respective loans, other real estate owned, securities
portfolio, fixed assets and operations. With respect
to all information reviewed by it relating to the
Companies, Chaffe relied, without independent
verification, upon the accuracy and completeness of
such information. Chaffe did not perform an
independent review of the assets or liabilities of
Sugarland or MidSouth, and relied solely on the
Companies for information as to the condition of each
company's loan portfolio, the adequacy of its loan loss
reserve and the value of other real estate owned.
Analysis of the Mergers. In connection with
rendering its opinion and preparing its presentations
to the Sugarland Board of Directors, Chaffe performed a
variety of financial analyses. Chaffe compared certain
financial and stock market data for peer groups of bank
holding companies whose securities are publicly traded;
reviewed the financial terms of business combinations
in the commercial banking industry specifically and
other industries generally; considered a number of
valuation methodologies, including, among others, those
that incorporate book value, deposit base premium and
capitalization of earnings; and performed such other
studies and analyses as Chaffe deemed relevant for
purposes of its opinion. Chaffe also analyzed the
terms of the MidSouth Preferred Stock.
Analysis of Selected Merger Transactions. In
connection with its July 13, 1994 meeting with
Sugarland's Board of Directors, Chaffe analyzed
premiums paid in acquisitions of selected banks and
bank holding companies whose asset size, leverage ratio
and return on average assets were comparable to
Sugarland's (the "U.S. Peer Group"). Transactions
considered in this analysis were those throughout the
United States between March 31, 1993 and June 24, 1994,
in which the seller's total assets were between $10
million and $50 million, leverage ratio was between
9.0% and 15.0%, and return on average assets was
between 0.75% and 1.50%. Chaffe also analyzed premiums
paid in acquisitions of selected banks and bank holding
companies located in 16 states in the southern United
States (the "Southern Peer Group"). Finally, Chaffe
analyzed premiums paid in substantially all
acquisitions of Louisiana banks from March 31, 1993
through July 12, 1994 (the "Louisiana Acquisitions").
For each bank acquired or to be acquired in such
transactions, Chaffe compared the prices to be received
by the shareholders of each institution being acquired
as a multiple of its tangible equity, its earnings per
share for the four quarters prior to such a
transaction, its premium over tangible equity to core
deposits, and its total assets.
The figures for the U.S. Peer Group, Southern Peer
Group and Louisiana Acquisitions produced: (i) median
percentages of premium (purchase price in excess of
tangible equity) to core deposits of 5.44%, 5.72% and
10.73%, respectively; (ii) median ratios of purchase
price to tangible equity of 1.44x, 1.45x and 1.86x,
respectively; (iii) median ratios of purchase price to
earnings per share for the four quarters prior to
transaction of 15.52x, 16.59x and 13.05x,
respectively, and (iv) median percentages of purchase
price to assets of 14.88%, 15.32% and 17.32%,
respectively. In comparison, assuming the
consideration to be paid in the Mergers for each share
of Sugarland Common Stock equals that number of shares
of MidSouth Preferred Stock with a stated value of
$14.25, Chaffe determined that the consideration to be
received by the holders of Sugarland Common Stock in
the Mergers represented a percentage of premium to core
deposits of 2.94%, a ratio of price to tangible equity
of 1.20x, a ratio of price to Sugarland's earnings for
the twelve months ended March 31, 1994 of 14.12x, and a
percentage of price to assets of 14.34%. Prior to
rendering its opinion, Chaffe updated the above-
referenced analysis through November 25, 1994. With
respect to each of the above-referenced groups of
transactions and the proposed Merger, Chaffe compared
the prices to be received by the peer groups in the
manner described above, and such analysis yielded
results substantially similar to those stated above.
Conclusions based on the foregoing analysis are
not mathematical; rather, an analysis of the foregoing
necessarily involves complex considerations and
judgments concerning differences in financial and
operating characteristics of the companies and other
factors that could affect the public trading value or
the acquisition value of the companies to which
Sugarland is being compared.
Discounted Earnings Analysis. In connection with
its July 13, 1994 meeting with Sugarland's Board of
Directors, Chaffe calculated, using discounted earnings
analysis, the present value of the stream of after-tax
cash flows that Sugarland could produce in the future.
Chaffe estimated the earnings stream through 2000 and a
terminal value after 2000 based upon information
provided by Sugarland management, and then discounted
such values, using an estimated required rate of return
for Sugarland of 12.0%. Additional earnings analyses
were performed at the time of the December 30, 1994
opinion, applying similar methodology and discount
rates to the above-described earnings analysis and
yielding substantially similar results.
Analysis of MidSouth Preferred Stock. In
connection with its August 10, 1994 meeting with
Sugarland's Board of Directors, Chaffe examined the
proposed terms of the MidSouth Preferred Stock. By
using discounted cash flow and option valuation models,
Chaffe considered various factors that might affect the
value of the Preferred Stock and that can be evaluated,
including, but not limited to, the appropriate market
rate for the Preferred Stock, certain information
concerning MidSouth Common Stock and proposed
conversion provisions for the MidSouth Preferred Stock.
The foregoing summary does not purport to be a
complete description of the analyses performed by
Chaffe. The preparation of an opinion necessarily is
not susceptible to partial analysis or summary
description. Chaffe believes that the summary set
forth above and Chaffe's analyses must be considered as
a whole and that selecting only a portion of its
analyses, without considering all of its analyses,
creates an incomplete view of the process underlying
Chaffe's opinion.
The analyses performed by Chaffe are not
necessarily indicative of actual values or actual
future results, which may be significantly more or less
favorable than suggested by such analyses. The
analyses do not purport to be appraisals or to reflect
the prices at which a company might actually be sold or
the prices at which any securities may trade at the
present time or any time in the future. Furthermore,
Chaffe may have given certain analyses more or less
weight than other analyses, and may have deemed various
assumptions more or less probable than other
assumptions, so that the ranges of valuations resulting
from any particular analysis described above should not
be taken to be Chaffe's view of the actual value of
Sugarland, MidSouth or the combined Companies. The
fact that any specific analysis has been referred to in
the summary above is not meant to indicate that such
analysis was given greater weight than any other
analysis.
To date, Sugarland has paid Chaffe $27,681.74 in
fees and out-of-pocket expenses for the financial
advisory services referred to above, including its ser-
vices in rendering the opinion. For other services
requested of Chaffe by Sugarland, Sugarland has agreed
to pay Chaffe on an hourly basis. According to Chaffe,
these amounts are insignificant when compared to
Chaffe's total gross revenues. The fees received by
Chaffe in connection with its services to Sugarland are
not dependent upon consummation of the Mergers or any
similar transaction, or shareholder or regulatory
approval of the Plan.
Prior to its retention in May 1994 as Sugarland's
financial advisor, Chaffe had provided no services to
Sugarland. Chaffe has not provided any services to
MidSouth. Neither Chaffe nor any of its officers or
employees has any interest in Sugarland Common Stock,
MidSouth Common Stock or MidSouth Preferred Stock.
Pursuant to the Engagement Letter, Sugarland has
agreed to indemnify and hold harmless Chaffe, its
subsidiaries and affiliates, the officers, directors,
shareholders, employees, attorneys, agents and
representatives of Chaffe and its subsidiaries and
affiliates, and their respective heirs, legatees, legal
representatives, successors and assigns from and
against any and all damage, loss, cost, expense,
obligation, claim or liability, including reasonable
attorneys fees and expenses arising directly or
indirectly from, or in any way related to, the opinion
or any other services performed by Chaffe pursuant to
the Engagement Letter, provided that Chaffe and its
officers, directors, employees, agents and
representatives have not been grossly negligent or
guilty of reckless or willful misconduct in connection
with the opinion or such other services.
Conversion of Sugarland Common Stock
In consideration of the Mergers, each share of
Sugarland Common Stock outstanding on the date the
Holding Company Merger becomes effective (the
"Effective Date") will be converted into a number of
shares of MidSouth Preferred Stock equal to the
quotient of 187,286 divided by the number of shares of
Sugarland Common Stock outstanding on the Effective
Date. Assuming the number of shares of Sugarland
Common Stock outstanding on the Effective Date remains
the same, each share of Sugarland Common Stock will be
exchanged for one share of MidSouth Preferred Stock,
having the rights and preferences described below under
the heading "Rights and Preferences of MidSouth
Preferred Stock."
Shareholders who perfect dissenters' rights will
not receive MidSouth Preferred Stock but instead will
be entitled to receive the "fair cash value" of their
shares as determined under Section 131 of the Louisiana
Business Corporation Law (the "LBCL"). See
"Dissenters' Rights."
In lieu of the issuance of any fractional share of
MidSouth Preferred Stock to which a holder of Sugarland
Common Stock may be entitled, each shareholder of
Sugarland, upon surrender of the certificate or
certificates which immediately prior to the Effective
Date represented Sugarland Common Stock held by such
shareholder, will be entitled to receive a cash payment
(without interest) equal to such fractional share
multiplied by $14.25, the stated value of a share of
Preferred Stock.
For information regarding restrictions on the
transfer of the Preferred Stock by certain Sugarland
shareholders, see "Status under Federal Securities
Laws; Certain Restrictions on Resales."
Effective Date
The Bank Merger Agreement has been filed with the
Office of the United States Comptroller of the Currency
(the "OCC"), and will be filed for recordation with the
Louisiana Commissioner of Financial Institutions (the
"Commissioner"), and the Bank Merger will be effective
at the time and date specified in a certificate or
other written record issued by the OCC, or in the
Certificate of Merger issued by the Commissioner,
whichever date is later. A Certificate of Merger with
respect to the Holding Company Merger will be filed for
recordation with the Louisiana Secretary of State as
soon as practicable after shareholder approval is
obtained and all other conditions to the consummation
of the Mergers have been satisfied or waived, and the
Holding Company Merger will be effective at the date
and time specified in a certificate issued by the
Secretary of State. It is intended that the Bank
Merger will be consummated immediately after
consummation of the Holding Company Merger. The
Companies are not able to predict the Effective Date of
the Bank Merger or the Holding Company Merger, and no
assurance can be given that the transactions
contemplated by the Plan will be effected at any time.
See "The Plan - Regulatory Approvals and Other Condi-
tions of the Mergers."
Exchange of Certificates
On the Effective Date, each Sugarland shareholder
will cease to have any rights as a shareholder of
Sugarland, and his sole rights will pertain to the
shares of MidSouth Preferred Stock into which his
shares of Sugarland Common Stock have been converted
pursuant to the Holding Company Merger, except for any
such shareholder who exercises statutory dissenters'
rights and except for the right to receive cash for any
fractional share. See "Dissenters' Rights."
Upon the consummation of the Mergers, a letter of
transmittal, together with instructions for the
exchange of certificates representing shares of
Sugarland Common Stock for certificates representing
shares of MidSouth Preferred Stock will be mailed to
each person who was a shareholder of record of
Sugarland on the Effective Date of the Mergers.
Shareholders are
requested not to send in their Sugarland Common Stock
certificates until they have received a letter of
transmittal and further written instructions.
After the Effective Date and until surrendered,
certificates representing Sugarland Common Stock will
be deemed for all purposes, other than the payment of
dividends or other distributions, if any, in respect of
MidSouth Preferred Stock, to represent the number of
whole shares of MidSouth Preferred Stock into which
such shares of Sugarland Common Stock have been
converted. MidSouth, at its option, may decline to pay
former shareholders of Sugarland who become holders of
MidSouth Preferred Stock pursuant to the Holding
Company Merger any dividends or other distributions
that may have become payable to holders of record of
MidSouth Preferred Stock following the Effective Date
until they have surrendered their certificates
evidencing ownership of shares of Sugarland Common
Stock. Any dividends not paid after one year from the
date that such dividends were eligible to be paid will
revert in ownership to MidSouth, and MidSouth will have
no further obligation to pay such dividends.
Sugarland shareholders who cannot locate their
certificates are urged to contact promptly Ronald A.
Hebert, Sr., Sugarland Bancshares, Inc., 1527 W. Main
Street, Jeanerette, Louisiana 70544, telephone number
(318) 276-6307. A new certificate will be issued to
replace the lost certificate(s) only upon execution by
the shareholder of an affidavit certifying that his or
her certificate(s) cannot be located and an agreement
to indemnify Sugarland or MidSouth, as its successor,
against any claim that may be made against them by the
owner of the certificate(s) alleged to have been lost
or destroyed. Either of the Companies may also require
the shareholder to post a bond in such sum as is
sufficient to support the shareholder's agreement to
indemnify them.
Regulatory Approvals and Other Conditions of the
Mergers
In addition to shareholder approvals, consummation
of the Mergers will require the approval of the OCC,
and approval or waiver of prior approval from the FRB.
On January 25, 1995, MidSouth filed an application
seeking the prior approval of the Bank Merger from the
OCC and, by letter dated January 30, 1995, requested a
waiver of prior approval from the FRB. MidSouth
received OCC approval of the Mergers on March 22, 1995,
and confirmation of waiver of prior approval from the
FRB on March 17, 1995.
The obligations of the parties to the Plan are
also subject to other conditions set forth in the Plan,
including, among others: (i) that no action or
proceeding has been brought before a court or
governmental body to restrain or prohibit the Mergers;
(ii) that prior to the Effective Date there has not
been a material adverse change in the financial
condition, results of operations, business or prospects
of the other party or its subsidiary; (iii) the receipt
of customary legal opinions; (iv) that on the date of
closing, the representations and warranties made in the
Plan by each party are true and correct in all material
respects; and (v) the receipt by MidSouth and Sugarland
of an opinion from Deloitte & Touche LLP to the effect
that the Mergers will constitute a reorganization
within the meaning of Section 368(c) of the Internal
Revenue Code and that the shareholders of Sugarland
will not recognize gain or loss with respect to the
shares of Preferred Stock received in the Holding
Company Merger. The obligations of MidSouth and
MidSouth Bank to consummate the Mergers are also
conditioned upon, among other things, that MidSouth has
received satisfactory assurance from the FRB or
delegated authority that the Preferred Stock will be
treated as Tier 1 Capital for the purpose of the
capital adequacy guidelines of the FRB; and confir-
mation from the directors, executive officers and
certain principal shareholders of Sugarland as to
representations and covenants previously made by them
in a certain Joinder of Shareholders. See "The Plan -
Joinder of Shareholders."
The Companies intend to consummate the Mergers as
soon as practicable after all of the conditions to the
Mergers have been met or waived; however, there can be
no assurance that the conditions to the Mergers will be
satisfied.
Conduct of Business Prior to the Effective Date
Sugarland and the Bank have agreed pursuant to the
Plan that, prior to the Effective Date, each will
conduct its business only in the ordinary course and
that, without the prior written consent of the Chief
Executive Officer of MidSouth or his duly authorized
designee, and except as otherwise provided in the Plan,
Sugarland and the Bank will not, among other things,
(a) declare or pay any dividend or change the number of
outstanding shares of its capital stock; (b) amend its
articles of incorporation or bylaws or adopt or amend
any resolution or agreement concerning indemnification
of its directors and officers; (c) merge or consolidate
with another entity, or sell or dispose of a
substantial part of its assets, or except in the
ordinary course of business, sell any of its assets;
(d) acquire or dispose of investment securities having
an aggregate market value greater than 10% of the
aggregate book value of its investment securities
portfolio as of September 30, 1994; or acquire any
investment securities that are less than investment
grade, or acquire or dispose of investment securities
except in the ordinary course of business; (e) charge
off (except as may otherwise be required by law or
regulatory authorities or generally accepted accounting
principles consistently applied) or sell (except for a
price not less than the book value thereof) any of its
portfolio of loans, discounts or financing leases; or
sell any asset held as other real estate or other
foreclosed assets for an amount less than 100% of its
book value as of September 30, 1994; or sell any asset
held as other real estate or other foreclosed assets
that had a book value at September 30, 1994 in excess
of $25,000; (f) enter into or modify any agreement
pertaining to compensation arrangements with its
present or former directors, officers or employees or
increase the compensation of such persons, except for
budgeted bonuses or other incentive payments in amounts
previously disclosed to the Chief Executive Officer of
MidSouth; (g) except in the ordinary course of business
consistent with past practices, place or suffer to
exist on any of its assets any mortgage, pledge or
other encumbrance (except as allowed under the Plan) or
cancel any material indebtedness owing to it or any
claims which it may possess, or waive any right of
substantial value or discharge or satisfy any material
noncurrent liability; (h) make any extension of credit
which, together with all other extensions of credit to
the borrower and its affiliates, would exceed $100,000,
or, without reasonable prior notice to the Chief
Executive Officer of MidSouth, or his designee, commit
to make any extensions of new credit in excess of
$50,000; (i) fail to pay, or make adequate provision in
all material respects for the payment of, all taxes,
interest payments and penalties due and payable, except
those being contested in good faith by appropriate
proceedings and for which sufficient reserves have been
established; or (j) enter into any new line of
business.
In addition, Sugarland and the Bank have agreed
that, without the prior approval of the Chief Executive
Officer of MidSouth or his designee, they will not
solicit or initiate inquiries or proposals with respect
to, or, except as may be necessary as advised in
writing by their counsel to discharge properly their
fiduciary duties to Sugarland, the Bank and their
Shareholders, furnish any information relating to, or
participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a
substantial portion of the assets of, or a substantial
equity interest in, or any business combination with
Sugarland or the Bank, other than as contemplated by
the Plan. Each of Sugarland and the Bank has also
agreed to instruct its officers, directors, agents and
affiliates to refrain from doing any of the above and
to notify MidSouth immediately if any such inquiries or
proposals are received by, any such information is
requested from, or any such negotiations or discussions
are sought to be initiated with, it or any of its
officers, directors, agents and affiliates.
Further, Sugarland has committed that neither
Sugarland's Board of Directors nor any committee
thereof will (i) withdraw or modify or propose to with-
draw or modify in a manner adverse to MidSouth the
approval or recommendation to its shareholders of the
Plan and the Mergers, (ii) approve or recommend, or
propose to recommend any takeover proposal with respect
to Sugarland or the Bank, except such action that its
counsel advises in writing is necessary to discharge
its fiduciary duties to Sugarland and its shareholders,
or (iii) modify, or waive or release any party from any
material provision of or fail to enforce any material
provision of, if enforcement is requested by MidSouth,
any confidentiality agreement entered into by Sugarland
or the Bank with any prospective acquiror after the
date of the Plan or during the two years prior to such
date.
Waiver, Amendment and Termination
The Plan provides that the parties thereto may
waive any of the conditions to their respective
obligations to consummate the Mergers other than the
receipt of necessary regulatory approvals, shareholder
approvals of the Plan, the satisfaction of all
conditions prescribed by law for consummation of the
Mergers and certain other conditions that have already
been satisfied. A waiver must be in writing and
approved by the Board of Directors of the waiving
party.
The Plan, including all related agreements, may be
amended or modified at any time, before or after
shareholder approval, by the mutual agreement in
writing of the Boards of Directors of the parties to
the Plan; provided that, under the LBCL any amendment
made subsequent to such shareholder approval may not
alter the amount or type of shares into which
Sugarland's Common Stock will be converted, or alter
any term or condition of the Plan in a manner that
would adversely affect any shareholder of Sugarland.
Additionally, the Plan may be amended at any time by
the sole action of the Chief Executive Officers of the
respective parties to the Plan or their designees to
correct typographical errors or other misstatements, or
in any other manner, which is not material to the
substance of the transactions contemplated by the Plan.
The Plan may be terminated at any time prior to
the Effective Date by (i) the mutual consent of the
respective Boards of Directors of the Companies, (ii)
the Board of Directors of either MidSouth or Sugarland
in the event of a material breach by the other or its
subsidiary of any representation, warranty or covenant
contained in the Plan which cannot be cured by the
earlier of 10 days after written notice of such breach
or June 30, 1995; (iii) the Board of Directors of
either MidSouth or Sugarland if by June 30, 1995 all
conditions to consummating the Mergers required by the
Plan have not been met or waived, cannot be met, or the
Mergers have not occurred; (iv) the Board of Directors
of MidSouth if the number of shares of Sugarland Common
Stock as to which holders thereof are, at the time of
the closing, legally entitled to assert dissenters'
rights exceeds 5% of the total number of issued and
outstanding shares of Sugarland Common Stock on the
Effective Date; or (v) the Board of Directors of
MidSouth if the Board of Directors of Sugarland (A)
withdraws, modifies or changes its recommendation to
its shareholders regarding the Plan and the Mergers or
shall have resolved to do any of the foregoing, (B)
recommends to its shareholders (1) any merger,
consolidation, share exchange, business combination or
other similar transaction (other than transactions
contemplated by the Plan), (2) any sale, lease,
transfer or other disposition of all or substantially
all of the assets of Sugarland or the Bank, or (3) any
acquisition, by any person or group, of beneficial
ownership of one third or more of any class of
Sugarland's capital stock, or (C) makes any
announcement of a proposal, plan or intention to do any
of the foregoing or agreement to engage in any of the
foregoing.
Interests of Certain Persons in the Mergers
Pursuant to the Plan, MidSouth and MidSouth Bank
have agreed that, following the Effective Date, they
will indemnify each person who as of the Effective Date
served as an officer or director of Sugarland or the
Bank, or who has previously served as an officer or
director of Sugarland or the Bank at any time since
December 31, 1992 (an "Indemnified Person") from and
against all damages, liabilities, judgments and claims,
and related expenses, based upon or arising out of such
person's service as an officer or director of Sugarland
or the Bank, to the same extent as he would have been
indemnified under the Articles or Bylaws of Sugarland
or the Bank, as appropriate, as such Articles or Bylaws
were in effect on December 28, 1994. The aggregate
amount of indemnification payments required to be made
by MidSouth and MidSouth Bank pursuant to the Plan is
$1.2 million. Indemnification otherwise required to be
paid by MidSouth or MidSouth Bank will be reduced by
any amounts that the Indemnified Person recovers by
virtue of the claim for which indemnification is
sought, and no Indemnified Person is entitled to
indemnification for any claim made prior to the closing
date of which the Indemnified Person, Sugarland or the
Bank was aware but did not disclose to MidSouth prior
to the execution of the Plan (if such claim was known
at such time) or prior to the closing date (if such
claim became known after execution of the Plan).
Receipt of the indemnification benefits set forth in
the Plan by a director or officer of Sugarland and the
Bank is conditioned upon his execution of an agreement
described in more detail under the heading "Joinder of
Shareholders." Any claim for indemnification pursuant
to the Plan must be submitted in writing to MidSouth's
Chief Executive Officer prior to December 28, 1999.
MidSouth has also agreed to indemnify Sugarland,
the Bank, and each of the directors, officers and
controlling persons of Sugarland against any claim
insofar as it arises from, or is based upon, an untrue
statement or omission, or alleged untrue statement or
omission, of a material fact in the Registration
Statement or the Joint Proxy Statement and Prospectus
to the extent that such untrue statement or omission
was not made in reliance on, and in conformance with,
information furnished to MidSouth by Sugarland. The
$1.2 million limit on MidSouth's indemnification
obligation discussed above does not apply to MidSouth's
indemnification obligations with respect to the
Registration Statement and Joint Proxy Statement and
Prospectus. Any person making a claim for
indemnification for damages arising from misstatements
or omissions in the Registration Statement or Joint
Proxy Statement and Prospectus must promptly notify
MidSouth of any such claim. MidSouth shall have the
right to assume the defense thereof and will not be
liable for any expenses subsequently incurred by such
person in connection with the defense thereof, except
that if MidSouth does not assume such defense, or
counsel for the person making a claim is advised in
writing that there are material substantive issues that
raise conflicts of interest between MidSouth and such
person, the person claiming indemnification may retain
counsel satisfactory to him and MidSouth shall pay all
reasonable fees and expenses of such counsel, provided
that (i) MidSouth shall be obligated to pay for only
one counsel for all persons making a claim in any
jurisdiction, (ii) all such persons will cooperate in
the defense of their claims, and (iii) MidSouth will
not be liable for any settlement effected without its
prior written consent.
Joinder of Shareholders
It is anticipated that MidSouth or MidSouth Bank
will enter into employment contracts providing for
employment following the Mergers of one or more
executive officers of the Bank, including Mr. D.J.
Tranchina, the President and a director of Sugarland
and the Bank. The terms of any such employment
contracts have not yet been determined.
As a condition to consummation of the Mergers,
each Sugarland director and executive officer and each
shareholder owning 5% or more of Sugarland Common Stock
has executed an individual agreement (a "Joinder
Agreement") pursuant to which he has agreed (i) solely
in his capacity as a shareholder of Sugarland, to vote
in favor of the Plan and against any other proposal
relating to the sale or disposition of the Bank or
Sugarland, unless MidSouth or MidSouth Bank is in
breach or default in any material respect with regard
to any covenant, representation or warranty as to it
contained in the Plan to an extent that would permit
Sugarland to terminate the Plan pursuant to the terms
thereof; (ii) not to transfer any of the shares of
Sugarland Common Stock over which he has dispositive
power, or grant any proxy thereto not approved by
MidSouth, until the earlier of the Effective Date or
the date that the Plan has been terminated, except for
transfers by operation of law or transfers in
connection with which the transferee agrees to be bound
by the Joinder Agreement; (iii) not to purchase, sell
or otherwise deal in MidSouth Common Stock until the
Effective Date or termination of the Plan; (iv) to
release, as of the Effective Date, MidSouth and
MidSouth Bank from any obligation that either of them
may have to indemnify such shareholder for acts taken
as an officer, director or employee of Sugarland or the
Bank, except to the extent set forth in the Plan; (v)
prior to the Effective Date or until termination of the
Plan, and except to the extent required to discharge
properly his fiduciary duties as a director of
Sugarland, not to solicit, encourage, initiate or
participate in any negotiations or discussions
concerning the acquisition of all or a substantial
portion of the assets of, or of a substantial equity
interest in, or any business combination with,
Sugarland or the Bank, without the prior approval of
the Chief Executive Officer of MidSouth or his
designees, and to notify MidSouth immediately if any
such proposals or inquiries are received by him; and
(vi) for a period of two years following the Effective
Date, not to serve as a director, officer, employee or
advisor of, or have any investment in any financial
institution that competes with the business of Bank as
continued by MidSouth Bank in Iberia and Lafayette
Parishes; however, such person may continue to hold any
investment that he held on the date of the Joinder
Agreement and may make an investment in any such
financial institution if the investment does not
materially enhance the ability of such institution to
compete with MidSouth Bank.
Employee Benefits
Pursuant to the Plan, MidSouth has agreed that,
from and after the Effective Date, MidSouth and
MidSouth Bank will offer to all persons who were
employees of Sugarland or the Bank immediately prior to
the Effective Date and who become employees of MidSouth
or MidSouth Bank following the Mergers, the same
employee benefits as are offered by MidSouth or
MidSouth Bank, as the case may be, to its employees,
except that there will not be a waiting period for
coverage under any of its plans, and no employee of
Sugarland or the Bank who is an active employee on the
Effective Date will be denied such benefits for a pre-
existing condition. Full credit will be given for
prior service by such employees with Sugarland or the
Bank for eligibility and vesting purposes under all of
MidSouth's or MidSouth Bank's benefit plans and
policies. In addition, all benefits accrued through
the Effective Date under Sugarland's and the Bank's
benefit plans will be paid by MidSouth or MidSouth Bank
to the extent such benefits are not otherwise provided
to such employees under the benefit plans of MidSouth
or MidSouth Bank.
Expenses
The Plan provides that regardless of whether the
Mergers are consummated, expenses incurred in
connection with the Plan and the transactions
contemplated thereby shall be borne by the party that
has incurred them. If certain expenses incurred by
Sugarland relating to the Mergers exceed $110,000, the
amount of such expenses in excess of $110,000 will be
deducted from the aggregate initial dividend payment
and, if necessary, subsequent dividend payments due to
holders of Preferred Stock, resulting in a pro rata
reduction of the dividend payment due to each holder of
Preferred Stock. See "Rights and Preferences of
MidSouth Preferred Stock - Dividend Rights."
Status Under Federal Securities Laws; Certain
Restrictions on Resales
The shares of MidSouth Preferred Stock to be is-
sued to shareholders of Sugarland pursuant to the Plan
have been registered under the Securities Act of 1933
(the "Securities Act") thereby allowing such shares to
be freely transferred without restriction by persons
who will not be "affiliates" of MidSouth or who were
not "affiliates" of Sugarland, as that term is defined
in the Securities Act. In general, affiliates of
Sugarland include its executive officers and directors
and any person who controls, is controlled by or is
under common control with Sugarland. Rule 145, among
other things, imposes certain restrictions upon the
resale of securities received by affiliates in
connection with certain reclassifications, mergers,
consolidations or asset transfers. MidSouth Preferred
Stock received by affiliates of Sugarland will be
subject to the applicable resale limitations of Rule
145.
Such persons will not be able to resell the
MidSouth Preferred Stock received by them pursuant to
the Holding Company Merger unless such stock is regis-
tered for resale under the Securities Act or an
exemption from the registration requirements of the
Securities Act is available. All such persons should
carefully consider the limitations imposed by Rules 144
and 145 under the Securities Act prior to effecting any
resales of MidSouth Preferred Stock. Sugarland has
agreed to use its best efforts to cause each of its
directors and executive officers and each person who is
a beneficial owner of 5% or more of the outstanding
Sugarland Common Stock (each of whom may be deemed to
be an "affiliate" under the Securities Act) to enter
into an agreement not to sell shares of MidSouth
Preferred Stock received by him in violation of the
Securities Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of material
federal income tax consequences to holders of Sugarland
Common Stock resulting from the Mergers. The
discussion set forth below is based upon applicable
federal law and judicial and administrative
interpretations on the date hereof, any of which is
subject to change at any time.
Consummation of the Mergers is conditioned upon
receipt by the Companies of an opinion from Deloitte &
Touche LLP to the following effects, among others:
(a) Each of the Mergers qualifies as a
reorganization under Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the "Code"),
and Sugarland and MidSouth each will be a "party to a
reorganization" within the meaning of Section 368(b) of
the Code.
(b) No gain or loss will be recognized by
Sugarland and MidSouth as a result of the Mergers.
(c) No gain or loss will be recognized by a
shareholder of Sugarland on the receipt solely of
MidSouth Preferred Stock in exchange for his shares of
Sugarland Common Stock.
(d) The basis of the shares of MidSouth Preferred
Stock to be received by Sugarland's shareholders
pursuant to the Holding Company Merger will, in each
instance, be the same as the basis of the shares of
Sugarland Common Stock surrendered in exchange
therefor, increased by any gain recognized on the
exchange.
(e) The holding period of the shares of MidSouth
Preferred Stock to be received by Sugarland's
shareholders pursuant to the Holding Company Merger
will, in each instance, include the holding period of
the respective shares of Sugarland Common Stock
exchanged therefor, provided that the shares of
Sugarland Common Stock are held as capital assets on
the date of the Holding Company Merger.
(f) The payment of cash to Sugarland's
shareholders in lieu of fractional share interests of
MidSouth Preferred Stock will be treated as if the
fractional shares were distributed as part of the
exchange and then redeemed by MidSouth. These cash
payments will be treated as having been received as a
distribution in redemption of that fractional share
interest subject to the conditions and limitations of
Section 302 of the Code. If a fractional share of
MidSouth Preferred Stock would constitute a capital
asset in the hands of a redeeming shareholder, any
resulting gain or loss will be characterized as capital
gain or loss in accordance with the provisions and
limitations of Subchapter P of Chapter 1 of the Code.
(g) A Sugarland shareholder who perfects his
statutory right to dissent from the Holding Company
Merger and who receives solely cash in exchange for his
Sugarland Common Stock will be treated as having
received such cash payment as a distribution in
redemption of his shares of Sugarland Common Stock,
subject to the provisions and limitations of Section
302 of the Code. After such distribution, if the
former Sugarland shareholder does not actually or
constructively own any Sugarland Common Stock, the
redemption will constitute a complete termination of
interest and be treated as a distribution in full
payment in exchange for the Sugarland Common Stock
redeemed.
The opinion of Deloitte & Touche LLP is not
binding on the Internal Revenue Service which could
take positions contrary to the conclusions in such
opinion.
As a result of the complexity of the tax laws, and
because the tax consequences to any particular
shareholder may be affected by matters not discussed
herein, it is recommended that each shareholder of
Sugarland consult his personal tax advisor concerning
the applicable federal, state and local income tax
consequences of the Mergers to him.
DISSENTERS' RIGHTS
Unless the Plan is approved by the shareholders of
Sugarland holding at least 80% of its total voting
power, Section 131 of the LBCL allows a shareholder of
Sugarland who objects to the Holding Company Merger and
who complies with the provisions of that section to
dissent from the Holding Company Merger and to have
paid to him in cash the fair cash value of his shares
of Sugarland Common Stock as of the day before the
Special Meeting, as determined in each case by
agreement between the shareholder and MidSouth or by
the state district court for the Parish of Lafayette if
the shareholder and MidSouth are unable to agree upon
the fair cash value. MidSouth has the right to
terminate the Plan if, at the time of closing, the
number of shares of Sugarland Common Stock as to which
the holders thereof are legally entitled to assert
dissenters' rights exceeds 5% of the total number of
outstanding shares of Sugarland Common Stock on the
Closing Date.
To exercise the right of dissent, a shareholder
must (i) file with Sugarland, a written objection to
the Plan prior to or at the Special Meeting and also
(ii) vote his shares (in person or by proxy) against
the Plan. Neither a vote against the Plan, nor a
specification in a proxy to vote against the Plan,
will, in and of itself, constitute the necessary
written objection to the Plan. Moreover, by voting in
favor of, or abstaining from voting on, the Plan, or by
returning the enclosed proxy without instructing the
proxy holders to vote against the Plan, a shareholder
waives his rights under Section 131. The right to
dissent may be exercised only by the record owners of
the shares and not by persons who hold shares only
beneficially. Beneficial owners who wish to dissent
from the Holding Company Merger should have the record
ownership of the shares transferred to their names or
instruct the record owner to follow the Section 131
procedure on their behalf.
If the Plan is approved by less than 80% of the
total number of shares of Sugarland Common Stock
outstanding, then promptly after the Effective Date
written notice of the consummation of the Holding
Company Merger will be given by MidSouth by registered
mail to each shareholder of Sugarland who filed a
written objection to the Plan and voted against it at
such shareholder's last address on Sugarland's records.
Within 20 days after the mailing of such notice, the
shareholder must file with MidSouth a written demand
for payment for his shares at their fair cash value as
of the day before the Special Meeting and must state
the amount demanded and a post office address to which
MidSouth may reply. He must also deposit the certifi-
cate(s) formerly representing his shares of Sugarland
Common Stock in escrow with a bank or trust company
located in Lafayette Parish, Louisiana. The
certificates must be duly endorsed and transferred to
MidSouth upon the sole condition that they be delivered
to MidSouth upon payment of the value of the shares in
accordance with Section 131. With the above-mentioned
demand, the shareholder must also deliver to MidSouth
the written acknowledgment of such bank or trust
company that it holds the certificate(s), duly endorsed
as described above.
Unless the shareholder objects to and votes
against the Holding Company Merger, demands payment,
endorses and deposits his certificates and delivers the
required acknowledgment in accordance with the
procedures and within the time periods set forth above,
the shareholder will conclusively be presumed to have
acquiesced to the Mergers and will forfeit any right to
seek payment pursuant to Section 131.
If MidSouth does not agree to the amount demanded
by the shareholder, or does not agree that payment is
due, it will, within 20 days after receipt of such
demand and acknowledgment, notify such shareholder in
writing at the designated post office address of either
(i) the value it will agree to pay or (ii) its belief
that no payment is due. If the shareholder does not
agree to accept the offered amount, or disagrees with
MidSouth's assertion that no payment is due, he must,
within 60 days after receipt of such notice, file suit
against MidSouth in the 15th Judicial District Court
for the Parish of Lafayette for a judicial deter-
mination of the fair cash value of the shares. Any
shareholder of Sugarland entitled to file such suit
may, within such 60-day period but not thereafter,
intervene as a plaintiff in any suit filed against
MidSouth by another former shareholder of Sugarland for
a judicial determination of the fair cash value of such
other shareholder's shares. If a shareholder of
Sugarland fails to bring or to intervene in such a suit
against MidSouth within the applicable 60-day period,
he will be deemed to have consented to accept
MidSouth's statement that no payment is due or, if
MidSouth does not contend that no payment is due, to
accept the amount specified by MidSouth in its notice
of disagreement.
If upon the filing of any such suit or
intervention, MidSouth deposits with the court the
amount, if any, which it specified in its notice of
disagreement, and if in that notice MidSouth offered to
pay such amount to the shareholder on demand, then the
costs (not including legal fees) of the suit or inter-
vention will be taxed against the shareholder if the
amount finally awarded to him, exclusive of interest
and costs, is equal to or less than the amount so
deposited; otherwise, the costs (not including legal
fees) will be taxed against MidSouth.
Upon filing a demand for the value of his shares,
a shareholder ceases to have any rights of a
shareholder except the rights created by Section 131.
The shareholder's demand may be withdrawn voluntarily
at any time before MidSouth gives its notice of
disagreement, but thereafter only with the written con-
sent of MidSouth. If his demand is properly withdrawn,
or if the shareholder otherwise loses his dissenters'
rights, he will be restored to his rights as a share-
holder as of the time of filing of his demand for fair
cash value.
Prior to the Effective Date, shareholders of
Sugarland who dissent from the Mergers should send any
communications regarding their rights to Ronald R.
Hebert, Sr., Secretary, Sugarland Bancshares, Inc.,
1527 W. Main Street, Jeanerette, Louisiana 70544. On
or after the Effective Date, dissenting shareholders of
Sugarland should send any communications regarding
their rights to Karen L. Hail, MidSouth Bancorp, Inc.,
102 Versailles Boulevard, Versailles Centre, Lafayette,
Louisiana 70501. All such communications should be
signed by or on behalf of the dissenting shareholder in
the form in which his shares are registered on the
books of Sugarland.
Shareholders of MidSouth are not entitled to vote
on the Mergers under the LBCL or MidSouth's Articles
and do not have dissenters' rights, although such
shareholders must approve the issuance of the Preferred
Stock. See "Introductory Statement - Shares Entitled
to Vote; Quorum; Vote Required."
INFORMATION ABOUT SUGARLAND
Description of the Business
Sugarland Bancshares, Inc., a business corporation
organized under the laws of Louisiana and a registered
bank holding company under the Bank Holding Company Act
of 1956, was incorporated in 1981 to acquire the
outstanding stock of the Bank. Sugarland owns all of
the outstanding stock of the Bank and has no other
subsidiaries. At December 31, 1994, Sugarland had
total consolidated assets of approximately $17.5
million and shareholders' equity of approximately $2.1
million. Sugarland's principal executive office is
located at 1527 West Main Street, Jeanerette,
Louisiana, and its telephone number is (318) 276-6307.
Sugarland State Bank, a Louisiana state bank
organized in 1967, provides full-service consumer and
commercial banking services in Jeanerette, Louisiana
and surrounding areas of Iberia Parish, Louisiana,
through its main banking office at 1527 West Main
Street, Jeanerette, Louisiana, and a full service
branch located in New Iberia, Louisiana. Deposits of
the Bank are insured by the Federal Deposit Insurance
Corporation ("FDIC") up to applicable legal limits.
The Bank offers an array of deposit services, including
demand accounts, NOW accounts, certificates of deposit,
and money market accounts, and provides safe deposit
boxes, night depository, individual retirement
accounts, and drive-in banking services. The Bank's
lending activities consist principally of real estate,
consumer, and commercial loans. At December 31, 1994,
the Bank had total deposits of approximately $15.3
million and total assets of approximately $17.5
million.
The Bank's deposits represent a cross-section of
the area's economy and there is no material
concentration of deposits from any single customer or
group of customers. Sugarland's loan portfolio contains
a concentration of loans to the Iberia Parish farming
industry. At December 31, 1994, Sugarland had
approximately $2.5 million of loans outstanding to
borrowers in the local farming industry, which
represented approximately 110% of the Bank's Tier 1
Capital and 30% of the Bank's total outstanding loans
on such date.
Competition
The Bank's general market area consists of Iberia
Parish, which has an approximate population of 70,000
and in which there are numerous banks and other
financial institutions.
Competition among banks for loan customers is
generally governed by such factors as loan terms,
including interest charges, restrictions on borrowers
and compensating balances, and other services offered
by such banks. The Bank competes with numerous other
commercial banks, savings and loan associations and
credit unions for customer deposits, as well as with a
broad range of financial institutions in consumer and
commercial lending activities. In addition to thrift
institutions, other businesses in the financial
services industry compete with the Bank for retail and
commercial deposit funds and for retail and commercial
loan business. Competition for loans and deposits is
intense among the financial institutions in the area.
At present, Sugarland is experiencing competitive
pressure on interest rates from other businesses in the
financial services industry, including larger
institutions whose size permits them to operate on a
narrower profit margin than would be appropriate for
Sugarland. See "Sugarland Management's Discussion and
Analysis of Financial Condition and Results of
Operations."
Property
The executive office of Sugarland and the Bank,
located at 1527 W. Main Street, Jeanerette, Louisiana,
is owned by the Bank. The Bank also owns the building
and land where its New Iberia branch is located. None
of the properties owned by the Bank is subject to a
mortgage.
Employees
Sugarland and the Bank have, in the aggregate,
approximately 15 full-time employees and one part-time
employee and considers its relationship with its
employees to be good. None of Sugarland's or the
Bank's employees are subject to a collective bargaining
agreement.
Market Prices and Dividends
Market Prices. Sugarland Common Stock is not
traded on any exchange or in any other established
public trading market. There are no bid or asked
prices available for Sugarland Common Stock.
At ___________, 1995, there were 307 shareholders
of record of Sugarland.
Cash Dividends. Sugarland declared cash dividends
on Sugarland Common Stock of $.20 per share during the
fiscal year ended December 31, 1993 and did not declare
a dividend during the fiscal year ended December 31,
1994. Sugarland has agreed in the Plan that it will
not make, declare, set aside or pay any dividend prior
to the Effective Date of the Mergers without the
written consent of MidSouth.
Substantially all of the funds available to
Sugarland to pay dividends to its shareholders are
derived from dividends paid to it by the Bank. The
Bank's payment of dividends is subject to certain legal
restrictions applicable to all Louisiana state banks.
The prior approval of the Louisiana Commissioner of
Financial Institutions (the "Commissioner") is required
if the total of all dividends declared in any one year
will exceed the sum of the Bank's net profits of that
year and net profits of the immediately preceding year.
Additionally, dividends may not be declared or paid by
a Louisiana state bank unless the bank has unimpaired
surplus equal to 50% of the outstanding capital stock
of the bank, and no dividend payment may reduce the
bank's unimpaired surplus below 50%. At December 31,
1994, the Bank had approximately $358,000 available for
the payment of dividends without prior approval of the
Commissioner.
