AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of January 17, 2001, by
and between THE PEOPLES BANCTRUST COMPANY, INC., an Alabama business corporation
("BancTrust"), and South Alabama Bancorporation, Inc., an Alabama business
corporation ("South Alabama").
WITNESSETH
WHEREAS, the respective Boards of Directors of BancTrust and South Alabama
are of the opinion that the combination of their companies through a tax-free,
stock-for-stock merger, under the terms and conditions set forth in this
Agreement, is in the best interests of the parties and their respective
shareholders, and such Boards of Directors have adopted resolutions approving
this Agreement; and
WHEREAS, neither the Board of Directors of BancTrust nor the Board of
Directors of South Alabama seeks to sell its respective company at this time,
but both Boards desire to merge their respective companies in a transaction
structured as a merger of equals; and
WHEREAS, it is intended that to accomplish this result, BancTrust will be
merged with and into South Alabama, with South Alabama as the surviving
corporation (the "Merger"), whose name will be changed to "The Peoples BancTrust
Company, Inc."; and
WHEREAS, it is intended that as soon as practicable subsequent to the
Merger, subject to required regulatory approvals, operational issues and other
relevant factors, each of the current South Alabama commercial bank subsidiaries
will be merged with and into BancTrust's wholly owned Alabama commercial bank
subsidiary, The Peoples Bank and Trust Company ("Peoples Bank"), with Peoples
Bank as the surviving corporation; and
WHEREAS, it is intended that (i) for federal income tax purposes the Merger
shall qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement shall
constitute a plan of reorganization pursuant to Section 368 of the Code and (ii)
the Merger shall qualify for pooling of interests accounting treatment under
generally accepted accounting principles; and
WHEREAS, as an inducement to and condition of BancTrust's willingness to
enter into this Agreement and the BancTrust Stock Option Agreement, South
Alabama will grant to BancTrust an option pursuant to the South Alabama Stock
Option Agreement, and as an inducement to and condition of South Alabama's
willingness to enter into this Agreement and the South Alabama Stock Option
Agreement, BancTrust will grant South Alabama an option pursuant to the
BancTrust Stock Option Agreement in the forms attached hereto as Exhibits A and
B, respectively; and
WHEREAS, concurrently with the execution and delivery of this Agreement,
and as a condition and inducement to the parties' willingness to enter into this
Agreement, BancTrust and each of the directors of South Alabama, and South
Alabama and each of the directors of BancTrust, have entered into voting
agreements in the form attached hereto as Exhibits C and D, respectively (the
"Voting Agreements"); and
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WHEREAS, the Boards of Directors of BancTrust and South Alabama (at
meetings duly called and held) have each determined that this Agreement and the
transactions contemplated hereby are in the best interests of BancTrust and
South Alabama and their respective shareholders and have approved this Agreement
and the Stock Option Agreement; and
WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
"ABCA" shall mean the Alabama Business Corporation Act, as amended.
"Articles of Merger" shall mean the Articles of Merger to be executed by
South Alabama and filed with the Secretary of State of the State of Alabama
relating to the Merger as contemplated by Section 2.1 of this Agreement.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"BancTrust Common Stock" shall mean the shares of common stock, par value
$.10 per share, of BancTrust.
"BancTrust Subsidiaries" shall mean the Subsidiaries of BancTrust and any
corporation, bank, association, or other entity acquired as a Subsidiary of
BancTrust in the future and owned by BancTrust at the Effective Time.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Time" shall mean the time and date specified pursuant to Section
2.8 of this Agreement as the effective time of the Merger.
"Environmental Claim" shall mean any written notice from any governmental
authority or third party alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern.
"Environmental Laws" shall mean all applicable federal, state and local
laws and regulations dealing with the management, use, treatment and/or disposal
of Hazardous Substances, as defined by the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. ss. 9601 et seq., and
Hazardous Waste, as defined by the Resource, Conservation and Recovery Act, as
amended, 42 U.S.C. ss. 6901 et seq.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FRB" shall mean the Board of Governors of the Federal Reserve System, and
shall also include the Federal Reserve Bank of Atlanta.
"Financial Statements" shall mean (a) with respect to South Alabama, (i)
the consolidated balance sheets (including related notes and schedules, if any)
of South Alabama as of December 31, 1999 and 1998 and the related consolidated
statements of income, shareholders' equity and cash flows (including related
notes and schedules, if any) for each of the last three fiscal years ended
December 31, 1999 as filed by South Alabama in its Securities Documents and (ii)
the consolidated balance sheets of South Alabama (including related notes and
schedules, if any) and related consolidated statements of income, shareholders'
equity, and cash flows (including related notes and schedules, if any) included
in the Securities Documents filed and to be filed by South Alabama with respect
to the quarterly and annual periods ended subsequent to December 31, 1999; and
(b) with respect to BancTrust (i) the consolidated balance sheets (including
related notes and schedules, if any) of BancTrust as of December 31, 1999 and
1998 and the related consolidated statements of income, shareholders' equity and
cash flows (including related notes and schedules, if any) for each of the last
three fiscal years ended December 31, 1999 as filed by BancTrust in its
Securities Documents and (ii) the consolidated balance sheets of BancTrust
(including related notes and schedules, if any) and related consolidated
statements of income, shareholders' equity and cash flows (including related
notes and schedules, if any) included in the Securities Documents filed and to
be filed by BancTrust with respect to the quarterly and annual periods ended
subsequent to December 31, 1999.
"Knowledge" as used with respect to South Alabama and BancTrust shall mean
the actual knowledge after due inquiry of the Chairman, President, Chief
Financial Officer, Chief Accounting Officer, Chief Credit Officer, or any Senior
or Executive Vice President of South Alabama or BancTrust, as the case may be.
"Materials of Environmental Concern" shall mean pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"OCC" shall mean the Office of the Comptroller of the Currency.
"Prospectus/Joint Proxy Statement" shall mean the prospectus of South
Alabama and the joint proxy statement of South Alabama and BancTrust, together
with any supplements thereto, sent to shareholders of South Alabama and
BancTrust to solicit their votes in connection with the approval of this
Agreement and the Merger.
"Registration Statement" shall mean the registration statement with respect
to the Surviving Corporation Common Stock as filed with the Commission under the
Securities Act.
"Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock.
"Secretary of State" shall mean the Secretary of State of the State of
Alabama.
"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Securities Documents" shall mean all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or required
to be filed, pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations promulgated thereunder.
"South Alabama Common Stock" shall mean the shares of common stock, par
value $.01 per share, of South Alabama prior to the Effective Time and the
change of South Alabama's name to "The Peoples BancTrust Company, Inc."
"South Alabama Subsidiaries" shall mean the Subsidiaries of South Alabama
and any corporation, bank, association, or other entity acquired as a Subsidiary
of South Alabama in the future and owned by South Alabama at the Effective Time.
"Subsidiaries" shall mean all those corporations, banks, associations, or
other entities of which the entity in question owns or controls 50% or more of
the outstanding equity securities either directly or indirectly through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent; provided,
however, that there shall not be included any such entity acquired through
foreclosure or any such entity the equity securities of which are owned or
controlled in a fiduciary capacity.
"Superintendent" shall mean the Superintendent of Banks of the State of
Alabama.
"Surviving Corporation" shall mean South Alabama as existing on and after
the Effective Time."
"Surviving Corporation Common Stock" shall mean the shares of common stock,
par value $.01 per share, of the Surviving Corporation at and after the
Effective Time.
Other terms used herein are defined in the preamble and elsewhere in this
Agreement.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 The Merger
Subject to the satisfaction of the terms and conditions of this Agreement
and pursuant to the applicable provisions of the ABCA and the BHCA, at the
Effective Time, BancTrust shall be merged with and into South Alabama pursuant
to the terms and conditions set forth herein, with South Alabama to be the
Surviving Corporation, and each share of BancTrust Common Stock issued and
outstanding immediately prior to the Effective Time shall thereupon and without
further action be converted into one share of Surviving Corporation Common Stock
plus the right to receive 0.35 shares of Surviving Corporation Common Stock and
cash for fractional share interests (if any), in compliance with the provisions
of Section 2.7 below.
2.2 Closing and Closing Date
The Merger shall be consummated at a closing (the "Closing") to be held at
a location to be determined by mutual consent of the parties to this Agreement,
on the first business day following satisfaction of the conditions to
consummation of the Merger set forth in Article VI hereof, or on such later date
within 30 days thereafter as the parties may mutually agree (the "Closing
Date").
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2.3 Effect of Merger
(a) At the Effective Time, the separate existence of BancTrust shall cease
and South Alabama, as the Surviving Corporation, shall continue unaffected and
unimpaired by the Merger, subject to the amendments to South Alabama's Articles
of Incorporation to be effected by the Merger.
(b) The Merger shall have the effects described in Section 11.06 of the
ABCA.
(c) The names of the corporations proposing to merge are "South Alabama
Bancorporation, Inc." and "The Peoples BancTrust Company, Inc." At and after the
Effective Time, the name of the Surviving Corporation shall be "The Peoples
BancTrust Company, Inc." The Surviving Corporation shall be headquartered in
Mobile, Alabama.
2.4 Directors and Officers
(a) At and after the Effective Time, the initial directors of the Surviving
Corporation (the "Initial Directors"), who shall hold office until their
resignation or removal or until their successors have been elected and qualified
in accordance with the ABCA, the Surviving Corporation's Articles of
Incorporation and Bylaws and this Agreement, shall be as provided in Section
8.4(a) herein.
(b) At and after the Effective Time, the executive officers of the
Surviving Corporation shall be as provided in Section 8.4(b) herein.
2.5 Articles of Incorporation and Bylaws of Surviving Corporation
(a) At the Effective Time, the Articles of Incorporation of South Alabama,
as then in effect, amended and restated as set forth in Exhibit E hereto, shall
be the Articles of Incorporation of the Surviving Corporation, until amended as
provided therein or as otherwise permitted by the ABCA.
(b) The Bylaws of South Alabama in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation.
2.6 Capital Stock of South Alabama; Dissenters' Rights
Each share of capital stock of South Alabama issued and outstanding
immediately prior to the Effective Time shall, at and after the Effective Time,
continue to be issued and outstanding, and shall be an identical outstanding
share of the Surviving Corporation. Any holder of shares of South Alabama Common
Stock shall be entitled to exercise dissenters' rights of appraisal as specified
in the ABCA if such shareholder complies in all respects with the procedures set
forth in Sections 13.20-13.28 of the ABCA.
2.7 Conversion and Exchange of BancTrust Common Stock; Fractional Share
Interests
(a) At the Effective Time, except as provided in Sections 2.7(b) and (h)
below, each share of BancTrust Common Stock issued and outstanding immediately
prior to the Effective Time shall thereupon and thereafter, by virtue of the
Merger becoming effective and without any action on the part of the registered
holder thereof (such registered holder being hereinafter referred to as a
"Record Holder") or any other person, be converted into one share of Surviving
Corporation Common Stock plus the right to receive 0.35 shares of Surviving
Corporation Common Stock, or 1.35 shares of Surviving Corporation Common Stock
in the aggregate (the "Exchange Ratio"). Cash will be paid in lieu of fractional
shares pursuant to Section 2.7(j) below.
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(b) At the Effective Time, all shares of BancTrust Common Stock (i) held as
treasury stock by BancTrust, (ii) owned beneficially by BancTrust or any
BancTrust Subsidiary other than in a fiduciary capacity or in connection with a
debt previously contracted or (iii) owned beneficially by South Alabama or any
subsidiary of South Alabama other than in a fiduciary capacity or in connection
with a debt previously contracted shall be cancelled and no cash, stock or other
property shall be delivered in exchange therefor.
(c) From and after the Effective Time, each such outstanding certificate
that, prior to the Effective Time, represented shares of BancTrust Common Stock,
other than shares as to which a Record Holder has previously exercised
dissenters' rights of appraisal as specified in the ABCA, shall be deemed for
all corporate purposes to evidence the ownership of the number of whole shares
of Surviving Corporation Common Stock into which such shares of BancTrust Common
Stock shall have been converted. Former holders of BancTrust Common Stock will
not be required to exchange their certificate(s) for new certificates evidencing
the same number of shares of Surviving Corporation Common Stock. All shares of
Surviving Corporation Common Stock into which shares of BancTrust Common Stock
shall have been converted shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares. Within ten (10) business
days after the Effective Time, the Surviving Corporation's Transfer Agent shall
transmit by U.S. Mail to each Record Holder, other than a Record Holder who has
previously exercised dissenters' rights of appraisal as specified in the ABCA,
certificates representing additional shares of Surviving Corporation Common
Stock to which such Record Holder is entitled as a result of the Merger and cash
paid in lieu of fractional share interests.
(d) After the Effective Time, Record Holders may elect at their option to
exchange their certificate(s) that, prior thereto, represented shares of
BancTrust Common Stock. Upon surrender of such certificate(s) to the Surviving
Corporation's Transfer Agent, each Record Holder shall be entitled to receive,
in exchange therefor, a certificate or certificates representing the number of
whole shares of Surviving Corporation Common Stock into which the shares
theretofore represented by the surrendered certificate(s) shall have been
converted, as provided in Section 2.7(a) above. In the case of lost or stolen
certificates, the Surviving Corporation may require such Record Holder to
execute a bond of the kind and amount it deems necessary or appropriate to
indemnify the Surviving Corporation in a manner reasonably satisfactory to it
against all such claims, expenses and liabilities as may arise out of its
payment to such Record Holder in the absence of the surrender of a certificate.
(e) Certificate(s) surrendered for exchange by any person constituting an
"affiliate" of BancTrust for purposes of Rule 145(c) under the Securities Act
shall not be exchanged for certificates representing whole shares of Surviving
Corporation Common Stock until the Surviving Corporation has received from such
person the written agreement contemplated by Section 5.11 hereof and shall
contain the legend required by the written letter agreement attached hereto as
Exhibit F.
(f) As of the Effective Time, the stock transfer books of BancTrust shall
be closed, and no transfers of BancTrust Common Stock by such holder shall
thereafter be made or recognized. On the Closing Date, BancTrust shall deliver
to South Alabama a certified copy of its list of shareholders as of such date.
(g) In the event that prior to the Effective Time the outstanding shares of
BancTrust Common Stock shall have been increased, decreased, or changed into or
exchanged for a different number or kind of shares or securities by
reorganization, recapitalization, reclassification, stock dividend, stock split,
or other like change in capitalization, then an appropriate and proportionate
adjustment shall be made in the number and kind of shares of Surviving
Corporation Common Stock to be thereafter delivered pursuant to this Agreement.
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(h) Any holder of shares of BancTrust Common Stock shall be entitled to
exercise dissenters' rights of appraisal as specified in the ABCA if such
shareholder complies in all respects with the procedures set forth in Sections
13.20-13.28 of the ABCA. Shares of BancTrust Common Stock that have not been
voted for adoption of the Agreement and with respect to which appraisal shall
have been properly demanded in accordance with the foregoing provisions of the
ABCA ("Dissenting Shares") shall not be converted into the right to receive
shares of Surviving Corporation Common Stock and cash in lieu of fractional
share interests pursuant to Section 2.7(a) hereof at and after the Effective
Time unless and until the holder of Dissenting Shares withdraws his or her
demand or becomes ineligible for such appraisal.
(i) Any other provision of this Agreement notwithstanding, no party hereto
or agent thereof shall be liable to a holder of BancTrust Common Stock for any
amount paid or property delivered in good faith to a public official pursuant to
any applicable abandoned property, escheat, or similar law.
(j) Nothwithstanding any other provision hereof, each Record Holder of
BancTrust Common Stock who would otherwise have been entitled to receive a
fraction of a share of Surviving Corporation Common Stock (after taking into
account all shares held by such Record Holder) shall receive, in lieu thereof,
cash in an amount equal to the average of the bid and asked price of Surviving
Corporation Common Stock as of the close of business on the first business day
immediately following the Effective Time. No such Record Holder shall be
entitled to dividends, voting rights or any other shareholder right in respect
of any fractional share. All fractional share interests of each Record Holder,
including fractional share interests relating to shares kept in a Record
Holder's account under BancTrust's Dividend Reinvestment and Stock Purchase Plan
(the "Dividend Reinvestment Plan"), shall be aggregated.
2.8 Effective Time of the Merger
Immediately following and contingent upon the occurrence of the Closing,
the Merger shall become effective at the time, and on the date, specified in the
Articles of Merger. Such time and date shall be referred to in this Agreement as
the "Effective Time."
2.9 Conversion of BancTrust Stock Options
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of any holder of an option, each outstanding option under the stock
option plans of BancTrust (the "BancTrust Option Plans") shall continue
outstanding as an option to purchase, in place of the purchase of each share of
BancTrust Common Stock, the number of shares (rounded up to the nearest whole
share) of Surviving Corporation Common Stock that would have been received by
the optionee in the Merger had the option been exercised in full (without regard
to any limitations contained therein on exercise) for shares of BancTrust Common
Stock immediately before the Merger upon the same terms and conditions under the
relevant option as were applicable immediately before the Effective Time, except
for appropriate pro rata adjustments as to the relevant option price for shares
of Surviving Corporation Common Stock substituted therefor so that the aggregate
option exercise price of shares subject to an option immediately following the
assumption and substitution shall be the same as the aggregate option exercise
price for such shares immediately before such assumption and substitution. From
and after the Effective Time, each BancTrust stock option assumed by the
Surviving Corporation may be exercised solely for shares of Surviving
Corporation Common Stock, and the Surviving Corporation and its Personnel
Committee shall be substituted for BancTrust and the Stock Option Committee of
BancTrust's Board of Directors. The Surviving Corporation shall take such
actions as may be required to effectuate the foregoing. It is intended that the
foregoing assumption shall be undertaken consistent with and in a manner that
will not constitute a modification, renewal or extension under Section 424 of
the Internal Revenue Code as to any stock option which is an incentive stock
option.
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(b) If the Surviving Corporation's proposed 2001 Incentive Compensation
Plan (the "2001 Plan") is approved by South Alabama's shareholders, the
Surviving Corporation shall substitute at the Effective Time options under the
2001 Plan for the BancTrust stock options, subject to the requirements of the
first and last sentences in Section 2.9(a) above. The substituted options shall
continue in effect on the same terms and conditions as provided in the stock
option agreements and BancTrust Option Plans governing each BancTrust stock
option.
(c) Each grant of a converted or substitute option to any individual who
subsequent to the Merger will be a director or officer of the Surviving
Corporation as construed under Rule 16b-3 shall, as a condition to such
conversion or substitution, be approved in accordance with Rule 16b-3.
(d) At all times after the Effective Time, the Surviving Corporation shall
reserve for issuance such number of shares of Surviving Corporation Common Stock
as necessary so as to permit the exercise of options granted under the BancTrust
Option Plans in the manner contemplated by this Agreement and the instruments
pursuant to which such options were granted. South Alabama shall make all
filings required under federal and state securities laws no later than the
Effective Time so as to permit the exercise of such options and the sale of the
shares received by the optionee upon such exercise at and after the Effective
Time, and the Surviving Corporation shall continue to make such filings
thereafter as may be necessary to permit the continued exercise of options and
sale of such shares.
