As filed with the Securities and Exchange Commission on April 26, 2017
Registration
No. 333-216813
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT
NO. 1
TO
FORM
S-4
REGISTRATION STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
RENASANT CORPORATION
(Exact name of registrant as specified in its charter)
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Mississippi
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6022
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64-0676974
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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209 Troy Street
Tupelo,
Mississippi 38804-4827
(662)
680-1001
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
E. Robinson McGraw
Renasant Corporation
209
Troy Street
Tupelo, Mississippi 38804-4827
(662)
680-1001
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Mark A. Fullmer, Esq.
Mark. W. Jeanfreau, Esq.
Phelps Dunbar LLP
365 Canal
Street, Suite 2000
New Orleans, Louisiana 70130
(504)
566-1311
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Curtis J. Gabardi
Metropolitan BancGroup, Inc.
1069 Highland Colony Parkway
Ridgeland, Mississippi 39157
(601)
853-0000
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David W. Ghegan, Esq.
Brad R. Resweber, Esq.
Troutman Sanders LLP
600
Peachtree Street, Suite 5200
Atlanta, Georgia 30308
(404)
885-3000
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Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after the effective date of
this Registration Statement and the satisfaction or waiver of all other conditions to the proposed merger described in the enclosed proxy statement/prospectus.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2
of the Exchange Act.
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule
13e-4(i)
(Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule
143-1(d)
(Cross-Border Third-Party Tender Offer) ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a), may determine.
The information in this proxy statement/prospectus is not complete and may be changed. A
registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold prior to the time the registration statement becomes effective. This document shall not constitute an
offer to sell nor shall there be any sale of these securities in any jurisdiction in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
PRELIMINARYSUBJECT TO
COMPLETIONDATED APRIL 26, 2017
MERGER PROPOSEDYOUR VOTE IS VERY IMPORTANT
Dear Stockholder:
On January 17, 2017,
Renasant Corporation (Renasant) and Metropolitan BancGroup, Inc. (Metropolitan) announced the execution of an agreement and plan of merger pursuant to which Metropolitan will merge with and into Renasant, with Renasant
continuing as the surviving corporation (which we refer to as the merger). Immediately following the merger, Metropolitan Bank, Metropolitans wholly-owned subsidiary, will merge with and into Renasant Bank, Renasants
wholly-owned subsidiary, with Renasant Bank continuing as the surviving bank corporation. The combined company, which will retain the Renasant name, will have approximately $10.0 billion in assets and operate over 175 branches across
Mississippi, Tennessee, Alabama, Georgia and Florida. We are sending you this proxy statement/prospectus to invite you to attend a special meeting of stockholders being held by Metropolitan to consider the merger agreement that Metropolitan has
entered into with Renasant, and to ask you to vote in favor of the approval of the merger agreement.
If the merger is completed, holders of
Metropolitan common stock, par value $0.01 per share, will be entitled to receive 0.6066 of a share of Renasant common stock, par value $5.00 per share, in exchange for each share of Metropolitan common stock held immediately prior to the merger,
subject to the payment of cash in lieu of fractional shares. The number of shares of Renasant common stock that Metropolitan stockholders will receive in the merger for each share of Metropolitan common stock is fixed. However, the market value of
the consideration Metropolitan stockholders will receive in the merger will change depending on changes in the market price of Renasant common stock and will not be known at the time Metropolitan stockholders vote on the merger.
Based on the
closing price of Renasants common stock on the NASDAQ Global Select Market, or Nasdaq, as of January 17, 2017, the 0.6066 exchange ratio represented approximately $23.52 in value for each share of Metropolitan common stock. Based on
Renasants closing price on April 24, 2017 of $42.92 per share, the 0.6066 exchange ratio represented approximately $26.04 in value for each share of Metropolitan common stock. Based on the 0.6066 exchange ratio and the number of shares of
Metropolitan common stock outstanding as of April 24, 2017, the maximum number of shares of Renasant common stock issuable in the merger is approximately
4,526,661 shares.
We urge you to obtain a current market quotation for
Renasant (trading symbol RNST) on Nasdaq.
Metropolitans common stock is not listed or traded on any established securities exchange or quotation system.
The merger will be treated as a reorganization within the meaning of 368(a) of the Internal Revenue Code of 1986, as amended, and
holders of Metropolitan common stock are not expected to recognize any gain or loss for United States federal income tax purposes on the exchange of shares of Metropolitan common stock for shares of Renasant common stock in the merger, except with
respect to any cash received in lieu of a fractional share of Renasant common stock.
At the special meeting of Metropolitan
stockholders to be held on June 6, 2017 at Metropolitans main office located at 1069 Highland Colony Parkway, Ridgeland, Mississippi, 39157-8722 at 9:00 a.m., local time, holders of Metropolitan common stock will be asked to vote to approve
the agreement and plan of merger and the transactions contemplated by the agreement and plan of merger, including the merger.
Your vote is very important.
Approval of the agreement and plan of merger and the transactions contemplated by the
agreement and plan of merger requires the affirmative vote of the holders of a majority of the outstanding shares of Metropolitan common stock entitled to vote. Regardless of whether or not you plan to attend the special meeting, please take the
time to vote your shares in accordance with the instructions contained in this proxy statement/prospectus. Failing to vote will have the same effect as voting against the merger.
The Metropolitan board of directors unanimously recommends that Metropolitan stockholders vote FOR the approval of the agreement
and plan of merger and the transactions contemplated by the agreement and plan of merger.
This document, which serves as a proxy
statement for the special meeting of Metropolitan stockholders and a prospectus for the shares of Renasant common stock to be issued in the merger to Metropolitan stockholders, describes the special meeting, the merger, the documents related to the
merger and other related matters.
Please carefully read this entire document, including
Risk Factors
beginning on page
18
for a
discussion of the risks relating to the proposed merger and owning Renasant common stock after the merger.
You also can obtain information about Renasant from documents that Renasant has filed with the Securities and Exchange Commission.
If you have any questions concerning the merger, Metropolitan stockholders should contact the undersigned by telephone at (601)
499-2927.
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Curtis J. Gabardi
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Chairman, President, and Chief Executive Officer
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Metropolitan BancGroup, Inc.
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Neither the Securities and Exchange Commission, the Board of Governors of the Federal Reserve System,
the Federal Deposit Insurance Corporation, nor any state securities commission or other bank regulatory agency has approved or disapproved of the merger or the Renasant common stock to be issued under this document or passed upon the adequacy or
accuracy of this document. Any representation to the contrary is a criminal offense.
The shares of Renasant common stock to be
issued in the merger are not savings or deposit accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
This proxy statement/prospectus is dated
, 2017, and it is first being mailed or otherwise delivered to Metropolitan
stockholders, along with the enclosed form of proxy card, on or about , 2017.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on June 6, 2017
To
the stockholders of Metropolitan BancGroup, Inc.:
On June 6, 2017, Metropolitan BancGroup, Inc. (Metropolitan) will hold
a
Special Meeting of Stockholders
at
Metropolitans main office located at 1069 Highland Colony Parkway, Ridgeland, Mississippi 39157-8722 at 9:00 a.m., local time, to consider and vote upon the following
matters:
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a proposal to approve the Agreement and Plan of Merger, dated as of January 17, 2017, by and among Renasant Corporation (Renasant), Renasant Bank, Metropolitan and Metropolitan Bank, as it may be
amended from time to time (referred to as the merger agreement), pursuant to which Metropolitan will merge with and into Renasant as more fully described in the attached proxy statement/prospectus, which we refer to as the merger
proposal;
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a proposal to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the
merger proposal, which we refer to as the adjournment proposal; and
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any other business properly brought before the special meeting or any adjournment or postponement thereof.
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The Metropolitan board of directors has fixed the close of business on April 20, 2017 as the record date for the special meeting. Only
Metropolitan stockholders of record at that time are entitled to notice of and to vote at the special meeting or any adjournment or postponement of the special meeting. Approval of the merger proposal requires the affirmative vote of holders of a
majority of the outstanding shares of Metropolitan common stock. The adjournment proposal will be approved if a majority of the shares represented, in person or by proxy, at the special meeting and entitled to vote are voted in favor of the
proposal.
Your vote is very important.
We cannot complete the merger unless Metropolitans stockholders approve the merger
proposal. Whether or not you plan to attend the special meeting, please mail your proxy with voting instructions
as soon as possible
. To mail your proxy, please complete, sign, date and return the accompanying proxy card in the enclosed
self-addressed, stamped envelope. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of record of Metropolitan common stock who is present at the special meeting may
vote in person instead of by proxy, thereby canceling any previous proxy. In any event, a proxy may be revoked in writing at any time before the special meeting in the manner described in the accompanying proxy statement/prospectus.
The attached proxy statement/prospectus provides a detailed description of the special meeting, the merger, the merger agreement and the other
documents related to the merger, and related matters, and includes the complete text of the merger agreement as Annex A. We urge you to read the attached materials carefully for a complete description of the merger agreement and the merger. The
accompanying proxy statement/prospectus forms a part of this notice.
Metropolitan stockholders are entitled to appraisal
rights under Delaware law. If you wish, you may exercise these appraisal rights and obtain a cash payment for the fair value of your shares rather than receive the merger consideration described in this proxy statement/prospectus.
To exercise appraisal rights, you must not vote in favor of the adoption and approval of the merger agreement, and you must strictly comply with all of the other applicable requirements of the Delaware appraisal rights statute, which are summarized
in the accompanying proxy statement/prospectus under the heading The MergerAppraisal Rights. In addition, a copy of the Delaware statute governing appraisal rights is attached as Annex C to this proxy statement/prospectus.
The Metropolitan board of directors has unanimously adopted and approved the merger agreement and determined that the merger agreement and
the transactions contemplated thereby are advisable and in the best interests of Metropolitan and its stockholders and unanimously recommends that Metropolitan stockholders vote FOR the merger proposal and FOR the adjournment
proposal.
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By Order of the Board of Directors
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Date: , 2017
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Curtis J. Gabardi
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Chairman, President, and Chief Executive Officer
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TABLE OF CONTENTS
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ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information about Renasant from documents that Renasant has
filed with the Securities and Exchange Commission, which we refer to as the SEC, that has not been included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request.
You can obtain documents incorporated by reference into this proxy statement/prospectus by requesting them from Renasant in writing or by telephone or email at the following address:
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Renasant Corporation
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209 Troy Street
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Tupelo, Mississippi 38804-4827
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Attn: Kevin D. Chapman
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Chief Financial Officer
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Phone: (662)
680-1450
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Email: KChapman@renasant.com
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You will not be charged for any of these documents that you request. IF YOU WOULD LIKE TO REQUEST
DOCUMENTS, PLEASE DO SO PRIOR TO JUNE 1, 2017 IN ORDER TO RECEIVE THEM BEFORE THE SPECIAL MEETING.
You should rely only on the
information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to provide you with any different or inconsistent information. We take no responsibility for, and can provide no assurance as to
the reliability of, any other information that others may give you. This document may be used only for the purpose for which it has been prepared.
This proxy statement/prospectus is
dated , 2017, and you should assume that the information in this document is accurate only as of such date or such other date as is specified. You
should assume that the information incorporated by reference into this document is only accurate as of the date of such document or such other date as is specified. Neither the mailing of this document to Metropolitan stockholders nor the issuance
by Renasant of shares of Renasant common stock in connection with the merger will create any implication to the contrary.
This
document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such
jurisdiction. Except where the context otherwise indicates, information contained in this document regarding Metropolitan has been provided by Metropolitan and information contained in this document regarding Renasant has been provided by Renasant.
See Where You Can Find More Information on page
of this proxy
statement/prospectus for more information about the documents referred to in this proxy statement/prospectus.
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QUESTIONS AND ANSWERS
The following are answers to certain questions that you may have regarding the special meeting and the merger. We urge you to read
carefully the remainder of this proxy statement/prospectus (including the risk factors beginning on page
) because the information in this
section may not provide all of the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference into, this document.
Unless otherwise indicated or unless the context requires otherwise, references in this proxy statement/prospectus to Renasant
mean Renasant Corporation, references to Metropolitan mean Metropolitan BancGroup, Inc., and references to we, our or us mean Renasant and Metropolitan, taken together.
Q: What are Metropolitan stockholders being asked to vote on?
A: Metropolitan stockholders are being asked to vote to approve (1) an agreement and plan of merger by and among Renasant, Renasant Bank, Metropolitan and
Metropolitan Bank, which we refer to as the merger proposal, and (2) the adjournment of the special meeting of Metropolitan stockholders, if necessary or appropriate, to solicit additional proxies in favor of the approval of the merger
proposal, which we refer to as the adjournment proposal.
In the merger, Metropolitan will merge with and into Renasant, with Renasant
being the surviving corporation. Immediately after this merger, Metropolitan Bank will merge with and into Renasant Bank, with Renasant Bank being the surviving banking corporation.
References to the merger refer to the merger of Metropolitan with and into Renasant, unless the context clearly indicates
otherwise.
Q: What will I receive in the merger?
A: If the merger is completed, Metropolitan stockholders (other than stockholders who exercise and maintain their appraisal rights under Delaware law) will
receive 0.6066 of a share of Renasant common stock in exchange for each share of Metropolitan common stock held immediately prior to the merger, subject to the payment of cash in lieu of fractional shares.
Q: What if the value of the merger consideration changes between the date of this proxy statement/prospectus and the time that the merger is completed?
A: The implied value of the stock consideration may fluctuate between the date of this proxy statement/prospectus and the completion of the merger
based upon the market value for Renasant common stock. A fluctuation in the market price of Renasant common stock after the date of this proxy statement/prospectus will change the implied value of the stock consideration that you receive. We make no
assurances as to whether or when the merger will be completed or, if completed, as to the market price of Renasant common stock at the time of the merger or any time thereafter. You should obtain current market quotations for Renasant common stock,
which is listed on the NASDAQ Global Select Market, or Nasdaq, under the symbol RNST.
Q: What does the Metropolitan board of directors
recommend?
A: The Metropolitan board of directors unanimously recommends that you vote to approve the merger proposal and the adjournment
proposal.
Q: When and where is the special meeting?
A: The special meeting will be held on June 6, 2017, at Metropolitans main office located at 1069 Highland Colony Parkway, Ridgeland, Mississippi
39157-8722 at 9:00 a.m., local time.
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Q: What constitutes a quorum for the special meeting?
A: The presence at the special meeting, in person or by proxy, of holders of a majority of the outstanding shares of Metropolitan common stock entitled to vote
at the special meeting will constitute a quorum for the transaction of business.
Q: What is the vote required to approve each proposal at the
Metropolitan special meeting?
A: Approval of the merger agreement requires the affirmative vote of a majority of the outstanding shares of
Metropolitan common stock as of the close of business on April 20, 2017, the record date for the special meeting. The adjournment proposal will be approved if a majority of the shares represented, in person or by proxy, at the special meeting are
voted in favor of the proposal, assuming a quorum is present.
Q: What do Metropolitan stockholders need to do now?
A: After you have carefully read this document and have decided how you wish to vote your shares of Metropolitan common stock, indicate on your proxy card how
you want your shares to be voted with respect to the merger proposal and the adjournment proposal. When complete, please sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. Submitting your proxy by
mail or directing your bank or broker to vote your shares will ensure that your shares are represented and voted at the special meeting. Your proxy card must be received prior to the special meeting on June 6, 2017 in order to be counted. If you
would like to attend the special meeting, see Can I attend the special meeting and vote my shares in person?
Q: Why is my vote as
a Metropolitan stockholder important?
A: If you do not vote by proxy or in person at the special meeting, it will be more difficult for
Metropolitan to obtain the necessary quorum to hold its special meeting. In addition, approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Metropolitan common stock, and not just the
shares represented at the special meeting. So, your failure to vote has the same effect as a vote against the merger proposal.
Q: If my shares are
held in street name by a broker, bank or other holder of record, will my shares automatically be voted for me?
A: No. Banks, brokers
or other holders of record who hold shares of Metropolitan common stock in street name for customers who are the beneficial owners of such shares may not give a proxy to vote those customers shares in the absence of specific
instructions. You should instruct the street name holder as to how to vote your shares, following the directions provided to you. Please check the voting form used by your bank or broker. Shares of Metropolitan common stock present but not voted on
any particular matter, or a broker
non-vote,
will be counted for the purpose of determining whether a quorum is present.
Q: What if I abstain from voting or fail to instruct my broker?
A: If you are a Metropolitan stockholder and you abstain from voting or a broker
non-vote
is submitted because you did
not instruct the broker, bank or other holder of record of your shares as to how the shares were to be voted, the abstention or broker
non-vote
will be counted toward a quorum at the special meeting.
However, because approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Metropolitan common stock, an abstention or failure to vote your shares will have the same effect as a vote
against the approval of the merger proposal. An abstention or failure to vote your shares will have no effect on the vote to approve the adjournment proposal, because approval of the adjournment proposal only requires the affirmative vote of the
shares represented, in person or by proxy, at the special meeting, assuming a quorum is present.
Q: Can I attend the special meeting and vote
my shares in person?
A: Yes. All Metropolitan stockholders, including stockholders of record and stockholders who hold their shares through banks,
brokers or any other holder of record, are invited to attend the special meeting. Stockholders of
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record as of the record date can vote in person at the special meeting. If you choose to vote in person at the special meeting and if you are a stockholder of record, you should bring the
enclosed proxy card and proof of identity. If you hold your shares in street name, you must obtain and bring a broker representation letter in your name from your bank, broker or other holder of record and proof of identity. Everyone who attends the
special meeting must abide by the rules for the conduct of the meeting, which will be printed on the meeting agenda. At the appropriate time during the special meeting, the stockholders present will be asked whether anyone wishes to vote in person.
You should raise your hand at this time to receive a ballot to record your vote. Even if you plan to attend the special meeting, Metropolitan encourages you to vote by mail so your vote will be counted if you later decide not to attend the special
meeting. Metropolitan reserves the right to refuse admittance to anyone without proper proof of ownership or proof of identity.
Q: If I am a
Metropolitan stockholder, can I change or revoke my vote?
A: Yes. You may revoke any proxy at any time before it is voted in any of the following
ways: (1) by personally appearing, notifying the Corporate Secretary, and choosing to vote at the special meeting, if you are the stockholder of record or you obtain and bring a broker representation letter in your name from your bank, broker
or the holder of record and, in all cases, you bring proof of identity; (2) by written notification to Metropolitan received prior to the exercise of the proxy; or (3) by a subsequent proxy executed by the person executing the prior proxy
and presented at the special meeting. Metropolitan stockholders must send a written revocation letter to Metropolitan BancGroup, Inc., 1069 Highland Colony Parkway, Ridgeland, Mississippi 39157-8722, Attention: Curtis J. Gabardi.
Any stockholder entitled to vote in person at the special meeting may vote in person regardless of whether a proxy has been previously given,
but the mere presence of a stockholder at the special meeting will not constitute revocation of a previously given proxy.
Q: What are the material
United States federal income tax consequences of the merger to Metropolitan stockholders?
A: The merger will be treated as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code). In connection with the filing of the registration statement of which this proxy statement/prospectus is a part,
Phelps Dunbar LLP, Renasants counsel, has delivered to Renasant, and Troutman Sanders LLP, Metropolitans counsel, has delivered to Metropolitan, their respective opinions that, for United States federal income tax purposes, subject to
the limitations, assumptions and qualifications described in Material United States Federal Income Tax Consequences of the Merger (beginning on page
), the merger will qualify as a
reorganization. Additionally, it is a condition to Renasants and Metropolitans obligations to complete the merger that they each receive a tax opinion, dated the closing date of the merger, that the merger will be treated for
United States federal income tax purposes as a reorganization. Accordingly, holders of Metropolitan common stock are not expected to recognize any gain or loss for United States federal income tax purposes on the exchange of shares of
Metropolitan common stock for shares of Renasant common stock in the merger, except with respect to any cash received in lieu of a fractional share of Renasant common stock. We note that the opinions referenced in this paragraph, however, will not
bind the Internal Revenue Service (the IRS) or the courts, which could take a contrary view. You should read Material United States Federal Income Tax Consequences of the Merger for a more complete discussion of the United
States federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the specific tax
consequences of the merger to you.
Q: Do Metropolitan stockholders have appraisal rights?
A: Yes. If you are a holder of shares of Metropolitan common stock and if you follow the procedures prescribed by Delaware law, you may exercise your appraisal
rights and receive the fair value of your Delaware common stock in cash rather than receive the consideration payable in the merger. If you follow these procedures, you will not receive Renasant common stock. Instead, the fair value of
your Metropolitan common stock, determined in
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the manner prescribed by Delaware law, will be paid to you in cash. That amount could be more or less than the merger consideration or the market value of Renasant common stock as of the closing
date of the merger. Additionally, holders will recognize gain or loss for United States federal income tax purposes on such an exchange of Metropolitan common stock for cash pursuant to these appraisal rights procedures. For a more complete
description of these appraisal rights, see The MergerAppraisal Rights beginning on page and Annex C to this proxy statement/prospectus, which contains a copy of Section 262 of the Delaware General
Corporation Law, which addresses appraisal rights.
Q: Should I send in my Metropolitan stock certificates now?
A: No. You should not send in your Metropolitan stock certificates at this time. After completion of the merger, Renasant will cause instructions to be sent to
you for exchanging Metropolitan stock certificates for shares of Renasant common stock and cash to be paid in lieu of a fractional share of Renasant common stock. The shares of Renasant common stock that Metropolitan stockholders will receive in the
merger will be issued in book-entry form. Please do not send in your stock certificates with your proxy card.
Q: Whom can I contact if I cannot
locate my Metropolitan stock certificate(s)?
A: If you are unable to locate your original Metropolitan stock certificate(s), you should contact
DeJuan Johnson, Computershares Assistant Vice President-Relationship Management, at:
Computershare
Meidinger Tower, 462 S. 4
th
Street
Louisville, Kentucky 40202-3466
Phone: (502)
301-6108
Email: dejuan.johnson@computershare.com
Q: When do you expect to complete the merger?
A:
We currently expect to complete the merger during the third quarter of 2017. However, we cannot assure you when or if the merger will occur. We must, among other things, first obtain the approval of Metropolitan stockholders at the special meeting
and the required regulatory approvals described below in The MergerRegulatory and Third Party Approvals beginning on page
.
Q: Whom should I call with questions?
A:
Metropolitan stockholders should contact:
Curtis J. Gabardi
Chairman, President, and Chief Executive Officer
Metropolitan BancGroup, Inc.
1069 Highland Colony Parkway
Ridgeland, Mississippi 39157-8722
Phone: (601)
499-2927
Email: cgabardi@metropolitan.bank
or
Gregory B. Barron
Chief Financial Officer
Metropolitan BancGroup, Inc.
1069 Highland Colony Parkway
Ridgeland, Mississippi 39157-8722
Phone: (601)
499-2925
Email: gbarron@metropolitan.bank
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus and the documents that are made part of this proxy statement/prospectus by reference to other documents filed
with the SEC include various forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Renasant and Metropolitan that are subject to risks and uncertainties. Congress passed the Private Securities
Litigation Reform Act of 1995 in an effort to encourage companies to provide information about their anticipated future financial performance. This act provides a safe harbor for such disclosure, which protects a company from unwarranted litigation
if actual results are different from management expectations. This document reflects the current views and estimates of future economic circumstances, industry conditions, company performance and financial results of the management of Renasant and
Metropolitan. These forward-looking statements are subject to a number of factors and uncertainties which could cause Renasants, Metropolitans or the combined companys actual results and experience to differ from the anticipated
results and expectations expressed in such forward-looking statements, and such differences may be material. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Neither
Renasant nor Metropolitan assumes any duty to update forward-looking statements. In addition to factors previously disclosed in Renasants reports filed with the SEC and those identified elsewhere in this proxy statement/prospectus, these
forward-looking statements include, but are not limited to, statements about (1) the expected benefits of the transaction between Renasant and Metropolitan, including future financial and operating results, cost savings, enhanced revenues and
the expected market position of the combined company that may be realized from the transaction, and (2) Renasants and Metropolitans plans, objectives, expectations and intentions and other statements contained in this document that
are not historical facts. Other statements identified by words such as expects, anticipates, intends, plans, believes, seeks, estimates, targets,
projects or words of similar meaning generally are intended to identify forward-looking statements. These statements are based upon the current beliefs and expectations of Renasants and Metropolitans management and are
inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond their respective control. In addition, these forward-looking statements are subject to assumptions with respect to future business
strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material.
The following risks, among others, could cause actual results to differ materially from the anticipated results or other expectations
expressed in the forward-looking statements:
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the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;
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the businesses of Renasant and Metropolitan may not be integrated successfully or the integration may be more difficult, time-consuming or costly than expected;
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the expected growth opportunities or costs savings from the transaction may not be fully realized or may take longer to realize than expected;
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revenues following the transaction may be lower than expected as a result of losses of customers or other reasons;
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deposit attrition, operating costs, customer loss and business disruption following the transaction, including difficulties in maintaining relationships with employees, may be greater than expected;
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Metropolitans stockholders may fail to approve the transaction;
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reputational risks and the reaction of the companies customers to the transaction;
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diversion of management time on merger-related issues;
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changes in asset quality and credit risk;
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the cost and availability of capital;
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customer acceptance of the combined companys products and services;
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customer borrowing, repayment, investment and deposit practices;
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the introduction, withdrawal, success and timing of business initiatives;
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the impact, extent and timing of technological changes;
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increased cybersecurity risk, including potential network breaches, business disruptions or financial losses;
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severe catastrophic events in the companies geographic area;
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macroeconomic, geopolitical or other factors may prevent the growth that the companies expect in the markets in which they operate;
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a weakening of the economies in which the combined company will conduct operations may adversely affect its operating results;
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the U.S. legal and regulatory framework, including those associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act, could adversely affect the operating results of the combined company;
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the outcome of any legal proceedings that may be instituted against Renasant or Metropolitan;
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the interest rate environment may compress margins and adversely affect net interest income;
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competition from other financial services companies in the companies markets could adversely affect operations; and
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other financial institutions with greater financial resources than Renasant may be able to develop or acquire products that enable them to compete more successfully than Renasant can.
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Additional factors that could cause Renasants, Metropolitans or the combined companys results to differ materially from those described in
the forward-looking statements can be found in Renasants reports (such as Annual Reports on Form
10-K,
Quarterly Reports on Form
10-Q
and Current Reports on Form
8-K)
filed with the SEC and available at the SECs website (www.sec.gov). All subsequent written and oral forward-looking statements concerning Renasant, Metropolitan or the proposed merger or other matters and
attributable to Renasant, Metropolitan or any person acting on either of their behalf are expressly qualified in their entirety by the cautionary statements above. Renasant and Metropolitan do not undertake any obligation to update any
forward-looking statement, whether written or oral, to reflect circumstances or events that occur after the date the forward-looking statements are made.
For any forward-looking statements made in this proxy statement/prospectus or in any documents incorporated by reference into this proxy
statement/prospectus, Metropolitan and Renasant claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
6
SUMMARY
This summary highlights material information from this proxy statement/prospectus. It may not contain all of the information that is
important to you. We urge you to carefully read the entire document and the other documents to which we refer in order to fully understand the merger and the related transactions, including the risk factors set forth on page
. See Where You Can Find More Information on page
. We have included page references parenthetically to direct you to a more complete description of the topics presented in this summary.
The Parties to the Merger (page )
Metropolitan BancGroup, Inc.
Metropolitan
BancGroup, Inc. is a Delaware corporation and privately-held bank holding company. Metropolitans wholly-owned subsidiary, Metropolitan Bank, operates two offices in each of Nashville and Memphis, Tennessee, and four offices in the Jackson,
Mississippi metropolitan area. The principal executive offices of Metropolitan are located at 1069 Highland Colony Parkway, Ridgeland, Mississippi 39157-8722, and its telephone number at that location is (601)
853-0000.
Renasant Corporation
Renasant Corporation is a Mississippi corporation and a registered bank holding company headquartered in Tupelo, Mississippi. Through Renasant
Bank, its wholly-owned bank subsidiary, Renasant currently operates more than 170 banking, mortgage, financial services and insurance offices throughout Mississippi, Tennessee, Alabama, Florida and Georgia. Through Renasant Bank, Renasant is also
the owner of Renasant Insurance, Inc.
The principal executive offices of Renasant are located at 209 Troy Street, Tupelo, Mississippi
38804-4827, and its telephone number at that location is (662)
680-1001.
Additional information about Renasant and its business and subsidiaries is included in documents incorporated by reference into this
document. See Where You Can Find More Information on page
.
The Merger Agreement
(page and Annex A)
Renasant and Metropolitan are proposing the merger of Metropolitan with and
into Renasant. If the merger is completed, Metropolitan will merge with and into Renasant, with Renasant being the surviving corporation. The merger agreement between Renasant and Metropolitan governs the merger, and it is included in this document
as Annex A. Please read the merger agreement carefully. All descriptions in this summary and elsewhere in this document of the terms and conditions of the merger are qualified by reference to the merger agreement.
In the Merger, Metropolitan Stockholders Will Have a Right to Receive 0.6066 of a Share of Renasant Common Stock per Share of Metropolitan Common Stock
(page )
Under the terms of the merger agreement, Metropolitan stockholders will have a right to receive
0.6066 (the exchange ratio) of a share of Renasant common stock for each share of Metropolitan common stock held immediately prior to the merger, which we refer to as the merger consideration. Renasant will not issue any fractional
shares of Renasant common stock in the merger. Instead, a Metropolitan stockholder who otherwise would have received a fraction of a share of Renasant common stock will receive an amount in cash. This cash amount will be determined by multiplying
the fraction of a share of Renasant common stock to which the holder would otherwise be entitled by the weighted average of the closing sale prices of one share of Renasant common stock as reported on Nasdaq for the 15 consecutive trading days
immediately prior to the date on which the merger is completed, and then rounded to the nearest cent.
7
Example: If you hold 100 shares of Metropolitan common stock, you will have a right to
receive 60 shares of Renasant common stock and a cash payment instead of the 0.66 of a share of Renasant common stock that you otherwise would have received.
Equivalent Metropolitan Per Share Value
Renasant common stock is listed on Nasdaq under the symbol RNST. Shares of Metropolitan common stock are not publicly traded. The
following table shows the closing sale price of Renasant common stock as reported on Nasdaq on January 17, 2017, the last trading day before Renasant and Metropolitan announced the merger, and on April 24, 2017, the last practicable
trading day before the distribution of this document. This table also shows the implied value of the merger consideration proposed for each share of Metropolitan common stock on January 17, 2017 and April 24, 2017, which we calculated by
multiplying the closing price of Renasant common stock as of those dates by the exchange ratio.
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Renasant
Common Stock
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Metropolitan
Common Stock
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Implied Value of
One Share of
Metropolitan
Common Stock
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January 17, 2017
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$
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38.77
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$
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12.35
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(1)
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$
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23.52
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(2)
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April 24, 2017
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42.92
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12.57
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(3)
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26.04
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(4)
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(1)
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Represents the unaudited book value per share of Metropolitan common stock as of December 31, 2016.
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(2)
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Represents the per share merger consideration to a Metropolitan stockholder as of January 17, 2017.
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(3)
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Represents the unaudited book value per share of Metropolitan common stock as of March 31, 2017.
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(4)
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Represents the per share merger consideration to a Metropolitan stockholder as of April 24, 2017.
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The market price of Renasant common stock will fluctuate prior to the merger. Metropolitan stockholders are urged to obtain current market
quotations for Renasant shares prior to making any decision with respect to the merger.
Treatment of Metropolitan Stock Options
(page )
Upon completion of the merger, any options to purchase Metropolitan common stock granted under the
Metropolitan BancGroup, Inc. 2007 Stock Incentive Plan, which we refer to as the Metropolitan Stock Incentive Plan, that are outstanding immediately prior to the effective time (whether vested or unvested) will vest in full and be converted into the
right to receive a cash payment. The amount of this cash payment will be equal to (1) the total number of shares subject to the stock option multiplied by (2) the difference between $25.50 and the exercise price of the option, less
applicable tax withholdings. Stock options with an exercise price equal to or greater than $25.50 will be forfeited and cancelled.
The Metropolitan
Board of Directors Unanimously Recommends that Metropolitan Stockholders Vote FOR the Approval of the Merger Proposal (page )
The Metropolitan board of directors believes that the merger is in the best interests of Metropolitan and its stockholders and has unanimously
approved the merger and the merger agreement. The Metropolitan board of directors unanimously recommends that Metropolitan stockholders vote FOR the approval of the merger proposal. In reaching its decision, the Metropolitan board of
directors considered a number of factors, which are described in more detail in The MergerMetropolitans Reasons for the Merger; Recommendation of the Metropolitan Board of Directors on page
. The Metropolitan board of directors did not assign relative weights to the factors described in that section or the other factors considered by it. In addition, the Metropolitan board of
directors did not reach any specific conclusion on each factor considered, but conducted an overall analysis of these factors. Individual members of the Metropolitan board of directors may have given different weights to different factors.
8
Opinion of Metropolitans Financial Advisor (page and Annex B)
At the January 16, 2017 meeting of Metropolitans board of directors, representatives of Raymond James &
Associates, Inc. (Raymond James) rendered Raymond James oral opinion, which was subsequently confirmed by delivery of a written opinion to the board of directors, dated January 16, 2017, as to the fairness, as of such date,
from a financial point of view, to the holders of Metropolitans outstanding common stock of the merger consideration to be received by such holders in the transactions pursuant to the merger agreement, based upon and subject to the assumptions
made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the opinion.
The
full text of the written opinion of Raymond James, dated January 16, 2017, which sets forth, among other things, assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the
other matters considered, is attached as Annex B to this document. The description and discussion in this document of Raymond James opinion is qualified in its entirety by reference to the full text of Raymond James opinion. Raymond
James provided its opinion for the information and assistance of the Metropolitan board of directors (solely in its capacity as such) in connection with, and for purposes of, its consideration of the transaction, and its opinion only addresses
whether the merger consideration to be received by the holders of the common stock in the transactions pursuant to the merger agreement was fair, from a financial point of view, to such holders. The opinion of Raymond James did not address any other
term or aspect of the merger agreement or the transactions contemplated thereby. The Raymond James opinion does not constitute a recommendation to the board of directors or any holder of Metropolitan common stock as to how the board of directors,
such stockholder or any other person should vote or otherwise act with respect to the merger or any other matter.
Risk Factors Related to the
Merger (page )
You should consider all of the information contained in or incorporated by reference into
this proxy statement/prospectus in deciding how to vote for the proposals presented in this document. In particular, you should consider the factors under Risk Factors.
Metropolitan Will Hold its Special Meeting on June 6, 2017 (page )
The special meeting will be held on June 6, 2017, at Metropolitans main office located at 1069 Highland Colony Parkway, Ridgeland,
Mississippi 39157-8722 at 9:00 a.m., local time. At the special meeting, Metropolitan stockholders will be asked to approve the merger proposal and the adjournment proposal and to vote on any other business properly brought before the special
meeting or any adjournment or postponement thereof.
Record Date.
Only holders of record of Metropolitan common stock at the close
of business on April 20, 2017 will be entitled to vote at the special meeting. Each outstanding share of Metropolitan common stock is entitled to one vote on each proposal to be considered at the Metropolitan special meeting. As of the record
date, there were
7,462,349 outstanding shares of Metropolitan common stock entitled to vote at the special meeting.
Required Vote.
Approval of the merger proposal requires the affirmative vote of holders of a majority of the outstanding shares of
Metropolitan common stock entitled to vote on such matter. Approval of the adjournment proposal requires the affirmative vote of a majority of the shares represented, in person or by proxy, at the special meeting and entitled to vote, assuming that
a quorum is present. With respect to the vote to approve the merger proposal, your failure to vote or abstention or a broker
non-vote
will have the same effect as a vote against the merger proposal. With
respect to the adjournment proposal, your failure to vote, an abstention or a broker
non-vote
will have no effect on the approval of the adjournment proposal assuming a quorum is present.
All of the directors of Metropolitan have entered into agreements with Renasant pursuant to which they have agreed, in their capacity as
Metropolitan stockholders, to vote all of their shares in favor of the approval of
9
the merger proposal. As of the record date, these directors of Metropolitan and their affiliates had the right to vote 2,775,338 shares of Metropolitan common stock, or
approximately 37% of the outstanding Metropolitan shares entitled to vote at the special meeting. We expect these individuals to vote their Metropolitan common stock in favor of the approval of the merger proposal in accordance with those
agreements. As of the record date, all directors and executive officers of Metropolitan, including their affiliates, had the right to vote 2,944,405 shares of Metropolitan common stock, or approximately 39% of the outstanding
Metropolitan shares entitled to vote at the special meeting, and held options to purchase 612,032 shares of Metropolitan common stock.
As of the record date, neither Renasant nor any of its affiliates held any shares of Metropolitan common stock (other than shares held in
trust accounts, managed accounts, mutual funds and the like or otherwise in a fiduciary or agency capacity or as a result of debts previously contracted), and Renasants directors and executive officers and their affiliates also did not hold
any shares of Metropolitan common stock.
Renasant Banks Board of Directors Following Completion of the Merger
(page )
Upon completion of the
merger, the number of directors constituting Renasants and Renasant Banks respective boards of directors will be increased by one, and one individual who is currently a director of Metropolitan, selected by Renasant after consultation
with Metropolitan, will be appointed to complete the larger boards. After consultation with Metropolitan, Renasants board of directors has selected Donald Clark, Jr. to be appointed to join Renasant and Renasant Banks respective board of
directors upon completion of the merger.
Metropolitans Directors and Executive Officers May Receive Additional Benefits from the Merger
(page )
When considering the information contained in this proxy statement/prospectus, including the
recommendation of Metropolitans board of directors to vote to adopt and approve the merger proposal, Metropolitan stockholders should be aware that Metropolitans executive officers and members of Metropolitans board of directors
may have interests in the merger that are different from, or in addition to, those of Metropolitan stockholders generally. Metropolitans board of directors was aware of and considered these interests, among other matters, in evaluating and
negotiating the merger agreement and the merger (to the extent these interests were in existence at the time of the evaluation and negotiation of the merger agreement and the merger), and in recommending that the merger agreement be adopted and
approved by Metropolitans stockholders. For information concerning these interests, please see the discussion under the caption The MergerInterests of Certain Metropolitan Directors and Executive Officers in the Merger on
page
.
Appraisal Rights (page )
Under Section 262 of the Delaware General Corporation Law, which we refer to as the DGCL, holders of Metropolitan common stock may
exercise their appraisal rights and receive in cash the fair value of their Metropolitan common stock, as determined by a Delaware court, in lieu of the right to receive 0.6066 shares of Renasant common stock in the merger. To exercise
appraisal rights, a Metropolitan stockholder must follow certain procedures, including filing certain notices with Metropolitan and refraining from voting the stockholders shares of Metropolitan common stock in favor of the merger agreement.
Persons having beneficial interests in Metropolitan common stock held of record in the name of another person, such as a broker, bank or other holder of record, must act promptly to cause the record holder to take the actions required under Delaware
law to exercise their appraisal rights.
For more information, see The MergerAppraisal Rights and Annex C to this proxy
statement/prospectus, which sets forth the full text of Section 262 of the DGCL. If you intend to exercise appraisal rights, please read Annex C carefully and consult with your own legal counsel. Please note that, if you return a signed proxy
card but do not provide instructions as to how to vote your shares of Metropolitan common stock, you will be considered to have voted in favor of the merger proposal. In that event, you will not be able to assert appraisal rights.
10
The Merger Will Be
Tax-Free
to Metropolitan Stockholders as to
the Shares of Renasant Common Stock They Receive (page )
The merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. In connection with the filing of the registration statement of which this proxy statement/prospectus is a part, Phelps Dunbar LLP, Renasants counsel, has
delivered to Renasant, and Troutman Sanders LLP, Metropolitans counsel, has delivered to Metropolitan, their respective opinions that, for United States federal income tax purposes, subject to the limitations, assumptions and qualifications
described in Material United States Federal Income Tax Consequences of the Merger (beginning on page
), the merger will qualify as a reorganization. Additionally, it is a
condition to Renasants and Metropolitans obligations to complete the merger that they each receive a tax opinion, dated the closing date of the merger, that the merger will be treated for United States federal income tax purposes as a
reorganization. Accordingly, holders of Metropolitan common stock are not expected to recognize any gain or loss for United States federal income tax purposes on the exchange of shares of Metropolitan common stock for shares of
Renasant common stock in the merger, except with respect to any cash received in lieu of a fractional share of Renasant common stock. We note that the opinions referenced herein, however, will not bind the IRS or the courts, which could take a
contrary view. See Material United States Federal Income Tax Consequences of the Merger.
The United States federal income
tax consequences described above may not apply to all Metropolitan stockholders. Your tax consequences will depend on your individual situation. Accordingly, Metropolitan strongly urges you to consult your tax advisor for a full understanding of the
particular tax consequences of the merger to you.
Nasdaq Listing (page )
Renasant will cause the shares of its common stock to be issued to Metropolitan stockholders in the merger to be approved for listing on Nasdaq
subject to notice of issuance, prior to the effective time of the merger.
Accounting Treatment of Merger (page )
Renasant will account for the merger under the purchase method of accounting for business combinations under United States
generally accepted accounting principles.
Conditions Exist That Must Be Satisfied or Waived for the Merger to Occur (page )
Currently, Renasant and Metropolitan expect to complete the merger during the third quarter of 2017. As more fully described
in this document and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others, receipt of the requisite approval of
Metropolitans stockholders, the receipt of all required regulatory approvals (including approval by (or a waiver from) the Board of Governors of the Federal Reserve System (the Federal Reserve), the Federal Deposit Insurance
Corporation (the FDIC) and the Mississippi Department of Banking and Consumer Finance), and the receipt of legal opinions by each company regarding the United States federal income tax treatment of the merger. In addition, holders of no
more than 5% of Metropolitans outstanding common stock shall have exercised their statutory appraisal rights. As noted below, the Federal Reserve, the FDIC and the Mississippi Department of Banking and Consumer Finance have already approved
the merger (or waived the approval requirement).