Legal Proceedings
Sugarland and the Bank normally are parties to and
have pending routine litigation arising from their
regular business activities of furnishing financial
services, including providing credit and collecting
secured and unsecured indebtedness. In some instances,
such litigation involves claims or counterclaims
against Sugarland and the Bank, or either of them. As
of the date of this Joint Proxy Statement and
Prospectus, neither Sugarland nor the Bank had any
litigation pending.
Security Ownership of Principal Shareholders and
Management
Ownership of Principal Shareholders. Except for
Sugarland Common Stock, Sugarland has no other class of
voting securities issued or outstanding. The following
table provides information concerning all persons known
to Sugarland to be beneficial owners, directly or
indirectly, of more than 5% of the outstanding shares
of Sugarland Common Stock, as of the Record Date.
Unless otherwise noted, the named persons own the
shares directly and have sole voting and investment
power with respect to the shares indicated, subject to
applicable community property laws.
Number of
Name and Address Shares Owned Percentage
of Beneficial Owner Beneficially of Class
___________________ _____________ __________
J. Bryan Allain 9,516 <FN1> 5.08%
1519 Church Street
Jeanerette, LA 70544
Ronald R. Hebert, Sr. 17,252 9.21%
3009 D'Albor Street
Jeanerette, LA 70544
Adolphe A. Larroque 10,000 5.34%
P.O. Box 111
Jeanerette, LA 70544
Pierre L. Larroque 11,864 <FN2> 6.33%
200 N. Druilhet Street
Jeanerette, LA 70544
Herman J. Louviere 12,024 <FN3> 6.42%
2210 Hubertville Rd.
Jeanerette, LA 70544
Lawrence L. Lewis, III 20,000 10.74%
and Reverend H. Alexander
Larroque, Trustees for The
Larroque Family Trust
102 Versailles Blvd., Suite 600
Lafayette, LA 70502
__________________
<FN1>Includes 1,000 shares held of record by Mr. Allain
and 8,516 shares held of record by Insurance Trust
Number Two of Mr. Allain and Suzanne Pole Allain, Mr.
Allain's wife.
<FN2>Includes 2,000 shares held of record by Mr.
Larroque, 4,000 shares held of record in two equal lots
by Aqua-Kleen, Inc. and Dyna-Tec, Inc., corporations of
which Mr. Larroque is a majority shareholder, President
and director, and 5,864 shares held of record by
Superior Fabricators, Inc., a corporation of which Mr.
Larroque is a majority shareholder, President and
director.
<FN3>Includes 5,212 shares held of record by Mr. Louviere
and 5,212 shares held of record by Mr. Louviere, as
usufructuary with respect to shares the naked ownership
of which is held by Ronald, Eldridge and Farrell
Louviere and Carolyn L. Clement. Also includes 1,600
shares held of record by Herman J. Louviere & Sons,
Inc., a corporation of which Mr. Louviere is a
principal shareholder, officer and director.
____________________________
Ownership of Directors and Executive Officers of
Sugarland. The following table provides information
concerning the shares of Sugarland Common Stock
beneficially owned, directly or indirectly, by each
director and executive officer of Sugarland, and all
directors and executive officers as a group, as of the
Record Date. Unless otherwise noted, the named persons
have sole voting and investment power with respect to
the shares indicated, subject to applicable community
property laws.
Number of
Shares Owned Percentage
Name of Beneficial Owner Beneficially of Class
________________________ ____________ ___________
J. Bryan Allain 9,516 <FN1> 5.08%
Alton G. Barbin 4,500 2.40%
Ronald R. Hebert, Sr. 17,252 9.21%
Pierre L. Larroque 11,864 <FN2> 6.33%
Herman J. Louviere 12,024 <FN3> 6.42%
J.B. Pecot, M.D. 4,000 2.14%
D.J. Tranchina 800 *
All Directors and 59,956 32.01%
Executive Officers as a
Group (7 persons)
__________________
*Less than one percent of class
<FN1>Includes 1,000 shares held of record by Mr. Allain
and 8,516 shares held of record by Insurance Trust
Number Two of Mr. Allain and Suzanne Pole Allain, Mr.
Allain's wife.
<FN2>Includes 2,000 shares held of record by Mr.
Larroque, 4,000 shares held of record in two equal lots
by Aqua-Kleen, Inc. and Dyna-Tec, Inc., corporations of
which Mr. Larroque is a majority shareholder, President
and director, and 5,864 shares held of record by
Superior Fabricators, Inc., a corporation of which Mr.
Larroque is a majority shareholder, President and
director.
<FN3>Includes 5,212 shares held of record by Mr. Louviere
and 5,212 shares held of record by Mr. Louviere, as
usufructuary with respect to shares the naked ownership
of which is held by Ronald, Eldridge and Farrell
Louviere and Carolyn L. Clement. Also includes 1,600
shares held of record by Herman J. Louviere & Sons,
Inc., a corporation of which Mr. Louviere is a
principal shareholder, officer and director.
_____________________________
SUGARLAND MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Sugarland reported net income of $162,000 for 1994,
which represents a 13.83% decrease from the net income
of $188,000 for 1993. Net income per share was $0.87
for 1994 and $1.01 for 1993.
The primary reason for the decline in net income during
1994 over 1993 was an increase in income tax expense.
Income tax expense for 1994 was $56,000, compared to
$24,000 for 1993. The 133% increase in income tax
expense for 1994 resulted from the use in 1993 of a net
operating loss carryover, which resulted in a tax
benefit of $44,000 in 1993. Pre-tax income in 1994 was
$218,000, an increase of $6,000 over 1993 pre-tax
income of $212,000. The slight increase in pre-tax
income during 1994 was principally attributable to
decreases in expenses.
Improving loan quality resulted in no provision for
loan losses during 1994 or 1993. Net interest income
for 1994 decreased $7,000 to $853,000, which represents
a .81% decrease over 1993. The primary reason for the
decrease was a slight overall average interest rate
reduction in the loan portfolio.
At December 31, 1994, Sugarland had total assets and
deposits of $17,473,000 and $15,320,000, respectively,
which represented decreases of 4.15% and 4.68%,
respectively, from amounts reported at December 31,
1993. Loans, net of the reserve for possible loan
losses, were $8,226,000 at December 31, 1994, an
increase of 2.21% from the amount reported at the end
of 1993. The decrease in assets as of December 31,
1994 when compared to December 31, 1993 is principally
due to a decrease in interest-bearing deposits,
resulting in a decrease in funds available for
investment and federal funds sold, partially offset by
an increase in loan demand. Management attributes the
decrease to increased competition from other businesses
in the financial services industry, including larger
institutions whose size permits them to pay higher
interest rates and operate on a narrower profit margin
than would be appropriate for Sugarland. See
"Information about Sugarland - Competition."
The following table sets forth certain information
regarding Sugarland's results of operations for the
periods indicated.
Years Ended
December 31,
__________________
1994 1993
________ _______
(Dollars in thousands,
except per share data)
Net income $ 162 $ 188
Net income per share* $ 0.87 $ 1.01
Return on average assets 0.94% 1.04%
Return on average equity 7.64% 9.14%
Average equity to average assets 12.33% 11.40%
Dividend pay-out ratio -- 19.80%
* Per share data are based upon a weighted average
number of shares outstanding of 187,286.
A more detailed review of Sugarland's financial
condition and results of operations for the years ended
December 31, 1994 and 1993 follows. This discussion
and analysis should be read in conjunction with
Sugarland's financial statements and the notes thereto
appearing elsewhere in this Joint Proxy Statement and
Prospectus.
Results of Operations
Net Interest Income.
The principal component of Sugarland's net earnings is
net interest income, which is the difference between
interest and fees earned on interest-earning assets and
interest paid on deposits and borrowed funds. Net
interest income, when expressed as a percentage of
total average interest-earning assets, is referred to
as net interest margin. 1994 net interest income of
$853,000 represents a decrease of $7,000, or .81%, from
net interest income of $860,000 reported for 1993. The
slight decline in 1994 was primarily the result of
decreases in overall average interest rates.
Average interest-earning assets were $14,715,000 and
$15,625,000 in 1994 and 1993, respectively. Average
loans, the Company's highest yielding assets, rose .91%
from 1993 to 1994. Net interest margin increased 30
basis points to 5.80% for the year ended December 31,
1994 from 5.50% recorded for 1993.
Sugarland's net interest income is affected by the
change in the amount and mix of interest-earning assets
and interest-bearing liabilities, and by changes in
yields earned on assets and rates paid on deposits and
other borrowed funds. The following table sets forth
certain information concerning average interest-earning
assets and interest-bearing liabilities and the yields
and rates thereon for the periods presented. Average
balances are computed using daily average balances.
<TABLE>
<CAPTION>
Year Ended December 31, 1994 Year Ended December 31, 1993
____________________________ _____________________________
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
_______ ________ _______ _______ ________ ________
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Loans $ 8,159 $ 868 10.64% $ 8,066 $ 885 10.97%
Investment securities 4,240 263 6.20% 4,575 295 6.45%
Federal funds sold 2,316 88 3.80% 2,984 88 2.95%
________ _______ _________ _______
Total interest-
earning assets $ 14,715 $ 1,219 8.28% $ 15,625 $ 1,268 8.12%
________ _______ _________ _______
Interest-Bearing Liabilities:
Deposits:
Money market demand $ 2,565 $ 71 2.77% $ 2,439 $ 70 2.87%
Savings and other interest-
bearing demand 2,911 78 2.68% 2,931 85 2.90%
Time deposits 5,838 217 3.72% 6,611 253 3.83%
________ _______ _________ _______
Total interest-
bearing liabilities $ 11,314 $ 366 3.23% $ 11,981 $ 408 3.41%
________ _______ _________ _______
Net interest income $ 853 $ 860
_______ _______
Net interest margin 5.80% 5.50%
</TABLE>
The following table sets forth changes in interest
income and interest expense for each major category of
interest-earning assets and interest-bearing
liabilities and the amount of change attributable to
volume change and rate change for the periods
indicated.
<TABLE>
<CAPTION>
1994 OVER 1993 1993 OVER 1992
_________________________________________________________________________
Total Change Change Change Total Change Change Change
Increase in in in Increase in in in
(Decrease) Volume Rate Rate/Vol (Decrease) Volume Rate Rate/Vol
_________ ______ ______ ________ ________ ______ ____ ________
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans $ (17) $ 10 $ (27) $ -- $ (43) $ 12 $ (53) $ (2)
Investment securities (32) (22) (10) -- 31 77 (35) (11)
Federal funds sold -- (19) 25 (6) (15) (1) (14) --
______ ______ _______ _______ _______ _______ _______ ______
Total $ (49) $ (31) $ (12) $ (6) $ (27) $ 88 $ (102) $ (13)
Interest-Bearing Liabilities:
Interest bearing
deposits $ (42) $ (23) $ (22) $ 3 $ (94) $ 17 $ (109) $ (2)
______ ______ _______ _______ _______ _______ _______ ______
Total $ (42) $ (23) $ (22) $ 3 $ (94) $ 17 $ (109) $ (2)
Net interest income
before allocation of
rate/volume $ (7) $ (8) $ 10 $ (9) $ 67 $ 71 $ 7 $ (11)
Allocation or
rate/volume -- (17) 8 9 -- (10) (1) 11
Changes in net
interest income $ (7) $ (25) $ 18 $ - $ 67 $ 61 $ 6 $ --
</TABLE>
Provision for Loan Losses.
The provision for loan losses is the periodic charge to
earnings for potential losses in the loan portfolio.
The amounts provided for loan losses are determined by
management after evaluations of the loan portfolio.
This evaluation process requires that management apply
various judgments, assumptions and estimates concerning
the impact certain factors may have on amounts
provided. Factors considered by management in its
evaluation process include known and inherent losses in
the loan portfolio, the current economic environment,
the composition of and risk in the loan portfolio,
prior loss experience and underlying collateral values.
While management considers the amounts provided through
December 31, 1994 to be adequate, subsequent changes in
these factors and related assumptions may warrant
significant adjustments in amounts provided, based on
conditions prevailing at the time. In addition,
various regulatory agencies, as an integral part of the
examination process, review Sugarland's allowance for
loan losses. Such agencies may require Sugarland to
make additions to the allowance based on their
judgments of information available to them at the time
of their examinations.
No provision for loan losses was made for 1994 and
1993.
Non-interest Income.
Non-interest income was $180,000 for the year ended
December 31, 1994, compared to $199,000 for 1993. The
decrease in non-interest income from 1993 to 1994 was
due principally to a decrease in income from sales of
other real estate owned.
Non-interest Expense.
Non-interest expense for the year ended December 31,
1994 and December 31, 1993 was $815,000 and $846,000,
respectively, a 3.66% decrease. The decrease in non-
interest expense was attributable principally to
decreased general and administrative expenses, salaries
and occupancy expenses.
Income Taxes.
Sugarland's provision for income taxes was $56,000 for
the year ended December 31, 1994, compared to $24,000
for 1993. The 133% increase in income tax expense for
1994 resulted from the use in 1993 of a net operating
loss carryover, which resulted in a tax benefit of
$44,000 in 1993.
Sugarland adopted a new standard for accounting for
income taxes effective January 1, 1993. Under
Statement of Financial Accounting Standards No. 109
("SFAS 109"), deferred income taxes are provided for by
the liability method. The adoption of SFAS 109 did not
have a material effect on Sugarland's results of
operations or financial condition.
Financial Condition
The following table sets forth the Company's average
assets, liabilities and shareholders' equity and the
percentage distribution of these items for the periods
indicated.
<TABLE>
<CAPTION>
Years Ended December 31,
_________________________________________________
1994 1993
_____________________ _____________________
Average Average
Balance Percent Balance Percent
_______ _______ _______ _______
(Dollars in thousands)
<S> <C> <C> <C> <C>
Assets:
Cash and due from banks $ 1,685 9.80% $ 1,552 8.60%
Investment securities 4,240 24.67% 4,575 25.36%
Federal funds sold 2,316 13.47% 2,984 16.54%
Loans (net of allowance for credit losses) 8,159 47.48% 8,066 44.73%
Other assets 788 4.58% 860 4.77%
_______ _______ _______ _______
Total assets $17,188 100.00% $18,037 100.00%
======= ======= ======= =======
Liabilities and Shareholders' Equity:
Demand deposits $ 3,691 21.47% $ 3,919 21.73%
Interest-bearing deposits 11,314 65.83% 11,981 66.42%
Other liabilities 63 .37% 81 .45%
_______ _______ _______ _______
Total liabilities 15,068 87.67% 15,981 88.60%
Shareholders' equity 2,120 12.33% 2,056 11.40%
_______ _______ _______ _______
Total liabilities and shareholders' equity $17,188 100.00% $18,037 100.00%
======= ======= ======= =======
</TABLE>
Total Assets.
At December 31, 1994, total assets were
approximately $17,473,000, compared to $18,230,000 at
December 31, 1993. Total average assets for the year
ended December 31, 1994 were $17,188,000, a decrease
of 4.71%, from the $18,037,000 average for the year
ended December 31, 1993. The decrease in assets as of
December 31, 1994 when compared to December 31, 1993
is principally due to a decrease in interest-bearing
deposits, resulting in a decrease in funds available
for investment and federal funds sold, partially
offset by an increase in loan demand. Management
attributes the decrease to increased competition from
other businesses in the financial services industry,
including larger institutions whose size permits them
to pay higher interest rates and operate on a narrower
profit margin than would be appropriate for Sugarland.
See "Information about Sugarland - Competition."
Investment Securities.
At December 31, 1994, Sugarland's investment
securities portfolio aggregated $4,252,000, an
increase of $332,000 from the $3,920,000 reported at
December 31, 1993.
The following table sets forth the composition
of Sugarland's investment portfolio at the
end of each period presented.
<TABLE>
<CAPTION>
December 31,
___________________________________________________
1994 1993
________________________ ______________________
Amortized Fair Book Market
Cost Value Value Value
_________ _________ _______ ________
(Dollars in thousands)
<S> <C> <C> <C> <C>
U.S. government agencies $ 1,901 $ 1,787 $ 1,407 $ 1,416
Government guaranteed mortgage backed
securities 1,647 1,555 1,978 2,029
Government guaranteed & private issue
CMO's & REMIC's 404 371 289 291
Mutual funds 200 132 146 146
Other equity securities 100 100 100 100
_______ _______ _______ _______
Total $ 4,252 $ 3,945 $ 3,920 $ 3,982
======= ======= ======= =======
</TABLE>
Effective January 1, 1994, Sugarland adopted
Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"), which requires the
classification of securities into one of three
categories: Trading, Available-for-sale, or Held-to-
maturity. Management determines the appropriate
classification of debt securities at the time of
purchase and re-evaluates this classification
periodically. Trading account securities are held for
resale in anticipation of short-term market movements.
Sugarland has not engaged in trading activities
related to any of its investment securities and has no
securities classified as Trading. Debt securities are
classified as held-to-maturity when Sugarland has the
positive intent and ability to hold the securities to
maturity. Held-to-maturity securities are stated at
amortized cost. Securities not classified as trading
or held-to-maturity are classified as available-for-
sale. All of the securities in Sugarland's portfolio
at December 31, 1994 were classified as available-for
sale. Available-for-sale securities are stated at
fair value, with unrealized gains and losses, net of
tax, reported in a separate component of shareholders'
equity. Sugarland may sell these securities in
response to liquidity demands. Available-for-sale
securities also may be used as a means of adjusting
the interest rate sensitivity of Sugarland's balance
sheet through sale and reinvestment.
The following table presents selected
contractual maturity data for the investment
securities in Sugarland's portfolio at December 31,
1994. Dollar values are based upon the amortized cost
of such securities at December 31, 1994.
<TABLE>
<CAPTION>
After One Year
Through Five After Five Years
One Year or Less Years Through 10 Years After 10 Years
________________ _______________ ________________ __________________
Amount Yield Amount Yield Amount Yield Amount Yield
______ _____ ______ _____ ______ _____ ______ _____
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. government agencies $ -- $ 1,900 5.15% $ -- $ --
Government guaranteed
mortgage backed securities -- 92 8.00% 476 6.00% 1,080 7.52%
Government guaranteed &
private issue CMO's REMIC's -- -- -- 404 5.58%
Total -- $ 1,992 $ 476 $ 1,484
</TABLE>
The following table presents selected
contractual maturity data for the investment
securities in Sugarland's portfolio at December 31,
1993. Dollar values are based upon the book value of
such securities at December 31, 1993.
<TABLE>
<CAPTION>
After One Year
Through Five After Five Years
One Year or Less Years Through 10 Years After 10 Years
________________ _______________ ________________ __________________
Amount Yield Amount Yield Amount Yield Amount Yield
______ _____ ______ _____ ______ _____ ______ _____
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. government agencies $ -- $ 1,407 6.47% $ -- $ --
Government guaranteed
mortgage backed securities -- 177 8.00% 483 6.00% 1,318 7.57%
Government guaranteed &
private issue CMO's &
REMIC's -- -- -- 289 6.09%
________ _______ ______ _______
Total $ -- $ 1,584 $ 483 $ 1,607
======== ======= ======= =======
See Note 2 to Sugarland's Financial Statements
appearing elsewhere in this Joint Proxy Statement and
Prospectus for information concerning the amortized
cost and estimated fair values of Sugarland's
investment securities at December 31, 1994 and 1993.
Loans.
Sugarland engages in real estate lending
through real estate construction and mortgage loans,
and commercial and consumer lending. The lending
activities of Sugarland are guided by the basic
lending policy established by its Board of Directors.
Each loan is evaluated based on, among other things,
character and leverage capacity of the borrower,
capital and investment in a particular property, if
applicable, cash flow, collateral, market conditions
for the borrower's business or project and prevailing
economic trends and conditions.
The following table sets forth the type and
amount of loans outstanding as of the dates indicated:
December 31,
____________________
1994 1993
______ _______
(Dollars in thousands)
Commercial/Industrial/Agricultural $ 4,277 $ 4,127
Commercial Real Estate 849 1,056
Residential Real Estate 1,423 1,432
Consumer/Installment 1,907 1,676
Other 4 4
________ ________
Total loans $ 8,460 $ 8,295
======== ========
In addition to the matters set forth in the
table above, as of December 31, 1994, Sugarland's loan
portfolio contained a concentration of loans to
borrowers engaged in the Iberia Parish agriculture
industry. A concentration is defined as amounts
loaned to a multiple number of borrowers engaged in
similar activities, which would cause them to be
similarly impacted by economic or other conditions,
where the amount exceeds 10% of total outstanding
loans. At December 31, 1994, Sugarland had
approximately $2.5 million of loans outstanding to
borrowers in the local farming industry, which
represented approximately 30% of Sugarland's total
outstanding loans.
At December 31, 1994, loans, net of unearned
discount and the allowance for possible loan losses,
were $8,226,000, as compared to $8,048,000 at
December 31, 1993. Average loans have increased over
these periods as well, from $8,066,000 to $8,159,000,
respectively, for 1993 and 1994. These increases in
the amount of outstanding loans are attributable
principally to increased loan demand in the market
served by Sugarland as the local economy strengthened.
Sugarland's average loan to deposit ratio was 54.4%
for 1994 as compared to 50.7% for 1993. This increase
is primarily the product of increased loan demand and
decreased deposit base.
At December 31, 1994, residential real estate,
commercial real estate and
commercial/industrial/agricultural loans comprised
approximately 17%, 10% and 51%, respectively, of total
outstanding loans. This compares to 17%, 13% and 50%
categorized as residential real estate, commercial
real estate and commercial/industrial/agricultural
loans, respectively, at December 31, 1993.
The following table provides information
concerning loan portfolio maturity as of December 31,
1994. Loan portfolio maturity by type of loan as
presented in the table above is not readily available.
(Dollars in thousands)
One year or less
Floating interest rate $ 593
Fixed interest rate 2,762
After one year through five years:
Floating interest rate 1,574
Fixed interest rate 1,494
After five years:
Floating interest rate 1,199
Fixed interest rate 838
_______
Total $ 8,460
=======
Nonaccrual, Past Due and Modified Loans.
The performance of Sugarland's loan portfolio
is evaluated regularly by Senior Management and the
Board of Directors. Interest on loans is accrued
daily as earned. A loan is generally placed on
nonaccrual status when principal or interest is past
due 90 days or more, except when management determines
the loan remains likely to be fully collectible. Upon
being placed on nonaccrual status, the accrual of
income from a loan is discontinued and previously
accrued but unpaid interest is reversed against
income. Each loan that is 90 days or more past due is
evaluated to determine its collectibility and the
adequacy of its collateral.
The following table sets forth the amount of
Sugarland's nonperforming loans (nonaccrual loans and
loans past due 90 days or more and still accruing
interest) and loans with modified terms as of the
dates indicated:
December 31,
______________________
1994 1993
________ ________
(Dollars in thousands)
Nonaccrual loans $26 $72
Loans past due 90 days or
more and still accruing
interest 16 62
Renegotiated debt, still
accruing interest -- --
As a percent of total loans, loans past due 90
days or more and not on nonaccrual status were .19% at
December 31, 1994, compared to .75% of total loans at
December 31, 1993. Nonaccrual loans were .31% of
total loans at December 31, 1994, and .87% at year-end
1993. There were no loans with modified terms at
year-end 1994 or 1993.
As of December 31, 1994, Sugarland was not
aware of any other loans where known information about
possible credit problems of the borrower caused
management to have serious doubts as to the ability of
such borrowers to comply with the loan repayment
terms. Sugarland's primary regulators and external
auditors review the loan portfolio as part of their
regular examinations and their assessment of specific
credits, based on information available to them at the
time of their examination, may affect the level of
Sugarland's non-performing loans. Additionally, the
loan portfolio is regularly monitored by Senior
Management and the Board. Accordingly, there can be
no assurance that other loans will not be placed on
nonaccrual, become 90 days or more past due, or have
terms modified in the future.
In May 1993, the Financial Accounting Standards
Board issued Statement of Financial Accounting
Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" ("SFAS 114"). This standard
requires the measurement of certain impaired loans
based on the present value of expected future cash
flows discounted at the loan's effective interest
rate. Adoption of this new standard is required for
fiscal years beginning after December 15, 1994.
Sugarland will adopt this statement beginning
January 1, 1995. The effect of adopting SFAS 114 on
Sugarland's financial statements has not yet been
determined, but is not expected to be material.
Allowance for Loan Losses.
A certain degree of risk is inherent in the
extension of credit. Management has credit policies
in place to monitor and attempt to control the level
of loan losses and nonperforming loans. One product
of Sugarland's credit risk management is the
maintenance of the allowance for loan losses at a
level considered by management to be adequate to
absorb estimated known and inherent losses in the
existing portfolio, including commitments and standby
letters of credit. The allowance for loan losses is
established through charges to operations in the form
of provisions for loan losses.
The allowance is based upon a regular review of
current economic conditions, which might affect a
borrower's ability to pay, underlying collateral
values, risk in and the composition of the loan
portfolio, prior loss experience and industry
averages. In addition, Sugarland's primary
regulators, as an integral part of their examination
process, periodically review Sugarland's allowance for
loan losses and may recommend additions to the
allowance based on their assessment of information
available to them at the time of their examination.
Loans that are deemed to be uncollectible are charged-
off and deducted from the allowance. The provision
for loan losses and recoveries on loans previously
charged-off are added to the allowance.
The following table sets forth Sugarland's loan
loss experience and certain information relating to
its allowance for loan losses as of the dates and for
the periods indicated.
</TABLE>
<TABLE>
<CAPTION>
Years Ended
December 31,
______________________
1994 1993
__________ ________
(Dollars in thousands)
<S> <C> <C>
Average net loans outstanding $ 8,159 $ 8,066
Balance of allowance for credit losses at
beginning of period 145 135
Charge offs:
Commercial loans (15) --
Consumer loans (1) (6)
Recoveries 5 16
________ ________
Net recoveries (charge-offs) (11) 10
________ ________
Provisions charged to expense -- --
________ ________
Balance of allowance for credit losses
at end of period $ 134 $ 145
======== ========
Ratio of net charge-offs to average loans
outstanding 0.13% (0.12%)
</TABLE>
The allowance for loan losses was $134,000 or
1.64% of average loans, and $145,000 or 1.80% of
average loans at December 31, 1994 and December 31,
1993, respectively. Net charged-off loans during this
period were $11,000 for the year ended December 31,
1994 as compared to ($10,000) in 1993. The allowance
for loan losses should not be interpreted as an
indication of future charge-off trends.
Management believes that the allowance for loan
losses at December 31, 1994 was adequate to absorb the
known and inherent risks in the loan portfolio at that
time. However, no assurance can be given that future
changes in economic conditions that might adversely
affect Sugarland's principal market area, borrowers or
collateral values, and other circumstances will not
result in increased losses in Sugarland's loan
portfolio in the future.
The following table sets forth the approximate
dollar amount of the allowance for loan losses
allocable to the stated loan categories, and the
percent of total loans in each such category for the
periods presented.
<TABLE>
<CAPTION>
Years Ended December 31,
_____________________________________________
1994 1993
____________________ ____________________
Allow. Loan Allow. Loan
________ ______ ________ ______
(Dollars in thousands)
<S> <C> <C> <C> <C>
Commercial/Industrial $ 94 50.56% $ 110 49.75%
/Agricultural
Real Estate 15 26.86% 10 30.00%
Consumer/Installment/Other 25 22.58% 25 20.25%
________ _______ ________ _______
$ 134 100.00% $ 145 100.00%
======== ======= ======== =======
</TABLE>
The allocation of the allowance for loan losses
should not be interpreted as an indication of future
credit trends or that losses will occur in these
amounts or proportions. Furthermore, the portion
allocated to each loan category is not the total
amount available for future losses that might occur
within such categories, since the total allowance is a
general allowance applicable to the entire portfolio.
In determining the adequacy of the allowance
for credit losses, management considers such factors
as known problem loans, evaluations made by bank
regulatory agencies and external auditors,
individual loan reviews for loans in excess of
$40,000, collateral, assessment of economic and market
conditions, concentrations and other appropriate data
in order to identify the risks in the portfolio. The
Loan Review Committee reviews on a quarterly basis the
loan loss reserve of the Bank and makes
recommendations to the Board of Directors of the Bank
concerning the adequacy of the allowance.
Additionally, the Bank's policy is to maintain a loan
loss reserve equal to at least 1.0% of the total loans
outstanding or an amount sufficient to cover all
reasonably anticipated loan losses. If, following a
review of the allowance, the allowance is determined
to be inadequate or excessive, the amount of the
allowance is adjusted accordingly.
Deposits.
Deposits are the primary source of funding for
Sugarland's earning assets. Total deposits at
December 31, 1994 and December 31, 1993 were
approximately $15,320,000 and $16,072,000,
respectively. Time certificates of deposit of
$100,000 or more, which were approximately $501,000 at
the end of 1994 and $703,000 at the end of 1993, had
remaining maturities as follows:
December 31,
_____________________
1994 1993
________ _______
Maturing within: (Dollars in thousands)
Three months or less $301 $503
Over three months to six months -- --
Over six months to twelve months 200 200
Over twelve months -- --
_____ _____
Total $501 $703
Average deposit balances are summarized for the periods
indicated:
<TABLE>
<CAPTION>
Years Ended December 31,
_________________________________________
Average Average
1994 Rate 1993 Rate
______ _______ ______ _______
(Dollars in thousands)
<S> <C> <C> <C> <C>
Demand deposits $ 3,691 0.00% $ 3,919 0.00%
Money market demand 2,565 2.77% 2,439 2.87%
Savings and other interest-
bearing demand deposits 2,911 2.68% 2,931 2.90%
Time deposits 5,838 3.72% 6,611 3.83%
________ ________
Total $ 15,005 3.23% $ 15,900 3.41%
======== ========
</TABLE>
At December 31, 1994 and December 31, 1993, Sugarland
had no brokered deposits.
Interest Rate Sensitivity.
Interest rate risk is the potential impact of
changes in interest rates on net interest income and
results from disparities in repricing opportunities of
assets and liabilities over a period of time.
Management estimates the effects of changing interest
rates and various balance sheet strategies on the
level of net interest income. Management may alter
the mix of floating- and fixed-rate assets and
liabilities, change pricing schedules, and adjust
maturities through sales and purchases of securities
available for sale as a means of limiting interest
rate risk.
The degree of interest rate sensitivity is not
equal for all types of assets and liabilities.
Sugarland's experience has indicated that the
repricing of interest-bearing demand, savings and
money market accounts does not move with the same
magnitude as general market rates. Additionally,
these deposit categories, along with non-interest
demand, have historically been stable sources of funds
to Sugarland, which indicates a much longer implicit
maturity than their contractual availability.
Sugarland's cumulative behavioral gap to total assets
at December 31, 1994 was a positive 11.36% in the 0-1
year cumulative range. A positive gap implies that
earnings would increase in a rising interest rate
environment and decrease in a falling interest rate
environment.
Liquidity.
Sugarland seeks to manage its liquidity
position to attempt to ensure that sufficient funds
are available to meet customers' needs for borrowing
and deposit withdrawals. Liquidity is derived from
both the asset and liability sides of the balance
sheet. Asset liquidity arises from the ability to
convert assets to cash and self-liquidation or
maturity of assets. Liquid asset balances include
cash, interest-bearing deposits with financial
institutions, short-term investments and federal funds
sold. Liability liquidity arises from a diversity of
funding sources as well as from the ability of
Sugarland to attract deposits of varying maturities.
If Sugarland were limited to only one source of
funding or all its deposits had the same maturity, its
liquidity position would be adversely impacted.
Sugarland's funding source is primarily its
deposit base which is comprised of interest-bearing
and noninterest-bearing accounts. Sugarland's non-
interest bearing demand deposits are, by their very
nature, subject to withdrawal upon demand. Declines
in one form of funding source require Sugarland to
obtain funds from another source. If Sugarland were
to experience a decline in noninterest-bearing demand
deposits and have a significant increase in loan
volume without a commensurate increase in such
deposits, it would utilize alternative sources of
funds, probably at higher cost, to maintain its
liquidity and to meet its loan funding needs. This
would place downward pressure on Sugarland's net
interest margin and might have a negative impact on
Sugarland's liquidity position.
Sugarland's liquidity expressed as a percentage
of net liquid assets to net liabilities was 28.6% and
33.6% at December 31, 1994 and December 31, 1993,
respectively. The decreased percentage at December
31, 1994 was due principally to a decrease in
deposits.
Capital Adequacy.
At December 31, 1994, Sugarland's total
shareholders' equity was $2,107,000, a decrease of
.43% from $2,116,000 at December 31, 1993. The
decrease was due principally to Sugarland's adoption
of SFAS 115, which resulted in Sugarland's investment
securities being stated at fair value and unrealized
losses therein causing a reduction in shareholders'
equity. Book value per common share is presented in
the table below.
Years Ended December 31,
________________________
1994 1993
_________ _________
(Dollars in thousands,
except per share amounts
Shares outstanding 187,286 187,286
Shareholder's equity $ 2,107 $ 2,116
Book volue per common
share $ 11.25 $ 11.30
Adequate levels of capital are necessary over
time to sustain growth and absorb losses. In the case
of banks and bank holding companies, capital levels
must also meet minimum regulatory requirements. All
risk-based and other capital ratios improved from
year-end 1993 to 1994, and remain well above
regulatory minimums. At December 31, 1994, the Bank's
Tier 1 capital was 24.39% of risk-weighted assets and
its total capital was 25.83% of risk-weighted assets,
compared to the regulatory minimums of 4.0% and 8.0%,
respectively. The Bank's regulatory leverage ratio,
which compares Tier 1 capital to adjusted total
assets, was 13.42% at December 31, 1994, compared to
the regulatory minimum of 4.0%. Under present
regulations, the Bank was classified as "well-
capitalized" based upon its capital ratios at
December 31, 1994 and 1993. The following table sets
forth the Bank's risk based capital and capital ratios
at year end 1994 and 1993.
Regulatory
December 31, Minimum
_______________________ ____________
1994 1993
______ _______
(Dollars in thousands)
Capital:
Tier 1 $ 2,264 $ 2,176
Tier 2 134 145
________ ________
Total capital $ 2,398 $ 2,321
Risk-weighted assets $ 9,284 $ 9,594
Ratios:
Tier 1 Capital to risk-
weighted assets 24.39% 22.68% 4.0%
Tier 2 Capital to risk-
weight assets 1.44% 1.51% --
Total capital to
risk-weighted assets 25.83% 24.19% 8.0%
Leverage Ratio 13.42% 12.13% 4.0%
INFORMATION ABOUT MIDSOUTH
A copy of MidSouth's Annual Report to
Shareholders is being delivered to the Shareholders of
MidSouth along with this Joint Proxy Statement and
Prospectus. A copy of MidSouth's Annual Report on
Form 10-KSB for the fiscal year ended December 31,
1994, has been filed with the Commission, and is
incorporated herein by reference. In addition, all
other documents that will be filed by MidSouth with
the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") between the date of this Joint Proxy
Statement and Prospectus and the date of the Meetings
shall be deemed to be incorporated herein by reference
from the date of filing. See "Available Information"
for information with respect to obtaining copies of
documents incorporated by reference in this Joint
Proxy Statement and Prospectus.
Any statement contained in a document
incorporated or deemed to be incorporated by reference
shall be deemed to be modified or superseded to the
extent that a statement contained herein or in any
other document subsequently filed and incorporated or
deemed to be incorporated by reference herein modifies
or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of
this Joint Proxy Statement and Prospectus.
COMPARATIVE RIGHTS OF SHAREHOLDERS
If the Mergers are subsequently consummated,
all shareholders of Sugarland, other than those
perfecting dissenters' rights, will become
shareholders of MidSouth and their rights will be
governed by and be subject to the Articles of
Incorporation and Bylaws of MidSouth rather than the
Articles of Incorporation and Bylaws of Sugarland.
The following is a brief summary of certain of the
principal differences between the rights of holders of
MidSouth Preferred Stock and Sugarland Common Stock
not described elsewhere herein.
Preferred Stock
The Board of Directors of MidSouth is
authorized by the Company's Articles of Incorporation,
without action of its shareholders, to issue preferred
stock from time to time and to establish the
designations, preferences and relative, optional or
other special rights and qualifications, limitations
and restrictions thereof, as well as to establish and
fix variations in the relative rights as between
holders of any one or more series of such preferred
stock. The authority of the Board of Directors
includes but is not limited to the determination or
fixing of the following with respect to each series of
preferred stock which may be issued: (i) the
designation of such series; (ii) the number of shares
initially constituting such series; (iii) the dividend
rate and conditions, and the dividend preferences, if
any, in respect of the preferred stock and among the
series of preferred stock; (iv) whether, and upon what
terms, the preferred stock would be convertible into
or exchanged for shares of any other class or other
series of the same class; (v) whether, and to what
extent, holders of one or more shares of a series of
preferred stock will have voting rights; and (vi) the
restrictions, if any, that are to apply on the issue
or reissue of any additional preferred stock. Shares
of preferred stock that are authorized would be
available for issuance in connection with the
acquisition of other businesses, infusion of capital,
or for other lawful corporate purposes, at the
discretion of the Board of Directors. The Board of
Directors could issue preferred stock to a person or
persons who would support management in connection
with a proxy contest to replace an incumbent director
or in opposition to an unsolicited tender offer. As a
result such proposals or tender offers could be
defeated even though favored by the holders of a
majority of MidSouth Common Stock.
The Articles of Incorporation of Sugarland do
not authorize the issuance of preferred stock.
Directors
The Articles of Incorporation of MidSouth
provide that the Board of Directors shall be divided
into three equal classes, with directors in each class
holding office for a staggered term of three years.
Accordingly, only one-third of the directors are
subject to election each year. The Articles further
provide that the affirmative vote of not less than 80%
of the "Total Voting Power" is required to remove a
director from office during his term of service, and
that a director may only be removed for cause. The
Articles define Total Voting Power as the total number
of votes that shareholders and holders of any bonds,
debentures or other obligations granted voting rights
by the Corporation pursuant to La. R.S. 12:75(H) are
entitled to cast with respect to the election of
directors or, if such term is used in reference to any
other particular matter properly brought before the
shareholders for a vote, means the total number of
such votes that are entitled to be cast with respect
to such matter.
Nominations for directors must comply with
the nominating procedures set forth in Article IV(H),
which requires, among other things, that a written
notice of nomination be delivered to the Board prior
to the shareholders' meeting at which the nomination
will be considered, and that such notice must contain
certain specific information about the candidate and
the shareholder making the nomination, as required
under the Securities Exchange Act of 1934.
MidSouth's Articles also permit directors to
vote by proxy.
Provisions governing the election and powers
of Sugarland's directors are contained in its Bylaws
rather than its Articles, and the Bylaws do not
contain any of the special provisions discussed above.
Business Combinations
With respect to a tender offer or offer to
merge or consolidate, MidSouth's Articles permit its
directors to consider: (i) the consideration offered
in relation to the current market price of the stock
versus the estimated future market price of the stock
that could be achieved over several years; (ii) the
social and economic effects of the transaction on the
corporation, its subsidiaries, or their employees,
customers, creditors and the communities in which the
corporation and its subsidiaries do business; (iii)
the business and financial condition and earning
prospects of the acquiring party; and (iv) the
competence, experience and integrity of the acquiring
party and its management. These provisions are
intended to give MidSouth's directors substantial
discretion in evaluating an offer to merge or
consolidate. Sugarland's Articles do not contain
provisions on business combinations.
Special Meetings of Shareholders
MidSouth's Articles require that at least 80%
of the total voting power of MidSouth is necessary for
the shareholders to call a special meeting.
Sugarland's Articles and Bylaws do not address the
call of a special meeting by shareholders, so under
the LBCL shareholders of Sugarland would be entitled
to call a special meeting upon the written request of
20% of the outstanding stock of Sugarland.
Bylaws
Bylaws of MidSouth may be adopted only by a
majority vote of all of the Continuing Directors.
"Continuing Directors" is defined in the Articles as
the persons who (1) are members of the Board of
Directors of the Corporation on March 3, 1993 or (2)
become members of the Board of Directors after March
3, 1993 upon the nomination of the Board of Directors
at a time when a Majority of the Members are
Continuing Directors. The Bylaws may be amended or
repealed only by a majority vote of all of the
Continuing Directors or by the affirmative vote of the
holders of at least 80% of the Total Voting Power at
any annual or special meeting of shareholders, the
notice of which expressly states that the proposed
amendment or repeal is to be considered at the
meeting. Any purported amendment to the Bylaws which
would add thereto a matter not covered in the Bylaws
prior to such purported amendment shall be deemed to
constitute the adoption of a Bylaw provision and not
an amendment to the Bylaws.
Sugarland's Articles provide that its Bylaws
may be adopted, amended or repealed concurrently by
the Board or the shareholders, and that the
shareholders may provide that any alterations,
amendments or repeal of a provision of the Bylaws by
the shareholders may not be altered, amended, repealed
or reinstated by the Board.
Vote Required for Shareholder Action
MidSouth's Articles provide that any proposal
to approve a merger, consolidation, share exchange,
disposition of all the corporation's assets,
dissolution or an amendment to the Articles which has
the recommendation and approval of a majority of the
Continuing Directors need only be approved by the
shareholders by a majority of the voting power present
at a meeting to consider such matters. All other
proposals submitted to the shareholders upon the
recommendation and approval of a majority of the
Continuing Directors need only be approved by a
majority of the votes cast at any meeting to consider
the proposal. Any matter submitted to the
shareholders other than with the recommendation and
approval of a majority of the Continuing Directors
must be approved by the affirmative vote of 80% of the
Total Voting Power.
Sugarland's Articles provide that shareholder
approval of any matter properly brought before the
shareholders is effected by a majority of the votes
actually cast, with the exception of directors, who
are elected by a plurality vote.
Limitation of Personal Liability and Indemnification
of Directors and Officers
The Articles of Incorporation of MidSouth
contain a provision limiting the personal liability of
MidSouth's directors and officers under certain
circumstances (the "Limitation of Liability Provi-
sion"). Pursuant to the Limitation of Liability
Provision, the officers and directors of MidSouth have
no personal liability to MidSouth or its shareholders
for monetary damages for breach of their fiduciary
duty as directors or officers of MidSouth except for
(a) any breach of the director's or officer's duty of
loyalty to MidSouth or its shareholders, (b) acts or
omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(c) liability pertaining to acts related to an
unlawful stock repurchase or payment of a dividend, or
(d) any transaction from which the director or officer
derived an improper personal benefit. The Articles
also permit the Board to cause the Company to enter
into contracts with its directors and officers to
further limit an individual's liability to the fullest
extent permitted by law, and to adopt similar
limitation of liability and indemnification provisions
with respect to the Company's subsidiaries.
Sugarland's Articles contain indemnification
provisions which provide indemnification to its
directors and officers to the fullest extent permitted
by the LBCL. Neither Sugarland's Articles nor its
Bylaws contain provisions limiting the liability of
its directors and officers.
