AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 27, 2002
REGISTRATION NO. 333-28081
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 7
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------
BANCORPSOUTH, INC.
(Exact name of Registrant as specified in its charter)
MISSISSIPPI 6712 64-0659571
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
ONE MISSISSIPPI PLAZA AUBREY B. PATTERSON
201 SOUTH SPRING STREET BANCORPSOUTH, INC.
TUPELO, MISSISSIPPI 38804 ONE MISSISSIPPI PLAZA
(662) 680-2000 201 SOUTH SPRING STREET
(Address, including zip code, and telephone number, TUPELO, MISSISSIPPI 38804
including area code, of registrant's principal executive (662) 680-2000
offices) (Name, address, including zip code, and telephone
number, including area code, of agent for service)
-----------------
With a copy to:
HOWARD W. HERNDON, ESQ. HERMANN IVESTER, ESQ.
L. BETH EVANS, ESQ. MITCHELL, WILLIAMS, SELIG, GATES
WALLER LANSDEN DORTCH & DAVIS, PLLC & WOODYARD, P.L.L.C
511 UNION STREET, SUITE 2100 425 WEST CAPITOL AVENUE, SUITE 1800
NASHVILLE, TENNESSEE 37219 LITTLE ROCK, ARKANSAS 72201-3525
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this post-effective amendment becomes
effective.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ______________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________________________________
[FIRST LAND LOGO]
TRANSACTION PROPOSED -- YOUR VOTE IS VERY IMPORTANT
BancorpSouth, Inc. and First Land and Investment Co. have entered into
an agreement and plan of reorganization which provides that, subject to
shareholder approval and other conditions, First Land will sell all of its real
property and then transfer substantially all of its assets to BancorpSouth for
shares of BancorpSouth common stock. If the agreement and plan of reorganization
is approved and the transfer of assets is completed, First Land will distribute
the BancorpSouth shares received in exchange for substantially all of its assets
to its shareholders in dissolution and liquidation of First Land within 120 days
of the closing of the asset transfer.
To satisfy the requirement of the agreement and plan of reorganization
that First Land sell all of its real property, First Land has entered into an
agreement for sale of its real property with Arkansas Pulpwood Company, Inc.
which provides that First Land will sell all of its real property to Arkansas
Pulpwood Company for $2,450,000, subject to shareholder approval and other
conditions.
The sale of the real property, the transfer of assets and the
dissolution and liquidation of First Land cannot be completed without the
approval of First Land's shareholders. First Land's Board of Directors has
scheduled a special meeting of its shareholders to vote on the agreement and
plan of reorganization and the dissolution and liquidation of First Land.
Shareholders will also be asked to vote on the agreement for sale of real
property. In order for the agreement and plan of reorganization, the dissolution
and liquidation, and the agreement for sale of real property to be approved, at
least a majority of the outstanding shares of First Land common stock and at
least a majority of the outstanding shares of First Land common stock other than
shares owned by or voted under the control of members of First Land's Board of
Directors must be voted in favor of the agreement and plan of reorganization,
the dissolution and liquidation of First Land and the agreement for sale of real
property. The date, time and place of First Land's special meeting is as
follows:
April __, 2002
__:00 _.m. (Central Time)
BancorpSouth Bank, Cal Partee Room
300 North Jackson Street
Magnolia, Arkansas 71753
The attached Prospectus Supplement/Proxy Statement provides you with
detailed information about the proposed sale of real property, the transfer of
substantially all of First Land's assets, the dissolution and liquidation of
First Land and the companies involved. We encourage you to read it carefully.
You can also obtain information about BancorpSouth from documents it has filed
with the Securities and Exchange Commission.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the
special meeting of shareholders, please take the time to vote your proxy by
completing and mailing the enclosed proxy card to us. If your proxy is properly
given and not revoked without indicating how you want to vote, your proxy will
be counted as a vote in favor of the agreement and plan of reorganization, the
dissolution and liquidation of First Land and the agreement for sale of real
property. If you do not vote your proxy, the effect will be a vote against the
agreement and plan of reorganization, the dissolution and liquidation of First
Land and the agreement for sale of real property. If you attend the shareholders
meeting, you may vote in person if you wish, even though you previously voted
your proxy.
Very truly yours,
/s/ Partee Tuberville
President
First Land and Investment Co.
[FIRST LAND LOGO]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL __, 2002
TO THE SHAREHOLDERS OF FIRST LAND AND INVESTMENT CO.:
This serves as notice to you that a special meeting of shareholders of
First Land and Investment Co. will be held on April __, 2002 at __:00 _.m.,
Central Time, at BancorpSouth Bank, Cal Partee Room, 300 North Jackson Street,
Magnolia, Arkansas 72201, for the purpose of considering and voting upon the
following:
- Approval of the Agreement and Plan of Reorganization, dated as
of December 26, 2001, between First Land and Investment Co. and
BancorpSouth, Inc., which provides for (i) the sale of all real
property owned by First Land, (ii) the transfer of substantially
all of the assets of First Land to BancorpSouth, Inc. in
exchange for common stock of BancorpSouth, Inc. and (iii) the
dissolution and liquidation of First Land.
- Approval of the Agreement for Sale of Real Property, dated as of
March 15, 2002, between First Land and Investment Co. and
Arkansas Pulpwood Company, Inc., which provides for the sale of
all of First Land's real property to Arkansas Pulpwood Company,
Inc. for a purchase price of $2,450,000.
Shareholders are entitled to assert dissenters' rights in connection
with either the sale of First Land's real property pursuant to the agreement for
sale of real property, the sale and exchange of substantially all of First
Land's assets pursuant to the agreement and plan of reorganization, or both. If
First Land shareholders dissent from either transaction, they will not be
entitled to receive a distribution upon the dissolution and liquidation of First
Land.
Only shareholders of record of First Land common stock at the close of
business on March __, 2002 are entitled to notice of and to vote at the special
meeting or any adjournments or postponements of the special meeting. In order
for the agreement and plan of reorganization and the agreement for sale of real
property to be approved, at least a majority of the outstanding shares of First
Land common stock and at least a majority of the outstanding shares other than
shares owned by or voted under the control of members of First Land's Board of
Directors must be voted in favor of the agreement and plan of reorganization,
the dissolution and liquidation of First Land and the agreement for sale of real
property.
If the agreement and plan of reorganization is approved, First Land
will sell its real property and then transfer substantially all of its assets to
BancorpSouth. Within 120 days after the closing of the asset transfer, First
Land will distribute the shares of BancorpSouth common stock received in
exchange for the transfer of its assets to its shareholders, other than First
Land shareholders who properly exercised their rights to dissent from the asset
transfer or the agreement for sale of real property, in dissolution and
liquidation of First Land. The number of shares of BancorpSouth common stock
exchanged for substantially all of First Land's assets, and therefore the number
of shares which will later be distributed to First Land's shareholders, will
fluctuate, depending on the market price of BancorpSouth common stock.
We intend that First Land and First Land shareholders not recognize any
gain or loss for U.S. federal income tax purposes as a result of the transfer of
assets to BancorpSouth in exchange for shares of BancorpSouth common stock and
the dissolution and liquidation of First Land, except for First Land
shareholders who receive cash instead of fractional shares of BancorpSouth
common
stock or First Land shareholders who dissent from either the sale of First
Land's real property pursuant to the agreement for the sale of real property,
the sale and exchange of substantially all of First Land's assets pursuant to
the agreement and plan of reorganization, or both, under Arkansas law.
Determining the actual tax consequences of the reorganization to you can be
complicated and will depend on your specific situation and many variables not
within your control. You should consult your own tax advisor for a full
understanding of the reorganization's tax consequences.
PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TO FIRST
LAND IN THE ENCLOSED ENVELOPE AT THE ADDRESS LISTED ON THE PROXY CARD WHETHER OR
NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. ALSO, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED LETTER OF INSTRUCTION TO FIRST LAND IN THE SAME ENVELOPE. All First
Land shareholders are cordially invited to attend the special meeting. To ensure
your representation at the special meeting, please complete and promptly mail
the enclosed proxy card in the enclosed return envelope. This will not prevent
you from voting in person, but will help to secure a quorum and avoid added
solicitation costs. You may revoke your proxy at any time before it is voted.
Please review the Prospectus Supplement/Proxy Statement attached to this notice
for more complete information regarding the proposed asset transfer and the
special meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Partee Tuberville
President
March ___, 2002
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 25, 2002)
AND PROXY STATEMENT
[BANCORPSOUTH LOGO]
COMMON STOCK
This Prospectus Supplement/Proxy Statement provides you with detailed
information about a proposed (i) sale of real property by First Land and
Investment Co., (ii) transfer of assets by First Land to BancorpSouth, Inc., and
(iii) dissolution and liquidation of First Land. This document also contains
information about BancorpSouth and First Land. If the transactions are approved,
First Land will sell all of its real property and then transfer substantially
all of its assets to BancorpSouth in exchange for shares of BancorpSouth common
stock. Upon dissolution of First Land within 120 days after the closing of the
asset transfer, First Land shareholders, other than First Land shareholders who
properly exercised their right to dissent, will receive a number of shares of
BancorpSouth common stock in accordance with their respective interests in First
Land, with cash to be paid in lieu of any fractional share interest of
BancorpSouth common stock.
In exchange for substantially all of its assets, First Land will
receive a number of shares of BancorpSouth common stock equal to (a) the market
value of 433,593 shares of BancorpSouth common stock, plus (b) cash held by
First Land as of the closing date, less (c) cash necessary to pay all known
liabilities of First Land, less (d) $500,000, all divided by the market value of
a share of BancorpSouth common stock. The actual number of shares of
BancorpSouth common stock exchanged for substantially all of First Land's assets
depends on the market price of BancorpSouth common stock. The market value of a
share of BancorpSouth common stock will be determined by taking the average of
the high and the low sale prices on the New York Stock Exchange on the trading
day preceding the closing date of the asset transfer. We encourage you to
carefully read and consider this Prospectus Supplement/Proxy Statement in its
entirety.
You can obtain additional information about BancorpSouth from documents
that it has filed with the Securities and Exchange Commission. For information
on how to obtain copies of these documents, you should refer to the section of
this document entitled "WHERE YOU CAN FIND MORE INFORMATION," which begins on
page 51.
BancorpSouth common stock is listed on the New York Stock Exchange
under the symbol "BXS." On ______________, 2002, the closing price per share of
BancorpSouth common stock reported on the New York Stock Exchange was $________.
You should carefully consider the risk factors described in Item 7 of
BancorpSouth's Annual Report on Form 10-K for the year ended December 31, 2000.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSIONER HAS APPROVED OR DISAPPROVED OF THE SHARES OF BANCORPSOUTH COMMON
STOCK TO BE ISSUED UNDER THIS PROSPECTUS SUPPLEMENT/PROXY STATEMENT OR
DETERMINED IF THIS PROSPECTUS SUPPLEMENT/PROXY STATEMENT IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
SHARES OF BANCORPSOUTH COMMON STOCK ARE NOT SAVINGS OR DEPOSIT ACCOUNTS
OR OTHER OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION, AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
The date of this Prospectus Supplement/Proxy Statement is March __, 2002.
TABLE OF CONTENTS
PAGE
----
QUESTIONS AND ANSWERS ABOUT THE TRANSACTION.........................................................1
SUMMARY.............................................................................................4
THE SPECIAL MEETING................................................................................13
General...................................................................................13
Proxies...................................................................................13
Solicitation of Proxies...................................................................14
Record Date and Voting Rights.............................................................14
Submission by the Board of Directors......................................................15
Dissenters' Rights........................................................................15
THE TRANSACTION....................................................................................21
The Asset Transfer........................................................................21
Dissolution and Liquidation of First Land.................................................22
The Sale of First Land's Real Property....................................................23
Background of the Transaction.............................................................24
Actions of the Special Committee and Board of Directors of First Land.....................25
First Land's Reasons for the Transaction; Submission by the Board of Directors............26
Analysis of First Land's Financial Advisor................................................28
BancorpSouth's Reasons for the Transaction................................................30
Regulatory Approvals......................................................................31
Accounting Treatment......................................................................31
Certain U.S. Federal Income Tax Consequences..............................................31
Interests of Certain Persons in the Transaction...........................................33
Restrictions on Resales by Affiliates.....................................................33
THE AGREEMENT AND PLAN OF REORGANIZATION...........................................................35
Delivery of Certificates..................................................................35
Conditions to the Asset Transfer..........................................................35
Termination of the Agreement and Plan of Reorganization...................................36
Conduct of Business Prior to the Asset Transfer and Other Covenants.......................37
Indemnification...........................................................................38
Amendment of the Agreement and Plan of Reorganization.....................................38
Waiver....................................................................................39
Expenses..................................................................................39
PRICE RANGE OF COMMON STOCK AND DIVIDENDS..........................................................40
INFORMATION ABOUT BANCORPSOUTH.....................................................................41
INFORMATION ABOUT FIRST LAND.......................................................................43
General...................................................................................43
Certain Relationships and Related Transactions............................................43
Investment Policies of First Land.........................................................43
Description of First Land's Real Property.................................................44
Tax Treatment of First Land and its Shareholders..........................................45
Principal Shareholders and Management.....................................................46
i
COMPARISON OF RIGHTS OF SHAREHOLDERS...............................................................47
Cumulative Voting; Action By Written Consent..............................................47
Change of Control.........................................................................47
Shareholder Nominations and Proposals.....................................................48
Board of Directors........................................................................49
Removal of Directors......................................................................49
Authorized Capital Stock..................................................................50
Rights of Shareholders to Call Special Meetings...........................................50
WHERE YOU CAN FIND MORE INFORMATION................................................................51
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION........................................53
LEGAL MATTERS......................................................................................54
EXPERTS............................................................................................54
PROSPECTUS DATED JANUARY 25, 2002 ............................................................... P-1
ANNEX A - AGREEMENT AND PLAN OF REORGANIZATION ............................................... A-1
ANNEX B - AGREEMENT FOR SALE OF REAL PROPERTY ................................................ B-1
ANNEX C - PROVISIONS OF SUBCHAPTER 13 OF THE ARKANSAS BUSINESS CORPORATION
ACT OF 1987, RELATING TO DISSENTERS' RIGHTS ........................................ C-1
ANNEX D - APPRAISAL OF REAL PROPERTY BY STEVENS FORESTRY SERVICE, INC......................... D-1
ANNEX E - APPRAISAL OF REAL PROPERTY BY KINGWOOD FORESTRY SERVICES, INC....................... E-1
ANNEX F - FAIRNESS OPINION ................................................................... F-1
THIS PROSPECTUS SUPPLEMENT/PROXY STATEMENT INCORPORATES IMPORTANT
BUSINESS AND FINANCIAL INFORMATION THAT IS NOT INCLUDED IN OR DELIVERED WITH
THIS PROSPECTUS SUPPLEMENT/PROXY STATEMENT. THIS INFORMATION IS AVAILABLE
WITHOUT CHARGE TO SECURITY HOLDERS UPON ORAL OR WRITTEN REQUEST TO CATHY S.
FREEMAN, VICE PRESIDENT AND CORPORATE SECRETARY OF BANCORPSOUTH, INC., ONE
MISSISSIPPI PLAZA, 201 SOUTH SPRING STREET, TUPELO, MISSISSIPPI, 38804, (662)
680-2000. TO ENSURE TIMELY DELIVERY OF THE REQUESTED INFORMATION, YOU SHOULD
MAKE YOUR REQUEST BY APRIL __, 2002, WHICH IS FIVE BUSINESS DAYS BEFORE THE DATE
UPON WHICH YOU MUST MAKE YOUR INVESTMENT DECISION.
----------------------------------------
THIS PROSPECTUS SUPPLEMENT/PROXY STATEMENT IS NOT AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO PURCHASE ANY SECURITIES OTHER THAN SHARES OF
BANCORPSOUTH COMMON STOCK TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH AN OFFER.
ii
QUESTIONS AND ANSWERS
ABOUT THE TRANSACTION
Q: WHAT DO I NEED TO DO NOW?
A: You should read this Prospectus Supplement/Proxy Statement carefully in
its entirety, including its annexes, to consider how the matters
discussed will affect you. Whether or not you plan to attend the special
meeting of First Land shareholders, please vote your proxy promptly by
indicating on the enclosed proxy card how you want to vote, and fill out
your letter of instruction according to its instructions. Please sign
and mail the proxy card and the letter of instruction in the enclosed
return envelope, which is addressed to First Land, as soon as possible
so that your shares may be represented at the special meeting of
shareholders. If your proxy is properly given and not revoked without
indicating how you want to vote, your proxy will be counted as a vote in
favor of the agreement and plan of reorganization between First Land and
BancorpSouth, including the sale of all of First Land's real property
and the dissolution and liquidation of First Land described in the
agreement and plan of reorganization, and in favor of the agreement for
sale of real property between First Land and Arkansas Pulpwood Company.
If you do not vote on the agreement and plan of reorganization or if you
abstain, the effect will be a vote against the agreement and plan of
reorganization and the dissolution and liquidation of First Land. If you
do not vote on the agreement for sale of real property, or if you
abstain, the effect will be a vote against the agreement for sale of
real property.
Regardless of whether you plan to attend the special meeting in person,
we encourage you to vote your proxy promptly. This will help to ensure
that a quorum is present at the special meeting and will help reduce the
costs associated with the solicitation of proxies.
Q: MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?
Yes. You can take back your proxy at any time until shareholders vote at
the special meeting of shareholders and either change your vote or
attend the special meeting and vote in person.
You may change your vote in any of the following ways:
- by sending written notice to First Land prior to the special
meeting stating that you would like to revoke your proxy;
- by completing, signing and dating another proxy card and
returning it by mail to First Land prior to the special meeting;
- by delivering at the special meeting a duly executed proxy; or
- by attending the special meeting and voting in person.
Q: WHAT IS THE PURPOSE OF THIS PROSPECTUS SUPPLEMENT/PROXY STATEMENT?
A: This document serves as First Land's proxy statement and as
BancorpSouth's prospectus. As a proxy statement, this document is being
provided to First Land shareholders because First Land's Board of
Directors is soliciting your proxy to vote to approve the agreement and
plan of reorganization, the dissolution and liquidation of First Land
and the agreement for sale of real property. As a prospectus, this
document is being provided to First Land shareholders by BancorpSouth
because First Land is receiving shares of BancorpSouth common stock in
exchange for substantially all of its assets, and because, if the asset
transfer is completed,
First Land will distribute such shares of BancorpSouth common stock to
its shareholders in connection with the dissolution and liquidation of
First Land.
Q: IS THERE OTHER INFORMATION I SHOULD CONSIDER?
A: Yes. Much of the business and financial information about BancorpSouth
that may be important to you is not included directly in this document.
Instead, this information is incorporated into this document by
reference to documents separately filed by BancorpSouth with the
Securities and Exchange Commission. This means that BancorpSouth may
satisfy its disclosure obligations to you by referring you to one or
more documents separately filed by them with the SEC. See "WHERE YOU CAN
FIND MORE INFORMATION," beginning on page 51, for a list of documents
that BancorpSouth has incorporated by reference into this Prospectus
Supplement/Proxy Statement and for instructions on how to obtain copies
of these documents. The documents are available to you without charge.
Q: WHAT IF I CHOOSE NOT TO READ THE DOCUMENTS INCORPORATED BY REFERENCE?
A: Information contained in a document that is incorporated into this
Prospectus Supplement/Proxy Statement by reference is part of this
Prospectus Supplement/Proxy Statement, unless it is superseded by
information contained directly in this Prospectus Supplement/Proxy
Statement or in documents filed by BancorpSouth with the SEC after the
date of this Prospectus Supplement/Proxy Statement. Information that is
incorporated from another document is considered to have been disclosed
to you whether or not you choose to read the document.
Q: WHAT WILL FIRST LAND RECEIVE FOR THE ASSETS BEING TRANSFERRED TO
BANCORPSOUTH?
A: In exchange for substantially all of its assets, First Land will receive
a number of shares of BancorpSouth common stock equal to (a) the market
value of 433,593 shares of BancorpSouth common stock, plus (b) cash held
by First Land as of the closing date, less (c) cash necessary to pay all
known liabilities of First Land, (d) less $500,000, all divided by the
market value of a share of BancorpSouth common stock. The market value
of a share of BancorpSouth common stock will be determined by taking the
average of the high and the low sale prices for BancorpSouth common
stock on the New York Stock Exchange on the trading day preceding the
closing date of the asset transfer.
Q: WHAT WILL FIRST LAND SHAREHOLDERS RECEIVE UPON THE DISSOLUTION AND
LIQUIDATION OF FIRST LAND?
A: Upon dissolution and liquidation of First Land, which will occur within
120 days of the closing of the asset transfer, the shares of
BancorpSouth common stock received in connection with the asset transfer
will be distributed by First Land to its shareholders, other than those
who properly exercised their right to dissent from the agreement for
sale of real property or the agreement and plan of reorganization, or
both, in accordance with their respective ownership interests in First
Land. First Land shareholders will receive cash instead of any
fractional shares of BancorpSouth common stock to which they would
otherwise be entitled.
Q: WHAT ARE THE TAX CONSEQUENCES OF THE TRANSACTIONS TO ME?
A: We intend that, for federal income tax purposes, the asset transfer to
BancorpSouth and the dissolution and liquidation of First Land will be
treated as a reorganization within the meaning of ss. 368(a)(1)(C) of
the Internal Revenue Code, and, accordingly, that First Land and
2
First Land shareholders will not recognize any gain or loss for U.S.
federal income tax purposes as a result of the transfer of assets to
BancorpSouth in exchange for shares of BancorpSouth common stock and the
dissolution and liquidation of First Land, except for First Land
shareholders who receive cash instead of fractional shares of
BancorpSouth common stock or First Land shareholders who dissent under
Arkansas law. Determining the actual tax consequences of the
reorganization to you can be complicated and will depend on your
specific situation and many variables not within your control. You
should consult your own tax advisor for a full understanding of the
reorganization's tax consequences.
THIS TAX TREATMENT MAY NOT APPLY TO ALL FIRST LAND SHAREHOLDERS. YOU
SHOULD CONSULT YOUR OWN TAX ADVISOR FOR A FULL UNDERSTANDING OF THE TAX
CONSEQUENCES OF THE ASSET TRANSFER AND DISSOLUTION AND LIQUIDATION OF
FIRST LAND THAT ARE PARTICULAR TO YOU.
Q: WHAT HAPPENS IF I MISS THE PROXY DEADLINE?
A: Your proxy must be received by First Land prior to the shareholders
meeting. Missing the proxy deadline will invalidate the proxy granted by
the enclosed proxy card and is therefore the same as voting against the
agreement and plan of reorganization and the agreement for sale of real
property unless you do one of the following:
- vote by proxy at the special meeting; or
- attend the special meeting and vote in person.
Q. WHOM DO I CONTACT IF I HAVE QUESTIONS ABOUT THE REORGANIZATION?
A: If you have more questions about the reorganization, you should contact:
First Land and Investment Co.
Post Office Box 111
Magnolia, Arkansas 71753
Attention: Partee Tuberville
Phone Number: (870) 234-0473
Q. ARE BANCORPSOUTH SHAREHOLDERS REQUIRED TO APPROVE THE REORGANIZATION?
A: No, BancorpSouth shareholders are not required to approve the
reorganization.
Q. DO I HAVE DISSENTERS' RIGHTS?
A: Yes, if you so choose, you are entitled to exercise dissenters' rights
in connection with either the agreement for sale of real property, the
sale and exchange of substantially all of First Land's assets pursuant
to the agreement and plan of reorganization, or both. However, if you
dissent from either transaction, you will not be entitled to receive a
distribution upon the dissolution and liquidation of First Land.
Q. WHEN WILL THE TRANSFER OF ASSETS BE COMPLETED?
A: We expect to complete the transaction in April 2002, promptly after the
First Land shareholders approve the agreement and plan of reorganization
and First Land sells its real property, provided that all of the other
conditions to the transaction have been satisfied at such time. If the
agreement for sale of real property and the agreement and plan of
3
reorganization are approved, First Land will sell its real property and
then promptly transfer substantially all of its assets to BancorpSouth
in exchange for shares of BancorpSouth common stock.
4
SUMMARY
This summary highlights selected information from this document. It
does not contain all of the information that is important to you. You should
carefully read this entire document and the documents to which it refers you in
order to understand fully the reorganization and to obtain a more complete
description of the companies and the legal terms of the transaction. For
information on how to obtain copies of documents referred to in this document,
you should read the section of this document entitled "Where You Can Find More
Information." Each item in this summary includes a page reference that directs
you to a more complete description in this document of the topic discussed.
THE COMPANIES (PAGES P-1, 41 AND 43)
BANCORPSOUTH, INC.
One Mississippi Plaza
201 South Spring Street
Tupelo, Mississippi 38804
(662) 680-2000
BancorpSouth is a Mississippi corporation and a bank holding company
with commercial banking and financial services operations in Mississippi,
Tennessee, Alabama, Arkansas, Texas and Louisiana. Its principal subsidiary is
BancorpSouth Bank. At September 30, 2001, BancorpSouth had total assets of about
$9.4 billion, deposits of about $7.8 billion, and shareholders' equity of about
$796.4 million. For a more detailed description of BancorpSouth's business,
please see "Information About BancorpSouth" on page 41 and the attached
Prospectus, on page P-1, dated as of January 25, 2002.
FIRST LAND AND INVESTMENT COMPANY
Post Office Box 111
Magnolia, Arkansas 71753
(870) 234-0473
First Land is an Arkansas corporation located in Magnolia, Arkansas.
First Land's primary assets are 433,593 shares of BancorpSouth common stock and
around 1000 acres of timberland located in Columbia and Lafayette counties,
Arkansas. For a more detailed description of First Land's business, please see
"Information About First Land" on page 43.
THE ASSET TRANSFER (PAGE 21)
BancorpSouth and First Land have entered into an agreement and plan of
reorganization, under which First Land will (i) sell all of its real property,
(ii) transfer substantially all of its assets, which consist of shares of
BancorpSouth common stock, cash (less cash necessary to pay all known
liabilities of First Land), furniture, fixtures and office equipment, to
BancorpSouth, in exchange for BancorpSouth common stock and (iii) liquidate and
dissolve, subject to the approval of First Land's shareholders and other
conditions. BancorpSouth and First Land hope to complete the asset transfer
during April 2002. The agreement and plan of reorganization is attached to this
Prospectus Supplement/Proxy Statement as Annex A. You should read it carefully.
5
THE SALE OF FIRST LAND'S REAL PROPERTY (PAGE 23)
BancorpSouth will not acquire First Land's real property, which
consists of around 1000 acres of timberland and certain mineral and royalty
interests. A condition to the closing of the asset transfer to BancorpSouth is
that First Land will sell its timberland and royalty interests to other parties.
First Land has entered into an agreement for sale of real property with Arkansas
Pulpwood Company, Inc. pursuant to which Arkansas Pulpwood Company will purchase
all of First Land's real property for $2,450,000, subject to certain conditions,
including approval of the agreement for sale of real property and the agreement
and plan of reorganization by First Land's shareholders. First Land will pay
capital gains taxes on the net proceeds of the sale of the timberland and
royalty interests in excess of its basis in those assets. If the sale of the
real property for $2,450,000 is consummated, it is expected that, after paying
transaction costs and taxes, First Land will net approximately $1,630,000. The
agreement for sale of real property is attached to this Prospectus
Supplement/Proxy Statement as Annex B. You should read it carefully.
WHAT FIRST LAND WILL RECEIVE IN THE ASSET TRANSFER (PAGE 21)
In exchange for substantially all of its assets, First Land will
receive a number of shares of BancorpSouth common stock equal to (a) the market
value of 433,593 shares of BancorpSouth common stock, plus (b) cash held by
First Land as of the closing date, less (c) cash necessary to pay all known
liabilities of First Land, less (d) $500,000, all divided by the market value of
a share of BancorpSouth common stock. The market value of a share of
BancorpSouth common stock will be determined by taking the average of the high
and the low sale prices of BancorpSouth common stock on the New York Stock
Exchange on the trading day preceding the closing date of the asset transfer.
WHAT FIRST LAND SHAREHOLDERS WILL RECEIVE UPON DISSOLUTION OF FIRST LAND
(PAGE 22)
If the agreement and plan of reorganization is approved and the
transfer of assets is completed, First Land will distribute the BancorpSouth
shares received in exchange for substantially all of its assets and any other
assets not conveyed to BancorpSouth to First Land's shareholders, except for
shareholders that exercised their right to dissent from the agreement for sale
of real property or the agreement and plan of reorganization, or both, in
dissolution of First Land within 120 days of the closing of the asset transfer.
No First Land shareholder will receive fractional shares of BancorpSouth common
stock. Instead, a First Land shareholder will receive cash equal to the value of
one share of BancorpSouth common stock as reported on the New York Stock
Exchange on or around the time transfer of the shares of BancorpSouth common
stock to the First Land shareholders is completed, multiplied by the fraction of
a share of BancorpSouth common stock to which the shareholder would otherwise be
entitled.
BANCORPSOUTH'S STOCK PRICE WILL FLUCTUATE (PAGE 22)
BancorpSouth expects the market price of its common stock to fluctuate
due to market factors beyond its control before and following the closing of the
asset transfer. Because the number of shares provided by BancorpSouth as
consideration for substantially all of the assets of First Land depends upon the
average of the high and low sale prices of a share of BancorpSouth common stock
on the trading day preceding the closing of the asset transfer, the number of
shares of BancorpSouth common stock that First Land (and its shareholders, as a
result of the dissolution and liquidation of First Land) will receive in the
reorganization may increase or decrease. BancorpSouth cannot assure you that the
market price of BancorpSouth common stock will not increase or decrease before
or after completion of the asset transfer.
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SPECIAL SHAREHOLDERS MEETING (PAGE 13)
A special meeting of the shareholders of First Land will be held on
April __, 2002 at the following time and place:
April __, 2002
__:00 _.m. (Central Time)
BancorpSouth Bank, Cal Partee Room
300 North Jackson Street
Magnolia, Arkansas 71753
At the special meeting, shareholders of First Land will be asked to
approve the agreement and plan of reorganization between First Land and
BancorpSouth and the dissolution and liquidation of First Land, and the
agreement for sale of real property between First Land and Arkansas Pulpwood
Company, Inc.
ACTIONS OF THE SPECIAL COMMITTEE AND BOARD OF DIRECTORS OF FIRST LAND (PAGE 25)
Five of First Land's eight directors are shareholders of BancorpSouth
and therefore have an interest in the asset transfer. First Land's Board of
Directors appointed a Special Committee of three disinterested directors to
investigate the proposed transaction and make a recommendation to the Board of
Directors. Upon completion of the investigation, the Special Committee concluded
that the proposed transaction is in the best interests of First Land and its
shareholders and unanimously recommended that the Board of Directors approve it.
The Board of Directors concluded that the proposed transaction is in the best
interests of First Land and its shareholders and unanimously approved it. The
Board of Directors also unanimously approved submission of the proposed
transaction to the shareholders, but without recommendation because of its
conflict of interest. All members of the Board of Directors who are shareholders
of First Land intend to vote their shares "FOR" approval of the agreement and
plan of reorganization and the resulting dissolution and liquidation of First
Land.