(e) Following the Effective Time, in case of any reclassification,
reorganization, recapitalization, stock dividend or distribution, subdivision,
combination or exchange of the outstanding shares of Surviving Corporation
Common Stock or in case of any consolidation or merger of the Surviving
Corporation with or into any other corporation, or in the case of any sale or
transfer of all or substantially all of the Surviving Corporation's assets,
then, the rights of the optionees who then hold outstanding options under the
BancTrust Option Plans shall be appropriately adjusted so that the optionees
will be in the same position as if their options had been exercised immediately
before such corporate action or transaction. The provisions hereof shall
similarly apply following the Effective Time to successive reclassifications,
reorganizations, recapitalizations, stock dividends or distributions,
subdivisions, combinations or exchanges, consolidations, mergers, sales or
transfers.
(f) With respect to those individuals who subsequent to the Merger may be
subject to reporting requirements under Section 16(a) of the Exchange Act, the
Surviving Corporation shall administer the BancTrust Option Plans assumed
pursuant to Section 2.9(a) (or the 2001 Plan, if applicable) in a manner that
complies with Rule 16b-3 under the Exchange Act to the extent necessary to
preserve for such individuals the benefits of Rule 16b-3 to the extent such
benefits were available to them prior to the Effective Time.
(g) As soon as practicable following the Effective Time, the Surviving
Corporation shall deliver to the participants receiving converted options an
appropriate notice setting forth such participant's rights pursuant thereto.
2.10 BancTrust Dividend Reinvestment Plan
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of a participant therein (a "Participant"), the Dividend
Reinvestment Plan shall be assumed by the Surviving Corporation upon the same
terms and conditions under the Dividend Reinvestment Plan as shall be applicable
immediately before the Effective Time. It is currently anticipated that the
Dividend Reinvestment Plan will be amended prior to the Effective Time to change
the administration of such Plan. Any amendment of the Dividend Reinvestment Plan
will be made with South Alabama's prior consent.
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(b) At and after the Effective Time, the number of shares of Surviving
Corporation Common Stock subject to each Participant's account in the Dividend
Reinvestment Plan shall be the number of shares of Surviving Corporation Common
Stock determined by multiplying the number of shares of BancTrust Common Stock
(including fractional interests in shares of BancTrust Common Stock) subject to
such account immediately prior to the Effective Time by the Exchange Ratio.
(c) Notwithstanding the foregoing, if a Participant is also a Record Holder
of BancTrust Common Stock, the total of the shares of BancTrust Common Stock
held in the Dividend Reinvestment Plan for the benefit of the Participant and
the shares held of record by such person as a Record Holder shall be multiplied
by the Exchange Ratio. Any additional share shall be issued directly to the
Record Holder and not credited to the Participant's account in the Dividend
Reinvestment Plan.
2.11 Further Assurances
If at any time the Surviving Corporation shall consider or be advised that
any further assignments, conveyances or assurances are necessary or desirable to
vest, perfect or confirm in the Surviving Corporation title to any property or
rights of BancTrust, or otherwise carry out the provisions hereof, the proper
officers and directors of BancTrust, as of the Effective Time, and thereafter
the officers of the Surviving Corporation, acting on behalf of BancTrust, shall
execute and deliver any and all property or assignments, conveyances and
assurances, and do all things necessary or desirable to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and otherwise
carry out the provisions hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SOUTH ALABAMA
South Alabama represents and warrants to BancTrust as follows:
3.1 Capital Structure of South Alabama
The authorized capital stock of South Alabama consists of (i) 20,000,000
shares of South Alabama Common Stock, of which 8,526,544 shares are issued and
outstanding as of the date hereof, and (ii) 500,000 shares of preferred stock,
no par value, of which no shares are issued or outstanding as of the date
hereof. All outstanding shares of South Alabama Common Stock have been duly
issued and are validly outstanding, fully paid and nonassessable. As of the date
hereof, South Alabama had reserved 319,238 shares of South Alabama Common Stock
for issuance upon the exercise of options granted under its stock option plans.
Except for stock options under South Alabama's stock option plans and the South
Alabama Stock Option Agreement annexed hereto as Exhibit A, there are no Rights
authorized, issued or outstanding with respect to the capital stock of South
Alabama. None of the shares of South Alabama Common Stock has been issued in
violation of the preemptive rights of any person. Each share of Surviving
Corporation Common Stock that the holders of BancTrust Common Stock will have
the right to receive in respect of their shares of BancTrust Common Stock after
the Effective Time has been duly authorized and, when issued in accordance with
this Agreement, will be validly issued, fully paid and nonassessable and will
have the same rights as each share of the South Alabama Common Stock currently
outstanding.
3.2 Organization, Standing and Authority of South Alabama
South Alabama is duly organized, validly existing and in good standing
under the laws of the State of Alabama with full corporate power and authority
to carry on its business as now conducted and is duly qualified to do business
in each jurisdiction in which its ownership or leasing of property or the
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conduct of its business requires such qualification and where the failure to so
qualify would have a material adverse effect on the financial condition, results
of operations, business or prospects of South Alabama. South Alabama is
registered as a bank holding company under the BHCA. South Alabama has
previously delivered to BancTrust true and complete copies of the Articles of
Incorporation and Bylaws of South Alabama as of the date hereof.
3.3 South Alabama Subsidiaries
Set forth on Schedule 3.3 hereto is the name and state of incorporation of
each of the South Alabama Subsidiaries. Each of the South Alabama Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation or the United States and has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business. Each of the South Alabama Subsidiaries is duly qualified
and in good standing to do business as a foreign corporation in each
jurisdiction where the nature or location of such subsidiary's assets or its
business makes such qualification necessary, except where the failure to be so
qualified or in good standing does not and will not have a material adverse
effect on South Alabama and the South Alabama Subsidiaries taken as a whole. The
outstanding shares of capital stock of each of the South Alabama Subsidiaries
are duly authorized, validly issued, fully paid, and (except pursuant to 12
U.S.C. Section 55 in the case of national banks) non-assessable, have been
issued in compliance with all applicable federal and state securities laws, and
are owned, as set forth on Schedule 3.3, free and clear of all liens, claims or
encumbrances. There are no outstanding options, warrants, calls, rights,
commitments, or other agreements of any character obligating any of the South
Alabama Subsidiaries to issue any shares of its capital stock or any securities
convertible into or evidencing the right to purchase or acquire any shares of
such capital stock. Except for shares of the South Alabama Subsidiaries and
securities or other interests taken in consideration of debts previously
contracted, neither South Alabama nor any of the South Alabama Subsidiaries owns
or has the right to acquire, directly or indirectly, any outstanding capital
stock or other voting securities or ownership interests of any corporation,
bank, savings association, partnership, joint venture, or other organization.
3.4 Authorized and Effective Agreement
(a) South Alabama has all requisite corporate power and authority to enter
into this Agreement and (subject to receipt of all necessary governmental
approvals and the approval of this Agreement by South Alabama's shareholders) to
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement and consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of South Alabama, except the approval of this Agreement by
South Alabama's shareholders. This Agreement constitutes a legal, valid and
binding obligation of South Alabama, enforceable against South Alabama in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(b) Neither the execution and delivery of this Agreement, nor consummation
of the transactions contemplated hereby, nor compliance by South Alabama with
any of the provisions hereof shall (i) conflict with or result in a breach of
any provision of the Articles of Incorporation or Bylaws of South Alabama, (ii)
constitute or result in a breach of any term, condition or provision of, or
constitute a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, or result in the creation of any
lien, charge or encumbrance upon any material property or asset of South Alabama
pursuant to, any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation, or (iii) subject to receipt of all required
governmental approvals, violate any order, writ, injunction, decree, statute,
rule or regulation applicable to South Alabama.
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3.5 Regulatory Reports
For the five years preceding the date hereof, South Alabama has duly filed
with the FRB and the South Alabama Subsidiaries have duly filed with the OCC,
Superintendent and FDIC in correct form in all material respects the monthly,
quarterly and annual reports and other documents required to be filed with all
applicable governmental authorities, and such reports and other documents comply
in all material respects with applicable law and regulations. South Alabama has
previously delivered, or will deliver, to BancTrust complete and accurate copies
of all such reports. In connection with the most recent examinations of South
Alabama and the South Alabama Subsidiaries by the FRB, the OCC, the
Superintendent and the FDIC, and except as disclosed on Schedule 3.5 hereto,
neither South Alabama nor any of the South Alabama Subsidiaries was required to
correct or change any action, procedure or proceeding that South Alabama or any
of the South Alabama Subsidiaries believes has not been corrected or changed as
required as of the date hereof.
3.6 Securities Documents
South Alabama has previously delivered to BancTrust complete and accurate
copies of its Annual Report on Form 10-K and Annual Report to Shareholders for
the fiscal year ended December 31, 1999 and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, June 30 and September 30, 2000. South
Alabama has timely filed all Securities Documents required by the Securities
Laws for the past three years.
3.7 Financial Statements
The Financial Statements of South Alabama fairly present or will fairly
present, as the case may be, the consolidated financial position of South
Alabama, and the South Alabama Subsidiaries as of the dates indicated and the
consolidated results of operations, changes in shareholders' equity and
statements of cash flows for the periods then ended in conformity with generally
accepted accounting principles applied on a consistent basis (except as stated
therein).
3.8 Material Adverse Change
South Alabama has not suffered any material adverse change in its business,
financial condition, results of operations or prospects since the date of its
most recent audited Financial Statements, nor are there any circumstances that,
to the Knowledge of South Alabama, could reasonably be expected to result in any
such material adverse change.
3.9 Absence of Undisclosed Liabilities
Except as disclosed on Schedule 3.9 hereto, neither South Alabama nor any
of the South Alabama Subsidiaries has any liability (contingent or otherwise)
that is material to South Alabama or that, when combined with all similar
liabilities, would be material to South Alabama, except as disclosed in the
Financial Statements of South Alabama and except for liabilities incurred in the
ordinary course of business since the date of the most recent audited Financial
Statements, nor are there any circumstances that, to the knowledge of South
Alabama, are reasonably expected to result in any such liability.
3.10 Environmental Matters
(a) Schedule 3.10 lists all facts, circumstances and events to the
Knowledge of South Alabama that relate to any material noncompliance, alleged
noncompliance or potential noncompliance
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by South Alabama or any South Alabama Subsidiary with any Environmental Law or
any material liability or potential liability by South Alabama or any South
Alabama Subsidiary under any such law.
(b) Except as contained in Schedule 3.10, South Alabama and the South
Alabama Subsidiaries, including the properties owned, leased, managed,
controlled or operated by South Alabama and the South Alabama Subsidiaries, are
in compliance in all material respects with all Environmental Laws, except for
any violation(s) of any Environmental Law that would not, singly or in the
aggregate, have a material adverse effect on the business, financial condition,
results of operations or prospects of South Alabama and the South Alabama
Subsidiaries taken as a whole. Neither South Alabama nor any South Alabama
Subsidiary has received any communication alleging that it is not in such
compliance and, to the Knowledge of South Alabama, there are no present
circumstances that would prevent or interfere with the continuation of such
compliance.
(c) Except as contained in Schedule 3.10, to the Knowledge of South
Alabama, none of the properties in which South Alabama or any of the South
Alabama Subsidiaries holds a security interest is in violation of or liable
under any Environmental Law, except any such violations or liabilities that
would not singly or in the aggregate have a material adverse effect on the
financial condition, results of operations, business or prospects of South
Alabama and the South Alabama Subsidiaries taken as a whole. It is acknowledged
by the parties to this Agreement that South Alabama has made no additional
inquiry in regard to the matters reflected in this Section 3.10(c) as to such
properties for the purpose of making the representations and warranties
contained herein.
(d) Except as contained in Schedule 3.10, to the Knowledge of South
Alabama, there are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably form the basis of any
Environmental Claim or other claim or action or governmental investigation that
could result in the imposition of any liability arising under any Environmental
Law against South Alabama or any of the South Alabama Subsidiaries or against
any person or entity whose liability for any Environmental Claim South Alabama
or any of the South Alabama Subsidiaries has or may have retained or assumed
either contractually or by operation of law, except any such that would not have
a material adverse effect on the financial condition, results of operations,
business or prospects of South Alabama and the South Alabama Subsidiaries taken
as a whole.
3.11 Allowance for Loan Losses
The allowance for loan losses reflected on the statements of financial
condition included in the Financial Statements of South Alabama is, and in the
case of future Financial Statements will be, in the opinion of management of
South Alabama, adequate in all material respects as of the date of the most
recent Financial Statements of South Alabama under the requirements of generally
accepted accounting principles, to provide for reasonably anticipated losses on
outstanding loans net of recoveries and other extensions of credit.
3.12 Tax Matters
(a) For the past five years, South Alabama and the South Alabama
Subsidiaries have timely filed all federal, state and local (and, if applicable,
foreign) tax returns required by applicable law to be filed by them (including,
without limitation, estimated tax returns, income tax returns, information
returns, and withholding and employment tax returns) and have paid, or where
payment is not required to have been made, have set up an adequate reserve or
accrual for the payment of, all taxes required to be paid in respect of the
periods covered by such returns and, as of the Effective Time, will have paid,
or where payment is not required to have been made, will have set up an adequate
reserve or accrual for the payment of, all taxes for any subsequent periods
ending on or prior to the Effective Time. At the
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Effective Time, neither South Alabama nor any of the South Alabama Subsidiaries
will have any material liability for any such taxes in excess of the amounts so
paid or reserves or accruals so established.
(b) For the past five years, all federal, state and local (and, if
applicable, foreign) tax returns filed by South Alabama and the South Alabama
Subsidiaries have been complete and accurate in all material respects. Neither
South Alabama nor any of the South Alabama Subsidiares is delinquent in the
payment of any material tax, assessment or tax obligation, and neither South
Alabama nor any of the South Alabama Subsidiaries has requested any extension of
time within which to file any tax returns in respect of any fiscal year or
portion thereof that have not since been filed. No deficiencies for the tax,
assessment or governmental charge have been proposed, asserted or assessed
(tentatively or otherwise) against South Alabama or any of the South Alabama
Subsidiaries that have not been settled and paid. There are currently no
agreements in effect with respect to South Alabama or any of the South Alabama
Subsidiaries to extend the period of limitations for the assessment or
collection of any tax. As of the date hereof, no audit, examination or
deficiency or refund litigation is pending. 3.13 Legal Proceedings; Regulatory
Approvals
Except as disclosed on Schedule 3.13 hereto, there are no actions, suits,
claims, governmental investigations or proceedings instituted, pending or, to
the best knowledge of South Alabama, threatened (or unasserted but considered by
South Alabama probable of assertion and that, if asserted, would have at least a
reasonable probability of a material adverse effect) against South Alabama or
any of the South Alabama Subsidiaries or against any asset, interest, or right
of South Alabama or any of the South Alabama Subsidiaries or against any
officer, director or employee of any of them that in any such case, if decided
adversely, would have a material adverse effect on the financial condition,
results of operations, business or prospects of South Alabama. To the Knowledge
of South Alabama, there are no actual or threatened actions, suits or
proceedings that present a claim to restrain or prohibit the Merger or that
would prevent South Alabama from obtaining all of the federal and state
regulatory approvals contemplated herein.
3.14 Compliance with Laws
South Alabama and the South Alabama Subsidiaries are in compliance in all
material respects with all statutes and regulations applicable and material to
the conduct of their respective businesses (except for any violations not
material to the financial condition, results of operations, business or
prospects of South Alabama). Neither South Alabama nor any of the South Alabama
Subsidiaries has received notification from any agency or department of federal,
state or local government (i) asserting a violation or possible violation of any
such statute or regulation that would have a material adverse effect on the
financial condition, results of operations, business or prospects of South
Alabama, (ii) threatening to revoke any license, franchise, permit or government
authorization or (iii) restricting or in any way limiting the operations of
South Alabama or any of the South Alabama Subsidiaries. Neither South Alabama
nor any of the South Alabama Subsidiaries is subject to any regulatory or
supervisory cease and desist order, agreement, written directive, memorandum of
understanding or written commitment, nor have they received any written
communication requesting that any of them enter into any of the foregoing.
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3.15 Deposit Insurance
The deposit accounts of the commercial bank South Alabama Subsidiaries are
insured by the FDIC to the maximum extent permitted by law, and the commercial
bank South Alabama Subsidiaries have paid all premiums and assessments and filed
all reports required under the FDIA.
3.16. Obstacles to Tax Treatment
To the Knowledge of South Alabama, no fact or condition (including South
Alabama's record of compliance with the Community Reinvestment Act) exists that
may reasonably be expected to prevent or materially impede or delay South
Alabama from (i) obtaining the regulatory approvals and consents required in
order to consummate the Merger or (ii) based on consultation with qualified tax
advisors, obtaining the tax treatment contemplated by Section 6.1(e) of this
Agreement, and, if any such fact or condition becomes known to the executive
officers of South Alabama, South Alabama promptly (and in any event within 10
business days after obtaining such knowledge) shall communicate such fact or
condition to BancTrust.
3.17 Certain Information
When the Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such effectiveness up to
and including the time of the meeting of shareholders of South Alabama to vote
upon the Merger, such Registration Statement and all amendments or supplements
thereto, with respect to all information set forth therein furnished by South
Alabama relating to South Alabama and the South Alabama Subsidiaries, (i) shall
comply in all material respects with the applicable provisions of the Securities
Laws, and (ii) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
3.18 Employee Benefit Plans
(a) Appended as Schedule 3.18 hereto is a complete list of all stock
option, employee stock purchase and stock bonus plans, qualified pension or
profit-sharing plans, any deferred compensation, consultant, bonus or group
insurance contract and any other incentive, welfare and employee benefit plans
and agreements maintained for the benefit of employees or former employees of
South Alabama and/or the South Alabama Subsidiaries. South Alabama and the South
Alabama Subsidiaries shall make available to BancTrust full and complete copies
of all such plans and agreements, together with (i) the most recent actuarial
and financial reports prepared with respect to any qualified plans, (ii) the
most recent annual reports filed with any governmental agency, and (iii) all
rulings and determination letters and any open requests for rulings or letters
that pertain to any qualified plan.
(b) Neither South Alabama or any of the South Alabama Subsidiaries nor any
pension plan maintained by South Alabama or the South Alabama Subsidiaries and
qualified under Section 401 of the Code has incurred any material liability to
the Pension Benefit Guaranty Corporation or the Internal Revenue Service with
respect to any pension plan that South Alabama or the South Alabama Subsidiaries
maintain for or with respect to any of their employees and that is qualified
under Section 401 of the Code except liabilities to the Pension Benefit Guaranty
Corporation pursuant to Section 4007 of ERISA, all of which have been fully
paid. To the Knowledge of South Alabama, no reportable event under Section
4043(b) of ERISA has occurred with respect to any such pension plan.
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(c) Neither South Alabama nor any of the South Alabama Subsidiaries
participates in or has incurred any liability under Section 4201 of ERISA for a
complete or partial withdrawal from, a multiemployer plan (as such term is
defined in ERISA).
(d) A favorable determination letter has been issued by the Internal
Revenue Service with respect to each "employee pension plan" (as defined in
Section 3(2) of ERISA) of South Alabama and/or the South Alabama Subsidiaries
that is intended to qualify under Section 401 of the Code to the effect that
such plan is qualified under Section 401 of the Code and the trust associated
with such employee pension plan is tax exempt under Section 501 of the Code. To
the Knowledge of South Alabama, no such letter has been revoked or threatened to
be revoked, and South Alabama knows of no ground on which such revocation may be
based. Neither South Alabama nor any of the South Alabama Subsidiaries has any
material liability under any such plan that is not reflected on the balance
sheet included in the Financial Statements as of September 30, 2000.