Renasant and Metropolitan cannot be certain when, or if, the conditions to the
merger will be satisfied or waived, or that the merger will be completed.
Regulatory Approvals Required for the Merger
(page )
Metropolitan and Renasant have agreed to use their reasonable best efforts to obtain all regulatory
approvals, including all antitrust clearances, required to complete the transactions contemplated by the merger
11
agreement. The required regulatory approvals include approval by (or a waiver from) the Federal Reserve, the FDIC, the Mississippi Department of Banking and Consumer Finance, state securities
authorities and various other federal and state regulatory authorities and self-regulatory organizations. As of the date of this proxy statement/prospectus, Renasant and Metropolitan have received all necessary regulatory approvals (or waivers
therefrom) from the Federal Reserve, the FDIC and the Mississippi Department of Banking and Consumer Finance for the completion of the merger.
Metropolitan or Renasant May Terminate the Merger Agreement Under Certain Circumstances (page )
Metropolitan and Renasant may mutually agree to terminate the merger agreement before completing the merger, even after Metropolitan
stockholder approval, as long as the termination is approved by the Metropolitan and Renasant boards of directors.
The merger agreement
may also be terminated by either party in the following circumstances:
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if the merger has not been completed on or before December 31, 2017, unless the required regulatory approvals are pending and have not been finally resolved or any stockholder litigation challenging the merger
agreement has not been resolved, in which event such date shall be automatically extended to March 31, 2018, unless the failure to complete the merger by that date is due to the breach of the merger agreement by the party seeking to terminate;
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Metropolitans stockholders do not approve the merger agreement at the special meeting, unless the failure to obtain stockholder approval is due to the breach of the merger agreement by Metropolitan;
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upon written notice, once 30 days pass after any application for regulatory or governmental approval is denied or withdrawn at the request or recommendation of the governmental entity, unless within such
30-day
period a petition for rehearing or an amended application is filed. A party may terminate 30 or more days after a petition for rehearing or an amended application is denied. No party may terminate when the
denial or withdrawal is due to that partys failure to observe or perform its covenants or agreements set forth in the merger agreement;
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if there has been a final,
non-appealable
order enjoining or otherwise prohibiting the completion of the merger and the other transactions contemplated by the merger agreement; or
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if there is a breach of or failure to perform any of the representations, warranties, covenants or undertakings under the merger agreement by the other party that prevents it from satisfying any of the closing
conditions to the merger and such breach or failure to perform cannot be cured or has not been cured within 30 days after the breaching party receives written notice of such breach.
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In addition, Metropolitan may terminate the merger agreement at any time prior to the approval of the merger agreement by Metropolitans
stockholders, for the purpose of entering into a definitive agreement with respect to a superior proposal (as described in more detail later in this document), provided that Metropolitan is not in material breach of any of its
obligations under the merger agreement to not solicit other acquisition proposals and to recommend that Metropolitan stockholders approve the merger agreement and the merger. Also, no such purported termination shall be effective until Metropolitan
has paid the termination fee described below.
Renasant may terminate the merger agreement:
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if prior to receipt of Metropolitans stockholder approval, Metropolitan, its board or any committee of its board (1) withdraws, or modifies or qualifies in a manner adverse to Renasant, the recommendation
that its stockholders approve the merger agreement, (2) Metropolitans board authorizes, recommends, or publicly announces its intention to authorize or recommend, an acquisition proposal by a third party, or (3) fails to convene its
special stockholders meeting;
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after receipt of certain business combination proposals, Renasant advises Metropolitan that it has elected not to propose revisions to the merger agreement to match or better such other business combination proposal;
and
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if holders of more than 5% of the shares of Metropolitans common stock outstanding at any time prior to the closing date of the merger exercise and maintain appraisal rights.
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For a further description of the termination provisions contained in the merger agreement see The Merger AgreementTermination of
the Merger Agreement beginning on page
.
Termination Fee (page )
In general, each of Metropolitan and Renasant will be responsible for all expenses incurred by it in connection with the
negotiation and completion of the transactions contemplated by the merger agreement, subject to specific exceptions discussed in this document. Upon termination of the merger agreement under specified circumstances, Metropolitan may be required to
pay Renasant a termination fee equal to $6.8
million plus up to $650,000 of reasonable costs and documented expenses incurred by Renasant in connection with the merger agreement and the merger. See The Merger
AgreementTermination Fee beginning on page
for a complete discussion of the circumstances under which termination fees will be required to be paid.
The Rights of Metropolitan Stockholders Will Change as a Result of the Merger (page )
The rights of Metropolitan stockholders are governed by Delaware law, as well as Metropolitans Amended and Restated Certificate of
Incorporation (which we refer to as the Metropolitan Certificate), and Metropolitans Bylaws. After completion of the merger, the rights of former Metropolitan stockholders will be governed by Mississippi law and by Renasants Articles of
Incorporation, as amended (which we refer to as the Renasant Articles), and Renasants Restated Bylaws, as amended (which we refer to as the Renasant Bylaws). This document contains descriptions of the material differences in stockholder rights
beginning on page
.
No Restrictions on Resale
All shares of Renasant common stock received by Metropolitan stockholders in the merger will be freely tradeable, except that shares of
Renasant common stock received by any person who becomes an affiliate of Renasant for purposes of Rule 144 under the Securities Act of 1933, as amended, which we refer to as the Securities Act, may be resold only in transactions permitted by Rule
144 or as otherwise permitted under the Securities Act.
Recent Developments
Renasant First Quarter Results
On
April 25, 2015, Renasant reported its financial results for the quarter ended March 31, 2017, which included the following:
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Net income was $24.0 million for the first quarter of 2017, up 12.9% as compared to net income of $21.2 million for the same quarter of 2016. Basic and diluted earnings per share were $0.54 for the first quarter of 2017
as compared to basic and diluted earnings per share of $0.53 and $0.52, respectively, for the first quarter of 2016.
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Renasants return on average assets and return on average equity were 1.11% and 7.80%, respectively, for the first quarter of 2017 as compared to 1.07% and 8.12%, respectively, for the first quarter of 2016.
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Total assets at March 31, 2017 were approximately $8.8 billion, as compared to $8.7 billion at December 31, 2016. Total loans, including loans acquired and not acquired, increased 0.59% to
approximately $6.24 billion at March 31, 2017 as compared to $6.20 at December 31, 2016. Not acquired loans increased $123.7 million, or 2.63%, to $4.8 billion at March 31, 2017.
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Deposits increased to $7.2 billion at March 31, 2017 as compared to $7.1 billion at December 31, 2016. Renasants noninterest-bearing deposits averaged approximately $1.6 billion, or 21.8% of
average deposits, for the first quarter of 2017, up from $1.3 billion, or 20.9% of average deposits, for the first quarter of 2016.
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Net interest income was $74.0 million for the first quarter of 2017 as compared to $70.1 million for the first quarter of 2016, while net interest margin was 4.01% for the first quarter of 2017 as compared to
4.21% for the first quarter of 2016.
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For the first quarter of 2017, noninterest income decreased to $32.0 million as compared to $33.3 million for the first quarter of 2016, driven primarily by a decline in mortgage banking income. Noninterest
expense was $69.3 million for the first quarter of 2017 as compared to $69.8 million for the first quarter of 2016. Excluding nonrecurring charges for merger and conversion expenses and debt prepayment penalties, noninterest expense
remained relatively flat compared to the first quarter of 2016.
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At March 31, 2017, total nonperforming loans (loans 90 days or more past due and nonaccrual loans) were $35.2 million and total other real estate owned (OREO) was $21.3 million. Acquired
nonperforming loans and OREO (collectively referred to as acquired nonperforming assets) were $20.4 million and $16.3 million, respectively at March 31, 2017. Excluding the acquired nonperforming assets, nonperforming loans
were $14.8 million at March 31, 2017 as compared to $13.4 million at December 31, 2016, and OREO was $5.1 million at March 31, 2017 as compared to $5.9 million at December 31, 2016, a 14.7% decrease. Renasant
recorded a provision for loan losses of $1.5 million for the first quarter of 2017 as compared to $1.8 million for the first quarter of 2016. Excluding acquired nonperforming assets, the allowance for loan losses as a percentage of loans
was 0.89% at March 31, 2017 as compared to 0.91% at December 31, 2016.
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These results have not been audited or
reviewed by Renasants independent registered public accountants, nor have any other review procedures been performed by them with respect to these results. Accordingly, no opinion or any other form of assurance can be provided with respect to
this information. Renasants actual results could differ from these results based on the completion of the review by its independent registered public accountants of its consolidated financial statements as of and for the quarter ended March
31, 2017 when they are subsequently filed with the SEC.
14
SELECTED HISTORICAL FINANCIAL DATA OF RENASANT
Set forth below are highlights from Renasants consolidated financial data as of and for the fiscal years ended December 31, 2012
through December 31, 2016. This selected consolidated financial data has been derived from the audited consolidated financial statements of Renasant. You should not assume that the results for any periods indicate results for any future period.
You should read this information in conjunction with Renasants consolidated financial statements and related notes included in Renasants Annual Report on Form
10-K/A
for the year ended
December 31, 2016, which is incorporated by reference into this proxy statement/prospectus. See Where You Can Find More Information on page
.
(In thousands, except share data) (Unaudited)
(1)
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As of and for the year ended
December 31,
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2016
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2015
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2014
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2013
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2012
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Summary of Operations
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Interest income
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$
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329,138
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$
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263,023
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$
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226,409
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$
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180,604
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$
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159,313
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Interest expense
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28,147
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21,665
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23,927
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23,471
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25,975
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Net interest income
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300,991
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241,358
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202,482
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157,133
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133,338
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Provision for loan losses
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7,530
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4,750
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6,167
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10,350
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18,125
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Noninterest income
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137,415
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108,270
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80,509
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71,891
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68,711
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Noninterest expense
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295,099
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245,114
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190,937
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172,928
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150,459
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Income before income taxes
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135,777
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99,764
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85,887
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45,746
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33,465
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Income taxes
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44,847
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31,750
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26,305
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12,259
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6,828
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Net income
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$
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90,930
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$
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68,014
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$
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59,582
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$
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33,487
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26,637
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Dividend payout
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32.72
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%
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36.17
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%
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36.17
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%
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55.74
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%
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64.15
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%
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Per Common Share Data
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Net incomeBasic
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$
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2.18
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$
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1.89
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$
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1.89
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$
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1.23
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1.06
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Net incomeDiluted
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2.17
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1.88
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1.88
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1.22
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1.06
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Book value
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27.81
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25.73
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22.56
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21.21
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19.80
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Closing price
(2)
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42.22
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34.41
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28.93
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31.46
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19.14
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Cash dividends declared and paid
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0.71
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0.68
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0.68
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0.68
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0.68
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Financial Condition Data
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Assets
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$
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8,699,851
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$
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7,926,496
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$
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5,805,129
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$
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5,746,270
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$
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4,178,616
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Loans, net of unearned income
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6,202,709
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5,413,462
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3,987,874
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3,881,018
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2,810,253
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Securities
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1,030,530
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1,105,205
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983,747
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913,329
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674,077
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Deposits
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7,059,137
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6,218,602
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4,838,418
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4,841,912
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3,461,221
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Borrowings
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312,135
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570,496
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188,825
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171,875
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164,706
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Shareholders equity
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1,232,883
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1,036,818
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711,651
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665,652
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498,208
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Selected Ratios
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Return on average:
Total assets
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1.08
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%
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0.99
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%
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1.02
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%
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0.71
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%
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0.64
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%
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Shareholders equity
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8.15
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%
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7.76
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%
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8.61
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%
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6.01
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%
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5.39
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%
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Average shareholders equity to average assets
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13.26
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%
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12.76
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%
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11.89
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%
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11.78
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%
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11.96
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%
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Shareholders equity to assets
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14.17
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%
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13.08
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%
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12.26
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%
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11.58
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%
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11.92
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%
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Allowance for loan losses to total loans, net of unearned income
(3)
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0.91
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%
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1.11
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%
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1.29
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%
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1.65
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%
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1.72
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%
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Allowance for loan losses to nonperforming
loans
(3)
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320.08
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%
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283.46
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%
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209.49
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%
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248.90
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%
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146.90
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%
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Nonperforming loans to total loans, net of unearned income
(3)
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0.28
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%
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0.39
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%
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0.62
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%
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0.66
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%
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1.17
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%
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15
(1)
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Selected consolidated financial data includes the effect of mergers and other acquisition transactions from the date of each merger or other transaction. On
April 1, 2016, Renasant Corporation and Renasant Bank acquired KeyWorth Bank, a Georgia banking corporation (KeyWorth), headquartered in Johns Creek, Georgia. On July 1, 2015, Renasant Corporation acquired Heritage Financial
Group, Inc., a Maryland corporation (Heritage), headquartered in Albany, Georgia. On September 1, 2013, Renasant Corporation acquired First M&F Corporation, a Mississippi corporation (First M&F), headquartered in
Kosciusko, Mississippi. For additional information about the KeyWorth and Heritage transactions, please refer to Item 1, Business, and Note 2, Mergers and Acquisitions, in the Notes to Consolidated Financial Statements in Item 8,
Financial Statements and Supplementary Data, in Renasants Annual Report on Form
10-K/A
for the year ended December 31, 2016, filed with the SEC on February 28, 2017 and incorporated by
reference herein. For additional information about the First M&F transaction (as well as the American Trust and Crescent transactions described in note 3 below), please refer to Item 1, Business, and Note B, Mergers and Acquisitions,
in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in Renasants Annual Report on Form
10-K
for the year ended December 31, 2015, filed with the
SEC on February 29, 2016.
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(2)
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Reflects the closing price on Nasdaq on the last trading day of the applicable fiscal year.
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(3)
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Excludes assets acquired in the previously-disclosed transactions related to KeyWorth, Heritage and First M&F as well as assets acquired in connection with each
of Renasant Banks February 2011 acquisition of specified assets and assumption of specified liabilities of American Trust Bank, a Georgia-chartered bank headquartered in Roswell, Georgia (American Trust), from the FDIC, as receiver
for American Trust, and Renasant Banks July 2010 acquisition of specified assets and assumption of specified liabilities of Crescent Bank & Trust Company, a Georgia-chartered bank headquartered in Jasper, Georgia
(Crescent), from the FDIC, as receiver for Crescent. Effective December 8, 2016, Renasant Bank entered into an agreement with the FDIC to terminate the loss-share agreements with the FDIC entered into in connection with the American
Trust and Crescent transactions.
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16
COMPARATIVE PER SHARE DATA
The following table sets forth for Renasant common stock and Metropolitan common stock certain historical, pro forma and pro forma-equivalent
per share financial information as of and for the year ended December 31, 2016. The unaudited pro forma and pro forma-equivalent per share information gives effect to the merger as well as Renasants acquisition of KeyWorth (which was
completed effective April 1, 2016) as if the acquisitions had been effective as of the dates presented, in the case of the book value data, and as if they had become effective on January 1, 2016, in the case of the net income and dividends
declared data. The unaudited pro forma data in the table assumes that the merger is accounted for using the acquisition method of accounting, with Renasant as the acquiror, and represents a current estimate based on available information of the
combined companys results of operations. The pro forma financial adjustments record the assets and liabilities of Metropolitan at their estimated fair values and are subject to adjustment as additional information becomes available and as
additional analyses are performed; in addition, Renasant is still finalizing its determination of the fair values of the assets and liabilities of KeyWorth. The information in the following table is based on, and should be read together with, the
historical financial information that Renasant has presented in its prior filings with the SEC that are incorporated herein by reference and the selected historical financial data of Renasant in this proxy statement/prospectus. See Selected
Historical Financial Data of Renasant beginning on page and Where You Can Find More Information on page
.
We anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses and revenue
enhancement opportunities. The unaudited pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the impact of possible business model changes as a
result of current market conditions which may impact revenues, expense efficiencies, asset dispositions, share repurchases and other factors. It also does not necessarily reflect what the historical results of the combined company would have been
had the companies been combined during these periods nor is it indicative of the results of operations in future periods or the future financial position of the combined company. The Comparative Per Share Data table for the year ended
December 31, 2016 combines the historical income per share data of Renasant and subsidiaries and Metropolitan and subsidiaries giving effect to the transactions as if the merger and Renasants acquisition of KeyWorth, using the acquisition
method of accounting, had become effective on January 1, 2016. The pro forma adjustments are based upon available information and certain assumptions that Renasants management believes are reasonable. Upon completion of the merger, the
operating results of Metropolitan will be reflected in the consolidated financial statements of Renasant on a prospective basis.
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December 31, 2016
(12 months)
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Income*
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Book Value
Common**
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Cash Dividends
Common
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Renasant Historical
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$
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2.17
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$
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27.81
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$
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0.71
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Metropolitan Historical
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0.90
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12.35
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Pro Forma Combined
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2.03
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29.52
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$
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0.71
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Per Equivalent Metropolitan Share***
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1.23
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17.91
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$
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0.43
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*
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Income per share is calculated on diluted shares.
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**
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Book Value per share is calculated on the number of shares outstanding as of the end of the period.
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***
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Per Equivalent Metropolitan Share is pro forma combined multiplied by the exchange ratio of 0.6066.
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17
RISK FACTORS
In addition to the general investment risks and other information included in or incorporated by reference into this proxy
statement/prospectus, including the matters addressed under the heading Special Note Regarding Forward-Looking Statements on page and the matters discussed under the caption Risk Factors in
Renasants Annual Report on Form
10-K/A
for the year ended December 31, 2016 filed by Renasant with the SEC (as updated by subsequently filed Forms
10-Q
and
other reports filed with the SEC), Metropolitan stockholders should carefully consider the matters described below in determining whether to approve the merger agreement. Metropolitan stockholders should also read and consider the risks associated
with Renasants business because these risks will relate to the combined company. If any of the following risks or other risks that have not been identified, or that Renasant and Metropolitan currently believe are immaterial or unlikely,
actually occur, the business, financial condition and results of operations of the combined company could be harmed. Many factors, including those described below, could cause actual results to differ materially from those discussed in
forward-looking statements.
Risks Related to the Merger
Because the market price of Renasant common stock will fluctuate, Metropolitan stockholders cannot be sure of the market value of the merger
consideration they will receive.
Upon completion of the merger, each outstanding share of Metropolitan common stock will be
converted into the right to receive the merger consideration consisting of 0.6066 of a share of Renasant common stock and cash in lieu of the issuance of any fractional share of Renasant common stock. The market value of the merger consideration may
vary from the closing price of Renasant common stock on the date we announced the merger, on the date that this document was mailed to Metropolitan stockholders, on the date of the special meeting of the Metropolitan stockholders and on the date we
complete the merger and thereafter. Any change in the market price of Renasant common stock prior to completion of the merger will affect the market value of the merger consideration that Metropolitan stockholders will receive upon completion of the
merger. Accordingly, at the time of the special meeting, Metropolitan stockholders will not know or be able to calculate the market value of the merger consideration they would receive upon completion of the merger. Neither company is permitted to
terminate the merger agreement or resolicit the vote of Metropolitan stockholders solely because of changes in the market price of Renasants stock. There will be no adjustment to the merger consideration for changes in the market price of
shares of Renasant common stock. Stock price changes result from a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these
factors are beyond our control. You should obtain a current market quotation for Renasant common stock before you vote.
The price of
Renasants common stock might decrease after the merger.
The value of the shares of Renasants common stock you will
receive in the merger in exchange for your shares of Metropolitan common stock will increase or decrease as the market price for Renasants common stock changes. During the twelve-month period ended on April 24, 2017 (the most recent
practicable date before the printing of the proxy statement/prospectus), the price of Renasants common stock varied from a low of $30.21 to a high of $44.65, and ended that period at $42.92. The market value of Renasants common stock
fluctuates based upon general market and economic conditions, Renasants business and prospects and other factors.
Metropolitan
stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.
Metropolitan stockholders currently have the right to vote in the election of the Metropolitan board of directors and on other matters
affecting Metropolitan. When the merger occurs, each Metropolitan stockholder
18
that receives shares of Renasant common stock will become a Renasant stockholder with a percentage ownership of the combined organization that is smaller than such stockholders current
percentage ownership of Metropolitan. Because of this, Metropolitan stockholders will have less influence on the management and policies of Renasant than they now have on the management and policies of Metropolitan.
Metropolitan will be subject to business uncertainties and contractual restrictions while the merger is pending.
Metropolitans employees and customers may be uncertain about the effect on Metropolitan of the merger, and this uncertainty may adversely
affect Metropolitans ability to attract, retain and motivate key personnel until the merger is completed. In addition, customers, vendors and other third parties could seek to alter their existing business relationships with Metropolitan on
account of the merger. Because of uncertainty about their future employment with Renasant following the merger, retention of certain employees by Metropolitan may be challenging while the merger is pending. If key employees depart for any reason,
Metropolitans business, both while the merger is pending and after its completion, could be negatively impacted. In addition, Metropolitan has agreed to certain contractual restrictions on the operation of its business prior to closing. See
The Merger AgreementCovenants and Agreements on page
for a discussion of the restrictive covenants applicable to Metropolitan.
The merger agreement limits Metropolitans ability to pursue an alternative acquisition proposal and requires Metropolitan to pay a termination fee
of $6.8 million plus up to $650,000 of Renasants expenses under limited circumstances relating to alternative acquisition proposals.
The merger agreement prohibits Metropolitan from, among other things, soliciting, initiating or facilitating certain alternative acquisition
proposals with any third party unless Metropolitans directors conclude in good faith (after consultation with its financial advisor (as to financial matters) and outside legal counsel) that (1) their failure to take such action would be
inconsistent with their fiduciary duties under applicable law and (2) such alternative transaction is or is reasonably likely to result in a transaction more favorable to Metropolitans stockholders from a financial point of view than the
merger with Renasant and is reasonably likely to be consummated. See The Merger AgreementNo Solicitation of Other Offers on page
. The merger agreement also provides for the
payment by Metropolitan of a termination fee in the amount of $6.8 million plus up to $650,000 of Renasants reasonable costs and documented expenses in the event that either party terminates the merger agreement for certain reasons. These
provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of Metropolitan from considering or proposing such an acquisition, even if this third party was willing to pay
consideration with a higher per share value than the consideration payable in the merger with Renasant. Similarly, such a competing acquiror might propose a price lower than it might otherwise have been willing to offer because of the potential
added expense of the termination fee that may become payable to Renasant in certain circumstances under the merger agreement. See The Merger AgreementTermination Fee on page
.
Metropolitan has not obtained an updated fairness opinion from Raymond James & Associates, Inc. reflecting changes in circumstances that
may have occurred since the signing of the merger agreement.
Metropolitan has not obtained an updated opinion as of the date of
this proxy statement/prospectus from Raymond James, Metropolitans financial advisor, regarding the fairness, from a financial point of view, of the consideration to be received by Metropolitan stockholders in connection with the merger. The
opinion was delivered verbally on January 16, 2017, and it was confirmed in writing on the same day. Changes in the operations and prospects of Renasant or Metropolitan, general market and economic conditions and other factors which may be
beyond the control of Renasant and Metropolitan, and on which the fairness opinion was based, may have altered the value of Renasant or Metropolitan or the price of Renasant stock as of the date of this document, or may alter such values and price
by the time the merger is completed. The opinion does not speak as of any date other than the date of that opinion. For a description of the opinion that Metropolitan received from its financial advisor, please refer to The MergerOpinion
of Metropolitans Financial Advisor beginning on
19
page
. For a description of the other factors considered by Metropolitans board of directors in determining to approve the merger, please
refer to The MergerMetropolitans Reasons for the Merger; Recommendation of the Metropolitan Board of Directors beginning on page
.
Certain of Metropolitans directors and executive officers have interests in the merger that may differ from the interests of Metropolitans
stockholders including, if the merger is completed, the receipt of financial and other benefits.
Metropolitans executive
officers and directors have interests in the merger that are in addition to, and may be different from, the interests of Metropolitan stockholders generally. These interests include, among others, the following:
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payments attributable to the
cash-out
of vested and unvested options previously granted under the Metropolitan Stock Incentive Plan, as provided under the merger agreement;
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certain cash payments that will be made upon closing pursuant to the termination of employment agreements previously entered into by some Metropolitan executive officers;
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the right to continued indemnification and directors and officers liability insurance coverage by Metropolitan after the completion of the merger; and
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with respect to Mr. Gabardi, employment with Renasant Bank after the closing under certain terms and conditions set forth in an employment agreement that will become effective upon the closing.
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See The MergerInterests of Certain Metropolitan Directors and Executive Officers in the Merger beginning on
page
for a discussion of these interests. In addition, Metropolitan director Donald Clark, Jr. will be appointed to Renasant and Renasant Banks respective boards of directors upon
completion of the merger.
The merger is subject to the receipt of consents and approvals from government entities that may impose conditions
that could delay the completion of the merger or have an adverse effect on the combined company following the merger.
Before
the merger may be completed, various approvals or consents must be obtained from the Federal Reserve, the FDIC and various domestic bank, securities and other regulatory authorities. As of the date of this proxy statement/prospectus, each of the
Federal Reserve, the FDIC and the Mississippi Department of Banking and Consumer Finance have approved the merger (or waived the approval requirement). However, it is possible that, on account of a change in circumstances affecting Renasant,
Metropolitan or both companies or for other reasons, any of these regulatory approvals could be withdrawn in its entirety or made subject to the satisfaction of certain conditions. Although unlikely, the occurrence of such an event could have the
effect of delaying completion of the merger or imposing additional costs on, or limiting the revenues of, the combined company following the merger, any of which might have an adverse effect on the combined company following the merger.
The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed.
The merger is subject to customary conditions to closing, including the approval of Metropolitans stockholders. If any condition to the
merger is not satisfied or waived (to the extent waiver is legally permitted at all), the merger will not be completed. In addition, Renasant and Metropolitan may terminate the merger agreement under certain circumstances even if the merger is
approved by Metropolitans stockholders, including but not limited to if the merger has not been completed on or before December 31, 2017. Metropolitan would not realize any of the expected benefits of having completed the merger. If the
merger is not completed, additional risks could materialize, which could materially and adversely affect the business, financial condition and results of operations of Metropolitan. For more information on closing conditions to the merger agreement,
see The Merger AgreementConditions to the Completion of the Merger on page
.
20
Renasant and Metropolitan may waive one or more of the conditions to the merger without
re-soliciting
Metropolitan stockholder approval for the merger agreement.
Each of the conditions
to the obligations of Renasant and Metropolitan to complete the merger may be waived, in whole or in part, to the extent permitted by applicable law, by agreement of Renasant and Metropolitan, if the condition is a condition to both parties
obligation to complete the merger, or by the party for which such condition is a condition of its obligation to complete the merger. The boards of directors of Renasant and Metropolitan will evaluate the materiality of any such waiver to determine
whether amendment of this proxy statement/prospectus and the
re-solicitation
of the approval of the merger by Metropolitan stockholders is necessary. Renasant and Metropolitan, however, generally do not expect
any such waiver to be significant enough to require
re-solicitation
of Metropolitans stockholders, except that if the parties waive the condition to their respective obligation to complete the merger
that each party receive an opinion from its tax counsel as to the tax consequences of the merger, and such tax consequences have materially changed from the consequences described herein,
re-solicitation
of
Metropolitans stockholders would be required. In the event that any such waiver is not determined to be significant enough to require
re-solicitation
of Metropolitans stockholders, the companies
will have the discretion to complete the merger without seeking further stockholder approval.
If the merger is not completed, Metropolitan will
have incurred substantial expenses without realizing the expected benefits of the merger.
Metropolitan has incurred substantial
expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as a portion of the costs and expenses of filing, printing and mailing this proxy statement/prospectus and all filing and
other fees paid to the SEC in connection with the merger. If the merger is not completed, Metropolitan would have to recognize these expenses without realizing the expected benefits of the merger.
Risks Related to the Combined Company after the Merger
Renasant may not be able to successfully integrate Metropolitan or realize the anticipated benefits of the merger.
Renasants merger with Metropolitan involves the combination of two bank holding companies that previously have operated and, until
completion of the merger, will continue to operate independently. A successful combination of the operations of the two entities will depend substantially on Renasants ability to consolidate operations, systems and procedures and to eliminate
redundancies and costs. Renasant may not be able to combine the operations of Metropolitan with its operations without encountering difficulties, such as:
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the loss of key employees and customers;
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the disruption of operations and business;
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inability to maintain and increase competitive presence;
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deposit attrition, customer loss and revenue loss;
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possible inconsistencies in standards, control procedures and policies;
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unexpected problems with costs, operations, personnel, technology and credit; and/or
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problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations.
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Additionally, general market and economic conditions and governmental actions affecting the financial industry generally may inhibit Renasants
successful integration of Metropolitan.
Further, Renasant entered into the merger agreement with the expectation that the merger will
result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company in Tennessee and in the metro Jackson, Mississippi market, cross-selling
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opportunities, technology, cost savings and operating efficiencies. Achieving the anticipated benefits of the merger is subject to a number of uncertainties, including whether Renasant integrates
Metropolitan in an efficient and effective manner, and general competitive factors in the marketplace. Renasant also believes that its ability to successfully integrate Metropolitan with its operations will depend to a large degree upon its ability
to retain Metropolitans existing management personnel. Although Renasant expects to enter into an employment agreement with Curtis J. Gabardi, Metropolitans President and Chief Executive Officer, there can be no assurances that he or any
other key employees will not subsequently depart. See The MergerInterests of Certain Metropolitan Directors and Executive Officers in the Merger beginning on page
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Renasants failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues
and diversion of managements time and energy and could materially impact its business, financial condition and operating results. In addition, the attention and effort devoted to the integration of Metropolitan with Renasants existing
operations may divert managements attention from other important issues and could seriously harm its business. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.
The market price of Renasant common stock after the merger may be affected by factors different from those currently affecting Renasant common stock.
The businesses of Renasant and Metropolitan differ in some respects and, accordingly, the results of operations of the combined
company and the market price of Renasants common stock after the merger may be affected by factors different from those currently affecting the independent results of operations of Renasant and Metropolitan. For a discussion of the business of
Renasant and of certain factors to consider in connection with the business, see the documents incorporated by reference into this proxy statement/prospectus and referred to under Where You Can Find More Information beginning on page
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The shares of Renasant common stock to be received by Metropolitan stockholders as a result
of the merger will have different rights from the shares of Metropolitan common stock.
Upon completion of the merger, Metropolitan
stockholders will become Renasant stockholders and their rights as stockholders will be governed by the Renasant Articles, the Renasant Bylaws and Mississippi law. The rights associated with Metropolitan common stock are different from the rights
associated with Renasant common stock. Please see Comparison of Rights of Stockholders of Metropolitan and Renasant beginning on page
for a discussion of the different rights
associated with Renasant common stock.
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METROPOLITAN SPECIAL MEETING
This section contains information about the special meeting of Metropolitan stockholders that has been called to consider and vote on the
merger proposal and the adjournment proposal. Together with this proxy statement/prospectus, Metropolitan is also sending its stockholders a notice of the special meeting and a form of proxy that the Metropolitan board of directors is soliciting for
use at the special meeting and at any adjournments or postponements of the special meeting.
On or
about , 2017, Metropolitan commenced mailing or otherwise delivering this document and the enclosed form of proxy card to
its stockholders entitled to vote at the special meeting.
Date, Time and Place of Meeting
The special meeting will be held on June 6, 2017, at
Metropolitans main office located at 1069 Highland Colony Parkway,
Ridgeland, Mississippi 39157-8722 at 9:00 a.m., local time.
Matters to Be Considered
The purpose of the special meeting is to vote on:
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the adjournment proposal; and
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any other business properly brought before the special meeting or any adjournment or postponement thereof.
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Record Date and Quorum
The close of business on April 20, 2017 has been fixed as the record date for determining the Metropolitan stockholders entitled to
receive notice of and to vote at the special meeting. At that time, 7,462,349 shares of Metropolitan common stock were outstanding, held by approximately
300 holders of record.
In order to conduct voting at the special meeting, there must be a quorum, which is the number of shares that must be present at the meeting,
either in person or by proxy. The presence at the meeting, in person or by proxy, of at least a majority of Metropolitan common stock entitled to vote at the special meeting will constitute a quorum. Abstentions and broker
non-votes
will be counted for the purpose of determining whether a quorum is present.
Proxies
The form of proxy accompanying this proxy statement/prospectus contains instructions for voting Metropolitan common stock by mail. If you hold
Metropolitan common stock in your name as a stockholder of record and are voting by mail, you should complete, sign, date and return the proxy card accompanying this document in the enclosed postage-paid return envelope to ensure that your vote is
counted at the special meeting, or at any adjournment or postponement of the special meeting, regardless of whether you plan to attend the special meeting.
If you hold your Metropolitan common stock in street name through a bank, broker or other holder of record, you must direct your
bank or broker to vote in accordance with the instructions you have received from your bank or broker.
If you hold your Metropolitan
common stock through the Metropolitan 401(k) plan, you will receive voting instructions with respect to all the shares of Metropolitan common stock allocated to your account. You must
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provide separate voting instructions to the trustee of each plan, who will act as your proxy and cause your votes to be cast. The trustee will vote all of the shares of each plan even if less
than 100% of participants respond, proportionally according to the voting instructions received.
All shares represented by valid proxies
that Metropolitan receives through this solicitation, and that are not revoked, will be voted in accordance with the instructions on the proxy card. If you make no specification on your proxy card how you want your Metropolitan common stock voted
before signing and returning it, your proxy will be voted FOR approval of the merger proposal and FOR the approval of the adjournment proposal.
Revocation of Proxies
If you hold Metropolitan common stock in your name as a stockholder of record, you may revoke any proxy at any time before it is voted by
signing and returning a proxy card with a later date, delivering a written revocation letter to Metropolitans President and Chief Executive Officer, or by attending the special meeting in person and voting by ballot at the special meeting. Any
Metropolitan stockholder entitled to vote in person at the special meeting may vote in person regardless of whether a proxy has been previously given, but the mere presence of a stockholder at the special meeting will not constitute revocation of a
previously given proxy.
Written notices of revocation and other communications about revoking a Metropolitan proxy should be addressed
to:
Metropolitan BancGroup, Inc.
1069 Highland Colony Parkway
Ridgeland, Mississippi 39157-8722
Attn: Curtis J. Gabardi
If your
Metropolitan common stock is held in street name by a bank, broker or other holder of record, you should follow the instructions of your bank, broker or other holder of record regarding the revocation of proxies.
Vote Required; Treatment of Abstentions and Failure to Vote
Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Metropolitan common
stock, while the adjournment proposal requires the affirmative vote of a majority of the shares represented, in person or by proxy, at the special meeting and entitled to vote, assuming a quorum is present. For each share of Metropolitan common
stock you hold as of the record date, you are entitled to one vote at the special meeting on each proposal to be considered.
Because
approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Metropolitan common stock, an abstention or failure to vote your shares will have the same effect as a vote against the approval
of the merger proposal. Since approval of the adjournment proposal by Metropolitan stockholders requires only the affirmative vote of a majority of the shares represented, in person or by proxy, at the special meeting and entitled to vote, your
failure to vote, an abstention or a broker
non-vote
will have no effect on the adjournment proposal.
The Metropolitan board of directors urges you to promptly vote your Metropolitan common stock by completing, dating and signing the
accompanying proxy card and returning it promptly in the enclosed postage-paid envelope. If you hold your Metropolitan common stock in street name through a bank, broker or other holder of record, please vote by following the voting
instructions of your bank, broker or other holder of record.
If you are the registered holder of your Metropolitan common stock
or you obtain a broker representation letter from your bank, broker or other holder of record of your Metropolitan common stock and in all cases you
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bring proof of identity, you may vote your Metropolitan common stock in person by ballot at the special meeting. Votes properly cast at the special meeting, in person or by proxy, will be tallied
by Metropolitans inspector of elections.
As of the record date, directors and executive officers of Metropolitan had the right
to vote approximately 2,944,405 shares of Metropolitan common stock, or approximately 39% of the outstanding Metropolitan common stock entitled to vote at the special meeting. All of Metropolitans directors, who own
approximately 37% of the outstanding Metropolitan common stock entitled to vote at the special meeting (which includes shares owned by the affiliates of such directors), have entered into agreements with Renasant pursuant to which they have
agreed, in their capacity as Metropolitan stockholders, to vote all of their Metropolitan common stock in favor of the approval of the merger agreement. We expect these individuals to vote their Metropolitan common stock in accordance with these
agreements.
Recommendation of the Metropolitan Board of Directors
The Metropolitan board of directors has unanimously adopted and approved the merger agreement and the transactions it contemplates, including
the merger. The Metropolitan board of directors determined that the merger, merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of Metropolitan and its stockholders and unanimously
recommends that you vote your Metropolitan common stock FOR approval of the merger proposal and FOR the adjournment proposal. See The MergerMetropolitans Reasons for the Merger; Recommendation of the
Metropolitan Board of Directors on page
for a more detailed discussion of the Metropolitan board of directors recommendation.
Solicitation of Proxies
Metropolitan is soliciting your proxy in conjunction with the merger. Metropolitan will bear the entire cost of soliciting proxies from its
stockholders. In addition to solicitation of proxies by mail, Metropolitan will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of Metropolitan common stock and secure their voting
instructions. If necessary, Metropolitan may use several of its regular employees, who will not be specially compensated, to solicit proxies from Metropolitan stockholders, either personally or by telephone, facsimile, letter or other electronic
means.
Appraisal Rights
Holders of Metropolitan common stock who comply with Section 262 of the DGCL are entitled to exercise their appraisal rights and receive a
cash payment equal to the fair value of the shares of Metropolitan common stock owned by such stockholder, as determined by a Delaware court, in lieu of the right to receive 0.6066 shares of Renasant common stock, if the merger is
consummated. A copy of Section 262 of the DGCL is attached as Annex C to this proxy statement/prospectus. Please see the section entitled The MergerAppraisal Rights beginning on page
for a summary of the procedures to be followed in asserting appraisal rights. Failure to take all of the steps required under Delaware law may result in the loss of appraisal rights by the
Metropolitan stockholder.
Attending the Special Meeting
All holders of Metropolitan common stock, including stockholders of record and stockholders who hold their shares through banks, brokers,
nominees or any other holder of record, are invited to attend the special meeting. Metropolitan reserves the right to refuse admittance to anyone without proper proof of share ownership and without proper photo identification. Everyone who attends
the special meeting must abide by the rules for the conduct of the meeting. These rules will be printed on the meeting agenda. Even if you plan to attend the special meeting, we encourage you to vote by mail so your vote will be counted if you later
decide not to attend the special meeting.
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Other Matters
As of the date of this proxy statement/prospectus, management of Metropolitan was unaware of any other matters to be brought before the special
meeting other than those set forth herein. However, if any other matters are properly brought before the special meeting, the persons named in the enclosed form of proxy for Metropolitan will have discretionary authority to vote all proxies with
respect to such matters in accordance with their best judgment.
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THE METROPOLITAN PROPOSALS
Proposal No. 1Merger Proposal
Metropolitan is asking its stockholders to approve the merger agreement and the transactions contemplated thereby. Metropolitan urges
Metropolitan stockholders to read this proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger of Metropolitan with and into Renasant. A copy of
the merger agreement is attached to this proxy statement/prospectus as Annex A.
After careful consideration, the Metropolitan board of
directors has unanimously adopted and approved the merger agreement and the transactions it contemplates, including the merger. The Metropolitan board of directors determined that the merger, merger agreement and the transactions contemplated by the
merger agreement are advisable and in the best interests of Metropolitan and its stockholders. See The MergerMetropolitans Reasons for the Merger; Recommendation of the Metropolitan Board of Directors included elsewhere in
this proxy statement/prospectus for a more detailed discussion of the Metropolitan board recommendation.
Metropolitans board of
directors unanimously recommends a vote FOR the merger proposal.
Proposal No. 2Adjournment
Proposal
If there are insufficient votes at the time of the special meeting to adopt the merger proposal, the special meeting may
be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies. If the number of shares of Metropolitan common stock present in person or by proxy at the special meeting and voting in favor of the merger proposal
is insufficient to adopt such proposal, Metropolitan intends to move to adjourn the special meeting so that the Metropolitan board of directors may solicit additional proxies for approval of the merger. In that event, Metropolitan will ask its
stockholders to vote only upon the adjournment proposal and not the merger proposal.
In this proposal, Metropolitan is asking its
stockholders to authorize the holder of any proxy solicited by the Metropolitan board on a discretionary basis to vote in favor of adjourning the special meeting to another time and place for the purpose of soliciting additional proxies, including
the solicitation of proxies from Metropolitan stockholders who have previously voted.
Metropolitans board of directors
unanimously recommends a vote FOR the adjournment proposal.
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THE MERGER
The discussion in this proxy statement/prospectus of the merger and the principal terms of the merger agreement is subject to, and
qualified in its entirety by reference to, the merger agreement, a copy of which accompanies this proxy statement/prospectus as Annex A and is incorporated into this proxy statement/prospectus by reference. References in this discussion and
elsewhere in this proxy statement/prospectus to the merger are to the merger of Metropolitan into Renasant unless the context clearly indicates otherwise.