After First Land had entered into the agreement and plan of
reorganization with BancorpSouth, First Land received an offer from Arkansas
Pulpwood Company to purchase all of First Land's real property. The Board of
Directors unanimously determined that it was in the best interests of First Land
and its shareholders to enter into the agreement for sale of real property with
Arkansas Pulpwood Company, subject to certain conditions, including shareholder
approval. Because the sale of the real property is a condition to the closing of
the transfer of assets to BancorpSouth in which five of First Land's eight
directors have an interest, the Directors unanimously approved submission of the
agreement for the sale of real property to the shareholders without
recommendation. All members of the Board of Directors who are shareholders in
First Land intend to vote their shares "FOR" approval of the agreement for sale
of real property.
VOTE REQUIRED TO COMPLETE THE ASSET TRANSFER AND DISSOLUTION (PAGE 15)
In order for the asset transfer and dissolution and liquidation to be
approved, at least (i) a majority of the outstanding shares of First Land common
stock and (ii) a majority of the outstanding shares other than shares owned by
or voted under the control of members of First Land's Board of Directors must be
voted in favor of the agreement and plan of reorganization and the dissolution.
First Land expects that its executive officers and directors will vote all of
their shares of First Land common stock in favor of the agreement and plan of
reorganization and the dissolution.
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The following chart describes the First Land shareholder vote required
to approve the agreement and plan of reorganization:
Number of shares of common stock of First Land
outstanding on March ___, 2002.................... 136,211
Number of votes necessary to approve the agreement
and plan of reorganization and dissolution and
liquidation....................................... 68,106
Percentage of outstanding shares of First Land
common stock necessary to approve the agreement
and plan of reorganization and dissolution and
liquidation....................................... 50.01%
Number of votes that executive officers and
directors of First Land and their affiliates can
cast as of March __, 2002......................... 22,376
Percentage of votes that executive officers and
directors of First Land and their affiliates can
cast as of March __, 2002......................... 16.4%
Number of shares of common stock of First Land
exclusive of shares owned by or voted under the
control of members of First Land's Board of
Directors......................................... 113,835
Number of shares of First Land common stock
exclusive of shares of common stock owned by or
voted under the control of members of First
Land's Board of Directors necessary to approve the
agreement and plan of reorganization and
dissolution and liquidation....................... 56,918
Percentage of outstanding shares of First Land
common stock exclusive of shares owned by or voted
under the control of members of First Land's Board
of Directors necessary to approve the agreement
and plan of reorganization and dissolution and
liquidation....................................... 50.01%
VOTE REQUIRED TO APPROVE THE AGREEMENT FOR SALE OF REAL PROPERTY (PAGE 15)
The same votes necessary to approve the asset transfer and dissolution
and liquidation of First Land as specified in the preceding chart are also
required to approve the agreement for sale of real property.
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RECORD DATE; VOTING POWER (PAGE 14)
You can vote at the special meeting of First Land shareholders if you
owned First Land common stock as of the close of business on March __, 2002, the
record date set by First Land's Board of Directors. Each share of First Land
common stock is entitled to one vote. On March __, 2002, there were 136,211
shares of First Land common stock outstanding and entitled to vote on the
agreement and plan of reorganization and agreement for sale of real property. On
March _____, 2002 there were 113,835 shares of First Land common stock
outstanding exclusive of shares owned by or voted under the control of members
of First Land's Board of Directors.
BACKGROUND OF THE TRANSACTION (PAGE 24)
The Board of Directors of First Land has recognized for several years
the inefficiencies inherent in continuing First Land as a business entity. In
1998, Mercer Capital Management, Inc. advised the Board of Directors that the
most advantageous type of reorganization to First Land shareholders would be a
tax-free reorganization with First United Bancshares, Inc. First United
Bancshares determined that it would not enter into a reorganization with First
Land.
Upon the merger of First United Bancshares with and into BancorpSouth,
First Land contacted BancorpSouth to determine BancorpSouth's interest in
acquiring First Land or its assets. In late 2001, BancorpSouth submitted a
proposal that, with modification, is embodied in the agreement and plan of
reorganization.
WHY FIRST LAND WANTS TO TRANSFER ITS ASSETS TO BANCORPSOUTH (PAGE 26)
First Land desires to transfer substantially all of its assets, which,
after the sale of its real property, will consist primarily of shares of
BancorpSouth common stock and cash, because the Board has reviewed other
alternatives and believes that this transaction is the best option. The proposed
transaction will eliminate administrative costs, legal fees and accounting fees
that do not add value to First Land's assets, will provide First Land
shareholders a liquid investment in place of an illiquid investment, will enable
First Land shareholders who sell BancorpSouth shares formerly represented by
First Land shares to realize an amount commensurate with the underlying value of
First Land's assets, and may be consummated in a manner that allows First Land
shareholders to exchange their shares of First Land stock for shares of
BancorpSouth common stock without the recognition of taxable income by either
First Land or its shareholders.
In determining whether to approve the asset transfer, the Board of
Directors of First Land consulted with its senior management and legal and
financial advisors and considered the strategic, financial and other
considerations referred to under "The Transaction - First Land's Reasons for the
Transaction; Submission by the Board of Directors," starting at page 26.
WHY FIRST LAND WANTS TO SELL ITS REAL PROPERTY (PAGE 23)
BancorpSouth will not acquire the real property and will not effect the
asset transfer with First Land until after First Land sells its real property. A
necessary step in the consummation of the agreement and plan of reorganization
is the sale of First Land's real property.
ACCOUNTING TREATMENT (PAGE 31)
We expect that the asset transfer will be treated as a purchase
transaction under generally accepted accounting principles for accounting and
financial reporting purposes.
9
FEDERAL INCOME TAX CONSEQUENCES (PAGE 31)
We intend that, for federal income tax purposes, the asset transfer to
BancorpSouth and the dissolution and liquidation of First Land will be treated
as a reorganization within the meaning of ss. 368(a)(1)(C) of the Internal
Revenue Code, and, accordingly, that First Land and First Land shareholders,
except for First Land shareholders who receive cash instead of fractional shares
of BancorpSouth common stock or First Land shareholders who dissent from the
asset transfer or the sale of real property under Arkansas law, will not
recognize any gain or loss for U.S. federal income tax purposes as a result of
the transfer of assets to BancorpSouth in exchange for shares of BancorpSouth
common stock and the dissolution and liquidation of First Land. Determining the
actual tax consequences of the reorganization to you can be complicated and will
depend on your specific situation and many variables not within your control.
You should consult your own tax advisor for a full understanding of the
reorganization's tax consequences.
First Land will not be obligated to complete the reorganization unless
it receives an opinion from its tax counsel, dated the closing date, that the
reorganization will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code and that BancorpSouth and First Land will each be a party to that
reorganization within the meaning of Section 368(b) of the Internal Revenue
Code. If such opinion is rendered, the U.S. federal income tax consequences
should be as described above. The opinion of First Land's tax counsel, however,
does not bind the Internal Revenue Service and does not preclude the IRS or the
courts from adopting a contrary position.
INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION (PAGE 33)
Five of the eight First Land directors are shareholders of BancorpSouth
and will receive shares of BancorpSouth common stock upon the liquidation and
dissolution of First Land on the same basis as other First Land shareholders.
YOU MAY DISSENT FROM THE SALE AND EXCHANGE OF SUBSTANTIALLY ALL OF THE
ASSETS OR THE SALE OF THE REAL PROPERTY OR BOTH (PAGE 15)
Arkansas law permits First Land shareholders to dissent from the sale
of First Land's real property pursuant to the agreement for sale of real
property, from the sale and exchange of substantially all of First Land's assets
pursuant to the agreement and plan of reorganization, or both, and, if the
transaction from which the shareholder dissents is completed, to receive the
fair value of their shares of First Land common stock in cash. To do this, a
First Land shareholder must follow certain procedures, including filing certain
notices with First Land and refraining from voting their shares in favor of the
transaction from which the shareholder dissents. If a shareholder dissents from
either the sale of First Land's real property pursuant to the agreement for sale
of real property or from the sale and exchange of substantially all of First
Land's assets pursuant to the agreement and plan of reorganization and the
transaction from which the shareholder dissents is completed, the shareholder
will not be entitled to a distribution upon the dissolution of First Land, and
the shareholder's only right will be to receive the appraised fair value of the
shareholder's shares of First Land common stock in cash. A copy of the Arkansas
statutes describing these dissenters' rights and the procedures for exercising
them is attached as Annex C to this Prospectus Supplement/Proxy Statement. First
Land shareholders who perfect their dissenters' rights and receive cash in
exchange for their shares of First Land common stock may recognize gain or loss
for U.S. federal income tax purposes.
The exercise of dissenters' rights with respect to no more than 2% of
First Land's shares is a condition precedent to the obligations of both First
Land and BancorpSouth to complete the asset
10
transfer. Therefore, the exercise of dissenters' rights with respect to more
than 2% of First Land's shares would jeopardize the transaction.
NO REGULATORY APPROVALS REQUIRED (PAGE 31)
First Land and BancorpSouth are not aware of any regulatory or
governmental requirements that must be complied with or approvals that must be
obtained in connection with the asset transfer or the subsequent dissolution and
liquidation of First Land other than the requirements of the Arkansas Business
Corporation Act of 1987 governing the dissolution of Arkansas corporations.
BancorpSouth also intends to notify the Federal Reserve Board of the
transactions.
CONDITIONS TO COMPLETION OF THE ASSET TRANSFER (PAGE 35)
The completion of the asset transfer depends on a number of conditions
being met, including the following:
- Shareholders of First Land approving the agreement and plan of
reorganization;
- The sale of all of First Land's real property;
- The absence of any governmental order blocking completion of the
transfer, or of any proceedings by a government body trying to
block it; and
- Receipt of an opinion of legal counsel to First Land that the
asset transfer and liquidation and dissolution of First Land
will be treated for U.S. federal income tax purposes as a
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code and that BancorpSouth and First Land will
each be a party to that reorganization.
In cases where the law permits, a party to the agreement and plan of
reorganization could elect to waive a condition that has not been satisfied and
complete the asset transfer although the party is entitled not to complete the
asset transfer. We cannot be certain whether or when any of these conditions
will be satisfied (or waived, where permissible), or that the asset transfer
will be completed.
TERMINATION OF THE AGREEMENT AND PLAN OF REORGANIZATION (PAGE 36)
We can agree at any time to terminate the agreement and plan of
reorganization without completing the transfer, even if the shareholders of
First Land have already voted to approve it.
BancorpSouth may terminate the agreement and plan of reorganization if
the First Land shareholders fail to approve the agreement and plan of
reorganization or if First Land's Board of Directors has withdrawn, modified or
changed in a manner adverse to BancorpSouth its approval of the asset transfer,
or its submission of the agreement and plan of reorganization and the
transactions contemplated by it to its shareholders.
In addition, either of us can terminate the agreement and plan of
reorganization in the following circumstances:
- After a final decision by a governmental authority to prohibit
the transfer, or 60 days after the rejection of an application
for a required governmental approval;
- If the asset transfer is not completed by April 30, 2002; or
11
- If the other party violates, in a significant way, any of its
representations, warranties, covenants or obligations contained
in the agreement and plan of reorganization.
Generally, a party can only terminate the agreement and plan of
reorganization in one of these situations if that party is not in violation of
the agreement and plan of reorganization or if its violations of the agreement
and plan of reorganization are not the cause of the event permitting
termination.
COMPARATIVE PER SHARE MARKET PRICE INFORMATION (PAGE 40)
Shares of BancorpSouth common stock are listed on the New York Stock
Exchange. On December 24, 2001, the last full trading day prior to the signing
of the agreement and plan of reorganization, BancorpSouth common stock closed at
$16.97 per share. On March __, 2002, BancorpSouth common stock closed at $_____
per share. Of course, the market price of BancorpSouth common stock will
fluctuate prior to and after completion of the asset transfer. You should obtain
current stock price quotations for BancorpSouth common stock.
There is no established trading market for shares of First Land common
stock, which is inactively traded in private transactions. Therefore, reliable
information is not available about the prices at which shares of First Land
common stock have been bought and sold. In four separate transactions between
1999 and 2001, First Land purchased a total of 19,000 First Land shares of
common stock at a price of $25.00 per share.
COMPARISON OF RIGHTS OF SHAREHOLDERS (PAGE 47)
At the closing of the asset transfer, First Land will receive shares of
BancorpSouth common stock, and at the time of dissolution and liquidation of
First Land (which must occur within 120 days of the closing of the asset
transfer), the shares of BancorpSouth common stock will be distributed to First
Land shareholders, who will become BancorpSouth shareholders. BancorpSouth is a
Mississippi corporation governed by provisions of the Mississippi Business
Corporation Act and BancorpSouth's restated articles of incorporation and
amended and restated bylaws. First Land is an Arkansas corporation governed by
provisions of the Arkansas Business Corporation Act of 1987 and First Land's
articles of incorporation, as amended, and bylaws, as amended. See "COMPARISON
OF RIGHTS OF SHAREHOLDERS."
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE (PAGE 53)
This document, and other documents to which you are referred in this
document, contain forward-looking statements that are subject to risks and
uncertainties. Forward-looking statements generally refer to a future period
and/or include any of the words "believes," "expects," "anticipates," "should,"
"will," "estimates," "plans" or "intends" or similar expressions. Many possible
events or factors could affect each of our future financial results and
performance and that of BancorpSouth after the reorganization and could cause
those results or performance to differ materially from those expressed in
forward-looking statements. These possible events or factors include the
following:
- Legal and regulatory risks and uncertainties;
- Economic, political and competitive forces affecting our
businesses, markets, constituencies or securities; and
- Inaccuracies in our analyses of these risks and forces, and lack
of success of strategies developed to deal with them.
12
THE SPECIAL MEETING
GENERAL
This Prospectus Supplement/Proxy Statement is first being mailed, on or
about March __, 2002, to all persons who were First Land shareholders on March
__, 2002.
Along with this Prospectus Supplement/Proxy Statement, First Land
shareholders are being provided with a Notice of Special Meeting, a form of
proxy card that is solicited by First Land's Board of Directors for use at the
special meeting of First Land shareholders and at any adjournments or
postponements of that meeting and a letter of instruction, pursuant to which the
shareholders shall provide guidance as to how many shares of BancorpSouth common
stock they will be entitled to receive upon the dissolution and liquidation of
First Land.
At the special meeting, First Land shareholders will consider and vote
upon a proposal to approve the Agreement and Plan of Reorganization, dated as of
December 26, 2001, between First Land and BancorpSouth, which provides for the
sale of First Land's real property, the transfer of substantially all of First
Land's assets to BancorpSouth and the dissolution and liquidation of First Land.
First Land shareholders will also consider and vote upon a proposal to approve
an Agreement for Sale of Real Property which provides for the sale of all of
First Land's real property to Arkansas Pulpwood Company for $2,450,000.
The special meeting of First Land shareholders will be held at the
following time and place:
April __, 2002
__:00 _.m. (Central Time)
BancorpSouth Bank
Cal Partee Room
300 North Jackson Street
Magnolia, Arkansas 71753
PROXIES
We encourage First Land shareholders to promptly vote their proxies by
completing, signing, dating and returning the enclosed proxy card solicited by
First Land's Board of Directors if they are unable to attend the special meeting
in person or wish to have their shares of First Land common stock voted by proxy
even if they do attend the meeting.
A First Land shareholder may revoke any proxy given in connection with
this solicitation by:
- Delivering to First Land's corporate secretary a written notice
revoking the proxy prior to the taking of the vote at the
special meeting;
- Delivering to First Land's corporate secretary a duly executed
proxy relating to the same shares bearing a later date;
- Delivering at the special meeting a duly executed proxy relating
to the same shares; or
- Attending the meeting and voting in person (however, attendance
at the special meeting without voting at the meeting will not in
and of itself constitute a revocation of a proxy).
13
First Land shareholders should address all written notices of
revocation and other communications with respect to the revocation of proxies to
the following:
First Land and Investment Co.
Post Office Box 111
Magnolia, Arkansas 71753
Attention: Homer Greer, Jr.
For a notice of revocation or later proxy to be valid, however, First
Land must actually receive it prior to the vote of First Land shareholders at
the special meeting. First Land will vote all shares of First Land common stock
represented by valid proxies received through this solicitation and not revoked
before they are exercised as instructed by the shareholders signing the proxies.
If no specification is made, shares of First Land common stock represented by
proxies received will be voted for approval of the agreement and plan of
reorganization, the dissolution and liquidation of First Land, the agreement for
sale of real property and in the discretion of the proxy holder as to any other
matters that properly may come before the special meeting.
First Land is currently unaware of any other matters that may be
presented for action at the special meeting. If other matters do properly come
before the special meeting, then shares of First Land common stock represented
by proxies will be voted (or not voted) by the persons named in the proxies in
their discretion.
SOLICITATION OF PROXIES
In addition to the solicitation of proxies by mail, if necessary, First
Land may use several of its directors to solicit proxies from First Land
shareholders, either personally or by telephone, telegram, facsimile or special
delivery letter. Such directors will not be specially compensated.
RECORD DATE AND VOTING RIGHTS
First Land's Board of Directors has fixed March __, 2002 as the record
date for the determination of First Land shareholders entitled to receive notice
of and to vote at First Land's special meeting of shareholders. Accordingly,
only First Land shareholders of record at the close of business on March __,
2002 will be entitled to notice of and to vote at the special meeting. At the
close of business on First Land's record date, there were 136,211 shares of
First Land common stock entitled to vote at the special meeting held by around
379 holders of record, and the directors of First Land beneficially owned or
exercised voting control of around 16.4% of the outstanding shares of First Land
common stock.
The presence, in person or by proxy, of shares of First Land common
stock representing a majority of the votes entitled to be cast at the First Land
special meeting is necessary to constitute a quorum. Each share of First Land
common stock outstanding on First Land's record date entitles its holder to one
vote as to the approval of the agreement and plan of reorganization, the
dissolution and liquidation of First Land, the agreement for sale of real
property and any other proposal that may properly come before the special
meeting.
For purposes of determining the presence or absence of a quorum for the
transaction of business, First Land will count shares of First Land common stock
present in person at the special meeting but not voting, and shares of First
Land common stock for which it has received proxies but with respect to which
holders of such shares have abstained, as present at the special meeting.
Abstentions are counted as present at the First Land special meeting for
purposes of determining
14
whether a quorum exists and have the effect of a vote "against" any matter as to
which they are specified.
Under Arkansas law, approval of the agreement for sale of real
property, the agreement and plan of reorganization and the dissolution and
liquidation of First Land requires the affirmative vote of the holders of a
majority of all outstanding shares of First Land and the holders of a majority
of the outstanding shares of First Land other than those owned by or voted under
the control of members of First Land's Board of Directors entitled to be cast on
the agreement and plan of reorganization, the agreement for sale of real
property and the dissolution. Because approval of the agreement and plan of
reorganization and the agreement for sale of real property requires the
affirmative vote of the holders of a majority of the outstanding shares of First
Land common stock and the holders of a majority of the outstanding shares of
First Land other than those owned by or voted under the control of members of
First Land's Board of Directors, abstentions will have the same effect as
negative votes. Accordingly, First Land's Board of Directors urges First Land
shareholders to complete, date and sign the enclosed proxy card and return it
promptly in the enclosed, postage-paid envelope.
SUBMISSION BY THE BOARD OF DIRECTORS
First Land's Board of Directors has unanimously approved the agreement
and plan of reorganization. Five of First Land's eight directors are
shareholders of BancorpSouth and therefore have an interest in the asset
transfer. First Land's Board of Directors appointed a Special Committee of three
disinterested directors to investigate the proposed transaction with
BancorpSouth and make a recommendation to the Board of Directors. Upon
completion of the investigation, the Special Committee concluded that the
proposed transaction is in the best interests of First Land and its shareholders
and unanimously recommended that the Board of Directors approve it. The Board of
Directors concluded that the proposed transaction is in the best interests of
First Land and its shareholders and unanimously approved it. The Board of
Directors also unanimously approved submission of the proposed transaction to
the shareholders, but without recommendation because of its conflict of
interest. The conclusions of First Land's Special Committee and Board of
Directors with respect to the transaction are based on a number of factors. See
"THE TRANSACTION -- Reasons for the Transaction; Submission by the Board of
Directors." All members of the Board of Directors who are shareholders of First
Land intend to vote their shares "FOR" approval of the agreement and plan of
reorganization.
After First Land had entered into the agreement and plan of
reorganization with BancorpSouth, First Land received an offer from Arkansas
Pulpwood Company, Inc. to purchase all of First Land's real property. The Board
of Directors unanimously determined that it was in the best interest of First
Land and its shareholders to enter into the agreement for sale of real property
with Arkansas Pulpwood Company, subject to certain conditions, including
shareholder approval and the expected closing of the asset transfer with
BancorpSouth. Because the sale of the real property is a condition to the
closing of the transfer of assets to BancorpSouth in which five of First Land's
eight directors have an interest, the Directors unanimously approved submission
of the agreement for the sale of real property to the shareholders without
recommendation. All members of the Board of Directors who are shareholders of
First Land intend to vote their shares "FOR" approval of the agreement for sale
of real property.
DISSENTERS' RIGHTS
Holders of First Land common stock who notify First Land in writing of
their intent to demand payment for their shares before the vote on the agreement
and plan of reorganization, the agreement for sale of real property, or both,
and who do not vote in favor of the transaction from which they dissent, will be
entitled to dissenters' rights and to demand payment of the fair value of
15
their shares as a result of the sale and exchange of substantially all of First
Land's assets not in the ordinary course of business under Subchapter 13 of the
Arkansas Business Corporation Act of 1987. If a shareholder dissents from either
the sale of First Land's real property pursuant to the agreement for sale of
real property or from the sale and exchange of substantially all of First Land's
assets pursuant to the agreement and plan of reorganization, or both, and the
transaction or transactions from which the shareholder dissents is completed,
the shareholder will not be entitled to a distribution upon the dissolution of
First Land, and the shareholder's only right will be to receive the appraised
fair value of the shareholder's shares of First Land common stock in cash.
If the statutory procedure is followed and dissenting holders and First
Land do not otherwise agree on the value of such holders' shares, these rights
could lead to a judicial determination of the fair value required to be paid to
such dissenting holders for their shares. Arkansas law defines "fair value" as
the value of the shares immediately before consummation of the transaction from
which the holders dissent, excluding any appreciation or depreciation in
anticipation of the transaction unless such exclusion would be inequitable, but
it does not prescribe a method for determining fair value. Consequently, any
judicial determination of the fair value of the shares could be based upon any
valuation method or combination of methods the court deems appropriate, and the
value so determined could be more or less than the consideration paid in
connection with the asset transfer. If any holder of shares who demands payment
under Arkansas law fails to perfect, or effectively waives, his or her right to
payment as a dissenting shareholder, as provided under Arkansas law, the
shareholder will receive a distribution upon the dissolution of First Land
according to his or her percentage ownership interest in First Land.
A person having a beneficial interest in shares of First Land common
stock that are held of record in the name of another person, such as a nominee,
must act promptly to cause the record holder to follow the steps summarized
below properly and in a timely manner to perfect whatever dissenters' rights the
beneficial owner may have, or must submit to First Land the record shareholder's
written consent to the dissent not later than the time the beneficial owner
asserts dissenters' rights, and must do so with respect to all shares that such
person beneficially owns.
A First Land shareholder of record may assert dissenters' rights as to
fewer than all of the shares registered in such holder's name only if the holder
dissents with respect to all shares beneficially owned by any one person and
notifies First Land in writing of the name and address of each person on whose
behalf the holder asserts dissenters' rights. The rights of a partial dissenter
are determined as if the shares as to which the holder dissents and the holder's
other shares were registered in the names of different shareholders.
The following discussion is not a complete statement of the law
pertaining to dissenters' rights under the Arkansas Business Corporation Act of
1987. Any First Land shareholder who wishes to exercise such dissenters' rights,
or who wishes to preserve his or her right to do so, should review Subchapter 13
of the Arkansas Business Corporation Act of 1987, a copy of which is attached as
Annex C to this Prospectus Supplement/Proxy Statement, and the following
discussion carefully.
The availability of dissenters' rights is conditioned upon full
compliance with a complicated procedure set forth in Subchapter 13 of the
Arkansas Business Corporation Act of 1987. Failure to timely and properly comply
with the procedures specified will result in the complete loss of dissenters'
rights. Accordingly, any First Land shareholder who wishes to dissent from the
asset transfer or the sale of real property, or both, and receive the value of
his or her First Land common stock in cash should consult with his or her own
legal counsel. No further notice of the events giving rise to dissenters' rights
or any steps associated with exercising dissenters' rights will be furnished to
First Land shareholders, except as indicated below or otherwise required by law.
16
A First Land shareholder cannot vote for the transaction from which the
shareholder dissents and pursue dissenters' rights. However, a First Land
shareholder's failure to vote against the transaction from which the shareholder
dissents will not constitute a waiver of his or her dissenters' rights. In
addition, a vote against the transaction from which the shareholder dissents
will not be deemed to satisfy all of the notice requirements under Arkansas law
with respect to dissenters' rights.
PROCEDURE FOR THE EXERCISE OF FIRST LAND SHAREHOLDERS DISSENTERS'
RIGHTS. In order to be eligible to exercise the right to dissent, a First Land
shareholder must:
- Notify First Land in writing prior to the shareholders' vote
that the First Land shareholder intends to demand payment for
his or her shares of First Land common stock if the sale of real
property or sale and exchange of substantially all of First
Land's assets is completed; and
- Not vote such shares of First Land common stock in favor of the
transaction from which the shareholder dissents.
The written notice of intent to dissent should be addressed as follows:
First Land and Investment Co.
Post Office Box 111
Magnolia, Arkansas 71753
Attention: Homer Greer, Jr.
If the transaction from which the shareholder dissents is approved at
the First Land special meeting, First Land must deliver a written dissenters'
notice to all dissenting First Land shareholders who satisfied the requirements
referred to in the preceding paragraph within 10 days after the shareholders
approve the transaction. This notice must:
- State where the First Land shareholders must send demand for
payment of their shares of First Land common stock if the
transaction from which the shareholder dissents is completed and
where and when First Land common stock certificates must be
deposited;
- Inform holders of uncertificated shares of First Land common
stock to what extent transfer of the shares will be restricted
after the demand for payment is received;
- Supply a form for demanding payment that includes the date of
the first announcement of the transaction from which the
shareholder dissents to news media or to shareholders and
requires the dissenting shareholder to certify whether or not he
or she or, if a nominee asserting dissenters' rights on behalf
of a beneficial shareholder, the beneficial shareholder acquired
beneficial ownership before that date;
- Set a date by which First Land must receive the demand for
payment, which date may not be fewer than 30 nor more than 60
days after the date the dissenters' notice is delivered; and
- Be accompanied by a copy of Subchapter 13 of the Arkansas
Business Corporation Act of 1987.
A First Land shareholder of record who is sent a dissenters' notice
must demand payment in accordance with the terms of the dissenters' notice,
certify that he or she (or the beneficial shareholder on whose behalf such
holder is asserting dissenters' rights) acquired beneficial
17
ownership of the shares of First Land common stock before the date required to
be set forth in the dissenters' notice and deposit his or her certificates
representing shares of First Land common stock in accordance with the terms of
the dissenters' notice.
A First Land shareholder who demands payment and deposits his or her
stock certificates in accordance with the previous paragraph retains all other
rights of a First Land shareholder until those rights are canceled or modified
by the completion of the asset transfer and subsequent dissolution and
liquidation of First Land.
A First Land shareholder who does not demand payment by the date set
forth in the dissenters' notice is not entitled to payment for his or her shares
of First Land common stock except for payments to be made pursuant to the terms
of the agreement and plan of reorganization and in connection with the
dissolution and liquidation of First Land.
FIRST LAND'S PAYMENT OR OFFER OF PAYMENT. Except as described below, as
soon as the transaction from which the shareholder dissents is completed, or
upon receipt of a demand for payment, First Land must pay each dissenting First
Land shareholder who has complied with the payment demand and deposit
requirements described above the amount First Land estimates to be the fair
value of the First Land shareholder's shares of First Land common stock, plus
accrued interest from the time the transaction is completed. First Land must pay
the rate of interest in the manner and amount described in Section 4-27-1301(4)
of the Arkansas Business Corporation Act of 1987. This offer of payment must be
accompanied by the following:
- First Land's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income
statement for that year, a statement of changes in shareholders'
equity for that year and the latest available interim financial
statements, if any;
- A statement of First Land's estimate of the fair value of the
shares of First Land common stock;
- An explanation of how the interest was calculated;
- A statement of the dissenting shareholder's right to demand
payment under Section 4-27-1328 of the Arkansas Business
Corporation Act of 1987; and
- A copy of Subchapter 13 of the Arkansas Business Corporation Act
of 1987.
First Land may elect to withhold payment from a dissenting shareholder
under Section 4-27-1327 of the Arkansas Business Corporation Act of 1987 unless
he or she was the beneficial owner of the shares before the date set forth in
the dissenters' notice as the date of the first announcement to news media or to
shareholders of the transaction from which the shareholder dissents. To the
extent First Land elects to withhold payment, it must estimate, after the
completion of the transaction, the fair value of the First Land shareholder's
shares of First Land common stock, plus accrued interest, and must pay this
amount to each dissenting shareholder who agrees to accept it in full
satisfaction of his or her demand. First Land must send with its offer a
statement of its estimate of the fair value of the shares, an explanation of how
the interest was calculated and a statement of the dissenting shareholder's
right to demand payment.
If dissatisfied with First Land's offer of payment, a dissenting First
Land shareholder may notify First Land in writing of the shareholder's own
estimate of the fair value of his or her shares of First Land common stock and
amount of interest due. The dissenting shareholder may demand payment of the
shareholder's estimate (less any payments previously made) or reject First
Land's
18
offer and demand payment of the fair value of the shareholder's shares of First
Land common stock and interest due, if:
- The dissenting shareholder believes that the amount paid under
Section 4-27-1325 or offered under Section 4-27-1327 of the
Arkansas Business Corporation Act of 1987 is less than the fair
value of the shareholder's shares of First Land common stock or
that the interest due is incorrectly calculated;
- First Land fails to make payment within 60 days after the date
set forth demanding payment; or
- First Land, having failed to complete the transaction from which
the shareholder dissents, does not return the deposited
certificates or release the transfer restrictions imposed on the
uncertificated shares of First Land common stock within 60 days
after the date set for demanding payment.
However, a dissenting First Land shareholder waives the right to demand
such payment unless the shareholder notifies First Land of such demand in
writing within 30 days after First Land made or offered payment for the
shareholder's shares of First Land common stock.
If the transaction from which the shareholder dissents is not completed
within 60 days after the date set for demanding payment and depositing share
certificates of a dissenting First Land shareholder's shares of First Land
common stock, First Land must return the deposited certificates and release the
transfer restrictions imposed on the uncertificated shares of First Land common
stock. If First Land, after returning deposited certificates and releasing the
transfer restrictions imposed upon the shareholder's shares of First Land common
stock, completes the transaction from which the shareholder dissents, a new
dissenters' notice must be delivered to the shareholder and the payment demand
procedure discussed above must be repeated.