(e) To the Knowledge of South Alabama, no prohibited transaction (which
shall mean any transaction prohibited by Section 406 of ERISA and not exempt
under Section 408 of ERISA or Section 4975 of the Code) has occurred with
respect to any employee benefit plan maintained by South Alabama or any of the
South Alabama Subsidiaries (i) that would result in the imposition, directly or
indirectly, of a material excise tax under Section 4975 of the Code, or (ii) the
correction of which would have a material adverse effect on the financial
condition, results of operations, business or prospects of South Alabama.
3.19 Certain Contracts
(a) Except as disclosed on Schedule 3.19 hereto, at the date hereof,
neither South Alabama nor any of the South Alabama Subsidiaries is a party to,
is bound or affected by, receives, or is obligated to pay, benefits under (i)
any material agreement, arrangement or commitment not made in the ordinary
course of business, including, without limitation, agreements or memoranda of
understanding with regulatory authorities, (ii) any agreement, indenture or
other instrument not made in the ordinary course of business relating to the
borrowing of money by South Alabama or the South Alabama Subsidiaries or the
guarantee by South Alabama or the South Alabama Subsidiaries of any such
obligation, (iii) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election or retention in office of
any present or former director or officer, or (iv) any contract, agreement or
understanding with a labor union, in each case whether written or oral.
(b) Neither South Alabama nor any of the South Alabama Subsidiaries is in
default, which default would have a material adverse effect on South Alabama or
the transactions contemplated herein, under any agreement, commitment,
arrangement, lease, insurance policy, or other instrument whether entered into
the ordinary course of business or otherwise and whether written or oral, and
there has not occurred any event that, with the lapse of time or giving of
notice or both, would constitute such a default.
3.20 Brokers and Finders
Except for the retention of Mercer Capital, Memphis, Tennessee as its
financial advisor in connection with the Merger (the "South Alabama Financial
Advisor"), neither South Alabama nor any of the South Alabama Subsidiaries nor
any of their respective officers, directors or employees has (a) entered into
any agreement with any broker, finder or financial advisor relating to services
rendered or to be rendered to South Alabama in connection with the Merger or (b)
incurred any liability for any fees, commissions or other transaction-based
compensation in connection with the Merger (other than fees to attorneys,
auditors and similar professionals).
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3.21 Insurance
Set forth on Schedule 3.21 is an accurate and complete list and a brief
description of all policies of insurance, including fidelity and bond insurance,
of South Alabama and the South Alabama Subsidiaries. Neither South Alabama nor
any of the South Alabama Subsidiaries is in default with respect to the
provisions of any such policy or has failed to give notice or to present any
claim thereunder in a due and timely fashion. All such policies (a) are
sufficient for compliance by South Alabama and the South Alabama Subsidiaries
with all requirements of law and all agreements to which South Alabama or any of
the South Alabama Subsidiaries is a party, (b) are valid, outstanding and
enforceable and (c) will not terminate or lapse prior to the Effective Time
without similar policies being obtained that would continue until the Effective
Time.
3.22 No Repurchase Agreements
Except for agreements in the ordinary course of business, neither South
Alabama nor any of the South Alabama Subsidiaries is a party to any agreement
pursuant to which South Alabama or any of the South Alabama Subsidiaries has
purchased securities subject to an agreement to resell, any agreements pursuant
to which South Alabama or any of the South Alabama Subsidiaries has sold
securities subject to an agreement to repurchase, or any interest rate swap or
other similar agreement.
3.23 Loans
Each of the loans reflected in the Financial Statements of South Alabama as
of September 30, 2000, including unfunded portions of outstanding lines of
credit and loan commitments, was made in all material respects in accordance
with customary lending standards in the ordinary course of business, is
evidenced in all material respects by appropriate and sufficient documentation
and, to the Knowledge of South Alabama, in all material respects, constitutes
the legal, valid and binding obligation of the obligor named therein, subject to
bankruptcy, insolvency, fraudulent conveyance and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. To the Knowledge of South Alabama, neither the terms of any such
loans nor any of the loan documentation, nor the manner in which such loans have
been administered and serviced, violates, in any material respect, any federal,
state or local statute, regulation or ordinance.
3.24 Properties
All real and personal property owned by South Alabama and the South Alabama
Subsidiaries or presently used by any of them in their respective business is in
an adequate condition (ordinary wear and tear excepted) and is sufficient to
carry on the business of South Alabama and the South Alabama Subsidiaries in the
ordinary course of business consistent with their past practices. South Alabama
and the South Alabama Subsidiaries have good and marketable title free and clear
of all liens, encumbrances, charges, defaults or equities (other than equities
of redemption under applicable foreclosure laws) to all of the material
properties and assets, real and personal, reflected on the statements of
financial condition included in the most recent audited Financial Statements of
South Alabama or acquired after such date, except (i) liens for current taxes
not yet due and payable, (ii) pledges to secure deposits and other liens
incurred in the ordinary course of its banking business, (iii) such
imperfections of title, easements and encumbrances, if any, as are not material
in character, amount or extent, (iv) dispositions and encumbrances for business
and (v) as disclosed in the Financial Statements of South Alabama. All material
leases pursuant to which South Alabama and the South Alabama Subsidiaries, as
lessees, lease real or personal property, are valid and enforceable in
accordance with their respective terms.
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3.25 Minute Books
The minute books of South Alabama and the South Alabama Subsidiaries
contain complete and accurate records of all meetings and other corporate
actions held or taken by their respective Boards of Directors (including
committees of their respective Boards of Directors) and shareholders.
3.26 Disclosures
None of the representations and warranties of South Alabama, or any of the
information or documents furnished or to be furnished by South Alabama or the
South Alabama Subsidiaries to BancTrust in connection with the execution and
delivery of this Agreement and the consummation of the Merger, is or will be
false or misleading in any material respect or contains or will contain any
untrue statement of a material fact. Except as set forth on Schedule 3.26 and
the other Schedules hereto, to the Knowledge of South Alabama, there is no fact
that could materially adversely affect the financial condition, results of
operation, business or prospects of South Alabama on a consolidated basis. To
the Knowledge of South Alabama, copies of all documents referred to in, and/or
provided to BancTrust pursuant to this Article III are true, correct and
complete copies thereof and include all amendments, supplements and
modifications thereto and all waivers thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
BANCTRUST
BancTrust represents and warrants to South Alabama as follows:
4.1 Capital Structure of BancTrust
The authorized capital stock of BancTrust consists of (i) 9,000,000 shares
of BancTrust Common Stock, of which 5,148,138 shares are issued and outstanding
as of the date hereof, and (ii) 1,000,000 shares of preferred stock, par value
$.10 per share, of which no shares are issued or outstanding as of the date
hereof. All outstanding shares of BancTrust Common Stock have been duly issued
and are validly outstanding, fully paid and nonassessable. As of the date
hereof, BancTrust had reserved 121,275 shares of BancTrust Common Stock for
issuance upon the exercise of options granted under its stock option plans.
Except for stock options under the BancTrust Option Plans and the BancTrust
Stock Option Agreement annexed hereto as Exhibit B, there are no Rights
authorized, issued or outstanding with respect to the capital stock of
BancTrust. None of the shares of BancTrust Common Stock has been issued in
violation of the preemptive rights of any person.
4.2 Organization, Standing and Authority of BancTrust
BancTrust is duly organized, validly existing and in good standing under
the laws of the State of Alabama with full corporate power and authority to
carry on its business as now conducted and is duly qualified to do business in
each jurisdiction in which its ownership or leasing of property or the conduct
of its business requires such qualification and where the failure to so qualify
would have a material adverse effect on the financial condition, results of
operations, business or prospects of BancTrust. BancTrust is registered as a
bank holding company under the BHCA. BancTrust has previously delivered to South
Alabama true and complete copies of the Articles of Incorporation and Bylaws of
BancTrust as of the date hereof.
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4.3 BancTrust Subsidiaries
Set forth on Schedule 4.3 hereto is the name and state of incorporation of
each of the BancTrust Subsidiaries. Each of the BancTrust Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation and has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business.
Each of the BancTrust Subsidiaries is duly qualified and in good standing to do
business as a foreign corporation in each jurisdiction where the nature or
location of such subsidiary's assets or its business makes such qualification
necessary, except where the failure to be so qualified or in good standing does
not and will not have a material adverse effect on BancTrust and the BancTrust
Subsidiaries taken as a whole. The outstanding shares of capital stock of each
of the BancTrust Subsidiaries are duly authorized, validly issued, fully paid,
and non-assessable, have been issued in compliance with all applicable federal
and state securities laws, and are owned, as set forth on Schedule 4.3, free and
clear of all liens, claims or encumbrances. There are no outstanding options,
warrants, calls, rights, commitments or other agreements of any character
obligating any of the BancTrust Subsidiaries to issue any shares of its capital
stock or any securities convertible into or evidencing the right to purchase or
acquire any shares of such capital stock. Except for shares of the BancTrust
Subsidiaries and securities or other interests taken in consideration of debts
previously contracted, neither BancTrust nor any of the BancTrust Subsidiaries
owns or has the right to acquire, directly or indirectly, any outstanding
capital stock or other voting securities or ownership interests of any
corporation, bank, savings association, partnership, joint venture, or other
organization.
4.4 Authorized and Effective Agreement
(a) BancTrust has all requisite corporate power and authority to enter into
this Agreement, and (subject to receipt of all necessary governmental approvals
and the approval of this Agreement by BancTrust's shareholders) to perform all
of its obligations under this Agreement. The execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of BancTrust except the approval of this Agreement by
BancTrust's shareholders. This Agreement constitutes a legal, valid and binding
obligation of BancTrust, enforceable against BancTrust in accordance with its
terms subject, as to enforceability, to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(b) Neither the execution and delivery of this Agreement, nor consummation
of the transactions contemplated hereby, nor compliance by BancTrust with any of
the provisions hereof shall (i) conflict with or result in a breach of any
provision of the Articles of Incorporation or Bylaws of BancTrust, (ii)
constitute or result in a breach of any term, condition or provision of, or
constitute a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, or result in the creation of any
lien, charge or encumbrance upon any property or asset of BancTrust pursuant to,
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation, or (iii) subject to receipt of all required governmental approvals,
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to BancTrust.
4.5. Regulatory Reports
For the five years preceding the date hereof, BancTrust has duly filed with
the FRB and the BancTrust Subsidiaries have duly filed with the Superintendent,
FDIC and FRB in correct form in all material respects the monthly, quarterly and
annual reports and other documents required to be filed with all applicable
governmental authorities, and such reports and other documents comply in all
material respects with applicable law and regulations. BancTrust has previously
delivered, or will make available,
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to South Alabama complete and accurate copies of all such reports. In connection
with the most recent examinations of BancTrust and the BancTrust Subsidiaries by
the FRB and the Superintendent, and except as disclosed on Schedule 4.5 hereto,
neither BancTrust nor any of the BancTrust Subsidiaries was required to correct
or change any action, procedure or proceeding that BancTrust or any of the
BancTrust Subsidiaries believes has not been corrected or changed as required as
of the date hereof.
4.6 Securities Documents
BancTrust has previously delivered to South Alabama complete and accurate
copies of its Annual Report on Form 10-K and Annual Report to Shareholders for
the fiscal year ended December 31, 1999 and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, June 30 and September 30, 2000.
BancTrust has timely filed all Securities Documents required by the Securities
Laws for the past three years.
4.7 Financial Statements
The Financial Statements of BancTrust fairly present or will fairly
present, as the case may be, the consolidated financial position of BancTrust
and the BancTrust Subsidiaries as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity and statements of cash
flows for the periods then ended in conformity with generally accepted
accounting principles applied on a consistent basis (except as stated therein).
4.8 Material Adverse Change
BancTrust has not suffered any material adverse change in its financial
condition, results of operations, business or prospects since the date of the
most recent audited Financial Statements, nor are there any circumstances that,
to the Knowledge of BancTrust, could reasonably be expected to result in any
such material adverse change.
4.9 Absence of Undisclosed Liabilities
Except as disclosed on Schedule 4.9 hereto, neither BancTrust nor any of
the BancTrust Subsidiaries has any liability (contingent or otherwise) that is
material to BancTrust or that, when combined with all similar liabilities, would
be material to BancTrust, except as disclosed in the Financial Statements of
BancTrust and except for liabilities incurred in the ordinary course of business
since the date of the most recent Financial Statements, nor are there any such
circumstances that, to the knowledge of BancTrust, are reasonably expected to
result in any such liability.
4.10 Environmental Matters
(a) Schedule 4.10 hereto lists all facts, circumstances and events to the
Knowledge of BancTrust that relate to any material noncompliance, alleged
noncompliance or potential noncompliance by BancTrust or any BancTrust
Subsidiary with any Environmental Law or any material liability or potential
liability by BancTrust or any BancTrust Subsidiary under any such law.
(b) Except as contained in Schedule 4.10, BancTrust and the BancTrust
Subsidiaries, including the properties owned, leased, managed, controlled or
operated by BancTrust and the BancTrust Subsidiaries, are in compliance in all
material respects with all Environmental Laws, except for any violation(s) of
any Environmental Law that would not, singly or in the aggregate, have a
material adverse effect on the business, financial condition, results of
operations or prospects of BancTrust and the BancTrust Subsidiaries taken as a
whole. Neither BancTrust nor any BancTrust Subsidiary has received
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any communication alleging that it is not in such compliance and, to the
Knowledge of BancTrust, there are no present circumstances that would prevent or
interfere with the continuation of such compliance.
(c) Except as contained in Schedule 4.10, to the Knowledge of BancTrust,
none of the properties in which BancTrust or any of the BancTrust Subsidiaries
holds a security interest is in violation of or liable under any Environmental
Law, except any such violations or liabilities that would not singly or in the
aggregate have a material adverse effect on the financial condition, results of
operations, business or prospects of BancTrust and the BancTrust Subsidiaries
taken as a whole. It is acknowledged by the parties to this Agreement that
BancTrust has made no additional inquiry in regard to the matters reflected in
this Section 4.10(c) as to such properties for the purpose of making the
representations and warranties contained herein.
(d) Except as contained in Schedule 4.10, to the Knowledge of BancTrust,
there are no past or present actions, activities, circumstances, conditions,
events or incidents that could reasonably form the basis of any Environmental
Claim or other claim or action or governmental investigation that could result
in the imposition of any liability arising under any Environmental Law against
BancTrust or any of the BancTrust Subsidiaries or against any person or entity
whose liability for any Environmental Claim BancTrust or any of the BancTrust
Subsidiaries has or may have been retained or assumed either contractually or by
operation of law, except any such that would not have a material adverse effect
on the financial condition, results of operations, business or prospects of
BancTrust and the BancTrust Subsidiaries taken as a whole.
4.11 Allowance for Loan Losses
The allowance for loan losses reflected on the statements of financial
condition included in the Financial Statements of BancTrust is, and in the case
of future Financial Statement will be, in the opinion of the management of
BancTrust, adequate in all material respects as of the date of the most recent
Financial Statements of BancTrust under the requirements of generally accepted
accounting principles, to provide for reasonably anticipated losses on
outstanding loans net of recoveries and other extensions of credit.
4.12 Tax Matters
(a) For the past five years, BancTrust and the BancTrust Subsidiaries have
timely filed all federal, state and local (and, if applicable, foreign) tax
returns required by applicable law to be filed by them (including, without
limitation, estimated tax returns, income tax returns, information returns, and
withholding and employment tax returns) and have paid, or where payment is not
required to have been made, have set up an adequate reserve or accrual for the
payment of, all taxes required to be paid in respect of the periods covered by
such returns and, as of the Effective Time, will have paid, or where payment is
not required to have been made, will have set up an adequate reserve or accrual
for the payment of, all taxes for any subsequent periods ending on or prior to
the Effective Time. At the Effective Time, neither BancTrust nor any of the
BancTrust Subsidiaries will have any material liability for any such taxes in
excess of the amounts so paid or reserves or accruals so established.
(b) For the past five years, all federal, state and local (and, if
applicable, foreign) tax returns filed by BancTrust and the BancTrust
Subsidiaries have been complete and accurate in all material respects. Neither
BancTrust nor any of the BancTrust Subsidiaries is delinquent in the payment of
any material tax, assessment or tax obligation, and neither BancTrust nor any of
the BancTrust Subsidiaries has requested any extension of time within which to
file any tax returns in respect of any fiscal year or portion thereof that have
not since been filed. No deficiencies for the tax, assessment or governmental
charge have been proposed, asserted or assessed (tentatively or otherwise)
against BancTrust or any of the
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BancTrust Subsidiaries that have not been settled and paid. There are currently
no agreements in effect with respect to BancTrust or any of the BancTrust
Subsidiaries to extend the period of limitations for the assessment or
collection of any tax. As of the date hereof, no audit, examination or
deficiency or refund litigation is pending.
4.13 Legal Proceedings; Regulatory Approvals
Except as disclosed on Schedule 4.13 hereto, there are no actions, suits,
claims, governmental investigations or proceedings instituted, pending or, to
the best knowledge of BancTrust, threatened (or unasserted but considered by
BancTrust probable of assertion and that, if asserted, would have a reasonable
probability of a material adverse effect) against BancTrust or any of the
BancTrust Subsidiaries or against any asset, interest or right of BancTrust or
any of the BancTrust Subsidiaries, or against any officer, director or employee
of any of them that, if decided adversely, might have a material adverse effect
on the financial condition, results of operations, business or prospects of
BancTrust. To the Knowledge of BancTrust, there are no actual or threatened
actions, suits or proceedings that present a claim to restrain or prohibit the
Merger or that would prevent BancTrust from obtaining all of the federal and
state regulatory approvals contemplated herein.
4.14 Compliance with Laws
BancTrust and the BancTrust Subsidiaries are in compliance in all material
respects with all statutes and regulations applicable and material to the
conduct of their respective businesses (except for any violations not material
to the financial condition, results of operations, business or prospects of
BancTrust). Neither BancTrust nor any of the BancTrust Subsidiaries has received
notification from any agency or department of federal, state or local government
(i) asserting a violation or possible violation of any such statute or
regulation that would have a material adverse effect on the financial condition,
results of operations, business or prospects of BancTrust, (ii) threatening to
revoke any license, franchise, permit or government authorization or (iii)
restricting or in any way limiting the operations of BancTrust. Neither
BancTrust nor any of the BancTrust Subsidiaries is subject to any regulatory or
supervisory cease and desist order, agreement, written directive, memorandum of
understanding or written commitment, nor have they received any written
communication requesting that any of them enter into any of the foregoing.
4.15 Deposit Insurance
The deposit accounts of Peoples Bank are insured by the FDIC to the maximum
extent permitted by law, and Peoples Bank has paid all premiums and assessments
and filed all reports required under the FDIA.
4.16 Obstacles to Tax Treatment
To the Knowledge of BancTrust, no fact or condition (including BancTrust's
record of compliance with the Community Reinvestment Act) exists that may
reasonably be expected to prevent or materially impede or delay BancTrust from
(i) obtaining the regulatory approvals and consents required in order to
consummate the Merger or (ii) based on consultation with qualified tax advisors,
obtaining the tax treatment contemplated by Section 6.1(e) of this Agreement,
and, if any such fact or condition becomes known to the executive officers of
BancTrust, BancTrust promptly (and in any event within 10 business days after
obtaining such knowledge) shall communicate such fact or condition to South
Alabama.