General
On January 17, 2017, the Metropolitan and Renasant board of directors, respectively, unanimously adopted and approved the merger agreement
and the merger. If all of the conditions set forth in the merger agreement are satisfied or waived (to the extent waiver is permitted by law) and if the merger is otherwise completed, Metropolitan will merge with and into Renasant, with Renasant the
surviving corporation. Immediately after the merger of Metropolitan with and into Renasant, Metropolitan Bank will merge with and into Renasant Bank, with Renasant Bank the surviving banking corporation. At the effective time of the merger, each
outstanding share of Metropolitan common stock, par value $0.01 per share (excluding shares owned by Metropolitan, Renasant or any of their respective subsidiaries, unless such shares are held in trust accounts, managed accounts, mutual funds and
the like or otherwise in a fiduciary or agency capacity or as a result of debts previously contracted, and shares held by Metropolitan stockholders who have elected to exercise appraisal rights), will be converted into the right to receive 0.6066
(the exchange ratio) of a share of Renasant common stock, par value $5.00 per share.
Background of the
Merger
As part of its ongoing long-term strategic planning, Metropolitans board of directors continually evaluates
opportunities for Metropolitan, as well as challenges that may affect Metropolitans ability to grow or maintain its business and maximize stockholder value. In recent years, the challenges identified by Metropolitans board of directors
have included the increasing costs and complexity associated with operating a financial institution, regulatory pressure, a low interest rate environment, increased competitive pressures and limited liquidity for Metropolitan common stock.
As to Renasant, its strategic plans include growing its franchise through, among other things, acquisition opportunities that Renasant senior
management identifies internally or has presented to it. As part of this ongoing process, Renasants management team identified Metropolitan, along with a number of other financial institutions whose geographic footprint and other
characteristics appeared complementary to Renasants based on publicly-available information, as a potential merger partner, although no detailed analysis with respect to a strategic transaction with Metropolitan was undertaken.
In 2016, the executive committee of Metropolitans board of directors studied the opportunities and challenges facing Metropolitan in
greater detail to consider strategic alternatives that Metropolitans board of directors might pursue in order to maximize opportunities for the business and value for Metropolitans stockholders. The executive committee, consisting of
Mr. Gabardi and several outside directors, met on numerous occasions during the summer and fall of 2016, reviewing and evaluating the best future course for Metropolitan. The strategic alternatives included maintaining Metropolitans
business in its current form, embarking on more aggressive growth plans, including potential acquisitions, finding a strategic partner for a merger of equals, merging Metropolitan with a larger financial institution, and conducting an
initial public offering, or IPO.
In August and September 2016, Mr. Gabardi attended numerous investor conferences hosted by various
investment banking firms and held discussions with representatives from these investment banking firms regarding various strategic alternatives, including an IPO. In September 2016, Mr. Gabardi started to receive
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informal inquiries from Renasant regarding the possibility of opening discussions regarding a potential merger, but no specific merger terms were proposed. Shortly thereafter, Metropolitan
contacted Raymond James to begin consultation regarding a more focused process for pursuing strategic alternatives. Metropolitan selected Raymond James based on its experience and familiarity with Metropolitan and its reputation and experience with
similar engagements. Raymond James also had significant experience in working with Renasant, and Metropolitan believed that this experience would be beneficial if negotiations progressed. Metropolitan concluded that Raymond James prior
relationship with Renasant would not compromise its ability to act as Metropolitans financial advisor.
On October 6, 2016, E.
Robinson McGraw, Chairman and Chief Executive Officer of Renasant, and Mr. Gabardi met to speak informally about their respective companies and the markets and industries in which they operate and to discuss preliminarily the potential for a
transaction in the future. Afterwards, Raymond James met with Metropolitan to discuss the process for a potential transaction and the related schedule and roles and responsibilities.
On October 13, 2016, after consulting with Raymond James and Troutman Sanders LLP, Metropolitans outside counsel (Troutman
Sanders), Metropolitan entered into a nondisclosure agreement with Renasant. Following the execution of the nondisclosure agreement, Mr. Gabardi and Mr. McGraw met on several occasions and had multiple telephone conversations during
which the possibilities of a business combination were discussed.
On October 14, 2016, Mr. Gabardi met with Mr. McGraw and
Raymond James to further discuss the possibilities of a potential transaction with Renasant.
On October 25, 2016, Mr. Gabardi
met with a representative of another community bank with a presence in one of Metropolitans markets to discuss a potential strategic transaction (Company A).
On October 26, 2016, the executive committee of Metropolitans board of directors convened to discuss various strategic
alternatives, including a potential transaction with Renasant, a potential strategic merger with Company A as well as a potential IPO. Raymond James presented at this meeting an overview and financial analysis of the various alternatives. Troutman
Sanders was also present at this meeting and provided a legal overview of the process for the various alternatives as well as the boards fiduciary duties in considering the various alternatives. On October 27, 2016, the Metropolitan board
of directors met for a regularly scheduled meeting. Raymond James and Troutman Sanders also attended this meeting. At this meeting, Raymond James and Troutman Sanders gave presentations to the board of directors regarding the financial analysis and
process relating to a potential IPO. At this meeting, an overview of the potential transactions with Renasant and Company A was also discussed.
In early November 2016, discussions continued with Company A, but no specific transaction terms were ever discussed.
On November 10, 2016, Mr. Gabardi, Gregory B. Barron, Chief Financial Officer of Metropolitan, Mr. McGraw, C. Mitchell
Waycaster, President and Chief Operations Officer of Renasant, and Kevin D. Chapman, Chief Financial Officer of Renasant, met, along with Raymond James, to discuss Metropolitans financial performance and potential strategies.
Throughout late November and into early December, discussions continued with Renasant as the parties worked through various organizational
issues and began to conduct preliminary discussions on valuation. On November 29, 2016, Mr. Gabardi met with Mr. McGraw in Tupelo, Mississippi, to discuss the potential merger. Mr. Gabardi also attended a meeting in Tupelo on
December 5, 2016 with Mr. McGraw and Mr. Waycaster to further discuss a combination of the companies. During this time, the parties began to conduct preliminary financial due diligence on each other, but as yet no specific merger
terms had been proposed.
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Over the first few weeks of December, Mr. Gabardi and Mr. Barron consulted on various
occasions with representatives from Raymond James and Troutman Sanders regarding valuation and planning issues regarding a strategic transaction with Renasant. There were also continued discussions regarding a potential IPO and Metropolitans
readiness for an IPO should discussions with Renasant fail to progress.
On December 15, 2016, representatives from Raymond James
presented materials to Metropolitans executive committee regarding a potential IPO and the potential transactions with Renasant and Company A.
On December 22, 2016, Renasant submitted a preliminary, nonbinding indication of interest letter to Metropolitan. The Renasant indication
of interest provided for a purchase price of $25.25 per share of Metropolitan common stock pursuant to a fixed exchange ratio based on Renasants recent trading price, to be paid 100% in Renasant stock. The indication of interest also provided
for a
cash-out
of Metropolitans existing options based on the fixed exchange ratio.
At a
special meeting held on December 27, 2016, Metropolitans executive committee met to discuss the nonbinding indication of interest. Raymond James and Troutman Sanders also attended this meeting. Raymond James walked the executive committee
through a detailed presentation regarding the proposed terms in the indication of interest from Renasant. During this meeting, the executive committee discussed topics such as the respective valuations of Metropolitan and Renasant, employee
retention, the advantages and disadvantages of deal collars, full or partial cash out of options, potential Renasant Board representation, exclusivity and the other terms contained in the indication of interest. Raymond James discussed comparable
valuation multiples and short term risks in the marketplace and the advantages and disadvantages of a fixed exchange ratio. Troutman Sanders discussed the legal standards applicable to the executive committee and the boards decisions regarding
a potential business combination with Renasant. Troutman Sanders also provided comments to the executive committee regarding the indication of interest and the regulatory approval process. After discussion, the executive committee authorized
Mr. Gabardi to continue negotiations with Renasant and to proceed with execution of the indication of interest.
On December 28,
2016, Metropolitans executive committee entered into an engagement letter with Raymond James to provide financial advisory and investment banking services in connection with the Renasant transaction.
On December 28, 2016, Mr. Gabardi continued to engage in discussions with Mr. McGraw regarding the nonbinding indication of
interest. Metropolitan received a revised nonbinding indication of interest during the afternoon of December 28, 2016 with a revised price of $25.50 per share based on a fixed exchange ratio of 0.6066 shares of Renasant common stock. The
indication of interest also provided that all unexercised options would be cashed out based on the price of $25.50 per share. On December 29, 2016, the parties executed the indication of interest, which, among other things, provided for an
exclusivity period of 45 days.
From late December 2016 through January 2017, Metropolitan and Renasant and their respective financial and
legal advisors continued to perform financial and legal due diligence with respect to the other party based on due diligence request lists exchanged between the parties. Metropolitan populated an electronic dataroom for Renasant to review the
responses to its initial due diligence requests and its
follow-up
diligence requests.
On
January 6, 2017, Renasant, through its counsel Phelps Dunbar LLP (Phelps Dunbar), delivered an initial draft of the proposed definitive merger agreement to Metropolitan and Troutman Sanders based on the terms outlined in the
indication of interest. Over the course of the next several days, negotiations between the parties and their counsel ensued on the terms of the definitive merger agreement. The parties negotiated various issues which included the respective
representations and warranties of the parties, the respective covenants of the parties pending closing of the transaction, the rights and obligations of the parties in the event the merger agreement is terminated prior to the consummation of the
merger, including negotiations regarding the amount of the termination fee, various employee-related issues and the new employment agreement proposed by Renasant Bank for Mr. Gabardi.
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During the course of discussions regarding the definitive merger agreement, representatives of
Renasant and Metropolitan also discussed their expectation that Metropolitans directors would enter into customary support agreements in their capacity as stockholders of Metropolitan agreeing to vote their shares of Metropolitan common stock
in favor of the merger agreement and the transactions provided for in the merger agreement, along with entering into certain restrictive covenant agreements in their individual capacity.
On January 9, 2017, representatives from Renasant and Metropolitan conducted a telephonic due diligence call which covered a variety of
topics including financial, legal and regulatory matters. On January 10, 2017, representatives of Troutman Sanders and Raymond James conducted
on-site
reverse due diligence at the executive offices of
Renasant, including discussions with Renasant senior management regarding a variety of topics.
On January 12, 2017, Metropolitan
held a special board meeting, and information regarding the merger and the current draft of the definitive merger agreement and ancillary documents were provided to each director of Metropolitan. At the special board meeting, the Metropolitan board
of directors discussed the terms and conditions of the proposed definitive merger agreement. Certain members of management of Metropolitan and representatives of Troutman Sanders and Raymond James also attended the meeting. At the meeting, Raymond
James reviewed its financial analyses with respect to Renasant, Metropolitan and the proposed merger. Troutman Sanders also discussed the terms of the merger agreement and related documents, answered questions and reminded the directors of their
fiduciary duties regarding any decisions related to a merger with Renasant.
Over the next few days, the parties continued negotiations on
the definitive merger agreement, exchanged drafts of the merger agreement and disclosure schedules and finalized various employment-related matters.
On January 16, 2017, the Metropolitan and Metropolitan Bank board of directors held a joint special meeting to discuss and approve the
definitive merger agreement. The current draft of the definitive merger agreement and ancillary documents were provided to each director in advance of the meeting on January 15, 2017. Representatives of Raymond James and Troutman Sanders also
attended this meeting. Representatives of Troutman Sanders provided an updated summary of the definitive terms and conditions of the merger agreement. Representatives of Raymond James delivered to Metropolitan a presentation to the board of
directors regarding the transaction and delivered an oral opinion, which was later confirmed in writing, to the effect that, as of January 16, 2017, and based on and subject to various assumptions, qualifications and limitations described in
Opinion of Metropolitans Financial Advisor below, the merger consideration to be received by the Metropolitan stockholders pursuant to the merger agreement was fair, from a financial point of view. After further discussion and
deliberation, including questions to Raymond James, Troutman Sanders and Metropolitans management team regarding the merger and the terms and conditions of the merger agreement, the Metropolitan and Metropolitan Bank board of directors, having
determined that the terms of the merger, the related merger agreement and the transactions contemplated thereby, including the merger, were in the best interests of Metropolitan and its stockholders, unanimously approved and declared advisable the
merger agreement and the transactions contemplated thereby, including the merger, and determined to recommend the approval of the merger to Metropolitan stockholders. The Metropolitan board of directors authorized Mr. Gabardi to execute the
merger agreement on behalf of Metropolitan and Metropolitan Bank.
On the morning of January 17, 2017, Renasants board of
directors convened its regular quarterly board meeting, at which the Renasant board reviewed and considered the merger agreement with Metropolitan and the transactions contemplated by the merger agreement. Representatives of Sandler
ONeill & Partners, L.P., Renasants financial advisor (Sandler ONeill), and Phelps Dunbar were present at such meeting or participated by telephone. Mr. McGraw and Mr. Chapman first reported to
Renasants board of directors on the status of the negotiations with Metropolitan and its due diligence findings, including with respect to potential credit deterioration and expense savings. Next, a representative of Phelps Dunbar discussed
the directors fiduciary duties in connection with evaluating a strategic transaction and then provided an overview of the material terms of the merger agreement to the board of directors. Following the Phelps Dunbar presentation,
representatives of
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Sandler ONeill presented a detailed analysis, which included written materials prepared for the Renasant board, of the financial aspects of the proposed merger. After further discussion and
deliberation, including questions to Sandler ONeill, Phelps Dunbar and Renasants management regarding the financial, legal and other aspects of the merger, the assumptions underlying the financial analysis and the results of
Renasants due diligence, the board of directors, having determined that the terms of the merger, the related merger agreement and the transactions contemplated thereby, including the merger, were in the best interests of Renasant and its
stockholders, unanimously approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger. The Renasant board of directors then authorized Mr. McGraw to execute the merger agreement on behalf
of Renasant and Renasant Bank.
In the afternoon of January 17, 2017, Renasant and Metropolitan executed the merger agreement, which
was publicly announced after the close of the market on January 17, 2017.
Metropolitans Reasons for the
Merger; Recommendation of the Metropolitan Board of Directors
After careful consideration, Metropolitans board of directors,
at a meeting held on January 16, 2017, determined that the merger agreement and the transactions contemplated thereby were in the best interests of Metropolitan and its stockholders. Accordingly, Metropolitans board of directors adopted
and approved the merger agreement by unanimous vote and determined to recommend that Metropolitan stockholders vote FOR the approval of the merger agreement.
In reaching its decision to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger
agreement, and to recommend that its stockholders approve the merger, the Metropolitan board of directors consulted with Metropolitan management, as well as Raymond James, its financial advisor, and Troutman Sanders, its outside legal counsel, and
considered a number of factors, including the following material factors, which are not presented in order of priority:
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the board of directors knowledge of and deliberation with respect to the current and prospective business and economic environment of the markets served by Metropolitan and by Renasant, including the competitive
environment in Metropolitans and Renasants markets, the pressure on net interest margins resulting from a low interest rate environment, the continuing consolidation of the financial services industry, the increased regulatory burdens on
financial institutions and the uncertainties in the regulatory climate going forward, and the escalating need for investment in technology, and the likely effects of these factors on Metropolitans and Renasants potential growth,
development, productivity, profitability and strategic options, and the historical market prices of Metropolitan and Renasant common stock;
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the board of directors knowledge of and deliberation with respect to Metropolitans business, operations, financial condition, earnings and prospects, and of Renasants business, operations, financial
condition, earnings and prospects, taking into account the results of Metropolitans due diligence review of Renasant and information provided by Raymond James;
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the board of directors views with respect to other potential Metropolitan strategic alternatives, including remaining independent, competing for organic growth, making acquisitions, pursuing other strategic merger
partners, or a potential initial public offering;
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the results of Metropolitans exploration of possible merger partners other than Renasant, and the board of directors views with respect to the likelihood of any such other merger occurring and providing
greater value to Metropolitan stockholders;
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|
the difficulties, risks and challenges associated with the timing and pursuit of an initial public offering;
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|
the complementary aspects of Metropolitan and Renasants businesses, including customer focus, geographic coverage, business orientation and compatibility of the companies management and operating styles;
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32
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the board of directors understanding of Renasants commitment to enhancing its strategic position in the Southeast region;
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the prospect of Metropolitans stockholders becoming stockholders of a company with a much larger stockholder base resulting in a much more liquid common stock and the tax deferred treatment of the shares of
Renasant common stock received by Metropolitan stockholders;
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Renasants successful track record and the Metropolitan board of directors belief that the combined enterprise would benefit from application of Renasants ability to take advantage of economies of scale
and grow in the current economic environment while providing improved service to Metropolitans customers and markets, making Renasant an attractive partner for Metropolitan;
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the consideration being offered as the merger consideration in relation to the boards then-current assessment of the fair market value of Metropolitans stock and in relation to the then-current value of
Metropolitan in a freely negotiated transaction;
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|
the merger consideration will consist of shares of Renasant common stock, which would allow Metropolitan stockholders to participate in the future performance of the combined Metropolitan and Renasant business and
synergies resulting from the merger, and the value to Metropolitan stockholders represented by that consideration;
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the Metropolitan board of directors then-estimate of the future value of Metropolitan as an independent entity;
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|
the short-term and long-term social and economic effects on the employees, depositors, customers, stockholders and other constituents of Metropolitan and on the communities within which Metropolitan operates;
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its review with Troutman Sanders regarding the terms of the merger agreement, and the presentation by Troutman Sanders regarding the merger and the merger agreement;
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the oral opinion delivered to Metropolitan by Raymond James on January 16, 2017, which was subsequently confirmed in a written opinion delivered to Metropolitan by Raymond James, to the effect that based upon and
subject to the assumptions, procedures, considerations, qualifications, and limitations set forth in the opinion, the merger consideration to be received by Metropolitan stockholders under the merger agreement was fair, from a financial point of
view, to such holders;
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the financial terms of recent business combinations in the financial services industry reviewed by the board of directors and a comparison of the multiples paid in such selected business combinations with the terms of
the merger, including information that was included in the Raymond James fairness opinion analysis;
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|
the regulatory and other approvals required in connection with the merger and the Metropolitan board of directors determination as to the likelihood that the approvals needed to complete the merger would be
obtained without unacceptable conditions.
|
The Metropolitan board of directors also considered as a part of its process
potential risks and potentially negative factors concerning the merger in connection with its deliberations of the proposed transaction, including the following material factors:
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|
that the exchange ratio of the merger consideration is fixed, so that if the market price of Renasant common stock at the time of the closing of the merger is lower than the market price on the date of the merger
agreement (January 17, 2017), the economic value of the per share merger consideration to be received by Metropolitans stockholders in exchange for their shares of Metropolitan common stock will also be lower;
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the potential risk of diverting management focus and resources from other strategic opportunities and from operational matters while working to implement the merger;
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33
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|
|
the provisions of the merger agreement restricting Metropolitans solicitation of third-party acquisition proposals and providing for the payment of a termination fee in certain circumstances, which the
Metropolitan board of directors understood, while potentially limiting the willingness of a third party to propose a competing business combination transaction with Metropolitan, were a condition to Renasants willingness to enter into the
merger agreement;
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the fact that the Metropolitan board of directors and executive officers have other interests in the merger that are different from, or in addition to, their interests as Metropolitan stockholders. See The
MergerInterests of Certain Metropolitan Directors and Executive Officers in the Merger;
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the potential displacement of Metropolitans employees and the adverse anticipated effect on those employees;
|
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|
the potential risks associated with integrating Metropolitans business, operations and workforce with those of Renasant, including the execution risk of data system conversion and the possible negative effect on
customer relationships;
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|
|
the possibility that the merger could be announced but not consummated, and the possibility that Metropolitan could lose customers, business and employees as a result of announcing the transaction; and
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|
the possibility that the required regulatory and other approvals might not be obtained.
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The
foregoing discussion of the information and factors considered by the Metropolitan board of directors as part of its process is not intended to be exhaustive, but includes the material factors considered by the Metropolitan board of directors. In
view of the wide variety of the factors considered in connection with its evaluation of the merger and the complexity of these matters, the Metropolitan board of directors did not find it useful, and did not attempt, to quantify, rank or otherwise
assign relative weights to these factors. In considering the factors described above, the individual members of the Metropolitan board of directors may have given different weight to different factors. The Metropolitan board of directors conducted
an overall analysis of the factors described above and engaged in thorough discussions amongst themselves and had discussions with, and questioned, Metropolitans management and legal and financial advisors, and considered the factors overall
to be favorable to, and to support, its determination.
It should be noted that this discussion of the information and factors considered
by the Metropolitan board of directors in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading Special Note Regarding Forward-Looking Statements.
Opinion of Metropolitans Financial Advisor
Metropolitan retained Raymond James as its financial advisor on December 28, 2016. Pursuant to that engagement, the Metropolitan board of
directors requested that Raymond James evaluate the fairness, from a financial point of view, to the holders of Metropolitans outstanding common stock of the merger consideration to be received by such holders pursuant to the merger agreement.
At the January 16, 2017 meeting of the Metropolitan board of directors, representatives of Raymond James rendered its oral opinion,
which was subsequently confirmed by delivery of a written opinion to the board of directors, dated January 16, 2017, as to the fairness, as of such date, from a financial point of view, to the holders of Metropolitans outstanding common
stock of the merger consideration to be received by such holders in the transactions pursuant to the merger agreement, based upon and subject to the assumptions made, procedures followed, matters considered, limitations of the review undertaken and
qualifications contained in the opinion.
The full text of the written opinion of Raymond James is attached as Annex B to this document.
The summary of the opinion of Raymond James set forth in this document is qualified in its entirety by reference to
34
the full text of such written opinion. Holders of Metropolitan common stock are encouraged to read this opinion carefully and in its entirety for an understanding of the procedures followed,
assumptions made, other matters considered and limits of the review undertaken by Raymond James in connection with Raymond James opinion.
Raymond James provided its opinion for the information of the Metropolitan board of directors (solely in its capacity as such) in connection
with, and for purposes of, its consideration of the transactions and its opinion only addresses whether the merger consideration to be received by the holders of Metropolitan common stock in the transactions contemplated by the merger agreement was
fair, from a financial point of view, to such holders. The opinion of Raymond James does not address any other term or aspect of the merger agreement or the transactions contemplated thereby. The Raymond James opinion does not constitute a
recommendation to the board of directors or to any holder of Metropolitan common stock as to how the board of directors, such stockholder or any other person should vote or otherwise act with respect to the transactions or any other matter. Raymond
James does not express any opinion as to the likely trading range of Renasant common stock following the merger, which may vary depending on numerous factors that generally impact the price of securities or on the financial condition of Renasant.
In connection with its review of the proposed transactions and the preparation of its opinion, Raymond James, among other things:
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|
|
reviewed the financial terms and conditions as stated in the draft of the merger agreement;
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|
reviewed certain information related to the historical, current and future operations, financial condition and prospects of Metropolitan made available to Raymond James by Metropolitan, including, but not limited to,
financial projections prepared by the management of Metropolitan relating to Metropolitan for the fiscal years ending December 31, 2016 through December 31, 2021, as approved for Raymond James use by Metropolitan, which we refer to
in this section as the Projections;
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|
reviewed Metropolitans recent public filings and certain other publicly available information regarding Metropolitan;
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|
reviewed financial, operating and other information regarding Metropolitan and the industry in which it operates;
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|
reviewed the financial and operating performance of Metropolitan and those of selected public companies that Raymond James deemed to be relevant;
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|
considered the publicly available financial terms of certain transactions that Raymond James deemed to be relevant;
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|
reviewed the current and historical market prices and trading volume for Renasant, and the current market prices of the publicly-traded securities of certain other companies that Raymond James deemed to be relevant;
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|
conducted such other financial studies, analyses and inquiries and considered such other factors, as Raymond James deemed appropriate; and
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|
discussed with members of the senior management of Metropolitan certain information relating to the aforementioned and any other matters which Raymond James deemed relevant to its inquiry.
|
With Metropolitans consent, Raymond James assumed and relied upon the accuracy and completeness of all information supplied by or on
behalf of Metropolitan, or otherwise reviewed by or discussed with Raymond James, and Raymond James did not undertake any duty or responsibility to, nor did Raymond James, independently verify any of such information. Raymond James did not make or
obtain an independent appraisal of the assets or liabilities (contingent or otherwise) of Metropolitan. With respect to the Projections and any other information and data provided to or otherwise reviewed by or discussed with Raymond James, Raymond
James, with Metropolitans consent, assumed that the Projections and such other information and data were reasonably
35
prepared in good faith on bases reflecting the best currently available estimates and judgments of management of Metropolitan, and Raymond James relied upon Metropolitan to advise Raymond James
promptly if any information previously provided became inaccurate or was required to be updated during the period of its review. Raymond James expressed no opinion with respect to the Projections or the assumptions on which they were based. Based
upon the terms specified in the merger agreement, Raymond James assumed that the merger will qualify as a reorganization under Section 368(a) of the Code. Raymond James relied upon and assumed, without independent verification, that the
final form of the merger agreement would be substantially similar to the draft merger agreement reviewed by Raymond James in all respects material to its analysis, and that the transactions contemplated thereby would be consummated in accordance
with the terms of the merger agreement without waiver of or amendment to any of the conditions thereto. Furthermore, Raymond James assumed, in all respects material to its analysis, that the representations and warranties of each party contained in
the merger agreement were true and correct and that each party will perform all of the covenants and agreements required to be performed by it under the merger agreement without being waived. Raymond James also relied upon and assumed, without
independent verification, that (i) the transactions would be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory
or other consents and approvals necessary for the consummation of the transactions would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would have an effect
on the transactions or Metropolitan that would be material to its analysis or opinion.
Raymond James expressed no opinion as to the
underlying business decision to effect the transactions, the structure or tax consequences of the transactions, or the availability or advisability of any alternatives to the transactions. The Raymond James opinion is limited to the fairness, from a
financial point of view, of the merger consideration to be received by the holders of Metropolitan common stock in the merger. Raymond James expressed no opinion with respect to any other reasons (legal, business, or otherwise) that may support the
decision of Metropolitans board of directors to approve or consummate the transactions. Furthermore, no opinion, counsel or interpretation was intended by Raymond James on matters that require legal, accounting or tax advice. Raymond James
assumed that such opinions, counsel or interpretations had been or would be obtained from appropriate professional sources. Furthermore, Raymond James relied, with the consent of Metropolitan, on the fact that Metropolitan was assisted by legal,
accounting and tax advisors, and, with the consent of Metropolitan, relied upon and assumed the accuracy and completeness of the assessments by Metropolitan and its advisors, as to all legal, accounting and tax matters with respect to Metropolitan
and the transactions.
In formulating its opinion, Raymond James considered only the merger consideration to be received by the holders of
Metropolitan common stock in the merger, and Raymond James did not consider, and its opinion did not address, the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of
Metropolitan, or such class of persons, in connection with the transactions whether relative to the merger consideration or otherwise. Raymond James was not requested to opine as to, and its opinion did not express an opinion as to or otherwise
address, among other things: (1) the fairness of the transactions to the holders of any class of securities, creditors or other constituencies of Metropolitan, or to any other party, except and only to the extent expressly set forth in the last
sentence of its opinion or (2) the fairness of the transactions to any one class or group of Metropolitans or any other partys security holders or other constituents
vis-à-vis
any other class or group of Metropolitans or such other partys security holders or other constituents (including, without limitation, the
allocation of any consideration to be received in the transactions amongst or within such classes or groups of security holders or other constituents). Raymond James expressed no opinion as to the impact of the transactions on the solvency or
viability of Metropolitan or Renasant or the ability of Metropolitan or Renasant to pay their respective obligations when they come due.
Material Financial Analyses
The following summarizes the material financial analyses reviewed by Raymond James with the Metropolitan board of directors at its meeting on
January 16, 2017, which material was considered by Raymond
36
James in rendering its opinion. No company or transaction used in the analyses described below is identical or directly comparable to Metropolitan, Renasant or the contemplated transactions.
Selected Companies Analysis.
Raymond James analyzed the relative valuation multiples of eight (8) publicly-traded Southeast
(Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia) banks and
non-mutual
thrifts headquartered in a top 50 U.S. Metropolitan Statistical
Area (MSA) (a top 50 MSA includes the highest 50 U.S. MSAs ranked by population) that are traded on a major exchange (NASDAQ, NYSE, NYSE MKT) with assets between $1.0 billion and $2.0 billion, last twelve months (LTM) return on average
assets (ROAA) greater than 0.50%,
non-performing
assets to total assets (NPAs/assets) less than 3.0% and a tangible common equity to tangible assets (TCE/TA) ratio less than 14.0% that it deemed relevant,
including:
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WashingtonFirst Bankshares Inc.
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Access National Corp.
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National Commerce Corp.
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|
Capstar Financial Holdings, Inc.
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Paragon Commercial Corp.
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|
Community Bankers Trust Corp.
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C&F Financial Corp.
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|
Southern National Bancorp of Virginia, Inc.
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Raymond James calculated various financial multiples for each company, including (i) price per share
compared to tangible book value (TBV) per share as of September 30, 2016, (ii) price per share compared to diluted earnings per share (EPS) for the most recent LTM ended September 30, 2016 and (iii) price per share compared to Wall
Street research analysts mean estimated diluted earnings per share for the next year ended December 31, 2017. The estimates published by Wall Street research analysts were not prepared in connection with the merger or at the request of
Raymond James and may or may not prove to be accurate. Raymond James reviewed the mean, median, 25
th
percentile and 75
th
percentile relative
valuation multiples of the selected public companies and compared them to corresponding valuation multiples for Metropolitan implied by the merger consideration. The results of the selected public companies analysis are summarized below:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price / TBV
per share
|
|
|
Price /
LTM EPS
|
|
|
Price /
2017E EPS
|
|
Mean
|
|
|
188
|
%
|
|
|
18.6x
|
|
|
|
18.6x
|
|
Median
|
|
|
180
|
%
|
|
|
17.8x
|
|
|
|
18.4x
|
|
25
th
Percentile
|
|
|
167
|
%
|
|
|
16.7x
|
|
|
|
16.2x
|
|
75
th
Percentile
|
|
|
213
|
%
|
|
|
20.4x
|
|
|
|
20.7x
|
|
Merger Consideration
|
|
|
212
|
%
|
|
|
26.2x
|
|
|
|
20.8x
|
|
Furthermore, Raymond James applied the mean, median, 25
th
percentile and 75
th
percentile relative valuation multiples for each of the metrics to Metropolitans actual and projected financial results and determined the implied equity price per share
of Metropolitan common stock and then compared those implied equity values per share to the assumed merger consideration of $24.49 per share (which reflects the $40.37 closing sales price of a share of Renasant common stock on Nasdaq on
January 13, 2017, multiplied by the 0.6066 exchange ratio). The results of this are summarized below:
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|
|
|
|
|
|
|
|
|
|
|
|
Price / TBV
per share
|
|
|
Price /
LTM EPS
|
|
|
Price /
2017E EPS
|
|
Mean
|
|
$
|
21.66
|
|
|
$
|
17.42
|
|
|
$
|
21.83
|
|
Median
|
|
|
20.70
|
|
|
|
16.60
|
|
|
|
21.62
|
|
25
th
Percentile
|
|
|
19.24
|
|
|
|
15.60
|
|
|
|
19.06
|
|
75
th
Percentile
|
|
|
24.53
|
|
|
|
19.09
|
|
|
|
24.33
|
|
Merger Consideration
|
|
$
|
24.49
|
|
|
$
|
24.49
|
|
|
$
|
24.49
|
|
Selected Transaction Analysis.
Raymond James analyzed publicly available information relating to
selected transactions announced since January 1, 2014 involving targets headquartered in a top 50 U.S. MSA (a top 50 MSA includes the highest 50 U.S. MSAs ranked by population) with assets between $1.0 billion and $2.0 billion,
37
LTM ROAA greater than 0.50%, NPAs/assets ratio less than 3.0% and a TCE/TA ratio less than 14.0%. The regional transactions that Raymond James analyzed consisted of transactions involving targets
headquartered in the following Southeast states: Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia. The nationwide transactions that Raymond James analyzed consisted of
transactions involving targets headquartered in the United States. Raymond James prepared a summary of the relative valuation multiples paid in these transactions. The selected transactions used in the analysis included:
Regional:
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|
|
Acquisition of Middleburg Financial Corporation by Access National Corporation (10/24/2016)
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|
|
Acquisition of Avenue Financial Holdings, Inc. by Pinnacle Financial Partners, Inc. (1/28/2016)
|
|
|
|
Acquisition of Monarch Financial Holdings, Inc. by TowneBank (12/17/2015)
|
|
|
|
Acquisition of C1 Financial, Inc. by Bank of the Ozarks, Inc. (11/9/2015)
|
|
|
|
Acquisition of CNLBancshares, Inc. by Valley National Bancorp (5/27/2015)
|
|
|
|
Acquisition of Georgia Commerce Bancshares, Inc. by IBERIABANK Corporation (12/8/2014)
|
|
|
|
Acquisition of Old Florida Bancshares, Inc. by IBERIABANK Corporation (10/27/2014)
|
National:
|
|
|
Acquisition of Sovereign Bancshares, Inc. by Veritex Holdings, Inc. (12/14/2016)
|
|
|
|
Acquisition of Middleburg Financial Corporation by Access National Corporation (10/24/2016)
|
|
|
|
Acquisition of Your Community Bankshares, Inc. by WesBanco, Inc. (05/03/2016)
|
|
|
|
Acquisition of California Republic Bancorp by Mechanics Bank (04/28/2016)
|
|
|
|
Acquisition of Avenue Financial Holdings, Inc. by Pinnacle Financial Partners, Inc. (01/28/2016)
|
|
|
|
Acquisition of Monarch Financial Holdings, Inc. by TowneBank (12/17/2015)
|
|
|
|
Acquisition of Bank of Georgetown by United Bankshares, Inc. (11/09/2015)
|
|
|
|
Acquisition of C1 Financial, Inc. by Bank of the Ozarks, Inc. (11/09/2015)
|
|
|
|
Acquisition of Patriot Bancshares, Inc. by Green Bancorp, Inc. (05/27/2015)
|
|
|
|
Acquisition of CNLBancshares, Inc. by Valley National Bancorp (05/27/2015)
|
|
|
|
Acquisition of Bridge Capital Holdings by Western Alliance Bancorporation (03/09/2015)
|
|
|
|
Acquisition of LNB Bancorp, Inc. by Northwest Bancshares, Inc. (12/15/2014)
|
|
|
|
Acquisition of Marquette Financial Companies by UMB Financial Corporation (12/15/2014)
|
|
|
|
Acquisition of Georgia Commerce Bancshares, Inc. by IBERIABANK Corporation (12/08/2014)
|
|
|
|
Acquisition of Central Bancshares, Inc. by MidWestOne Financial Group, Inc. (11/21/2014)
|
|
|
|
Acquisition of Old Florida Bancshares, Inc. by IBERIABANK Corporation (10/27/2014)
|
|
|
|
Acquisition of Bank of Kentucky Financial Corporation by BB&T Corporation (09/08/2014)
|
|
|
|
Acquisition of ConnectOne Bancorp, Inc. by Center Bancorp, Inc. (01/21/2014)
|
Raymond James
examined valuation multiples of transaction value compared to the target companies most recent quarter (MRQ) TBV, LTM earnings per share and MRQ core deposits, where such information was
38
publicly available. Raymond James reviewed the mean, median, 25th percentile and 75th percentile relative valuation multiples of the selected transactions and compared them to corresponding
valuation multiples for Metropolitan implied by the merger consideration. Furthermore, Raymond James applied the mean, median, 25
th
percentile and
75
th
percentile relative valuation multiples to Metropolitans MRQ TBV, LTM earnings per share and MRQ core deposits to determine the implied equity price per share and then compared those
implied equity values per share to the assumed merger consideration of $24.49 per share. The results of the selected transactions analysis are summarized below:
Regional:
|
|
|
|
|
|
|
|
|
|
|
Price /
MRQ TBV
|
|
|
Implied Equity Price
Per Share
|
|
Mean
|
|
|
199
|
%
|
|
$
|
22.96
|
|
Median
|
|
|
197
|
%
|
|
|
22.74
|
|
25
th
Percentile
|
|
|
194
|
%
|
|
|
22.31
|
|
75
th
Percentile
|
|
|
206
|
%
|
|
|
23.72
|
|
Merger Consideration
|
|
|
212
|
%
|
|
$
|
24.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Price /
LTM EPS
|
|
|
Implied Equity Price
Per Share
|
|
Mean
|
|
|
28.0x
|
|
|
$
|
26.18
|
|
Median
|
|
|
28.2x
|
|
|
|
26.38
|
|
25
th
Percentile
|
|
|
26.5x
|
|
|
|
24.75
|
|
75
th
Percentile
|
|
|
30.8x
|
|
|
|
28.76
|
|
Merger Consideration
|
|
|
26.2x
|
|
|
$
|
24.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium to
Core Deposits
|
|
|
Implied Equity Price
Per Share
|
|
Mean
|
|
|
13.2
|
%
|
|
$
|
24.06
|
|
Median
|
|
|
13.4
|
%
|
|
|
24.22
|
|
25
th
Percentile
|
|
|
12.1
|
%
|
|
|
23.04
|
|
75
th
Percentile
|
|
|
14.2
|
%
|
|
|
24.97
|
|
Merger Consideration
|
|
|
13.7
|
%
|
|
$
|
24.49
|
|
National:
|
|
|
|
|
|
|
|
|
|
|
Price /
MRQ TBV
|
|
|
Implied Equity Price
Per Share
|
|
Mean
|
|
|
195
|
%
|
|
$
|
22.50
|
|
Median
|
|
|
196
|
%
|
|
|
22.66
|
|
25
th
Percentile
|
|
|
181
|
%
|
|
|
20.83
|
|
75
th
Percentile
|
|
|
216
|
%
|
|
|
24.86
|
|
Merger Consideration
|
|
|
212
|
%
|
|
$
|
24.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Price /
LTM EPS
|
|
|
Implied Equity Price
Per Share
|
|
Mean
|
|
|
24.1x
|
|
|
$
|
22.51
|
|
Median
|
|
|
24.4x
|
|
|
|
22.76
|
|
25
th
Percentile
|
|
|
17.7x
|
|
|
|
16.53
|
|
75
th
Percentile
|
|
|
27.6x
|
|
|
|
25.83
|
|
Merger Consideration
|
|
|
26.2x
|
|
|
$
|
24.49
|
|
39
|
|
|
|
|
|
|
|
|
|
|
Premium to
Core Deposits
|
|
|
Implied Equity Price
Per Share
|
|
Mean
|
|
|
13.2
|
%
|
|
$
|
24.00
|
|
Median
|
|
|
13.6
|
%
|
|
|
24.41
|
|
25
th
Percentile
|
|
|
11.2
|
%
|
|
|
22.18
|
|
75
th
Percentile
|
|
|
14.7
|
%
|
|
|
25.48
|
|
Merger Consideration
|
|
|
13.7
|
%
|
|
$
|
24.49
|
|
Discounted Cash Flow Analysis.
Raymond James analyzed the discounted present value of
Metropolitans projected free cash flows for the years ending December 31, 2017 through 2021 on a standalone basis. Raymond James used tangible common equity in excess of a target ratio of 8.0% at the end of each projection period for free
cash flow.
The discounted cash flow analysis was based on the Projections. Consistent with the periods included in the Projections,
Raymond James used calendar year 2021 as the final year for the analysis and applied multiples, ranging from 13.5x to 16.0x, to calendar year 2021 Net Income in order to derive a range of terminal values for Metropolitan in 2021.
The projected free cash flows and terminal values were discounted using rates ranging from 10.0% to 15.0%, which reflected the cost of equity
capital associated with executing Metropolitans business plan. The resulting range of present equity values was divided by the number of diluted shares outstanding in order to arrive at a range of present values per Metropolitan share. Raymond
James reviewed the range of per share prices derived in the discounted cash flow analysis and compared them to the price per share for Metropolitan implied by the merger consideration. The results of the discounted cash flow analysis are summarized
below:
|
|
|
|
|
|
|
Equity Value/
Per Share
|
|
Minimum
|
|
$
|
19.70
|
|
Maximum
|
|
|
28.67
|
|
Merger Consideration
|
|
$
|
24.49
|
|
Additional Considerations.
The preparation of a fairness opinion is a complex process and is not
susceptible to a partial analysis or summary description. Raymond James believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering the analyses taken as a whole, would create an
incomplete view of the process underlying its opinion. In addition, Raymond James considered the results of all such analyses and did not assign relative weights to any of the analyses, but rather made qualitative judgments as to significance and
relevance of each analysis and factor, so the ranges of valuations resulting from any particular analysis described above should not be taken to be the view of Raymond James as to the actual value of Metropolitan.
In performing its analyses, Raymond James made numerous assumptions with respect to industry performance, general business, economic and
regulatory conditions and other matters, many of which are beyond the control of Metropolitan. The analyses performed by Raymond James are not necessarily indicative of actual values, trading values or actual future results which might be achieved,
all of which may be significantly more or less favorable than suggested by such analyses. Such analyses were provided to the Metropolitan board of directors (solely in its capacity as such) and were prepared solely as part of the analysis of Raymond
James of the fairness, from a financial point of view, to the holders of Metropolitan common stock of the merger consideration to be received by such holders in connection with the proposed transactions pursuant to the merger agreement. The analyses
do not purport to be appraisals or to reflect the prices at which companies may actually be sold, and such estimates are inherently subject to uncertainty. The opinion of Raymond James was one of many factors taken into account by the Metropolitan
board of directors in making its determination to approve the transactions. Neither Raymond James opinion nor the analyses described above should be viewed as determinative of the
40
Metropolitan board of directors or Metropolitan managements views with respect to Metropolitan, Renasant or the transactions. Raymond James provided advice to Metropolitan with
respect to the proposed transaction. Raymond James did not, however, recommend any specific amount of consideration to the Board or that any specific merger consideration constituted the only appropriate consideration for the transactions.
Metropolitan placed no limits on the scope of the analysis performed, or opinion expressed, by Raymond James.