First Land, and not BancorpSouth, shall be responsible for making any
and all payments which dissenting shareholders are entitled to receive. Neither
First Land nor BancorpSouth is obligated to complete the asset transfer if
dissenters' rights are perfected with respect to more than 2% of the outstanding
shares of First Land.
JUDICIAL APPRAISAL OF FIRST LAND COMMON STOCK. If a demand for payment
under Section 4-27-1328 of the Arkansas Business Corporation Act of 1987 remains
unsettled, First Land must commence a proceeding within 60 days after receiving
the demand for payment and petition the relevant court to determine the fair
value of the shares of First Land common stock and accrued interest. If First
Land does not commence this proceeding within this 60-day period, it must pay
each dissenting First Land shareholder whose demand remains unsettled the amount
demanded.
First Land must commence any such proceeding relating to First Land
common stock in the circuit court of Columbia County, Arkansas. First Land must
make all dissenting shareholders whose demands remain unsettled, whether or not
residents of Arkansas, parties to the proceeding and must serve all parties with
a copy of the petition. The court may appoint one or more persons as appraisers
to receive evidence and recommend a fair value. The appraisers will have the
powers described in the order appointing them. Dissenting shareholders are
entitled to the same discovery rights as parties to other civil proceedings.
Each dissenting First Land shareholder made a party to the proceeding
is entitled to judgment for the amount the court finds as the fair value of such
shareholder's shares of First Land common stock, plus interest, less the amount
paid by First Land, or for the fair value, plus accrued
19
interest, of the shareholder's after-acquired shares for which First Land
elected to withhold payment under Section 4-27-1327 of the Arkansas Business
Corporation Act of 1987.
The court, in an appraisal proceeding, must determine all costs of the
proceeding, including the reasonable compensation and expense of appraisers
appointed by the court. The court must assess these costs against First Land,
except that the court may assess costs against all or some of the dissenting
shareholders in amounts the court finds equitable, to the extent that the court
finds that the dissenting shareholders acted arbitrarily, vexatiously or not in
good faith in demanding payment.
The court may also assess the reasonable fees and expenses of counsel
and experts for the respective parties, in amounts the court finds equitable, as
follows:
- Against First Land or in favor of any and all dissenting
shareholders if the court finds that First Land did not
substantially comply with the requirements of Sections 4-27-1320
through 4-27-1328 of the Arkansas Business Corporation Act of
1987; or
- Against either First Land or a dissenting shareholder, in favor
of any other party, if the court finds that the party against
whom the fees and expenses are assessed acted arbitrarily,
vexatiously or not in good faith with respect to the rights
provided by Subchapter 13 of the Arkansas Business Corporation
Act of 1987.
If the court finds that the services of counsel for any dissenting
First Land shareholder were of substantial benefit to other dissenting
shareholders similarly situated, and that the fees for those services should not
be assessed against First Land, the court may award to those counsel reasonable
fees to be paid out of the amounts awarded to the dissenting First Land
shareholders who were benefited.
Any dissenting First Land shareholder who perfects his or her right to
be paid the fair value of his or her shares will recognize taxable gain or loss
upon receipt of cash for his or her shares for federal income tax purposes.
20
THE TRANSACTION
The discussion in this Prospectus Supplement/Proxy Statement of the
transfer of substantially all the assets of First Land to BancorpSouth and the
dissolution and liquidation of First Land does not purport to be complete and is
qualified by reference to the full text of the agreement and plan of
reorganization and the other annexes attached to, and incorporated by reference
into, this Prospectus Supplement/Proxy Statement.
THE ASSET TRANSFER
Under the terms of the agreement and plan of reorganization, First Land
shall, after the sale of First Land's real property, transfer substantially all
of its assets to BancorpSouth. The assets include shares of BancorpSouth stock,
all cash held by First Land as of the closing date (except for cash necessary to
pay all known liabilities), and certain furniture, fixtures and office
equipment. In exchange for substantially all of its assets, First Land will
receive a number of shares of BancorpSouth common stock, the value of which is
equal to (a) the market value of 433,593 shares of BancorpSouth common stock,
plus (b) cash held by First Land as of the closing date, less (c) cash necessary
to pay all known liabilities of First Land, including all income taxes accrued
or owed by First Land, expenses relating to the transactions contemplated by the
agreement and plan of reorganization incurred by BancorpSouth and First Land,
all amounts reserved to pay dissenting shareholders and expenses related to
dissenting shareholders, and amounts reserved to pay fractional shares upon the
distribution of BancorpSouth common stock to the First Land shareholders, less
(d) $500,000, all divided by the market value of a share of BancorpSouth common
stock.
The market value of a share of BancorpSouth common stock will be
determined by taking the average of the high and the low sale prices on the New
York Stock Exchange on the trading day preceding the closing date of the asset
transfer. Upon dissolution of First Land, which will occur within 120 days of
the closing of the asset transfer, the shares of BancorpSouth common stock
received in connection with the asset transfer will be distributed to First
Land's shareholders, other than those who properly exercised their right to
dissent from the asset transfer, in accordance with their respective ownership
interests in First Land.
Subject to the satisfaction or waiver of certain conditions set forth
in the agreement and plan of reorganization, the asset transfer will become
effective upon the exchange of substantially all of First Land's assets for the
appropriate number of shares of BancorpSouth common stock. See "THE AGREEMENT
AND PLAN OF REORGANIZATION -- Conditions to the Asset Transfer."
By way of example and for illustration purposes only, assuming that the
asset transfer had occurred on December 27, 2001, the day after the agreement
and plan of reorganization was executed, and making the additional assumptions
described below, First Land would have received 480,818 shares of BancorpSouth
common stock in exchange for its assets. As of December 27, 2001, the market
value of the BancorpSouth common stock would have been valued based on the
average of the December 26 high sale price of $16.98 and low sale price of
$16.90, resulting in a market value of $16.94. Assuming that First Land had
$1,400,000 in cash on hand and known liabilities of $100,000, the number of
shares of BancorpSouth common stock would be calculated as follows:
21
(433,593 * per share market value) + cash held - cash to
pay known liabilities - $500,000 =
------------------------------------------------------
per share market value
(433,593 * $16.94) + $1,400,000 - $100,000 - $500,000 =
------------------------------------------------------
$16.94
$8,145,065 = 480,818 shares
----------
$16.94
Assuming that the liquidation and dissolution of First Land is
accomplished immediately after the asset transfer and no shareholders exercise
dissenters' rights, the number of shares of BancorpSouth common stock each
shareholder would be entitled to receive is the number of First Land shares the
shareholder owns multiplied by the following distribution ratio:
Distribution ratio = 480,818 = 3.529
-------
136,211
In this example, a shareholder who owns 100 First Land shares would
receive 352 shares of BancorpSouth common stock, plus a cash payment for
nine-tenths of a fractional share. In this example, the value of each First Land
share would have been approximately $59.80.
Holders of shares of First Land common stock with respect to which
dissenters' rights have been properly exercised in accordance with Subchapter 13
of the Arkansas Business Corporation Act of 1987 will not receive a distribution
upon the dissolution of First Land. Instead, the holders of these shares will be
entitled to cash payment of the value of their shares in accordance with
Subchapter 13 of the Arkansas Business Corporation Act of 1987. First Land, not
BancorpSouth, shall be responsible for making any and all payments which
dissenting shareholders may be entitled to receive.
If any holder of these shares subsequently delivers a written
withdrawal of his or her demand for dissenters' rights, or if any holder fails
to establish his or her entitlement to dissenters' rights, the holder will
forfeit the right to dissent from the asset transfer and he or she will be
entitled to a distribution from First Land upon its dissolution and liquidation.
See "SPECIAL MEETING -- Dissenters' Rights."
BancorpSouth expects the market price of BancorpSouth common stock to
fluctuate due to market factors beyond its control between the date of this
Prospectus Supplement/Proxy Statement and the date on which the asset transfer
is completed and thereafter. Because the number of shares provided by
BancorpSouth as consideration for substantially all of the assets of First Land
depends upon the average of the high and low sale prices of a share of
BancorpSouth common stock on the trading day preceding the closing of the asset
transfer, the number of shares of BancorpSouth common stock that First Land (and
its shareholders, as a result of the dissolution and liquidation of First Land)
will receive in the asset transfer may increase or decrease. For further
information concerning the historical market prices of BancorpSouth common
stock, see "PRICE RANGE OF COMMON STOCK AND DIVIDENDS" on page 40. BancorpSouth
cannot assure you that the market price of BancorpSouth common stock will not
increase or decrease before or after the asset transfer.
DISSOLUTION AND LIQUIDATION OF FIRST LAND
Within 120 days after completion of the asset transfer, First Land will
distribute the shares of BancorpSouth common stock received in exchange for its
assets and any assets not conveyed to BancorpSouth, less any amounts necessary
to pay liabilities and expenses, to First Land's
22
shareholders in accordance with their respective ownership interests and
applicable law. No First Land shareholder will receive fractional shares of
BancorpSouth common stock. Instead, a First Land shareholder will receive cash
equal to the average of the high and low sale prices per share of BancorpSouth
common stock as reported on the New York Stock Exchange on the trading day
preceding the date on which the transfer is completed, multiplied by the
fraction of a share of BancorpSouth common stock to which the shareholder would
otherwise be entitled.
THE SALE OF FIRST LAND'S REAL PROPERTY
First Land has entered into an agreement for sale of real property with
Arkansas Pulpwood Company, Inc. pursuant to which Arkansas Pulpwood Company will
purchase all of First Land's real property for $2,450,000, subject to certain
conditions, including approval of the agreement for sale of real property and
the agreement and plan of reorganization by First Land's shareholders. The
agreement for sale of real property is attached as Annex B to this Prospectus
Supplement/Proxy Statement.
First Land has obtained appraisals of its timberland from Stevens
Forestry Service, Inc., El Dorado, Arkansas, and Kingwood Forestry Services,
Inc., Arkadelphia, Arkansas. These appraisals indicate market values for the
timberland exclusive of mineral rights of $2,520,000 and $2,338,000,
respectively. First Land's Board of Directors determined that it was in the best
interests of First Land and its shareholders to enter into the agreement for
sale of real property for $2,450,000. If First Land had solicited bids for the
real property, it would have no assurance that the total sale price for the real
property would equal or exceed the amount of either appraisal. Based on the sale
price of $2,450,000, after making allowance for the costs of the sale of around
$20,000 and for state and federal income taxes of around $800,000, First Land is
expected to net a total of around $1,630,000 from the sale of the real property.
Stevens Forestry Service, Inc. is an independent forestry consulting
firm engaged in, among other things, the management and appraisal of timberland
in southwest Arkansas, northwest Louisiana and northeast Texas. Stevens provides
professional management for around 100,000 acres of timberland. Stevens conducts
around 24 appraisals of timberland annually. Stevens was selected to conduct an
appraisal of First Land's timberland based on its reputation. Stevens has not
previously provided any services to First Land.
The Stevens appraisal was based on data regarding timber volume on First
Land's timberland provided to Stevens by Jeff Neil Timberland Management, Inc.,
which manages First Land's timberland, spot-checks of various tracts, and a
timber cruise of First Land's timberland conducted in 1997. The Stevens
appraisal concluded that the market value of First Land's timberland is
$2,522,000. The Stevens appraisal further estimated that the unsevered mineral
rights in the timberland, which were not appraised, should add $50 to $100 per
acre to the overall value. Stevens was paid $1,250 to appraise First Land's
timberland. A copy of the Stevens appraisal is attached to this Prospectus
Supplement/Proxy Statement as Annex D.
Kingwood Forestry Services, Inc. is an independent forestry consulting
and management services firm engaged in, among other things, the management and
appraisal of timberland in south Arkansas, north Louisiana and northeast Texas.
Kingwood provides professional management for around 100,000 acres of
timberland. Kingwood conducts around 30 appraisals annually. Kingwood was
selected to conduct an appraisal of First Land's timberland based on its
reputation. Kingwood has not previously provided any services for First Land.
The Kingwood appraisal was based on data regarding timber volume on
First Land's timberland provided by Jeff Neil Timberland Management, Inc. and
spot-checks of various tracts. The Kingwood appraisal concluded that the market
value of the timberland is $2,338,000.
23
Kingwood was paid $975 to appraise First Land's timberland. A copy of the
Kingwood appraisal is attached to this Prospectus Supplement/Proxy Statement as
Annex E.
BACKGROUND OF THE TRANSACTION
The Board of Directors of First Land has recognized for several years
the inefficiencies inherent in continuing First Land as a business entity. In
1998, the Board of Directors of First Land engaged Mercer Capital Management,
Inc. to advise them with respect to a specific acquisition proposal from another
party. Mercer Capital advised the Board that the proposal would be no more
advantageous to First Land's shareholders than would a liquidation and
distribution of assets. Mercer Capital also advised the Board that, due to the
fact that First Land's greatest asset was the block of common stock in First
United Bancshares, Inc. owned by First Land, the transaction that would result
in the greatest value to be received by First Land's shareholders would be a
tax-free acquisition of First Land by First United.
In October 1998, Larry Burrow, Chairman of First Land, contacted James
V. Kelley, Chairman, President and Chief Executive Officer of First United, to
determine First United's interest in such a transaction. Mr. Burrow and Mr.
Kelley discussed the possibility of such a transaction from time to time for a
number of months. To induce First United to consider the transaction, First Land
indicated that it would be willing to bear all of First United's transaction
costs and pay a transaction premium of $500,000. In April 1999, First United
advised First Land that it would not pursue the transaction because it could
adversely affect First United's ability to use the pooling method of accounting
in the event it was a party to a merger transaction.
On August 30, 2000, First United merged with and into BancorpSouth.
James V. Kelley became the President and Chief Operating Officer of BancorpSouth
after the merger.
Shortly after the merger of First United into BancorpSouth, Mr. Burrow
contacted Mr. Kelley to determine BancorpSouth's interest in acquiring First
Land or its assets. Mr. Burrow and Mr. Kelley informally discussed the
possibility of a transaction on several occasions. Their discussions were
general in nature and did not include discussions of the substantive terms of a
possible transaction. By letter dated August 28, 2001, BancorpSouth submitted a
draft of an agreement pursuant to which BancorpSouth would exchange BancorpSouth
common stock for the assets of First Land and First Land would liquidate and
distribute its remaining assets, including the BancorpSouth stock, to its
shareholders.
On October 9, 2001, First Land held its annual shareholders meeting at
which it elected eight directors, five who were already serving on the Board of
Directors and three who had not previously served on the Board of Directors.
First Land's newly elected Board of Directors met immediately after the annual
shareholders meeting. Because the five continuing directors were all
shareholders of BancorpSouth, the three newly elected directors, David Ashby,
Howard Groves and Ken Miller, were appointed to a Special Committee to
investigate the proposed transaction.
The Special Committee met immediately after the Board of Directors
meeting. Mercer Capital had been asked by First Land's Board of Directors to
submit a proposal pursuant to which Mercer Capital would analyze the
BancorpSouth proposal and alternatives to the BancorpSouth proposal, advise the
Special Committee and the Board of Directors with respect to the BancorpSouth
proposal and provide a fairness opinion regarding any transaction entered into
by First Land. The Special Committee reviewed and accepted the proposal from
Mercer Capital to serve as First Land's financial advisor. No other instructions
were given to Mercer Capital and no limitations were placed on Mercer Capital's
investigation of the proposal and alternatives to the proposal. Mercer Capital
did not conduct any negotiations with BancorpSouth and did not determine the
amount of consideration to be paid.
24
On October 23, 2001, the Special Committee met by telephone conference
call with a representative of Mercer Capital, Brent McDade, and discussed the
BancorpSouth proposal and possible alternatives to the BancorpSouth proposal.
The Special Committee concluded that the BancorpSouth proposal was superior to
other alternatives available to First Land and determined that First Land should
proceed to finalize the terms of the transaction with BancorpSouth. On November
14, 2001, the Special Committee met and received a written and oral presentation
from Mr. McDade. The Special Committee also heard a report from legal counsel on
the terms of the agreement and plan of reorganization and the status of
negotiations. After a review of all aspects of the proposed transaction and
considerable discussion, the Special Committee unanimously voted to recommend to
the Board of Directors that First Land agree to the proposed transaction with
BancorpSouth and submit the proposed transaction to the shareholders for their
approval.
Immediately following the meeting of the Special Committee, the First
Land Board of Directors met. The Board of Directors heard a report from legal
counsel on the terms of the agreement and plan of reorganization and on the
status of negotiations. The Board of Directors also heard a report of the
Special Committee's investigation from the Chairman of the Special Committee,
David Ashby, and further considered the written and oral report of Mr. McDade.
After a review of all aspects of the proposed transaction and considerable
discussion, the Board of Directors voted unanimously to approve the report of
the Special Committee, to authorize legal counsel and its officers to complete
final negotiations with BancorpSouth, to authorize its officers to execute a
definitive agreement and plan of reorganization, and to submit the transaction
to First Land's shareholders for their approval without recommendation due to
the conflicts of interest of five members of the Board of Directors.
On December 26, 2001, First Land and BancorpSouth executed the
agreement and plan of reorganization.
ACTIONS OF THE SPECIAL COMMITTEE AND BOARD OF DIRECTORS OF FIRST LAND
Five of the directors of First Land, E. Larry Burrow, W. R. Gantt, III,
Homer Greer, Jr., Partee Tuberville, and Claude Wilson, Jr., own shares of
BancorpSouth common stock. Because of this ownership, these directors have
conflicts of interest with respect to the asset transfer to BancorpSouth.
Because of these conflicts of interest, the Board of Directors appointed a
Special Committee consisting of three directors who do not own common stock of
BancorpSouth, J. David Ashby, Howard Groves, and Ken W. Miller, to investigate
the proposed asset transfer and make a recommendation to the Board of Directors
as to the action First Land should take with respect to the proposal. The
Special Committee engaged Mercer Capital to advise it with respect to the
BancorpSouth proposal and any alternatives available to First Land. On November
14, 2001, Mercer Capital reported to the Special Committee, and legal counsel
described the terms and expected tax treatment of the transaction. The Special
Committee concluded that the proposed transaction is in the best interests of
First Land and its shareholders and voted unanimously to recommend that the
Board of Directors accept the proposal. The Board of Directors met immediately
after the Special Committee meeting and considered the recommendation of the
Special Committee, the reports of Mercer Capital and legal counsel's description
of the terms and expected tax treatment of the transaction. The Board of
Directors concluded that the transaction is in the best interests of First Land
and its shareholders and voted unanimously to accept the proposal, subject to
final negotiation of the terms of the agreement and plan of reorganization. The
Board of Directors also voted to submit the proposed transaction to the First
Land shareholders without recommendation due to the conflicts of interest of a
majority of the directors. All members of the Board of Directors who are
shareholders of First Land intend to vote their shares "FOR" approval of the
agreement and plan of reorganization.
25
BancorpSouth and First Land executed the agreement and plan of
reorganization on December 26, 2001.
After First Land had entered into the agreement and plan of
reorganization with BancorpSouth, First Land received an offer from Arkansas
Pulpwood Company, Inc. to purchase all of First Land's real property. The Board
of Directors determined that it was in the best interests of First Land and its
shareholders to enter into the agreement for sale of real property with Arkansas
Pulpwood Company, subject to certain conditions, including shareholder approval.
Because the sale of the real property is a condition to the closing of the
transfer of assets to BancorpSouth in which five of First Land's eight directors
have an interest, the Board of Directors unanimously approved submission of the
agreement for sale of real property to the shareholders without recommendation.
All members of the Board of Directors who are shareholders of First Land intend
to vote their shares "FOR" approval of the agreement for sale of real property.
FIRST LAND'S REASONS FOR THE TRANSACTION; SUBMISSION BY THE BOARD OF DIRECTORS
First Land's Special Committee and Board of Directors deliberated and
unanimously approved the agreement and plan of reorganization at Committee and
Board meetings held on November 14, 2001. In reaching their determinations to
approve the agreement and plan of reorganization, First Land's Special Committee
and Board of Directors consulted with First Land's management and financial and
legal advisors and considered a number of factors.
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., tax counsel for
First Land, informed First Land's Special Committee and Board of Directors that
several requirements must be met in order for the proposed transaction to
qualify as a reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended. These requirements include (1) that
First Land transfer substantially all of its assets to BancorpSouth; (2) that
First Land only receive BancorpSouth common stock in the transaction; (3) that,
after the transaction, First Land must distribute to its shareholders the
BancorpSouth stock it receives, as well as its other properties, as part of the
plan of reorganization; (4) that BancorpSouth must continue one of First Land's
historic businesses or use a significant portion of First Land's assets in one
of BancorpSouth's businesses; (5) that First Land's shareholders must receive
BancorpSouth stock equal in value to at least 50% of the value of First Land's
formerly outstanding common stock; (6) that the transaction must be undertaken
for reasons germane to the continuance of the business of a corporation which is
a party to a reorganization; and (7) that First Land and BancorpSouth are not
both classified as investment companies within the meaning of Section
368(a)(2)(F) of the Internal Revenue Code. Based on the facts disclosed to tax
counsel, tax counsel discussed with the Special Committee and Board of Directors
the foregoing requirements and informed the Special Committee and Board of
Directors it could issue an opinion, subject to certain assumptions,
qualifications and limitations, that in its reasoned judgment the proposed
transaction should qualify for treatment by the Internal Revenue Service as a
reorganization under Section 368(a)(1)(C) of the Internal Revenue Code. See
"Certain U. S. Federal Income Tax Consequences."
The following is a discussion of the information and factors considered
by First Land's Special Committee and Board of Directors in reaching their
determinations. This discussion is not intended to be exhaustive, but includes
the material factors considered by First Land's Special Committee and Board of
Directors. In the course of their deliberations with respect to the asset
transfer and dissolution, First Land's Special Committee and Board of Directors
reviewed possible alternatives to the reorganization and concluded that the
reorganization was the best option. They discussed the anticipated impact of the
asset transfer and dissolution on First Land and its shareholders. First Land's
Special Committee and Board of Directors did not identify any material
disadvantages expected to result from the asset transfer and dissolution during
these discussions. In
26
reaching their determinations to approve the agreement and plan of
reorganization and submit it to First Land's shareholders, First Land's Special
Committee and Board of Directors did not assign any relative or specific weights
to the factors considered in reaching such determinations, and individual
members of First Land's Special Committee and Board of Directors may have given
differing weights to different factors.
The following includes the material factors that were considered by
First Land's Special Committee and Board of Directors:
- The proposed transaction would likely result in shareholders
receiving significantly greater value than they would receive
under any other transaction pursuant to which First Land could
liquidate or reorganize;
- The proposed transaction would eliminate administrative costs,
legal fees and accounting fees that do not add value to First
Land's assets;
- The proposed transaction would provide First Land shareholders
with a liquid investment, having a readily established fair
market value, by giving them a direct interest in shares of
BancorpSouth common stock, in place of a non-liquid investment
that is difficult to value, First Land common stock;
- The number of shareholders of First Land may, within the
foreseeable future, exceed 500, and the proposed transaction
would eliminate the need for First Land to bear the substantial
cost of registering First Land as a public company when that
occurs;
- The sale of First Land's real property and continuation of First
Land in its present form would subject it to the requirement
that it register as an investment holding company and the
proposed transaction would eliminate the need for First Land to
bear the substantial cost of registering First Land as an
investment holding company in the event of such sale;
- It is not likely that a transaction with advantages similar or
equal to the proposed transaction would be available to First
Land in the future;
- First Land's main asset is its block of common stock in
BancorpSouth, a publicly traded stock;
- Dividends paid to First Land on its BancorpSouth common stock
are subject to corporate income taxes and, to the extent the
dividends are subsequently paid to First Land shareholders, are
subject to income taxes of individual shareholders;
- There is no market for First Land's common stock;
- Mercer Capital made presentations to the Special Committee and
the Board of Directors and gave an opinion that the terms of the
transaction are fair to First Land's shareholders from a
financial point of view; and
- The reorganization is expected to allow First Land shareholders
to exchange their shares of First Land common stock for shares
of BancorpSouth common stock without the recognition of taxable
income by either First Land or its shareholders.
BASED ON A THOROUGH EVALUATION OF THESE FACTORS, FIRST LAND'S SPECIAL
COMMITTEE AND BOARD OF DIRECTORS BELIEVES THE ASSET TRANSFER AND DISSOLUTION AND
LIQUIDATION OF FIRST
27
LAND ARE IN THE BEST INTERESTS OF FIRST LAND AND FIRST LAND'S SHAREHOLDERS.
FIRST LAND'S SPECIAL COMMITTEE UNANIMOUSLY RECOMMENDED THAT FIRST LAND'S BOARD
OF DIRECTORS VOTE TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION. FOR THE
REASONS STATED UNDER ACTIONS OF THE SPECIAL COMMITTEE AND BOARD OF DIRECTORS OF
FIRST LAND (PAGE 25), FIVE OF THE MEMBERS OF FIRST LAND'S BOARD OF DIRECTORS
HAVE INTERESTS IN THE ASSET TRANSFER, RESULTING IN CONFLICTS OF INTEREST. DUE TO
THESE CONFLICTS OF INTEREST, THE BOARD OF DIRECTORS VOTED TO SUBMIT THE
AGREEMENT AND PLAN OF REORGANIZATION TO THE SHAREHOLDERS FOR THEIR APPROVAL
WITHOUT RECOMMENDATION. ALL MEMBERS OF THE BOARD OF DIRECTORS WHO OWN FIRST LAND
COMMON STOCK INTEND TO VOTE "FOR" APPROVAL OF THE AGREEMENT AND PLAN OF
REORGANIZATION.
ANALYSIS OF FIRST LAND'S FINANCIAL ADVISOR
Mercer Capital acted as a financial advisor to First Land in connection
with the proposed transaction with BancorpSouth. Mercer Capital is a nationally
recognized, independent business valuation firm engaged, among other things, in
the valuation of businesses and their securities in connection with mergers and
acquisitions and other corporate restructurings. Mercer Capital was selected to
act as First Land's financial advisor on the basis of its national reputation.
Mercer Capital had previously advised First Land with respect to a potential
transaction in 1998 for which Mercer Capital received customary compensation.
At the First Land Special Committee and Board of Directors meetings on
November 14, 2001, Mercer Capital orally stated that, subject to satisfactory
completion of final negotiations regarding the terms of the agreement and plan
of reorganization, Mercer Capital could provide a written opinion that the
proposed transaction was fair to the First Land shareholders from a financial
point of view. On December 26, 2001, Mercer Capital delivered its written
fairness opinion and has delivered to First Land's Board of Directors a
substantially identical written opinion dated March __, 2002 confirming its
opinion dated December 26, 2001. The full text of Mercer Capital's fairness
opinion dated March __, 20002 is attached as Annex F to this Prospectus
Supplement/Proxy Statement.
In arriving at its opinion as to the fairness of the proposed asset
transfer from a financial point of view, Mercer Capital considered, among other
things, the following factors:
- The likelihood that there could be an alternate banking industry
acquirer who would offer materially greater consideration for
First Land or its assets than that proposed pursuant to the
agreement and plan of reorganization;
- The likelihood that there could be an alternate timber company
acquirer who would offer a materially greater consideration for
First Land or its assets than that proposed pursuant to the
agreement and plan of reorganization;
- The estimated proceeds to shareholders that would be received in
a liquidation of First Land's assets other than pursuant to the
agreement and plan of reorganization;
- The absence of an organized trading market for First Land's
shares and the low likelihood that any organized trading market
for First Land's shares would develop in the foreseeable future;
and
- The relative benefits to shareholders of continuing to hold the
shares of First Land as opposed to converting the investment in
First Land to a direct investment in BancorpSouth common stock.
28
Mercer Capital met with the Special Committee of the Board of Directors
and with First Land's Board of Directors on November 14, 2001. At those
meetings, Mercer Capital presented its opinion that the proposed asset transfer
was fair, from a financial point of view, to the shareholders of First Land. The
analysis presented by Mercer Capital indicated that as of that date:
- Mercer Capital was relying on the assurance of management that
the anticipated proceeds from the sale of First Land's
timberland, mineral and royalty interests would be consistent
with the fair market value of those assets.
- Mercer Capital had solicited expressions of interest from 13
bank holding companies with operations in or around the
BancorpSouth market area. No indications of interest were
received as a result of those solicitations.
- First Land's low basis in its holding of BancorpSouth shares
resulted in a significant imbedded potential tax liability.
- Liquidation of First Land other than pursuant to the agreement
and plan of reorganization would trigger not only the imbedded
potential tax liability in First Land's appreciated assets, but
would also trigger shareholder-level capital gains taxes on cash
or other assets received in liquidation.
- Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., tax
counsel for First Land, had informed First Land's Special
Committee and Board of Directors that, based on facts disclosed
to tax counsel, it could issue an opinion, subject to certain
assumptions, qualifications and limitations, that in its
reasoned judgment the proposed transaction should qualify for
treatment by the Internal Revenue Service as a reorganization
under Section 368(a)(1)(C) of the Internal Revenue Code, and the
confirmation of the opinion as of the closing date is a
condition to the closing.
- Based on the expected tax treatment, Mercer Capital concluded
that First Land's shareholders would receive securities with an
estimated value of $51.06 upon dissolution and liquidation of
First Land pursuant to the agreement and plan of reorganization.
The assumptions used to calculate this amount were as follows:
- The high and low trading prices of BancorpSouth common
stock on November 12, 2001 were $15.32 and $15.00,
according to Commodity Systems, Inc. The average of the
high and low trading prices was therefore $15.16,
implying a value for purposes of the transaction of the
433,593 shares of BancorpSouth held by First Land of
$6,753,270.
- The assumed value, after transactions costs, of First
Land's real property was $1,975,000. This amount was
estimated by management.
- First Land was assumed to hold cash in the amount of
$19,604 and to have total liabilities of $95,815
(pursuant to the September 30, 2001 internal financial
statements). The net assets of First Land were therefore
$8,472,059.
- Mercer Capital assumed $400,000 in transaction expenses
and a $500,000 incentive payment to BancorpSouth.
- Mercer Capital assumed taxes on the sale of First Land's
real property of $616,649, calculated at 38.3% of the
difference between the assumed net proceeds of
$1,975,000 and the cost basis of $364,950.
29
- Based on the expected tax opinion, Mercer Capital
assumed that no additional taxes would be generated in
the transaction.
- The total value to be transferred to First Land's
shareholders in the transaction was therefore
$6,955,410, or $51.06 per share.
- Mercer Capital concluded that a liquidation of First Land other
than pursuant to the agreement and plan of reorganization would
result in the distribution of approximately $42.36 to First
Land's shareholders. First Land's shareholders would also incur
shareholder-level tax consequences at the time of the
liquidation. The assumptions used to calculate this amount were
as follows:
- Mercer Capital assumed net assets of $8,472,059.