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4.17 Certain Information
When the Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such effectiveness up to
and including the time of the meeting of shareholders of BancTrust to vote upon
the Merger, such Registration Statement and all amendments or supplements
thereto, with respect to all information set forth therein furnished by
BancTrust relating to BancTrust and the BancTrust Subsidiaries, (i) shall comply
in all material respects with the applicable provisions of the Securities Laws,
and (ii) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
4.18 Employee Benefit Plans
(a) Appended as Schedule 4.18 hereto is a complete list of all stock
option, employee stock purchase and stock bonus plans, qualified pension or
profit-sharing plans, any deferred compensation, consultant, bonus or group
insurance contract and any other incentive, welfare and employee benefit plans
and agreements maintained for the benefit of employees or former employees of
BancTrust and/or the BancTrust Subsidiaries. BancTrust and the BancTrust
Subsidiaries shall make available to South Alabama full and complete copies of
all such plans and agreements, together with (i) the most recent actuarial and
financial reports prepared with respect to any qualified plans, (ii) the most
recent annual reports filed with any governmental agency, and (iii) all rulings
and determination letters and any open requests for rulings or letters that
pertain to any qualified plan.
(b) Neither BancTrust or any of the BancTrust Subsidiaries nor any pension
plan maintained by BancTrust or the BancTrust Subsidiaries and qualified under
Section 401 of the Code has incurred any material liability to the Pension
Benefit Guaranty Corporation or the Internal Revenue Service with respect to any
pension plan that BancTrust or the BancTrust Subsidiaries maintains for or with
respect to any of their employees and that is qualified under Section 401 of the
Code except liabilities to the Pension Benefit Guaranty Corporation pursuant to
Section 4007 of ERISA, all of which have been fully paid. To the Knowledge of
BancTrust, no reportable event under Section 4043(b) of ERISA has occurred with
respect to any such pension plan.
(c) Neither BancTrust nor any of the BancTrust Subsidiaries participates in
or has incurred any liability under Section 4201 of ERISA for a complete or
partial withdrawal from, a multiemployer plan (as such term is defined in
ERISA).
(d) A favorable determination letter has been issued by the Internal
Revenue Service with respect to each "employee pension plan" (as defined in
Section 3(2) of ERISA) of BancTrust and/or the BancTrust Subsidiaries that is
intended to qualify under Section 401 of the Code to the effect that such plan
is qualified under Section 401 of the Code and the trust associated with such
employee pension plan is tax exempt under Section 501 of the Code. To the
Knowledge of BancTrust, no such letter has been revoked or threatened to be
revoked, and BancTrust knows of no ground on which such revocation may be based.
Neither BancTrust nor any of the BancTrust Subsidiaries has any material
liability under any such plan that is not reflected on the balance sheet
included in the Financial Statements as of September 30, 2000.
(e) To the Knowledge of BancTrust, no prohibited transaction (which shall
mean any transaction prohibited by Section 406 of ERISA and not exempt under
Section 408 of ERISA or Section 4975 of the Code) has occurred with respect to
any employee benefit plan maintained by BancTrust or any of the BancTrust
Subsidiaries (i) that would result in the imposition, directly or indirectly, of
a material excise tax under Section 4975 of the Code, or (ii) the correction of
which would have a
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material adverse effect on the financial condition, results of operations,
business or prospects of BancTrust.
4.19 Certain Contracts
(a) Except as disclosed on Schedule 4.19 hereto, at the date hereof,
neither BancTrust nor any of the BancTrust Subsidiaries is a party to, is bound
or affected by, receives, or is obligated to pay, benefits under (i) any
material agreement, arrangement or commitment not made in the ordinary course of
business, including, without limitation, agreements or memoranda of
understanding with regulatory authorities, (ii) any agreement, indenture or
other instrument not made in the ordinary course of business relating to the
borrowing of money by BancTrust or the BancTrust Subsidiaries or the guarantee
by BancTrust or the BancTrust Subsidiaries of any such obligation, (iii) any
agreement, arrangement or commitment relating to the employment of a consultant
or the employment, election or retention in office of any present or former
director or officer, or (iv) any contract, agreement or understanding with a
labor union, in each case whether written or oral.
(b) Neither BancTrust nor any of the BancTrust Subsidiaries is in default,
which default would have a material adverse effect on BancTrust or the
transactions contemplated herein, under any agreement, commitment, arrangement,
lease, insurance policy, or other instrument whether entered into the ordinary
course of business or otherwise and whether written or oral, and there has not
occurred any event that, with the lapse of time or giving of notice or both,
would constitute such a default.
4.20 Brokers and Finders
Except for the retention of Sterne, Agee & Leach, Inc., Birmingham,
Alabama, as its financial advisor in connection with the Merger (the "BancTrust
Financial Advisor"), neither BancTrust nor any of the BancTrust Subsidiaries nor
any of their respective officers, directors or employees has (a) entered into
any agreement with any broker, finder or financial advisor relating to services
rendered or to be rendered to BancTrust in connection with the Merger or (b)
incurred any liability for any fees, commissions or other transaction-based
compensation in connection with the Merger (other than fees to attorneys,
auditors and similar professionals).
4.21 Insurance
Set forth on Schedule 4.21 is an accurate and complete list and a brief
description of all policies of insurance, including fidelity and bond insurance,
of BancTrust and the BancTrust Subsidiaries. Neither BancTrust nor any of the
BancTrust Subsidiaries is in default with respect to the provisions of any such
policy or has failed to give notice or to present any claim thereunder in a due
and timely fashion. All such policies (a) are sufficient for compliance by
BancTrust and the BancTrust Subsidiaries with all requirements of law and all
agreements to which BancTrust or any of the BancTrust Subsidiaries is a party,
(b) are valid, outstanding and enforceable and (c) will not terminate or lapse
prior to the Effective Time without similar policies being obtained that would
continue until the Effective Time.
4.22 No Repurchase Agreements
Except for agreements in the ordinary course of business, neither BancTrust
nor any of the BancTrust Subsidiaries is a party to any agreement pursuant to
which BancTrust or the BancTrust Subsidiaries has purchased securities subject
to an agreement to resell, any agreements pursuant to which BancTrust or the
BancTrust Subsidiaries has sold securities subject to an agreement to
repurchase, or any interest rate swap or other similar agreement.
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4.23 Loans
Each of the loans reflected in the Financial Statements of BancTrust as of
September 30, 2000, including unfunded portions of outstanding lines of credit
and loan commitments, was made in all material respects in accordance with
customary lending standards in the ordinary course of business, is evidenced in
all material respects by appropriate and sufficient documentation and, to the
Knowledge of BancTrust, in all material respects, constitutes the legal, valid
and binding obligation of the obligor named therein, subject to bankruptcy,
insolvency, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles. To
the Knowledge of BancTrust, neither the terms of any such loans nor any of the
loan documentation, nor the manner in which such loans have been administered
and serviced, violates, in a any material respect, any federal, state or local
statute, regulation or ordinance.
4.24 Properties
All real and personal property owned by BancTrust and the BancTrust
Subsidiaries or presently used by any of them in their respective business is in
an adequate condition (ordinary wear and tear excepted) and is sufficient to
carry on the business of BancTrust and the BancTrust Subsidiaries in the
ordinary course of business consistent with their past practices. BancTrust and
the BancTrust Subsidiaries have good and marketable title free and clear of all
liens, encumbrances, charges, defaults or equities (other than equities of
redemption under applicable foreclosure laws) to all of the material properties
and assets, real and personal, reflected on the statements of financial
condition included in the most recent audited Financial Statements of BancTrust
or acquired after such date, except (i) liens for current taxes not yet due and
payable, (ii) pledges to secure deposits and other liens incurred in the
ordinary course of its banking business, (iii) such imperfections of title,
easements and encumbrances, if any, as are not material in character, amount or
extent, (iv) dispositions and encumbrances for business and (v) as disclosed in
the Financial Statements of BancTrust. All material leases pursuant to which
BancTrust and the BancTrust Subsidiaries, as lessees, lease real or personal
property, are valid and enforceable in accordance with their respective terms.
4.25 Minute Books
The minute books of BancTrust and the BancTrust Subsidiaries contain
complete and accurate records of all meetings and other corporate actions held
or taken by their respective Boards of Directors (including committees of their
respective Boards of Directors) and shareholders.
4.26 Disclosures
None of the representations and warranties of BancTrust, or any of the
information or documents furnished or to be furnished by BancTrust or the
BancTrust Subsidiaries to South Alabama in connection with the execution and
delivery of this Agreement and the consummation of the Merger, is or will be
false or misleading in any material respect or contains or will contain any
untrue statement of a material fact. Except as set forth on Schedule 4.26 and
the other Schedules hereto, to the Knowledge of BancTrust, there is no fact that
could materially adversely affect the financial condition, results of operation,
business or prospects of BancTrust on a consolidated basis. To the Knowledge of
BancTrust, copies of all documents referred to in, and/or provided to South
Alabama pursuant to this Article IV are true, correct and complete copies
thereof and include all amendments, supplements and modifications thereto and
all waivers thereunder.
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ARTICLE V
COVENANTS
5.1 Shareholder Meeting(s)
(a) South Alabama and BancTrust shall take all action necessary to properly
call and convene meetings of their shareholders as soon as reasonably
practicable, including without limitation the preparation of proxy materials for
such meetings of shareholders. At both such meetings, this Agreement shall be
submitted for shareholder approval.
(b) Subject to compliance with the legal and fiduciary duties of such
directors, and subject further to the receipt by South Alabama and BancTrust of
opinions of the South Alabama Financial Advisor and the BancTrust Financial
Advisor (as defined in Section 5.2 hereof), dated on or immediately prior to the
date of mailing of the Prospectus/Joint Proxy Statement for the meetings of
South Alabama and BancTrust shareholders at which this Agreement will be
considered and voted upon and not subsequently withdrawn prior to such meeting
of shareholders, to the effect that the terms of this Agreement, including the
Exchange Ratio, are fair to such shareholders from a financial point of view,
the Boards of Directors of South Alabama and BancTrust shall recommend that
their respective shareholders approve this Agreement.
5.2 Prospectus/Joint Proxy Statement; Registration Statement
BancTrust and South Alabama shall cooperate in the timely preparation and
filing of the Registration Statement with the Commission, and South Alabama
shall use its best efforts to cause such Registration Statement to be declared
effective under the Securities Act, which Registration Statement, at the time it
becomes effective, and at the Effective Time, shall in all material respects
conform to the requirements of the Securities Act and the general rules and
regulations of the Commission thereunder. The Registration Statement shall
include the form of Prospectus/Joint Proxy Statement for the meetings of
shareholders of each of BancTrust and South Alabama to be held for the purpose
of having such shareholders vote upon approval of this Agreement. BancTrust and
South Alabama shall cause the Prospectus/Joint Proxy Statement to be mailed to
their shareholders. BancTrust shall furnish to South Alabama the information
required to be included in the Registration Statement and any amendments thereto
with respect to its business and affairs before it is filed with the Commission
and again before any amendment is filed, and shall have the right to review and
comment on the form of Prospectus/Joint Proxy Statement included in the
Registration Statement and any amendments thereto prior to their filing with the
Commission. South Alabama shall take all actions required to qualify or obtain
exemptions from such qualification for the Surviving Corporation Common Stock to
be issued in connection with the Merger, under applicable state "Blue Sky" laws,
as appropriate.
5.3 Applications
(a) As promptly as practicable after the date hereof, South Alabama shall
submit applications for prior approval of the transactions contemplated herein
to each federal, state or local government agency, department or body the
approval of which is required for consummation of the Merger. BancTrust shall
have the right to review and comment on the portions of such applications and
amendments that relate directly to it prior to their filing with any regulatory
agencies, and South Alabama promptly shall furnish BancTrust with copies after
filing of applications with these or any other regulatory agencies. The parties
to this Agreement represent and warrant to each other that all information
concerning them and their directors, officers and shareholders included (or
submitted for inclusion) in any such application shall be true, correct and
complete in all material respects.
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(b) South Alabama shall use all reasonable efforts to cause the shares of
Surviving Corporation Common Stock to be issued in the Merger to be approved for
listing on the Nasdaq National Market.
5.4 Best Efforts
BancTrust and South Alabama shall each use its best efforts in good faith
to (i) furnish such information as may be required in connection with and
otherwise cooperate in the preparation and filing of the documents referred to
in Sections 5.2 and 5.3 above, and (ii) take or cause to be taken all action
necessary or desirable on its part so as to permit consummation of the Merger at
the earliest practicable date. Neither BancTrust nor South Alabama shall take,
or cause or to the best of its ability permit to be taken, any action that would
substantially delay or impair the prospects of completing the Merger pursuant to
this Agreement.
5.5 Investigation and Confidentiality
(a) South Alabama and BancTrust will keep each other advised of all
material developments relevant to their respective business and to consummation
of the Merger, including any material adverse change or material development
that is likely adversely to affect consummation of the Merger. South Alabama and
BancTrust each may make or cause to be made such investigation of the financial
and legal condition of the other as such party reasonably deems necessary or
advisable in connection with the Merger; provided, however, that such
investigation shall be reasonably related to the Merger, shall not interfere
unnecessarily with normal operations, and shall be conducted and completed on as
prompt a basis as shall be reasonably possible under the circumstances and, in
any event, shall be completed prior to March 1, 2001. BancTrust and South
Alabama agree to furnish the other and the other's representatives with such
financial data and other information with respect to its business and properties
as such other party or its representatives shall from time to time reasonably
request. Each party hereto shall, and shall cause its directors, officers,
attorneys, and advisors to, maintain the confidentiality of all information
obtained which is not otherwise publicly disclosed by the other party, said
undertaking with respect to confidentiality to survive any termination of this
Agreement pursuant to Section 7.1 hereof. In the event that the Merger is not
consummated, each party, and its officers and representatives, shall return to
the other party all such non-public information and all copies thereof whether
in written or other tangible form.
(b) In the event BancTrust or South Alabama becomes aware, as a result of
an investigation pursuant to Section 5.5(a) above, of a breach of any
representation or warranty made by the other party, which represents, or is
reasonably likely to represent, a material breach of any representation or
warranty of the other party or is reasonably likely to have a material adverse
effect on the Surviving Corporation, BancTrust or South Alabama shall give the
party committing the breach written notice of such breach not later than 30 days
after discovery thereof. No investigation pursuant to Section 5.5(a) above or
notice of a breach hereunder by South Alabama or BancTrust shall affect the
termination rights of such party under Section 7.1 of this Agreement or the
representations and warranties of the other party, and subject to Section 7.3 of
this Agreement, each such representation and warranty shall survive any such
investigation and notice.
5.6 Disclosure Supplements
From time to time prior to the Effective Time, South Alabama and BancTrust
shall promptly (i) furnish each other copies of all Financial Statements as and
when they become available, and (ii) supplement or amend any materials disclosed
and delivered to the other party pursuant to this Agreement with respect to any
matter hereafter arising that, if existing, occurring or known at the date of
this
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Agreement, would have been required to be set forth or described in materials
disclosed herein or on schedules hereto or that is necessary to correct any
untrue representation or warranty or information in such materials that has been
rendered materially inaccurate thereby. No supplement or amendment to such
materials shall have any effect for the purpose of determining satisfaction of
the conditions set forth in Article VI or compliance with the covenants set
forth in Section 5.8 hereof.
5.7 Press Releases
BancTrust and South Alabama shall agree with each other as to the form and
substance of any press release related to this Agreement or the transactions
contemplated hereby and thereby, and consult with each other as to the form and
substance of other public disclosures related thereto; provided, however, that
nothing contained herein shall prohibit either party, following notification to
the other party, from making any disclosure that its counsel deems necessary.
5.8 Forbearance of South Alabama and BancTrust
Except with the prior written consent of the other party, which consent
shall not be unreasonably withheld, or as expressly contemplated herein, between
the date hereof and the Effective Time, neither BancTrust nor South Alabama
shall:
(a) carry on its business other than in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted or
established (including the acquisition of capital assets exceeding $100,000
in amount, either individually or in the aggregate, or in the case of
related acquisitions, except in connection with realizing on collateral),
or acquire any new subsidiary or cause to permit any subsidiary to engage
in any new activity or materially expand any existing activities;
(b) declare, set aside, make or pay any dividend or other distribution
in respect of its capital stock except for the payment of its regular
dividend;
(c) issue, sell or otherwise dispose of any shares of its capital
stock, except pursuant to the exercise of currently outstanding options;
(d) purchase, redeem, retire or otherwise acquire or hypothecate,
pledge or otherwise encumber any shares of its capital stock;
(e) issue, grant or authorize any Rights or effect any
recapitalization, reclassification, stock dividend, stock split or like
change in capitalization;
(f) except as set forth on Schedule 5.8(f) hereto, purchase or
otherwise acquire, or sell, encumber, or otherwise dispose of, any assets
or incur any liabilities other than in the ordinary course of business
consistent with past practices and policies.
(g) except as set forth on Schedule 5.8(g) hereto, engage in any
transaction or agreement with any officer, director or greater than 5%
shareholder or any affiliate of any such officer, director or shareholder;
(h) amend its Articles of Incorporation or Bylaws or equivalent
documents; impose, or suffer the imposition, on any share of stock held by
South Alabama or BancTrust of any material lien, charge or encumbrance or
permit any such lien to exist; or waive or release any material right or
cancel or comprise any material debt or claim other than in the ordinary
course of its business;
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(i) fail to comply in any material respect with any laws, regulations,
ordinances, or governmental actions applicable to it and to the conduct of
its business except where South Alabama or BancTrust is in good faith
contesting the validity of any of the foregoing; or where the failure to so
comply will not have a material adverse effect on the financial condition,
results of operations, business or prospects of South Alabama or BancTrust;
(j) enter into or substantially modify (except as may be required by
applicable law) any pension, retirement, stock option, stock purchase,
stock appreciation right, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit, incentive or
welfare contract, plan or arrangement, or any trust agreement related
thereto, in respect of any of its directors, officers or other employees,
or, except as required by applicable law or regulation, renew, amend or
modify any such arrangement or plan now in existence;
(k) solicit or encourage inquiries or proposals with respect to,
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, South
Alabama or BancTrust or any business combination with South Alabama or
BancTrust other than as contemplated by this Agreement (except as may be
required if the directors of South Alabama or BancTrust receive reasoned
advice of their legal counsel based on which such directors conclude that
the failure to furnish such information or participate in such negotiations
or discussions would constitute a breach of the directors' fiduciary or
legal obligations); or authorize or permit any officer, director, agent or
affiliate of it to do any of the above; or fail to notify the other party
immediately if any such inquiries or proposals are received by, any such
information is required from, or any such negotiations or discussions are
sought to be initiated with, South Alabama or BancTrust (South Alabama or
BancTrust shall provide the other party with reasonable detail as to the
identity of any person or entity from whom such inquiries or proposals are
received and the terms of the transaction discussed or proposed);
(l) enter into (i) any material agreement, arrangement or commitment
not made in the ordinary course of business, other than agreements or
memoranda of understanding with regulatory authorities, (ii) any agreement,
indenture or other instrument relating to the borrowing of money by South
Alabama or BancTrust or guarantee by South Alabama or BancTrust of any such
obligation, except in the ordinary course of business consistent with past
practice and except for drawing on currently existing lines of credit,
(iii) any agreement, arrangement or commitment relating to the employment
of, or severance of, a consultant or the employment, severance, election or
retention in office of any present or former director, officer or employee,
or (iv) any contract, agreement or understanding with a labor union;
(m) change its lending, investment or asset liability management
policies in any material respect except as may be required by applicable
law;
(n) change its method of accounting in effect at December 31, 1999,
except as required by changes in regulation or generally accepted
accounting principles concurred in by its independent certified public
accountants, or change any of its methods of reporting income and
deductions for federal income tax purposes from those employed in the
preparation of its federal income tax returns for the year ended December
31, 1999, except as required by changes in law or regulation;
(o) agree to do any of the foregoing; or
(p) permit any of its Subsidiaries to agree to take or authorize any
of the foregoing actions.
