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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been declared effective
by the Securities and Exchange Commission pursuant to Rule 415 under the
Securities Act of 1933. These securities may not be sold nor may offers to buy
be accepted without the delivery of a final Prospectus Supplement and
Prospectus. This Preliminary Prospectus Supplement and Prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
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Registration No. 333-72712
Filed Pursuant to Rule 424(b)(5)
SUBJECT TO COMPLETION, DATED JANUARY 16, 2002
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus Dated December 17, 2001)
[Bancorp South LOGO]
4,000,000 TRUST PREFERRED SECURITIES
BANCORPSOUTH CAPITAL TRUST I
% Trust Preferred Securities (TRUPS(R))
(Liquidation Amount $25 per Trust Preferred Security)
Fully and Unconditionally Guaranteed,
to the Extent Described herein, by
BancorpSouth, Inc.
----------------------------------
The % trust preferred securities (TRUPS(R)) will be issued by
BancorpSouth Capital Trust I, a statutory Delaware business trust. BancorpSouth,
Inc., a Mississippi corporation, will own all of the outstanding common
securities of the Trust and will effectively fully and unconditionally guarantee
payment of amounts due on the trust preferred securities. The Trust will use the
proceeds received in connection with the sale of the trust preferred securities
to purchase % junior subordinated debt securities due January 15, 2032 issued
by BancorpSouth, Inc. The Trust was formed for the sole purpose of issuing the
trust preferred securities and investing in the junior subordinated debt
securities.
The trust preferred securities have been approved for listing on the New
York Stock Exchange under the symbol "BXS PrA," subject to official notice of
issuance. Trading of the trust preferred securities is expected to begin on the
New York Stock Exchange within 30 days of the date of this prospectus
supplement.
----------------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-7 OF THIS PROSPECTUS SUPPLEMENT TO
READ ABOUT CERTAIN FACTORS YOU SHOULD CONSIDER BEFORE BUYING THE TRUST PREFERRED
SECURITIES.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
These securities are not savings accounts or deposits. These securities
are not insured by the Federal Deposit Insurance Corporation or any other
governmental agency.
----------------------------------
Per Trust
Preferred Security Total
------------------ -----
Public offering price (1)...................... $ 25.00 $100,000,000
Underwriting commissions to be paid by (2) (2)
BancorpSouth, Inc..............................
Proceeds (before expenses) to BancorpSouth $ 25.00 $100,000,000
Capital Trust I................................
--------------------------
(1) Plus accrued distributions from January , 2002, if settlement occurs after
that date.
(2) Underwriting commissions of $ per trust preferred security, or $ for all
% trust preferred securities, will be paid by BancorpSouth, Inc.
The underwriters may also purchase up to an additional trust preferred
securities within 30 days from the date of this prospectus to cover
over-allotments.
The underwriters expect to deliver the trust preferred securities in
book-entry form only through the facilities of The Depository Trust Company
against payment in New York, New York on or about January , 2002.
"TRUPS(R)" is a registered service mark of Salomon Smith Barney Inc.
----------------------------------
SALOMON SMITH BARNEY
A.G. EDWARDS & SONS, INC.
MORGAN STANLEY & CO.
STEPHENS INC.
STIFEL, NICOLAUS & COMPANY
INCORPORATED
The date of this prospectus supplement is January , 2002.
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Summary............................................................. S-2
Risk Factors........................................................ S-7
Forward-Looking Statements.......................................... S-10
BancorpSouth, Inc................................................... S-10
Accounting Treatment................................................ S-11
Selected Financial Data............................................. S-12
Capitalization...................................................... S-13
Use of Proceeds..................................................... S-13
BancorpSouth Capital Trust I........................................ S-14
Description of the Preferred Securities............................. S-14
Description of the Junior Subordinated Debt Securities.............. S-20
Certain United States Federal Income Tax Consequences............... S-23
ERISA Considerations................................................ S-27
Underwriting........................................................ S-29
Legal Matters....................................................... S-31
Experts............................................................. S-31
PAGE
----
PROSPECTUS
About this Prospectus................................................. 3
Ratio of Earnings to Fixed Charges.................................... 4
Where You can Find More Information................................... 5
The Company........................................................... 6
The BXS Trusts........................................................ 6
Certain Regulatory Considerations..................................... 9
Use of Proceeds....................................................... 10
Description of Debt Securities........................................ 10
Description of Junior Subordinated Debt Securities.................... 17
Description of Trust Preferred Securities............................. 28
Description of Guarantees............................................. 38
Relationship Among the Trust Preferred Securities, the Corresponding
Junior Subordinated Debt Securities and the Guarantees........... 40
Description of Common Stock........................................... 42
Book-Entry Issuance................................................... 47
Legal Matters......................................................... 50
Experts............................................................... 50
Plan of Distribution.................................................. 50
--------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and the underwriters are
not, making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information appearing
in this prospectus supplement, the accompanying prospectus and the documents
incorporated by reference is accurate only as of their respective dates.
BancorpSouth's business, financial condition, results of operations and
prospects may have changed since such dates.
S-1
SUMMARY
The following information should be read together with the information
contained in other parts of this prospectus supplement and in the accompanying
prospectus. It may not contain all the information that is important to you. You
should carefully read this entire prospectus supplement and the accompanying
prospectus to understand fully the terms of the trust preferred securities and
the related guarantee and junior subordinated debt securities, as well as the
tax and other considerations that may be important to you in making a decision
about whether to invest in the trust preferred securities. You should pay
special attention to the "Risk Factors" section of this prospectus supplement to
determine whether an investment in the trust preferred securities is appropriate
for you.
Unless the context requires otherwise, references to (1) the "Trust,"
"us," "our," or similar terms are to BancorpSouth Capital Trust I, a statutory
Delaware business trust and the issuer of the preferred securities, (2)
"BancorpSouth" are to BancorpSouth, Inc. and its consolidated subsidiaries and
(3) "preferred securities" are to the % trust preferred securities to be issued
by us in this offering.
ABOUT BANCORPSOUTH
Headquartered in Tupelo, Mississippi, BancorpSouth is a bank holding
company operating 246 banking and mortgage locations and 233 ATMs in Arkansas,
Alabama, Louisiana, Mississippi, Tennessee and Texas communities. BancorpSouth
and its subsidiaries also provide investment brokerage services, consumer
lending, credit life insurance sales and sales of other insurance products.
At September 30, 2001, BancorpSouth had total assets of approximately $9.4
billion, total deposits of approximately $7.8 billion, total loans (net of
unearned income) of approximately $6.1 billion and common shareholders' equity
of approximately $800 million.
On November 15, 2001, BancorpSouth, Inc. and Pinnacle Bancshares,
Inc. announced the signing of a definitive agreement for the merger of
their respective companies. The transaction is expected to be completed by
the end of the first quarter of 2002. Pinnacle Bancshares had total
assets of approximately $128 million as of September 30, 2001.
ABOUT BANCORPSOUTH CAPITAL TRUST I
We are BancorpSouth Capital Trust I, a business trust organized under
Delaware law by its trustees. We were established solely for the following
purposes:
- to issue to the public the preferred securities, which represent
undivided beneficial ownership interests in our assets;
- to issue common securities to BancorpSouth;
- to use the proceeds from the issuance of the preferred securities
and common securities to purchase BancorpSouth's junior subordinated
debt securities; and
- to engage in other activities that are directly related to the
activities described above, such as registering the transfer of the
preferred securities.
Because we were established only for the purposes listed above, the junior
subordinated debt securities will be our sole assets. Payments on the junior
subordinated debt securities will be our sole source of income. We will issue
only one series of preferred securities.
S-2
THE OFFERING
TITLE................... BancorpSouth Capital Trust I % Trust Preferred
Securities.
SECURITIES OFFERED...... $100,000,000 of preferred securities in
denominations of $25 each. Each preferred security
will represent an undivided beneficial ownership
interest in our assets. Each preferred security will
entitle its holder to receive quarterly cash
distributions as described below.
BANCORPSOUTH CAPITAL We are a statutory Delaware business trust formed by
TRUST I................. BancorpSouth for the sole purpose of issuing the
preferred securities to the public and the common
securities to BancorpSouth and purchasing
BancorpSouth's % junior subordinated debt securities
due January 15, 2032, and engaging in the other
transactions described below.
We have four trustees. The two administrative
trustees are affiliated with BancorpSouth. The Bank
of New York will act as the property trustee and The
Bank of New York (Delaware) will act as the Delaware
trustee.
We will hold the junior subordinated debt securities
that we receive from BancorpSouth in exchange for the
proceeds from the issuance of preferred securities
and common securities. We will sell the preferred
securities to the public and BancorpSouth will retain
the common securities that it receives from us.
BancorpSouth will pay interest on the junior
subordinated debt securities at the same rate and at
the same times as we make payments on the preferred
securities. We will use the payments we receive on
the junior subordinated debt securities to make the
corresponding payments on the preferred securities.
BancorpSouth will guarantee payments made on the
preferred securities to the extent described below.
Both the junior subordinated debt securities and the
guarantee will be subordinated to the holders of
BancorpSouth's existing and future senior debt.
DISTRIBUTIONS........... If you purchase the preferred securities, as an
undivided beneficial owner of the junior
subordinated debt securities, you will be entitled
to receive cumulative cash distributions at an
annual rate of %. Interest on the junior
subordinated debt securities will accrue, and as a
result distributions on the preferred securities
will accumulate, from the date of issuance, and will
be paid quarterly in arrears on January 15, April 15,
July 15 and October 15 of each year, beginning
April 15, 2002, unless they are deferred as
described below.
DISTRIBUTION DEFERRAL... BancorpSouth can, on one or more occasions, defer
the quarterly interest payments on the junior
subordinated debt securities for up to 20
consecutive quarterly periods. In other words,
BancorpSouth may declare at its discretion up to a
five-year interest payment moratorium on the junior
subordinated debt securities and may choose to do
that on more than one occasion. A deferral of
interest payments cannot extend, however, beyond the
maturity date of the junior subordinated debt
securities, nor can BancorpSouth begin a new
interest deferral period until it has paid all
accrued interest on the junior subordinated debt
securities from the previous interest deferral
period.
If BancorpSouth defers interest payments on the
junior subordinated debt securities, we will also
defer distributions on the preferred securities. Any
deferred interest on the junior subordinated debt
securities will accrue additional interest at an
annual rate of %, and, as a result, any deferred
distributions will accumulate additional amounts at
an annual rate of %,
S-3
compounded quarterly. Once BancorpSouth pays all
deferred interest payments on the junior
subordinated debt securities, with accrued interest,
BancorpSouth can again defer interest payments on
the junior subordinated debt securities as described
above, but not beyond the maturity date of the
junior subordinated debt securities.
If BancorpSouth defers payments of interest on the
junior subordinated debt securities, the junior
subordinated debt securities will be treated at that
time as being issued with original issue discount for
United States federal income tax purposes. This means
you would be required to accrue interest income in an
amount equal to the deferred distributions on your
preferred securities even though you will not be
receiving any cash distributions on your preferred
securities. These amounts will be included in your
gross income for United States federal income tax
purposes. For more information, see below under the
caption "Certain United States Federal Income Tax
Consequences" in this prospectus supplement.
REDEMPTION.............. We will redeem all of the outstanding preferred
securities when the junior subordinated debt
securities are repaid at maturity. The junior
subordinated debt securities are scheduled to mature
on January 15, 2032.
In addition, if BancorpSouth redeems any junior
subordinated debt securities before their maturity,
we will use the cash we receive on the redemption of
the junior subordinated debt securities to redeem, on
a proportionate basis, the preferred securities and
the common securities. BancorpSouth can redeem the
junior subordinated debt securities before their
maturity at 100% of their principal amount plus
accrued and unpaid interest in whole or in part on
one or more occasions any time on and after January 15,
2007, or in whole at any time if certain changes
occur in tax or investment company laws and
regulations or in the treatment of the preferred
securities for bank regulatory purposes. These
circumstances are more fully described below under
the caption "Description of the Preferred Securities
-- Mandatory Redemption" in this prospectus
supplement.
BancorpSouth will not redeem the junior subordinated
debt securities unless it obtains the prior approval
of the Board of Governors of the Federal Reserve
System to do so, if then required.
RANKING................. The preferred securities generally will rank on
parity, and payments thereon will be made pro rata,
with our common securities, except as described
under "Description of Trust Preferred Securities -
Subordination of Trust Common Securities" in the
accompanying prospectus. The junior subordinated
debt securities will be BancorpSouth's unsecured
obligations and will rank subordinate and junior in
right of payment to all senior indebtedness.
THE GUARANTEE........... BancorpSouth will fully and unconditionally
guarantee the payments of all amounts due on the
preferred securities to the extent we have funds
available for payment of such distributions.
BancorpSouth is also obligated to pay most of our
expenses and obligations (other than our obligations
to make payments on the preferred securities and
common securities, which are covered only by the
guarantee).
The guarantee does not cover payments when we do not
have sufficient funds to make payments on the
preferred securities. In other words, if BancorpSouth
does not make a payment on the junior subordinated
debt securities, we will not have sufficient funds to
make payments on the preferred securities, and
S-4
the guarantee will not obligate BancorpSouth to make
those payments on our behalf. In addition,
BancorpSouth's obligations under the guarantee are
subordinate to its obligations to other creditors to
the same extent as the junior subordinated debt
securities. For more information, see "Description of
Guarantees" in the accompanying prospectus.
LIQUIDATION PREFERENCE.. Upon any dissolution, winding-up or liquidation of
the Trust, the holders of the preferred securities
will be entitled to receive, out of assets held by
us, subject to the rights of any of our creditors,
the liquidation distribution in cash. We will be
able to make this distribution of cash only if
BancorpSouth redeems the junior subordinated debt
securities. If BancorpSouth does not redeem the
junior subordinated debt securities, upon
liquidation of the Trust holders of the preferred
securities will be entitled to receive junior
subordinated debt securities.
DISSOLUTION OF
BANCORPSOUTH CAPITAL
TRUST I AND DISTRIBUTIONS
OF THE JUNIOR BancorpSouth can dissolve the Trust at any time,
SUBORDINATED DEBT subject to obtaining any required prior approval of
SECURITIES.............. the Federal Reserve Board to do so, and distribute
the junior subordinated debt securities to holders of
the preferred securities and the common securities on
a proportionate basis.
USE OF PROCEEDS......... The net proceeds from the offering of the preferred
securities are estimated to be $ . BancorpSouth
currently intends to use $ of the proceeds from
the sale of the preferred securities for general
corporate purposes, which may include repurchase of
shares of its outstanding common stock, investments
at the holding company level, extensions of credit
to its subsidiaries and possible acquisitions.
LISTING................. The preferred securities have been approved for
listing on the New York Stock Exchange. Trading is
expected to commence within 30 days after the
preferred securities are first issued. You should be
aware that the listing of the preferred securities
will not necessarily ensure that an active trading
market will be available for the preferred
securities or that you will be able to sell your
preferred securities at the price you originally
paid for them.
If we distribute the junior subordinated debt
securities, BancorpSouth will use its best efforts to
list them on the New York Stock Exchange or wherever
the preferred securities are then listed.
FORM OF THE PREFERRED
SECURITIES.............. The preferred securities will be represented by one
or more global securities that will be deposited
with and registered in the name of The Depository
Trust Company, New York, New York. This means that
you will not receive a certificate for your
preferred securities and the preferred securities
will not be registered in your name. For more
details, see the information under the caption
"Book-Entry Issuance" in the accompanying prospectus.
S-5
SUMMARY CONSOLIDATED FINANCIAL DATA OF
BANCORPSOUTH, INC.
On behalf of BancorpSouth, we provide below summary consolidated financial
data of BancorpSouth as of and for the periods specified. You should read the
data below with the more detailed information, consolidated financial statements
and the notes to the consolidated financial statements that we refer you to in
the accompanying prospectus under the caption "Where You Can Find More
Information."
NINE MONTHS
ENDED
SEPTEMBER 30,(1) YEARS ENDED DECEMBER 31,
--------------------------- --------------------------------------------
2001 2000 2000 1999 1998
---------- ---------- ---------- ---------- ----------
(in thousands, except per share data)
EARNINGS SUMMARY:
Interest revenue $ 508,799 $ 495,640 $ 674,035 $ 596,670 $ 574,414
Interest expense 261,839 251,287 346,883 280,150 277,104
---------- ---------- ---------- ---------- ----------
Net interest revenue 246,960 244,353 327,152 316,520 297,310
Provision for credit losses 15,718 20,669 26,166 17,812 19,310
Other revenue 86,674 75,526 85,578 100,321 85,418
Other expense 219,363 204,561 274,227 251,882 232,928
---------- ---------- ---------- ---------- ----------
Income before income tax and accounting
change 98,553 94,649 112,337 147,147 130,490
Applicable income taxes 31,405 32,528 37,941 44,736 42,249
---------- ---------- ---------- ---------- ----------
Net income $ 67,148 $ 62,121 $ 74,396 $ 102,411 $ 88,241
========== ========== ========== ========== ==========
EARNINGS PER SHARE:
Basic $ 0.81 $ 0.73 $ 0.88 $ 1.20 $ 1.04
Diluted 0.80 0.73 0.88 1.19 1.03
PERIOD-ENDED BALANCES:
Total loans, net of unearned income $6,061,146 $5,922,564 $6,095,315 $5,541,961 $4,935,668
Total assets 9,388,462 9,301,602 9,044,034 8,441,697 7,899,655
Total deposits 7,810,741 7,388,072 7,480,920 7,066,645 6,720,906
Total stockholders' equity 796,441 766,827 789,576 757,111 723,162
-------------
(1) Unaudited.
S-6
RISK FACTORS
Your investment in the preferred securities will involve certain risks.
You should carefully consider the following discussion as well as the other
information included or incorporated by reference in this prospectus supplement
and the accompanying prospectus before deciding whether to invest in the
preferred securities.
BANCORPSOUTH'S OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE
GUARANTEE ARE SUBORDINATED TO ITS SENIOR DEBT.
BancorpSouth's obligations under the junior subordinated debt securities
are unsecured and will rank junior to BancorpSouth's senior indebtedness. This
means that BancorpSouth may not make any payments of principal, including
redemption payments, or interest on the junior subordinated debt securities if
it defaults on a payment of its senior indebtedness. As a result, in the event
of the bankruptcy, liquidation or dissolution of BancorpSouth, BancorpSouth's
assets will be used to repay BancorpSouth's senior indebtedness in full before
any payments may be made on the junior subordinated debt securities or the
guarantee. BancorpSouth's obligations under the guarantee are unsecured and will
rank junior to all of BancorpSouth's senior indebtedness in the same manner as
the junior subordinated debt securities. Further, the junior subordinated debt
securities and the guarantee also will effectively rank junior to the debt and
other liabilities of BancorpSouth's subsidiaries, including deposit liabilities.
See "Capitalization" and "Use of Proceeds" in this prospectus supplement.
Neither the preferred securities, the junior subordinated debt securities
nor the guarantees limit the ability of BancorpSouth and its subsidiaries to
incur additional debt, including debt that ranks senior to the junior
subordinated debt securities and the guarantee. See "Description of the Junior
Subordinated Debt Securities - Subordination" in this prospectus supplement.
BANCORPSOUTH IS A HOLDING COMPANY, WHICH MAY LIMIT ITS ABILITY TO MAKE PAYMENTS
UNDER THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE.
BancorpSouth is a holding company that conducts substantially all of its
operations through its principal subsidiary bank, BancorpSouth Bank, and other
subsidiaries. As a result, BancorpSouth's ability to make payments on the junior
subordinated debt securities and the guarantee will depend primarily upon the
receipt of dividends and other distributions from its subsidiaries. There are
various regulatory restrictions on the ability of the principal subsidiary bank
to pay dividends or make other payments to BancorpSouth. See "Certain Regulatory
Considerations" beginning on page 9 of the accompanying prospectus.
In addition, BancorpSouth's right to participate in any distribution of
assets of any of its subsidiaries upon the subsidiary's liquidation or
otherwise, and thus your ability as a holder of the preferred securities to
benefit indirectly from such distribution, will be subject to the prior claims
of creditors of that subsidiary, except to the extent that BancorpSouth is a
creditor of such subsidiary with recognized claims. Consequently, as a holder of
the preferred securities, you should look only to BancorpSouth's assets for
payments on the preferred securities.
BANCORPSOUTH'S GUARANTEE OF THE PREFERRED SECURITIES COVERS PAYMENTS ONLY IF THE
TRUST HAS CASH AVAILABLE TO MAKE THE PAYMENTS BUT OTHERWISE FAILS TO DO SO.
Our ability to make payments on the preferred securities depends solely
upon BancorpSouth making the related payments on the junior subordinated debt
securities when due. If BancorpSouth defaults on its obligation to make payments
on the junior subordinated debt securities, we will not have sufficient funds to
make payments on the preferred securities. In those circumstances, you may not
rely upon the guarantee for payment of these amounts because the guarantee
covers payment only when we have sufficient funds on hand but fail to make such
payment.
Instead, you may:
- seek legal redress against BancorpSouth directly or seek other
remedies to collect your pro rata share of payments owed; or
- rely on the property trustee to enforce your rights under the junior
subordinated debt securities.
S-7
See "Description of the Junior Subordinated Debt Securities" in this prospectus
supplement.
WE CAN DEFER DISTRIBUTIONS ON THE PREFERRED SECURITIES AND, AS A RESULT, (1) YOU
MAY HAVE TO INCLUDE INTEREST IN YOUR TAXABLE INCOME BEFORE YOU RECEIVE CASH AND
(2) THE TRADING PRICE OF THE PREFERRED SECURITIES MAY BE ADVERSELY AFFECTED.
So long as BancorpSouth is not in default under the junior subordinated
debt securities, BancorpSouth may defer interest payments on the junior
subordinated debt securities for up to 20 consecutive quarterly periods, but not
beyond the maturity date of the junior subordinated debt securities. Because
interest payments on the junior subordinated debt securities fund the
distributions on the preferred securities, each such deferral would result in a
corresponding deferral of distributions on the preferred securities. See
"Description of the Junior Subordinated Debt Securities - Option to Extend
Interest Payment Date" in this prospectus supplement.
If distributions on the preferred securities are deferred, you must accrue
and recognize interest income for United States federal income tax purposes (in
the form of original issue discount) in respect of your proportionate share of
the junior subordinated debt securities held by us before receiving any cash
distributions relating to the accrued but unpaid interest. In addition, you will
not receive this cash if you sold your preferred securities before the end of
any deferral period or before the relevant record date. YOU SHOULD CONSULT WITH
YOUR OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN INVESTMENT IN THE
PREFERRED SECURITIES.
BancorpSouth currently does not intend to defer interest payments on the
junior subordinated debt securities. If, however, BancorpSouth does so in the
future, the preferred securities may trade at a price that does not reflect
fully the value of the accrued but unpaid distributions. If you sell your
preferred securities during an interest deferral period, you may not receive the
same return on your investment that you would have received if you continued to
hold those securities. Even if BancorpSouth does not defer interest payments on
the junior subordinated debt securities, BancorpSouth's right to do so could
mean that the market price for the preferred securities may be more volatile
than that of other securities without interest deferral rights.
For more information regarding the tax consequences of purchasing, holding
and selling the preferred securities, see "Certain United States Federal Income
Tax Consequences - U.S. Holders - Interest Income and Original Issue Discount"
in this prospectus supplement.
YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE PREFERRED SECURITIES THROUGH
THEIR MATURITY DATE - THEY MAY BE REDEEMED AT ANY TIME IF CERTAIN CHANGES IN
TAX, INVESTMENT COMPANY OR BANK REGULATORY LAW OCCUR.
If certain changes, which are more fully described below, in tax,
investment company or bank regulatory law or interpretations occur and other
conditions more fully described below are satisfied, we may redeem the preferred
securities within 90 days of the event at a redemption price equal to $25 per
security plus any accrued and unpaid distributions. See "Description of the
Preferred Securities - Mandatory Redemption" in this prospectus supplement.
YOU SHOULD NOT RELY ON THE DISTRIBUTIONS FROM THE PREFERRED SECURITIES THROUGH
THEIR MATURITY DATE - THEY MAY BE REDEEMED AT THE OPTION OF BANCORPSOUTH.
The preferred securities may be redeemed, in whole or in part, from time
to time, on or after January 15, 2007, at a redemption price equal to $25 per
preferred security plus any accrued and unpaid distributions to the redemption
date. You should assume that this redemption option will be exercised if
BancorpSouth is able to finance at a lower interest rate or it is otherwise in
the interest of BancorpSouth to redeem the junior subordinated debt securities.
If the junior subordinated debt securities are redeemed, we must redeem the
preferred securities and the common securities having an aggregate liquidation
amount equal to the aggregate principal amount of junior subordinated debt
securities to be redeemed. BancorpSouth will not redeem the junior subordinated
debt securities unless it obtains the prior approval of the Board of Governors
of the Federal Reserve System to do so, if then required. See "Description of
Preferred Securities - Mandatory Redemption" and "Description of the Junior
Subordinated Debt Securities - Redemption" in this prospectus supplement.
S-8
DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES MAY HAVE POSSIBLE ADVERSE
TAX CONSEQUENCES AND A NEGATIVE EFFECT ON TRADING PRICE.
BancorpSouth has the right to dissolve the Trust at any time, subject to
approval by the Board of Governors of the Federal Reserve System if required. If
BancorpSouth does dissolve the Trust, the Trust will be liquidated by
distribution of the junior subordinated debt securities to holders of the
preferred securities and the common securities.
Under current United States federal income tax laws, a distribution of
junior subordinated debt securities to you on our dissolution would not be a
taxable event to you. Nevertheless, if we are classified for United States
federal income tax purposes as an association taxable as a corporation at the
time we are dissolved, the distribution of junior subordinated debt securities
to you would be a taxable event. In addition, if there is a change in law, a
distribution of junior subordinated debt securities to you on our dissolution
could also be a taxable event. See "Certain United States Federal Income Tax
Consequences - U.S. Holders - Receipt of Junior Subordinated Debt Securities or
Cash Upon Liquidation of the Trust" in this prospectus supplement.
BancorpSouth has no current intention of dissolving the Trust. However,
there are no restrictions on its ability to do so at any time. BancorpSouth
anticipates that it would consider exercising this right if expenses associated
with maintaining the Trust were substantially greater than currently expected,
such as if a tax event, investment company event or capital treatment event
occurred. BancorpSouth cannot predict the other circumstances under which this
right would be exercised.
BancorpSouth cannot predict the market prices for the junior subordinated
debt securities that may be distributed. Accordingly, the junior subordinated
debt securities that you receive on a distribution, or the preferred securities
you hold pending such a distribution, may trade at a discount to the price that
you paid to purchase the preferred securities.
Because you may receive junior subordinated debt securities, you should
carefully consider all the information regarding the junior subordinated debt
securities contained in this prospectus supplement and the accompanying
prospectus before deciding to invest in the preferred securities.
BECAUSE YOU HAVE LIMITED VOTING RIGHTS, YOU CANNOT PREVENT THE PROPERTY TRUSTEE
FROM TAKING ACTIONS WITH WHICH YOU MAY NOT AGREE.
Except for limited instances where you may vote to modify the guarantee,
you will not have voting rights. Only BancorpSouth, as the holder of the common
securities, may elect or remove any of the trustees. See "The BXS Trusts"
beginning on page 6 of the accompanying prospectus and "Description of the
Preferred Securities - Voting Rights" in this prospectus supplement.
AN ACTIVE TRADING MARKET FOR THE PREFERRED SECURITIES MAY NOT DEVELOP.