RIGHTS AND PREFERENCES OF MIDSOUTH PREFERRED
STOCK
Shareholders of Sugarland who receive
MidSouth Preferred Stock in exchange for their shares
of Sugarland Common Stock will have the rights and
preferences described in the Form of Articles of
Amendment of MidSouth attached hereto as Appendix B.
Shareholders of Sugarland are urged to review the Form
of Articles of Amendment of MidSouth at Appendix B for
a complete description of the rights and preferences
afforded to holders of MidSouth Preferred Stock.
Dividend Rights
Holders of record of the MidSouth Preferred
Stock are entitled to receive, but only when as and if
declared by the MidSouth Board of Directors, and out
of the funds of MidSouth legally available for that
purpose, cumulative cash dividends at an annual rate,
fixed on December 31 of each year for the ensuing
calendar year, equal to the yield for Government Bonds
and Notes maturing in December of the following year,
as published in the Treasury Bonds, Notes and Bills
Section of the last issue of the Wall Street Journal
published each year, plus 1% per annum, and no more;
provided that the annual dividend rate shall in no
case be greater than 10% nor less than 6%, and that,
from and after the tenth anniversary of the date of
issuance of the Preferred Stock the annual dividend
rate will be fixed at 10%. If more than one yield is
shown for December maturities, the average will be
applied. If no yield is quoted for December
maturities, the yield for the next earlier available
month will be applied. On the basis of the
foregoing, from the date of issuance of the Preferred
Stock through December 31, 1995, the annual dividend
rate will be 8.28%. If any quarterly dividend is not
paid when due, the unpaid amount will bear interest at
a rate of 10% per annum until paid.
Dividends payable on the Preferred Stock will
be paid on the first day of April, July, October or
January of each year or on such earlier dates as the
MidSouth Board of Directors may from time to time fix
as the dates for payment of quarterly dividends on
MidSouth Common Stock. The initial dividend on the
Preferred Stock will be payable on the first day of
April, July, October, or January that is at least 91
days from the date of original issuance of the
Preferred Stock and will be in an amount, at the
applicable dividend rate, based on the number of days
between the date of original issuance and the dividend
payment date minus 90 days, provided that the
aggregate amount payable (A) will be increased by the
amount by which certain expenses of Sugarland related
to the Plan are less than $110,000 (the "Additional
Amount"), or (B) will be reduced by the amount by
which certain expenses (as defined in the Articles)
exceed $110,000 (the "Subtracted Amount"). Such
expenses include Sugarland's actual legal, accounting
and financial advisory fees and expenses of printing
and mailing this Joint Proxy Statement and Prospectus
and holding the Special Meeting, and any other
expenses in connection with the negotiation,
execution, implementation and consummation of the
Plan. In any case in which the Additional Amount is
greater than the dividend that would have been paid
for the 90 excluded days set forth above, such excess
will be payable on the next succeeding dividend
payment date. In any case in which the Subtracted
Amount is greater than the amount otherwise payable
under this paragraph, such excess will be deducted
from the amount otherwise payable on the next
succeeding dividend payment date.
As long as any shares of MidSouth Preferred
Stock are outstanding, MidSouth will not declare, pay
or set apart for payment any dividend on any shares of
its Common Stock or other capital stock ranking junior
to the Preferred Stock as to dividends or liquidation
rights (collectively, "Junior Securities") or make any
payment on account of, or set apart for payment money
for a sinking or other similar fund, for the purchase,
redemption or other retirement of, any of the Junior
Securities or any warrants, rights, calls or options
exercisable for or convertible into any of the Junior
Securities, or make any distribution in respect
thereof, either directly or indirectly, whether in
cash, other property, obligations or shares of
MidSouth (other than distributions or dividends in
Junior Securities to the holders of Junior
Securities), and will not permit any corporation or
other entity directly or indirectly controlled by
MidSouth to purchase or redeem any of the Junior
Securities or any warrants, rights, calls or options
exercisable for or convertible into any of the Junior
Securities, unless prior to or concurrently with the
payment or setting apart for payment of any dividend
on any of the Junior Securities, all accumulated and
unpaid dividends on shares of Preferred Stock, and
interest thereon, if any, have been or will be paid.
Holders of Sugarland Common Stock are not
entitled to any dividend preference.
Redemption Rights
On or after the fifth anniversary of the date
of issuance of the Preferred Stock, MidSouth may, at
its option, redeem the whole, or from time to time,
any part of the Preferred Stock at a redemption price
per share payable in cash in an amount equal to the
sum of (i) $14.25, (ii) all accrued and unpaid
dividends on the Preferred Stock to the date fixed for
redemption, whether or not earned or declared and
(iii) interest accrued to the date of redemption on
all accrued and unpaid dividends on the Preferred
Stock, if any.
Conversion Rights
At their option, the holders of the shares of
MidSouth Preferred Stock may convert such stock into
shares of MidSouth Common Stock at the conversion rate
of one share of MidSouth Common Stock for each share
of Preferred Stock converted at any time prior to the
redemption of the Preferred Stock. The conversion
rate is subject to adjustment from time to time as
further provided in MidSouth's Articles of
Incorporation.
Voting Rights
Except as otherwise required by law or the
MidSouth Articles of Incorporation, holders of
MidSouth Preferred Stock are not entitled to any vote
on any matter, including but not limited to any
merger, consolidation or transfer of assets, or
statutory share exchange, and to notice of any meeting
of shareholders of MidSouth. If at any time MidSouth
falls in arrears in the payment of dividends on the
Preferred Stock for two consecutive quarterly dividend
periods, the number of directors constituting the full
Board of Directors of MidSouth will be automatically
increased by two, and the holders of the Preferred
Stock, voting separately as a single class, will be
entitled to elect two directors of MidSouth to fill
the two created directorships, at a special meeting
called for the purpose, and thereafter at each
shareholders meeting held for the purpose of electing
directors of MidSouth, so long as there continues to
be any arrearage in the payment of dividends on the
Preferred Stock for any past quarterly dividend period
or of interest on such accumulated and unpaid
dividends. When all accumulated and unpaid dividends
on the Preferred Stock for all past quarterly dividend
periods, and the interest thereon, have been paid in
full, the right of the holders of the Preferred Stock
to elect directors will cease, the number of directors
of MidSouth will automatically be reduced by two, and
the term of office of all directors elected by the
holders of the Preferred Stock will immediately
terminate.
Liquidation Rights
Upon the dissolution, liquidation or winding
up of MidSouth, the holders of the shares of Preferred
Stock will be entitled to receive upon liquidation,
and to be paid out of the assets of MidSouth available
for distribution to its shareholders before any
payment or distribution may be made on the MidSouth
Common Stock or on any other junior securities, the
amount of $14.25 per share, plus a sum equal to all
accrued and unpaid dividends, whether or not earned or
declared on such shares, and accrued interest thereon,
if any, to the date of final distribution. Neither
the sale of all or substantially all of the property
or business of MidSouth, nor the merger or
consolidation of MidSouth into or with any other
entity, or the merger or consolidation of any other
entity into MidSouth will be considered a dissolution,
liquidation or winding up, voluntary or involuntary,
of MidSouth.
Preemptive Rights
Holders of shares of MidSouth Preferred Stock
do not have preemptive rights.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined
financial statements are presented assuming the merger
of Sugarland into MidSouth will be accounted for as a
purchase, and subject to the purchase adjustments
noted below regarding the Companies, reflect the
combination of the historical consolidated financial
statements of the respective companies for the
following periods. The unaudited pro forma combined
balance sheet assumes the Mergers were consummated on
December 31, 1994. The unaudited pro forma financial
statements give effect to (1) the issuance of
187,286 shares of Preferred Stock at $14.25 per share
(2) the payment of preferred dividends at the rate
effective December 31, 1994, (3) the amortization of
restated goodwill, and (4) the adjustment of certain
assets of Sugarland to fair market value.
The unaudited pro forma information does not
purport to represent what the Companies' combined
results of operations actually would have been if the
Mergers had occurred as of the dates indicated or will
be for any future period. The unaudited pro forma
combined financial statements should be read in
conjunction with the historical financial statements
and notes thereto of MidSouth and Sugarland contained
elsewhere or incorporated by reference herein.
<TABLE>
<CAPTION>
Bancorp, Inc.
Unaudited Pro Forma Combined Balance Sheet
December 31, 1994
Pro Forma
MidSouth Sugarland MidSouth
Bancorp, Inc. Bancshares, Inc. Combined Pro Forma Adjustments Bancorp, Inc.
ASSETS DEBITS CREDITS
<S> <C> <C> <C> <C> <C> <C>
Cash and
Due From
Banks $6,941,989 2,323,694 9,265,683 200,000(F) 9,065,683
Federal
Funds Sold 1,700,000 2,075,000 3,775,000 3,775,000
_________ _________ _________ _________
Total Cash
and
Equivalents 8,641,989 4,398,694 13,040,683 12,840,683
Interest-
Bearing
Deposits in
Banks 48,422 48,422 48,422
Securities
Available
for Sale 31,369,476 3,944,856 35,314,332 35,314,332
Investment
Securities 370,946 370,946 370,946
Loans 60,432,275 8,359,628 68,791,903 68,791,903
Allowance
for
Possible
Loan Losses (873,934) (133,853) (1,007,787) (1,007,787)
Loans, Net 59,558,341 8,225,775 67,784,116 67,784,116
Bank
Premises
and
Equipment,
Net 2,117,512 493,338 2,610,850 287,000(B) 2,897,850
Other Real
Estate
Owned, Net 198,350 198,350 198,350
Accrued
Interest
Receivable
and Other
Asset 1,469,233 409,896 1,879,129 97,580(C) 1,976,709
Goodwill,
Net 191,691 191,691 561,487(A) 287,000(B) 568,598
___________ _________ _________ 200,000(F) 97,580(C) ________
TOTAL
ASSETS $103,965,960 17,472,559 121,438,519 122,000,006
============ ========== =========== ===========
LIABILITIES
Deposits $ 31,035,865 4,821,975 35,857,840 35,857,840
Non-
Interest
Bearing 65,454,490 10,497,969 75,952,459 75,952,459
___________ __________ __________ __________
Total
Deposits 96,490,355 15,319,944 111,810,299 111,810,299
Securities
Sold Under
Repurchase
Agreements 301,730 301,730 301,730
Accrued
Interest
Payable 191,366 191,366 191,366
Notes
Payable 1,195,917 1,195,917 1,195,917
Other
Liabilities 413,246 45,277 458,523 458,523
__________ __________ ___________ ___________
Total
Liabilities 98,592,614 15,365,221 113,957,835 113,957,835
__________ __________ ___________ ___________
Stockholders'
Equity
Preferred
Stock 2,668,825A 2,668,825
Common
Stock 71,399 1,161,430 1,232,829 1,161,430(A) 71,399
Capital
Surplus 6,144,070 1,452,364 7,596,434 1,452,364(A) 6,144,070
Unearned
ESOP Shares (73,021) (73,021) (73,021)
Unrealized
(Losses)
Gains on
Securities
Available-
For-Sale,
Net of Tax (1,062,800) (225,360) (1,288,160) 225,360(A) (1,062,800)
Retained
Earnings 293,698 232,514 526,212 232,514(A) 293,698
Treasury
Stock (513,610) (513,610) 513,610(A)
__________ _________ __________ __________
Total
Shareholders'
Equity 5,373,346 2,107,338 7,480,684 8,042,171
__________ _________ __________ ___________
Total
Liabilities
and
Shareholders'
Equity 103,965,960 17,472,559 121,438,519 122,000,006
=========== ========== =========== ===========
MidSouth
Bancorp, Inc.
Unaudited Pro Forma Combined Statement of Earnings
December 31, 1994
Pro Forma
MidSouth Sugarland MidSouth
Bancorp, Inc. Bancshares, Inc. Combined Pro Forma Adjustments Bancorp, Inc.
INTEREST DEBITS CREDITS
INCOME
Interest
and Fees on
Loans $ 5,463,501 868,282 6,331,783 6,331,783
Interest on
Investment
Securities 1,782,504 262,604 2,045,108 2,045,108
Interest on
Federal
Funds Sold 142,473 88,030 230,503 230,503
__________ _________ __________ ___________
Total
Interest
Income 7,388,478 1,218,916 8,607,394 8,607,394
__________ _________ __________ ___________
INTEREST
EXPENSE
Interest on
Deposits 1,924,906 365,679 2,290,585 2,290,585
Interest on
Notes Pay-
able 51,195 51,195 51,195
__________ _________ __________ ___________
Total
Interest
Expense 1,976,101 365,679 2,341,780 2,341,780
__________ _________ __________ ___________
NET IN-
TEREST
INCOME 5,412,377 853,237 6,265,614 6,265,614
PROVISION
FOR
POSSIBLE
LOAN LOSSES 210,000 210,000 210,000
__________ _________ __________ ___________
NET
INTEREST
INCOME
AFTER
PROVISION
FOR
POSSIBLE
LOAN LOSSES 5,202,377 853,237 6,055,614 6,055,614
__________ _________ __________ ___________
NON-
INTEREST
INCOME
Service
Charges on
Deposits 1,015,529 154,173 1,169,702 1,169,702
Other
Service
Charges and
Fees 406,187 25,980 432,167 432,167
Securities
Gains, Net 1,178 1,178 1,178
__________ _________ __________ ___________
TOTAL NON-
INTEREST
INCOME 1,422,894 180,153 1,603,047 1,603,047
NON-
INTEREST
EXPENSE
Salaries
and
Employee
Benefits 2,242,892 436,220 2,679,112 2,679,112
Occupancy
and
Equipment
Expenses 822,615 205,824 1,028,439 1,028,439
Other
Operating
Expenses 1,816,623 173,118 1,989,741 32,000(D) 2,021,741
__________ _________ __________ ___________
TOTAL NON-
INTEREST
EXPENSE 4,882,130 815,162 5,697,292 5,729,292
__________ _________ __________ ___________
INCOME
BEFORE
INCOME
TAXES 1,743,141 218,228 1,961,369 1,929,369
PROVISION
FOR INCOME
TAXES 601,500 55,685 657,185 657,185
NET INCOME 1,141,641 162,543 1,304,184 1,272,184
__________ _________ __________ ___________
PREFERRED
DIVIDEND
REQUIRE-
MENT 220,979(E) 220,979
INCOME
AVAILABLE
TO COMMON
SHARE-
HOLDERS $ 1,141,641 162,543 1,304,184 1,051,205
=========== ======== ========= =========
(A) To record preferred stock (187,286 shares @ $14.25/share)
and eliminate equity of Sugarland.
(B) To adjust Bank Premises and Equipment to market.
(C) To record deferred taxes for write-up of Bank Premises and Equipment.
(D) To amortize adjusted goodwill for 1994.
(E) To record payment of Preferred Stock dividends.
($2,668,825 a 8.28%).
(F) To record estimated expenses relating to the Mergers as a purchase
price adjustment.
__________________________________
ELECTION OF DIRECTORS OF MIDSOUTH
MidSouth's Articles provide that the number
of directors will be set by the By-Laws, and the By-
Laws currently provide for a Board of Directors of
nine directors. The Articles also provide for three
classes of directors, with one class to be elected at
each annual meeting for a three-year term. At the
Annual Meeting, Class II Directors will be elected to
serve until the third succeeding annual meeting of
shareholders and until their successors have been duly
elected and qualified.
Unless authority is withheld, the persons
named in the enclosed proxy will vote the shares
represented by the proxies they receive for the
election of the three Class II director nominees named
below. In the unanticipated event that one or more
nominees cannot be a candidate at the Annual Meeting,
the shares represented by the proxies will be voted in
favor of such other nominees as may be designated by
the Board. Directors will be elected by plurality
vote.
MidSouth's Articles provide that only persons
who are nominated in accordance with the procedures
set forth in Article IV(H) of the Articles are
eligible for election as directors. Other than the
Board of Directors, only shareholders of MidSouth
entitled to vote at a meeting for the election of
directors who have complied with the notice procedures
set forth in the Articles may nominate a person for
director. In order for such shareholder to timely
nominate a person for election at the Annual Meeting,
the shareholder must have provided written notice to
MidSouth by January 15, 1995. The shareholders'
notice must set forth the following: (1) as to each
person whom the shareholder proposes to nominate for
election or reelection as director, (a) the name, age,
business address and residential address of such
person, (b) the principal occupation or employment of
such person, (c) the class and number of shares of
capital stock of MidSouth of which such person is the
beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934 ("Rule 13d-3") and (d)
any other information relating to such person that
would be required to be disclosed in solicitations of
proxies for the election of directors pursuant to
Regulation 14A promulgated under the Securities
Exchange Act of 1934; and (2) as to the shareholder of
record giving the notice, (a) the name and address of
such shareholder, (b) the class and number of shares
of capital stock of MidSouth of which such shareholder
is the beneficial owner (as defined in Rule 13d-3) and
(c) a description of any agreements, arrangements or
relationships between the shareholder giving the
notice and each person the shareholder proposes to
nominate. Two inspectors, not affiliated with
MidSouth, appointed by MidSouth's secretary, will
determine whether the notice provisions were met. If
the inspectors determine that the Shareholder has not
complied with Article IV(H), the defective nomination
shall be disregarded.
The following table sets forth certain
information as of February 28, 1995 with respect to
each director nominee and each director whose term as
a director will continue after the Meeting. Unless
otherwise indicated, each person has been engaged in
the principal occupation shown for the past five
years. The Board recommends a vote FOR each of the
three nominees named below.
Director Nominees for terms expiring in 1998 (Class II Directors)
</TABLE>
<TABLE>
<CAPTION>
Year First Became
_________________
Name Age Principal Occupation Director of MidSouth
____ ___ ____________________ _____________________
<C> <C> <C>
Will G. Charbonnet, Sr. 47 President, Acadiana Fast Foods Inc. 1985
(owner/operator fast food stores);
Chairman of the Board, MidSouth and
MidSouth Bank
Clayton Paul Hilliard 69 President, Badger Oil Corporation 1992(1)
Robert Burke Keaty 45 Partner, Keaty & Keaty Law Firm 1985
Directors whose terms expire in 1996 (Class III Directors)
Year First Became
Name Age Principal Occupation Director of MidSouth
____ ___ _____________________ ____________________
James R. Davis, Jr. 42 Owner, Safe-America Security System 1991
(1994- present); Director of Gas
Supply for Louisiana, Victoria Gas
Corporation (October 1992 - 1993);
President, Elsbury Production, Inc.
(oil and gas exploration and
production) (June 1982 - September
1992)
Karen L. Hail 41 Chief Financial Officer and Secretary, 1988
MidSouth
Milton B. Kidd, Jr. 75 Optometrist, Kidd Vision Centers 1984
____________________________________
</TABLE>
<FN1> Mr. Hilliard also was a director of MidSouth Bancorp, Inc.
and MidSouth National Bank from 1985 to 1987.
Directors whose terms expire in 1997 (Class I Directors)
<TABLE>
<CAPTION>
Name Age Principal Occupation Director of MidSouth
____ ___ _____________________ ____________________
<C> <C> <C>
C. R. Cloutier 48 President and C.E.O., MidSouth and 1984
MidSouth Bank
J. B. Hargroder, M.D. 64 Physician, retired 1984
William M. Simmons 61 Private Investments 1984
</TABLE>
During 1994 the Board held 17 meetings. Each
incumbent director attended at least 75% of the
aggregate number of meetings held during 1994 of the
Board and committees of which he or she was a member,
except Robert Burke Keaty and James R. Davis, who
attended 41% and 74% respectively.
The Board has an Executive Committee, an
Audit and Loan Review Committee and a Personnel
Committee. The members of the Executive Committee are
Will G. Charbonnet, Sr., C. R. Cloutier, J. B.
Hargroder, M.D. and Robert Burke Keaty. The Executive
Committee's duties include nominations, shareholder
relations, bank examination and Securities and
Exchange Commission ("SEC") reporting. The Executive
Committee will consider nominees that are proposed by
shareholders in accordance with the procedures,
described below, set forth in MidSouth's Articles.
The Executive Committee did not meet in 1994 as such
matters usually taken up by this Committee were
brought to the full Board.
The current members of the Audit and Loan
Review Committee are James R. Davis, Jr., Milton B.
Kidd, III, and Clayton Paul Hilliard. The Committee,
which held 12 meetings in 1994, is responsible for
maintaining a program of internal accounting controls
and monitoring all loans and lines of credit for
consistency with MidSouth Bank's loan policy.
The current members of the Personnel
Committee are Will G. Charbonnet, Sr., James R. Davis,
Jr., J. B. Hargroder, Clayton Paul Hilliard and
William M. Simmons. The Personnel Committee, which
met one time in 1994, is responsible for evaluating
the performance and setting the compensation of
MidSouth's executive officers.
Directors of MidSouth are also members of the
Board of Directors of MidSouth Bank. With the
exception that Milton B. Kidd, III, is a director of
MidSouth only, and Milton B. Kidd, Jr., is a director
of MidSouth and director emeritus of MidSouth Bank.
Directors were entitled to fees of $200 per month for
service on both boards, except for the Chairman of the
Board of MidSouth and MidSouth Bank who receives an
additional $400 per month. In addition to the monthly
fee, each director receives $250 for each regular
meeting, and $125 for each special meeting of the
Board of MidSouth Bank and $75 for the first hour, and
$25 per hour for each additional hour, of each
committee meeting. Directors received fees only for
meetings they attended.
Section 16(a) of the Securities and Exchange
Act of 1934 requires MidSouth's directors and
executive officers and persons who own more than ten
percent of a registered class of MidSouth's equity
securities to file with the SEC initial reports of
ownership, reports of changes in ownership, annual
reports regarding certain transactions in common stock
and other equity securities of MidSouth. Executive
officers, directors and greater than ten-percent
shareholders are required to furnish MidSouth with
copies of all Section 16(a) reports they file. To
MidSouth's knowledge, all such Section 16(a) filings
were filed on a timely basis.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS OF MIDSOUTH
Security Ownership of Management
The following table sets forth certain
information as of February 28, 1995, concerning the
beneficial ownership of MidSouth's Common Stock by
each director and nominee of MidSouth, by MidSouth's
Chief Executive Officer, C. R. Cloutier (who is also a
director) and by all directors and executive officers
of MidSouth as a group, determined in accordance with
Rule 13d-3 of the SEC. Unless otherwise indicated,
the Common Stock is held with sole voting and
investment power.
<TABLE>
<CAPTION>
Amount and
Nature
of Beneficial Percent
Name and Address Ownership<FN1> of Class
<S> <C> <C>
Will G. Charbonnet, Sr. 40,045<FN2> 5.6%
1003 Hugh Wallis Road,
South, Suite F
Lafayette, LA 70508
C. R. Cloutier 47,866<FN3> 6.6%
P. O. Box 3745
Lafayette, LA 70502
James R. Davis, Jr. 15,618<FN4> 2.2%
9151 Interline Ave.,
Ste. 1-B
Lafayette, LA 70503
Karen L. Hail 22,200<FN5> 3.1%
P. O. Box 3745
Lafayette, LA 70502
J. B. Hargroder, M.D. 59,913<FN6> 8.4%
P. O. Box 1049
Jennings, LA 70546
Clayton Paul Hilliard 34,052<FN7> 4.8%
P. O. Box 52745
Lafayette, LA 70505
Robert Burke Keaty 34,566<FN8> 4.8%
345 Doucet Road
Suite 104
Lafayette, LA 70503
Milton B. Kidd, Jr., O.D. 17,221<FN9> 2.4%
1500 N.W. Blvd.
P. O. Box 1071
Franklin, LA 70538
William M. Simmons 23,282<FN10> 3.3%
P. O. Box 111
Avery Island, LA 70513
All directors and
executive officers as a
group (13 persons) 306,616 41.64%
______________________
</TABLE>
<FN1> MidSouth Common Stock held by MidSouth's
Directors' Deferred Compensation Trust (the "Trust")
is beneficially owned by the Plan Administrator, which
has sole voting and investment power. Because the
Plan Administrator is the Executive Committee of the
Board of MidSouth, all directors of MidSouth could be
deemed to share voting and investment power with
respect to all MidSouth Common Stock held in the Trust
(50,966 shares or 7.1% as of February 28, 1995). For
each individual director, the table reflects the
number of shares held for his or her account only.
The group figure reflects all shares held in the Trust
February 28, 1995. MidSouth Common Stock held by
MidSouth's Employee Stock Ownership Plan (the "ESOP")
is not included in the table, except that shares
allocated to an individual's account are included as
beneficially owned by that individual. Beneficial
ownership of shares held in the ESOP is attributed to
the ESOP, ESOP Trustees and ESOP Administrative
Committee, as reflected in the table below. The Board
has the power to appoint and remove the ESOP Trustees
and Administrative Committee. Shares subject to
options are deemed outstanding for purposes of
computing the percentage of outstanding Common Stock
owned by persons beneficially owning such shares and
by all directors and executive officers as a group but
are not deemed to be outstanding for the purpose of
computing the ownership percentage of any other
person.
<FN2> Includes 8,883 shares as to which he shares
voting and investment power and 6,938 held for his
account in the Trust.
<FN3> Includes 7,362 shares held by the ESOP for
his account as to which he shares voting power, 19,038
shares as to which he shares voting and investment
power, 6,861 shares held for his account in the Trust
and 10,500 shares underlying stock options.
<FN4> Includes 10,131 shares as to which he shares
voting and investment power and 5,487 shares held for
his account in the Trust.
<FN5> Includes 5,234 shares held for her account in
the ESOP as to which she shares voting power, 210
shares as to which she shares voting and investment
power, 5,416 shares held for her account in the Trust
and 10,500 shares underlying stock options.
<FN6> Includes 53,436 shares as to which he shares
voting and investment power, and 5,772 held for his
account in the Trust.
<FN7> Includes 30,992 shares as to which he shares
voting and investment power and 2,204 shares held for
his account in the Trust.
<FN8> Includes 262 shares as to which he shares
voting and investment power, and 4,616 shares held for
his account in the Trust.
<FN9> Includes 5,250 shares as to which he shares
voting and investment power, and 4,173 shares held
for his account in the Trust.
<FN10> Includes 570 shares as to which he shares
voting and investment power and 5,447 shares held for
his account in the Trust.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain
information as of February 28, 1995 concerning persons
or groups, other than the directors listed in the
table above, known to MidSouth to be the beneficial
owner of more than five percent of MidSouth's Common
Stock, determined in accordance with Rule 13d-3 of the
SEC.
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
Robert C. Schumacher, M.D. 36,411 5.1%
16134 N. Gallaugher
Jennings, LA 70546
Hilton B. Watson 36,855 5.2%
102 S. Cutting Avenue
Jennings, LA 70546
MidSouth Bancorp, Inc. 67,120 <FN1> 9.4%
Employee Stock Ownership
Plan, ESOP Trustees and
ESOP Administrative
Committee
P. O. Box 3745
Lafayette, LA 70502
<FN1> The ESOP Administrative Committee directs the
ESOP Trustees how to vote the approximately 6,065
unallocated shares of Common Stock held in the ESOP as
of February 28, 1995. Voting rights of the shares
allocated to ESOP participants' accounts are passed
through to the participants. The ESOP Trustees have
investment power with respect to the ESOP's assets,
but must exercise this power in accordance with an
investment policy established by the ESOP
Administrative Committee. Thus, the ESOP Trustees
share investment power with the ESOP Administrative
Committee for all shares held pursuant to the ESOP.
The ESOP Trustees are Donald R. Landry, an executive
officer of MidSouth, and Russell Henson and Kim
Cormier, MidSouth Bank employees. The ESOP
Administrative Committee consists of Teri S. Stelly
and Todd Kidder, executive officers of MidSouth, and
Dailene Melancon, a MidSouth Bank employee.
___________________________
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
Summary of Executive Compensation
The following table shows all compensation
awarded to, earned by or paid to MidSouth's Chief
Executive Officer, C. R. Cloutier, for all services
rendered by him in all capacities to MidSouth and its
subsidiaries for the year ended December 31, 1994. No
other executive officer of MidSouth had total annual
salary and bonus exceeding $100,000 for the year ended
December 31, 1994.
<TABLE>
<CAPTION>
Long Term Compensation
______________________________________________________________________________
Annual Compensation Awards Payouts Other
______________________________________________________________________________
Other Securities All
Annual Restricted Under- Other
Name Compen- Stock lying LTIP Compen-
and Principal Year Salary($) Bonus($) sation Awards(s) Options/ Payouts sation
Position ($) ($) SARs(#) ($) ($)
__________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C.R. Cloutier, 1994 99,617 15,071 0 0 0 0 21,065<FN2>
Chief 1993 99,617 4,956 0 0 0 0 20,764
Executive 1992 90,405 0 0 0 0 0 14,705
Officer
</TABLE>
<FN1> Awarded pursuant to the Incentive Compensation
Plan of MidSouth Bank.
<FN2> Consists of $11,900 in directors' fees, all of
which were deferred by Mr. Cloutier pursuant to the
Trust, an estimated $8,338 contributed by MidSouth to
the ESOP for the account of Mr. Cloutier and $827 paid
by MidSouth in insurance premiums for term life
insurance for the benefit of Mr. Cloutier.
Option Exercises and Holdings
The following table sets forth information
with respect to MidSouth's Chief Executive Officer, C.
R. Cloutier, concerning his exercise of options during
1994 and unexercised options held as of December 31,
1994. As of December 31, 1994, as adjusted for a
stock dividend paid February 18, 1994, other executive
officers of MidSouth held options to purchase an
aggregate of 10,500 shares of common stock exercisable
at $9.52 per share and expiring on December 31, 1996.
AGGREGATED OPTION EXERCISES IN 1994 AND OPTION VALUES
AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________
No. of
Shares
Acquired
on Value Number of Value of
Name Exercise Realized Securities Unexercised
Underlying In-the-
Unexercised Money
Options/SARs at Options/SARs at
December 31, 1994<FN1> December 31, 1994
_______________________________________________________________________________________________________
Exercisable Unexercisable Exercisable Unexercisable
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
C. R. Cloutier 0 $0 10,500 0 $20,790 N.A.
________________________________________________________________________________________________________
</TABLE>
<FN1> As adjusted for a stock dividend paid February
18, 1994, Mr. Cloutier's options are exercisable at an
exercise price of $9.52 per share and expire on
December 31, 1996.
Employment and Severance Contract
Mr. Cloutier has a written employment
agreement with MidSouth Bank for a term of one year,
commencing February 15th of each year. The employment
agreement is automatically extended for a period of
one year every year thereafter commencing on the
termination date, unless written notice of termination
is given by any party to the agreement not later than
60 days before the termination date. Pursuant to the
contract, Mr. Cloutier receives term life insurance
equal to four times his annual salary payable to a
beneficiary of his choice and disability insurance of
not less than two-thirds of his annual salary. Mr.
Cloutier's contract has a severance provision which
entitles him to one year's salary if the agreement is
terminated by MidSouth Bank, unless he is removed by a
regulatory body.
Certain Transactions
Directors, nominees and executive officers of
MidSouth and their associates have been customers of,
and have had loan transactions with, MidSouth Bank in
the ordinary course of business, and such transactions
are expected to continue in the future. In the
opinion of MidSouth's management, such transactions
have been on substantially the same terms, including
interest rates and collateral, as those prevailing at
the time for comparable transactions with other
persons and did not involve more than the normal risk
of collectibility or present other unfavorable
features.
____________________________
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
MidSouth's consolidated financial statements
for the year ended December 31, 1994 were audited by
the firm of Deloitte & Touche LLP and the Board has
appointed such firm to audit MidSouth's financial
statements for the year ending December 31, 1995.
Representatives of Deloitte & Touche LLP are not
expected to be present at the Annual Meeting.
SHAREHOLDER PROPOSALS
Eligible shareholders who desire to present a
proposal qualified for inclusion in the proxy
materials relating to the 1996 annual meeting of
MidSouth must forward such proposals to the Secretary
of MidSouth at the address listed on the first page of
this Proxy Statement in time to arrive at MidSouth
prior to ___________________.
LEGAL MATTERS
Correro, Fishman & Casteix, L.L.P., New
Orleans, Louisiana, has rendered its opinion that the
shares of MidSouth Preferred Stock to be issued in
connection with the Holding Company Merger have been
duly authorized and, if and when issued pursuant to
the terms of the Plan, will be validly issued, fully
paid and non-assessable.
EXPERTS
The audited consolidated financial statements
of Sugarland and its subsidiary as of and for each of
the years in the two year period ended December 31,
1994 and 1993 have been audited by Mixon, Roy, Metz &
Mixon, independent public accountants, as indicated in
their report with respect thereto, and have been
included herein in reliance upon the authority of such
firm as experts in accounting and auditing.
The consolidated financial statements of
MidSouth incorporated in this Joint Proxy Statement
and Prospectus by reference from the MidSouth Annual
Report on Form 10-KSB have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference and
has been so incorporated in reliance upon the report
of such firm given upon authority as experts in
accounting and auditing.
____________________________
OTHER MATTERS
With respect to the Companies, at the time
of the preparation of this Joint Proxy Statement and
Prospectus, neither of them had been informed of any
matters to be presented by or on behalf of the
Companies or the management thereof for action at the
Meetings other than those listed in the Notice of
Special Meeting of Shareholders of Sugarland and
Notice of Annual Meeting of Shareholders of MidSouth
referred to herein. If any other matters come before
the meeting or any adjournment thereof, the persons
named in the enclosed proxy will vote on such matters
according to their best judgment.
Shareholders are urged to sign the enclosed
proxy, which is solicited on behalf of the
Board of Directors of Sugarland or MidSouth, and
return it at once in the enclosed envelope.
ANY SHAREHOLDER MAY BY WRITTEN REQUEST OBTAIN WITHOUT
CHARGE A COPY OF MIDSOUTH'S ANNUAL REPORT ON FORM 10-
KSB FOR THE YEAR ENDED DECEMBER 31, 1994, WITHOUT
EXHIBITS. REQUESTS SHOULD BE ADDRESSED TO SALLY D.
GARY, INVESTOR RELATIONS, MIDSOUTH BANCORP, INC., P.
O. BOX 3745, LAFAYETTE, LOUISIANA 70502.
BY ORDER OF THE BOARD OF DIRECTORS
OF SUGARLAND
Jeanerette, Louisiana
___________, 1995 __________________________________
RONALD R. HEBERT, SR., SECRETARY
BY ORDER OF THE BOARD OF DIRECTORS
OF MIDSOUTH
Lafayette, Louisiana
_____________, 1995 ____________________________________
KAREN L. HAIL, SECRETARY
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
OF
SUGARLAND BANCSHARES, INC.
Page
Independent Auditors' Report ............................... F-2
Consolidated Balance Sheets as of
December 31, 1994 and 1993 ........................... F-3
Consolidated Statements of Income for
the Years Ended December 31, 1994
and 1993 ............................................. F-4
Consolidated Statements of Changes in Shareholders'
Equity for the Years Ended
December 31, 1993 and 1992 ........................... F-5
Consolidated Statements of Cash Flows for
the Years Ended December 31, 1994
and 1993 ............................................. F-6
Notes to Consolidated Financial Statements ................ F-7
<PAGE>
Independent Auditors' Report
____________________________
The Board of Directors and Shareholders
Sugarland Bancshares, Inc.
P.O. Box 71
Jeanerette, LA 70544
We have audited the accompanying consolidated balance sheets of
Sugarland Bancshares, Inc. and Sugarland State Bank as of
December 31, 1994 and 1993, and the related consolidated
statements of income, changes in shareholders' equity and cash
flows for each of the years then ended. These financial
statements are the responsibility of the Corporations'
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Sugarland Bancshares, Inc. and Sugarland
State Bank at December 31, 1994 and 1993, and the consolidated
results of their operations and their cash flows for each of the
years then ended, in conformity with generally accepted
accounting principles.
MIXON, ROY, METZ & MIXON
CERTIFIED PUBLIC ACCOUNTANTS
March 1, 1995
<PAGE>
Sugarland Bancshares, Inc.
Consolidated Balance Sheets
December 31, 1994 and 1993
1994 1993
___________ ___________
Assets:
______
Cash and Due From Banks $ 2,323,694 $ 2,364,404
Federal Funds Sold 2,075,000 3,050,000
Securities Available for Sale 3,944,856 3,919,566
Loans, Net of Unearned Discount and
Allowance for Possible Loan Losses 8,225,775 8,048,063
Bank Premises and Equipment, Net of
Accumulated Depreciation 493,338 551,978
Accrued Income and Other Assets 409,896 295,698
___________ ___________
Total Assets: $17,472,559 $18,229,709
____________ =========== ===========
Liabilities and Shareholders' Equity:
____________________________________
Liabilities:
___________
Deposits
Demand $ 4,821,975 $ 4,614,157
Savings and NOW Deposits 5,090,390 5,324,182
Other Time Deposits 5,407,579 6,133,173
___________ ___________
Total Deposits $15,319,944 $16,071,512
Accrued Interest on Deposits 17,194 15,805
Other Liabilities 28,083 25,927
___________ ___________
Total Liabilities: $15,365,221 $16,113,244
_________________ =========== ===========
Shareholders' Equity:
____________________
Common Stock, Par Value $5,
400,000 Shares Authorized,
232,286 Issued and 187,286
Shares Outstanding $ 1,161,430 $ 1,161,430
Capital Surplus 1,452,364 1,452,364
Retained Earnings 232,514 70,285
Net Unrealized Losses on Securities
Available for Sale, Net of Tax
of $81,131 (225,360) (54,004)
Treasury Stock, 45,000 Shares (513,610) (513,610)
___________ ___________
Total Shareholders' Equity: $ 2,107,338 $ 2,116,465
__________________________ ___________ ___________
Total Liabilities and Shareholders'
Equity: $17,472,559 $18,229,709
___________________________________ =========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Sugarland Bancshares, Inc.
Consolidated Statements of Income
For The Years Ended December 31, 1994 and 1993
1994 1993
___________ ___________
Interest Income:
_______________
Interest and Fees on Loans $ 868,282 $ 885,008
Interest on Securities
Available for Sale 262,604 295,127
Interest on Federal Funds Sold 88,030 87,614
___________ ___________
Total Interest Income: $ 1,218,916 $ 1,267,749
_____________________
Interest Expense:
________________
Interest on Deposits 365,679 408,049
___________ ___________
Net Interest Income: $ 853,237 $ 859,700
___________________
Provision for Possible Loan
Losses -0- -0-
___________ ___________
Net Interest Income After
_________________________
Provision for Credit Losses: $ 853,237 $ 859,700
___________________________ ___________ ___________
Other Income:
____________
Customer Service Charges $ 154,173 $ 153,034
Other Income 25,980 37,375
Net Investment Securities Gains -0- 8,297
___________ ___________
Total Other Income: $ 180,153 $ 198,706
__________________ ___________ ___________
Other Expenses:
______________
Salaries and Employee Benefits $ 436,220 $ 444,628
Occupancy Expenses 148,649 153,133
Equipment Expenses 57,175 59,178
Other Expenses 173,118 189,324
___________ ___________
Total Other Expenses: $ 815,162 $ 846,263
____________________ ___________ ___________
Income Before Income Taxes: $ 218,228 $ 212,143
__________________________
Income Tax Expense: 55,685 23,826
__________________ ___________ ___________
Net Income: $ 162,543 $ 188,317
__________ =========== ===========
Net Income Per Share of Common
Stock $ .87 $ 1.01
=========== ===========
Average Shares Outstanding 187,286 187,286
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Sugarland Bancshares, Inc.
Consolidated Statements of Changes in Shareholders' Equity
For The Years Ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Unrealized
Loss on
Securities
Common Capital Retained Available Treasury
Stock Surplus Earnings for Sale Stock
__________ __________ __________ ____________ _________
<S> <C> <C> <C> <C> <C>
Balances at
___________
December 31, 1992: $1,161,430 $1,452,364 $(80,271) $(50,912) $(513,610)
__________________
Net Income For Year 188,317
Unrealized Loss on
Securities
Available For Sale (3,092)
Dividends (37,457)
Minority Interest in
Income of Subsidiary (304)
__________ __________ __________ ____________ _________
Balances at
___________
December 31, 1993: $1,161,430 $1,452,364 $ 70,285 $(54,004) $(513,610)
_________________ ========== ========== ========== ============ =========
Net Income For Year 162,543
Net Change in
Unrealized Loss on
Securities Available
For Sale, Net Taxes
of $81,131 (171,356)
Minority Interest in
Income of Subsidiary (314)
__________ __________ __________ ____________ _________
Balances at
___________
December 31, 1994: $1,161,430 $1,452,364 $232,514 $(225,360) $(513,610)
_________________ ========== ========== ========== ============ =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Sugarland Bancshares, Inc.
Consolidated Statements of Cash Flows
For The Years Ended December 31, 1994 and 1993
1994 1993
________ ________
Cash Flows From Operating Activities:
____________________________________
Net Income $162,543 $188,317
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation 60,145 62,298
Increase in Accrued Income and
Other Assets (14,932) (26,943)
Increase/(Decrease) in Interest
Payable 1,389 (7,378)
Increase/(Decrease) in Other
Liabilities 2,298 (10,008)
Loss/(Gain) on Sale of Other
Real Estate Owned 2,527 (12,500)
__________ __________
Net Cash Provided by Operating
______________________________
Activities: $213,970 $193,786
____________ __________ __________
Cash Flows From Investing Activities:
____________________________________
Proceeds From Maturities of
Securities Available for Sale $520,923 $917,697
Purchases of Securities Available
for Sale (799,156) (1,450,227)
Net Decrease in Federal Funds Sold 975,000 2,600,000
Net Increase in Loans (177,712) (454,319)
Purchase of Equipment (1,505) (21,022)
Acquisition of Other Real Estate
Owned (55,000) -0-
Proceeds From Sale of Other Real
Estate Owned 34,338 67,500
__________ __________
Net Cash Provided by Investing
______________________________
Activities: $496,888 $1,659,629
____________ __________ __________
Cash Flows From Financing Activities:
____________________________________
Net Decrease in Demand Deposits,
NOW and Savings Accounts $(25,974) $(792,775)
Net Decrease in Time Deposits (725,594) (570,226)
Dividends Paid -0- (37,457)
__________ __________
Net Cash Used in Financing
__________________________
Activities: $(751,568) $(1,400,458)
____________ _________ _________
Net (Decrease)/Increase in Cash
and Cash Equivalents $(40,710) $452,957
_________ _________
Cash and Due from Banks at
January 1 2,364,404 1,911,447
_________ _________
Cash and Due from Banks at
December 31 $2,323,694 $2,364,404
========= =========
Supplemental Disclosures:
________________________
1. The Corporation paid interest costs of $364,290 and $415,427
in the years ended December 31, 1994 and 1993, respectively.
2. The Corporation made income tax payments of $49,894 and
$26,653 for the years ended December 31, 1994 and 1993,
respectively.
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies:
___________________________________________________
The Corporation
_______________
Sugarland Bancshares, Inc., a Louisiana corporation (the
Corporation), is a bank holding company. Sugarland State Bank
(the Bank) is a state non-member banking institution and a
99.8% owned subsidiary of the Corporation. The Bank is located
in Jeanerette, LA with a branch in New Iberia, LA and its
customers are primarily from that area.
