AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("Agreement") dated as of
December 11, 1997, by and among THE PEOPLES BANCTRUST COMPANY, INC., an Alabama
business corporation ("BancTrust"), THE PEOPLES BANK AND TRUST COMPANY, an
Alabama commercial bank ("Peoples"), XXXXXX COUNTY BANCSHARES, INC., an Alabama
business corporation ("Bancshares"), and THE BANK OF TALLASSEE, an Alabama
commercial bank ("Tallassee").
WITNESSETH
WHEREAS, the respective Boards of Directors of BancTrust, Peoples,
Bancshares and Tallassee are of the opinion that the merger of Bancshares with
and into BancTrust, under the terms and conditions set forth in this Agreement
(the "Merger"), is in the best interests of the parties and their respective
shareholders, and such Boards of Directors have adopted resolutions approving
this Agreement; and
WHEREAS, upon consummation of the Merger, Bancshares' wholly owned
subsidiary, Tallassee, will become the wholly owned subsidiary of BancTrust; and
WHEREAS, simultaneously with the execution of this Agreement, BancTrust and
Bancshares are entering into a Stock Option Agreement (the "Stock Option
Agreement") dated as of the date hereof; and
WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
"ABCA" shall mean the Alabama Business Corporation Act, as amended.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"Bancshares Common Stock" shall mean the shares of common stock, par value
$.05 per share, of Bancshares.
"BancTrust Common Stock" shall mean the shares of common stock, par value
$.10 per share, of BancTrust.
"Bancshares Subsidiaries" shall mean any corporation, partnership, joint
venture or other organization other than Tallassee more than 10% of the stock or
ownership interest of which is owned, directly or indirectly, by Bancshares.
"BancTrust Subsidiaries" shall mean any corporation, partnership, joint
venture or other organization other than Peoples more than 10% of the stock or
ownership interest of which is owned, directly or indirectly, by BancTrust.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Time" shall mean the time and date specified pursuant to Section
2.7 of this Agreement as the effective time of the Merger.
"Environmental Claim" shall mean any written notice from any governmental
authority or third party alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern.
"Environmental Laws" shall mean all applicable federal, state and local
laws and regulations dealing with the management, use, treatment and/or disposal
of Hazardous Substances, as defined by the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. (S) 9601 et seq., and
Hazardous Waste, as defined by the Resource, Conservation and Recovery Act, as
amended, 42 U.S.C. (S) 6901 et seq.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FRB" shall mean the Board of Governors of the Federal Reserve System, and
shall also include the Federal Reserve Bank of Atlanta.
"Financial Statements" shall mean (a) with respect to Bancshares, (i) the
consolidated balance sheets (including related notes and schedules, if any) of
Bancshares as of December 31, 1996 and 1995 and the related consolidated
statements of income, shareholders' equity and cash flows (including related
notes and schedules, if any) for each of the fiscal years ended December 31,
1996 and 1995 and (ii) the consolidated balance sheets of Bancshares (including
related notes and schedules, if any) and the related consolidated statements of
income, shareholders' equity, and cash flows (including related notes and
schedules, if any) with respect to the quarterly periods ended subsequent to
December 31, 1996; and (b) with respect to BancTrust (i) the
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consolidated balance sheets (including related notes and schedules, if any) of
BancTrust as of December 31, 1996 and 1995 and the related consolidated
statements of income, shareholders' equity and cash flows (including related
notes and schedules, if any) for each of the last three fiscal years ended
December 31, 1996 as filed by BancTrust in its Securities Documents and (ii) the
balance sheets of BancTrust (including related notes and schedules, if any) and
related statements of income, shareholders' equity and cash flows (including
related notes and schedules, if any) included in the Securities Documents filed
by BancTrust with respect to the quarterly periods ended subsequent to the last
reported fiscal year-end.
"Materials of Environmental Concern" shall mean pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"Joint Proxy Statement" shall mean the proxy statement together with any
supplements thereto sent to shareholders of Bancshares and BancTrust to solicit
their votes in connection with the approval of this Agreement.
"Registration Statement" shall mean the registration statement with respect
to the BancTrust Common Stock as declared effective by the Commission under the
Securities Act.
"Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock or other ownership interests.
"Secretary of State" shall mean the Secretary of State of the State of
Alabama.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or required
to be filed, pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations promulgated thereunder.
"Superintendent" shall mean the Superintendent of Banks of the State of
Alabama.
"Tallassee Common Stock" shall mean the shares of common stock, par value
$1.00 per share, of Tallassee.
Other terms used herein are defined in the preamble and elsewhere in this
Agreement.
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ARTICLE II
MERGER
2.1 The Merger
----------
Subject to the satisfaction of the terms and conditions of this
Agreement and pursuant to the applicable provisions of the ABCA and the BHCA, at
the Effective Time, Bancshares shall be merged with and into BancTrust pursuant
to the terms and conditions set forth herein, with BancTrust to be the surviving
corporation, and each share of Bancshares Common Stock issued and outstanding
immediately prior to the Effective Time shall thereupon and without further
action be converted into the right to receive shares of BancTrust Common Stock
and cash for fractional share interests (if any) in compliance with the
provisions of Section 2.6 below.
2.2 Closing and Closing Date
------------------------
The Merger shall be consummated at a closing (the "Closing") to be
held at a location to be determined by mutual consent of the parties to this
Agreement, on the first business day following satisfaction of the conditions to
consummation of the Merger set forth in Article VI hereof, or on such later date
within 30 days thereafter as the parties may mutually agree (the "Closing
Date").
2.3 Effect of Merger
----------------
(a) At the Effective Time, the separate existence of Bancshares shall
cease and BancTrust, as the surviving corporation, shall continue unaffected and
unimpaired by the Merger. BancTrust as existing on and after the Effective Time
is hereinafter sometimes referred to as the "Surviving Corporation."
(b) The Surviving Corporation shall have all the rights, privileges,
immunities and powers and shall be subject to all the duties and liabilities of
a corporation organized under the ABCA law and shall thereupon and thereafter
possess all other privileges, immunities, and franchises of a private, as well
as of a public nature, of each of the constituent corporations. All property
(real, personal and mixed) and all debts on whatever account, including
subscriptions to shares, and all other choses in action, all and every other
interest, of or belonging to or due to each of the constituent corporations so
merged, shall be taken and deemed to be transferred to and vested in the
Surviving Corporation without further act or deed. The title to any real
estate, or any interest therein, vested in any of the constituent corporations
shall not revert or be in any way impaired by reason of the Merger. The
Surviving Corporation shall thenceforth be responsible and liable for all the
liabilities and obligations of each of the constituent corporations so merged;
and any claim existing or action or proceeding pending by or against either of
the constituent corporations may be prosecuted as if the Merger had not taken
place or the Surviving Corporation may be substituted in its place. Neither the
rights of creditors nor any liens upon the property of any constituent
corporation shall be impaired by the Merger.
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(c) The names of the corporations proposing to merge are "Xxxxxx
County Bancshares, Inc." and "The Peoples BancTrust Company, Inc." At and after
the Effective Time, the name of the Surviving Corporation shall be "The Peoples
BancTrust Company, Inc."
(d) The Articles of Incorporation and Bylaws of BancTrust in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation, in each case until amended in
accordance with applicable law.
2.4 Directors and Officers
----------------------
(a) At and after the Effective Time, the directors of the Surviving
Corporation, who shall hold office until their resignation or removal or until
their successors have been elected and qualified in accordance with the ABCA and
the Surviving Corporation's Articles of Incorporation and Bylaws of the
Surviving Corporation, shall be those persons who are serving as directors of
BancTrust as of the Effective Time, with the addition of Xx. Xxxxxx X. Xxxxxx
and Xx. X.X. Xxxxxxxx.
(b) At and after the Effective Time, the officers of the Surviving
Corporation shall be those persons who are serving as officers of BancTrust as
of the Effective Time.
2.5 Capital Stock of BancTrust
--------------------------
Each share of capital stock of BancTrust issued and outstanding
immediately prior to the Effective Time shall, at and after the Effective Time,
continue to be issued and outstanding, and shall be an identical outstanding
share of the Surviving Corporation.
2.6 Conversion and Exchange of Bancshares Common Stock; Fractional Share
--------------------------------------------------------------------
Interests
---------
(a) At the Effective Time, except as provided in Sections 2.6(b) and
(h) below, each share of Bancshares Common Stock issued and outstanding
immediately prior to the Effective Time shall thereupon and thereafter, by
virtue of the Merger becoming effective and without any action on the part of
the holder thereof or any other person, be converted into the right of the
registered holder thereof immediately prior to the Effective Time (such
registered holder being hereinafter referred to as a "Record Holder") to receive
the number of shares of BancTrust Common Stock that is equal to the product of
one multiplied by the Exchange Ratio, as defined herein. Cash will be paid in
lieu of fractional shares pursuant to Section 2.6(g) hereof.
As used in this Section 2.6:
(i) "Exchange Ratio" shall mean the quotient of (A) the product
of 2.35 times the Net Book Value Per Share (as defined herein) divided
by (B) the Fair Market Value Per BancTrust Share (as defined herein);
(ii) "Net Book Value Per Share" shall mean (A) the net book value
of Bancshares as reasonably determined by BancTrust as of September
30, 1997, through due diligence investigation and certified through
reasonable audits and audit tests of
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Wilson, Price, Xxxxxxxx, divided by (B) the total number of shares of
Bancshares Common Stock issued and outstanding as of September 30,
1997, provided that, if Bancshares' aggregate out-of-pocket fees and
expenses associated with the Merger exceed $25,000 (the "Approved
Amount"), then the net book value of Bancshares (clause (A) of this
paragraph) shall be reduced by the difference between such out-of-
pocket fees and expenses and the Approved Amount; and
(iii) "Fair Market Value Per BancTrust Share" shall mean $20.00.
(b) At the Effective Time, all shares of Bancshares Common Stock (i) held
as treasury stock by Bancshares, (ii) owned beneficially by Bancshares,
Tallassee or any Bancshares Subsidiary other than in a fiduciary capacity or in
connection with a debt previously contracted or (iii) owned beneficially by
BancTrust or any subsidiary of BancTrust other than in a fiduciary capacity or
in connection with a debt previously contracted shall be cancelled and no cash,
stock or other property shall be delivered in exchange therefor.
(c) After the Effective Time, each Record Holder shall surrender the
certificate(s) that immediately prior to the Effective Time evidenced and
represented Bancshares Common Stock ("Certificate(s)") to the exchange agent to
be selected by BancTrust and which may be Peoples (the "Exchange Agent"), and
each Record Holder shall be entitled upon such surrender to receive in exchange
therefor certificate(s) representing the number of whole shares of BancTrust
Common Stock to which such Record Holder is entitled as provided herein and a
check in an amount equal to the amount of cash, without interest, to which such
Record Holder is entitled for any fraction of a share under Section 2.6(g)
hereof. Within five (5) business days after the Effective Time, the Exchange
Agent shall transmit by U.S. Mail a notice and appropriate transmittal materials
to each Record Holder whose shares of Bancshares Common Stock shall have been
converted into BancTrust Common Stock advising such holder of the effectiveness
of the Merger and the procedure for surrendering outstanding Certificates.
Promptly after receipt of properly completed transmittal materials, together
with the Certificates that formerly evidenced and represented the Record
Holders' shares of Bancshares Common Stock, the Exchange Agent shall deliver the
consideration to which such Record Holders are entitled pursuant to Sections
2.6(a) and (g) hereof, and the surrendered Certificates shall forthwith be
cancelled. The Exchange Agent shall not be obligated to deliver the
consideration to which any Record Holder is entitled as a result of the Merger
until such Record Holder shall have surrendered the Certificate(s) that formerly
evidenced and represented shares of Bancshares Common Stock outstanding
immediately prior to the Effective Time for exchange as provided in this Section
2.6(c), and no interest shall accrue or be paid on such amounts. In the case of
lost or stolen certificates, the Exchange Agent may require such Record Holder
to execute a bond of the kind and amount it deems necessary or appropriate to
indemnify the Exchange Agent in a manner reasonably satisfactory to it against
all such claims, expenses and liabilities as may arise out of its payment to
such registered holder in the absence of the surrender of a certificate. After
the Effective Time, each Certificate that evidenced and represented shares of
Bancshares Common Stock outstanding immediately prior to the Effective Time
shall be deemed for all corporate purposes to evidence and represent only the
right of the registered holder thereof to receive the consideration provided in
Section 2.6(a) hereof, upon compliance with the provisions
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of this Section 2.6(c), and shall evidence and represent no further interest of
any kind or nature whatsoever in Bancshares.
(d) Until surrendered as provided in Section 2.6(c) hereof, each
Certificate shall be deemed for all purposes to evidence ownership of the number
of shares of BancTrust Common Stock into which the shares represented by such
Certificate have been converted; however, no dividend or other distribution
payable with respect to the shares of BancTrust Common Stock shall be paid to an
entitled former shareholder of Bancshares until such shareholder surrenders his
or her Certificate(s) for exchange as provided in Section 2.6(c), at which time,
subject to Section 2.6(i) below, such shareholder shall receive all dividends
and distributions, without interest thereon, previously payable but withheld
from such shareholder pursuant to this Section 2.6(d). Certificates surrendered
for exchange by any person constituting an "affiliate" of Bancshares for
purposes of Rule 145(c) under the Securities Act shall not be exchanged for
certificates representing whole shares of BancTrust Common Stock until BancTrust
has received from such person the written agreement contemplated by Section 5.11
hereof and shall contain any legends required by applicable law.
(e) As of the Effective Time, the stock transfer books of Bancshares shall
be closed, and no transfers of Bancshares Common Stock by such holder shall
thereafter be made or recognized. On the Closing Date, Bancshares shall deliver
to BancTrust a certified copy of its list of shareholders as of such date.
(f) In the event that prior to the Effective Time the outstanding shares of
Bancshares Common Stock shall have been increased, decreased, or changed into or
exchanged for a different number or kind of shares or securities by
reorganization, recapitalization, reclassification, stock dividend, stock split,
or other like change in capitalization, then an appropriate and proportionate
adjustment shall be made in the number and kind of shares of BancTrust Common
Stock to be thereafter delivered pursuant to this Agreement.
(g) Notwithstanding any other provision hereof, each holder of Bancshares
Common Stock who would otherwise have been entitled to receive a fraction of a
share of BancTrust Common Stock (after taking into account all Certificates
delivered by such shareholder) shall receive, in lieu thereof, cash in an amount
equal to such fractional part of a share of BancTrust Common Stock multiplied by
the BancTrust shareholder's equity per share of outstanding BancTrust Common
Stock as of September 30, 1997, or such other date as shall be mutually agreed
upon by the parties. No such holder shall be entitled to dividends, voting
rights or any other shareholder right in respect of any fractional share. All
fractional share interests of each such holder shall be aggregated.
(h) Any holder of shares of Bancshares Common Stock shall be entitled to
exercise dissenters' rights of appraisal as specified in the ABCA if such
shareholder complies in all respects with the procedures set forth in Sections
13.20-13.28 of the ABCA. Shares of Bancshares Common Stock that have not been
voted for adoption of the Agreement and with respect to which appraisal shall
have been properly demanded in accordance with the foregoing provisions of the
ABCA ("Dissenting Shares") shall not be converted into the right to receive
shares of BancTrust Common Stock pursuant to Section 2.6(a) hereof at and after
the Effective
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Time unless and until the holder of Dissenting Shares withdraws his or her
demand or becomes ineligible for such appraisal.
(i) Any other provision of this Agreement notwithstanding, no party hereto
or agent thereof shall be liable to a holder of Bancshares Common Stock for any
amount paid or property delivered in good faith to a public official pursuant to
any applicable abandoned property, escheat, or similar law.
2.7 Effective Time of the Merger
----------------------------
Immediately following and contingent upon the occurrence of the Closing,
the Merger shall become effective at the time, and on the date, specified in the
Articles of Merger as filed with the Secretary of State of Alabama in accordance
with the applicable provisions of the ABCA. Such time and date shall be
referred to in this Agreement as the "Effective Time."
2.8 Further Assurances
------------------
If at any time the Surviving Corporation shall consider or be advised that
any further assignments, conveyances or assurances are necessary or desirable to
vest, perfect or confirm in the Surviving Corporation title to any property or
rights of Bancshares, or otherwise carry out the provisions hereof, the proper
officers and directors of Bancshares, as of the Effective Time, and thereafter
the officers of the Surviving Corporation, acting on behalf of Bancshares, shall
execute and deliver any and all property or assignments, conveyances and
assurances, and do all things necessary or desirable to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and otherwise
carry out the provisions hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANCSHARES AND TALLASSEE
Bancshares and Tallassee represent and warrant to BancTrust and Peoples as
follows:
3.1 Capital Structure of Bancshares
-------------------------------
The authorized capital stock of Bancshares consists of 1,680,000 shares of
Bancshares Common Stock. As of the date hereof, there are 554,140 shares of
Bancshares Common Stock issued and outstanding and an additional 285,860 shares
of Bancshares Common Stock issued and held as treasury stock. All outstanding
shares of Bancshares Common Stock have been duly issued and are validly
outstanding, fully paid and nonassessable. Except for options described on
Schedule 3.1 and the option referred to in Section 5.15 hereof, there are no
Rights authorized, issued or outstanding with respect to the capital stock of
Bancshares. None of the shares of Bancshares Common Stock has been issued in
violation of the preemptive rights of any person. No shares of preferred stock
are authorized under the Articles of Incorporation of Bancshares.