Although the preferred securities have been approved for listing on the
New York Stock Exchange, you should be aware that an active trading market may
not develop. In addition, the preferred securities may trade at prices below the
price you pay for preferred securities in this offering.
FEDERAL BANKING AUTHORITIES MAY RESTRICT THE ABILITY OF THE TRUST TO MAKE
DISTRIBUTIONS ON OR REDEEM THE PREFERRED SECURITIES.
Federal banking authorities will have the right to examine our activities
because we are a subsidiary of BancorpSouth. Under certain circumstances,
including any determination that our relationship with BancorpSouth would result
in an unsafe and unsound banking practice, these banking authorities have the
authority to issue orders which could restrict our ability to make distributions
on or to redeem the preferred securities.
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THERE MAY BE NO TRADING MARKET FOR THE JUNIOR SUBORDINATED DEBT SECURITIES
IF WE DISTRIBUTE THEM TO YOU.
Although BancorpSouth will use its best efforts to list the junior
subordinated debt securities, if they are distributed, on the New York Stock
Exchange, or any other exchange on which the preferred securities are then
listed, BancorpSouth cannot assure you that the junior subordinated debt
securities will be approved for listing or that a trading market will exist for
those securities.
FORWARD-LOOKING STATEMENTS
This prospectus supplement contains forward-looking statements within the
meaning of the federal securities laws. We may also make forward-looking
statements in reports filed with the SEC that we incorporate by reference into
this prospectus supplement and the accompanying prospectus. Statements that are
not historical facts, including statements about our beliefs and expectations,
are forward-looking statements. Forward-looking statements include statements
preceded by, followed by or that include the words "believes," "expects,"
"anticipates," "plans," "estimates" or similar expressions. These statements are
based on beliefs and assumptions of BancorpSouth's management and on information
currently available to BancorpSouth's management.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. We caution you that a number of important
factors could cause actual results to differ materially from those contained in
any forward-looking statement. Many of these factors are beyond our ability to
control or predict. Such factors include, but are not limited to, the following:
- competitive pressures among depository and other financial
institutions may increase significantly;
- changes in the interest rate environment may reduce margins;
- general economic or business conditions may lead to a deterioration
in credit quality or a reduced demand for credit;
- legislative or regulatory changes, including changes in accounting
standards, may adversely affect the business in which BancorpSouth
is engaged;
- changes in the securities markets; and
- BancorpSouth's competitors may have greater financial resources and
develop products that enable them to compete more successfully than
it does.
We believe these forward-looking statements are reasonable; however, undue
reliance should not be placed on any forward-looking statements, which are based
on current expectations. Further, forward-looking statements speak only as of
the date they are made, and we undertake no obligation to update publicly any of
them in light of new information or future events.
BANCORPSOUTH, INC.
BancorpSouth is a bank holding company and Mississippi corporation
operating 246 banking and mortgage locations and 233 ATMs in Arkansas, Alabama,
Louisiana, Mississippi, Tennessee and Texas. Its principal subsidiary is
BancorpSouth Bank, a Mississippi banking corporation. BancorpSouth's principal
office is located at One Mississippi Plaza, Tupelo, Mississippi 38804, and its
telephone number is (662) 680-2000.
At September 30, 2001, BancorpSouth had total assets of approximately $9.4
billion, total deposits of approximately $7.8 billion, total loans (net of
unearned income) of approximately $6.1 billion and common shareholders' equity
of approximately $800 million.
BancorpSouth Bank has its principal office in Tupelo, Lee County,
Mississippi, and conducts a general commercial banking and trust business
through offices in over 100 municipalities or communities in Mississippi,
Tennessee, Alabama, Arkansas, Texas and Louisiana. The Bank has grown through
the acquisition of other banks, the purchase of assets from federal regulators
and through the opening of new branches and offices.
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The Bank and its subsidiaries provide a range of financial services to
individuals and small-to-medium size businesses. The Bank operates investment
services, consumer finance, credit life insurance and insurance agency
subsidiaries which engage in investment brokerage services, consumer lending,
credit life insurance sales and sales of other insurance products. The Bank's
trust department offers a variety of services including personal trust and
estate services, certain employee benefit accounts and plans, including IRAs,
and limited corporate trust functions.
On November 15, 2001, BancorpSouth, Inc. and Pinnacle Bancshares, Inc.
announced the signing of a definitive agreement for the merger of their
respective companies. The transaction is expected to be completed by the end of
the first quarter of 2002. Approval of banking regulators and Pinnacle
Bancshares shareholders is required. Pinnacle Bancshares is an Arkansas business
corporation that owns all of the stock of the $128 million asset Pinnacle Bank.
The bank operates two full-service banking locations in the Little Rock market.
As previously disclosed, in some states in which we operate, there has
been a trend toward increased class action lawsuits and other litigation
against financial services companies in connection with lending and other
financial transactions. This trend is especially true with respect to
Mississippi. These actions tend to seek substantial damages for transactions
that involve relatively small amounts of money. Some of these actions have
resulted in large settlements or substantial damage awards. Some of our
subsidiaries are defendants in similar lawsuits in which the plaintiffs are
seeking substantial damages. The number of these lawsuits increased during
2001. Similarly, the number of plaintiffs participating in these lawsuits has
increased significantly. Management has no reason to believe that these trends
will not continue. It is not possible to determine with any certainty at this
point in time the potential exposure related to damages in connection with
these suits. Future legislation and court decisions in some states may limit
the amount of damages that can be recovered in legal proceedings; however, we
cannot predict at this time whether such legislation and court decisions will
occur or the effect they may have on cases involving our subsidiaries.
ACCOUNTING TREATMENT
We will be treated as a subsidiary of BancorpSouth for financial reporting
purposes and our accounts will be included in BancorpSouth's consolidated
financial statements. The preferred securities will be shown as "Guaranteed
preferred beneficial interests in junior subordinated debt securities" on the
balance sheets of BancorpSouth, and the footnotes to BancorpSouth's consolidated
financial statements will contain a statement that the Trust is wholly owned by
BancorpSouth and that the sole asset of the Trust is the junior subordinated
debt securities, indicating the principal amount, interest rate and maturity
date of the junior subordinated debt securities.
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SELECTED FINANCIAL DATA
The following selected consolidated financial data as of and for the years
ended December 31, 1996 through 2000 are derived from BancorpSouth's
consolidated financial statements for those years, which have been audited by
KPMG LLP. The selected financial data for the nine months ended September 30,
2000 and 2001 have been derived from BancorpSouth's unaudited financial
statements and, in BancorpSouth's opinion, reflect all adjustments (consisting
of normal accruals) necessary to present fairly the data for those periods.
BancorpSouth's results of operations for the nine months ended September 30,
2001 may not be indicative of results that may be expected for the full year.
You should read the table below in conjunction with "Management's Discussion and
Analysis of the Financial Condition and Results of Operations" and
BancorpSouth's consolidated financial statements and notes thereto incorporated
by reference in this prospectus supplement.
AS OF AND FOR THE NINE
MONTHS ENDED SEPTEMBER
30, (1) AS OF AND FOR THE YEARS ENDED DECEMBER 31,
------------------------- ----------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT
PER SHARE DATA) 2001 2000 2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- ---------- ---------- ----------
EARNINGS SUMMARY:
Interest revenue $ 508,799 $ 495,640 $ 674,035 $ 596,670 $ 574,414 $ 523,770 $ 476,862
Interest expense 261,839 251,287 346,883 280,150 277,104 246,945 222,806
----------- ----------- ----------- ----------- ---------- ---------- ----------
Net interest revenue 246,960 244,353 327,152 316,520 297,310 276,825 254,056
Provision for credit losses 15,718 20,669 26,166 17,812 19,310 15,682 11,643
Other revenue 86,674 75,526 85,578 100,321 85,418 77,835 71,388
Other expense 219,363 204,561 274,227 251,882 232,928 225,199 198,360
----------- ----------- ----------- ----------- ---------- ---------- ----------
Income before income tax 98,553 94,649 112,337 147,147 130,490 113,779 115,441
Applicable income taxes 31,405 32,528 37,941 44,736 42,249 34,141 37,031
----------- ----------- ----------- ----------- ---------- ---------- ----------
Net income $ 67,148 $ 62,121 $ 74,396 $ 102,411 $ 88,241 $ 79,638 $ 78,410
=========== =========== =========== =========== ========== ========== ==========
PER SHARE DATA:
Basic earnings $ 0.81 $ 0.73 $ 0.88 $ 1.20 $ 1.04 $ 0.96 $ 0.98
Diluted earnings 0.80 0.73 0.88 1.19 1.03 0.96 0.98
Cash dividends 0.42 0.39 0.53 0.49 0.45 0.40 0.35
Book value (end of period) 8.74 8.25 9.40 8.84 8.44 7.72 7.08
BALANCE SHEET (PERIOD END):
Total assets $ 9,388,462 $ 9,301,602 $ 9,044,034 $ 8,441,697 $7,899,655 $7,207,205 $6,398,872
Loans, net of unearned income 6,061,146 5,922,564 6,095,315 5,541,961 4,935,668 4,400,643 3,909,003
Allowance for credit losses 82,605 78,100 81,730 74,232 68,385 61,932 56,657
Total deposits 7,810,741 7,388,072 7,480,920 7,066,645 6,720,906 6,102,882 5,553,941
Total stockholders' equity 796,441 766,827 789,576 757,111 723,162 639,012 566,183
BALANCE SHEET (AVERAGES):
Total assets $ 9,232,750 $ 8,653,681 $ 8,756,474 $ 8,139,196 $7,574,870 $6,780,305 $6,166,162
Total stockholders' equity 793,014 758,044 761,884 737,526 681,483 614,105 530,489
Average number of diluted 83,437 84,993 84,811 86,008 85,680 83,000 79,443
shares outstanding
SELECTED RATIOS (ANNUALIZED):
Return on average assets 0.97% 0.96% 0.85% 1.26% 1.16% 1.17% 1.27%
Return on average 11.32% 10.93% 9.76% 13.89% 12.95% 12.97% 14.78%
stockholders' equity
Dividend payout ratio N/M N/M 60.23% 41.18% 43.69% N/A N/A
Net interest margin 3.97% 4.18% 4.14% 4.32% 4.35% N/A N/A
Efficiency ratio 63.90% 62.07% 64.42% 58.65% 59.07% N/A N/A
Net charge-offs to average 0.33% 0.39% 0.34% 0.25% 0.30% 0.28% 0.27%
loans
Allowance for credit losses 1.36% 1.32% 1.34% 1.34% 1.39% 1.41% 1.45%
to total loans
Allowance for credit losses 624.00% 368.90% 524.85% 555.96% 510.11% 678.78% 532.04%
to nonaccrual loans
Nonperforming assets to total 0.88% 0.68% 0.69% 0.57% 0.57% 0.54% 0.58%
loans
Nonperforming assets to total 0.67% 0.51% 0.55% 0.51% 0.47% N/A N/A
assets
Tier 1 capital to 10.33% 11.85% 11.31% 12.75% N/A N/A N/A
risk-weighted assets
Total capital to 11.52% 13.10% 12.56% 14.02% N/A N/A N/A
risk-weighted assets
Leverage ratio 7.88% 8.35% 8.10% 8.83% N/A N/A N/A
Tangible equity ratio 8.13% 7.98% 8.34% 8.65% 8.86% N/A N/A
(1) Unaudited.
N/A - Not available.
N/M - Not meaningful.
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CAPITALIZATION
The following table sets forth the consolidated capitalization of
BancorpSouth as of September 30, 2001, and as adjusted to give effect to the
issuance and sale of the preferred securities and the application of the
proceeds. See "Use of Proceeds." You should read the following table together
with BancorpSouth's consolidated financial statements and notes thereto
incorporated by reference into this prospectus supplement and the accompanying
prospectus.
September 30, 2001
------------------
Actual As Adjusted
------ -----------
(Dollars in thousands)
Long-term advances $ 141,223 $ 141,223
Total long-term borrowings $ 141,223 $ 141,223
Company obligated mandatory redeemable capital securities of
subsidiary trust -- $ 100,000
Common stock, par value $2.50; Authorized - 500,000,000 shares,
Issued - 85,793,477 shares $ 214,484 $ 214,484
Additional paid in capital 70,095 70,095
Retained earnings 550,290 550,290
Unrealized gain on available-for-sale securities, net of tax 31,043 31,043
Unearned compensation (2,749) (2,749)
Treasury stock at cost, 4,344,112 shares (66,722) (66,722)
--------- ---------
Total stockholders' equity $ 796,441 $ 796,441
========= =========
USE OF PROCEEDS
We will use the proceeds from the sale of the preferred securities to
purchase the junior subordinated debt securities issued by BancorpSouth.
BancorpSouth intends to use the net proceeds from the sale of the junior
subordinated debt securities for general corporate purposes, which may include:
- the repurchase by BancorpSouth of shares of common stock pursuant to
its ongoing stock purchase plan;
- investments at the holding company level;
- investments in, or extensions of credit to, its banking and other
subsidiaries and other banks and companies engaged in other
financial service activities; and
- possible acquisitions.
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BANCORPSOUTH CAPITAL TRUST I
We are a statutory business trust formed under Delaware law. We were
created pursuant to a certificate of trust, as amended, which was originally
filed with the Secretary of State of Delaware on August 22, 1997. A statutory
business trust is a separate legal entity that can be formed for the purpose of
holding property. For United States federal income tax purposes, we are a
grantor trust. We exist for the exclusive purposes of:
- issuing and selling the preferred securities and common securities;
- investing the gross proceeds received from the sale of the preferred
securities and common securities in an equal aggregate principal
amount of the junior subordinated debt securities;
- making distributions; and
- engaging in only those other activities necessary, appropriate,
convenient or incidental thereto.
The public will initially own all of our preferred securities.
BancorpSouth will own all of our common securities. When we issue the preferred
securities, our existing trust agreement will be amended and restated to set the
terms of the preferred securities. The common securities will represent an
aggregate liquidation amount equal to at least 3% of our total capitalization.
The preferred securities will represent the remaining approximate 97% of our
total capitalization.
Pursuant to the amended trust agreement, we will initially have four
trustees. The two administrative trustees are employees or officers of
BancorpSouth. The Bank of New York will serve as property trustee under the
amended trust agreement. The Bank of New York (Delaware) will act as the
Delaware trustee. The property trustee and the Delaware trustee may at any time
be removed or replaced by the holder of the common securities. For purposes of
compliance with the provisions of the Trust Indenture Act, The Bank of New York
will also act as indenture trustee under the guarantee.
The property trustee will hold title to the junior subordinated debt
securities for our benefit and that of the holders of the preferred securities
and common securities and, so long as we hold the junior subordinated debt
securities, the property trustee will have the power to exercise all rights,
powers, and privileges of a holder of junior subordinated debt securities under
the indenture. In addition, the property trustee will maintain exclusive control
of a segregated non-interest bearing trust account to hold all payments made in
respect of the junior subordinated debt securities for the benefit of the
holders of the preferred securities and common securities, which we refer to as
the "property account." The property account may be held at the property trustee
or any paying agent of the property trustee. The property trustee will make
payments of distributions and payments on liquidation, redemption and otherwise
to the holders of the preferred securities and common securities out of funds
from the property account. The Bank of New York will hold the guarantee for the
benefit of the holders of the preferred securities.
BancorpSouth, as the direct or indirect holder of all the common
securities, will have the right to appoint, remove or replace any trustee and to
increase or decrease the number of trustees. BancorpSouth will pay all fees,
expenses, debts and obligations, other than with respect to the preferred
securities and common securities, incurred and associated with us and the
offering of the preferred securities.
DESCRIPTION OF THE PREFERRED SECURITIES
The preferred securities will be issued pursuant to the amended trust
agreement. The amended trust agreement has been qualified as an indenture under
the Trust Indenture Act of 1939. The terms of the preferred securities will
include those in the amended trust agreement and those made part of the amended
trust agreement by the Trust Indenture Act. The following summary of the
material terms and provisions of the preferred securities is not intended to be
complete. You should read the following description together with the amended
trust agreement and the accompanying prospectus to help you understand the terms
of the preferred securities. A form of the amended trust agreement has been
filed as an exhibit to the registration statement of which the accompanying
prospectus forms a part.
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GENERAL
The amended trust agreement authorizes the administrative trustees to
issue the preferred securities and the common securities. Our only assets will
be the junior subordinated debt securities. The preferred securities and common
securities represent undivided beneficial interests in our assets. All of the
common securities will be owned, directly or indirectly, by BancorpSouth. The
common securities rank equally, and payments will be made on the common
securities on a ratable basis, with the preferred securities. If an event of
default under the amended trust agreement exists, however, the rights of the
holders of the common securities to receive distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the preferred securities. The amended trust agreement does not permit
us to issue any securities other than the preferred securities and common
securities or to incur any debt.
DISTRIBUTIONS
The preferred securities represent undivided beneficial interests in our
assets. Distributions on the preferred securities will be cumulative and will
accrue from January , 2002 at the annual rate of % of the $25 liquidation
amount of each preferred security. Distributions will be payable quarterly in
arrears on January 15, April 15, July 15 and October 15 of each year,
beginning April 15, 2002, to holders of record of the preferred securities.
Distributions not paid when due for more than one quarterly payment period will
themselves accumulate interest at the annual rate of % compounded quarterly. We
will compute the amount of distributions payable for any period on the basis of
a 360-day year of twelve 30-day months. The amount of distributions payable for
any partial period will be computed on the basis of the actual number of days
elapsed per 30-day month.
The term "distributions" includes any quarterly payments made on the
preferred and common securities, any deferred distribution and any payments that
accumulate on distributions not paid on the applicable distribution date, all as
further described below and in the accompanying prospectus.
DEFERRAL OF DISTRIBUTIONS
If BancorpSouth is not in default under the indenture, BancorpSouth may,
on one or more occasions, defer the payment of interest on the junior
subordinated debt securities for up to 20 consecutive quarterly periods, which
we refer to in each case as an "extension period." Because interest payments on
the junior subordinated debt securities fund distributions on the preferred
securities, quarterly distributions on the preferred securities will be deferred
during any extension period. During an extension period, the amount of
distributions due to you on the preferred securities will accumulate and these
deferred distributions will accrue additional distributions at the annual rate
of % compounded quarterly.
BancorpSouth may not defer interest payments for any period of time:
- that exceeds 20 consecutive quarterly periods with respect to each
extension period; or
- that extends beyond the maturity date of the junior subordinated
debt securities on January 15, 2032.
During any extension period, BancorpSouth and its subsidiaries are
restricted from taking certain actions. For a listing of these restrictions, see
"Descriptions of Junior Subordinated Debt Securities - Option to Defer Interest
Payments" beginning on page 21 of the accompanying prospectus.
Prior to the termination of any extension period, BancorpSouth may further
extend the payment of interest provided that the extension period complies with
the conditions above. Upon the termination of an extension period and the
payment of all amounts then due under the indenture, BancorpSouth may elect to
begin a new extension period as long as BancorpSouth complies with the above
conditions. There may be more than one extension period prior to the maturity of
the junior subordinated debt securities. Deferral of interest payments is not an
event of default under the indenture.
If BancorpSouth elects to defer interest payments as described above, you
will receive notice as described under "Description of the Junior Subordinated
Debt Securities - Option to Extend Interest Payment Date" in this prospectus
supplement. There is no limitation on the number of times that BancorpSouth may
elect to defer interest
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payments and begin an extension period. If BancorpSouth elects to defer interest
payments, you will be required to accrue and recognize income (in the form of
original issue discount) for United States federal income tax purposes
regardless of your actual receipt of the distributions, subject to any changes
in the United States federal income tax laws.
PAYMENT OF DISTRIBUTIONS
Distributions on the preferred securities will be payable to holders named
on the securities register of the Trust on the relevant record date. As long as
the preferred securities are represented by a global security, the record date
for the payment of distributions will be one business day before the relevant
payment date. If the preferred securities are ever issued in certificated form,
the applicable record date for each interest payment will be on January 1,
April 1, July 1 and October 1, as the case may be, of each year, even if that
day is not a business day.
As long as the preferred securities are represented by a global security,
payments on the preferred securities will be made in immediately available funds
to DTC, the depositary for the preferred securities. If the preferred securities
are ever issued in certificated form, payment of distributions on the preferred
securities will be made by check mailed on or before the due date to the holders
of preferred securities on the relevant record date.
Our only source of income is the payments BancorpSouth will make on the
junior subordinated debt securities. If BancorpSouth does not make payments on
the junior subordinated debt securities, we will not have funds available to
make payments on the preferred securities. Although BancorpSouth will guarantee
payment of distributions on the preferred securities under the guarantee,
BancorpSouth will only be obligated to make a payment under the guarantee if we
have the funds available to make the payment but fail to do so.
MANDATORY REDEMPTION
The preferred securities have no stated maturity but must be redeemed upon
the maturity of the junior subordinated debt securities or their earlier
redemption. The junior subordinated debt securities mature on January 15, 2032.
BancorpSouth may redeem the junior subordinated debt securities before their
maturity:
(1) in whole or in part at any time on or after January 15, 2007; and
(2) in whole, but not in part, at any time within 90 days upon the
occurrence of a "tax event," "investment company event" or "capital
treatment event," as such terms are defined under "Description of
Junior Subordinated Debt Securities - Redemption" beginning on page
21 of the accompanying prospectus.
BancorpSouth will obtain regulatory approval to redeem the junior
subordinated debt securities, if then required.
Upon the repayment or redemption of some or all of the junior subordinated
debt securities, we will use the cash we receive to redeem a like liquidation
amount of the preferred securities and, unless an event of default under the
amended trust agreement then exists, the common securities. We will redeem the
preferred securities and common securities (if applicable) at a price equal to
the redemption price for a like amount of junior subordinated debt securities
plus accrued and unpaid distributions to the redemption date. In the case of
repayment of the junior subordinated debt securities at maturity or their
earlier redemption, the repayment or redemption price, as the case may be, will
be 100% of the principal amount of the junior subordinated debt securities to be
repaid or redeemed plus accrued and unpaid interest to the repayment or
redemption date.
If less than all the preferred securities and common securities are to be
redeemed in situations where common securities may be redeemed, then the
aggregate liquidation amount of preferred securities and common securities to be
redeemed will be allocated pro rata based on the liquidation amount of the
preferred securities and the common securities. We cannot redeem less than all
of the preferred securities unless all accrued and unpaid distributions on the
preferred securities and common securities have been paid on or before the
redemption date.
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REDEMPTION PROCEDURES
You will receive at least 30 days', but not more than 60 days', written
notice before any redemption of preferred securities. If there are accrued and
unpaid distributions on the preferred securities that have not been paid on or
before the redemption date, we cannot redeem less than all of the preferred
securities.
If (1) we give an irrevocable notice of redemption of the preferred
securities, and (2) BancorpSouth has paid to the property trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
junior subordinated debt securities, then on the redemption date, the property
trustee will irrevocably deposit with DTC funds sufficient to pay the redemption
price for the preferred securities being redeemed. See " - Book-Entry Only
Issuance - The Depository Trust Company" in this prospectus supplement. We will
also give DTC irrevocable instructions and authority to pay the redemption
amount in immediately available funds to the beneficial owners of the global
securities representing the preferred securities. Distributions to be paid on or
before the redemption date for any preferred securities called for redemption
will be payable to the holders on the record dates for the related dates of
distribution.
Once notice of redemption is given and funds are irrevocably deposited,
distributions on the preferred securities will cease to accumulate immediately
prior to the close of business on the redemption date and all rights of the
holders of the preferred securities called for redemption will cease, except for
the right to receive the redemption amount (but without interest on such
redemption amount).
If any redemption date is not a business day, then the redemption amount
will be payable on the next business day (and without any interest or other
payment in respect of any such delay). However, if payment on the next business
day causes payment of the redemption amount to be in the next calendar year,
then payment will be on the preceding business day.
If payment of the redemption amount for any preferred securities called
for redemption is improperly withheld or refused and not paid either by us or by
BancorpSouth under the guarantee, distributions on the preferred securities will
continue to accumulate at the applicable rate from the original redemption date
scheduled to the actual date of payment. In this case, the actual payment date
will be considered the redemption date for purposes of calculating the
redemption amount.
If less than all of the preferred securities are redeemed, the preferred
securities will be redeemed pro rata in accordance with DTC's internal
procedures. See " - Book-Entry Only Issuance - The Depository Trust Company" in
this prospectus supplement.
In compliance with applicable law, including the United States federal
securities laws, BancorpSouth or its affiliates may, at any time, purchase
outstanding preferred securities by tender, in the open market, by private
agreement or otherwise.
EVENTS OF DEFAULT UNDER AMENDED TRUST AGREEMENT
An event of default under the indenture, which we refer to as an
"indenture event of default," constitutes an event of default under our amended
trust agreement, which we refer to as a "declaration event of default."
Notwithstanding the foregoing, the holder of the common securities will be
deemed to have waived any declaration event of default with respect to the
common securities until all declaration events of defaults with respect to the
preferred securities have been cured, waived or otherwise eliminated. Until such
declaration event of default with respect to the preferred securities has been
cured, waived or otherwise eliminated, the property trustee will be deemed to be
acting solely on behalf of the holders of the preferred securities and only the
holders of the preferred securities will have the right to direct the property
trustee with respect to certain matters under the amended trust agreement, and
therefore the indenture.
If the property trustee fails to enforce its rights under the junior
subordinated debt securities, any holder of preferred securities may directly
institute a legal proceeding against BancorpSouth to enforce these rights
without first suing the property trustee or any other person or entity. If a
declaration event of default exists and is attributable to the failure of
BancorpSouth to pay interest or principal on the junior subordinated debt
securities when otherwise
S-17
payable, or in the case of redemption, the redemption date, then a holder of
preferred securities may also bring a direct action. This means that a holder
may directly sue for enforcement of payment to such holder of the principal of
or interest on the junior subordinated debt securities having a principal amount
equal to the aggregate liquidation amount of the preferred securities of such
holder on or after the respective due date specified in the junior subordinated
debt securities. Such holder need not first (1) direct the property trustee to
enforce the terms of the junior subordinated debt securities or (2) sue
BancorpSouth to enforce the property trustee's rights under the junior
subordinated debt securities.
In connection with such direct action, BancorpSouth will be subrogated to
the rights of such holder of preferred securities under the amended trust
agreement to the extent of any payment made by BancorpSouth to such holder of
preferred securities in such direct action. This means that BancorpSouth will be
entitled to payment of amounts that a holder of preferred securities receives in
respect of an unpaid distribution that resulted in the bringing of a direct
action to the extent that the holder receives or has already received full
payment relating to such unpaid distribution from BancorpSouth. Holders of
preferred securities may not exercise directly any other remedy available to the
holders of the junior subordinated debt securities.
Upon the occurrence of a declaration event of default, the property
trustee will have the right under the indenture to declare the principal of and
interest on the junior subordinated debt securities to be immediately due and
payable.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBT SECURITIES
BancorpSouth will have the right at any time to cause our dissolution and
cause the junior subordinated debt securities to be distributed to the holders
of the preferred securities and common securities. For a discussion of the
effects of such distribution, see "Description of Trust Preferred Securities -
Redemption or Exchange - Distribution of Corresponding Junior Subordinated Debt
Securities" beginning on page 29 of the accompanying prospectus.
BancorpSouth will not redeem the junior subordinated debt securities
unless it obtains the prior approval of the Board of Governors of the Federal
Reserve System to do so, if then required.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the amended trust agreement, we will dissolve upon the
earliest of:
- January 15, 2032, the expiration of our term;
- certain events of bankruptcy, dissolution or liquidation of
BancorpSouth;
- our liquidation and the distribution of junior subordinated debt
securities to holders of the preferred securities and common
securities;
- the entry of a decree of judicial dissolution of us; and
- the redemption of all our securities.