- In the liquidation scenario, Mercer Capital assumed that
First Land would incur corporate level income tax on the
difference between the value of the BancorpSouth
portfolio ($6,573,270) and First Land's basis in the
stock ($1,126,483) at the marginal federal/state rate
of 38.3%. The assumed tax burden was $2,086,119.
- Mercer Capital assumed that First Land would also incur
the tax mentioned above on the liquidation of First
Land's real property of $616,649.
- The net assets to be distributed to First Land's
shareholders in liquidation would be $5,769,290, or
$42.36 per share.
- Based on management's representations to Mercer Capital, First
Land's shares were not traded in an active market. According to
management, several recent sales of First Land shares have been
at a price of $25.00 per share.
Based upon the above considerations and additional analyses performed
by Mercer Capital, Mercer Capital concluded that the transaction was fair, from
a financial point of view, to the shareholders of First Land. Mercer Capital
provided the fairness opinion letter attached as Annex F. As of the date of the
fairness opinion letter, Mercer Capital believes that the transaction is fair,
from a financial point of view, to the shareholders of First Land.
First Land agreed to pay Mercer Capital a fee of $18,000 for its
services rendered in connection with the proposed transaction with BancorpSouth,
including delivery of its opinion. First Land also agreed to reimburse Mercer
Capital for its reasonable travel and other out-of-pocket expenses incurred in
connection with its engagement and to indemnify Mercer Capital against
liabilities and expenses relating to or arising out of its engagement, including
liabilities arising under the federal securities laws.
BANCORPSOUTH'S REASONS FOR THE TRANSACTION
BancorpSouth's Board of Directors approved and adopted the agreement
and plan of reorganization at their meeting on January 23, 2002. In reaching its
determination to approve and adopt the agreement and plan of reorganization,
BancorpSouth's Board of Directors consulted with BancorpSouth's management and
financial and legal advisors and considered a number of factors. The following
is a discussion of information and factors considered by BancorpSouth's Board of
Directors in reaching this determination. This discussion is not intended to be
exhaustive, but includes the material factors considered by BancorpSouth's Board
of Directors. In the course of its deliberations with respect to the agreement
and plan of reorganization, BancorpSouth's Board of
30
Directors discussed the anticipated impact of the asset acquisition on
BancorpSouth, BancorpSouth's shareholders and various other constituencies.
BancorpSouth's Board of Directors did not identify any material disadvantages
expected to result from the asset acquisition during these discussions. In
reaching its determination to approve the agreement and plan of reorganization,
BancorpSouth's Board of Directors did not assign any relative or specific
weights to the factors considered in reaching its determination, and individual
members of BancorpSouth's Board of Directors may have given differing weights to
different factors.
The following includes the material factors that were considered by
BancorpSouth's Board of Directors:
- The terms of the agreement and plan of reorganization, including
the amount and form of consideration to be paid by BancorpSouth
to First Land in the transaction, and the expectation that the
transaction will be a tax-free transaction to BancorpSouth and
BancorpSouth's shareholders;
- The ability to disperse the holdings of one large shareholder
among many individual smaller shareholders; and
- First Land's payment of BancorpSouth's expenses as well as the
$500,000 discount granted by First Land with respect to the
asset transfer.
REGULATORY APPROVALS
First Land and BancorpSouth are not aware of any regulatory or
governmental requirements that must be complied with or approvals that must be
obtained in connection with the asset transfer or the subsequent dissolution and
liquidation of First Land other than the requirements of the Arkansas Business
Corporation Act of 1987 governing the dissolution of Arkansas corporations.
BancorpSouth also intends to notify the Federal Reserve Board of the
transactions.
ACCOUNTING TREATMENT
BancorpSouth intends to account for the asset transfer as a purchase
transaction under generally accepted accounting principles.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material anticipated U.S. federal
income tax consequences of the transfer of substantially all of the assets of
First Land to BancorpSouth and the dissolution and liquidation of First Land,
which are collectively referred to as the "reorganization," to First Land
shareholders who hold First Land common stock as a capital asset at the time of
the reorganization. The summary is based on the Internal Revenue Code,
applicable Treasury regulations, and administrative rulings and court decisions
in effect as of the date of this Prospectus Supplement/Proxy Statement, all of
which are subject to change at any time, possibly with retroactive effect. This
summary is not a complete description of all of the consequences of the
reorganization and, in particular, may not address U.S. federal income tax
considerations applicable to shareholders subject to special treatment under
U.S. federal income tax law, such as non-U.S. persons, financial institutions,
dealers in securities, insurance companies, tax-exempt entities, holders who
acquired First Land common stock upon the exercise of an employee stock option
or right or otherwise as compensation, holders who hold First Land common stock
as a part of a hedge, straddle or conversion transaction, and holders who
exercise their dissenters' rights. In addition, no information is provided
herein with respect to the tax consequences of the reorganization under
applicable foreign, state or local laws.
31
The reorganization has been structured with the intention that it
qualify for federal income tax purposes as a tax-free reorganization under
Section 368(a)(1)(C) of the Internal Revenue Code. There are numerous
requirements that must be satisfied in order for the reorganization to be
accorded tax-free treatment under the Internal Revenue Code. This description of
the federal income tax consequences is not binding on the Internal Revenue
Service and does not preclude the IRS or the courts from adopting a contrary
position.
In connection with the filing of the registration statement of which
this Prospectus Supplement/Proxy Statement is a part, Mitchell, Williams, Selig,
Gates & Woodyard, P.L.L.C., tax counsel for First Land, has rendered an opinion
that, as of the date of the opinion, if certain factual circumstances exist, in
its reasoned judgment the reorganization will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code and that BancorpSouth and First Land will each be a party
to that reorganization within the meaning of Section 368(b) of the Internal
Revenue Code. It is a condition to the obligation of First Land to complete the
reorganization that First Land's tax counsel confirm its opinion as of the
closing date.
The opinion of First Land's tax counsel regarding the reorganization
has relied, and the opinion regarding the reorganization as of the closing date
will rely, on (1) representations and covenants made by BancorpSouth and First
Land, and (2) specific assumptions, including an assumption regarding the
completion of the reorganization in the manner contemplated by the agreement and
plan of reorganization. In addition, the opinion of First Land's tax counsel has
assumed, and such tax counsel's ability to provide the opinion at the closing of
the reorganization will depend on, the absence of changes in existing facts or
in law between the date of this Prospectus Supplement/Proxy Statement and the
closing date. If any of those representations, covenants or assumptions is
inaccurate, First Land's tax counsel may not be able to provide the required
opinion to be delivered at the closing of the reorganization and/or the tax
consequences of the reorganization could differ from those described in the
opinion that tax counsel has delivered. Such opinion does not bind the Internal
Revenue Service and does not preclude the IRS or the courts from adopting a
contrary position. BancorpSouth and First Land do not intend to obtain a ruling
from the IRS on the tax consequences of the reorganization.
Assuming that the reorganization qualifies as a reorganization within
the meaning of Section 368(a)(1)(C) of the Internal Revenue Code, the following
are the material federal income tax consequences:
- No gain or loss will be recognized by BancorpSouth or First Land
as a result of the reorganization;
- No gain or loss will be recognized by First Land shareholders
who receive shares of BancorpSouth common stock pursuant to the
agreement and plan of reorganization, except with respect to
cash received in lieu of a fractional share of BancorpSouth
common stock;
- The aggregate tax basis of the BancorpSouth common stock
received (including any fractional shares of BancorpSouth common
stock deemed received) by First Land shareholders pursuant to
the agreement and plan of reorganization will be the same as the
aggregate tax basis of First Land common stock held by the
shareholders; and
- The holding period of a share of BancorpSouth common stock
received (including a fractional share interest deemed received)
by a First Land shareholder pursuant to the agreement and plan
of reorganization will include the holding period in such
holder's First Land common stock.
32
Generally, cash received by a First Land shareholder in lieu of a
fractional share of BancorpSouth common stock will be treated as received in
redemption of that fractional share interest, and the First Land shareholder
should generally recognize capital gain or loss for federal income tax purposes
measured by the difference between the amount of cash received and the portion
of the tax basis of the share of First Land common stock allocable to that
fractional share. This gain or loss should be a long-term capital gain or loss
if the holding period for shares of First Land common stock is greater than one
year at the time of the dissolution and liquidation of First Land.
This discussion of material U.S. federal income tax consequences is
intended to provide only a general summary, and is not a complete analysis or
description of all potential federal income tax consequences of the
reorganization. This discussion does not address tax consequences that may vary
with, or are contingent on, individual circumstances. In addition, it does not
address any non-income tax or any foreign, state or local tax consequences of
the reorganization. Accordingly, First Land shareholders are urged to consult
with their tax advisors regarding the tax consequences of the reorganization to
them, including the effects of U.S. federal, state, local, foreign and other tax
laws and of potential changes to applicable tax law.
INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION
Five of the eight directors of First Land own shares of BancorpSouth
common stock. These five directors will receive shares of BancorpSouth common
stock upon the liquidation and dissolution of First Land on the same basis as
other First Land shareholders.
Those five directors and the number of shares of BancorpSouth common
stock owned by the directors and their wives are as follows:
NUMBER OF SHARES OF
DIRECTOR BANCORPSOUTH COMMON STOCK OWNED
-------- -------------------------------
E. Larry Burrow 68,228(1)
W. R. Gantt, III 51,051
Homer Greer, Jr. 8,069
Partee Tuberville 11,999
Claude Wilson, Jr. 6,581
------------------ -------
Total BancorpSouth Shares
Owned by Five Directors 185,928
(1) E. Larry Burrow owns of record 3,327 shares and Mr. Burrow's wife
owns of record 64,901 shares in which Mr. Burrow disclaims any beneficial
interest.
The five directors and their wives own or control the voting of a total
of 22,376 shares, or 16.4%, of First Land's outstanding common stock.
See also the section, "Actions of the Special Committee and Board of
Directors of First Land" on page 25.
RESTRICTIONS ON RESALES BY AFFILIATES
The shares of BancorpSouth common stock that will be distributed to
First Land shareholders upon completion of the asset transfer and subsequent
dissolution of First Land have been registered under the Securities Act of 1933.
These shares may be traded freely without
33
restriction by those shareholders who are not deemed to be "affiliates" of First
Land or BancorpSouth, as that term is defined in SEC rules under the Securities
Act. An "affiliate" of a company generally includes its directors and executive
officers and holders of a significant amount of the company's voting stock.
Shares of BancorpSouth common stock received by those First Land
shareholders who are deemed to be affiliates of First Land at the time of the
receipt of the shares may be resold without registration under the Securities
Act only as permitted by Rule 145 under the Securities Act. Under Rule 145,
during the one-year period following the receipt of shares of BancorpSouth
common stock in connection with the dissolution of First Land, affiliates of
First Land may resell shares of BancorpSouth common stock received by them as a
distribution upon the dissolution of First Land, subject to limitations on the
number of shares that may be sold during any three-month period and the manner
in which the shares may be sold, including the use of a broker and
non-solicitation of a buyer.
First Land has agreed in the agreement and plan of reorganization to
use its reasonable best efforts to cause each person who is an affiliate, for
purposes of Rule 145 under the Securities Act, to deliver to BancorpSouth a
written agreement intended to ensure compliance with the Securities Act, and
those agreements have been delivered.
34
THE AGREEMENT AND PLAN OF REORGANIZATION
The following summary of certain terms and provisions of the agreement
and plan of reorganization is qualified in its entirety by reference to the
agreement and plan of reorganization, which is incorporated into this document
by reference and, with the exception of exhibits and schedules to the agreement
and plan of reorganization, is attached as Annex A to this Prospectus
Supplement/Proxy Statement.
DELIVERY OF CERTIFICATES
BancorpSouth will deliver to First Land certificates representing
shares of BancorpSouth common stock in exchange for the acquisition of
substantially all of the assets of First Land, which will consist of 433,593
shares of BancorpSouth common stock, cash and certain furniture, fixtures and
office equipment. First Land will receive a number of shares of BancorpSouth
common stock equal to (a) the market value of 433,593 shares of BancorpSouth
common stock, plus (b) cash held by First Land as of the closing date, less (c)
cash necessary to pay all known liabilities of First Land, including all income
taxes accrued or owed by First Land, expenses relating to the transactions
contemplated by the agreement and plan of reorganization incurred by
BancorpSouth and First Land, all amounts reserved to pay dissenting shareholders
and expenses related to dissenting shareholders, and amounts reserved to pay
fractional shares upon the distribution of BancorpSouth common stock to the
First Land shareholders, less (d) $500,000, all divided by the market value of a
share of BancorpSouth common stock. The market value of a share of BancorpSouth
common stock will be determined by taking the average of the high and the low
sale prices on the New York Stock Exchange on the trading day preceding the
closing date of the asset transfer.
Enclosed is a letter of instruction to First Land to be completed by
First Land shareholders. The letter of instruction details the manner in which
shares of BancorpSouth common stock and cash in lieu of fractional shares of
BancorpSouth common stock are to be issued to First Land shareholders upon the
dissolution and liquidation of First Land after the transfer of substantially
all of its assets to BancorpSouth.
The parties intend for the transactions described by the agreement and
plan of reorganization to qualify as a reorganization under Section 368(a)(1)(C)
of the Internal Revenue Code. BancorpSouth, however, makes no representation or
warranty with respect to the tax consequences of the reorganization or the
transactions described in this Prospectus Supplement/Proxy Statement.
CONDITIONS TO THE ASSET TRANSFER
The obligations of First Land and BancorpSouth to complete the asset
transfer are subject to the satisfaction (or waiver, where legally allowed), at
or prior to the effective time of the asset transfer, of a number of conditions,
which are set forth in the agreement and plan of reorganization. These
conditions include:
- Approval of the agreement and plan of reorganization by First
Land shareholders;
- Receipt of the required regulatory approvals;
- The perfection of dissenter's rights with respect to no more
than 2% of the outstanding shares of First Land;
- First Land's sale of all of its real estate and mineral rights;
35
- The repayment by First Land to BancorpSouth of all amounts
arising under the notes payable from First Land to BancorpSouth;
- The absence of any legal prohibition to completion of the
reorganization; and
- The accuracy of the parties' representations and performance of
the parties' obligations under the agreement and plan of
reorganization.
The obligations of First Land to complete the asset transfer are
subject to the satisfaction (or waiver, where legally allowed), at or prior to
the effective time of the asset transfer, of a number of conditions, which are
set forth in the agreement and plan of reorganization. These conditions include:
- Receipt of the required tax opinion from counsel to First Land;
and
- Receipt of the required fairness opinion from Mercer Capital
Management, Inc.
The obligations of BancorpSouth to complete the asset transfer are
subject to the satisfaction (or waiver, where legally allowed), at or prior to
the effective time of the asset transfer, of a number of conditions, which are
set forth in the agreement and plan of reorganization. These conditions include:
- Receipt of a duly executed bill of sale from First Land with
respect to the assets being transferred.
We cannot guarantee that all of the conditions precedent to the
reorganization will be satisfied or, where legally permitted, waived by the
party permitted to do so.
TERMINATION OF THE AGREEMENT AND PLAN OF REORGANIZATION
The agreement and plan of reorganization may be terminated at any time
prior to the effective time of the asset transfer, whether before or after
approval of the agreement and plan of reorganization by First Land shareholders,
by mutual consent of BancorpSouth and First Land. In addition, the agreement and
plan of reorganization may be terminated by either party if:
- A governmental entity issues a final order prohibiting the
reorganization or (subject to a 60 day waiting period) rejects
an application for a required regulatory approval;
- The shareholders of First Land fail to approve the agreement and
plan of reorganization or the transactions contemplated by it;
- The asset transfer is not completed on or before April 30, 2002;
or
- The other party materially breaches its representations or
covenants set forth in the agreement and plan of reorganization
and fails to cure that breach within the prescribed time limit.
BancorpSouth may terminate the agreement and plan of reorganization if
First Land's Board of Directors has withdrawn, modified or changed in a manner
adverse to BancorpSouth its submission of the agreement and plan of
reorganization and the transactions contemplated by it to First Land's
shareholders.
36
In the event of termination of the agreement and plan of
reorganization, the agreement and plan of reorganization will become void and
have no effect, except with respect to First Land's obligations regarding
expenses as set forth in the agreement and plan of reorganization. Termination
also will not relieve or release a breaching party from liability or damages for
its willful breach of the agreement and plan of reorganization.
CONDUCT OF BUSINESS PRIOR TO THE ASSET TRANSFER AND OTHER COVENANTS
In the agreement and plan of reorganization, First Land and
BancorpSouth agreed that, except as expressly contemplated or permitted by the
agreement and plan of reorganization or with the prior written consent of the
other party, each party will carry on their respective businesses in the
ordinary course consistent with past practice. Each of the parties also agreed
to refrain from engaging in, or permitting its subsidiaries to engage in,
certain activities which are described in the agreement and plan of
reorganization.
First Land has agreed to refrain from:
- Amending its articles of incorporation or bylaws;
- Making capital expenditures in excess of $1,000 in the
aggregate;
- Entering into any new line of business;
- Engaging in a material acquisition of another business;
- Taking any action intended or reasonably expected to result in
any of its representations and warranties in the agreement and
plan of reorganization being or becoming untrue, or in any of
the conditions to the asset transfer set forth in the agreement
and plan of reorganization not being satisfied;
- Failing to use its best efforts to maintain the assets being
sold in their present condition;
- Changing its methods of accounting in effect on December 31,
2000, except as required by changes in generally accepted
accounting principles or regulatory accounting principles;
- Adopting or amending any employee benefit plan or, except for
normal increases, in each case in the ordinary course of
business consistent with past practice, compensation
arrangement;
- Incurring any indebtedness or assuming, guaranteeing or
otherwise becoming responsible for the obligations of any other
individual, corporation or other entity;
- Taking any action or entering into any agreement that could
reasonably be expected to jeopardize or materially delay the
receipt of any required regulatory approval;
- Disposing of any material assets, properties or other rights or
agreements; or
- Entering into, renewing, amending or terminating any material
contract, agreement or lease for goods, services or office
space.
BancorpSouth has agreed to refrain from:
37
- Taking any action intended or reasonably expected to result in
any of its representations and warranties in the agreement and
plan of reorganization being or becoming untrue, or in any of
the conditions to the asset transfer set forth in the agreement
and plan of reorganization not being satisfied;
- Taking any action or entering into any agreement that could
reasonably be expected to jeopardize or materially delay the
receipt of any required regulatory approval; or
- Taking any action, including entering into any agreement with
another party, that would require it to authorize additional
shares of its common stock in order to fulfill both its
obligations under the agreement and plan of reorganization and
its obligations to any other party pursuant to an agreement.
The agreement and plan of reorganization also contains certain other
agreements relating to the conduct of the parties prior to the asset transfer,
including, among other things, those requiring each party:
- To use its best efforts to obtain all consents and approvals
required to complete the asset transfer; and
- To take all actions required to comply with any legal
requirements to complete the asset transfer.
First Land agreed to use its reasonable best efforts to cause each
director, executive officer and other person who is an "affiliate" of First Land
for purposes of Rule 145 under the Securities Act to deliver to BancorpSouth a
written agreement intended to ensure compliance with the Securities Act. In
addition, First Land agreed to afford BancorpSouth and its representatives
access during normal business hours to all of the information concerning its
business, properties and personnel as BancorpSouth may reasonably request.
First Land agreed to call and hold a special meeting of its
shareholders for the purpose of voting upon the approval and adoption of the
agreement and plan of reorganization. BancorpSouth agreed to cause the shares of
BancorpSouth common stock to be issued in the asset transfer to be approved for
listing on the New York Stock Exchange.
INDEMNIFICATION
First Land agreed to provide indemnification to BancorpSouth for all
litigation, liabilities or obligations of and claims against BancorpSouth
arising from First Land's business prior to the closing of the asset transfer.
Also, First Land agreed to provide indemnification to BancorpSouth for all
losses, damages, costs and deficiencies arising from a misrepresentation, breach
of warranty or failure to perform a covenant or undertaking by First Land
pursuant to the agreement and plan of reorganization. First Land also agreed to
provide indemnification for all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses incident to the items described
above.
AMENDMENT OF THE AGREEMENT AND PLAN OF REORGANIZATION
Subject to compliance with applicable law, the agreement and plan of
reorganization may be amended by First Land and BancorpSouth, by action taken or
authorized by their respective Boards of Directors, at any time before or after
the First Land shareholders approve the agreement and plan of reorganization.
However, after any approval of the agreement and plan of reorganization by First
Land shareholders, there may not be, without further approval of the First Land
shareholders, any amendment of the agreement and plan of reorganization which
reduces the amount or changes the
38
form of the consideration due under the agreement and plan of reorganization,
other than as contemplated in the agreement and plan of reorganization. The
agreement and plan of reorganization provides that it may not be amended except
by an instrument in writing signed on behalf of BancorpSouth and First Land.
WAIVER
Prior to the completion of the asset transfer, BancorpSouth and First
Land may extend the time for the performance of any of the obligations or other
acts of the other party to the agreement and plan of reorganization, or, where
the law permits, waive compliance in writing with any of the agreements or
conditions of the other party contained in the agreement and plan of
reorganization. Also, no delay or omission on the part of BancorpSouth or First
Land in exercising any right under the agreement and plan of reorganization
shall operate as a waiver of that right or any other right under the agreement
and plan of reorganization.
EXPENSES
First Land will bear all expenses incurred by BancorpSouth in
connection with the agreement and plan of reorganization and the transactions
described in it, whether or not the transactions are consummated. These expenses
are estimated to be less than $100,000. In addition, in the event one or more
First Land shareholders dissents, First Land shall be responsible for making any
and all payments which the dissenting shareholders shall be entitled to receive.
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PRICE RANGE OF COMMON STOCK AND DIVIDENDS
BANCORPSOUTH
BancorpSouth common stock is listed on the New York Stock Exchange
under the symbol "BXS." As of March ___, 2002, BancorpSouth common stock was
held of record by around ________ persons. The following table sets forth the
high and low sale prices for BancorpSouth common stock as reported on the New
York Stock Exchange, and cash dividends declared per share of BancorpSouth
common stock, for the periods indicated:
Stock Prices
------------ Cash Dividends
High Low Per Share
---- --- ---------
2002
First Quarter (through March __, 2002)........ $ $ $
2001
First Quarter................................. $15.6250 $12.0625 $0.14
Second Quarter................................ 17.0000 14.0000 0.14
Third Quarter ................................ 16.9700 13.4500 0.14
Fourth Quarter................................ 17.0000 14.2500 0.15
2000
First Quarter................................. $16.6250 $14.0000 $0.13
Second Quarter................................ 17.2500 14.0000 0.13
Third Quarter................................. 15.3125 13.8125 0.13
Fourth Quarter................................ 14.8750 11.8750 0.14
1999
First Quarter................................. $19.4375 $15.7500 $0.12
Second Quarter................................ 19.1250 15.8125 0.12
Third Quarter................................. 19.3750 15.3750 0.12
Fourth Quarter ............................... 17.5000 16.3125 0.13
FIRST LAND
There is no established trading market for shares of First Land common
stock, which is inactively traded in private transactions. Therefore, reliable
information is not available about the prices at which shares of First Land
common stock have been bought and sold. In four separate transactions between
1999 and 2001, First Land purchased 19,000 shares at a price of $25 per share.
As of March __, 2002, a total of 136,211 shares of First Land common
stock was held of record by around 379 persons. First Land paid cash dividends
of $.10 per share on June 30, 1999 and December 31, 2000.
40
INFORMATION ABOUT BANCORPSOUTH
BancorpSouth, Inc. is a Mississippi corporation and a bank holding
company with commercial banking and financial services operations in
Mississippi, Tennessee, Alabama, Arkansas, Texas and Louisiana. BancorpSouth's
principal subsidiary is BancorpSouth Bank. BancorpSouth conducts a general
commercial banking and trust business through BancorpSouth Bank, which has its
principal office in Tupelo, Lee County, Mississippi, and operates offices in
Mississippi, Tennessee, Alabama, Arkansas, Texas and Louisiana. BancorpSouth
Bank has grown through the acquisition of other banks, the purchase of assets
from federal regulators and through the opening of new branches and offices.
BancorpSouth's lending activities include both commercial and consumer
loans. Loan originations are derived from a number of sources including real
estate broker referrals, mortgage loan companies, direct solicitation by its
loan officers, existing savers and borrowers, builders, attorneys, walk-in
customers and, in some instances, other lenders. BancorpSouth has established
disciplined and systematic procedures for approving and monitoring loans that
vary depending on the size and nature of the loan.
BancorpSouth offers a variety of services through the trust department
of BancorpSouth Bank, including personal trust and estate services, certain
employee benefit accounts and plans, including individual retirement accounts,
and limited corporate trust functions.
BancorpSouth provides, through its subsidiaries, a range of financial
services to individuals and small-to-medium size businesses. BancorpSouth Bank
operates investment services, consumer finance, credit life insurance and
insurance agency subsidiaries which engage in investment brokerage services,
consumer lending, credit life insurance sales and sales of other insurance
products.
In some states in which we operate, and particularly in Mississippi,
there has been a substantial increase in litigation against financial services
companies in connection with lending, insurance and other financial
transactions. While the allegations vary from case to case and from company to
company, in general such cases allege that loans were originated or renewed at a
time or in a way that improperly enhanced the charges paid by the borrower
and/or that the borrowers were sold insurance products or charged fees without
appropriate disclosures.
As previously disclosed, such cases have been filed against some of our
subsidiaries. During 2001 the number of cases filed against our subsidiaries,
and the number of individual plaintiffs in those cases, has substantially
increased. Such claims are now being asserted by several hundred individuals in
an increasing number of cases filed in several different counties noted for
large jury awards. Since attorneys are actively advertising for such claimants,
and since some of the attorneys who have already filed cases purport to
represent hundreds of additional claimants for whom they have not yet filed
proceedings, the number of cases filed and the number of individuals asserting
such claims will in all probability continue to increase.
41
These actions tend to seek large amounts of damages for claims arising
out of transactions that involve relatively small amounts of money. It is not
possible to quantify the potential exposure presented by these claims for a
number of reasons, primarily because many of the cases have only been recently
filed, the facts vary from case to case and are usually disputed, the amount of
jury awards have differed from county to county and case to case, and the law
provides juries little guidance to determine the amount of punitive damages they
may render. The relatively few cases actually tried against other companies in
our market area have produced varying awards. Some cases have resulted in large
awards of actual and punitive damages for each claimant. None of those larger
awards has yet been reviewed on appeal. Rather than face the risk and
uncertainty of such awards, some companies have engaged in settlements of such
cases. Thus, the results of litigation against other companies in other cases
provide only limited information to predict the amount of risk created by the
claims asserted against us since the factual basis for those claims may be quite
different from those asserted against us, the documentation of the transactions
underlying each claim varies from company to company, and jury awards (and the
expectation of such awards in influencing settlement) turn on many factors.
Future legislation and court decisions may limit the amount of damages
that can be recovered in such cases; however, we cannot predict the course of
any such legislation or court decisions or the effect that they may have with
respect to litigation directed toward us.
BancorpSouth's principal office is located at One Mississippi Plaza,
201 South Spring Street, Tupelo, Mississippi 38804 and its telephone number is
(662) 680-2000.
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INFORMATION ABOUT FIRST LAND
GENERAL
First Land is an Arkansas corporation located in Magnolia, Arkansas.
First Land owns 433,593 shares of BancorpSouth common stock, around 1,000 acres
of timberland located in Columbia and Lafayette counties, Arkansas, and certain
mineral and royalty interests. First Land's business consists of overseeing its
investment in BancorpSouth and managing its timberland interests. First Land's
only office is located at 100 West North Street, Magnolia, Arkansas 71753,
telephone (870) 234-0473.
First Land has no employees and is not regulated by any governmental
agency. First Land is not a party to any pending litigation or other legal
proceeding.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
First Land maintains a normal banking relationship with BancorpSouth
Bank, a subsidiary of BancorpSouth, on the same terms available to the public.
On March 31, 1999, First Land borrowed $400,000 from BancorpSouth Bank at an
interest rate of 7.75%. Proceeds of the loan were used to repurchase outstanding
shares of First Land common stock. As of December 31, 2001, the principal amount
outstanding was $85,000, at an interest rate of 6.25%. This amount will be paid
off on or prior to the effective date of the reorganization. The loan is secured
by a pledge of BancorpSouth common stock.
Five of the directors of First Land, E. Larry Burrow, W. R. Gantt, III,
Homer Greer, Jr., Partee Tuberville, and Claude Wilson, Jr., and their wives own
a total of 185,928 shares of BancorpSouth common stock. These five directors
will receive shares of BancorpSouth common stock upon the liquidation and
dissolution of First Land on the same basis as other First Land shareholders.
The five directors and their wives own or control the voting of a total of
22,376 shares, or 16.4%, of First Land's outstanding common stock.
INVESTMENT POLICIES OF FIRST LAND
First Land was created in 1975 to receive certain real property then
owned by First National Bank of Magnolia, Magnolia, Arkansas. First National
Bank was required by banking regulators to divest itself of the real property.
First National Bank transferred to First Land approximately 680 acres of
timberland in Columbia County, Arkansas, and some nonmaterial severed mineral
and royalty interests. After creation of First Land, it was spun off to the
shareholders of First National Bank in accordance with the pro rata interest of
each First National Bank shareholder. First Land owns all of the timberland and
severed mineral and royalty interests First Land received from First National
Bank. In addition, First Land has selectively acquired approximately 337 acres
of timberland since 1975, and two parcels of land with improvements that were
sold in 1992 and 1994, respectively. In its acquisitions, First Land has
acquired several nonmaterial severed mineral and royalty interests that were
part of the transactions involving timberland.
All of the real property owned by First Land is located in Columbia and
Lafayette Counties, Arkansas. First Land has never acquired or considered
acquiring real property in any county that is not contiguous with Columbia
County, Arkansas. None of the real property owned by First Land contains any
improvements. Other than the two improved parcels that were purchased and sold,
First Land has not acquired or considered acquiring improved real property.
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First Land has financed its real property purchases from a combination
of cash on hand and bank loans secured by the common stock of First United
Bancshares, Inc., now a part of BancorpSouth. The most recent bank loan to
acquire real property was made in April, 1995. None of First Land's real
property is presently subject to any mortgage.
The practice followed by First Land's Board of Directors as to First
Land's acquisition of real property has been to selectively acquire parcels of
timberland brought to its attention at what the Board of Directors considers a
reasonable price. Several business associates of the Board of Directors and real
estate brokers have on occasion brought such parcels to the Board's attention.
The Board has followed no fixed policy regarding the acquisition of timberland
and has set no limitations on the amount or percentage of assets which will be
invested in any specific property.
First Land has not invested and does not intend to invest in real
estate mortgages, securities of or interests in persons engaged in real estate
activities, or in improved real estate, except for the two properties described
above. First Land has no plans for the development of any of its real property.