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5.9 Affiliates
After execution of this Agreement, South Alabama and BancTrust shall
cooperate and use their best efforts to identify those persons who may be deemed
to be "affiliates" of South Alabama and BancTrust within the meaning of Rule 405
under the Securities Act. Each party shall use its respective best efforts to
cause to be delivered to the other from each person so identified not later than
thirty (30) days prior to the Closing Date, a written letter agreement, in the
forms as set forth in Exhibits F and G hereto, regarding restrictions on resale
of shares of South Alabama, BancTrust and Surviving Corporation Common Stock, to
ensure compliance with applicable restrictions imposed under the federal
securities laws and generally accepted accounting principles for pooling of
interests accounting treatment, and prior to the Effective Time each of the
parties shall use its best efforts to secure such written letter agreement from
any other person who becomes an affiliate of it. Neither party shall take any
action which would prevent the Merger and the other transactions contemplated
hereby from (A) qualifying for accounting treatment as a pooling of interests or
(B) qualifying as a reorganization within the meaning of Section 368 of the
Internal Revenue Code, provided that nothing hereunder shall limit the ability
of either party to exercise its rights under the Stock Option Agreement.
5.10 Employee Benefits
BancTrust and South Alabama agree that as to employee benefit plans as
defined in ERISA ("Benefit Plans") of BancTrust and the BancTrust Subsidiaries
(the "BancTrust Benefit Plans") and South Alabama and the South Alabama
Subsidiaries (the "South Alabama Benefit Plans"), the parties shall negotiate in
good faith to formulate prior to the Effective Time, or within a reasonable time
thereafter, Benefit Plans for the Surviving Corporation and its Subsidiaries,
with respect to employees who were covered by the BancTrust Benefit Plans and
the South Alabama Benefit Plans, that provide benefits for services after the
Effective Time on a basis that does not discriminate between employees who were
covered by the BancTrust Benefit Plans and employees who were covered by the
South Alabama Benefit Plans.
5.11 Stock Option Agreements
As of the date hereof, South Alabama has executed and delivered to
BancTrust the South Alabama Stock Option Agreement annexed hereto as Exhibit A
and BancTrust has executed and delivered to South Alabama the BancTrust Stock
Option Agreement annexed hereto as Exhibit B.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent -- All Parties
The respective obligations of the parties to this Agreement to effect the
Merger shall be subject to satisfaction or waiver of the following conditions at
or prior to the Closing Date:
(a) All corporate action necessary to authorize the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby, including without limitation the approval of this
Agreement by the requisite vote by the shareholders of South Alabama and
BancTrust, shall have been duly and validly taken.
(b) All approvals of the transactions contemplated hereby from any
state or federal government agency, department or body, the approval of
which is required for the consummation of the Merger, shall have been
received (subject to no conditions that in the reasonable judgment of
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BancTrust and South Alabama would have a material adverse effect on the
condition (financial or other), business operations, assets or prospects
of, or would materially impair the value of, BancTrust or South Alabama),
all notice periods and waiting periods required after the granting of any
such approvals shall have passed and all such approvals shall be in effect,
and at the Closing Date neither BancTrust nor South Alabama shall be
subject to any regulatory or supervisory cease and desist order, agreement,
written directive, memorandum of understanding or written commitment.
(c) The Registration Statement (including any post-effective
amendments thereto) shall be effective under the Securities Act, and South
Alabama shall have received all state securities or "Blue Sky" permits or
other authorizations, or confirmations as to the availability of an
exemption from registration requirements as may be necessary for
consummation of the Merger, and no proceedings shall be pending or to the
knowledge of South Alabama threatened by the Commission or any state "Blue
Sky" securities administration to suspend the effectiveness of such
Registration Statement or any state permit or authorization.
(d) Neither BancTrust nor South Alabama shall be subject to any order,
decree or injunction of a court or agency of competent jurisdiction that
enjoins or prohibits consummation of the Merger.
(e) BancTrust and South Alabama shall have received an opinion of Hand
Arendall, L.L.C., Mobile, Alabama, dated as of the Closing Date, subject to
customary qualifications and assumptions and reliance on certificates of
executive officers of South Alabama and BancTrust to the effect that, for
federal income tax purposes:
(i) The Merger will qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code;
(ii) No gain or loss will be recognized by BancTrust or South
Alabama by reason of the Merger;
(iii) No gain or loss will be recognized by any shareholder of
BancTrust to the extent that such shareholder exchanges his or her
shares of BancTrust Common Stock solely for shares of Surviving
Corporation Common Stock in the Merger;
(iv) The basis of the Surviving Corporation Common Stock received
by a shareholder of BancTrust who exchanges BancTrust Common Stock
solely for Surviving Corporation Common Stock in the Merger will be
the same as the basis of the BancTrust Common Stock surrendered in
exchange therefor (subject to any adjustments required as the result
of receipt of cash in lieu of a fractional share of Surviving
Corporation Common Stock);
(v) The holding period of the Surviving Corporation Common Stock
received by a shareholder of BancTrust in the Merger will include the
holding period of the BancTrust Common Stock surrendered in exchange
therefor (provided that such shares of BancTrust Common Stock were
held as a capital asset by such shareholder at the Effective Time);
and
(vi) Cash received by a BancTrust shareholder in lieu of a
fractional share interest of Surviving Corporation Common Stock as
part of the Merger will be treated as having been received as a
distribution in full payment in exchange for the fractional share
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interest of Surviving Corporation Common Stock that such shareholder
would otherwise be entitled to receive.
(f) South Alabama and BancTrust shall have received the written
agreements from "affiliates" of BancTrust and South Alabama as specified in
Section 5.9 hereof.
(g) To the extent that any material contract, arrangement or lease to
which BancTrust or any of the BancTrust Subsidiaries, on the one hand, or
South Alabama or any of the South Alabama Subsidiaries, on the other hand,
is a party shall require the consent of any other person to the Merger,
such consent shall be obtained.
(h) The holders of not more than 10% of the South Alabama Common Stock
or 10% of the BancTrust Common Stock outstanding immediately prior to the
Closing Date shall not have filed with South Alabama or BancTrust,
respectively, proper demand for appraisal of and payment for their shares
pursuant to applicable law, unless such demands have been duly withdrawn.
(i) The shares of Surviving Corporation Common Stock to be issued in
the Merger shall have been approved for listing on the Nasdaq SmallCap
Market or the Nasdaq National Market, subject to official notice of
issuance.
(j) South Alabama and BancTrust shall have received an opinion from
Pricewaterhouse Coopers LLP to the effect that the Merger shall qualify for
accounting treatment as a pooling of interests.
6.2 Conditions Precedent -- South Alabama
The obligations of South Alabama to effect the Merger shall be subject to
satisfaction of the following additional conditions at or prior to the Closing
Date, unless waived by South Alabama pursuant to Section 7.4 hereof:
(a) South Alabama shall have completed to its satisfaction its due
diligence investigation of BancTrust pursuant to Section 5.5(a) hereof, and
the Board of Directors of South Alabama shall not have made a formal
determination prior to March 1, 2001, that, in its best judgment, based on
the results of such due diligence review, consummation of the Merger
pursuant to the terms of this Agreement would be materially adverse to the
economic interests of South Alabama's shareholders.
(b) The representations and warranties of BancTrust set forth in
Article IV hereof shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date (or on the date when made in the case of any
representation and warranty that specifically relates to an earlier date),
except as otherwise contemplated by this Agreement and except for changes,
none of which individually or in the aggregate has materially and adversely
affected the condition (financial or other), business operations, assets or
prospects of BancTrust.
(c) BancTrust shall have in all material respects performed all
material obligations and complied with all material covenants required to
be performed by it on or prior to the Closing Date.
(d) Between the date of this Agreement and the Effective Time, there
shall not have been any material adverse change in the financial condition,
results of operations, assets, properties, businesses or operations of
BancTrust and the BancTrust Subsidiaries taken as a whole, other than
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any such change attributable to or resulting from any change in general
economic conditions, law, regulation or generally accepted accounting
principles that impair both BancTrust and South Alabama in a substantially
similar manner.
(e) BancTrust shall have delivered to South Alabama certificates,
dated as of the Closing Date and signed by its Chairman, to the effect that
the conditions set forth in Sections 6.1(a), 6.1(d), 6.1(g), 6.2(c) and
6.2(e), to the extent applicable to BancTrust, have been satisfied.
(f) South Alabama shall have received an opinion from Gamble, Gamble &
Calame, L.L.C., Selma, Alabama, dated as of the Closing Date, covering the
matters set forth in Exhibit H hereto. Such opinion may rely upon an
opinion from Kutak Rock LLP, Washington, D.C., as to matters of federal
law.
(g) South Alabama shall have received an opinion from the South
Alabama Financial Advisor, dated on or immediately prior to the date of the
mailing of the Prospectus/Joint Proxy Statement, and not subsequently
withdrawn at or prior to the Closing Date, to the effect that the terms of
this Agreement, including the Exchange Ratio, are fair to South Alabama's
shareholders from a financial point of view.
6.3 Conditions Precedent -- BancTrust
The obligations of BancTrust to effect the Merger shall be subject to
satisfaction of the following additional conditions at or prior to the Closing
Date, unless waived by BancTrust pursuant to Section 7.4 hereof:
(a) BancTrust shall have completed to its satisfaction its due
diligence investigation of South Alabama pursuant to Section 5.5(a) hereof,
and the Board of Directors of BancTrust shall not have made a formal
determination prior to March 1, 2001, that, in its best judgment, based on
the results of such due diligence review, consummation of the Merger
pursuant to the terms of this Agreement would be materially adverse to the
economic interests of BancTrust's shareholders.
(b) The representations and warranties of South Alabama set forth in
Article III hereof shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date (or on the date when made in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Agreement and except for changes,
none of which individually or in the aggregate has materially and adversely
affected the condition (financial or other), business operations, assets or
prospects of South Alabama.
(c) South Alabama shall have in all material respects performed all
material obligations and complied with all material covenants required to
be performed by it on or prior to the Closing Date.
(d) Between the date of this Agreement and the Effective Time, there
shall not have been any material adverse change in the financial condition,
results of operations, assets, properties, businesses or operations of
South Alabama and the South Alabama Subsidiaries taken as a whole, other
than any such change attributable to or resulting from any change in
general economic conditions, law, regulation or generally accepted
accounting principles that impair both BancTrust and South Alabama in a
substantially similar manner.
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(e) South Alabama shall have delivered to BancTrust a certificate,
dated as of the Closing Date and signed by its President, to the effect
that the conditions set forth in Sections 6.1(a), 6.1(d), 6.1(g), 6.3(b),
6.3(c) and 6.3(e), to the extent applicable to South Alabama, have been
satisfied.
(f) BancTrust shall have received an opinion from Hand Arendall,
L.L.C., Mobile, Alabama, dated as of the Closing Date, covering the matters
set forth in Exhibit I hereto.
(g) BancTrust shall have received an opinion from the BancTrust
Financial Advisor, dated on or immediately prior to the date of the mailing
of the Prospectus/Joint Proxy Statement, and not subsequently withdrawn at
or prior to the Closing Date, to the effect that the terms of this
Agreement, including the Exchange Ratio, are fair to BancTrust's
shareholders from a financial point of view.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination
This Agreement may be terminated by action of the Board of Directors of the
applicable party or parties:
(a) at any time on or prior to the Closing Date, by the mutual consent
in writing of the parties hereto;
(b) at any time on or prior to the Closing Date, by BancTrust in
writing if South Alabama has, or by South Alabama in writing if BancTrust
has, in any material respect, breached (i) any covenant or undertaking
contained herein, or (ii) any representation or warranty contained herein,
which breach materially and adversely affects the financial condition,
results of operations, business or prospects of South Alabama or BancTrust,
in any case if such breach has not been cured by the earlier of 30 days
after the date on which written notice of such breach is given to the party
committing such breach (which notice must be given not later than 30 days
after discovery of such breach) or the Closing Date;
(c) on the Closing Date, by either BancTrust or South Alabama in
writing, if any of the conditions precedent to the obligations of such
party to consummate the transactions contemplated hereby have not been
satisfied or fulfilled, provided that the terminating party is not then in
material breach hereunder;
(d) at any time, by either BancTrust or South Alabama in writing, if
any of the applications for prior approval referred to in Section 5.4
hereof are denied or are approved contingent upon the satisfaction of any
condition or requirement that, in the reasonable opinion of BancTrust or
South Alabama, would so materially adversely affect the business or
economic benefits of the Merger as to render consummation of the Merger
inadvisable or unduly burdensome, and the time period for appeals and
requests for reconsideration has run;
(e) at any time, by either BancTrust or South Alabama in writing, if
the shareholders of South Alabama or BancTrust do not approve this
Agreement by a vote taken thereon at a meeting duly called for such
purpose;
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(f) by either BancTrust or South Alabama in writing, if the Closing
Date has not occurred within nine (9) months from the date of this
Agreement; provided that this right to terminate shall not be available to
any party whose failure to perform an obligation under this Agreement has
been the cause of, or resulted in, the failure of the Merger to be
consummated within such nine-month period; and
(g) at any time, by either BancTrust or South Alabama in writing, if
it determines in good faith that any condition precedent to its obligations
to consummate the transactions contemplated hereby are or would be
impossible to satisfy.
7.2 Effect of Termination
In the event this Agreement is terminated pursuant to Section 7.1 hereof,
this Agreement shall become void and have no effect, except that (a) the
provisions relating to confidentiality and expenses set forth in Sections 5.6
and 8.1, respectively, shall survive any such termination and (b) a termination
pursuant to Section 7.l(c) shall not relieve the breaching party from liability
for an uncured willful breach of the covenant, undertaking, representation or
warranty giving rise to such termination.
7.3 Termination of Representations, Warranties and Covenants
All representations, warranties and covenants in this Agreement or in any
instrument delivered pursuant hereto or thereto, including any rights arising
out of the breach of such representations, warranties and covenants, shall
expire on, and be terminated and extinguished at, the Effective Time other than
covenants that by their terms are to be performed after the Effective Time,
provided that no such representations, warranties or covenants shall be deemed
to be terminated or extinguished so as to deprive BancTrust or South Alabama (or
any director, officer or controlling person thereof) of any defense at law or in
equity which otherwise would be available against the claims of any person,
including, without limitation, any shareholder or former shareholder of either
BancTrust or South Alabama, the aforesaid representations, warranties and
covenants being material inducements to consummation by the parties hereto of
the transactions contemplated herein.
7.4 Waiver
Each party hereto, by written instrument signed by an executive officer of
such party, may at any time (whether before or after approval of this Agreement
by the shareholders of South Alabama and BancTrust) extend the time for the
performance of any of the obligations or other acts of the other party hereto
and may waive (i) any inaccuracies of the other party in the representations or
warranties contained in this Agreement or any other document delivered pursuant
hereto, (ii) compliance with any of the covenants, undertakings or agreements of
the other party, or satisfaction of any of the conditions precedent to its
obligations or (iii) the performance by the other party of any of its
obligations set out herein or therein; provided, however, that no such waiver or
amendment or supplement pursuant to Section 7.5 hereof executed after approval
of this Agreement by the shareholders of BancTrust shall reduce, without the
requisite approval of the shareholders of BancTrust, either the number of shares
of Surviving Corporation Common Stock into which each share of BancTrust Common
Stock shall be converted in the Merger or the payment terms for fractional
interests. Nothing in this Section 7.4 will permit any party to waive any
required regulatory approvals or other conditions that, if not satisfied, would
result in the violation of any law or applicable governmental regulation.
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7.5 Amendment or Supplement
This Agreement may be amended or supplemented at any time by mutual
agreement of the parties hereto, subject to the proviso to Section 7.4 hereof.
Any such amendment or supplement must be in writing and approved by the
respective Boards of Directors of the parties hereto.
ARTICLE VIII
CERTAIN POST-MERGER AGREEMENTS
8.1 Registration of Stock Underlying BancTrust Stock Options
In order to permit the exercise of options to purchase Surviving
Corporation Common Stock which were originally granted under the BancTrust
Option Plans and are to be substituted and assumed by the Surviving Corporation,
at and after the Effective Time, South Alabama shall take all such actions as
may be necessary or appropriate in order to carry out fully the provisions of
Section 2.9 hereof.
8.2 Reports to the Commission
Subject to Section 8.6 herein, the Surviving Corporation shall continue to
file all reports and data with the Commission necessary to permit shareholders
of BancTrust and South Alabama who may be deemed affiliates of BancTrust or
South Alabama within the meaning of Rule 405 under the Securities Act to sell
Surviving Corporation Common Stock held or received by them in connection with
the Merger pursuant to Rules 144 and 145 under such Act if they would otherwise
be so entitled. After the Effective Time, the Surviving Corporation will file
with the Commission all reports, statements and other materials required by the
federal securities laws on a timely basis.
8.3 Insurance
For a period of six (6) years from and after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by BancTrust
and the BancTrust Subsidiaries (provided that the Surviving Corporation may
substitute therefor policies from financially capable insurers of at least the
same coverage and amounts containing terms and conditions which are
substantially no less advantageous, or in the event such coverage is provided
through the Surviving Corporation's insurer it may be on terms and conditions
(other than coverage and amounts) consistent with the Surviving Corporation's
coverage) with respect to claims arising from facts or events which occurred
before the Effective Time. Following consummation of the Merger, the directors
and officers of South Alabama and the South Alabama Subsidiaries shall be
covered by the directors' and officers' liability insurance maintained by the
Surviving Corporation and its Subsidiaries.
8.4 Directors and Initial Executive Officers of Surviving Corporation
(a) At the Effective Time, the Initial Directors of the Surviving
Corporation shall be fixed at twenty-four (24) directors, one-half of whom shall
be selected by the Board of Directors of BancTrust and one-half of whom shall be
selected by the Board of Directors of South Alabama, in each case prior to the
Effective Time. As soon as practicable, the Boards of Directors of BancTrust and
South Alabama shall each select those persons it is to select who are to serve
on the Board of Directors of the Surviving Corporation. South Alabama and its
Board of Directors shall take all necessary corporate action prior to the
Effective Time to effectuate this agreement of the parties including the
election of the designated persons as directors of the Surviving Corporation,
effective at the Effective Time.
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(b) At the Effective Time, the initial executive officers of the Surviving
Corporation shall be Richard P. Morthland, Chairman of the Board and Co-Chief
Executive Officer; W. Bibb Lamar, Jr., President and Co-Chief Executive Officer;
Elam P. Holley, Jr., Vice-Chairman of the Board of Directors and Chief Operating
Officer; and J. Stephen Nelson, Vice-Chairman of the Board of Directors and
Chairman of the Executive Committee (collectively, the "Initial Executive
Officers"). The Board of Directors of the Surviving Corporation may appoint such
additional executive officers as it may deem appropriate.