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3.2 Capital Structure of Tallassee
------------------------------
The authorized capital stock of Tallassee consists of 42,000 shares of
Tallassee Common Stock. As of the date hereof, there are 42,000 shares of
Tallassee Common Stock issued and outstanding, all of which are held of record
and beneficially by Bancshares. All outstanding shares of Tallassee Common
Stock have been duly issued and are validly outstanding, fully paid and
nonassessable. There are no Rights authorized, issued or outstanding with
respect to the capital stock of Tallassee. None of the shares of Tallassee
Common Stock has been issued in violation of the preemptive rights of any
person.
3.3 Organization, Standing and Authority of Bancshares and Tallassee
----------------------------------------------------------------
Bancshares is a business corporation and Tallassee is a commercial bank,
each of which is duly organized, validly existing and in good standing under the
laws of the State of Alabama with full corporate power and authority to carry on
its business as now conducted and is duly qualified to do business in each
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification and where the failure to so qualify would
have a material adverse effect on the financial condition, results of operation,
business or prospects of Bancshares or Tallassee. Bancshares is registered as a
bank holding company under the BHCA. Bancshares and Tallassee have previously
delivered to BancTrust and Peoples true and complete copies of the Articles of
Incorporation and Bylaws of Bancshares and Tallassee as of the date hereof.
3.4 Bancshares Subsidiaries
-----------------------
Set forth on Schedule 3.4 hereto, which is incorporated herein by
reference, is the name and state of incorporation of each of the Bancshares
Subsidiaries. Each of the Bancshares Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business. Each of the
Bancshares Subsidiaries is duly qualified and in good standing to do business as
a foreign corporation in each jurisdiction where the nature or location of such
subsidiary's assets or its business makes such qualification necessary, except
where the failure to be so qualified or in good standing does not and will not
have a material adverse effect on Bancshares and its subsidiaries taken as a
whole. All the outstanding shares of capital stock of each of the Bancshares
Subsidiaries is duly authorized, validly issued, fully paid, and non-assessable,
have been issued in compliance with all applicable federal and state securities
laws, and are owned directly or indirectly by Bancshares or Tallassee free and
clear of all liens, claims or encumbrances. There are no outstanding options,
warrants, calls, rights, commitments, or other agreements of any character
obligating any of the Bancshares Subsidiaries to issue any shares of its capital
stock or any securities convertible into or evidencing the right to purchase or
acquire any shares of such capital stock. Except for shares of the Bancshares
Subsidiaries and securities or other interests taken in consideration of debts
previously contracted, neither Bancshares nor Tallassee owns or has the right to
acquire, directly or indirectly, any outstanding capital stock or other voting
securities or ownership interests of any corporation, bank, savings association,
partnership, joint venture, or other organization.
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3.5 Authorized and Effective Agreement
----------------------------------
(a) Each of Bancshares and Tallassee has all requisite corporate power and
authority to enter into this Agreement and (subject to receipt of all necessary
governmental approvals and the approval of this Agreement by Bancshares'
shareholders) to perform all of its obligations under this Agreement. The
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Bancshares, except the
approval of this Agreement by Bancshares' shareholders. This Agreement
constitutes a legal, valid and binding obligation of Bancshares and Tallassee,
enforceable against each of them in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(b) Neither the execution and delivery of this Agreement, nor consummation
of the transactions contemplated hereby, nor compliance by Bancshares or
Tallassee with any of the provisions hereof shall (i) conflict with or result in
a breach of any provision of the Articles of Incorporation or Bylaws of either
of Bancshares or Tallassee, (ii) constitute or result in a breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with respect to, or result in
the creation of any lien, charge or encumbrance upon any material property or
asset of Bancshares or Tallassee pursuant to, any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation, or (iii)
subject to receipt of all required governmental approvals, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Bancshares
or Tallassee.
3.6 Regulatory Reports
------------------
For the five years preceding the date hereof, Bancshares has duly filed
with the FRB and Tallassee has duly filed with the Superintendent and the FDIC
in correct form in all material respects the monthly, quarterly and annual
reports and other documents required to be filed with all applicable
governmental authorities, and such reports and other documents comply in all
material respects with applicable law and regulations. Bancshares and Tallassee
have previously delivered, or will deliver, to BancTrust and Peoples complete
and accurate copies of all such reports. In connection with the most recent
examinations of Bancshares and Tallassee by the FRB, the FDIC and the
Superintendent, and except as disclosed on Schedule 3.6 hereto, neither
Bancshares nor Tallassee was required to correct or change any action, procedure
or proceeding that Bancshares or Tallassee believes has not been corrected or
changed as required as of the date hereof.
3.7 Financial Statements
--------------------
(a) The Financial Statements of Bancshares fairly present or will fairly
present, as the case may be, the consolidated financial position of Bancshares,
Tallassee and the Bancshares Subsidiaries as of the dates indicated and the
results of operations, changes in shareholders' equity and statements of cash
flows for the periods then ended in conformity with generally accepted
accounting principles applied on a consistent basis (except as stated therein).
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(b) The books and record of Bancshares and Tallassee are being maintained
in material compliance with applicable legal and accounting requirements.
3.8 Material Adverse Change
-----------------------
Except as disclosed on Schedule 3.8 hereto, Bancshares has not suffered any
material adverse change in its business, financial condition, results of
operations or prospects since the date of its most recent audited Financial
Statements, nor are there any circumstances that, to the knowledge of
Bancshares, could reasonably be expected to result in any such material adverse
change.
3.9 Absence of Undisclosed Liabilities
----------------------------------
Except as disclosed on Schedule 3.9 hereto, neither Bancshares nor
Tallassee has any liability (contingent or otherwise) that is material to
Bancshares or Tallassee or that, when combined with all similar liabilities,
would be material to Bancshares or Tallassee, except for liabilities incurred in
the ordinary course of business since the date of the most recent audited
Financial Statements, nor are there any circumstances that, to the knowledge of
Bancshares and Tallassee, are reasonably expected to result in any such
liability.
3.10 Environmental Matters
---------------------
(a) Schedule 3.10 hereto lists all facts, circumstances and events known to
Bancshares or Tallassee that relate to any material noncompliance, alleged
noncompliance or potential noncompliance by Bancshares, Tallassee or any
Bancshares Subsidiary with any Environmental Law or any material liability or
potential liability by Bancshares, Tallassee or any Bancshares Subsidiary under
any such law.
(b) Except as contained in Schedule 3.10, Bancshares, Tallassee and the
Bancshares Subsidiaries are in compliance in all material respects with all
Environmental Laws, except for any violations of any Environmental Law that
would not, singly or in the aggregate, have a material adverse effect on the
business, financial condition, results of operations or prospects of Bancshares,
Tallassee and the Bancshares Subsidiaries taken as a whole. Neither Bancshares,
Tallassee, nor any Bancshares Subsidiary has received any communication alleging
that it is not in such compliance and, to the best knowledge of Bancshares,
there are no present circumstances that would prevent or interfere with the
continuation of such compliance.
(c) Except as contained in Schedule 3.10, neither Bancshares, Tallassee,
nor any of the Bancshares Subsidiaries is in violation or liable under any
Environmental Law, and none of the properties owned, leased, managed, controlled
or operated by Bancshares, Tallassee or any of the Bancshares subsidiaries, and
to the best knowledge of Bancshares, any property in which any of such companies
holds a security interest is in violation of or liable under any Environmental
Law, except any such violations or liabilities that would not singly or in the
aggregate have a material adverse effect on the financial condition, results of
operations, business or prospects of Bancshares, Tallassee and the Bancshares
Subsidiaries taken as a whole.
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(d) Except as contained in Schedule 3.10, to the best knowledge of
Bancshares, there are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably form the basis of any
Environmental Claim or other claim or action or governmental investigation that
could result in the imposition of any liability arising under any Environmental
Law against Bancshares, Tallassee or any of the Bancshares Subsidiaries or
against any person or entity whose liability for any Environmental Claim
Bancshares, Tallassee or any of the Bancshares Subsidiaries has or may have
retained or assumed either contractually or by operation of law, except any such
that would not have a material adverse effect on the financial condition,
results or operations, business or prospectus of Bancshares, Tallassee and the
Bancshares Subsidiaries taken as a whole.
3.11 Allowance for Loan Losses
-------------------------
The allowance for loan losses reflected on the statements of financial
condition included in Tallassee's most recently filed Consolidated Reports of
Condition and Income ("Call Report") is, in the opinion of the management of
Bancshares and Tallassee, adequate in all material respects as of the date of
the Call Report under applicable regulatory requirements and the requirements of
generally accepted accounting principles, to provide for reasonably anticipated
losses on outstanding loans net of recoveries.
3.12 Tax Matters
-----------
(a) For the past five years, Bancshares and Tallassee have timely filed all
federal, state and local (and, if applicable, foreign) tax returns required by
applicable law to be filed by them (including, without limitation, estimated tax
returns, income tax returns, information returns, and withholding and employment
tax returns) and have paid, or where payment is not required to have been made,
have set up an adequate reserve or accrual for the payment of, all taxes
required to be paid in respect of the periods covered by such returns and, as of
the Effective Time, will have paid, or where payment is not required to have
been made, will have set up an adequate reserve or accrual for the payment of,
all taxes for any subsequent periods ending on or prior to the Effective Time.
At the Effective Time, neither Bancshares nor Tallassee will have any material
liability for any such taxes in excess of the amounts so paid or reserves or
accruals so established.
(b) For the past five years, all federal, state and local (and, if
applicable, foreign) tax returns filed by Bancshares and Tallassee have been
complete and accurate in all material respects. Neither Bancshares nor
Tallassee is delinquent in the payment of any material tax, assessment or tax
obligation, and neither Bancshares nor Tallassee has requested any extension of
time within which to file any tax returns in respect of any fiscal year or
portion thereof that have not since been filed. No deficiencies for the tax,
assessment or governmental charge have been proposed, asserted or assessed
(tentatively or otherwise) against Bancshares or Tallassee that have not been
settled and paid. There are currently no agreements in effect with respect to
Bancshares or Tallassee to extend the period of limitations for the assessment
or collection of any tax. Except as disclosed on Schedule 3.12 hereto, as of
the date hereof, no audit, examination or deficiency or refund litigation with
respect to such return is pending.
12
3.13 Legal Proceedings; Regulatory Approvals
---------------------------------------
Except as disclosed on Schedule 3.13 hereto, there are no actions, suits,
claims, governmental investigations or proceedings instituted, pending or, to
the best knowledge of Bancshares and Tallassee, threatened (or unasserted but
considered by Bancshares or Tallassee probable of assertion and, if asserted,
would have at least a reasonable probability of a material adverse effect)
against Bancshares or Tallassee or against any asset, interest, or right of
Bancshares or Tallassee or against any officer, director or employee of either
of them that in any such case, if decided adversely, would have a material
adverse effect on the financial condition, results of operations, business or
prospects of Bancshares or Tallassee. To the best knowledge of Bancshares and
Tallassee, there are no actual or threatened actions, suits or proceedings that
present a claim to restrain or prohibit the transactions contemplated herein.
No fact or condition (including but not limited to Community Reinvestment Act
compliance) relating to Bancshares or Tallassee, known to Bancshares or
Tallassee, exists that would prevent BancTrust and Peoples from obtaining all of
the federal and state regulatory approvals and consents contemplated herein
without the imposition of any condition that BancTrust determines to be
materially burdensome to BancTrust or the Surviving Corporation.
3.14 Compliance with Laws
--------------------
Bancshares and Tallassee are in compliance in all material respects with
all statutes and regulations applicable and material to the conduct of their
respective businesses (except for any violations not material to the financial
condition, results of operations, business or prospects of Bancshares and
Tallassee, respectively). Neither Bancshares nor Tallassee has received
notification from any agency or department of federal, state or local government
(i) asserting a violation or possible violation of any such statute or
regulation that would have a material adverse effect on the financial condition,
results of operations, business or prospects of Bancshares or Tallassee, (ii)
threatening to revoke any license, franchise, permit or government authorization
or (iii) restricting or in any way limiting the operations of Bancshares or
Tallassee. Neither Bancshares nor Tallassee is subject to any regulatory or
supervisory cease and desist order, agreement, written directive, memorandum of
understanding or written commitment, nor has received any written communication
requesting that either enter into any of the foregoing.
3.15 Deposit Insurance and Other Regulatory Matters
----------------------------------------------
The deposit accounts of Tallassee are insured by the Bank Insurance Fund of
the FDIC to the maximum extent permitted by law, and Tallassee has paid all
premiums and assessments and filed all reports required under the FDIA.
Tallassee has no brokered deposits.
3.16 Certain Information
-------------------
When the Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such effectiveness up to
and including the time of the meeting of shareholders of Bancshares to vote upon
the Merger, such Registration Statement and all amendments or supplements
thereto, with respect to all information set forth therein furnished by
Bancshares relating to Bancshares and Tallassee, (i) shall comply in all
material respects with
13
the applicable provisions of the Securities Laws, and (ii) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
3.17 Employee Benefit Plans
----------------------
(a) Appended as Schedule 3.17 hereto is a complete list of all stock
option, employee stock purchase and stock bonus plans, qualified pension or
profit-sharing plans, any deferred compensation, consultant, bonus or group
insurance contract and any other incentive, welfare and employee benefit plans
and agreements maintained for the benefit of employees or former employees of
Bancshares and/or Tallassee. Bancshares and Tallassee shall make available to
BancTrust full and complete copies of all such plans and agreements, together
with (i) the most recent actuarial and financial reports prepared with respect
to any qualified plans, (ii) the most recent annual reports filed with any
governmental agency, and (iii) all rulings and determination letters and any
open requests for rulings or letters that pertain to any qualified plan.
(b) Neither Bancshares (or Tallassee) nor any pension plan maintained by
Bancshares (or Tallassee) and qualified under Section 401 of the Code has
incurred any material liability to the Pension Benefit Guaranty Corporation or
the Internal Revenue Service with respect to any pension plan that Bancshares or
Tallassee maintains for or with respect to any of its employees and that is
qualified under Section 401 of the Code except liabilities to the Pension
Benefit Guaranty Corporation pursuant to Section 4007 of ERISA, all of which
have been fully paid. To the best of the knowledge of Bancshares and Tallassee,
no reportable event under Section 4043(b) of ERISA has occurred with respect to
any such pension plan.
(c) Neither Bancshares nor Tallassee participates in or has incurred any
liability under Section 4201 of ERISA for a complete or partial withdrawal from,
a multiemployer plan (as such term is defined in ERISA).
(d) A favorable determination letter has been issued by the Internal
Revenue Service with respect to each "employee pension plan" (as defined in
Section 3(2) of ERISA) of Bancshares and/or Tallassee that is intended to
qualify under Section 401 of the Code to the effect that such plan is qualified
under Section 401 of the Code and the trust associated with such employee
pension plan is tax exempt under Section 501 of the Code. To the best of the
knowledge of Bancshares and Tallassee, no such letter has been revoked or
threatened to be revoked, and neither Bancshares nor Tallassee knows of any
ground on which such revocation may be based. Neither Bancshares nor Tallassee
has any material liability under any such plan
that is not reflected on the balance sheet included in the Financial Statements
as of December 31, 1996.
(e) To the best knowledge of Bancshares and Tallassee, no prohibited
transaction (which shall mean any transaction prohibited by Section 406 of ERISA
and not exempt under Section 408 of ERISA or Section 4975 of the Code) has
occurred with respect to any employee benefit plan maintained by Bancshares or
Tallassee (i) that would result in the imposition, directly or indirectly, of a
material excise tax under Section 4975 of the Code, or (ii) the
14
correction of which would have a material adverse effect on the financial
condition, results of operations, business or prospects of Bancshares or
Tallassee.
(f) Neither Bancshares nor Tallassee maintains any defined benefit plan.