We refer to any of these events as a "dissolution event."
Upon the occurrence of a dissolution event, the holders of preferred
securities will be entitled to receive out of our assets, after satisfaction of
liabilities to creditors, distributions in an amount equal to the aggregate of
the liquidation amount of $25 per preferred security plus accrued and unpaid
distributions thereon to the payment date. Such holders will not receive this
distribution, however, if BancorpSouth instead distributes on a ratable basis to
the holders of the preferred securities junior subordinated debt securities in
an aggregate principal amount equal to the aggregate liquidation amount of, with
an interest rate equal to the distribution rate of, and bearing accrued and
unpaid interest in an amount equal to accrued and unpaid distributions on, such
preferred securities.
If this distribution can be paid only in part because we have insufficient
assets available to pay in full the aggregate distribution, then the amounts
payable directly by us on the preferred securities will be paid on a ratable
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basis. The holder of the common securities will be entitled to receive
distribution upon any such dissolution event on a ratable basis with the holders
of the preferred securities, except that if a declaration event of default has
occurred and is continuing, the preferred securities will have a preference over
the common securities with regard to such distributions.
VOTING RIGHTS
Except as described herein and under "Description of Trust Preferred
Securities - Voting Rights; Amendment of Each Trust Agreement" on page 35 in the
accompanying prospectus, as provided under the Delaware Business Trust Act and
the Trust Indenture Act, and as otherwise required by law and the amended trust
agreement, the holders of the preferred securities will have no voting rights.
MODIFICATION OF THE AMENDED TRUST AGREEMENT
The amended trust agreement may be modified and amended by the
administrative trustees, and in certain circumstances, the property trustee and
the Delaware trustee. For a discussion of the rights to modify the amended trust
agreement, see "Description of Trust Preferred Securities - Voting Rights;
Amendment to Each Trust Agreement" beginning on page 35 in the accompanying
prospectus.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
We may not consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer or lease our properties and assets substantially as an
entirety, to any corporation or other body except as described below. We may,
with the consent of a majority of the administrative trustees and without the
consent of the holders of the preferred securities, consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease our
properties and assets substantially as an entirety to, a trust organized as such
under the laws of any State; provided, that the conditions set forth under
"Description of Trust Preferred Securities - Mergers, Consolidations,
Amalgamations or Replacements of the BXS Trusts" beginning on page 34 in the
accompanying prospectus are met.
BOOK-ENTRY ONLY ISSUANCE - THE DEPOSITORY TRUST COMPANY
The preferred securities will be book-entry securities. Upon issuance, all
book-entry securities will be represented by one or more fully registered global
preferred securities, without distribution coupons. Each global preferred
security will be deposited with, or on behalf of, The Depositary Trust Company,
a securities depository, and will be registered in the name of DTC or a nominee
of DTC. DTC will thus be the only registered holder of these preferred
securities and will be considered the sole owner of the preferred securities for
purposes of the amended trust agreement.
Any global preferred security that is exchangeable, as described under
"Book-Entry Issuance" beginning on page 47 of the accompanying prospectus, will
be exchangeable in whole for definitive preferred securities in registered form,
with the same terms and of an equal aggregate liquidation amount, in
denominations of $25 and whole multiples of $25.
BancorpSouth and the trustees will not have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, beneficial ownership interest in the book-entry securities or for
maintaining, supervising or reviewing any records relating to the beneficial
ownership interests.
DTC may discontinue providing its services as securities depositary with
respect to the preferred securities at any time by giving reasonable notice to
us. Under such circumstances, in the event that a successor securities
depositary is not obtained, preferred securities certificates are required to be
printed and delivered. Additionally, the administrative trustees, with the
consent of BancorpSouth, may decide to discontinue use of the system of
book-entry transfers through DTC or any successor depositary with respect to the
preferred securities. In that event, certificates for the preferred securities
will be printed and delivered.
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INFORMATION CONCERNING THE PROPERTY TRUSTEE
Prior to the occurrence of a default relating to the preferred securities
and common securities, the property trustee undertakes to perform only such
duties as are specifically set forth in the amended trust agreement. After such
a default, the property trustee will exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs. The
property trustee is under no obligation to exercise any of the powers vested in
it by the amended trust agreement at the request of any holder of preferred
securities unless offered reasonable indemnity by such holder against the costs,
expenses and liabilities which might be incurred thereby. Despite the foregoing,
the holders of preferred securities will not be required to offer such indemnity
in the event such holders, by exercising their voting rights, direct the
property trustee to take any action following a declaration event of default.
The property trustee also serves as the trustee under the guarantee and as the
trustee under the indenture.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The Bank of New York will act as registrar, transfer agent and paying
agent for the preferred securities. The Bank of New York is presently located at
5 Penn Plaza, 13th Floor, New York, New York 10001. If the preferred securities
do not remain in book-entry only form, one or more additional paying agents may
be appointed if so required by any rule or regulation of any securities exchange
upon which the preferred securities may be listed at such time. The paying agent
may resign as paying agent upon 30 days' written notice to our trustees. In the
event that The Bank of New York is no longer the paying agent, the property
trustee will appoint a successor to act as paying agent, which must be a bank or
trust company acceptable to the administrative trustees.
Registration of transfers of preferred securities will be effected without
charge by us or on our behalf, but upon payment, with the giving of any
indemnity we or BancorpSouth may require, in respect of any tax or other
governmental charges that may be imposed in relation to it.
We will not be required to register or cause to be registered the transfer
of preferred securities after such preferred securities have been called for
redemption.
GOVERNING LAW
The amended trust agreement and the preferred securities will be governed
by, and construed in accordance with, the internal laws of the State of
Delaware.
MISCELLANEOUS
The regular trustees are authorized and directed to operate us in such a
way so that we will not be required to register as an "investment company" under
the Investment Company Act of 1940 or be characterized as other than a grantor
trust for United States federal income tax purposes. BancorpSouth is authorized
and directed to conduct its affairs so that the junior subordinated debt
securities will be treated as indebtedness of BancorpSouth for United States
federal income tax purposes. In this connection, BancorpSouth and the regular
trustees are authorized to take any action, not inconsistent with applicable
law, our certificate of trust or the certificate of incorporation of
BancorpSouth, that each of BancorpSouth and the regular trustees determine in
their discretion to be necessary or desirable to achieve such end, as long as
such action does not adversely affect the interests of the holders of the
preferred securities or vary the terms of the preferred securities.
Holders of the preferred securities have no preemptive rights.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
The junior subordinated debt securities will be issued pursuant to the
indenture. The indenture has been qualified under the Trust Indenture Act of
1939. The terms of the junior subordinated debt securities will include those in
the amended trust agreement and those made part of the indenture by the Trust
Indenture Act. The following summary of the material terms and provisions of the
junior subordinated debt securities is not intended to be complete. You should
read the following description together with "Description of Junior Subordinated
Debt
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Securities" beginning on page 17 of the accompanying prospectus and the
indenture to help you understand the terms of the junior subordinated debt
securities. A copy of the indenture has been filed as an exhibit to the
registration statement of which the accompanying prospectus forms a part.
GENERAL
The junior subordinated debt securities will be issued as unsecured debt
under the indenture. The junior subordinated debt securities will be limited in
aggregate principal amount to approximately $ . This amount is the sum of
the aggregate stated liquidation amount of the preferred securities and the
common securities. The entire principal amount of the junior subordinated debt
securities will mature and become due and payable, together with any accrued and
unpaid interest thereon, and additional interest (as defined below), if any, on
January 15, 2032.
If junior subordinated debt securities are distributed to holders of
preferred securities in liquidation of such holders' interests in us, the junior
subordinated debt securities will initially be issued in the form of one or more
global securities (as described below). As described in this prospectus
supplement, under limited circumstances, junior subordinated debt securities may
be issued in certificated form in exchange for a global security. In the event
that junior subordinated debt securities are issued in certificated form, the
junior subordinated debt securities will be in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices described
below. Payments on junior subordinated debt securities issued as a global
security will be made to DTC, to a successor depositary or, in the event that no
depositary is used, to a paying agent for the junior subordinated debt
securities. If junior subordinated debt securities are issued in certificated
form, principal and interest will be payable, the transfer of the junior
subordinated debt securities will be registerable and junior subordinated debt
securities will be exchangeable for junior subordinated debt securities of other
denominations of a like aggregate principal amount at the corporate trust office
of the indenture trustee in New York, New York. Payment of interest may be made
at the option of BancorpSouth by check mailed to the address of the persons
entitled thereto or by transfer to an account maintained by the person entitled
thereto.
SUBORDINATION
The junior subordinated debt securities are unsecured and will rank junior
to all of BancorpSouth's senior indebtedness. BancorpSouth may not make payments
of principal, including redemption payments, or interest on the junior
subordinated debt securities if it defaults on a payment of its senior
indebtedness. As a result, in the event of a distribution of BancorpSouth's
assets to creditors upon any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors, marshalling of assets
or liabilities or any bankruptcy, insolvency or similar proceedings, all
principal, premium, if any, interest due or to become due on all of
BancorpSouth's senior indebtedness must be paid in full before the holders of
the junior subordinated debt securities are entitled to receive any payment.
Neither the junior subordinated debt securities nor the guarantee will
limit BancorpSouth's ability to incur any additional indebtedness including
indebtedness that ranks senior to the junior subordinated debt securities and
the guarantee. In addition, because BancorpSouth is a holding company, the
junior subordinated debt securities will effectively rank junior to all existing
and future debt and other liabilities of BancorpSouth's subsidiaries. See
"Capitalization" and "Use of Proceeds" in this prospectus supplement.
INTEREST RATE AND MATURITY
The junior subordinated debt securities will mature on January 15, 2032,
and will bear interest, accruing from January , 2002, at the annual rate of %
of their principal amount, payable quarterly in arrears on January 15, April 15,
July 15 and October 15 of each year, beginning April 15, 2002. So long as the
junior subordinated debt securities are represented by a global security, the
applicable record date shall be one business day before the relevant payment
date. If the junior subordinated debt securities are ever issued in certificated
form (unless held by the property trustee), applicable record dates for each
interest payment will be March 1, June 1, September 1 and December 1, as the
case may be, of each year, even if that day is not a business day. Interest
payments not paid when due will themselves accrue additional interest at the
annual rate of %. When we refer to any payment of interest, interest includes
such additional interest and any additional amounts. Each date on which interest
is paid is called an "interest payment date." The interest payment provisions
for the junior subordinated debt securities
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correspond to the distribution provisions for the preferred securities. The
junior subordinated debt securities do not have a sinking fund. This means that
BancorpSouth is not required to make any principal payments prior to maturity of
the junior subordinated debt securities.
OPTION TO EXTEND INTEREST PAYMENT DATE
If no event of default has occurred or is continuing with respect to the
junior subordinated debt securities, BancorpSouth may, on one or more occasions,
defer interest payments on the junior subordinated debt securities for up to 20
consecutive quarterly periods. An extension period may not extend beyond the
maturity of the junior subordinated debt securities on January 15, 2032 and may
not end on a date other than an interest payment date. No interest will be due
and payable on the junior subordinated debt securities until the end of the
extension period unless the junior subordinated debt securities are redeemed
prior to such time. For a more complete discussion, see "Description of Junior
Subordinated Debt Securities - Option to Defer Interest Payments" beginning on
page 21 of the accompanying prospectus.
REDEMPTION
BancorpSouth may redeem the junior subordinated debt securities
before their maturity:
- in whole or in part on or after January 15, 2007; or
- in whole but not in part within 90 days upon the occurrence of a tax
event, investment company event or capital treatment event;
in each case at a redemption price equal to 100% of the principal amount of the
junior subordinated debt securities being redeemed plus accrued and unpaid
interest, including any additional interest as described below, to the
redemption date. BancorpSouth will obtain regulatory approval to redeem the
junior subordinated debt securities, if then required.
In the event of a "tax event," BancorpSouth will pay any and all taxes,
duties, assessments or governmental charges that may be owed by us to the United
States or any other taxing authority.
ADDITIONAL INTEREST
If a "tax event" has occurred while the property trustee holds any junior
subordinated debt securities and the trust is required to pay any taxes, duties,
assessments or governmental charges of whatever nature, other than withholding
taxes, imposed by the United States, or any other taxing authority, then
BancorpSouth will be required to pay additional interest on the junior
subordinated debt securities. The amount of any additional interest will be an
amount sufficient so that the net amounts received and retained by us after
paying any such taxes, duties, assessments or other governmental charges will be
not less than the amounts we would have received had no such taxes, duties,
assessments or other governmental charges been imposed. This means that we will
be in the same position we would have been if we did not have to pay such taxes,
duties, assessments or other charges.
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
BancorpSouth will have the right at any time to cause our dissolution and
cause the junior subordinated debt securities to be distributed to the holders
of the preferred securities and common securities. If the property trustee
distributes the junior subordinated debt securities to the holders of the
preferred and common securities upon our dissolution and liquidation, the junior
subordinated debt securities will be issued in denominations of $25 principal
amount and integral multiples thereof. We anticipate that the junior
subordinated debt securities would be distributed in the form of one or more
global securities and DTC, or any successor depositary of the preferred
securities, would act as depositary for the junior subordinated debt securities.
The depositary arrangements for the junior subordinated debt securities would be
substantially similar to those in effect for the preferred securities.
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BOOK-ENTRY AND SETTLEMENT
If distributed to holders of preferred securities in connection with
the involuntary or voluntary dissolution, winding-up or liquidation of us as a
result of the occurrence of a tax event, investment company event or capital
treatment event, the junior subordinated debt securities will be issued in the
form of one or more global certificates registered in the name of the depositary
or its nominee. Each global certificate is referred to as a "global security."
For a more complete discussion, see "Book-Entry Issuance" beginning on page 47
of the accompanying prospectus.
THE DEPOSITARY
If junior subordinated debt securities are distributed to holders of
preferred securities in liquidation of such holders' interests in us, DTC will
act as securities depositary for the junior subordinated debt securities. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Preferred Securities - Book-Entry Only Issuance - The
Depository Trust Company" in this prospectus supplement.
None of BancorpSouth, we, the indenture trustee, any paying agent or
any other agent of BancorpSouth or the indenture trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global security
for such junior subordinated debt security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of the material U.S. federal income tax
consequences that may be relevant to a beneficial owner of the preferred
securities. This discussion is based upon the provisions of the Internal Revenue
Code of 1986, as amended, applicable Treasury regulations, administrative
rulings and judicial decisions, all as in effect as of the date of this
prospectus supplement. There can be no assurance that future legislative,
administrative or judicial changes or interpretations, which changes could apply
retroactively, will not affect the accuracy of this discussion or the statements
or conclusions set forth in the opinions referred to below. In addition, the
authorities on which this summary is based are subject to various
interpretations, and the opinions referred to below are not binding on the
Internal Revenue Service (which we refer to as the "IRS") or the courts. Either
the IRS or the courts could disagree with the explanations or conclusions
contained in this summary.
This summary deals only with a beneficial owner of the preferred
securities that purchases the preferred securities upon original issuance and
who will hold the preferred securities as capital assets. This summary does not
address tax considerations applicable to investors to whom special tax rules may
apply, including:
- financial institutions;
- tax-exempt entities;
- insurance companies;
- regulated investment companies;
- common trust funds;
- dealers in securities or currencies;
- persons that will own the preferred securities indirectly
through a partnership or similar pass-through entity;
- persons liable for the U.S. alternative minimum tax;
- persons that will hold the preferred securities as part of an
integrated investment, including a straddle or conversion
transaction, comprised of a preferred security and one or more
other positions; or
- U.S. holders (as defined below) that have a functional
currency other than the U.S. dollar.
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This discussion does not address the tax consequences arising under any
state, local or foreign law. Investors should consult their tax advisors in
determining the tax consequences to them of purchasing, holding and disposing of
the preferred securities, including the application to their particular
situations of the U.S. federal income tax considerations discussed below, as
well as the application of state, local, foreign or other tax laws.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In connection with the issuance of the junior subordinated debt
securities, Waller Lansden Dortch & Davis, A Professional Limited Liability
Company, tax counsel to BancorpSouth and us, will render its opinion generally
to the effect that, under then current law and assuming full compliance with the
terms of the indenture and other relevant documents, and based on the facts and
assumptions contained in such opinion, the junior subordinated debt securities
held by us will be classified for U.S. federal income tax purposes as
indebtedness of BancorpSouth.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the preferred securities, Waller
Lansden Dortch & Davis, A Professional Limited Liability Company, tax counsel to
BancorpSouth and us, will render its opinion generally to the effect that, under
then current law and assuming full compliance with the terms of the amended
trust agreement, the indenture and other relevant documents, and based on the
facts and assumptions contained in such opinion, we will be classified for U.S.
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for U.S. federal income tax purposes, each holder
of preferred securities generally will be considered the owner of an undivided
interest in the junior subordinated debt securities and will be required to
include in its gross income all interest or original issue discount (which we
refer to as "OID") relating to its allocable share of those junior subordinated
debt securities.
U.S. HOLDERS
For purposes of this discussion, a "U.S. holder" is a beneficial owner
of the preferred securities who or that is:
- a citizen or resident of the United States, as determined for
U.S. federal income tax purposes;
- a legal entity (1) created or organized in or under the laws
of the United States or any state in the United States or the
District of Columbia and (2) treated as a corporation for U.S.
federal income tax purposes;
- an estate, the income of which is subject to U.S. federal
income taxation regardless of its source; or
- a trust if (1) a U.S. court is able to exercise primary
supervision over the trust's administration and one or more
U.S. persons have the authority to control all of the trust's
substantial decisions or (2) such trust has in effect a valid
election to be treated as a domestic trust.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under applicable Treasury regulations, a "remote" contingency that
stated interest will not be timely paid is ignored in determining whether a debt
instrument is issued with OID. Because BancorpSouth's exercise of the option to
defer payments of stated interest on the junior subordinated debt securities
would prevent BancorpSouth from declaring dividends on any class of capital
stock, BancorpSouth believes that the likelihood of its exercising its option to
defer payments is remote within the meaning of the regulations. Based on the
foregoing, BancorpSouth believes that, although the matter is not free from
doubt, the junior subordinated debt securities will not be considered to be
issued with OID. Accordingly, each U.S. holder of preferred securities should
include in gross income such holder's allocable share of interest on the junior
subordinated debt securities in accordance with such holder's method of tax
accounting. No published IRS or judicial interpretations have addressed the
meaning of the term "remote" as used in the regulations, however, and it is
possible that the IRS could take a position contrary to BancorpSouth's position.
Under the regulations, if the likelihood that BancorpSouth would
exercise the option to defer any payment of interest was determined not to be
"remote" or if BancorpSouth were to exercise its option to defer any payment of
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interest, the junior subordinated debt securities would be treated, solely for
purposes of the OID rules, as issued with OID either initially or at the time of
such exercise, respectively. In that event, a U.S. holder would be required to
include OID in gross income on a current basis over the period the preferred
securities are held, even though in the latter case BancorpSouth and we would
not be making any actual cash payments during the extended interest payment
period. The amount of OID includible in the holder's taxable income would be
determined on the basis of a constant yield method over the remaining term of
the junior subordinated debt securities, and the actual receipt of stated
interest payments would no longer be reported separately as taxable income. The
amount of OID that would accrue, in the aggregate, during an extended interest
payment period would be approximately equal to the accrued stated interest on
the junior subordinated debt securities for such period.
Because income on the preferred securities will constitute interest or
OID, corporate holders of preferred securities will not be entitled to a
dividends-received deduction relating to any income recognized relating to the
preferred securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF THE
TRUST
Under the circumstances described in this prospectus supplement, junior
subordinated debt securities may be distributed to holders in exchange for
preferred securities upon our liquidation. Under current law, such a
distribution, for U.S. federal income tax purposes, would be treated as a
non-taxable event to each U.S. holder, and each U.S. holder would receive an
aggregate tax basis in the junior subordinated debt securities equal to such
holder's aggregate tax basis in its preferred securities. A U.S. holder's
holding period in the junior subordinated debt securities received in such
liquidation would include the period during which the preferred securities were
held by such holder. If, however, an event occurs which results in us being
treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to holders of the preferred securities.
Under the circumstances described in this prospectus supplement, the
junior subordinated debt securities may be redeemed by BancorpSouth for cash and
the proceeds of such redemption distributed by us to holders in redemption of
their preferred securities. Under current law, such a redemption would
constitute a taxable disposition of the redeemed preferred securities.
Accordingly, a U.S. holder could recognize gain or loss as if it had sold such
redeemed preferred securities for cash as described below under "-- Sales of
Preferred Securities" in this section.
SALES OF PREFERRED SECURITIES
A U.S. holder that sells preferred securities will recognize gain or
loss in an amount equal to the difference between its adjusted tax basis in the
preferred securities and the amount realized on the sale of such preferred
securities. Assuming that BancorpSouth does not exercise its option to defer
payment of interest on the junior subordinated debt securities and that the
junior subordinated debt securities are not deemed to be issued with OID, a U.S.
holder's adjusted tax basis in the preferred securities generally will be its
initial purchase price. If the junior subordinated debt securities are deemed to
be issued with OID, a U.S. holder's adjusted tax basis in the preferred
securities generally will be its initial purchase price, increased by OID
previously includible in such U.S. holder's gross income to the date of
disposition and decreased by distributions or other payments received on the
preferred securities since and including the date that the junior subordinated
debt securities were deemed to be issued with OID. Such gain or loss generally
will be a capital gain or loss, except to the extent of any accrued interest
relating to such U.S. holder's ratable share of the junior subordinated debt
securities required to be included in income, and generally will be a long-term
capital gain or loss if the preferred securities have been held for more than
one year.
The preferred securities may trade at a price that does not fully
reflect the amount of accrued but unpaid interest or deferred interest relating
to the underlying junior subordinated debt securities. A U.S. holder who
disposes of its preferred securities between record dates for payments of
distributions will be required to include in income as ordinary income a portion
of the amount realized equal to accrued but unpaid interest and accrued OID on
the junior subordinated debt securities to the date of disposition and to add
such amount to its adjusted tax basis in such preferred securities. To the
extent the selling price is less than the holder's adjusted tax basis, such
holder will recognize a capital loss. Subject to certain limited exceptions,
capital losses generally cannot be applied to offset ordinary income for U.S.
federal income tax purposes.
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INFORMATION REPORTING AND BACKUP WITHHOLDING
Generally, income on the preferred securities will be reported to the
IRS and to holders on Form 1099-INT, or, where applicable, Form 1099-OID, which
forms should be mailed to holders of preferred securities by January 31
following each calendar year. In addition, U.S. holders may be subject to a
backup withholding tax at a rate not to exceed 31% on such payments if they do
not provide their taxpayer identification numbers to the trustee in the manner
required, fail to certify that they are not subject to backup withholding tax,
or otherwise fail to comply with applicable backup withholding tax rules. U.S.
holders may also be subject to information reporting and backup withholding tax
with respect to the proceeds from a sale, exchange, retirement or other taxable
disposition of the preferred securities. All individuals are subject to these
requirements, however, some holders, including all corporations, are exempt from
these requirements.
NON-U.S. HOLDERS
The following discussion only applies to non-U.S. holders. For purposes
of this discussion, a "non-U.S. holder" is a beneficial owner of preferred
securities other than a U.S. holder.
U.S. FEDERAL WITHHOLDING TAX
Generally, the 30% U.S. federal withholding tax will not apply to any
payments on the preferred securities provided that:
- the holder does not actually (or constructively) own 10% or
more of the total combined voting power of all classes of
BancorpSouth voting stock;
- the holder is not a controlled foreign corporation that is
related to BancorpSouth through stock ownership; and
- (a) the holder provides its name and address on an IRS Form
W-8BEN (or other applicable form), and certifies, under
penalties of perjury, that it is a non-U.S. holder, or (b) the
holder holds its preferred securities through a "qualified
intermediary" as provided in applicable Treasury regulations
and satisfies the requirements of those regulations.
If the holder cannot satisfy the requirements described above, payments
on the preferred securities made to such holder will be subject to the 30% U.S.
federal withholding tax, unless the holder provides us with a properly executed
(1) IRS Form W-8BEN (or other applicable form) claiming an exemption from, or
reduction in the rate of, withholding under the benefit of an applicable tax
treaty or (2) IRS Form W-8ECI (or successor form) stating that interest paid on
the preferred securities is not subject to withholding tax because it is
effectively connected with the holder's conduct of a trade or business in the
United States as discussed below under the caption "--U.S. Federal Income Tax"
in this section.
The 30% U.S. federal withholding tax will not apply to any gain a
non-U.S. holder realizes on the sale, exchange, retirement or other disposition
of the preferred securities.
U.S. FEDERAL INCOME TAX
If a non-U.S. holder is engaged in a trade or business in the United
States and interest on the preferred securities is effectively connected with
the conduct of that trade or business, the non-U.S. holder will be subject to
U.S. federal income tax on that interest on a net income basis (although exempt
from the 30% withholding tax), in the same manner as if it were a U.S. holder.
In addition, if the non-U.S. holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% (or lower applicable treaty rate) of its
earnings and profits for the taxable year, subject to adjustments, that are
effectively connected with the conduct by such holder of a trade or business in
the United States.
Any gain realized by a non-U.S. holder on the sale, exchange,
retirement or other disposition of a preferred security generally will not be
subject to U.S. federal income tax unless (1) that gain is effectively connected
with the conduct of a trade or business by such holder in the United States, or
(2) the holder is an individual who is present in the United States for 183 days
or more in the taxable year of that disposition and certain other conditions are
met.
S-26
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. information reporting requirements and backup withholding tax will
not apply to payments on a preferred security if the beneficial owner (1)
certifies its non-U.S. person status under penalties of perjury and also
satisfies documentary evidence requirements for establishing that it is a
non-U.S. person, or (2) otherwise establishes an exemption.
Information reporting requirements and backup withholding tax will not
apply to any payment of the proceeds of the sale of a preferred security
effected outside the United States by a foreign office of a foreign broker,
provided that such broker:
- derives less than 50% of its gross income for particular
periods from the conduct of a trade or business in the United
States;
- is not a controlled foreign corporation for U.S. federal
income tax purposes; and
- is not a foreign partnership that, at any time during its
taxable year, is 50% or more, by income or capital interest,
owned by U.S. holders or is engaged in the conduct of a U.S.
trade or business.
Backup withholding tax will also not apply to the payment of the
proceeds of the sale of a preferred security effected outside the United States
by a foreign office of any other foreign or any U.S. broker. However,
information reporting requirements will be applicable to such payment unless (1)
such broker has documentary evidence in its records that the beneficial owner is
a non-U.S. person and other conditions are met or (2) the beneficial owner
otherwise establishes an exemption.
Information reporting requirements and backup withholding tax will
apply to the payment of the proceeds of a sale of a preferred security by the
U.S. office of a broker, unless the beneficial owner certifies its non-U.S.
person status under penalties of perjury or otherwise establishes an exemption.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS ARE STRONGLY URGED TO CONSULT THEIR TAX
ADVISORS REGARDING THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
Before authorizing an investment in the preferred securities,
fiduciaries of any:
- pension, profit sharing or other employee benefit plans
subject to the Employee Retirement Income Security Act of
1974, as amended, or "ERISA";
- plan described in Section 4975(e)(1) of the Internal Revenue
Code, including an individual retirement account ("IRA") or a
Keogh plan; or
- entity whose underlying assets include plan assets by reason
of any such plans' investment in that entity;
which we refer to as "Plans," should consider, among other matters, (1) the
fiduciary standards of ERISA (including its prudence and diversification
requirements), (2) whether such fiduciaries have authority to make such
investment in the preferred securities under the applicable Plan investment
policies and governing instruments, and (3) rules under ERISA and the Internal
Revenue Code that may prohibit Plan fiduciaries from causing a Plan to engage in
a "prohibited transaction." Further, such fiduciaries should also consider that
each Plan investing in the preferred securities will be deemed to have made
certain representations with respect to the Plan's purchase of the preferred
securities, including that the Plan's purchase of the preferred securities is
covered by one or more prohibited transaction exemptions.