First Land's investments have consisted of investments in the common
stock of First National Bank and First United Bancshares, Inc., both now part of
BancorpSouth Bank and BancorpSouth, respectively, repurchases of First Land's
outstanding common stock and selective investments in timberland. If First Land
continues its separate existence, the Board of Directors would continue these
longstanding practices with respect to its investments in BancorpSouth common
stock, timberland and repurchasing its own common stock. First Land has no
specific policy limiting the amount or percentage of assets First Land may
invest in BancorpSouth common stock or timberland, in repurchases of First
Land's outstanding common stock or in any other investment. First Land's Board
of Directors evaluates investment opportunities as they arise and as First Land
has funds or cash flow available for investment. First Land's investment
practices are determined by and may be changed by First Land's Board of
Directors without a vote of the shareholders.
It has been the practice of the Board of Directors to invest in the
securities described and timberland for both income and capital gain. Since
1998, First Land has refrained from harvesting timber, foregoing current income,
for the purpose of enhancing the market value of its properties.
DESCRIPTION OF FIRST LAND'S REAL PROPERTY
First Land owns fee simple interests in approximately 981 acres of
timberland as sole owner and is the owner of undivided, partial fee simple
interests in 63 acres, giving it an ownership equivalent to approximately 1016
acres. All of this property is located in Columbia County, Arkansas, except for
95 acres located in Lafayette County, Arkansas. The severed mineral and royalty
interests owned by First Land are not material to First Land.
Around 297 acres of First Land's timberland is subject to annually
renewable hunting leases that yield a nominal amount of income to First Land.
These leases are terminable by either First Land or the lessees. Around 315
acres of First Land's timberland is subject to brine leases that yield a nominal
amount of income to First Land and expire in 2005.
First Land has no plans to improve or develop any of its real property.
If First Land continues its separate existence, it will continue to hold its
real property for income and capital gain. The value of First Land's real
properties and First Land's ability to derive income from its timberland are
subject to competitive and other economic conditions that affect the market for
timber and other wood products. In particular, First Land is affected by
competition from Canadian timber imports and a general weakness in the economy.
Except as contemplated by the agreement
44
and plan of reorganization and as disclosed in this Prospectus Supplement/Proxy
Statement, First Land has no plans or contracts to sell any of its real
property.
First Land's properties are not covered by casualty insurance.
TAX TREATMENT OF FIRST LAND AND ITS SHAREHOLDERS
First Land pays ordinary income taxes to the United States federal
government and the State of Arkansas on income derived by First Land from its
real properties and from dividends paid on the BancorpSouth common stock owned
by First Land. First Land would pay capital gains taxes to the United States
federal government and the State of Arkansas on capital gains realized from the
sale of any of its assets. As a general rule, dividends paid to shareholders of
First Land on First Land common stock would be subject to federal ordinary
income taxes.
45
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information as of March ___,
2002 regarding those persons known by First Land to be beneficial owners of more
than 5% of the outstanding shares of First Land common stock, and the number and
percentage of outstanding shares of First Land common stock beneficially owned
by each director and executive officer of First Land and all directors and
executive officers as a group. Unless otherwise indicated, each person listed is
the sole or joint record holder of, and exercises sole or joint voting power
over, the shares listed. Percentages are computed based on 136,211 shares of
First Land common stock eligible to vote at the First Land special meeting.
Shares Percentage of
Beneficial Beneficially Shares
Owner Position Owned Outstanding
----- -------- ----- -----------
DIRECTORS AND EXECUTIVE OFFICERS:
Partee Tuberville ....................... President and Director 4,511 3.3%
E. Larry Burrow(1)....................... Chairman and Director 11,018 8.1%
Homer Greer, Jr. ........................ Secretary-Treasurer and Director 1,324 1.0%
W. R. Gantt, III(2)...................... Assistant Secretary-Treasurer and 4,446 3.3%
Director
J. David Ashby........................... Director 0 *
Howard Groves............................ Director 0 *
Ken W. Miller............................ Director 0 *
Claude W. Wilson, Jr. ................... Director 1,077 *
All Directors and Executive Officers
a group (8 Persons).................................................. 22,376 16.4%
* Denotes ownership of less than 1% of the total shares of First Land common
stock.
(1) Includes 880 shares owned by Mr. Burrow's wife in which Mr. Burrow disclaims
any beneficial interest and 2,227 shares owned and voted by Mr. Burrow's wife as
co-executrix of an estate in which she has a beneficial interest.
(2) Includes 1,307 shares owned and voted by Mr. Gantt as executor of an estate
in which Mr. Gantt has a beneficial interest and 2,466 shares voted by Mr. Gantt
and owned by the executrix of an estate in which Mr. Gantt has a beneficial
interest.
46
COMPARISON OF RIGHTS OF SHAREHOLDERS
First Land shareholders, whose rights are governed by First Land's
articles of incorporation, as amended, and bylaws, as amended, and by the
Arkansas Business Corporation Act of 1987, will become shareholders of
BancorpSouth upon completion of the asset transfer and the dissolution and
liquidation of First Land. As such, the rights of the former First Land
shareholders will eventually be governed by BancorpSouth's restated articles of
incorporation and amended and restated bylaws and by the Mississippi Business
Corporation Act.
While it is impractical to summarize all of the pertinent differences,
set forth below are the material differences between the rights of First Land
shareholders under First Land's governing documents and law and the rights of
BancorpSouth shareholders under BancorpSouth's governing documents and law.
CUMULATIVE VOTING; ACTION BY WRITTEN CONSENT
BANCORPSOUTH. BancorpSouth's governing documents do not provide
cumulative voting by shareholders. BancorpSouth's bylaws provide that
shareholders may take action by the unanimous written consent of all
shareholders entitled to vote on any matter.
FIRST LAND. First Land's governing documents provide for cumulative
voting by shareholders with respect to the election of directors, meaning that
each shareholder (i) is entitled to a number of votes equal to the number of his
or her shares of First Land common stock multiplied by the number of directors
to be elected and (ii) may cast all votes for a single director or distribute
them among some or all of the candidates for director. First Land's bylaws do
not provide for action by written consent of First Land's shareholders.
CHANGE OF CONTROL
BANCORPSOUTH. BancorpSouth's governing documents and shareholders
rights plan contain several provisions which make a change of control of
BancorpSouth more difficult to accomplish without the approval of BancorpSouth's
Board of Directors, including the following:
- BancorpSouth's Board of Directors is divided into three classes
so that one-third of the directors will be subject to reelection
at each annual meeting of the shareholders of BancorpSouth;
- Two-thirds of the shares of BancorpSouth common stock entitled
to vote are required to constitute a quorum for the transaction
of any business at a special meeting of shareholders. A majority
of the shares of BancorpSouth common stock entitled to vote are
required to constitute a quorum at an annual meeting of
shareholders;
- BancorpSouth's bylaws provide that a vote of at least 80% of the
outstanding shares of BancorpSouth common stock is required to
increase the maximum number of members of BancorpSouth's Board
of Directors unless BancorpSouth's Board recommends such an
increase;
- BancorpSouth's articles of incorporation provide that the
affirmative vote of the holders of not less than 80% of the
outstanding shares of voting stock of BancorpSouth is required
in the event that BancorpSouth's Board of Directors does not
recommend to BancorpSouth shareholders a vote in favor of a
merger or consolidation of BancorpSouth
47
with, or a sale or lease of all or substantially all of the
assets of BancorpSouth to, any person or entity;
- The affirmative vote of the holders of not less than 80% of the
outstanding shares of voting stock of BancorpSouth, as well as
at least 67% of the outstanding shares of voting stock of
BancorpSouth not held by a person owning or controlling 20% or
more of BancorpSouth's voting stock, is required for the
approval of a merger, consolidation, or sale or lease of all or
substantially all of BancorpSouth's assets with or to a
controlling person, except in certain instances; and
- BancorpSouth has implemented a shareholders rights plan (which
is commonly referred to as a "poison pill") under which a common
stock purchase right attaches to and trades with each share of
BancorpSouth common stock (including shares of BancorpSouth
common stock to be issued to First Land shareholders in
connection with the dissolution of First Land). Upon the
occurrence of certain events, including the acquisition of, or
tender offer for, 20% or more of the outstanding shares of
BancorpSouth common stock by any person or entity, then the
holders of each such purchase right (except those held by the
person acquiring the shares or making the tender offer) will be
entitled to purchase one share of BancorpSouth common stock at a
price equal to 50% of the then current market price.
FIRST LAND. First Land's governing documents do not provide for the
staggered election of members of First Land's Board of Directors. Directors of
First Land are elected annually for a one-year term and hold office until the
next succeeding annual meeting of First Land's shareholders and until their
successors have been elected and qualified, subject to earlier resignation and
removal. A majority in interest of all First Land voting capital stock issued
and outstanding is required to constitute a quorum of shareholders. Under First
Land's governing documents, a majority of this quorum is required to decide any
question to come before a shareholders meeting other than an amendment of First
Land's bylaws, which requires the vote of at least 75% of First Land's issued
and outstanding voting capital stock. The asset transfer to BancorpSouth, the
dissolution and liquidation of First Land, and the sale of real property require
the affirmative vote of the holders of at least a majority of the outstanding
shares of First Land and the holders of a majority of the outstanding shares of
First Land other than those owned by or voted under the control of members of
First Land's Board of Directors. First Land has not adopted a shareholders
rights plan.
SHAREHOLDER NOMINATIONS AND PROPOSALS
BANCORPSOUTH. BancorpSouth's bylaws provide that proposals by
BancorpSouth shareholders of business to be considered, or nominations by
shareholders for election of directors, at an annual meeting of shareholders
must be stated in writing and filed with BancorpSouth's corporate Secretary not
later than 90 calendar days and not earlier than 120 calendar days prior to the
first anniversary date of the preceding year's annual meeting. If the annual
meeting is more than 30 calendar days from the anniversary date of the preceding
year's annual meeting, notice by the shareholders must be delivered not earlier
than 120 calendar days prior to the annual meeting and not later than the later
of 90 calendar days prior to the annual meeting or 10 calendar days following
the day that BancorpSouth first publicly announces the date of the annual
meeting.
BancorpSouth shareholders who wish to nominate any person for election
to BancorpSouth's Board of Directors at a special meeting of shareholders must
deliver written notice to BancorpSouth's corporate Secretary not earlier than
120 calendar days prior to the special meeting and not later than the later of
90 calendar days prior to the special meeting or 10 calendar days following the
day on which BancorpSouth first publicly announces the date of the special
meeting.
48
BancorpSouth's bylaws also require that any shareholder notice of
nomination for election of a director provide certain information concerning the
shareholder and his or her nominee, including, among other things, the
information regarding the nominee as would be required to be included in a proxy
statement filed under the proxy rules of the SEC, and the consent of the nominee
to serve as a director of BancorpSouth if elected.
The chairman of the meeting may refuse to acknowledge any shareholder
proposals or nominations that are not made in compliance with these procedures.
FIRST LAND. First Land's governing documents do not contain any
provisions which require First Land shareholders to provide advance notice to
First Land prior to proposing business or nominating persons at an annual
meeting or a special meeting of shareholders.
BOARD OF DIRECTORS
BANCORPSOUTH. BancorpSouth's Board of Directors consists of between
nine and 24 members, as determined from time to time by BancorpSouth's Board of
Directors, and on the date of this Prospectus Supplement/Proxy Statement
consisted of 12 members. The vote of at least 80% of the outstanding shares of
BancorpSouth common stock is required to increase the maximum number of members
of BancorpSouth's Board of Directors unless BancorpSouth's Board of Directors
recommends the increase. Any vacancy on BancorpSouth's Board of Directors,
including a vacancy resulting from an increase in the number of directors, may
be filled by BancorpSouth's shareholders, BancorpSouth's Board of Directors, or,
if the directors remaining in office constitute fewer than a quorum of the Board
of Directors, the Board of Directors by the affirmative vote of a majority of
all of the directors remaining in office. A vacancy that will occur at a later
date, by reason of resignation effective at a later date or any other reason,
may be filled before the vacancy occurs, but the new director may not take
office until the vacancy occurs. The members of BancorpSouth's Board of
Directors are divided into three classes, with the classes elected for staggered
three-year terms. Each director of BancorpSouth must own at least $200 of par
value of unencumbered shares of BancorpSouth common stock.
FIRST LAND. First Land's Board of Directors consists of eight members,
unless increased by the vote of First Land's shareholders, and on the date of
this Prospectus Supplement/Proxy Statement consisted of eight members. Any
vacancy on First Land's Board of Directors is to be filled by First Land's
shareholders. Each First Land director is elected to serve a one-year term.
First Land's shareholders elect directors at their annual meeting or, if the
annual meeting is not held, at a special meeting called for the purpose of the
election of directors. Directors of First Land are not required to be
shareholders of First Land.
REMOVAL OF DIRECTORS
BANCORPSOUTH. BancorpSouth's governing documents provide that a
director of BancorpSouth may be removed by the affirmative vote of a majority of
the entire Board of Directors of BancorpSouth and by BancorpSouth's
shareholders, only for cause, at a special meeting called for the purpose of
removing such director.
FIRST LAND. First Land's governing documents provide that a director
may be removed at any time with or without cause by a special shareholders
meeting called expressly for that purpose.
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AUTHORIZED CAPITAL STOCK
Authorized Shares Par Value per Share
----------------- -------------------
First Land.................. 500,000 $0.10
BancorpSouth................ 500,000,000 $2.50
RIGHTS OF SHAREHOLDERS TO CALL SPECIAL MEETINGS
BANCORPSOUTH. BancorpSouth's governing documents provide that a special
meeting of BancorpSouth's shareholders may be called by the Chief Executive
Officer or Secretary of BancorpSouth, or by the holders of not less than a
majority of the shares of BancorpSouth common stock entitled to vote at a
special meeting.
FIRST LAND. First Land's bylaws provide that a special meeting of the
First Land shareholders may be called at any time by the President or Treasurer,
by the First Land Board of Directors, or by any shareholders owning in the
aggregate at least 25% of First Land's voting capital stock issued and
outstanding.
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WHERE YOU CAN FIND MORE INFORMATION
BancorpSouth has filed with the SEC under the Securities Act a
registration statement on Form S-4 including a post-effective amendment that
registers the shares of BancorpSouth common stock to be issued in connection
with the asset transfer and subsequent distribution to the shareholders of First
Land as a result of First Land's dissolution. The registration statement,
including the attached exhibits and schedules, contains additional relevant
information about BancorpSouth and BancorpSouth common stock. The rules and
regulations of the SEC allow BancorpSouth and First Land to omit certain
information included in the registration statement from this Prospectus
Supplement/Proxy Statement.
In addition, BancorpSouth files reports, proxy statements and other
information with the SEC under the Securities Exchange Act. You may read and
copy this information at the following locations of the SEC:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. Woolworth Center Citicorp Center
Room 1024 233 Broadway 500 West Madison Street
Washington, D.C. 20549 New York, New York 10279 Suite 1400
Chicago, Illinois 60661-2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like
BancorpSouth, which file electronically with the SEC. The address of that site
is http://www.sec.gov.
You can also inspect reports, proxy statements and other information
about BancorpSouth at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The SEC allows BancorpSouth to "incorporate by reference" information
into this Prospectus Supplement/Proxy Statement from documents it has have
previously filed with the SEC. This means that BancorpSouth can disclose
important information to you by referring you to another document filed
separately with the SEC. These documents contain important information about
BancorpSouth and its financial condition, operations and business. The
information incorporated by reference is considered to be a part of this
Prospectus Supplement/Proxy Statement, except for any information that is
superseded by other information contained directly in this Prospectus
Supplement/Proxy Statement or in documents filed by BancorpSouth with the SEC
after the date of this Prospectus Supplement/Proxy Statement. Information
incorporated from another document is considered to have been disclosed to you
whether or not you chose to read the document.
This Prospectus Supplement/Proxy Statement incorporates by reference
the following documents with respect to BancorpSouth:
- BancorpSouth's Annual Report on Form 10-K for the year ended
December 31, 2000;
- BancorpSouth's Quarterly Report on Form 10-Q for the three
months ended March 31, 2001;
51
- BancorpSouth's Quarterly Report on Form 10-Q for the three
months ended June 30, 2001;
- BancorpSouth's Quarterly Report on Form 10-Q for the three
months ended September 30, 2001;
- BancorpSouth's Current Report on Form 8-K dated March 28, 2001;
- BancorpSouth's Current Report on Form 8-K dated January 18,
2002;
- BancorpSouth's Current Report on Form 8-K dated January 30,
2002;
- BancorpSouth's Current Report on Form 8-K dated February 19,
2002;
- BancorpSouth's Post-Effective Amendment No. 6 to Form S-4,
Registration No. 333-28081, dated January 25, 2002;
- BancorpSouth's Annual Report for the BancorpSouth, Inc. 401(k)
Amended and Restated Salary Deferral-Profit Sharing Employee
Stock Ownership Plan on Form 11-K for the year ended December
31, 2000;
- The description of BancorpSouth common stock contained in
BancorpSouth's Registration Statement on Form 8-A dated May 14,
1997;
- The description of BancorpSouth common stock purchase rights
contained in BancorpSouth's Registration Statement on Form 8-A
dated May 14, 1997; and
- The description of amendments to BancorpSouth common stock
purchase rights contained in an amended Registration Statement
on Form 8-A/A dated as of March 28, 2001.
BancorpSouth incorporates by reference additional documents that
BancorpSouth may file with the SEC between the date of this Prospectus
Supplement/Proxy Statement and the completion of the asset transfer. These
documents include periodic reports, such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.
BancorpSouth has supplied all information contained or incorporated by
reference in this Prospectus Supplement/Proxy Statement relating to BancorpSouth
and BancorpSouth Bank.
First Land has supplied all information contained in this Prospectus
Supplement/Proxy Statement relating to First Land.
You can obtain copies of the documents incorporated by reference in
this Prospectus Supplement/Proxy Statement with respect to BancorpSouth without
charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this Prospectus
Supplement/Proxy Statement, by requesting them in writing or by telephone from
BancorpSouth at the following:
BancorpSouth, Inc.
One Mississippi Plaza
201 South Spring Street
Tupelo, Mississippi 38804
(662) 680-2000
Attention: Cathy S. Freeman, Secretary
52
IF YOU WOULD LIKE TO REQUEST DOCUMENTS FROM BANCORPSOUTH, PLEASE DO SO
BY APRIL ___, 2002 TO RECEIVE THEM BEFORE THE SPECIAL MEETING. You can also
obtain copies of these documents from the SEC through the SEC's Internet world
wide web site or at the SEC's address described in this section above.
You should rely only on the information contained in or incorporated by
reference in this Prospectus Supplement/Proxy Statement in considering how to
vote your shares. Neither BancorpSouth nor First Land has authorized anyone to
provide you with information that is different from the information in this
document. This Prospectus Supplement/Proxy Statement is dated March ___, 2002.
You should not assume that the information contained in this document is
accurate as of any date other than that date. Neither the mailing of this
Prospectus Supplement/Proxy Statement nor the issuance of BancorpSouth common
stock in connection with the asset transfer shall create any implication to the
contrary.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This Prospectus Supplement/Proxy Statement contains certain
forward-looking statements about the financial condition, results of operations
and business of BancorpSouth and First Land and about BancorpSouth following the
asset transfer. These statements concern First Land's intention to distribute
shares of BancorpSouth's common stock it receives pursuant to the agreement and
plan of reorganization, the timing and terms of the distributions to be made to
First Land shareholders in connection with First Land's dissolution,
BancorpSouth's reasons for entering into the transaction, the anticipated impact
of the asset transfer on BancorpSouth's financial performance and market prices
of BancorpSouth common stock. These statements appear in several sections of
this Prospectus Supplement/Proxy Statement, including "Summary", "Dissolution
and Liquidation of First Land", and "BancorpSouth's Reasons for the
Transaction." You should carefully read other parts of this Prospectus
Supplement/Proxy Statement, and the documents which are incorporated by
reference, for other factors which could affect BancorpSouth's or First Land's
operations in the future. Also, the forward-looking statements generally include
any of the words "believes," "expects," "anticipates," "intends," "estimates,"
"should," "will" or "plans" or similar expressions.
Forward-looking statements are not guarantees of future performance.
They involve risks, uncertainties and assumptions. The future results and
shareholder values of BancorpSouth and First Land may differ materially from
those expressed in these forward-looking statements. Many of the factors that
could influence or determine actual results are unpredictable and not within the
control of BancorpSouth or First Land. In addition, neither BancorpSouth nor
First Land intends to, nor are they obligated to, update these forward-looking
statements after this Prospectus Supplement/Proxy Statement is distributed, even
if new information, future events or other circumstances have made them
incorrect or misleading as of any future date. For all of these statements,
BancorpSouth and First Land claim the protection of the safe harbor for
forward-looking statements provided in Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act.
Factors that may cause actual results to differ materially from those
contemplated by these forward-looking statements include, among others, the
following possibilities:
- Inability to manage growth and effectively serve an expanding
customer and market base;
- Competitive pressure among financial services providers in the
region of the United States in which BancorpSouth operates or in
the financial services industry generally may increase
significantly;
53
- BancorpSouth may be exposed to unknown liabilities of First Land
through successor liability;
- Interest rates may change in such a way as to reduce
BancorpSouth's margins;
- General economic or monetary conditions, either nationally or
regionally, may be less favorable than expected, resulting in a
deterioration in credit quality or a diminished demand for
BancorpSouth's services and products;
- Changes in laws or government rules, or the way in which courts
interpret these laws or rules, may adversely affect
BancorpSouth's businesses; and
- Business conditions, inflation or securities markets may undergo
significant change.
LEGAL MATTERS
Riley, Ford, Caldwell & Cork, P.A., Tupelo, Mississippi, counsel to
BancorpSouth, will pass upon the validity of the shares of BancorpSouth common
stock to be issued in the reorganization. Mitchell, Williams, Selig, Gates &
Woodyard, P.L.L.C, Little Rock, Arkansas, counsel to First Land, will pass upon
certain legal matters concerning the reorganization on behalf of First Land.
EXPERTS
The consolidated financial statements of BancorpSouth as of December
31, 2000 and 1999, and for each of the years in the three-year period ended
December 31, 2000, have been incorporated by reference in this Prospectus
Supplement/Proxy Statement and in the registration statement on Form S-4 in
reliance upon the report of KPMG LLP, independent accountants, incorporated by
reference herein, and upon the authority of such firm as experts in accounting
and auditing.
54
PROSPECTUS
15,000,000 SHARES
BANCORPSOUTH
COMMON STOCK
---------------
This prospectus relates to 15,000,000 shares of BancorpSouth common
stock that may be offered and issued from time to time, or have previously been
issued, in connection with acquisitions of other businesses, assets or
securities.
The amount and type of consideration we will offer and the other
specific terms of each acquisition will be determined by negotiations with the
owners or controlling persons of the businesses, assets or securities to be
acquired. We may structure business acquisitions in a variety of ways, including
acquiring stock, other equity interests or assets of the acquired business or
merging the acquired business with us or one of our subsidiaries. We may be
required to provide further information by means of a post-effective amendment
to the registration statement of which this prospectus is a part or a supplement
to this document once we know the actual information concerning a specific
acquisition. This document, unless amended or supplemented as previously
described, may only be used in connection with the issuance of our common stock
in connection with combinations, mergers or acquisitions which would be exempt
from registration but for the possibility of integration with other
transactions.
We do not expect to receive any cash proceeds from the sale of shares
of our common stock issued pursuant to this prospectus. We are paying all
expenses of this offering. We do not expect to pay any underwriting discounts or
commissions in connection with issuing these shares, although we may pay
finder's fees in specific acquisitions. Any person receiving a finder's fee may
be deemed an underwriter within the meaning of the Securities Act of 1933.
Our common stock is listed on the New York Stock Exchange under the
symbol "BXS."
---------------
Neither the Securities and Exchange Commission nor any state securities
commissioner has approved or disapproved of the shares of BancorpSouth
common stock to be issued under this prospectus or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------
SHARES OF BANCORPSOUTH COMMON STOCK ARE NOT SAVINGS OR DEPOSIT ACCOUNTS
OR OTHER OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION, AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
---------------
The date of this prospectus is January 25, 2002.
P-1
TABLE OF CONTENTS
Page
----
BancorpSouth............................................................. 1
Where You Can Find More Information...................................... 1
Legal Matters............................................................ 3
Experts.................................................................. 3
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL
INFORMATION THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. THIS
INFORMATION IS AVAILABLE WITHOUT CHARGE TO SECURITY HOLDERS UPON ORAL OR WRITTEN
REQUEST TO CATHY S. FREEMAN, VICE PRESIDENT AND CORPORATE SECRETARY OF
BANCORPSOUTH, INC., ONE MISSISSIPPI PLAZA, TUPELO, MISSISSIPPI, 38804, (662)
680-2000. TO ENSURE TIMELY DELIVERY OF THE REQUESTED INFORMATION, YOU SHOULD
MAKE YOUR REQUEST AT LEAST FIVE BUSINESS DAYS BEFORE THE DATE UPON WHICH YOU
MUST MAKE YOUR INVESTMENT DECISION.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents that are and will be incorporated into
this prospectus, as well as amendments and supplements to this prospectus,
contain forward-looking statements that involve risks and uncertainties. The
outcome of the events described in these forward-looking statements is subject
to risks and actual results could differ materially from the events predicted in
the applicable statements. These statements relate to our future plans,
objectives, expectations and intentions. These statements may be identified by
the use of words like "anticipates," "believes," "estimates," "expects," "may,"
"might," "will," "would," "should," "seeks," "pro forma," or "intends," and
similar expressions.
We caution you not to place undue reliance on forward-looking
statements since actual results could differ materially from those discussed in
these statements due to a variety of factors, many of which are beyond our
control. Forward-looking statements speak only as of the date of the document in
which they are made, and we might not update them to reflect changes that occur
after that date. For a discussion of some of the factors that could cause actual
results to differ from our forward-looking statements, refer to our reports
filed with the Securities and Exchange Commission, including our Annual Report
on Form 10-K for the year ended December 31, 2000 in the section captioned "Risk
Factors," which is incorporated by reference into this prospectus. Refer also to
the documents we file with the SEC after the date of this prospectus, as those
documents might update information contained in previously filed documents or
provide additional information. See "Where You Can Find More Information" on
page 1.
P-2
BANCORPSOUTH
BancorpSouth, Inc. is a Mississippi corporation and a bank holding
company with commercial banking and financial services operations in
Mississippi, Tennessee, Alabama, Arkansas, Texas and Louisiana. Our principal
subsidiary is BancorpSouth Bank. We conduct a general commercial banking and
trust business through BancorpSouth Bank, which has its principal office in
Tupelo, Lee County, Mississippi, and operates offices in Mississippi, Tennessee,
Alabama, Arkansas, Texas and Louisiana. BancorpSouth Bank has grown through the
acquisition of other banks, the purchase of assets from federal regulators and
through the opening of new branches and offices.
Our lending activities include both commercial and consumer loans. Loan
originations are derived from a number of sources including real estate broker
referrals, mortgage loan companies, direct solicitation by our loan officers,
existing savers and borrowers, builders, attorneys, walk-in customers and, in
some instances, other lenders. We have established disciplined and systematic
procedures for approving and monitoring loans that vary depending on the size
and nature of the loan.
We offer a variety of services through the trust department of
BancorpSouth Bank, including personal trust and estate services, certain
employee benefit accounts and plans, including individual retirement accounts,
and limited corporate trust functions.
We provide, through our subsidiaries, a range of financial services to
individuals and small-to-medium size businesses. BancorpSouth Bank operates
investment services, consumer finance, credit life insurance and insurance
agency subsidiaries which engage in investment brokerage services, consumer
lending, credit life insurance sales and sales of other insurance products.
Our principal office is located at One Mississippi Plaza, Tupelo,
Mississippi 38804 and our telephone number is (662) 680-2000.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC under the Securities Act of 1933 a
registration statement on Form S-4 (Registration No. 333-28081) that registers
the distribution of our shares to be offered in connection with this prospectus.
The registration statement, including the attached exhibits and schedules, and
any amendments or supplements to the registration statement, if any, contain
additional relevant information about us and our common stock. The rules and
regulations of the SEC allow us to omit certain information included in the
registration statement from this prospectus.
In addition, we file reports, proxy statements and other information
with the SEC under the Securities Exchange Act of 1934. You may read and copy
this information at the following locations of the SEC:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. Woolworth Center Citicorp Center
Room 1024 233 Broadway 500 West Madison Street
Washington, D.C. 20549 New York, New York 10279 Suite 1400
Chicago, Illinois 60661-2511
P-3
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like us, which
file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information
about us at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The SEC allows us to "incorporate by reference" information into this
prospectus from documents that they we previously filed with the SEC. This means
that we can disclose important information to you by referring you to another
document filed separately with the SEC. These documents contain important
information about us and our financial condition, operations and business. The
information incorporated by reference is considered to be a part of this
prospectus, except for any information that is superseded by other information
contained directly in this prospectus or in documents filed by us with the SEC
after the date of this prospectus. Information incorporated from another
document is considered to have been disclosed to you whether or not you chose to
read the document.
This prospectus incorporates by reference the following documents:
1. Our Annual Report on Form 10-K for the year ended December 31,
2000;
2. Our Quarterly Report on Form 10-Q for the three months ended
March 31, 2001;
3. Our Quarterly Report on Form 10-Q for the three months ended
June 30, 2001;
4. Our Quarterly Report on Form 10-Q for the three months ended
September 30, 2001;
5. Our Current Report on Form 8-K dated March 28, 2001;
6. Our Current Report on Form 8-K dated January 18, 2002;
7. Our Annual Report for the BancorpSouth, Inc. 401(k) Amended and
Restated Salary Deferral-Profit Sharing Employee Stock Ownership
Plan on Form 11-K for the year ended December 31, 2000;
8. The description of our common stock contained in a Registration
Statement on Form 8-A, dated May 14, 1997;
9. The description of our common stock purchase rights contained in
a Registration Statement on Form 8-A, dated May 14, 1997; and
10. The description of amendments to our common stock purchase
rights contained in an amended Registration Statement on Form
8-A/A, dated as of March 28, 2001.
We incorporate by reference additional documents that we may file with
the SEC after the date of this prospectus. These documents include, but are not
limited to, periodic reports, such as Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.
P-4
You can obtain copies of the documents incorporated by reference in
this prospectus without charge, excluding any exhibits to those documents unless
the exhibit is specifically incorporated by reference as an exhibit in this
prospectus, by requesting them in writing or by telephone from Cathy S. Freeman,
Vice President and Corporate Secretary of BancorpSouth, Inc., at One Mississippi
Plaza, Tupelo, Mississippi 38804, (662) 680-2000. To ensure timely delivery of
the requested information, you should make your request at least five business
days before the date upon which you must make your final investment decision.
You can also obtain copies of these documents from the SEC through the SEC's
Internet world wide web site or at the SEC's address described in this section
above.
You should rely only on the information contained in or incorporated by
reference in this prospectus in making your final investment decision. We have
not authorized anyone to provide you with information that is different from the
information in this document. This prospectus is dated January 25, 2002. You
should not assume that the information contained in this document is accurate as
of any date other than that date. Neither the mailing of this prospectus nor the
issuance of our common stock in connection with this prospectus shall create any
implication to the contrary.