The Raymond James opinion
was necessarily based upon market, economic, financial and other circumstances and conditions existing and disclosed to it on January 16, 2017, and any material change in such circumstances and conditions may affect the opinion of Raymond
James, but Raymond James does not have any obligation to update, revise or reaffirm that opinion after the date of the opinion. Raymond James relied upon and assumed, without independent verification, that there had been no change in the business,
assets, liabilities, financial condition, results of operations, cash flows or prospects of Metropolitan since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Raymond James that
would be material to its analyses or its opinion, and that there was no information or any facts that would make any of the information reviewed by Raymond James incomplete or misleading in any material respect.
During the two years preceding the date of Raymond James written opinion, Raymond James has not been engaged by, performed services for
or received any compensation from Metropolitan other than any amounts that were paid to Raymond James under the engagement letter described in this proxy statement/prospectus pursuant to which Raymond James was retained as a financial advisor to
Metropolitan to assist in reviewing strategic alternatives.
For services rendered in connection with the delivery of its opinion,
Metropolitan paid Raymond James a customary investment banking fee of $200,000 upon delivery of its opinion, which is not contingent upon the completion of the proposed merger or the conclusion reached in the opinion. Metropolitan will also pay
Raymond James a customary fee for advisory services in connection with the transactions of 1.25% of the implied value of the proposed transactions, a substantial portion of which is contingent upon the closing of the transactions. Metropolitan also
agreed to reimburse Raymond James for its expenses incurred in connection with its services, including the fees and expenses of its counsel, and will indemnify Raymond James against certain liabilities arising out of its engagement.
Raymond James is actively involved in the investment banking business and regularly undertakes the valuation of investment securities in
connection with public offerings, private placements, business combinations and similar transactions. In the ordinary course of business, Raymond James may trade in the securities of Renasant for its own account and for the accounts of its customers
and, accordingly, may at any time hold a long or short position in such securities. Raymond James has provided certain services to Renasant (in the previous two years), including serving as an underwriter in its $78.9 million
follow-on
offering of common equity in December 2016, serving as an underwriter in its $100.0 million offering of subordinated debt in August 2016, serving as financial advisor and rendering a fairness opinion
in connection with its acquisition of KeyWorth Bank (announced in October 2015), and serving as financial advisor and rendering a fairness opinion in connection with its acquisition of Heritage Financial Group, Inc. (announced in December 2014), for
which it has been paid customary fees. Additionally, Raymond James and its affiliates have in the past provided and are currently providing other financial services to Renasant for which Raymond James or its affiliates have received, or would expect
to receive, compensation, including, during the past two years, having provided advisory services to Renasant with respect to portfolios of fixed income securities held or managed by Renasant. Furthermore, Raymond James may provide investment
banking, financial advisory and other financial services to Metropolitan and/or Renasant or other participants in the transactions in the future, for which Raymond James may receive compensation. Finally, two members of the Raymond James deal team
assigned to this engagement are owners of 20,000 and 11,776 shares of Metropolitan common stock, respectively.
41
Renasants Reasons for the Merger
In reaching its decision to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement,
the Renasant board of directors consulted with Renasant management, as well as Sandler ONeill & Partners, L.P. (Sandler ONeill), its financial advisor, and Phelps Dunbar, its outside legal counsel, and considered a
number of factors, including the following material factors:
|
|
|
each of Renasants and Metropolitans business, operations, financial condition, asset quality, earnings and prospects. In reviewing these factors, the Renasant board of directors considered that the merger
(1) will enhance its presence in the metro markets of Jackson, Mississippi, Memphis, Tennessee, and Nashville, Tennessee; (2) will increase Renasants core deposit base, an important funding source; (3) will provide Renasant with
an experienced management team and quality bank branches in Mississippi and Tennessee; and (4) will provide Renasant with the opportunity to sell Renasants broad array of products to Metropolitans client base, thereby increasing
non-interest
income through enhanced
fee-based
services;
|
|
|
|
its understanding of the current and prospective environment in which Renasant and Metropolitan operate, including national and local economic conditions, the competitive environment for financial institutions
generally, and the likely effect of these factors on Renasant both with and without the proposed transaction;
|
|
|
|
managements expectations regarding cost synergies, accretion, dilution and internal rate of return that will ultimately be to the benefit of the combined companys stockholders, including the expectations
that:
|
|
|
|
Renasant will realize cost savings of approximately 37.5%, or approximately $11.9 million, on a
pre-tax
basis;
|
|
|
|
the transaction will be immediately accretive to earnings per share (excluding the impact of
one-time
merger-related expenses and expenses associated with Renasants crossing
the $10 billion asset threshold);
|
|
|
|
the dilution to tangible book value per share is minimal and expected to be earned back in less than three years; and
|
|
|
|
the transaction will have an internal rate of return of approximately 23.1%;
|
|
|
|
the transaction is expected to more than offset the projected earnings impact of Renasant crossing the $10 billion asset threshold;
|
|
|
|
its review and discussions with Renasants management concerning the due diligence examination of Metropolitan;
|
|
|
|
the complementary nature of the cultures of the two companies, which management believes should facilitate integration and implementation of the transaction;
|
|
|
|
managements expectation that Renasant will retain its strong capital position upon completion of the transaction, with regulatory capital ratios exceeding well-capitalized requirements and a tangible
common equity ratio of approximately 8.55% after restructuring charges;
|
|
|
|
the financial and other terms of the merger agreement, including the fixed exchange ratio, tax treatment and deal protection and termination fee provisions, which it reviewed with Sandler ONeill and Phelps Dunbar;
and
|
|
|
|
the regulatory and other approvals required in connection with the merger and the expectation that such regulatory approvals will be received in a timely manner and without the imposition of unacceptable conditions.
|
42
In its deliberations, Renasants board of directors also considered a variety of risks
associated with the merger agreement and the merger, including the following (not in any relative order of importance):
|
|
|
the risk that potential benefits and cost synergies and other savings sought in the merger may not be realized or may not be realized within the expected time period, and the risks associated with the integration of
Metropolitans business, operations and workforce with those of Renasant;
|
|
|
|
the significant risks and costs involved in connection with entering into and completing the merger, or failing to complete the merger in a timely manner, or at all, including as a result of any failure to obtain
required regulatory approvals, such as the risks and costs relating to diversion of management and employee attention, potential employee attrition, and the potential effect on business and customer relationships;
|
|
|
|
the fact that the transaction accelerates Renasants crossing the $10 billion asset threshold from
mid-2018
to late-2017, which will result in Renasant being subject by
the third quarter of 2018 to increased FDIC assessments and other operating expenses as well as the limitation on interchange fees imposed pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act; and
|
|
|
|
the possibility of litigation in connection with the merger.
|
The foregoing discussion of the information and
factors considered by the Renasant board of directors is not intended to be exhaustive, but includes the material factors considered by the Renasant board of directors. In reaching its decision to approve the merger agreement, the merger and the
other transactions contemplated by the merger agreement, the Renasant board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The
Renasant board of directors considered all these factors as a whole, including discussions with, and questioning of, Renasants management and Renasants financial advisor and outside legal counsel, and overall considered the factors to be
favorable to, and to support, its determination.
It should be noted that this discussion of the information and factors considered by the
Renasant board of directors in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading Special Note Regarding Forward-Looking Statements.
Renasants Board of Directors Following Completion of the Merger
Upon completion of the merger, the number of directors constituting Renasants and Renasant Banks respective boards of directors
will be increased by one, and one individual who is currently a director of Metropolitan and Metropolitan Bank, selected by Renasant after consultation with Metropolitan, will be appointed to fill the newly-created vacancies on each board. After
consultation with Metropolitan, Renasants board of directors has selected Donald Clark, Jr. to be appointed to fill these newly-created vacancies upon completion of the merger. Information about the current Renasant directors and senior
executive officers of Renasant, who are the same as the directors and executive officers of Renasant Bank, can be found in the documents under the heading Renasant SEC Filings in the section entitled Where You Can Find More
Information on page
. Information about Mr. Clark is set forth below.
Donald
Clark, Jr., age 67, currently serves as Chairman of Butler Snow, LLP, the largest Mississippi-based law firm. With nearly 300 attorneys, the firm provides counsel to a wide range of clients in more than 40 areas of law. As a member of Butler
Snows Public Finance and Incentives Group, Mr. Clark has extensive experience in municipal bonds, economic development incentives and government relations. Mr. Clark is highly regarded as a leader in the legal profession, having been listed in
The Best Lawyers in America
®
(Public Finance Law),
Chambers USA
,
Americas Leading Lawyers for Business
(Municipal Finance) and
Mid-South Super Lawyers
®
(Bonds/Government Finance), and receiving an AV-rating by Martindale-Hubbell. Mr. Clark is a graduate of the University of Southern Mississippi (B.S. 1971) and earned his J.D. from The University
of Mississippi in 1973.
43
Interests of Certain Metropolitan Directors and Executive Officers in the Merger
When considering the recommendation of the board of directors of Metropolitan to approve the merger agreement, stockholders should
be aware that the executive officers and
non-employee
members of the board of directors of Metropolitan may have interests in the merger that are different from, or in addition to, those of Metropolitan
stockholders, which may create potential conflicts of interest. The Metropolitan board of directors was aware of and considered these interests, among other matters, in reaching its decision to approve the merger agreement. The interests of the
Metropolitan board members and its executive officers include the interests described in this section.
Equity Awards
.
Metropolitans executive officers and directors hold options and restricted stock granted or awarded under the Metropolitan Stock Incentive Plan. Immediately prior to the effective time of the merger, each unvested option will vest in full,
without any action on the part of a holder thereof. Each outstanding option will then be converted to the right to receive a cash payment equal to (1) the total number of shares subject to such option multiplied by (2) the difference
between $25.50 and the exercise price of each option, less applicable tax withholdings. Outstanding options with an exercise price greater than $25.50 will be cancelled and forfeited, without compensation. All options held by Metropolitans
executive officers have an exercise price that is less than $25.50.
Upon the completion of the merger, each share of restricted stock
will become fully vested and converted to the right to receive the merger consideration, less applicable tax withholdings. Some of Metropolitans executive officers and all of its
non-employee
directors
hold restricted stock.
The aggregate amounts payable to Metropolitans executive officers in consideration of their outstanding
equity awards are reflected in the table below. The table assumes that (1) no outstanding options are exercised prior to the merger, (2) no amounts are withheld for taxes, and (3) the product of the market price of a share of Renasant
common stock multiplied by the exchange ratio will be $25.50 at the time of the merger.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
options
outstanding
|
|
|
Aggregate option
consideration
|
|
|
Number of Shares of
Restricted Stock
|
|
|
Estimated Dollar
Value of Restricted
Stock
|
|
Curtis J. Gabardi
|
|
|
269,426
|
|
|
$
|
4,495,773
|
|
|
|
19,664
|
|
|
$
|
501,432
|
|
Richard L. Adams
|
|
|
114,900
|
|
|
|
1,977,850
|
|
|
|
11,402
|
|
|
|
290,751
|
|
Gregory B. Barron
|
|
|
45,549
|
|
|
|
711,093
|
|
|
|
5,622
|
|
|
|
143,361
|
|
William M. Barron
|
|
|
102,827
|
|
|
|
1,802,066
|
|
|
|
6,909
|
|
|
|
176,180
|
|
Phillip May, Jr.
|
|
|
102,827
|
|
|
|
1,802,066
|
|
|
|
8,134
|
|
|
|
207,417
|
|
Metropolitan Employment Agreements.
Each of Messrs. Gabardi, Adams, May, Jr., G. Barron and W. Barron
also have employment agreements with Metropolitan. The board of directors of Metropolitan has terminated these agreements, subject to the completion of the merger. In connection with the termination of the agreements, each executive will receive a
cash payment determined as if his employment was terminated without cause (as defined in the agreement) immediately after the occurrence of a change in control (as defined in the agreement). Notwithstanding the termination of
the employment agreements, each executive will remain subject to covenants contained in his agreement that restrict the use and disclosure of confidential information, bar the solicitation of employees and customers and prohibit competition.
44
Cash payments to each of Messrs. Gabardi, Adams, May, Jr., G. Barron and W. Barron in connection
with the termination of their respective employment agreements will be determined as (1) a multiple of each executives base salary immediately before the merger and his average bonus for the three calendar years preceding the merger, and
(2) an amount equal to the premium cost of group medical continuation coverage for the number of months remaining in his employment term.
|
|
|
|
|
|
|
|
|
Multiple
|
|
|
Number of Months Remaining in Employment Term
(assumes the merger occurs on July 1, 2017)
|
Curtis J. Gabardi
|
|
|
3
|
|
|
10
|
Richard L. Adams
|
|
|
2
|
|
|
12
|
Phillip May, Jr.
|
|
|
2
|
|
|
12
|
Gregory B. Barron
|
|
|
2
|
|
|
2
|
William M. Barron
|
|
|
2
|
|
|
1
|
Certain payments made in consideration of a change in control, including payments to be made on account of the
termination of the Metropolitan employment agreements, may subject the recipient to an excise tax and cause the loss of the federal income tax deduction for the payment. Each of the employment agreements contains a best net provision
pursuant to which aggregate change in control payments will either: (1) be reduced to the extent necessary to avoid the excise tax and loss of deduction, or (2) paid in full if the recipient would be in a better position financially after
his payment of the excise and other applicable taxes than he would have been had the payments been reduced. As of the date of this proxy statement/prospectus, we expect that Mr. Gabardis change in control payment will be subject to
reduction under the best net provision, but the payments to Messrs. Adams, May, Jr., G. Barron and W. Barron will not be reduced.
The table below illustrates the change in control payments to be made on account of the termination of the employment agreements for Messrs.
Gabardi, Adams, May, Jr., G. Barron and W. Barron.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Payments Under Employment Agreements
|
|
|
|
Base Salary
(1)
|
|
|
Bonus
(2)
|
|
|
Health Care
Continuation
(3)
|
|
|
Total
(4)
|
|
Curtis J. Gabardi
|
|
$
|
1,096,002
|
|
|
$
|
484,494
|
|
|
$
|
3,874
|
|
|
$
|
1,584,370
|
|
Richard L. Adams
|
|
|
482,062
|
|
|
|
212,236
|
|
|
|
4,649
|
|
|
|
698,947
|
|
Phillip May, Jr.
|
|
|
411,642
|
|
|
|
188,801
|
|
|
|
4,649
|
|
|
|
605,092
|
|
Gregory B. Barron
|
|
|
326,996
|
|
|
|
139,857
|
|
|
|
775
|
|
|
|
467,628
|
|
William M. Barron
|
|
|
381,382
|
|
|
|
153,760
|
|
|
|
387
|
|
|
|
535,529
|
|
(1)
|
Determined using current base salaries in the amount of $365,334, $241,031, $205,821, $163,498, and $190,691 for Messrs. Gabardi, Adams, May, Jr., G. Barron and W.
Barron, respectively.
|
(2)
|
Determined by averaging bonuses for Metropolitans 2014, 2015, and 2016 fiscal years.
|
(3)
|
Calculated using a monthly premium in the amount of $387.41, which is the cost of providing continuation coverage under the Metropolitan group health plan for each
executive.
|
(4)
|
For Mr. Gabardi, the total payment may be subject to reduction under the best net provision of his employment agreement.
|
45
Metropolitan Long-Term Incentive Plan.
Messrs. Garbardi, Adams, May, Jr., G. Barron and W.
Barron participate in the Metropolitan Long-Term Incentive Plan, which is a performance-based cash bonus plan. Bonuses under the plan, if any, are payable at the end of a three-year performance cycle, or as of December 31, 2017. Upon the
completion of the merger, payouts will determined based on Metropolitans performance through the month-end preceding the merger. Payouts will be made as scheduled, as of December 31, 2017, or earlier in the event an executive is
involuntarily terminated without cause or he terminates his employment for good reason (as such terms are defined in the plan). Amounts payable under the Long-Term Incentive Plan for the performance cycle ending December 31,
2017, assuming performance at the target level, are:
|
|
|
|
|
Executive
|
|
Long-Term Incentive Plan
Estimated Target Bonus Payment
|
|
Curtis J. Gabardi
|
|
$
|
103,896
|
|
Richard L. Adams
|
|
$
|
44,791
|
|
Phillip May, Jr.
|
|
$
|
38,618
|
|
Gregory B. Barron
|
|
$
|
29,427
|
|
William M. Barron
|
|
$
|
36,164
|
|
Employment Agreement with Renasant.
Mr. Gabardi will enter into an employment agreement with
Renasant Bank, which will be effective when the merger occurs, under which he will serve as the President and Chief Banking Officer of Renasant Bank. The material terms of Mr. Gabardis employment agreement are summarized below:
|
|
|
He will receive a base salary of $425,000, which is subject to annual adjustment.
|
|
|
|
The agreement has a
two-year
initial term, and will be automatically renewed for successive
one-year
terms, unless either party provides
notice of
non-renewal
to the other.
|
|
|
|
He will receive a time-based restricted stock award of 5,000 shares of Renasant common stock.
One-half
of the award will vest on December 31, 2017, and
one-half
of the award will vest on December 31, 2018, provided in each case that Mr. Gabardi is then employed by Renasant Bank. If Mr. Gabardis employment terminates before the award vests, the
award will be forfeited to and cancelled by Renasant, unless his termination is on account of death, disability, or involuntary termination without cause (as such terms are defined in Renasants 2011 Long-Term Incentive
Compensation Plan, the Renasant LTIP), in which event he will receive a prorated number of shares. If a change in control (as defined in the Renasant LTIP) occurs before his award vests, Mr. Gabardis award will vest in
accordance with its terms, unless his employment is terminated during the
24-month
period following the change in control either involuntarily without cause or for good reason (as defined in the
Renasant LTIP), in which event his award will vest on his termination date.
|
|
|
|
He is eligible to receive annual performance-based cash bonuses under Renasants Performance-Based Rewards Plan and equity compensation under the Renasant LTIP.
|
|
|
|
He will be eligible to participate in the plans and arrangements available to executive officers and employees of Renasant, including a
tax-qualified
401(k) plan, various
insurance benefits, and deferred compensation plans.
|
|
|
|
He will receive standard perquisites, including a monthly car allowance and country club dues.
|
|
|
|
In the event Mr. Gabardi is constructively terminated or is terminated without cause (as such terms are defined in his employment agreement), (1) he will receive (a) a cash payment
equal to his base compensation for the remainder of the employment term, but not less than 12 months, and (b) his cash bonus in the target amount,
pro-rated
to reflect the period of service prior to his
termination, and (2) his outstanding equity awards (other than his retention award) will vest in accordance with the terms of the Renasant LTIP (generally on a pro rata basis). In addition, Mr. Gabardi will receive monthly premium
reimbursements if he or his eligible dependents elect continuation coverage under the Renasant Bank group medical plan for the lesser of 18 months or the actual period of continuation coverage.
|
46
|
|
|
In the event Mr. Gabardi is constructively terminated or terminated without cause within the
24-months
following a change in control (as
defined in his employment agreement), (1) he will receive (a) a cash payment in an amount equal to two times the sum of his base compensation and average annual cash bonus for the two whole calendar years preceding the change in control and
(b) monthly premium reimbursements under the Renasant Bank group medical plan for the lesser of 18 months or the actual period of continuation coverage, and (2) his outstanding equity awards will vest in accordance with the terms of the
Renasant LTIP.
|
|
|
|
The employment agreement contains standard covenants prohibiting the solicitation of employees and customers and competition during the
two-year
period following
Mr. Gabardis termination of employment, except that if his termination is without cause or for constructive termination, either following a change in control, the prohibition on competition is limited to one year. The agreement also
includes a covenant protecting the use and disclosure of Renasants confidential information that applies at all times during his employment and thereafter.
|
Regulatory and Third-Party Approvals
Completion of the merger is subject to prior receipt of all approvals and consents required to be obtained from applicable governmental and
regulatory authorities. Renasant and Metropolitan have agreed to cooperate and use all reasonable best efforts to prepare as promptly as possible all documentation, to make all requisite regulatory filings and to obtain any necessary permits,
consents, approvals or authorizations of governmental entities necessary to consummate the transactions contemplated by the merger agreement as soon as practicable. As of the date of this proxy statement/prospectus, Metropolitan and Renasant have
received all necessary regulatory approvals (or waivers therefrom) of the Federal Reserve, the FDIC and the Mississippi Department of Banking and Consumer Finance for the completion of the merger.
Although all necessary regulatory approvals have been obtained, nevertheless there can be no assurance that any state attorney general or
other domestic regulatory authority will not attempt to challenge the merger on antitrust grounds or for other reasons, or, if such a challenge is made, as to the result thereof. The merger is conditioned upon the receipt of all consents, approvals
and actions of governmental authorities and the filing of all other notices with such authorities in respect of the merger. See The Merger AgreementConditions to the Completion of the Merger on pages
through
of this proxy statement/prospectus.
FDIC Approval
. The FDIC notified Renasant that it had approved the merger on April 19, 2017. The merger of Metropolitan Bank with and
into Renasant Bank was subject to the prior approval of the FDIC pursuant to Section 18(c) of the Federal Deposit Insurance Act, as amended, and related federal regulations. In reviewing the transactions under applicable statutes and regulations,
the FDIC considered, among other factors, the competitive impact of the merger. The FDIC also considered the financial and managerial resources and future prospects of the companies and their subsidiary banks and the convenience and needs of the
communities to be served as well as the companies effectiveness in combatting money-laundering activities. Furthermore, the FDIC was required to take into consideration the extent to which the proposed acquisition would result in greater or
more concentrated risks to the stability of the United States banking or financial system. Under the Community Reinvestment Act of 1977, as amended, the FDIC was required to take into account the record of performance of each of Metropolitan and
Renasant in meeting the credit needs of the entire communities, including
low-income
and moderate-income neighborhoods, served by the companies and their subsidiaries. As of their last respective examinations,
Metropolitan Bank was rated satisfactory
and Renasant Bank was rated satisfactory.
In connection with its
review, the FDIC provided an opportunity for public comment on the application for the merger and was authorized to hold a public meeting or other proceeding if it determined that such action would be appropriate (no such public meeting was held).
Federal Reserve Approval.
The merger of bank holding companies was also subject to the approval of the Federal Reserve, unless
such merger did not require Federal Reserve approval under regulations promulgated by
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the Federal Reserve pursuant to the Bank Holding Company Act of 1956, as amended. On March 24, 2017, the Federal Reserve confirmed that Renasant was not required to file an application with
the Federal Reserve for approval of the merger.
State Bank Regulatory Approvals
. Renasant also received approval from the
Mississippi Department of Banking and Consumer Finance with respect to the bank merger. In reviewing the merger of the banks, the Department was required to take competitive considerations into account, as well as the capital adequacy, the quality
of management and earnings prospects (in terms of both quality and quantity).
Other Applications and Notices.
Other
applications and notices are being filed with various regulatory authorities and self-regulatory organizations in connection with the merger, including applications and notices in connection with the indirect change in control, as a result of the
merger, of certain subsidiaries directly or indirectly owned by Metropolitan.
Renasant and Metropolitan are not aware of any governmental
approvals or compliance with banking laws and regulations that are required for the merger to become effective other than those described above. Renasant and Metropolitan intend to seek any other approval and to take any other action that may be
required to complete the merger. There can be no assurance that any required approval or action can be obtained or taken prior to the meeting.
If the approval of the merger by any of the authorities mentioned above is subject to compliance with any conditions, there can be no
assurance that the parties or their subsidiaries will be able to comply with such conditions or that compliance or
non-compliance
will not have adverse consequences for the combined company after consummation
of the merger. The parties believe that the proposed merger is compatible with such regulatory requirements.
Third-Party
Approvals
. The merger is conditioned upon the receipt of all consents and approvals of third parties with respect to specified agreements, such as real property leases, unless the failure to obtain any such consent or approval would not
reasonably be expected to have a material adverse effect on Renasant or Metropolitan. Pursuant to the merger agreement, Renasant and Metropolitan have agreed to use their reasonable best efforts to obtain all consents, approvals and waivers from
third parties necessary in connection with the completion of the merger.
Public Trading Markets
Renasant common stock trades on Nasdaq under the symbol RNST. The newly issued Renasant common stock issuable pursuant to the
merger agreement will be listed on Nasdaq, subject to notice of issuance.
Appraisal Rights
THIS DISCUSSION IS NOT A COMPLETE STATEMENT OF THE LAW PERTAINING TO APPRAISAL RIGHTS UNDER THE DELAWARE GENERAL CORPORATION LAW AND IS
QUALIFIED IN ITS ENTIRETY BY THE FULL TEXT OF SECTION 262 THEREOF, WHICH IS REPRINTED IN ITS ENTIRETY AS ANNEX C TO THIS PROXY STATEMENT/PROSPECTUS. ALL REFERENCES IN THIS SUMMARY TO A STOCKHOLDER OR HOLDER ARE TO THE RECORD
HOLDER OF THE SHARES OF METROPOLITAN COMMON STOCK AS TO WHICH APPRAISAL RIGHTS ARE ASSERTED.
General.
Under Section 262
of the DGCL, which we refer to as Section 262, subject to exceptions not applicable to the merger of Metropolitan with and into Renasant, where a proposed merger of a Delaware corporation is to be submitted for approval at a meeting
of stockholders, as with the special meeting of Metropolitan stockholders, the corporation, not less than 20 days before the meeting, must notify each of its
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stockholders entitled to vote on the merger that appraisal rights are available. This notice must include a copy of Section 262. This proxy statement/prospectus constitutes that notice to
the holders of Metropolitan common stock, and Section 262 is attached to this proxy statement/prospectus as Annex C.
Any
Metropolitan stockholder who wishes to exercise appraisal rights or who wishes to preserve that right should review carefully the following discussion and Annex C to this proxy statement/prospectus. Moreover, because of the complexity of the
procedures for exercising the right to seek appraisal, if you are considering exercising such appraisal rights, we urge you to obtain the advice of counsel (which will be at your own expense). Failure to comply with the procedures specified in
Section 262 timely and properly will result in the loss of appraisal rights. A Metropolitan stockholder who fails to comply with the procedures specified in Section 262 and thus loses appraisal rights will be deemed to have elected to
receive shares of Renasant common stock for such stockholders shares of Metropolitan common stock.
A person having a beneficial
interest in shares of Metropolitan common stock held of record in the name of another person, such as a bank or broker, must act promptly to cause the record holder to timely follow the steps required by the DGCL to perfect appraisal rights. A
demand for appraisal submitted by a beneficial owner who is not the record owner will not be honored.
Procedure for exercising
appraisal rights.
Any holder of Metropolitan common stock wishing to exercise his or her appraisal rights under Section 262 must satisfy each of the following conditions:
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The holder must deliver to Metropolitan a written demand for appraisal of the holders shares before the vote on the merger agreement and the merger at the special meeting. This written demand must reasonably
inform Metropolitan of the identity of the holder and that the holder intends to demand the appraisal of the holders shares. This appraisal demand is in addition to and separate from any proxy or vote. Voting against, or abstaining from voting
or failing to vote on, the adoption and approval of the merger agreement and the merger will not constitute a written demand for appraisal within the meaning of Section 262.
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The holder must not vote the holders shares of common stock in favor of the adoption and approval of the merger agreement and the merger at the special meeting. As a result, a Metropolitan stockholder who submits
a proxy and wishes to exercise appraisal rights must vote against the adoption and approval of the merger agreement and the merger, or abstain from voting, because a proxy which does not contain voting instructions will, unless revoked, be voted in
favor of the merger agreement and the merger.
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The holder must continuously hold the shares from the date of making the demand through the closing of the merger. If a Metropolitan stockholder on the date the written demand for appraisal is made thereafter transfers
his or her Metropolitan shares before the closing of the merger, such stockholder will lose any right to appraisal in respect of those shares.
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Only a holder of record of shares of common stock issued and outstanding through the effective time of the merger is entitled to assert
appraisal rights for the shares of common stock registered in that holders name. A demand for appraisal should be executed by or on behalf of the stockholder of record, fully and correctly, as the stockholders name appears on the
applicable stock certificates, and should specify the stockholders name and mailing address, the number of shares of common stock owned and that the stockholder intends to demand appraisal of the stockholders common stock. If the shares
are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand should be made in that capacity. If the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common,
the demand should be executed by or on behalf of all owners. An authorized agent, including one or more joint owners, may execute a demand for appraisal on behalf of a stockholder. The agent, however, must identify the record owner or owners and
expressly disclose the fact that, in executing the demand, the agent is acting as agent for such owner or owners. A record holder such as a broker who holds shares as nominee for several beneficial owners may
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exercise appraisal rights with respect to the shares held for one or more of the beneficial owners while not exercising appraisal rights with respect to shares held for other beneficial owners.
In such case, the written demand should set forth the number of shares as to which appraisal is sought. Where no number of shares is expressly mentioned, the demand will be presumed to cover all shares held in the name of the record owner.
Any stockholder who has duly demanded an appraisal in compliance with Section 262 will not, from and after the effective time of the
merger, be entitled to vote or consent by written action the shares subject to that demand for any purpose. Any such stockholder also will not be entitled to the payment of dividends or other distributions on those shares (except dividends or other
distributions payable to stockholders of record of shares as of a record date before the effective time of the merger).
A stockholder who
elects to exercise appraisal rights under Section 262 should mail or deliver a written demand to Metropolitan BancGroup, Inc., 1069 Highland Colony Parkway, Ridgeland, Mississippi 39157-8722, Attn: Curtis J. Gabardi, President and Chief
Executive Officer.
Under the merger agreement, Metropolitan has agreed to give Renasant prompt notice of any demands for appraisal
received by Metropolitan. Renasant has the right to participate in all negotiations and proceedings with respect to demands for appraisal. Metropolitan will not, except with the prior written consent of Renasant, make any payment with respect to any
demands for appraisal, or offer to settle, or settle, any such demands.
Notice by the Company.
If the merger agreement and the
merger are adopted and approved at the special meeting, then within 10 days after the effective time of the merger, Renasant must send a notice of the effectiveness of the merger to each of Metropolitans former stockholders who (1) have
made a written demand for appraisal in accordance with Section 262 and (2) have not voted to approve and adopt, nor consented to, the merger agreement and the merger.
Within 120 days after the effective time of the merger, any of the former stockholders of Metropolitan who have demanded an appraisal and who
have not withdrawn such demand in accordance with Section 262 will be entitled to receive from Renasant, upon written request, a statement setting forth the aggregate number of shares not voted in favor of the merger agreement and the merger
and, with respect to such shares voting against the merger agreement and the merger, demands for appraisal have been received and the aggregate number of holders of such shares. Renasant must mail that statement to the stockholder within 10 days of
receipt of the request or within 10 days after expiration of the period for delivery of demands for appraisals under Section 262, whichever is later.
Filing a petition for appraisal.
Within 120 days after the effective date of the merger, either Renasant (as the surviving corporation)
or any stockholder who has demanded an appraisal and who has not withdrawn such demand in accordance with the requirements of Section 262 may file a petition with the Delaware Court of Chancery, which we refer to as the Delaware court or simply
the court, demanding a determination of the value of the shares of common stock held by all stockholders who have exercised and maintained appraisal rights. Neither Metropolitan nor Renasant (as the surviving corporation) is under any obligation,
and has no present intent, to file a petition for appraisal, and stockholders seeking to exercise appraisal rights should not assume that Renasant (as the surviving corporation) will file such a petition or that it will initiate any negotiations
with respect to the fair value of the shares. Accordingly, stockholders who desire to have their shares appraised should initiate any petitions necessary for the perfection of their appraisal rights within the time and the manner prescribed in
Section 262. Inasmuch as Metropolitan has no obligation to file such a petition, the failure of a stockholder to do so within the time specified could nullify the stockholders previous written demand for appraisal. If, within the
120-day
period following the effective time of the merger, no petition shall have been filed as provided above, all rights to appraisal will cease, and all stockholders who owned shares of common stock will become
entitled to receive shares of Renasant common stock for such stockholders Metropolitan common stock.
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A stockholder timely filing a petition for appraisal with the Delaware court must deliver a copy
to Renasant, which will then be obligated within 20 days to provide the Register in Chancery (that is, the clerk of court) with a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares
and with whom agreements as to the value of their shares have not been reached by Renasant. After notice to those stockholders, the court may conduct a hearing on the petition to determine which stockholders have become entitled to appraisal rights.
The court may require stockholders who have demanded an appraisal of their shares and who hold stock represented by certificates to submit their certificates to the Register for notation thereon of the pendency of the appraisal proceedings. If any
stockholder fails to comply with the requirement, the court may dismiss the proceedings as to that stockholder.
Determination of fair
value.
After determining the stockholders entitled to an appraisal, the Delaware court will appraise the shares of common stock owned by such stockholders. Through such proceeding, the court will determine fair value, exclusive of any element of
value arising from the accomplishment or expectation of the merger. In making its determination, the court is to take into account all relevant factors. Stockholders considering seeking appraisal should be aware that the fair value of their shares
as determined under Section 262 could be more than, the same as or less than the 0.6066 shares of Renasant common stock per share of Metropolitan common stock they would receive under the merger agreement if they did not seek appraisal of their
shares. Stockholders should also be aware that the opinion of Raymond James discussed in this proxy statement/prospectus is not an opinion as to fair value under Section 262. Renasant reserves the right to assert in any appraisal proceedings,
that, for purposes of Section 262, the fair value of a share of common stock is less than the consideration payable pursuant to the merger agreement.
In the appraisal proceeding, the court will also set a rate of interest, if any, to be paid upon the amount determined to be the fair value,
from the effective date of the merger through the date of payment. Although the court may determine otherwise, Section 262 provides that interest shall accrue at the rate of 5% over the Federal Reserve discount rate, as established from time to
time, and compound quarterly. To the extent that, prior to the conclusion of an appraisal proceeding, the surviving corporation makes any cash payment to stockholders party to such proceeding, interest shall accrue thereafter only upon the sum of
(1) the difference, if any, between the amount paid and the fair value of the shares as ultimately determined by the court and (2) any accrued but unpaid interest.
The costs of the action may be determined by the Delaware court and taxed upon the parties as the court deems equitable. Upon application of a
stockholder, the court may also order that all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys fees and the fees and expenses of experts,
be charged pro rata against the value of all of the shares entitled to appraisal.
Withdrawal.
Any stockholder may withdraw a
demand for appraisal and elect to receive 0.6066 shares of Renasant common stock in exchange for each share of Metropolitan common stock by delivering to Metropolitan (or Renasant, if after the effective date of the merger) a written withdrawal of
the stockholders demand for appraisal; if the withdrawal is submitted more than 60 days after the effective date of the merger, Renasant must consent to the stockholders withdrawal of his or her appraisal demand. No appraisal proceeding
in the Delaware court will be dismissed as to any stockholder without the approval of the court, and such approval may be conditioned upon such terms as the court deems just.
Any stockholder wishing to exercise appraisal rights is urged to consult legal counsel before attempting to exercise appraisal rights.
Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL may result in the loss of a stockholders statutory appraisal rights.
Accounting Treatment of the Merger
Renasant will account for the merger using the purchase method of accounting, with Renasant as the acquiror. The assets (including identifiable
intangible assets) and liabilities (including executory contracts and
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other commitments) of Metropolitan will be recorded, as of completion of the merger, at their respective fair values and added to those of Renasant. Any excess of the purchase price over fair
values will be recorded as goodwill. Consolidated financial statements and reported results of operations of Renasant issued after completion of the merger will reflect these values, but will not be restated retroactively to reflect the historical
financial position or results of operations of Metropolitan.
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THE MERGER AGREEMENT
The following is a summary of the material provisions of the merger agreement. This description does not purport to be complete and is
qualified in its entirety by reference to the agreement and plan of merger, a copy of which is attached as Annex A to this proxy statement/prospectus and incorporated by reference herein. This summary may not contain all of the information about the
merger agreement that may be important to you. We urge you to read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.
Terms of the Merger
Each of the Renasant board of directors and the Metropolitan board of directors has unanimously approved the merger agreement, which provides
for the merger of Metropolitan with and into Renasant. Renasant will be the surviving corporation in the merger. Immediately after the merger, Metropolitan Bank will merge with and into Renasant Bank, with Renasant Bank as the surviving banking
corporation in the merger.
The Renasant Articles and Renasant Bylaws as in effect immediately prior to the completion of the merger
will be the articles of incorporation and bylaws of the surviving corporation. As described in The MergerRenasants Board of Directors Following Completion of the Merger, the board of directors of Renasant and Renasant Bank
immediately prior to the effective time of the merger will be the surviving corporations and surviving banks board of directors after the merger, with the addition of current Metropolitan director Donald Clark, Jr. to each board. Each of
Renasants officers immediately prior to the effective time of the merger will be the officers of the surviving corporation from and after the merger. Curtis J. Gabardi, Metropolitans President and Chief Executive Officer, will serve as
President and Chief Banking Officer of Renasant Bank after completion of the merger.
Effective Time of the Merger
The merger will be completed no later than the fifth business day, or such later date as the parties mutually agree, following
the receipt of all necessary approvals and consents of all governmental entities, the expiration of all statutory waiting periods and the satisfaction or waiver of all other conditions to the merger set forth in the merger agreement. See
Conditions to the Completion of the Merger below. Articles of Merger to be filed with the Mississippi Secretary of State as required under the corporation laws of Mississippi and a Certificate of Merger to be filed with the Delaware
Secretary of State as required under the corporation laws of Delaware will establish the effective time of the merger. It is currently anticipated that the completion of the merger will occur in the third quarter of 2017, subject to the receipt of
the approval of Metropolitans stockholders and the satisfaction of other customary closing conditions, but neither Renasant nor Metropolitan can guarantee when or if the merger will be completed.
Merger Consideration; Treatment of Metropolitan Stock Options and Other Equity-Based Awards
General
. Each share of Metropolitan common stock issued and outstanding immediately prior to the completion of the merger, except for
shares of Metropolitan common stock held by Metropolitan in its treasury, shares owned by Renasant or any subsidiary of Renasant or Metropolitan (other than shares held in trust accounts, managed accounts, mutual funds and the like or otherwise in a
fiduciary or agency capacity or as a result of debts previously contracted) and shares held by Metropolitan stockholders who have elected to exercise appraisal rights, will be converted into the right to receive 0.6066 of a share of Renasant common
stock, which we refer to as the exchange ratio. If the number of shares of common stock of Renasant or Metropolitan changes before the merger is completed because of a reclassification, recapitalization, stock dividend, stock split, reverse stock
split or similar event, then a proportionate adjustment will be made to the exchange ratio.
Fractional Shares
. Renasant will not
issue fractional shares of its common stock in connection with the merger. Instead, Renasant will make a cash payment (without interest) to each Metropolitan stockholder who
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would otherwise have received a fractional share of Renasant common stock. The amount of this cash payment will equal the product of (1) the fraction of a share of Renasant common stock
otherwise issuable to such stockholder and (2) the weighted average of the closing sale price of a share of Renasant common stock as reported on Nasdaq for the 15 consecutive trading days ending on the trading day immediately prior to the
closing date of the merger.
Stock Options
. The merger agreement provides that, upon completion of the merger, each
in-the-money
stock option or similar right to purchase Metropolitan common stock granted under the Metropolitan Stock Incentive Plan or otherwise will vest in full and be
converted into the right to receive a cash payment. The amount of this cash payment will be equal to (1) the total number of shares subject to such stock option multiplied by (2) the difference between $25.50 and the exercise price of the
option, less applicable tax withholdings.
Out-of-the-money
Metropolitan stock options will be cancelled for no consideration.
Restricted Stock
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Each share of Metropolitan common stock subject to restrictions on transfer and/or forfeiture granted
under the Metropolitan Stock Incentive Plan or otherwise that is outstanding immediately prior to the effective time of the merger shall fully vest and be converted into the right to receive the merger consideration, less applicable tax
withholdings.
Conversion of Shares; Exchange of Certificates
The conversion of Metropolitan common stock into the right to receive the merger consideration will occur automatically upon completion of the
merger. Renasant has appointed as exchange agent under the merger agreement Renasants transfer agent, Computershare, Inc., which we refer to as the exchange agent. As promptly as practicable after the completion of the merger, the exchange
agent will mail a letter of transmittal to each holder of Metropolitan common stock (other than shares held by Metropolitan stockholders who have elected to exercise appraisal rights) at the effective time of the merger. This mailing will contain
instructions on how to surrender Metropolitan stock certificates in exchange for the merger consideration. Metropolitan stockholders should not send in their stock certificates until they receive the letter of transmittal and instructions.
Upon surrender to the exchange agent of the certificate(s) representing his or her shares of Metropolitan common stock, accompanied by a
properly completed letter of transmittal, a Metropolitan stockholder will be entitled to receive after the effective time of the merger the merger consideration (including any cash in lieu of fractional shares). Until surrendered, each such
certificate will represent after the effective time of the merger, for all purposes, only the right to receive, without interest, the merger consideration (including any cash in lieu of fractional shares) and any dividends or distributions to which
such holder is entitled pursuant to the merger agreement.
If a certificate for Metropolitan common stock has been lost, stolen or
destroyed, the exchange agent will issue the consideration properly payable under the merger agreement upon receipt of an affidavit of that fact by the claimant and, if required by Renasant or the exchange agent, the posting of a bond in such amount
as Renasant or the exchange agent determines is reasonably necessary as indemnity.
Each of Renasant and the exchange agent will be
entitled to deduct and withhold from the cash in lieu of fractional shares payable to any holder of Metropolitan common stock the amounts it is required to deduct and withhold under any federal, state, local or foreign tax law. If Renasant or the
exchange agent withholds any amounts, these amounts will be treated for all purposes as having been paid to the stockholders from whom they were withheld.
Dividends and Distributions
Until Metropolitan stock certificates are surrendered for exchange, any dividends or other distributions with a record date on or after the
effective time of the merger with respect to Renasant common stock into which the
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relevant shares of Metropolitan common stock have been converted will accrue but will not be paid. Renasant will pay to former Metropolitan stockholders any unpaid dividends or other
distributions with respect to Renasant common stock, without interest and less any taxes withheld, only after they have duly surrendered their Metropolitan shares.