3.18 Certain Contracts
-----------------
(a) Except as disclosed on Schedule 3.18 hereto, at the date hereof,
neither Bancshares nor Tallassee is a party to, is bound or affected by,
receives, or is obligated to pay, benefits under (i) any material agreement,
arrangement or commitment not made in the ordinary course of business,
including, without limitation, agreements or memoranda of understanding with
regulatory authorities, (ii) any agreement, indenture or other instrument not
made in the ordinary course of business relating to the borrowing of money by
Bancshares or Tallassee or the guarantee by Bancshares or Tallassee of any such
obligation, (iii) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election or retention in office of
any present or former director or officer, or (iv) any contract, agreement or
understanding with a labor union, in each case whether written or oral.
(b) Neither Bancshares nor Tallassee is in default, which default would
have a material adverse effect on Bancshares or Tallassee or the transactions
contemplated herein, under any agreement, commitment, arrangement, lease,
insurance policy, or other instrument whether entered into the ordinary course
of business or otherwise and whether written or oral, and there has not occurred
any event that, with the lapse of time or giving of notice or both, would
constitute such a default.
3.19 Brokers and Finders
-------------------
Except for the retention of T. Xxxxxxx Xxxxxxx and Associates as its
financial advisor in connection with the Merger, neither Bancshares nor
Tallassee nor any of their respective officers, directors or employees has (a)
entered into any agreement with any broker, finder, financial advisor or
attorney relating to services rendered or to be rendered to Bancshares or
Tallassee in connection with the Merger or (b) incurred any liability for any
fees, commissions or other transaction-based compensation in connection with the
Merger (other than fees to attorneys, auditors and similar professionals).
3.20 Insurance
---------
Set forth on Schedule 3.20 is an accurate and complete list and a brief
description of all policies of insurance, including fidelity and bond insurance,
of Bancshares and Tallassee. Neither Bancshares nor Tallassee is in default
with respect to the provisions of any such policy or has failed to give notice
or to present any claim thereunder in a due and timely fashion. All such
policies (a) are sufficient for compliance by Bancshares and Tallassee with all
requirements of law and all agreements to which Bancshares or Tallassee is a
party, (b) are valid, outstanding and enforceable and (c) will not terminate or
lapse prior to the Effective Time without similar policies being obtained that
would continue until the Effective Time.
15
3.21 No Repurchase Agreements
------------------------
Except for the Agreement for Sale of Stock dated August 14, 1990 and
further described in Section 5.17 hereof, neither Bancshares nor Tallassee is a
party to any agreement pursuant to which Bancshares or Tallassee has purchased
securities subject to an agreement to resell, any agreements pursuant to which
Bancshares or Tallassee has sold securities subject to an agreement to
repurchase, or any interest rate swap or other similar agreement.
3.22 Loans
-----
Each of the loans on the books and records of Bancshares and Tallassee,
including unfunded portions of outstanding lines of credit and loan commitments,
was made in all material respects in accordance with customary lending standards
in the ordinary course of business, is evidenced in all material respects by
appropriate and sufficient documentation and, to the best knowledge of
Bancshares and Tallassee, constitutes the legal, valid and binding obligation of
the obligator named therein, subject to bankruptcy, insolvency, fraudulent
conveyance and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. To the best knowledge of
Bancshares and Tallassee, neither the terms of any such loans nor any of the
loan documentation, nor the manner in which such loans have been administered
and serviced, violates, in a any material respect, any federal, state or local
statute, regulation or ordinance, including but not limited to Regulation O of
the FRB, the regulations of the FDIC and the Alabama State Banking Department,
the Truth in Lending Act, the Equal Credit Opportunity Act, Regulations Z and B
of the FRB, and state laws, rules and regulations relating consumer protection,
instalment sales and usury.
3.23 Properties
----------
All real and personal property owned by Bancshares and Tallassee or
presently used by either of them in their respective business is in an adequate
condition (ordinary wear and tear excepted) and is sufficient to carry on the
business of Bancshares and Tallassee in the ordinary course of business
consistent with their past practices. Bancshares and Tallassee have good and
marketable title free and clear of all liens, encumbrances, charges, defaults or
equities (other than equities of redemption under applicable foreclosure laws)
to all of the material properties and assets, real and personal, reflected on
the statements of financial condition included in the most recent audited
Financial Statements of Bancshares and Tallassee or acquired after such date,
except (i) liens for current taxes not yet due and payable, (ii) pledges to
secure deposits and other liens incurred in the ordinary course of its banking
business, (iii) such imperfections of title, easements and encumbrances, if any,
as are not material in character, amount or extent, (iv) dispositions and
encumbrances for business and (v) as disclosed in the Financial Statements of
Bancshares and Tallassee. All material leases pursuant to which Bancshares or
Tallassee, as lessee, leases real or personal property, are valid and
enforceable in accordance with their respective terms.
16
3.24 Minute Books
------------
The minute books of Bancshares and Tallassee contain complete and accurate
records of all meetings and other corporate actions held or taken by their
respective Boards of Directors (including committees of their respective Boards
of Directors) and shareholders.
3.25 Disclosures
-----------
None of the representations and warranties of Bancshares and Tallassee, or
any of the information or documents furnished or to be furnished by Bancshares
or Tallassee to BancTrust and Peoples in connection with the execution and
delivery of this Agreement and the consummation of the Merger, is or will be
false or misleading in any material respect or contains or will contain any
untrue statement of a material fact. Except as set forth on Schedule 3.25
hereto, there is no fact known to Bancshares or Tallassee that could materially
adversely affect the financial condition, results of operation, business or
prospects of Bancshares on a consolidated basis. To the best knowledge of
Bancshares and Tallassee, copies of all documents referred to in, and/or
provided to BancTrust pursuant to this Article III are true, correct and
complete copies thereof and include all amendments, supplements and
modifications thereto and all waivers thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
BANCTRUST AND PEOPLES
BancTrust and Peoples each represent and warrant to Bancshares as follows:
4.1 Capital Structure
-----------------
The authorized capital stock of BancTrust consists of (i) 9,000,000 shares
of BancTrust Common Stock, of which 3,387,388 shares are issued and outstanding
as of the date hereof, and (ii) 1,000,000 shares of preferred stock, par value
$.10 per share, of which no shares are issued or outstanding as of the date
hereof. All outstanding shares of BancTrust Common Stock have been duly issued
and are validly outstanding, fully paid and nonassessable. As of the date
hereof, BancTrust had reserved 200,000 shares of BancTrust Common Stock for
issuance under its stock option plan. Except for stock options under
BancTrust's stock option plan, there are no Rights authorized, issued or
outstanding with respect to the capital stock of BancTrust. None of the shares
of BancTrust Common Stock has been issued in violation of the preemptive rights
of any person. Each share of BancTrust Common Stock that the holders of
Bancshares Common Stock will have the right to receive in respect of their
shares of Bancshares Common Stock after the Effective Time has been duly
authorized and, when issued in accordance with this Agreement, will be validly
issued, fully paid and nonassessable and will have the same rights as each share
of the BancTrust Common Stock currently outstanding.
17
4.2 Organization, Standing and Authority
------------------------------------
BancTrust is a corporation, and Peoples is a commercial bank, both duly
organized, validly existing and in good standing under the laws of the State of
Alabama. Each has full corporate power and authority to carry on its business
as now conducted and is duly qualified to do business in each jurisdiction in
which its ownership or leasing of property or the conduct of its business
requires such qualification and where the failure to so qualify would have a
material adverse effect on the financial condition, results of operations,
business or prospects of BancTrust or Peoples. BancTrust is registered as a
bank holding company under the BHCA.
4.3 Ownership of Peoples and BancTrust Subsidiaries
-----------------------------------------------
The outstanding shares of capital stock or other ownership interests of
Peoples and the BancTrust Subsidiaries are validly issued and outstanding, fully
paid and nonassessable, and all such shares are directly or indirectly owned by
BancTrust free and clear of all liens, claims and encumbrances or preemptive
rights of any person. No Rights are authorized, issued or outstanding with
respect to the capital stock or other ownership interests of Peoples or any
BancTrust Subsidiary, and there are no agreements, understanding or commitments
relating to the right of BancTrust to vote or to dispose of said shares or other
ownership interest.
4.4 Authorized and Effective Agreement
----------------------------------
(a) Each of BancTrust and Peoples has all requisite corporate power and
authority to enter into this Agreement, and (subject to receipt of all necessary
governmental approvals and the approval of this Agreement by BancTrust's
shareholders) to perform all of its obligations under this Agreement. The
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of BancTrust and
Peoples except the approval of this Agreement by BancTrust's shareholders. This
Agreement constitutes a legal, valid and binding obligation of BancTrust and
Peoples, enforceable against each of them in accordance with its terms subject,
as to enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(b) Neither the execution and delivery of this Agreement, nor consummation
of the transactions contemplated hereby, nor compliance by BancTrust and Peoples
with any of the provisions hereof shall (i) conflict with or result in a breach
of any provision of the Articles of Incorporation or Bylaws of BancTrust or
Peoples, (ii) constitute or result in a breach of any term, condition or
provision of, or constitute a default under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon any property or asset of
BancTrust or Peoples pursuant to, any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to BancTrust or
Peoples.
18
4.5 Securities Documents; Regulatory Reports
----------------------------------------
BancTrust has previously delivered to Bancshares complete and accurate
copies of its Annual Report on Form 10-K and Annual Report to Shareholders for
the fiscal year ended December 31, 1996 and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, June 30 and September 30, 1997.
BancTrust has timely filed all Securities Documents required by the Securities
Laws for the past three years. Peoples has previously delivered to Bancshares
complete and accurate copies of its Call Reports for the quarters ended June 30
and September 30, 1997, as filed with the FRB.
4.6 Financial Statements
--------------------
The Financial Statements of BancTrust fairly present or will fairly
present, as the case may be, the consolidated financial position of BancTrust as
of the dates indicated and the results of operations, changes in shareholders'
equity and changes in cash flows for the periods then ended in conformity with
generally accepted accounting principles applied on a consistent basis (except
as stated therein).
4.7 Material Adverse Change
-----------------------
Neither BancTrust nor Peoples has suffered any material adverse change in
its financial condition, results of operations, business or prospects since the
date of the most recent audited Financial Statements of BancTrust, nor are there
any circumstances that, to the knowledge of BancTrust or Peoples, could
reasonably be expected to result in any such material adverse change.
4.8 Absence of Undisclosed Liabilities
----------------------------------
Except (a) as disclosed on Schedule 4.8 hereto and (b) for the obligations
of BancTrust under the Agreement and Plan of Reorganization dated as of December
2, 1997 by and among BancTrust, Peoples, Merchants & Planters Bancshares, Inc.
and Merchants & Planters Bank, neither BancTrust nor Peoples has any liability
(contingent or otherwise) that is material to BancTrust or Peoples that, when
combined with all similar liabilities, would be material to BancTrust or
Peoples, except as disclosed in the Financial Statements of BancTrust and except
for liabilities incurred in the ordinary course of their respective business
since the date of the most recent Financial Statements of BancTrust, nor are
there any such circumstances, that, to the knowledge of BancTrust and Peoples,
are reasonably expected to result in any such liability.
4.9 Allowance for Loan Losses
-------------------------
The allowance for loan losses reflected on the statements of financial
condition included in the Financial Statements of BancTrust is, in the opinion
of the management of BancTrust and Peoples, adequate in all material respects as
of the date of the most recent Financial Statements of BancTrust under the
requirements of generally accepted accounting principles, to provide for
reasonably anticipated losses on outstanding loans net of recoveries.
19
4.10 Legal Proceedings; Regulatory Approvals
---------------------------------------
Except as disclosed on Schedule 4.10 hereto, on the date hereof, there are
no actions, suits, claims, governmental investigations or proceedings
instituted, pending or, to the best knowledge of BancTrust and Peoples,
threatened (or unasserted but considered by BancTrust and Peoples probable of
assertion and that, if asserted, would have a reasonable probability of a
material adverse effect) against BancTrust or Peoples or against any asset,
interest or right of BancTrust or Peoples, or against any officer, director or
employee of any of them that, if decided adversely, might have a material
adverse effect on the financial condition, results of operations, business or
prospects of BancTrust or Peoples. To the knowledge of BancTrust and Peoples,
there are no actual or threatened actions, suits or proceedings that present a
claim to restrain or prohibit the Merger or that would prevent BancTrust and
Peoples from obtaining all of the federal and state regulatory approvals
contemplated herein.
4.11 Tax Matters
-----------
(a) For the past five years, BancTrust and Peoples have timely filed all
federal, state and local (and, if applicable, foreign) tax returns required by
applicable law to be filed by them (including, without limitation, estimated tax
returns, income tax returns, information returns, and withholding and employment
tax returns) and have paid, or where payment is not required to have been made,
have set up an adequate reserve or accrual for the payment of, all taxes
required to be paid in respect of the periods covered by such returns and, as of
the Effective Time, will have paid, or where payment is not required to have
been made, will have set up an adequate reserve or accrual for the payment of,
all taxes for any subsequent periods ending on or prior to the Effective Time.
Neither BancTrust nor Peoples will have any material liability for any such
taxes in excess of the amounts so paid or reserves or accruals so established.
(b) For the past five years, all federal, state and local (and, if
applicable, foreign) tax returns filed by BancTrust and Peoples have been
complete and accurate in all material respects. Neither Bancshares nor Peoples
is delinquent in the payment of any material tax, assessment or tax obligation,
and neither BancTrust nor Peoples has requested any extension of time within
which to file any tax returns in respect of any fiscal year or portion thereof
that have not since been filed. No deficiencies for the tax, assessment or
governmental charge have been proposed, asserted or assessed (tentatively or
otherwise) against BancTrust or Peoples that have not been settled and paid.
There are currently no agreements in effect with respect to BancTrust or Peoples
to extend the period of limitations for the assessment or collection of any tax.
4.12 Deposit Insurance
-----------------
The deposit accounts of Peoples are insured by the FDIC to the maximum
extent permitted by law, and Peoples has paid all premiums and assessments and
filed all reports required under the FDIA.
20
4.13 Obstacles to Tax Treatment
--------------------------
To the best knowledge and belief of the management of BancTrust and
Peoples, no fact or condition (including Peoples' record of compliance with the
Community Reinvestment Act) exists that may reasonably be expected to prevent or
materially impede or delay BancTrust or Peoples from (i) obtaining the
regulatory approvals and consents required in order to consummate the Merger or
(ii) based on consultation with qualified tax advisors, obtaining the tax
treatment contemplated by Section 6.1(e) of this Agreement, and, if any such
fact or condition becomes known to the executive officers of BancTrust and/or
Peoples, BancTrust promptly (and in any event within 10 business days after
obtaining such knowledge) shall communicate such fact or condition to the Chief
Executive Officer of Bancshares.
4.14 Compliance with Laws
--------------------
BancTrust and Peoples are in compliance in all material respects with all
statutes and regulations applicable and material to the conduct of their
respective businesses (except for any violations not material to the financial
condition, results of operations, business or prospects of BancTrust and
Peoples, respectively). Neither BancTrust nor Peoples has received notification
from any agency or department of federal, state or local government (i)
asserting a violation or possible violation of any such statute or regulation
that would have a material adverse effect on the financial condition, results of
operations, business or prospects of BancTrust or Peoples, (ii) threatening to
revoke any license, franchise, permit or government authorization or (iii)
restricting or in any way limiting the operations of Bancshares or Peoples.
Neither Bancshares nor Peoples is subject to any regulatory or supervisory cease
and desist order, agreement, written directive, memorandum of understanding or
written commitment, nor has received any written communication requesting that
either enter into any of the foregoing.
4.15 Certain Information
-------------------
When the Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such effectiveness up to
and including the time of the meeting of shareholders of BancTrust to vote upon
the Merger, such Registration Statement and all amendments or supplements
thereto, with respect to all information set forth therein furnished by
BancTrust relating to BancTrust and Peoples, (i) shall comply in all material
respects with the applicable provisions of the Securities Laws, and (ii) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
4.16 Brokers and Finders
-------------------
Except for the retention of Xxxxxx Xxxxxxxx and Company as its financial
advisor in connection with the Merger, neither BancTrust nor Peoples nor any of
their respective officers, directors or employees has (a) entered into any
agreement with any broker, finder or financial advisor relating to services
rendered or to be rendered to BancTrust or Peoples in connection with the Merger
or (b) incurred any liability for any fees, commissions or other transaction-
21
based compensation in connection with the Merger (other than fees to attorneys,
auditors and similar professionals).
ARTICLE V
COVENANTS
5.1 Stockholder Meeting(s)
----------------------
Bancshares and BancTrust shall take all action necessary to properly call
and convene meetings of their shareholders as soon as reasonably practicable,
including without limitation the preparation of proxy materials for such
meetings of shareholders. At such meetings, this Agreement shall be submitted
for shareholder approval. Subject to compliance with the legal and fiduciary
duties of such directors, and subject further to the receipt by Bancshares of an
opinion of Bancshares' Financial Advisor (as defined in Section 5.2 hereof),
dated on or immediately prior to the date of mailing of the Joint Proxy
Statement for the meeting of Bancshares shareholders at which this Agreement
will be considered and voted upon and not subsequently withdrawn prior to such
meeting of shareholders, to the effect that the terms of this Agreement,
including the Exchange Ratio, are fair to such shareholders from a financial
point of view, the Board of Directors of Bancshares shall recommend that its
shareholders approve this Agreement.