S-27
Section 406 of ERISA and Section 4975 of the Internal Revenue Code
prohibit Plans, from, among other things, engaging in certain transactions
involving "plan assets" with persons who are "parties in interest" under ERISA
or "disqualified persons" under the Internal Revenue Code, which we refer to as
"Parties in Interest," with respect to such Plans. A violation of these
"prohibited transaction" rules may result in an excise tax, penalties or other
liabilities under ERISA and/or Section 4975 of the Internal Revenue Code for
such persons, unless exemptive relief is available under an applicable
statutory, regulatory or administrative exemption. In the case of an IRA, the
occurrence of a prohibited transaction involving the individual who established
the IRA, or his or her beneficiaries, would cause the IRA to lose its tax exempt
status, unless exemptive relief is available. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church plans
(as defined in Section 3(33) of ERISA) and foreign plans (as described in
Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Internal Revenue Code; however, such plans may be subject to
similar provisions under applicable law, all of which are outside the scope of
this section of the prospectus supplement.
The United States Department of Labor has issued a regulation, the
"Plan Assets Regulation," concerning the definition of what constitutes the
assets of a Plan. The Plan Assets Regulation provides that, as a general rule,
the underlying assets and properties of corporations, partnerships, trusts and
certain other entities in which a Plan makes an "equity" investment will be
deemed, for purposes of ERISA, to be "plan assets" of the investing Plan unless
there is an applicable exception for its investment.
One such exception under the Plan Asset Regulation is for an equity
investment which is a "publicly-offered security." A publicly-offered security
is a security that:
(1) is freely transferable;
(2) is part of a class of securities that is "widely-held," that is,
owned by 100 or more investors independent of the issuer and of one another; and
(3) is either:
- part of a class of securities registered under Section 12(b)
or 12(g) of the Securities Exchange Act of 1934, or
- sold to the Plan as part of an offering of securities to the
public pursuant to an effective registration statement under
the Securities Act of 1933 and the class of securities of
which such security is part is registered under the Securities
Exchange Act of 1934 within the requisite time.
A security will not fail to be "widely held" because the number of
independent investors falls below 100 subsequent to the initial offering as a
result of events beyond the control of the issuer. The Plan Assets Regulation
provides that whether a security is "freely transferable" is a factual question
to be determined on the basis of all relevant facts and circumstances.
We expect that the preferred securities will meet the criteria of
"publicly-offered securities" under the Plan Assets Regulation and, if this
occurs, our assets would not be considered "plan assets" for ERISA purposes. The
underwriters expect that the preferred securities will be held by at least 100
independent investors at the conclusion of the offering, and there are no
restrictions imposed on the transfer of the preferred securities and the
preferred securities will be sold as part of an offering pursuant to an
effective registration statement under the Securities Act, and then will be
timely registered under the Exchange Act.
On the other hand, there can be no assurance that the publicly-offered
security exception or any of the other exceptions set forth in the Plan Assets
Regulation will apply to the purchase of preferred securities offered in this
prospectus supplement and, as a result, an investing Plan's assets could be
considered to include an undivided interest in the junior subordinated debt
securities that we hold. In the event that our assets are considered assets of
an investing Plan, our trustees, BancorpSouth, and/or other persons, in
providing services with respect to the junior subordinated debt securities,
could be considered fiduciaries to such Plan and subject to the fiduciary
responsibility provisions of Title I of ERISA. In addition, certain transactions
involving us and/or the preferred securities could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Internal Revenue Code with respect to a Plan. For example, if BancorpSouth is a
Party in Interest with respect to an investing Plan, extensions of credit
between us and BancorpSouth (as represented by the junior subordinated debt
S-28
securities and the guarantee) would likely be prohibited by Section 406(a)(1)(B)
of ERISA and Section 4975(c)(1)(B) of the Internal Revenue Code.
If a prohibited transaction occurs for which no exemption is available,
any fiduciary or other person that has engaged in the prohibited transaction
could be required (1) to restore to the Plan any profit realized on the
transaction and (2) to reimburse the Plan for any losses suffered by the Plan as
a result of the investment. In addition, each disqualified person (within the
meaning of Section 4975 of the Internal Revenue Code) involved could be subject
to an excise tax equal to 15% of that amount involved in the prohibited
transaction for each year the transaction continues and, unless the transaction
is corrected within statutorily required periods, to an additional tax of 100%.
Further, the Department of Labor could impose other penalties on the fiduciary
or other person participating in the transaction. Plan fiduciaries who decide to
invest in the preferred securities could, under certain circumstances, be liable
for prohibited transactions or other violations as a result of their investment
in the preferred securities or as co-fiduciaries for actions taken by or on
behalf of BancorpSouth or our trustees. With respect to an IRA that invests in
preferred securities, the occurrence of a prohibited transaction involving the
individual who established the IRA, or his or her beneficiaries, would cause the
IRA to lose its tax-exempt status.
Even if there is no exemption available under the Plan Asset
Regulations, the Department of Labor has issued five prohibited transaction
class exemptions that may provide exemptive relief for direct or indirect
prohibited transactions resulting from the purchase or holding of the preferred
securities, assuming that our assets were deemed to be "plan assets" of Plans
investing in us (see above). Those class exemptions are PTCE 96-23 (for certain
transactions determined by in-house asset managers); PTCE 91-38 (for certain
transactions involving bank collective investment funds), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 90-1
(for certain transactions involving insurance company pooled separate accounts),
and PTCE 84-14 (for certain transactions determined by independent qualified
asset managers).
Because there might not be an exemption available under the Plan Asset
Regulation, the preferred securities may not be purchased or held by any Plan,
any entity whose underlying assets include "plan assets" by reason of any Plan's
investment in the entity, which we refer to as a "Plan Asset Entity," or any
other person investing "plan assets" of any Plan, unless such purchase or
holding is covered by the prohibited transaction class exemptions or another
applicable class or individual exemption. If a purchaser or holder of the
preferred securities that is a Plan or a Plan Asset Entity elects to rely on an
exemption other than the prohibited transaction class exemptions, we and
BancorpSouth may require a satisfactory opinion of counsel or other evidence
with respect to the availability of such exemption for such purchase and
holding. In any event, any purchaser or holder of the preferred securities that
is a Plan or a Plan Asset Entity or is purchasing such securities on behalf of
or with "plan assets" will be deemed to have represented by its purchase and
holding thereof that (1) the purchase and holding of the preferred securities is
covered by the exemptive relief provided by the prohibited transaction class
exemptions or another applicable exemption, (2) BancorpSouth and our trustees
are not "fiduciaries" within the meaning of Section 3(21) of ERISA and the
regulations thereunder with respect to such person's interest in the preferred
securities or the junior subordinated debt securities, and (3) in purchasing the
preferred securities, such person approves the purchase of the junior
subordinated debt securities and the appointment of our trustees.
The foregoing discussion is general in nature and is not intended to be
inclusive. Consequently, and due to the complexity of the fiduciary
responsibility and prohibited transaction rules described above and the
penalties that may be imposed upon persons involved in non-exempt prohibited
transactions, it is particularly important that fiduciaries or other persons
considering purchasing the capital securities on behalf of or with "plan assets"
of any Plan consult with their counsel, prior to any such purchases, regarding
the potential applicability of ERISA, Section 4975 of the Internal Revenue Code
and any similar laws to such investment and whether all conditions of such
exemption or exemptions have been satisfied such that the acquisition and
holding of the preferred securities by the purchaser Plan are entitled to full
exemptive relief thereunder.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting
agreement relating to the preferred securities, we have agreed to sell to each
of the underwriters listed below, and each of the underwriters has severally
agreed to purchase from us, the respective number of preferred securities shown
opposite its name below:
S-29
Number of
Preferred
Underwriters Securities
------------ ----------
Salomon Smith Barney Inc. ...............................
A.G. Edwards & Sons, Inc. ...............................
Morgan Stanley & Co. Incorporated........................
Stephens Inc...............................................
Stifel, Nicolaus & Company, Incorporated...................
---------
Total 4,000,000
=========
The underwriting agreement provides that the obligations of the
underwriters to purchase the preferred securities are subject to certain
conditions and that, if any preferred securities are purchased by the
underwriters under the underwriting agreement, all of the preferred securities
agreed to be purchased by the underwriters under the underwriting agreement must
be so purchased.
We have been advised by the underwriters that they propose to offer the
preferred securities offered hereby initially at the public offering price set
forth on the cover page of this prospectus supplement, and to certain selected
dealers (who may include the underwriters) at such public offering price less a
concession not in excess of $ per preferred security. The underwriters or such
selected dealers may re-allow a commission to certain other dealers not to
exceed $ per preferred security. After the initial public offering, the
public offering price, the concession to selected dealers and the re-allowance
to other dealers may be changed by the underwriters.
The following table summarizes the commissions to be paid by BancorpSouth
to the underwriters in connection with this offering.
Per Preferred
Security Total
-------- -----
Public offering price (1)...................... $ 25.00 $100,000,000
Underwriting commissions to be paid by
BancorpSouth, Inc.............................. (2) (2)
Proceeds (before expenses) to BancorpSouth
Capital Trust I................................ $ 25.00 $100,000,000
----------
(1) Plus accrued distributions from January , 2002, if settlement occurs
after that date.
(2) Underwriting commissions of $ per trust preferred security, or
$ for all % preferred securities, will be paid by BancorpSouth,
Inc.
BancorpSouth and the Trust have granted an option to the underwriters,
exercisable during the 30-day period after the date of this prospectus, to
purchase up to an aggregate of additional preferred securities to cover
over-allotments, if any, at the offering price to the public set forth on the
cover page of this prospectus. If the underwriters exercise this option in whole
or in part, BancorpSouth will pay underwriting commissions of $ per
additional preferred security so purchased.
The preferred securities have been approved for listing on the New York
Stock Exchange under the symbol "BXS PrA" subject to official notice of
issuance. BancorpSouth expects the preferred securities will begin trading on
the New York Stock Exchange within 30 days after they are first issued.
We have been advised by the underwriters that certain underwriters
presently intend to make a market in the preferred securities; however, none of
the underwriters is obligated to do so. Any such market-making may be
discontinued at any time, for any reason and without notice. If any of the
underwriters ceases to act as a market-maker for the preferred securities for
any reason, there can be no assurance that another firm or person will make a
market in the preferred securities. There can be no assurance that an active
market for the preferred securities will develop or, if a market does develop,
at what prices the preferred securities will trade.
In connection with this offering and in compliance with applicable law,
the underwriters may sell more preferred securities than the total amount shown
on the list of underwriters and participations which appears above. The
underwriters may also effect transactions which stabilize, maintain or otherwise
affect the market price of the preferred securities at levels above those which
might otherwise prevail in the open market. Such transactions may include
placing bids for the preferred securities or effecting purchases of the
preferred securities for the purpose of pegging, fixing or maintaining the price
of the preferred securities or for the purpose of reducing a syndicate short
position created in connection with the offering. Finally, the underwriters may
reclaim selling concessions allowed
S-30
to dealers for distributing the preferred securities in this offering, if they
repurchase previously distributed preferred securities in transactions to cover
short positions, in stabilization transactions or otherwise. The underwriters
are not required to engage in any of these activities and such activities, if
commenced, may be discontinued at any time.
Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the preferred securities. In addition,
neither we nor any of the underwriters makes any representation that the
underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
We estimate that our total expenses for this offering will be
approximately $ .
Certain underwriters or their affiliates have from time to time
provided investment banking and/or financial advisory services to BancorpSouth
and its affiliates in the ordinary course of business, for which they have
received customary fees, and they may continue to do so in the future.
Because the NASD views the preferred securities as interests in a
direct participation program, the offering is being made in compliance with Rule
2810 of the NASD's Conduct Rules. The underwriters may not confirm sales to any
discretionary account without the prior specific written approval of a customer.
We and BancorpSouth have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments the underwriters may be required to make in respect of
such liabilities.
It is expected that delivery of the preferred securities will be made
against payment therefor on or about the date specified in the last paragraph of
the cover page of this prospectus supplement, which will be the fourth business
day in the United States following the date hereof ("T+4"). Under Rule 15c6-1
under the Exchange Act, trades in the secondary market generally are required to
settle in three business days, unless the parties to any such trade expressly
agree otherwise. Accordingly, purchasers who wish to trade preferred securities
on the date hereof will be required, by virtue of the fact that the preferred
securities initially will settle in T+4, to specify an alternate settlement
cycle at the time of any such trade to prevent a failed settlement. Purchasers
of preferred securities which wish to trade preferred securities on the date
hereof should consult their own advisors.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
preferred securities, the enforceability of the amended trust agreement and our
creation will be passed upon on our behalf by Richards, Layton & Finger, P.A.,
as special Delaware counsel to both us and BancorpSouth. The validity of the
junior subordinated debt securities, the guarantee and certain matters relating
thereto will be passed upon on behalf of BancorpSouth and us by Riley, Ford,
Caldwell & Cork, P.A., Tupelo, Mississippi. Certain legal matters will be passed
upon for the underwriters by Cravath, Swaine & Moore, New York, New York.
Certain matters relating to United States federal income tax considerations will
be passed upon for us and BancorpSouth by Waller Lansden Dortch & Davis, A
Professional Limited Liability Company, Nashville, Tennessee.
EXPERTS
The consolidated financial statements of BancorpSouth, Inc. and
subsidiaries as of December 31, 2000 and 1999, and for each of the years in the
three-year period ended December 31, 2000, have been incorporated by reference
in this prospectus supplement and in the registration statement in reliance upon
the report of KPMG LLP, independent accountants, incorporated herein by
reference, and upon the authority of said firm as experts in accounting and
auditing.
S-31
PROSPECTUS
$500,000,000
BANCORPSOUTH, INC.
Debt Securities
Junior Subordinated Debt Securities
Common Stock
BANCORPSOUTH CAPITAL TRUST I
BANCORPSOUTH CAPITAL TRUST II
BANCORPSOUTH CAPITAL TRUST III
BANCORPSOUTH CAPITAL TRUST IV
Trust Preferred Securities
(fully and unconditionally guaranteed on a subordinated basis, as described
herein, by BancorpSouth, Inc.)
BancorpSouth, Inc. and the BXS Trusts may offer and sell from time to
time, in one or more series, up to $500,000,000 of the securities listed above
in connection with this prospectus.
Each of the BXS Trusts is a Delaware business trust which may sell
trust preferred securities in one or more offerings to the public and common
securities to BancorpSouth, Inc. In the event of such sales, the BXS Trusts will
use the proceeds to buy an equal principal amount of junior subordinated debt
securities of BancorpSouth, Inc.
The common stock of BancorpSouth, Inc. is listed on the New York Stock
Exchange under the symbol "BXS."
This prospectus contains a general description of the securities which
may be offered. The specific terms of the securities will be contained in one or
more supplements to this prospectus. Read the prospectus and any supplement
carefully before you invest. The supplement may also add, update or change
information contained in this prospectus.
THE SECURITIES COVERED BY THIS PROSPECTUS WILL NOT BE SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF BANCORPSOUTH
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is December 17, 2001.
This prospectus may not be used to consummate sales of securities
unless accompanied by a prospectus supplement.
TABLE OF CONTENTS
HEADING PAGE
------- ----
About this Prospectus .............................................. 3
Ratio of Earnings to Fixed Charges ................................. 4
Where You Can Find More Information ................................ 5
The Company ........................................................ 6
The BXS Trusts ..................................................... 6
Certain Regulatory Considerations .................................. 9
Use of Proceeds .................................................... 10
Description of Debt Securities ..................................... 10
Description of Junior Subordinated Debt Securities ................. 17
Description of Trust Preferred Securities .......................... 28
Description of Guarantees .......................................... 38
Relationship Among the Trust Preferred Securities, the Corresponding
Junior Subordinated Debt Securities and the Guarantees ............. 40
Description of Common Stock ........................................ 42
Book-Entry Issuance ................................................ 47
Legal Matters ...................................................... 50
Experts ............................................................ 50
Plan of Distribution ............................................... 50
2
ABOUT THIS PROSPECTUS
This document is called a prospectus. This summary highlights selected
information from this prospectus and may not contain all of the information that
is important to you. To understand the terms of the securities, you should
carefully read this prospectus with the attached prospectus supplement. This
prospectus and the prospectus supplement together give the specific terms of the
securities being offered. You should also read the documents referred to under
the heading "Where You Can Find More Information" for information on
BancorpSouth, Inc. and its financial statements. The Company has its principal
offices at One Mississippi Plaza, Tupelo, Mississippi 38804 (telephone: (662)
680-2000). Certain capitalized terms used in this summary are defined elsewhere
in this prospectus.
BancorpSouth, Inc. (also referred to as the "Company" or "we") and
BancorpSouth Capital Trust I, BancorpSouth Capital Trust II, BancorpSouth
Capital Trust III and BancorpSouth Capital Trust IV have filed a registration
statement with the Securities and Exchange Commission under a "shelf"
registration procedure. Under this procedure, the Company and the BXS Trusts may
offer and sell from time to time, in one or more series, up to an aggregate of
$500,000,000 of any of the following securities:
(i) unsecured debt securities of the Company;
(ii) shares of common stock of the Company;
(iii) trust preferred securities of a BXS Trust;
(iv) unsecured junior subordinated debt securities of the Company
relating to the trust preferred securities; and
(v) guarantees of the Company relating to the trust preferred
securities.
This prospectus provides you with a general description of the
securities the Company or a BXS Trust may offer. Each time the Company or a BXS
Trust offers securities, we will provide you with a prospectus supplement that
will describe the specific amounts, prices and terms of the securities being
offered. The prospectus supplement may also add, update or change information
contained in this prospectus.
The prospectus supplement may also contain information about certain
U.S. federal income tax considerations relating to the securities covered by the
prospectus supplement.
The Company and each BXS Trust may sell securities to underwriters who
will sell the securities to the public on terms fixed at the time of sale. In
addition, the securities may be sold by the Company and each BXS Trust directly
or through dealers or agents designated from time to time, which agents may be
affiliates of the Company and each BXS Trust. If the Company, directly or
through agents, solicits offers to purchase the securities, the Company reserves
the sole right to accept and, together with its agents, to reject, in whole or
in part, any such offer.
The prospectus supplement will also contain, with respect to the
securities being sold, the names of the underwriters, dealers or agents, if any,
together with the terms of offering, the compensation of the underwriters and
the net proceeds to the Company and each BXS Trust.
Any underwriters, dealers or agents participating in the offering may
be deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended.
3
RATIO OF EARNINGS TO FIXED CHARGES
For the nine months ended September 30, 2001 and 2000 and for the five
years ended December 31, 2000, the ratio of earnings to fixed charges of the
Company, computed as set forth below, was as follows:
Nine months ended Year ended December 31:
----------------- -----------------------
9/30/2001 9/30/2000 2000 1999 1998 1997 1996
--------- --------- ---- ---- ---- ---- ----
Earnings to Fixed
Charges:
Excluding Interest on 5.10 4.69 4.08 7.29 7.59 10.05 9.09
Deposits
Including Interest on 1.38 1.38 1.32 1.53 1.47 1.46 1.52
Deposits
For purposes of computing the ratio of earnings to fixed charges,
earnings represent net income (loss) before extraordinary items plus applicable
income taxes and fixed charges. Fixed charges, excluding interest on deposits,
include interest expense (other than on deposits) and the proportion deemed
representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including interest on deposits, include all interest
expense and the proportion deemed representative of the interest factor of rent
expense, net of income from subleases.
4
WHERE YOU CAN FIND MORE INFORMATION
The Company and the BXS Trusts have filed a registration statement with
the SEC. This prospectus is part of the registration statement but the
registration statement also contains additional information and exhibits. The
Company also files proxy statements, annual, quarterly and special reports and
other information with the SEC. You may read and copy the registration statement
and any reports, proxy statements and other information at the public reference
room maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
You can call the SEC for further information about its public reference room at
1-800-732-0330. The SEC also maintains an Internet website that contains
reports, proxy statements and other information about issuers, like the Company,
that file electronically with the SEC. The address of the SEC's website is
"http://www.sec.gov."
The Company's common stock is listed on the New York Stock Exchange
under the symbol "BXS." Reports and other information concerning the Company can
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The SEC allows the Company to incorporate documents by reference in
this prospectus. This means that by listing or referring to a document which the
Company has filed with the SEC in this prospectus, that document is considered
to be a part of this prospectus and should be read with the same care. When the
Company updates the information contained in documents which have been
incorporated by reference by making future filings with the SEC, the information
incorporated by reference in this prospectus is considered to be automatically
updated.
The documents listed below are incorporated by reference into this
prospectus:
- The Company's Annual Report on Form 10-K for the year ended December 31, 2000;
- The Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2001;
- The Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2001; - The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001;
- The Company's Current Report on Form 8-K, dated March 28, 2001;
- The description of the Company's Common Stock and Common Stock Purchase Rights
contained in the Company's Registration Statements on Form 8-A filed pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including any amendment or report filed for the purpose of
updating such description; and
- Any documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of the initial filing of this
registration statement of which this prospectus is a part and before the
effective date of that registration statement and after the date of this
prospectus and before the termination of the offering of the securities.
You may request a free copy of any or all of these filings by writing
or telephoning us at the following address:
BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, Mississippi 38804
Attention: Corporate Secretary
Telephone number: (662) 680-2000
5
No separate financial statements of any BXS Trust are included in this
prospectus. The Company and the BXS Trusts do not consider that such financial
statements would be material to holders of the Trust Preferred Securities
because each BXS Trust is a special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Corresponding Junior
Subordinated Debt Securities (as defined below under the heading "The BXS
Trusts") of the Company and issuing the Trust Securities. Furthermore, taken
together, the Company's obligations under each series of Corresponding Junior
Subordinated Debt Securities, the Junior Indenture pursuant to which the
Corresponding Junior Subordinated Debt Securities will be issued, the related
Trust Agreement and the related Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the related Trust Preferred Securities of a BXS Trust. For a more
detailed discussion see "The BXS Trusts," "Description of Trust Preferred
Securities," "Description of Junior Subordinated Debt Securities --
Corresponding Junior Subordinated Debt Securities" and "Description of
Guarantees." In addition, the Company does not expect that any of the BXS Trusts
will be filing reports under the Exchange Act with the SEC.
You should only rely on the information contained in this prospectus
and any applicable prospectus supplement or incorporated by reference. Neither
the Company nor any BXS Trust has authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of a later date than the
date of this prospectus or the applicable prospectus supplement. The financial
condition, results of operations or business prospects of the Company may have
changed since those dates.
THE COMPANY
The Company is a bank holding company and Mississippi corporation with
commercial banking and financial services operations in Mississippi, Tennessee,
Alabama, Arkansas, Texas and Louisiana. Its principal subsidiary is BancorpSouth
Bank, a Mississippi banking corporation (the "Bank"). The Company's principal
office is located at One Mississippi Plaza, Tupelo, Mississippi 38804 and its
telephone number is (662) 680-2000.
The Bank has its principal office in Tupelo, Lee County, Mississippi,
and conducts a general commercial banking and trust business through offices in
over 100 municipalities or communities in Mississippi, Tennessee, Alabama,
Arkansas, Texas and Louisiana. The Bank has grown through the acquisition of
other banks, the purchase of assets from federal regulators and through the
opening of new branches and offices.
The Bank and its subsidiaries provide a range of financial services to
individuals and small-to-medium size businesses. The Bank operates investment
services, consumer finance, credit life insurance and insurance agency
subsidiaries which engage in investment brokerage services, consumer lending,
credit life insurance sales and sales of other insurance products. The Bank's
trust department offers a variety of services including personal trust and
estate services, certain employee benefit accounts and plans, including
individual retirement accounts, and limited corporate trust functions.
THE BXS TRUSTS
Each BXS Trust is a statutory business trust created under Delaware law
and is governed by:
(i) a trust agreement, in effect as of the date hereof, as Depositor of
the BXS Trust, and the Delaware Trustee of such BXS Trust; and
6
(ii) a certificate of trust, in effect as of the date hereof, filed
with the Delaware Secretary of State.
Unless otherwise specified in the applicable prospectus supplement:
- Each BXS Trust will have a term of approximately 55 years from the date
it issues its Trust Securities, but may dissolve earlier as provided in
the applicable Trust Agreement.
- Each BXS Trust's business and affairs will be conducted by its
trustees.
- The trustees will be appointed by the Company as holder of the Trust
Common Securities.
- The trustees will be The Bank of New York, as the Property Trustee (the
"Property Trustee"), The Bank of New York (Delaware), as the Delaware
Trustee (the "Delaware Trustee"), and two individual trustees (the
"Administrative Trustees") who are employees or officers of or
affiliated with the Company (collectively, the "BXS Trust Trustees").
The Bank of New York, as Property Trustee, will act as sole indenture
trustee under each Trust Agreement for purposes of compliance with the
Trust Indenture Act. The Bank of New York will also act as trustee
under the Guarantees and the Junior Indenture. See "Description of
Guarantees" and "Description of Junior Subordinated Debt Securities."
- If an event of default under the Trust Agreement for a BXS Trust has
occurred and is continuing, the holder of the Trust Common Securities
of that BXS Trust, or the holders of a majority in Liquidation Amount
of the Related Trust Preferred Securities, will be entitled to appoint,
remove or replace the Property Trustee or the Delaware Trustee for such
BXS Trust.
- Under all circumstances, only the holder of the Trust Common Securities
has the right to vote to appoint, remove or replace the Administrative
Trustees.
- The duties and obligations of each BXS Trust Trustee are governed by
the applicable Trust Agreement.
- The Company will pay all fees and expenses related to each BXS Trust
and the offering of the Trust Preferred Securities and will pay,
directly or indirectly, all ongoing costs, expenses and liabilities of
each BXS Trust.
Each trust agreement of a BXS Trust in effect on the date hereof will
be amended and restated in its entirety (each, as so amended and restated, a
"Trust Agreement") substantially in the form filed as an exhibit to the
registration statement of which this prospectus forms a part.
Each Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
Each BXS Trust may offer to the public, from time to time, preferred
securities (the "Trust Preferred Securities") representing preferred beneficial
interests in the applicable BXS Trust. In addition to Trust Preferred Securities
offered to the public, each BXS Trust will sell common securities representing
common ownership interests in such BXS Trust to the Company (the "Trust Common
Securities"). All of the Trust Common Securities of each BXS Trust will be owned
by the Company. The Trust Common Securities and the Trust Preferred Securities
together are also referred to as the "Trust Securities."
Each BXS Trust exists for the exclusive purposes of:
(i) issuing and selling its Trust Securities;
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(ii) using the proceeds from the sale of such Trust Securities to
acquire a series of Corresponding Junior Subordinated Debt Securities issued by
the Company;
(iii) making distributions; and
(iv) engaging in only those other activities necessary or incidental
thereto (such as registering the transfer of the Trust Securities).