LEGAL MATTERS
Riley, Ford, Caldwell & Cork, P.A., Tupelo, Mississippi, counsel to
BancorpSouth, will pass upon the validity of the shares of BancorpSouth common
stock to be offered in connection with this prospectus. Waller Lansden Dortch &
Davis, A Professional Limited Liability Company, Nashville, Tennessee, special
counsel to BancorpSouth, will pass upon certain legal matters concerning the
shares of BancorpSouth common stock to be offered in connection with this
prospectus.
EXPERTS
The consolidated financial statements of BancorpSouth, as of December
31, 2000 and 1999, and for each of the years in the three-year period ended
December 31, 2000, have been incorporated by reference in this prospectus and in
the registration statement on Form S-4 in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of KPMG LLP as experts in accounting and auditing.
P-5
ANNEX A
AGREEMENT AND PLAN OF REORGANIZATION
DATED DECEMBER 26, 2001
BETWEEN
FIRST LAND AND INVESTMENT COMPANY
AND
BANCORPSOUTH, INC.
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 TRANSFER OF ASSETS; CONSIDERATION; CLOSING................................................. A-1
1.1 Transfer of Assets......................................................................... A-1
1.2 Liabilities................................................................................ A-1
1.3 Consideration for Transfer................................................................. A-2
1.4 Expenses................................................................................... A-2
1.5 Transfer Taxes............................................................................. A-2
1.6 Further Acts and Assurances................................................................ A-2
1.7 Closing.................................................................................... A-2
1.8 Purchaser to Make Shares Available......................................................... A-3
1.9 Tax Treatment.............................................................................. A-3
1.10 Dissolution of Seller...................................................................... A-3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER................................................... A-3
2.1 Organization............................................................................... A-3
2.2 Authority.................................................................................. A-3
2.3 Subsidiaries............................................................................... A-4
2.4 Title to Assets............................................................................ A-4
2.5 Substantially All of the Assets............................................................ A-4
2.6 Type of Assets............................................................................. A-4
2.7 Absence of Undisclosed Liabilities......................................................... A-4
2.8 Contracts.................................................................................. A-4
2.9 Defaults................................................................................... A-4
2.10 Environmental Matters...................................................................... A-5
2.11 Litigation................................................................................. A-5
2.12 Compliance with Law........................................................................ A-5
2.13 Taxes...................................................................................... A-6
2.14 Employment Matters......................................................................... A-6
2.15 Consent and Approvals...................................................................... A-7
2.16 Seller Information......................................................................... A-7
2.17 No Untrue or Inaccurate Representation or Warranty......................................... A-7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PURCHASER................................................ A-7
3.1 Organization and Standing of Purchaser..................................................... A-7
3.2 Authority of Purchaser..................................................................... A-7
3.3 SEC Reports................................................................................ A-8
3.4 Purchaser Information...................................................................... A-8
3.5 No Untrue or Inaccurate Representation or Warranty......................................... A-8
3.6 Tax Representations........................................................................ A-8
ARTICLE 4 COVENANTS OF PURCHASER..................................................................... A-9
4.1 Corporate Action........................................................................... A-9
4.2 Confidential Handling of Documents......................................................... A-9
4.3 Conduct of Business........................................................................ A-9
ARTICLE 5 COVENANTS OF SELLER........................................................................ A-9
5.1 Access and Information..................................................................... A-9
5.2 Conduct of Business....................................................................... A-10
5.3 Best Efforts to Secure Consents........................................................... A-11
5.4 Unusual Events............................................................................ A-11
5.5 Press Releases............................................................................ A-11
i
ARTICLE 6 ADDITIONAL AGREEMENTS..................................................................... A-11
6.1 Regulatory Matters........................................................................ A-11
6.2 Shareholder Meeting....................................................................... A-12
6.3 Legal Conditions.......................................................................... A-12
6.4 Stock Exchange Listing.................................................................... A-12
6.5 Affiliates................................................................................ A-12
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY..................................... A-13
7.1 Shareholder Approval...................................................................... A-13
7.2 Listing of Shares......................................................................... A-13
7.3 Other Approvals........................................................................... A-13
7.4 S-4 ...................................................................................... A-13
7.5 No Injunctions or Restraints; Illegality.................................................. A-13
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER......................................... A-13
8.1 Representations and Warranties True....................................................... A-13
8.2 Performance of Obligations of Purchaser................................................... A-13
8.3 Other Deliveries.......................................................................... A-14
8.4 Proceedings and Documents Satisfactory.................................................... A-14
8.5 Fairness Opinion.......................................................................... A-14
8.6 Sale of Real Estate and Mineral Rights.................................................... A-14
8.7 Tax Opinion............................................................................... A-14
8.8 Dissenting Shares......................................................................... A-14
ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER...................................... A-14
9.1 Representations and Warranties True....................................................... A-14
9.2 Performance of Obligations of Seller...................................................... A-14
9.3 Completion of Due Diligence Review........................................................ A-15
9.4 Board of Director Approval................................................................ A-15
9.5 Bill of Sale.............................................................................. A-15
9.6 Other Deliveries.......................................................................... A-15
9.7 Proceedings and Documents Satisfactory.................................................... A-15
9.8 No Adverse Change......................................................................... A-15
9.9 Sale of Real Estate and Mineral Rights.................................................... A-15
9.10 Loan Payoff............................................................................... A-15
9.11 Dissenting Shares......................................................................... A-15
ARTICLE 10 TERMINATION............................................................................... A-15
10.1 Termination............................................................................... A-15
10.2 Effect of Termination..................................................................... A-17
ARTICLE 11 INDEMNIFICATION........................................................................... A-17
ARTICLE 12 MISCELLANEOUS............................................................................. A-17
12.1 Notices................................................................................... A-17
12.2 Entire Agreement.......................................................................... A-18
12.3 Governing Law............................................................................. A-18
12.4 Section Headings.......................................................................... A-18
12.5 Waiver.................................................................................... A-18
12.6 Exhibits.................................................................................. A-18
12.7 Assignment................................................................................ A-18
12.8 Plain Meaning............................................................................. A-18
12.9 Counterparts.............................................................................. A-18
12.10 Severability.............................................................................. A-18
ii
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated
as of December 26, 2001, between FIRST LAND AND INVESTMENT COMPANY, an Arkansas
corporation ("Seller"), and BANCORPSOUTH, INC., a Mississippi corporation
("Purchaser").
RECITAL:
WHEREAS, Seller is a corporation which owns the securities,
cash, furniture, fixtures and office equipment (collectively, the "Assets") used
in connection with its business (the "Business");
WHEREAS, Seller is a shareholder of Purchaser;
WHEREAS, Seller desires to transfer and Purchaser desires to
acquire the Assets (except for certain excluded assets as set forth herein), in
exchange for the issuance and delivery by Purchaser to Seller of certain shares
of common stock of Purchaser, with such shares to be further distributed by
Seller to the shareholders of Seller in complete liquidation and dissolution of
Seller, all upon terms and conditions hereinafter set forth; and
WHEREAS, for federal income tax purposes, it is intended that
the transactions provided for herein shall qualify as a reorganization ("the
Reorganization") within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code").
The parties hereby agree as follows:
ARTICLE 1
TRANSFER OF ASSETS; CONSIDERATION; CLOSING
1.1 Transfer of Assets
(a) Upon the terms of this Agreement and based
upon the representations, warranties and agreements made herein by each of the
parties to the other, on the Closing Date (as defined below), Seller shall
transfer and Purchaser shall acquire all securities, cash, furniture, fixtures
and office equipment owned by Seller and utilized in the Business, as described
in Schedule 1.1(a)(i) (the "Schedule of Assets"); provided, however, Seller
shall not transfer and Purchaser shall not acquire title to any of the excluded
assets set forth on Schedule 1.1(a)(ii), consisting of the real estate (the
"Real Estate") and the mineral rights (the "Mineral Rights") described therein;
and
(b) In lieu of acquiring the Real Estate and the
Mineral Rights, prior to Closing, Seller intends to sell to one or more third
parties all of the Real Estate and the Mineral Rights and to transfer to
Purchaser the net proceeds of such sale or sales remaining after satisfaction of
or provision for all liabilities, claims and obligations of Seller; and
(c) Seller shall execute and deliver to
Purchaser a Bill of Sale in the form of Exhibit 1.1(c).
1.2 Liabilities. Seller has no liabilities, claims or
obligations (whether accrued, absolute, contingent or otherwise) related to the
Business or the Assets other than those set forth on Schedule 1.2 (the "Schedule
of Liabilities"). The Assets shall be sold free and clear of all liabilities,
A-1
liens, charges and encumbrances. Purchaser shall not assume any liability or
obligation of Seller, fixed or contingent, disclosed or undisclosed, at the
closing of the transactions contemplated hereby or otherwise. Seller agrees to
satisfy, at or before the Closing (as defined below) all liabilities,
indebtedness and obligations related to the Assets and to have all liens related
to the Assets released. Notwithstanding the foregoing, the shareholders of
Seller (each a "Shareholder" and, collectively, the "Shareholders") will have
the right of dissent from the transactions proposed herein under Sections
4-27-1301, et seq., of the Arkansas Business Corporation Act of 1987 (the
"ABCA"); in the event one or more Shareholders dissents, the payments such
Shareholders may be entitled to receive may not be known or satisfied prior to
the Closing. Notwithstanding the foregoing, Seller shall be responsible for
making any and all payments which such dissenting shareholders shall be entitled
to receive.
1.3 Consideration for Transfer. The purchase price for
the Assets (the "Purchase Price") paid to Seller shall be that number of shares
of Common Stock, $2.50 par value per share, of Purchaser (the "Common Stock")
determined according to the following formula:
(I) (a) The market value of 433,593 shares of Common
Stock, determined by the average of the high and low
prices of the Common Stock on the New York Stock
Exchange (the "NYSE") on the trading day preceding
the Closing Date, plus (b) all cash held by Seller
as of the Closing Date, less (c) cash necessary to
pay any and all known liabilities of Seller,
including without limitation (i) all income taxes
accrued or owed by Seller, (ii) all legal,
accounting, NYSE listing and other expenses relating
to the transactions contemplated hereby incurred by
either Seller or Buyer, (iii) all amounts reserved
to pay dissenting shareholders and expenses relating
to dissenting shareholders, and (iv) all amounts
reserved to pay fractional shares upon distribution
of the Common Stock to the Shareholders, less (d)
the sum of $500,000 all divided by (II) the market
value of a share of the Common Stock determined by
the average of the high and low prices of the Common
Stock on the NYSE on the trading day preceding the
Closing Date.
1.4 Expenses. All expenses of Purchaser in connection
with this Agreement or the transactions provided for hereby shall be borne by
Seller, whether or not such transactions are consummated.
1.5 Transfer Taxes. Seller shall be responsible for any
documentary transfer taxes and any sales, use or other taxes imposed by reason
of the transfer of the Assets, the fees and costs of recording or filing all
applicable conveyancing instruments necessary to transfer the Assets and any
transfer taxes, costs or fees by reason of the issuance of the shares of Common
Stock pursuant to Section 1.3.
1.6 Further Acts and Assurances. Seller shall, at any
time and from time to time at and after the Closing, upon the request of
Purchaser, take any and all steps necessary to place Purchaser in possession and
operating control of the Assets to be transferred hereunder, and will do,
execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be required for
the better transferring and confirming to Purchaser or to its successors or
assigns, or for reducing to possession, any or all of the Assets.
1.7 Closing. Subject to the terms and conditions of this
Agreement, the transfer, acquisition and other activities provided for herein
(the "Closing") shall take place at the offices of Waller Lansden Dortch &
Davis, PLLC, on or before April 30, 2002 (the "Closing Date") or such other
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time, date and place as the parties shall mutually agree. The Closing will not
take place between the record date and the payable date for any dividend
declared by Purchaser.
1.8 Purchaser to Make Shares Available. On the Closing
Date, Purchaser shall deliver to Seller certificates representing the shares of
Common Stock and cash in lieu of fractional shares to be paid pursuant to
Section 1.3. Notwithstanding anything to the contrary contained herein, no
certificate representing a fractional share of Common Stock shall be issued
hereunder, no dividend or distribution with respect to Common Stock shall be
payable on or with respect to the fractional share, and such fractional share
interest shall not entitle the owner thereof to vote or to any other rights of a
shareholder of Purchaser. In lieu of the issuance of any such fractional share,
Purchaser shall pay to Seller an amount in cash equal to the product of (x) the
market value of a share of the Common Stock determined in accordance with
Section 1.3 and (y) the fraction of a share of Common Stock which Seller would
otherwise be entitled to receive pursuant to this Article 1.
1.9 Tax Treatment. Purchaser and Seller intend that the
transactions contemplated by this Agreement be treated for tax purposes as a
reorganization under Section 368(a)(1)(C) of the Code and that this Agreement
shall constitute a "plan or reorganization" for the purposes of Section 368(a)
of the Code. Purchaser does not make any representation or warranty with respect
to the transactions contemplated by this Agreement qualifying as a
reorganization under Section 368(a)(1)(C) of the Code, nor with respect to the
tax consequences of such transactions.
1.10 Dissolution of Seller. Approval of this Agreement by
the Shareholders shall constitute (i) adoption of a plan of reorganization
meeting the requirements of Section 368(a) of the Code (the "Plan of
Reorganization"), (ii) approval of the sale of all of the Real Estate and
Mineral Rights, and (iii) approval of the dissolution of Seller. Pursuant to
this Plan of Reorganization, Seller will take all steps necessary or appropriate
so that the dissolution of Seller pursuant to the laws of the State of Arkansas
will occur as soon as practicable after the Closing (and in any event within 120
days after the Closing Date). At the conclusion of the Reorganization pursuant
to the Plan of Reorganization, (i) any assets of Seller that have not been
conveyed to Purchaser hereunder shall be distributed to the Shareholders in
accordance with their respective interests and applicable law, including Section
368 of the Code, and Seller shall be responsible for filing any and all final
tax returns of Seller and for paying any liabilities associated therewith.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the date hereof and, when read in light of any Schedules
that are to be provided in accordance with the provisions of Section 12.7
hereof, Seller represents and warrants to Purchaser as follows:
2.1 Organization. Seller is a corporation, duly
organized, validly existing and in good standing under and by virtue of the laws
of the State of Arkansas.
2.2 Authority. Seller has all requisite power and
authority to (a) own and lease Seller's properties and assets, (b) carry on
Seller's business as and where it is now being conducted, (c) execute, deliver
and perform its obligation under this Agreement and the documents to be executed
in connection herewith, and, (d) upon requisite approval of the Shareholders of
Seller, consummate the transactions contemplated hereby. All action on the part
of Seller necessary for the authorization, execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
has been or will be taken prior to the Closing Date. This Agreement shall
constitute the legal, valid and binding obligation of Seller, enforceable in
accordance with its terms except as enforceability may be restricted, limited or
delayed by applicable
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bankruptcy or other laws affecting creditor's rights generally and except as
enforceability is subject to general principles of equity.
2.3 Subsidiaries. Seller does not have and has never had
any subsidiaries or affiliated organizations and does not otherwise own and has
never otherwise owned any shares of capital stock or any interest in, or control
of, directly or indirectly, any other corporation, partnership, limited
liability company, association, joint venture or other business entity, other
than shares of Common Stock in Purchaser.
2.4 Title to Assets. Seller has, and at Closing will
have, good and marketable title to all of the Assets subject to no mortgage,
pledge, lien, lease, conditional sales agreement, option, right of first refusal
or any other encumbrance or charge, including taxes. Seller agrees to remove all
security interests reflected on any search of public records, if any, prior to
the Closing and to remove any other security interests filed with respect to the
Assets between the date of such search of public records and the Closing Date.
The Bill of Sale, in the form attached hereto as Exhibit 1.1(b), to be executed
and delivered by Seller at the Closing will be valid, binding and enforceable in
accordance with its terms, and will effectively vest in Purchaser good and
marketable title to all of the Assets. At the Closing, Seller shall deliver
certificates representing all of the securities owned by it, duly endorsed for
transfer.
2.5 Substantially All of the Assets. The Assets described
in the Schedule of Assets represent "substantially all" of the assets of Seller
within the meaning of Section 368(a)(1)(C) of the Code and applicable
regulations of the United States Department of the Treasury.
2.6 Type of Assets. The Assets consist solely of common
stock of Purchaser, cash, and equipment in the nature of furniture, fixtures and
office equipment.
2.7 Absence of Undisclosed Liabilities. Except as and to
the extent reflected in the Schedule of Liabilities, Seller, as of the date
hereof, has no liabilities, claims or obligations (whether accrued, absolute,
contingent or otherwise) related to the Business or the Assets and no knowledge
of any facts or circumstances that may give rise to a liability, claim or
obligation in the future.
2.8 Contracts. There are no contracts, leases, agreements
or other instruments to which Seller is a party or is bound which could either
singularly or in the aggregate have an adverse effect on the value to Purchaser
of the Assets or which could inhibit or prevent Seller in its ability
effectively to transfer to or vest in Purchaser good and sufficient title to the
Assets.
2.9 Defaults. Seller is not in default under, nor has any
event occurred which, with the lapse of time or action by a third party, could
result in a default under, any outstanding indenture, mortgage, lease, contract
or agreement to which Seller is a party, except for defaults that would not have
a material adverse effect on Seller, the Assets or Purchaser. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement will not (i) violate any provision
of, or result in the breach of, or constitute a default under, any law the
violation of which would result in a significant liability to Seller, or any
order, writ, injunction or decree of any court, governmental agency or
arbitration tribunal; (ii) constitute a violation of or a default under, or
conflict with, any term or provision of any contract, commitment, indenture,
lease or other agreement, or any other restriction of any kind to which Seller
is a party or by which Seller is bound; or (iii) cause or give any party grounds
to cause (with or without notice, the passage of time or both) the maturity of
any liability or obligation of Seller to be accelerated, or increase any such
liability or obligation.
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2.10 Environmental Matters. There are no underground
storage tanks located on or under the Real Estate used by the Business on or
prior to the date hereof, which property is described on Schedule 1.1(a)(ii)
attached hereto (the "Property"). There are no "Hazardous Substances" (as
hereinafter defined) on, in or under the Property, and neither Seller nor, to
Seller's knowledge, any third party has engaged in the generation, production,
use, handling, manufacture, treatment, storage or disposal of any Hazardous
Substances on, in or under the Property. "Hazardous Substances" shall mean any
substance, material, waste or pollutant that is now or hereafter listed,
defined, characterized or regulated as hazardous, toxic or dangerous under or
pursuant to any statute, law, ordinance, rule or regulation of any federal,
state, regional, county or local governmental authority having jurisdiction over
the Property or its use or operation, including, without limitation, (i) any
substance, material, element, compound, mixture, solution, waste, chemical or
pollutant listed, defined, characterized or regulated as hazardous, toxic or
dangerous under Applicable Environmental Law, (ii) petroleum, petroleum
derivatives or by-products and other hydrocarbons, (iii) polychlorinated
biphenyls (PCBs), asbestos and urea formaldehyde and (iv) radioactive
substances, materials or waste. "Applicable Environmental Law" shall include (i)
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601 et seq. ("CERCLA"); (ii) the Resource Conservation and Recovery
Act, 42 U.S.C. ss. 6901 et seq. ("RCRA"); (iii) the Federal Water Pollution
Control Act, 33 U.S.C. ss. 1251 et seq.; (iv) the Clean Air Act, 42 U.S.C. ss.
7401 et seq.; (v) the Hazardous Material Transportation Act, 49 U.S.C. ss. 1471
et seq.; (vi) the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.;
(vii) any amendments to the foregoing Acts as adopted from time to time; (viii)
any rule, regulation, order, injunction, judgment, declaration or decree
implementing or interpreting any of the foregoing Acts, as amended; and (ix) any
other federal, state or local statute, law, ordinance, rule, regulation, order
or decree regulating, relating to, interpreting or imposing liability or
standards of conduct concerning hazardous, toxic or dangerous substances,
material, waste, chemicals or pollutants. There is no pending or, to the
knowledge of Seller, threatened civil or criminal litigation, notice of
violation or administrative proceeding relating in any way to any Applicable
Environmental Law involving the Business, the Property or the Assets, and, to
the knowledge of Seller, there is no basis for such litigation, notice or
proceeding that could have a material adverse effect on the Assets.
2.11 Litigation Except as set forth in Schedule 2.11,
there is no litigation, arbitration, governmental claim, investigation, workers
compensation claim or proceeding pending or threatened against Seller at law or
in equity, before any court, arbitration tribunal or governmental agency related
to Seller, the Business or the Assets. No such proceeding set forth in Schedule
2.11 concerns the ownership or any other rights with respect to the Assets.
Seller knows of no facts on which material claims may be hereafter made against
Seller related to the Assets. Any and all claims relating to Seller or the
Business arising from incidents on, before or after the Closing Date shall be
the sole responsibility of Seller and are specifically not assumed by Purchaser
hereunder. All claims and litigation against Seller are fully covered by
insurance. Seller shall unconditionally indemnify and hold Purchaser harmless
against any loss or liability including, without limitation, attorney's fees,
resulting from any claims or litigation arising out of incidents which occurred
prior to the Closing Date.
2.12 Compliance with Law. There is not outstanding or, to
Seller's knowledge, threatened any order, writ, injunction or decree of any
court, governmental agency or arbitration tribunal against or affecting Seller,
the Business or the Assets. Seller, the Business and the Assets are in
compliance with all applicable federal, state and local laws, regulations and
administrative orders which are significant to the Business (including, without
limitation, applicable statutes, rules, regulations, orders and restrictions
relating to licensure, equal employment opportunities or environmental standards
or controls), and Seller has received no notices of alleged violations thereof.
No governmental authorities are presently conducting proceedings against Seller
and, to Seller's knowledge, no such investigation or proceeding is pending or
being threatened. Seller has all federal, state and local permits, certificates,
licenses, approvals and other authorizations necessary
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in the conduct and operation of the Business as currently conducted. All such
licenses and permits of Seller are in full force and effect, and no violations
are or have been recorded in respect thereof for which a fine or penalty may be
levied, and no proceeding is pending or threatened to revoke or limit any such
licenses and permits. Seller has obtained all consents, approvals and
authorizations of, and made all declarations, filings and registrations with any
governmental or regulatory authority, as required in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
2.13 Taxes. All federal, state, local and foreign tax
returns, information returns and other reports (the "Tax Returns") of Seller
required by law to be filed have been timely filed, and Seller has paid or
provided for all taxes (including taxes on properties (real and personal),
income, franchises, licenses, sales and payrolls) which have become due pursuant
to such Tax Returns or pursuant to any assessment, including any interest,
penalty or addition thereto, whether disputed or not. There are no tax liens on
any of the Assets except those with respect to taxes not yet due and payable.
There are no pending tax examinations of the Tax Returns of Seller nor has
Seller received a revenue agent's report asserting a tax deficiency. There are
not now and will not be at the Closing Date any claims pending or asserted
against the Assets for unpaid taxes by any federal, state, local or other
governmental body. Seller has withheld from each payment made to employees of
Seller the amount of all taxes (including, but not limited to, federal, state
and local income taxes and Federal Insurance Contribution Act taxes) required to
be withheld therefrom, and has set aside all other employee contributions or
payments customarily set aside with respect to such wages and has paid or will
pay the same to, or has deposited or will deposit such payment with, the proper
tax receiving officers or other appropriate authorities. Seller is not a partner
or a member of any partnership or joint venture or any other entity classified
as a partnership for federal income tax purposes.
2.14 Employment Matters.
(a) Seller is not a party to any written or oral
employment agreements with any of its employees (the "Employees"), consultants,
agents or other persons performing services for the Business except as set forth
on Schedule 2.14(a) attached hereto, and any such agreement is terminable by
Seller at will without penalty or cost to Seller. Seller has paid or made
provision for the payment of all salaries and wages of the Employees accrued
through the date hereof. Purchaser does not assume and is not responsible for
any obligation or liability arising out of any employment relationship of Seller
or the termination thereof. Purchaser shall have no obligation to hire any of
the Employees who are engaged in the Business as of the date hereof. Nothing in
this Agreement shall confer upon any of the Employees any rights or remedies,
including any right to employment or continued employment for any specified
period or of any nature or kind whatsoever. Seller is not a party to any
collective bargaining contracts or any other contracts, agreements or
understandings with any labor unions or other representatives of the Employees.
No collective bargaining agreement is currently being negotiated by Seller.
There exists no present or, to the best of Seller's knowledge, threatened labor
disturbance or pending arbitration, unfair labor practice, grievance or other
proceedings or litigation of any kind with respect to the Employees, and no such
labor disturbance, proceedings or litigation has existed during the past twelve
(12) months or exists which remains unresolved on the date hereof.
(b) Seller has not since inception, nor does it
currently sponsor, maintain, contribute to or participate in a Multiemployer
Plan or a "defined benefit plan" within the meaning of Section 3(35) of the
Employee Retirement Income Security Act of 1974 ("ERISA") covering employees of
Seller. None of the Employee Benefit Plans is an "employee pension benefit
plan," or an "employee welfare benefit plan," within the meaning of Section 3(3)
of ERISA. There are no pending or, to the best of Seller's knowledge, threatened
claims, lawsuits or arbitrations against any Employee Benefit Plan or any
fiduciary thereof. Each Employee Benefit Plan is, and has been, operated in
compliance in all material respects with the applicable provisions of federal
and state
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law. Seller has paid in full all insurance premiums or otherwise met all other
funding obligations with regard to all Employee Benefit Plans for policy years
or other applicable policy funding periods ending on or before the Closing Date.
Upon termination of employment of any Employee, neither Seller nor any employee
will incur any liability for any severance or termination pay, pension,
profit-sharing or other post-retirement benefit, including but not limited to
life, health and welfare benefits, or other similar payment. Seller does not
self-insure any Employee Benefit Plan. For purposes of this representation,
"Employee Benefit Plans" shall mean bonus, pension, benefit, welfare,
profit-sharing, retirement, disability, insurance, incentive, deferred
compensation and other similar fringe or employee benefit plans, funds, programs
or arrangements, and any employment contracts or executive compensation
agreements, written or oral, in each of the foregoing cases, which cover or
covered, are or were maintained for the benefit of, or relate or related to, any
or all current or former employees of Seller.
2.15 Consents and Approvals. Except for (a) the filing
with the Securities and Exchange Commission (the "SEC") of a proxy statement in
definitive form relating to the meeting of the Shareholders to be held in
connection with this Agreement and the transactions contemplated hereby (the
"Proxy Statement"), (b) the filing of applications and notices, as applicable,
with the Board of Governors of the Federal Reserve System, and any necessary
approval of such applications and/or notices and (c) the approval of this
Agreement by the requisite vote of the Shareholders, no consents or approvals of
or filings or registrations with any court, administrative agency or commission
or other governmental authority or instrumentality (each, a "Governmental
Entity") or with any third party are necessary in connection with the execution
and delivery by Seller of this Agreement and the consummation by Seller of the
transactions contemplated hereby
2.16 Seller Information. The information relating to
Seller which is provided to Purchaser by Seller or its representatives for
inclusion in the Proxy Statement and the post-effective amendment to Purchaser's
shelf registration statement on Form S-4 (such shelf registration statement and
any post-effective amendment thereto relating to this transaction, or any other
S-4 Registration Statement used in connection with the transactions contemplated
hereby, the "S-4") in which the Proxy Statement will be included as a
prospectus, or in any other document filed with any other regulatory agency in
connection herewith, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not misleading. The Proxy Statement
(except for such portions thereof that relate only to Purchaser or any of its
subsidiaries) will comply with the provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations thereunder.
2.17 No Untrue or Inaccurate Representation or Warranty.
No representation or warranty by Seller contains or will contain any untrue
statement of material fact, or omits or will omit to state a material fact,
necessary to make the statements therein not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
3.1 Organization and Standing of Purchaser. Purchaser is
a corporation duly organized, validly existing and in good standing under and by
virtue of the laws of the State of Mississippi.
3.2 Authority of Purchaser. Purchaser has all requisite
power and authority to (a) execute, deliver and perform its obligations under
this Agreement and the documents to be
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executed in connection herewith, and (b) consummate the transactions
contemplated hereby. All action on the part of Purchaser necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby has been or will be taken
prior to the Closing Date. This Agreement shall constitute the legal, valid and
binding obligation of Purchaser, enforceable in accordance with its terms except
as enforceability may be restricted, limited or delayed by applicable bankruptcy
or other laws affecting creditor's rights generally and except as enforceability
is subject to general principles of equity
3.3 SEC Reports. Purchaser has previously made available
to Seller a true and correct copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since December
31, 1999 by Purchaser with the SEC pursuant to the Securities Act of 1933 (the
"Securities Act") or the Exchange Act (collectively, the "Purchaser Reports")
and (b) communication mailed by Purchaser to its shareholders since December 31,
1999, and no such Purchaser Report or communication contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances in which they were made, not misleading, except that
information as of a later date shall be deemed to modify information as of an
earlier date. Purchaser has timely filed all Purchaser Reports and other
documents required to be filed by it under the Securities Act and the Exchange
Act, and, as of their respective dates, all Purchaser Reports complied with the
published rules and regulations of the SEC with respect thereto.
3.4 Purchaser Information. The information relating to
Purchaser and its subsidiaries to be contained in the Proxy Statement and the
S-4, or in any other document filed with any other regulatory agency in
connection herewith, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not misleading. The Proxy Statement
(except for such portions thereof that relate only to Seller) will comply with
the provisions of the Exchange Act, and the rules and regulations thereunder.
3.5 No Untrue or Inaccurate Representation or Warranty.
No representation or warranty by Purchaser contains or will contain any untrue
statement of material fact, or omits or will omit to state a material fact,
necessary to make the statements therein not misleading.
3.6 Tax Representations.
(a) Purchaser has no intention or plan to
reacquire any of the Common Stock issued to Seller or, subsequently, to the
Shareholders pursuant to this Agreement. To the best knowledge of Purchaser, no
person related to Purchaser (within the meaning of Treasury Regulation
ss.1.368-1(e)(3)) and no person acting as an intermediary for Purchaser or such
a related person has a plan or intention to acquire any of the Common Stock
issued pursuant to this Agreement.
(b) Purchaser has no plan or intention to sell
or otherwise dispose of any of the assets of Seller acquired in this
transaction, except for dispositions made in the ordinary course of business or
transfers described in Treasury Regulation ss.1.368-2(k)(1).
(c) Purchaser is not a regulated investment
company, a real estate investment trust, or a corporation 50% or more of the
value of whose total assets (excluding cash, cash items, receivables and U.S.
government securities) are stock or securities and 80% or more of the value of
whose total assets (excluding cash, cash items, receivables and U.S. government
securities) are assets held for investment. For purposes of the 50% and 80%
determinations under the preceding sentence, stock and securities in any
subsidiary corporation shall be disregarded and the parent corporation shall be
deemed to own its ratable share of the subsidiary's assets. A corporation shall
be considered a subsidiary for purposes of this subparagraph if the parent owns
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50% or more or the combined voting power of all classes of stock entitled to
vote, or 50% or more of the total value of shares of all classes of stock
outstanding.