5.2 Financial Advisory Firm
-----------------------
Bancshares has selected, and will retain, the firm of T. Xxxxxxx Xxxxxxx
and Associates, Roswell, Georgia, as a financial advisor (the "Financial
Advisor") to provide a fairness opinion addressing the fairness of the Exchange
Ratio to the shareholders of Bancshares, for a fee of $10,000, plus expenses.
5.3 Joint Proxy Statement; Registration Statement
---------------------------------------------
BancTrust and Bancshares shall cooperate in the timely preparation and
filing of the Registration Statement with the Commission, and BancTrust shall
use its best efforts to cause such Registration Statement to be declared
effective under the Securities Act, which Registration Statement, at the time it
becomes effective, and at the Effective Time, shall in all material respect
conform to the requirements of the Securities Act and the general rules and
regulations of the Commission thereunder. The Registration Statement shall
include the form of Joint Proxy Statement for the meetings of shareholders of
each of BancTrust and Bancshares to be held for the purpose of having such
shareholders vote upon approval of this Agreement. BancTrust and Bancshares
shall cause the Joint Proxy Statement to be mailed to their shareholders.
Bancshares will furnish to BancTrust the information required to be included in
the Registration Statement and any amendments thereto with respect to its
business and affairs before it is filed with the Commission and again before any
amendment is filed, and shall have the right to review and comment on the form
of Joint Proxy Statement included in the Registration Statement and any
amendments thereto prior to the filing with the Commission. BancTrust shall
take all actions required to qualify or obtain exemptions from such
qualification for the BancTrust Common
22
Stock to be issued in connection with the Merger, under applicable state "Blue
Sky" laws, as appropriate.
5.4 Applications
------------
(a) As promptly as practicable after the date hereof, BancTrust shall
submit applications for prior approval of the transactions contemplated herein
to each federal, state or local government agency, department or body the
approval of which is required for consummation of the Merger. Bancshares shall
have the right to review and comment on the portions of such applications and
amendments that relate directly to it prior to their filing with any regulatory
agencies, and BancTrust promptly shall furnish Bancshares with copies after
filing of applications with these or any other regulatory agencies. The parties
to this Agreement represent and warrant to each other that all information
concerning them and their directors, officers and shareholders included (or
submitted for inclusion) in any such application shall be true, correct and
complete in all material respects.
(b) BancTrust shall use all reasonable efforts to cause the shares of
BancTrust Common Stock to be issued in the Merger to be approved for listing on
the NASDAQ SmallCap Market.
5.5 Best Efforts
------------
BancTrust and Bancshares shall each use its best efforts in good faith to
(i) furnish such information as may be required in connection with and otherwise
cooperate in the preparation and filing of the documents referred to in Sections
5.3 and 5.4 above, and (ii) take or cause to be taken all action necessary or
desirable on its part so as to permit consummation of the Merger at the earliest
practicable date. Neither BancTrust or Peoples on the one hand nor Bancshares
or Tallassee on the other hand shall take, or cause or to the best of its
ability permit to be taken, any action that would substantially delay or impair
the prospects of completing the Merger pursuant to this Agreement.
5.6 Investigation and Confidentiality
---------------------------------
(a) Bancshares and Tallassee will keep BancTrust and Peoples advised of all
material developments relevant to their respective business and to consummation
of the Merger. BancTrust and Peoples will advise Bancshares and Tallassee of
any material adverse change or material development that is likely adversely to
affect consummation of the Merger. BancTrust and Bancshares each may make or
cause to be made such investigation of the financial and legal condition of the
other as such party reasonably deems necessary or advisable in connection with
the Merger; provided, however, that such investigations shall be reasonably
related to the Merger, shall not interfere unnecessarily with normal operations,
and shall be conducted and completed on as prompt a basis as shall be reasonably
possible under the circumstances and, in any event, shall be completed no later
than 45 days after the date of this Agreement. BancTrust and Bancshares agree
to furnish the other and the other's representatives with such financial data
and other information with respect to its business and properties as such other
party or its representatives shall from time to time reasonably request. No
investigation pursuant to this
23
Section 5.6(a) shall affect or be deemed to modify any representation or
warranty made by, or the conditions to the obligations hereunder of, either
party hereto. Each party hereto shall, and shall cause its directors, officers,
attorneys, and advisors to, maintain the confidentiality of all information
obtained in such investigation which is not otherwise publicly disclosed by the
other party, said undertaking with respect to confidentiality to survive any
termination of this Agreement pursuant to Section 7.1 hereof. In the event that
the Merger is not consummated, each party, and its officers and representatives,
shall return to the other party all such non-public information and all copies
thereof whether in written or other tangible form.
(b) In the event BancTrust or Bancshares becomes aware, as a result of an
investigation pursuant to Section 5.6(a) above, of a breach of any
representation or warranty made by the other party, BancTrust or Bancshares
shall give the party committing the breach written notice of such breach not
later than 30 days after discovery thereof. The party committing the breach
shall cure such breach within 30 days after it receives written notice of such
breach.
5.7 Disclosure Supplements
----------------------
From time to time prior to the Effective Time, Bancshares and Tallassee
shall promptly supplement or amend any materials disclosed and delivered to
BancTrust and Peoples pursuant to this Agreement with respect to any matter
hereafter arising that, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described in materials
disclosed herein or on schedules hereto or that is necessary to correct any
untrue representation or warranty or information in such materials that has been
rendered materially inaccurate thereby. No supplement or amendment to such
materials shall have any effect for the purpose of determining satisfaction of
the conditions set forth in Article VI or compliance by Bancshares and Tallassee
with the covenants set forth in Section 5.9 hereof.
5.8 Press Releases
--------------
BancTrust and Bancshares shall agree with each other as to the form and
substance of any press release related to this Agreement or the transactions
contemplated hereby and thereby, and consult with each other as to the form and
substance of other public disclosures related thereto; provided, however, that
nothing contained herein shall prohibit either party, following notification to
the other party, from making any disclosure that its counsel deems necessary.
5.9 Forbearance of Bancshares and Tallassee
---------------------------------------
Except with the prior written consent of BancTrust, which consent shall not
be unreasonably withheld, or as expressly contemplated herein, between the date
hereof and the Effective Time, neither Bancshares nor Tallassee shall:
(a) carry on its business other than in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted or
established (including the acquisition of capital assets exceeding
$25,000.00 in amount, either individually or in the aggregate, or in the
case of related acquisitions, except in connection with realizing on
24
collateral), or acquire any new subsidiary or cause to permit any
subsidiary to engage in any new activity or materially expand any existing
activities;
(b) declare, set aside, make or pay any dividend or other distribution
in respect of its capital stock except for the payment of its regular semi-
annual dividend of $0.25 per share, payable in June and December;
(c) issue, sell or otherwise dispose of any shares of its capital
stock;
(d) purchase, redeem, retire or otherwise acquire or hypothecate,
pledge or otherwise encumber any shares of its capital stock;
(e) issue, grant or authorize any Rights or effect any
recapitalization, reclassification, stock dividend, stock split or like
change in capitalization;
(f) except as set forth on Schedule 5.9(f) hereto, purchase or
otherwise acquire, or sell, encumber, or otherwise dispose of, any assets
or incur any liabilities other than in the ordinary course of business
consistent with past practices and policies, provided, however, that in no
event shall Bancshares or Tallassee purchase or otherwise acquire, or sell,
encumber or otherwise dispose of, any investment securities in excess of
$100,000.00;
(g) except as set forth on Schedule 5.9(g) hereto, engage in any
transaction or agreement with any officer, director or greater than 5%
shareholder of Bancshares or Tallassee or any affiliate of any such
officer, director or shareholder;
(h) amend its Articles of Incorporation or Bylaws or equivalent
documents; impose, or suffer the imposition, on any share of stock held by
Bancshares of any material lien, charge or encumbrance or permit any such
lien to exist; or waive or release any material right or cancel or comprise
any material debt or claim other than in the ordinary course of its
business;
(i) fail to comply in any material respect with any laws, regulations,
ordinances, or governmental actions applicable to it and to the conduct of
its business except where Bancshares or Tallassee is in good faith
contesting the validity of any of the foregoing; or where the failure to so
comply will not have a material adverse effect on the financial condition,
results of operations, business or prospects of Bancshares or Tallassee;
(j) except as set forth on Schedule 5.9(j) hereto, elect any
additional officers or directors; increase the rate of compensation of any
of its directors, officers or employees; pay or agree to pay any bonus to,
or provide any other employee benefit or incentive to, any of its
directors, officers or employees; or effect any change in retirement
benefits to any class of directors, officers or employees;
25
(k) enter into or substantially modify (except as may be required by
applicable law) any pension, retirement, stock option, stock purchase,
stock appreciation right, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit, incentive or
welfare contract, plan or arrangement, or any trust agreement related
thereto, in respect of any of its directors, officers or other employees,
or, except as required by applicable law or regulation, renew, amend or
modify any such arrangement or plan now in existence, except that
Bancshares and/or Tallassee shall purchase tail coverage under their
directors' and officers' liability insurance for a period of three years
after the Effective Time;
(l) solicit or encourage inquiries or proposals with respect to,
furnish any information relating to, or participate in any negotiations or
discussions concerning, any acquisition or purchase of all or a substantial
portion of the assets of, or a substantial equity interest in, Bancshares
or Tallassee or any business combination with Bancshares or Tallassee other
than as contemplated by this Agreement (except as may be required if the
directors of Bancshares receive reasoned advice of their legal counsel
based on which such directors conclude that the failure to furnish such
information or participate in such negotiations or discussions would
constitute a breach of the directors' fiduciary or legal obligations); or
authorize or permit any officer, director, agent or affiliate of it to do
any of the above; or fail to notify BancTrust immediately if any such
inquiries or proposals are received by, any such information is required
from, or any such negotiations or discussions are sought to be initiated
with, Bancshares (Bancshares shall provide BancTrust with reasonable detail
as to the identity of any person or entity from whom such inquiries or
proposals are received and the terms of the transaction discussed or
proposed);
(m) enter into (i) any material agreement, arrangement or commitment
not made in the ordinary course of business, other than agreements or
memoranda of understanding with regulatory authorities, (ii) any agreement,
indenture or other instrument relating to the borrowing of money by
Bancshares or Tallassee or guarantee by Bancshares or Tallassee of any such
obligation, except in the ordinary course of business consistent with past
practice and except for drawing on currently existing lines of credit,
(iii) any agreement, arrangement or commitment relating to the employment
of, or severance of, a consultant or the employment, severance, election or
retention in office of any present or former director, officer or employee,
or (iv) any contract, agreement or understanding with a labor union;
(n) change its lending, investment or asset liability management
policies in any material respect except as may be required by applicable
law;
(o) change its method of accounting in effect at December 31, 1996,
except as required by changes in regulation or generally accepted
accounting principles concurred in by its independent certified public
accountants, or change any of its methods of reporting income and
deductions for federal income tax purposes from those employed in the
preparation of its federal income tax returns for the year ended December
31, 1996, except as required by changes in law or regulation; or
26
(p) agree to do any of the foregoing.
5.10 Forbearance of BancTrust
------------------------
Except with the prior written consent of Bancshares, which consent shall
not be unreasonably withheld, or as expressly contemplated herein, between the
date hereof and the Effective Time, BancTrust shall not:
(a) authorize or create: (i) any class of capital stock that ranks
prior to the BancTrust Common Stock in respect of dividend payments or of
distributions or payments upon any liquidation of BancTrust or that has per
share voting rights greater than BancTrust Common Stock; (ii) any shares of
capital stock other than shares of BancTrust Common Stock reserved for
issuance as reflected under Section 4.1 hereof or in connection with
subsequent negotiations in respect of mergers or other business
combinations wherein, if concluded and consummated, BancTrust would be the
surviving corporation, or shares to be issued with respect to stock splits
or stock dividends subsequently declared and distributed on a basis
consistent with past practices and its current policy subject to the
antidilutive adjustments to be made as contemplated under Section 2.6(f)
hereof; or (iii) amend its Articles of Incorporation or Bylaws or issue
securities on terms or with voting rights so as to adversely affect the
rights of the Bancshares shareholders as if they had been holders of
BancTrust Common Stock as of the date hereof;
(b) enter into any agreement, understanding or commitment, written or
oral, with any other party that would impede in any material respect the
ability of BancTrust to perform the undertakings, commitments and
obligations arising under this Agreement;
(c) enter into a merger or other business combination transaction with
any other corporation or person in which BancTrust or Peoples, as the case
may be, would not be the surviving or continuing entity after the
consummation thereof; or
(d) sell or lease any material portion of the assets and business of
BancTrust of Peoples, except where any such sale or lease will not
materially and adversely affect their respective businesses and operations.
5.11 Affiliates
----------
Bancshares and BancTrust shall cooperate and use their best efforts to
identify those persons who may be deemed to be "affiliates" of Bancshares under
the meaning of Rule 145 promulgated by the Commission under the Securities Act.
Bancshares shall use its best efforts to cause each person so identified to
deliver to BancTrust on or prior to the Closing Date a written "affiliate"
agreement, in form and substance satisfactory to BancTrust and its counsel,
restricting the disposition by such person of the BancTrust Common Stock to be
received by such person in the Merger.
27
5.12 Employment Arrangements
-----------------------
(a) Bancshares and BancTrust agree that appropriate steps shall be taken to
terminate all employee benefit plans of Bancshares and Tallassee as of the
Effective Time or as promptly as practicable thereafter.
(b) Bancshares and BancTrust agree that the existing employment agreement
between Tallassee and Xxxxx X. Xxxxxxx, Xx. ("Xxxxxxx") will be terminated by
Bancshares and Tallassee prior to or at the Effective Time and shall be replaced
with an employment agreement among BancTrust, Tallassee and Xxxxxxx in
substantially the form annexed hereto as Exhibit A, to be entered into on the
---------
Closing Date and to become effective as of the Effective Time. In addition, on
the Closing Date, BancTrust and Tallassee shall enter into an employment
agreement with Xxxxxx X. Xxxxxx in substantially the form annexed hereto as
Exhibit B, to become effective as of the Effective Time.
---------
(c) Except as provided for in this Section 5.12(c), each employee of
Bancshares or Tallassee who continues as an employee of Tallassee or who becomes
an employee of Peoples subsequent to the Merger shall be immediately entitled to
participate in all employee benefit plans sponsored by Peoples or BancTrust on
the same terms and to the same extent as employees of Peoples, and such
employees shall receive credit for their period of service to Bancshares and/or
Tallassee for purposes of determining accrued vacation, sick leave and short-
term disability, and for eligibility, participation and vesting in all Peoples'
plans qualifying under Section 401 of the Code. Such employees shall not,
however, be given credit for prior service to Bancshares or Tallassee for the
purpose of determining benefit accrual with respect to any plans of Peoples
qualifying under Section 401 of the Code.
5.13 BancTrust Board of Directors
----------------------------
BancTrust agrees to take all necessary action to elect Xx. Xxxxxx X. Xxxxxx
and Xx. X.X. Xxxxxxxx as directors of BancTrust for initial terms commencing at
the Effective Time and ending at the next annual meeting of shareholders of
BancTrust thereafter.
5.14 Tallassee Board of Directors
----------------------------
At the Effective Time, certain nominees of BancTrust's Board of Directors
shall be appointed members of the Board of Directors of Tallassee.
5.15 Stock Option Agreement
----------------------
As of the date hereof, Bancshares has executed and delivered to BancTrust
the Stock Option Agreement annexed hereto as Exhibit C.
---------
28
5.16 Accruals and Reserves
---------------------
Prior to the Effective Time, at the request of BancTrust, Bancshares and
Tallassee shall adjust their loan loss and other reserves as may be appropriate
and consistent with generally accepted accounting principles and applicable
federal and state regulation. Notwithstanding the foregoing, Bancshares and
Tallassee shall not be obligated to take nay such action pursuant to this
Section 5.16 unless and until Bancshares acknowledges that all conditions to its
obligation to consummate the Merger have been satisfied.