When any BXS Trust sells its Trust Preferred Securities to the public,
it will use the money it receives together with the money it receives from the
sale of its Trust Common Securities to buy a series of the Company's Junior
Subordinated Debt Securities (the "Corresponding Junior Subordinated Debt
Securities"). The payment terms of the Corresponding Junior Subordinated Debt
Securities will be virtually the same as the payment terms of that BXS Trust's
Trust Preferred Securities (the "Related Trust Preferred Securities").
Each BXS Trust will own only the applicable series of Corresponding
Junior Subordinated Debt Securities. The only source of funds for each BXS Trust
will be the payments it receives from the Company on the Corresponding Junior
Subordinated Debt Securities. Each BXS Trust will use such funds to make cash
payments to holders of the Trust Preferred Securities.
The Trust Common Securities of a BXS Trust will rank equally, and
payments will be made thereon pro rata, with the Trust Preferred Securities of
such BXS Trust, except that upon the occurrence and continuance of an event of
default under a Trust Agreement resulting from an event of default under the
Junior Indenture, the rights of the Company, as holder of the Trust Common
Securities, to payment in respect of Distributions and payments upon liquidation
or redemption will be subordinated to the rights of the holders of the Trust
Preferred Securities of such BXS Trust. See "Description of Trust Preferred
Securities -- Subordination of Trust Common Securities." The Company will
acquire Trust Common Securities in an aggregate Liquidation Amount equal to not
less than 3% of the total capital of each BXS Trust.
The prospectus supplement relating to any Trust Preferred Securities
will contain the details of the cumulative preferential cash distributions
("Distributions") to be made periodically to the holders of the Trust
Securities.
Under certain circumstances, the Company may redeem the Corresponding
Junior Subordinated Debt Securities which it sold to a BXS Trust. If it does
this, the BXS Trust will redeem a like amount of the Trust Preferred Securities
which it sold to the public and the Trust Common Securities which it sold to the
Company.
Under certain circumstances, the Company may dissolve each BXS Trust
and cause the Corresponding Junior Subordinated Debt Securities to be
distributed to the holders of the Related Trust Preferred Securities. If this
happens, owners of the Related Trust Preferred Securities will no longer have
any interest in such BXS Trust and will only own the Corresponding Junior
Subordinated Debt Securities.
Generally, the Company needs the approval of the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board") to redeem the
Corresponding Junior Subordinated Debt Securities or to dissolve one or more of
the BXS Trusts. A more detailed description is provided under the heading
"Description of Trust Preferred Securities -- Liquidation Distribution Upon
Dissolution."
The principal executive office of each BXS Trust is One Mississippi
Plaza, Tupelo, Mississippi 38804 and the telephone number of each is (662)
680-2000.
8
CERTAIN REGULATORY CONSIDERATIONS
GENERAL. As a bank holding company, the Company is subject to the
regulation, supervision and examination of the Federal Reserve Board under the
Bank Holding Company Act of 1956, as amended by the Gramm-Leach-Bliley Act,
which became effective March 11, 2000.
The Company's subsidiary bank is also subject to regulation,
supervision and examination by applicable federal and state banking agencies.
The Bank, the Company's principal banking subsidiary, is a Mississippi chartered
banking corporation and is subject to regulation, supervision and examination by
the Mississippi Department of Banking and Consumer Finance and the Federal
Deposit Insurance Corporation. The Bank is not a member of the Federal Reserve.
Depository institutions, such as the Bank, are also affected by various state
and federal laws, including those related to consumer protection and similar
matters.
For a discussion of the material elements of the regulatory framework
applicable to bank holding companies and their subsidiaries, which is
information relevant to the Company, please refer to the Company's Annual Report
on Form 10-K for the year ended December 31, 2000 and the other reports filed
subsequently with the SEC by the Company, which are incorporated by reference in
this prospectus. This regulatory framework is intended primarily for the
protection of depositors and the federal deposit insurance funds and not for the
protection of investors.
DIVIDENDS. The Company is a legal entity separate and distinct from its
subsidiaries (including the Bank), although the principal source of the
Company's cash revenues are payments of interest and dividends from the Bank.
There are various legal and regulatory limitations on the extent to which the
Bank can finance or otherwise supply funds to the Company and certain of its
other affiliates.
Various federal and state laws limit the amount of dividends that the
Bank may pay to the Company without regulatory approval. Under Mississippi law,
the Bank must obtain written approval of the Commissioner of the Mississippi
Department of Banking and Consumer Finance prior to paying any dividend on the
Bank's common stock. Under the Federal Deposit Insurance Corporation Improvement
Act of 1991, the Bank may not pay any dividends if, after paying the dividend,
it would be undercapitalized under applicable capital requirements. The FDIC
also has the authority to prohibit the Bank from engaging in business practices
which the FDIC considers to be unsafe or unsound, which, depending on the
financial condition of the Bank, could include the payment of dividends.
Consistent with its policy regarding bank holding companies serving as
a source of financial strength for their subsidiary banks, the Federal Reserve
Board has indicated that, as a matter of prudent banking, a bank holding company
generally should not maintain a rate of cash dividends unless its net income
available to common shareholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears consistent
with the bank holding company's capital needs, asset quality and overall
financial condition.
9
USE OF PROCEEDS
Except as may be set forth in a prospectus supplement, the Company will
use the net proceeds from the sale of the securities offered hereby for general
corporate purposes, including refinancing of debt, investments in, or extensions
of credit to, the Bank and, to a lesser extent, other existing or future
subsidiaries. Pending such use, the net proceeds may be temporarily invested in
short-term obligations. The precise amounts and timing of the application of
proceeds used for general corporate purposes will depend upon funding
requirements of the Company and its subsidiaries and the availability of other
funds.
DESCRIPTION OF DEBT SECURITIES
SUMMARY. The following description of the terms of the debt securities
other than the Junior Subordinated Debt Securities (the "Debt Securities") sets
forth certain general terms and provisions. The particular terms of any offering
of Debt Securities will be contained in a prospectus supplement. The prospectus
supplement will describe the:
- specific designation;
- priority in rights of payment, if any;
- aggregate principal amount;
- denominations;
- maturity;
- premium, if any;
- interest rate, if any (which may be fixed or variable);
- dates interest is paid;
- terms for redemption at the option of the Company or the holder, if
any;
- terms for sinking or purchase fund payments, if any;
- currency or currencies of denomination and payment, if other than U.S.
dollars;
- securities exchanges, if any, on which the Debt Securities are to be
listed;
- initial public offering price;
- principal amounts, if any, to be purchased by underwriters; and
- other terms in connection with the offering and sale of the Debt
Securities being sold.
All or a portion of the Debt Securities may be issued in global form.
This means that you will not receive a paper certificate. Instead, you will
receive a statement showing your ownership of the Debt Securities that you
purchased. A more detailed discussion of the depositary arrangements that will
apply appears under the heading "Book-Entry Issuance."
Debt Securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Certain United States federal income tax
consequences and special considerations applicable to any such Debt Securities
will be described in the applicable prospectus supplement.
If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on any series of Debt Securities, special
United States federal income tax, accounting and other considerations applicable
thereto will be described in the applicable prospectus supplement.
10
The Debt Securities are to be issued under an Indenture, as it may be
supplemented from time to time (the "Debt Securities Indenture"), between the
Company and The Bank of New York, as Trustee (the "Debt Securities Trustee").
The form of the Debt Securities Indenture has been filed as an exhibit to the
registration statement of which this prospectus forms a part. The Debt
Securities Indenture is qualified under the Trust Indenture Act.
The following summaries of certain provisions of the Debt Securities
and the Debt Securities Indenture are not complete. For a complete description
of the Debt Securities, you should read the Debt Securities Indenture applicable
to a particular series of Debt Securities (the "Applicable Indenture"),
including the definitions therein of certain terms.
Wherever we refer to particular sections, articles or defined terms of
the Applicable Indenture, we are incorporating those sections, articles or
defined terms into this prospectus by reference. Capitalized terms not otherwise
defined herein shall have the meaning given to them in the Applicable Indenture.
GENERAL. The aggregate principal amount of Securities which may be
authenticated and delivered under the Debt Securities Indenture is unlimited.
The Securities may be issued up to the aggregate principal amount of Securities
from time to time authorized by or pursuant to a Company Board Resolution.
The Securities may be issued in one or more series. All Securities of
each series issued under the Debt Securities Indenture shall in all respects be
equally and ratably entitled to the benefits thereof with respect to such series
without preference, priority or distinction on account of the actual time or
times of the authentication and delivery or Maturity of the Securities of such
series. There shall be established in or pursuant to a Company Board Resolution,
and set forth in an Officers' Certificate of the Company, or established in one
or more indentures supplemental to the Debt Securities Indenture, which shall be
delivered to the Trustee prior to the issuance of Securities of any series:
(1) the form of the Securities of the series and the Coupons, if any,
appertaining thereto;
(2) the title of the Securities of the series;
(3) any limit upon the aggregate principal amount of the Securities of
the series;
(4) the date or dates on which the Securities may be issued;
(5) the date or dates, which may be serial, on which the principal of,
and premium, if any, on the Securities of such series shall be payable;
(6) the rate or rates, or the method of determination thereof, at which
the Securities of such series shall bear interest, if any;
(7) whether Securities under the Debt Securities Indenture are to be
designated as Senior Debt Securities or Subordinated Debt Securities;
(8) the place or places where the principal of, and premium, if any,
and interest, if any, on Securities of the series shall be payable;
(9) the provisions, if any, establishing the price or prices at which,
the period or periods within which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the option of
the Company;
(10) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to the sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices, in the
currency or currency unit in which the
11
Securities of such series are payable, at which and the period or periods within
which and the terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(11) the denominations in which such series of Debt Securities will be
issuable, if other than denominations of $1000 and any integral multiple
thereof;
(12) the portion of the principal amount of Securities of such series
which shall be payable upon declaration of acceleration of the Maturity, if
other than the principal amount thereof;
(13) whether payment of the principal of, premium, if any, and
interest, if any, on the Securities of such series shall be with or without
deduction for taxes, assessments or governmental charges, and with or without
reimbursement of taxes, assessments or governmental charges paid by Holders;
(14) any Events of Default or Defaults with respect to the Securities
of such series;
(15) the applicable dates for the list of names and addresses of the
Holders of Registered Securities in case the Securities of such series do not
bear interest;
(16) whether the Securities of such series are to be issued as
Registered Securities (with or without Coupons) or Unregistered Securities or
both, and, if Unregistered Securities or Coupon Securities are issued, whether
Unregistered Securities or Coupon Securities of such series may be exchanged for
Registered Securities or Fully Registered Securities of such series and whether
Registered Securities or Fully Registered Securities of such series may be
exchanged for Unregistered Securities of such series and the circumstance under
which and the place or places where any such exchanges, if permitted, may be
made;
(17) the currency or currencies in which the principal of, and premium,
if any, and interest, if any, on the Securities of such series are to be
denominated, payable, redeemable or repurchaseable;
(18) provisions for the satisfaction and discharge of the indebtedness
represented by the Securities of such series;
(19) whether the Securities of such series are issuable as a Global
Security and, in such case, the identity of the Depositary for such series;
(20) if the amount of payment of principal of (and premium, if any) or
interest on the Securities of such series may be determined with reference to an
index, formula or other method based on a coin, currency or currency unit other
than that in which the Securities are stated to be payable or otherwise, the
manner in which such amounts shall be determined;
(21) any other terms of such series; and
(22) any trustees, paying agents, transfer agents or registrars with
respect to the Securities of such series, and, if the Securities of such series
are to be denominated and payable in any currency other than Dollars, the
initial Dollar Determination Agent.
Unless otherwise provided in the prospectus supplement:
(i) principal of (and premium, if any) and interest on the Debt
Securities will be payable, and the Debt Securities will be exchangeable and
transfers thereof will be registerable, at the office or agency of the Company,
except that, at the option of the Company, interest may be paid by mailing a
check to the address of the person entitled thereto as it appears in the
Security Register; and
12
(ii) the Debt Securities will be issued only in registered form and in
denominations of $1,000 or any integral multiple thereof, and shall be payable
in Dollars.
No service charge will be made for any transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Debt Securities may be issued as Original Issue Discount Securities to
be sold at a substantial discount below their principal amount. "Original Issue
Discount Security" means any security which provides for an amount less than the
principal amount thereof to be due and payable upon the declaration of
acceleration of the maturity thereof upon the occurrence and continuance of an
Event of Default.
The Debt Securities Indenture does not contain any provisions that
would provide protection to holders of the Debt Securities against a sudden and
dramatic decline in credit quality of the Company resulting from any highly
leveraged transaction, takeover, merger, recapitalization or similar
restructuring or change in control.
The Debt Securities Indenture allows the Company to merge or
consolidate with another company, or to sell all or substantially all of its
assets to another company. If these events occur, the other company will be
required to assume the Company's responsibilities relating to the Debt
Securities and the Company will be released from all liabilities and
obligations. See " -- Merger, Consolidation and Sale of Assets" for a more
detailed discussion.
DEFAULTS. The Debt Securities Indenture defines an Event of Default
with respect to any Senior Debt Securities as any one of the following events:
(1) default in the payment of any interest upon any Security of
such series when such interest becomes due and payable, and
continuance of such default for a period of 30 days;
(2) default in the payment of the principal of (including any
sinking fund payment or analogous obligation) or premium, if
any, on any Security of such series as and when the same shall
become due and payable either at Maturity, upon redemption, by
declaration or otherwise;
(3) default in the performance, or breach, of any covenant or
warranty of the Company in respect of the Securities of such
series (other than a covenant or warranty a default in the
performance of which or the breach of which is specifically
dealt with elsewhere), and continuance of such default or
breach for a period of 90 days after there has been given to
the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of such
series, a written notice specifying such default or breach and
requiring it to be remedied;
(4) the entry of a decree or order by a court having jurisdiction
in the premises for relief in respect of the Company under
Title 11 of the United States Code, as now constituted or as
hereafter amended, or any other applicable bankruptcy law or
other similar law, or appointing a receiver, trustee or other
similar official of the Company or ordering the winding-up or
liquidation of its affairs and the continuance of any such
decree or order unstayed and in effect for a period of 60
consecutive days;
(5) the filing by the Company a petition or answer or consent
seeking relief under Title 11 of the United States Code, as
now constituted or as hereinafter amended, or any other
applicable Federal or State bankruptcy law or other similar
law, or the consent by it to the institution of proceedings
thereunder or to the filing of any such petition
13
or to the appointment or taking possession of a receiver,
trustee, custodian or other similar official of the Company
shall fail generally to pay its debts as such debts become due
or shall take any corporate action in furtherance of any such
action; or
(6) any other Event of Default provided in the supplemental
indenture under which such series of Securities is issued or
in the form of Securities for such series.
The Debt Securities Indenture defines an Event of Default with respect
to any Subordinated Debt Securities as any one of the following events:
(1) the entry of a decree or order by a court having jurisdiction
in the premises for relief in respect of the Company under
Title 11 of the United States Code, as now constituted or as
hereafter amended, or any other applicable Federal or State
bankruptcy law or other similar law, or appointing a receiver,
trustee or other similar official of the Company or ordering
the winding-up or liquidation of its affairs and the
continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days;
(2) the filing by the Company of a petition or answer or consent
seeking relief under Title 11 of the United States Code, as
now constituted or as hereinafter amended, or any other
applicable Federal or State bankruptcy law or other similar
law, or the consent by it to the institution of proceedings
thereunder or to the filing of any such petition or to the
appointment or taking possession of a receiver, trustee,
custodian or other similar official of the Company, shall fail
generally to pay its debts as such debts become due or shall
take any corporate action in furtherance of any such action;
or
(3) any other Event of Default provided in the supplemental
indenture under which such series of Securities is issued or
in the form of Security for such series.
If an Event of Default with respect to any series of Securities occurs
and is continuing, then and in every such case the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities outstanding of
such series may declare the principal (or, if Securities of such series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of the Securities of such series) of all the
Securities of such series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders of Securities),
and upon any such declaration the same shall become immediately due and payable.
The Debt Securities Indenture provides that the applicable Trustee
will, within 90 days after the occurrence of any default under the Debt
Securities Indenture with respect to any series of Securities, transmit in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of such default under the Debt Securities Indenture known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of or premium,
if any, or interest on any Security of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to the Securities
of such series, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Holders of
Securities of such series and any Coupons appertaining thereto; and provided,
further, that in the case of any default in the performance, or breach, of any
covenant or warranty of the Company in respect of the Securities of such series,
no such notice to Holders of Securities of such series shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default or a Default.
14
The Debt Securities Indenture provides that the Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders of Securities or
Coupons, if any, appertaining thereto pursuant to this Indenture, unless such
Holders of Securities or Coupons, if any, appertaining thereto shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
SUPPLEMENTAL INDENTURES. From time to time, without the consent of the
Holders of any Securities, the Company, when authorized by a Board Resolution,
and the Trustee for the Securities of any or all series, at any time and from
time to time, may enter into one or more indentures supplemental to the Debt
Securities Indenture, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the
covenants and obligations of the Company and in the Securities
contained;
(2) to evidence and provide for the acceptance of appointment by
another corporation as a successor trustee with respect to one
or more series of Securities;
(3) to add to the covenants and agreements of the Company for the
benefit of the Holders of all or any series of Securities and
the Coupons, if any, appertaining thereto (if such covenants
are for less than all series, stating that such covenants are
for the benefit of such series), or to surrender any right or
power conferred upon the Company by the Debt Securities
Indenture, provided that such action shall not adversely
affect the interests of the Holders of Securities of any
series then Outstanding and the Holders of the Coupons, if
any, appertaining thereto;
(4) to cure any ambiguity, to correct or supplement any provision
of the Debt Securities Indenture which may be defective or
inconsistent with any other provision therein, or to make any
other provisions with respect to matters or questions arising
under the Debt Securities Indenture, provided such other
provisions shall not adversely affect the interests of the
Holders of Securities of any series then Outstanding and
Coupons, if any, appertaining thereto;
(5) to establish any additional form of Security and to provide
for the issuance of any additional series of Securities and
Coupons, if any, appertaining thereto and to set forth the
terms thereof;
(6) to permit payment in the United States of principal, premium
or interest on Unregistered Securities or of interest on
Coupon Securities; or
(7) to provide for the issuance of uncertificated Securities of
one or more series in the place of certificated Securities.
From time to time, with the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of all series (voting
as one class) affected by such supplemental indenture or indentures, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental to the Debt Securities Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Debt Securities Indenture or of modifying in any manner the
rights of the Holders of the Securities of each such series under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby:
(1) change the Maturity of the principal of, or the Stated
Maturity of, or any installment of interest on, any Security,
or reduce the principal amount thereof (including in the
15
case of an Original Issue Discount Security the amount payable
upon acceleration of the Maturity thereof) or any premium
thereon or the rate of interest thereon, or change the method
of computing the amount of principal thereof on any date, or
eliminate a Place of Payment where, or the coin or currency in
which, any Security or any premium thereon or the interest
thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Maturity
or the Stated Maturity, as the case may be, thereof (or, in
the case of redemption or a repayment, on or after the
Redemption Date or the Repayment Date, as the case may be);
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is
required for any such supplemental indenture or the consent of
whose Holders is required for any waiver (of compliance with
certain provisions of the Debt Securities Indenture or certain
defaults hereunder and their consequences) provided for in the
Debt Securities Indenture; or
(3) modify any of the provisions of the "Supplemental Indentures",
"Waiver of Covenants" or "Waiver of Past Defaults" sections of
the Debt Securities Indenture, except to increase any such
percentage or to provide that certain other provisions of the
Debt Securities Indenture cannot be modified or waived without
the consent of the Holder of each Security affected thereby.
MERGER, CONSOLIDATION AND SALE OF ASSETS. The Company shall not
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety, to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance
or transfer the properties and assets of the Company
substantially as an entirety shall be a corporation organized
and existing under the laws of the United States of America or
any State or the District of Columbia, and shall expressly
assume, by an indenture supplemental to the Debt Securities
Indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of
the principal of and premium, if any, and interest on all the
Securities of each series and the Coupons, if any,
appertaining thereto and the performance of every covenant of
the Debt Securities Indenture on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default or Default, and no event which, after notice or
lapse of time or both, would become an Event of Default or a
Default, shall have happened and be continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such
supplemental indenture comply with these requirements and that
all conditions precedent provided for the Debt Securities
Indenture relating to such transaction have been complied
with.
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Debt Securities Indenture with the same effect as if such successor
corporation had been named as the Company therein.
In the event of any such conveyance or transfer, the Person named as
the Company or any successor which shall theretofore have become such may be
dissolved, wound-up and liquidated at
16
any time thereafter, and such Person thereafter shall be released from its
liabilities as obligor and maker of all the securities and from its obligations
under the Debt Securities Indenture.
OUTSTANDING DEBT SECURITIES. The Debt Securities Indenture provides
that, in determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the Applicable Indenture:
(a) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration
of the Maturity thereof; and
(b) Securities owned by the Company or any other obligor upon the
Securities or by any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other
obligor.
TRUSTEE. The Bank of New York is the Trustee under the Debt Securities
Indenture.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
SUMMARY. The following description of the terms of the Junior
Subordinated Debt Securities sets forth certain general terms and provisions.
The particular terms of any Junior Subordinated Debt Securities will be
contained in a prospectus supplement. The prospectus supplement will describe
the following terms of the Junior Subordinated Debt Securities:
(1) the title of the series of Junior Subordinated Debt
Securities;
(2) any limit upon the aggregate principal amount of the Junior
Subordinated Debt Securities and the Company's right to
increase such amount;
(3) the date or dates on which the principal of the Junior
Subordinated Debt Securities is payable (the "Stated
Maturity") or the method of determination thereof and the
Company's right to shorten or extend such date or dates;
(4) the rate or rates, if any, at which the Junior Subordinated
Debt Securities shall bear interest;
(5) the dates on which any such installment of interest shall be
payable (the "Interest Payment Dates");
(6) the right, if any, of the Company to defer or extend an
Interest Payment Date;
(7) the Regular Record Date for the interest payable on any
Interest Payment Date or the method by which any of the
foregoing shall be determined;
(8) the place or places where the principal of (and premium, if
any) and interest on the Junior Subordinated Debt Securities
will be payable and the place or places where notices and
demands to or upon the Company in respect of the Junior
Subordinated Debt Securities may be made ("Place of Payment");
17
(9) any period or periods within which or the date or dates on
which, the price or prices at which and the terms and
conditions upon which Junior Subordinated Debt Securities may
be redeemed, in whole or in part, at the option of the
Company;
(10) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Junior Subordinated Debt Securities
pursuant to any sinking fund, amortization or analogous
provisions, or at the option of a Holder thereof, and the
period or periods within which, the price or prices at which,
the currency or currencies (including currency unit or units)
in which and the other terms and conditions upon which the
Junior Subordinated Debt Securities shall be redeemed, repaid
or purchased, in whole or in part, pursuant to such
obligations;
(11) the denominations in which any Junior Subordinated Debt
Securities shall be issuable, if other than denominations of
$25.00 and any integral multiple thereof;
(12) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of
(and premium, if any) and interest, if any, on the Junior
Subordinated Debt Securities shall be payable, or in which the
Junior Subordinated Debt Securities shall be denominated;
(13) any additions, modifications or deletions in the events of
default under the Junior Indenture or covenants of the Company
specified in the Junior Indenture with respect to the Junior
Subordinated Debt Securities;
(14) if other than the principal amount thereof, the portion of the
principal amount of Junior Subordinated Debt Securities that
shall be payable upon declaration of acceleration of the
Maturity thereof;
(15) any additions or changes to the Junior Indenture with respect
to a series of Junior Subordinated Debt Securities as shall be
necessary to permit or facilitate the issuance of such series
in bearer form, registerable or not registerable as to
principal, and with or without interest coupons;
(16) any index or indices used to determine the amount of payments
of principal of and premium, if any, on the Junior
Subordinated Debt Securities and the manner in which such
amounts will be determined;
(17) the terms and conditions relating to the issuance of a
temporary Global Security representing all of the Junior
Subordinated Debt Securities of such series and the exchange
of such temporary global security for definitive Junior
Subordinated Debt Securities of such series;
(18) subject to the terms described herein under " -- Global Junior
Subordinated Debt Securities," whether the Junior Subordinated
Debt Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such
case, the Depositary for such Global Securities, which
Depositary shall be a clearing agency registered under the
Exchange Act;
(19) the appointment of any Paying Agent or Agents;
(20) the terms and conditions of any right to convert or exchange
the Junior Subordinated Debt Securities into other Company
securities;
(21) the transfer restrictions and legends required to be on the
Junior Subordinated Debt Securities;
(22) the form of Trust Agreement and Guarantee Agreement;
(23) the relative degree, if any, to which the Junior Subordinated
Debt Securities of the series shall be senior to or be
subordinated to other series of Junior Subordinated
18
Debt Securities or other indebtedness of the Company in right
of payment, whether such other series of Junior Subordinated
Debt Securities or other indebtedness are outstanding or not;
and
(24) any other terms of the Junior Subordinated Debt Securities not
inconsistent with the provisions of the Junior Indenture.
Unless otherwise provided in the related prospectus supplement, the
Junior Subordinated Debt Securities will be issued in global (book-entry) form
to a BXS Trust. The Corresponding Junior Subordinated Debt Securities will be
registered in the name of The Depository Trust Company ("DTC") or a nominee of
DTC.
The Junior Subordinated Debt Securities are to be issued in one or more
series under a Junior Subordinated Indenture, as supplemented from time to time
(as so supplemented, the "Junior Indenture"), between the Company and The Bank
of New York, as trustee (the "Junior Indenture Trustee"). Certain U.S. federal
income tax consequences and special considerations applicable to any such Junior
Subordinated Debt Securities will be described in the applicable prospectus
supplement.
The following summary of certain terms and provisions of the Junior
Subordinated Debt Securities, Corresponding Junior Subordinated Debt Securities
and the Junior Indenture is not complete. For a complete description, you should
read the Junior Indenture. The form of the Junior Indenture has been filed as an
exhibit to the registration statement of which this prospectus forms a part. The
Junior Indenture will be qualified under the Trust Indenture Act.
References herein to particular sections, articles or defined terms of
the Junior Indenture incorporate those sections, articles or defined terms into
this prospectus by reference. Capitalized terms not otherwise defined herein
shall have the meaning given to them in the Junior Indenture.
GENERAL. Each series of Junior Subordinated Debt Securities will rank
equally with all other series of Junior Subordinated Debt Securities and will be
unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in the Junior Indenture to all Senior Debt of the Company,
including the Debt Securities. See " -- Subordination."
Except as otherwise provided in the applicable prospectus supplement,
the Junior Indenture does not limit the incurrence or issuance of other secured
or unsecured debt of the Company, including Senior Debt, whether under the
Junior Indenture, any other existing indenture or any other indenture that the
Company may enter into in the future or otherwise.
The Junior Subordinated Debt Securities will be issuable in one or more
series pursuant to an indenture supplemental to the Junior Indenture or a
resolution of the Company's Board of Directors or a committee thereof.
Junior Subordinated Debt Securities may provide for an amount less than
the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof. Certain U.S. federal income tax
consequences and special considerations applicable to any such Junior
Subordinated Debt Securities will be described in the applicable prospectus
supplement.
If any index is used to determine the amount of payments of principal
of and premium, if any, on the Junior Subordinated Debt Securities, special U.S.
federal income tax, accounting and other considerations applicable thereto will
be described in the applicable prospectus supplement.
The Junior Indenture does not limit the aggregate principal amount of
the Junior Subordinated Debt Securities that may be authenticated and delivered
thereunder and provides that Junior Subordinated Debt Securities may be issued
in one or more series.