Metropolitan has agreed that, prior to the completion of the merger, it will not declare or pay any dividend or distribution on its stock.
Representations and Warranties
The representations, warranties and covenants by Renasant, Renasant Bank, Metropolitan and Metropolitan Bank described below and included in
the merger agreement were made only for purposes of the merger agreement and as of specific dates. These representations, warranties and covenants may be subject to qualifications and limitations agreed upon by the contracting parties, including
being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts; may be limited to the knowledge of specified officers of Renasant or Metropolitan;
and may be subject to standards of materiality applicable to the contracting parties that differ from those generally applicable to investors. In reviewing the representations, warranties and covenants contained in the merger agreement, as described
below, it is important to bear in mind that such representations, warranties and covenants or any descriptions thereof were not intended by the parties to the merger agreement to be characterizations of the actual state of facts or condition of
Renasant, Metropolitan or any of their respective subsidiaries or affiliates. Such representations and warranties are not intended to amend, supplement or supersede any statement contained in any reports or documents filed by Renasant with the SEC.
Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in Renasants public
disclosures. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction with the other information contained in this proxy
statement/prospectus and in the reports, statements and filings that Renasant publicly files with the SEC. See Where You Can Find More Information on page
.
Each of Renasant and Metropolitan has made customary representations and warranties related to their businesses regarding, among other things:
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corporate matters, including due organization and qualification;
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authority relative to execution and delivery of the merger agreement and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger;
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required governmental filings and consents;
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financial statements and the absence of undisclosed liabilities;
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the accuracy of information supplied for inclusion in this proxy statement/prospectus and other similar documents;
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the absence of certain changes or events;
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its internal control over financial reporting;
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compliance with applicable laws and permits;
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tax matters, including that the applicable party or any of its subsidiaries has not taken or agreed to take any action that might cause the merger not to constitute a reorganization under Section 368(a) of
the Code or impede or delay the receipt of regulatory approval;
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employee benefit matters;
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brokers fees payable in connection with the merger;
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deposit insurance and other bank regulatory matters;
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certain material contracts;
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Community Reinvestment Act compliance; and
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the receipt of an opinion of its financial advisor.
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The merger agreement includes additional
representations of Metropolitan regarding, among other things:
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its employees and labor matters;
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real and personal property and insurance matters;
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matters relating to loans (including mortgage loans held for sale), the allowance for loan losses and other real estate owned;
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its risk management instruments;
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its investment securities and bank-owned life insurance;
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intellectual property matters;
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inapplicability of state takeover laws; and
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transactions with affiliates.
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The merger agreement includes additional representations of
Renasant regarding, among other things:
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compliance with Nasdaq rules;
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its disclosure controls and procedures.
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None of the parties representations and
warranties in the merger agreement survive the effective time of the merger.
Material Adverse Effect
Certain representations and warranties of Renasant and Metropolitan are qualified as to a material adverse effect. For purposes of
the merger agreement, a material adverse effect, when used in reference to Renasant or Metropolitan, means any change, state of facts, circumstance, event or development that, individually or in the aggregate, would reasonably be
expected to either (a) materially impair its ability to perform its obligations under the merger agreement or complete the merger or (b) have a material adverse effect on the business, operations, assets, liabilities, condition (financial
or otherwise) or results of operations of the applicable party and its subsidiaries, as applicable, taken individually or as a whole. In determining, with respect to subpart (b) of the foregoing sentence, whether a material adverse effect has
occurred or would reasonably be expected to occur, Renasant and Metropolitan will disregard:
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any effects resulting from the impact of any action by Metropolitan or Renasant or any of their respective
subsidiaries taken with the prior written consent of the other party or required expressly by
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the merger agreement or any action not taken by Metropolitan or Renasant or any of their respective subsidiaries to the extent taking such action is expressly prohibited by the merger agreement
without the prior written consent of the other party and such consent has not been given;
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(2)
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changes in laws or interpretations thereof that are generally applicable to the banking industry;
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(3)
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changes in generally accepted accounting principles or regulatory accounting requirements applicable to banks and their holding companies generally;
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(4)
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expenses incurred in connection with the merger agreement and the merger, including payments to be made pursuant to employment and severance agreements and the termination of benefit plans;
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(5)
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changes attributable to or resulting from changes that are the result of factors generally affecting financial institutions, including changes in interest rates;
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(6)
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changes in general economic, market, political or regulatory conditions in the United States;
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the failure to meet earnings projections or internal financial forecasts and, as to Renasant, changes in the trading price of Renasants common stock but, as to any of the foregoing, not including the causes
thereof;
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(8)
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any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism; or
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the impact of the announcement of the merger and the other transactions contemplated by the merger agreement.
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With respect to items (2), (3), (5), (6) and (8) above, a material adverse effect on Metropolitan or Renasant, as the case may be, will
be deemed to exist if the effect on the party is disproportionate to the effect that the relevant item has on financial institutions or their holding companies generally.
The representations and warranties of Metropolitan and Metropolitan Bank are generally contained in Article 3 of the merger agreement. The
representations and warranties of Renasant and Renasant Bank are generally contained in Article 4 of the merger agreement.
Covenants and Agreements
Metropolitan has agreed that, prior to the effective time of the merger, it will, and will cause each of its subsidiaries to conduct its
business only in the ordinary course and consistent with past practice (as well as with projections of future growth and the maintenance of capital that were communicated to Renasant prior to the execution of the merger agreement) and prudent
banking practices. Metropolitan and Metropolitan Bank must use their commercially reasonable efforts to maintain and preserve intact their business organization, rights, franchises and other authorizations issued by governmental entities and their
current relationships with customers, regulators, employees and others. Renasant and Renasant Bank also agreed to conduct their business in the ordinary course consistent with past practices and to maintain their franchise and relationships, except
to the extent a change would not have a material adverse effect on Renasant.
In addition to these general covenants, Metropolitan has agreed to notify Renasant as promptly as practicable if it makes or acquires any loan, issues any commitment
(including the renewal or extension of any existing commitment) or amends or restructures any existing loan relationship where Metropolitans total exposure to the borrower and its affiliates is or would be in excess of $3.5 million.
Each of Renasant and Metropolitan has undertaken customary covenants that place restrictions on it and its respective subsidiaries until the
completion of the merger. Each of Renasant and Metropolitan has agreed not to, and will not permit its subsidiaries to:
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knowingly take, or fail to take, any action that would be reasonably expected to adversely affect or delay its ability to perform its respective covenants and agreements on a timely basis under the merger agreement or
to consummate the transactions contemplated by the merger agreement;
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knowingly take, or fail to take, any action that could reasonably be expected to result in any of its representations and warranties contained in the merger agreement not being true and correct in any material respect
at the effective time;
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knowingly take, or fail to take, any action that would be reasonably expected to (1) prevent the merger from qualifying as a reorganization under Section 368(a) of the Code or (2) adversely affect
or delay its ability to obtain any necessary regulatory approvals, consents or waivers with respect to the merger or that could reasonably be expected to result in any such approvals, consents or waivers containing any condition or restriction that
would materially impair the value of the merger;
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change any provision of its articles of incorporation or certificate of incorporation or bylaws, as applicable, or comparable organizational document, although Renasant may amend its organizational documents if the
amendment would not reasonably be expected to adversely affect its ability to perform its obligations under the merger agreement or the rights of a Renasant stockholder;
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change its financial accounting methods or systems of internal accounting controls or revalue in any material respect any of its assets (including writing off notes or accounts receivable), except in each case insofar
as may have been required by a change in generally accepted accounting principles as concurred in by its independent accounts; or
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agree to take, make any commitment to take, or adopt board resolutions in favor of any of the actions restricted under the merger agreement.
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In addition to the general covenants above, Metropolitan has also agreed that, subject to specified exceptions and except with Renasants
prior written consent, Metropolitan will not, and will not permit its subsidiaries to, among other things, undertake any of the following actions:
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except for the issuance of Metropolitan common stock pursuant to the present terms of the outstanding Metropolitan stock options, (1) change the number of shares of its authorized or issued stock or other equity
interests, (2) issue or grant (or commit to issue or grant) any shares of its stock or other equity interests, as applicable, or any option, warrant, call, commitment, subscription, award, right to purchase or agreement of any character
relating to its authorized or issued stock or other equity interests, as applicable, any security convertible into shares of such stock or other equity interests, as applicable, or any stock or equity appreciation right, restricted unit or other
equity-based compensation, (3) split, combine or reclassify any shares of its stock or other equity interests, as applicable, (4) redeem, purchase or otherwise acquire any shares of its stock or other equity interests, as applicable, or
(5) enter into any agreement, undertaking or arrangement with respect to the sale or voting of its stock or other equity interests, as applicable;
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subject to certain exceptions relating to actions within the ordinary course of Metropolitans business, create or incur any indebtedness for borrowed money (which includes any Certificate of Deposit Account
Registry Services products with maturities in excess of 120 days) or assume or guarantee the indebtedness of a third party;
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declare or pay any dividends or other distributions on any shares of its stock;
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except as required under applicable law or as contemplated by the merger agreement or any Metropolitan employee benefit plan, enter into, establish, adopt, amend, modify, renew or terminate a Metropolitan employee
benefit plan or grant or accelerate the vesting of any equity-based award;
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except as contemplated by the merger agreement, (1) grant any severance or termination pay to, or enter into
any employment, consulting or compensation agreement with, any of its directors, officers, employees or consultants, (2) grant any salary increase or increase employee benefits except in the ordinary course of business consistent with past
practice (and subject in any case to a 3.5% cap on aggregate increases in compensation to all directors, officers, employees and consultants), (3) hire, transfer, promote or terminate any employee who has a base annual compensation of $100,000 or
more
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or (4) pay any bonus of any kind or amount to any director, officer, employee or consultant except in the ordinary course of business consistent with past practice;
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sell, lease, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets, except for sales of loans and other real estate owned in the ordinary course of business (a sale of a loan or of other
real estate owned for less than 90% of its carrying value or appraised value, as applicable, will not be considered to have occurred in the ordinary course) or as required by contracts or agreements in force;
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pay, discharge or satisfy any claims, liabilities or obligations other than in the ordinary course of business and consistent with past practice;
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make, or commit to make, any capital expenditures in excess of $150,000 in the aggregate, other than pursuant to binding commitments existing on the date of the merger agreement and expenditures necessary to maintain
existing assets in good repair;
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permit the commencement of any construction of new structures or facilities upon, or purchase or lease, any of its real property in respect of any branch or other facility, or file any application, or otherwise take any
action, to establish, relocate or terminate the operation of any banking office;
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enter into any new line of business or materially change its lending, deposit, investment, underwriting, interest rate or fee pricing, originating, acquiring, selling, servicing, hedging, risk and asset-liability
management and other material banking or operating policies in any material respect other than as required by law or regulatory agreement;
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make, change or revoke any material tax election, change an annual tax accounting period or adopt or change any material tax accounting method, file any amended material tax return or settle or compromise any tax claim,
audit, assessment or dispute or surrender any right to claim a material refund of taxes;
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engage in any transaction with any of its affiliates other than in the ordinary course of business and in compliance with Regulation O;
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enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to
changes in market rates of interest;
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(1) materially restructure or materially change its investment securities portfolio, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, (2) invest in any
mortgage-backed or mortgage related securities which would be considered high-risk securities under applicable regulatory pronouncements or (3) without previously notifying and consulting with Renasant, purchase or otherwise acquire
any debt security with a remaining term as of the date of such purchase or acquisition of greater than five years for Metropolitans or Metropolitan Banks own account;
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(1) merge or consolidate with any other business or entity or incorporate or organize any subsidiary, or (2) with certain exceptions, make any other investment either by purchase of stock or securities,
contributions to capital, property transfers or purchase of any property or assets of any other person or entity;
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restructure, reorganize or completely or partially liquidate or dissolve;
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(1) settle any claim, action or proceeding other than claims, actions or proceedings in the ordinary course of business consistent with past practice involving solely money damages not in excess of $75,000 individually
or $125,000 in the aggregate, or waive, compromise, assign, cancel or release any material rights or claims or (2) agree or consent to the issuance of any judgment, order, writ, decree or injunction restricting or otherwise affecting its
business or operations; or
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knowingly fail to comply with any laws applicable to it or Metropolitan Bank in a manner adverse to its business.
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No Solicitation of Other Offers
The merger agreement provides, subject to limited exceptions described below, that Metropolitan or Metropolitan Bank will not, and will not
authorize its affiliates, officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative retained by it or its affiliates to, directly or indirectly, take any of the following actions:
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solicit, initiate, or knowingly facilitate or encourage (including by way of furnishing information or assistance), or take any other action designed to solicit, initiate, knowingly facilitate or encourage any inquiries
or the making of any proposal that constitutes, or is reasonably likely to lead to, any acquisition proposal, which is defined in the next paragraph;
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participate in any discussions, negotiations or communications regarding any acquisition proposal; or
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provide any confidential or nonpublic information or data to any person relating to an acquisition proposal.
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Metropolitan has also agreed not to release any third party from, or to waive any provisions of, any confidentiality or standstill agreements to which it is a
party with respect to any acquisition proposal. Finally, Metropolitan was required under the merger agreement to immediately cease, and cause its affiliates, officers, directors, employees and representatives to cease, any discussions or
negotiations with any other party regarding an acquisition proposal, and if requested by Renasant, Metropolitan must request the return and destruction of all confidential information provided to any third person.
For purposes of the merger agreement, the term acquisition proposal means any inquiry, proposal or offer, filing of any regulatory
application or notice or disclosure of an intention to do any of the foregoing from any person relating to any (1) direct or indirect acquisition or purchase of a business that constitutes a substantial portion of the net revenues, net income
or assets of Metropolitan, (2) direct or indirect acquisition or purchase of any class of equity securities representing 20% or more of the voting power of Metropolitan or 20% or more of the assets of Metropolitan, (3) tender offer or
exchange offer that if consummated would result in any person beneficially owning 20% or more of the voting power of Metropolitan, or (4) merger, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or
similar transaction involving Metropolitan, in each case other than transactions contemplated by the merger agreement.
Notwithstanding
the restrictions described above, the board of directors of Metropolitan may, prior to the special meeting, participate in any discussions, negotiations or communications or provide any confidential or nonpublic information or data in response to an
unsolicited bona fide written acquisition proposal if and only to the extent that it has concluded in good faith, after consultation with its financial advisers (as to financial matters) and outside legal counsel, that (1) failure to take such
actions would be inconsistent with the board of directors fiduciary duties under applicable law and (2) taking into account all legal, financial, regulatory and other aspects of the acquisition proposal and the person making it (including
any applicable termination fees, expense reimbursement provisions and conditions to consummation) that Metropolitans board of directors deems relevant as well as the terms and conditions of the merger agreement with Renasant (including any
amendments thereto that Renasant might propose), such acquisition proposal (as defined above, but substituting 50% for 20% in the definition) both is more favorable to Metropolitans stockholders from a financial point of view than the merger
with Renasant and is reasonably capable of being completed on the terms proposed. Any acquisition proposal that meets the criteria set forth in subpart (2) of the preceding sentence is referred to as a superior proposal. Prior to
providing any nonpublic information pursuant to the foregoing exception, Metropolitan must provide notice to Renasant of its intention to provide such information to the third party as well as to Renasant (if not previously provided), and
Metropolitan must have entered into a confidentiality agreement with such third party on customary terms and conditions.
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Metropolitan must notify Renasant in writing as promptly as practicable (and in no event more
than 24 hours) after receipt of any acquisition proposal, any request for nonpublic information relating to Metropolitan or Metropolitan Bank that could reasonably be expected to lead to an acquisition proposal, or any inquiry from any person
seeking to have discussions, negotiations or other communications relating to a possible acquisition proposal. Such notice shall indicate the identity of the person making the acquisition proposal, inquiry or request and the material terms and
conditions of any inquiries, requests, proposals or offers (including a copy of the most recent proposed agreement, if any), except to the extent that such material both constitutes confidential information of the third party making such acquisition
proposal under an effective confidentiality agreement and is not related to the terms and conditions of such acquisition proposal. Metropolitan must also keep Renasant informed on a reasonably current basis of the status and terms of any such
proposal, offer, information request, negotiations or discussions (including any amendments or modifications to such proposal, offer or request).
Board Recommendation
The merger agreement requires Metropolitans board of directors to recommend the approval of the
merger agreement and the merger, which recommendation is set forth in this proxy statement/prospectus. Neither the Metropolitan board of directors nor any board committee shall:
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withhold, withdraw, amend, modify or qualify (or propose publicly to withhold, withdraw, amend, modify or qualify), in a manner adverse in any respect to Renasants interests, or take any action in connection with
the special meeting inconsistent with, the boards recommendation set forth in this proxy statement/prospectus that Metropolitans stockholders approve the merger agreement and the merger; or
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approve or recommend, or publicly propose to approve or recommend, any acquisition proposal.
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Either of the
foregoing actions is referred to in this document as a change in the Metropolitan recommendation, and this term also includes the failure by Metropolitans board of directors to recommend against an acquisition proposal. Finally,
the Metropolitan board of directors may not permit Metropolitan to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other similar agreement related to an acquisition
transaction other than a permitted confidentiality agreement.
Notwithstanding the foregoing restrictions, Metropolitans board of
directors may make a change in the Metropolitan recommendation if it has determined in good faith, after consultation with its financial advisors (as to financial matters) and outside legal counsel, that its failure to take such action otherwise
would be inconsistent with the board of directors fiduciary duties under applicable law and it has both (1) complied with all of its
non-solicitation
obligations and obligations with respect to its
recommendation of the approval of the merger agreement to Metropolitans stockholders under the merger agreement and (2) undertaken the following steps:
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the board of directors has determined in good faith, after consultation with its financial advisor (as to financial matters) and its outside legal counsel, that the acquisition proposal is a superior proposal, has not
been withdrawn and continues to be a superior proposal after taking into account all adjustments to the terms of the merger agreement that may be offered by Renasant pursuant to the following bullet-points;
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Metropolitan has given Renasant at least five business days prior written notice of its intention to make a change in the Metropolitan recommendation (which notice shall specify the material terms and conditions
of any such superior proposal, including the identity of the party making the proposal) and has contemporaneously provided an unredacted copy of the relevant proposed transaction agreements with the person making such superior proposal; and
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Metropolitan has, and has caused its financial advisors and legal counsel to, negotiate with Renasant in good
faith to allow Renasant to propose changes to the terms of the merger agreement that make it unnecessary for Metropolitans board of directors to make a change in the Metropolitan
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recommendation or otherwise terminate the merger agreement. In the case of a superior proposal, this means that Renasant would propose changes to the merger agreement such that the proposal no
longer is a superior proposal. If during the negotiation period there are any material modifications to the financial terms or other material terms of the superior proposal, Metropolitan must give Renasant written notice thereof, and Renasant shall
have an additional period to propose revisions to the terms of the merger agreement. The length of this new period will be the greater of the number of days remaining in the original
five-day
notice period or
three business days.
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During this negotiation period, Metropolitan may not terminate the merger agreement unless
Renasant notifies it that it does not intend to propose revisions to the merger agreement to match or better the superior proposal.
Reasonable Best Efforts
Renasant and Metropolitan have agreed to use reasonable best efforts to take all actions that are
necessary, proper or advisable under the merger agreement and applicable laws to consummate and make effective the merger and the other transactions contemplated by the merger agreement as promptly as practicable. Renasant and Metropolitan have also
agreed to cooperate and use all reasonable best efforts to prepare as promptly as possible all documentation, to make all requisite regulatory filings and to obtain any necessary permits, consents, approvals or authorizations of governmental
entities necessary to consummate the transactions contemplated by the merger agreement as soon as practicable. Further, each of Renasant and Metropolitan must use their reasonable best efforts to resolve any objections to the merger that may be
asserted by a governmental entity. However, if a governmental entity brings a formal proceeding to contest the merger, neither party is required to answer or defend such contest or otherwise pursue the merger.
Renasant is not required to, and without Renasants prior consent, neither Metropolitan nor Metropolitan Bank may, take any action or
agree to any condition or restriction in connection with obtaining the foregoing permits, consents, waivers, approvals and authorizations if such action, condition or restriction would have, or would be reasonably expected to have, a material
adverse effect on Renasant or Metropolitan.
Employee Matters
For employees of Metropolitan and its subsidiaries who become employees of Renasant or its subsidiaries after the merger, Renasant will either
offer such employees coverage under similar Renasant employee benefit plans or maintain the existing Metropolitan benefit plans. Renasant will recognize transferred employees service with Metropolitan and Metropolitan Bank as service with
Renasant or any subsidiary or affiliate thereof, as the case may be, for purposes of eligibility to participate and vesting under seniority-based benefit arrangements, such as vacation accrual and severance benefits, to the same extent as provided
under the corresponding provisions of Metropolitans plans, without any duplication of benefits.
Renasant will provide continuation
coverage as required under COBRA to former employees of Metropolitan and their beneficiaries who were entitled to COBRA coverage immediately prior to the closing of the merger. Renasant has agreed that any preexisting condition, limitation or
exclusion in its group health, long-term disability and group term life insurance plans shall not apply to transferred employees or their covered dependents who are covered under similar plans maintained by Metropolitan or Metropolitan Bank at
closing to the extent such condition, limitation or exclusion is waived, satisfied or inapplicable to such employee under a Metropolitan or Metropolitan Bank plan on the closing date of the merger and who then change coverage to the analogous
Renasant plan when the employee is first given the option to enroll. The merger agreement does not restrict the ability of Renasant, Renasant Bank or any other Renasant employer to amend, merge or terminate Metropolitans employee benefit plans
in accordance with their terms or applicable law.
Prior to the effective time, Metropolitan will adopt resolutions to terminate its
401(k) plan, effective as of the day prior to the closing date and provided that such termination shall be contingent on the closing of the
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merger. After the closing date, Renasant will assume sponsorship of the 401(k) plan for the sole purpose of administering termination benefits thereunder.
Any employee of Metropolitan or Metropolitan Bank who has been employed for at least six months (other than employees who are parties to an
employment, severance or change in control agreement that provides for severance benefits) and who is involuntarily terminated without cause (as defined in the merger agreement) in connection with, or within six months after, the merger
will be entitled to receive severance payments from Renasant. The amount of such severance is equal to two weeks of an employees base pay (calculated as of the termination of employment or, if greater, the effective time) for each full year
such employee was employed by Metropolitan or Metropolitan Bank or any predecessor entity, with a minimum of four weeks of pay and a maximum of sixteen weeks of pay. Any employee receiving severance must execute and deliver a waiver and
release in favor of Metropolitan, Metropolitan Bank, Renasant and Renasant Bank (as successors to Metropolitan and Metropolitan Bank).
Directors and Officers Insurance and Indemnification
The merger agreement provides that for a period of six years
following the closing date of the merger Renasant will indemnify and hold harmless the current and former directors and officers of Metropolitan and any of its subsidiaries, and their heirs, personal representatives and estates. Current Metropolitan
directors and officers are entitled to indemnity only if such persons sign a joinder agreement with Renasant allowing Renasant to participate in or completely assume the defense of any claim for which indemnification may be sought. The
indemnification applies to acts or omissions occurring at, prior to or after the closing date of the merger. The indemnification will be provided to the same extent as such Metropolitan directors or officers would be indemnified under
Metropolitans amended and restated certificate of incorporation, as amended, and bylaws in effect on the date of the merger agreement. The agreement also requires such officer or director to cooperate in the defense of any action for which
indemnification is sought. Renasant will indemnify such individuals against, and shall advance or reimburse any and all costs and expenses of, any judgments, interest, fines, damages or other liabilities, or amounts paid in settlement, as such are
incurred in connection with any claim, action, suit or proceeding based upon or arising from the indemnified partys capacity as an officer or director of Metropolitan or any of its subsidiaries. No indemnity will be provided, however, if the
claim against the Metropolitan director or officer arises on account of his or her service on the board of another
for-profit
entity. Any amounts otherwise owed by Renasant pursuant to its indemnification
obligations will be reduced by any amounts that an indemnified party receives from any third party.
Renasant has also agreed to indemnify
and hold harmless Metropolitan and Metropolitan Bank and each of the directors, officers and controlling persons of either against any losses, claims, damages or liabilities arising under the Securities Act or otherwise. Renasant will indemnify such
individuals only insofar as such losses, claims, damages or liabilities (or actions in respect of any of the foregoing) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in this proxy
statement/prospectus, or in any amendment or supplement, or arising out of or based upon the omission or alleged omission to state in any such document a material fact required to be stated or necessary to make the statements in such document not
misleading. Renasant will pay or promptly reimburse such person for any legal or other expenses reasonably incurred in connection with investigating or defending any such action or claim. Renasant, however, is not obligated to indemnify such persons
with respect to any such loss, claim, damage or liability (or actions in respect of any of the foregoing) which arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in this proxy
statement/prospectus, or in any amendment or supplement, in reliance upon information furnished to Renasant by Metropolitan or Metropolitan Bank for use in this proxy statement/prospectus. Renasant is entitled to participate in, or assume, the
defense of any such action. If Renasant assumes the defense with counsel satisfactory to the indemnified party, after notice to the indemnified party of its election to assume the defense, Renasant will not be liable for any legal or other expenses
of defense incurred by the indemnified party. If Renasant elects not to assume such defense, or if counsel for the indemnified party advises that there are conflicts of interest between Renasant and the indemnified parties, such parties may retain
their own counsel, at Renasants expense.
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Metropolitan has also agreed to obtain a six year tail prepaid directors and
officers liability insurance policy(ies). The insurance policy(ies) must cover acts or omissions occurring prior to the closing date of the merger. The policy(ies) must be in the same coverage amount and otherwise on terms substantially
similar to those in effect for Metropolitan immediately prior to the effective time. However, Metropolitan is not permitted to pay an aggregate premium for such insurance coverage in excess of 300% of the premium for such coverage as currently held
by Metropolitan. In such event, Metropolitan shall purchase as much coverage as reasonably practicable for 300% of the premium amount.
Voting Agreements
Each director of Metropolitan and Metropolitan Bank has signed an agreement with Renasant obligating such
person, in his or her capacity as a Metropolitan stockholder, to vote his or her shares of Metropolitan common stock in favor of the merger agreement. The voting agreements signed by
non-employee
directors of
Metropolitan contain one feature not found in the analogous agreements signed by directors who are also Metropolitan employees: for a period of two years following the closing of the merger, those
non-employee
directors are prohibited from, directly or indirectly, engaging in a competitive business, or soliciting Renasant customers with respect to any competitive business, in the State of Mississippi and the State of Tennessee. These
non-employee
directors are also prohibited from directly or indirectly soliciting employees, contractors or agents of Renasant in any geographic area during this
two-year
period. In these agreements, a
non-employee
director will be engaged in a competitive business if he engages in the business of banking.
In addition, two Metropolitan stockholders affiliated with two of Metropolitans directors and that each own approximately 10% of
Metropolitans outstanding common stock have also signed voting agreements in favor of Renasant. These voting agreements are on terms substantially the same as the agreements signed by Metropolitans directors who are employees.
Conditions to the Completion of the Merger
The obligation of Renasant, on the one hand, and the obligation of Metropolitan, on the other hand, to complete the merger are subject, but not
limited, to the fulfillment or, in certain cases, waiver of the following conditions:
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The parties must have received all necessary regulatory, governmental and other approvals and consents required to complete the merger of Metropolitan into Renasant and the merger of Metropolitan Bank into Renasant
Bank, except for any
non-governmental
consent or approval that would not reasonably be expected to have a material adverse effect on Metropolitan or Renasant.
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Stockholders of Metropolitan shall have approved the merger agreement and the merger.
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There shall be no legal prohibition to the merger, nor shall there be any action by a government entity of competent jurisdiction which in effect prohibits and makes the completion of the merger illegal.
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The registration statement of which this proxy statement/prospectus forms a part shall be effective (with no stop order suspending the effectiveness of the registration statement), and the shares of Renasant common
stock being registered shall have been approved for listing on Nasdaq, subject to notice of issuance.
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Renasant Bank and Curtis J. Gabardi shall have entered into the employment agreement described in The MergerInterests of Certain Metropolitan Directors and Executive Officers in the Merger above;
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Customary legal opinions as to the U.S. federal income tax treatment of the merger shall have been delivered.
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The representations and warranties in the merger agreement of Metropolitan and Metropolitan Bank, as to
Renasants obligation to complete the merger, and the representations and warranties in the merger
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agreement of Renasant and Renasant Bank, as to Metropolitans obligation to complete the merger, must be true and correct as of the date of the merger agreement and as of the effective time
as though made as of the effective time (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date), except for inaccuracies of representations or warranties which,
individually or in the aggregate, have not had, and would not be expected to have, a material adverse effect on such other party to the merger agreement (other than certain representations and warranties relating to bank regulatory matters, which
must be true and correct in all material respects).
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The other party to the merger agreement must have performed in all material respects all of its obligations under the merger agreement.
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The parties shall have executed and delivered the articles of merger and the certificate of merger and analogous documents for the merger of Metropolitan Bank with and into Renasant Bank.
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No material adverse effect shall have occurred with respect to the other party.
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The
obligations of Renasant under the merger agreement to complete the merger are also subject to the fulfillment, on or prior to the closing date of the merger, of the following conditions (any one or more of which may be waived by Renasant to the
extent permitted by law):
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Metropolitan stockholders who exercise their appraisal rights in the merger must not hold more than 5% of the outstanding shares of Metropolitan common stock immediately prior to the effective time.
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Metropolitans board of directors shall have adopted resolutions terminating Metropolitans 401(k) plan effective as of the closing date of the merger.
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Metropolitan shall have delivered consents from certain specified individuals regarding the cancellation and
cash-out
of their stock options.
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We cannot provide assurance as to when or if all of the conditions to the merger can or will be satisfied or waived by the appropriate party.
As of the date of this proxy statement/prospectus, we have no reason to believe that any of these conditions will not be satisfied.
T
ermination of the Merger Agreement
Subject to certain limitations, the merger agreement may be terminated at any time prior to
the closing date of the merger, whether before or after approval of the merger agreement by Metropolitans stockholders:
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by mutual written consent of Renasant and Metropolitan;
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by Renasant or Metropolitan if:
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the effective time of the merger shall not have occurred on or prior to December 31, 2017, unless the closing is delayed because approval by a governmental entity is pending and has not been finally resolved or
because any stockholder litigation challenging the merger agreement has not been resolved (by dismissal, settlement or otherwise), in which event such date shall be automatically extended to March 31, 2018, unless the failure to complete the
merger by that date is due to the breach of the merger agreement by the party seeking to terminate;
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Metropolitans stockholders do not approve the merger agreement at the special meeting, unless the failure to receive such approval is due to the breach of the merger agreement by the party seeking to terminate;
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30 days pass after any application for regulatory or governmental approval is denied or withdrawn at the request
or recommendation of the governmental entity, unless within such
30-day
period a petition for rehearing or an amended application is filed. A party may terminate 30 or more days
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after a petition for rehearing or an amended application is denied. No party may terminate when the denial or withdrawal is due to that partys failure to observe or perform its covenants or
agreements set forth in the merger agreement;
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any governmental entity shall have issued a final,
non-appealable
order enjoining the completion of the merger;
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if there is a breach of or failure to perform any of the representations, warranties, covenants or undertakings under the merger agreement by the other party that prevents it from satisfying any of the closing
conditions to the merger and such breach or failure to perform, cannot be or has not been cured within 30 days after the breaching party receives written notice of such breach;
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Renasant elects not to propose revisions to the merger agreement to match or better a superior proposal;
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Metropolitans board of directors makes a change in the Metropolitan recommendation;
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Metropolitan fails to convene the special meeting to approve the merger agreement;
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Metropolitan authorizes, recommends, or publicly announces its intention to authorize or recommend, an acquisition proposal by a third party;
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holders of more than 5% of the shares of Metropolitans common stock outstanding at any time prior to the closing date of the merger exercise appraisal rights; or
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by Metropolitan, in order to enter into a definitive agreement with respect to a superior proposal, except that Metropolitan may not terminate the merger agreement if it has materially breached its
non-solicitation
obligations or its obligations with respect to the board recommendation to Metropolitan stockholders. Also, any such purported termination shall be void unless Metropolitan has paid the termination
fee.
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Termination Fee
Under certain circumstances, Metropolitan may owe Renasant a termination fee if the merger agreement is terminated. In all cases, the
termination fee is $6.8 million plus all of Renasants reasonable costs and documented expenses, up to $650,000, incurred in connection with the merger agreement and the transactions contemplated thereby, including legal, accounting and
investment banking fees and expenses. The payment of the termination fee is the exclusive remedy available to Renasant if the merger agreement is terminated under the circumstances described below.
Under the first set of circumstances, prior to any event allowing either party to terminate the merger agreement, an acquisition proposal must
have been publicly announced or otherwise made known to Metropolitans senior management, board of directors or stockholders generally and not have been irrevocably withdrawn more than five business days prior to the special meeting. Next, the
merger agreement must have been terminated either (1) by Renasant or Metropolitan, because Metropolitans stockholders failed to approve the merger agreement, or (2) by Renasant, because of a willful breach or failure to perform by
Metropolitan of any covenant, undertaking, representation or warranty contained in the merger agreement, which breach cannot be or has not been cured within 30 days following delivery of written notice of the breach. In such event, if Metropolitan
enters into a definitive agreement with respect to the acquisition proposal or the acquisition proposal is consummated with the third party whose acquisition proposal precipitated the termination of the merger agreement within 12 months of
termination, then on the earlier of the date of such definitive agreement is executed or the date of such consummation Metropolitan must pay Renasant the termination by wire transfer of
same-day
funds.
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Alternatively, if (1) Renasant terminates the merger agreement under any of the
circumstances described under the third bullet point in the Termination of the Merger Agreement subsection immediately above (except for the last
sub-bullet
point in the third bullet point), or
(2) Metropolitan terminates the merger agreement under the circumstances described under the fourth bullet point in the Termination of the Merger Agreement subsection immediately above, then in either case Metropolitan is required
to pay Renasant the termination fee by wire transfer of
same-day
funds. A termination under these circumstances is not effective until Renasant receives such funds. In no event shall Metropolitan be required
to pay the termination fee to Renasant more than once.
If Metropolitan fails promptly to pay the termination fee, as described
immediately above, and Renasant sues for such fee and wins a judgment against Metropolitan, Metropolitan must also pay to Renasant its costs and expenses (including reasonable attorneys fees and expenses) in connection with such suit.
Amendment and Waiver
Subject to applicable law, the parties may amend the merger agreement by written agreement if so authorized by their respective boards of
directors. However, after Metropolitan stockholders have approved the merger agreement, there may not be, without further stockholder approval, any amendment of the merger agreement that requires further stockholder approval under applicable law.
Either party to the merger agreement may, subject to applicable law, extend the time for performance of any obligation of the other party, waive any inaccuracies in the representations and warranties of the other party or waive compliance by the
other party with any of the other agreements or conditions contained in the merger agreement.
Expenses
Regardless of whether the merger is completed, all expenses incurred in connection with the merger, the bank merger, the merger agreement and
other transactions contemplated thereby will be paid by the party incurring the expenses, except that Renasant and Metropolitan will share equally the costs and expenses of printing and mailing this proxy statement/prospectus as well as the filing
fee for the Registration Statement on Form
S-4
of which this proxy statement/prospectus is a part and all other fees related to the merger and the bank merger.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
Subject to the limitations, assumptions and qualifications described herein and customary limitations, factual assumptions and
qualifications in their respective legal opinions, it is the opinion of each of Phelps Dunbar LLP and Troutman Sanders LLP that the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of Metropolitan common
stock that exchange their shares of Metropolitan common stock for shares of Renasant common stock in the merger are as described below. The tax opinions of outside legal counsel for each of Renasant and Metropolitan have been filed as Exhibit 8.1
and Exhibit 8.2, respectively, to the registration statement on Form
S-4
of which this proxy statement/prospectus is a part. These opinions, however, will not bind the IRS or the courts. No assurance can be
given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences set forth below.
The following is a general discussion of the anticipated material U.S. federal income tax consequences of the merger to U.S. holders that hold
shares of Metropolitan common stock as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion is based upon, and subject to, the Code, legislative history, the treasury
regulations promulgated under the Code, as well as published administrative rulings and judicial decisions relating thereto, all as in effect as of the date of this proxy statement/prospectus. All of these authorities are subject to change, possibly
with retroactive effect. Any such change could materially affect the continuing validity of this discussion. Tax laws are complex, and your individual circumstances may affect the tax consequences to you. We urge you to consult a tax advisor
regarding the tax consequences of the merger to you.
This discussion does not address the tax consequences of the merger under
non-income,
state, local, foreign or other tax laws, nor does it address any tax consequences arising under the unearned income Medicare contribution tax pursuant to Section 1411 of the Code. The following is
not intended to be a complete description of the U.S. federal income tax consequences of the merger to all holders of Metropolitan common stock in light of their particular circumstances or to holders of Metropolitan common stock subject to special
treatment under U.S. federal income tax laws, such as:
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entities treated as
S-corporations,
partnerships or other pass-through entities for U.S. federal income tax purposes or holders of Metropolitan common stock who hold their shares
through entities treated as
S-corporations,
partnerships or other pass-through entities for U.S. federal income tax purposes;
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banks, thrifts or other financial institutions;
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tax-exempt
organizations;
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qualified retirement plans and individual retirement accounts;
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brokers or dealers in securities or currencies;
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traders in securities that elect to use a
mark-to-market
method of accounting;
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regulated investment companies;
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real estate investment trusts;
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persons whose functional currency is not the U.S. dollar;
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persons who own more than 1.0% of Metropolitans outstanding common stock;
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former citizens or residents of the United States;
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stockholders subject to the alternative minimum tax provisions of the Code;
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stockholders who received their stock upon the exercise of employee stock options or otherwise acquired their stock as compensation;
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persons who purchased or sell their shares of Metropolitan common stock as part of a wash sale; or
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stockholders who hold Metropolitan common stock as part of a hedge, straddle or other risk reduction mechanism, constructive sale, or conversion transaction, as these
terms are used in the Code.
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A U.S. holder of Metropolitan common stock, referred to in this discussion as a holder
of Metropolitan common stock, means a beneficial owner of Metropolitan common stock that is for U.S. federal income tax purposes (1) an individual citizen or resident of the United States, (2) a corporation (or other entity treated as a
corporation for U.S. federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia, (3) a trust if (a) a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) such trust has made a valid election to be treated as a U.S. person for U.S. federal
income tax purposes, or (4) an estate that is subject to U.S. federal income tax on its income regardless of the source of the income.
If a partnership (including any entity or arrangement that is treated as a partnership for U.S. federal income tax purposes) holds
Metropolitan common stock, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Partnerships holding Metropolitan common stock and their partners should consult their tax advisers
about the tax consequences of the merger to their particular circumstances.
Qualification of the Merger as a
Reorganization
Subject to the limitations, assumptions and qualifications described herein, the merger will qualify as
a reorganization within the meaning of Section 368(a) of the Code. Accordingly, and as discussed in greater detail below, no gain or loss will be recognized for U.S. federal income tax purposes in respect of the receipt of Renasant
common stock, except for any gain or loss that may result from the receipt of cash instead of fractional shares of Renasant common stock. The obligation of Renasant to complete the merger is conditioned upon the receipt of a tax opinion from Phelps
Dunbar LLP, Renasants tax counsel, dated as of the closing date of the merger, to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Code. Similarly, the obligation of
Metropolitan to complete the merger is conditioned upon the receipt of a tax opinion from Troutman Sanders LLP, Metropolitans tax counsel, dated as of the closing date of the merger, to the effect that the merger will constitute a
reorganization within the meaning of Section 368(a) of the Code. Renasant and Metropolitan each has the ability to waive the condition to obtain a tax opinion as described in this paragraph; however, neither Renasant nor Metropolitan
currently intends to waive this opinion condition to its obligation to consummate the merger. If either Renasant or Metropolitan waives this opinion condition after the registration statement of which this proxy statement/prospectus forms a part is
declared effective by the SEC, and if the tax consequences of the merger to holders of Metropolitan common stock have materially changed, Renasant and Metropolitan will recirculate appropriate soliciting materials to resolicit the votes of
Metropolitan stockholders.
The issuance of these opinions are and will be subject to customary factual assumptions, including assumptions
regarding the absence of changes in existing facts and the completion of the merger strictly in accordance with the merger agreement and the registration statement. In rendering their tax opinions, each counsel is entitled to rely upon
representation letters executed by officers of Renasant and Metropolitan, reasonably satisfactory in form and substance to each such counsel. If any of these assumptions or representations are inaccurate in any way, the tax opinions could be
adversely affected. Neither of these opinions of counsel is binding on the IRS or the courts, and neither Renasant nor Metropolitan have requested, nor do they intend to request, a ruling from the IRS as to the U.S. federal income tax consequences
of the merger.
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Consequently, no assurance can be given that the IRS will not assert, or that a court would not sustain, a position contrary to the consequences set forth below. In addition, if any of the
representations or assumptions upon which the opinions are based are inconsistent with the actual facts, the U.S. federal income tax consequences of the merger could be adversely affected. Accordingly, each holder of Metropolitan common stock should
consult its tax advisor with respect to the particular tax consequences of the merger to such holder.
Tax Consequences
to Renasant and Metropolitan
Each of Renasant and Metropolitan will be a party to the merger within the meaning of Section 368(b)
of the Code. Neither Renasant nor Metropolitan will recognize any gain or loss as a result of the merger, except for, in the case of Metropolitan, gain, if any, that has been deferred in accordance with the consolidated return regulations.