ARTICLE 4
COVENANTS OF PURCHASER
4.1 Corporate Action. Purchaser will take all necessary
corporate action required of it to carry out the transactions contemplated by
this Agreement and to satisfy the conditions specified herein.
4.2 Confidential Handling of Documents. Purchaser shall
use its best efforts to keep confidential all information provided by Seller
pursuant to this Agreement which is not in the public domain, and shall exercise
the same care in handling such information as it would exercise with similar
information of its own.
4.3 Conduct of Business. Except as otherwise contemplated
by this Agreement or consented to in writing by Seller, Purchaser shall not:
(a) take any action or enter into any agreement that
could reasonably be expected to jeopardize or materially delay the
receipt of any Requisite Regulatory Approval (as defined in Section 7.3
hereof);
(b) take any action, including entering into any
agreement with any other party, the effect of which would be to require
Purchaser to authorize additional shares of its common stock in order
to fulfill both Purchaser's obligations to Seller pursuant to this
Agreement and obligations to any such other party pursuant to any such
agreement; or
(c) agree or commit to do any of the foregoing.
ARTICLE 5
COVENANTS OF SELLER
Seller hereby covenants and agrees as follows:
5.1 Access and Information. Between the date hereof and
the Closing Date, Seller shall give to representatives of Purchaser reasonable
access during normal business hours to Seller's premises, books, accounts and
records and all other relevant documents and will make available, and use its
best efforts to cause the independent accountants of Seller to make available,
copies of all such documents and information with respect to the business and
properties of Seller related to the Assets and the Business as representatives
of Purchaser may from time to time request, including, without limitation, the
working papers used to prepare the Schedule of Assets, all in such manner as not
unduly to disrupt the normal business activities of Seller. Such access shall
include consultations with the officers of Seller. During the period from the
date of this Agreement to the Closing Date, Seller shall confer on a regular and
frequent basis with one or more representatives of Purchaser to report material
operational matters and to report the general status of ongoing operations.
Seller shall notify Purchaser of any material adverse change in the financial
position, earnings or business of Seller after the date hereof and prior to the
Closing and of any governmental complaints, investigations, hearings or
adjudicatory proceedings (or communications indicating that the same may be
contemplated) or of any other matter which may be material to Seller and shall
keep Purchaser fully informed of such events and permit its representatives to
participate in all discussions relating thereto.
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5.2 Conduct of Business. Between the date hereof and the
Closing Date, except as otherwise contemplated by this Agreement or approved by
Purchaser, Seller shall conduct the Business only in the ordinary course thereof
consistent with past practice, in such a manner that the representations and
warranties contained in Article 2 shall be true and correct at and as of the
Closing Date (except for changes contemplated, permitted or required by this
Agreement) and so that the conditions to be satisfied by Seller at the Closing
shall have been satisfied. From the date hereof until Closing, except as
otherwise consented to by Purchaser in writing, Seller shall not:
(a) fail to use its best efforts to (i) maintain the
Assets in their present condition, (ii) comply with all laws and
regulations of governmental agencies or authorities, including
applicable tax laws and regulations, (iii) operate the Business in the
manner necessary to maintain its reputation and (iv) keep in force all
licenses, permits and approvals necessary to the operation of the
Business as now conducted;
(b) fail to deliver to Purchaser any notices of any
defaults or noncompliance, cease and desist orders, notices of review
or requests for information received from lessors, mortgage holders,
governmental bodies or insurers relating to Seller, the Business or its
operations;
(c) fail to deliver to Purchaser any notice or other
information regarding pending or threatened litigation with respect to
Seller, the Business or its operations;
(d) amend its Articles of Incorporation, Bylaws or other
similar governing documents;
(e) make any capital expenditures other than those which
(i) are made in the ordinary course of business or are necessary to
maintain existing assets in good repair and (ii) in any event, are in
an amount of no more than $1,000 in the aggregate, or except as
necessary to comply with regulatory guidelines or requirements;
(f) enter into any new line of business;
(g) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity interest in
or a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire any assets, which
would be material, individually or in the aggregate, to Seller, or
which could reasonably be expected to impede or delay consummation of
the transactions contemplated hereby;
(h) change its methods of accounting in effect December
31, 2000, except as required by changes in generally accepted
accounting principles or regulatory accounting principles as concurred
to by Seller's independent accountants;
(i) except as required by applicable law, (i) adopt,
amend, or terminate any employee benefit plan or any agreement,
arrangement, plan or policy between Seller and one or more of its
current or former directors, officers or employees or (ii) except for
normal increases, in each case in the ordinary course of business
consistent with past practice, or except as required by applicable law,
increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any
employee benefit plan or agreement as in effect as of the date hereof
(including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock units or
performance units or shares);
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(j) sell, lease, encumber, assign or otherwise dispose
of, or agree to sell, lease, encumber, assign or otherwise dispose of,
any of its material assets, properties or other rights or agreements;
(k) incur any indebtedness for borrowed money or assume,
guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other individual, corporation or other
entity;
(l) create, renew, amend or terminate, or give notice of
a proposed renewal, amendment or termination of, any material contract,
agreement or lease for goods, services or office space to which Seller
is a party or by which Seller or its property is bound;
(m) take any action or enter into any agreement that
could reasonably be expected to jeopardize or materially delay the
receipt of any Requisite Regulatory Approval (as defined in Section 7.3
hereof); or
(n) agree or commit to do any of the foregoing.
5.3 Best Efforts to Secure Consents. Seller shall take
the necessary action and shall use its best efforts to secure before the Closing
all necessary consents and approvals required to carry out the transactions
contemplated by this Agreement and to satisfy all other conditions precedent to
the obligations of Purchaser and Seller.
5.4 Unusual Events. Seller shall deliver prompt written
notice to Purchaser of any material change in the Assets or the Business from
the date of this Agreement until the Closing. Until the Closing Date, Seller
shall supplement or amend all relevant Schedules and Exhibits with respect to
any matter thereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described in
such Schedules and Exhibits.
5.5 Press Releases. Seller shall not issue any press
release or other public statement relating to this Agreement or the transactions
contemplated hereby except as may be required by law.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Regulatory Matters.
(a) Purchaser and Seller shall promptly prepare
and file with the SEC the Proxy Statement, and Purchaser shall promptly prepare
and file with the SEC the S-4, in which the Proxy Statement will be included as
a prospectus. Each of Seller and Purchaser shall use its reasonable best efforts
to have the S-4 declared effective under the Securities Act as promptly as
practicable after such filing, and Seller shall thereafter mail the Proxy
Statement to the Shareholders. Purchaser shall also use its reasonable best
efforts to obtain all necessary state securities law or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by this Agreement.
(b) The parties hereto shall cooperate with each
other and use their reasonable best efforts to promptly prepare and file all
necessary documentation, to effect all applications, notices, petitions and
filings, and to obtain as promptly as practicable all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
which are necessary or advisable to consummate the transactions contemplated by
this Agreement. Seller and
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Purchaser shall have the right to review in advance, and to the extent
practicable each will consult the other on, in each case subject to applicable
laws relating to the exchange of information, all the information relating to
Seller or Purchaser, as the case may be, which appears in any filing made with,
or written materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement, and
each party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) Seller and Purchaser shall, upon request,
furnish each other with all information concerning themselves, their directors,
officers and shareholders and such other matters as may be reasonably necessary
or advisable in connection with the Proxy Statement, the S-4 or any other
statement, filing, notice or application made by or on behalf of Purchaser or
Seller to any Governmental Entity in connection with the transactions
contemplated by this Agreement.
(d) Purchaser and Seller shall promptly furnish
each other with copies of written communications received by Purchaser or
Seller, as the case may be, or any of their respective Subsidiaries, Affiliates
or Associates (as such terms are defined in Rule 12b-2 under the Exchange Act as
in effect on the date of this Agreement) from, or delivered by any of the
foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
6.2 Shareholder Meeting. Seller shall take all steps
necessary to duly call, give notice of, convene and hold a meeting of the
Shareholders to be held as soon as is reasonably practicable after the date on
which the S-4 becomes effective for the purpose of voting upon the approval and
adoption of this Agreement. Seller will, without recommendation due to conflicts
of interest of a majority of Seller's directors, submit this Agreement and the
transactions contemplated hereby to the Shareholders for their approval.
6.3 Legal Conditions. Each of Purchaser and Seller shall
use their reasonable best efforts (a) to take, or cause to be taken, all actions
necessary, proper or advisable to comply promptly with all legal requirements
which may be imposed on such party with respect to the transactions contemplated
hereby and, subject to the conditions set forth in Articles 7, 8 and 9 hereof,
to consummate the transactions contemplated by this Agreement and (b) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity and any other
third party which is required to be obtained by Seller or Purchaser in
connection with the transactions contemplated by this Agreement, and to comply
with the terms and conditions of such consent, authorization, order or approval.
6.4 Stock Exchange Listing. Purchaser shall make all
filings required of it to cause the shares of Common Stock issued pursuant to
this Agreement to be approved for listing on the NYSE, subject to official
notice of issuance, as of the Closing Date.
6.5 Affiliates. Seller shall provide a list to Buyer of
all directors, executive officers and other persons who are "affiliates" of
Seller (for purposes of Rule 145 of the Securities Act). Seller shall use its
reasonable best efforts to cause each such "affiliate" of Seller to deliver to
Purchaser as soon as practicable after the date of this Agreement a written
agreement in the form of Exhibit 6.5. Seller agrees and acknowledges that such
"affiliates" receiving Common Stock of Purchaser shall receive stock
certificates containing a legend stating that such shares may only be
transferred in accordance with such written agreement.
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ARTICLE 7
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY
The respective obligations of each party which are to be
discharged under this Agreement at the Closing are subject to the performance,
at or prior to the Closing, of the following conditions:
7.1 Shareholder Approval. This Agreement shall have been
approved and adopted by the requisite vote of the Shareholders under applicable
law.
7.2 Listing of Shares. The shares of Common Stock which
shall be issued to the Shareholders upon consummation of the transactions
contemplated hereby shall have been authorized for listing on the NYSE, subject
to official notice of issuance.
7.3 Other Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect, and all statutory waiting periods in
respect thereof shall have expired (all such approvals and the expiration of all
such waiting periods being referred to herein as the "Requisite Regulatory
Approvals").
7.4 S-4. The S-4 shall have become effective under the
Securities Act, no stop order suspending the effectiveness of the S-4 shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
7.5 No Injunctions or Restraints; Illegality. No action
or proceeding shall have been instituted against, and no order, decree or
judgment of any court, agency, commission or other Governmental Entity shall
exist against Purchaser or Seller, which seeks to or would render it unlawful as
of the Closing to effect the transactions contemplated hereby in accordance with
the terms hereof, and no such action shall seek damages by reason of the
transactions contemplated hereby. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, promulgated or enforced
by any Governmental Entity which prohibits, restricts or makes illegal
consummation of the transactions contemplated hereby. No substantive legal
objection to the transactions contemplated by this Agreement shall have been
received from or threatened by any Governmental Entity.
ARTICLE 8
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
All obligations of Seller which are to be discharged under
this Agreement at the Closing are subject to the fulfillment at or prior to the
Closing of each of the following conditions (unless expressly waived in writing
by Seller at any time at or prior to the Closing):
8.1 Representations and Warranties True. All of the
representations and warranties made by Purchaser contained in Article 3 of this
Agreement shall be true as of the date of this Agreement, shall be deemed to
have been made again at and as of the date of the Closing, and shall be true at
and as of the date of the Closing in all material respects. On the Closing Date,
Purchaser shall have delivered a certificate signed by a duly authorized officer
of Purchaser certifying the foregoing.
8.2 Performance of Obligations of Purchaser. Purchaser
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior
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to the Closing Date, and Seller shall have received a certificate signed by a
duly authorized officer of Purchaser certifying the foregoing.
8.3 Other Deliveries. Purchaser shall have delivered such
other documents and instruments contemplated by this Agreement or the agreements
entered into in connection herewith, and such other documents and instruments as
Seller or its counsel may reasonably request.
8.4 Proceedings and Documents Satisfactory. All
proceedings in connection with the sale of the Assets and all certificates and
documents delivered to Seller pursuant to this Agreement shall be satisfactory
in form and substance to Seller and its counsel acting reasonably and in good
faith.
8.5 Fairness Opinion. Prior to mailing the Proxy
Statement, Seller shall have received an opinion from Mercer Capital Management
Services, Inc. to the effect that as of the date thereof and based upon and
subject to the matters set forth therein, the Purchase Price is fair to the
Shareholders from a financial point of view.
8.6 Sale of Real Estate and Mineral Rights. Seller shall
have entered into one or more contracts to sell to third parties all of the Real
Estate and Mineral Rights for a cumulative sales price that, in the judgment of
Seller's Board of Directors, is reasonable, and the sale of all of the Real
Estate and Mineral Rights shall have occurred prior to Closing.
8.7 Tax Opinion. Seller shall have received an opinion
from Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. ("Seller's Counsel")
in form and substance reasonably satisfactory to Seller, dated the Closing Date,
substantially to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state of
facts existing on the Closing Date, the Reorganization will be treated as a
reorganization within the meaning of Section 368(a)(1)(C) of the Code and that
Purchaser and Seller will each be a party to that reorganization. In rendering
such opinion, Seller's Counsel may require and rely upon representations and
covenants, including those contained in certificates of officers of Seller and
others, reasonably satisfactory in form and substance to Seller's Counsel.
Seller will cooperate with Seller's Counsel in executing and delivering to
Seller's Counsel customary representations in connection with such opinion.
8.8 Dissenting Shares. Dissenters rights shall have been
perfected with respect to no more than two percent (2%) of Seller's outstanding
shares.
ARTICLE 9
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
All obligations of Purchaser which are to be discharged under
this Agreement at the Closing are subject to the fulfillment at or prior to the
Closing of each of the following conditions (unless expressly waived in writing
by Purchaser at any time at or prior to the Closing):
9.1 Representations and Warranties True. All of the
representations and warranties of Seller contained in Article 2 of this
Agreement shall be true as of the date of this Agreement, shall be deemed to
have been made again at and as of the Closing, and shall be true at and as of
the date of the Closing. On the Closing Date, Seller shall have delivered a
certificate signed by a duly authorized officer of Seller certifying the
foregoing.
9.2 Performance of Obligations of Seller. Seller shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to
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the Closing Date, and Purchaser shall have received a certificate signed by a
duly authorized officer of Seller certifying the foregoing.
9.3 Completion of Due Diligence Review. Purchaser shall
have completed due diligence review of the Business, the Assets and Seller by no
later than December 31, 2001, and Purchaser shall be satisfied in its sole
discretion with the information obtained.
9.4 Board of Director Approval. Purchaser's Board of
Directors shall have approved this Agreement and all transactions contemplated
hereby no later than January 31, 2002.
9.5 Bill of Sale. Purchaser shall have received a Bill of
Sale in the form of Exhibit 1.1(b), executed by a duly authorized officer of
Seller.
9.6 Other Deliveries. Seller shall have delivered such
other documents and instruments contemplated by this Agreement or the agreements
entered into in connection herewith, and such other documents and instruments as
Purchaser or its counsel may reasonably request.
9.7 Proceedings and Documents Satisfactory. All
proceedings in connection with the sale of the Assets and all certificates and
documents delivered to Purchaser pursuant to this Agreement shall be
satisfactory in form and substance to Purchaser and its counsel acting
reasonably and in good faith.
9.8 No Adverse Change. From the date of this Agreement
until the Closing, the operations of Seller shall have been conducted in the
ordinary course of business, consistent with Section 5.2 of this Agreement; no
event shall have occurred or have been threatened which has or would have a
material adverse affect upon the Business or Seller; and Seller shall not have
sustained any loss or damage to the Assets or the Business, whether or not
insured.
9.9 Sale of Real Estate and Mineral Rights. All of the
Real Estate and Mineral Rights shall have been sold prior to Closing.
9.10 Loan Payoff. All amounts arising under any and all
notes payable from Seller to Purchaser shall have been paid in full.
9.11 Dissenting Shares. Dissenters rights shall have been
perfected with respect to no more than two percent (2%) of Seller's outstanding
shares.
ARTICLE 10
TERMINATION
10.1 Termination. This Agreement may be terminated at any
time prior to the Closing Date, whether before or after approval of the matters
presented in connection with the transactions contemplated hereby by the
Shareholders:
(a) by mutual agreement of Seller and Purchaser in a
written instrument, if the Board of Directors of such party so
determines by a vote of a majority of the members of its entire Board;
(b) by either Purchaser or Seller, upon written notice to
the other party (i) 60 days after the date on which any request or
application for a Requisite Regulatory Approval shall have been denied
or withdrawn at the request or recommendation of the Governmental
Entity which must grant such Requisite Regulatory Approval, unless
within the 60-day
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period following such denial or withdrawal a petition for rehearing or
an amended application has been filed with the applicable Governmental
Entity; provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 10.1(b)(i) if such
denial or request or recommendation for withdrawal shall be due to the
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein, or
(ii) if any Governmental Entity of competent jurisdiction shall have
issued a final nonappealable order enjoining or otherwise prohibiting
the transactions contemplated hereby;
(c) by either Purchaser or Seller, if the transactions
contemplated hereby shall not have been consummated on or before April
30, 2002, unless the failure of the Closing to occur by such date shall
be due to the failure of the party seeking to terminate this Agreement
to perform or observe the covenants and agreements of such party set
forth herein;
(d) by either Purchaser or Seller (provided that Seller
may not terminate if it is in material breach of any of its obligations
under Section 6.2), if any approval of the Shareholders required for
the consummation of the transactions contemplated hereby shall not have
been obtained by reason of the failure to obtain the required vote at a
duly held meeting of such Shareholders or at any adjournment or
postponement thereof;
(e) by either Purchaser or Seller, if any approval of
Purchaser's Board of Directors required for the consummation of the
transactions contemplated hereby shall not have been obtained by reason
of the failure to obtain the required vote at a duly held meeting of
such Board of Directors or at any adjournment or postponement thereof;
(f) by either Purchaser or Seller (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), if any of the
representations or warranties set forth in this Agreement on the part
of the other party shall be untrue or incorrect in any material
respect, which is not cured within thirty (30) days following written
notice to the party making such representation, or which, by its
nature, cannot be cured prior to the Closing; provided, however, that
neither party shall have the right to terminate this Agreement pursuant
to this Section 10.1(e) unless the representation or warranty, together
with all other representations and warranties that are untrue or
incorrect, would entitle the party receiving such representation not to
consummate the transactions contemplated hereby under Section 9.1 (in
the case of a representation or warranty by Seller) or Section 8.1 (in
the case of a representation or warranty by Purchaser);
(g) by either Purchaser or Seller (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), if there shall
have been a material breach of any of the covenants or agreements set
forth in this Agreement on the part of the other party, which breach
shall not have been cured within thirty (30) days following receipt by
the breaching party of written notice of such breach from the other
party hereto, or which breach, by its nature, cannot be cured prior to
the Closing;
(h) by Purchaser, if the Board of Directors of Seller
shall have withdrawn, modified or changed in a manner adverse to
Purchaser its submission of this Agreement and the transactions
contemplated hereby to the Shareholders or
(i) by either Purchaser or Seller, if any condition to
the terminating party's obligation to close, other than a condition
contained in Sections 7.1, 7.3, 8.1, 8.2, 9.1, 9.2 or
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9.4, is not satisfied or waived on or prior to the Closing Date, and if
any applicable cure period has lapsed, and if the failure to satisfy
the condition that is the basis for termination is not due to the
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein.
10.2 Effect of Termination. In the event of termination of
this Agreement by either Purchaser or Seller as provided in Section 10.1, this
Agreement shall forthwith become void and have no effect except that (i)
Sections 1.4 and 10.2 shall survive any termination of this Agreement, and (ii)
notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
breach of any provision of this Agreement.
ARTICLE 11
INDEMNIFICATION
Subject to the conditions and provisions herein set forth,
Seller agrees to indemnify, defend and hold harmless Purchaser from and against:
(a) All litigation, liabilities or obligations of and
claims against Purchaser arising out of the Business prior to the
Closing Date;
(b) Any and all losses, damages, costs or deficiencies
resulting from any and all misrepresentations or breaches of warranty
or failures to perform the covenants or undertakings by Seller
contained in or made pursuant to this Agreement; and
(c) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses incident to any of
the foregoing.
ARTICLE 12
MISCELLANEOUS
12.1 Notices. All notices, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered in person or mailed by certified mail, postage prepaid:
To Seller: First Land and Investment Company
Post Office Box 111
Magnolia, Arkansas 71753
Attention: Partee Tuberville
With a copy (which Mitchell, Williams, Selig, Gates
shall not constitute & Woodyard, PLLC
notice) to: 425 West Capitol Avenue, Suite 1800
Little Rock, Arkansas 72201-3525
Attention: Hermann Ivester, Esq.
To Purchaser: BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, Mississippi 38804
Attention: Chief Executive Officer
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With a copy (which Waller Lansden Dortch & Davis, PLLC
shall not constitute 511 Union Street, Suite 2100
notice) to: Nashville, Tennessee 37219-1760
Attention: Ralph W. Davis, Esq.
or to such other address as either Seller or Purchaser may designate by notice
to the other.
12.2 Entire Agreement. This Agreement and the Exhibits,
Schedules and documents delivered pursuant hereto constitute the entire
agreement between the parties hereto relating to the subject matter of this
Agreement. Subject to compliance with applicable law, this Agreement may be
amended by the parties hereto, by action taken or authorized by their respective
Boards of Directors, at any time before or after approval of the matters
presented in connection with the transactions contemplated hereby by the
Shareholders; provided, however, that after any approval of the transactions
contemplated by this Agreement by the Shareholders, there may not be, without
further approval of such Shareholders, any amendment of this Agreement which
reduces the amount or changes the form of the consideration to be delivered to
the Shareholders hereunder other than as contemplated by this Agreement. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
12.3 Governing Law. The validity and construction of this
Agreement shall be governed by the laws of the State of Mississippi applicable
to contracts made and to be performed wholly within such State.
12.4 Section Headings. The Section headings are for
reference only and shall not limit or control the meaning of any provision of
this Agreement.
12.5 Waiver. No delay or omission on the part of any party
hereto in exercising any right hereunder shall operate as a waiver of such right
or any other right under this Agreement.
12.6 Exhibits. All Exhibits, Schedules and documents
referred to in or attached to this Agreement are integral parts of this
Agreement as if fully set forth herein, and all statements appearing therein
shall be deemed to be representations.
12.7 Assignment. No party hereto shall assign this
Agreement without first obtaining the written consent of the other party.
Without waiver of the foregoing provisions, all of the rights, benefits, duties,
liabilities and obligations of the parties hereto shall inure to the benefit of
and be binding upon the parties and their respective successors and assigns.
12.8 Plain Meaning. Seller and Purchaser have each
negotiated the terms hereof, reviewed this Agreement carefully, and discussed it
with their legal counsel. It is the intent of the parties that each word, phrase
and sentence and other part hereof shall be given its plain meaning, and that
rules of interpretation or construction of contracts that would construe any
ambiguity of any part hereof against the draftsman, by virtue of being the
draftsman, shall not apply.
12.9 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall comprise one and the same instrument.
12.10 Severability. If any one or more of the provisions of
this Agreement is determined to be illegal or unenforceable, all other
provisions of this Agreement shall be given effect separately from the provision
or provisions determined to be illegal or unenforceable and shall not be
affected thereby.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
"SELLER"
FIRST LAND AND INVESTMENT COMPANY
By: /s/ Partee Tuberville
----------------------------------------
President
"PURCHASER"
BANCORPSOUTH, INC.
By: /s/ Aubrey B. Patterson
----------------------------------------
Chairman and Chief Executive Officer
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ANNEX B
AGREEMENT FOR SALE OF REAL PROPERTY
(UNIMPROVED PROPERTY)
THIS AGREEMENT is entered into by and between First Land and Investment
Co., an Arkansas corporation ("Seller") and Arkansas Pulpwood Company, Inc., an
Arkansas corporation ("Buyer") (Seller and Buyer collectively referred to herein
as the "Parties"). It is hereby agreed:
1. Real Property. The Seller shall sell and the Buyer shall buy the
unimproved real property (the "Property") located in Columbia and
Lafayette Counties, Arkansas described on the attached Exhibit A.
2. Purchase Price.
(a) The purchase price of the Property (the "Purchase
Price") shall be the sum of Two Million Four Hundred Fifty
Thousand Dollars ($2,450,000.00), payable by the Buyer to the
Seller in cash at Closing.
(b) Buyer upon execution of this Agreement, shall deliver
to Security Abstract Company, Magnolia, Arkansas ("Escrow
Agent") a check in the amount of One Hundred Fifty Thousand
Dollars ($150,000.00) as earnest money ("Earnest Money"),
which shall be applied to the Purchase Price. If Buyer fails
to fulfill Buyer's obligations under this Agreement or, after
all conditions have been met, Buyer fails to close this
transaction:
(i) Seller may, in Seller's sole discretion,
seek any legal or equitable remedy available
to it; or
(ii) The Earnest Money may, in Seller's sole
discretion, be paid by the Escrow Agent to
Seller in full satisfaction of Seller's
damages; or
(iii) The Earnest Money may, in Seller's sole
discretion, be paid by the Escrow Agent to
Seller to be credited against the damages
sustained by Seller as a result of Buyer's
failure to close, in which event Seller may
seek any other or additional legal or
equitable remedy available to it.
3. Loan and Closing Costs. All of Buyer's closing costs, including
origination fee, prepaid items, and loan discount points shall be paid
by Buyer. Seller shall pay Seller's closing costs.
4. Conveyance. Except for the mineral and royalty interests, severed and
unsevered, conveyance of all fee simple interests in the Property shall
be made to Buyer by Special Warranty Deed substantially in the form
attached as Exhibit B to this Agreement, free and clear of all liens,
encumbrances and parties in possession, but subject to the exceptions
contained in the owner's policy of title insurance. Conveyance of all
mineral and royalty interests in the Property, severed and unsevered,
shall be made to Buyer by Quitclaim Deed.
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5. Title Requirements.
A. Within 20 days of the execution hereof, Seller shall obtain at
its cost an owner's title insurance commitment evidencing good
and merchantable title in the Property being vested in Seller.
B. Upon Seller's receipt of the title insurance commitment, it
shall provide the same to Buyer and it shall have 7 days
within which to have the title insurance commitment examined
by an attorney of Buyer's choice and to provide written notice
to Seller of any objections which impair the merchantability
of the title. Absent notice of objections to title within said
time period, the title shall be deemed approved.
C. Seller shall have a reasonable period of time after receipt of
Buyer's objections to title to cure the same to the
satisfaction of Buyer. If Seller cannot cure the objections to
title within a reasonable period of time, then Buyer may elect
to rescind this agreement by providing written notice thereof
to Seller and receive a refund of the earnest money paid
hereunder, or Buyer may elect to waive the objections to title
and proceed to closing.
D. At the Closing, Seller shall furnish at Seller's cost an
owners' policy of title insurance in the amount of Two Million
Four Hundred Forty Thousand Dollars ($2,440,000.00) (i.e.,
Purchase Price less amounts attributable to mineral and
royalty interests). The title insurance policy furnished by
Seller shall not apply to any mineral or royalty interests,
whether severed or unsevered. If required by the lender, Buyer
shall furnish, at Buyer's cost, a mortgagee's title policy in
the amount of the mortgage.
6. Survey. If desired by Buyer, Buyer shall be responsible for obtaining
and paying for a survey.
7. Prorations. Taxes and special assessments for prior years and those
currently due on or before Closing shall be paid by Seller. Taxes and
special assessments for the current year shall be prorated as of
Closing. Real estate transfer tax stamps shall be paid one-half (1/2)
by Seller and one-half (1/2) by Buyer.
8. Closing Date. The Closing shall occur within no later than fourteen
(14) days following satisfaction of all of the Conditions Precedent to
Seller's obligation to close as specified in paragraph 18 below (the
"Closing Date").
9. Possession. Possession shall be delivered to Buyer upon Seller's
delivery of the deeds described in paragraph 4 above.
10. Risk of Loss. Risk of loss or damage to the Property by fire or other
casualty occurring up to the time of Closing is assumed by the Seller.
Seller's responsibility as an owner of the Property shall cease upon
Closing.
11. Buyer's Representations and Warranties. Buyer hereby represents and
warrants to Seller as follows:
A. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Arkansas.
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B. Buyer has full corporate power to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of Buyer.
No other proceedings on the part of Buyer are necessary to
approve this Agreement and to consummate the transaction
contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and
binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as enforcement may be
limited by general principals of equity, whether applied in a
court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights and
remedies generally.
C. Neither the execution and delivery of this Agreement by Buyer
nor the consummation by Buyer of the transactions contemplated
hereby will violate (i) Buyer's Articles of Incorporation,
(ii) Buyer's Bylaws, (iii) any statute, rule, regulation,
judgment, order, decree or injunction applicable to Buyer or
its properties or assets or (iv) any contractual obligation of
Buyer; and will not conflict with or constitute a default or
breach of any contractual obligation of Buyer;
D. Buyer has the financial ability to consummate the transaction
contemplated hereby and will, upon request, provide
satisfactory evidence of such ability to Seller;
E. Buyer has made such inspection and investigation of the
Property as it has deemed necessary or desirable and it is not
relying on any statements or representations, oral or written,
made by Seller or anyone acting on Seller's behalf except to
the extent such statements and representations are contained
in this Agreement.
12. Seller's Representations and Warranties. Seller hereby represents and
warrants to Buyer as follows:
A. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Arkansas.
B. Seller has full corporate power to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated will have been
duly and validly approved by the Board of Directors of Seller
at the time of closing.
C. Neither the execution and delivery of this Agreement by Seller
nor the consummation by Seller of the transactions
contemplated hereby will violate (i) Seller's Articles of
Incorporation, (ii) Seller's Bylaws, (iii) any statute, rule,
regulation, judgment, order, decree or injunction applicable
to Seller or its properties or assets, or (iv) any contractual
obligation of Seller; and will not conflict with or constitute
a default or breach of any contractual obligation of Seller.
13. Captions. All captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provisions hereof.
B-3
14. Severability. If any part of this Agreement or any other Agreement
entered into pursuant hereto is contrary to, prohibited by or deemed
invalid under applicable law or regulation, such provision shall be
deemed inapplicable and deemed amended to the extent so contrary,
prohibited or invalid and the remainder hereof shall not be invalidated
thereby and shall be given full force and effect so far as possible.
15. Time is of the Essence. The Parties agree that time is of the essence
of this Agreement.
16. No Broker. Buyer and Seller represent and warrant to each other that no
real estate agent or broker has been employed, and each hereby agrees
to indemnify the other from any and all claims for any such real estate
agent's commissions or brokerage fees arising from the actions to the
other party.
17. Legally Binding. THIS AGREEMENT IS A LEGALLY BINDING CONTRACT WHEN
SIGNED BY BOTH BUYER AND SELLER. IF NOT UNDERSTOOD, BUYER SHOULD
CONSULT AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.