19
The Junior Indenture allows the Company to merge or consolidate with
another company or to transfer or lease all or substantially all of its assets
to another company. If these events occur, the other company shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under the Junior Indenture and the Company shall be discharged from all
obligations and covenants under the Junior Indenture and the Junior Subordinated
Debt Securities and may be dissolved and liquidated. See "Consolidation, Merger,
Sale of Assets and Other Transactions" for a more detailed discussion.
The Junior Indenture provides that the Company, when authorized by its
Board of Directors, and the Junior Indenture Trustee, at any time and from time
to time, may enter into one or more indentures supplemental thereto to, among
other things, change certain of the Company's obligations or certain of the
holder's rights concerning the Junior Subordinated Debt Securities of that
series without such holder's consent. The Company and the Junior Indenture
Trustee may enter into an indenture supplement to change the principal amount or
Stated Maturity of principal of or any installment of interest on (other than as
described herein under " -- Option to Defer Interest Payments") the Junior
Subordinated Debt Securities, however, with the consent of the Holders of not
less than a majority in principal amount of the outstanding Junior Subordinated
Debt Securities of each series affected by such supplemental indenture. See
"Modification of the Junior Indenture" for a more detailed discussion.
DENOMINATIONS, REGISTRATION AND TRANSFER. Unless otherwise specified in
the applicable prospectus supplement, the Junior Subordinated Debt Securities
will be issuable only in registered form without coupons in denominations of
$25.00 and any integral multiple thereof. See "Book-Entry Issuance." Subject to
restrictions relating to Junior Subordinated Debt Securities represented by
global certificates, Junior Subordinated Debt Securities of any series will be
exchangeable for other Junior Subordinated Debt Securities of the same series,
of authorized denominations, of a like aggregate principal amount, of the same
Original Issue Date and Stated Maturity and having the same terms.
Subject to restrictions relating to Junior Subordinated Debt Securities
represented by global certificates, Junior Subordinated Debt Securities may be
presented for exchange as provided above and may be surrendered by or on behalf
of the Depositary or its nominee to the Securities Registrar, accompanied by
registration instructions, without service charge and upon payment of any taxes
or other governmental charges as described in the Junior Indenture. The Company
will appoint the Junior Indenture Trustee as Securities Registrar under the
Junior Indenture.
In the event of any redemption, neither the Company nor the Junior
Indenture Trustee shall be required to (i) issue, transfer or exchange Junior
Subordinated Debt Securities of any series during a period beginning at the
opening of business 15 days before the day of mailing of a notice of redemption
and ending at the close of business on the day of mailing of a notice of
redemption or (ii) transfer or exchange any Junior Subordinated Debt Securities
so selected for redemption in whole or in part, except, in the case of any
Junior Subordinated Debt Securities to be redeemed in part, any portion thereof
not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBT SECURITIES. Unless otherwise stated in
a prospectus supplement or unless issued to a BXS Trust as Corresponding Junior
Subordinated Debt Securities, each series of the Junior Subordinated Debt
Securities will be issued as global Junior Subordinated Debt Securities to be
deposited with a Depositary designated by the Company and registered in the name
of such Depositary or its nominee. The depositary arrangements that will apply,
including the manner in which principal of and premium, if any, and interest on
Junior Subordinated Debt Securities and other payments will be payable are
discussed in more detail under the heading "Book-Entry Issuance."
20
PAYMENT AND PAYING AGENTS. The applicable prospectus supplement will
specify the place or places where the principal of (and premium, if any) and
interest on any series of Junior Subordinated Debt Securities shall be payable.
Unless otherwise indicated in the applicable prospectus supplement, payment of
any interest on any series of Junior Subordinated Debt Securities will be made
to the Person in whose name such Junior Subordinated Debt Security is registered
at the close of business on the Regular Record Date for such interest, except in
the case of Defaulted Interest. The Company may designate one or more Paying
Agents.
Any money deposited with the Junior Indenture Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the principal of
(and premium, if any) or interest on any Junior Subordinated Debt Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall (unless otherwise required by
applicable law), at the request of the Company, be paid to the Company or (if
held by the Company) be discharged from such trust and all liability of the
Junior Indenture Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease.
OPTION TO DEFER INTEREST PAYMENTS. If provided in the applicable
prospectus supplement, so long as no Debenture Event of Default has occurred and
is continuing, the Company will have the right, at any time or from time to time
during the term of any series of Junior Subordinated Debt Securities, to defer
payment of interest for up to such number of consecutive interest payment
periods as may be specified in the applicable prospectus supplement (each, an
"Extension Period"), subject to the terms, conditions and covenants, if any,
specified in such prospectus supplement, provided that no Extension Period may
extend beyond the Stated Maturity of such series of Junior Subordinated Debt
Securities. During any such Extension Period, the Company may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock; (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Corresponding Junior Subordinated Debt
Securities, or (iii) make any guarantee payments with respect to any guarantee
by the Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Junior Subordinated
Debt Securities (other than (a) dividends or distributions in Common Stock of
the Company, (b) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any rights under
such plan, (c) payments under the Guarantee, (d) purchases or acquisitions of
shares of Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or other contractual obligation of
the Company, (e) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, or (f)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged).
Prior to the termination of any such applicable Extension Period, the
Company may further defer the payment of interest.
REDEMPTION. Unless otherwise indicated in the applicable prospectus
supplement, the Company may at any time, at its option and subject to receipt of
prior approval of the Federal Reserve Board if such approval is then required
under applicable capital guidelines or policies, redeem the Junior Subordinated
Debt Securities of any series in whole or in part at any time or from time to
time prior to Maturity. If the Junior Subordinated Debt Securities of any series
are so redeemable only on or after a specified date or upon the satisfaction of
additional conditions, the applicable prospectus supplement will specify such
date or describe such conditions. Unless
21
otherwise indicated in the applicable prospectus supplement, Junior Subordinated
Debt Securities may be redeemed in part but only in integral multiples of
$25.00. Except as otherwise specified in the applicable prospectus supplement,
the redemption price for any Junior Subordinated Debt Security so redeemed shall
equal any accrued and unpaid interest (including Additional Interest) thereon to
the redemption date, plus 100% of the principal amount thereof.
Unless otherwise specified in the applicable prospectus supplement, if
a Tax Event in respect of a series of Junior Subordinated Debt Securities, an
Investment Company Event or a Capital Treatment Event shall occur and be
continuing, the Company may, at its option and subject to receipt of prior
approval by the Federal Reserve Board if such approval is then required under
applicable capital guidelines or policies, prepay such series of Junior
Subordinated Debt Securities in whole (but not in part) within 90 days following
the occurrence of such Tax Event, Investment Company Event or Capital Treatment
Event, at a prepayment price equal to 100% of the principal amount of such
Junior Subordinated Debt Securities then outstanding plus accrued and unpaid
interest to the date fixed for redemption, except as otherwise specified in the
applicable prospectus supplement.
"Tax Event" means the receipt by the Company of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date of issuance of the Junior Subordinated Debt Securities or of the related
Trust Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) such BXS Trust is, or will be within 90 days of the
date of such opinion of independent counsel, subject to U.S. federal income tax
with respect to income received or accrued on the Corresponding Junior
Subordinated Debt Securities or subject to more than a de minimis amount of
other taxes, duties or other governmental charges as determined by such counsel,
or (ii) interest payable by the Company on such series of Corresponding Junior
Subordinated Debt Securities is not, or within 90 days of the date of such
opinion of independent counsel, will not be, deductible by the Company, in whole
or in part, for U.S. federal income tax purposes.
A "Capital Treatment Event" means the reasonable determination by the
Company that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision thereof or
therein, or as a result of any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or after the date of issuance of the related Trust Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
that the Company will not be entitled to treat an amount equal to the
liquidation amount of the Trust Preferred Securities as "Tier 1 Capital" (or the
then equivalent thereof) for purposes of the capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Company.
An "Investment Company Event" means the receipt by the Company of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change (including any
announced prospective change) in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the affected BXS Trust
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of original issuance
of the Trust Preferred Securities of such affected BXS Trust.
22
Notice of any redemption will be mailed not later than 30 days and not
earlier than 60 days prior to the date fixed for redemption, to each Holder of
Junior Subordinated Debt Securities to be redeemed, at the address of such
Holder as it appears in the Securities Register. Unless the Company defaults in
payment of the redemption price, on and after the redemption date interest shall
cease to accrue on such Junior Subordinated Debt Securities or portions thereof
called for redemption.
MODIFICATION OF THE JUNIOR INDENTURE. From time to time, the Company
and the Junior Indenture Trustee may, without the consent of the Holders of any
series of Junior Subordinated Debt Securities, supplement the Junior Indenture
for specified purposes, including, among other things, curing ambiguities or
inconsistencies (provided that any such action does not materially adversely
affect the interest of the Holders of any series of Junior Subordinated Debt
Securities or, in the case of Corresponding Junior Subordinated Debt Securities,
the Holders of the Related Trust Preferred Securities so long as they remain
outstanding) and complying with the requirements of the SEC in order to effect
or maintain the qualification of the Junior Indenture under the Trust Indenture
Act. The Junior Indenture contains provisions permitting the Company and the
Junior Indenture Trustee, with the consent of the holders of not less than a
majority in principal amount of each outstanding series of Junior Subordinated
Debt Securities affected, to supplement the Junior Indenture for the purpose of
modifying in any manner the rights of the Holders of such series of the Junior
Subordinated Debt Securities under the Junior Indenture; provided, however, that
no such supplement may, without the consent of the holder of each outstanding
Junior Subordinated Debt Security so affected, among other things, (i) change
the Stated Maturity of the principal of, or any installment of interest on
(other than as described herein under " -- Option to Defer Interest Payments")
any series of Junior Subordinated Debt Securities (except as otherwise specified
in the applicable prospectus supplement), or reduce the principal amount thereof
or of interest thereon or reduce any premium payable upon the redemption
thereof, or change the place of payment where any Junior Subordinated Debt
Securities or interest thereon is payable or (ii) reduce the percentage of
principal amount of Junior Subordinated Debt Securities of any series, the
Holders of which are required to consent to any such supplement; provided that,
in the case of Corresponding Junior Subordinated Debt Securities, so long as any
of the Related Trust Preferred Securities remain outstanding, no such amendment
may be made that adversely affects the holders of such Trust Preferred
Securities, and no termination of the Junior Indenture may occur, and no waiver
of any Debenture Event of Default or compliance with any covenant under the
Junior Indenture may be effective, without the prior consent of the holders of
at least a majority of the aggregate Liquidation Amount of all outstanding
Related Trust Preferred Securities unless and until the principal (and premium,
if any) of the Corresponding Junior Subordinated Debt Securities and all accrued
and unpaid interest thereon have been paid in full and certain other conditions
have been satisfied.
In addition, the Company and the Junior Indenture Trustee may execute,
without the consent of any holder of Junior Subordinated Debt Securities, any
supplemental Junior Indenture for the purpose of establishing the form or terms
of any new series of Junior Subordinated Debt Securities.
JUNIOR SUBORDINATED DEBT SECURITY EVENTS OF DEFAULT. The Junior
Indenture provides that any one or more of the following described events (with
grace and cure periods) with respect to a series of Junior Subordinated Debt
Securities that has occurred and is continuing constitutes a "Debenture Event of
Default" with respect to such series of Junior Subordinated Debt Securities:
(i) default in the payment of any interest on such series of
Junior Subordinated Debt Securities, including any Additional
Interest in respect thereof, when it becomes due and payable
and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an
Extension Period);
23
(ii) default in the payment of the principal of (or premium, if
any, on) such series of Junior Subordinated Debt Securities
when due, whether at Maturity, upon redemption, by declaration
of acceleration or otherwise;
(iii) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Company in the
Junior Indenture and continuance of such default or breach for
90 days after written notice specifying such default or breach
and requiring it to be remedied to the Company from the Junior
Indenture Trustee or the Holders of at least 25% in aggregate
outstanding principal amount of such affected series of
outstanding Junior Subordinated Debt Securities; or
(iv) certain events in bankruptcy, insolvency or reorganization of
the Company.
The Holders of a majority in principal amount of outstanding Junior
Subordinated Debt Securities of any series have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Junior Indenture Trustee. The Junior Indenture Trustee or the Holders of not
less than 25% in aggregate principal amount of outstanding Junior Subordinated
Debt Securities of each series affected may declare the principal (or, if the
Junior Subordinated Debt Securities of such series are Discount Securities, such
portion of the principal amount as may be specified in a prospectus supplement)
due and payable immediately upon a Debenture Event of Default, and, in the case
of Corresponding Junior Subordinated Debt Securities, should the Junior
Indenture Trustee or such Holders of such Corresponding Junior Subordinated Debt
Securities fail to make such declaration, the Holders of at least 25% in
aggregate Liquidation Amount of the Related Trust Preferred Securities shall
have such right by a notice in writing to the Company and the Junior Indenture
Trustee. The Holders of a majority in aggregate principal amount of outstanding
Junior Subordinated Debt Securities of each series affected may annul such
declaration and waive the default by written notice to the Property Trustee, the
Company and the Junior Indenture Trustee, subject to certain limitations. In the
case of Corresponding Junior Subordinated Debt Securities, should the holders of
such Corresponding Junior Subordinated Debt Securities fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Related Trust Preferred Securities shall have such
right.
The holders of a majority in aggregate outstanding principal amount of
each series of Junior Subordinated Debt Securities affected thereby may, on
behalf of the Holders of all the Junior Subordinated Debt Securities of such
series, waive any past default, except a default in the payment of principal of
(or premium, if any) or interest (including any Additional Interest) (unless
such default has been cured and a sum sufficient to pay all matured installments
of interest (including any Additional Interest) and principal due otherwise than
by acceleration has been deposited with the Junior Indenture Trustee) or a
default in respect of a covenant or provision which under the Junior Indenture
cannot be modified or amended without the consent of the Holder of each
outstanding Junior Subordinated Debt Security of such series. In the case of
Corresponding Junior Subordinated Debt Securities, should the holders of such
Corresponding Junior Subordinated Debt Securities fail to annul such declaration
and waive such default, the holders of a majority in aggregate Liquidation
Amount of the Related Trust Preferred Securities shall have such right. The
Company is required to file annually with the Junior Indenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Junior Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES.
If a Debenture Event of Default with respect to a series of Corresponding Junior
Subordinated Debt Securities has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on such
Corresponding Junior Subordinated Debt Securities on the date such interest or
principal is due and payable, a holder of the Related Trust Preferred Securities
may institute a suit directly against the Company for enforcement of payment to
such
24
holder of principal of (and premium, if any) and interest (including any
Additional Interest) on such Corresponding Junior Subordinated Debt Securities
having a principal amount equal to the aggregate Liquidation Amount of the
Related Trust Preferred Securities of such holder (a "Direct Action"). The
Company may not amend the Junior Indenture to remove the foregoing right to
bring a Direct Action without the prior consent of the holders of all of the
Related Trust Preferred Securities outstanding until the principal (and premium,
if any) of the Corresponding Junior Subordinated Debt Securities and all accrued
unpaid interest (including Additional Interest) thereon have been paid in full.
The holders of such Related Trust Preferred Securities will not be able
to exercise directly any remedies other than those set forth in the preceding
paragraph available to the holders of the Junior Subordinated Debt Securities
unless there shall have been an event of default under the Trust Agreement. See
"Description of Trust Preferred Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS. The
Junior Indenture provides that the Company shall not consolidate with or merge
with or into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(i) in case the Company consolidates with or merges with or into
another Person or conveys, transfers or leases its properties
and assets substantially as an entirety to any Person, the
successor Person is a corporation, partnership, limited
liability company or trust organized and existing under the
laws of the United States or any State or the District of
Columbia, and such successor Person expressly assumes the due
and punctual payment of the principal of (and premium, if any)
and interest (including the Additional Interest) on the Junior
Subordinated Debt Securities and the performance of every
covenant and every obligation of the Junior Indenture on the
part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction, no
Debenture Event of Default, and no event which, after notice
or lapse of time or both, would become a Debenture Event of
Default, shall have occurred and be continuing; and
(iii) certain other conditions as prescribed by the Junior Indenture
are met.
SATISFACTION AND DISCHARGE. The Junior Indenture shall cease to be of
further effect and the Junior Indenture Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of the Junior Indenture, when
(1) either (a) all Junior Subordinated Debt Securities theretofore
authenticated and delivered have been delivered to the Junior
Indenture Trustee for cancellation or (b) all such Securities
not theretofore delivered to the Trustee for cancellation have
become due and payable, or will become due and payable at
their Stated Maturity within one year of the date of deposit,
and the Company has deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose, an
amount in the currency or currencies in which the Securities
of such series are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest (including any Additional
Interest) to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity;
(2) the Company has paid or caused to be paid all other sums
payable under the Junior Indenture by the Company; and
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(3) the Company has delivered to the Junior Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating
that all conditions precedent of the Junior Indenture have
been complied with.
TRANSFER OR EXCHANGE. At the option of the holder, Junior Subordinated
Debt Securities may be exchanged for other Securities of the same series of any
authorized denominations, of a like aggregate principal amount, of the same
Original Issue Date and Stated Maturity and having the same terms, upon
surrender of the Junior Subordinated Debt Securities to be exchanged at such
office or agency. Whenever any securities are so surrendered for exchange, the
Company shall execute, and the Junior Indenture Trustee shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive. All Securities issued upon any transfer or exchange of the Junior
Subordinated Debt Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under the Junior
Indenture, as the Securities surrendered upon such transfer or exchange.
SUBORDINATION. The Company covenants and agrees, and each holder of a
Junior Subordinated Debt Security, by its acceptance thereof, likewise covenants
and agrees, that the payment of the principal of (and premium, if any) and
interest (including any Additional Interest) on each and all of the Junior
Subordinated Debt Securities are hereby expressly made subordinate and junior in
right of payment to the prior payment in full of all amounts then due and
payable in respect of all Senior Debt. As used herein, "Senior Debt" with
respect to any series of Securities means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Company, whether incurred on or prior to the date of this Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or the Other
Debentures. Senior Debt does not include (a) any Debt of the Company which, when
incurred and without respect to any election under Section 1111(b) of the U.S.
Bankruptcy Code of 1978, as amended, was without recourse to the Company; (b)
any Debt of the Company to any of its Subsidiaries; (c) Debt to any employee of
the Company; (d) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Debt by the Holders as a result
of the subordination provisions of the Junior Indenture would be greater than
such payments otherwise would have been as a result of any obligation of such
holders of such Debt to pay amounts over to the obligees on such trade accounts
payable or accrued liabilities arising in the ordinary course of business as a
result of the subordination provisions to which such Debt is subject; and (e)
any other debt securities issued pursuant to the Junior Indenture.
In the event of:
(i) any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, its creditors or
its property,
(ii) any proceeding for the liquidation, dissolution, or other
winding up of the Company, voluntary or involuntary, whether
or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors or
(iv) any other marshaling of the assets of the Company (each such
event, if any, herein sometimes referred to as a
"Proceeding"),
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then the holders of Senior Debt shall be entitled to receive payment in full of
principal of (and premium, if any) and interest, if any, on such Senior Debt, or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Securities are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or securities
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of the Company (including any series of
the Securities) subordinated to the payment of the Securities, such payment or
distribution being hereinafter referred to as a "Junior Subordinated Payment"),
on account of principal of (or premium, if any) or interest (including any
Additional Interest) on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary and to that end the
holders of Senior Debt shall be entitled to receive, for application to the
payment thereof, any payment or distribution of any kind or character, whether
in cash, property or securities, including any Junior Subordinated Payment,
which may be payable or deliverable in respect of the Securities in any such
Proceeding; provided, however, that holders of Senior Debt shall not be entitled
to receive payment of any such amounts to the extent that such holders would be
required by the subordination provisions of such Senior Debt to pay such amounts
over to the obligees on trade accounts payable or other liabilities arising in
the ordinary course of business.
In the event that, notwithstanding the foregoing provisions of this
Section, the Junior Indenture Trustee or the Holder of any Junior Subordinated
Debt Security shall have received any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities,
including any Junior Subordinated Payment, before all Senior Debt is paid in
full or payment thereof is provided for in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Debt, and if such fact shall,
at or prior to the time of such payment or distribution, have been made known to
a Responsible Officer of the Junior Indenture Trustee or, as the case may be,
such Holder, then and in such event such payment or distribution shall be paid
over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
TRUST EXPENSES. The Company, as holder of the Trust Common Securities,
covenants to pay all debts and obligations and all costs and expenses of each
BXS Trust, including, but not limited to, all costs and expenses relating to the
organization of each BXS Trust, the fees and expenses of the Trustees and all
costs and expenses relating to the operation of such BXS Trust, and to pay any
and all taxes, duties, assessments or other governmental charges of whatever
nature imposed on each BXS Trust by the United States or any other taxing
authority.
GOVERNING LAW. The Junior Indenture and the Junior Subordinated Debt
Securities will be governed by and construed in accordance with the laws of the
State of New York, without regard to principles of conflicts of laws.
INFORMATION CONCERNING THE JUNIOR INDENTURE TRUSTEE. The Junior
Indenture Trustee undertakes to perform such duties and only such duties as are
specifically set forth in the Junior Indenture, and no implied covenants or
obligations shall be read into the Junior Indenture against the Trustee. The
Junior Indenture Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Junior Indenture at the request or
direction of any of the holders of Junior Subordinated Debt Securities pursuant
to the Junior Indenture, unless such holders shall have offered to the Junior
Indenture Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
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DESCRIPTION OF TRUST PREFERRED SECURITIES
This summary of certain provisions of the Trust Preferred Securities
and each Trust Agreement is not complete. For a complete description, you should
read each Trust Agreement and the applicable prospectus supplement. Wherever
particular defined terms of a Trust Agreement are referred to herein or in a
prospectus supplement, such defined terms are incorporated herein or therein by
reference. The form of each Trust Agreement has been filed as an exhibit to the
registration statement of which this prospectus forms a part. The applicable
prospectus supplement will also describe certain U.S. federal income tax
considerations applicable to any offering of the Trust Preferred Securities.
Pursuant to the terms of the applicable Trust Agreement, each BXS Trust
will sell Trust Preferred Securities to the public and Trust Common Securities
to the Company. The Trust Preferred Securities represent preferred beneficial
interests in the BXS Trust that sold them. Holders of such Trust Preferred
Securities will be entitled to receive Distributions and amounts payable on
redemption or liquidation ahead of holders of the Trust Common Securities. A
more complete discussion appears under the heading " -- Subordination of Trust
Common Securities." Holders of the Trust Preferred Securities will also be
entitled to other benefits as described in the corresponding Trust Agreement.
Each of the BXS Trusts is a legally separate entity and the assets of
one are not available to satisfy the obligations of any of the others.
GENERAL. The Trust Preferred Securities of a BXS Trust will rank on a
parity, and payments will be made thereon pro rata, with the Trust Common
Securities of that BXS Trust except as described under " -- Subordination of
Trust Common Securities." Legal title to the Corresponding Junior Subordinated
Debt Securities will be held and administered by the Property Trustee in trust
for the benefit of the holders of the Related Trust Preferred Securities and
Trust Common Securities.
DISTRIBUTIONS. Distributions on the Trust Securities will be
cumulative, will accumulate whether or not there are funds of the related BXS
Trust available, will accrue from the date of original issuance and will be
payable in arrears, subject to the Company's right to defer payment of interest
on the Junior Subordinated Debt Securities as described under "Description of
Junior Subordinated Debt Securities -- Option to Defer Interest Payments," on
such dates as specified in the applicable prospectus supplement. In the event
that any date on which Distributions are payable on the Trust Securities is not
a Business Day, payment of the Distribution payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect to any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in either case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Junior Indenture Trustee is closed for business.
Each BXS Trust's Trust Preferred Securities represent preferred
beneficial interests in the applicable BXS Trust and the Distributions on each
Trust Preferred Security will be payable at a rate specified in the applicable
prospectus supplement for such Trust Preferred Securities. Distributions to
which holders of Trust Preferred Securities are entitled will accumulate
additional Distributions at the rate per annum if and as specified in the
applicable prospectus supplement. The
28
term "Distributions" as used herein includes any such additional Distributions
unless otherwise stated.
If an Extension Period occurs with respect to the Corresponding Junior
Subordinated Debt Securities, distributions on the Related Trust Preferred
Securities will be correspondingly deferred. See "Description of Junior
Subordinated Debt Securities -- Option to Defer Interest Payments."
The revenue of each BXS Trust available for distribution to holders of
its Trust Securities will be limited to payments it receives under the
Corresponding Junior Subordinated Debt Securities in which the BXS Trust will
invest the proceeds from the issuance and sale of its Trust Securities. See
"Description of Junior Subordinated Debt Securities -- Corresponding Junior
Subordinated Debt Securities." If the Company does not make interest payments on
such Corresponding Junior Subordinated Debt Securities, the Property Trustee
will not have funds available to pay Distributions on the related Trust
Securities. The payment of Distributions (if and to the extent the BXS Trust has
funds legally available for the payment of such Distributions and cash
sufficient to make such payments) is guaranteed by the Company on a limited
basis as set forth herein under "Description of Guarantees."
Distributions on the Trust Preferred Securities will be payable to the
holders thereof as they appear on the register of such BXS Trust at the close of
business on the relevant record dates for the related Distribution Dates.
Subject to any applicable laws and regulations and the provisions of the
applicable Trust Agreement, each such payment will be made as described under
"Book-Entry Issuance."
REDEMPTION OR EXCHANGE
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debt Securities, whether at
maturity or upon earlier redemption as provided in the Junior Indenture, the
proceeds from such repayment or redemption shall be applied by the Property
Trustee to redeem a Like Amount of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate Liquidation Amount of such Trust Securities plus
accumulated and unpaid Distributions thereon to the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by the
Company upon the concurrent redemption of such Corresponding Junior Subordinated
Debt Securities, allocated on a pro rata basis (based on Liquidation Amounts)
among the Trust Securities. See "Description of Junior Subordinated Debt
Securities -- Redemption." If less than all the Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Trust Securities. The Redemption Price will be
payable on each Redemption Date only to the extent that the BXS Trust has funds
then on hand and available in the Payment Account for the payment of such
Redemption Price.
DISTRIBUTION OF CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES.
Subject to the Company having received prior approval of the Federal Reserve
Board to do so, if such approval is then required under applicable capital
guidelines or policies of the Federal Reserve Board, the Company has the right
at any time (including upon the occurrence and continuation of a Tax Event,
Investment Company Event or Capital Treatment Event in respect of the BXS Trust)
to dissolve any BXS Trust and, after satisfaction of liabilities to creditors of
such BXS Trust as provided by applicable law, cause a Like Amount of the
Corresponding Junior Subordinated Debt Securities in respect of the Trust
Securities issued by such BXS Trust to be distributed to the holders of such
Trust Securities in liquidation of such BXS Trust.
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"Like Amount" means (i) with respect to a redemption of any series of
Trust Securities, Trust Securities of such series having a Liquidation Amount
equal to that portion of the principal amount of Corresponding Junior
Subordinated Debt Securities to be contemporaneously redeemed in accordance with
the Junior Indenture, the proceeds of which will be used to pay the Redemption
Price of such Trust Securities allocated to the Trust Securities based upon
their relative Liquidation Amounts and the proceeds of which will be used to pay
the redemption price of such Trust Securities, and (ii) with respect to a
distribution of Corresponding Junior Subordinated Debt Securities to Holders of
any series of Trust Securities in connection with a dissolution or liquidation
of the related BXS Trust, Corresponding Junior Subordinated Debt Securities
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Corresponding Junior Subordinated Debt
Securities are distributed.