Principles of Consolidation
___________________________
The consolidated financial statements include the accounts of
Sugarland Bancshares, Inc. and its 99.8% owned subsidiary,
Sugarland State Bank. Intercompany transactions and balances
have been eliminated in consolidation.
Cash and Cash Equivalents
_________________________
For purposes of reporting cash flows, cash and cash equivalents
are defined as those amounts included in the balance sheet
caption "Cash and Due From Banks".
Investments in Securities
_________________________
For 1993, investments in securities are stated at cost,
adjusted for amortization of premium and accretion of discount,
which are recognized as adjustments to interest income. Gain
or losses on the sale of investment securities are based upon
the adjusted cost of the specific security sold and the net
proceeds. The investment marketable equity security is carried
at the lower of cost or market value. Generally, the
Corporation sells these securities only to meet liquidity
needs. For 1994, the Corporation adopted SFAS No. 115 and
classified all its U.S. Government Agency Bonds and Notes as
securities available for sale. These securities are reflected
at fair value, and unrealized holding gains and losses, net of
tax on securities available for sale, are reported as a net
amount in a separate component of shareholders' equity until
realized.
Loans
_____
Loans are stated at the amount of unpaid principal, reduced by
unearned discounts and an allowance for possible loan losses.
Interest income on installment loans is recognized using the
sum-of-the-digits method which is similar to the interest
method. Income on other loans is credited to operations based
on the principal amount outstanding using the simple interest
method. Based upon the evaluation of individual loans, the
Corporation does not recognize interest income where collection
of interest is not expected.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 1 - Summary of Significant Accounting Policies:
___________________________________________________
Allowance for Possible Loan Losses
__________________________________
The allowance for possible loan losses is established through a
provision for loan losses charged to expenses. Loans are
charged against the allowance for possible loan losses when
management believes that the collectability of the principal is
unlikely.
The allowance is an amount that management believes will be
adequate to absorb possible loan losses on existing loans that
may become uncollectible, based on evaluation of the
collectability of loans and prior loan loss experience.
Off Balance Sheet Financial Instruments
_______________________________________
In the ordinary course of business, the Bank has entered into
off balance sheet financial instruments consisting of
commitments to extend credit and standby letters of credit.
Such financial instruments are recorded in the financial
statements when they become payable.
Net Income Per Share of Common Stock
____________________________________
Net income per share of common stock is computed by dividing
net income by the weighted average number of shares of common
stock outstanding during the period.
Premises and Equipment
______________________
The premises and equipment are carried at cost less accumulated
depreciation. Depreciation of premises and equipment is
provided over the estimated useful lives of the respective
assets on the straight-line basis for financial reporting
purposes and accelerated methods for income tax reporting
purposes.
Other Real Estate Owned
_______________________
Other real estate owned is comprised of properties acquired
through partial or total satisfaction of loans. These
properties are carried at the lower of cost or market value.
Loan losses arising from the acquisition of such properties are
charged against the allowance for possible loan losses. Other
expenses incurred are charged directly to operations.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 1 - Summary of Significant Accounting Policies:
___________________________________________________
Income Taxes
____________
Provisions for income taxes are based on amounts reported in
the statement of income (after exclusion of non-taxable income
such as interest on state and municipal securities) and include
deferred income taxes on temporary differences in the
recognition of income and expense for tax and financial
statement purposes. Deferred tax assets and liabilities are
included in the financial statements at currently enacted
income tax rates applicable to the period in which the deferred
tax assets and liabilities are expected to be realized or
settled as prescribed in SFAS No. 109, Accounting for Income
Taxes. As changes in tax laws or rates are enacted, deferred
tax assets and liabilities are adjusted through the provision
for income taxes.
The Corporation does not consider the allowance for possible
loan losses as a timing difference since it believes the
allowance will not reverse in the future.
Compensated Absences
____________________
Employees of the Bank are entitled to paid vacation days and
sick days depending on length of service. The amount of
compensation for future absences is immaterial and,
accordingly, no liability has been recorded in the financial
statements. The Bank's policy is to recognize the costs of
compensated absences when actually paid to employees.
Post Retirement Benefits
________________________
The Bank presently offers no post retirement benefits which
would be required to be recorded in the financial statements.
The Bank has a nonqualified deferred compensation plan in which
some of its directors participate. These fees were deducted in
the financial statements but were not deducted for tax
purposes. No deferrals have been made for a number of years.
The economic liability is reflected in the financial
statements.
Fair Values of Financial Instruments
____________________________________
Cash and cash equivalents - The carrying amounts of cash and
short-term instruments approximate their fair value.
Securities available for sale - Fair values for investment
securities, excluding restricted equity securities, are based
on quoted market prices. The carrying value of restricted
equity securities approximates fair value.
Loans receivable - Fair values are based on carrying values.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 1 - Summary of Significant Accounting Policies (Continued):
_______________________________________________________________
Deposit liabilities - The fair values disclosed for demand
deposits are, by definition, equal to the amount payable on
demand at the reporting date (that is, their carrying amounts).
The carrying amounts of money market accounts and certificates
of deposit approximate their fair values at the reporting date.
Accrued interest - the carrying amount of accrued interest
approximates their fair values.
Note 2 - Investments in Securities:
__________________________________
The carrying amounts of securities available for sale as shown in
the consolidated balance sheets and their approximate fair values
at December 31 were as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
December 31, 1994:
Mutual Fund $ 200,000 $ -0- $ 68,327 $ 131,673
U. S. Government and
Agency Securities 3,951,803 930 239,550 3,713,183
Other Securities 100,000 -0- -0- 100,000
___________ __________ __________ ___________
$ 4,251,803 $ 930 $ 307,877 $ 3,944,856
Gross Gross
Book Unrealized Unrealized Market
Value Gains Losses Value
___________ __________ __________ ___________
December 31, 1993:
Mutual Fund $ 145,996 $ -0- $ -0- $ 145,996
U. S. Government and
Agency Securities 3,673,570 63,888 1,454 3,736,004
Other Securities 100,000 -0- -0- 100,000
___________ __________ __________ ___________
$ 3,919,566 $ 63,888 $ 1,454 $ 3,982,000
</TABLE>
Securities carried at approximately $1,000,000 at December 31,
1994 and $800,000 at December 31, 1993, were pledged to secure
public deposits and for other purposes required by law. "Mutual
fund" is a marketable equity security with an original cost of
$200,000 and market values of $131,673 at December 31, 1994 and
$145,996 at December 31, 1993. "Other Securities" is stock in a
nonpublicly traded corresponding bank.
The maturities of securities available for sale at December 31,
were as follows:
1994 1993
__________ __________
Due from one to five years $3,509,439 $3,193,512
Due over five years 442,364 480,058
__________ __________
$3,951,803 $3,673,570
========== ==========
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 3 - Loans and Allowance for Possible Loan Losses:
_____________________________________________________
The components of loans outstanding at December 31 were as
follows:
1994 1993
__________ __________
Commercial and Real Estate Loans $7,757,393 $7,591,935
Installment Loans 698,375 699,436
Overdrafts 3,490 4,336
__________ __________
Gross Loans $8,459,258 $8,295,707
Less:
Unearned Discounts (99,630) (102,252)
Allowance for Possible Loan Losses (133,853) (145,392)
__________ __________
Total Loans $8,225,775 $8,048,063
========== ==========
Nonperforming loans, which include loans contractually past due
90 days or more and those on nonaccrual, were $26,000 and $72,000
at December 31, 1994 and 1993, respectively.
Approximately 30% of the Bank's loans were related to the farming
industry of the Jeanerette, LA area.
The maturities of fixed rate loans outstanding (excluding
nonaccruals) at December 31 were as follows:
1994 1993
__________ __________
Less than one year $2,748,000 $2,614,000
One to five years $1,482,000 $1,244,000
Over five years $ 838,000 $ 732,000
The repricing frequencies of floating rate loans were as follows:
1994 1993
__________ __________
Annually or more frequent $2,692,000 $2,957,000
Less frequently than annually $ 674,000 $ 676,000
Changes in the Allowance for Possible Loan Losses for the years
ended December 31 were as follows:
1994 1993
________ ________
Balance at January 1 $145,392 $134,763
Provisions Charged to Operations -0- -0-
Recoveries of Loans Previously
Charged Off 4,646 16,582
Loans Charged Off (16,003) (5,953)
________ ________
Balance at December 31 $133,853 $145,392
======== ========
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 4 - Bank Premises and Equipment:
____________________________________
Components of properties and equipment were
as follows:
1994 1993
__________ __________
Building - Main Office $ 469,788 $ 469,788
Furniture, Fixtures and Vehicles 713,760 712,255
Land - Jeanerette, LA 50,238 50,238
Land - New Iberia, LA 87,563 87,563
__________ __________
Total $1,321,349 $1,319,844
Less Accumulated Depreciation (828,011) (767,866)
__________ __________
Fixed Assets (Net) $ 493,338 $ 551,978
========== ==========
Depreciation expense for the years ended December 31, 1994 and
1993 was $60,145 and $62,298, respectively.
Note 5 - Treasury Stock:
_______________________
Treasury stock is shown at cost.
Note 6 - Commitments and Contingent Liabilities:
_______________________________________________
In the normal course of business there are outstanding various
commitments and contingent liabilities, such as guarantees and
commitments to extend credit, which are not reflected in the
accompanying financial statements until they become payable. In
the opinion of management, these do not represent unusual risks.
At December 31, 1994 and 1993 unused lines of credit totaled
$1,565,000 and $2,104,000, respectively.
At December 31, 1994 and 1993 letters of credit totaled $33,000
and $51,000, respectively.
The Corporation and the Bank are also subject to claims and
lawsuits which arise primarily in the ordinary course of
business. Based on information presently available it is the
opinion of management that such claims and lawsuits, if any, will
not have a material adverse effect on the consolidated financial
position of the Corporation.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 7 - Income Taxes:
_____________________
The provision for income taxes at December 31 consisted of the
following:
1994 1993
_______ _______
Currently Payable
Federal $52,623 $22,173
State 3,062 1,653
_______ _______
$55,685 $23,826
======= =======
As discussed in Note 1, no deferred taxes have been recorded in
the financial statements for the components of allowance for
possible loan losses. Writedowns of other real estate owned of
$15,124 creates a benefit of $5,142, and the use of accelerated
depreciation creates a liability of $1,905. Due to the
immaterial benefit, no deferred asset or liability was
recorded.
The provision for federal income taxes is less than that
computed by applying the federal statutory rate of 34% in 1994
and 1993, as indicated in the following analysis.
1994 1993
_______ _______
Tax based on statutory rate $74,198 $72,129
Effect on tax-exempt income -0- (3,844)
Effect of net loan recoveries (losses) (3,923) 3,614
Deferred compensation paid (10,499) -0-
Non deductible expenses 509 554
Contribution carryover -0- (481)
Net operating loss carryover -0- (43,895)
Depreciation 2,346 (4,251)
Other (Net) (6,946) -0-
_______ _______
$55,685 $23,826
======= =======
Note 8 - Related Parties:
________________________
Some of the directors and executive officers of Sugarland State
Bank and companies with which they are associated had banking
transactions with the Bank in the ordinary course of business.
Loans and commitments for loans to those individuals and their
related companies were made on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did
not involve more than a normal risk of collectability or present
any other unfavorable features to the Bank. The aggregate in
indebtedness of those individuals and their related companies to
the Bank at December 31, 1994 and 1993 was $1,388,000 and
$1,100,000, respectively. During 1994, new loans to such related
parties amounted to $1,000,000 and repayments amounted to
$712,000.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 9 - Concentrations of Credit:
_________________________________
All the Bank's loans, commitments, and standby letters of credit
have been granted to customers in the Bank's market area. All
such customers are depositors of the Bank. The concentrations of
credit by type of loans are set forth in Note 3. The
distribution of commitments to extend credit approximates the
distribution of loans outstanding. Standby letters of credit
were granted primarily to commercial borrowers. The Bank, as a
matter of policy, does not extend credit to any single borrower
or group of related borrowers in excess of $500,000.
Note 10 - Regulatory Matters:
____________________________
The Bank is subject to various regulatory capital requirements
administered by the state and federal banking agencies. Failure
to meet minimum capital requirements can initiate certain
mandatory and possibly additional discretionary actions by
regulators that, in those circumstances, could have a direct
material effect on the institution's financial statements. The
regulations require the Bank to meet specific capital adequacy
guidelines that involve qualitative measures of the Bank's assets
and liabilities as calculated under regulatory accounting
principles. The regulations also require agencies to make
qualitative judgments about the Bank. Those qualitative
judgments could also effect the Bank's capital structure.
Management believes that, as of December 31, 1994, the
institution meets all such capital requirements to which it is
subject.
Note 11 - Subsequent Events:
___________________________
On December 28, 1994, MidSouth Bancorp, Inc. (MidSouth) and
Sugarland Bancshares, Inc. issued a joint news release announcing
an agreement under which Sugarland Bancshares, Inc. and its 99.8%
owned subsidiary, Sugarland State Bank, would be acquired by
MidSouth. This transaction is structured to qualify as a tax-
free reorganization and will result in 187,286 shares of
convertible preferred stock of Midsouth being issued to
shareholders of the Corporation. The transaction is subject to
receipt of federal and state regulatory approvals, the approval
of the shareholders of MidSouth and the Corporation, and the
satisfaction of certain other conditions. The transaction is
expected to be consummated in the spring of 1995.
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 12 - Sugarland Bancshares, Inc. (Parent Only) Condensed
_________________________________________________________________
Financial Statements:
____________________
The following condensed financial statements summarize the
financial position and results of operations of Sugarland
Bancshares, Inc. (parent company only) as of December 31, 1994
and 1993 and for the years then ended.
(Parent Only)
Sugarland Bancshares, Inc.
Condensed Balance Sheets
December 31, 1994 and 1993
Assets: 1994 1993
______ __________ __________
Current Assets:
______________
Cash on Hand and in Banks $ 12,566 $ 6,046
Investments:
___________
Stock - Sugarland State Bank
(Equity Basis) 2,102,549 2,172,028
Other Assets:
____________
Due From Sugarland State Bank 2,333 1,827
Merger Costs 54,739 -0-
__________ __________
Total Assets: $2,172,187 $2,179,901
____________ ========== ==========
Liabilities and Shareholders' Equity:
____________________________________
Current Liabilities:
___________________
Income Taxes Payable $ 1,414 $ -0-
__________ __________
Shareholders' Equity:
____________________
Common Stock, par value $5; 400,000
Shares Authorized, 232,286 Issued and
187,286 Shares Outstanding $1,161,430 $1,161,430
Capital Surplus 1,452,363 1,452,363
Retained Earnings 295,950 79,718
Unrealized Gains (Losses) on Available
for Sale Securities (225,360) -0-
Treasury Stock, 45,000 Shares at Cost (513,610) (513,610)
__________ __________
Total Shareholders' Equity: $2,170,773 $2,179,901
__________________________ __________ __________
Total Liabilities and Shareholders'
___________________________________
Equity: $2,172,187 $2,179,901
________ ========== ==========
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
(Parent Only)
Sugarland Bancshares, Inc.
Condensed Statements of Income and Retained Earnings
For The Years Ended December 31, 1994 and 1993
1994 1993
_________ _________
Revenues:
________
Dividends $ 64,000 $ 37,457
_________ _________
Expenses:
________
Legal and Accounting $ 2,500 $ 2,500
Taxes and Assessments 375 885
Miscellaneous 45 302
_________ _________
Total Expenses: $ 2,920 $ 3,687
______________ _________ _________
Income Before Taxes and Equity in
_________________________________
Undistributed Income of Sugarland
___________________________________
State Bank: $ 61,080 $ 33,770
____________
Income Taxes (729) 174
Equity in Earnings of Sugarland
State Bank 102,193 154,372
_________ _________
Net Income: $ 162,544 $ 188,316
__________
Retained Earnings, Beginning: 79,718 (67,743)
____________________________
Dividends -0- (37,457)
Unrealized Loss in Equity Securities -0- (3,086)
Add Back Net Unrealized Loss on Mutual
Funds as of 12/31/93 53,895 -0-
Minority Interest in Income of
Subsidiary (207) (312)
_________ _________
Retained Earnings, Ending: $ 295,950 $ 79,718
_________________________ ========= =========
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
Note 13 - Sugarland State Bank (Subsidiary Only) Condensed
_________________________________________________________________
Financial Statements:
____________________
The following condensed financial statements summarize the
financial position and results of operations of Sugarland State
Bank (subsidiary only) as of December 31, 1994 and 1993 and for
the years then ended.
(Subsidiary Only)
Sugarland State Bank
Condensed Balance Sheets
December 31, 1994 and 1993
1994 1993
___________ ___________
Assets:
______
Cash and Due From Banks $ 2,311,128 $ 2,358,358
Federal Funds Sold 2,075,000 3,050,000
Investment Securities 3,944,856 3,919,566
Loans, Net 8,225,775 8,048,063
Bank Premises, Net 556,775 615,415
Other Real Estate Owned 60,000 41,865
Accrued Interest and Other Assets 295,175 253,832
___________ ___________
Total Assets: $17,468,691 $18,287,099
____________ =========== ===========
Liabilities and Stockholders' Equity:
____________________________________
Liabilities:
___________
Deposits $15,319,944 $16,071,512
Accrued Interest and Other
Liabilities 41,942 39,163
___________ ___________
Total Liabilities: $15,361,886 $16,110,675
_________________ ___________ ___________
Stockholders' Equity:
____________________
Common Stock ($5 par Value; 50,000
Shares Issued and Outstanding) $ 250,000 $ 250,000
Capital Surplus 750,000 750,000
Unrealized Loss on Available for
Sale Securities (157,489) -0-
Unrealized Loss on Equity
Securities (68,327) -0-
Retained Earnings 1,332,621 1,176,424
___________ ___________
Total Stockholers' Equity: $ 2,106,805 $ 2,176,424
_________________________ ___________ ___________
Total Liabilities and Stockholders'
___________________________________
Equity: $17,468,691 $18,287,099
________ =========== ===========
<PAGE>
Sugarland Bancshares, Inc.
Notes to the Consolidated Financial Statements (Continued)
(Subsidiary Only)
Sugarland State Bank
Condensed Statements of Income and Retained Earnings
For The Years Ended December 31, 1994 and 1993
1994 1993
__________ __________
Interest Income:
_______________
Interest and Fees on Loans $ 868,282 $ 885,008
Interest on Investment Securities 262,604 295,127
Interest on Federal Funds Sold 88,030 87,614
__________ __________
Total Interest Income: $1,218,916 $1,267,749
_____________________
Interest Expense:
________________
Interest on Deposits 365,679 408,049
__________ __________
Net Interest Income: $ 853,237 $ 859,700
___________________
Provision for Possible Loan Losses -0- -0-
__________ __________
Net Interest Income After Provision
___________________________________
for Credit Losses: $ 853,237 $ 859,700
_________________ __________ __________
Other Income:
____________
Customer Service Charges $ 154,173 $ 153,034
Other 25,980 45,671
__________ __________
Total Other Income: $ 180,153 $ 198,705
__________________ __________ __________
Other Expense:
_____________
Salaries $ 355,656 $ 362,101
Employee Benefits 80,564 82,527
Occupancy Expenses 148,649 153,123
Other Expenses 227,372 244,824
__________ __________
Total Other Expense: $ 812,241 $ 842,575
___________________ __________ __________
Income Before Income Taxes: $ 221,149 $ 215,830
__________________________
Income Taxes 54,956 24,000
__________ __________
Net Income: $ 166,193 $ 191,830
__________
Retained Earnings, Beginning: 1,176,424 1,025,144
____________________________
Dividends (64,000) (37,457)
Unrealized Loss in Equity Securities 54,004 (3,093)
__________ __________
Retained Earnings, Ending: $1,332,621 $1,176,424
_________________________ ========== ==========
<PAGE>
APPENDIX A
Letterhead of Chaffe & Associates, Inc.
Investment Bankers
December 30, 1994
The Board of Directors
Sugarland Bancshares, Inc.
1527 West Main Street
Jeanerette, LA 70544-3527
Gentlemen:
You have requested our opinion as to the fairness, from a
financial point of view, to Sugarland Bancshares, Inc.
("Sugarland") and its shareholders, of the proposed acquisition
of its common stock, $5.00 par value per share (the "Common
Stock" or "Shares"), by MidSouth Bancorp, Inc. ("MidSouth"). The
terms of the transaction contemplated are set forth in a
Agreement and Plan of Merger dated December 29, 1994 (the
"Agreement") and the related merger agreement (collectively, the
"Plan"); and provide that Sugarland will merge into MidSouth
(the "Company Merger"), and Sugarland State Bank ("Bank"),
Sugarland's majority-owned subsidiary, will merge into MidSouth
National Bank, MidSouth's wholly-owned subsidiary (together with
the Company Merger, collectively called the "Mergers"). Under
the terms of the Plan, on the date the holding company merger
becomes effective, the shareholders of Sugarland will become
preferred stock shareholders of MidSouth, as follows:
Each issued and outstanding share of the Common Stock of
Sugarland, except for the Shares as to which dissenters' rights
of appraisal have been perfected and not withdrawn or forfeited
in accordance with applicable law, shall be converted into a
number of shares of Series A cumulative convertible preferred
stock (the "Preferred Stock") of MidSouth, having the terms set
forth in the form of Articles of Amendment attached as Exhibit C
to the Agreement, equal to the quotient of (i) 187,286, divided
by (ii) the number of outstanding Shares of Sugarland on the date
the merger becomes effective (the "Exchange Ratio"). In lieu of
the issuance of any fractional share of Preferred Stock to which
a holder of Sugarland Common Stock may be entitled, each such
shareholder of Sugarland shall be entitled to receive a cash
payment (without interest) equal to such fractional share
multiplied by the state value of a share of Preferred Stock.
Chaffe & Associates, Inc. ("Chaffe"), through its experience in
the securities industry, investment analysis and appraisal, and
in related corporate finance and investment banking activities,
including mergers and acquisitions, corporate recapitalization,
and valuations for estate, corporate and other purposes, states
that it is competent to provide an opinion as to the fairness of
the transaction contemplated herein. Neither Chaffe nor any of
its officers or employees has an interest in the common stocks of
Sugarland or MidSouth. During the past year, Chaffe has provided
financial advisory services to Sugarland, including assistance in
negotiating the proposed transaction ("Advisory Services"). The
fee received for the preparation of this report is not, and fees
received for Advisory Services were not, dependent or contingent
upon any transaction.
The Board of Directors December 30, 1994
Sugarland Bancshares, Inc. Page 2
In connection with this opinion, we have reviewed materials
bearing upon the transaction and upon the financial and operating
condition of Sugarland and the Bank, including, among other
information: a) the Plan; b) Sugarland's audited financial
statements with examination and opinion by Mixon, Roy & Romero,
Certified Public Accountants, for the years 1988 through 1990;
c) Sugarland's audited financial statements with examination and
opinion by Mixon, Roy, Metz & Mixon, Certified Public
Accountants, for the years 1991 through 1993; d) Sugarland's
Federal Reserve Forms FR-Y6 dated December 31, 1992 and 1993, and
Form FRY9-SP dated June 30, 1994; e) Sugarland's Income Tax
Returns for the years 1992 and 1993, prepared by Mixon, Roy, Metz
& Mixon, Certified Public Accountants; f) Bank CALL Reports for
each quarter ended December 31, 1992 through September 30, 1994;
g) Bank's Uniform Bank Performance Reports dated December 31,
1992 and 1993; h) Bank's 1994 Budget; i) Articles of
Incorporation and By-Laws of both Sugarland and Bank; and j)
various Sugarland and Bank reports, unaudited financial
statements, information, documents and regulatory correspondence.
In addition, we have reviewed materials bearing upon the
financial and operating condition of MidSouth, including: a)
MidSouth's audited financial statements for the years 1989
through 1993, with examination and opinion by Deloitte & Touche,
and for the year 1988, with examination and opinion by Deloitte,
Haskins & Sells; b) MidSouth's Proxy Statements for Annual
Shareholders Meetings held in 1993 and 1994; c) MidSouth's Annual
Reports on Form 10-K for the years 1988 through 1993 and
quarterly reports on Form 10-Q for the quarters ended March 31,
June 30 and September 30, 1993, and March 31, June 30, and
September 30, 1994; d) MidSouth's Registration Statements on
Form S-2 dated April 16, 1993, June 4, 1993, and March 31,
1994; and S.E.C. Forms 8-A dated March 23, 1993 and April 7,
1993; e) Articles of Incorporation and By-Laws of both
MidSouth and MidSouth National Bank; f) MidSouth National Bank's
CALL reports for each quarter ended March 31, 1993 through
September 30, 1994; g) MidSouth National Bank's Uniform Bank
Performance Reports dated December 31, 1993, and June 30, 1994;
and, h) various MidSouth information and correspondence. We have
also reviewed statistical and financial information derived from
various statistical services for Sugarland, MidSouth, and
comparable companies, as well as certain publicly-available
information and analysis relating to them.
We have reviewed certain historical market information for the
Common Stock of Sugarland and note that no independent market
exists for the Shares. We note that, at present, Sugarland has
authorized 400,000 Shares, of which 232,286 Shares are issued,
187,286 Shares are outstanding and 45,000 Shares are held in its
treasury. In addition, we have reviewed certain historical
market information for the common stock of MidSouth. We note
that at September 30, 1994, MidSouth had authorized 5,000,000
shares of MidSouth common stock, par value $0.10 per share, of
which at such date 711,869 shares were issued and outstanding,
and no shares were held as treasury stock. In addition, MidSouth
had authorized 5,000,000 shares of preferred stock , no par
value, of which none were issued and outstanding. We note that
MidSouth's common stock is traded on the American Stock Exchange
Emerging Company Marketplace, and we have been informed by the
management of MidSouth that a market will be made in the
Preferred Stock also. Further, we note that although there is an
independent market for MidSouth's common stock, this stock is
thinly traded and this condition will likely exist for the
Preferred Stock as well.
The Board of Directors December 30, 1994
Sugarland Bancshares, Inc. Page 3
We have analyzed the historical performance of Sugarland and
MidSouth and have considered the current financial condition,
operations and prospects for both companies. We have held
discussions with the managements of both companies about these
matters. We analyzed information and data provided by the
management of Sugarland and MidSouth concerning the loans
(including non-performing loans), other real estate, securities
portfolio, fixed assets and operations, although we did not
perform an independent review of Sugarland's or MidSouth's assets
or liabilities. We have relied solely on Sugarland and MidSouth
for information as to the condition of the loan portfolio, the
adequacy of the loan loss reserve and the value of other real
estate held.
Also, we compared certain financial and stock market data for a
peer group of bank holding companies, composed primarily of
institutions with market share in Louisiana, whose securities are
publicly traded; reviewed the financial terms of business
combinations in the commercial banking industry specifically,
using national, southern and Louisiana peer groups and other
industries generally; considered a number of valuation
methodologies, including among others, those that incorporate
book value, deposit base premium and capitalization of earnings;
and performed such other studies and analyses as we deemed
appropriate to this analysis. This opinion is necessarily based
upon market, economic and other conditions as they exist on, and
can be evaluated as of, the date of this letter.
We note that Chaffe was retained by Sugarland to assist the Board
of Directors and senior management of Sugarland in its
negotiations of this transaction with MidSouth. Chaffe was not
asked to and did not participate in any efforts by Sugarland to
market itself for sale; nor did Chaffe evaluate potential
alternative transactions. The senior management of Sugarland has
informed Chaffe that it is unaware of any transaction more
favorable than the one contemplated by the Plan and that no other
transaction has been proposed to Sugarland at this time.
Management of Sugarland has instructed Chaffe to provide this
opinion on that basis.
In our review, we have relied, without independent verification,
upon the accuracy and completeness of the historical and
projected financial information and other information reviewed by
us for purposes of this opinion, and we are relying on the tax
opinion issued in connection with the transaction contemplated.
We express no opinion on the tax consequences of the proposed
transaction or the effect of any tax consequences on the value
received by the holders of Sugarland Common Stock.
Based upon and subject to the foregoing and based upon such other
matters as we considered relevant, it is our opinion that the
proposed Exchange Ratio is fair to Sugarland Bancshares, Inc.,
and its shareholders, from a financial point of view.
Very truly yours,
/s/ CHAFFE & ASSOCIATES, INC.
CHAFFE & ASSOCIATES, INC.
GFGL:mr
<PAGE>
APPENDIX B
ARTICLES OF AMENDMENT
TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
MIDSOUTH BANCORP, INC.
MidSouth Bancorp, Inc., a Louisiana corporation (the
"Corporation"), through its undersigned President and Secretary,
hereby certifies that:
1. On ________, 1995, the Board of Directors of the Corporation
adopted, pursuant to Section 33A of the Louisiana Business
Corporation Law (the "LBCL"), the following amendment to Article
III of its Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") to establish and fix the
preferences, limitations and relative rights of a series of
preferred stock, and authorized the delivery of these Articles of
Amendment to the Secretary of State for filing pursuant to
Section 32B of the LBCL.
2. Article III of the Articles of Incorporation is amended to
add a new Section E to read in its entirety as follows:
"E.Of the 5,000,000 shares of authorized no par value per
share Preferred Stock, [187,286] shares shall constitute a
separate series of Preferred Stock with the voting powers and
the preferences and rights hereinafter set forth.
(1)Designation. The series of Preferred Stock created
hereunder is designated "Cumulative Convertible Preferred
Stock, Series A" (the "Series A Preferred Stock").
(2)Stated Value. The stated value of each share of Series
A Preferred Stock is $14.25.
(3)Dividend Rights.
(a)Except as provided in Subparagraph (ii),
(i)the holders of record of the shares of Series A
Preferred Stock are entitled to receive, but only when,
as and if declared by the Board of Directors, and out
of the funds of the Corporation legally available for
that purpose, cumulative cash dividends at an annual
rate, fixed on December 31 of each year for the ensuing
calendar year, equal to the yield for Government Bonds
and Notes maturing in December of the following year,
as published in the Treasury Bonds, Notes and Bills
Section of the last issue of the Wall Street Journal
published each year, plus 1% per annum, and no more;
provided that, the annual dividend rate shall in no
case be greater than 10% nor less than 6%; provided
further that, from and after the tenth anniversary of
the date of issuance of the Series A Preferred Stock
the annual dividend rate shall be fixed at 10%. If
more than one yield is shown for December maturities,
the average shall be applied. If no yield is quoted
for December maturities, the yeild for the next earlier
available month shall be applied. From the date of
issuance of the Series A Preferred Stock through
December 31, 1995, the annual dividend rate shall be
________%. The Corporation by resolution of its Board
of Directors shall, to the extent of Legally Available
Funds, as defined below, declare a dividend on the
Series A Preferred Stock payable quarterly on the first
day of April, July, October, and January in each year,
or on such earlier dates as the Board of Directors may
from time to time fix as the dates for payment of
quarterly dividends on the Common Stock, except that
any dividend payable on a payment date that is a legal
holiday shall be paid on the next succeeding business
day. Dividends on each share of Series A Preferred
Stock shall be cumulative from the date of original
issuance thereof whether or not there shall be funds
legally available for the payment of such dividends.
Dividends payable on the Series A Preferred Stock (i)
for any period other than a full year shall be computed
on the basis of a 360-day year consisting of twelve 30-
day months and (ii) for each full dividend period shall
be computed by dividing the annual dividend rate by
four. If any quarterly dividend is not paid when due,
the unpaid amount shall bear interest at a rate of 10%
per annum until paid.
(ii)The first dividend payable on the Series A
Preferred Stock shall be paid on the first day of
April, July, October or January that is at least 91
days from the date of original issuance of the Series A
Preferred Stock and will be in an amount, at the
applicable dividend rate, based on the number of days
between the date of original issuance and the dividend
payment date minus 90 days, provided that the aggregate
amount payable (A) will be increased by the amount by
which Expenses, as defined below, are less than
$110,000 (the "Additional Amount"), or (B) will be
reduced by the amount by which Expenses exceed $110,000
("The Subtracted Amount"). In any case in which (A)
the Additional Amount is greater than the dividend that
would have been paid for the 90 excluded days set forth
above, such excess will be payable on the next
succeeding dividend payment date, or (B) the Subtracted
Amount is greater than the amount otherwise payable
under this paragraph, such excess will be deducted from
the amount otherwise payable on the next succeeding
dividend payment date.
(iii) The term "Expenses" means the actual expenses
of Sugarland Bancshares, Inc. ("Sugarland") in
connection with the negotiation, execution,
implementation and consummation of that certain
agreement between Sugarland and the Corporation dated
______________, 1994 (the "Agreement"), including,
without limitation, legal, accounting and financial
advisory fees and expenses and expenses of printing and
mailing Sugarland's proxy statement and holding its
shareholders meeting to consider the Agreement.
(iv) The term "Legally Available Funds" means such
amount of the surplus of the Corporation that may be
paid as dividends under the Business Corporation Law of
Louisiana as may be provided in cash by MidSouth Bank
to the Corporation as a dividend under applicable
statutes and regulations of the U. S. Comptroller of
the Currency and that would not result in the
Corporation or MidSouth Bank having capital ratios, of
less than the required regulatory minimum capital
ratios, or failing to be "adequately-capitalized"
within the meaning of applicable law and regulations or
being in violation of any law, regulation or regulatory
directive, agreement or order.
(b)So long as any shares of the Series A Preferred
Stock are outstanding, the Corporation shall not declare,
pay or set apart for payment any dividend on any shares of
capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends or liquidation
rights (collectively, "Junior Securities") or make any
payment on account of, or set apart for payment money for
a sinking or other similar fund, for the purchase,
redemption or other retirement of, any of the Junior
Securities or any warrants, rights, calls or options
exercisable for or convertible into any of the Junior
Securities, or make any distribution in respect thereof,
either directly or indirectly, whether in cash, other
property, obligations or shares of the Corporation (other
than distributions or dividends in Junior Securities to
the holders of Junior Securities), and shall not permit
any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any of
the Junior Securities or any warrants, rights, calls or
options exercisable for or convertible into any of the
Junior Securities, unless prior to or concurrently with
the payment or setting apart for payment of any dividend
on any of the Junior Securities, all accumulated and
unpaid dividends on shares of Series A Preferred Stock,
and interest thereon, if any, shall have been or shall be
paid.
(c)If dividends are paid in part and not in full upon
the shares of Series A Preferred Stock and on any other
Preferred Stock ranking on a parity, as to dividends, with
the Series A Preferred Stock, such dividends must be
divided pro rata among such parity shares in proportion to
the respective dividends accrued and unpaid thereon as of
the dividend payment date.
(d)Except as otherwise expressly provided in this
Section E, holders of shares of the Series A Preferred
Stock are not entitled to any dividend, whether payable in
cash, property or stock, or any interest, or sum of money
in lieu of interest, in respect of any dividend on Series
A Preferred Stock which may be in arrears.
(4)Redemption.
(a)On or after the fifth anniversary of the date of
issuance of the Series A Preferred Stock, the Corporation
may, at its option, and subject to appropriate approval by
the Board of Governors of the Federal Reserve System or
delegated authority, redeem the whole or, from time to
time, any part of the Series A Preferred Stock at a
redemption price per share payable in cash in an amount
equal to the sum of (i) $14.25, (ii) all accrued and
unpaid dividends on the Series A Preferred Stock to the
date fixed for redemption, whether or not earned or
declared, and (iii) interest accrued to the date of
redemption on all accrued and unpaid dividends on the
Series A Preferred Stock, if any.
(b)If the Corporation redeems fewer than all of the
outstanding shares of Series A Preferred Stock, it must
select the shares to be redeemed by lot or pro rata, in
such manner as the Board of Directors may determine to be
fair and appropriate. The Board of Directors has full
power and authority, subject to the limitations and
provisions herein contained, to prescribe the manner in
which shares of the Series A Preferred Stock are to be
redeemed.
(c)Notice of redemption must be given by first class
mail, postage prepaid, mailed not fewer than 30 nor more
than 90 days before the redemption date, to each holder of
record of shares to be redeemed, at the holder's address
as it appears on the stock register of the Corporation.
Each notice must state: (i) the redemption date; (ii) the
total number of shares of Series A Preferred Stock to be
redeemed and, if fewer than all the shares held by the
holder are to be redeemed, the number of shares to be
redeemed from the holder; (iii) the redemption price;
(iv) the place or places where certificates for the shares
are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease
to accrue on the redemption date; and (vi) that the holder
has the right to convert the shares into Common Stock
until the close of business on the fifth day preceding the
redemption date at the Conversion Price then in effect and
the place where certificates for the shares of the Series
A Preferred Stock may be surrendered for conversion.
(d)Unless the Corporation fails to pay the redemption
price, the right to convert shares of the Series A
Preferred Stock called for redemption shall expire at the
close of business on the fifth day preceding the date
fixed for redemption of such shares, and, from and after
the redemption date, dividends on the shares of Series A
Preferred Stock called for redemption shall cease to
accrue, and such shares shall no longer be deemed to be
outstanding, and all rights of the holders of such shares
as shareholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall
cease. Upon surrender of the certificates for any shares
so redeemed in accordance with the requirements of the
notice of redemption (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation so
requires and the notice so states), such shares shall be
redeemed by the Corporation at the redemption price. If
fewer than all the shares represented by any such
certificates are redeemed, the Corporation is obligated to
issue without cost to the holder a new certificate
representing the shares not redeemed.
(e)Any shares of Series A Preferred Stock converted
under Subsection (5), or redeemed or otherwise acquired by
the Corporation, shall have the status of authorized but
unissued shares of Preferred Stock, without designation as
to series, preferences, limitations or relative rights
until the shares are once more designated as part of a
particular series by the Board of Directors of the
Corporation.
(f)The Corporation may, before the redemption date
specified in the notice of redemption, deposit in trust
for the account of the holders of shares of the Series A
Preferred Stock to be redeemed, with a bank or trust
company organized under the laws of the United States of
America or of the State of Louisiana and having capital,
surplus and undivided profits aggregating at least
$20,000,000, designated in the notice of redemption, all
funds necessary for the redemption, together with
irrevocable written instructions authorizing the bank or
trust company, on behalf and at the expense of the
Corporation, to have the notice of redemption mailed as
provided in Paragraph (c) and to include in the notice of
redemption a statement that all funds necessary for the
redemption have been so deposited in trust and are
immediately available. Immediately upon the mailing of
such notice, notwithstanding that any certificate for
shares of Series A Preferred Stock so called for
redemption has not been surrendered for cancellation, all
shares of Series A Preferred Stock with respect to which
the deposit has been made shall cease to be outstanding
and all rights with respect to such shares of Series A
Preferred Stock shall terminate other than the right of
the holders thereof to receive from the bank or trust
company, at any time after the time of the deposit, the
redemption price of the shares so to be redeemed, and the
right, if any, to convert the shares into Common Stock
until the close of business on the fifth day preceding the
redemption date.
(g)If the holder of any shares of the Series A
Preferred Stock called for redemption does not, within one
year after the redemption date, claim the redemption price
thereof, the unclaimed amount shall then escheat and
revert in full ownership to the Corporation in accordance
with Article VII of these Articles of Incorporation, and
if the funds to pay the redemption price have been
deposited pursuant to paragraph (f), above, the depositary
shall, upon the request of the Corporation expressed in a
resolution of its Board of Directors, pay over to the
Corporation the unclaimed amount.
(h)Notwithstanding the foregoing provisions of this
Subsection (4), so long as any dividends on the Series A
Preferred Stock, or interest thereon, are in arrears, the
Corporation may not redeem any shares of the Series A
Preferred Stock unless all outstanding shares of the
Series A Preferred Stock are simultaneously redeemed and
may not purchase or otherwise acquire any shares of Series
A Preferred Stock. The foregoing shall not, however,
prevent the purchase or acquisition of shares of Series A
Preferred Stock pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding
shares of Series A Preferred Stock.
(5)Conversion. The holders of shares of the Series A
Preferred Stock have the right, at their option, to convert
all or any part of such shares into shares of Common Stock
of the Corporation at any time before the close of business
on the fifth day preceding the date, if any, fixed for
redemption of those shares, subject to the following terms
and conditions:
(a)The shares of Series A Preferred Stock shall be
convertible into shares of Common Stock at the Conversion
Rate of one share of Common Stock for each share of Series
A Preferred Stock converted. Such Conversion Rate shall
be subject to adjustment from time to time as provided in
Paragraph (e). The Corporation shall pay all accrued but
unpaid dividends, and interest thereon, on any shares of
Series A Preferred Stock surrendered for conversion. If
any shares of Series A Preferred Stock are called for
redemption, the right of conversion shall expire as to the
shares designated for redemption at the close of business
on the fifth day immediately preceding the date fixed for
redemption, unless default is made in the payment of the
redemption price on such shares.
(b)To convert any shares of Series A Preferred Stock
into Common Stock, the holder must surrender the cer-
tificate or certificates therefor, duly endorsed to the
Corporation or in blank, at the principal office of the
Corporation or at such other place or places as the Board
of Directors may designate and must give written notice to
the Corporation at that office or place that the holder
elects to convert all or a part of such shares, setting
forth the name or names (with the address or addresses) in
which the shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable thereafter,
cause to be issued and delivered at that office or place
to the holder, or the holder's designee or designees, a
certificate or certificates for the number of whole shares
of Common Stock to which such holder is entitled, together
with a certificate or certificates representing any shares
of Series A Preferred Stock which are not to be converted
but constitute part of the shares of Series A Preferred
Stock represented by the certificate or certificates
surrendered and cash in lieu of the issuance of a
fractional share. A conversion shall be effective as of
the close of business on the date of the due surrender of
the certificates for the shares to be converted, and the
rights of the holder of such shares shall, to the extent
of such conversion, cease at such time, and the person or
persons entitled to receive shares of the Common Stock
upon conversion of such shares of Series A Preferred Stock
shall be treated for all purposes as having become the
record holder or holders of the Common Stock at that time.
(c)No fractional shares of Common Stock shall be issued
on conversion. If any fractional interest in a share of
Common Stock would, except for the provisions of this
Paragraph (c), be deliverable upon conversion hereunder,
the Corporation, in lieu of such fractional share shall
pay cash to the converting shareholder in an amount equal
to the product derived by multiplying such fraction of a
share by the closing price per share of the Common Stock
on the day next preceding the date of conversion.
(d)In the case of any shares of Series A Preferred
Stock converted after any record date for payment of a
dividend on the Series A Preferred Stock but on or before
the date for payment of the dividend, the dividend
declared and payable on the dividend payment date shall
continue to be payable on the dividend payment date to the
holder of record of the shares as of such preceding record
date notwithstanding their conversion. Shares of the
Series A Preferred Stock surrendered for conversion during
the period from the close of business on any such record
date to the opening of business on the dividend payment
date shall be accompanied by payment in full of an amount
equal to the dividend payable on the dividend payment date
on the shares of the Series A Preferred Stock surrendered
for conversion. Except as provided in this Paragraph, no
payment or adjustment shall be made upon any conversion on
account of any dividends on shares of the Series A
Preferred Stock surrendered for conversion or on account
of any dividends on the shares of Common Stock issued upon
conversion.