Tax Consequences to Metropolitan Stockholders
Exchange of Metropolitan Common Stock Solely for Renasant Common Stock
. No gain or loss will be recognized by holders of Metropolitan
common stock upon the exchange of shares of Metropolitan common stock for shares of Renasant common stock pursuant to the merger, except in respect of cash received in lieu of any fractional share of Renasant common stock (as discussed below).
Cash Received in Lieu of a Fractional Share
. A holder of Metropolitan common stock who receives cash in lieu of a fractional share of
Renasant common stock will generally be treated as having received such fractional share pursuant to the merger and then as having received cash in exchange for such fractional share. Gain or loss generally will be recognized by such holder of
Metropolitan common stock in an amount equal to the difference between the amount of cash received in lieu of the fractional share of Renasant common stock and the portion of the holders aggregate adjusted tax basis of the Metropolitan shares
allocable to the fractional share of Renasant common stock. Such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for such shares of
Metropolitan common stock by the holder thereof is more than one year. The deductibility of capital losses is subject to limitations.
Tax Basis of Renasant Common Stock Received in the Merger
. The aggregate tax basis of the Renasant common stock received in the merger
by a holder of Metropolitan common stock will equal the aggregate tax basis of the Metropolitan common stock surrendered in the exchange reduced by any basis allocable to a fractional share of Renasant common stock deemed received and exchanged for
cash in the merger (as described above). If a U.S. holder acquired different blocks of Metropolitan common stock at different prices, the Renasant common stock such holder receives in the merger will be allocated pro rata to each block of
Metropolitan common stock, and the basis of each block of Renasant common stock such holder receives will be determined on a
block-for-block
basis depending on the basis
of the blocks of Metropolitan common stock exchanged for such block of Renasant common stock.
Holding Period for Renasant Common Stock
Received in the Merger
. The holding period for any Renasant common stock received in the merger by a holder of Metropolitan common stock will include the holding period of the Metropolitan common stock surrendered in the exchange. If a U.S.
holder acquired different blocks of Metropolitan common stock at different times, the Renasant common stock such holder receives in the merger will be allocated pro rata to each block of Metropolitan common stock, and the holding period of each
block of Renasant common stock such holder receives will be determined on a
block-for-block
basis depending on the holding period of the blocks of Metropolitan common
stock exchanged for such block of Renasant common stock.
Appraisal Rights
. The discussion above does not apply to holders of
Metropolitan common stock who properly exercise appraisal rights. Upon the proper exercise of appraisal rights, a holder of Metropolitan common stock will exchange all of the shares of Metropolitan common stock actually owned by that holder solely
for cash
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and that holder generally will recognize gain or loss equal to the difference between the amount of cash received and the holders adjusted tax basis in the shares of Metropolitan common
stock surrendered. Such gain or loss generally will be long-term capital gain or loss if the holders holding period with respect to the Metropolitan common stock surrendered is more than one year at the time of such exchange.
The tax rules applicable to holders who exercise appraisal rights are complex and dependent upon the specific factual circumstances particular
to each holder. Consequently, we urge each holder that may be subject to these rules to consult its tax advisor as to the application of these rules to the particular facts relevant to such holder.
Backup Withholding and Information Reporting
In general, information reporting requirements may apply to the cash payments made to
non-corporate
U.S. holders of Metropolitan common stock in connection with the merger, unless an exemption applies. Backup withholding may be imposed on such payments at a rate of 28% if a holder of Metropolitan common stock (1) fails to provide a taxpayer
identification number or appropriate certificates or (2) otherwise fails to comply with all applicable requirements of the backup withholding rules.
Any amounts withheld from payments to holders of Metropolitan common stock under the backup withholding rules are not an additional tax and
will be allowed as a refund or credit against such holders applicable U.S. federal income tax liability, provided the required information is timely furnished to the IRS. Holders of Metropolitan common stock should consult their own tax
advisors regarding the application of backup withholding based on their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding.
Certain Reporting Requirements
If a holder of Metropolitan common stock that receives Renasant common stock in the merger is considered a significant holder, it
will be required (1) to file a statement with its U.S. federal income tax return providing certain facts pertinent to the merger, including such holders tax basis in, and the fair market value of, the Metropolitan common stock surrendered
by such holder, and (2) to retain permanent records of these facts relating to the merger. A significant holder is any holder of Metropolitan common stock that, immediately before the merger, owned at least 1% (by vote or value) of
Metropolitans outstanding stock or owned Metropolitan securities with a federal tax basis of $1 million or more. The statement must be prepared in accordance with Treasury Regulation Section
1.368-3(b)
and must be entitled STATEMENT PURSUANT TO
§1.368-3(b)
BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER], A SIGNIFICANT
HOLDER. The statement must include the information set forth in such regulation, including the names and employer identification numbers of Metropolitan and Renasant, the date of the merger, and the fair market value and tax basis of
Metropolitan common stock exchanged (determined immediately before the merger).
Pursuant to Treasury Regulation Section 1.368-3(d), all
holders of Metropolitan common stock who receive Renasant common stock in the merger are required to maintain certain information relating to the merger in their permanent records, specifically including information regarding the amount, basis, and
fair market value of all transferred property, and relevant facts regarding any liabilities assumed or extinguished as part of such merger, as applicable. All such holders should consult their own tax advisors regarding information maintenance
requirements.
THE FOREGOING DISCUSSION DOES NOT ADDRESS TAX CONSEQUENCES THAT VARY WITH OR ARE CONTINGENT ON INDIVIDUAL CIRCUMSTANCES. MOREOVER, IT
DOES NOT ADDRESS ANY
NON-INCOME,
FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE MERGER. THIS DISCUSSION IS NOT A SUBSTITUTE FOR AN INDIVIDUAL ANALYSIS OF THE TAX CONSEQUENCES OF THE MERGER TO YOU. WE URGE YOU
TO CONSULT A TAX ADVISOR REGARDING THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE MERGER TO YOU.
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DESCRIPTION OF RENASANT CAPITAL STOCK
This section describes the material features and rights of Renasants capital stock after the merger. The following discussion is only a
summary and is subject to and qualified in its entirety by reference to the Renasant Articles and the Renasant Bylaws as well as the Mississippi Business Corporation Act, which we refer to as the MBCA, and other applicable provisions of Mississippi
law. See Where You Can Find More Information on page
. Additional information regarding Renasants capital stock can be found in the next section, entitled Comparison of
Rights of Stockholders of Metropolitan and Renasant beginning on page
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General
The authorized capital stock of Renasant consists of 150 million shares of common stock, par value $5.00 per share, and 5 million
shares of preferred stock, no par value per share, none of which are issued and outstanding. As of , a total
of shares of Renasant common stock were issued and outstanding, and
approximately shares of common stock were reserved for issuance pursuant to Renasants employee benefit plans. After the merger with Metropolitan (using an
exchange ratio of 0.6066 resulting in an issuance of approximately shares),
approximately shares of Renasants common stock will be outstanding. Renasant common stock is listed on Nasdaq under the symbol RNST.
Common Stock
Voting Rights
.
Holders of shares of Renasant common stock are entitled to one vote per share on all matters submitted to a vote of stockholders, including the election of directors. In general, a majority of votes cast on a matter, whether in person or by
proxy, at a meeting of stockholders at which a quorum is present is sufficient to take action on such matter, except that supermajority votes are required to approve specified business combinations as well as the amendment of the provisions of the
Renasant Articles relating to such elevated approval requirements and related to Renasants classified board of directors. Directors are elected by a plurality of votes cast, and stockholders do not have cumulative voting rights.
Dividends
.
Subject to certain restrictions under the MBCA, holders of Renasant common stock are entitled to receive dividends or
distributions, whether payable in cash or otherwise, if, as and when declared by Renasants board of directors, out of funds legally available for these payments.
As a bank holding company, Renasants ability to pay dividends is substantially dependent on the ability of Renasant Bank to transfer
funds to it in the form of dividends, loans and advances. Under Mississippi law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A Mississippi bank with earned surplus in excess of three
times capital stock may pay a dividend, subject to the approval of the Mississippi Department of Banking and Consumer Finance. Accordingly, the approval of this supervisory authority is required prior to Renasant Bank paying dividends to Renasant.
Election of Directors
.
Renasants board of directors is divided into three classes of directors serving staggered
three-year terms. Each class of directors consists, as nearly as possible, of
one-third
of the total number of directors. Under the Renasant Articles, the affirmative vote of the holders of at least 80% of the
total outstanding shares of Renasant common stock entitled to vote in the election of directors is required to alter, amend, repeal or adopt any provision inconsistent with the provisions of the Renasant Articles governing Renasants classified
board of directors.
Liquidation
.
Renasant stockholders are entitled to share ratably in Renasants assets legally
available for distribution to Renasants stockholders in the event of its liquidation, dissolution or winding up, whether voluntary or involuntary, after payment of, or adequate provision for, all of Renasants known debts and liabilities.
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Other
.
Holders of shares of Renasant common stock have no preference, conversion or
exchange rights and have no preemptive rights to subscribe for securities Renasant proposes to issue. There are no sinking fund provisions applicable to Renasant common stock. All outstanding common stock is, when issued against payment therefor,
fully paid and
non-assessable.
Such shares are not redeemable at the option of Renasant or holders thereof. Finally, subject to Nasdaq rules, Renasants board of directors may issue additional shares of
common stock or rights to purchase shares of common stock without the approval of Renasant stockholders.
Preferred Stock
No shares of preferred stock are outstanding. Renasants board of directors may, without further action by the stockholders of Renasant,
issue one or more series of Renasant preferred stock and fix the rights and preferences of those shares, including the dividend rights, conversion rights, exchange rights, voting rights, terms of redemption, redemption price or prices, liquidation
preferences, the number of shares constituting any series and the designation of such series.
Transfer Agent and Registrar
The transfer agent and registrar for Renasant common stock is Computershare, Inc.
Anti-Takeover Provisions of the Renasant Articles
The Renasant Articles contain certain provisions that may make it more difficult to acquire control of Renasant by means of a tender offer,
open market purchase, proxy contest or otherwise.
Classified Board of Directors.
As described above, Renasants board of
directors is divided into three classes, with directors serving staggered three-year terms. The classification of Renasants board of directors has the effect of making it more difficult for stockholders to change the composition of
Renasants board of directors. At least two annual meetings of stockholders, instead of one, will generally be required to effect a change in a majority of Renasants board of directors. This may have the effect of discouraging a third
party from initiating a proxy contest, making a tender offer or otherwise attempting to obtain control of Renasant. In addition, because the classification of Renasants board of directors may discourage accumulations of large blocks of
Renasants common stock by purchasers whose objective is to take control of Renasant and remove a majority of Renasants board of directors, the classification of Renasants board of directors could tend to reduce the likelihood of
fluctuations in the market price of Renasant common stock that might result from accumulations of large blocks of Renasant common stock for such a purpose. Accordingly, Renasants stockholders could be deprived of certain opportunities to sell
their shares at a higher market price than might otherwise be the case.
Fair Price Provision.
Under the fair price
provision of the Renasant Articles, the affirmative vote of the holders of not less than 80% of the outstanding shares of all voting stock of Renasant and the affirmative vote of the holders of not less than 67% of the outstanding shares of voting
stock held by stockholders other than the controlling party is required for the approval or authorization of any merger, consolidation, sale, exchange or lease of all of the assets or of assets having a fair market or book value of 25%
or more of Renasants total assets. These provisions only apply if the subject transaction involves a controlling party. A controlling party is a stockholder owning or controlling 20% or more of Renasants voting stock at the
time of the proposed transaction.
The elevated voting requirements described above are not applicable in any transaction in which
(1) the cash or fair market value of the property, securities or other consideration to be received (which includes common stock of Renasant retained by its existing stockholders in such a transaction where Renasant is the surviving entity) per
share by holders of Renasant common stock in such transaction is not less than the highest per share price (with appropriate adjustments for stock splits, recapitalizations and the like) paid by the controlling party in the acquisition of any of its
holdings of Renasant common stock in the three years preceding the announcement of the proposed transaction or (2) the transaction is approved by a majority of the entire board of directors.
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Authority to Issue Blank Check Preferred Stock.
As noted above,
Renasants board of directors is authorized to issue, without any further approval from Renasants stockholders, a series of preferred stock with the designations, preferences and relative participating, optional or other special rights,
and the qualifications, limitations or restrictions, as the board determines in its discretion. This authorization may operate to provide anti-takeover protection because, in the event of a proposed merger, tender offer or other attempt to gain
control of Renasant that the board of directors does not believe is in Renasants or Renasants stockholders best interests, the board has the ability to quickly issue shares of preferred stock with certain rights, preferences and
limitations that could make the proposed takeover attempt more difficult to complete. Such preferred stock may also be used in connection with the issuance of a stockholder rights plan, sometimes called a poison pill.
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COMPARISON OF RIGHTS OF STOCKHOLDERS OF METROPOLITAN AND RENASANT
If the merger is completed, holders of Metropolitan common stock will exchange their shares of stock in a Delaware corporation,
governed by the laws of the State of Delaware, including the DGCL, as well as the Metropolitan Certificate and the Metropolitan Bylaws, for shares of common stock of Renasant, a Mississippi corporation governed by the MBCA and the Renasant Articles
and the Renasant Bylaws. This section of the proxy statement/prospectus summarizes the material differences between the current rights of the holders of Metropolitan common stock and the rights those stockholders will have as Renasant stockholders
following the merger.
The following summary is intended only to highlight certain aspects of the DGCL and the MBCA and certain material
differences between the rights of the holders of Metropolitan common stock and the rights of the Renasant stockholders. It does not purport to be a complete statement of all of the differences affecting the rights of a Metropolitan stockholder and
the rights of a Renasant stockholder. Further, the identification of specific provisions or differences is not meant to indicate that other equally significant differences do not exist.
The summary is qualified in its entirety by reference to the DGCL, the MBCA, the Renasant Articles and the Renasant Bylaws, and the
Metropolitan Certificate and the Metropolitan Bylaws. See Where You Can Find More Information on page
for information regarding how to receive a copy of these documents.
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Provision
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Renasant
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Metropolitan
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Authorized Capital Stock
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Renasants authorized capital stock consists of 150,000,000 shares of common stock, par value $5.00 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. The Renasant Articles
authorize Renasants board of directors to issue shares of preferred stock in one or more series and to fix the designations, preferences, rights, qualifications, limitations or restrictions of the shares of Renasant preferred stock in each
series. As of , 2017, there were shares
of Renasant common stock outstanding. No shares of Renasant preferred stock were issued and outstanding as of that date.
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Metropolitans authorized capital stock consists of 20,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. The Metropolitan Certificate
authorizes Metropolitans board of directors to issue shares of preferred stock in one or more series and to fix the stated values, designations, powers, preferences, rights, qualifications, limitations or restrictions of the shares of
Metropolitan preferred stock in each series. As of April 20, 2017, there were 7,462,349 shares of Metropolitan common stock outstanding, and no shares of Metropolitan preferred stock were outstanding.
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Voting Limitations
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The Renasant Articles do not limit the number of shares held by a stockholder that may be voted by such stockholder.
The MBCA contains a control share acquisition statute that limits the voting power of a
stockholder under certain circumstances. However, this statute does not apply to Renasant because it is a bank holding company.
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The Metropolitan Certificate does not limit the number of shares held by a stockholder that may be voted by such stockholder.
The DGCL contains a business combinations with interested stockholders
provision that imposes heightened approval requirements on mergers and other business combination transactions under certain circumstances. However, this statute does not apply to Metropolitan because it is not a public company nor does it have more
than 2,000 stockholders.
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Provision
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Renasant
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Metropolitan
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Board of Directors; Election of Directors
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The Renasant Articles provide for a board of directors consisting of between seven and 20 directors as fixed from time to time by
Renasants board of directors. Currently, there are 16 directors on Renasants board of directors.
The Renasant board of directors is classified into three classes, with approximately
one-third
of the directors elected
at each years annual meeting of stockholders. In the election of directors, Renasant stockholders do not have the right to cumulate their votes. The candidates in each class up for election who receive the highest number of votes cast, up to
the number of directors to be elected in that class, are elected.
Renasant has adopted
a majority voting policy which applies in an uncontested election of directors. Under this policy, any nominee for director who receives a greater number of withhold votes from his or her election than votes for
such election, although still elected as a director, must promptly tender his or her resignation, which will become effective upon acceptance by Renasants board of directors.
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The Metropolitan Bylaws provide for a board of directors consisting of between one and 15 directors as fixed from time to time by
Metropolitans board of directors or stockholders. Currently, there are 11 directors on Metropolitans board of directors.
All of Metropolitans directors are elected annually by a plurality of votes cast. Metropolitan stockholders do not have the right to cumulate their
votes.
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Stockholder Nominations and Proposals
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Renasant is a public company and, as such, is subject to the SECs proxy rules set forth in Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act), including Rule
14a-8.
Rule
14a-8
establishes the rules for stockholder proposals intended to
be included in a public companys proxy statement. Under the rule, a stockholder proposal must be received by the subject company at least 120 days before the anniversary of the date on which the company first released the previous years
proxy statement to stockholders. If, however, the annual meeting date has been changed by more than 30 days from the date of the prior years meeting, or for special meetings, the proposal must be submitted within a reasonable time before the
subject company begins to print and mail its proxy materials.
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As a private company, Metropolitan is not subject to Rule
14a-8
promulgated by the SEC.
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Provision
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Renasant
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Metropolitan
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The Renasant Bylaws contain advance notice procedures for the nomination by a stockholder of Renasant of candidates for election as directors
and for other stockholder proposals. These procedures are the exclusive means by which a stockholder may make nominations or submit other proposals for consideration at a meeting of Renasant stockholders (other than in accordance with Rule
14a-8).
The Renasant Bylaws provide that, for any stockholder proposal to be presented in connection with an annual meeting but without inclusion in Renasants proxy materials for that meeting, including the
nomination of an individual to be elected to the board of directors, the stockholder must give timely written notice thereof in writing to Renasants Secretary in compliance with the advance notice and eligibility requirements contained in the
Renasant Bylaws. To be timely, a stockholders notice must be delivered to the Secretary at Renasants corporate headquarters not less than 90 days nor more than 120 days prior to the first anniversary of the immediately preceding
years annual meeting. If, however, the date of the annual meeting is advanced by more than 30 days or delayed by more than 90 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the
120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or, if public announcement of the date of such meeting is made less than 120 days in advance, the 10th day
following the date of the first public announcement of the date of such meeting.
The
advance notice provisions in the Renasant Bylaws also provide that in the case of a special meeting of stockholders called for the purpose of electing one or more directors, a stockholder may nominate a person or persons (as the case may be) for
election to such position if the stockholders notice is delivered to the Secretary at Renasants headquarters address not earlier than the 120th day prior
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Provision
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Renasant
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Metropolitan
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to the special meeting and not later than the close of business on the later of the 90th day prior to the special meeting or, if public
announcement of the date of such meeting is made less than 120 days in advance, the 10th day following the date of the first public announcement of the date of the special meeting and of the nominees proposed by the board of directors to be elected
at such meeting.
For any nomination or other proposal, whether to be submitted with
respect to an annual or special meeting of stockholders, the stockholders notice must contain the detailed information specified in the Renasant Bylaws about the stockholder making the nomination or proposal and, as applicable, each nominee or
the proposed business. Nominations that are not made in accordance with the foregoing provisions may be ruled out of order by the presiding officer or the chairman of the meeting.
|
|
|
|
|
|
Removal of Directors
|
|
Under the MBCA, unless a corporations articles of incorporation provide otherwise, stockholders may remove a director with or without cause if the number of votes cast to remove the director exceeds the number of votes cast
not to remove the director. The Renasant Articles do not address director removal, and therefore the foregoing MBCA provision governs the removal of a director from Renasants board.
|
|
Under the Metropolitan Bylaws and the DGCL, directors may be removed from office by the stockholders, with or without cause, by a vote of stockholders holding a majority of the outstanding stock present at the meeting, assuming a
quorum is present.
|
|
|
|
Vacancies
|
|
Under the Renasant Bylaws, if during the year a vacancy in the board of directors should occur, the remaining directors on Renasants board may appoint a Renasant stockholder to serve until the next annual meeting of
stockholders or until a special meeting of stockholders held for the purpose of electing such appointees successor.
|
|
Under the Metropolitan Bylaws, any vacancies in the board of directors may be filled by the affirmative vote of a majority of the remaining directors in office, and any director elected to fill a vacancy holds office until the next
annual election and until a successor is elected and qualifies, unless sooner displaced.
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|
|
|
Special Meetings of Stockholders
|
|
The Renasant Bylaws provide that a special meeting of stockholders may be called by the Renasant board. Under the MBCA, stockholders owning at least 10% of Renasants outstanding capital stock also may call a special
meeting.
|
|
The Metropolitan Bylaws provide that a special meeting of stockholders may be called by the president, and shall be called by the president or secretary at the written request of a majority of Metropolitans directors or
stockholders owning a majority of Metropolitans outstanding voting stock.
|
78
|
|
|
|
|
Provision
|
|
Renasant
|
|
Metropolitan
|
Action by Written Consent
|
|
The Renasant Articles and Renasant Bylaws are silent with respect to its stockholders ability to act by written consent; therefore, Mississippi law governs. The MBCA provides that any action required or permitted to be taken
at a stockholders meeting may be taken without a meeting if the action is taken by all the stockholders entitled to vote on the action and is evidenced by one or more written consents.
|
|
Under the Metropolitan Bylaws, any action that may be taken at a meeting of stockholders may be taken without a meeting if a written consent, setting forth the action so taken, shall be signed by holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon was present and voted.
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|
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|
Dividends and Other Distributions
|
|
The MBCA prohibits a Mississippi corporation from making any distributions to its stockholders, including the payment of cash dividends,
which would render the corporation unable to pay its debts as they become due in the usual course of business. Also prohibited is any distribution that would result in the corporations total assets being less than the sum of its total
liabilities plus the amount that would be needed, if it were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the
distribution.
As discussed above in Description of Renasant Capital
StockCommon Stock, Renasants ability to pay dividends is substantially dependent on the ability of Renasant Bank to transfer funds to it in the form of dividends, loans and advances.
|
|
The DGCL provides that dividends may be declared from the corporations surplus, or if there is no surplus, from its net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year. Dividends
may not be declared out of net profits, however, if the corporations capital has been diminished to an amount less than the aggregate amount of all capital represented by the issued and outstanding stock of all classes having a preference upon
the distribution of assets until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets is repaired. Furthermore, the DGCL generally provides that a
corporation may redeem or repurchase its shares only if the redemption or repurchase would not impair the capital of the corporation.
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|
Indemnification
|
|
The Renasant Bylaws require Renasant to indemnify its directors and officers (referred to as indemnitees) against liability and reasonable expenses (including attorneys fees) incurred in connection with any proceeding to which
an indemnitee is made a party if he or she met the required standard of conduct. To meet the standard of conduct, the indemnitee must have conducted himself or herself in good faith, and he or she must have reasonably believed that any conduct in
the indemnitees official capacity was in Renasants best interests, and in all other cases, his or her conduct was at least not opposed to Renasants best interests, or in any criminal proceeding, the indemnitee had no reasonable
cause to believe his or
|
|
The DGCL provides that a corporation may indemnify its officers, directors, employees and agents against liabilities and expenses incurred in
proceedings if the person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interest of the corporation and, with respect to any criminal action, had no reasonable cause to believe that the
persons conduct was unlawful. However, under the DGCL, no indemnification is available in respect of a claim as to which the person has been adjudged to be liable to the corporation, unless and only to the extent that a court determines that
in view of all the circumstances, such person is fairly and reasonably entitled to indemnity for such expenses that the court deems proper.
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79
|
|
|
|
|
Provision
|
|
Renasant
|
|
Metropolitan
|
|
|
her conduct was unlawful. Unless otherwise ordered by a court, Renasant is not obligated to indemnify an indemnitee in connection with
(1) a proceeding in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the indemnitee met the standard of conduct described in the immediately preceding sentence, or
(2) a proceeding where the indemnitee was found liable because he or she received a financial benefit to which he or she was not entitled.
An indemnitee may apply to the court conducting the proceeding, or to another court, for indemnification or advance for expenses. The court shall
(1) order indemnification if the court determines that the indemnitee is entitled to mandatory indemnification under applicable provisions of the MBCA or (2) order indemnification or advance for expenses if the court determines that
(a) the indemnitee is entitled to indemnification or advance for expenses under the Renasant Bylaws or (b) in view of all relevant circumstances it is fair and reasonable to indemnify or advance expenses to such indemnitee even if he or
she has not met the standard of conduct described above. Renasant must indemnify an indemnitee who is wholly successful, on the merits or otherwise, in the defense of any proceeding to which the indemnitee was a party against reasonable expenses
incurred in the proceeding.
Renasant generally must advance funds to pay for or
reimburse the reasonable expenses incurred by an indemnitee who is a party to a proceeding. As a condition to advancing expenses, the indemnitee must provide a written affirmation of his or her good faith belief that his or her conduct met the
required standard of conduct. The indemnitee must also undertake to repay the advanced amount if it is ultimately determined that he or she is not entitled to indemnity.
All rights to indemnification provided under the Renasant Bylaws are subject to any limitations imposed by federal law,
|
|
Under the DGCL, a Delaware corporation must indemnify its directors and officers against expenses (including attorneys fees) actually
and reasonably incurred to the extent that the officer or director has been successful on the merits or otherwise in defense of any action, suit or proceeding brought against him or by reason of the fact that he or she is or was a director or
officer of the corporation.
The corporation may pay any expenses (including
attorneys fees) incurred in defending any proceeding in advance of the final disposition of such proceeding if the applicable director or officer undertakes to repay such advance if it shall ultimately be determined that he or she is not
entitled to indemnification.
Metropolitans Bylaws provide for indemnification to
the same extent as the DGCL.
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80
|
|
|
|
|
Provision
|
|
Renasant
|
|
Metropolitan
|
|
|
including the Securities Act and the Federal Deposit Insurance Act.
|
|
|
|
|
|
Limitations on Director Liability
|
|
The Renasant Articles and Renasant Bylaws do not address the limitation of a directors liability.
Section 81-5-105
of the Mississippi Banking
Code provides that it is the sole and exclusive law governing the relation and liability of directors and officers to their bank holding company, like Renasant, or to the stockholders thereof, or to any other person or entity. Under Miss. Code Ann.
Section 81-5-105(1),
the duties of a director or officer of a bank holding company to the bank holding company and its stockholders are to discharge the directors
or officers duties in good faith and with the diligence, care, judgment and skill as provided in subsection (2). Under subsection (2), a director or officer of a bank or bank holding company cannot be held personally liable for money damages
to a corporation or its stockholder unless the officer or director acts in a grossly negligent manner or engages in conduct that demonstrates a greater disregard of the duty of care than gross negligence.
|
|
Pursuant to the DGCL and the Metropolitan Certificate, a director will not be personally liable to Metropolitan or its stockholders for monetary damages for breach of fiduciary duty as a director, except for (1) any breach of
the directors duty of loyalty to Metropolitan or its stockholders, (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) for any willful or negligent violation of the laws
governing the payment of dividends or the purchase or redemption of stock, or (4) any transaction from which the director derives an improper personal benefit.
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|
|
|
Vote on Extraordinary Corporate Transactions; Anti-Takeover Provisions
|
|
Under the MBCA, a merger, share exchange, sale, lease, exchange or other disposal of all or substantially all of a Mississippi
corporations assets, or its dissolution, is approved if the votes cast in favor of the transaction exceed the votes cast against the transaction at a meeting of the stockholders of the corporation where a quorum is present and acting
throughout, except approval of a merger by stockholders of the surviving corporation is not required in the instances specified in the MBCA.
See Description of Renasants Capital StockCertain Anti-Takeover Provisions of the Renasant Articles above for a discussion of
provisions of the Renasant Articles and the Renasant Bylaws that may have an anti-takeover effect.
|
|
The DGCL provides that, unless a corporations certificate of incorporation requires a greater vote of the stockholders, the (1) a
sale, lease or other disposition of substantially all of the corporations assets, (2) a merger or consolidation of the corporation with another corporation or (3) a dissolution of the corporation requires the affirmative vote of the
majority of the outstanding stock entitled to vote thereon.
The Metropolitan
Certificate does not change the vote required by the DGCL.
|
|
|
|
Amendments to Articles or Certificate of Incorporation
|
|
The MBCA provides that the articles of incorporation of a Mississippi corporation may be amended if the votes cast in favor of the amendment exceed the votes cast
|
|
Under the DGCL, an amendment of a corporations certificate of incorporation is adopted of stockholders holding a majority of the corporations outstanding stock vote
in
|
81
|
|
|
|
|
Provision
|
|
Renasant
|
|
Metropolitan
|
|
|
against the amendment at a meeting where a quorum of stockholders is present and acting throughout.
Notwithstanding the general MBCA provision, the Renasant Articles impose elevated approval
requirements with respect to certain types of amendments. Under the Renasant Articles, the affirmative vote of not less than 80% of the outstanding common stock of Renasant is required to amend or repeal the provisions of the articles of
incorporation that establish a classified board of directors or that pertain to the fair price provisions.
|
|
favor of the amendment. Any provision in the certificate of incorporation which requires a greater vote than required by law cannot be
amended or repealed except by such greater vote.
The Metropolitan Certificate does not
change the vote required by the DGCL.
|
|
|
|
Appraisal Rights of Stockholders
|
|
The MBCA provides for appraisal rights that are generally the same as the appraisal rights available to a Metropolitan stockholder. However,
the MBCA provides that a stockholder of a Mississippi corporation does not have appraisal rights if, among other things, (1) the transaction qualifies as a reorganization transaction, (2) the stock is listed on the New York Stock Exchange
or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc., or (3) there are at least 2,000 stockholders and the outstanding shares of such class or series has a
market value of at least $20,000,000 (exclusive of the value of such shares held by its subsidiaries, senior executives, directors and beneficial stockholders owning more than 10% of such shares).
Since Renasant common stock is listed on Nasdaq, Renasant stockholders generally do not
have appraisal rights. There are exceptions to this general rule where the consideration the stockholder is forced to receive in the transaction is not cash or other liquid securities and where the corporate action is an interested
transaction as defined in the MBCA.
|
|
The appraisal rights provided to a holder of Metropolitan common stock under §262 of the DGCL are described above under the caption The MergerAppraisal
Rights.
|
82
COMPARATIVE PER SHARE MARKET PRICE INFORMATION
Renasant common stock trades on Nasdaq under the symbol RNST. The following table sets forth, for the periods indicated, the high
and low
intra-day
sales prices of shares of Renasant common stock as reported on Nasdaq, and the quarterly cash dividends declared per share. As
of , 2017, the last date prior to the printing of this document for which it was practicable to obtain this information, there
were shares of Renasant common stock issued and outstanding, and approximately
stockholders of record.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renasant Common Stock
|
|
|
|
High
|
|
|
Low
|
|
|
Dividends
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter
|
|
$
|
30.09
|
|
|
$
|
26.14
|
|
|
$
|
0.17
|
|
2nd Quarter
|
|
|
33.47
|
|
|
|
28.98
|
|
|
|
0.17
|
|
3rd Quarter
|
|
|
33.86
|
|
|
|
29.50
|
|
|
|
0.17
|
|
4th Quarter
|
|
|
37.28
|
|
|
|
31.88
|
|
|
|
0.17
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter
|
|
$
|
34.41
|
|
|
$
|
29.49
|
|
|
$
|
0.17
|
|
2nd Quarter
|
|
|
35.00
|
|
|
|
30.21
|
|
|
|
0.18
|
|
3rd Quarter
|
|
|
35.78
|
|
|
|
30.98
|
|
|
|
0.18
|
|
4th Quarter
|
|
|
44.65
|
|
|
|
32.51
|
|
|
|
0.18
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
1
st
Quarter
|
|
$
|
43.15
|
|
|
$
|
37.78
|
|
|
$
|
0.18
|
|
2nd Quarter (through April 24, 2017)
|
|
|
43.41
|
|
|
|
38.87
|
|
|
|
|
|
On January 17, 2017, the last full trading day before the announcement of the merger agreement,
the high and low sales prices of shares of Renasant common stock as reported on Nasdaq were $39.82 and $38.74, respectively. On April 24, 2017, the high and low sale prices of shares of Renasant common stock as reported on Nasdaq were $43.41
and $42.58, respectively.
Metropolitan common stock is not listed on any established securities exchange or quotation system,
Accordingly, there is no established public trading market for Metropolitan common stock. Transactions in shares of Metropolitan common stock are privately negotiated directly between the purchaser and the seller, and any sales that do occur are not
subject to any reporting system. The last sale of Metropolitan common stock prior to the execution of the merger agreement known to Metropolitan management occurred on December 22, 2016 at $13.10 per share. As of April 24, 2017, the last
date prior to the printing of this document for which it was practicable to obtain this information, there were 7,462,349 shares of Metropolitan common stock issued and outstanding, and approximately
300 stockholders of record.
Metropolitan has not paid any dividends to date.
83
ABOUT RENASANT CORPORATION
General
Renasant Corporation is a
Mississippi corporation and a registered bank holding company headquartered in Tupelo, Mississippi. Renasant was organized in 1982 under the Bank Holding Company Act of 1956, as amended, and the laws of the State of Mississippi. Renasant currently
operates more than 170 banking, mortgage, financial services and insurance offices throughout Mississippi, Tennessee, Alabama, Florida and Georgia through its wholly-owned bank subsidiary, Renasant Bank. Through Renasant Bank, Renasant is also the
owner of Renasant Insurance, Inc.
As of March 31, 2017, Renasant had total assets of approximately $8.8 billion and total
deposits of approximately $7.2 billion.
The principal executive offices of Renasant are located at 209 Troy Street, Tupelo,
Mississippi 38804-4827, and its telephone number at this location is (662)
680-1001.
Additional Information
Information about Renasant and its business and subsidiaries, including information relating to executive compensation, voting
securities and the principal holders of its securities, its various benefit plans, related party transactions and other related matters about Renasant, is included in documents incorporated by reference into this document or set forth in
Renasants Annual Report on Form
10-K/A
for the year ended December 31, 2016, which is incorporated into this document by reference. See Where You Can Find More Information on
page
.
84
ABOUT METROPOLITAN BANCGROUP, INC.
Metropolitan BancGroup, Inc. is a Delaware corporation and privately-held bank holding company. Metropolitans wholly-owned subsidiary,
Metropolitan Bank, operates two offices in each of Nashville and Memphis, Tennessee, and four offices in the Jackson, Mississippi metropolitan area.
Metropolitan Bank focuses on private banking, commercial banking, mortgage products, and treasury management services.
As of March 31, 2017, Metropolitans consolidated assets were approximately $1.2 billion, total loans and deposits were
approximately $929.7 million and $945.1 million, respectively, and total equity was approximately $93.8 million.
The
principal executive offices of Metropolitan are located at 1069 Highland Colony Parkway, Ridgeland, Mississippi 39157-8722, and its telephone number at this location is (601)
853-0000.
Metropolitans
website can be accessed at https://www.metropolitan.bank/. Information contained on Metropolitans website does not constitute part of, and is not incorporated into, this proxy statement/prospectus. Metropolitans common stock is not
listed or traded on any established securities exchange or quotation system.
METROPOLITAN 2017 ANNUAL
MEETING
Metropolitan will hold its 2017 annual meeting of stockholders only if the merger is not completed. If determined to be
necessary, the Metropolitan board of directors will provide each Metropolitan stockholder information relevant to its 2017 annual meeting of stockholders.
85
BENEFICIAL OWNERSHIP OF METROPOLITAN COMMON STOCK BY MANAGEMENT AND
PRINCIPAL STOCKHOLDERS OF METROPOLITAN
The following table sets forth the beneficial ownership of Metropolitan common stock as of
April 20, 2017 by each director and executive officer of Metropolitan, any person who is known by Metropolitan to own beneficially more than 5% of its common stock and all Metropolitan directors and executive officers as a group.
Beneficial ownership has been determined in accordance with the rules of the SEC, based on factors including voting and investment power with
respect to shares. The percentage of beneficial ownership is calculated in relation to the 7,462,349 shares of Metropolitan common stock that were issued and outstanding as of April 20, 2017. Under the SECs rules, shares of
common stock issuable upon the exercise of options or warrants currently exercisable or exercisable within 60 days after April 20, 2017, are deemed outstanding for the purpose of computing the percentage ownership of the person holding
such options or warrants, but are not deemed outstanding for computing the percentage ownership of any other persons.
Unless
otherwise indicated, to Metropolitans knowledge, the persons or entities identified in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them.
|
|
|
|
|
|
|
|
|
Name
(1)
|
|
Amount and
Nature of
Beneficial
Ownership
(2)
|
|
|
Percentage of
Outstanding Shares
|
|
|
|
|
|
|
|
Richard L. Adams
|
|
|
165,368
|
(3)
|
|
|
2.2
|
%
|
Gregory B. Barron
|
|
|
56,473
|
(4)
|
|
|
*
|
|
William M. Barron
|
|
|
163,425
|
(5)
|
|
|
2.2
|
%
|
William Batt
|
|
|
41,000
|
(6)
|
|
|
*
|
|
Wei Chen
|
|
|
25,102
|
(7)
|
|
|
*
|
|
Donald Clark, Jr.
|
|
|
63,948
|
(8)
|
|
|
*
|
|
Dean Donovan
|
|
|
952,086
|
(9)
|
|
|
12.8
|
%
|
Curtis J. Gabardi
|
|
|
364,442
|
(10)
|
|
|
4.7
|
%
|
E. Jackson Garner
|
|
|
2,793
|
(11)
|
|
|
*
|
|
Phillip L. May, Jr.
|
|
|
138,150
|
(12)
|
|
|
1.8
|
%
|
Michael T. McRee
|
|
|
718,866
|
(13)
|
|
|
9.6
|
%
|
Karl Schade
|
|
|
740,834
|
(14)
|
|
|
9.9
|
%
|
George Walker
|
|
|
63,950
|
(15)
|
|
|
*
|
|
James D. Wingett
|
|
|
60,000
|
(16)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All directors and officers as a group (14 persons)
|
|
|
3,556,437
|
|
|
|
47.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Address
>5% Stockholders
|
|
Number of
Shares
|
|
|
Percentage of Class
(1)
|
|
Columbia Equity Partners
|
|
|
952,086
|
(9)
|
|
|
12.8
|
%
|
Presidio Investors, LLC
|
|
|
740,834
|
(14)
|
|
|
9.9
|
%
|
Michael T. McRee
|
|
|
718,866
|
(13)
|
|
|
9.6
|
%
|
(1)
|
Unless otherwise noted, each beneficial owner has the same address as Metropolitan.
|
(2)
|
Beneficial ownership includes shares for which an individual or entity, directly or indirectly, has or shares voting or investment power over the shares listed opposite their names unless otherwise indicated
in the notes below. Beneficial ownership as reported in the above table has been determined in accordance with Rule
13d-3
of the Exchange Act. The ownership percentages are based upon 7,462,349 shares
outstanding, except for certain parties who hold presently exercisable stock options to purchase shares. The ownership percentage for each party holding presently exercisable stock options is based upon the sum of 7,462,349 shares outstanding plus
the number of shares held by such party subject to presently exercisable stock options, as indicated in the following notes.
|
(3)
|
Includes (i) 54,402 shares owned individually and (ii) 110,966 shares underlying currently exercisable options to purchase Metropolitan common stock.
|
86
(4)
|
Includes (i) 13,122 shares owned individually and (ii) 43,351 shares underlying currently exercisable options to purchase Metropolitan common stock.
|
(5)
|
Includes (i) 63,409 shares owned individually and (ii) 100,016 shares underlying currently exercisable options to purchase Metropolitan common stock.
|
(6)
|
41,000 shares owned individually.
|
(7)
|
25,102 shares owned individually.
|
(8)
|
63,948 shares owned individually.
|
(9)
|
Represents 952,086 shares held by Columbia Equity Partners (CEP). Mr. Donovan is Managing Director of CEP and may be deemed to be the beneficial owner of the securities over which CEP has voting and
investment power. Mr. Donovan has informed Metropolitan that he disclaims beneficial ownership of the shares owned by CEP.
|
(10)
|
Includes (i) 106,759 shares owned individually and (ii) 257,683 shares underlying currently exercisable options to purchase Metropolitan common stock.
|
(11)
|
2,793 shares owned individually.
|
(12)
|
Includes (i) 38,134 shares owned individually and (ii) 100,016 shares underlying currently exercisable options to purchase Metropolitan common stock.
|
(13)
|
718,866 shares owned individually.
|
(14)
|
Represents 740,834 shares held by Presidio Investors, LLC (Presidio Investors). Mr. Schade is Managing Director of Presidio Investors and may be deemed to be the beneficial owner of the securities over
which Presidio Investors has voting and investment power. Mr. Schade has informed Metropolitan that he disclaims beneficial ownership of the shares owned by Presidio Investors.
|
(15)
|
63,950 shares owned individually.
|
(16)
|
60,000 shares owned individually.
|
*
|
Represents holdings of less than one percent.
|
87
EXPERTS
The consolidated financial statements of Renasant as of December 31, 2016 and 2015, and for each of the years in the three-year period
ended December 31, 2016, and managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2016 have been incorporated by reference into this Registration Statement from Renasants
Annual Report on Form
10-K/A
for the year ended December 31, 2016 in reliance upon the reports of HORNE LLP, independent registered public accountants, as stated in their reports, which are incorporated
by reference herein, and upon the authority of said firm as experts in accounting and auditing.
LEGAL
MATTERS
The validity of the Renasant common stock to be issued in connection with the merger will be passed upon for Renasant by
Phelps Dunbar LLP, New Orleans, Louisiana, Renasants outside legal counsel. Certain U.S. federal income tax consequences of the merger will be passed upon for Renasant by Phelps Dunbar LLP and for Metropolitan by Troutman Sanders LLP. Phelps
Dunbar LLP also provides legal advice to Renasant on a regular basis. As of the date of this proxy statement/prospectus, members of Phelps Dunbar LLP owned an aggregate of approximately 39,000 shares of Renasant common stock.