"Liquidation Amount" means the stated liquidation amount per Trust
Security of $25 (or such other stated amount as is set forth in the applicable
prospectus supplement).
There can be no assurance as to the market prices for the Trust
Preferred Securities or the Corresponding Junior Subordinated Debt Securities
that may be distributed in exchange for Trust Preferred Securities if a
dissolution and liquidation of a BXS Trust were to occur. Accordingly, the Trust
Preferred Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debt Securities that the investor may receive on dissolution and
liquidation of a BXS Trust, may trade at a discount to the price that the
investor paid to purchase the Trust Preferred Securities offered hereby.
If the Property Trustee gives a notice of redemption in respect of any
Trust Securities, then, while the Trust Preferred Securities are in
book-entry-only form, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are available in the Payment Account, the Property Trustee
will irrevocably deposit with DTC funds sufficient to pay the applicable
Redemption Price and will give DTC irrevocable instructions and authority to pay
the Redemption Price to the holders of such Trust Preferred Securities. See
"Book-Entry Issuance." If such Trust Preferred Securities are held in
certificated form, the Property Trustee, to the extent funds are available in
the Payment Account, will irrevocably deposit with the Paying Agent for such
Trust Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such Paying Agent irrevocable instructions and authority to
pay the Redemption Price to the Holders thereof upon surrender of their
certificates evidencing such Trust Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of such Trust Securities so called for
redemption will cease, except the right of the holders of such Trust Securities
to receive the applicable Redemption Price and any Distribution payable on or
prior to the Redemption Date, but without interest, and such Trust Preferred
Securities will cease to be outstanding. In the event that any date on which any
applicable Redemption Price is payable is not a Business Day, then payment of
the applicable Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the applicable Redemption Price in
respect of any Trust Securities called for redemption is improperly withheld or
refused and not paid either by a BXS Trust or by the Company pursuant to the
related Guarantee (as described under "Description of Guarantees"),
Distributions on such Trust Securities will continue to accrue at the then
applicable rate from the Redemption Date originally established by such BXS
Trust for such Trust Securities to the date such applicable Redemption Price is
actually
30
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the applicable Redemption Price.
If less than all of the outstanding Trust Securities issued by a BXS
Trust are to be redeemed on a Redemption Date, then the aggregate Liquidation
Amount of such Trust Securities to be redeemed shall be allocated on a pro rata
basis (based on Liquidation Amounts) among the Trust Securities. The particular
Trust Securities to be redeemed shall be selected on a pro rata basis (based
upon Liquidation Amounts) not more than 60 days prior to the Redemption Date by
the Property Trustee from the outstanding Trust Securities not previously called
for redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof, unless a
different amount is specified in the applicable prospectus supplement) of the
Liquidation Amount of Trust Securities of a denomination larger than $25 (or
such other denomination as is specified in the applicable prospectus
supplement). The Property Trustee shall promptly notify the Securities Registrar
in writing of the Trust Securities selected for redemption and, in the case of
any Trust Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of Trust
Securities shall relate, in the case of any Trust Securities redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount of Trust
Preferred Securities which has been or is to be redeemed. Notice of any
redemption will be mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Trust Securities to be redeemed; at such
Holder's address appearing in the Security Register.
SUBORDINATION OF TRUST COMMON SECURITIES. Payment of Distributions on,
and the Redemption Price of, each BXS Trust's Trust Securities, as applicable,
shall generally be made pro rata to the holders of the Trust Securities based on
the Liquidation Amount of such Trust Securities; provided, however, that if on
any Distribution Date or Redemption Date, a Debenture Event of Default or other
Event of Default shall have occurred and be continuing, no payment of any
Distribution on, Redemption Price of, any of such BXS Trust's Trust Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Trust Common Securities, shall be made unless payment
in full in cash of all accumulated and unpaid Distributions on all of such BXS
Trust's outstanding Trust Preferred Securities for all Distribution Dates
occurring on or prior thereto, or in the case of payment of the applicable
Redemption Price the full amount of such Redemption Price on all of such BXS
Trust's outstanding Trust Preferred Securities, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, such BXS Trust's Trust Preferred Securities then due and
payable.
In the case of the occurrence of any Event of Default under the
applicable Trust Agreement resulting from a Debenture Event of Default, the
Company as holder of such BXS Trust's Trust Common Securities will be deemed to
have waived any right to act with respect to any such Event of Default under the
applicable Trust Agreement until the effect of all such Events of Default with
respect to such Trust Preferred Securities have been cured, waived or otherwise
eliminated. Until all such Events of Default under the applicable Trust
Agreement with respect to the Trust Preferred Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the Holders of such Trust Preferred Securities and not on behalf of the
Company as Holder of such BXS Trust's Trust Common Securities, and only the
Holders of such Trust Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION. Pursuant to each Trust
Agreement, each BXS Trust shall dissolve on the first to occur of:
(i) the expiration of its term;
31
(ii) certain events of bankruptcy, dissolution or liquidation of
the Company or the Holder of the Trust Common Securities;
(iii) the written direction from the Company, as Depositor, to the
Property Trustee to dissolve such BXS Trust (which direction
by the Company is optional and solely within the discretion of
the Company, subject to the Company having received prior
approval of the Federal Reserve if then so required under
applicable capital guidelines or policies) and, after
satisfaction of liabilities to creditors of such BXS Trust as
provided by applicable law, to distribute a Like Amount of the
Corresponding Junior Subordinated Debt Securities to the
holders of its Trust Securities;
(iv) redemption of all of such BXS Trust's Trust Securities in
connection with the redemption of all the Corresponding Junior
Subordinated Securities (including upon the occurrence and
continuation of a Tax Event, Capital Treatment Event or
Investment Company Event); and
(v) the entry of an order for the dissolution of such BXS Trust by
a court of competent jurisdiction.
If an early dissolution occurs as described in clause (ii), (iii) or
(v) above, the relevant BXS Trust shall be liquidated by the related BXS Trust
Trustees as expeditiously as such BXS Trust Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of such BXS Trust
as provided by applicable law, to the holders of such Trust Securities a Like
Amount of the Corresponding Junior Subordinated Debt Securities; provided,
however, in the event that such distribution is determined by the Property
Trustee not to be practical, the Trust Property of such BXS Trust will be
liquidated, and such BXS Trust will be dissolved, wound-up or terminated by the
Property Trustee and the holders of such Trust Securities will be entitled to
receive out of the assets of such BXS Trust available for distribution to
holders, after satisfaction of liabilities to creditors of such BXS Trust as
provided by applicable law, an amount equal to the aggregate of the Liquidation
Amount plus accumulated and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because such BXS Trust has insufficient
assets available to pay in full the aggregate Liquidation Distribution, then the
amounts payable by such BXS Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). The Holder(s) of such BXS Trust's
Trust Common Securities will be entitled to receive Liquidation Distributions
upon any such liquidation pro rata with the holders of the Trust Preferred
Securities, except that if a Debenture Event of Default has occurred and is
continuing, the Trust Preferred Securities shall have a priority over the Trust
Common Securities with respect to any such Liquidation Distribution, and no
payments shall be made with respect to the Trust Common Securities until holders
of Trust Preferred Securities have been paid in full.
EVENTS OF DEFAULT; NOTICE. Any one of the following events constitutes
an "Event of Default" under each Trust Agreement with respect to the Trust
Preferred Securities issued thereunder (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the
Junior Indenture (see "Description of Junior Subordinated Debt
Securities -- Junior Subordinated Debt Security Events of
Default"); or
(ii) default by such BXS Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such
default for a period of 30 days; or
32
(iii) default by such BXS Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable;
or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the BXS Trust Trustees
in such Trust Agreement (other than a covenant or warranty, a
default in the performance or breach of which is dealt with in
clause (ii) or (iii) above), and continuation of such default
or breach for a period of 60 days after there has been given,
by registered or certified mail, to the defaulting BXS Trust
Trustee or Trustees by the Holders of at least 25% in
aggregate Liquidation Amount of the outstanding Trust
Preferred Securities of the applicable BXS Trust, a written
notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of
Default" under such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency
with respect to the Property Trustee and the failure by the
Company, as Depositor, to appoint a successor Property Trustee
within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such BXS Trust's Trust
Securities, the Administrative Trustees and the Company, as Depositor, unless
such Event of Default shall have been cured or waived. The Company, as
Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under each Trust
Agreement.
REMOVAL OF BXS TRUST TRUSTEES. Unless a Debenture Event of Default
shall have occurred and be continuing, any BXS Trust Trustee may be removed at
any time by the holder of the Trust Common Securities. If a Debenture Event of
Default has occurred and is continuing, the Property Trustee or the Delaware
Trustee, or both of them, may be removed at such time by an action of the
Holders of a majority in Liquidation Amount of the outstanding Trust Preferred
Securities, delivered to the Relevant Trustee. An Administrative Trustee may be
removed by the holder of the Trust Common Securities at any time and only such
holder shall have the right to remove any Administrative Trustee. No resignation
or removal of a BXS Trust Trustee and no appointment of a successor trustee
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE. Unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of the Trust Indenture Act or of any jurisdiction
in which any part of the Trust Property of a BXS Trust may at the time be
located, the Company, as Depositor, and the Administrative Trustees shall have
power to appoint one or more persons approved by the Property Trustee either to
act as a co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF BXS TRUST TRUSTEES. Any person into which
the Property Trustee, the Delaware Trustee or any Administrative Trustee that is
not a natural person may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Trustee shall be a party, or any Person succeeding
to all or substantially all the corporate trust business of such Trustee, shall
be the successor of such Trustee under each Trust Agreement, provided such
Person shall be otherwise qualified and eligible.
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MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE BXS
TRUSTS. A BXS Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease all or substantially all of its
properties and assets substantially as an entirety to any Person, except as
described below. A BXS Trust may, at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the Holders of
the related Trust Preferred Securities, merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease all or substantially
all of its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that:
(i) such successor entity either (a) expressly assumes all of the
obligations of such BXS Trust with respect to such Trust
Securities or (b) substitutes for such Trust Securities other
securities having substantially the same terms as such Trust
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as such Trust Securities in
priority with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property
Trustee as the holder of the Corresponding Junior Subordinated
Debt Securities;
(iii) the Successor Securities (if Trust Preferred Securities) are
listed or traded, or any Successor Securities will be listed
or traded upon notification of issuance, on any national
securities exchange or other organization on which such Trust
Preferred Securities are then listed or traded, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Trust
Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
material rights, preferences and privileges of the holders of
the Trust Securities (including any Successor Securities) in
any material respect;
(vi) such successor entity has a purpose substantially identical
and limited to that of the BXS Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has
received an opinion from independent counsel to the BXS Trust
experienced in such matters to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any
material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer
or lease, neither the BXS Trust nor such successor entity will
be required to register as an investment company under the
Investment Company Act; and
(viii) the Company or any permitted successor or assignee owns all of
the common securities of such successor entity and guarantees
the obligations of such successor entity under the Successor
Securities at least to the extent provided by the related
Guarantee.
Notwithstanding the foregoing, a BXS Trust shall not, except with the
consent of holders of 100% in Liquidation Amount of the related Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other Person to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or
34
lease would cause the BXS Trust or the successor entity to be classified as
other than a grantor trust for U.S. federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT. Except as provided
below and in the Junior Indenture and as otherwise required by law and the
applicable Trust Agreement, the holders of the Trust Preferred Securities will
have no voting rights.
Each Trust Agreement may be amended from time to time by the Company,
as Depositor, the Property Trustee and the Administrative Trustees, without the
consent of the holders of the Trust Preferred Securities (i) to cure any
ambiguity, correct or supplement any provisions in such Trust Agreement that may
be inconsistent with any other provision therein, or to make any other
provisions with respect to matters or questions arising under such Trust
Agreement, which shall not be inconsistent with the other provisions of such
Trust Agreement, provided that any such amendment does not adversely affect in
any material respect the interests of any holder of Trust Securities, or (ii) to
modify, eliminate or add to any provisions of such Trust Agreement to such
extent as shall be necessary to ensure that the relevant BXS Trust will be
classified for U.S. federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that such BXS Trust will
not be required to register as an "investment company" under the Investment
Company Act. Any amendments of such Trust Agreement shall become effective when
notice thereof is given to the holders of Trust Securities. Each Trust Agreement
may be amended by the related BXS Trust Trustees and the Company, as Depositor,
with (i) the consent of holders of Trust Securities representing not less than a
majority (based upon Liquidation Amounts) of the outstanding Trust Securities,
and (ii) receipt by such BXS Trust Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to such BXS
Trust Trustees in accordance with such amendment will not affect such BXS
Trust's status as a grantor trust for U.S. federal income tax purposes or such
BXS Trust's exemption from status as an "investment company" under the
Investment Company Act, provided that without the consent of each affected
holder of Trust Securities, such Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made in
respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
So long as any Corresponding Junior Subordinated Debt Securities are
held by the Property Trustee, the related BXS Trust Trustees shall not (i)
direct the time, method and place of conducting any proceeding for any remedy
available to the Junior Indenture Trustee, or executing any trust or power
conferred on the Property Trustee with respect to such Corresponding Junior
Subordinated Debt Securities, (ii) waive any past default that is waivable under
the Junior Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Corresponding Junior Subordinated Debt Securities
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Junior Indenture or such Corresponding Junior Subordinated
Debt Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in aggregate
Liquidation Amount of all outstanding Trust Preferred Securities; provided,
however, that where a consent under the Junior Indenture would require the
consent of each holder of Corresponding Junior Subordinated Debt Securities
affected thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each Holder of the Related Trust Preferred
Securities. The BXS Trust Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Trust Preferred
Securities except by subsequent vote of the Holders of such Trust Preferred
Securities. The Property Trustee shall notify each Holder of Trust Preferred
Securities of any notice of default received from the Junior Indenture Trustee
with respect to the Corresponding Junior Subordinated Debt Securities. In
addition to obtaining the foregoing approvals of the Holders of the Trust
Preferred Securities, prior to taking any of the foregoing actions, the BXS
Trust Trustees shall, at the expense
35
of the Company as Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the BXS Trust will not fail to be classified as a
grantor trust for U.S. federal income tax purposes on account of such action.
Notwithstanding that holders of Trust Preferred Securities are entitled
to vote or consent under the circumstances set forth in the applicable Trust
Agreement, any of the Trust Preferred Securities that are owned by the Company,
as Depositor, the BXS Trust Trustees or any affiliate of the Company or any BXS
Trust Trustees, shall generally, for purposes of such vote or consent, be
disregarded and deemed not to be outstanding.
GLOBAL TRUST PREFERRED SECURITIES. Unless otherwise set forth in a
prospectus supplement, any Trust Preferred Securities will be represented by
fully registered global certificates issued as global Trust Preferred Securities
to be deposited with a depositary with respect to that series, instead of paper
certificates issued to each individual holder. The depositary arrangements that
will apply, including the manner in which principal of and premium, if any, and
interest on global Trust Preferred Securities and other payments will be payable
are discussed in more detail under the heading "Book-Entry Issuance."
PAYMENT AND PAYING AGENCY. Payments of Distributions in respect of
Trust Preferred Securities represented by global certificates shall be made to
DTC as described under "Book-Entry Issuance." If any Trust Preferred Securities
are not represented by global certificates, such payments shall be made by check
mailed to the address of the Person entitled thereto at such address as shall
appear on the Securities Register. Unless otherwise specified in the applicable
prospectus supplement, the paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company, as Depositor. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Administrative Trustees, Property Trustee and the Company. In the
event that the Property Trustee shall no longer be the Paying Agent, the
Administrative Trustees shall appoint a successor (which shall be a bank or
trust company) that is acceptable to the Property Trustee and the Company to act
as Paying Agent.
REGISTRAR AND TRANSFER AGENT. Unless otherwise specified in the
applicable prospectus supplement, the Property Trustee will act as registrar and
transfer agent for the Trust Preferred Securities. No service charge shall be
made to a Holder for any transfer or exchange of Trust Preferred Securities, but
the Property Trustee or the Securities Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Trust Preferred Securities. Neither
the BXS Trusts nor the Property Trustee will be required to register the
transfer or exchange of any Trust Preferred Securities selected for redemption
in whole or in part.
INFORMATION CONCERNING THE PROPERTY TRUSTEE. The Property Trustee is
under no obligation to exercise any of the rights or powers vested in it by the
applicable Trust Agreement at the request or direction of any of the holders of
Trust Preferred Securities unless such holders have offered to the Property
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that might be incurred thereby. If the Property Trustee (i) is
required to decide between alternative courses of action in performing its
duties under the applicable Trust Agreement, (ii) must construe ambiguous or
inconsistent provisions in the applicable Trust Agreement or (iii) is unsure of
the application of any provision of the applicable Trust Agreement, and the
matter is not one on which holders of Trust Preferred Securities are entitled
under such Trust Agreement to vote, then the Property Trustee shall deliver
notice to the Company, as Depositor, requesting written instructions as to the
course of action to be taken and take such action as is instructed in writing by
the Company; provided, however, that if the Property Trustee does not receive
such instructions within ten Business Days after it has delivered such notice,
it may take such action as it deems
36
advisable and in the best interests of the holders of the Trust Securities and
will have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS. The Administrative Trustees are authorized and directed
to conduct the affairs of and to operate the BXS Trusts in such a way that no
BXS Trust will be deemed to be an "investment company" required to be registered
under the Investment Company Act or fail to be classified as a grantor trust for
U.S. federal income tax purposes and so that the Corresponding Junior
Subordinated Debt Securities will be treated as indebtedness of the Company for
U.S. federal income tax purposes. In this connection, the Company and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of each BXS Trust or the applicable
Trust Agreement, that the Company and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as such
action does not adversely affect any material respects the interests of the
holders of the Trust Securities.
37
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Company at the same
time each BXS Trust issues its Trust Preferred Securities. Each Guarantee is for
the benefit of the holders from time to time of such Trust Preferred Securities.
The Bank of New York will act as indenture trustee ("Guarantee Trustee") under
each Guarantee for the purposes of compliance with the Trust Indenture Act and
each Guarantee will be qualified as an indenture under the Trust Indenture Act.
The Guarantee Trustee will hold each Guarantee for the benefit of the holders of
the related BXS Trust's Trust Preferred Securities.
This summary of certain terms and provisions of the Guarantees is not
complete. For a complete description, you should read each Guarantee. The form
of the Guarantee has been filed as an exhibit to the registration statement of
which this prospectus forms a part.
Each Guarantee will be qualified under the Trust Indenture Act.
References to Trust Preferred Securities include the Trust Preferred
Securities issued by the related BXS Trust to which a Guarantee relates.
GENERAL. The Company will irrevocably and unconditionally agree to pay
in full to the extent set forth herein, the Guarantee Payments to the holders of
the Trust Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such BXS Trust may have or assert. The
following payments or distributions with respect to the Trust Preferred
Securities, to the extent not paid by or on behalf of the related BXS Trust (the
"Guarantee Payments"), will be subject to the related Guarantee:
(i) any accrued and unpaid Distributions required to be paid on
such Trust Preferred Securities, to the extent that such BXS
Trust has funds on hand available therefor at such time;
(ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Guarantee
Redemption Price"), with respect to any Trust Preferred
Securities called for redemption, to the extent that such BXS
Trust has funds on hand available therefor at such time by a
BXS Trust; and
(iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of such BXS Trust, unless the Corresponding Junior
Subordinated Debt Securities are distributed to holders of
such Trust Preferred Securities or all of the Trust Preferred
Securities are redeemed, the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of such BXS Trust
remaining available for distribution to holders of Trust
Preferred Securities in liquidation of such BXS Trust.
The Company's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Company to the holders of the
applicable Trust Preferred Securities or by causing the BXS Trust to pay such
amounts to such holders.
Each Guarantee will be an irrevocable and unconditional guarantee on a
subordinated basis of the related BXS Trust's obligations under the Trust
Preferred Securities and will rank subordinate and junior in right of payment to
all Senior Debt of the Company. See " -- Status of the Guarantees."
STATUS OF THE GUARANTEES. Each Guarantee will constitute an unsecured
obligation of the Company and will rank subordinate and junior in right of
payment to all Senior Debt of the Company in the same manner as Corresponding
Junior Subordinated Debt Securities.
38
Each Guarantee will rank pari passu with any other Guarantees issued by
the Company. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held for the benefit of the holders of the related Trust
Preferred Securities. Each Guarantee will not be discharged except by payment of
the Guarantee Payments in full to the extent not paid by the BXS Trust or upon
distribution to the holders of the Trust Preferred Securities of the
Corresponding Junior Subordinated Debt Securities.
AMENDMENTS AND ASSIGNMENT. Except with respect to any changes which do
not materially adversely affect the material rights of holders of the related
Trust Preferred Securities (in which case no consent of the holders will be
required), each Guarantee may only be amended with the prior approval of the
holders of not less than a Majority of the aggregate Liquidation Amount of such
outstanding Trust Preferred Securities. All guarantees and agreements contained
in each Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the related Trust Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Company that is permitted
under the terms of the corresponding Indentures and pursuant to which the
assignee agrees in writing to perform the Company's obligations thereunder, the
Company may not assign its obligations under each Guarantee.
EVENTS OF DEFAULT. An event of default under each Guarantee will occur
upon the failure of the Company to perform any of its payment or other
obligations thereunder or to perform any non-payment obligations if such
non-payment default remains unremedied for 60 days after receipt of notice
thereof. The holders of a Majority in Liquidation Amount of the related Trust
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
The holders of a Majority in Liquidation Amount of the related Trust
Preferred Securities may, by vote, on behalf of the holders, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of each Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
Any holder of the Trust Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under such
Guarantee without first instituting a legal proceeding against the BXS Trust,
the Guarantee Trustee or any other person or entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE. The Guarantee Trustee,
before the occurrence of any Event of Default and after the curing of all Events
of Default that may have occurred, shall undertake to perform only such duties
as are specifically set forth in each Guarantee, and no implied covenants shall
be read into a Guarantee against the Guarantee Trustee. In case an Event of
Default has occurred which has not been cured or waived, the Guarantee Trustee
shall exercise such of the rights and powers vested in it by each Guarantee, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs. Subject to this provision, the Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by each
Guarantee at the request or direction of any holder of the Trust Preferred
Securities, unless such holder shall have provided to the Guarantee Trustee such
security and indemnity reasonably satisfactory to it, against the costs,
expenses and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the
39
Guarantee Trustee. Such a requirement, however, does not relieve the Guarantee
Trustee of its obligations to exercise its rights and powers under each
Guarantee upon the occurrence of an Event of Default..
TERMINATION OF THE GUARANTEES. Each Guarantee will terminate and be of
no further force and effect upon full payment of the Guarantee Redemption Price
of the related Trust Preferred Securities, upon full payment of the amounts
payable upon liquidation of the related BXS Trust or upon distribution of
Corresponding Junior Subordinated Debt Securities to the holders of the related
Trust Preferred Securities in exchange therefor. Not withstanding the foregoing,
each Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of the related Trust Preferred Securities must
restore payment of any sums paid under such Trust Preferred Securities or such
Guarantee.
GOVERNING LAW. Each Guarantee will be governed by and construed in
accordance with the laws of the State of New York.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE
CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES AND THE
GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE. Payments of Distributions and other
amounts due on the Trust Preferred Securities (to the extent the related BXS
Trust has funds available for the payment of such Distributions) are irrevocably
guaranteed by the Company as and to the extent set forth under "Description of
Guarantees." Taken together, the Company's obligations under each series of
Corresponding Junior Subordinated Debt Securities, the Junior Indenture, the
related Trust Agreement and the related Guarantee provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of Distributions and
other amounts due on the Related Trust Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the related BXS Trust's obligations under the Related Trust
Preferred Securities. If and to the extent that the Company does not make
payments on any series of Corresponding Junior Subordinated Debt Securities,
such BXS Trust will not pay Distributions or other amounts due on its Related
Trust Preferred Securities. The Guarantees do not cover payment of Distributions
when the related BXS Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of any Trust Preferred
Securities is to institute a legal proceeding directly against the Company
pursuant to the terms of the Junior Indenture for enforcement of payment of
amounts of such Distributions to such holder after the applicable due dates. The
obligations of the Company under each Guarantee are subordinate and junior in
right of payment to all Senior Debt of the Company.
SUFFICIENCY OF PAYMENTS. As long as payments of interest and other
payments are made when due on each series of Corresponding Junior Subordinated
Debt Securities, such payments will be sufficient to cover Distributions and
other payments due on the Related Trust Preferred Securities, primarily because:
(i) the aggregate principal amount of each series of Corresponding
Junior Subordinated Debt Securities will be equal to the sum
of the aggregate stated Liquidation Amount of the Related
Trust Preferred Securities and related Trust Common
Securities;
(ii) the interest rate and interest and other payment dates on each
series of Corresponding Junior Subordinated Debt Securities
will match the Distribution rate and Distribution and other
payment dates for the Related Trust Preferred Securities;
40
(iii) the Company shall pay for all and any costs, expenses and
liabilities of such BXS Trust except the BXS Trust's
obligations to holders of its Trust Preferred Securities under
such Trust Preferred Securities; and
(iv) each Trust Agreement provides that the BXS Trust will not
engage in any activity that is not consistent with the limited
purposes of such BXS Trust.
Notwithstanding anything to the contrary in the Junior Indenture, the
Company has the right to set-off any payment it is otherwise required to make
thereunder with and to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the related
Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF TRUST PREFERRED SECURITIES. A holder
of any related Trust Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the related Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
related BXS Trust or any other person or entity.
A default or event of default under any Senior Debt of the Company
would not constitute a default or Event of Default under the Junior Indenture.
However, in the event of payment defaults under, or acceleration of, Senior Debt
of the Company, the subordination provisions of the Junior Indenture provide
that no payments may be made in respect of the Corresponding Junior Subordinated
Debt Securities until such Senior Debt has been paid in full or any payment
default thereunder has been cured or waived. Failure to make required payments
on any series of Corresponding Junior Subordinated Debt Securities would
constitute a Debenture Event of Default under the applicable Trust Agreement.
LIMITED PURPOSE OF BXS TRUSTS. Each BXS Trust's Trust Preferred
Securities evidence a preferred and undivided beneficial interest in such BXS
Trust, and each BXS Trust exists for the sole purpose of issuing its Trust
Preferred Securities and Trust Common Securities and investing the proceeds
thereof in Corresponding Junior Subordinated Debt Securities and engaging in
only those other activities necessary or incidental thereto. A principal
difference between the rights of a holder of a Trust Preferred Security and a
holder of a Corresponding Junior Subordinated Debt Security is that a holder of
a Corresponding Junior Subordinated Debt Security is entitled to receive from
the Company the principal amount of and interest accrued on Corresponding Junior
Subordinated Debt Securities held, while a holder of Trust Preferred Securities
is entitled to receive Distributions from such BXS Trust (or from the Company
under the applicable Guarantee) if and to the extent such BXS Trust has funds
available for the payment of such Distributions.
RIGHTS UPON DISSOLUTION. Upon any voluntary or involuntary dissolution
or termination, winding-up or liquidation of any BXS Trust not involving the
distribution of the Corresponding Junior Subordinated Debt Securities, the
holders of the related Trust Preferred Securities will be entitled to receive,
out of the assets held by such BXS Trust, the Liquidation Distribution in cash.
See "Description of Trust Preferred Securities -- Liquidation Distribution Upon
Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of the
Company, the Property Trustee, as holder of the Corresponding Junior
Subordinated Debt Securities, would be a subordinated creditor of the Company,
subordinated in right of payment to all Senior Debt as set forth in the Junior
Indenture, but entitled to receive payment in full of principal and interest,
before any shareholders of the Company receive payments or distributions. Since
the Company is the guarantor under each Guarantee and has agreed to pay for all
costs, expenses and liabilities of each BXS Trust (other than the BXS Trust's
obligations to the holders of its Trust Preferred Securities), the positions of
a holder of such Trust Preferred Securities and a holder of such Corresponding
Junior Subordinated Debt Securities relative to other creditors and to
shareholders of the Company in the event of liquidation or bankruptcy of the
Company are expected to be substantially the same.