(c) It is currently anticipated that two years subsequent to the Effective
Time, Richard P. Morthland shall continue as Chairman of the Board of Directors
of the Surviving Corporation and W. Bibb Lamar, Jr. shall assume the sole
responsibilities of President and Chief Executive Officer of the Surviving
Corporation.
8.5 Agreement for Continuing Directors and Actions of Surviving Corporation
(a) It is the intention of BancTrust and South Alabama, and their
respective Boards of Directors, that until at least the second anniversary of
the Effective Time, the Board of Directors of the Surviving Corporation shall
consist of an equal number of persons serving on or representing the Boards of
Directors of BancTrust and South Alabama, respectively, prior to the Effective
Time. In this regard, if any Initial Director (or successor thereto) does not
continue to serve as a director of the Surviving Corporation for any reason
whatsoever during such two-year period (a "Departing Director"), his/her
successor will be the person recommended (i) in the case of a Departing Director
who either was a director of BancTrust prior to the Effective Time or was a
successor to such a director, by the majority of remaining directors of the
Surviving Corporation who prior to the Effective Time served as directors of
BancTrust and, if applicable, any successors to those BancTrust directors, or
(ii) in the case of a Departing Director who either was a director of South
Alabama prior to the Effective Time or was a successor to such a director, by
the majority of remaining directors of the Surviving Corporation who prior to
the Effective Time served as directors of South Alabama and, if applicable, any
successors to those directors. South Alabama and the Surviving Corporation shall
take all necessary corporate action, whether prior or subsequent to the
Effective Time, to effectuate this agreement of the parties. After the Effective
Time, the Surviving Corporation's Board of Directors will nominate, support the
solicitation of proxies in favor of, and otherwise actively use its best efforts
to secure the election of directors on a basis consistent with the foregoing, it
being understood and agreed that the election of directors shall be subject to a
vote of the shareholders of the Surviving Corporation.
(b) For a period of two (2) years following the Effective Time, a vote of
two-thirds (2/3) of the entire Board of Directors of the Surviving Corporation
shall be necessary to approve (i) any amendment to the Articles of Incorporation
or Bylaws of the Surviving Corporation, (ii) any merger, acquisition, sale of
substantially all of its assets or other extraordinary corporate transaction
involving the Surviving Corporation or any significant financial institution
subsidiary of the Surviving Corporation, or (iii) the dismissal or replacement
of any of the Initial Executive Officers. South Alabama and the Surviving
Corporation shall take all necessary corporate action, whether prior or
subsequent to the Effective Time, to effectuate this agreement of the parties.
Notwithstanding anything to the contrary herein, amendment to the Articles of
Incorporation or Bylaws of the Surviving Corporation specifically provided for
or contemplated in this Agreement shall require the vote of directors as set
forth in the Surviving Corporation's Articles of Incorporation or Bylaws.
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8.6 Other Agreements for Continuing Corporate Governance
BancTrust and South Alabama, their respective Boards of Directors, and the
Surviving Corporation's Board of Directors agree to take all corporate action,
whether prior or subsequent to the Effective Time, to effectuate the following
actions:
(a) For a period of at least two (2) years following the Effective Time,
the Board of Directors of the Surviving Corporation shall have an Executive
Committee of not less than eight (8) persons and such other committees as the
Board shall establish in accordance with the ABCA and the Surviving
Corporation's Articles of Incorporation and Bylaws. The number of persons to
serve on the Executive Committee shall be set at ten (10) persons as of the
Effective Time. The initial members of the Executive Committee shall be: J.
Stephen Nelson (Chairman), W. Bibb Lamar, Jr., Richard P. Morthland, Elam P.
Holley, Jr., three (3) directors to be chosen by BancTrust prior to the
Effective Time, and three (3) directors to be chosen by South Alabama prior to
the Effective Time. In no event shall more than four (4) members of the
Executive Committee be employees of BancTrust, South Alabama, the Surviving
Corporation and their respective Subsidiaries. The Executive Committee shall act
by majority vote to carry out the policies, plans, practices and directions
previously approved by the Board of Directors and to otherwise enable the
Surviving Corporation to conduct its business in the normal and regular course
consistent with the Surviving Corporation's current policies, plans, practices
and directions. The Executive Committee shall be responsible for setting
compensation for senior executive officers, budgeting, strategic planning and
the resolution of any dispute between the Surviving Corporation's Co-Chief
Executive Officers.
(b) For a period of at least two (2) years following the Effective Time,
the Executive Committee shall consist of an even number of members, one-half
(1/2) of which shall consist of directors who served as directors of BancTrust
prior to the Effective Time (or their successors) and one-half (1/2) shall
consist of directors who served as directors of South Alabama prior to the
Effective Time (or their successors).
(c) Prior to the Effective Time, BancTrust and South Alabama shall
reasonably agree as to the initial members of each other committee of the Board
of Directors of the Surviving Corporation. Each of such committees shall have at
the Effective Time and for two (2) years thereafter at least one member who
served as a director of BancTrust prior to the Effective Time (or their
successors) and at least one member who served as a director of South Alabama
prior to the Effective Time (or their successors).
(d) All South Alabama Subsidiaries that are commercial banks shall be
merged with and into Peoples Bank, Selma, Alabama, with Peoples Bank as the
surviving corporation, as soon as practicable after the Effective Time, taking
into account required regulatory approvals, operational issues, and other
relevant factors.
8.7 Survival of Certain Post-Merger Agreements
Those provisions of Section 8.5 and 8.6 hereof intended to survive the
Effective Time shall survive and remain in effect until the anniversary dates of
the Effective Date set forth therein, terminating thereafter; provided, however,
that prior to such anniversary dates, such post-merger agreements may be amended
by a vote of two-thirds (2/3) of the entire Board of Directors of the Surviving
Corporation.
8.8 Publication of Combined Results
The Surviving Corporation shall publish financial results of combined
operations of South Alabama and BancTrust, as contemplated by and in accordance
with the terms of Commission
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Accounting Series Release Nos. 130 and 135, no later than forty-five (45)
days after the end of the first fiscal quarter of the Surviving Corporation
containing the required period of post-Merger combined operations.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses
Each party hereto shall be responsible for all costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated hereby,
except that the costs of printing and mailing the Prospectus/Joint Proxy
Statement shall be shared equally by the parties. If either BancTrust or South
Alabama willfully breaches its obligations under this Agreement, or willfully
fails to satisfy a condition precedent to the closing of the Merger, such party
shall be liable to the other for all of its out-of-pocket expenses, in addition
to all other rights and remedies such other party may have.
9.2 Entire Agreement
This Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other than
documents referred to herein or therein. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and thereto and their respective successors. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto and thereto, and their respective successors, any rights,
remedies, obligations or liabilities.
9.3 No Assignment
Neither of the parties hereto may assign any of its rights or obligations
under this Agreement to any other person.
9.4 Notices
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
overnight express or by registered or certified mail, postage prepaid, addressed
as follows:
If to BancTrust:
The Peoples BancTrust Company, Inc.
310 Broad Street
Selma, Alabama 36701
Attention: Richard P. Morthland, Chairman of the Board
With copies to:
Gamble, Gamble & Calame, L.L.C.
807 Selma Avenue
Selma, Alabama 36701
Attention: Harry W. Gamble, Jr., Esq.
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and:
Kutak Rock LLP
1101 Connecticut Avenue, N.W., Suite 1000
Washington, D.C. 20036
Attention: Edward B. Crosland, Jr., Esq.
If to South Alabama:
South Alabama Bancorporation, Inc.
P.O. Box 3067 (36652)
100 St. Joseph Street
Mobile, Alabama 36602
Attention: W. Bibb Lamar, Jr., President
With a copy to:
Hand Arendall, L.L.C.
P.O. Box 123 (36601)
3000 AmSouth Building
107 St. Francis Street
Mobile, Alabama 36602
Attention: R. Preston Bolt, Jr., Esq.
9.5 Captions
The captions contained in this Agreement are for reference purposes only
and are not part of this Agreement.
9.6 Counterparts
This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original instrument, and all such counterparts together
shall constitute one agreement.
9.7 Governing Law
This Agreement shall be construed and interpreted in accordance with the
laws of the State of Alabama applicable to agreements made and entirely to be
performed within such jurisdiction.
9.8 Severability
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to the unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
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9.9 Enforcement of Agreement
The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement was not performed in accordance
with its specific terms or was otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers and their corporate
seals to be hereunto affixed and attested by their officers thereunto duly
authorized, all as of the day and year first above written.
Attest: THE PEOPLES BANCTRUST COMPANY, INC.
/s/ M. Scott Patterson By: /s/ Richard P. Morthland
------------------------------- ---------------------------------
Richard P. Morthland, Chairman
Attest: SOUTH ALABAMA BANCORPORATION, INC.
/s/ F. Michael Johnson By: /s/ W. Bibb Lamar, Jr.
------------------------------- ---------------------------------
W. Bibb Lamar, Jr., President
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EXHIBIT A
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of January 17, 2001, is by and
between South Alabama Bancorporation, Inc., an Alabama business corporation
("South Alabama"), and The Peoples BancTrust Company, Inc., an Alabama business
corporation ("BancTrust").
WHEREAS, South Alabama and BancTrust have entered into an Agreement and
Plan of Merger dated of even date hereof (the "Merger Agreement") regarding the
merger of BancTrust with and into South Alabama, which shall be the surviving
corporation and change its name to "The Peoples BancTrust Company, Inc."; and
WHEREAS, in order to induce BancTrust to enter into the Merger Agreement,
South Alabama has agreed to grant the Stock Option (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereby agree as follows:
1. Grant of Stock Option. Subject to the terms and conditions set forth
herein, South Alabama hereby irrevocably grants to BancTrust an option (the
"Stock Option") to purchase up to 1,696,782 shares of South Alabama common
stock, par value $.01 per share (the "Common Stock"), at a cash purchase price
of $8.625 per share (the "Exercise Price").
2. Exercise of Stock Option.
(a) Subject to the receipt of all necessary approvals required by, and the
expiration or termination of any applicable waiting period under, any federal or
state statutes regulating or governing the acquisition or change in control of
banks (the "Bank Regulatory Acts"), the Stock Option, subject to Section 2(b)
below, may be exercised by BancTrust or its permitted assignee, in whole or in
part, at any time or from time to time, on or before the termination of this
Stock Option Agreement (the "Termination Date"). The Termination Date shall be
the earliest to occur of the following:
(i) the Effective Time (as defined in the Merger Agreement);
(ii) eighteen (18) months after the first occurrence of an Initial
Triggering Event (as hereinafter defined); or
(iii) the date of termination of the Merger Agreement in accordance
with its terms prior to the occurrence of an Initial Triggering Event.
In the event BancTrust wishes to exercise the Stock Option, BancTrust shall
send a written notice to South Alabama specifying the total number of shares it
will purchase and a place and date not later than 10 business days from the date
such notice is given for the closing of such purchase.
(b) BancTrust may exercise the Stock Option, in whole or part, if, but only
if, an Initial Triggering Event (as hereinafter defined) shall have occurred
prior to the occurrence of the Termination Date; provided that BancTrust shall
have sent the written notice of such exercise (as provided in subsection (a) of
this Section 2).
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(c) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) South Alabama, without having received BancTrust's prior written
consent, shall have entered into an agreement to engage in an Acquisition
Transaction (as hereinafter defined) with any person (the term "person" for
purposes of this Stock Option Agreement having the meaning assigned thereto
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder) other
than BancTrust, or the Board of Directors of South Alabama shall have
recommended that the shareholders of South Alabama approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement.
For purposes of this Stock Option Agreement, "Acquisition Transaction"
shall mean (x) a merger or consolidation, or any similar transaction,
involving South Alabama; (y) a purchase, lease or other acquisition of all
or substantially all of the assets of South Alabama; or (z) a purchase or
other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 10% or more of the voting
power of South Alabama;
(ii) Any person other than BancTrust or the current holders of the
Common Stock shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the term "beneficial ownership" for purposes of this Stock
Option Agreement having the meaning assigned thereto in Section 13(d) of
the 1934 Act, and the rules and regulations thereunder);
(iii) Any person other than BancTrust shall have made a bona fide
proposal to South Alabama or its shareholders, by public announcement or
written communication that is or becomes the subject of public disclosure,
to engage in an Acquisition Transaction; or
(iv) Any person other than BancTrust, other than in connection with a
transaction to which BancTrust has given its prior written consent, shall
have filed an application or notice with the Board of Governors of the
Federal Reserve System, or other federal or state bank regulatory
authority, which application or notice has been accepted for processing,
for approval to engage in an Acquisition Transaction.
(d) South Alabama shall notify BancTrust promptly in writing of the
occurrence of any Initial Triggering Event, it being understood that the giving
of such notice by South Alabama shall not be a condition to the right of
BancTrust to exercise the Stock Option.
3. Payment and Delivery of Certificate(s). At any closing hereunder,
BancTrust or its permitted assignee shall make payment to South Alabama of the
aggregate Exercise Price for the shares of Common Stock so purchased by
certified or official bank check or wire transfer of same day funds to an
account specified by South Alabama, and South Alabama shall deliver to BancTrust
or its permitted assignee a certificate or certificates in form satisfactory to
BancTrust representing the number of shares of Common Stock being purchased in
the denominations designated by BancTrust in its notice of exercise.
4. Representations and Warranties of South Alabama. South Alabama hereby
represents and warrants to BancTrust as follows:
(a) Due Authorization. This Stock Option Agreement has been duly
authorized by all necessary corporate action on the part of South Alabama
and has been duly executed by a duly authorized officer of South Alabama,
and constitutes a valid and binding obligation of South Alabama,
enforceable against it in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally,
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and except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) Due Organization. South Alabama is a corporation duly organized,
validly existing and in good standing under the laws of Alabama and has the
requisite corporate power to enter into and perform this Stock Option
Agreement.
(c) Stock Option Shares. Except for any required regulatory filing,
South Alabama has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the Termination Date will keep reserved for issuance
upon exercise of the Stock Option, 1,696,782 shares of Common Stock, all of
which, upon issuance pursuant hereto, shall be duly and validly issued,
fully paid and nonassessable, and shall be delivered free and clear of all
charges, claims, liens, encumbrances, security interests or rights of
others, including any preemptive rights.
(d) No Conflicts. Subject to Section 2(b) hereof, neither the
execution and delivery of this Stock Option Agreement nor the consummation
of the transactions contemplated hereby will violate or result in any
violation of or be in conflict with or constitute a default under any term
of the Articles of Incorporation or Bylaws of South Alabama or of any
agreement, instrument, judgment, decree, order, statute, rule or government
regulation applicable to South Alabama.
5. Representations and Warranties of BancTrust. BancTrust hereby represents
and warrants to South Alabama as follows:
(a) Distribution. None of the shares of Common Stock acquired upon
exercise of the Stock Option will be transferred except in a transaction
registered or exempt from registration under the Securities Act of 1933, as
amended, and any applicable state securities law.
(b) No Conflicts. Neither the execution and delivery of this Stock
Option Agreement nor the consummation of the transactions contemplated
hereby will violate or result in any violation of or be in conflict with or
constitute a default under any term of the Articles of Incorporation or
Bylaws of BancTrust or of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to BancTrust.
6. Bank Regulatory Acts. South Alabama and BancTrust will each, timely and
promptly after the exercise hereof, make all filings required under each of the
Bank Regulatory Acts and use their best efforts to cause the receipt of all
required approvals and the satisfaction or termination of all waiting periods
under the Bank Regulatory Acts applicable to the exercise of the Stock Option.
South Alabama and BancTrust will furnish to each other such necessary
information and reasonable assistance as may be requested in connection with the
respective preparation of necessary filings or submissions to any governmental
agency including, without limitation, any filings necessary under the provisions
of any of the Bank Regulatory Acts. South Alabama and BancTrust will supply each
other with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between either of them or their respective
representatives and any governmental agency or authority or members of their
respective staffs with respect to this Stock Option Agreement or the
transactions contemplated hereby.
7. Cancellation Payment. In the event that any person or entity other than
BancTrust or any affiliate of BancTrust (as such term is defined in Rule 13e-3
promulgated under the 1934 Act) (a) consummates a tender offer, as determined by
the precedent construing Sections 14(c) and 14(d) of the 1934 Act, for more than
20% and not more than 25% of the outstanding shares of South Alabama, (b)
A-3
<PAGE>
commences a tender offer for 25% or more of the outstanding shares of South
Alabama, or (c) enters into any agreement with South Alabama to engage in an
Acquisition Transaction in which the Common Stock would be convertible into or
exchangeable for securities or assets of another entity or cash, BancTrust, at
its election and subject to any required regulatory approvals, shall be entitled
to receive, in consideration for the cancellation of the Stock Option, an amount
in cash (the "Cancellation Payment") equal to (i) the excess, if any of (A) the
highest price or consideration paid by such third party for any shares so
acquired less (B) the Exercise Price, multiplied by (ii) 1,696,782 shares, less
the number of shares (if any) that have previously been purchased upon exercise
of the Stock Option, or, at the option of BancTrust, such lesser amount, if any,
as may be paid by South Alabama without being required to obtain any prior
regulatory approval from or to make any filing with the regulatory agency with
respect to South Alabama's purchase of its equity securities. The Cancellation
Payment shall be made within three (3) business days of BancTrust's election to
receive the Cancellation Payment by certified or official bank check or wire
transfer of same day funds to such account as BancTrust shall designate.
8. Adjustment Upon Changes in Capitalization, Merger, Etc. In the event of
any change in the shares of Common Stock occurring on or after the date hereof,
by reason of stock dividends, stock splits, mergers, recapitalization,
combinations, conversions, exchanges of shares or the like, the number and kind
of shares or securities subject to the Stock Option, the Exercise Price per
share and the Cancellation Payment shall be appropriately adjusted.
9. Legend. Certificates for the shares of Common Stock delivered at the
closing hereunder shall be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement between the registered holder
thereof and South Alabama Bancorporation, Inc., a copy of which
agreement is on file at the principal office of South Alabama
Bancorporation, Inc. and to resale restrictions imposed by the
Securities Act of 1933. A copy of such agreement will be provided to
the holder without charge upon receipt by South Alabama Bancorporation,
Inc. of a written request."
In addition, such certificates shall bear any other legend as may be
required by law.
10. Assignment. Neither of the parties hereto may assign, pledge or convey
any of its rights or obligations under this Stock Option Agreement or the Stock
Option created hereunder to any other person or entity, without the express
written consent of the other party, provided, however, that BancTrust's rights
and obligations under this Stock Option Agreement and the Stock Option created
hereunder shall be automatically transferred to any corporation succeeding to
the rights and obligations of BancTrust under the Merger Agreement.
11. Remedies. BancTrust, on the one hand, and South Alabama, on the other
hand, each acknowledges and agrees that the other would be irreparably damaged
in the event any of the provisions of this Stock Option Agreement were not
performed by the other in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party shall be entitled to an
injunction or injunctions to redress the breaches of this Stock Option Agreement
and to specifically enforce the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which such party may be
entitled at law or in equity. In the event litigation shall be necessary to
enforce, interpret or rescind the provisions of this Stock Option Agreement, the
prevailing party shall be entitled to recover from the other party, in addition
to other relief, the prevailing party's reasonable attorneys' fees for services
before trial, on trial and on any appeal therefrom.