(e)The Conversion Rate shall be adjusted from time to
time as follows:
(i)If the Corporation at any time (A) pays a
dividend or makes a distribution to all holders of its
Common Stock in shares of its Common Stock, (B)
subdivides its outstanding shares of Common Stock into
a larger number of shares of Common Stock, or (C)
combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then in each
such case the Conversion Rate in effect immediately
before that event shall be proportionately decreased or
increased, as the case may be, so that the holder of
any shares of Series A Preferred Stock thereafter
surrendered for conversion shall be entitled to receive
the number of whole shares of Common Stock that the
holder would have owned or been entitled to receive
immediately following such event if those shares of
Series A Preferred Stock had been converted into Common
Stock immediately before that event. An adjustment
made under this Subparagraph (i) becomes effective
immediately after the payment date in the case of a
dividend or distribution and immediately after the
effective date in the case of a subdivision or
combination. No adjustment in the Conversion Rate
shall be made if, at the same time the Corporation
issues shares of Common Stock as a dividend or
distribution on the outstanding shares of Common Stock
which, as provided in this Subparagraph (i), would
otherwise call for an adjustment in the Conversion
Rate, the Corporation issues shares of Common Stock as
a dividend or distribution on the outstanding shares of
Series A Preferred Stock equivalent to the number of
shares distributable on the shares of Common Stock into
which the shares of Series A Preferred Stock is then
convertible.
(ii)No adjustment in the Conversion Rate shall be
required unless the adjustment would require an
increase or decrease in the Conversion Rate by more
than one percent, but any adjustments not required to
be made by reason of this Subparagraph shall be carried
forward cumulatively and taken into account in any
subsequent adjustments. All calculations under this
Paragraph (e) shall be made to the nearest one-tenth of
one percent.
(iii)In case of any reclassification of the Common
Stock (other than a subdivision or combination of
outstanding shares of Common Stock for which adjustment
is provided in Subparagraph (i) above), or a
consolidation or merger of the Corporation with or into
any other corporation (other than a consolidation or a
merger in which the Corporation is the continuing
corporation and the outstanding shares of the
Corporation's Common Stock are not changed into or
exchanged for stock or other securities of any other
person or cash or any other property as a result of or
in connection with such consolidation or merger) or a
sale of the properties and assets of the Corporation
as, or substantially as, an entirety to any other
business organization, or a statutory share exchange in
which all shares of Common Stock or any series or class
of Common Stock are exchanged for shares of another
corporation or other entity, each share of Series A
Preferred Stock shall, after such reclassification,
consolidation, merger, sale or exchange and upon the
terms and conditions specified in this Subsection (5),
be convertible into or represent the right to receive
the number of shares of stock or other securities or
property (including cash) to which the shares of Common
Stock deliverable (at the time of such reclassifi-
cation, consolidation, merger, sale or exchange) upon
conversion thereof would have been entitled upon such
reclassification, consolidation, merger, sale or
exchange, if the conversion of the Series A Preferred
Stock into Common Stock had taken place immediately
before that event; and in any case, if necessary, the
provisions set forth in this Subparagraph (iii) with
respect to the rights and interests thereafter of the
holders of the shares of Series A Preferred Stock shall
be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares of stock or
other securities or property (including cash)
thereafter deliverable upon conversion of shares of
Series A Preferred Stock.
(iv)Whenever the Conversion Rate is adjusted as
provided in this Paragraph (e):
(A) The Corporation shall compute the adjusted
Conversion Rate in accordance with this Paragraph (e)
and shall prepare a certificate signed by the
President or any Vice President of the Corporation
setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which
such adjustment is based, and the certificate shall
promptly be filed with the transfer agent for the
Series A Preferred Stock, but such transfer agent
shall have no duty with respect to any such
certificate filed with it except to keep the same on
file and available for inspection during reasonable
hours; and
(B)The Corporation shall cause to be mailed to
each holder of shares of Series A Preferred Stock at
his then registered address by first-class mail,
postage prepaid, a notice stating that the Conversion
Rate has been adjusted and setting forth the adjusted
Conversion Rate.
(v) Without limiting the obligation of the
Corporation to give the notices provided in Sub-
paragraph (iv), the failure of the Corporation to give
such notice shall not invalidate any corporate action
by the Corporation.
(f)The Corporation shall at all times reserve and keep
available, free from preemptive rights for the purpose of
effecting the conversion of the shares of Series A
Preferred Stock, the full number of shares of Common Stock
then deliverable upon the conversion of all shares of
Series A Preferred Stock then outstanding.
(g)The Corporation is not obligated to pay any tax
payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other
than that in which the shares of Series A Preferred Stock
so converted were registered, and the Corporation is not
obligated to make any such issue or delivery unless and
until the person requesting such issue has paid to the
Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation, that
such tax has been paid.
(h) In the event that:
(i)the Corporation declares a dividend or any other
distribution on its Common Stock, payable otherwise
than in cash out of surplus; or
(ii)the Corporation grants to all the holders of its
Common Stock rights to subscribe for or purchase any
shares of capital stock of any class or any other
rights; or
(iii)any reclassification, consolidation, merger,
sale or exchange of the type described in Subparagraph
(iii) of Paragraph (e) occurs; or
(iv)the voluntary or involuntary dissolution,
exchange, liquidation or winding up of the Corporation
occurs;
the Corporation shall cause to be mailed to the holders of
record of the Series A Preferred Stock at least 20 days
before the applicable date hereinafter specified a notice
stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or,
if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined or
(y) the date on which such reclassification,
consolidation, merger, sale, exchange, dissolution,
liquidation or winding up is expected to take place, and
the date, if any is to be fixed, as of which holders of
Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property
deliverable upon such reclassification, consolidation,
merger, sale, exchange, dissolution, liquidation or
winding up. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation,
merger, sale, exchange, dissolution, liquidation or
winding up.
(6)Voting.
(a)Except as otherwise expressly required by applicable
law or by the terms of this Section E, the holders of shares
of the Series A Preferred Stock are not entitled to any vote
on any matter, including but not limited to any merger,
consolidation or transfer of assets, or statutory share
exchange, and to no notice of any meeting of shareholders of
the Corporation.
(b)Except as otherwise provided herein, whenever the vote,
approval or other action of holders of shares of the Series
A Preferred Stock is required or permitted by applicable law
or by the terms of this Section E, each share is entitled to
one vote and the affirmative vote of a majority of shares of
Series A Preferred Stock present or represented at the
meeting at which a quorum is present is sufficient to
constitute such vote, approval or other action.
(c)If, at any time, the Corporation falls in arrears in
the payment of dividends on the Series A Preferred Stock for
two consecutive quarterly dividend periods, the number of
directors constituting the full board of directors of the
Corporation shall be automatically increased by two and the
holders of Series A Preferred Stock, voting separately as a
single class, shall be entitled to elect two directors of
the Corporation to fill the two newly created directorships,
at a special meeting called for that purpose in accordance
with Paragraph (f) and thereafter at each meeting of the
shareholders held for the purpose of electing directors, so
long as there continues to be any arrearage in the payment
of dividends on the Series A Preferred Stock for any past
quarterly dividend period or of interest on such accumulated
and unpaid dividends.
(d)When all accumulated and unpaid dividends on the Series
A Preferred Stock for all past quarterly dividend periods,
and interest thereon, have been paid in full, the right of
the holders of Series A Preferred Stock to elect directors
shall cease (subject to revesting from time to time as
provided in Paragraph (c)), the number of directors of the
Corporation shall be automatically reduced by two and the
term of office of all directors elected by the holders of
the Series A Preferred Stock shall immediately terminate.
(e)A director elected by the holders of Series A Preferred
Stock shall hold office until the annual meeting next
succeeding his election or until his successor, if any, is
elected by such holders. A director so elected may be
removed at any time with or without cause but only by the
vote of holders of the Series A Preferred Stock at a meeting
duly called for that purpose. So long as the holders of the
Series A Preferred Stock have the right to elect two
directors, any vacancy in the office of a director elected
by those holders may be filled by the remaining director so
elected or by the vote of the holders of Series A Preferred
Stock at any annual meeting or any special meeting called
for the purpose.
(f)At any time when the power to elect directors vests in
the holders of the Series A Preferred Stock, a proper
officer of the Corporation shall, on the written request of
record holders of at least 20 percent of the number of
shares of Series A Preferred Stock then outstanding,
addressed to the secretary of the Corporation at its
principal office, call a special meeting of the holders of
the Series A Preferred Stock for the purpose of electing
directors. The meeting must be held at the earliest
practicable date, not later than 45 days after receipt of
the written request (subject to compliance with applicable
proxy rules and rules of the American Stock Exchange), in
the city in which the last preceding annual meeting of the
shareholders of the Corporation was held, but may be held at
the time and place of the annual meeting if the annual
meeting is to be held within 60 days after the power to
elect directors first vests in the holders of the Series A
Preferred Stock. If the proper officer of the Corporation
does not call the meeting within the required time, then the
holders of record of 20 percent of the number of shares of
Series A Preferred Stock then outstanding may, by written
notice to the secretary of the Corporation at its principal
office, designate any person to call such meeting, and the
person so designated may call such meeting in the city above
provided upon not fewer than 30 nor more than 45 days notice
and for that purpose shall have access to the stock books of
the Corporation. At any meeting so called for the election
of directors by holders of the Series A Preferred Stock or
at any annual meeting held while the holders of Series A
Preferred Stock have the right to elect directors, holders
of a majority of the shares of Series A Preferred Stock then
outstanding is sufficient to constitute a quorum for the
purpose of electing directors at such a meeting. If at any
such meeting a quorum of the Series A Preferred Stock is not
present, the election of directors shall not take place, and
the meeting shall be adjourned from time to time for periods
not exceeding 30 days until a quorum is obtained.
(g)Approval of the holders of the Series A Preferred
Stock, voting separately as a single class by a favorable
vote of at least two-thirds of the number of shares of
Series A Preferred Stock then outstanding, is required to
adopt any proposed amendment to these Articles of
Incorporation (including but not limited to any amendment
adopted by resolution of the Board of Directors pursuant to
Article III of these Articles of Incorporation) if the
proposed amendment would affect shares of the Series A
Preferred Stock in any one or more of the following ways:
(i)Create or authorize any class or series of stock
ranking senior to or on a parity with the Series A
Preferred Stock in respect of dividends or distribution of
assets on liquidation or otherwise alter or abolish the
liquidation preferences or any other preferential right of
such shares.
(ii)Reduce the redemption price or otherwise alter or
abolish any right with respect to redemption of the Series
A Preferred Stock expressly provided by this Section E.
(iii)Alter or abolish any right of such shares
expressly provided by this Section E to receive dividends
or interest thereon except as such right may be affected
by dividend rights of new shares being authorized of
another class or series of shares ranking on a parity with
or junior to the Series A Preferred Stock.
(iv)Alter or abolish any right of holders of shares of
the Series A Preferred Stock under this Section E to
convert such shares into shares of Common Stock.
(v)Exclude, change or limit any voting rights of the
Series A Preferred Stock conferred by this Section E.
(h)Approval of the holders of the Series A Preferred
Stock, voting separately as a single class by a favorable
vote of at least two-thirds of the number of shares of
Series A Preferred Stock then outstanding, is required to
adopt any merger, consolidation, statutory share exchange or
sale of all, or substantially all, of the assets of the
Corporation or any of its banking subsidiaries unless either
(i) the holders of the Series A Preferred Stock will receive
in exchange for the Series A Preferred Stock a security with
terms substantially identical to the terms of the Series A
Preferred Stock, or (ii) provision is made for the complete
redemption in cash of the Series A Preferred Stock on the
date of consummation of such transaction and the Series A
Preferred Stock may be redeemed at such time under these
Articles of Incorporation.
(7)Liquidation Rights.
(a)Upon the dissolution, liquidation or winding up of the
Corporation, the holders of the shares of Series A Preferred
Stock shall be entitled to receive upon liquidation and to
be paid out of the assets of the Corporation available for
distribution to its shareholders, before any payment or
distribution may be made on the Common Stock or on any other
Junior Securities, the amount of $14.25 per share, plus a
sum equal to all accrued and unpaid dividends (whether or
not earned or declared) on such shares, and accrued interest
thereon, if any, to the date of final distribution.
(b)Neither the sale of all or substantially all the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other
corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to
be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Subsection (7).
(c)Upon payment to the holders of the shares of Series A
Preferred Stock of the full preferential amounts provided
for in this Subsection (7), the holders of Series A
Preferred Stock shall have no right or claim to any of the
remaining assets of the Corporation.
(d)If the assets of the Corporation available for
distribution to the holders of shares of Series A Preferred
Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, are
insufficient to pay in full all amounts to which such
holders are entitled under Paragraph (a) of this Subsection
(7), no such distribution may be made on account of any
shares of any other class or series of Preferred Stock
ranking on a parity with the shares of Series A Preferred
Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts are paid on
account of the shares of Series A Preferred Stock, ratably,
in proportion to the full distributable amounts for which
holders of all such parity shares are respectively entitled
upon dissolution, liquidation or winding up.
(8)Ranking. For purposes of this Section E any stock of any
class or classes of the Corporation shall be deemed to rank:
(a)prior to the shares of Series A Preferred Stock,
either as to dividends or upon liquidation, if the holders
of such class or classes are entitled under these Articles
of Incorporation to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of
the Corporation, as the case may be, in preference or
priority to the holders of shares of Series A Preferred
Stock;
(b)on a parity with shares of Series A Preferred Stock,
either as to dividends or upon liquidation, whether or not
the dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if
any, are different from those of Series A Preferred Stock,
if the holders of such class or classes are entitled under
these Articles of Incorporation to the receipt of dividends
or of amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in
proportion to their respective liquidation preferences,
without preference or priority, one over the other, as
between the holders of such class or classes and the holders
of shares of Series A Preferred Stock; and
(c)junior to shares of Series A Preferred Stock, either
as to dividends or upon liquidation, if such class or
classes are Common Stock or if the holders of shares of
Series A Preferred Stock are entitled under these Articles
of Incorporation to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of
the Corporation, as the case may be, in preference or
priority to the holders of shares of such class or classes.
(9)No Preemptive Rights. Holders of shares of Series A
Preferred Stock have no preemptive rights.
3. Except as amended by these Articles of Amendment, the
Articles of Incorporation of the Corporation shall remain in full
force and effect.
IN WITNESS WHEREOF, the undersigned President and Secretary
have executed these Articles of Amendment on ________, 1995 at
Lafayette, Louisiana.
MidSouth Bancorp, Inc.
By:
C. R. Cloutier, President
By:
Karen L. Hail, Secretary
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF LAFAYETTE
BEFORE ME, the undersigned authority personally came
and appeared C. R. Cloutier and Karen L. Hail to me known to be
the persons who signed the foregoing instrument as President and
Secretary, respectively, of MidSouth Bancorp, Inc. and who,
having been duly sworn, acknowledged and declared, in the
presence of the witnesses whose names are subscribed below, that
they signed that instrument as their free act and deed for the
purposes mentioned therein.
IN WITNESS WHEREOF, the
appearers and witnesses and I have signed below on this ______
day of ________, 1995.
WITNESSES:
______________________________ _____________________________
C. R. Cloutier, President
______________________________
______________________________ ____________________________
Karen L. Hail, Secretary
______________________________
________________________________________
NOTARY PUBLIC
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20.Indemnification of Directors and Officers
Section 83 of the Louisiana Business Corporation Law
("LBCL") permits a corporation to indemnify its directors and
officers against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him in connection with any action, suit or proceeding
to which he is or was a party or is threatened to be made a party
(including any action by or in the right of the corporation) if
such action arises out of the fact that he is or was a director,
officer, employee or agent of the corporation and he acted in
good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The indemnification
provisions of Section 83 are not exclusive, but no corporation
may indemnify any person for willful or intentional misconduct.
A corporation has the power to obtain and maintain insurance, or
to create a form of self-insurance on behalf of any person who is
or was acting for the corporation, regardless of whether the
corporation has the legal authority to indemnify the insured
person against such liability.
Section 10 of MidSouth's by-laws provides for mandatory
indemnification for current and former directors and officers
except to the extent that the director or officer fails to meet
the Standard of Conduct, as defined in the bylaws. MidSouth's
Articles of Incorporation permit MidSouth to enter into contracts
with its directors and officers providing for indemnification to
the fullest extent permitted by law, but no such contracts have
been entered in.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
The following Exhibits are filed as part of this
Registration Statement:
Exhibit No.Description
2 Agreement and Plan of Merger
3.1 Amended and Restated Articles of Incorporation of
MidSouth Bancorp, Inc. are included as Exhibit 3.1 to
MidSouth's Annual Report on Form 10-K for the Year
Ended December 3l, l993 and is incorporated herein by
reference.
3.2 Amended and Restated By-laws of MidSouth Bancorp,
Inc. are included as Exhibit 3.2 to MidSouth's Annual
Report on Form l0-K for the Year Ended December 3l,
l993 and are incorporated herein by reference.
4.l MidSouth agrees to furnish to the Commission on
request a copy of the instruments defining the rights
of the holder of its long-term debt, which debt does
not exceed l0% of the total consolidated assets of
MidSouth.
4.2 Form of Amendment to Articles of Incorporation
Defining Rights of Holders of MidSouth Cumulative,
Convertible Preferred Stock, Series A.
Exhibit No. Description
5 Opinion of Correro, Fishman & Casteix, L.L.P
8 Form of opinion of Deloitte & Touche LLP independent
public accountants as to certain tax matters
9 Annual Report to security holders
10.1 MidSouth National Bank Lease Agreement with Southwest
Bank Building Limited Partnership is included as
Exhibit 10.7 to MidSouth's Annual Report on Form 10-K
for the Year Ended December 31, 1992 and is
incorporated herein by reference.
10.2 First Amendment to Lease between MBL Life Assurance
Corporation, successor in interest to Southwest Bank
Building Limited Partnership in Commendam, and
MidSouth National Bank, included as Exhibit l0.2 to
MidSouth's Annual Report on Form l0K-SB for the Year
Ended December 31, l994 and incorporated herein by
reference.
10.3 Amended and Restated Deferred Compensation Plan and
Trust is included as Exhibit 10.3 to MidSouth's
Annual Report on Form 10-K for the year ended
December 31, 1992 and is incorporated herein by
reference.
10.4 Employment Agreements with C. R. Cloutier and Karen
L. Hail are included as Exhibit 5(c) to MidSouth's
Form l-A and are incorporated herein by reference.
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Mixon, Roy, Metz & Mixon
23.3 Consent of Correro, Fishman & Casteix, L.L.P.,
included in Exhibit 5
23.4 Consent of Chaffe & Associates, Inc.
24 Powers of Attorney of directors of MidSouth Bancorp,
Inc.
99.1 Form of Proxy of Sugarland Bancshares, Inc.
99.2 Form of Proxy of MidSouth Bancshares, Inc.
____________________
(b) Financial Statement Schedules
None
Item 22. Undertakings
The undersigned Registrant hereby undertakes as follows:
(1) To respond to requests for information that is
incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of Form S-4 within one business day
of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means.
This includes information contained in documents filed
subsequent to the effective date of the Registration
Statement through the date of responding to the request.
(2) To supply by means of a post-effective amendment
all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of
and included in the Registration Statement when it became
effective.
(3) That prior to any public reoffering of the
securities registered hereunder through use of a prospectus
which is a part of this Registration Statement, by any
person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the Registrant undertakes that
such reoffering prospectus will contain the information
called for by the applicable registration form with respect
to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of
the applicable form.
(4) That every prospectus (i) that is filed pursuant to
paragraph (3) immediately preceding, or (ii) that purports
to meet the requirements of Section 10(a)(3) of the
Securities Act of 1933 and is used in connection with an
offering of securities subject to Rule 415, will be filed as
a part of an amendment to the Registration Statement and
will not be used until such amendment is effective, and
that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
Registrant pursuant to the provisions described in response
to Item 20 of this Registration Statement, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
EXHIBIT INDEX
2 Agreement and Plan of Merger
3.1 Amended and Restated Articles of Incorporation
of MidSouth Bancorp, Inc. are included as
Exhibit 3.1 to MidSouth's Annual Report on Form
10-K for the Year Ended December 31, 1993 and
is incorporated herein by reference
3.2 Amended and Restated By-laws of MidSouth
Bancorp, Inc. are included as Exhibit 3.2 to
MidSouth's Annual Report on Form 10-K for the
Year Ended December 31, 1993 and is
incorporated herein by reference
4.1 MidSouth agrees to furnish to the Commission on
request a copy of the instruments defining the
rights of the holder of its long-term debt,
which debt does not exceed 10% of the total
consolidated assets of MidSouth.
4.2 Form of Amendment to Articles of Incorporation
Defining Rights of Holders of MidSouth
Cumulative Convertible Preferred Stock
Series A, included in Exhibit 2.
5 Opinion of Correro, Fishman & Casteix, L.L.P.
8 Form of opinion of Deloitte & Touche L.L.P.,
independent public accountants as to certain
tax matters, included in Exhibit 2.
10.1 MidSouth National Bank Lease Agreement with
Southwest Bank Building Limited Partnership is
included as Exhibit l0.7 to MidSouth's Annual
Report on Form l0-K for the Year Ended December
3l, l992 and is incorporated herein by
reference.
10.2 First Amendment to Lease between MBL Life
Assurance Corporation, successor in interest to
Southwest Bank Building Limited Partnership in
Commendam, and MidSouth National Bank, included
as Exhibit 10.2 to MidSouth's Annual Report on
Form l0K-SB for the Year Ended December 3l,
l994 and incorporated herein by reference.
10.3 Amended and Restated Deferred Compensation Plan
and Trust is included as Exhibit l0.3 to
MidSouth's Annual Report on Form l0-K for the
Year Ended December 3l, l992 and is
incorporated herein by reference.
10.4 Employment Agreements with C. R. Cloutier and
Karen L. Hail are included as Exhibit 5(c) to
MidSouth's Form l-A and are incorporated herein
by reference.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Mixon, Roy, Metz & Mixon.
23.3 Consent of Correro, Fishman & Casteix, L.L.P.,
included
in Exhibit 5.
23.4 Consent of Chaffe & Associates, Inc.
24 Powers of Attorney of Directors of MidSouth
Bancorp, Inc.
99.1 Form of Proxy of Sugarland Bancshares, Inc.
99.2 Form of Proxy of MidSouth Bancorp, Inc.
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made
December 28, 1994, between MidSouth Bancorp, Inc., a Louisiana
corporation ("MidSouth") and its wholly owned subsidiary,
MidSouth National Bank ("MidSouth Bank"), on the one hand; and
Sugarland Bancshares, Inc., a Louisiana corporation ("Holding"),
and its wholly owned subsidiary, Sugarland State Bank, a
Louisiana state banking association ("Bank"), on the other.
WHEREAS, the Board of Directors of MidSouth Bank and the
Board of Directors of Bank have each determined that it is
desirable and in the best interests of the institution and its
sole shareholder that Bank merge into MidSouth Bank (the "Bank
Merger") on the terms and subject to the conditions set forth in
this Agreement and in the agreement of merger attached hereto as
Exhibit A (the "Bank Merger Agreement"); and
WHEREAS, the Board of Directors of MidSouth and the Board of
Directors of Holding have each determined that it is desirable
and in the best interests of the corporation and its shareholders
that Holding merge into MidSouth (the "Company Merger" and,
together with the Bank Merger, collectively called the "Mergers")
on the terms and subject to the conditions set forth in this
Agreement and in the certificate of merger attached hereto as
Exhibit B (the "Company Merger Certificate").
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
SECTION 1
Mergers and Closing
1.1 Bank Merger. Simultaneously with the execution of
this Agreement, MidSouth Bank and Bank will enter into the Bank
Merger Agreement, pursuant to which Bank will, subject to the
conditions stated herein and therein, merge into MidSouth Bank,
which shall be the surviving association.
1.2 Company Merger. Subject to the conditions stated in
Section 6, at the Effective Time, as defined below, Holding will
merge into MidSouth, which shall be the surviving corporation,
and the separate existence of Holding will cease. The Company
Merger will have the effects set forth in Section 115 of the
Louisiana Business Corporation Law ("BCL").
1.3 The Closing. The "Closing" of the transactions
contemplated hereby will take place in the offices of MidSouth,
102 Versailles Boulevard, Versailles Centre, Lafayette, Louisiana
70501, at 10:00 a.m., local time, on a mutually agreeable date as
soon as practicable following satisfaction of the conditions set
forth in subparagraphs (a), (b) and (d) of subsection 6.1 hereof,
or on any date specified by any party to the others upon ten
days' notice following satisfaction of such conditions. The date
on which the Closing is to occur is herein called the "Closing
Date." If all conditions set forth in Section 6 hereof are
satisfied or waived by the party entitled to grant such waiver,
at the Closing (a) MidSouth and MidSouth Bank, on the one hand,
and Holding and Bank, on the other hand, shall each provide to
the other such proof or indication of satisfaction of the
conditions set forth in Section 6 as the party whose obligations
are conditioned upon such satisfaction may reasonably request,
(b) the certificates, letters and opinions required by Section 6
shall be delivered, (c) the appropriate officers of the parties
shall execute, deliver and acknowledge the Bank Merger Agreement
and the Company Merger Certificate, and (d) the parties shall
take such further action as is required to consummate the
transactions contemplated by this Agreement and the Bank Merger
Agreement. If on any date established for the Closing all
conditions in Section 6 hereof have not been satisfied or waived
by the party entitled to grant such waiver, then any party, on
one or more occasions, may declare a delay of the Closing of such
duration, not exceeding 10 business days, as the declaring party
shall select, but no such delay shall extend beyond the date set
forth in subparagraph (c) of subsection 7.1, and no such delay
shall interfere with the right of any party to declare a
termination pursuant to Section 7.
1.4 The Effective Date and Time. The Bank Merger
Agreement shall be filed and recorded as provided by law with the
Office of the Comptroller of the Currency (the "OCC") and the
Louisiana Office of Financial Institutions (the "OFI")
immediately following or concurrently with the Closing, and the
Bank Merger will be effective at the time specified in a
certificate or other written record issued by the OCC or the OFI,
whichever date is later. The Company Merger Certificate shall be
filed with and recorded by the Secretary of State of the State of
Louisiana immediately following (or concurrently with) the
Closing, and the Company Merger shall be effective at the date
and time specified in the Company Merger Certificate. The date
on which and the time at which the Company Merger becomes
effective are herein referred to as the "Effective Date" and the
"Effective Time," respectively.
SECTION 2
Conversion of Stock of Holding
2.1 Conversion of Stock of Holding. Except for shares as
to which dissenters' rights have been perfected and not withdrawn
or otherwise forfeited under Section 131 of the BCL, on the
Effective Date, by reason of the Company Merger, each issued and
outstanding share of common stock, $1.25 par value per share, of
Holding ("Holding Common Stock") shall be converted into a number
of shares of Series A cumulative convertible preferred stock (the
"Preferred Stock") of MidSouth, having the terms set forth in the
form of Articles of Amendment attached hereto as Exhibit C, equal
to the quotient of (i) 187,286, divided by (ii) the number of
outstanding shares of Holding on the Effective Date.
2.2 Fractional Shares. In lieu of the issuance of any
fractional share of Preferred Stock to which a holder of Holding
Common Stock may be entitled (after aggregation of all fractional
shares to which such holder is entitled), each shareholder of
Holding, upon surrender of the certificate or certificates which
immediately prior to the Effective Time represented Holding
Common Stock held by such shareholder, shall be entitled to
receive a cash payment (without interest) equal to such
fractional share multiplied by the stated value of a share of
Preferred Stock.
2.3 Exchange of Certificates. After the Effective Time,
each holder of an outstanding certificate or certificates
theretofore representing shares of Holding Common Stock (other
than shares as to which dissenters' rights have been perfected
and not withdrawn or otherwise forfeited under Section 131 of the
BCL), upon surrender thereof to MidSouth, shall be entitled to
receive the shares of Preferred Stock into which such shares have
been converted as provided in Section 2.1 and cash in lieu of any
fractional share as provided in Section 2.2. Until so
surrendered, each outstanding certificate shall be deemed for all
purposes, other than as provided below with respect to the
payment of dividends or other distributions, if any, in respect
of the Preferred Stock, to represent the number of whole shares
of Preferred Stock into which the shares of Holding Common Stock
theretofore represented thereby shall have been converted.
MidSouth may, at its option, refuse to pay any dividend or other
distribution, if any, payable to the holders of shares of
Preferred Stock to the holders of certificates evidencing
unsurrendered Holding Common Stock, provided, however, that upon
surrender of such certificates there shall be paid to the record
holders of the stock certificate or certificates issued in
exchange therefor the amount, without interest, of dividends and
other distributions, if any, which have become payable with
respect to the number of whole shares of Preferred Stock into
which the shares of Holding Common Stock theretofore represented
thereby shall have been converted and which have not previously
been paid, unless such distributions have reverted to MidSouth in
full ownership pursuant to its Articles of Incorporation.
Whether or not a stock certificate representing Holding Common
Stock is surrendered, from and after the Effective Time such
certificate shall under no circumstances evidence, represent or
otherwise constitute any stock or other interest in Holding or
any other person, firm or corporation (other than MidSouth).
2.4 Shares of MidSouth. The shares of capital stock of
MidSouth outstanding immediately prior to the Effective Time
shall not be changed or converted by virtue of the Company
Merger.
SECTION 3
Representations and
Warranties of Holding and Bank
Holding and Bank represent and warrant to MidSouth and
MidSouth Bank that, except as set forth in the corresponding
subsection of the Schedule of Exceptions that Holding and Bank
have delivered to MidSouth and MidSouth Bank:
3.1 Consolidated Group; Organization; Qualification.
Holding's "consolidated group", as such term is used in this
Agreement, consists of Holding and Bank. Holding is a
corporation duly organized and validly existing under the laws of
the State of Louisiana and is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act"). Bank is a state chartered banking
association duly organized and validly existing under the laws of
the State of Louisiana. Each member of Holding's consolidated
group has all requisite corporate power and authority to own and
lease its property and to carry on its business as it is
currently being conducted and is qualified and in good standing
as a foreign corporation in all jurisdictions in which the
failure to so qualify would have a material adverse effect on
such member's financial condition, results of operations,
business or prospects.
3.2 Capital Stock; Other Interests. The authorized
capital stock of Holding consists of 400,000 shares of Holding
Common Stock, of which 187,286 shares are issued and outstanding,
and 45,000 shares are held in its treasury. The authorized
capital stock of Bank consists of 50,000 shares of common stock,
$5.00 par value per share, of which 50,000 shares are issued and
outstanding and no shares are held in its treasury. All issued
and outstanding shares of capital stock of each member of
Holding's consolidated group have been duly authorized and are
validly issued, fully paid and (except as provided in La. R.S.
6:262) non-assessable, and all of the outstanding shares of each
such member (other than Holding) are owned by Holding, free and
clear of all liens, charges, security interests, mortgages,
pledges and other encumbrances. No member of Holding's
consolidated group has outstanding any stock options or other
rights to acquire any shares of its capital stock or any security
convertible into such shares, or has any obligation or commitment
to issue, sell or deliver any of the foregoing or any shares of
its capital stock. The capital stock of each member of Holding's
consolidated group has been issued in compliance with all legal
requirements and in compliance with any pre-preemptive or similar
rights. No member of Holding's consolidated group has a
subsidiary or direct or indirect ownership interest exceeding 1%
in any corporation, partnership or other business entity except
for interests in any other such member.
3.3 Corporate Authorization; No Conflicts. Subject to
the approval of this Agreement by the shareholders of Holding in
accordance with the BCL, all corporate acts and other proceedings
required of each member of Holding's consolidated group for the
due and valid authorization, execution, delivery and performance
of this Agreement and the Bank Merger Agreement and consummation
of the Mergers have been validly and appropriately taken.
Subject to such shareholder approval and to such regulatory
approvals as are required by law, this Agreement and the Bank
Merger Agreement are legal, valid and binding obligations of the
members of Holding's consolidated group which are parties
thereto, respectively, and are enforceable against such members
in accordance with the respective terms of such instruments,
except that enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court
decisions relating to or affecting the enforcement of creditors'
rights generally and by general equitable principles. With
respect to each member of Holding's consolidated group, neither
the execution, delivery or performance of this Agreement or the
Bank Merger Agreement, nor the consummation of the transactions
contemplated hereby or thereby will (i) violate, conflict with,
or result in a breach of any provisions of, (ii) constitute a
default (or event that, with notice or lapse of time or both,
would constitute a default) under, (iii) result in the
termination of or accelerate the performance required by, or (iv)
result in the creation of any lien, security interest, charge or
encumbrance upon any of its properties or assets under, any of
the terms, conditions or provisions of its articles of
incorporation or by-laws or any material note, bond, mortgage,
indenture, deed of trust, lease, license, agreement or other
instrument or obligation to or by which it or any of its assets
is bound; or violate any order, writ, injunction, decree,
statute, rule or regulation of any governmental body applicable
to it or any of its assets.
3.4 Financial Statements, Reports and Proxy Statements.
Holding has delivered to MidSouth true and complete copies of (a)
the consolidated balance sheets as of December 31, 1993 and 1992
of Holding and its subsidiaries, the related consolidated
statements of income, shareholders' equity and changes in
financial position for the respective years then ended, the
related notes thereto, and the report of its independent public
accountants with respect thereto (collectively, the "Financial
Statements"), (b) the unaudited consolidated balance sheets as of
September 30, 1994 and September 30, 1993 of Holding and its
subsidiaries, and the related unaudited statements of income,
shareholders' equity and changes in financial position for the
nine-month periods then ended (collectively, the "Interim
Financial Statements"), (c) the annual report to the Board of
Governors of the Federal Reserve System ("Federal Reserve Board")
for the year ended December 31, 1993, of each member of Holding's
consolidated group required to file such reports, (d) all call or
similar reports made to the Federal Deposit Insurance Corporation
("FDIC") or the Federal Reserve Board, as the case may be, since
December 31, 1991, of each member of Holding's consolidated group
required to file such reports, (e) Holding's Annual Report to
Shareholders for 1993 and all subsequent Quarterly Reports to
Shareholders, and (f) all proxy statements or other reports
disseminated to Holding's shareholders or the shareholders of any
of its subsidiaries at any time since December 31, 1991. The
Financial Statements and the Interim Financial Statements have
been prepared in conformity with generally accepted accounting
principles applied on a basis consistent with prior periods,
except as disclosed therein or in the accountant's report
accompanying such statement or statements, and present fairly, in
conformity with generally accepted accounting principles, except
as disclosed therein or in the accountant's report accompanying
such statement or statements, the consolidated results of
operations of Holding's consolidated group for the respective
periods covered thereby and the consolidated financial condition
of its consolidated group as of the respective dates thereof.
All call or similar reports referred to above have been filed on
the appropriate form and prepared in accordance with such form's
instructions and the applicable rules and regulations of the
regulating federal agency. No member of Holding's consolidated
group has, nor are any of any such member's assets subject to,
any material liability, commitment, indebtedness or obligation
(of any kind whatsoever, whether absolute, accrued, contingent,
known, unknown, matured or unmatured) which is not reflected and
adequately reserved against in the latest balance sheet forming
part of the Interim Financial Statements (the "Latest Balance
Sheet"). The Financial Statements and Interim Financial
Statements are supported by and consistent with detailed trial
balances of investment securities, loans and loan commitments,
depositors' accounts and cash balances on deposit with other
institutions, copies of which have been made available to
MidSouth.
3.5 Loan and Investment Portfolios. All loans, discounts
and financing leases (in which a member of Holding's consolidated
group is lessor) reflected on the Latest Balance Sheet (a) have
been made for good, valuable and adequate consideration in the
ordinary course of business of its consolidated group, (b) are
evidenced by notes, agreements or other evidences of indebtedness
which are true, genuine and what they purport to be and (c) to
the extent secured, have been secured by valid liens and security
interests which have been perfected. Accurate lists of all such
loans, discounts and financing leases as of the date of the
Latest Balance Sheet, and of the investment portfolios of each
member of Holding's consolidated group as of such date, have been
made available to MidSouth.
3.6 Adequacy of Loan Loss Reserves. Each of the
allowances for losses on loans, financing leases and other real
estate owned shown on the Latest Balance Sheet is adequate in
accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects, and
there are no facts or circumstances known to any executive
officer of Holding or Bank which are likely to require in
accordance with applicable regulatory guidelines or generally
accepted accounting principles a future material increase in any
provisions for such losses or a material decrease in any of the
allowances therefor reflected in the Latest Balance Sheet. Each
of the allowances for losses on loans, financing leases and other
real estate owned reflected on the books of Holding's
consolidated group at all times from and after the date of the
Latest Balance Sheet has been and will be adequate in accordance
with applicable regulatory guidelines and generally accepted
accounting principles in all material respects.
3.7 Examination Reports. To the extent permitted by
applicable law, Holding has made available to MidSouth true and
correct copies of all examination reports with respect to each
member of Holding's consolidated group made by any federal or
state bank or bank holding company regulatory authority since
December 31, 1991.
3.8 Absence of Certain Changes or Events. Since the date
of the Latest Balance Sheet, there has been no event or condition
of any character (whether actual, threatened or contemplated)
that has had, or can reasonably be anticipated to have, a
material adverse effect on the financial condition, results of
operations, business or prospects of any member of Holding's
consolidated group. No such member has, since the date of the
Latest Balance Sheet:
(a) borrowed any money except for deposits or, except in
the ordinary course of business consistent with past practices,
(i) loaned any money or pledged any of its credit in connection
with any aspect of its business, (ii) mortgaged or otherwise
subjected to any lien, encumbrance or other liability any of its
assets, (iii) sold, assigned or transferred any of its assets in
excess of $25,000 in the aggregate, or (iv) incurred any material
liability, commitment, indebtedness or obligation (of any kind
whatsoever, whether accrued, contingent, known, unknown, matured
or unmatured);
(b) suffered any material damage, destruction or loss,
whether or not covered by insurance;
(c) experienced any material change in asset concentrations
as to customers or industries or in the nature and source of its
liabilities or in the mix of interest-bearing versus non-interest
bearing deposits;
(d) received notice or had knowledge or reasonable grounds
to believe that any material labor unrest exists among any of its
employees or that any group, organization or union has attempted
to organize any of its employees;
(e) received notice or had knowledge or reasonable grounds
to believe that any of its substantial customers has terminated
or intends to terminate such customer's relationship with it;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to preserve its
business organization intact or to preserve the goodwill of its
customers and others with whom it has business relations;
(g) incurred any material loss except for losses adequately
reserved against on the date of this Agreement or waived any
material right in connection with any aspect of its business,
whether or not in the ordinary course of business;
(h) cancelled any debt owed to it, or cancelled any of its
claims, or paid any of its noncurrent obligations or liabilities;
(i) made any capital expenditure or capital addition or
betterment in excess of $25,000 each;
(j) entered into any agreement requiring the payment,
conditionally or otherwise, of any salary, bonus, extra
compensation, pension or severance payment to any of its present
or former directors, officers or employees, except such
agreements as are terminable at will without any penalty or other
payment by it, or increased the compensation (including salaries,
fees, bonuses, profit sharing, incentive, pension, retirement or
other similar payments) of any such person whose annual
compensation would, following such increase, exceed $30,000;
(k) changed any accounting practice followed or employed in
preparing the Financial Statements or Interim Financial
Statements;
(l) made any loan, given any discount or entered into any
financing lease which has not been (i) made for good, valuable
and adequate consideration in the ordinary course of business,
(ii) evidenced by notes or other evidences of indebtedness which
are true, genuine and what they purport to be, and (iii) fully
reserved against in an amount sufficient to provide for all
charge-offs reasonably anticipated in the ordinary course of
business after taking into account all recoveries reasonably
anticipated in the ordinary course of business; or
(m) entered into any agreement, contract or commitment to
do any of the foregoing.
3.9 Taxes. Each member of Holding's consolidated group
has timely filed all federal, state, foreign and local income,
franchise, excise, real and personal property, employment and
other tax returns, tax information returns and reports required
to be filed, has paid all taxes, interest payments and penalties
which have become due, has made (and will make) adequate
provision for the payment of all taxes accruable for all periods
ending on or before the date of this Agreement (and the Closing
Date) to any city, parish, state, foreign country, the United
States or any other taxing authority, and is not delinquent in
the payment of any tax or governmental charge of any nature. The
consolidated federal income tax returns of Holding's consolidated
group have never been audited. No audit, examination or
investigation is presently being conducted or, to the best of
such member's knowledge, threatened, by any taxing authority, no
material unpaid tax deficiencies or additional liabilities of any
sort have been proposed by any governmental representative, and
no agreements for extension of time for the assessment of any tax
have been entered into by or on behalf of any member of Holding's
consolidated group. Each such member has withheld from its
employees (and timely paid to the appropriate governmental
entity) proper and accurate amounts for all periods in compliance
in all material respects with all tax withholding provisions of
applicable federal, state, foreign and local laws (including,
without limitation, income, social security and employment tax
withholding for all forms of compensation).
3.10 Title to Assets. (a) On the date of the Latest
Balance Sheet, each member of Holding's consolidated group had
and, except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now has, good and merchantable title to all real property and
good and merchantable title to all other properties and assets
reflected on the Latest Balance Sheet, free and clear of all
mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages
and encumbrances which secure indebtedness which is properly
reflected in the Latest Balance Sheet; (ii) liens for taxes
accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet,
provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; (iv) such
imperfections of title and encumbrances, if any, as do not
materially detract from the value or interfere with the present
use of any of such properties or assets or the potential sale of
any of such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. Each member of Holding's consolidated group owns,
or has valid leasehold interests in, all material properties and
assets used in the conduct of its business. Any real property
and other material assets held under lease by any such member are
held under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use
of such property by such member.
(b) With respect to each lease of any real property or a
material amount of personal property to which any member of
Holding's consolidated group is a party, except for financing
leases in which a member of such consolidated group is lessor,
(i) such lease is in full force and effect in accordance with its
terms; (ii) all rents and other monetary amounts that have become
due and payable thereunder have been paid; (iii) there exists no
default, or event, occurrence, condition or act, which with the
giving of notice, the lapse of time or the happening of any
further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Company Merger nor
the Bank Merger will constitute a default or a cause for
termination or modification of such lease.
(c) No member of Holding's consolidated group has any legal
obligation, absolute or contingent, to any other person to sell
or otherwise dispose of any substantial part of its assets; or to
sell or dispose of any of its assets except in the ordinary
course of business consistent with past practices.