88
WHERE YOU CAN FIND MORE INFORMATION
Renasant has filed with the SEC a registration statement on Form
S-4
that registers the distribution
of the shares of Renasant common stock to Metropolitan stockholders in connection with the merger. This proxy statement/prospectus is a part of that registration statement and constitutes a prospectus of Renasant and a proxy statement of
Metropolitan for the special meeting.
Renasant files annual, quarterly and current reports, proxy statements and other information with
the SEC. You may read and copy this registration statement and any reports, statements or other information that Renasant files with the SEC at the SECs Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please
call the SEC at
1-800-SEC-0330
for further information on the Public Reference Room. Renasants SEC filings are also
available to the public from commercial document retrieval services and at the website maintained by the SEC at www.sec.gov. Reports, proxy statements and other information that Renasant files with the SEC are also found on its website,
www.renasant.com, under the link Investor Relations.
The SECs rules allow Renasant to incorporate by
reference the information it files with the SEC, which means that Renasant can disclose important information to you by referring you to those documents. The information incorporated by reference is deemed to be part of this proxy
statement/prospectus, and later information that Renasant files with the SEC will automatically update and supersede this information. In all cases, you should rely on the later information incorporated by reference over different information
included in this proxy statement/prospectus.
Renasant incorporates by reference into this proxy statement/prospectus the documents listed
below and any future filings Renasant makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the completion of the merger (other than any information contained in such filings that is deemed furnished
to, or is otherwise not deemed filed with, the SEC in accordance with SEC rules, including, but not limited to, Renasants compensation committee report and performance graph and information furnished under Items 2.02 and 7.01 of
any Current Report on Form
8-K
including related exhibits):
Renasant SEC Filings (File
No. 001-13253)
|
1.
|
Annual Report on Form
10-K
for the year ended December 31, 2016 filed with the SEC on February 27, 2017, as amended by the Annual Report on Form
10-K/A
(Amendment No. 1) for the year ended December 31, 2016 filed with the SEC on February 28, 2017;
|
|
2.
|
Current Reports on Form
8-K
filed with the SEC on January 18, 2017, January 19, 2017, February 7, 2017, February 8, 2017 (amending the Form
8-K
filed on February 7, 2017) and April 21, 2017; and
|
|
3.
|
The description of Renasants common stock contained in Renasants Registration Statement on Form
8-A/A
(Amendment No. 1) filed with the SEC on April 19, 2007
(amending and restating in its entirety the description of Renasants common stock set forth in Item 1 of Renasants Form
8-A
filed with the SEC on April 28, 2005).
|
You may request documents incorporated by reference into this proxy statement/prospectus from Renasant, at no cost, by writing or telephoning Renasant at the
following address and telephone number:
Renasant Corporation
209 Troy Street
Tupelo,
Mississippi 38804-4827
Attn: Kevin D. Chapman
Tel: (662)
680-1450
Metropolitan stockholders requesting documents should do so by
June 1, 2017, in order to receive them before the special meeting.
If
you request any incorporated documents from Renasant, Renasant will mail them to you by first class mail, or another equally prompt means, after it receives your request.
89
Other than any documents expressly incorporated by reference, the information on the websites of
Renasant or Metropolitan, or any subsidiary of Renasant or Metropolitan, or on the SECs website, is not part of this document. You should not rely on that information in deciding how to vote.
Neither Renasant nor Metropolitan has authorized anyone to give any information or make any representation about the merger or the
companies that is different from, or in addition to, that contained in this document or in any of the materials that have been incorporated in this document. Therefore, if anyone does give you information of this sort, you should not rely on it. If
you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this document or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to
direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document unless the information specifically indicates that another
date applies.
The representations, warranties and covenants by Renasant, Renasant Bank, Metropolitan and Metropolitan Bank described
in this proxy statement/prospectus and included in the merger agreement were made only for purposes of the merger agreement and as of specific dates. These representations, warranties and covenants may be subject to qualifications and limitations
agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts; may be limited to the knowledge of
specified officers of Renasant or Metropolitan; and may be subject to standards of materiality applicable to the contracting parties that differ from those generally applicable to investors.
In reviewing the representations, warranties and covenants contained in the merger agreement or any descriptions thereof in this proxy
statement/prospectus, it is important to bear in mind that such representations, warranties and covenants or any descriptions were not intended by Renasant or Metropolitan to be characterizations of the actual state of facts or condition of
Renasant, Metropolitan or any of their respective subsidiaries or affiliates. Such representations and warranties are not intended to amend, supplement or supersede any statement contained in any reports or documents filed by Renasant with the SEC.
Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in Renasants public
disclosures. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction with the information provided elsewhere in this proxy
statement/prospectus and in the documents incorporated by reference into this proxy statement/prospectus.
90
ANNEX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
RENASANT
CORPORATION,
RENASANT BANK
METROPOLITAN BANCGROUP, INC.,
AND
METROPOLITAN BANK
DATED JANUARY 17, 2017
Annex A
TABLE OF CONTENTS
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Page
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ARTICLE I
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THE MERGER
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A-1
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1.1
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The Merger
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A-1
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1.2
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Effective Time
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A-2
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1.3
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The Articles of Incorporation and Bylaws of the Surviving Corporation and the Subsidiary Surviving Bank
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A-2
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1.4
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Directors and Officers
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A-2
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1.5
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Effect of the Mergers
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A-3
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1.6
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Tax Consequences
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A-3
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ARTICLE II
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EFFECT OF THE MERGERS ON THE CAPITAL STOCK OF THE CONSTITUENT ENTITIES; EXCHANGE OF CERTIFICATES
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A-4
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2.1
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Conversion of Shares
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A-4
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2.2
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Exchange of Seller Stock Certificates
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A-5
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2.3
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Dissenting Shares
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A-6
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2.4
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Rights as Stockholders
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A-7
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2.5
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Stock Transfer Records
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A-7
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2.6
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Subsidiary Merger
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A-7
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2.7
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Seller Stock Options, Seller Restricted Stock and Related Matters
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A-7
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLER SUB
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A-8
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3.1
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Corporate Organization
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A-8
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3.2
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Capitalization
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A-9
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3.3
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Authority; No Violation
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A-10
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3.4
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Financial Statements
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A-11
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3.5
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Absence of Certain Changes or Events
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A-12
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3.6
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Legal Proceedings
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A-12
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3.7
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Taxes and Tax Returns
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A-12
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3.8
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Employee Benefit Plans
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A-14
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3.9
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Regulatory Reports
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A-16
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3.10
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Seller Information
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A-17
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3.11
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Compliance with Applicable Law
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A-17
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3.12
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Deposit Insurance and Other Regulatory Matters
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A-18
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3.13
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Certain Contracts
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A-18
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3.14
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Properties and Insurance
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A-19
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3.15
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Environmental Matters
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A-20
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3.16
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Allowance for Loan Losses and Real Estate Owned
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A-20
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3.17
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Minute Books
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A-21
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3.18
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Affiliate Transactions
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A-21
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3.19
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Internal Controls
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A-21
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3.20
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Risk Management Instruments
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A-21
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3.21
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Opinion
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A-21
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3.22
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Broker Fees
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A-22
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3.23
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Loans
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A-22
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3.24
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Investment Securities; BOLI
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A-23
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3.25
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Employees; Compensation
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A-24
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3.26
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Regulatory Matters
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A-24
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3.27
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Intellectual Property
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A-24
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3.28
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Regulatory Capital; Community Reinvestment Compliance
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A-25
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3.29
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Trust Matters
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A-25
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3.30
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Broker-Dealer and Investment Advisory Matters
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A-25
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3.31
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No Existing Discussions
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A-26
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A-i
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3.32
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Certain Business Practices
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A-26
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3.33
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Continuity of Business Enterprise
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A-26
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3.34
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Indemnification
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A-26
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3.35
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Vote Required
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A-26
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUIROR SUB
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A-26
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4.1
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Corporate Organization
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A-27
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4.2
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Capitalization
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A-28
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4.3
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Authority; No Violation
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A-28
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4.4
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Financial Statements
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A-29
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4.5
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Absence of Certain Changes or Events
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A-30
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4.6
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Legal Proceedings
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A-31
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4.7
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Taxes and Tax Returns
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A-31
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4.8
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Securities Documents and Regulatory Reports
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A-32
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4.9
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Acquiror Information
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A-32
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4.10
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Compliance with Applicable Law
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A-33
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4.11
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Employee Benefit Plans
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A-33
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4.12
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Deposit Insurance and Other Regulatory Matters
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A-35
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4.13
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Material Contracts; Other Agreements
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A-35
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4.14
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Nasdaq
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A-35
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4.15
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Broker Fees
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A-35
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4.16
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Regulatory Matters
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A-36
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4.17
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Regulatory Capital; Community Reinvestment Act
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A-36
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4.18
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Acquiror Shares
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A-36
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4.19
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Opinion
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A-36
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4.20
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No Acquiror Vote Required
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A-36
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ARTICLE V
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COVENANTS OF THE PARTIES
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A-36
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5.1
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Conduct of the Business of Seller and Seller Sub
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A-36
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5.2
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Negative Covenants of Seller and Seller Sub
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A-37
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5.3
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No Solicitation
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A-40
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5.4
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Negative Covenants of Acquiror and Acquiror Sub
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A-43
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5.5
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Current Information
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A-43
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5.6
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Access to Properties and Records; Confidentiality
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A-44
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5.7
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Regulatory Matters
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A-44
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5.8
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Preparation of Registration Statement; Stockholder Approval
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A-46
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5.9
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Legal Conditions to Merger
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A-46
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5.10
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Disclosure Supplements
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A-47
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5.11
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Public Announcements
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A-47
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5.12
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Stock Exchange Listing
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A-47
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5.13
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Certain Post-Merger Agreements
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A-47
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5.14
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Takeover Laws; No Rights Triggered
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A-49
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5.15
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Adoption of Accounting Policies
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A-49
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5.16
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Operating Functions
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A-49
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5.17
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Certain Agreements
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A-50
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5.18
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Hold Harmless
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A-50
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5.19
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Stockholder Litigation
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A-51
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5.20
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Severance
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A-51
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5.21
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Seller Indebtedness
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A-51
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5.22
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Officer Agreements
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A-51
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ARTICLE VI
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CLOSING CONDITIONS
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A-52
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6.1
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Conditions to the Parties Obligations under this Agreement
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A-52
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6.2
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Conditions to the Obligations of Acquiror and Acquiror Sub under this Agreement
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A-52
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6.3
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Conditions to the Obligations of Seller and Seller Sub under this Agreement
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A-53
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A-ii
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ARTICLE VII
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TERMINATION, AMENDMENT AND WAIVER, ETC.
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A-54
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7.1
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Termination
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A-54
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7.2
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Effect of Termination
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A-55
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7.3
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Amendment, Extension and Waiver
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A-55
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7.4
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Termination Fees
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A-56
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ARTICLE VIII
|
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MISCELLANEOUS
|
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A-57
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8.1
|
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Expenses
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A-57
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8.2
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Survival
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A-57
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8.3
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Notices
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A-57
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8.4
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Parties in Interest
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A-58
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8.5
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Complete Agreement
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A-58
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8.6
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Counterparts
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A-58
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8.7
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Governing Law; Venue; Waiver of Jury Trial
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A-58
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8.8
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Interpretation
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A-59
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8.9
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Specific Performance
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A-59
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8.10
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Severability
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A-59
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8.11
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Additional Actions
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A-59
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8.12
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Alternative Structure
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A-60
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Exhibits:
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Exhibit A
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Parent Merger Documents
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Exhibit B
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Subsidiary Merger Document
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|
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Schedules:
Seller Disclosure Schedule
Acquiror Disclosure Schedule
Schedule 5.13(b)
Schedule 5.17-A
Schedule 5.17-B
Schedule
5.22(i)
Schedule 5.22(ii)
Schedule 6.2(g)
A-iii
INDEX OF DEFINED TERMS
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Term
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Defined In Section.
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Acquiror
|
|
Preamble
|
Acquiror Common Stock
|
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2.1(a)(ii)
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Acquiror Disclosure Schedule
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|
First sentence Article IV
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Acquiror ERISA Affiliate
|
|
4.11(b)
|
Acquiror Financial Statements
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|
4.4(a)
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Acquiror Material Adverse Effect
|
|
4.1(a)
|
Acquiror Pension Plan
|
|
4.11(a)(i)
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Acquiror Plans
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|
4.11(a)(ii)
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Acquiror SEC Documents
|
|
4.8(a)
|
Acquiror Sub
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|
Preamble
|
Acquisition Proposal
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|
5.3(a)
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affiliate
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|
3.18
|
Agreement
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|
Preamble
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Articles
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|
1.4(a)
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Bankruptcy and Equity Exception
|
|
3.3(a)
|
BOLI
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3.24(b)
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Business Day
|
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1.2
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Bylaws
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1.4(a)
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Change in the Seller Recommendation
|
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5.3(c)
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Claims
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5.13(b)
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Closing
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1.2
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Closing Date
|
|
1.2
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Code
|
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Recitals
|
Commission
|
|
3.3(c)
|
Costs
|
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5.13(b)
|
CRA
|
|
3.28
|
DGCL
|
|
1.1(a)
|
Dissenting Stockholder
|
|
2.3
|
Effective Time
|
|
1.2
|
Employees
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|
3.8(a)
|
Employer
|
|
5.13(a)(i)
|
Environmental Law
|
|
3.15
|
ERISA
|
|
3.8(a)
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ERISA Affiliate
|
|
3.8(b)
|
ERISA Plan
|
|
3.8(b)
|
Exchange Agent
|
|
2.2(a)
|
Exchange Fund
|
|
2.2(a)
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Exchange Ratio
|
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2.1(a)(ii)
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Existing Officer Agreements
|
|
5.22
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FDIA
|
|
3.12
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FDIC
|
|
3.3(c)
|
FINRA
|
|
3.3(c)
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FRB
|
|
3.3(c)
|
GAAP
|
|
3.1(a)
|
Gabardi Agreement
|
|
5.22
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Governmental Entity
|
|
1.2
|
Hazardous Substance
|
|
3.15
|
Indemnified Parties
|
|
5.13(b)
|
Intellectual Property
|
|
3.27(a)
|
A-iv
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Term
|
|
Defined In Section.
|
IRS
|
|
3.7(b)
|
Law
|
|
3.3(b)
|
Loan Portfolio Properties and Other Properties Owned
|
|
3.15
|
MBCA
|
|
1.1(a)
|
MCB
|
|
1.2
|
Mergers
|
|
1.1(b)
|
Merger Consideration
|
|
2.1(a)(ii)
|
Merger Documents
|
|
1.2
|
Outside Date
|
|
7.1(b)(i)
|
Parent Merger
|
|
1.1(a)
|
Parent Merger Documents
|
|
1.2
|
party/parties
|
|
Preamble
|
Pension Plan
|
|
3.8(a)
|
Permitted Liens
|
|
3.14(a)
|
Pre-Termination Takeover Proposal Event
|
|
7.4(c)
|
Proceeding
|
|
5.13(b)
|
Proxy Statement/Prospectus
|
|
5.8(a)
|
Qualified Acquiror Plan
|
|
4.11(a)(iii)
|
Qualified Seller Plan
|
|
3.8(a)
|
Registration Statement
|
|
3.10
|
Representative
|
|
2.2(b)
|
Risk Management Instruments
|
|
3.20
|
Seller
|
|
Preamble
|
Seller Acquisition Agreement
|
|
5.3(c)
|
Seller Agreement
|
|
3.13(a)
|
Seller Common Stock
|
|
2.1(a)(ii)
|
Seller Designee
|
|
1.4(a)
|
Seller Disclosure Schedule
|
|
First sentence Article III
|
Seller Financial Statements
|
|
3.4(a)
|
Seller Material Adverse Effect
|
|
3.1(a)
|
Seller Plans
|
|
3.8(a)
|
Seller Recommendation
|
|
5.8(b)
|
Seller Representative
|
|
5.3(a)
|
Seller Restricted Stock
|
|
2.7(b)
|
Seller Stock Certificate
|
|
2.2(b)
|
Seller Stock Options
|
|
2.7(a)
|
Seller Stock Plan
|
|
2.7(a)
|
Seller Stockholder Approval
|
|
3.35
|
Seller Sub
|
|
Preamble
|
Seller Sub Common Stock
|
|
2.6
|
Seller Sub Designee
|
|
1.4(b)
|
Software
|
|
3.27(a)
|
Special Meeting
|
|
5.8(b)
|
Subsidiaries
|
|
3.1(b)
|
Subsidiary Merger
|
|
1.1(b)
|
Subsidiary Merger Document
|
|
1.2
|
Subsidiary Surviving Bank
|
|
1.1(b)
|
Superior Proposal
|
|
5.3(a)
|
Surviving Corporation
|
|
1.1(a)
|
Takeover Laws
|
|
3.3(d)
|
Taxes
|
|
3.7(c)
|
A-v
|
|
|
Term
|
|
Defined In Section.
|
Tax Returns
|
|
3.7(c)
|
Termination Fee
|
|
7.4(a)
|
Transferred Employees
|
|
5.13(a)(i)
|
WARN Act
|
|
3.25(c)
|
1933 Act
|
|
3.10
|
1934 Act
|
|
3.9(a)
|
A-vi
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this
Agreement
), dated as of January 17, 2017, is made by and among Renasant
Corporation, a Mississippi corporation (
Acquiror
), and Renasant Bank, a Mississippi banking corporation (
Acquiror Sub
), on the one hand, and Metropolitan BancGroup, Inc., a Delaware corporation
(
Seller
), and Metropolitan Bank, a Mississippi banking corporation (
Seller Sub
), on the other hand. Acquiror, Acquiror Sub, Seller and Seller Sub are sometimes referred to herein individually as a
party
and collectively as the
parties
.
WITNESSETH:
WHEREAS, the Boards of Directors of Acquiror and Seller each have determined that it is advisable and in the best interests of their
respective companies and their stockholders to consummate the business combination transactions provided for in the Parent Merger Documents and herein, including the merger of Seller with and into Acquiror on the terms and conditions set forth
therein and herein;
WHEREAS, the Boards of Directors of Acquiror Sub and Seller Sub each have determined that it is advisable and in the
best interests of their respective companies and their respective sole stockholder to consummate the business combination transactions provided for in the Subsidiary Merger Document and herein, including the merger of Seller Sub with and into
Acquiror Sub on the terms and conditions set forth therein and herein;
WHEREAS, it is the intention of the parties that, for federal
income tax purposes, the Parent Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
Code
), and that this Agreement shall constitute,
and is adopted as, a plan of reorganization for purposes of Sections 354 and 361 of the Code; and
WHEREAS, the parties desire
to provide for certain undertakings, conditions, representations, warranties and covenants in connection with the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1
The
Merger
.
(a) Subject to the terms and conditions of this Agreement, at the Effective Time, Seller shall be merged with and into
Acquiror (the
Parent Merger
) in accordance with the Mississippi Business Corporation Act (the
MBCA
) and the General Corporation Law of the State of Delaware (the
DGCL
), with Acquiror as the
surviving corporation (hereinafter sometimes called the
Surviving Corporation
) which shall continue its corporate existence under the laws of the State of Mississippi, and the separate corporate existence of Seller shall
terminate. The Parent Merger shall in all respects have the effects provided in Section 1.5 hereof.
(b) Subject to the terms and
conditions of this Agreement, immediately after the Effective Time of the Parent Merger, Seller Sub shall be merged with and into Acquiror Sub (the
Subsidiary Merger
and, together with the Parent Merger, the
Mergers
) in accordance with Title 81 of the Mississippi Code of 1972, as amended, with Acquiror Sub as the surviving banking corporation (hereinafter sometimes called the
Subsidiary Surviving Bank
) which shall
continue its corporate existence under the laws of the State of Mississippi, and the
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separate corporate existence of Seller Sub shall terminate. The Subsidiary Merger shall in all respects have the effects provided in Section 1.5 hereof.
1.2
Effective Time
. The Parent Merger shall become effective on the later of the dates and times that the Articles of Merger are filed
with the Secretary of State of the State of Mississippi pursuant to Section 79-4-11.06 of the MBCA and the Certificate of Merger is filed with the Delaware Secretary of State pursuant to Section 252(c) of the DGCL, such Articles of Merger
and Certificate of Merger to be substantially in the forms attached hereto as
Exhibit A
(the
Parent Merger Documents
), unless a later date and time is specified as the effective time in such documents,
provided
, that
the parties shall cause the Parent Merger to be effective no later than the day following the date on which the Closing occurs (the
Effective Time
). The Subsidiary Merger shall become effective upon the date and time specified in
the Certificate of Merger Approval issued by the Mississippi Commissioner of Banking and Consumer Finance (
MCB
) based on the Articles of Merger filed with the MCB and thereafter with the Mississippi Secretary of State, such
Articles of Merger to be substantially in the form attached hereto as
Exhibit B
(the
Subsidiary Merger Document
and, together with the Parent Merger Documents, the
Merger Documents
). On the terms and
subject to the conditions set forth in this Agreement, the closing (the
Closing
) shall take place at 10:00 a.m. no later than the fifth Business Day following the receipt of all necessary approvals and consents of any foreign,
federal, state, local or other court, tribunal, body, board, administrative agency, arbitrator, mediator or commission or other governmental, prosecutorial, regulatory or self-regulatory authority (including stock exchanges) or instrumentality
(
Governmental Entity
), and the expiration of all statutory waiting periods in respect thereof and the satisfaction or waiver, to the extent permitted hereunder, of the conditions to the consummation of the Mergers specified in
Article VI (other than the delivery of certificates, instruments and documents to be delivered at the Closing), at the offices of Acquiror, or at such other place, at such other time or on such other date as the parties may mutually agree upon (the
Closing Date
),
provided
,
however
, that if the Closing occurs at any time after such fifth Business Day following the receipt of all necessary approvals and consents, the Closing shall occur on the first Business Day
of the next month after the date on which all conditions to closing described in this sentence are satisfied, unless the parties otherwise agree to a different date. For purposes of this Agreement, a Business Day (
Business Day
) is
any day, other than a Saturday, Sunday or any other day that banks located in the State of Mississippi are not permitted to be open or are required to be closed. At the Closing, there shall be delivered to Acquiror, Acquiror Sub, Seller and Seller
Sub the certificates and other documents required to be delivered under Article VI hereof.
1.3
The Articles of Incorporation and
Bylaws of the Surviving Corporation and the Subsidiary Surviving Bank
. The articles of incorporation and bylaws of Acquiror and Acquiror Sub, each as in effect immediately prior to the Effective Time, shall be the articles of incorporation and
bylaws of the Surviving Corporation and the Subsidiary Surviving Bank, respectively, until thereafter changed or amended as provided therein and in accordance with applicable Law.
1.4
Directors and Officers
.
(a) Prior to the Effective Time, the parties shall take all appropriate actions so that, as of the Effective Time, and subject to and in
accordance with the Articles of Incorporation of Acquiror, as amended (the
Articles
), and the Restated Bylaws of Acquiror, as amended (the
Bylaws
), the number of directors of the Surviving Corporation shall be
increased by one director and shall consist of the directors of Acquiror in office immediately prior to the Effective Time as well as one current director of Seller selected by Acquiror in its sole and absolute discretion after consultation with
Seller (the
Seller Designee
), until the next annual meeting of the Surviving Corporations stockholders and until their respective successors are duly elected, appointed or qualified or until their earlier death, resignation
or removal in accordance with the articles of incorporation and bylaws of the Surviving Corporation. The Surviving Corporations board of directors shall consider in good faith the nomination for reelection of the Seller Designee at each
subsequent annual meeting of the Surviving Corporations stockholders through the 2019 annual meeting. The officers of Acquiror shall, from and after the Effective Time, continue as the officers of the Surviving Corporation until their
successors shall have been duly
A-2
elected, appointed or qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the Surviving Corporation.
(b) Prior to the effective time of the Subsidiary Merger, the parties shall take all appropriate actions so that, as of the effective time of
the Subsidiary Merger, and subject to and in accordance with the articles of incorporation and bylaws of Acquiror Sub, the number of directors of the Subsidiary Surviving Bank shall be increased by one director and shall consist of the directors of
Acquiror Sub in office immediately prior to the effective time of the Subsidiary Merger as well as one current director of Seller Sub selected by Acquiror Sub in its sole and absolute discretion after consultation with Seller Sub (the
Seller Sub Designee
), until the next annual meeting of the Subsidiary Surviving Banks sole stockholder and until their respective successors are duly elected, appointed or qualified or until their earlier death, resignation
or removal in accordance with the articles of incorporation and bylaws of the Subsidiary Surviving Bank. The Subsidiary Surviving Banks board of directors shall consider in good faith the nomination for reelection of the Seller Sub Designee at
each subsequent annual meeting of the Subsidiary Surviving Banks sole stockholder through the 2019 annual meeting. The officers of Acquiror Sub shall, from and after the effective time of the Subsidiary Merger, continue as the officers of the
Subsidiary Surviving Bank until their successors shall have been duly elected, appointed or qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the Subsidiary Surviving Bank.
1.5
Effect of the Mergers
.
(a) At the Effective Time, the separate existence of Seller shall cease, and all right, title and interest in and to all real estate and other
property owned by, and every contract right possessed by, Seller shall be vested in Acquiror, as the surviving corporation, without reversion or impairment, without further act or deed and without any transfer or assignment having occurred (but
subject to any existing liens or other encumbrances thereon), and all liabilities of Seller shall be vested in Acquiror, as the surviving corporation, as primary obligor therefor and, except as set forth herein, no other person shall be liable
therefor, and all proceedings pending by or against Seller shall be continued by or against Acquiror, as the surviving corporation, and all liabilities, obligations, assets or rights associated with such proceedings shall be vested in Acquiror, as
the surviving corporation.
(b) At the effective time of the Subsidiary Merger, the separate existence of Seller Sub shall cease, and all
right, title and interest in and to all real estate and other property owned by, and every contract right possessed by, Seller Sub shall be vested in Acquiror Sub, as the surviving bank, without reversion or impairment, without further act or deed
and without any transfer or assignment having occurred (but subject to any existing liens or other encumbrances thereon), and all liabilities of Seller Sub shall be vested in Acquiror Sub, as the surviving bank, as primary obligor therefor and,
except as set forth herein, no other person shall be liable therefor, and all proceedings pending by or against Seller Sub shall be continued by or against Acquiror Sub, as the surviving bank, and all liabilities, obligations, assets or rights
associated with such proceedings shall be vested in Acquiror Sub, as the surviving bank.
1.6
Tax Consequences
. The parties
acknowledge and agree that it is intended that the Parent Merger constitute a reorganization within the meaning of Section 368(a) of the Code, and this Agreement is intended to be and is adopted as the plan of
reorganization as that term is used in Sections 354 and 361 of the Code. From and after the date of this Agreement and until the Closing, each party hereto shall use its reasonable best efforts to cause the Parent Merger to qualify as a
reorganization under Section 368(a) of the Code.
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ARTICLE II
EFFECT OF THE MERGERS ON THE CAPITAL STOCK OF THE CONSTITUENT
ENTITIES; EXCHANGE OF CERTIFICATES
2.1
Conversion of Shares
.
(a) Subject to the provisions of this Agreement, at the Effective Time, automatically by virtue of the Parent Merger and without any action on
the part of Acquiror, Seller or the holder of any of the following securities:
|
(i)
|
Each share of Acquiror Common Stock issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding after the Effective Time and shall not be affected by the Parent Merger.
|
|
(ii)
|
Subject to the other provisions of this Article II, each share of Sellers common stock, $0.01 par value per share (the
Seller Common Stock
), issued and outstanding immediately prior to the
Effective Time (other than any shares of Seller Common Stock to be canceled in accordance with Section 2.1(a)(v) and shares held by Dissenting Stockholders) shall, subject to adjustment pursuant to Section 2.1(a)(iv), be converted
automatically into and thereafter represent the right to receive the number of shares (or a fraction thereof) of Acquiror Common Stock, rounded to the nearest four decimals, equal to the Exchange Ratio (the
Merger Consideration
).
As used in this Agreement, the term
Acquiror Common Stock
means the common stock, $5.00 par value per share, of Acquiror; the term
Exchange Ratio
means 0.6066.
|
|
(iii)
|
Certificates previously evidencing shares of Seller Common Stock shall be exchanged for certificates evidencing the Merger Consideration. Notwithstanding the foregoing, however, no fractional shares of Acquiror Common
Stock shall be issued, and, in lieu thereof, a cash payment shall be made pursuant to Section 2.1(b).
|
|
(iv)
|
If at any time during the period between the date of this Agreement and the Effective Time, any change in the number of outstanding shares of capital stock of Acquiror or Seller shall occur (or for which the relevant
record date will occur) as a result of any reclassification, recapitalization, stock split (including a reverse stock split) or other subdivision, combination or readjustment of shares, or as a result of any stock dividend or stock distribution with
a record date during such period, the Exchange Ratio shall be equitably and proportionately adjusted, if necessary and without duplication, to reflect such change.
|
|
(v)
|
Each share of Seller Common Stock held in the treasury of Seller and each share of Seller Common Stock issued and outstanding immediately prior to the Effective Time that is owned by Acquiror or any subsidiary of
Acquiror or Seller (other than shares held in trust accounts, managed accounts, mutual funds and the like or otherwise in a fiduciary or agency capacity or as a result of debts previously contracted) shall automatically be cancelled and extinguished
without any conversion thereof and no Merger Consideration or other consideration shall be delivered in exchange therefor.
|
(b) No certificates or scrip representing fractional shares of Acquiror Common Stock will be issued as a result of the Parent Merger. In lieu
of the issuance of fractional shares pursuant to Section 2.1(a), cash adjustments (without interest) will be paid to each holder of Seller Common Stock in respect of any fraction of a share of Acquiror Common Stock that would otherwise be
issuable to such holder of Seller Common Stock, and the amount of such cash adjustment shall be determined by multiplying (x) the fraction of a share of Acquiror Common Stock otherwise issuable by (y) the weighted average of the closing
sale prices of one share of Acquiror Common Stock as reported by the Nasdaq Global Select Market, for the 15 consecutive trading days ending on the trading day immediately prior to the Closing Date. No such holder shall be entitled to dividends,
voting rights or any other right of stockholders in respect of any fractional share.
A-4
2.2
Exchange of Seller Stock Certificates
.
(a) Acquiror has appointed Computershare, Inc. to serve as exchange agent in connection with the Parent Merger for the purpose of exchanging
shares of Seller Common Stock for the Merger Consideration (the
Exchange Agent
). At or immediately following the Effective Time, Acquiror shall deposit in trust with the Exchange Agent for the benefit of Sellers
stockholders the aggregate number of shares of Acquiror Common Stock equal to the aggregate Merger Consideration (such shares of Acquiror Common Stock, together with cash sufficient to make payments required with respect to fractional shares of
Acquiror Common Stock in accordance with Section 2.1(b) and pay any dividends or distributions with respect to such Acquiror Common Stock in accordance with Section 2.4, the
Exchange Fund
). Acquiror shall deposit such
shares of Acquiror Common Stock with the Exchange Agent by delivering to the Exchange Agent certificates representing, or providing to the Exchange Agent an uncertificated book-entry for, such shares and immediately available funds for such cash in
accordance with Section 2.1(b) and Section 2.4.
(b) As soon as reasonably practicable after the Effective Time, the Exchange
Agent shall mail to the former record holders of the shares of Seller Common Stock issued and outstanding immediately prior to the Effective Time that have been converted into the right to receive the Merger Consideration pursuant to
Section 2.1(a) (other than shares held by Dissenting Stockholders): (i) a letter of transmittal (which letter shall specify that the delivery of the Merger Consideration shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificate(s) formerly representing shares of Seller Common Stock (each a
Seller Stock Certificate
) to the Exchange Agent (or affidavits of loss in lieu of such certificate(s)) and shall otherwise be in
form and substance reasonably satisfactory to Acquiror and the Exchange Agent) and (ii) instructions for use in effecting the surrender to the Exchange Agent of Seller Stock Certificate(s) in exchange for the Merger Consideration. After the
Effective Time, upon surrender to the Exchange Agent by the holder thereof of the Seller Stock Certificate(s) issued and outstanding immediately prior to the Effective Time that have been converted into the right to receive the Merger Consideration,
together with a letter of transmittal duly executed and completed in accordance with the instructions thereto and any other documents reasonably required by the Exchange Agent, the Exchange Agent on behalf of Acquiror shall deliver the Merger
Consideration (in the form of an uncertificated share of Acquiror Common Stock, unless such holder specifically requests a certificated share) to each such holder in exchange for each such share plus a check in the amount (if any) equal to any cash
that such holder has the right to receive pursuant to Section 2.1(b) and, if applicable, Section 2.4 hereof, without interest. Holders of record of shares of Seller Common Stock who hold such shares as nominees, trustees or in other
representative capacities (a
Representative
) may submit multiple letters of transmittal, provided that such Representative certifies that each such letter of transmittal covers all the shares of Seller Common Stock held by such
Representative for a particular beneficial owner. Each Seller Stock Certificate so surrendered and all transmittal materials shall be duly completed and endorsed as the Exchange Agent may reasonably require. The Exchange Agent shall not be obligated
to deliver the Merger Consideration to which any former holder of Seller Common Stock is entitled as a result of the Parent Merger until such holder surrenders his, her or its Seller Stock Certificate(s) (or affidavits of loss in lieu of such
certificate(s)) for exchange as provided in this Section 2.2. After the Effective Time, each certificate that represented outstanding shares of Seller Common Stock prior to the Effective Time shall be deemed for all corporate purposes (other
than the payment of dividends and other distributions to which the former stockholders of Seller Common Stock may be entitled) to evidence only the right of the holder thereof to receive the Merger Consideration in exchange for each such share as
provided in this Article II. Acquiror shall instruct the Exchange Agent to promptly pay the Merger Consideration following the receipt of each letter of transmittal.
(c) Any portion of the Exchange Fund held by the Exchange Agent that remains unclaimed by the former stockholders of Seller for six months
after the Effective Time shall be delivered to Acquiror upon demand, and any former stockholders of Seller who have not theretofore complied with this Section 2.2 shall thereafter look only to Acquiror for payment of their claims for Acquiror
Common Stock, any cash in lieu of fractional shares of Acquiror Common Stock or any dividends or distributions with respect to Acquiror Common Stock (all without any interest thereon). Any Merger Consideration remaining unclaimed as of a date which
is immediately prior to
A-5
the time when such amounts would otherwise escheat to or become property of any Governmental Entity shall, to the extent permitted by applicable Law, become the property of Acquiror free and
clear of any claims or interest of any person or entity entitled thereto. Notwithstanding the foregoing, none of Acquiror, Seller, any subsidiary of Acquiror or Seller or the Exchange Agent or any other person shall be liable to any former holder of
Seller Common Stock for shares of Acquiror Common Stock (or dividends or distributions with respect thereto) or cash in lieu of fractional shares of Acquiror Common Stock delivered in good faith to public officials pursuant to any applicable
abandoned property, escheat or similar Law.
(d) From and after the Effective Time, the holders of Seller Stock Certificate(s) shall cease
to have any rights with respect to shares of Seller Common Stock represented thereby except as otherwise provided in this Agreement or by applicable Law. All rights to receive the Merger Consideration issued upon conversion of the shares of Seller
Common Stock pursuant to this Article II shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Seller Common Stock.
(e) If any portion of the Merger Consideration is to be issued to a person other than the person in whose name the shares of Seller Common
Stock so surrendered are registered, it shall be a condition to such issuance that each Seller Stock Certificate shall be properly endorsed or otherwise be in proper form for transfer, and the person requesting such issuance shall pay to the
Exchange Agent any transfer or other similar Taxes required as a result of such issuance to a person other than the registered holder of such Seller Stock Certificate, or establish to the reasonable satisfaction of the Exchange Agent that such Taxes
have been paid or are not payable. Acquiror or the Exchange Agent shall be entitled to deduct and withhold, without duplication, from the consideration otherwise payable pursuant to this Agreement to any holder of Seller Common Stock such amounts as
Acquiror or the Exchange Agent is required to deduct and withhold under the Code, or any provision of Tax Law, with respect to the making of such payment and shall further be entitled to sell Acquiror Common Stock otherwise issuable pursuant to this
Agreement to satisfy any such withholding requirement (which Acquiror Common Stock will be valued with respect to such withholding at the average of the high and low trading prices thereof on the day of such sale). To the extent the amounts are so
withheld by Acquiror or the Exchange Agent and paid over to the applicable Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of shares of Seller Common Stock in respect
of whom such deduction and withholding was made by Acquiror or the Exchange Agent, as applicable.
(f) In the event any Seller Stock
Certificate(s) shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Seller Stock Certificate(s) to be lost, stolen or destroyed and, if required by Acquiror or the Exchange Agent, the
posting by such person of a bond in such amount as either of them may reasonably direct as indemnity against any claim that may be made against it or the Surviving Corporation with respect to such Seller Stock Certificate(s), the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Seller Stock Certificate(s) the Merger Consideration (together with a check in the amount (if any) of any dividends or distributions payable in accordance with Section 2.4).
(g) The Exchange Agent shall invest the cash balances in the Exchange Fund in a demand deposit account or as directed by Acquiror. Any
interest and other income resulting from such investments shall be paid to Acquiror upon termination of the Exchange Fund pursuant to Section 2.2(c).
2.3
Dissenting Shares
. No outstanding share of Seller Common Stock as to which the holder has exercised appraisal rights under
Section 262 of the DGCL and did not vote for the adoption of this Agreement shall be converted into or represent a right to receive the Merger Consideration, and the holder thereof shall be entitled only to such rights as are granted by the
DGCL,
provided
, such stockholder complies with the procedures and perfects the rights contemplated by and set forth in the applicable provisions of the DGCL. Seller shall give Acquiror notice as promptly as practicable upon receipt by Seller
of any such written demands for payment of the fair value of such shares of the Seller Common Stock and of withdrawals of such demands and any other instruments provided pursuant to the DGCL (any stockholder duly making such demand being hereinafter
called a
Dissenting Stockholder
). Acquiror and Seller shall reasonably cooperate in all negotiations and proceedings
A-6
with respect to any such demands or notices by a Dissenting Stockholder. Seller shall not, without the prior written consent of Acquiror, which consent shall not be unreasonably withheld,
conditioned or delayed, make any payment with respect to, or settle, offer to settle or otherwise negotiate, any such demands. If any Dissenting Stockholder shall effectively withdraw or lose (through failure to perfect or otherwise) his right to
such payment, such holders shares of Seller Common Stock shall be automatically converted into a right to receive the Merger Consideration in accordance with the applicable provisions of this Agreement.
2.4
Rights as Stockholders
. All shares of Acquiror Common Stock to be issued as Merger Consideration shall be deemed issued and
outstanding as of the Effective Time. Former stockholders of Seller and any other persons who are entitled to receive Acquiror Common Stock as a result of the Parent Merger will be able to vote after the Effective Time at any meeting of Acquiror
stockholders or pursuant to any written consent procedure the number of whole shares of Acquiror Common Stock into which their shares of Seller Common Stock are converted, regardless of whether they have exchanged their Seller Stock Certificates. In
addition, whenever a dividend or other distribution is declared by Acquiror on the Acquiror Common Stock with a record date after the Effective Time, the declaration shall include dividends or other distributions on all shares of Acquiror Common
Stock issuable hereunder, but no stockholder will be entitled to receive his, her or its distribution of such dividends or other distributions until physical exchange of such stockholders Seller Stock Certificates shall have been effected.
Upon exchange of a stockholders Seller Stock Certificates, any such person shall be entitled to receive from Acquiror an amount equal to all dividends or other distributions (without interest thereon less the amount of any taxes, if any, that
have been withheld by, imposed on or paid by Acquiror or the Exchange Agent with respect to such dividends) declared, and for which the payment has occurred, on the shares represented thereby;
provided
,
however
, that former
stockholders of Seller shall not be entitled to receive any dividend on their Acquiror Common Stock with respect to any period for which Acquiror paid a dividend prior to the Effective Time.
2.5
Stock Transfer Records
. Prior to the Effective Time, Seller shall continue to maintain its stock transfer records and to transfer
and replace stock certificates in accordance with its existing policies and past practices with regard to such transfers and replacements. From and after the Effective Time, there shall be no further registration or transfers on the stock transfer
books of Seller or Acquiror of shares of Seller Common Stock that were issued and outstanding immediately prior to the Effective Time other than to settle transfers of Seller Common Stock that occurred prior to the Effective Time. If after the
Effective Time, the Seller Stock Certificates are presented for transfer to the Surviving Corporation or the Exchange Agent, they shall be cancelled and exchanged for the Merger Consideration in accordance with the procedures set forth in this
Article II.
2.6
Subsidiary Merger
. At the effective time of the Subsidiary Merger, each share of common stock, $5.00 par value per
share, of Seller Sub (the
Seller Sub Common Stock
) issued and outstanding immediately prior to the effective time of the Subsidiary Merger shall automatically be cancelled and there shall be no conversion or exchange of, or
consideration paid or issued for, such Seller Sub Common Stock. The certificate or certificates for such Seller Sub Common Stock shall be surrendered and cancelled. All of the shares of Acquiror Sub issued and outstanding immediately prior to the
effective time of the Subsidiary Merger shall remain issued and outstanding after the effective time of the Subsidiary Merger and shall be unaffected by the Subsidiary Merger.
2.7
Seller Stock Options, Seller Restricted Stock and Related Matters
.