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<PAGE>
12. Miscellaneous.
(a) Effect and Assignment of Agreement. Subject to the provisions of
Section 10 hereof, this Stock Option Agreement shall be binding upon and
enforceable by and against the parties hereto and their respective successors
and assigns.
(b) Amendments. This Stock Option Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
amendment executed by the parties.
(c) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
transmission, by mail (registered or certified mail, postage prepaid, return
receipt requested), or by courier or overnight carrier, to the respective
parties as follows:
If to South Alabama:
South Alabama Bancorporation, Inc.
P.O. Box 3067 (36652)
100 St. Joseph Street
Mobile, Alabama 36602
Attention: W. Bibb Lamar, Jr.,
President
with a copy to:
Hand Arendall, L.L.C.
P.O. Box 123 (36601)
3000 AmSouth Building
107 St. Francis Street
Mobile, Alabama 36602
Attention: R. Preston Bolt, Jr., Esq.
If to BancTrust:
The Peoples BancTrust Company, Inc.
310 Broad Street
Selma, Alabama 36701
Attention: Richard P. Morthland,
Chairman of the Board
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<PAGE>
with a copy to:
Gamble, Gamble & Calame, L.L.C.
807 Selma Avenue
Selma, Alabama 36701
Attention: Harry W. Gamble, Jr., Esq.
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of a change of address shall
only be effective upon receipt.
(d) Governing Law. This Stock Option Agreement shall be governed by and
construed in accordance with the laws of the State of Alabama, without regard to
the principles of conflict of laws.
(e) No Prior Agreements. This Stock Option Agreement (i) contains the
entire agreement, and supersedes all other prior agreements and understandings,
both written and oral, between the parties hereto with respect to the subject
matter hereof, and (ii) is not intended to confer upon any other person other
than a permitted assignee any rights or remedies hereunder.
(f) Severability. If any term, provision, covenant or restriction of this
Stock Option Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provision, covenants
and restrictions of this Stock Option Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
(g) Expenses. Each of the parties shall pay its own expenses in connection
with the negotiation, execution and performance of this Stock Option Agreement.
(h) Effect of Headings. The section headings herein are for convenience
only and shall not affect the meanings or construction of this Stock Option
Agreement.
(i) Counterparts. This Stock Option Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute the same agreement.
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<PAGE>
IN WITNESS WHEREOF, South Alabama and BancTrust have caused this Stock
Option Agreement to take effect as of the date set forth above.
SOUTH ALABAMA BANCORPORATION, INC.
/s/ W. Bibb Lamar, Jr.
----------------------------------
W. Bibb Lamar, Jr.
President
THE PEOPLES BANCTRUST COMPANY, INC.
/s/ Richard P. Morthland
----------------------------------
Richard P. Morthland
Chairman of the Board
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<PAGE>
EXHIBIT B
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of January 17, 2001, is by and
between The Peoples BancTrust Company, Inc., an Alabama business corporation
("BancTrust"), and South Alabama Bancorporation, Inc., an Alabama business
corporation ("South Alabama").
WHEREAS, BancTrust and South Alabama have entered into an Agreement and
Plan of Merger dated of even date hereof (the "Merger Agreement") regarding the
merger of BancTrust with and into South Alabama, which shall be the surviving
corporation and change its name to "The Peoples BancTrust Company, Inc."; and
WHEREAS, in order to induce South Alabama to enter into the Merger
Agreement, BancTrust has agreed to grant the Stock Option (as hereinafter
defined);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereby agree as follows:
1. Grant of Stock Option. Subject to the terms and conditions set forth
herein, BancTrust hereby irrevocably grants to South Alabama an option (the
"Stock Option") to purchase up to 1,024,479 shares of BancTrust common stock,
par value $.10 per share (the "Common Stock"), at a cash purchase price of
$12.435 per share (the "Exercise Price").
2. Exercise of Stock Option.
(a) Subject to the receipt of all necessary approvals required by, and the
expiration or termination of any applicable waiting period under, any federal or
state statutes regulating or governing the acquisition or change in control of
banks (the "Bank Regulatory Acts"), the Stock Option, subject to Section 2(b)
below, may be exercised by South Alabama or its permitted assignee, in whole or
in part, at any time or from time to time, on or before the termination of this
Stock Option Agreement (the "Termination Date"). The Termination Date shall be
the earliest to occur of the following:
(i) the Effective Time (as defined in the Merger Agreement);
(ii) eighteen (18) months after the first occurrence of an Initial
Triggering Event (as hereinafter defined); or
(iii) the date of termination of the Merger Agreement in accordance
with its terms prior to the occurrence of an Initial Triggering Event.
In the event South Alabama wishes to exercise the Stock Option, South
Alabama shall send a written notice to BancTrust specifying the total number of
shares it will purchase and a place and date not later than 10 business days
from the date such notice is given for the closing of such purchase.
(b) South Alabama may exercise the Stock Option, in whole or part, if, but
only if, an Initial Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of the Termination Date; provided that South
Alabama shall have sent the written notice of such exercise (as provided in
subsection (a) of this Section 2).
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(c) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) BancTrust, without having received South Alabama's prior written
consent, shall have entered into an agreement to engage in an Acquisition
Transaction (as hereinafter defined) with any person (the term "person" for
purposes of this Stock Option Agreement having the meaning assigned thereto
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder) other
than South Alabama, or the Board of Directors of BancTrust shall have
recommended that the shareholders of BancTrust approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement.
For purposes of this Stock Option Agreement, "Acquisition Transaction"
shall mean (x) a merger or consolidation, or any similar transaction,
involving BancTrust; (y) a purchase, lease or other acquisition of all or
substantially all of the assets of BancTrust; or (z) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting power of
BancTrust;
(ii) Any person other than South Alabama or the current holders of the
Common Stock shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the term "beneficial ownership" for purposes of this Stock
Option Agreement having the meaning assigned thereto in Section 13(d) of
the 1934 Act, and the rules and regulations thereunder);
(iii) Any person other than South Alabama shall have made a bona fide
proposal to BancTrust or its shareholders, by public announcement or
written communication that is or becomes the subject of public disclosure,
to engage in an Acquisition Transaction; or
(iv) Any person other than South Alabama, other than in connection
with a transaction to which South Alabama has given its prior written
consent, shall have filed an application or notice with the Board of
Governors of the Federal Reserve System, or other federal or state bank
regulatory authority, which application or notice has been accepted for
processing, for approval to engage in an Acquisition Transaction.
(d) BancTrust shall notify South Alabama promptly in writing of the
occurrence of any Initial Triggering Event, it being understood that the giving
of such notice by BancTrust shall not be a condition to the right of South
Alabama to exercise the Stock Option.
3. Payment and Delivery of Certificate(s). At any closing hereunder, South
Alabama or its permitted assignee shall make payment to BancTrust of the
aggregate Exercise Price for the shares of Common Stock so purchased by
certified or official bank check or wire transfer of same day funds to an
account specified by BancTrust, and BancTrust shall deliver to South Alabama or
its permitted assignee a certificate or certificates in form satisfactory to
South Alabama representing the number of shares of Common Stock being purchased
in the denominations designated by South Alabama in its notice of exercise.
4. Representations and Warranties of BancTrust. BancTrust hereby represents
and warrants to South Alabama as follows:
(a) Due Authorization. This Stock Option Agreement has been duly
authorized by all necessary corporate action on the part of BancTrust and
has been duly executed by a duly authorized officer of BancTrust, and
constitutes a valid and binding obligation of BancTrust, enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency,
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<PAGE>
moratorium or other similar laws relating to creditors' rights generally,
and except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) Due Organization. BancTrust is a corporation duly organized,
validly existing and in good standing under the laws of Alabama and has the
requisite corporate power to enter into and perform this Stock Option
Agreement.
(c) Stock Option Shares. Except for any required regulatory filing,
BancTrust has taken all necessary corporate and other action to authorize
and reserve and to permit it to issue, and at all times from the date
hereof through the Termination Date will keep reserved for issuance upon
exercise of the Stock Option, 1,024,479 shares of Common Stock, all of
which, upon issuance pursuant hereto, shall be duly and validly issued,
fully paid and nonassessable, and shall be delivered free and clear of all
charges, claims, liens, encumbrances, security interests or rights of
others, including any preemptive rights.
(d) No Conflicts. Subject to Section 2(b) hereof, neither the
execution and delivery of this Stock Option Agreement nor the consummation
of the transactions contemplated hereby will violate or result in any
violation of or be in conflict with or constitute a default under any term
of the Articles of Incorporation or Bylaws of BancTrust or of any
agreement, instrument, judgment, decree, order, statute, rule or government
regulation applicable to BancTrust.
5. Representations and Warranties of South Alabama. South Alabama hereby
represents and warrants to BancTrust as follows:
(a) Distribution. None of the shares of Common Stock acquired upon
exercise of the Stock Option will be transferred except in a transaction
registered or exempt from registration under the Securities Act of 1933, as
amended, and any applicable state securities law.
(b) No Conflicts. Neither the execution and delivery of this Stock
Option Agreement nor the consummation of the transactions contemplated
hereby will violate or result in any violation of or be in conflict with or
constitute a default under any term of the Articles of Incorporation or
Bylaws of South Alabama or of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to South
Alabama.
6. Bank Regulatory Acts. BancTrust and South Alabama will each, timely and
promptly after the exercise hereof, make all filings required under each of the
Bank Regulatory Acts and use their best efforts to cause the receipt of all
required approvals and the satisfaction or termination of all waiting periods
under the Bank Regulatory Acts applicable to the exercise of the Stock Option.
BancTrust and South Alabama will furnish to each other such necessary
information and reasonable assistance as may be requested in connection with the
respective preparation of necessary filings or submissions to any governmental
agency including, without limitation, any filings necessary under the provisions
of any of the Bank Regulatory Acts. BancTrust and South Alabama will supply each
other with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between either of them or their respective
representatives and any governmental agency or authority or members of their
respective staffs with respect to this Stock Option Agreement or the
transactions contemplated hereby.
7. Cancellation Payment. In the event that any person or entity other than
South Alabama or any affiliate of South Alabama (as such term is defined in Rule
13e-3 promulgated under the 1934 Act) (a) consummates a tender offer, as
determined by the precedent construing Sections 14(c) and 14(d) of the
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<PAGE>
1934 Act, for more than 20% and not more than 25% of the outstanding shares of
BancTrust, (b) commences a tender offer for 25% or more of the outstanding
shares of BancTrust, or (c) enters into any agreement with BancTrust to engage
in an Acquisition Transaction in which the Common Stock would be convertible
into or exchangeable for securities or assets of another entity or cash, South
Alabama, at its election and subject to any required regulatory approvals, shall
be entitled to receive, in consideration for the cancellation of the Stock
Option, an amount in cash (the "Cancellation Payment") equal to (i) the excess,
if any of (A) the highest price or consideration paid by such third party for
any shares so acquired less (B) the Exercise Price, multiplied by (ii) 1,024,479
shares, less the number of shares (if any) that have previously been purchased
upon exercise of the Stock Option, or, at the option of South Alabama, such
lesser amount, if any, as may be paid by BancTrust without being required to
obtain any prior regulatory approval from or to make any filing with the
regulatory agency with respect to BancTrust's purchase of its equity securities.
The Cancellation Payment shall be made within three (3) business days of South
Alabama's election to receive the Cancellation Payment by certified or official
bank check or wire transfer of same day funds to such account as South Alabama
shall designate.
8. Adjustment Upon Changes in Capitalization, Merger, Etc. In the event of
any change in the shares of Common Stock occurring on or after the date hereof,
by reason of stock dividends, stock splits, mergers, recapitalization,
combinations, conversions, exchanges of shares or the like, the number and kind
of shares or securities subject to the Stock Option, the Exercise Price per
share and the Cancellation Payment shall be appropriately adjusted.
9. Legend. Certificates for the shares of Common Stock delivered at the
closing hereunder shall be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is subject
to certain provisions of an agreement between the registered holder
thereof and The Peoples BancTrust Company, Inc., a copy of which
agreement is on file at the principal office of The Peoples BancTrust
Company, Inc. and to resale restrictions imposed by the Securities Act
of 1933. A copy of such agreement will be provided to the holder
without charge upon receipt by The Peoples BancTrust Company, Inc. of a
written request."
In addition, such certificates shall bear any other legend as may be
required by law.
10. Assignment. Neither of the parties hereto may assign, pledge or convey
any of its rights or obligations under this Stock Option Agreement or the Stock
Option created hereunder to any other person or entity, without the express
written consent of the other party, provided, however, that South Alabama's
rights and obligations under this Stock Option Agreement and the Stock Option
created hereunder shall be automatically transferred to any corporation
succeeding to the rights and obligations of South Alabama under the Merger
Agreement.
11. Remedies. South Alabama, on the one hand, and BancTrust, on the other
hand, each acknowledges and agrees that the other would be irreparably damaged
in the event any of the provisions of this Stock Option Agreement were not
performed by the other in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party shall be entitled to an
injunction or injunctions to redress the breaches of this Stock Option Agreement
and to specifically enforce the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which such party may be
entitled at law or in equity. In the event litigation shall be necessary to
enforce, interpret or rescind the provisions of this Stock Option Agreement, the
prevailing party shall be entitled to recover from the other party, in addition
to other relief, the prevailing party's reasonable attorneys' fees for services
before trial, on trial and on any appeal therefrom.
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<PAGE>
12. Miscellaneous.
(a) Effect and Assignment of Agreement. Subject to the provisions of
Section 10 hereof, this Stock Option Agreement shall be binding upon and
enforceable by and against the parties hereto and their respective successors
and assigns.
(b) Amendments. This Stock Option Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
amendment executed by the parties.
(c) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
transmission, by mail (registered or certified mail, postage prepaid, return
receipt requested), or by courier or overnight carrier, to the respective
parties as follows:
If to BancTrust:
The Peoples BancTrust Company, Inc.
310 Broad Street
Selma, Alabama 36701
Attention: Richard P. Morthland,
Chairman of the Board
with a copy to:
Gamble, Gamble & Calame, L.L.C.
807 Selma Avenue
Selma, Alabama 36701
Attention: Harry W. Gamble, Jr., Esq.
If to South Alabama:
South Alabama Bancorporation, Inc.
P.O. Box 3067 (36652)
100 St. Joseph Street
Mobile, Alabama 36602
Attention: W. Bibb Lamar, Jr.,
President
with a copy to:
Hand Arendall, L.L.C.
P.O. Box 123 (36601)
3000 AmSouth Building
107 St. Francis Street
Mobile, Alabama 36602
Attention: R. Preston Bolt, Jr., Esq.
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or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of a change of address shall
only be effective upon receipt.
(d) Governing Law. This Stock Option Agreement shall be governed by and
construed in accordance with the laws of the State of Alabama, without regard to
the principles of conflict of laws.
(e) No Prior Agreements. This Stock Option Agreement (i) contains the
entire agreement, and supersedes all other prior agreements and understandings,
both written and oral, between the parties hereto with respect to the subject
matter hereof, and (ii) is not intended to confer upon any other person other
than a permitted assignee any rights or remedies hereunder.
(f) Severability. If any term, provision, covenant or restriction of this
Stock Option Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provision, covenants
and restrictions of this Stock Option Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
(g) Expenses. Each of the parties shall pay its own expenses in connection
with the negotiation, execution and performance of this Stock Option Agreement.
(h) Effect of Headings. The section headings herein are for convenience
only and shall not affect the meanings or construction of this Stock Option
Agreement.
(i) Counterparts. This Stock Option Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute the same agreement.
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IN WITNESS WHEREOF, BancTrust and South Alabama have caused this Stock
Option Agreement to take effect as of the date set forth above.
THE PEOPLES BANCTRUST COMPANY, INC.
/s/ Richard P. Morthland
----------------------------------
Richard P. Morthland
Chairman of the Board
SOUTH ALABAMA BANCORPORATION, INC.
/s/ W. Bibb Lamar, Jr.
----------------------------------
W. Bibb Lamar, Jr.
President
B-7
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EXHIBIT C
VOTING AGREEMENT
January 16, 2001
The Peoples BancTrust Company, Inc.
310 Broad Street
Selma, Alabama 36701
Ladies and Gentlemen:
The undersigned is a director of South Alabama Bancorporation, Inc. ("South
Alabama") and is the beneficial holder of shares of common stock of South
Alabama ("South Alabama Common Stock").
South Alabama and The Peoples BancTrust Company, Inc. ("BancTrust") are
considering the execution of an Agreement and Plan of Merger ("Agreement")
contemplating that BancTrust will merge with and into South Alabama (the
"Merger"), pursuant to which each of the issued and outstanding shares of
BancTrust Common Stock shall automatically by operation of law be converted into
a number of shares of common stock of South Alabama as set forth in the
Agreement. South Alabama shall survive the Merger and change its name to "The
Peoples BancTrust Company, Inc." The execution of the Agreement is, among other
things, subject in the case of BancTrust to the execution and delivery of this
letter agreement ("letter agreement"). In consideration of the substantial
expenses that BancTrust will incur in connection with the transactions
contemplated by the Agreement and in order to induce BancTrust to execute the
Agreement and to proceed to incur such expenses, the undersigned agrees and
undertakes, in his capacity as a shareholder of South Alabama and not in his
capacity as a director of South Alabama (in which capacity as a director his
fiduciary duties shall apply), as follows:
1. The undersigned, while this letter agreement is in effect, shall vote or
cause to be voted all of the shares of South Alabama Common Stock that the
undersigned shall be entitled to so vote, whether such shares are beneficially
owned by the undersigned on the date of this letter agreement or are
subsequently acquired, whether pursuant to the exercise of stock options or
otherwise, at the meeting of South Alabama's shareholders to be called and held
following the date hereof, for the approval of the Agreement and the Merger.
2. The undersigned acknowledges and agrees that any remedy at law for
breach of the foregoing provisions shall be inadequate and that, in addition to
any other relief which may be available, BancTrust shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damages.
3. The foregoing restrictions shall not apply to shares with respect to
which the undersigned may have voting power as a fiduciary for others. In
addition, this letter agreement shall only apply to actions taken by the
undersigned in his capacity as a shareholder of South Alabama and shall not in
any way limit or affect actions the undersigned may take in his capacity as a
director of South Alabama.
4. This letter agreement shall automatically terminate upon termination of
the Agreement in accordance with its terms.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
Very truly yours,
------------------------------------
Signature
------------------------------------
Name (please print)
Accepted and agreed to as of the date first above written:
THE PEOPLES BANCTRUST COMPANY, INC.
By: _______________________________
Its
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EXHIBIT D
VOTING AGREEMENT
January 16, 2001
South Alabama Bancorporation, Inc.
100 St. Joseph Street
Mobile, Alabama 36602
Ladies and Gentlemen:
The undersigned is a director of The Peoples BancTrust Company, Inc.
("BancTrust") and is the beneficial holder of shares of common stock of Common
Stock").