3.11 Litigation, Pending Proceedings and Compliance with
Laws. (a) There are no claims of any kind or any actions, suits,
proceedings, arbitrations or investigations pending or
threatened, nor does any member of Holding's consolidated group
have knowledge of a basis for any claim, in any court or before
any governmental agency or instrumentality or arbitration panel
or otherwise, against any member of Holding's consolidated group.
(b) Each member of Holding's consolidated group has
complied with and is not in default in any material respect under
(and has not been charged or threatened with or come under
investigation with respect to any charge concerning any material
violation of any provision of) any federal, state or local law,
regulation, ordinance, rule or order (whether executive,
judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality.
(c) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be
required, cited in any compliance report to any member of
Holding's consolidated group as a result of examination by any
bank or bank holding company regulatory authority.
(d) No member of Holding's consolidated group is subject to
any written agreement, memorandum or order with or by any bank or
bank holding company regulatory authority.
3.12 Employee Benefit Plans. (a) Neither Holding nor
Bank sponsors, maintains or contributes to, and neither has at
any time sponsored, maintained or contributed to, any employee
benefit plan or arrangement.
(b) Except as contemplated by Section 5.15 hereof, the
consummation of the transactions contemplated hereunder will not
(i) result in the imposition of any obligation or liability on
Holding, Bank, MidSouth or MidSouth Bank to any employee or
former employee of Holding or Bank, or (ii) result in a
prohibited transaction as such term is used in Code Section 4975
or ERISA Section 406.
3.13 Insurance Policies. Each member of Holding's
consolidated group maintains in force insurance policies and
bonds in such amounts and against such liabilities and hazards as
are considered adequate. An accurate list of all such insurance
policies has been delivered to MidSouth and MidSouth Bank. No
member of Holding's consolidated group is now liable, nor will
any such member become liable, for any material retroactive
premium adjustment. All policies are valid and enforceable and
in full force and effect, and no member of Holding's consolidated
group has received any notice of a material premium increase or
cancellation with respect to any of its insurance policies or
bonds. Within the last three years, no member of Holding's
consolidated group has been refused any insurance coverage sought
or applied for, and no such member has reason to believe that its
existing insurance coverage cannot be renewed as and when the
same shall expire, upon terms and conditions as favorable as
those presently in effect.
3.14 Agreements. No member of Holding's consolidated
group is a party to:
(a) any collective bargaining agreement;
(b) any employment or other agreement or contract with or
commitment to any employee except such agreements as are
terminable at will without penalty by the employer;
(c) any obligation of guaranty or indemnification except,
if entered into in the ordinary course of business with respect
to customers or any member of Holding's consolidated group,
letters of credit, guaranties of endorsements and guaranties of
signatures;
(d) any agreement, contract or commitment which is or may
be materially adverse to the financial condition, results of
operations, business or prospects of any member of Holding's
consolidated group; or
(e) any agreement, contract or commitment containing any
covenant limiting the freedom of any member of Holding's
consolidated group to engage in any line of business or to
compete with any person.
The subsection of the Schedule of Exceptions that
corresponds to this subsection contains a list of each material
agreement, contract or commitment (except those entered into in
the ordinary course of business with respect to loans, lines of
credit, letters of credit, depositor agreements, certificates of
deposit and similar banking activities) to which any member of
Holding's consolidated group is a party or which affects any such
member. No member of Holding's consolidated group has in any
material respect breached, nor is there any pending or threatened
claims that it has materially breached, any of the terms or
conditions of any of its agreements, contracts or commitments.
3.15 Licenses, Franchises and Governmental
Authorizations. Each member of Holding's consolidated group
possesses all licenses, franchises, permits and other
governmental authorizations necessary for the continued conduct
of its business without interference or interruption. The
deposits of each such member are insured by the FDIC to the
extent provided by applicable law, and there are no pending or
threatened proceedings to revoke or modify that insurance or for
relief under 12 U.S.C. Section 1818.
3.16 Corporate Documents. Holding has delivered to
MidSouth and MidSouth Bank, with respect to each member of
Holding's consolidated group, true and correct copies of its
articles of incorporation or articles of association, and its by-
laws, all as amended. All of the foregoing and all of the
corporate minutes and stock transfer records of each member of
Holding's consolidated group are current, complete and correct in
all material respects.
3.17 Certain Transactions. No past or present director,
executive officer or five percent shareholder of any member of
Holding's consolidated group has, since January 1, 1991, engaged
in any transaction or series of transactions which, if such
member had been subject to Section 14(a) of the Exchange Act at
all times since that date, would be required to be disclosed in
its proxy materials pursuant to Item 404 of Regulation S-K of the
Rules and Regulations of the Securities and Exchange Commission
("SEC") without regard to the amount limitations of Item 404.
3.18 Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of any member of Holding's consolidated
group is entitled to any commission, broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement, except for the
financial advisor retained by Holding pursuant to a written
agreement which has been delivered to MidSouth and MidSouth Bank.
3.19 Environmental Matters.
(a) (i) Holding and each member of Holding's consolidated
group has obtained all material permits, licenses and other
authorizations that are required to be obtained by it under any
applicable Environmental Law Requirements (as hereinafter
defined) in connection with the operation of its businesses and
ownership of its properties (collectively, the "Subject
Properties"), including without limitation properties acquired by
foreclosure or in settlement of loans;
(ii) Holding and each member of its consolidated group
is in compliance in all material respects with all terms and
conditions of such permits, licenses and authorizations and with
all applicable Environmental Law Requirements;
(iii)There are no past or present events, conditions,
circumstances, activities or plans by any member of Holding's
consolidated group related in any manner to Holding or any member
of its consolidated group or the Subject Properties that did or
would, in any material respect, violate or prevent compliance or
continued compliance with any of the Environmental Law
Requirements, or give rise to any Environmental Liability, as
hereinafter defined;
(iv) There is no civil, criminal or administrative
action, suit, demand, claim, order, judgment, hearing, notice or
demand letter, notice of violation, investigation or proceeding
pending or, to the knowledge of any executive officer of Holding
or Bank, threatened by any person against Holding or any member
of its consolidated group, or any prior owner of any of the
Subject Properties and relating to the Subject Properties, and
relating in any way to any Environmental Law Requirement or
seeking to impose any Environmental Liability; and
(v) No member of Holding's consolidated group is
subject to or responsible for any material Environmental
Liability that is not set forth and adequately reserved against
on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means all applicable
statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all governmental agencies,
departments, commissions, boards, bureaus, or instrumentalities
of the United States, states and political subdivisions thereof
and all applicable judicial, administrative, and regulatory
decrees, judgments and orders relating to the protection of human
health or the environment, including without limitation: (A) all
requirements, including but not limited to those (i) pertaining
to reporting, licensing, permitting, investigation, and
remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below),
chemical substances, pollutants, contaminants, or hazardous or
toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials or
wastes, whether solid, liquid, or gaseous in nature; (B) all
requirements pertaining to protection of the health and safety of
employees or the public; and (C) all requirements pertaining to
the (i) drilling, production, and abandonment of oil and gas
wells, (ii) the transportation of produced oil and gas, and (iii)
the remediation of sites related to that drilling, production or
transportation.
(c) "Hazardous Materials" shall mean: (A) Any "hazardous
substance" as defined by either the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 USC Section
9601, et seq.) ("CERCLA") as amended from time to time, or
regulations promulgated thereunder; (B) asbestos; (C)
polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or La. Admin. Code 33:XI.
103; (E) any naturally occurring radioactive material ("NORM"),
as defined by La. Admin. Code 33:XV, Chapter 14, as amended
from time to time, irrespective of whether the NORM is
located in Louisiana or another jurisdiction; (F) any non-hazardous
oilfield wastes ("NOW") defined under La. R.S. 30:1, et seq.,
and regulations promulgated thereunder, irrespective of whether
those wastes are located in Louisiana or another jurisdiction;
(G) any substance the presence of which on the Subject Properties
is prohibited by any lawful rules and regulations of legally
constituted authorities from time to time in force and effect
relating to the Subject Properties; and (H) any other substance
which by any such rule or regulation requires special handling in
its collection, storage, treatment or disposal.
(d) "Environmental Liability" shall mean (i) any liability
or obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) arising under
any Environmental Law Requirement, or (ii) any liability or
obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) under any
other theory of law or equity (including without limitation any
liability for personal injury, property damage or remediation)
that results from, or is based upon or related to, the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment, of any
Hazardous Materials, pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
3.20 Community Reinvestment Act; Fair Lending. Bank has
complied in all material respects with the provisions of the
Community Reinvestment Act ("CRA") and the rules and regulations
thereunder, has a CRA rating of not less than "satisfactory", and
has received no material criticism from regulators with respect
to discriminatory lending practices.
3.21 Accuracy of Statements. No warranty or
representation made or to be made by any member of Holding's
consolidated group in this Agreement, and no information
furnished by any such member pursuant to this Agreement, contains
or will contain, as of the date of this Agreement, the effective
date of the Registration Statement (as defined in subsection 5.16
hereof) and the Closing Date, an untrue statement of a material
fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the
circumstances in which they are made, not misleading.
SECTION 4
Representations and Warranties
of MidSouth and MidSouth Bank
MidSouth and MidSouth Bank represent and warrant to Holding
and Bank that, except as set forth in the corresponding
subsection of the Schedule of Exceptions that MidSouth has
delivered to Holding:
4.1 Organization and Qualification. MidSouth's
"consolidated group" consists of MidSouth and MidSouth Bank.
MidSouth is a corporation duly organized and validly existing
under the laws of the State of Louisiana and is a bank holding
company within the meaning of the Bank Holding Company Act.
MidSouth Bank is a national banking association duly organized
and validly existing under the laws of the United States. Each
of MidSouth and MidSouth Bank has all requisite corporate power
and authority to own and lease its property and to carry on its
business as it is currently being conducted and is qualified and
in good standing as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse
effect on its financial condition, results of operations,
business or prospects.
4.2 Capital Stock; Other Interests. The authorized
capital stock of MidSouth consisted at September 30, 1994, of
5,000,000 shares of common stock, $0.10 par value per share, of
which at such date 709,687 shares were issued and outstanding and
no shares were held in its treasury; and 5,000,000 shares of
preferred stock, no par value per share, of which at such date no
shares were issued and outstanding and no shares were held in its
treasury. All issued and outstanding shares of capital stock of
each member of MidSouth's consolidated group have been duly
authorized and are validly issued, fully paid and (except as
provided in 12 U.S.C. 62) non-assessable, and all of the
outstanding shares of each such member (other than MidSouth) are
owned by MidSouth, free and clear of all liens, charges, security
interests, mortgages, pledges and other encumbrances. Except
with respect to stock options pursuant to MidSouth's stock option
plan, the shares of Preferred Stock to be issued pursuant to this
Agreement and the shares of MidSouth Common Stock that may be
issued upon conversion of the Preferred Stock, as of the date of
this Agreement no member of MidSouth's consolidated group has
outstanding any stock options or other rights to acquire any
shares of its capital stock or any security convertible into such
shares, or has any obligation or commitment to issue, sell or
deliver any of the foregoing or any shares of its capital stock.
The capital stock of each member of MidSouth's consolidated group
has been issued in compliance with all legal requirements and in
compliance with any pre-preemptive or similar rights. No member
of MidSouth's consolidated group has a subsidiary or direct or
indirect ownership interest exceeding 1% in any corporation,
partnership or other business entity except for interests in any
other such member.
4.3 Corporate Authorization; No Conflicts. Subject to
the approval of this Agreement by the shareholders of MidSouth in
accordance with the BCL or the rules of the American Stock
Exchange, if required, and to the approval of this Agreement and
the Bank Merger Agreement by MidSouth as sole shareholder of
MidSouth Bank, all corporate acts and other proceedings required
of MidSouth and MidSouth Bank for the due and valid
authorization, execution, delivery and performance of this
Agreement and the Bank Merger Agreement and consummation of the
Mergers have been validly and appropriately taken. Subject to
such shareholder approvals and to such regulatory approvals as
are required by law, this Agreement and the Bank Merger Agreement
are legal, valid and binding obligations of MidSouth and MidSouth
Bank, as the case may be, and are enforceable against them in
accordance with the respective terms of such instruments, except
that enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws and court decisions relating to
or affecting the enforcement of creditors' rights generally and
by general equitable principles. With respect to each of
MidSouth and MidSouth Bank, neither the execution, delivery or
performance of this Agreement or the Bank Merger Agreement, nor
the consummation of the transactions contemplated hereby or
thereby will (i) violate, conflict with, or result in a breach of
any provision of, (ii) constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, (iii) result in the termination of or accelerate the
performance required by, or (iv) result in the creation of any
lien, security interest, charge or encumbrance upon any of its
properties or assets under, any of the terms, conditions or
provisions of its articles of incorporation or by-laws or any
material note, bond, mortgage, indenture, deed of trust, lease,
license, agreement or other instrument or obligation to or by
which it or any of its assets is bound; or violate any order,
writ, injunction, decree, statute, rule or regulation of any
governmental body applicable to it or any of its assets.
4.4 MidSouth Corporate Documents. MidSouth and MidSouth
Bank have delivered to Holding true and correct copies of their
articles of incorporation or association, as amended, and by-
laws, as amended.
4.5 Financial Statements, Reports and Proxy Statements.
MidSouth has delivered to Holding true and complete copies of (a)
the consolidated balance sheets as of December 31, 1993 and 1992
of MidSouth and its subsidiaries, the related consolidated
statements of income, shareholders' equity and changes in
financial position for the respective years then ended, the
related notes thereto, and the report of its independent public
accountants with respect thereto (collectively, the "Financial
Statements"), (b) the unaudited consolidated balance sheets as of
September 30, 1994 and September 30, 1993 of MidSouth and its
subsidiaries, and the related unaudited statements of income,
shareholders' equity and changes in financial position for the
nine-month periods then ended (collectively, the "Interim
Financial Statements"), (c) the annual report to the Board of
Governors of the Federal Reserve System ("Federal Reserve Board")
for the year ended December 31, 1993, of each member of
MidSouth's consolidated group required to file such reports, (d)
all call or similar reports made to the OCC or the Federal
Reserve Board, as the case may be, since December 31, 1991, of
each member of MidSouth's consolidated group required to file
such reports, (e) MidSouth's Annual Report to Shareholders for
1993 and all subsequent Quarterly Reports to Shareholders, and
(f) all proxy statements or other reports disseminated to
MidSouth's shareholders or the shareholders of any of its
subsidiaries at any time since December 31, 1991. The Financial
Statements and the Interim Financial Statements have been
prepared in conformity with generally accepted accounting
principles applied on a basis consistent with prior periods, and
present fairly, in conformity with generally accepted accounting
principles, except as disclosed therein or in the accountant's
report accompanying such statement or statements, the
consolidated results of operations of MidSouth's consolidated
group for the respective periods covered thereby and the
consolidated financial condition of its consolidated group as of
the respective dates thereof. All call or similar reports
referred to above have been filed on the appropriate form and
prepared in accordance with such form's instructions and the
applicable rules and regulations of the regulating federal
agency. No member of MidSouth's consolidated group has, nor are
any of any such member's assets subject to, any material
liability, commitment, indebtedness or obligation (of any kind
whatsoever, whether absolute, accrued, contingent, known,
unknown, matured or unmatured) which is not reflected and
adequately reserved against in the latest balance sheet forming
part of the Interim Financial Statements (the "Latest Balance
Sheet"). The Financial Statements and Interim Financial
Statements are supported by and consistent with detailed trial
balances of investment securities, loans and loan commitments,
depositors' accounts and cash balances on deposit with other
institutions, copies of which have been made available to
Holding.
4.6 Loan and Investment Portfolios. All loans, discounts
and financing leases (in which a member of MidSouth's
consolidated group is lessor) reflected on the Latest Balance
Sheet (a) have been made for good, valuable and adequate
consideration in the ordinary course of business of its
consolidated group, (b) are evidenced by notes, agreements or
other evidences of indebtedness which are true, genuine and what
they purport to be and (c) to the extent secured, have been
secured by valid liens and security interests which have been
perfected.
4.7 Adequacy of Loan Loss Reserves. Each of the
allowances for losses on loans, financing leases and other real
estate owned shown on the Latest Balance Sheet is adequate in
accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects, and
there are no facts or circumstances known to any executive
officer of MidSouth or MidSouth Bank which are likely to require
in accordance with applicable regulatory guidelines or generally
accepted accounting principles a future material increase in any
provisions for such losses or a material decrease in any of the
allowances therefor reflected in the Latest Balance Sheet. Each
of the allowances for losses on loans, financing leases and other
real estate owned reflected on the books of MidSouth's
consolidated group at all times from and after the date of the
Latest Balance Sheet has been and will be adequate in accordance
with applicable regulatory guidelines and generally accepted
accounting principles in all material respects.
4.8 Examination Reports. To the extent permitted by
applicable law, MidSouth has made available to Holding true and
correct copies of all examination reports with respect to each
member of MidSouth's consolidated group made by any federal or
state bank or bank holding company regulatory authority since
December 31, 1991.
4.9 Absence of Certain Changes or Events. Since the date
of the Latest Balance Sheet, there has been no event or condition
of any character (whether actual, threatened or contemplated)
that has had, or can reasonably be anticipated to have, a
material adverse effect on the financial condition, results of
operations, business or prospects of any member of MidSouth's
consolidated group. No such member has, since the date of the
Latest Balance Sheet:
(a) borrowed any money except for deposits or, except in
the ordinary course of business consistent with past practices,
(i) loaned any money or pledged any of its credit in connection
with any aspect of its business, (ii) mortgaged or otherwise
subjected to any lien, encumbrance or other liability any of its
assets, (iii) sold, assigned or transferred any of its assets in
excess of $150,000 in the aggregate, or (iv) incurred any
material liability, commitment, indebtedness or obligation (of
any kind whatsoever, whether accrued, contingent, known, unknown,
matured or unmatured);
(b) suffered any material damage, destruction or loss,
whether or not covered by insurance;
(c) experienced any material change in asset concentrations
as to customers or industries or in the nature and source of its
liabilities or in the mix of interest-bearing versus non-interest
bearing deposits;
(d) received notice or had knowledge or reasonable grounds
to believe that any material labor unrest exists among any of its
employees or that any group, organization or union has attempted
to organize any of its employees;
(e) received notice or had knowledge or reasonable grounds
to believe that any of its substantial customers has terminated
or intends to terminate such customer's relationship with it;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to preserve its
business organization intact or to preserve the goodwill of its
customers and others with whom it has business relations;
(g) incurred any material loss except for losses adequately
reserved against on the date of this Agreement or waived any
material right in connection with any aspect of its business,
whether or not in the ordinary course of business;
(h) cancelled any debt owed to it, or cancelled any of its
claims, or paid any of its noncurrent obligations or liabilities;
(i) made any capital expenditure or capital addition or
betterment in excess of $150,000 each;
(j) changed any accounting practice followed or employed in
preparing the Financial Statements or Interim Financial
Statements;
(k) made any loan, given any discount or entered into any
financing lease which has not been (i) made for good, valuable
and adequate consideration in the ordinary course of business,
(ii) evidenced by notes or other evidences of indebtedness which
are true, genuine and what they purport to be, and (iii) fully
reserved against in an amount sufficient to provide for all
charge-offs reasonably anticipated in the ordinary course of
business after taking into account all recoveries reasonably
anticipated in the ordinary course of business; or
(l) entered into any agreement, contract or commitment to
do any of the foregoing.
4.10 Taxes. Each member of MidSouth's consolidated group
has timely filed all federal, state, foreign and local income,
franchise, excise, real and personal property, employment and
other tax returns, tax information returns and reports required
to be filed, has paid all taxes, interest payments and penalties
which have become due, has made (and will make) adequate
provision for the payment of all taxes accruable for all periods
ending on or before the date of this Agreement (and the Closing
Date) to any city, parish, state, foreign country, the United
States or any other taxing authority, and is not delinquent in
the payment of any tax or governmental charge of any nature. The
consolidated federal income tax returns of MidSouth's
consolidated group have never been audited. No audit,
examination or investigation is presently being conducted or, to
the best of such member's knowledge, threatened, by any taxing
authority, no material unpaid tax deficiencies or additional
liabilities of any sort have been proposed by any governmental
representative, and no agreements for extension of time for the
assessment of any tax have been entered into by or on behalf of
any member of MidSouth's consolidated group. Each such member
has withheld from its employees (and timely paid to the
appropriate governmental entity) proper and accurate amounts for
all periods in compliance in all material respects with all tax
withholding provisions of applicable federal, state, foreign and
local laws (including, without limitation, income, social
security and employment tax withholding for all forms of
compensation).
4.11 Title to Assets. (a) On the date of the Latest
Balance Sheet, each member of MidSouth's consolidated group had
and, except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now has, good and merchantable title to all real property and
good and merchantable title to all other properties and assets
reflected on the Latest Balance Sheet, free and clear of all
mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages
and encumbrances which secure indebtedness which is properly
reflected in the Latest Balance Sheet; (ii) liens for taxes
accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet,
provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; (iv) such
imperfections of title and encumbrances, if any, as do not
materially detract from the value or interfere with the present
use of any of such properties or assets or the potential sale of
any of such owned properties or assets; and (v) capital leases
and leases, if any, to third parties for fair and adequate
consideration. Each member of MidSouth's consolidated group
owns, or has valid leasehold interests in, all material
properties and assets used in the conduct of its business. Any
real property and other material assets held under lease by any
such member are held under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use of such property by such member.
(b) With respect to each lease of any real property or a
material amount of personal property to which any member of
MidSouth's consolidated group is a party, except for financing
leases in which a member of such consolidated group is lessor,
(i) such lease is in full force and effect in accordance with its
terms; (ii) all rents and other monetary amounts that have become
due and payable thereunder have been paid; (iii) there exists no
default, or event, occurrence, condition or act, which with the
giving of notice, the lapse of time or the happening of any
further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Company Merger nor
the Bank Merger will constitute a default or a cause for
termination or modification of such lease.
(c) No member of MidSouth's consolidated group has any
legal obligation, absolute or contingent, to any other person to
sell or otherwise dispose of any substantial part of its assets;
or to sell or dispose of any of its assets except in the ordinary
course of business consistent with past practices.
4.12 Litigation, Pending Proceedings and Compliance with
Laws. (a) Except as described in the list referred to in
subparagraph (e) below, there are no claims of any kind or any
actions, suits, proceedings, arbitrations or investigations
pending or threatened, nor does any member of MidSouth's
consolidated group have knowledge of a basis for any claim, in
any court or before any governmental agency or instrumentality or
arbitration panel or otherwise, against any member of MidSouth's
consolidated group.
(b) Each member of MidSouth's consolidated group has
complied with and is not in default in any material respect under
(and has not been charged or threatened with or come under
investigation with respect to any charge concerning any material
violation of any provision of) any federal, state or local law,
regulation, ordinance, rule or order (whether executive,
judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality.
(c) There are no material uncured violations, or violations
with respect to which material refunds or restitution may be
required, cited in any compliance report to any member of
MidSouth's consolidated group as a result of examination by any
bank or bank holding company regulatory authority.
(d) No member of MidSouth's consolidated group is subject
to any written agreement, memorandum or order with or by any bank
or bank holding company regulatory authority.
(e) The subsection of the Schedule of Exceptions that
corresponds to this subsection lists each claim, action, suit,
proceeding, arbitration, or investigation, pending or known to be
threatened, in which any material claim or demand is made or
threatened to be made against any member of MidSouth's
consolidated group.
4.13 Employee Benefit Plans. With respect to any
employee benefit plans covered by ERISA ("Erisa Plans") all
contributions required to be made by MidSouth or MidSouth Bank
have been made, all insurance premiums required have been paid
and each of the ERISA Plans has been maintained and administered
in all material respects in compliance with its terms, the
provisions of ERISA and all other applicable laws, and, where
applicable, the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"). With respect to each of the ERISA
Plans, no transaction has occurred that could result in the
imposition of a tax or penalty on prohibited transactions or
party-in-interest transactions pursuant to Section 4975 of the
Code or Section 502(i) of ERISA; there is no matter relating to
any of the ERISA Plans pending or, to the knowledge of Holding or
Bank, threatened, nor, to the knowledge of MidSouth or MidSouth
Bank, are there any facts or circumstances existing that could
lead to (other than routine filings such as qualification
determination filings) proceedings before, or administrative
actions by, any governmental agency; there are no actions, suits
or claims pending or, to the knowledge of MidSouth or MidSouth
Bank, threatened (including, without limitation, breach of
fiduciary duty actions, but excluding routine uncontested claims
for benefits) against any of the ERISA Plans or the assets
thereof, where applicable. MidSouth and MidSouth Bank have
complied in all material respects with the reporting and
disclosure requirements of ERISA and the Code. None of the ERISA
Plans are multi-employer plans within the meaning of Section
3(37) of ERISA. Except as set forth on the Schedule of
Exceptions, a favorable determination letter has been issued by
the Internal Revenue Service with respect to each ERISA Plan that
is intended to be qualified under Section 401(a) of the Code, the
Internal Revenue Service has taken no action to revoke any such
letter and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification. Neither
MidSouth nor MidSouth Bank has sponsored, maintained or made
contributions to any plan, fund or arrangement subject to Title
IV of ERISA or the requirements of Section 412 of the Code or
providing for post-retirement medical benefits.
(b) All group health plans of MidSouth and MidSouth Bank to
which Section 4980B(f) of the Code or Section 601 of ERISA
applies are in full compliance in all material respects with the
continuation coverage requirements of Section 4980B(f) of the
Code and Section 601 of ERISA and any prior violations of such
Sections have been cured prior to the date hereof.
(c) Except as contemplated by Section 5.15 hereof, the
consummation of the transactions contemplated hereunder will not
(i) result in the imposition of any obligation or liability on
Holding, Bank, MidSouth or MidSouth Bank to any employee benefit
plan, fund or arrangement of, or to any employee or former
employee of, MidSouth or MidSouth Bank, or (ii) result in a
prohibited transaction as such term is used in Code Section 4975
or ERISA Section 406.
(d) Each plan, fund or arrangement previously sponsored or
maintained by MidSouth or MidSouth Bank or to which MidSouth or
MidSouth Bank previously made contributions which has been
terminated by MidSouth or MidSouth Bank was terminated in
accordance with ERISA, the Code and the terms of such plan, fund
or arrangement and no event has occurred and no condition exists
that would subject Holding, Bank, MidSouth or MidSouth Bank to
any tax, penalty, fine or other liability as a result of,
directly or indirectly, the termination of such plan, fund or
arrangement.
4.14 Insurance Policies. Each member of MidSouth's
consolidated group maintains in force insurance policies and
bonds in such amounts and against such liabilities and hazards as
are considered adequate. No member of Holding's consolidated
group is now liable, nor will any such member become liable, for
any material retroactive premium adjustment. All policies are
valid and enforceable and in full force and effect, and no member
of MidSouth's consolidated group has received any notice of a
material premium increase or cancellation with respect to any of
its insurance policies or bonds. Within the last three years, no
member of MidSouth's consolidated group has been refused any
insurance coverage sought or applied for, and no such member has
reason to believe that its existing insurance coverage cannot be
renewed as and when the same shall expire, upon terms and
conditions as favorable as those presently in effect.
4.15 Agreements. No member of MidSouth's consolidated
group is a party to:
(a) any collective bargaining agreement;
(b) any obligation of guaranty or indemnification except,
if entered into in the ordinary course of business with respect
to customers or any member of MidSouth's consolidated group,
letters of credit, guaranties of endorsements and guaranties of
signatures;
(c) any agreement, contract or commitment which is or may
be materially adverse to the financial condition, results of
operations, business or prospects of any member of MidSouth's
consolidated group; or
(d) any agreement, contract or commitment containing any
covenant limiting the freedom of any member of MidSouth's
consolidated group to engage in any line of business or to
compete with any person.
No member of MidSouth's consolidated group has in any
material respect breached, nor is there any pending or threatened
claims that it has materially breached, any of the terms or
conditions of any of its agreements, contracts or commitments.
4.16 Licenses, Franchises and Governmental
Authorizations. Each member of MidSouth's consolidated group
possesses all licenses, franchises, permits and other
governmental authorizations necessary for the continued conduct
of its business without interference or interruption. The
deposits of each such member are insured by the FDIC to the
extent provided by applicable law, and there are no pending or
threatened proceedings to revoke or modify that insurance or for
relief under 12 U.S.C. Section 1818.
4.17 Environmental Matters.
(a) (i) MidSouth and each member of MidSouth's
consolidated group has obtained all material permits, licenses
and other authorizations that are required to be obtained by it
under any applicable Environmental Law Requirements (as
hereinafter defined) in connection with the operation of its
businesses and ownership of its properties (collectively, the
"Subject Properties"), including without limitation properties
acquired by foreclosure or in settlement of loans;
(ii) MidSouth and each member of its consolidated group
is in compliance in all material respects with all terms and
conditions of such permits, licenses and authorizations and with
all applicable Environmental Law Requirements;
(iii)There are no past or present events, conditions,
circumstances, activities or plans by any member of MidSouth's
consolidated group related in any manner to MidSouth or any
member of its consolidated group or the Subject Properties that
did or would, in any material respect, violate or prevent
compliance or continued compliance with any of the Environmental
Law Requirements, or give rise to any Environmental Liability, as
hereinafter defined;
(iv) There is no civil, criminal or administrative
action, suit, demand, claim, order, judgment, hearing, notice or
demand letter, notice of violation, investigation or proceeding
pending or, to the knowledge of any executive officer of MidSouth
or MidSouth Bank, threatened by any person against MidSouth or
any member of its consolidated group, or any prior owner of any
of the Subject Properties and relating to the Subject Properties,
and relating in any way to any Environmental Law Requirement or
seeking to impose any Environmental Liability; and
(v) No member of MidSouth's consolidated group is
subject to or responsible for any material Environmental
Liability that is not set forth and adequately reserved against
on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means all applicable
statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all governmental agencies,
departments, commissions, boards, bureaus, or instrumentalities
of the United States, states and political subdivisions thereof
and all applicable judicial, administrative, and regulatory
decrees, judgments and orders relating to the protection of human
health or the environment, including without limitation: (A) all
requirements, including but not limited to those (i) pertaining
to reporting, licensing, permitting, investigation, and
remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below),
chemical substances, pollutants, contaminants, or hazardous or
toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials or
wastes, whether solid, liquid, or gaseous in nature; (B) all
requirements pertaining to protection of the health and safety of
employees or the public; and (C) all requirements pertaining to
the (i) drilling, production, and abandonment of oil and gas
wells, (ii) the transportation of produced oil and gas, and (iii)
the remediation of sites related to that drilling, production or
transportation.
(c) "Hazardous Materials" shall mean: (A) Any "hazardous
substance" as defined by either the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 USC Section
9601, et seq.) ("CERCLA") as amended from time to time, or re-
gulations promulgated thereunder; (B) asbestos; (C)
polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or La. Admin. Code
33:XI.103; (E) any naturally occurring radioactive material
("NORM"), as defined by La. Admin. Code 33:XV, Chapter 14, as
amended from time to time, irrespective of whether the
NORM is located in Louisiana or another jurisdiction; (F) any
non-hazardous oilfield wastes ("NOW") defined under La. R.S. 30
:1, et seq., and regulations promulgated thereunder, irrespec-
tive of whether those wastes are located in Louisiana or another
jurisdiction; (G) any substance the presence of which on the
Subject Properties is prohibited by any lawful rules and re-
gulations of legally constituted authorities from time to time
in force and effect relating to the Subject Properties; and (H)
any other substance which by any such rule or regulation requires
special handling in its collection, storage, treatment or
disposal.
(d) "Environmental Liability" shall mean (i) any liability
or obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) arising under
any Environmental Law Requirement, or (ii) any liability or
obligation (of any kind whatsoever, whether absolute or
contingent, accrued or unaccrued, known or unknown) under any
other theory of law or equity (including without limitation any
liability for personal injury, property damage or remediation)
that results from, or is based upon or related to, the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment, of any
Hazardous Materials, pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
4.18 Community Reinvestment Act; Fair Lending. MidSouth
Bank has complied in all material respects with the provisions of
the Community Reinvestment Act ("CRA") and the rules and
regulations thereunder, has a CRA rating of not less than
"satisfactory", and has received no material criticism from
regulators with respect to discriminatory lending practices.
4.19 Legality of MidSouth Securities. All shares of
Preferred Stock to be issued pursuant to this Agreement have been
duly authorized and, when issued pursuant to this Agreement will
be validly issued, fully paid and non-assessable.
4.20 Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of MidSouth or MidSouth Bank is entitled
to any commission, broker's or finder's fee from any of the
parties hereto in connection with any of the transactions
contemplated by this Agreement.
4.21 Accuracy of Statements. No warranty or
representation made or to be made by any member of Holding's
consolidated group in this Agreement, and no information
furnished by any such member pursuant to this Agreement, contains
or will contain, as of the date of this Agreement, the effective
date of the Registration Statement (as defined in subsection 5.16
hereof) and the Closing Date, an untrue statement of a material
fact or an omission of a material fact necessary to make the
statements contained herein and therein, in light of the
circumstances in which they are made, not misleading.
SECTION 5
Covenants and Conduct of Parties
Prior to the Effective Date
The parties covenant and agree with each other as follows:
5.1 Cooperation and Best Efforts. Each of the parties
will cooperate with the other parties and use its best efforts to
(a) procure all necessary consents and approvals, (b) complete
all necessary filings, registrations and certificates, (c)
satisfy all requirements prescribed by law for, and all
conditions set forth in this Agreement to, the consummation of
the Mergers and the transactions contemplated hereby and by the
Bank Merger Agreement, and (d) effect the transactions
contemplated by this Agreement and the Bank Merger Agreement at
the earliest practicable date.
5.2 Information for, and Preparation of, Proxy Statement.
(a) Each of the parties will cooperate in the preparation of the
Registration Statement referred to in subsection 5.16 and a proxy
statement of Holding (the "Proxy Statement"), which complies with
the requirements of the Securities Act of 1933 (the "Securities
Act"), for the purpose of submitting this Agreement and the
transactions contemplated hereby to MidSouth's and Holding's
shareholders for approval. Each of the parties will as promptly
as practicable after the date hereof furnish all such data and
information relating to it and its subsidiaries as any of the
other parties may reasonably request for the purpose of including
such data and information in the Proxy Statement and the
Registration Statement.
(b) MidSouth will indemnify Holding and Bank, each of their
directors and officers, and each controlling person of Holding
within the meaning of the Securities Act against any claims
insofar as they arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission of
material fact in the Registration Statement or the Proxy
Statement, and will reimburse each such person for expenses
reasonably incurred in connection with investigating or defending
any such claim; provided, that MidSouth will not be liable to the
extent that any such claim arises out of or is based upon any
untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information
furnished to MidSouth by Holding.
(c) Any indemnified person wishing to claim indemnification
under paragraph (b), upon learning of any claim, shall promptly
notify MidSouth thereof. MidSouth shall have the right to assume
the defense thereof and shall not be liable for any expenses
subsequently incurred by such indemnified person in connection
with the defense thereof, except that if MidSouth does not assume
such defense, or counsel for the indemnified person advises in
writing that there are material substantive issues that raise
conflicts of interest between MidSouth and the indemnified
person, the indemnified person may retain counsel satisfactory to
him, and MidSouth shall pay all reasonable fees and expenses of
such counsel, provided that (i) MidSouth shall be obligated to
pay for only one counsel for all indemnified persons in any
jurisdiction, (ii) the indemnified persons will cooperate in the
defense of any such claim, and (iii) MidSouth shall not be liable
for any settlement effected without its prior written consent.
5.3 Approval of Bank Merger Agreement. MidSouth, as the
sole shareholder of MidSouth Bank, and Holding, as the sole
shareholder of Bank, shall take all action necessary to effect
shareholder approval of the Bank Merger Agreement.
5.4 Press Releases. MidSouth and Holding will cooperate
with each other in the preparation of any press releases
announcing the execution of this Agreement or the consummation of
the transactions contemplated hereby. Without the prior written
consent of the chief executive officer of MidSouth, no member of
Holding's consolidated group will issue any press release or
other written statement for general circulation relating to the
transactions contemplated hereby, except as may otherwise be
required by law.
5.5 [LEFT BLANK INTENTIONALLY]
5.6 Investigations; Planning. The parties shall continue
to provide to each other and to their authorized representatives
full access during all reasonable times to their premises,
properties, books and records (including, without limitation, all
corporate minutes and stock transfer records), and to furnish
such financial and operating data and other information of any
kind respecting their business and properties as the others shall
from time to time reasonably request. Any investigation shall be
conducted in a manner which does not unreasonably interfere with
the operation of the business of a party. Each member of
Holding's consolidated group agrees to cooperate with MidSouth
and MidSouth Bank in connection with planning for the efficient
and orderly combination of the parties and the operation of
MidSouth and MidSouth Bank after consummation of the Mergers. In
the event of termination of this Agreement prior to the Effective
Date, each party shall return, without retaining copies thereof,
all confidential or non-public documents, work papers and other
materials obtained from the others in connection with the
transactions contemplated hereby and, for a period of not less
than two years following such termination, shall keep such
information confidential, not disclose such information to any
other person or entity except as may be required by legal
process, and not use such information in connection with its
business, in each case unless and until such information shall
come into the public domain through no fault of such party.
5.7 Preservation of Business. Each party will use its
best efforts to preserve the possession and control of all of its
assets other than those consumed or disposed of for value in the
ordinary course of business, to preserve the goodwill of
customers and others having business relations with it and to do
nothing knowingly to impair its ability to keep and preserve its
business as it exists on the date of this Agreement.
5.8 Conduct of Business in the Ordinary Course. Each
member of Holding's consolidated group shall conduct its business
only in the ordinary course and, except as otherwise provided
herein, it shall not, without the prior written consent of the
chief executive officer of MidSouth or his duly authorized
designee:
(a) declare, set aside, increase or pay any dividend, or
declare or make any distribution on, or directly or indirectly
combine, redeem, reclassify, purchase, or otherwise acquire, any
shares of its capital stock or authorize the creation or issuance
of or issue any additional shares of its capital stock or any
securities or obligations convertible into or exchangeable for
its capital stock, provided that this subparagraph shall not
apply to prevent dividends or distributions from any member of
Holding's consolidated group to any other member of such
consolidated group;
(b) amend its articles of incorporation or association or
by-laws or adopt or amend any resolution or agreement concerning
indemnification of its directors or officers;
(c) enter into or modify any agreement so as to require the
payment, conditionally or otherwise, of any salary, bonus, extra
compensation, pension or severance payment to any of its present
or former directors, officers or employees or increase the
compensation (including salaries, fees, bonuses, profit sharing,
incentive, pension, retirement or other similar benefits and
payments) of any such person except for budgeted bonuses or other
incentive payments in amounts previously disclosed to the Chief
Executive office of MidSouth;
(d) except in the ordinary course of business consistent
with past practices, place or suffer to exist on any of its
assets or properties any mortgage, pledge, lien, charge or other
encumbrance, except those of the character described in
subsection 3.10 hereof, or cancel any material indebtedness owing
to it or any claims which it may have possessed, or waive any
right of substantial value or discharge or satisfy any material
noncurrent liability;
(e) merge or consolidate with another entity, or sell or
otherwise dispose of a substantial part of its assets or, except
in the ordinary course of business consistent with past
practices, sell any of its assets;
(f) commit or omit to do any act which act or omission
would cause a breach of any covenant of Holding or Bank contained
in this Agreement or would cause any representation or warranty
of Holding or Bank contained in this Agreement to become untrue,
as if each such representation and warranty were continuously
made from and after the date hereof;
(g) violate in any material respect any law, statute, rule,
governmental regulation or order;
(h) fail to maintain its books, accounts and records in the
usual manner on a basis consistent with that heretofore employed;
(i) fail to pay, or to make adequate provision for the
payment of, all taxes, interest payments and penalties due and
payable (and/or accruable for all periods up to the Effective
Date, including that portion of its fiscal year to and including
the Effective Date) to any city, parish, state, foreign country,
the United States or any other taxing authority, except those
being contested in good faith by appropriate proceedings and for
which sufficient reserves have been established;
(j) acquire or dispose of investment securities having an
aggregate market value greater than 10% of the aggregate book
value of its investment securities portfolio on the date of the
Latest Balance Sheet; acquire any investment securities that are
less than investment grade; or acquire or dispose of investment
securities except in the ordinary course of business;
(k) enter into any new line of business;
(l) charge off (except as may otherwise be required by law
or by regulatory authorities or by generally accepted accounting
principles consistently applied) or sell (except for a price not
less than the book value thereof) any of the its portfolio of
loans, discounts or financing leases; or sell any asset held as
other real estate or other foreclosed assets for an amount less
than 100% of its book value at the date of the Latest Balance
Sheet; or sell any asset held as other real estate or other
foreclosed assets that had a book value at the date of the Latest
Balance Sheet in excess of $25,000; or
(m) make any extension of credit which, when added to all
other extensions of credit to the borrower and its affiliates,
would exceed $100,000 or, unless reasonable prior notice is
provided to the chief executive officer of MidSouth or his
authorized designee, commit or otherwise become obligated to make
any extension of credit in excess of $50,000.
5.9 Additional Information. Each party will provide the
other (a) with prompt written notice of any material adverse
change in the financial condition, results of operations,
business or prospects of any member of its consolidated group,
(b) as soon as they become available, copies of any financial
statements, reports and other documents of the type referred to
in Section 3 or 4 with respect to each member of its consolidated
group, and (c) promptly upon its dissemination, any report
disseminated to its shareholders.
5.10 Holding Shareholder Approval. Holding's Board of
Directors shall submit this Agreement to its shareholders for
approval in accordance with the BCL at a special meeting of
shareholders duly called and convened for that purpose as soon as
practicable.
5.11 Loan Policy. No member of Holding's consolidated
group will make any loans, or enter into any commitments to make
loans, which vary from its written loan policies, a true and
correct copy of which loan policies have been provided to
MidSouth, provided that this covenant shall not prohibit Bank
from extending or renewing credit or loans in connection with the
workout or renegotiation of loans currently in its loan
portfolio.
5.12 Prohibited Negotiations. (a) Prior to the Effective
Date or until the termination of this Agreement, no member of
Holding's consolidated group shall, without the prior approval of
the chief executive officer of MidSouth or his designee, directly
or indirectly, solicit, initiate or encourage inquiries or
proposals with respect to, or furnish any information relating
to, or participate in any negotiations or discussions concerning,
any transaction of the type that is referred to in clauses
(B)(i)(ii) and (iii) of subparagraph (e) of subsection 7.01 of
this Agreement (and in no event will any such information be
supplied except pursuant to a confidentiality agreement), and
each such member shall instruct its officers, directors, agents
and affiliates to refrain from doing any of the above, and will
notify MidSouth immediately if any such inquiries or proposals
are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated with,
it or any of its officers directors, agents and affiliates;
provided, however, that nothing contained herein shall be deemed
to prohibit any officer or director of Holding or Bank from
taking any action that in the written opinion of counsel is
required by law or is required to discharge his fiduciary duties
to Holding's consolidated group and its shareholders.