41
DESCRIPTION OF COMMON STOCK
The following summary is not complete. You should refer to the
applicable provisions of the Company's Restated Articles of Incorporation, as
amended, and to the Mississippi Business Corporation Act for a complete
statement of the terms and rights of the Common Stock.
The Company has authorized 500 million shares of Common Stock, $2.50
par value. The Common Stock is listed on the New York Stock Exchange. Its symbol
is "BXS."
DIVIDEND RIGHTS. Holders of outstanding shares of Common Stock are
entitled to receive such dividends, if any, as may be declared by the Board of
Directors of the Company, in its discretion, out of funds legally available
therefor.
VOTING RIGHTS. Holders of Common Stock are entitled to one vote per
share on all matters to be voted on by the shareholders of the Company,
including the election of directors, and do not have cumulative voting rights.
Under the Mississippi Business Corporation Act, an affirmative vote of the
majority of the shareholders present at a meeting is sufficient in order to take
most shareholder actions. Certain extraordinary actions require greater
percentages of affirmative shareholder votes, including an increase, without a
recommendation by the Board of Directors of such increase, in the maximum number
of members of the Board of Directors of the Company or an amendment or repeal of
the anti-takeover provision described below.
LIQUIDATION RIGHTS. In the event of the liquidation of the Company, the
holders of Common Stock are entitled to receive pro rata any assets distributed
to shareholders with respect to their shares, after payment of all debts and
payments to holders of preferred stock of the Company, if any.
PREEMPTIVE RIGHTS. Holders of Common Stock have no right to subscribe
to additional shares of capital stock that may be issued by the Company.
CERTAIN ANTI-TAKEOVER PROVISIONS. The Company's Restated Articles of
Incorporation, as amended, generally require the affirmative vote of the holders
of 80% of the outstanding shares of Common Stock to approve (i) a merger or
consolidation of the Company with, or (ii) a sale, exchange or lease of all or
substantially all of the assets (as defined in the Restated Articles of
Incorporation) of the Company to any person or entity, unless such transaction
is approved by the Board of Directors of the Company.
The Restated Articles of Incorporation of the Company also require the
affirmative vote of the holders of 80% of the outstanding shares of the Common
Stock, and the affirmative vote of the holders of 67% of the shares of Common
Stock held by shareholders other than a Controlling Party (as defined below),
for the approval or authorization of any merger, consolidation, sale, exchange
or lease of all or substantially all of the assets of the Company if such
transaction involves any shareholders owning or controlling 20% or more of the
Common Stock outstanding at the time of the proposed transaction (a "Controlling
Party"); provided, however, that these voting requirements are not applicable in
transactions in which: (a) the cash or fair market value of the property,
securities or other consideration to be received (which includes Common Stock
retained by the Company's existing shareholders in a transaction in which the
Company is the surviving entity) per share by holders of Common Stock in such
transaction is not less than the highest per share price (with appropriate
adjustments for recapitalizations, stock splits, stock dividends and
distributions) paid by the Controlling Party in the acquisition of any of its
holdings of the Common Stock in the three years preceding the announcement of
the proposed transaction, or (b) the transaction is approved by a majority of
the Board of Directors of the Company.
42
Neither of these provisions of the Restated Articles of Incorporation
may be repealed or amended except by the affirmative vote of 80% of the total
voting power of the Company.
COMMON STOCK PURCHASE RIGHTS
On April 23, 1991, the shareholders of the Company adopted a
shareholder rights plan. The terms of the shareholder rights plan are set forth
in a Rights Agreement, dated April 24, 1991 (the "Rights Agreement"), between
the Company and the Bank, as Rights Agent. On March 28, 2001, the Board of
Directors of the Company approved an amendment to the Rights Agreement (the
Rights Agreement, as so amended, the "Amended Rights Agreement"), which
amendment is set forth in a First Amendment to Rights Agreement, dated as of
March 28, 2001 (the "Amendment"), between the Company and the Bank, as Rights
Agent. The Amended Rights Agreement is incorporated by reference as an exhibit
to the registration statement of which this prospectus is a part. The Common
Stock Purchase Rights are the rights to purchase shares of the Company's Common
Stock, par value $2.50 per share, issued under the terms of the Amended Rights
Agreement.
The following descriptions of the provisions of the Amended Rights
Agreement are qualified in their entirety by reference to the Rights Agreement
and the Amendment (including the exhibits thereto).
DISTRIBUTION OF RIGHTS; EXERCISE PRICE. On April 24, 1991, each
shareholder of record at the close of business on April 24, 1991 (the "Record
Date") received a dividend distribution of one Common Stock purchase right (a
"Right") for each outstanding share of Common Stock. Each share of Common Stock
issued by the Company, including shares distributed from treasury, after April
24, 1991 and prior to the Distribution Date (as defined below) automatically has
had, or will have during the term of the Amended Rights Agreement, a Right
attached to it. Each Right entitles the registered holder, subject to the terms
of the Amended Rights Agreement, to purchase from the Company one share of
Common Stock at a purchase price per share of $60.00, subject to adjustment (the
"Purchase Price"). The Purchase Price is payable in cash or by certified or bank
check or bank draft payable to the order of the Company.
SEPARATION OF RIGHTS FROM COMMON STOCK. As of the date of this
prospectus, the Rights are incorporated in and represented by the certificates
representing shares of outstanding Common Stock, and no separate Rights
certificates have been distributed. The Rights will separate from the Common
Stock and separate Rights certificates will be distributed upon the earliest of
the following dates (the "Distribution Date"): (i) the close of business on the
tenth business day following a public announcement by the Company or an
Acquiring Person (as defined below) that an Acquiring Person has become such
(the "Stock Acquisition Date"); (ii) the close of business on the tenth business
day following the commencement of, or the announcement of an intent to commence,
a tender or exchange offer that would result in a person or group becoming an
Acquiring Person; or (iii) the close of business on the tenth business day after
a majority of the members of the Board of Directors who are not officers of the
Company determine that a person has, alone or together with his affiliates or
associates, become the beneficial owner of 10% or more of the outstanding shares
of Common Stock or voting power of the Company and is an "Adverse Person."
"Adverse Person" means any person declared to be an Adverse Person by a
majority of the Company's independent directors, upon a determination by such
directors that (a) such beneficial ownership by such person is intended to cause
the Company to repurchase the Common Stock or voting power of the Company
beneficially owned by such person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to provide
such person with short term financial gain under circumstances where these
directors determine that the best long term interests of the Company and the
shareholders would not be served by taking such action or entering into such
transaction or series of transactions or (b) such beneficial ownership is
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causing or is reasonably likely to cause a material adverse impact on the
business or prospects of the Company (including, but not limited to, impairment
of the Company's relationships with customers, its ability to maintain its
competitive position, its capital position, its ability to meet the convenience
and needs of the communities it serves, or its business reputation or ability to
deal with governmental agencies) to the detriment of the shareholders.
"Acquiring Person" means any person which, together with all affiliates
and associates of such person, shall be the beneficial owner of 20% or more of
the Common Stock then outstanding, but shall not include the Company or any of
its subsidiaries or employee benefit plans, or any trustee or fiduciary with
respect to any such plan acting in such capacity. No person shall become an
"Acquiring Person" as the result of an acquisition of Common Stock by the
Company which, by reducing the number of shares outstanding, increases the
proportionate percentage of shares beneficially owned by such person to 20% or
more of the Common Stock of the Company then outstanding; provided, however,
that if a person becomes the beneficial owner of 20% or more of the Common Stock
of the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the beneficial owner of
any additional Common Stock, then such person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, no person shall become an
"Acquiring Person" if a majority of the members of the Company's Board of
Directors, with the concurrence of a majority of the independent directors,
determines in good faith that such person who would otherwise be an Acquiring
Person has become such inadvertently and without any intention of changing or
influencing control of the Company, and if such person, after being advised of
such determination and within a period of time set by a majority of the
independent directors, divests himself or itself of a sufficient number of
shares of Common Stock so that such person shall not be deemed to be or have
become an "Acquiring Person" for any purpose under the Amended Rights Agreement.
EXERCISABILITY OF RIGHTS. The Rights are not exercisable until the
Distribution Date and will expire at the close of business on March 28, 2011
(the "Final Expiration Date") unless earlier redeemed by the Company as
described below.
SEPARATED RIGHTS EVIDENCED BY CERTIFICATES. Until the Distribution
Date, (i) the Rights will be evidenced by Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after the Record Date, including shares distributed
from treasury, will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates representing
outstanding Common Stock also will constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable after the Distribution Date, Rights certificates will be mailed to
holders of record of Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights certificates alone will
represent the Rights.
TRIGGERING EVENTS FOR RIGHT TO BUY COMMON STOCK AT DECREASED PURCHASE
PRICE; NULLIFICATION OF CERTAIN RIGHTS. In the event that (i) a person or group
(other than the Company, any of its subsidiaries, or any employee benefit plan
of the Company) becomes an Acquiring Person, or (ii) the Board has determined
the existence of an Adverse Person (either of such events being a "Triggering
Event"), then, in each such case, each holder of a Right shall have the right to
receive, upon exercise of such Right, shares of Common Stock (or, in certain
circumstances, cash, property or other Securities of the Company) having a value
equal to two times the Purchase Price. Notwithstanding any of the foregoing,
following the occurrence of one of the foregoing events, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or an Adverse Person will be null and
void.
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OPTIONAL EXCHANGE OF RIGHTS. At any time after the occurrence of a
Triggering Event, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by an Acquiring Person or Adverse Person which have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
TRIGGERING EVENTS FOR PURCHASE OF ACQUIROR'S SHARES. In the event that,
at any time following the earlier of the Stock Acquisition Date or Distribution
Date, (i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation, (ii) any person or
group effects a share exchange or merger with the Company and all or part of the
Company's Common Stock is converted or exchanged for securities, cash, or
property of any other person or group, or (iii) 50% or more of the Company's
assets or earning power is sold or transferred (any of such events also being a
"Triggering Event"), then, in each such case, proper provision will be made so
that each holder of a Right shall have the right to receive, upon exercise, the
number of shares of common stock of the "Principal Party" (as defined below)
having a value equal to two times the Purchase Price.
"Principal Party" means (i) in the case of any transaction described in
clause (i) or (ii) in the preceding paragraph, (A) the person that is the issuer
of any securities into which shares of the Company's Common Stock are converted
in such merger or share exchange, or, if there is more than one such issuer, the
issuer of Common Stock that has the highest aggregate current market price and
(B) if no securities are so issued, the person that is the other party to such
merger or share exchange, or, if there is more than one such person, the person
the Common Stock of which has the highest aggregate current market price; and
(ii) in the case of any transaction described in clause (iii) in the preceding
paragraph, the person that is the party receiving the largest portion of the
assets or earning power transferred pursuant to such transaction or
transactions, or, if each person that is a party to such transaction or
transactions receives the same portion of the assets or earning power
transferred pursuant to such transaction or transactions or if the person
receiving the largest portion of the assets or earning power cannot be
determined, whichever person the Common Stock of which has the highest aggregate
current market price; provided, however, that in any such case, (1) if the
Common Stock of such person is not at such time and has not been continuously
over the preceding twelve-month period registered under Section 12 of the
Exchange Act ("Registered Common Stock"), or such person is not a corporation,
and such person is a direct or indirect subsidiary of another person that has
Registered Common Stock outstanding, "Principal Party" shall refer to such other
person; (2) if the Common Stock of such person is not Registered Common Stock or
such person is not a corporation, and such person is a direct or indirect
subsidiary of another person but is not a direct or indirect subsidiary of
another person which has Registered Common Stock outstanding, "Principal Party"
shall refer to the ultimate parent entity of such first-mentioned person; (3) if
the Common Stock of such person is not Registered Common Stock or such person is
not a corporation, and such person is directly or indirectly controlled by more
than one person, and one or more of such other persons has Registered Common
Stock outstanding, "Principal Party" shall refer to whichever of such other
persons is the issuer of the Registered Common Stock having the highest
aggregate current market price; and (4) if the Common Stock of such person is
not Registered Common Stock or such person is not a corporation, and such person
is directly or indirectly controlled by more than one person, and none of such
other persons have Registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
shareholders equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
ANTI-DILUTION ADJUSTMENTS. The Purchase Price payable, and the number
of shares of Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution in the event the Company shall (i) declare a dividend on the Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
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Common Stock, (iii) combine the outstanding Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock in a reclassification
of the Common Stock, including any such reclassification in connection with a
share exchange or merger in which the Company is the continuing or surviving
corporation. With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional shares of Common Stock.
In lieu thereof, an adjustment in cash may be made based on the market price of
the Common Stock prior to the date of exercise.
REDEMPTION OF RIGHTS. The Rights are redeemable at $0.01 per Right (the
"Redemption Price"), subject to adjustment, by a majority of the Company's
independent directors, payable, at the election of such majority of independent
directors, in cash or shares of Common Stock, at any time prior to the close of
business on the Distribution Date (the "Right of Redemption"). Immediately upon
any redemption of the Rights, the right to exercise the Rights will become a
right to receive the Redemption Price. Unless earlier redeemed, the Rights will
expire on the Final Expiration Date. Common Stock purchasable upon exercise of
the Rights will not be redeemable.
NO SHAREHOLDER RIGHTS UNTIL EXERCISE. Until a Right is exercised, the
holder thereof, as such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends.
AMENDMENT TO AMENDED RIGHTS AGREEMENT. Any of the provisions of the
Amended Rights Agreement may be supplemented or amended by the Company's Board
of Directors at any time prior to the Distribution Date without the consent of
the shareholders. After the Distribution Date, the provisions of the Amended
Rights Agreement may be supplemented or amended without the consent of the
holders of the Rights in order to (i) cure any ambiguity, defect, or
inconsistency, (ii) make changes that are consistent with the objectives of the
Board of Directors in adopting the Amended Rights Agreement (except that from
and after such time as any person becomes an Acquiring Person and/or an Adverse
Person, no such amendment may adversely affect the interests of holders of
Rights), or (iii) shorten or lengthen any time period under the Amended Rights
Agreement, although no amendment to adjust the time period governing redemption
shall be made at such time as the Rights are not redeemable.
ANTI-TAKEOVER EFFECTS. The Rights approved by the Company's Board of
Directors are designed to protect and maximize the value of the outstanding
equity interests in the Company in the event of an unsolicited attempt by an
acquiror to take over the Company in a manner or on terms not approved by the
Board of Directors. Takeover attempts frequently include coercive tactics to
deprive a company's board of directors and its shareholders of any real
opportunity to determine the destiny of the company. The Rights have been
declared by the Company's Board of Directors in order to deter such tactics,
including a gradual accumulation of shares in the open market of a 20% or
greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all shareholders equally. These tactics can unfairly
pressure shareholders, squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company on
appropriate terms and will not do so. Subject to certain exceptions discussed
above, the Rights may be redeemed by the Company at $0.01 per Right prior to the
Distribution Date (or such later date as may be determined by the Board of
Directors). Accordingly, the Rights should not interfere with any merger or
business combination approved by the Board of Directors.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights has no dilutive effect, will not affect reported earnings per share,
should not be taxable to the Company or to its shareholders and will not change
the way in which the Company's shares are presently traded. The Company's Board
of
46
Directors believes that the Rights represent a sound and reasonable means of
addressing the complex issues of corporate policy created by the current
takeover environment.
However, the Rights may have the effect of rendering an acquisition
more difficult or discouraging an acquisition of the Company in a manner deemed
undesirable by the Board of Directors. The Rights may cause substantial dilution
to a person or group that attempts to acquire the Company on terms or in a
manner not approved by the Company's Board of Directors, except pursuant to an
offer conditioned upon the negation, purchase or redemption of the Rights.
BOOK-ENTRY ISSUANCE
If any Debt Securities or Trust Preferred Securities (collectively,
"Book Entry Securities") are to be represented by global certificates, The
Depository Trust Company ("DTC") will act as securities depositary for all of
the Book Entry Securities, unless otherwise referred to in the prospectus
supplement relating to an offering of the particular series of Book Entry
Securities.
The following is a summary of the depository arrangements applicable to
such securities issued in global form and for which DTC acts as depositary. If
there are any changes from this summary, they will appear in a prospectus
supplement.
If any securities are to be issued in global form, you will not receive
a paper certificate representing the Debt Securities you have purchased.
Instead, the Company will deposit with DTC or its custodian one or more
fully-registered global certificates registered in the name of Cede & Co. (DTC's
nominee) for the Book Entry Securities, representing in the aggregate the total
number of a BXS Trust's Trust Preferred Securities, aggregate principal balance
of Junior Subordinated Debt Securities or aggregate principal amount of Debt
Securities, respectively.
Since the global certificate is registered in the name of DTC or its
nominee, DTC or its nominee is said to have legal or record ownership of the
global certificate. Persons who buy interests in the global security by
purchasing securities are said to own a beneficial interest in the global
security.
Only institutions (sometimes referred to as "participants") that have
accounts with DTC or its nominee or persons that may hold interests through
participants, such as individual members of the public, may own beneficial
interests in a global certificate.
Ownership of beneficial interests in a global certificate by
participants will be evidenced only by, and the transfer of that ownership
interest will be effected only through, records maintained by DTC or its
nominee.
Ownership of beneficial interests in a global certificate by persons
that hold through participants will be evidenced only by, and the transfer of
that ownership interest within that participant will be effected only through,
records maintained by that participant.
DTC has no knowledge of the actual beneficial owners of the Book Entry
Securities. Beneficial owners will not receive written confirmation from DTC of
their purchase, but beneficial owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participants through which the beneficial
owners purchased the securities.
DTC alone is responsible for any aspect of its records, any nominee or
any participant relating to, or payments made on account of, beneficial
interests in a global certificate or for
47
maintaining, supervising or reviewing any of the records of DTC, any nominee or
any participant relating to such beneficial interests.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in a global
certificate.
We have been advised by DTC that upon the issuance of a global
certificate and the deposit of that global certificate with DTC, DTC will
immediately credit, on its book-entry registration and transfer system, the
respective principal amounts represented by that global certificate to the
accounts of its participants.
The Company will pay principal of, and interest or premium on,
securities represented by a global certificate registered in the name of or held
by DTC or its nominee to the relevant Trustee who in turn will make payments to
DTC or its nominee, as the case may be, as the registered owner and holder of
the global certificate representing those securities in immediately available
funds. Upon receipt of any payment of principal of, or interest or premium on, a
global certificate, DTC will immediately credit, on its book-entry registration
and transfer system, accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of that global certificate as shown in the records of DTC. Payments by
participants to owners of beneficial interests in a global certificate held
through those participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the sole
responsibility of those participants, subject to any statutory or regulatory
requirements as may be in effect from time to time.
A global certificate is exchangeable for definitive securities (paper
certificates) registered in the name of, and a transfer of a global certificate
may be registered to, any person other than DTC or its nominee, only if:
(a) DTC notifies us that it is unwilling or unable to continue as
depositary for that global certificate or if at any time DTC
ceases to be registered under the Exchange Act;
(b) we determine in our discretion that the global certificate
shall be exchangeable for definitive securities in registered
form; or
(c) in the case of Debt Securities, there shall have occurred and
be continuing an Event of Default or an event which, with
notice or the lapse of time or both, would constitute an Event
of Default with respect to the Debt Securities.
Any global certificate representing a Debt Security that is
exchangeable pursuant to the preceding paragraph will be exchangeable in whole
for definitive Debt Securities in registered form, of like tenor and of an equal
aggregate principal amount as the global certificate, in denominations specified
in the applicable prospectus supplement (if other than $1,000 and integral
multiples of $1,000). The definitive Debt Securities will be registered by the
registrar in the name or names instructed by DTC. Such instructions may be based
upon directions received by DTC from its participants with respect to ownership
of beneficial interests in the global certificate. Unless otherwise indicated in
a prospectus supplement any principal, premium and interest will be payable, the
transfer of the definitive Debt Securities will be registerable and the
definitive Debt Securities will be exchangeable at the corporate trust office of
The Bank of New York, provided that payment of interest may be made at the
option of the Company by check mailed to the address of the person entitled to
that interest payment as of the record date and as shown on the register for the
Debt Securities.
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Any global certificate representing a Trust Preferred Security that is
exchangeable pursuant to (a) or (b) above will be exchangeable in whole for
definitive Trust Preferred Securities in registered form, of like tenor and of
an equal aggregate principal amount as the global certificate, in denominations
specified in the applicable prospectus supplement (if other than $25.00 and
integral multiples of $25.00). The definitive Trust Preferred Securities will be
registered by the registrar in the name or names instructed by DTC. Such
instructions may be based upon directions received by DTC from its participants
with respect to ownership of beneficial interests in the global certificate. Any
Distributions and other payments will be payable, the transfer of the definitive
Trust Preferred Securities will be registerable and the definitive Trust
Preferred Securities will be exchangeable at the corporate trust office of The
Bank of New York, provided that such payment may be made at the option of the
Company by check mailed to the address of the person entitled to that payment as
of the record date and as shown on the register for the Trust Preferred
Securities.
DTC may discontinue providing its services as securities depositary
with respect to any of the Book Entry Securities at any time by giving
reasonable notice to the relevant Trustee and the Company. In the event that a
successor securities depositary is not obtained, definitive Debt Security or
Trust Preferred Security or certificates representing such Debt Security or
Trust Preferred Security are required to be printed and delivered. The Company,
at its option, may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary). After an Event of Default
under the applicable Indenture, the holders of a majority in liquidation amount
of Trust Preferred Securities or aggregate principal amount of Debt Securities
may determine to discontinue the system of book-entry transfers through DTC. In
any such event, definitive certificates for such Trust Preferred Securities or
Debt Securities will be printed and delivered.
Except as provided above, owners of the beneficial interests in a
global security will not be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the holders of
securities for any purpose under the Debt Securities Indenture, and no global
security shall be exchangeable except for another global security of like
denomination and tenor to be registered in the name of DTC or its nominee.
Accordingly, each person owning a beneficial interest in a global security must
rely on the procedures of DTC and, if that person is not a participant, on the
procedures of the participant through which that person owns its interest, to
exercise any rights of a holder under the global security or the Debt Securities
Indenture.
Redemption notices will be sent to Cede & Co. as the registered holder
of the Book Entry Securities. If less than all of a series of the Debt
Securities or a BXS Trust's Trust Preferred Securities are being redeemed, DTC
will determine the amount of the interest of each direct participant to be
redeemed in accordance with its then current procedures.
Although voting with respect to the Book Entry Securities is limited to
the holders of record of the Book Entry Securities, in those instances in which
a vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Book Entry Securities. Under its usual procedures, DTC would mail an
omnibus proxy to the relevant Trustee as soon as possible after the record date.
The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
direct participants to whose accounts such Book Entry Securities are credited on
the record date (identified in a listing attached to the omnibus proxy).
DTC has advised us that DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered under the Exchange Act. DTC
was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of
49
securities certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its participants and by the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly. The rules applicable to DTC and its participants
are on file with the SEC.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the BXS Trusts and the Company
believe to be accurate, but the BXS Trusts and the Company assume no
responsibility for the accuracy thereof. Neither the BXS Trusts nor the Company
has any responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
LEGAL MATTERS
Unless otherwise indicated below or in the applicable prospectus
supplement, the legality of certain matters will be passed upon for the Company
by Waller Lansden Dortch & Davis, A Professional Limited Liability Company,
Nashville, Tennessee. Certain matters of Mississippi law will be passed upon for
the Company by Riley, Ford, Caldwell & Cork, P.A., Tupelo, Mississippi.
Unless otherwise indicated in the applicable prospectus supplement,
certain matters of Delaware law relating to the validity of the Trust Preferred
Securities, the enforceability of the Trust Agreements and the formation of the
BXS Trusts will be passed upon by Richards, Layton & Finger, P.A., special
Delaware counsel to the Company and the BXS Trusts.
EXPERTS
The consolidated financial statements of BancorpSouth, Inc. and
subsidiaries as of December 31, 2000 and 1999, and for each of the years in the
three-year period ended December 31, 2000, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
PLAN OF DISTRIBUTION
SECURITIES OFFERED BY THE COMPANY AND EACH BXS TRUST. The securities to
be offered by the Company and each BXS Trust may be sold in a public offering to
or through agents, underwriters or dealers designated from time to time or
directly to purchasers. The Company and each BXS Trust may sell its securities
as soon as practicable after effectiveness of the registration statement of
which this prospectus forms a part. The names of any underwriters or dealers
involved in the sale of the securities in respect of which this prospectus is
delivered, the amount or number of securities to be purchased by any such
underwriters and any applicable commissions or discounts will be set forth in
the applicable prospectus supplement.
Underwriters may offer and sell securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of Debt Securities and Trust
Preferred Securities, underwriters may be deemed to have received compensation
from the Company or the applicable BXS Trust in the form of underwriting
discounts or commissions and may also receive commissions. Underwriters may sell
securities to or through dealers, and such dealers
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may receive compensation in the form of discounts, concessions or commissions
from the underwriters.
Any underwriters utilized may engage in stabilizing transactions and
syndicate covering transactions in accordance with Rule 104 under the Exchange
Act. Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the securities in the open market
after the distribution has been completed in order to cover syndicate short
positions. Such stabilizing transactions and syndicate covering transactions may
cause the price of the securities to be higher than it would otherwise be in the
absence of such transactions.
Any underwriting compensation paid by the Company or the applicable BXS
Trust to underwriters in connection with the offering of securities, and any
discounts, concessions or commissions allowed by such underwriters to
participating dealers, will be described in an accompanying prospectus
supplement. Dealers and agents participating in the distribution of securities
may be deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of such securities may be deemed
to be underwriting discounts and commissions, under the Securities Act.
Underwriters and dealers may be entitled under agreements with the Company or a
BXS Trust to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
In connection with the offering of the securities of the Company or any
BXS Trust, the Company or such BXS Trust may grant to the underwriters an option
to purchase additional securities to cover over-allotments, if any, at the
initial public offering price (with an additional underwriting commission), as
may be set forth in the accompanying prospectus supplement. If the Company or
such BXS Trust grants any over-allotment option, the terms of such
over-allotment option will be set forth in the prospectus supplement for such
securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Company and/or the applicable BXS Trust and/or any of their
affiliates in the ordinary course of business. Certain of the underwriters and
their associates may be customers of (including borrowers from) engage in
transactions with, and perform services for, the Company, the Bank and other
subsidiaries of the Company in the ordinary course of business.
Securities other than the Common Stock will have no established trading
market. Any underwriters to whom such securities are sold for public offering
and sale may make a market in such securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. Such securities may or may not be listed on a national securities
exchange or quoted on the Nasdaq National Market. No assurance can be given as
to the liquidity of or the existence of trading markets for any securities other
than the Common Stock.
51
4,000,000 TRUST PREFERRED SECURITIES
BANCORPSOUTH CAPITAL TRUST I
% TRUST PREFERRED SECURITIES (TRUPS(R))
[BANCORPSOUTH LOGO]
PRELIMINARY PROSPECTUS SUPPLEMENT
JANUARY 16, 2002
SALOMON SMITH BARNEY
A.G. EDWARDS & SONS, INC.
MORGAN STANLEY & CO.
STEPHENS INC.
STIFEL, NICOLAUS & COMPANY
INCORPORATED