5.17 Foundation and Trust Shares
---------------------------
The Agreement for Sale of Stock by and between Bancshares and The Xxxxxxx
and Xxxxxxx Xxxxxx Educational and Charitable Foundation, Inc., an Alabama
nonprofit corporation (the "Xxxxxx Foundation"), dated August 14, 1990 (the
"Xxxxxx Foundation Agreement"), provides that the Xxxxxx Foundation may at its
option and under certain conditions sell its shares of Bancshares Common Stock
to Bancshares, and Bancshares has agreed to purchase such shares, subject to
certain conditions set forth in the Xxxxxx Foundation Agreement. Further, the
Xxxxxxx Xxxxxx Trust (the "Xxxxxx Trust") currently holds the shares subject to
the Xxxxxx Foundation Agreement, and such shares constitute in excess of 10% of
the outstanding shares of Bancshares Common Stock. Bancshares agrees to use
reasonable efforts to obtain the consent of the Xxxxxx Foundation and the Xxxxxx
Trust to the Merger as well as their consent to execute such documents as
BancTrust may reasonably request to effect the Merger and ensure qualification
of the Merger for accounting treatment as a pooling of interests.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent -- All Parties
-----------------------------------
The respective obligations of the parties to this Agreement to effect the
Merger shall be subject to satisfaction or waiver of the following conditions at
or prior to the Closing Date:
(a) All corporate action necessary to authorize the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby, including without limitation the approval of this
Agreement by the requisite vote by the shareholders of Bancshares and
BancTrust, shall have been duly and validly taken;
(b) All approvals of the transactions contemplated hereby from any
state or federal government agency, department or body, the approval of
which is required for the consummation of the Merger, shall have been
received (subject to no conditions that in the reasonable judgment of
BancTrust would have a material adverse effect on the condition (financial
or other), business operations, assets or prospects of, or would materially
impair the value of, BancTrust, Peoples, Bancshares or Tallassee), all
notice periods and waiting periods required after the granting of any such
approvals shall have passed and all such approvals shall be in effect, and
at the Closing Date neither Bancshares nor Tallassee shall be subject to
any regulatory or supervisory cease and
29
desist order, agreement written directive, memorandum of understanding or
written commitment;
(c) The Registration Statement (including any post-effective
amendments thereto) shall be effective under the Securities Act, and
BancTrust shall have received all state securities or "Blue Sky" permits or
other authorizations, or confirmations as to the availability of an
exemption from registration requirements as may be necessary for
consummation of the Merger, and no proceedings shall be pending or to the
knowledge of BancTrust threatened by the Commission or any state "Blue Sky"
securities administration to suspend the effectiveness of such Registration
Statement or any state permit or authorization;
(d) Neither BancTrust or Peoples nor Bancshares or Tallassee shall be
subject to any order, decree or injunction of a court or agency of
competent jurisdiction that enjoins or prohibits consummation of the
Merger; and
(e) BancTrust and Bancshares shall have received an opinion of Xxxxx
Xxxx, dated as of the Closing Date, to the effect that, for federal income
tax purposes:
(i) The Merger will qualify as one or more "reorganizations"
under Section 368(a) of the Internal Revenue Code;
(ii) No gain or loss will be recognized by BancTrust or
Bancshares by reason of the Merger;
(iii) No gain or loss will be recognized by any shareholder
of Bancshares to the extent that such shareholder exchanges his or her
shares of Bancshares Common Stock solely for shares of BancTrust
Common Stock in the Merger;
(iv) The basis of the BancTrust Common Stock received by a
shareholder of Bancshares who exchanges Bancshares Common Stock solely
for BancTrust Common Stock in the Merger will be the same as the basis
of the Bancshares Common Stock surrendered in exchange therefor
(subject to any adjustments required as the result of receipt of cash
in lieu of a fractional share of BancTrust Common Stock);
(v) The holding period of the BancTrust Common Stock
received by a shareholder of Bancshares in the Merger will include the
holding period of the Bancshares Common Stock surrendered in exchange
therefor (provided that such shares of Bancshares Common Stock were
held as a capital asset by such shareholder at the Effective Time);
and
(vi) Cash received by a Bancshares shareholder in lieu of a
fractional share interest of BancTrust Common Stock as part of the
Merger will be treated as having been received as a distribution in
full payment in exchange for the
30
fractional share interest of BancTrust Common Stock that such
shareholder would otherwise be entitled to receive.
6.2 Conditions Precedent -- Bancshares
----------------------------------
The obligations of Bancshares to effect the Merger shall be subject to
satisfaction of the following additional conditions at or prior to the Closing
Date, unless waived by Bancshares and Tallassee pursuant to Section 7.4 hereof:
(a) Bancshares shall have completed to its satisfaction its due
diligence investigation of BancTrust and Peoples pursuant to Section 5.6(a)
hereof, and the Board of Directors of Bancshares shall not have made a
formal determination within 45 days of the date hereof that, in its best
judgment, based on the results of such due diligence review, consummation
of the Merger pursuant to the terms of this Agreement would be materially
adverse to the economic interests of Bancshares' shareholders.
(b) The representations and warranties of BancTrust and Peoples set
forth in Article IV hereof shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (or on the date when made in the
case of any representation and warranty that specifically relates to an
earlier date), except as otherwise contemplated by this Agreement or
consented to in writing by Bancshares (which consent shall not be
unreasonably withheld) and except for changes, none of which individually
or in the aggregate has materially and adversely affected the condition
(financial or other), business operations, assets or prospects of BancTrust
and Peoples.
(c) BancTrust and Peoples shall have in all material respects
performed all material obligations and complied with all material covenants
required to be performed by them on or prior to the Closing Date.
(d) BancTrust and Peoples shall have delivered to Bancshares
certificates, dated as of the Closing Date and signed by their respective
Chairmen or Presidents, to the effect that the conditions set forth in
Section 6.1(a), 6.1(d), 6.2(b), 6.2(c) and 6.2(e), to the extent applicable
to BancTrust and Peoples, respectively, have been satisfied.
(e) Between the date of this Agreement and the Effective Time, there
shall not have been any material adverse change in the financial condition,
results of operations, assets, properties, businesses or operations of
BancTrust, Peoples and the BancTrust Subsidiaries taken as a whole, other
than any such change attributable to or resulting from any change in
general economic conditions, law, regulation or generally accepted
accounting principles that impair both BancTrust and Bancshares in a
substantially similar manner.
(f) Bancshares shall have received opinions, dated as of the Closing
Date, from Gamble, Gamble, Xxxxxx & Xxxxxx, L.L.C., Selma, Alabama, and
Xxxxx Xxxx, Washington, D.C., which opinions, taken together, shall cover
the matters set forth in
31
Exhibit D hereto. Such opinions may be governed by, and interpreted in
---------
accordance with, the Legal Opinion Accord of the Section of Business Law,
American Bar Association (1991)(the "Legal Opinion Accord").
(g) Bancshares shall have received an opinion from its Financial
Advisor, dated on or immediately prior to the date of the mailing of the
Joint Proxy Statement contemplated by Section 5.3 hereof, and not
subsequently withdrawn at or prior to the meeting of Bancshares'
shareholders contemplated thereby, to the effect that the terms of this
Agreement, including the Exchange Ratio, are fair to Bancshares'
shareholders from a financial point of view.
(h) The shares of BancTrust Common Stock to be issued in the Merger
shall have been approved for listing on the NASDAQ SmallCap Market, subject
to official notice of issuance.
6.3 Conditions Precedent -- BancTrust
---------------------------------
The obligations of BancTrust to effect the Merger shall be subject to
satisfaction of the following additional conditions at or prior to the Closing
Date, unless waived by BancTrust and Peoples pursuant to Section 7.4 hereof:
(a) BancTrust shall have completed to its satisfaction its due
diligence investigation of Bancshares and Tallassee pursuant to Section
5.6(a) hereof, and the Board of Directors of BancTrust shall not have made
a formal determination within 45 days of the date hereof that, in its best
judgment, based on the results of such due diligence review, consummation
of the Merger pursuant to the terms of this Agreement would be materially
adverse to the economic interests of BancTrust and its shareholders.
(b) The representations and warranties of Bancshares and Tallassee set
forth in Article III hereof shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (or on the date when made in the
case of any representation and warranty which specifically relates to an
earlier date), except as otherwise contemplated by this Agreement or
consented to in writing by BancTrust and Peoples (which consent shall not
be unreasonably withheld) and except for changes, none of which
individually or in the aggregate has materially and adversely affected the
condition (financial or other), business operations, assets or prospects of
Bancshares or Tallassee.
(c) Bancshares and Tallassee shall have in all material respects
performed all material obligations and complied with all material covenants
required to be performed by it on or prior to the Closing Date.
(d) Except as set forth on Schedule 6.3(d) hereto, all employment
agreements between current and former directors, executive officers and
other employees of Bancshares shall have been terminated, and to the extent
that any other material contract,
32
arrangement or lease to which Bancshares is a party shall require the
consent of any other person to the Merger, such consent shall be obtained.
(e) Bancshares and Tallassee shall have delivered to BancTrust a
certificate, dated as of the Closing Date and signed by their respective
Chairmen or Presidents, to the effect that the conditions set forth in
Sections 6.1(a), 6.1(c), 6.3(b), 6.3(c) and 6.3(f), to the extent
applicable to Bancshares and Tallassee, respectively, have been satisfied.
(f) Between the date of this Agreement and the Effective Time, there
shall not have been any material adverse change in the financial condition,
results of operations, assets, properties, businesses or operations of
Bancshares, Tallassee and the Bancshares Subsidiaries taken as a whole,
other than any such change attributable to or resulting from any change in
general economic conditions, law, regulation or generally accepted
accounting principles that impair both BancTrust and Bancshares in a
substantially similar manner.
(g) BancTrust shall have received an opinion from Xxxxxx & Xxxxxx,
Tallassee, Alabama, dated as of the Closing Date, covering the matters set
forth in Exhibit E hereto. Such opinion may be governed by, and
---------
interpreted in accordance with, the Legal Opinion Accord.
(h) BancTrust shall have received an opinion from its financial
advisor, Xxxxxx Xxxxxxxx and Company, dated within 10 business days prior
to the Closing Date, to the effect that the terms of this Agreement are
fair to BancTrust's shareholders from a financial point of view.
(i) BancTrust shall have received the written agreements from
"affiliates" of Bancshares as specified in Section 5.11 hereof.
(j) BancTrust shall have received documents executed by the Xxxxxx
Foundation and the Xxxxxx Trust as specified in Section 5.17 hereof.
(k) BancTrust shall received an opinion from Coopers & Xxxxxxx L.L.P.
to the effect that the Merger shall qualify for accounting treatment as a
pooling of interests.
(l) The holders of not more than 10% of the Bancshares Common Stock
outstanding immediately prior to the Closing Date shall not have filed with
Bancshares proper demand for appraisal of and payment for their shares
pursuant to applicable law, unless such demands have been duly withdrawn.
(m) BancTrust shall have received an environmental report on
Tallassee's offices and underlying land located at Tallassee, East
Tallassee and Eclectic, Alabama and any other real estate owned by
Bancshares or Tallassee, such report or other reports derived therefrom to
be satisfactory to BancTrust (it being understood that such report or
reports shall be deemed satisfactory to BancTrust unless such report or
reports evidence potential environmental liabilities or costs which, if
incurred, would have a
33
material adverse affect on Bancshares' or Tallassee' consolidated financial
condition, results of operations, business or prospects).
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination
-----------
This Agreement may be terminated:
(a) at any time within 45 days after the date hereof, by BancTrust or
Bancshares in writing, if the respective Board of Directors has made a
formal determination that, in its best judgment, based on the results of
(i) BancTrust's due diligence review of Bancshares and Tallassee or (ii)
Bancshares' due diligence review of BancTrust and Peoples pursuant to
Section 5.6(a) hereof, consummation of the Merger pursuant to the terms of
this Agreement would be materially adverse to the economic interests of
BancTrust and its shareholders on the one hand or the economic interests of
Bancshares' shareholders on the other hand;
(b) at any time on or prior to the Closing Date, by the mutual consent
in writing of the parties hereto;
(c) at any time on or prior to the Closing Date, by BancTrust in
writing if Bancshares or Tallassee has, or by Bancshares in writing if
BancTrust or Peoples has, in any material respect, breached (i) any
covenant or undertaking contained herein, or (ii) any representation or
warranty contained herein, which breach materially and adversely affects
the financial condition, results of operations, business or prospects of
Bancshares or Tallassee on the one hand or BancTrust or Peoples on the
other hand, in any case if such breach has not been cured by the earlier of
30 days after the date on which written notice of such breach is given to
the party committing such breach (which notice must be given not later than
30 days after discovery of such breach) or the Closing Date;
(d) on the Closing Date, by either BancTrust or Bancshares in writing,
if any of the conditions precedent to the obligations of such party to
consummate the transactions contemplated hereby have not been satisfied or
fulfilled;
(e) at any time, by BancTrust in writing, if any of the applications
for prior approval referred to in Section 5.4 hereof are denied or are
approved contingent upon the satisfaction of any condition or requirement
that, in the reasonable opinion of BancTrust, would so materially adversely
affect the business or economic benefits of the Merger as to render
consummation of the Merger inadvisable or unduly burdensome, and the time
period for appeals and requests for reconsideration has run;
34
(f) at any time, by either BancTrust or Bancshares in writing, if the
shareholders of Bancshares or BancTrust do not approve this Agreement by a
vote taken thereon at a meeting duly called for such purpose;
(g) by either BancTrust or Bancshares in writing, if the Closing Date
has not occurred within nine (9) months from the date of this Agreement;
provided that this right to terminate shall not be available to any party
whose failure to perform an obligation under this Agreement has been the
cause of, or resulted in, the failure of the Merger to be consummated
within such nine-month period; and
(h) at any time, by either BancTrust or Bancshares in writing, if it
determines in good faith that it is reasonably probable that the Xxxxxx
Foundation or the Xxxxxx Trust will not both (i) consent to the Merger and
(ii) execute the documents referred to in Section 5.17 hereof.
(i) at any time, by either BancTrust or Bancshares in writing, if it
determines in good faith that any condition precedent to its obligations to
consummate the transactions contemplated hereby are or would be impossible
to satisfy.
7.2 Effect of Termination
---------------------
In the event this Agreement is terminated pursuant to Section 7.1 hereof,
this Agreement shall become void and have no effect, except that (a) the
provisions relating to confidentiality and expenses set forth in Sections 5.6
and 8.1, respectively, shall survive any such termination and (b) a termination
pursuant to Section 7.l(c) shall not relieve the breaching party from liability
for an uncured willful breach of the covenant, undertaking, representation or
warranty giving rise to such termination.
7.3 Survival of Representations, Warranties and Covenants
-----------------------------------------------------
All representations, warranties and covenants in this Agreement or in any
instrument delivered pursuant hereto or thereto shall expire on, and be
terminated and extinguished at, the Effective Time other than covenants that by
their terms are to be performed after the Effective Time, provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive BancTrust or Peoples on the one hand or Bancshares
or Tallassee on the other hand (or any director, officer or controlling person
thereof) of any defense at law or in equity which otherwise would be available
against the claims of any person, including, without limitation, any stockholder
or former stockholder of either BancTrust or Bancshares, the aforesaid
representations, warranties and covenants being material inducements to
consummation by the parties hereto of the transactions contemplated herein.
7.4 Waiver
------
Each party hereto, by written instrument signed by an executive officer of
such party, may at any time (whether before or after approval of this Agreement
by the shareholders of Bancshares and BancTrust) extend the time for the
performance of any of the obligations or
35
other acts of the other party hereto and may waive (i) any inaccuracies of the
other party in the representations or warranties contained in this Agreement or
any other document delivered pursuant hereto, (ii) compliance with any of the
covenants, undertakings or agreements of the other party, or satisfaction of any
of the conditions precedent to its obligations or (iii) the performance by the
other party of any of its obligations set out herein or therein; provided,
however, that no such waiver or amendment or supplement pursuant to Section 7.5
hereof executed after approval of this Agreement by the shareholders of
Bancshares shall reduce, without the requisite approval of the shareholders of
Bancshares, either the number of shares of BancTrust Common Stock into which
each share of Bancshares Common Stock shall be converted in the Merger or the
payment terms for fractional interests. Nothing in this Section 7.4 will permit
any party to waive any required regulatory approvals or other conditions that,
if not satisfied, would result in the violation of any law or applicable
governmental regulation.
7.5 Amendment or Supplement
-----------------------
This Agreement may be amended or supplemented at any time by mutual
agreement of the parties hereto, subject to the proviso to Section 7.4 hereof.
Any such amendment or supplement must be in writing and approved by the
respective Boards of Directors of the parties hereto.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses
--------
Each party hereto shall be responsible for its own costs and expenses;
provided, however, if either BancTrust or Peoples on the one hand or Bancshares
or Tallassee on the other hand willfully breaches its obligations under this
Agreement, or willfully fails to satisfy a condition precedent to the closing of
the Merger, such party shall be liable to the other for all of its out-of-pocket
expenses, in addition to all other rights and remedies such other party may
have. The allocable costs of the special legal counsel responsible for
preparing the Registration Statement and other appropriate filings with the
Commission shall be paid one-half by BancTrust and one-half by Bancshares;
provided, however, that the share of any such costs to be paid by Bancshares
shall not exceed the sum of $15,000. All other costs and expenses, including
legal, accounting and financial advisors' fees, and all fees to be submitted in
connection with applications and filings, shall be paid by the party for whom
such services are performed or on whose behalf such filing or application is
made.