(b) Neither the Board of Directors of Holding nor any
committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to MidSouth, the approval
or recommendation to shareholders of this Agreement or the
Mergers, (ii) approve or recommend, or propose to recommend, any
takeover proposal with respect to Holding or Bank, except such
action that is required in the written opinion of its counsel to
discharge his or her fiduciary duties to Holding's shareholders,
or (iii) modify or waive or release any party from any provision
of, or fail to enforce any provision of, if MidSouth requests
such enforcement, any confidentiality agreement entered into by
Holding or Bank with any prospective acquiror after the date of
this Agreement or within two years prior to such date.
5.13 Operating Functions. Each member of Holding's
consolidated group agrees to cooperate in the consolidation of
appropriate operating functions with MidSouth and MidSouth Bank
to be effective on the Effective Date, provided that the
foregoing shall not be deemed to require any action which, in the
opinion of such member's Board of Directors, would adversely
affect its operations if the Mergers were not consummated.
5.14 Application to Regulatory Authorities. MidSouth
shall prepare, as promptly as practicable, all regulatory
applications and filings which are required to be made with
respect to the Mergers.
5.15 Benefits Provided to Employees of Holding's
Consolidated Group. From and after the Effective Date, MidSouth
and MidSouth Bank shall offer to all persons who were employees
of Holding or Bank immediately prior to the Effective Date and
who become employees of MidSouth or MidSouth Bank immediately
following the Effective Date, the same employee benefits
(including benefits under MidSouth's retirement, 401(k), flexible
benefit, vacation, severance and sick leave plans or policies) as
are offered by MidSouth or MidSouth Bank, as the case may be, to
its employees, except that there shall be no waiting period for
coverage under any of its plans and no employee who is in an
active employee on the Effective Date shall be denied benefits
under such plans for a pre-existing condition. Full credit shall
be given for prior service by such employees with Holding or Bank
for eligibility and vesting purposes under all of their benefit
plans and policies, except that credit for prior service shall
not be given for eligibility, vesting or benefit accrual purposes
under MidSouth's Retirement Plan. All benefits accrued through
the Effective Date under benefit plans of Holding or Bank shall
be paid by MidSouth or MidSouth Bank, as the case may be, to the
extent such benefits are not otherwise provided to such employees
through the benefit plans of MidSouth or MidSouth Bank, as the
case may be. MidSouth and MidSouth Bank shall not be obligated
to continue any employee benefit or ERISA Plan maintained by
Holding or Bank.
5.16 MidSouth Registration Statement and Listing of
Preferred Stock. MidSouth will prepare and file on Form S-4 a
registration statement (the "Registration Statement") under the
Securities Act (which will include the Proxy Statement) complying
with all the requirements of the Securities Act applicable
thereto, for the purpose, among other things, of registering the
Preferred Stock which will be issued to the holders of Holding
Common Stock pursuant to the Company Merger. MidSouth shall use
its best efforts to cause the Registration Statement to become
effective as soon as practicable, to qualify the Preferred Stock
under the securities or blue sky laws of such jurisdictions as
may be required and to keep the Registration Statement and such
qualifications current and in effect for so long as is necessary
to consummate the transactions contemplated hereby. MidSouth
will use its best efforts to cause the Preferred Stock to be
listed for trading on the American Stock Exchange Emerging
Companies market.
SECTION 6
Conditions of Closing
6.1 Conditions of All Parties. The obligations of each
of the parties hereto to consummate the Mergers are subject to
the satisfaction of the following conditions at or prior to the
Closing:
(a) Shareholder Approval. This Agreement shall have been
duly approved by the shareholders of MidSouth and Holding, and
this Agreement and the Bank Merger Agreement shall have been duly
approved by Holding, as the sole shareholder of Bank and by
MidSouth as sole shareholder of MidSouth Bank.
(b) Effective Registration Statement. The Registration
Statement shall have become effective prior to the mailing of the
Proxy Statement, no stop order suspending the effectiveness of
the Registration Statement shall have been issued, and no
proceedings for that purpose shall have been instituted or, to
the knowledge of any party, shall be contemplated, and MidSouth
shall have received all state securities law permits and
authorizations necessary to consummate the transactions
contemplated hereby.
(c) No Restraining Action. No action or proceeding shall
have been threatened or instituted before a court or other
governmental body to restrain or prohibit the transactions
contemplated by the Bank Merger Agreement or this Agreement or to
obtain damages or other relief in connection with the execution
of such agreements or the consummation of the transactions
contemplated hereby or thereby; and no governmental agency shall
have given notice to any party hereto to the effect that
consummation of the transactions contemplated by the Bank Merger
Agreement or this Agreement would constitute a violation of any
law or that it intends to commence proceedings to restrain
consummation of either of the Mergers.
(d) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the
transactions contemplated by the Bank Merger Agreement and this
Agreement shall have been fulfilled; all appropriate orders,
consents and approvals from all regulatory agencies and other
governmental authorities whose order, consent or approval is
required by law for the consummation of the transactions
contemplated by this Agreement and the Bank Merger Agreement
shall have been received; and the terms of all requisite orders,
consents and approvals shall then permit the effectuation of the
Mergers without imposing any material conditions with respect
thereto except for any such conditions that are acceptable to
MidSouth and MidSouth Bank.
(e) Accountant's Letters. The parties shall have received
an opinion from DeLoitte & Touche, dated as of the Closing Date,
to the effect that the Mergers will constitute a reorganization
within the meaning of Section 368(c) of the Code and that the
shareholders of Holding will recognize no gain or loss with
respect to the shares of Preferred Stock received on consummation
of the Company Merger.
6.2 Additional Conditions of MidSouth and MidSouth Bank.
The obligation of MidSouth and MidSouth Bank to consummate the
Mergers are also subject to the satisfaction of the following
additional conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. Each of the
representations and warranties of Holding and Bank contained in
this Agreement shall be true and correct on the Closing Date,
with the same effect as though made at such date, except to the
extent of changes permitted by the terms of this Agreement, and
each of Holding and Bank shall have performed all obligations and
complied with all covenants required by this Agreement and the
Bank Merger Agreement to be performed or complied with by it at
or prior to the Closing. In addition, each of Holding and Bank
shall have delivered to MidSouth and MidSouth Bank its
certificate dated as of the Closing Date and signed by its chief
executive officer and chief financial officer to the effect that,
except as specified in such certificate, such persons do not
know, and have no reasonable grounds to know, of any material
failure or breach of any representation, warranty or covenant
made by it in this Agreement.
(b) No Material Adverse Change. There shall not have
occurred any material adverse change from the date of the Latest
Balance Sheet to the Closing Date in the financial condition,
results of operations, business or prospects of Holding's
consolidated group.
(c) Opinion of Counsel. MidSouth shall have received from
McGlinchey Stafford Lang, A Law Corporation, counsel for
Holding's consolidated group, an opinion dated as of the Closing
Date, in form and substance satisfactory to MidSouth and MidSouth
Bank, to the effect set forth in Exhibit D to this Agreement.
(d) Joinder of Shareholders; Confirmation. Within 5 days
prior to the mailing of the Proxy Statement a Joinder of
Shareholders in the form of Exhibit E annexed hereto ("Joinder of
Shareholders") shall have been executed by each person who serves
as an executive officer or director of Holding or Bank or who
owns 5% or more of the Holding Common Stock outstanding; and
MidSouth shall have received from each person who executes a
Joinder of Shareholders a written confirmation dated not earlier
than 5 days prior to the Closing Date to the effect that each
representation made by such person in the Joinder of Shareholders
is true and correct as of the date of such confirmation and that
such person has complied with all of his or her covenants therein
through the date of such confirmation.
(e) Accountants' Letters. MidSouth and MidSouth Bank shall
have received letters from Mixon, Roy, Metz & Mixon, independent
public accountants for Holding, dated, respectively, the date of
the Proxy Statement and immediately prior to the Closing Date, in
form and substance satisfactory to MidSouth and MidSouth Bank, to
the effect set forth in Exhibit F to this Agreement.
(f) Tier 1 Capital. MidSouth shall have received
satisfactory assurances from the Federal Reserve Board or
delegated authority that the Series A Preferred Stock will be
treated as Tier 1 Capital of MidSouth for purposes of the capital
adequacy guidelines of the Federal Reserve Board, provided that
if this condition is not met as a result of any term or provision
of the Series A Preferred Stock, MidSouth shall propose a
revision of such term or provision that would cause the Series A
Preferred Stock to be treated as Tier 1 Capital and Holding shall
have 15 days from receipt of such proposal to accept it and
permit this condition to be met.
6.3 Additional Conditions of Holding and Bank. The
obligations of Holding and Bank to consummate the Mergers are
also subject to the satisfaction of the following additional
conditions at a prior to the Closing:
(a) Representations, Warranties and Covenants. Each of the
representations and warranties of MidSouth and MidSouth Bank
contained in this Agreement shall be true and correct on the
Closing Date, with the same effect as though made at such date,
except to the extent of changes permitted by the terms of this
Agreement, and MidSouth and MidSouth Bank shall have performed
all obligations and complied with all covenants required by this
Agreement and the Bank Merger Agreement to be performed or
complied with by it at or prior to the Closing. In addition,
MidSouth and MidSouth Bank shall have delivered to Holding and
Bank its certificate dated as of the Closing Date and signed by
its chief executive officer and chief financial officer to the
effect that, except as specified in such certificate, such
persons so not know, and have no reasonable grounds to know, of
any material failure or breach of any representation, warranty or
covenant made by it in this Agreement.
(b) Opinion of Counsel. Holding shall have received from
Correro, Fishman & Casteix, counsel for MidSouth and MidSouth
Bank, an opinion, dated as of the Closing Date, in form and
substance satisfactory to Holding and Bank, to the effect set
forth in Exhibit G to annexed to this Agreement.
6.4 Waiver of Conditions. Any condition to a party's
obligations hereunder may be waived by that party, other than the
conditions specified in subparagraphs (a), (b) and (d) of
subsection 6.1. The failure to waive any condition hereunder
shall not be deemed a breach of subsection 5.2 hereof.
SECTION 7
Termination
7.1 Termination. This Agreement may be terminated at any
time before the time at which the Mergers become effective:
(a) Mutual Consent. By the mutual consent of the Boards of
Directors of MidSouth and Holding.
(b) Material Breach. By the Board of Directors of either
MidSouth or Holding in the event of a material breach by any
member of the consolidated group of the other of them of any
representation or warranty contained in this Agreement or of any
covenant contained in this Agreement, which in either case cannot
be cured within 10 days after written notice of such breach is
given to the entity committing such breach, provided that the
right to effect such cure shall not extend beyond the date set
forth in subparagraph (c) below.
(c) Abandonment. By the Board of Directors of either
MidSouth or Holding if (i) all conditions to Closing required by
Section 6 have not been met or waived by June 30, 1995, or (ii)
any such condition cannot be met by such date and has not been
waived by each party in whose favor such condition runs or (iii)
the Mergers have not occurred by such date.
(d) Dissenting Shareholders. By the Board of Directors of
MidSouth, if the number of shares of Holding Common Stock as to
which the holders thereof are, at the time of the Closing,
legally entitled to assert dissenting shareholder's rights
exceeds 5% of the total number of shares of Holding Common Stock
issued and outstanding on the Closing Date.
(e) Holding Recommendation. By the Board of Directors of
MidSouth if the Board of Directors of Holding (A) shall withdraw,
modify or change its recommendation to its shareholders of this
Agreement or the Mergers or shall have resolved to do any of the
foregoing; (B) shall have recommended to the shareholders of
Holding (i) any merger, consolidation, share exchange, business
combination or other similar transaction (other than the
transactions contemplated by this Agreement), (ii) any sale,
lease, transfer or other disposition of all or substantially all
of the assets of any member of Holding's consolidated group, or
(iii) any acquisition, by any person or group, of the beneficial
ownership of one-third or more of any class of Holding capital
stock; or (C) shall have made any announcement of a proposal,
plan or intention to do any of the foregoing or agreement to
engage in any of the foregoing.
7.2 Effect of Termination; Survival. Upon termination of
this Agreement pursuant to this Section 7, the Bank Merger
Agreement shall also terminate, and this Agreement and the Bank
Merger Agreement shall be void and of no effect, and there shall
be no liability by reason of this Agreement or the Bank Merger
Agreement, or the termination thereof, on the part of any party
or their respective directors, officers, employees, agents or
shareholders except for any liability of a party hereto arising
out of a breach of any representation, warranty or covenant in
this Agreement prior to the date of termination or any covenant
that survives pursuant to the following sentence. The following
provisions shall survive any termination of this Agreement: the
last sentence of subsection 5.6; subsection 7.2; and subsection
9.3.
SECTION 8
Indemnification of Directors and Officers of Holding and Bank
8.1 From and after the Effective Time of the Mergers,
MidSouth and MidSouth Bank agree to indemnify and hold harmless
each person who is or was at any time since December 31, 1992 an
officer or director of Holding or Bank (an "Indemnified Person")
from and against all damages, liabilities, judgments and claims
(and related expenses, including, but not limited to, attorneys'
fees and amounts paid in settlement) based upon or arising from
his capacity as an officer or director of Holding or Bank, to the
same extent as he would have been indemnified under the articles
of association (or articles of incorporation) or bylaws of
Holding or Bank, as appropriate, as such articles of association
(or articles of incorporation) or bylaws were in effect on the
date of execution of this Agreement.
8.2 The rights granted to the Indemnified Persons hereby
will be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of MidSouth or MidSouth
Bank.
8.3 The rights to indemnification granted by this Section
8 are subject to the following limitations: (a) the total
aggregate indemnification to be provided by MidSouth and MidSouth
Bank pursuant to Section 8.1 hereof will not exceed, as to all of
the Indemnified Persons described herein as a group, the sum of
$1.2 million and MidSouth and MidSouth Bank will have no
responsibility to any Indemnified Person for the manner in which
such sum is allocated among that group (but the Indemnified
Persons may seek reallocation among themselves); (b) a director
of officer who would otherwise be an Indemnified Person under
this Section 8 shall not be entitled to the benefits hereof
unless such director or officer has executed a Joinder of
Shareholders; (c) amounts otherwise required to be paid by
MidSouth or MidSouth Bank to an Indemnified Person pursuant to
this Section 8 will be reduced by any amounts that such
Indemnified Person recovers by virtue of the claim for which
indemnification is sought; (d) no Indemnified Person shall be
entitled to indemnification for any claim made or threatened
prior to the Closing Date of which such Indemnified Person,
Holding or Bank was aware but did not disclose to MidSouth prior
to the execution of this Agreement, if the claim or threatened
claim was known on or before such time, or prior to the Closing
Date, if such claim became known after execution of this
Agreement; and (e) any claim for indemnification pursuant to this
Section 8 must be submitted in writing to the Chief Executive
Officer of MidSouth within five years of the date of this
Agreement.
8.4 MidSouth and MidSouth Bank agree that the
indemnification limits set forth in Section 8.3(a) will not apply
to any damages, liabilities, judgments and claims (and related
expenses, including, but not limited to, attorney's fees and
amounts paid in settlement) insofar as they are subject to the
provisions of subsections 5.2(b) and (c).
SECTION 9
Miscellaneous
9.1 Notices. Any notice, communication, request, reply,
advice or disclosure (hereinafter severally and collectively
called "notice") required or permitted to be given or made by any
party to another in connection with this Agreement or the Bank
Merger Agreement or the transactions herein or therein
contemplated must be in writing and may be given or served by
depositing the same in the United States mail, postage prepaid
and registered or certified with return receipt requested, or by
delivering the same to the address of the person or entity to be
notified, or by sending the same by a national commercial courier
service (such as Federal Express, Emery Air Freight, Network
Courier, Purolator or the like) for next-day delivery, provided
such delivery is confirmed in writing by such courier. Notice
deposited in the mail in the manner hereinabove described shall
be effective 48 hours after such deposit, and notice delivered in
person or by commercial courier shall be effective at the time of
delivery. A party delivering notice shall endeavor to obtain a
receipt therefor. For purposes of notice, the addresses of the
parties shall, until changed as hereinafter provided, be as
follows:
If to MidSouth or MidSouth Bank:
MidSouth Bancorp, Inc.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
Attention: C. R. Cloutier
With copies to:
Correro, Fishman & Casteix, L.L.P.
47th Floor Place St. Charles
New Orleans, Louisiana 70170
Attention: Anthony J. Correro, III
If to Holding or Bank:
Sugarland Bancshares, Inc.
1527 W. Main Street
Jeanerette, Louisiana 70544
Attention: D. J. Tranchina
With copies to:
McGlinchey Stafford Lang
643 Magazine Street
New Orleans, Louisiana 70130
Attention: Bennet S. Koren
or such substituted persons or addresses of which any of the
parties may give notice to the other in writing.
9.2 Waiver. The failure by any party to enforce any of
its rights hereunder shall not be deemed to be a waiver of such
rights, unless such waiver is an express written waiver which has
been signed by the waiving party and expressly approved by its
Board of Directors. Waiver of any one breach shall not be deemed
to be a waiver of any other breach of the same or any other
provision hereof.
9.3 Expenses. Regardless of whether the Mergers are
consummated, all expenses incurred in connection with this
Agreement and the Bank Merger Agreement and the transactions
contemplated hereby and thereby shall be borne by the party
incurring them, except as otherwise provided herein.
9.4 Headings. The headings in this Agreement have been
included solely for reference and shall not be considered in the
interpretation or construction of this Agreement.
9.5 Exhibits and Schedules. The exhibits and schedules
to this Agreement are incorporated herein by this reference and
expressly made a part hereof.
9.6 Integrated Agreement. This Agreement, the Bank
Merger Agreement, the exhibits and schedules hereto and all other
documents and instruments delivered in accordance with the terms
hereon constitute the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof, and
there are no agreements, understanding, restrictions,
representations or warranties among the parties other than those
set forth herein or therein or herein or therein provided for,
all prior agreements and understandings being superseded hereby.
9.7 Choice of Law. The validity of this Agreement and
the Bank Merger Agreement, the construction of their terms and
the determination of the rights and duties of the parties hereto
in accordance therewith shall be governed by and construed in
accordance with the laws of the United States and those of the
State of Louisiana applicable to contracts made and to be
performed wholly within such State.
9.8 Parties in Interest. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective
successors and assigns, except that this Agreement may not be
transferred or assigned by any member of Holding's consolidated
group without the prior written consent of MidSouth, including
any transfer or assignment by operation of law. Nothing in this
Agreement or the Bank Merger Agreement is intended or shall be
construed to confer upon or to give any person other than the
parties hereto any rights or remedies under or by reason of this
Agreement or the Bank Merger Agreement, except as expressly
provided for herein and therein.
9.9 Amendment. The parties may, by mutual agreement of
their respective Boards of Directors, amend, modify or supplement
this Agreement, the Bank Merger Agreement, or any exhibit or
schedule of any of them, in such manner as may be agreed upon by
the parties in writing, at any time before or after approval of
this Agreement and the Bank Merger Agreement and the transactions
contemplated hereby and thereby by the shareholders of the
parties hereto. This Agreement and any exhibit or schedule to
this Agreement may be amended at any time and, as amended,
restated by the chief executive officers of the respective
parties (or their respective designees) without the necessity for
approval by their respective Boards of Directors or shareholders,
to correct typographical errors or to change erroneous references
or cross references, or in any other manner which is not material
to the substance of the transactions contemplated hereby.
9.10 Counterparts. This Agreement may be executed by the
parties in one or more counterparts, all of which shall be deemed
an original, but all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
MIDSOUTH BANCORP, INC. SUGARLAND BANCSHARES, INC.
By: By:
C. R. Cloutier D. J. Tranchina
President President
MIDSOUTH NATIONAL BANK SUGARLAND STATE BANK
By: By:
C. R. Cloutier D. J. Tranchina
President President
<PAGE>
EXHIBIT A
AGREEMENT OF MERGER
OF
SUGARLAND STATE BANK
INTO
MIDSOUTH NATIONAL BANK
This Agreement of Merger (this "Agreement") is made and
entered into as of this ______ day of December, 1994, between
Sugarland State Bank, a Louisiana state banking association
domiciled at Jeanerette, Louisiana ("Bank"),and MidSouth National
Bank, a national banking association domiciled at Lafayette,
Louisiana ("MidSouth Bank" or the "Receiving Association").
WHEREAS, the respective Boards of Directors of Bank and
MidSouth Bank (collectively called the "Merging Associations")
deem it advisable that Bank be merged with and into MidSouth Bank
(the "Bank Merger"), as provided in this Agreement and in the
Agreement and Plan of Merger dated ________, 1994 (the "Plan"),
among the Merging Associations, Sugarland Bancshares, Inc., a
Louisiana corporation ("Holding") of which Bank is a wholly owned
subsidiary, and MidSouth Bancorp, Inc., a Louisiana corporation,
of which MidSouth Bank is a wholly owned subsidiary, which sets
forth, among other things, certain representations, warranties,
covenants and conditions relating to the Bank Merger; and
WHEREAS, the respective Boards of Directors of the Merging
Associations wish to enter into this Agreement and submit it to
the respective shareholders of the Merging Associations for
approval in the manner required by law and, subject to said
approval and to approval by the Office of the Comptroller of the
Currency being duly given and to such other approvals as may be
required by law, to effect the Bank Merger, all in accordance
with the provisions of this Agreement.
NOW THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the Bank Merger, the parties
hereto agree as follows:
1. The Bank Merger. At the Effective Time (as defined in
Section 2 hereof), Bank shall be merged with and into MidSouth
Bank under the Articles of Association of MidSouth Bank, as
amended, existing Charter No. 18484, pursuant to the provisions
of, and with the effect provided in La. R.S. 6:351 et seq. At
the Effective Time, MidSouth Bank, the Receiving Association,
shall continue to be a national banking association, and its
business shall continue to be conducted at its main office in
Lafayette, Louisiana, and at its legally established branches
(including, without limitation, the legally established offices
from which Bank conducted business immediately prior to the
Effective Time). The Articles of Association of MidSouth Bank
shall not be altered or amended by virtue of the Bank Merger, and
the incumbency of the directors and officers of MidSouth Bank
shall not be affected by the Bank Merger nor shall any person
succeed to such positions by virtue of the Bank Merger.
2. Effective Time. The Bank Merger shall become effective
at the time specified in a certificate or other written record
issued by the OCC or the OFI, whichever date is later (the
"Effective Time").
3. Cancellation of Capital Stock of Bank. At the
Effective Time, by virtue of the Bank Merger, all shares of the
capital stock of Bank, other than any such shares as to which
dissenters' rights shall exist at the Effective Time, shall be
cancelled.
4. Capital Stock of the Receiving Association. The shares
of the capital stock of MidSouth Bank, the Receiving Association,
issued and outstanding immediately prior to the Effective Time
shall, at the Effective Time, continue to be issued and
outstanding, and no additional shares of MidSouth Bank shall be
issued as a result of the Bank Merger. Therefore, at the
Effective Time, the amount of capital stock of MidSouth Bank, the
Receiving Association, shall be $1,750,000, divided into 350,000
shares of common stock, par value $5.00 per share.
5. Assets and Liabilities of the Merging Associations. At
the Effective Time, the corporate existence of each of the
Merging Associations shall be merged into and continued in
MidSouth Bank, the Receiving Association, and such Receiving
Association shall be deemed to be the same corporation as each
bank or banking association participating in the Bank Merger.
All rights, franchises, and interests of the individual Merging
Associations in and to every type of property (real, personal and
mixed) and chooses in action shall be transferred to and vested
in the Receiving Association by virtue of the Bank Merger without
any deed or other transfer. The Receiving Association, upon the
Bank Merger and without any order or other action on the part of
any court or otherwise, shall hold and enjoy all rights of
property, franchises, and interests, including appointments,
designations, and nominations, and all other rights and interests
as trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, and in every other fiduciary
capacity, in the same manner and to the same extent as such
rights, franchises, and interests were held or enjoyed by any one
of the Merging Associations at the time of the Bank Merger. The
Receiving Association shall, from and after the Effective Time,
be liable for all liabilities of the Merging Associations.
6. Shareholder Approval; Conditions; Filing. This
Agreement shall be submitted to the shareholders of the Merging
Associations for ratification and confirmation in accordance with
applicable provisions of law. The obligations of the Merging
Associations to effect the Bank Merger shall be subject to all
the terms and conditions of the Plan. If the shareholders of the
Merging Associations ratify and confirm this Agreement, then the
fact of such approval shall be certified hereon by the Secretary
of each of the Merging Associations and this Agreement, so
approved and certified, shall, as soon as is practicable, be
signed and acknowledged by the President or Vice-President of
each of them. As soon as may be practicable thereafter, this
Agreement, so certified, signed and acknowledged, shall be
delivered to the OCC and the OFI for filing in the manner
required by law.
7. Miscellaneous. This Agreement may, at any time prior
to the Effective Time, be amended or terminated as provided in
the Plan. This Agreement may be executed in counterparts, each
of which shall be deemed to constitute an original but all of
which taken together shall constitute one and the same agreement.
This Agreement shall be governed and interpreted in accordance
with federal law and the applicable laws of the State of
Louisiana. This Agreement may be assigned only to the extent
that the party seeking to assign it is permitted to assign its
interests in the Plan, and subject to the same effect as any such
assignment. The headings in this Agreement are inserted for
convenience only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by a
majority of the directors of each of the Merging Associations, as
of the day and year first above written.
FOR THE BOARD OF DIRECTORS OF
SUGARLAND STATE BANK:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
<PAGE>
FOR THE BOARD OF DIRECTORS OF
MIDSOUTH NATIONAL BANK:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
<PAGE>
CERTIFICATE OF SECRETARY OF
SUGARLAND STATE BANK
(a Louisiana state banking association)
I hereby certify that I am the duly elected Secretary of
Sugarland State Bank, a Louisiana state bank, presently serving
in such capacity and that the foregoing Agreement was, in the
manner required by law, duly approved, without alteration or
amendment, by the sole shareholder of Sugarland State Bank.
Certificate dated , 1995.
___________________________________
Secretary
CERTIFICATE OF SECRETARY OF
MIDSOUTH NATIONAL BANK
(a national banking association)
I hereby certify that I am the duly elected Secretary of
MidSouth National Bank, a national banking association presently
serving in such capacity, and that the foregoing Agreement was,
in the manner required by law, duly approved, without alteration
or amendment, by the sole shareholder of MidSouth National Bank.
Certificate dated , 1995.
___________________________________
Secretary
EXECUTION BY BANKS
Considering the approval of this Agreement by the
shareholders of the parties hereto, as certified above, this
Agreement is executed by such parties, acting through their
respective Presidents, this _____ day of _______________, 1995.
SUGARLAND STATE BANK
By:
___________________________________
President
Attest:
___________________________________
Secretary
MIDSOUTH NATIONAL BANK
By:
___________________________________
President
Attest:
___________________________________
Secretary
ACKNOWLEDGMENT AS TO
SUGARLAND STATE BANK
STATE OF LOUISIANA
PARISH OF _______________
BEFORE ME, the undesigned authority, personally came and
appeared D. J. Tranchina, who, being duly sworn, declared and
acknowledged before me that he is the President of Sugarland
State Bank and that in such capacity he was duly authorized to
and did execute the foregoing Agreement on behalf of such bank,
for the purposes therein expressed and as his and such bank's
free act and deed.
___________________________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1995.
___________________________________
Notary Public
ACKNOWLEDGMENT AS TO
MIDSOUTH NATIONAL BANK
STATE OF LOUISIANA
PARISH OF LAFAYETTE
BEFORE ME, the undersigned authority, personally came and
appeared D. J. Tranchina who, being duly sworn, declared and
acknowledged before me that he is the President of MidSouth
National Bank and that in such capacity he was duly authorized to
and did execute the foregoing Agreement on behalf of such bank,
for the purposes therein expressed and as his and such bank's
free act and deed.
___________________________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1995.
___________________________________
Notary Public
<PAGE>
EXHIBIT B
CERTIFICATE OF MERGER
OF
SUGARLAND BANCSHARES, INC.
WITH AND INTO
MIDSOUTH BANCORP, INC.
The undersigned corporation, acting pursuant to Section 112F
of the Louisiana Business Corporation Law, hereby certifies as
follows:
First: That the name and state of incorporation of each of
the merging corporations is as follows:
Name State of Incorporation
___________________ ______________________
Sugarland Bancshares, Inc. Louisiana
MidSouth Bancorp, Inc. Louisiana
Second: That an Agreement and Plan of Merger between the
parties to the merger has been approved, adopted, certified,
executed and acknowledged by each of the parties in accordance
with the requirements of Section 112 of the Louisiana Business
Corporation Law.
Third: That the name of the surviving corporation of the
merger is MidSouth Bancorp, Inc..
Fourth: That the Articles of Incorporation of MidSouth
Bancorp, Inc. shall be the Articles of Incorporation of the
surviving corporation.
Fifth: That the executed Agreement and Plan of Merger is on
file at the principal place of business of MidSouth Bancorp, Inc.
located at 102 Versailles Boulevard, Versailles Centre,
Lafayette, Louisiana 70501.
Sixth: That a copy of the Agreement and Plan of Merger will
be furnished by MidSouth on request and without cost to any
shareholder of either party to the Merger.
Seventh: This Certificate of Merger shall be effective
immediately upon its filing with the Secretary of State of
Louisiana.
This Certificate of Merger is executed by each of the
parties, acting through their respective Presidents, this _____
day of __________, 1995.
SUGARLAND BANCSHARES, INC.
ATTEST: _________________________ By: ______________________
D. J. Tranchina,
President
MIDSOUTH BANCORP, INC.
ATTEST: _________________________ By: ____________________
C. R. Cloutier,
President
Acknowledgement as to
Sugarland Bancshares, Inc.
State of Louisiana)
Parish of __________)
BEFORE ME, the undesigned authority, personally came and
appeared D. J. Tranchina, who, being duly sworn, declared and
acknowledged before me that he is the President of Sugarland
Bancshares, Inc. and that in such capacity he was duly authorized
to and did execute the foregoing Certificate of Merger on behalf
of such corporation, for the purposes therein expressed and as
his and such corporation's free act and deed.
_______________________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1995.
___________________________________
NOTARY PUBLIC
Acknowledgement as to
MidSouth Bancorp, Inc.
State of Louisiana)
Parish of Lafayette)
BEFORE ME, the undesigned authority, personally came and
appeared C. R. Cloutier, who, being duly sworn, declared and
acknowledged before me that he is the President of MidSouth
Bancorp, Inc. and that in such capacity he was duly authorized to
and did execute the foregoing Certificate of Merger on behalf of
such corporation, for the purposes therein expressed and as his
and such corporation's free act and deed.
________________________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1995.
___________________________________
NOTARY PUBLIC
EXHIBIT C
ARTICLES OF AMENDMENT
TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
MIDSOUTH BANCORP, INC.
MidSouth Bancorp, Inc., a Louisiana corporation (the
"Corporation"), through its undersigned President and Secretary,
hereby certifies that:
1. On ________, 1995, the Board of Directors of the Corporation
adopted, pursuant to Section 33A of the Louisiana Business
Corporation Law (the "LBCL"), the following amendment to Article
III of its Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") to establish and fix the
preferences, limitations and relative rights of a series of
preferred stock, and authorized the delivery of these Articles of
Amendment to the Secretary of State for filing pursuant to
Section 32B of the LBCL.
2. Article III of the Articles of Incorporation is amended to
add a new Section E to read in its entirety as follows:
"E.Of the 5,000,000 shares of authorized no par value per
share Preferred Stock, [187,286] shares shall constitute a
separate series of Preferred Stock with the voting powers and
the preferences and rights hereinafter set forth.
(1)Designation. The series of Preferred Stock created
hereunder is designated "Cumulative Convertible Preferred
Stock, Series A" (the "Series A Preferred Stock").
(2)Stated Value. The stated value of each share of Series
A Preferred Stock is $14.25.
(3)Dividend Rights.
(a)Except as provided in Subparagraph (ii),
(i)the holders of record of the shares of Series A
Preferred Stock are entitled to receive, but only when,
as and if declared by the Board of Directors, and out
of the funds of the Corporation legally available for
that purpose, cumulative cash dividends at an annual
rate, fixed on December 31 of each year for the ensuing
calendar year, equal to the yield for Government Bonds
and Notes maturing in December of the following year,
as published in the Treasury Bonds, Notes and Bills
Section of the last issue of the Wall Street Journal
published each year, plus 1% per annum, and no more;
provided that, the annual dividend rate shall in no
case be greater than 10% nor less than 6%; provided
further that, from and after the tenth anniversary of
the date of issuance of the Series A Preferred Stock
the annual dividend rate shall be fixed at 10%. If
more than one yield is shown for December maturities,
the average shall be applied. If no yield is quoted
for December maturities, the yeild for the next earlier
available month shall be applied. From the date of
issuance of the Series A Preferred Stock through
December 31, 1995, the annual dividend rate shall be
________%. The Corporation by resolution of its Board
of Directors shall, to the extent of Legally Available
Funds, as defined below, declare a dividend on the
Series A Preferred Stock payable quarterly on the first
day of April, July, October, and January in each year,
or on such earlier dates as the Board of Directors may
from time to time fix as the dates for payment of
quarterly dividends on the Common Stock, except that
any dividend payable on a payment date that is a legal
holiday shall be paid on the next succeeding business
day. Dividends on each share of Series A Preferred
Stock shall be cumulative from the date of original
issuance thereof whether or not there shall be funds
legally available for the payment of such dividends.
Dividends payable on the Series A Preferred Stock (i)
for any period other than a full year shall be computed
on the basis of a 360-day year consisting of twelve 30-
day months and (ii) for each full dividend period shall
be computed by dividing the annual dividend rate by
four. If any quarterly dividend is not paid when due,
the unpaid amount shall bear interest at a rate of 10%
per annum until paid.
(ii)The first dividend payable on the Series A
Preferred Stock shall be paid on the first day of
April, July, October or January that is at least 91
days from the date of original issuance of the Series A
Preferred Stock and will be in an amount, at the
applicable dividend rate, based on the number of days
between the date of original issuance and the dividend
payment date minus 90 days, provided that the aggregate
amount payable (A) will be increased by the amount by
which Expenses, as defined below, are less than
$110,000 (the "Additional Amount"), or (B) will be
reduced by the amount by which Expenses exceed $110,000
("The Subtracted Amount"). In any case in which (A)
the Additional Amount is greater than the dividend that
would have been paid for the 90 excluded days set forth
above, such excess will be payable on the next
succeeding dividend payment date, or (B) the Subtracted
Amount is greater than the amount otherwise payable
under this paragraph, such excess will be deducted from
the amount otherwise payable on the next succeeding
dividend payment date.
(iii) The term "Expenses" means the actual expenses
of Sugarland Bancshares, Inc. ("Sugarland") in
connection with the negotiation, execution,
implementation and consummation of that certain
agreement between Sugarland and the Corporation dated
______________, 1994 (the "Agreement"), including,
without limitation, legal, accounting and financial
advisory fees and expenses and expenses of printing and
mailing Sugarland's proxy statement and holding its
shareholders meeting to consider the Agreement.
(iv) The term "Legally Available Funds" means such
amount of the surplus of the Corporation that may be
paid as dividends under the Business Corporation Law of
Louisiana as may be provided in cash by MidSouth Bank
to the Corporation as a dividend under applicable
statutes and regulations of the U. S. Comptroller of
the Currency and that would not result in the
Corporation or MidSouth Bank having capital ratios, of
less than the required regulatory minimum capital
ratios, or failing to be "adequately-capitalized"
within the meaning of applicable law and regulations or
being in violation of any law, regulation or regulatory
directive, agreement or order.
(b)So long as any shares of the Series A Preferred
Stock are outstanding, the Corporation shall not declare,
pay or set apart for payment any dividend on any shares of
capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends or liquidation
rights (collectively, "Junior Securities") or make any
payment on account of, or set apart for payment money for
a sinking or other similar fund, for the purchase,
redemption or other retirement of, any of the Junior
Securities or any warrants, rights, calls or options
exercisable for or convertible into any of the Junior
Securities, or make any distribution in respect thereof,
either directly or indirectly, whether in cash, other
property, obligations or shares of the Corporation (other
than distributions or dividends in Junior Securities to
the holders of Junior Securities), and shall not permit
any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any of
the Junior Securities or any warrants, rights, calls or
options exercisable for or convertible into any of the
Junior Securities, unless prior to or concurrently with
the payment or setting apart for payment of any dividend
on any of the Junior Securities, all accumulated and
unpaid dividends on shares of Series A Preferred Stock,
and interest thereon, if any, shall have been or shall be
paid.
(c)If dividends are paid in part and not in full upon
the shares of Series A Preferred Stock and on any other
Preferred Stock ranking on a parity, as to dividends, with
the Series A Preferred Stock, such dividends must be
divided pro rata among such parity shares in proportion to
the respective dividends accrued and unpaid thereon as of
the dividend payment date.
(d)Except as otherwise expressly provided in this
Section E, holders of shares of the Series A Preferred
Stock are not entitled to any dividend, whether payable in
cash, property or stock, or any interest, or sum of money
in lieu of interest, in respect of any dividend on Series
A Preferred Stock which may be in arrears.
(4)Redemption.
(a)On or after the fifth anniversary of the date of
issuance of the Series A Preferred Stock, the Corporation
may, at its option, and subject to appropriate approval by
the Board of Governors of the Federal Reserve System or
delegated authority, redeem the whole or, from time to
time, any part of the Series A Preferred Stock at a
redemption price per share payable in cash in an amount
equal to the sum of (i) $14.25, (ii) all accrued and
unpaid dividends on the Series A Preferred Stock to the
date fixed for redemption, whether or not earned or
declared, and (iii) interest accrued to the date of
redemption on all accrued and unpaid dividends on the
Series A Preferred Stock, if any.
(b)If the Corporation redeems fewer than all of the
outstanding shares of Series A Preferred Stock, it must
select the shares to be redeemed by lot or pro rata, in
such manner as the Board of Directors may determine to be
fair and appropriate. The Board of Directors has full
power and authority, subject to the limitations and
provisions herein contained, to prescribe the manner in
which shares of the Series A Preferred Stock are to be
redeemed.
(c)Notice of redemption must be given by first class
mail, postage prepaid, mailed not fewer than 30 nor more
than 90 days before the redemption date, to each holder of
record of shares to be redeemed, at the holder's address
as it appears on the stock register of the Corporation.
Each notice must state: (i) the redemption date; (ii) the
total number of shares of Series A Preferred Stock to be
redeemed and, if fewer than all the shares held by the
holder are to be redeemed, the number of shares to be
redeemed from the holder; (iii) the redemption price;
(iv) the place or places where certificates for the shares
are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease
to accrue on the redemption date; and (vi) that the holder
has the right to convert the shares into Common Stock
until the close of business on the fifth day preceding the
redemption date at the Conversion Price then in effect and
the place where certificates for the shares of the Series
A Preferred Stock may be surrendered for conversion.
(d)Unless the Corporation fails to pay the redemption
price, the right to convert shares of the Series A
Preferred Stock called for redemption shall expire at the
close of business on the fifth day preceding the date
fixed for redemption of such shares, and, from and after
the redemption date, dividends on the shares of Series A
Preferred Stock called for redemption shall cease to
accrue, and such shares shall no longer be deemed to be
outstanding, and all rights of the holders of such shares
as shareholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall
cease. Upon surrender of the certificates for any shares
so redeemed in accordance with the requirements of the
notice of redemption (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation so
requires and the notice so states), such shares shall be
redeemed by the Corporation at the redemption price. If
fewer than all the shares represented by any such
certificates are redeemed, the Corporation is obligated to
issue without cost to the holder a new certificate
representing the shares not redeemed.
(e)Any shares of Series A Preferred Stock converted
under Subsection (5), or redeemed or otherwise acquired by
the Corporation, shall have the status of authorized but
unissued shares of Preferred Stock, without designation as
to series, preferences, limitations or relative rights
until the shares are once more designated as part of a
particular series by the Board of Directors of the
Corporation.
(f)The Corporation may, before the redemption date
specified in the notice of redemption, deposit in trust
for the account of the holders of shares of the Series A
Preferred Stock to be redeemed, with a bank or trust
company organized under the laws of the United States of
America or of the State of Louisiana and having capital,
surplus and undivided profits aggregating at least
$20,000,000, designated in the notice of redemption, all
funds necessary for the redemption, together with
irrevocable written instructions authorizing the bank or
trust company, on behalf and at the expense of the
Corporation, to have the notice of redemption mailed as
provided in Paragraph (c) and to include in the notice of
redemption a statement that all funds necessary for the
redemption have been so deposited in trust and are
immediately available. Immediately upon the mailing of
such notice, notwithstanding that any certificate for
shares of Series A Preferred Stock so called for
redemption has not been surrendered for cancellation, all
shares of Series A Preferred Stock with respect to which
the deposit has been made shall cease to be outstanding
and all rights with respect to such shares of Series A
Preferred Stock shall terminate other than the right of
the holders thereof to receive from the bank or trust
company, at any time after the time of the deposit, the
redemption price of the shares so to be redeemed, and the
right, if any, to convert the shares into Common Stock
until the close of business on the fifth day preceding the
redemption date.
(g)If the holder of any shares of the Series A
Preferred Stock called for redemption does not, within one
year after the redemption date, claim the redemption price
thereof, the unclaimed amount shall then escheat and
revert in full ownership to the Corporation in accordance
with Article VII of these Articles of Incorporation, and
if the funds to pay the redemption price have been
deposited pursuant to paragraph (f), above, the depositary
shall, upon the request of the Corporation expressed in a
resolution of its Board of Directors, pay over to the
Corporation the unclaimed amount.
(h)Notwithstanding the foregoing provisions of this
Subsection (4), so long as any dividends on the Series A
Preferred Stock, or interest thereon, are in arrears, the
Corporation may not redeem any shares of the Series A
Preferred Stock unless all outstanding shares of the
Series A Preferred Stock are simultaneously redeemed and
may not purchase or otherwise acquire any shares of Series
A Preferred Stock. The foregoing shall not, however,
prevent the purchase or acquisition of shares of Series A
Preferred Stock pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding
shares of Series A Preferred Stock.
(5)Conversion. The holders of shares of the Series A
Preferred Stock have the right, at their option, to convert
all or any part of such shares into shares of Common Stock
of the Corporation at any time before the close of business
on the fifth day preceding the date, if any, fixed for
redemption of those shares, subject to the following terms
and conditions:
(a)The shares of Series A Preferred Stock shall be
convertible into shares of Common Stock at the Conversion
Rate of one share of Common Stock for each share of Series
A Preferred Stock converted. Such Conversion Rate shall
be subject to adjustment from time to time as provided in
Paragraph (e). The Corporation shall pay all accrued but
unpaid dividends, and interest thereon, on any shares of
Series A Preferred Stock surrendered for conversion. If
any shares of Series A Preferred Stock are called for
redemption, the right of conversion shall expire as to the
shares designated for redemption at the close of business
on the fifth day immediately preceding the date fixed for
redemption, unless default is made in the payment of the
redemption price on such shares.