18. Expiration of Offer. This Agreement shall expire and be null and void
if Buyer does not receive a fully executed original of this Agreement
by 5 p.m. on March 18, 2002.
19. Notices. Unless otherwise provided in this Agreement, all notices,
requests, demands or other communications required or permitted to be
given or made hereunder shall be in writing and delivered personally or
sent by prepaid, first class, certified or express mail, return receipt
requested, postage prepaid, as follows (or to such other addressee or
address as shall be set forth in a notice given in the same manner):
(a) If to Buyer: Mr. John Dawson, Jr.
Arkansas Pulpwood Company, Inc.
1725 Mt. Holly Road
Camden, AR 71701
With copy to: Paul E. Lindsey
Attorney at Law
P.O. Box K
Camden, AR 71711 (mail)
201 Jackson Street
Camden, AR 71701 (street)
(b) If to Seller: Mr. Partee Tuberville
First Land and Investment Co.
Post Office Box 111
100 W. North Street, Suite 25
Magnolia, Arkansas 71753
All such notices shall be deemed to have been given on the date
delivered or mailed in the manner provided above.
20. Conditions Precedent. Seller's obligation to sell the Property is
subject to the prior fulfillment at or prior to the Closing of each of
the following conditions.
A. Seller's shareholders shall have approved by the legally
requisite vote the transaction pursuant to which Seller will
(i) sell the Property to Buyer, (ii) the
B-4
transfer all of the securities, cash, furniture, fixtures and
office equipment owned by Seller, less any amounts required to
satisfy all liabilities, claims and obligations of Seller, to
BancorpSouth, Inc. in exchange for common stock of
BancorpSouth, Inc., and (iii) the dissolution of Seller after
completion of the foregoing sale and transfer; and
B. The transfer and exchange transaction with BancorpSouth, Inc.
shall be scheduled to occur immediately after the sale of the
Property to Buyer.
21. Assignment; Successor; Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any party hereto (whether by operation of law or
otherwise) without the prior written consent of the other party.
Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
THIS AGREEMENT TO PURCHASE AND SELL REAL PROPERTY IS ACCEPTED BY BUYER ON MARCH
14, 2002, AT 4:45 P.M.
ARKANSAS PULPWOOD COMPANY, INC.
By /s/ John Dawson, Jr.
--------------------------------
THIS AGREEMENT TO PURCHASE AND SELL REAL PROPERTY IS ACCEPTED BY SELLER ON MARCH
15, 2002, AT 1:30 P.M.
FIRST LAND AND INVESTMENT CO.
By /s/ Partee Tuberville
--------------------------------
Partee Tuberville, President
B-5
ANNEX C
ARKANSAS BUSINESS CORPORATION ACT OF 1987
SUBCHAPTER 13
DISSENTERS' RIGHTS
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
4-27-1301. DEFINITIONS.
In this subchapter:
1. "Corporation" means the issuer of the shares held by a
dissenter before the corporate action, or the surviving or acquiring corporation
by merger or share exchange of that issuer;
2. "Dissenter" means a shareholder who is entitled to dissent
from corporate action under ss. 4-27-1302 and who exercises that right when and
in the manner required by ss.ss. 4-27-1320 - 4-27-1328;
3. "Fair value", with respect to a dissenter's shares, means the
value of the shares immediately before the effectuation of the corporate action
to which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable;
4. "Interest" means interest from the effective date of the
corporate action until the date of payment, at the average rate currently paid
by the corporation on its principal bank loans or, if none, at a rate that is
fair and equitable under all the circumstances;
5. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation;
6. "Beneficial shareholder" means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder;
7. "Shareholder" means the record shareholder or the beneficial
shareholder.
4-27-1302. RIGHT OF DISSENT.
A. A shareholder is entitled to dissent from and obtain payment of the
fair value of his shares in the event of any of the following corporate actions:
1. Consummation of a plan of merger to which the corporation is a
party:
(i) If shareholder approval is required for the merger by
ss. 4-27-1103 or the articles of incorporation and the shareholder is
entitled to vote on the merger; or
(ii) If the corporation is a subsidiary that is merged
with its parent under ss. 4-27-1104;
2. Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
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3. Consummation of a sale or exchange of all, or substantially
all, of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale pursuant to
court order or a sale for cash pursuant to a plan by which all or substantially
all of the net proceeds of the sale will be distributed to the shareholders
within one (1) year after the date of sale;
4. An amendment of the articles of incorporation that materially
and adversely affects rights in respect of a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the
shares;
(ii) Creates, alters, or abolishes a right in respect of
redemption, including a provision respecting a sinking fund for the
redemption or repurchase, of the shares;
(iii) Alters or abolishes a preemptive right of the holder
of the shares to acquire shares or other securities;
(iv) Excludes or limits the right of the shares to vote on
any matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or
(v) Reduces the number of shares owned by the shareholder
to a fraction of a share if the fractional share so created is to be
acquired for cash under ss. 4-27-604; or
5. Any corporate action taken pursuant to a shareholder vote to
the extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
B. A shareholder entitled to dissent and obtain payment for his shares
under this subchapter may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
4-27-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
A. A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one (1) person and notifies the corporation in writing
of the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter under this subsection are determined
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.
B. A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:
1. He submits to the corporation the record shareholder's written
consent to the dissent not later than the time the beneficial shareholder
asserts dissenters' rights; and
2. He does so with respect to all shares of which he is the
beneficial shareholder or over which he has power to direct the vote.
C-2
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
4-27-1320. NOTICE OF DISSENTERS' RIGHTS.
A. If proposed corporate action creating dissenters' rights under ss.
4-27-1302 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this chapter and be accompanied by a copy of this chapter.
B. If corporate action creating dissenters' rights under ss. 4-27-1302 is
taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in ss. 4-27-1322.
4-27-1321. NOTICE OF INTENT TO DEMAND PAYMENT.
A. If proposed corporate action creating dissenters' rights under ss.
4-27-1302 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken
written notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(2) Must not vote his shares in favor of the proposed action.
B. A shareholder who does not satisfy the requirements of subsection A. of
this section is not entitled to payment for his shares under this subchapter.
4-27-1322. DISSENTERS' NOTICE.
A. If proposed corporate action creating dissenters' rights under ss.
4-27-1302 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of ss. 4-27-1321.
B. The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent
transfer of the shares will be restricted after the payment demand is received;
(3) Supply a form for demanding payment that includes the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting dissenter's
rights certify whether or not he acquired beneficial ownership of the shares
before that date;
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty (30) nor more than sixty (60)
days after the date the notice required by subsection A. of this section is
delivered; and
(5) Be accompanied by a copy of this subchapter.
C-3
4-27-1323. DUTY TO DEMAND PAYMENT.
A. A shareholder sent a dissenters' notice described in ss. 4-27-1322 must
demand payment, certify whether he acquired beneficial ownership of the shares
before the date required to be set forth in the dissenters' notice pursuant to
ss. 4-27-1322B.3, and deposit his certificates in accordance with the terms of
the notice.
B. The shareholder who demands payment and deposits his share certificates
under subsection A. of this section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action.
C. A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this subchapter.
4-27-1324. SHARE RESTRICTIONS.
A. The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under ss. 4-27-1326.
B. The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate action.
4-27-1325. PAYMENT.
A. Except as provided in ss. 4-27-1327, as soon as the proposed corporate
action is taken, or upon receipt of a payment demand, the corporation shall pay
each dissenter who complied with ss. 4-27-1323 the amount the corporation
estimates to be the fair value of his shares, plus accrued interest.
B. The payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for that
year, and the latest available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of
the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under
ss. 4-27-1328; and
(5) A copy of this subchapter.
4-27-1326. FAILURE TO TAKE ACTION.
A. If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
C-4
B. If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under ss. 4-27-1322 and repeat the payment demand procedure.
4-27-1327. AFTER-ACQUIRED SHARES.
A. A corporation may elect to withhold payment required by ss. 4-27-1325
from a dissenter unless he was the beneficial owner of the shares before the
date set forth in the dissenters' notice as the date of the first announcement
to news media or to shareholders of the terms of the proposed corporate action.
B. To the extent the corporation elects to withhold payment under
subsection A. of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of his demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares, an explanation of how the interest was
calculated, and a statement of the dissenter's right to demand payment under ss.
4-27-1328.
4-27-1328. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
A. A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate (less any payment under ss. 4-27-1325), or reject the
corporation's offer under ss. 4-27-1327 and demand payment of the fair value of
his shares and interest due, if:
(1) The dissenter believes that the amount paid under ss.
4-27-1325 or offered under ss. 4-27-1327 is less than the fair value of his
shares or that the interest due is incorrectly calculated;
(2) The corporation fails to make payment under ss. 4-27-1325
within sixty (60) days after the date set for demanding payment; or
(3) The corporation, having failed to take the proposed action,
does not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty (60) days after the date set for
demanding payment.
B. A dissenter waives his right to demand payment under this section
unless he notifies the corporation of his demand in writing under subsection A.
of this section within thirty (30) days after the corporation made or offered
payment for his shares.
JUDICIAL APPRAISAL OF SHARES
4-27-1330. COURT ACTION.
A. If a demand for payment under ss. 4-27-1328 remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after receiving
the payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the proceeding
within the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
B. The corporation shall commence the proceeding in the circuit court of
the county where the corporation's principal office (or, if none in this state,
its registered office) is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the
C-5
proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
C. The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
D. The jurisdiction of the court in which the proceeding is commenced
under subsection B. of this section is plenary and exclusive. The court may
appoint one (1) or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the order appointing them, or in any amendment to it. The dissenters are
entitled to the same discovery rights as parties in other civil proceedings.
E. Each dissenter made a party to the proceeding is entitled to judgment:
(1) For the amount, if any, by which the court finds the fair
value of his shares, plus interest, exceeds the amount paid by the corporation;
or
(2) For the fair value, plus accrued interest, of his
after-acquired shares for which the corporation elected to withhold payment
under ss. 4-27-1327.
4-27-1331. COURT COSTS AND COUNSEL FEES.
A. The court in an appraisal proceeding commenced under ss. 4-27-1330
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under ss. 4-27-1328.
B. The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
1. Against the corporation and in favor of any or all dissenters
if the court finds the corporation did not substantially comply with the
requirements of ss.ss. 4-27-1320 - 4-27-1328; or
2. Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this chapter.
C. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
C-6
ANNEX D
[LETTERHEAD OF STEVENS FORESTRY SERVICE, INC.]
February 8, 2002
Mr. Partee Tuberville
First Land & Investment Company
P.O. Box 111
Magnolia, AR 71753
Dear Mr. Tuberville:
Please find attached my evaluation of property owned by First Land and
Investment Company.
Timber volumes have been derived from using figures furnished by Jeff Neill,
which we verified by spot-checking various tracts. In addition we conducted a
timber cruise on this property in 1997.
Each tract has been appraised separately and is summarized as listed below.
Tract #1 $ 14,000.00
Tract #2 477,000.00
Tract #3 189,000.00
Tract #4 217,000.00
Tract #5 33,000.00
Tract #6 53,000.00
Tract #7 329,000.00
Tract #8 311,000.00
Tract #9 131,000.00
Tract #10 51,000.00
Tract #11 40,000.00
Tract #12 310,000.00
Tract #13 84,000.00
Tract #14 214,000.00
Tract #15 11,000.00
Tract #16 58,000.00
-------------
Total $2,522,000.00
In my opinion this is fair market value at this time. Mineral value is not
included and should add $50-$100 per acre to the overall value.
If you have any questions about this appraisal, please do not hesitate to call
me at your convenience.
D-1
Thank you for your confidence in Stevens Forestry Service.
Respectfully,
STEVENS FORESTRY SERVICE, INC.
/s/ Mike Nolan
Mike Nolan
D-2
ANNEX E
[LETTERHEAD OF KINGWOOD FORESTRY SERVICES, INC.]
February 25, 2002
First Land and Investment Company
c/o Partee Tuberville, President
P.O. Box 111
Magnolia, AR 71753
RE: Appraisal of First Land and Investment Company timberlands
Dear Mr. Tuberville,
Enclosed are two originals of the appraisal of First Land and Investment Company
timberland in Columbia and Lafayette Counties, Arkansas. Also enclosed is an
invoice for our services and an envelope for your convenience.
The Tract Valuation Summary page of this report shows the breakdown of timber
and land values for each tract. The effective date of appraisal is February 20,
2002. Market value of the subjects further described in the report as of this
date is as follows:
Tract #1: $ 16,000.00 Tract #7: $274,000.00 Tract #13: $ 45,000.00
Tract #2: $432,000.00 Tract #8: $319,000.00 Tract #14: $213,000.00
Tract #3: $173,000.00 Tract #9: $124,000.00 Tract #15: $ 4,000.00
Tract #4: $213,000.00 Tract #10: $ 52,000.00 Tract #16: $ 41,000.00
Tract #5: $ 26,000.00 Tract #11: $ 34,000.00
Tract #6: $ 28,000.00 Tract #12: $344,000.00
Intended user of the report is First Land and Investment Company and intended
use is for establishment of market value. Tract #15 and #16 values reflect 5/9th
partial interest held by First Land and Investment.
Thanks for the opportunity to work with you. If you need more information,
please let me know.
Respectfully submitted,
/s/ Peter W. Prutzman
Peter W. Prutzman, R.F., A.C.F.
E-1
ANNEX F
[LETTERHEAD OF MERCER CAPITAL MANAGEMENT, INC.]
March __, 2002
The Board of Directors
First Land and Investment Company
P.O. Box 111
Magnolia, Arkansas 71753
Ladies and Gentlemen:
The Board of Directors of First Land and Investment Company ("the Company" or
"FLI") have retained Mercer Capital Management, Inc. to provide an opinion as to
the fairness, from a financial point of view to the shareholders of FLI, of the
proposed transaction (further described below) between the Company and
BancorpSouth, Inc. ("BCS").
Our opinion does not constitute a recommendation to any shareholder as to how
the shareholder should vote with respect to the proposed transaction. Our
opinion does not constitute an appraisal of the Company. Our advisory services,
as defined in the engagement letter between Mercer Capital and the Company,
relate only to the provision of the fairness opinion and supporting
documentation. The opinion is necessarily based upon economic, market, financial
and other conditions as they exist, and the information made available to us, as
of the date of this letter.
SUMMARY OF PROPOSED TRANSACTION
Based on our conversations with management and the Company's legal counsel and
our review of the Company's recent internally-prepared financial statements as
of December 31, 2001 (the most recent financial statements supplied to Mercer
Capital for purposes of this engagement), it is our understanding that FLI's
assets consist of:
- 433,593 shares of BCS, a publicly-traded bank holding company
with $9.4 billion in assets;
- approximately 1,000 acres of timberland and certain mineral and
royalty interests;
- as of December 31, 2001, $1,032 in cash; and
- as of December 31, 2001, $350 in prepaid income tax.
The Company reported about $90 thousand in liabilities on its balance sheet at
December 31, 2001; however, the Company has a low basis in both its portfolio of
securities and its timberland that lead to an unrecorded potential liability of
approximately $3.5 million due to the tax impact of unrealized capital gains.
Management has entered into negotiations with BCS to structure a transaction
whereby FLI's assets will be acquired by BCS in a C reorganization. The
transaction will involve the purchase by BCS of substantially all of the assets
of FLI in exchange for shares of BCS. These shares of BCS will then be
distributed to the shareholders of FLI in a dissolution of the Company.
TRANSACTION DETAILS
Prior to the closing of the proposed transaction, the Company plans to liquidate
its mineral and royalty interests and timber holdings. Management estimates the
gross value of the timberland
F-1
(including the land, the timber, mineral rights, and all other interests
associated therewith) to be $2.45 million. Management estimates that the
transaction costs associated with liquidating the real estate portfolio will be
less than $25 thousand. It is the opinion of counsel for the Company that these
transaction costs will be deductible for corporate income tax purposes. Once the
real estate is liquidated, FLI will hold a portfolio of assets that will consist
of BCS stock, cash, and negligible items of office furniture and equipment.
On the date of closing, the value per share of the BCS stock held by FLI will be
determined based on the average of the stock's high and low trading prices on
the New York Stock Exchange on the previous trading day. This value per share
will be multiplied by the number of shares of BCS stock held by FLI to determine
the value of the Company's stock holdings. Any cash on hand will be added to
this amount in order to determine the value of the Company's gross assets.
In order to determine the value of the net assets of FLI, any liabilities,
including tax liabilities, will be deducted from the value of the gross assets,
as will any fees related to the transaction incurred by the parties, as well as
an additional $500,000, which represents an incentive payment to BCS. The value
of the net assets will then be divided by the same price per share used to
determine the value of the Company's stock holdings in order to determine the
number of shares of BCS stock to be issued to FLI in exchange for its assets.
These shares of BCS stock will then be distributed to the shareholders of FLI
upon dissolution of FLI.
ASSUMPTIONS
Our analysis of the transaction and our conclusion of fairness rely on the
following assumptions:
- Mercer Capital does not render tax, legal or accounting advice.
Our services relate solely to the issuance of an opinion of the
fairness, from a financial point of view, of the proposed
transaction. We assume, for purposes of our analysis and in
reaching our conclusion of fairness, that the proposed
transaction will be treated as a tax-free reorganization under
ss. 368(a)(1)(C) of the Internal Revenue Code. The Board of
Directors expects to receive on the closing date an opinion from
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C., the
Company's tax and transaction counsel, that the proposed
transaction between FLI and BCS will qualify as a valid tax-free
reorganization under ss. 368(a)(1)(C) of the IRC.
- Mercer Capital did not compile or audit the Company's financial
statements, nor have we independently verified the information
reviewed. We have relied upon such information as being complete
and accurate in all material respects.
- As Mercer Capital is not in the business of appraising land,
timber, mineral rights, or other forms of real property, this
opinion assumes that the consideration to be received in the
sale of the Company's portfolio of timberland is consistent with
the market value of such assets. It is our understanding that
the Board of Directors has entered into a contract to sell its
land, timber, mineral rights and other items of real property
for $2,450,000 and we have assumed that this represents the
fair-market value of the assets to be transferred.
ALTERNATIVES TO SELLING THE COMPANY
In reaching its decision to pursue the proposed transaction, the Board of
Directors examined a number of alternatives. These included (in no particular
order):
- DO NOTHING. The Board of Directors considered continuing to
operate the Company it has done in the past.
F-2
An appraisal of the fair market value of a minority interest in
the stock of FLI was beyond the scope of our engagement.
However, there have been a number of presumably arms'-length
transactions in the stock of the Company in recent years for
which pricing information is available. Within the prior 18
months, the Company on three occasions purchased minority
interests from individual shareholders for $25.00 per share. In
April of 1999, this same price was paid to First Land and Timber
Company for a block of 17,875 shares of the Company's stock.
These transactions, presumably taking place between a willing
and informed buyer (the Company) and willing and informed
sellers, provide market evidence that the value of the Company's
shares in the marketplace has remained relatively stable over
time at $25.00 per share.
- LIQUIDATE. If FLI is liquidated, two layers of taxation will be
triggered. The Company will realize gains at the corporate level
that will be taxed at ordinary income rates, and the
shareholders will have to pay capital gains taxes on cash and/or
distributed BCS shares received in liquidation. Because of the
tax inefficiency of liquidation, the shareholders would receive
less value than they can expect to receive under the proposed
reorganization.
- SELL THE COMPANY. Management explored the idea of selling the
Company to a publicly-traded entity in exchange for shares of
its common stock. Structuring a tax-free reorganization would
allow the Company to avoid paying taxes on the imbedded gains in
the transferred assets, and selling to a publicly-traded buyer
would allow the Company's shareholders to receive a liquid asset
as a result of the transaction.
In preparation of this fairness opinion, Mercer Capital considered each of the
above options. In our opinion, selling the Company is the most attractive
alternative in that it creates shareholder liquidity while maximizing
shareholder wealth.
THE SELLING PROCESS
At the time Mercer Capital was engaged to perform this analysis, negotiations
with BancorpSouth were already underway. At the request of counsel for the
Company, however, Mercer Capital solicited expressions of interest from thirteen
bank holding companies with operations in or around BancorpSouth's market area.
To date, we have received no expressions of interest as a result of our
solicitations.
In our opinion, it is unlikely that the Company will find another
publicly-traded buyer for the asset portfolio. The block of BCS shares is too
small to allow a potential acquirer to make a run for control of BCS, yet it is
large enough that any buyer would require a strategic reason to purchase the
Company.
EQUITABLE DISTRIBUTION OF PROCEEDS
One of the elements of fairness, from the point of view of the shareholders, is
an examination of the proposed distribution of the proceeds from the
transaction. In the proposed transaction, no managers or Directors of the
Company will receive any additional consideration beyond their pro rata share of
the proceeds from the transaction. The affiliates will receive lettered stock,
which can be dribbled into the market under SEC Rule 144, while the
non-affiliate shareholders will receive liquid shares, tradable immediately in
the public market. It is our opinion, therefore, that the affiliate shareholders
do not enjoy benefits from the transaction superior to those enjoyed by the
other shareholders.
F-3
INVESTMENT CHARACTERISTICS
After the transaction, the former shareholders of FLI will own an asset with
different investment characteristics than the FLI shares held before the
transaction. FLI shareholders currently hold illiquid securities that cannot be
sold in the public stock markets. To the best of management's knowledge and
belief, the occasional transactions that do occur in the shares of FLI take
place at a price of $25.00 per share. The anticipated value of the BCS shares to
be received in the proposed transaction total about $68.00 per existing FLI
share. Therefore, the shareholders can expect an increase in the fair market
value of their investment holdings as a result of the transaction.
In 1996 and 1997, FLI declared a dividend of just under $8,000 to be paid pro
rata to all shareholders. In 1998 and 2001, FLI did not pay a dividend.
Dividends in 1999 and 2000 totaled just under $14 thousand. BCS recently paid a
quarterly dividend of $0.14 per share. It is anticipated that in excess of 470
thousand shares of BCS will be distributed to the former shareholders of FLI.
This implies total dividend payments to FLI shareholders in excess of $260
thousand. Therefore, the shareholders will be in a superior position following
the transaction in terms of total dividend payments received.
Prior to the transaction, investors held an asset with risk characteristics
determined by the risk profiles of both BCS shares and timber land. After the
transaction, investors will be exposed only to the risk associated with
fluctuations in the value of BCS shares. While this reduction in diversification
can be considered an adverse characteristic of the consideration to be received,
it is important to note that individual shareholders will be able to sell a
portion of the BCS shares received in the transaction in order to meet their
individual portfolio allocation goals. This ability to sell a portion of the
shares and invest the proceeds in other assets, when coupled with the superior
dividend and market price characteristics of the consideration received, more
than offsets, in our opinion, any adverse risk characteristics caused by lack of
diversification.
CONCLUSION
Our fairness opinion was originally issued as of December 26, 2001. Based on
statements to us by representatives of the Company that no material adverse
changes in key information have taken place since that time, we reaffirm our
conclusion as of the date on this letter. It is our opinion, based on the above
and the additional procedures performed by Mercer Capital in our analysis, that
the transaction is fair, from a financial point of view, to the shareholders of
the Company.
CONSENT
We hereby consent to the filing of this letter containing these opinions with
the Securities and Exchange Commission as an exhibit to the Post-Effective
Amendment To Form S-4 Registration Statement filed in connection with the
transaction described herein and to the references to Mercer Capital Management,
Inc. under the captions "Background of the Transaction", "Actions of the Special
Committee and Board of Directors of First Land", "First Land's Reasons for the
Transaction; Submission by the Board of Directors" and "Analysis of First Land's
Financial Advisor" in the Supplemental Post-Effective Amendment and
Prospectus/Proxy Statement enclosed therein. In giving such consent, we do not
hereby admit that we are "experts" within the meaning of the Securities Act of
1933, as amended, or the rules and regulations thereunder.
Sincerely yours,
MERCER CAPITAL MANAGEMENT, INC.
/s/ Brent McDade
Associate Vice President
F-4
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
A. Restated Articles of Incorporation and Amended and Restated
Bylaws.
BancorpSouth's Restated Articles of Incorporation provide that it will
indemnify, and upon request advance expenses to, any person (or his estate) who
was or is a party to any legal proceeding because he is or was a director,
officer or employee of BancorpSouth, or is or was serving at the request of
BancorpSouth as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, or other entity, against any liability
incurred in that proceeding (A) to the full extent permitted by the Mississippi
Business Corporation Act, and (B) despite the fact that such person did not meet
the standard of conduct specified in the Mississippi Business Corporation Act or
would be disqualified for indemnification under the Mississippi Business
Corporation Act, if a determination is made that (i) the person seeking
indemnity is fairly and reasonably entitled to indemnification in view of all of
the relevant circumstances, and (ii) his acts or omissions did not constitute
gross negligence or willful misconduct. A request for reimbursement or
advancement of expenses prior to final disposition of the proceeding must be
accompanied by an undertaking to repay the advances if it is ultimately
determined that he did not meet the requisite standard of conduct but it need
not be accompanied by an affirmation that the person seeking indemnity believed
he has met the standard of conduct.
BancorpSouth's Amended and Restated Bylaws provide that it will
indemnify officers and directors who are a party to any legal proceeding because
he is or was an officer or director of BancorpSouth against any expenses or
awards in connection therewith if he acted in good faith and in a manner he
reasonably believed to be in the best interest of BancorpSouth and, with respect
to any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. BancorpSouth also will indemnify officers and directors who are a
party to any derivative suit with respect to BancorpSouth because that person is
or was an officer or director of BancorpSouth, against expenses incurred in
connection with that action unless he is found to have acted without good faith
and without that degree of care, diligence and skill which ordinarily prudent
men would exercise in similar circumstances and in like positions, unless,
despite such finding of liability, the court determines that he is entitled to
indemnity. The Amended and Restated Bylaws also provide that BancorpSouth may
(i) advance to the officer or director the expenses incurred in defending a
proceeding upon receipt of an undertaking that he will repay amounts advanced
unless it ultimately is determined that he is entitled to be indemnified, and
(ii) purchase and maintain insurance on behalf of an officer or director against
any liability arising out of his acting as such.
B. Mississippi Business Corporation Act.
In addition to the foregoing provisions of BancorpSouth's Restated
Articles of Incorporation and Amended and Restated Bylaws, directors, officers,
employees and agents of BancorpSouth and its subsidiaries may be indemnified by
BancorpSouth pursuant to Sections 79-4-8.50 through 79-4-8.57 and 79-4-8.59 of
the Mississippi Business Corporation Act.
II-1
C. Insurance.
BancorpSouth maintains and pays premiums on an insurance policy on
behalf of its officers and directors against liability asserted against or
incurred by such persons in or arising from their capacity as such.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
2.1 -- Agreement and Plan of Reorganization, dated as of December 26,
2001, between BancorpSouth, Inc. and First Land and Investment
Company
5.1 -- Opinion of Riley, Ford, Caldwell & Cork, P.A.
8.1 -- Opinion of Mitchell, Williams, Selig, Gates & Woodyard, PLLC,
as to tax matters
23.1 -- Consent of KPMG LLP
23.2 -- Consent of Mitchell, Williams, Selig, Gates & Woodyard, PLLC
(included in opinion filed as Exhibit 8.1)
23.3 -- Consent of Riley, Ford, Caldwell & Cork, P.A. (included in
opinion filed as Exhibit 5.1)
23.4 -- Consent of Mercer Capital Management, Inc.
23.5 -- Consent of Stevens Forestry Service, Inc.
23.6 -- Consent of Kingwood Forestry Services, Inc.
24.1 -- Power of Attorney (included on page II-5)
99.1 -- Form of First Land and Investment Company's Proxy Card
(b) Financial Statement Schedules
All schedules for which provision is made in the applicable
accounting regulations of the SEC are not required under the related
instructions or are inapplicable, and therefore have been omitted.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
Prospectus filed with the Commission pursuant to Rule
424(b) if, in the
II-2
aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective Registration Statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
The Registrant undertakes that every prospectus: (i) that is filed
pursuant to the paragraph immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tupelo, State of Mississippi, on March 27, 2002.
BANCORPSOUTH, INC.
By: /s/ Aubrey B. Patterson
----------------------------------
Aubrey B. Patterson
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Aubrey B. Patterson and L. Nash Allen,
Jr., and each of them, with full power to act without the other, his true and
lawful attorney-in-fact, as agent and with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacity, to sign any or all amendments to this post-effective amendment to the
registration statement and any Registration Statement relating to the same
offering as this Registration Statement that is to be effective upon filing
pursuant to Rule 4626 under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents in full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully and
to all intents and purposes as they might or be in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to the registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Aubrey B. Patterson Chairman of the Board, President, Chief March 27, 2002
--------------------------------- Executive Officer, Director (principal
Aubrey B. Patterson executive officer)
/s/ L. Nash Allen, Jr. Treasurer and Chief Financial Officer March 27, 2002
--------------------------------- (principal financial and accounting officer)
L. Nash Allen, Jr.
/s/ James V. Kelley
--------------------------------- President, Chief Operating Officer and March 27, 2002
James V. Kelley Director
/s/ Shed H. Davis Director March 22, 2002
---------------------------------
Shed H. Davis
/s/ Hassell H. Franklin Director March 27, 2002
---------------------------------
Hassell H. Franklin
II-5
Name Title Date
---- ----- ----
/s/ W.G. Holliman, Jr. Director March 18, 2002
---------------------------------
W.G. Holliman, Jr.
/s/ A. Douglas Jumper Director March 18, 2002
---------------------------------
A. Douglas Jumper
/s/ Turner O. Lashlee Director March 18, 2002
---------------------------------
Turner O. Lashlee
/s/ R. Madison Murphy Director March 18, 2002
---------------------------------
R. Madison Murphy
/s/ Robert C. Nolan Director March 18, 2002
---------------------------------
Robert C. Nolan
/s/ W. Cal Partee, Jr. Director March 19, 2002
---------------------------------
W. Cal Partee, Jr.
/s/ Alan W. Perry Director March 27, 2002
---------------------------------
Alan W. Perry
/s/ Travis E. Staub Director March 18, 2002
---------------------------------
Travis E. Staub
II-6
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
2.1 -- Agreement and Plan of Reorganization, dated as of December 26, 2001, between BancorpSouth, Inc. and
First Land and Investment Company
5.1 -- Opinion of Riley, Ford, Caldwell & Cork, P.A.
8.1 -- Opinion of Mitchell, Williams, Selig, Gates & Woodyard, PLLC, as to tax matters
23.1 -- Consent of KPMG LLP
23.2 -- Consent of Mitchell, Williams, Selig, Gates & Woodyard, PLLC (included in opinion filed as Exhibit
8.1)
23.3 -- Consent of Riley, Ford, Caldwell & Cork, P.A. (included in opinion filed as Exhibit 5.1)
23.4 -- Consent of Mercer Capital Management, Inc.
23.5 -- Consent of Stevens Forestry Service, Inc.
23.6 -- Consent of Kingwood Forestry Services, Inc.
24.1 -- Power of Attorney (included on page II-5)
99.1 -- Form of First Land and Investment Company's Proxy Card
II-7