8.2 Entire Agreement
----------------
This Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other than
documents referred to herein or therein. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and thereto and their respective successors. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto and thereto, and
36
their respective successors, any rights, remedies, obligations or liabilities
other than as set forth in Section 5.12 hereof.
8.3 No Assignment
-------------
None of the parties hereto may assign any of its rights or obligations
under this Agreement to any other person.
8.4 Notices
-------
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
overnight express or by registered or certified mail, postage prepaid, addressed
as follows:
If to BancTrust or Peoples:
The Peoples BancTrust Company, Inc.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Chairman of the Board
With copies to:
Gamble, Gamble, Xxxxxx & Xxxxxx, L.L.C.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx., Esq.
and:
Xxxxx Xxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
If to Bancshares or Tallassee:
Xxxxxx County Bancshares, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chairman of the Board
37
With a copy to:
Xxxxxx & Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx III, Esq.
8.5 Captions
--------
The captions contained in this Agreement are for reference purposes only
and are not part of this Agreement.
8.6 Counterparts
------------
This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original instrument, and all such counterparts together
shall constitute one agreement.
8.7 Governing Law
-------------
This Agreement shall be construed and interpreted in accordance with the
laws of the State of Alabama applicable to agreements made and entirely to be
performed within such jurisdiction.
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers and their corporate
seals to be hereunto affixed and attested by their officers thereunto duly
authorized, all as of the day and year first above written.
Attest: THE PEOPLES BANCTRUST COMPANY, INC.
/s/ Xxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------- ------------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
Attest: THE PEOPLES BANK AND TRUST COMPANY
/s/ Xxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------- ------------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
Attest: XXXXXX COUNTY BANCSHARES, INC.
/s/ Xxxxx X. Xxxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx
------------------------- ------------------------------
Xxxxxx X. Xxxxxx, Chairman
Attest: THE BANK OF TALLASSEE
/s/ Xxxxx X. Xxxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx
------------------------- ------------------------------
Xxxxxx X. Xxxxxx, Chairman
39
EXHIBIT A
EMPLOYMENT AGREEMENT
--------------------
AND COVENANT NOT TO COMPETE
---------------------------
THIS AGREEMENT (the "Agreement"), made this the 11th day of December,
1997, by and between THE PEOPLES BANCTRUST COMPANY, INC. ("BancTrust"), and THE
BANK OF TALLASSEE, an Alabama banking corporation ("Tallassee"), as Employers,
and XXXXX X. XXXXXXX, XX. ("Xxxxxxx"), as Employee.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, BancTrust has entered into an Agreement and Plan of
Reorganization dated the 11th day of December, 1997 (the "Acquisition
Agreement"), by and among The Peoples BancTrust Company, Inc., an Alabama
business corporation, The Peoples Bank and Trust Company, an Alabama commercial
bank ("Peoples"), Xxxxxx County Bancshares, Inc., an Alabama business
corporation ("Bancshares"), and The Bank of Tallassee, an Alabama commercial
bank ("Tallassee"), whereby the BancTrust, subject to the terms and conditions
of the Acquisition Agreement, is to acquire all of the outstanding shares of
Bancshares; and,
WHEREAS, Tallassee is a wholly-owned subsidiary of Bancshares and,
upon completion of the merger contemplated by the Acquisition Agreement, will be
a wholly-owned subsidiary of BancTrust; and,
WHEREAS, Xxxxxxx is the President of Tallassee, and BancTrust desires
to retain his experience and abilities by continuing his employment with
Tallassee following the acquisition by BancTrust of Bancshares; and,
WHEREAS, Xxxxxxx agrees to accept such engagement, upon the terms and
conditions set forth below; and,
WHEREAS, Xxxxxxx has certain rights under an Agreement Providing for
Salary Continuation Upon Resignation or Termination by and between Tallassee and
Xxxxxxx dated January 23, 1997 (the "Salary Continuation Agreement") which, for
the considerations stated herein, will be terminated; and,
WHEREAS, Xxxxxxx is a shareholder of Bancshares and will receive
shares of BancTrust upon the completion of the merger contemplated by the
Acquisition Agreement; and,
WHEREAS, as a further and material inducement to the exchange of
BancTrust shares for the Bancshares owned by Xxxxxxx and agreement by BancTrust
and Tallassee to enter into this Agreement, Xxxxxxx has agreed to enter into a
covenant not to compete, on the terms and conditions set forth below:
NOW, THEREFORE, the parties agree as follows:
1. EFFECTIVE DATE. This Agreement shall become effective following
--------------
the Closing and at the Effective Time as those terms are defined in the
Acquisition Agreement. If the Closing is not completed, in accordance with the
terms of the Acquisition Agreement, then this Agreement shall terminate and be
rendered void and of no force and effect.
2. TERM AND DUTIES. Tallassee, as of the Effective Time, as a
---------------
subsidiary of BancTrust, hereby employs Xxxxxxx for a period from said Effective
Time to a date two (2) years thereafter (the "Employment Period"). Xxxxxxx
shall be initially employed in his current position as President of Tallassee,
with the same general duties and responsibilities. Tallassee and/or BancTrust
may assign to Xxxxxxx such other positions or other duties as it may reasonably
determine are in the best interests of BancTrust and/or Tallassee; provided,
however, that any different position shall be at no less officer level than is
currently held by Xxxxxxx, and any such other position shall not, unless
consented to by Xxxxxxx, require him to be primarily located at offices other
than in Xxxxxx County, Alabama. Xxxxxxx'x employment shall be considered full-
time, and he shall devote his entire time and best efforts to the advancements
of the interests of Tallassee and BancTrust.
3. COMPENSATION. For consideration of the services to be performed
------------
under this Agreement, Xxxxxxx shall be guaranteed a minimum salary of SEVENTY-
SIX THOUSAND AND NO/100 DOLLARS ($76,000.00) annually, payable in installments
consistent with other officers of Peoples, less applicable federal and state
taxes, including social security withholding and unemployment insurance taxes.
Further, Xxxxxxx shall be entitled to be reviewed for salary increases
consistent with other officers of Peoples, and shall be eligible for incentive
compensation or bonuses in the same manner as are similarly situated officers
and employees of Peoples.
4. EMPLOYEE BENEFITS. Xxxxxxx shall receive benefits as an employee
-----------------
for medical insurance, disability, pension or retirement benefits, and life
insurance, in the manner and to the extent that such benefits are provided for
employees of Peoples and shall receive credit for his period of service to
Bancshares and/or Tallassee for purposes of determining accrued vacation, sick
leave and short-term disability, and for eligibility, participation and vesting
in all Peoples' plans qualifying under Section 401 of the Code. He shall not,
however, be given credit for prior service to Bancshares or Tallassee for the
purpose of determining benefit accrual with respect to any plans of Peoples
qualifying under Section 401 of the Code. If Xxxxxxx elects participation in
the cafeteria plan of Peoples, or similar plans where compensation is agreed
to be reduced, the compensation of Xxxxxxx as set forth herein shall be reduced
accordingly.
5. VACATION AND HOLIDAYS. Xxxxxxx shall receive such vacation and
---------------------
holidays as may be set by Tallassee and/or BancTrust, which shall be consistent
with the vacation and holidays for other employees of Peoples. Vacation,
however, shall not be less than three (3) weeks per year.
6. COVENANT NOT TO COMPETE. In consideration for this Agreement
-----------------------
and as a part of the consideration for the exchange of the Bancshares shares
of Xxxxxxx pursuant to the Acquisition Agreement, Xxxxxxx agrees as follows:
A-2
(a) That during the Employment Period and for a period of two (2)
years thereafter, Xxxxxxx will not within Xxxxxx or Tallapoosa Counties,
Alabama, or within a thirty-five (35) mile radius of the current offices of
The Bank of Tallassee or The Peoples Bank and Trust Company, directly or
indirectly, own, manage, operate, control, be employed by, participate in,
or be connected with any bank, savings association, savings bank, credit
union, other financial institution, or finance company, nor shall he
otherwise within such geographical area solicit the customers of
Tallassee, BancTrust or any of their subsidiaries.
(b) Xxxxxxx will not solicit any employee of BancTrust, Tallassee, or
any of their subsidiaries to leave their employment for any reason without
the prior written consent of BancTrust.
(c) Xxxxxxx will not use for his benefit or disclose at any time any
information that was obtained or developed by him while in the employ of
Tallassee with respect to any trade secrets, customers, suppliers,
products, employees, financial, or any other confidential matter
pertaining to BancTrust, Tallassee, or any of their subsidiaries.
(d) Xxxxxxx will not take with him upon leaving Tallassee's employment
any document or copies of documents, or any other items relating to any of
the business of Tallassee or BancTrust or any of their subsidiaries.
(e) If, at any time, the provisions of this Section 6 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 6
shall be considered divisible and shall become and be immediately amended
to only such area, duration and scope of activity as shall be determined to
be reasonable and enforceable by the court or other body having
jurisdiction over the matter; and Xxxxxxx agrees that this Section 6 as so
amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
(f) Both parties recognize that this covenant not to compete is
material and unique. Accordingly, if Xxxxxxx breaches the terms and
conditions of this Agreement, either BancTrust or Tallassee shall be
entitled to institute legal and equitable proceedings in any court of
competent jurisdiction. The remedies of BancTrust and Tallassee for such
breach shall, in addition to any other available legal remedies, include
the right to enforce specific performance by Xxxxxxx, and to enjoin Xxxxxxx
from performing services for any competing person, firm, or corporation
during the period that this covenant not to compete is applicable.
7. CONTINUATION - SUCCESSOR. It is understood that Tallassee may, at
------------------------
some time, merge into Peoples or that other mergers or reorganizations may occur
whereby either Tallassee or BancTrust would cease to be the surviving
corporation. In such event, this Agreement shall continue and be binding upon
any successor to Tallassee or BancTrust, and Xxxxxxx'x position, title, and
duties with any such successor shall be substantially similar to those provided
for herein as to Tallassee, except that his position would be as a Division
President.
A-3
8. CANCELLATION OF SALARY CONTINUATION AGREEMENT. In consideration for
---------------------------------------------
entering into this Agreement, and in further consideration for agreement by
Xxxxxxx to terminate and not exercise rights under the Salary Continuation
Agreement, BancTrust and Tallassee agree to pay or cause to be paid to Xxxxxxx
the sum of SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($75,000.00). Said sum
shall be paid at the Effective Time, and conditioned upon this Agreement
becoming effective. As of the Effective Time, this Agreement shall replace the
Salary Continuation Agreement and any other prior agreements of employment or
for salary continuation between Xxxxxxx and Tallassee or Xxxxxxx and Bancshares,
and all such agreements shall be thereupon cancelled and terminated. Further,
Xxxxxxx agrees that he will not exercise any rights under the Salary
Continuation Agreement by reason of the actions contemplated by the Acquisition
Agreement before the Effective Time, it being understood, however, that if the
Acquisition Agreement is terminated, Xxxxxxx'x rights under the Salary
Continuation Agreement shall remain in full force and effect.
9. TERMINATION.
-----------
(a) Unless sooner terminated in accordance with this Section, this
Agreement shall terminate upon expiration of the Employment Period described
under Section 2 hereof.
(b) This Agreement shall automatically terminate upon Xxxxxxx'x death, in
which event his estate shall be entitled to receive the compensation due Xxxxxxx
through the last day of the calendar month in which his death occurred and such
other benefits as may accrue to Xxxxxxx in his status as an employee.
(c) In the event Xxxxxxx becomes disabled to the extent that he cannot
substantially perform the duties of his employment, and should such disability
continue for a period of ninety (90) days, this Agreement may be terminated by
either BancTrust or Tallassee, in which event compensation shall cease, except
for accrued benefits and such benefits as are provided to employees with similar
disabilities.
(d) Tallassee or BancTrust may terminate this Agreement at any time for
cause, immediately and with or without notice to Xxxxxxx. BancTrust may from
time to time establish grounds for cause, consistent with grounds as are
determined for employees of Peoples.
(e) Termination of this Agreement, for whatever reason, shall not terminate
the continuing obligations under the covenant not to compete, as provided for in
Section 6.
10. NOTICE. Any notice or communication herein required or permitted to
------
be given shall be in writing and may be hand delivered, sent by telex,
telegraph, or telefax, or if mailed, shall be deemed given when mailed by United
States Registered or Certified Mail, postage prepaid, addressed as follows:
A-4
XXXXXXX: BANCTRUST:
Xxxxx X. Xxxxxxx, Xx. The Peoples BancTrust Company, Inc.
0000 Xxxxxxxx Xxxx 000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000 Xxxxx, Xxxxxxx 00000
TALLASSEE:
The Bank of Tallassee
P. X. Xxx 000
Xxxxxxxxx, Xxxxxxx 00000
Each party shall have the right to specify as his or its proper address any
other address in the United States of America by giving to the other party at
least fifteen (15) days written notice thereof.
11. WAIVER, MODIFICATION, OR CANCELLATION. Any waiver, alteration, or
-------------------------------------
modification of any of the provisions of this Agreement, or its cancellation
or replacement, shall not be valid unless in writing and signed by the parties.
Neither the failure nor any delay by any party in exercising any right, power
or privilege under this Agreement will operate as a waiver of such right, power
or privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
----------------
between the parties with respect to the subject matter of this Agreement and
supersedes all prior written and oral agreements and understandings between the
parties with respect to the subject matter of this Agreement. This Agreement may
not be amended except by a written agreement executed by both parties.
13. BINDING EFFECT. Except as may be otherwise limited herein, this
--------------
Agreement shall inure to the benefit of and bind the parties hereto
and their respective legal representatives, successors, and assigns.
14. GOVERNING LAW. This Agreement shall be construed and interpreted in
-------------
accordance with the laws of the State of Alabama applicable to agreements made
and entirely to be performed within such jurisdiction .
A-5
IN WITNESS WHEREOF, BancTrust and Xxxxxxx have caused this Agreement to be
signed as of the day, month and year first hereinabove written.
BANCTRUST:
THE PEOPLES BANCTRUST COMPANY, INC.
BY: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
TALLASSEE:
THE BANK OF TALLASSEE
BY: /s/ X.X. Xxxxxx
---------------
XXXXXXX:
/s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Xxxxx X. Xxxxxxx, Xx.
A-6
EXHIBIT B
EMPLOYMENT AGREEMENT
--------------------
AND COVENANT NOT TO COMPETE
---------------------------
THIS AGREEMENT (the "Agreement"), made this the 11th day of December, 1997,
by and between THE PEOPLES BANCTRUST COMPANY, INC. ("BancTrust"), and THE BANK
OF TALLASSEE, an Alabama banking corporation ("Tallassee"), as Employers, and
XXXXXX X. XXXXXX ("Xxxxxx"), as Employee.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, BancTrust has entered into an Agreement and Plan of Reorganization
dated the 11th day of December, 1997 (the "Acquisition Agreement"), by and among
The Peoples BancTrust Company, Inc., an Alabama business corporation, The
Peoples Bank and Trust Company, an Alabama commercial bank ("Peoples"), Xxxxxx
County Bancshares, Inc., an Alabama business corporation ("Bancshares"), and The
Bank of Tallassee, an Alabama commercial bank ("Tallassee"), whereby BancTrust,
subject to the terms and conditions of the Acquisition Agreement, is to acquire
all of the outstanding shares of Bancshares; and,
WHEREAS, Tallassee is a wholly-owned subsidiary of Bancshares and, upon
completion of the merger contemplated by the Acquisition Agreement, will be a
wholly-owned subsidiary of BancTrust; and,
WHEREAS, Xxxxxx is Chairman of the Board of Tallassee, and BancTrust
desires to retain his experience and abilities by continuing his employment with
Tallassee and have him assist in performing duties for BancTrust following the
acquisition by BancTrust of Bancshares; and,
WHEREAS, Xxxxxx agrees to accept such engagement, upon the terms and
conditions set forth below; and,
WHEREAS, Xxxxxx is a shareholder of Bancshares and will receive shares of
BancTrust upon the completion of the merger contemplated by the Acquisition
Agreement; and,
WHEREAS, as a further and material inducement to the exchange of BancTrust
shares for the Bancshares owned by Xxxxxx and agreement by BancTrust and
Tallassee to enter into this Agreement, Xxxxxx has agreed to enter into a
covenant not to compete, on the terms and conditions set forth below:
NOW, THEREFORE, the parties agree as follows:
1. EFFECTIVE DATE. This Agreement shall become effective following the
--------------
Closing and at the Effective Time as those terms are defined in the Acquisition
Agreement. If the Closing is not completed, in accordance with the terms of the
Acquisition Agreement, then this Agreement shall terminate and be rendered void
and of no force and effect.