(b)To convert any shares of Series A Preferred Stock
into Common Stock, the holder must surrender the cer-
tificate or certificates therefor, duly endorsed to the
Corporation or in blank, at the principal office of the
Corporation or at such other place or places as the Board
of Directors may designate and must give written notice to
the Corporation at that office or place that the holder
elects to convert all or a part of such shares, setting
forth the name or names (with the address or addresses) in
which the shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable thereafter,
cause to be issued and delivered at that office or place
to the holder, or the holder's designee or designees, a
certificate or certificates for the number of whole shares
of Common Stock to which such holder is entitled, together
with a certificate or certificates representing any shares
of Series A Preferred Stock which are not to be converted
but constitute part of the shares of Series A Preferred
Stock represented by the certificate or certificates
surrendered and cash in lieu of the issuance of a
fractional share. A conversion shall be effective as of
the close of business on the date of the due surrender of
the certificates for the shares to be converted, and the
rights of the holder of such shares shall, to the extent
of such conversion, cease at such time, and the person or
persons entitled to receive shares of the Common Stock
upon conversion of such shares of Series A Preferred Stock
shall be treated for all purposes as having become the
record holder or holders of the Common Stock at that time.
(c)No fractional shares of Common Stock shall be issued
on conversion. If any fractional interest in a share of
Common Stock would, except for the provisions of this
Paragraph (c), be deliverable upon conversion hereunder,
the Corporation, in lieu of such fractional share shall
pay cash to the converting shareholder in an amount equal
to the product derived by multiplying such fraction of a
share by the closing price per share of the Common Stock
on the day next preceding the date of conversion.
(d)In the case of any shares of Series A Preferred
Stock converted after any record date for payment of a
dividend on the Series A Preferred Stock but on or before
the date for payment of the dividend, the dividend
declared and payable on the dividend payment date shall
continue to be payable on the dividend payment date to the
holder of record of the shares as of such preceding record
date notwithstanding their conversion. Shares of the
Series A Preferred Stock surrendered for conversion during
the period from the close of business on any such record
date to the opening of business on the dividend payment
date shall be accompanied by payment in full of an amount
equal to the dividend payable on the dividend payment date
on the shares of the Series A Preferred Stock surrendered
for conversion. Except as provided in this Paragraph, no
payment or adjustment shall be made upon any conversion on
account of any dividends on shares of the Series A
Preferred Stock surrendered for conversion or on account
of any dividends on the shares of Common Stock issued upon
conversion.
(e)The Conversion Rate shall be adjusted from time to
time as follows:
(i)If the Corporation at any time (A) pays a
dividend or makes a distribution to all holders of its
Common Stock in shares of its Common Stock, (B)
subdivides its outstanding shares of Common Stock into
a larger number of shares of Common Stock, or (C)
combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then in each
such case the Conversion Rate in effect immediately
before that event shall be proportionately decreased or
increased, as the case may be, so that the holder of
any shares of Series A Preferred Stock thereafter
surrendered for conversion shall be entitled to receive
the number of whole shares of Common Stock that the
holder would have owned or been entitled to receive
immediately following such event if those shares of
Series A Preferred Stock had been converted into Common
Stock immediately before that event. An adjustment
made under this Subparagraph (i) becomes effective
immediately after the payment date in the case of a
dividend or distribution and immediately after the
effective date in the case of a subdivision or
combination. No adjustment in the Conversion Rate
shall be made if, at the same time the Corporation
issues shares of Common Stock as a dividend or
distribution on the outstanding shares of Common Stock
which, as provided in this Subparagraph (i), would
otherwise call for an adjustment in the Conversion
Rate, the Corporation issues shares of Common Stock as
a dividend or distribution on the outstanding shares of
Series A Preferred Stock equivalent to the number of
shares distributable on the shares of Common Stock into
which the shares of Series A Preferred Stock is then
convertible.
(ii)No adjustment in the Conversion Rate shall be
required unless the adjustment would require an
increase or decrease in the Conversion Rate by more
than one percent, but any adjustments not required to
be made by reason of this Subparagraph shall be carried
forward cumulatively and taken into account in any
subsequent adjustments. All calculations under this
Paragraph (e) shall be made to the nearest one-tenth of
one percent.
(iii)In case of any reclassification of the Common
Stock (other than a subdivision or combination of
outstanding shares of Common Stock for which adjustment
is provided in Subparagraph (i) above), or a
consolidation or merger of the Corporation with or into
any other corporation (other than a consolidation or a
merger in which the Corporation is the continuing
corporation and the outstanding shares of the
Corporation's Common Stock are not changed into or
exchanged for stock or other securities of any other
person or cash or any other property as a result of or
in connection with such consolidation or merger) or a
sale of the properties and assets of the Corporation
as, or substantially as, an entirety to any other
business organization, or a statutory share exchange in
which all shares of Common Stock or any series or class
of Common Stock are exchanged for shares of another
corporation or other entity, each share of Series A
Preferred Stock shall, after such reclassification,
consolidation, merger, sale or exchange and upon the
terms and conditions specified in this Subsection (5),
be convertible into or represent the right to receive
the number of shares of stock or other securities or
property (including cash) to which the shares of Common
Stock deliverable (at the time of such reclassifi-
cation, consolidation, merger, sale or exchange) upon
conversion thereof would have been entitled upon such
reclassification, consolidation, merger, sale or
exchange, if the conversion of the Series A Preferred
Stock into Common Stock had taken place immediately
before that event; and in any case, if necessary, the
provisions set forth in this Subparagraph (iii) with
respect to the rights and interests thereafter of the
holders of the shares of Series A Preferred Stock shall
be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares of stock or
other securities or property (including cash)
thereafter deliverable upon conversion of shares of
Series A Preferred Stock.
(iv)Whenever the Conversion Rate is adjusted as
provided in this Paragraph (e):
(A) The Corporation shall compute the adjusted
Conversion Rate in accordance with this Paragraph (e)
and shall prepare a certificate signed by the
President or any Vice President of the Corporation
setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which
such adjustment is based, and the certificate shall
promptly be filed with the transfer agent for the
Series A Preferred Stock, but such transfer agent
shall have no duty with respect to any such
certificate filed with it except to keep the same on
file and available for inspection during reasonable
hours; and
(B)The Corporation shall cause to be mailed to
each holder of shares of Series A Preferred Stock at
his then registered address by first-class mail,
postage prepaid, a notice stating that the Conversion
Rate has been adjusted and setting forth the adjusted
Conversion Rate.
(v) Without limiting the obligation of the
Corporation to give the notices provided in Sub-
paragraph (iv), the failure of the Corporation to give
such notice shall not invalidate any corporate action
by the Corporation.
(f)The Corporation shall at all times reserve and keep
available, free from preemptive rights for the purpose of
effecting the conversion of the shares of Series A
Preferred Stock, the full number of shares of Common Stock
then deliverable upon the conversion of all shares of
Series A Preferred Stock then outstanding.
(g)The Corporation is not obligated to pay any tax
payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other
than that in which the shares of Series A Preferred Stock
so converted were registered, and the Corporation is not
obligated to make any such issue or delivery unless and
until the person requesting such issue has paid to the
Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation, that
such tax has been paid.
(h) In the event that:
(i)the Corporation declares a dividend or any other
distribution on its Common Stock, payable otherwise
than in cash out of surplus; or
(ii)the Corporation grants to all the holders of its
Common Stock rights to subscribe for or purchase any
shares of capital stock of any class or any other
rights; or
(iii)any reclassification, consolidation, merger,
sale or exchange of the type described in Subparagraph
(iii) of Paragraph (e) occurs; or
(iv)the voluntary or involuntary dissolution,
exchange, liquidation or winding up of the Corporation
occurs;
the Corporation shall cause to be mailed to the holders of
record of the Series A Preferred Stock at least 20 days
before the applicable date hereinafter specified a notice
stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or,
if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined or
(y) the date on which such reclassification,
consolidation, merger, sale, exchange, dissolution,
liquidation or winding up is expected to take place, and
the date, if any is to be fixed, as of which holders of
Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property
deliverable upon such reclassification, consolidation,
merger, sale, exchange, dissolution, liquidation or
winding up. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation,
merger, sale, exchange, dissolution, liquidation or
winding up.
(6)Voting.
(a)Except as otherwise expressly required by applicable
law or by the terms of this Section E, the holders of shares
of the Series A Preferred Stock are not entitled to any vote
on any matter, including but not limited to any merger,
consolidation or transfer of assets, or statutory share
exchange, and to no notice of any meeting of shareholders of
the Corporation.
(b)Except as otherwise provided herein, whenever the vote,
approval or other action of holders of shares of the Series
A Preferred Stock is required or permitted by applicable law
or by the terms of this Section E, each share is entitled to
one vote and the affirmative vote of a majority of shares of
Series A Preferred Stock present or represented at the
meeting at which a quorum is present is sufficient to
constitute such vote, approval or other action.
(c)If, at any time, the Corporation falls in arrears in
the payment of dividends on the Series A Preferred Stock for
two consecutive quarterly dividend periods, the number of
directors constituting the full board of directors of the
Corporation shall be automatically increased by two and the
holders of Series A Preferred Stock, voting separately as a
single class, shall be entitled to elect two directors of
the Corporation to fill the two newly created directorships,
at a special meeting called for that purpose in accordance
with Paragraph (f) and thereafter at each meeting of the
shareholders held for the purpose of electing directors, so
long as there continues to be any arrearage in the payment
of dividends on the Series A Preferred Stock for any past
quarterly dividend period or of interest on such accumulated
and unpaid dividends.
(d)When all accumulated and unpaid dividends on the Series
A Preferred Stock for all past quarterly dividend periods,
and interest thereon, have been paid in full, the right of
the holders of Series A Preferred Stock to elect directors
shall cease (subject to revesting from time to time as
provided in Paragraph (c)), the number of directors of the
Corporation shall be automatically reduced by two and the
term of office of all directors elected by the holders of
the Series A Preferred Stock shall immediately terminate.
(e)A director elected by the holders of Series A Preferred
Stock shall hold office until the annual meeting next
succeeding his election or until his successor, if any, is
elected by such holders. A director so elected may be
removed at any time with or without cause but only by the
vote of holders of the Series A Preferred Stock at a meeting
duly called for that purpose. So long as the holders of the
Series A Preferred Stock have the right to elect two
directors, any vacancy in the office of a director elected
by those holders may be filled by the remaining director so
elected or by the vote of the holders of Series A Preferred
Stock at any annual meeting or any special meeting called
for the purpose.
(f)At any time when the power to elect directors vests in
the holders of the Series A Preferred Stock, a proper
officer of the Corporation shall, on the written request of
record holders of at least 20 percent of the number of
shares of Series A Preferred Stock then outstanding,
addressed to the secretary of the Corporation at its
principal office, call a special meeting of the holders of
the Series A Preferred Stock for the purpose of electing
directors. The meeting must be held at the earliest
practicable date, not later than 45 days after receipt of
the written request (subject to compliance with applicable
proxy rules and rules of the American Stock Exchange), in
the city in which the last preceding annual meeting of the
shareholders of the Corporation was held, but may be held at
the time and place of the annual meeting if the annual
meeting is to be held within 60 days after the power to
elect directors first vests in the holders of the Series A
Preferred Stock. If the proper officer of the Corporation
does not call the meeting within the required time, then the
holders of record of 20 percent of the number of shares of
Series A Preferred Stock then outstanding may, by written
notice to the secretary of the Corporation at its principal
office, designate any person to call such meeting, and the
person so designated may call such meeting in the city above
provided upon not fewer than 30 nor more than 45 days notice
and for that purpose shall have access to the stock books of
the Corporation. At any meeting so called for the election
of directors by holders of the Series A Preferred Stock or
at any annual meeting held while the holders of Series A
Preferred Stock have the right to elect directors, holders
of a majority of the shares of Series A Preferred Stock then
outstanding is sufficient to constitute a quorum for the
purpose of electing directors at such a meeting. If at any
such meeting a quorum of the Series A Preferred Stock is not
present, the election of directors shall not take place, and
the meeting shall be adjourned from time to time for periods
not exceeding 30 days until a quorum is obtained.
(g)Approval of the holders of the Series A Preferred
Stock, voting separately as a single class by a favorable
vote of at least two-thirds of the number of shares of
Series A Preferred Stock then outstanding, is required to
adopt any proposed amendment to these Articles of
Incorporation (including but not limited to any amendment
adopted by resolution of the Board of Directors pursuant to
Article III of these Articles of Incorporation) if the
proposed amendment would affect shares of the Series A
Preferred Stock in any one or more of the following ways:
(i)Create or authorize any class or series of stock
ranking senior to or on a parity with the Series A
Preferred Stock in respect of dividends or distribution of
assets on liquidation or otherwise alter or abolish the
liquidation preferences or any other preferential right of
such shares.
(ii)Reduce the redemption price or otherwise alter or
abolish any right with respect to redemption of the Series
A Preferred Stock expressly provided by this Section E.
(iii)Alter or abolish any right of such shares
expressly provided by this Section E to receive dividends
or interest thereon except as such right may be affected
by dividend rights of new shares being authorized of
another class or series of shares ranking on a parity with
or junior to the Series A Preferred Stock.
(iv)Alter or abolish any right of holders of shares of
the Series A Preferred Stock under this Section E to
convert such shares into shares of Common Stock.
(v)Exclude, change or limit any voting rights of the
Series A Preferred Stock conferred by this Section E.
(h)Approval of the holders of the Series A Preferred
Stock, voting separately as a single class by a favorable
vote of at least two-thirds of the number of shares of
Series A Preferred Stock then outstanding, is required to
adopt any merger, consolidation, statutory share exchange or
sale of all, or substantially all, of the assets of the
Corporation or any of its banking subsidiaries unless either
(i) the holders of the Series A Preferred Stock will receive
in exchange for the Series A Preferred Stock a security with
terms substantially identical to the terms of the Series A
Preferred Stock, or (ii) provision is made for the complete
redemption in cash of the Series A Preferred Stock on the
date of consummation of such transaction and the Series A
Preferred Stock may be redeemed at such time under these
Articles of Incorporation.
(7)Liquidation Rights.
(a)Upon the dissolution, liquidation or winding up of the
Corporation, the holders of the shares of Series A Preferred
Stock shall be entitled to receive upon liquidation and to
be paid out of the assets of the Corporation available for
distribution to its shareholders, before any payment or
distribution may be made on the Common Stock or on any other
Junior Securities, the amount of $14.25 per share, plus a
sum equal to all accrued and unpaid dividends (whether or
not earned or declared) on such shares, and accrued interest
thereon, if any, to the date of final distribution.
(b)Neither the sale of all or substantially all the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other
corporation or the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to
be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Subsection (7).
(c)Upon payment to the holders of the shares of Series A
Preferred Stock of the full preferential amounts provided
for in this Subsection (7), the holders of Series A
Preferred Stock shall have no right or claim to any of the
remaining assets of the Corporation.
(d)If the assets of the Corporation available for
distribution to the holders of shares of Series A Preferred
Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, are
insufficient to pay in full all amounts to which such
holders are entitled under Paragraph (a) of this Subsection
(7), no such distribution may be made on account of any
shares of any other class or series of Preferred Stock
ranking on a parity with the shares of Series A Preferred
Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts are paid on
account of the shares of Series A Preferred Stock, ratably,
in proportion to the full distributable amounts for which
holders of all such parity shares are respectively entitled
upon dissolution, liquidation or winding up.
(8)Ranking. For purposes of this Section E any stock of any
class or classes of the Corporation shall be deemed to rank:
(a)prior to the shares of Series A Preferred Stock,
either as to dividends or upon liquidation, if the holders
of such class or classes are entitled under these Articles
of Incorporation to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of
the Corporation, as the case may be, in preference or
priority to the holders of shares of Series A Preferred
Stock;
(b)on a parity with shares of Series A Preferred Stock,
either as to dividends or upon liquidation, whether or not
the dividend rates, dividend payment dates or redemption or
liquidation prices per share or sinking fund provisions, if
any, are different from those of Series A Preferred Stock,
if the holders of such class or classes are entitled under
these Articles of Incorporation to the receipt of dividends
or of amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in
proportion to their respective liquidation preferences,
without preference or priority, one over the other, as
between the holders of such class or classes and the holders
of shares of Series A Preferred Stock; and
(c)junior to shares of Series A Preferred Stock, either
as to dividends or upon liquidation, if such class or
classes are Common Stock or if the holders of shares of
Series A Preferred Stock are entitled under these Articles
of Incorporation to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding up of
the Corporation, as the case may be, in preference or
priority to the holders of shares of such class or classes.
(9)No Preemptive Rights. Holders of shares of Series A
Preferred Stock have no preemptive rights.
3. Except as amended by these Articles of Amendment, the
Articles of Incorporation of the Corporation shall remain in full
force and effect.
IN WITNESS WHEREOF, the undersigned President and Secretary
have executed these Articles of Amendment on ________, 1995 at
Lafayette, Louisiana.
MidSouth Bancorp, Inc.
By:
C. R. Cloutier, President
By:
Karen L. Hail, Secretary
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF LAFAYETTE
BEFORE ME, the undersigned authority personally came
and appeared C. R. Cloutier and Karen L. Hail to me known to be
the persons who signed the foregoing instrument as President and
Secretary, respectively, of MidSouth Bancorp, Inc. and who,
having been duly sworn, acknowledged and declared, in the
presence of the witnesses whose names are subscribed below, that
they signed that instrument as their free act and deed for the
purposes mentioned therein.
IN WITNESS WHEREOF, the
appearers and witnesses and I have signed below on this ______
day of ________, 1995.
WITNESSES:
______________________________ _____________________________
C. R. Cloutier, President
______________________________
______________________________ ____________________________
Karen L. Hail, Secretary
______________________________
________________________________________
NOTARY PUBLIC
EXHIBIT D
The opinion letter referred to in subparagraph (c) of
subsection 6.2 of the Agreement from counsel for Holding's
consolidated group shall state that except as described in the
Schedule of Exceptions:
(i) each member of Holding's consolidated group is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, each has all requisite
corporate power and authority to own and lease its property and
to carry on the business described as being carried on by it in
the Registration Statement and each is qualified and in good
standing as a foreign corporation in any jurisdictions in which
the character of the property owned or leased by it or the nature
of the activities conducted by it make such qualification
necessary, except where the failure to so qualify would not have
a material adverse affect on the financial condition or results
of operations or business of Holding's consolidated group.
(ii) the execution, delivery and performance of the
Agreement and the Bank Merger Agreement have been duly authorized
by the Boards of Directors and shareholders of each member of
Holding's consolidated group that is a party thereto, and all
corporate acts and other corporate proceedings required on the
part of each member of Holding's consolidated group for the due
and valid authorization, execution, delivery and performance of
this Agreement and the Bank Merger Agreement, and the
consummation of the Mergers, have been validly and appropriately
taken. Upon the filing of the executed Bank Merger Agreement
with the OCC and the OFI, the Bank Merger will be effective as of
the time referred to in subsection 1.4 of the Agreement; and upon
the filing of the executed Company Merger Certificate with the
Secretary of State of Louisiana, the Company Merger will be
effective as of the Effective Time;
(iii) this Agreement and the Bank Merger Agreement are the
legal, valid and binding obligations of Holding and Bank, as the
case may be, and are enforceable against them in accordance with
their terms, except as such enforcement may be limited by
bankruptcy, reorganization, insolvency and other similar laws and
court decisions relating to or affecting the enforcement of
creditors' rights generally and except as to the availability of
specific performance or other equitable remedies;
(iv) neither the execution, delivery or performance of the
Agreement or the Bank Merger Agreement by Holding and Bank, nor
the consummation of the transactions contemplated hereby or
thereby, will (A) violate, conflict with or result in a breach of
any provision of, constitute a default (or an event that, with
notice or lapse of time or both, would constitute a default)
under, result in the termination of or accelerate the performance
required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of any member of Holding's consolidated group under, any
of the terms, conditions or provisions of the articles of
incorporation, articles of association or by-laws of any member
of Holding's consolidated group or of any note, bond, mortgage,
indenture, deed of trust, lease, license, agreement or other
instrument or obligation known to such counsel which binds any of
them or any of their assets, or (B) to the knowledge of such
counsel, violate any order, writ, injunction, decree, statute,
rule or regulation of any governmental body applicable to any
member of Holding's consolidated group or any of their assets;
(v) the authorized capital stock of each member of
Holding's consolidated group is as set forth in subsection 3.2 of
the Agreement, and all shares described therein as issued and
outstanding have been duly authorized and validly issued, and are
fully paid and (except as provided in La. R.S. 6:262) non-
assessable. To such counsel's knowledge, except as contemplated
in the Agreement there are no outstanding options, warrants,
contracts or commitments entitling any person to purchase or
otherwise acquire from any member of Holding's consolidated group
any shares of its capital stock; nor to such counsel's knowledge
has any member of Holding's consolidated group any outstanding
obligation with respect to its unissued capital stock or treasury
stock, nor any outstanding obligation to repurchase, redeem or
otherwise acquire any of its outstanding shares of capital stock;
(vi) to such counsel's knowledge, (A) no audit,
examination or investigation is presently being conducted or is
threatened by any taxing authority with respect to any member of
Holding's consolidated group, (B) no unpaid tax deficiencies or
additional liabilities of any sort have been proposed by any
governmental representative and (C) no agreement for extension of
time for the assessment of any amounts of tax has been entered
into by or on behalf of any member of Holding's consolidated
group;
(vii) to such counsel's knowledge, there are no material
claims of any kind or any material actions, suits, proceedings,
arbitrations or investigations pending or threatened, in any
court or before any governmental agency or instrumentality or
arbitration panel or otherwise against, by or affecting any
member of Holding's consolidated group or the business, financial
condition or assets of any such member or which would prevent the
performance of the Agreement or the Bank Merger Agreement or any
of the transactions contemplated hereby or thereby or declare the
same unlawful or cause the rescission thereof;
(viii) to such counsel's knowledge, each member of
Holding's consolidated group has complied with and is not in
default in any respect under (and has not been charged with,
threatened with or come under investigation with respect to any
charge concerning any material violation of any provision of) any
federal, state or local law, regulation, ordinance, rule or order
(whether executive, judicial, legislative or administrative) or
any order, writ, injunction or decree of any court, agency or
instrumentality, which default or violation could have a material
adverse affect on the financial condition, results of operations
or business of Holding's consolidated group taken as a whole; and
(ix) such counsel has no reason to believe that the
employee benefit plans of Holding's consolidated group are not
qualified under Section 401(a) of the Code, or that the related
trusts are not exempt from tax under Section 501(a) of the Code
or that each of such plans is not in material compliance with the
applicable provisions of ERISA, the Code and other applicable
laws.
In addition, such counsel shall state that they have
participated in conferences with representatives of the parties
to the Agreement and their respective accountants and counsel in
connection with the preparation of the Registration Statement and
the Proxy Statement and have considered the matters required to
be stated therein and the statements contained therein, and based
on the foregoing (in certain circumstances relying as to
materiality on the opinions of officers and representatives of
the parties to the Agreement) nothing has come to the attention
of such counsel that would lead them to believe that the
Registration Statement and the Proxy Statement, as amended or
supplemented, if they have been amended or supplemented (in the
case of the Registration Statement), or at the time distributed
to shareholders (in the case of the Proxy Statement), contained
any untrue statement of a material fact or omitted a material
fact required to be stated therein or necessary to make the
statements therein not misleading (except in each such case for
the financial statements and other financial and statistical data
included therein, as to which no statement need be made).
Such opinion shall also cover such other matters incident to
the transactions herein contemplated as MidSouth may reasonably
request, including the form of all documents and the validity of
all proceedings.
In connection with such opinion such counsel may rely as to
factual matters on certificates of officers of members of
Holding's consolidated group, and such counsel's knowledge shall
mean its actual knowledge as such counsel.
EXHIBIT E
FORM OF JOINDER OF SHAREHOLDERS
The undersigned shareholder of Sugarland Bancshares, Inc.
("Holding"), in consideration of the benefits to be derived by
Holding and its shareholders pursuant to an Agreement and Plan of
Merger dated ________, 1994, (the "Agreement") among Holding,
Sugarland State Bank ("Bank"), MidSouth Bancorp, Inc.
("MidSouth") and MidSouth National Bank (the defined terms in
which are used herein as defined therein) and the expenses to be
incurred by MidSouth in connection therewith, hereby agrees with
MidSouth as follows:
(1)Such shareholder, acting solely in such shareholder's
capacity as such, agrees and undertakes to vote or cause to be
voted all shares of Holding Common Stock as to which such
shareholder has voting power at any meeting or meetings
(including any and all adjournments thereof) before which the
Agreement or any similar agreement may come for consideration by
Holding's shareholders, in favor of the approval of the
Agreement, and against any similar agreement, unless MidSouth or
MidSouth Bank then is in breach or default in any material
respect with respect to any covenant, representation or warranty
as to it contained in the Agreement to an extent that would
permit Holding to terminate the Agreement pursuant to Section 7
of the Agreement. Such shareholder further agrees not to
transfer any of the shares of Holding Common Stock over which
such shareholder has dispositive power or grant any proxy thereto
(except any such proxy approved by MidSouth) until the earlier of
the Effective Date or the date that the Agreement has been
terminated pursuant to its provisions, except (i) for transfers
by operation of law and (ii) for transfers in connection with
which the transferee shall agree in writing with MidSouth to be
bound by this Joinder as fully as the undersigned. In the case
of any transfer by operation of law, the provisions of this
Joinder of Shareholders are intended to be binding upon and to
inure to the benefit of such transferee, and such transferee
shall be bound thereby.
(2)Such shareholder (i) will not, prior to the Effective Date
or until the termination of the Agreement, without the prior
approval of the chief executive officer of MidSouth or his
designee, solicit, encourage, initiate or participate in any
inquiries, proposals or bids with respect to, or except to the
extent required in the opinion of Holding's counsel to discharge
properly his fiduciary duties in his capacity as a director to
Holding and its shareholders, furnish any information relating to
or participate in any negotiations or discussions concerning any
acquisition or purchase of all or a substantial part of the
assets of, or of a substantial equity interest in, or any
business combination with, Holding's consolidated group, other
than as contemplated by the Agreement and (ii) will notify
MidSouth immediately if any such inquiries or proposals are
received by him, any such information is requested from him or
any such negotiations or discussions are sought to be initiated
with him; provided, however, that nothing contained herein shall
be deemed to prohibit him from taking any action that in the
opinion of counsel to Holding is required by law or is required
to discharge properly his fiduciary duties in his capacity as a
director to Holding and its shareholders.
(3) Except as provided in Section 8 of the Agreement, such
shareholder hereby releases, effective at the Effective Time of
the Company Merger, MidSouth and MidSouth Bank from any
obligation that either may have (including any obligation as
successors to Holding's consolidated group) to indemnify such
shareholder for acts taken by such shareholder as an officer
and/or director and/or employee of any member of Holding's
consolidated group; provided that MidSouth and MidSouth Bank does
in fact provide such shareholder with the indemnification
provided for in Section 8 of the Agreement.
(4) Such shareholder will not, for a period of two years from
and after the Effective Date of the Company Merger, serve a
director, officer or employee of, or advisor to, or have an
investment in, any financial institution that competes with the
business being conducted by Bank (as continued by MidSouth Bank
as successor to Bank) in Lafayette or Iberia Parishes, provided
that this paragraph shall not prevent such shareholder from (i)
making any investment in such an institution if such investment
does not materially enhance the ability of such institution to
compete with Bank's business (as continued by MidSouth Bank as
successor to Bank), or (ii) continuing to hold any investment
which such shareholder holds on the date of this Joinder of
Shareholders.
(5)Such shareholder will not, and will cause such shareholders'
affiliates not to, until the Effective Time of the Company Merger
or until the Agreement has been terminated, whichever shall first
occur, purchase or sell or otherwise deal in MidSouth Common
Stock.
(6) The provisions of this Joinder of Shareholders shall be
enforceable through an action by MidSouth for damages at law or a
suit for specific performance or other appropriate extraordinary
relief, the signatory shareholder acknowledging that remedies at
law for breach or default under this Joinder of Shareholders
might be or become inadequate.
The provisions of Sections 3, 4 and 6 hereof shall survive the
Effective Date of the Mergers.
This Joinder of Shareholders is dated __________________, 1995.
_______________________________________
EXHIBIT F
The letters referred to in subparagraph (c) of subsection 6.2
of the Agreement from Holding's independent public accountants
shall be to the effect that:
(i) It is a firm of independent public accountants with
respect to Holding's consolidated group within the meaning of the
Securities Act and the rules and regulations of the SEC
thereunder;
(ii) in its opinion the audited consolidated financial
statements of Holding's consolidated group examined by it and
included in the Registration Statement comply as to form in all
material respects with the applicable requirements of the
Securities Act and the applicable published rules and regulations
of the SEC thereunder with respect to registration statements on
Form S-4; and
(iii) on the basis of specified procedures (which do not
constitute an examination in accordance with generally accepted
auditing standards) consisting of a reading of the unaudited
consolidated financial statements of Holding's consolidated group
included in the Registration Statement and of the latest
available unaudited consolidated financial statements of
Holding's consolidated group, discussions with officers of
Holding and Bank responsible for financial and accounting matters
and a reading of the minutes of meetings of shareholders and the
Board of Directors, and the Audit and Executive Committees of the
Board of Directors, of the members of Holding's consolidated
group, nothing has come to its attention which caused it to
believe (A) that the unaudited consolidated financial statements
of Holding's consolidated group included in the Registration
Statement or delivered to MidSouth were not presented in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the latest
audited consolidated financial statements of Holdings's
consolidated group, or that the unaudited net income amounts, if
any, set forth in the Registration Statement were not determined
on a basis substantially consistent with that of the
corresponding accounts in the audited statement of consolidated
income of Holding's consolidated group, (B) during the period
from the date of the latest balance sheet of Holding included in
the Registration Statement to a specified date not more than five
business days prior to the date of such letter there was any
change in the capital stock or long-term debt of Holding's
consolidated group or any decrease in consolidated net assets as
compared with amounts shown in such consolidated balance sheet,
except for changes or decreases which the Registration Statement
discloses have occurred or may occur, or they shall state any
specific changes or decreases therein, or that during the period
from the date of said balance sheet to such specified date there
was any decrease, as compared with the corresponding period in
the prior year, in consolidated net income of Holding's
consolidated group except for any decrease which the Registration
Statement discloses has occurred or may occur, or they shall
state any specific decrease therein, and (C) that the unaudited
consolidated financial statements, if any, of Holding's
consolidated group included in the Registration Statement do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the published
rules and regulations of the SEC thereunder.
EXHIBIT G
The opinion letter referred to in subparagraph (c) of
subsection 6.2 of the Agreement from counsel for MidSouth and
MidSouth Bank shall state that:
(i) MidSouth and MidSouth Bank are each duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, each has all requisite
corporate power and authority to own and lease its property and
to carry on the business described as being carried on by it in
the Registration Statement and each is qualified and in good
standing as a foreign corporation in any jurisdictions in which
the character of the property owned or leased by it or the nature
of the activities conducted by it make such qualification
necessary;
(ii) the execution, delivery and performance of the
Agreement and the Bank Merger Agreement have been duly authorized
by the Boards of Directors of MidSouth and MidSouth Bank which
are parties thereto, and by MidSouth as the sole shareholder of
MidSouth Bank, and all corporate acts and other corporate
proceedings required on the part of MidSouth and MidSouth Bank
for the due and valid authorization, execution, delivery and
performance of the Agreement and the Bank Merger Agreement, and
the consummation of the Mergers, have been validly and
appropriately taken. Upon the filing of the executed Bank Merger
Agreement with the Office of Comptroller of the Currency and the
Louisiana Office of Financial Institutions, the Bank Merger will
be effective as of the time referred to in subsection 1.4 of the
Agreement, and upon the filing of the executed Company Merger
Certificate with the Secretary of State of Louisiana, the Company
Merger will be effective as of the Effective Time;
(iii) the Agreement and the Bank Merger Agreement are the
legal, valid and binding obligations of MidSouth and MidSouth
Bank, as the case may be, and are enforceable against MidSouth
and MidSouth Bank, as the case may be, in accordance with their
terms, except as such enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court
decisions relating to or affecting the enforcement of creditors'
rights generally, and except as to the availability of specific
performance or other equitable remedies;
(iv) neither the execution, delivery or performance of the
Agreement or the Bank Merger Agreement by MidSouth or MidSouth
Bank, nor the consummation of the transactions contemplated
hereby or thereby, will (A) violate, conflict with or result in a
breach of any provision of, 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 accelerate the
performance required by, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of MidSouth or MidSouth Bank under, any of
the terms, conditions or provisions of the articles of
incorporation, articles of association or by-laws of MidSouth or
MidSouth Bank or any note, bond, mortgage, indenture, deed of
trust, lease, license, agreement or other instrument or
obligation known to such counsel which binds either of them or
any of their assets or (B) to the knowledge of such counsel,
violate any order, writ, injunction, decree, statute, rule or
regulation of any governmental body applicable to MidSouth or
MidSouth Bank or any of their assets;
(v) the authorized capital stock of MidSouth is as set
forth in subsection 4.2 of the Agreement, and all shares of
Preferred Stock to be issued to holders of Holding Common Stock
will be, when issued as described in the Agreement and the
Registration Statement, duly authorized and validly issued, fully
paid and non-assessable;
(vi) the Registration Statement has become effective, and
to such counsel's knowledge, no stop order suspending its
effectiveness has been issued nor have any proceedings for that
purpose been instituted.
In addition, such counsel shall state that they have
participated in conferences with representatives of the parties
hereto and their respective accountants and counsel in connection
with the preparation of the Registration Statement and the Proxy
Statement and have considered the matters required to be stated
therein and the statements contained therein, and based on the
foregoing (in certain circumstances relying as to materiality on
the opinion of officers and representatives of the parties
hereto) nothing has come to the attention of such counsel that
would lead them to believe that the Registration Statement and
the Proxy Statement, as amended or supplemented if they have been
amended or supplemented (in the case of the Registration
Statement), or at the time distributed to shareholders (in the
case of the Proxy Statement), contained any untrue statement of a
material fact or omitted a material fact required to be stated
therein or necessary to make the statements therein not
misleading (except in each such case for the financial statements
and other financial and statistical data included therein; as to
which no statement need be made).
Such opinion shall also cover such other matters incident to
the transactions herein contemplated as Holding may reasonably
request, including the form of all documents and the validity of
all proceedings.
In connection with such opinion such counsel may rely as to
factual matters on certificates of officers of MidSouth and
MidSouth Bank, and such counsel's knowledge shall mean its actual
knowledge as such counsel.
April 5, 1995
MidSouth Bancorp, Inc.
102 Versailles Boulevard
Versailles Centre
Lafayette, Louisiana 70501
Gentlemen:
We have acted as counsel for MidSouth Bancorp, Inc. a
Louisiana corporation (the "Company"), in connection with the
Company's Registration Statement on Form S-4 (the "Registration
Statement") covering up to 187,286 shares of Series A Cumulative
Convertible Preferred Stock (the "Preferred Stock") of the
Company (the "Shares") which the Company proposes to issue to
shareholders of Sugarland Bancshares, Inc. in accordance with the
Agreement and Plan of Merger (the "Plan") described in the
Registration Statement.
For the purposes of the opinion expressed below, we have
examined the Registration Statement, the Plan, the Articles of
Incorporation, as amended, and By-laws, as amended, of the
Company, resolutions adopted by the Board of Directors of the
Company and such other documents and sources of law as we
considered necessary to render the opinions hereinafter
expressed.
On the basis of the foregoing, we are of the opinion that
the proposed issuance of the Shares has been duly authorized by
all necessary corporate action, and such Shares, if and when
issued in accordance with the terms of the Plan, will be validly
issued, fully paid and non-assessable.
We hereby consent (i) to be named in the Registration
Statement under the heading "Legal Matters" as counsel for the
Company and (ii) to the filing of this opinion as an Exhibit to
the Registration Statement. In so doing we do not admit that we
are "experts" within the meaning of the Securities Act of 1933.
Yours sincerely,
Anthony J. Correro, III
AJC/jgo
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Midsouth Bancorp, Inc. in Form S-4 of our report
dated January 27, 1995, appearing in the Annual Report on Form
10-KSB of MidSouth Bancorp, Inc. for the year ended December 31,
1994, and to the reference to us under the headings "Certain
Federal Tax Consequences", "Experts" and "Relationship with
Independent Public Accountants" in the Prospectus, which is part
of this Registration Statement.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
April 5, 1995
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use
of our reports and to all references to our Firm included in or
made a part of this registration statement.
New Iberia, Louisiana
April 4, 1995 Mixon, Roy, Metz & Mixon
EXHIBIT 23.4
Letterhead of Chaffe & Associates, Inc.
Investment Bankers
April 4, 1995
Mr. D. J. Tranchina
President and CEO
Sugarland Bancshares, Inc.
1527 W. Main Street
Jeanerette, LA 70544
Dear D. J.:
We hereby consent to the use by Sugarland Bancshares, Inc. of our
opinion dated December 30, 1994, addressed to the Board of
Directors of the Sugarland Bancshares, Inc. of Jeanerette,
Louisiana in your Proxy Statement and to the references to us in
the Proxy Statement.
Sincerely yours,
CHAFFE & ASSOCIATES, INC.
/s/ G. F. Gay LeBreton
G. F. Gay LeBreton
Vice President
GFGL:mr
cc: Sherwood G. Briggs
Larry Mandala
Carla Michel
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints
Karen L. Hail his true and lawful attorney-in-fact and agent,
with full power of substitution, for him and in his name, place
and stead, in any and all capacities, to sign on behalf of
MidSouth Bancorp, Inc., and on his behalf, MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or her
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
C. R. Cloutier
President, Chief Executive
Officer and Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints C.
R. Cloutier and Karen L. Hail, or either of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign on his behalf MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
J B. Hargroder, M.D.Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints C.
R. Cloutier and Karen L. Hail, or either of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign on his behalf MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
Will G. Charbonnet, Sr.
Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints C.
R. Cloutier and Karen L. Hail, or either of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign on his behalf MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
Clayton Paul Hilliard
Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints C.
R. Cloutier and Karen L. Hail, or either of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign on his behalf MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
Robert Burke Keaty
Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints C.
R. Cloutier and Karen L. Hail, or either of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign on his behalf MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
James R. Davis, Jr.
Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears immediately below constitutes and appoints C.
R. Cloutier and Karen L. Hail, or either of them, his true and
lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign on his behalf MidSouth Bancorp,
Inc.'s Registration Statement on Form S-4 relating to the
proposed offering of its preferred stock, and any and all
amendments (including post-effective amendments) thereto, and to
file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Date: March 8, 1995
Milton B. Kidd, Jr., O.D.
Director
PROXY
MIDSOUTH BANCORP, INC.
_____________, 1995
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Raymond F. Mikolayezk, Rodney J.
Poche, and Natalee F. Wood, or any of them, proxies of the
undersigned, with full power of substitution, to represent the
undersigned and to vote all of the shares of Common Stock of
MidSouth Bancorp, Inc. (the "Company") that the undersigned is
entitled to vote at the annual meeting of the shareholders of the
Company to be held on ________________, 1995 and at any and all
adjournments thereof.
1. A proposal to approve the issuance of up to 187,286 shares
of Series A Cumulative Convertible Preferred Stock
("Preferred Stock") in connection with an Agreement and Plan
of Merger (the "Plan") pursuant to which, among other
things, Sugarland Bancshares, Inc. ("Sugarland") will merge
into the Company (the "Merger") and, on the effective date
of the Merger, each outstanding share of common stock of
Sugarland will be converted into a number of shares of
Preferred Stock as determined in accordance with the terms
of the Plan.
FOR ____ AGAINST ____ ABSTAIN ____
2. Election of Class II Directors
Will G. Charbonnet, Sr. Clayton Paul Hilliard
Robert Burke Keaty
*For all nominees Withhold authority for
listed above all nominees listed ______
except as marked
to the contrary ______
*If you wish to withhold authority to vote for certain of
the nominees listed, strike through the nominee(s) names.
3. In their discretion, to vote upon such other business as may
properly come before the meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFIC DIRECTIONS
ARE GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 SET FORTH
HEREIN AND FOR EACH OF THE NOMINEES NAMED ABOVE.
[REVERSE SIDE]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
TO THE COMPANY PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as name appears on the certificate or
certificates representing shares to be voted by this proxy. When
signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by president or other
authorized persons. If a partnership, please sign in partnership
name by authorized persons.
Dated: _______________, 1995 ____________________________
Signature of Shareholder
Insert Mailing Label ____________________________
Signature (if jointly owned)
PROXY
SUGARLAND BANCSHARES, INC.
SPECIAL MEETING OF SHAREHOLDERS
_________________, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints J. Bryan
Allain, D.J. Tranchina and Bennet S. Koren, or any of them, the
proxies of the undersigned, with full power of substitution, to
represent the undersigned and to vote all of the shares of Common
Stock of Sugarland Bancshares, Inc. (the "Company"), that the
undersigned is entitled to vote at the Special Meeting of
Shareholders of the Company to be held on ________________, 1995,
and any adjournment thereof.
1. To consider and vote upon a proposal to approve an Agreement
and Plan of Merger, dated as of December 28, 1994, and
related merger agreement (collectively, the "Plan"),
pursuant to which, among other things: (a) the Company will
be merged into MidSouth Bancorp, Inc. ("MidSouth") (the
"Holding Company Merger"), (b) Sugarland State Bank (the
"Bank"), the subsidiary of the Company, will be merged into
MidSouth National Bank, the wholly-owned subsidiary of
MidSouth and (c) on the effective date of the Holding
Company Merger, each outstanding share of common stock of
the Company will be converted into MidSouth Series A
Cumulative Convertible Preferred Stock as determined in
accordance with the Plan.
FOR AGAINST ABSTAIN
2. In their discretion, to vote upon such other business as may
properly come before the Special Meeting or any adjournment
thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFIC DIRECTIONS
ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1 SET FORTH
HEREIN.
[REVERSE SIDE]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE TO: Sugarland Bancshares, Inc., 1527
W. Main Street, Jeanerette, Louisiana 70544, Attention: Ronald
R. Hebert, Sr., Secretary.
Please sign exactly as the name appears on the certificate
or certificates representing shares to be voted by this proxy.
When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by president or other
authorized person. If a partnership, please sign in partnership
name by authorized persons.
Dated: ____________________
___________________________
Insert Mailing Label Signature of Shareholder
___________________________
Signature (if jointly owned)