BancTrust and South Alabama Bancorporation, Inc. ("South Alabama") are
considering the execution of an Agreement and Plan of Merger ("Agreement")
contemplating that BancTrust will merge with and into South Alabama (the
"Merger"), pursuant to which each of the issued and outstanding shares of
BancTrust Common Stock shall automatically by operation of law be converted into
a number of shares of common stock of South Alabama as set forth in the
Agreement. South Alabama shall survive the Merger and change its name to "The
Peoples BancTrust Company, Inc." The execution of the Agreement is, among other
things, subject in the case of South Alabama to the execution and delivery of
this letter agreement ("letter agreement"). In consideration of the substantial
expenses that South Alabama will incur in connection with the transactions
contemplated by the Agreement and in order to induce South Alabama to execute
the Agreement and to proceed to incur such expenses, the undersigned agrees and
undertakes, in his capacity as a shareholder of BancTrust and not in his
capacity as a director of BancTrust (in which capacity as a director his
fiduciary duties shall apply), as follows:
1. The undersigned, while this letter agreement is in effect, shall vote or
cause to be voted all of the shares of BancTrust Common Stock that the
undersigned shall be entitled to so vote, whether such shares are beneficially
owned by the undersigned on the date of this letter agreement or are
subsequently acquired, whether pursuant to the exercise of stock options or
otherwise, at the meeting of BancTrust's shareholders to be called and held
following the date hereof, for the approval of the Agreement and the Merger.
2. The undersigned acknowledges and agrees that any remedy at law for
breach of the foregoing provisions shall be inadequate and that, in addition to
any other relief which may be available, South Alabama shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damages.
3. The foregoing restrictions shall not apply to shares with respect to
which the undersigned may have voting power as a fiduciary for others. In
addition, this letter agreement shall only apply to actions taken by the
undersigned in his capacity as a shareholder of BancTrust and shall not in any
way limit or affect actions the undersigned may take in his capacity as a
director of BancTrust.
4. This letter agreement shall automatically terminate upon termination of
the Agreement in accordance with its terms.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
Very truly yours,
------------------------------------
Signature
------------------------------------
Name (please print)
Accepted and agreed to as of the date first above written:
SOUTH ALABAMA BANCORPORATION, INC.
By: _______________________________
Its
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EXHIBIT E
[AMENDMENTS TO SOUTH ALABAMA'S ARTICLES OF INCORPORATION]
E-1
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EXHIBIT F
AFFILIATE AGREEMENT
South Alabama Bancorporation, Inc.
Mobile, Alabama
Attention: W. Bibb Lamar, Jr.
President
Gentlemen:
The undersigned is a shareholder of The Peoples BancTrust Company, Inc., an
Alabama corporation ("BancTrust"), and upon the merger of BancTrust with and
into South Alabama Bancorporation, Inc. ("South Alabama"), which shall be the
surviving corporation (the "Surviving Corporation"), the undersigned will become
a shareholder of the Surviving Corporation as described in the Agreement and
Plan of Merger, dated as of January 17, 2001 (the "Agreement"), by and between
South Alabama and BancTrust. Under the terms of the Agreement, the shares of
common stock of BancTrust ("BancTrust Common Stock") will be converted into and
exchanged for shares of the common stock of the Surviving Corporation
("Surviving Corporation Common Stock"). This Affiliate Agreement represents an
agreement between the undersigned and South Alabama regarding certain rights and
obligations of the undersigned in connection with the shares of the Surviving
Corporation to be received by the undersigned as a result of the merger.
In consideration of the Agreement and the mutual covenants contained
herein, the undersigned and South Alabama hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to
BancTrust he or she is an "affiliate" of BancTrust under Rule 145(c) and as
defined in Rule 405 of the Rules and Regulations of the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended ("1933 Act"),
and the undersigned anticipates that he or she will be such an "affiliate" at
the time of the merger.
2. Initial Restriction on Disposition. The undersigned agrees that he or
she will not sell, transfer or otherwise dispose of his or her interests in, or
reduce his or her risk relative to, any of the shares of BancTrust Common Stock
or Surviving Corporation Common Stock into which his or her shares of BancTrust
Common Stock are converted upon consummation of the merger until such time as
the Surviving Corporation notifies the undersigned that the requirements of SEC
Accounting Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met.
The undersigned understands that ASR 130 and 135 relate to publication of
financial results of post-merger combined operations of South Alabama and
BancTrust. South Alabama agrees that it will publish such results within
forty-five (45) days after the end of the first fiscal quarter of the Surviving
Corporation containing the required period of post-merger combined operations
and that it will notify the undersigned promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned represents,
warrants and agrees that:
(a) The Surviving Corporation Common Stock received by the undersigned
as a result of the merger will be taken for his or her own account and not
for others, directly or indirectly, in whole or in part.
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<PAGE>
(b) South Alabama has informed the undersigned that any distribution
by the undersigned of the Surviving Corporation Common Stock has not been
registered under the 1933 Act and that shares of Surviving Corporation
Common Stock received pursuant to the merger can only be sold by the
undersigned (1) following registration under the 1933 Act, or (2) in
conformity with the volume and other requirements of Rule 145(d)
promulgated by the SEC as the same now exist or may hereafter be amended,
or (3) to the extent some other exemption from registration under the 1933
Act might be available. The undersigned understands that the Surviving
Corporation will be under no obligation to file a registration statement
with the SEC covering the disposition of the undersigned's shares of
Surviving Corporation Common Stock.
(c) The undersigned is aware that the Surviving Corporation intends to
treat the merger as a tax-free reorganization under Section 368 of the
Internal Revenue Code ("Code") for federal income tax purposes. The
undersigned agrees to treat the transaction in the same manner as the
Surviving Corporation for federal income tax purposes. The undersigned
acknowledges that the Income Tax Regulations require "continuity of
interest" in order for the merger to be treated as tax-free under Section
368 of the Code. The undersigned has no prearrangement, plan or intention
to sell or otherwise dispose of an amount of his or her Surviving
Corporation Common Stock to be received in the Merger which would cause the
foregoing requirement not to be satisfied.
4. Restrictions on Transfer. The undersigned understands and agrees that
stop transfer instructions with respect to the shares of Surviving Corporation
Common Stock received by the undersigned pursuant to the merger will be given to
the Surviving Corporation's Transfer Agent and that there will be placed on the
certificates representing such shares, or shares issued in substitution thereof,
a legend stating in substance:
The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his or her risks
relative thereto in any way, until such time as The Peoples BancTrust
Company, Inc. (the "Corporation") has published the financial results
covering at least thirty (30) days of combined operations after the
after the effective date of the merger through which the business
combination was effected. In addition, the shares represented by this
certificate may not be sold, transferred or otherwise disposed of
except or unless (1) covered by an effective registration statement
under the Securities Act of 1933, as amended, (2) in accordance with
(i) Rule 145(d) (in the case of shares issued to an individual who is
not an affiliate of the Corporation) or (ii) Rule 144 (in the case of
shares issued to an individual who is an affiliate of the Corporation)
of the Rules and Regulations under such Act, or (3) in accordance with
a legal opinion satisfactory to counsel for the Corporation that such
sale or transfer is otherwise exempt from the registration requirements
of such Act.
The undersigned further agrees that such legend shall be placed on the
certificates representing his or her shares of BancTrust Common Stock which are
not exchanged for certificates representing shares of Surviving Corporation
Common Stock. The undersigned will surrender such certificates to the Transfer
Agent within five (5) business days after receipt of written notice from the
Surviving Corporation of the effectiveness of the merger together with
appropriate transmittal materials.
Such legend will also be placed on any certificate representing Surviving
Corporation securities issued subsequent to the original issuance of the
Surviving Corporation Common Stock pursuant to the merger as a result of any
stock dividend, stock split, or other recapitalization as long as the Surviving
Corporation Common Stock issued to the undersigned pursuant to the merger has
not been transferred in such manner to justify the removal of the legend
therefrom. Upon the request of the undersigned, the
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Surviving Corporation shall cause the certificates representing the shares of
Surviving Corporation Common Stock issued to the undersigned in connection with
the merger to be reissued free of any legend relating to restrictions on
transfer by virtue of ASR 130 and 135 as soon as practicable after the
requirements of ASR 130 and 135 have been met. In addition, if the provisions of
Rules 144 and 145 are amended to eliminate restrictions applicable to the
Surviving Corporation Common Stock received by the undersigned pursuant to the
merger, or at the expiration of the restrictive period set forth in Rule 145(d),
the Surviving Corporation, upon the request of the undersigned, will cause the
certificates representing the shares of Surviving Corporation Common Stock
issued to the undersigned in connection with the merger to be reissued free of
any legend relating to the restrictions set forth in Rules 144 and 145(d) upon
receipt by the Surviving Corporation of an opinion of its counsel to the effect
that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his or her ability to sell, transfer, or otherwise
dispose of the shares of Surviving Corporation Common Stock received by the
undersigned, to the extent he or she believes necessary, with his or her counsel
or counsel for BancTrust.
6. Filing of Reports by South Alabama. South Alabama agrees, for a period
of three years after the effective date of the merger, to file on a timely basis
all reports required to be filed by the Surviving Corporation pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, so that the
public information provisions of Rule 145(d) promulgated by the SEC as the same
are presently in effect will be available to the undersigned in the event the
undersigned desires to transfer any shares of Surviving Corporation Common Stock
issued to the undersigned pursuant to the merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of Surviving Corporation Common Stock received by
him or her in connection with the merger at any time during the restrictive
period set forth in Rule 145(d), the undersigned will provide the necessary
representation letter to the Transfer Agent for Surviving Corporation Common
Stock together with such additional information as the Transfer Agent may
reasonably request. If the Surviving Corporation's counsel concludes that such
proposed sale or transfer complies with the requirements of Rule 145(d), the
Surviving Corporation shall cause such counsel to provide such opinions as may
be necessary to the Surviving Corporation's Transfer Agent so that the
undersigned may complete the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to (i) the undersigned's spouse, (ii) any
relative of the undersigned or of the undersigned's spouse who has the same home
as the undersigned, (iii) any trust or estate in which the undersigned, the
undersigned's spouse, and any such relative collectively own at least a 10%
beneficial interest or of which any of the foregoing serves as trustee,
executor, or in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, the undersigned's spouse and any such
relative collectively own at least 10% of any class of equity securities or of
the equity interest. The undersigned further recognizes that, in the event that
the undersigned is a director, officer or 10% shareholder of the Surviving
Corporation or becomes a director, officer or 10% shareholder of the Surviving
Corporation upon consummation of the merger, among other things, any sale of the
Surviving Corporation Common Stock by the undersigned within a period of less
than six months following the effective time of the merger may subject the
undersigned to liability pursuant to Section 16(b) of the Securities Exchange
Act of 1934, as amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
between South Alabama and the undersigned concerning the subject matter hereof.
Any notice required to be sent to any
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party hereunder shall be sent by registered or certified mail, return receipt
requested, using the addresses set forth herein or such other address as shall
be furnished in writing by the parties. This Affiliate Agreement shall be
governed by the laws of the State of Alabama.
This Affiliate Agreement is executed as of the ____ day of _____________,
2001.
Very truly yours,
---------------------
Signature
---------------------
Print Name
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EXHIBIT G
AFFILIATE AGREEMENT
The Peoples BancTrust Company, Inc.
Selma, Alabama
Attention: Richard P. Morthland
Chairman of the Board and CEO
Gentlemen:
The undersigned is a shareholder of South Alabama Bancorporation ("South
Alabama"), an Alabama corporation. Under the terms of the Agreement and Plan of
Merger, dated as of January 17, 2001 (the "Agreement"), by and between The
Peoples BancTrust Company, Inc. ("BancTrust") and South Alabama, BancTrust will
be merged with and into South Alabama, which shall be the surviving corporation
(the "Surviving Corporation"), and the shares of the common stock of BancTrust
will be converted into shares of the common stock of the Surviving Corporation
("Surviving Corporation Common Stock"). This Affiliate Agreement represents an
agreement between the undersigned and BancTrust regarding certain rights and
obligations of the undersigned in connection with the merger.
In consideration of the Agreement and the mutual covenants contained
herein, the undersigned and BancTrust hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to
South Alabama he or she is an "affiliate" of South Alabama under Rule 144(a)(1)
and as defined in Rule 405 of the Rules and Regulations of the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended ("1933
Act"), and the undersigned anticipates that he or she will be such an
"affiliate" at the time of the merger.
2. Initial Restriction on Disposition. The undersigned agrees that he or
she will not sell, transfer or otherwise dispose of his or her interests in, or
reduce his or her risk relative to, any of his or her shares of South Alabama
Common Stock or Surviving Corporation Common Stock until such time as the
Surviving Corporation notifies the undersigned that the requirements of SEC
Accounting Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met.
The undersigned understands that ASR 130 and 135 relate to publication of
financial results of post-merger combined operations of South Alabama and
BancTrust. South Alabama has agreed that it will publish such results within
forty-five (45) days after the end of the first fiscal quarter of the Surviving
Corporation containing the required period of post-merger combined operations
and that it will notify the undersigned promptly following such publication. The
undersigned understands that, prior to such notification by the Surviving
Corporation, stop transfer instructions with respect to shares of Surviving
Corporation Common Stock beneficially owned by the undersigned will be given to
the Surviving Corporation's Transfer Agent.
3. Understanding of Restrictions on Dispositions. The undersigned has
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his or her ability to sell, transfer, or otherwise
dispose of his or her shares of Surviving Corporation Common Stock, to the
extent he or she believes necessary, with his or her counsel or counsel for
South Alabama. The undersigned further understands that such restrictions are in
addition to the continuing restrictions on sales of stock of the Surviving
Corporation applicable to persons who are "affiliates" (as defined in SEC Rule
405) of the Surviving Corporation.
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4. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to (i) the undersigned's spouse, (ii) any
relative of the undersigned or of the undersigned's spouse who has the same home
as the undersigned, (iii) any trust or estate in which the undersigned, the
undersigned's spouse, and any such relative collectively own at least a 10%
beneficial interest or of which any of the foregoing serves as trustee,
executor, or in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, the undersigned's spouse and any such
relative collectively own at least 10% of any class of equity securities or of
the equity interest.
5. Miscellaneous. This Affiliate Agreement is the complete agreement
between BancTrust and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such other address as shall be furnished in writing by the parties. This
Affiliate Agreement shall be governed by the laws of the State of Alabama.
This Affiliate Agreement is executed as of the ____ day of _____________,
2001.
Very truly yours,
---------------------
Signature
---------------------
Print Name
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EXHIBIT H
LEGAL OPINION MATTERS -- BANCTRUST
1. BancTrust is a corporation duly organized, validly existing and in good
standing under the laws of the State of Alabama with full corporate power and
authority to carry on the business in which it is engaged and to own the
properties owned by it.
2. The execution and delivery of the Agreement and compliance with its
terms do not and will not violate or contravene any provision of the Articles of
Incorporation or Bylaws of BancTrust or, to the best of our knowledge but
without any independent investigation, result in any conflict with, breach of,
or default or acceleration under any mortgage, agreement, lease, indenture, or
other instrument, order, arbitration award, judgment or decree to which
BancTrust is a party or by which BancTrust is bound.
3. In accordance with the Bylaws of BancTrust and pursuant to resolutions
duly adopted by its Board of Directors and shareholders, the Agreement has been
duly adopted and approved by the Board of Directors of BancTrust.
4. The Agreement has been duly and validly executed and delivered by
BancTrust and, assuming valid authorization, execution and delivery by South
Alabama, constitutes a valid and binding agreement of BancTrust enforceable in
accordance with its terms. This opinion concerning the validity, binding effect
and enforceability of the Agreement means that (a) the Agreement constitutes an
effective contract under applicable law, (b) the Agreement is not invalid in its
entirety because of a specific statutory prohibition or public policy and is not
subject in its entirety to a contractual defense and (c) subject to the last
sentence of this paragraph, some remedy is available if a party is in material
default under the Agreement. This opinion does not mean that (a) any particular
remedy is available upon a material default or (b) every provision of the
Agreement will be upheld or enforced in any or each circumstance by a court.
Furthermore, the validity, binding effect and enforceability of the Agreement
may be limited or otherwise affected by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar statutes,
rules, regulations or other laws affecting the enforcement of creditors' rights
and remedies generally and (b) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a proceeding in equity
or at law) because of an equitable principle or a requirement as to commercial
reasonableness, conscionability or good faith.
5. The authorized capital stock of BancTrust consists of 9,000,000 shares
of BancTrust Common Stock, of which ________ shares were issued and outstanding
as of ______, 2001, and 1,000,000 shares of preferred stock, par value $.10 per
share, none of which is issued and outstanding. The shares of BancTrust Common
Stock that are issued and outstanding were not issued in violation of any
statutory preemptive rights of shareholders, were duly issued and are fully paid
and nonassessable under the Alabama Business Corporation Act.
The opinion of counsel need refer only to matters of Alabama and federal
law and may add other qualifications and explanations of counsel's opinion as
may be reasonably acceptable to South Alabama.
H-1
<PAGE>
EXHIBIT I
LEGAL OPINION MATTERS -- SOUTH ALABAMA
1. South Alabama is a corporation duly organized, validly existing and in
good standing under the laws of the State of Alabama with full corporate power
and authority to carry on the business in which it is engaged and to own the
properties owned by it.
2. The execution and delivery of the Agreement and compliance with its
terms do not and will not violate or contravene any provision of the Articles of
Incorporation or Bylaws of South Alabama or, to the best of our knowledge but
without any independent investigation, result in any conflict with, breach of,
or default or acceleration under any mortgage, agreement, lease, indenture, or
other instrument, order, arbitration award, judgment or decree to which South
Alabama is a party or by which South Alabama is bound.
3. In accordance with the Bylaws of South Alabama and pursuant to
resolutions duly adopted by its Board of Directors and shareholders, the
Agreement has been duly adopted and approved by the Board of Directors of South
Alabama.
4. The Agreement has been duly and validly executed and delivered by South
Alabama and, assuming valid authorization, execution and delivery by BancTrust,
constitutes a valid and binding agreement of South Alabama enforceable in
accordance with its terms. This opinion concerning the validity, binding effect
and enforceability of the Agreement means that (a) the Agreement constitutes an
effective contract under applicable law, (b) the Agreement is not invalid in its
entirety because of a specific statutory prohibition or public policy and is not
subject in its entirety to a contractual defense and (c) subject to the last
sentence of this paragraph, some remedy is available if a party is in material
default under the Agreement. This opinion does not mean that (a) any particular
remedy is available upon a material default or (b) every provision of the
Agreement will be upheld or enforced in any or each circumstance by a court.
Furthermore, the validity, binding effect and enforceability of the Agreement
may be limited or otherwise affected by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar statutes,
rules, regulations or other laws affecting the enforcement of creditors' rights
and remedies generally and (b) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a proceeding in equity
or at law) because of an equitable principle or a requirement as to commercial
reasonableness, conscionability or good faith.
5. The authorized capital stock of South Alabama consists of 20,000,000
shares of South Alabama Common Stock, of which _______ shares were issued and
outstanding as of _____, 2001, and _____ shares of preferred stock, no par
value, none of which is issued and outstanding. The shares of South Alabama
Common Stock that are issued and outstanding were not issued in violation of any
statutory preemptive rights of shareholders, were duly issued and are fully paid
and nonassessable under the Alabama Business Corporation Act. The shares of
South Alabama Common Stock to be issued to the shareholders of BancTrust as
contemplated by the Agreement are duly authorized, have been registered under
the Securities Act of 1933, as amended, and when properly issued and delivered
following consummation of the Merger will be validly issued, fully paid and
nonassessable.
The opinion of counsel need refer only to matters of Alabama and federal
law and may add other qualifications and explanations of counsel's opinion as
may be reasonably acceptable to BancTrust.