2. TERM AND DUTIES. Tallassee, as of the Effective Time, as a subsidiary
---------------
of BancTrust, hereby employs Xxxxxx for a period from said Effective Time to
September 16, 2000 (the "Employment Period"). Xxxxxx shall be employed as
Chairman of the Board of Tallassee, and shall also be responsible for the
Tallassee division of BancTrust and Peoples. Xxxxxx shall devote his best
efforts to the advancement of the interests of Tallassee and BancTrust and shall
perform such duties as may be reasonably assigned to him by BancTrust and
Tallassee.
3. COMPENSATION. For consideration of the services to be performed under
------------
this Agreement, Xxxxxx shall be paid a salary of ONE HUNDRED FIFTEEN THOUSAND
($115,000.00) annually, payable in installments consistent with other officers
of Peoples, less applicable federal and state taxes, including social security
withholding and unemployment insurance taxes. This salary shall constitute the
entire compensation of Xxxxxx, and he shall not be eligible for incentive
bonuses, a director's fee, or other forms of compensation while such salary is
being paid.
4. BANCTRUST BOARD. The management of BancTrust agrees to nominate and
---------------
support the election of Xxxxxx to its Board of Directors beginning with the
Effective Time and ending at the next annual meeting of shareholders of
BancTrust thereafter.
5. EMPLOYEE BENEFITS. Xxxxxx shall receive benefits as an employee for
-----------------
medical insurance, disability, pension or retirement benefits, and life
insurance, in the manner and to the extent that such benefits are provided for
employees of Peoples and shall receive credit for his period of service to
Bancshares and/or Tallassee for purposes of determining accrued vacation, sick
leave and short-term disability, and for eligibility, participation and vesting
in all Peoples' plans qualifying under Section 401 of the Code. He shall not,
however, be given credit for prior service to Bancshares or Tallassee for the
purpose of determining benefit accrual with respect to any plans of Peoples
qualifying under Section 401 of the Code. If Xxxxxx elects participation in the
cafeteria plan of Peoples, or similar plans where compensation is agreed to be
reduced, the compensation of Xxxxxx as set forth herein shall be reduced
accordingly.
6. VACATION AND HOLIDAYS. Xxxxxx shall receive such vacation and
---------------------
holidays as may be agreed upon by him and Tallassee and/or BancTrust, and shall
not be bound by the vacation policies set for employees generally.
7. COVENANT NOT TO COMPETE. In consideration for this Agreement and as a
-----------------------
part of the consideration for the exchange of the Bancshares shares of Xxxxxx
pursuant to the Acquisition Agreement, Xxxxxx agrees as follows:
(a) That during the Employment Period and for a period of two (2)
years thereafter, Xxxxxx will not within Xxxxxx or Tallapoosa Counties,
Alabama, or within a thirty-five (35) mile radius of the current offices of
The Bank of Tallassee or The Peoples Bank and Trust Company, directly or
indirectly, own, manage, operate, control, be employed by, participate in,
or be connected with any bank, savings association, savings bank, credit
union, other financial institution, or finance company, nor shall he
B-2
otherwise within such geographical area solicit the customers of
Tallassee, BancTrust or any of their subsidiaries.
(b) Xxxxxx will not solicit any employee of BancTrust, Tallassee, or
any of their subsidiaries to leave their employment for any reason without
the prior written consent of BancTrust.
(c) Xxxxxx will not use for his benefit or disclose at any time any
information that was obtained or developed by him while in the employ of
Tallassee with respect to any trade secrets, customers, suppliers,
products, employees, financial, or any other confidential matter pertaining
to BancTrust, Tallassee, or any of their subsidiaries.
(d) Xxxxxx will not take with him upon leaving Tallassee's employment
any document or copies of documents, or any other items relating to any of
the business of Tallassee or BancTrust or any of their subsidiaries.
(e) If, at any time, the provisions of this Section 7 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 7
shall be considered divisible and shall become and be immediately amended
to only such area, duration and scope of activity as shall be determined to
be reasonable and enforceable by the court or other body having
jurisdiction over the matter; and Xxxxxx agrees that this Section 7 as so
amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
(f) Both parties recognize that this covenant not to compete is
material and unique. Accordingly, if Xxxxxx breaches the terms and
conditions of this Agreement, either BancTrust or Tallassee shall be
entitled to institute legal and equitable proceedings in any court of
competent jurisdiction. The remedies of BancTrust and Tallassee for such
breach shall, in addition to any other available legal remedies, include
the right to enforce specific performance by Xxxxxx, and to enjoin Xxxxxx
from performing services for any competing person, firm, or corporation
during the period that this covenant not to compete is applicable.
8. CONTINUATION - SUCCESSOR. It is understood that Tallassee may, at
------------------------
some time, merge into Peoples or that other mergers or reorganizations may occur
whereby either Tallassee or BancTrust would cease to be the surviving
corporation. In such event, this Agreement shall continue and be binding upon
any successor to Tallassee or BancTrust, and Xxxxxx'x position, title, and
duties with any such successor shall be substantially similar to those provided
for herein as to Tallassee, except that he shall be Division Chairman.
9. CANCELLATION OF PRIOR AGREEMENTS. As of the Effective Time, this
--------------------------------
Agreement shall replace any prior agreements of employment between Xxxxxx and
Tallassee or Xxxxxx and Bancshares, which agreements shall thereupon be
cancelled and terminated, but shall not affect the funded salary continuation
agreement(s) listed on the schedule to the Acquisition Agreement,
B-3
except that base salary under the salary continuation agreement shall be as of
the date of the Acquisition Agreement.
10. TERMINATION.
-----------
(a) Unless sooner terminated in accordance with this Section, this
Agreement shall terminate upon expiration of the Employment Period described
under Section 2 hereof.
(b) Xxxxxx shall have the right to terminate this Agreement, in his sole
discretion, upon ninety (90) days written notice to BancTrust and Tallassee, in
which event his duties hereunder and his compensation and benefits shall
thereupon cease.
(c) This Agreement shall automatically terminate upon Xxxxxx'x death, in
which event his estate shall be entitled to receive the compensation due Xxxxxx
through the last day of the calendar month in which his death occurred and such
other benefits as may accrue to Xxxxxx in his status as an employee.
(d) In the event Xxxxxx becomes disabled to the extent that he cannot
substantially perform the duties of his employment, and should such disability
continue for a period of ninety (90) days, this Agreement may be terminated by
either BancTrust or Tallassee, in which event compensation shall cease, except
for accrued benefits and such benefits as are provided to employees with similar
disabilities.
(e) Tallassee or BancTrust may terminate this Agreement at any time for
cause, immediately and with or without notice to Xxxxxx. BancTrust may from
time to time establish grounds for cause, consistent with grounds as are
determined for employees of Peoples.
(f) Termination of this Agreement, for whatever reason, shall not terminate
the continuing obligations under the covenant not to compete, as provided for in
Section 7.
11. NOTICE. Any notice or communication herein required or permitted to
------
be given shall be in writing and may be hand delivered, sent by telex,
telegraph, or telefax, or if mailed, shall be deemed given when mailed by United
States Registered or Certified Mail, postage prepaid, addressed as follows:
XXXXXX: BANCTRUST:
Xxxxxx X. Xxxxxx The Peoples BancTrust Company, Inc.
P. O. Xxx 000000 000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000 Xxxxx, Xxxxxxx 00000
TALLASSEE:
The Bank of Tallassee
P. O. Box 607
Tallassee, Alabama 36078
B-4
Each party shall have the right to specify as his or its proper address any
other address in the United States of America by giving to the other party at
least fifteen (15) days written notice thereof.
12. WAIVER, MODIFICATION, OR CANCELLATION. Any waiver, alteration, or
-------------------------------------
modification of any of the provisions of this Agreement, or its cancellation or
replacement, shall not be valid unless in writing and signed by the parties.
Neither the failure nor any delay by any party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege .
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior written and oral agreements and understandings between the
parties with respect to the subject matter of this Agreement. This Agreement
may not be amended except by a written agreement executed by both parties.
14. BINDING EFFECT. Except as may be otherwise limited herein, this
--------------
Agreement shall inure to the benefit of and bind the parties hereto and their
respective legal representatives, successors, and assigns.
15. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Alabama applicable to agreements made
and entirely to be performed within such jurisdiction.
B-5
IN WITNESS WHEREOF, BancTrust and Xxxxxx have caused this Agreement to be
signed as of the day, month and year first hereinabove written.
BANCTRUST:
THE PEOPLES BANCTRUST COMPANY, INC.
BY: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
TALLASSEE:
THE BANK OF TALLASSEE
BY: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
XXXXXX:
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
B-6
EXHIBIT C
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of December 11, 1997, is by and
between Xxxxxx County Bancshares, Inc., an Alabama business corporation
("Bancshares") and The Peoples BancTrust Company, Inc., an Alabama business
corporation ("BancTrust").
WHEREAS, Bancshares and BancTrust have entered into an Agreement and Plan
of Merger and Reorganization dated of even date hereof (the "Merger Agreement")
regarding the acquisition by BancTrust of all of the outstanding capital stock
of Bancshares; and
WHEREAS, in order to induce BancTrust to enter into the Merger Agreement,
Bancshares has agreed to grant the Stock Option (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereby agree as follows:
1. Grant of Stock Option. Subject to the terms and conditions set forth
---------------------
herein, Bancshares hereby irrevocably grants to BancTrust an option (the "Stock
Option") to purchase up to 110,273 shares of Bancshares common stock, par value
$.05 per share (the "Common Stock"), at a cash purchase price of $26.45 per
share (the "Exercise Price").
2. Exercise of Stock Option.
------------------------
(a) Subject to the receipt of all necessary approvals required by, and the
expiration or termination of any applicable waiting period under, any federal or
state statutes regulating or governing the acquisition or change in control of
banks (the "Bank Regulatory Acts"), the Stock Option, subject to Section 2(b)
below, may be exercised by BancTrust or its permitted assignee, in whole or in
part, at any time or from time to time, on or before the termination of this
Stock Option Agreement (the "Termination Date"). The Termination Date shall be
the earlier to occur of the following:
(i) the Effective Time (as defined in the Merger Agreement);
(ii) termination of this Stock Option Agreement prior to the occurrence
of an Initial Triggering Event (as hereinafter defined);
(iii) eighteen (18) months after the first occurrence of an Initial
Triggering Event;
(iv) eighteen (18) months after the date of termination of the Merger
Agreement by BancTrust pursuant to Sections 7.1(c) or 7.1(d) thereof; or
(v) the date of termination of the Merger Agreement in accordance with
its terms (other than by BancTrust in accordance with Section 2(a)(iv)
hereof) prior to the occurrence of an Initial Triggering Event.
In the event BancTrust wishes to exercise the Stock Option, BancTrust shall
send a written notice to Bancshares specifying the total number of shares it
will purchase and a place and date not later than 10 business days from the date
such notice is given for the closing of such purchase.
(b) BancTrust may exercise the Stock Option, in whole or part, if, but only
if, an Initial Triggering Event (as hereinafter defined) shall have occurred
prior to the occurrence of the Termination Date; provided that BancTrust shall
--------
have sent the written notice of such exercise (as provided in subsection (a) of
this Section 2).
(c) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) Bancshares, without having received BancTrust's prior written
consent, shall have entered into an agreement to engage in an Acquisition
Transaction (as hereinafter defined) with any person (the term "person" for
purposes of this Stock Option Agreement having the meaning assigned thereto
in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the rules and regulations thereunder) other
than BancTrust, or the Board of Directors of Bancshares shall have
recommended that the shareholders of Bancshares approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement.
For purposes of this Stock Option Agreement, "Acquisition Transaction"
shall mean (x) a merger or consolidation, or any similar transaction,
involving Bancshares; (y) a purchase, lease or other acquisition of all or
substantially all of the assets of Bancshares; or (z) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting power of
Bancshares;
(ii) Any person other than BancTrust or the current holders of the
Common Stock shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the term "beneficial ownership" for purposes of this Stock
Option Agreement having the meaning assigned thereto in Section 13(d) of
the 1934 Act, and the rules and regulations thereunder);
(iii) Any person other than BancTrust shall have made a bona fide
---- ----
proposal to Bancshares or its shareholders by public announcement or
written communication that is or becomes the subject of public disclosure
to engage in an Acquisition Transaction; or
(iv) Any person other than BancTrust, other than in connection with a
transaction to which BancTrust has given its prior written consent, shall
have filed an application or notice with the Board of Governors of the
Federal Reserve System, or
C-2
other federal or state bank regulatory authority, which application or
notice has been accepted for processing, for approval to engage in an
Acquisition Transaction.
(d) Bancshares shall notify BancTrust promptly in writing of the occurrence
of any Initial Triggering Event, it being understood that the giving of such
notice by Bancshares shall not be a condition to the right of BancTrust to
exercise the Stock Option.
3. Payment and Delivery of Certificate(s). At any closing hereunder,
--------------------------------------
BancTrust or its permitted assignee shall make payment to Bancshares of the
aggregate Exercise Price for the shares of Common Stock so purchased by
certified or official bank check or wire transfer of same day funds to an
account specified by Bancshares, and Bancshares shall deliver to BancTrust or
its permitted assignee a certificate or certificates in form satisfactory to
BancTrust representing the number of shares of Common Stock being purchased in
the denominations designated by BancTrust in its notice of exercise.
4. Representations and Warranties of Bancshares. Bancshares hereby
--------------------------------------------
represents and warrants to BancTrust as follows:
(a) Due Authorization. This Stock Option Agreement has been duly
-----------------
authorized by all necessary corporate action on the part of Bancshares and
has been duly executed by a duly authorized officer of Bancshares, and
constitutes a valid and binding obligation of Bancshares, enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally, and except that the availability
of equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding therefor may be
brought.
(b) Due Organization. Bancshares is a corporation duly organized,
----------------
validly existing and in good standing under the laws of Alabama and has the
requisite corporate power to enter into and perform this Stock Option
Agreement.
(c) Stock Option Shares. Except for any required regulatory filing,
-------------------
Bancshares has taken all necessary corporate and other action to authorize
and reserve and to permit it to issue, and at all times from the date
hereof through the Termination Date will keep reserved for issuance upon
exercise of the Stock Option, 110,273 shares of Common Stock, all of which,
upon issuance pursuant hereto, shall be duly and validly issued, fully paid
and nonassessable, and shall be delivered free and clear of all charges,
claims, liens, encumbrances, security interests or rights of others,
including any preemptive rights.
(d) No Conflicts. Subject to Section 2(b) hereof, neither the
------------
execution and delivery of this Stock Option Agreement nor the consummation
of the transactions contemplated hereby will violate or result in any
violation of or be in conflict with or constitute a default under any term
of the Articles of Incorporation or Bylaws of Bancshares or of any
agreement, instrument, judgment, decree, order, statute, rule or government
regulation applicable to Bancshares.
C-3
5. Representations and Warranties of BancTrust. BancTrust hereby
-------------------------------------------
represents and warrants to Bancshares as follows:
(a) Distribution. None of the shares of Common Stock acquired upon
------------
exercise of the Stock Option will be transferred except in a transaction
registered or exempt from registration under the Securities Act of 1933, as
amended, and any applicable state securities law.
(b) No Conflicts. Neither the execution and delivery of this Stock
------------
Option Agreement nor the consummation of the transactions contemplated
hereby will violate or result in any violation of or be in conflict with or
constitute a default under any term of the Articles of Incorporation or
Bylaws of BancTrust or of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to BancTrust.
6. Bank Regulatory Acts. Bancshares and BancTrust will each, timely and
--------------------
promptly after the execution hereof, make all filings required under each of the
Bank Regulatory Acts and use their best efforts to cause the receipt of all
required approvals and the satisfaction or termination of all waiting periods
under the Bank Regulatory Acts applicable to the exercise of the Stock Option.
Bancshares and BancTrust will furnish to each other such necessary information
and reasonable assistance as may be requested in connection with the respective
preparation of necessary filings or submissions to any governmental agency
including, without limitation, any filings necessary under the provisions of any
of the Bank Regulatory Acts. Bancshares and BancTrust will supply each other
with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between either of them or their respective
representatives and any governmental agency or authority or members of their
respective staffs with respect to this Stock Option Agreement or the
transactions contemplated hereby.
7. Cancellation Payment. In the event that any person or entity other
--------------------
than BancTrust or any affiliate of BancTrust (as such term is defined in Rule
13e-3 promulgated under the 0000 Xxx) (a) consummates a tender offer, as
determined by the precedent construing Sections 14(c) and 14(d) of the 1934 Act,
for more than 20% and not more than 25% of the outstanding shares of Bancshares,
(b) commences a tender offer for 25% or more of the outstanding shares of
Bancshares, or (c) enters into any agreement with Bancshares to engage in an
Acquisition Transaction in which the Common Stock would be convertible into or
exchangeable for securities or assets of another entity or cash, BancTrust, at
its election and subject to any required regulatory approvals, shall be entitled
to receive, in consideration for the cancellation of the Stock Option, an amount
in cash (the "Cancellation Payment") equal to (i) the excess, if any of (A) the
highest price or consideration paid by such third party for any shares so
acquired less (B) the Exercise Price, multiplied by (ii) 110,273 shares, less
the number of shares (if any) that have previously been purchased upon exercise
of the Stock Option, or, at the option of BancTrust, such lesser amount, if any,
as may be paid by Bancshares without being required to obtain any prior
regulatory approval from or to make any filing with the regulatory agency with
respect to Bancshares' purchase of its equity securities. The Cancellation
Payment shall be made within three (3) business days of BancTrust's election to
receive the Cancellation Payment by
C-4
certified or official bank check or wire transfer of same day funds to such
account as BancTrust shall designate.
8. Adjustment Upon Changes in Capitalization, Merger, Etc. In the event
------------------------------------------------------
of any change in the shares of Common Stock occurring on or after the date
hereof, by reason of stock dividends, stock splits, mergers, recapitalization,
combinations, conversions, exchanges of shares or the like, the number and kind
of shares or securities subject to the Stock Option, the Exercise Price per
share and the Cancellation Payment shall be appropriately adjusted.
9. Legend. Certificates for the shares of Common Stock delivered at the
------
closing hereunder shall be endorsed with a restrictive legend that shall read
substantially as follows:
"The transfer of the shares represented by this certificate is subject to
certain provisions of an agreement between the registered holder thereof
and Xxxxxx County Bancshares, Inc., a copy of which agreement is on file at
the principal office of Xxxxxx County Bancshares, Inc. and to resale
restrictions imposed by the Securities Act of 1933. A copy of such
agreement will be provided to the holder without charge upon receipt by
Xxxxxx County Bancshares, Inc. of a written request."
In addition, such certificates shall bear any other legend as may be
required by law.
10. Assignment. Neither of the parties hereto may assign, pledge or
----------
convey any of its rights or obligations under this Stock Option Agreement or the
Stock Option created hereunder to any other person or entity, without the
express written consent of the other party, provided, however, that BancTrust's
rights and obligations under this Stock Option Agreement and the Stock Option
created hereunder shall be automatically transferred to any corporation
succeeding to the rights and obligations of BancTrust under the Merger
Agreement.
11. Remedies. BancTrust, on the one hand, and Bancshares, on the other
--------
hand, each acknowledges and agrees that the other would be irreparably damaged
in the event any of the provisions of this Stock Option Agreement were not
performed by the other in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party shall be entitled to an
injunction or injunctions to redress the breaches of this Stock Option Agreement
and to specifically enforce the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which such party may be
entitled at law or in equity. In the event litigation shall be necessary to
enforce, interpret or rescind the provisions of this Stock Option Agreement, the
prevailing party shall be entitled to recover from the other party, in addition
to other relief, the prevailing party's reasonable attorneys' fees for services
before trial, on trial and on any appeal therefrom.
12. Miscellaneous.
-------------
(a) Effect and Assignment of Agreement. Subject to the provisions of
----------------------------------
Section 10 hereof, this Stock Option Agreement shall be binding upon and
enforceable by and against the parties hereto and their respective successors
and assigns.
C-5
(b) Amendments. This Stock Option Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a written
amendment executed by the parties.
(c) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram or telex, or by mail (registered or certified mail, postage prepaid,
return receipt requested) to the respect parties as follows:
If to Bancshares:
Xxxxxx County Bancshares, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Chairman of the Board
with a copy to:
Xxxxxx & Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
If to BancTrust:
The Peoples BancTrust Company, Inc.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx,
Chairman of the Board
with a copy to:
Gamble, Gamble, Xxxxxx & Xxxxxx, L.L.C.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx., Esq.
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of a change of address shall
only be effective upon receipt.
C-6
(d) Governing Law. This Stock Option Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Alabama, without regard to
the principles of conflict of laws.
(e) No Prior Agreements. This Stock Option Agreement (i) contains the
-------------------
entire agreement, and supersedes all other prior agreements and understandings,
both written and oral, between the parties hereto with respect to the subject
matter hereof, and (ii) is not intended to confer upon any other person other
than a permitted assignee any rights or remedies hereunder.
(f) Severability. If any term, provision, covenant or restriction of this
------------
Stock Option Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provision, covenants
and restrictions of this Stock Option Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
(g) Expenses. Each of the parties shall pay its own expenses in connection
--------
with the negotiation, execution and performance of this Stock Option Agreement.
(h) Effect of Headings. The section headings herein are for convenience
------------------
only and shall not affect the meanings or construction of this Stock Option
Agreement.
(i) Counterparts. This Stock Option Agreement may be executed in several
------------
counterparts, each of which shall be an original, but all of which together
shall constitute the same agreement.
C-7
IN WITNESS WHEREOF, Bancshares and BancTrust have caused this Stock Option
Agreement to take effect as of the date set forth above.
XXXXXX COUNTY BANCSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board
THE PEOPLES BANCTRUST COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx
Chairman of the Board
C-8
EXHIBIT D
LEGAL OPINION MATTERS -- BANCTRUST AND PEOPLES
1. BancTrust is a corporation, and Peoples is a commercial bank, validly
existing and in good standing under the laws of the State of Alabama, and each
of them has the corporate power and corporate authority to execute, deliver and
perform all transactions contemplated by the Agreement and Plan of Merger and
Reorganization (the "Agreement").
2. BancTrust and Peoples each have the requisite corporate power and
authority to carry on their respective businesses as they are now being
conducted and to own their respective properties and assets as such businesses,
properties and assets are described in the BancTrust Annual Report on Form 10-K
for the year ended December 31, 1996.
3. The authorized capital stock of BancTrust consists of 9,000,000 shares
of BancTrust Common Stock, of which the number of shares of BancTrust Common
Stock specified in the opinion are issued and outstanding at the Effective Time.
Each of such outstanding shares of BancTrust Common Stock (a) has been validly
issued and is fully paid and nonassessable and (b) has not been issued in
violation of any preemptive rights. To such counsel's knowledge, except for
BancTrust's obligations to issue shares of BancTrust's Common Stock under the
terms of its stock option plan, (i) no unissued shares of BancTrust Common Stock
or any other securities of BancTrust are subject to any warrants, options,
commitments, preemptive or other rights of any kind or nature, and (ii)
BancTrust is not obligated to issue any additional shares of capital stock or
any other securities of any kind or nature.
4. The authorized capital stock of Peoples consists of 100,000 shares of
Peoples Common Stock, of which 100,000 are issued and outstanding at the
Effective Time. Each of the outstanding shares of Peoples Common Stock (a) has
been validly issued and is fully paid and nonassessable and (b) has not been
issued in violation of any preemptive rights. To such counsel's knowledge, no
unissued shares of Peoples Common Stock or any other securities of Peoples are
subject to any warrants, options, commitments, preemptive rights or other rights
of any kind or nature, and Peoples is not obligated to issue any additional
share of capital stock or any other securities of any kind or nature. The
shares of Peoples Common Stock owned by BancTrust are owned free and clear of
all liens, pledges, security interests, claims or other encumbrances.
5. The execution, delivery and performance, as of the date of such
opinions, of all transactions contemplated by the Agreement have been duly
authorized and approved by all requisite corporate action on the part of
BancTrust and Peoples.
6. The Agreement has been duly authorized, executed and delivered by
BancTrust and Peoples and constitutes the valid and binding obligation of
BancTrust and Peoples, enforceable against BancTrust and Peoples in accordance
with its terms. This opinion concerning the validity, binding effect and
enforceability of the Agreement means that (a) the Agreement constitutes an
effective contract under applicable law, (b) the Agreement is not invalid in its
entirety because of a specific statutory prohibition or public policy and is not
subject in its entirety to a contractual defense and (c) subject to the last
sentence of this paragraph, some remedy is available if a party is in material
default under the Agreement. This opinion does not mean that (a) any particular
remedy is available upon a material default or (b) every provision of the
Agreement will be upheld or enforced in any or each circumstance by a court.
Furthermore, the validity, binding effect and enforceability of the Agreement
may be limited or otherwise affected by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar statutes,
rules, regulations or other laws affecting the enforcement of creditors' rights
and remedies generally and (b) the unavailability of, or limitation on the
availability of, a particular right or remedy (whether in a proceeding in equity
or at law) because of an equitable principle or a requirement as to commercial
reasonableness, conscionability or good faith.
7. Neither the execution and delivery of the Agreement by BancTrust and
Peoples nor the consummation of the Merger will (a) violate in any material
respect any provision of the Articles of Incorporation or Bylaws of BancTrust or
Peoples or any federal or Alabama statute or regulation; (b) to such counsel's
knowledge, violate the provisions of or constitute a default under any other
material agreement or instrument to which BancTrust or Peoples is a party or to
which either of them or any of its properties or assets is subject, except where
such default would not have a material adverse effect on the financial
condition, operations, business or properties of BancTrust or Peoples; (c)
require that BancTrust or Peoples obtain the consent or approval of any third
party other than consents and approvals previously obtained; or (d) violate, in
any material respect, any judgment, order, injunction, decree or award against,
or binding upon, BancTrust or Peoples known to such counsel that would prohibit
consummation of the Merger.
8. Subject to the satisfaction of post-closing conditions, BancTrust has
obtained all consents and approvals of (and made all filings with) all federal
or state regulatory agencies or other authorities having jurisdiction over the
Merger that BancTrust was required to obtain or make in order to consummate the
Merger, and all such consents and approvals are in full force and effect; such
opinion to express those agencies or authorities whose approvals have been
obtained or accomplished and to be given on a knowledge basis as to all others.
9. Assuming that all necessary corporate action in respect of the Merger
has been duly and validly taken by Bancshares and its shareholders, upon filing
of Articles of Merger between BancTrust and Bancshares with the Secretary of
State of Alabama, the Merger will have been validly effected in accordance with
the Alabama Business Corporation Act.
10. To the best knowledge of counsel, there are no pending or threatened
actions, suits or proceedings before any federal, state or local court or
governmental authority that seek to modify, enjoin or prohibit or otherwise
adversely and materially interfere with the Merger.
11. To the best knowledge of counsel, there are no pending actions, suits
or proceedings before any federal, state or local or governmental authority
against BancTrust or Peoples (except as set forth in Schedule 4.10 or other
schedules to the Agreement or an attachment to counsel's opinion) that, if
determined adversely to BancTrust or Peoples, would
D-2
have a material adverse effect upon the financial condition, business or
operation of BancTrust or Peoples.
12. The shares of BancTrust Common Stock into which shares of Bancshares
Common Stock will be converted pursuant to the Agreement have been duly
authorized and, when initially issued in accordance with the Agreement as of the
Effective Time, will be duly and validly issued and will be fully paid and
nonassessable.
The opinions of counsel need refer only to matters of Alabama and federal
law and may add other qualifications and explanations of counsels' opinions as
may be reasonably acceptable to Bancshares.
D-3
EXHIBIT E
LEGAL OPINION MATTERS -- BANCSHARES AND TALLASSEE
1. Bancshares is a corporation, and Tallassee is a commercial bank, duly
organized, validly existing and in good standing under the laws of the State of
Alabama, and each of them has the corporate power and corporate authority to
execute, deliver and perform its obligations under the Agreement and Plan of
Merger and Reorganization (the "Agreement").
2. Bancshares and Tallassee each have the requisite corporate power and
authority to carry on their respective businesses as they are now being
conducted and to own their respective properties and assets.
3. The authorized capital stock of Bancshares consists of 1,680,000
shares of Bancshares Common Stock, of which the number of shares of Bancshares
Common Stock specified in the opinion are issued and outstanding at the
Effective Time. Each of such outstanding shares of Bancshares Common Stock (a)
has been validly issued and is fully paid and nonassessable and (b) has not been
issued in violation of any preemptive rights. To such counsel's knowledge,
except for Bancshares' obligations under that certain Stock Option Agreement
dated as of December 11, 1997, (i) no unissued shares of Bancshares Common Stock
or any other securities of Bancshares are subject to any warrants, options,
commitments, preemptive or other rights of any kind or nature and (ii)
Bancshares is not obligated to issue any additional shares of capital stock or
any other securities of any kind or nature.
4. The authorized capital stock of Tallassee consists of 42,000 shares of
Tallassee Common Stock, of which 42,000 are issued and outstanding at the
Effective Time. Each of the outstanding shares of Tallassee Common Stock (a)
has been validly issued and is fully paid and nonassessable and (b) has not been
issued in violation of any preemptive rights. To such counsel's knowledge, no
unissued shares of Tallassee Common Stock or any other securities of Tallassee
are subject to any warrants, options, commitments, preemptive rights or other
rights of any kind or nature, and Tallassee is not obligated to issue any
additional share of capital stock or any other securities of any kind or nature.
The shares of Tallassee Common Stock owned by Bancshares are owned free and
clear of all liens, pledges, security interests, claims or other encumbrances.
5. The execution, delivery and performance, as of the date of such
opinion, of the Agreement and all transactions contemplated by the Agreement
have been duly authorized and approved by all requisite corporate action on the
part of Bancshares and Tallassee.
6. The Agreement has been duly authorized, executed and delivered by
Bancshares and Tallassee and constitutes the valid and binding obligation of
Bancshares and Tallassee, enforceable against Bancshares and Tallassee in
accordance with its terms. This opinion concerning the validity, binding effect
and enforceability of the Agreement means that (a) the Agreement constitutes an
effective contract under applicable law, (b) the Agreement is not invalid in its
entirety because of a specific statutory prohibition or public policy and is not
subject in its entirety to a contractual defense and (c) subject to the last
sentence of this
paragraph, some remedy is available if a party is in material default under the
Agreement. This opinion does not mean that (a) any particular remedy is
available upon a material default or (b) every provision of the Agreement will
be upheld or enforced in any or each circumstance by a court. Furthermore, the
validity, binding effect and enforceability of the Agreement may be limited or
otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar statutes, rules, regulations or other
laws affecting the enforcement of creditors' rights and remedies generally and
(b) the unavailability of, or limitation on the availability of, a particular
right or remedy (whether in a proceeding in equity or at law) because of an
equitable principle or a requirement as to commercial reasonableness,
conscionability or good faith.
7. Neither the execution and delivery of the Agreement by Bancshares and
Tallassee nor the consummation of the Merger will (a) violate in any material
respect any provision of the Articles of Incorporation or Bylaws of Bancshares
or Tallassee or any federal or Alabama statute or regulation; (b) to such
counsel's knowledge, violate the provisions of or constitute a default under any
other material agreement or instrument to which Bancshares or Tallassee is a
party or to which either of them or any of its properties or assets is subject,
except where such default would not have a material adverse effect on the
financial condition, operations, business or properties of Bancshares or
Tallassee; (c) require that Bancshares or Tallassee obtain the consent or
approval of any third party other than consents and approvals previously
obtained; or (d) violate, in any material respect, any judgment, order,
injunction, decree or award against, or binding upon, Bancshares or Tallassee
known to such counsel that would prohibit consummation of the Merger.
8. Subject to the satisfaction of post-closing conditions, Bancshares has
obtained all consents and approvals of (and made all filings with) all federal
or state regulatory agencies or other authorities having jurisdiction over the
Merger that Bancshares was required to obtain or make in order to consummate the
Merger, and all such consents and approvals are in full force and effect; such
opinion to express those agencies or authorities whose approvals have been
obtained or accomplished and to be given on a knowledge basis as to all others.
9. Assuming that all necessary corporate action in respect of the Merger
has been duly and validly taken by BancTrust and its shareholders, upon filing
of Articles of Merger between BancTrust and Bancshares with the Secretary of
State of Alabama, the Merger will have been validly effected in accordance with
the Alabama Business Corporation Act.
10. To the best knowledge of counsel, there are no pending or threatened
actions, suits or proceedings before any federal, state or local court or
governmental authority that seek to modify, enjoin or prohibit or otherwise
adversely and materially interfere with the Merger.
11. To the best knowledge of counsel, there are no pending actions, suits
or proceedings before any federal, state or local or governmental authority
against Bancshares or Tallassee (except as set forth in Schedule 3.4 or other
schedules to the Agreement or an attachment to counsel's opinion) that, if
determined adversely to Bancshares or Tallassee, would have a material adverse
effect upon the financial condition, business or operation of Bancshares or
Tallassee.
E-2
The opinion of counsel need refer only to matters of Alabama and federal
law and may add other qualifications and explanations of counsel's opinion as
may be reasonably acceptable to BancTrust.
E-3