(a) At the Effective Time, by virtue of the Parent Merger and without any action on the part of the holders thereof, each option to purchase
shares of Seller Common Stock (collectively,
Seller Stock Options
) granted by Seller under the Metropolitan BancGroup, Inc. 2007 Stock Incentive Plan (the
Seller Stock Plan
) or otherwise, whether vested or
unvested, that is outstanding immediately prior to the Effective Time, shall be cancelled and converted into an obligation of Acquiror to pay (or cause to be paid) and a right of the holder to receive, in full satisfaction of any rights in respect
of the Seller Stock Option, a cash payment, without interest, equal to the product of (i) the total number of shares of Seller Common Stock subject to such Seller Stock Option, multiplied by (ii) the excess, if any, of $25.50 over the
exercise price per share of Seller Common Stock
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subject to such Seller Stock Option (with the aggregate amount of such payment to the holder to be rounded to the nearest cent), less the amount of any required withholding Tax. No holder of a
Seller Stock Option that has an exercise price per share of Seller Common Stock that is equal to or greater than $25.50 shall be entitled to any payment with respect to such cancelled Seller Stock Option before, on, or after the Effective Time.
Acquiror shall pay (or cause to be paid) to the holders of Seller Stock Options the cash payments described in this Section 2.7(a) on or as soon as reasonably practicable after the Closing Date, but in any event within ten Business Days
following the Closing Date.
(b) At the Effective Time, each share of Seller Common Stock subject to restrictions on transfer and/or
forfeiture granted under the Seller Stock Plan or otherwise (
Seller Restricted Stock
) that is outstanding immediately prior to the Effective Time shall become fully vested and shall be converted automatically into and shall
thereafter represent the right to receive the Merger Consideration, less the amount of any required withholding Tax, in accordance with Section 2.1(a)(ii).
(c) Before the Effective Time, Sellers compensation committee of its board of directors shall adopt such resolutions or take such other
actions as may be reasonably required to effect the transactions described in this Section 2.7.
(d) Prior to the Effective Time,
Seller shall notify each holder of Seller Stock Options and/or Seller Restricted Stock (which form notices shall be provided to Acquiror for review and comment in advance of distribution to holders of Seller Stock Options and/or Seller Restricted
Stock) stating that such holders Seller Stock Options and/or Seller Restricted Stock shall be treated in the manner set forth in Section 2.7(a) and (b) hereof, respectively, and shall use its reasonable best efforts to obtain from
such holder a written acknowledgement of the receipt of such Seller notice.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND SELLER SUB
Except as disclosed in writing in the correspondingly enumerated section or subsection of the disclosure schedule of Seller and Seller Sub
delivered herewith (the
Seller Disclosure Schedule
) (
provided
, that each exception set forth in the Seller Disclosure Schedule shall be deemed to qualify any other representation and warranty to the extent that the
relevance of such exception to such other representation and warranty is reasonably apparent on the face of the disclosure (without need to examine underlying documentation)), Seller and Seller Sub, jointly and severally, represent and warrant as of
the date hereof to Acquiror and Acquiror Sub as set forth in this Article III. The Seller Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections contained in this Article III. The phrase
provided to
Acquiror
,
delivered to Acquiror
or
made available to Acquiror
or any phrase of similar import means that Seller or Seller Sub has delivered, provided access to or made certain items available for
review and copying to Acquiror, Acquiror Sub or their counsel. For purposes of this Article III, the phrase
to the Knowledge of Seller
, the phrase
to Sellers Knowledge
or any phrase of similar import shall
be deemed to refer to the actual knowledge of the officers of Seller and Seller Sub listed on
Seller Disclosure Schedule 3
after reasonable investigation.
3.1
Corporate Organization
.
(a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has the
requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which
the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing, or
to have such power or authority, individually or in the aggregate, would not have a Seller Material Adverse Effect. The term
Seller Material Adverse Effect
shall mean any change, state of facts, circumstance, event or development
which, individually or in the
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aggregate, would reasonably be expected to either (i) materially impair Sellers or Seller Subs ability to perform its obligations under this Agreement or consummate the Mergers
on a timely basis or (ii) have a material adverse effect on the business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of Seller, Seller Sub or any of the other Subsidiaries, taken individually or
as a whole, other than, as to subpart (ii), (A) effects resulting from the impact of any action taken by Seller or any of the Subsidiaries with the prior written consent of Acquiror or required expressly by this Agreement or any action not
taken by Seller or any of its Subsidiaries to the extent such action is expressly prohibited by this Agreement without the prior written consent of Acquiror and Acquiror has not consented to such action; (B) changes in Laws or interpretations
thereof that are generally applicable to the banking industry; (C) changes in accounting principles generally accepted in the United States of America (
GAAP
) or regulatory accounting requirements applicable to banks or their
holding companies generally; (D) expenses incurred in connection with this Agreement and the Mergers including payments to be made pursuant to employment and severance agreements and the termination of other benefit plans; (E) changes
attributable to or resulting from changes that are the result of factors generally affecting financial institutions including changes in interest rates; (F) changes in general economic, market, political or regulatory conditions in the United
States; (G) a failure, in and of itself, to meet earnings projections or internal financial forecasts, but not including any underlying causes thereof; (H) any outbreak or escalation of hostilities, declared or undeclared acts of war or
terrorism; or (I) the impact of the announcement of this Agreement, the Mergers and the other transactions contemplated hereby;
provided
, that as to each of clauses (B), (C), (E), (F) or (H), such change, state of facts,
circumstance, event or development does not have a disproportionate effect on Seller or Seller Sub as compared to other financial institutions or their holding companies. Seller is registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended, and (together with Seller Sub) is a member in good standing of the Federal Home Loan Bank of Dallas and owns the requisite amount of stock therein. Seller has furnished or made available to Acquiror true and complete copies
of the certificate of incorporation and bylaws (or comparable organizational documents) of Seller and each of the Subsidiaries as in effect on the date hereof.
(b)
Seller Disclosure Schedule 3.1(b)
lists the direct and indirect subsidiaries of Seller (collectively, the
Subsidiaries
), in which Seller owns, directly or indirectly, all of the issued and outstanding shares or other equity interests therein. Seller Sub is a state banking corporation duly incorporated, validly existing and in good
standing under the laws of the State of Mississippi. Seller Sub is not a member of the Federal Reserve System. Seller Sub has the requisite corporate power and authority to own or lease all of its properties and assets and to conduct its business as
it is now being conducted, and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing, or to have such power or authority, individually or in the aggregate, would not have a Seller Material Adverse Effect.
(c) Each of the Subsidiaries other than Seller Sub, is duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization. Each of the Subsidiaries has the requisite corporate, limited liability company or trust power and authority, as applicable, to own or lease all of its properties and assets and to conduct its business as it
is now being conducted, and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing, or to have such power or authority, individually or in the aggregate, would not have a Seller Material Adverse Effect.
(d) Other than as listed on
Seller Disclosure Schedule 3.1(b)
and Seller Subs ownership of stock of the Federal Home Loan Bank of
Dallas, Seller does not own or control, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any other entity.
3.2
Capitalization
. The authorized capital stock of Seller consists of (i) 20,000,000 shares of Seller Common Stock, of which
7,446,560 shares are issued and outstanding, including 90,170 shares of Seller Restricted Stock,
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1,192,000 shares are reserved for issuance pursuant to the Seller Stock Plan (of which 913,419 shares are subject to outstanding Seller Stock Options) and no shares are held in treasury as
of the date hereof, and (ii) 5,000,000 shares of preferred stock, par value $0.01 per share, of which no shares are issued and outstanding as of the date hereof. The authorized capital stock of Seller Sub consists of 200,000 shares of Seller
Sub Common Stock. All issued and outstanding shares of Seller Common Stock and all issued and outstanding shares of Seller Sub Common Stock have been duly authorized and validly issued and are fully paid, non-assessable and free of preemptive
rights, and there are no voting trusts, stockholder agreements, proxies or other agreements in effect with respect to Seller Common Stock or Seller Sub Common Stock. All outstanding shares of Seller Common Stock and all outstanding shares of the
capital stock of Seller Sub have been issued in material compliance with applicable federal and state securities Laws, and none of the outstanding shares of capital stock or other security of Seller has been issued in violation of any preemptive
rights of the current or past stockholders of Seller. All of the outstanding shares of Seller Sub Common Stock are owned by Seller free and clear of any liens, encumbrances, charges, restrictions or rights of third parties of any kind whatsoever.
Except for outstanding Seller Stock Options, neither Seller, Seller Sub nor any of the other Subsidiaries has or is bound by any outstanding subscriptions, options, warrants, rights, calls, commitments or agreements of any character calling for the
transfer, purchase, redemption or issuance of any shares of Seller Common Stock or Seller Sub Common Stock or any securities representing the right to purchase or otherwise receive any shares of such capital stock or any securities convertible into
or representing the right to purchase or subscribe for any such stock. As of the date of this Agreement, no bonds, debentures, notes or other indebtedness having the right to vote on any matters on which Seller stockholders may vote are outstanding.
3.3
Authority; No Violation
.
(a) Subject to the approval of this Agreement and the transactions contemplated hereby by the stockholders of Seller and Seller Sub, Seller
and Seller Sub have all requisite corporate power and authority to execute and deliver this Agreement and the Merger Documents, as applicable, and to consummate the transactions contemplated hereby and thereby in accordance with the terms hereof and
thereof. The execution and delivery of this Agreement and the Merger Documents and the consummation of the transactions contemplated hereby and thereby, including the Mergers, have been duly and validly approved by the unanimous vote of the Boards
of Directors of Seller and Seller Sub, as applicable, and the Board of Directors of Seller has determined to recommend that the stockholders of Seller adopt and approve the Parent Merger and the transactions contemplated hereby. Except for the
approval of Sellers stockholders of this Agreement and the other transactions contemplated hereby on substantially the terms and conditions set forth in this Agreement, no other corporate or similar proceedings on the part of Seller are
necessary to consummate the transactions so contemplated other than the filing of the Parent Merger Documents as contemplated in Section 1.2. Except for the approval of Seller Subs sole stockholder of this Agreement and the transactions
contemplated hereby on substantially the terms and conditions set forth in this Agreement, no other corporate or similar proceedings on the part of Seller Sub are necessary to consummate the transactions so contemplated other than the filing of the
Subsidiary Merger Document as contemplated in Section 1.2. Subject to the receipt of the regulatory and other approvals described in this Agreement, this Agreement and the Merger Documents have been, or will be, duly and validly executed and
delivered by Seller and Seller Sub, as applicable, and constitute, or will constitute upon execution and delivery thereof, valid and binding obligations of Seller and Seller Sub, as applicable, enforceable against Seller and Seller Sub, as
applicable, in accordance with and subject to their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors rights
generally, except that the availability of equitable remedies (including specific performance and injunctive relief) is within the discretion of the court before which any proceeding may be brought (the
Bankruptcy and Equity
Exception
).
(b) None of the execution and delivery of this Agreement and the Merger Documents by Seller or Seller Sub, as
applicable, nor the consummation by Seller or Seller Sub of the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof, nor compliance by Seller or Seller Sub with any of the terms or provisions hereof or
thereof, will (i) assuming that the stockholder approvals referred to in Section 3.3(a) have been
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obtained, violate any provision of the certificate of incorporation or bylaws (or comparable organizational documents) of Seller, Seller Sub or any other Subsidiary; (ii) assuming that the
consents and approvals set forth in Section 3.3(c) are duly obtained, violate any (A) federal, state, local or foreign or provincial law, statute, ordinance, rule, regulation, order, policy, guideline or agency requirement of or
undertaking to or agreement with any Governmental Entity, including common law (collectively,
Law
), to which Seller, Seller Sub or any of the other Subsidiaries is subject or (B) any judgment, order, writ, decree or
injunction applicable to Seller or Seller Sub or any of their respective properties or assets; or (iii) except as provided in
Seller Disclosure Schedule 3.3(b)
, assuming the consents and approvals set forth in Section 3.3(c) are
duly obtained, violate, conflict with, result in a breach of any provisions of, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of, accelerate the
performance required by, require the payment of any termination or like fee, or result in the creation of any lien, security interest, charge or other encumbrance upon any of the respective properties or assets of Seller or the Subsidiaries under
any of the terms, conditions or provisions of the Seller Agreements or any note, bond, mortgage, indenture, guarantee, deed of trust, license, lease, agreement or other instrument or obligation to which Seller or any of the Subsidiaries is a party,
or by which any of their respective properties or assets may be bound or affected, except, with respect to clauses (ii) and (iii) above, such as individually or in the aggregate would not reasonably be likely to have a Seller Material
Adverse Effect.
(c) Except for consents and approvals of or filings or effective registrations with or notices to the Secretary of State
of the State of Mississippi, the Secretary of State of the State of Delaware, the MCB, the Securities and Exchange Commission (the
Commission
), other applicable state and federal securities commissions, agencies and other similar
regulatory bodies (including Nasdaq, the Financial Industry Regulatory Authority (
FINRA
) and other industry self-regulatory organizations), the Federal Reserve Board (the
FRB
), the Federal Deposit Insurance
Corporation (
FDIC
), the Federal Trade Commission, the Department of Justice, the stockholders of Seller and Seller Sub, and such other consents or approvals of or filings or effective registrations with or notices to any
non-governmental third party which the failure to make or obtain, individually or in the aggregate, would not reasonably be likely to have a Seller Material Adverse Effect, no consents or approvals of or filings or effective registrations with or
notices to any Governmental Entity or non-governmental third party are required on behalf of Seller or Seller Sub in connection with (i) the execution and delivery of this Agreement and the Merger Documents by Seller or Seller Sub, as
applicable, (ii) the consummation by Seller of the Parent Merger and the other transactions contemplated hereby and by the Parent Merger Documents, and (iii) the consummation by Seller Sub of the Subsidiary Merger and the other
transactions contemplated hereby and by the Subsidiary Merger Document. As of the date of this Agreement, Seller has no Knowledge of any reason why any requisite regulatory approvals to be obtained by it (i) should not be granted on a timely
basis or (ii) may be conditioned or restricted in any manner (including any requirement relating to the raising of additional capital or the disposition of assets) which could cause a Seller Material Adverse Effect.
(d) No business combination moratorium, control share acquisition, fair price, or other form of federal or
state antitakeover Law (collectively,
Takeover Laws
) is applicable to this Agreement and the transactions contemplated hereby.
3.4
Financial Statements
.
(a) Seller has previously delivered to Acquiror true and correct copies of the audited consolidated balance sheets of Seller as of
December 31, 2015 and 2014 and the related audited consolidated statements of income, comprehensive income, stockholders equity and cash flows for the years ended December 31, 2015, 2014 and 2013, in each case accompanied by the
audit reports of Horne LLP, independent public accountants, as well as the unaudited consolidated balance sheet of Seller as of September 30, 2016 and the related unaudited consolidated statements of income, comprehensive income,
stockholders equity and cash flows for the nine months ended September 30, 2016. The consolidated financial statements of Seller referred to herein (including the related notes, where applicable) (the
Seller Financial
Statements
), (i) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), and (ii) fairly present in all material respects the
financial position of Seller at the respective dates
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thereof and the results of Sellers operations and cash flows for the periods indicated therein, subject, in the case of unaudited interim financial statements, to the omission of footnotes
and normal and year-end audit adjustments as permitted by GAAP, none of which adjustments, to the extent they relate to Sellers or Seller Subs capital ratios, will be material.
(b) Except to the extent reflected, disclosed or reserved against in the Seller Financial Statements or immaterial liabilities incurred since
September 30, 2016 in the ordinary course of business and consistent with past practice (none of which arises from breach of any contract or agreement, breach of warranty, tort, infringement, violation of any applicable Law or any litigation or
other proceeding or is otherwise a loss contingency within the meaning of Accounting Standards Codification Topic 450, Contingencies), neither Seller nor any of the Subsidiaries has any obligation or liability, whether absolute, accrued,
contingent or otherwise and whether due or to become due, that is material to the business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of Seller and the Subsidiaries, taken individually or as a
whole.
(c) Since January 1, 2013 (i) neither Seller nor any of its Subsidiaries nor, to the Knowledge of Seller, any director,
officer, employee, auditor, accountant or representative of it or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of Seller or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Seller or any of its
Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing Seller or any of its Subsidiaries, whether or not employed by Seller or any of its Subsidiaries, has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation by Seller or any of its officers, directors, employees or agents to Sellers board of directors or any committee thereof or to any of Sellers directors or
officers.
3.5
Absence of Certain Changes or Events
. There has not been any material change in the business, operations, assets,
liabilities, condition (financial or otherwise) or results of operations of Seller and any of the Subsidiaries, taken individually or as a whole, since September 30, 2016, other than in connection with: (i) any change in banking or similar
Laws of general applicability to banks or their holding companies or interpretations thereof by Governmental Entities; (ii) changes in GAAP that are generally applicable to the banking or savings industry; (iii) reasonable expenses
incurred in connection with the transactions contemplated hereby; and (iv) changes attributable to or resulting from changes in general economic conditions, including changes in the prevailing level of interest rates.
3.6
Legal Proceedings
. Except as provided in
Seller Disclosure Schedule 3.6
, neither Seller nor any of the Subsidiaries is a
party to any, and there are no pending or, to the Knowledge of Seller, threatened, legal, administrative, arbitration or other proceedings, claims, actions or governmental investigations of any nature against Seller or any of the Subsidiaries, other
than routine litigation arising in the ordinary course of business, which, individually or in the aggregate, would not reasonably be expected to have a Seller Material Adverse Effect. Neither Seller nor any of the Subsidiaries is a party to any
judgment, order, writ, decree or injunction which, individually or in the aggregate, would reasonably be expected to have a Seller Material Adverse Effect.
3.7
Taxes and Tax Returns
.
(a) Each of Seller and the Subsidiaries has duly and timely filed all Tax Returns required to be filed (taking into account all applicable
extensions of time in which to file), and all such Tax Returns were correct and complete in all material respects. Each of Seller and the Subsidiaries has duly paid all Taxes that were due and payable other than Taxes which (i) are being
contested in good faith through appropriate proceedings (and are set forth on
Seller Disclosure Schedule 3.7(a)
) and (ii) have not finally been determined. Seller and Seller Sub have established on their books and records reserves that
are adequate for the payment of all Taxes not yet due and payable, in accordance with GAAP. Except as set forth on
Seller Disclosure Schedule 3.7(a)
, no Tax Return filed of Seller or any of its Subsidiaries is under examination by any
Governmental Entity or is the subject of any
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administrative or judicial proceeding, and no written notice of assessment, proposed assessment or unpaid Tax deficiency has been received by or asserted against Seller or any of its Subsidiaries
by any Governmental Entity that has not been resolved and paid in full. No written claim has been made by any Governmental Entity in any jurisdiction where the Seller or any of its Subsidiaries does not file Tax Returns that it is, or may be,
subject to Tax in that jurisdiction that has not been resolved. The federal income Tax Returns of Seller and the Subsidiaries for all taxable periods ended on or prior to December 31, 2012 are closed to examination due to the expiration of the
applicable statute of limitations, and the Delaware and Mississippi franchise Tax Returns of Seller and the Subsidiaries, as applicable, respectively, for all taxable periods ended on or prior to December 31, 2012 are closed to examination due
to the expiration of the statute of limitations. Neither Seller nor any of its Subsidiaries has granted any extension or waiver of the limitation period for the assessment or collection of any Tax that remains in effect.
(b) Neither Seller nor any of the Subsidiaries (i) has requested any extension of time within which to file any Tax Return which Tax
Return has not since been filed; (ii) is a party to any written or unwritten agreement, arrangement or understanding providing for the allocation or sharing of, or indemnification with respect to, Taxes, which agreement, arrangement or
understanding required Seller or any of the Subsidiaries to make payments after January 1, 2017 or could require Seller or any of the Subsidiaries to make any payments after the Effective Time (other than such an agreement or arrangement
exclusively between or among the Seller and its Subsidiaries that is set forth on
Seller Disclosure Schedule 3.7(b)
); (iii) has initiated a change in accounting method (nor does Seller or Seller Sub have any Knowledge that the Internal
Revenue Service (the
IRS
) has proposed any such change of accounting method), as contemplated by Section 481 of the Code; (iv) has been a distributing corporation or a controlled corporation in a
transaction intended to qualify under Section 355(a) of the Code within the past five years; (v) has ever been a member of a consolidated, combined or unitary Tax group (other than a group of which Seller is or was the common parent) or
has any liability for Taxes of any other entity under Treasury Regulation Section 1.1502-6 (or any similar provision of any Law); (vi) has ever engaged in any listed transaction within the meaning of Treasury Regulation
Section 1.6011-4(b)(2); or (vii) is an S corporation within the meaning of Section 1361(a) of the Code.
(c) For purposes
of this Agreement,
Taxes
shall mean all taxes, charges, fees, levies or other assessments imposed by any taxing authority (domestic or foreign), including all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll, employment (including withholding, payroll and employment taxes required to be withheld with respect to income paid to employees), excise, estimated, severance, stamp, occupation, property
or other taxes, customs duties, fees, assessments or charges of a similar kind, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority (domestic or foreign). For purposes of this
Agreement,
Tax Return
shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied
or required to be supplied to a Governmental Entity
(d) No liens for Taxes exist upon, or with respect to, any of the assets or
properties of Seller or any of the Subsidiaries, except for liens for Taxes not yet due and payable.
(e) None of the assets of Seller or
any of the Subsidiaries (i) is tax-exempt use property within the meaning of Section 168(h) of the Code, (ii) directly or indirectly secures any debt the interest on which is exempt under Section 103(a) of the Code or
(iii) is property that is required to be treated as being owned by a person (other than Seller or the applicable Subsidiary) pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, as in effect
immediately before the enactment of the Tax Reform Act of 1986.
(f) Neither Seller nor any of the Subsidiaries will be required to
include in a taxable period ending after the Effective Time taxable income attributable to (i) a change in method of accounting pursuant to Section 481 of the Code (or any similar provision of state, local or foreign Law) prior to the
Effective Time, (ii) an installment sale or open transaction disposition made on or entered into prior to the Effective Time, (iii) a prepaid amount received on
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or prior to the Closing Date, (iv) a closing agreement within the meaning of Section 7121(a) of the Code (or any similar provision of state, local or foreign Law) or
(v) an election pursuant to Section 108(i) of the Code (or any similar provision of state, local or foreign Law).
(g) Seller
and the Subsidiaries have disclosed on their federal income Tax Returns all positions taken therein that could reasonably be expected to give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the
Code.
(h) Except as set forth on
Seller Disclosure Schedule 3.1(b)
, neither Seller nor any of the Subsidiaries is a partner or a
member of any partnership, joint venture or any other entity classified as a partnership for federal income tax purposes.
(i) All Taxes
that Seller and any of the Subsidiaries is or was required by applicable Law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Authority or other Person, including with
respect to any employee or independent contractor.
(j) Seller is not aware of any fact or circumstance that would reasonably be expected
to prevent the Parent Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
3.8
Employee Benefit Plans
.
(a) Each employee benefit plan, arrangement or agreement of Seller or any of the Subsidiaries which is an
employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (
ERISA
), is listed in
Seller Disclosure Schedule 3.8(a)
, and each bonus, deferred
compensation, pension (including an employee pension benefit plan within the meaning of Section 3(2) of ERISA (
Pension Plan
)), retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus,
stock purchase, restricted stock and stock option plan, employment or severance contract and all other material fringe benefits, employee benefit plans, practices, arrangements or commitments under which either Seller or any of the Subsidiaries has
any liability that cover current or former officers or employees (
Employees
) or current or former directors of Seller and any of the Subsidiaries, whether individually or in the aggregate or by group or class, whether written or
unwritten, qualified or non-qualified, are listed in
Seller Disclosure Schedule 3.8(a)
(the
Seller Plans
). Seller has furnished or made available to Acquiror true and complete copies or descriptions of each Seller Plan
together, if applicable, with (i) all amendments, supplements, funding arrangements, policies, or other related documents thereto, (ii) the most recent summary plan description for each such Seller Plan for which a summary plan description
is required, (iii) any applicable trust agreement, (iv) the most recent actuarial (to the extent applicable) and financial reports prepared with respect to any Seller Plan that is intended to be qualified under Section 401(a) of the
Code (
Qualified Seller Plan
), (v) the three most recent annual reports filed with any Governmental Entity, including all schedules thereto, (vi) the most recent determination, advisory or opinion letter or ruling, if
any, issued by the IRS with respect to any Qualified Seller Plan and a description of any open requests for rulings, statements or letters that pertain to any such Qualified Seller Plan and (vii) any material written communications within the
past six plan years to or from the IRS or any Governmental Entity with respect to any Seller Plan.
(b) (i) Each Seller Plan has been
operated in compliance with the applicable provisions of ERISA, the Code, all regulations, rulings and announcements promulgated or issued thereunder, and all other applicable governmental Laws, including but not limited to the Health Insurance
Portability and Accountability Act of 1996, the Age Discrimination in Employment Act of 1967, the Family and Medical Leave Act of 1994, the Americans with Disabilities Act and the Americans with Disabilities Amendments Act of 2008 and the Patient
Protection and Affordable Care Act of 2010, except for such instances of non-compliance that, either individually or in the aggregate, would not reasonably be expected to result in a Seller Material Adverse Effect; (ii) at all times after
December 31, 2004, except for such instances of non-compliance that, either individually or in the aggregate, would not reasonably be expected to result in a Seller Material Adverse Effect, each Seller Plan that constitutes
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or includes a nonqualified plan of deferred compensation within the meaning of Section 409A of the Code and is not otherwise exempt from Section 409A of the Code has been
operated in compliance with the applicable provisions of Section 409A of the Code and each such Seller Plan has been timely amended to comply in all material respects with the applicable provisions of such section; (iii) each Qualified
Seller Plan has received a favorable determination letter from the IRS or is entitled to rely upon a letter issued to a prototype sponsor or volume submitter sponsor covering the qualified status of such Qualified Seller Plan or has applied to the
IRS for such favorable determination letter within the applicable remedial amendment period under Section 401(b) of the Code and, to the Knowledge of Seller, no fact or event has occurred since the date of such letter that could reasonably be
expected to materially adversely affect the qualified status of any Qualified Seller Plan; (iv) except for such instances of non-compliance that, either individually or in the aggregate, would not reasonably be expected to result in a Seller
Material Adverse Effect, all filings required by ERISA and the Code to be made to the IRS or Department of Labor as to each Seller Plan have been timely filed, and all notices and disclosures to participants required by either ERISA or the Code,
including notice by any Seller Plan grandfathered under the Patient Protection and Affordable Care Act, have been timely provided; (v) neither Seller nor any of the Subsidiaries has any liability to the IRS with respect to any Seller Plan,
including any liability imposed by Chapter 43 of the Code, that, either individually or in the aggregate, would reasonably be expected to result in a Seller Material Adverse Effect; (vi) as of the date hereof, there is no pending or, to the
Knowledge of Seller, threatened claim, administrative proceeding or litigation relating to any Seller Plan except claims for benefits arising in the ordinary course of the administration of such plans; (vii) neither Seller nor any of the
Subsidiaries has engaged in a transaction with respect to any Seller Plan subject to ERISA (an
ERISA Plan
) that could reasonably be expected to subject Seller or any of the Subsidiaries to a Tax or penalty imposed by either
Section 4975 of the Code or Sections 502(i) and 4071 of ERISA that, either individually or in the aggregate, would reasonably be expected to result in a Seller Material Adverse Effect; (viii) neither Seller nor any ERISA Affiliate of
Seller within the last six (6) years has sponsored, maintained, or contributed to a plan, including any Seller Plan, which is a defined benefit plan within the meaning of Section 3(35) of ERISA or subject to Title IV of
ERISA, and Seller has no Knowledge of any facts, circumstances, or reportable events that could reasonably be expected to give rise to any material liability of Acquiror to the IRS or the Pension Benefit Guaranty Corporation under Title IV of ERISA;
and (ix) neither Seller nor any of the Subsidiaries has contributed to or been obligated to contribute to, within the last six (6) years, any multi-employer plan within the meaning of Section 3(37) of ERISA or a
multiple employer welfare arrangement within the meaning of Section 3(40) of ERISA, regardless of whether based on contributions of an ERISA Affiliate. For purposes of this Agreement, the term
ERISA Affiliate
shall mean any entity, which together with Seller or any of its Subsidiaries, as applicable, would be treated as a single employer under Code Section 414 or ERISA Section 4001(b).
(c) All material contributions required to be made by Seller or any of the Subsidiaries under the terms of any of their Seller Plans, as of
the date hereof, have been timely made when due, and all obligations and liabilities under such Seller Plans that have accrued but are not due have been reflected in accordance with GAAP in the Seller Financial Statements.
(d) Except as otherwise set forth in
Seller Disclosure Schedule 3.8(d)
, neither Seller nor Seller Sub has any material obligation to
provide medical, health, dental, vision, life insurance, or disability benefits under any Seller Plan for any period after termination of employment, except as may be required by Section 4980B of the Code or Section 601 of ERISA or similar
state or local law. Seller may amend or terminate any health or life benefit plan maintained by it at any time without incurring any liability thereunder other than in respect of vested benefits accrued and claims incurred prior to or in connection
with such amendment or termination pursuant to the terms of such plans and other than administrative and other expenses normally and typically required as part of a similar amendment or termination.
(e) For the current fiscal year, there has been no amendment to, to Sellers Knowledge, announcement by Seller or any of the Subsidiaries
relating to, or, to Sellers Knowledge, change in employee participation or coverage under, any Seller Plan which would materially increase the expense of maintaining such Seller Plan,
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either, individually or in the aggregate, in a way that would reasonably be expected to result in a Seller Material Adverse Effect. Except as set forth on
Seller Disclosure Schedule
3.8(e)
, neither the execution of this Agreement, approval of this Agreement by the stockholders of Seller or Seller Sub nor the consummation of the transactions contemplated hereby (individually or in conjunction with any other event) will
(i) accelerate the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits or increase in the amounts payable or result in any other material obligation pursuant to any
Seller Plan; (ii) limit or restrict their right or, after the consummation of the transactions contemplated hereby, the right of the sponsor of the Seller Plan, to merge, amend or terminate any Seller Plan in accordance with its terms;
(iii) entitle any Employee to severance pay or any increase in severance pay upon any termination of employment after the date hereof; or (iv) cause Seller or any of the Subsidiaries to record additional compensation expense on their
income statements with respect to any outstanding stock option or other equity-based award.
Without limiting the generality of the
foregoing, except as set forth on
Seller Disclosure Schedule 3.8(e)
, neither the execution of this Agreement, approval of this Agreement by the stockholders of Seller or Seller Sub nor the consummation of the transactions contemplated hereby
(individually or in conjunction with any other event) will result in amounts paid or payable that would constitute an excess parachute payment within the meaning of Section 280G of the Code.
(f) Except as set forth on
Seller Disclosure Schedule 3.8(f)
, there are no outstanding compensatory equity awards, including any
contracts or arrangements awarding stock options, stock appreciation rights, restricted stock, deferred stock, phantom stock or any other equity or equity-based compensation to any employee, officer, director, consultant or other service provider of
or to Seller or the Subsidiaries. With respect to the Seller Stock Options, (i) the per share exercise price of all such options is equal to or greater than the fair market value (determined in accordance with Section 409A of the Code) of
the underlying shares of Seller Common Stock as of their effective grant date and (ii) the effective date of grant of all such options was either the date of approval by Sellers board of directors or the compensation committee of
Sellers board of directors or a later date specified by such board of directors or compensation committee, as applicable.
3.9
Regulatory Reports
.
(a) Neither Seller nor any of the Subsidiaries is required to file or furnish annual, quarterly or other
reports with the Commission or the FDIC pursuant to the Securities Exchange Act of 1934, as amended (the
1934 Act
).
(b) Since January 1, 2013, Seller and Seller Sub have duly filed in correct form all monthly, quarterly and annual reports, forms,
correspondence, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file with the MCB, the FDIC, the FRB and any other federal or state Governmental Entity having
jurisdiction over Seller and/or Seller Sub, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file (or furnish, as applicable) such monthly, quarterly and annual reports, forms,
correspondence, registrations and statements or to pay such fees and assessments, individually or in the aggregate, is not reasonably likely to have a Seller Material Adverse Effect. As of their filing date, each such report or other filing did not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. To
the extent not prohibited by Law, Seller has delivered or made available to Acquiror accurate and complete copies of such reports, forms, correspondence, registrations and statements. There is no unresolved violation, criticism or exception by the
MCB, the FDIC, the FRB and any other federal or state Governmental Entity having jurisdiction over Seller and/or Seller Sub with respect to any such report or relating to any examination or inspection of Seller or Seller Sub which would reasonably
be expected to have, either individually or in the aggregate, a Seller Material Adverse Effect. Other than its normal examinations, there is no proceeding, examination or investigation pending or, to the Knowledge of Seller, threatened by any
Governmental Entity with respect to Sellers business or operations.
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3.10
Seller Information
. None of the information relating to Seller and the Subsidiaries
provided or to be provided by Seller or Seller Sub for inclusion or incorporation by reference in the Proxy Statement/Prospectus and/or in the registration statement on Form S-4, in which the Proxy Statement/Prospectus will be included as a part
thereof, to be filed by Acquiror with the Commission in connection with the solicitation of the approval of this Agreement and the transactions contemplated hereby by the stockholders of Seller, as amended or supplemented (or on any successor or
other appropriate schedule or form) (the
Registration Statement
), or in any application, notification or other document to be filed with any Governmental Entity in connection with the transactions contemplated by this Agreement,
will, as of the date the Proxy Statement/Prospectus is first mailed to Sellers stockholders or at the time of the Special Meeting, or at the time the Registration Statement becomes effective under the Securities Act of 1933, as amended (the
1933 Act
), or at the Effective Time, or at the time any such other application, notification or other document are so filed, as the case may be, contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (except that this representation shall not apply to any information in the Proxy
Statement/Prospectus, the Registration Statement or such other applications, notifications or other documents supplied by Acquiror or Acquiror Sub for inclusion or incorporation by reference therein), provided that information as of a later date
shall be deemed to modify information as of an earlier date.
3.11
Compliance with Applicable Law
.
(a) Each of Seller and the Subsidiaries has all permits, licenses, certificates of authority, orders and approvals of, and has made all
filings, applications and registrations with Governmental Entities, that are required in order to permit it to carry on its business as it is presently being conducted and to own or lease its properties and assets, and all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect, except for such failures to have such permits, licenses, certificates of authority, orders and approvals of, to make all filings, applications and registrations with
Governmental Entities or to be in full force and effect which, individually or in the aggregate, would not reasonably be likely to result in a Seller Material Adverse Effect. To the Knowledge of Seller, no suspension or cancellation of any of the
same is threatened.
(b) Neither Seller nor any of the Subsidiaries is (i) in violation of (A) its respective certificate of
incorporation or bylaws (or comparable organizational documents) or any other governing instrument, or (B) any Law of any Governmental Entity material to the business or operations of Seller or any of the Subsidiaries or (ii) in default
with respect to any judgment, order, writ, decree or injunction of any court or other Governmental Entity material to the business or operations of Seller or any of the Subsidiaries, except in the case of clause (i)(A) such violations which,
individually or in the aggregate, would not reasonably be likely to result in a Seller Material Adverse Effect. Neither Seller nor any of the Subsidiaries has received any written notice from any Governmental Entity asserting that Seller or any of
the Subsidiaries is in violation of or default with respect to any of the foregoing, except for such violations or defaults which, individually or in the aggregate, would not reasonably be likely to result in a Seller Material Adverse Effect.
Neither Seller nor any of the Subsidiaries is subject to any regulatory or supervisory cease and desist order, agreement, written directive, memorandum of understanding or written commitment (other than those of general applicability to all banks
issued by Governmental Entities), and neither of them has received any written communication requesting that it enter into any of the foregoing. Neither Seller nor Seller Sub participated in the United States Department of the Treasurys
Capital Purchase Program or its Community Development Capital Initiative.
(c) Without limiting the generality of the foregoing, each of
Seller and Seller Sub is in compliance with applicable Laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Fair Credit
Reporting Act, the Truth in Lending Act, Sections 23A and 23B of the Federal Reserve Act or the regulations implementing such Laws, all applicable Financial Crimes Enforcement Network requirements, all other applicable anti-money laundering Laws,
fair lending Laws and other Laws relating to discriminatory lending, financing, leasing or business practices and all agency requirements relating to the origination, sale and servicing of mortgage loans,
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except when the failure to be in compliance would not reasonably be likely to have a Seller Material Adverse Effect. Neither Seller nor any of its Subsidiaries has been advised in writing of any
material supervisory criticisms regarding their compliance with the Bank Secrecy Act or related state or federal anti-money laundering laws, regulations and guidelines. Each of Seller and Seller Sub has timely and properly filed and maintained in
all material respects all requisite Currency Transaction Reports and Suspicious Activity Reports and has properly monitored transaction activity (including, but not limited to, wire transfers). Seller and Seller Sub have neither had nor suspected
any material incidents of fraud or defalcation during the last two years.
3.12
Deposit Insurance and Other Regulatory Matters
. The
deposit accounts of Seller Sub are insured by the FDIC to the maximum extent permitted by the Federal Deposit Insurance Act, as amended (the
FDIA
), and Seller Sub has paid when due all premiums and assessments required by the FDIA
and the regulations thereunder. No action, suit or proceeding is pending or, to the Knowledge of Seller, has been threatened by the FDIC against Seller or Seller Sub with respect to the termination of such insurance. As of the date hereof, other
than reciprocal deposit accounts obtained through Promontory Interfinancial Network, LLC, none of Seller Subs deposits or deposits of any of its Subsidiaries are brokered deposits (as such term is defined in 12 C.F.R.
§ 337.6(a)(2)) or are subject to any material encumbrance, legal restraint or other legal process (other than garnishments, pledges, liens, levies, subpoenas, set off rights, escrow limitations and similar actions taken in the ordinary
course of business), and no portion of such deposits represents a deposit of it or any of its Subsidiaries.
3.13
Certain
Contracts
.
(a) Except as disclosed in
Seller Disclosure Schedule 3.13(a)
, neither Seller nor any of the Subsidiaries is a
party to, is bound or affected by, receives or is obligated to pay compensation or benefits under (i) any agreement, arrangement or commitment, including any agreement, indenture or other instrument relating to the borrowing of money by Seller
or any of the Subsidiaries or the guarantee by Seller or any of the Subsidiaries of any obligation except for deposit liabilities, federal funds purchased, borrowings from the Federal Home Loan Bank and securities repurchase agreements entered into
in the ordinary course of business; (ii) any contract, agreement or understanding with a labor union; (iii) any agreement, arrangement or understanding pursuant to which any payment (whether of severance pay or otherwise) became or may
become due to any director, officer or employee of Seller or any of the Subsidiaries upon execution of this Agreement or upon or following consummation of the transactions contemplated by this Agreement (either alone or in connection with the
occurrence of any additional acts or events); (iv) any agreement, arrangement or understanding to which Seller or any of the Subsidiaries is a party or by which any of them is bound which limits the freedom of Seller or any of the Subsidiaries
to compete in any line of business or with any person, or that involve any restriction of the geographic area in which, or method by which, they may carry on their business (other than as may be required by Law or any Governmental Entity);
(v) any assistance agreement, supervisory agreement, memorandum of understanding, consent order, cease and desist order or condition of any regulatory order or decree with or by the FRB, the FDIC or any other regulatory agency (and no such
agreement, memorandum or order imposes any obligation on Seller or any of the Subsidiaries to make any additional capital contributions); (vi) any joint venture, partnership or similar agreement, arrangement or understanding providing for the
sharing of profits, losses, costs or liabilities by Seller or Seller Sub with any other person; (vii) any purchase and assumption agreement with the FDIC; or (viii) any other agreement, arrangement or understanding to which Seller or any
of the Subsidiaries is a party and which is material to the business, operations assets, liabilities, condition (financial or otherwise) or results of operations of Seller and the Subsidiaries, taken individually or as a whole (excluding loan
agreements or agreements relating to deposit accounts); in each of the foregoing cases whether written or oral (each such agreement listed, or required to be listed, in this Section 3.13(a) is referred to herein as a
Seller
Agreement
). Except as set forth in
Seller Disclosure Schedule 3.13(a)
, neither Seller nor any of the Subsidiaries is a party to any agreement, arrangement or commitment relating to the employment of a consultant or the employment,
retirement, election or retention in office of any present or former director, officer or employee of Seller or Seller Sub (other than those which are terminable at will without any further amounts being payable thereunder as a result of termination
by Seller or Seller Sub).
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(b) Neither Seller nor any of the Subsidiaries is in default or in non-compliance under any
Seller Agreement, and there has not occurred any event that with the lapse of time or the giving of notice, or both, would constitute such a default or non-compliance, except for such default or non-compliance which, individually or in the
aggregate, would not reasonably be likely to result in a Seller Material Adverse Effect. Each Seller Agreement is valid, binding and enforceable against, as applicable, Seller or any Subsidiary and, to the Knowledge of Seller, the other parties
thereto in accordance with their respective terms, except as limited by the Bankruptcy and Equity Exception, and is in full force and effect in accordance with its terms and all rents and other monetary amounts that may have become due and payable
thereunder have been paid, except for such failures to be valid, binding and enforceable, to be in full force and effect or to have paid all rents and other monetary amounts which, individually or in the aggregate, would not reasonably be likely to
result in a Seller Material Adverse Effect.
3.14
Properties and Insurance
.
(a) All of the tangible assets and other personal property owned or leased by Seller or any of the Subsidiaries or presently used by either of
them in their respective business is in good condition (ordinary wear and tear excepted) and is sufficient to carry on the business of Seller and Seller Sub in the ordinary course consistent with past practices. Seller and each of the Subsidiaries
have title and, as to owned real property, good and marketable title to all material assets and properties, whether real or personal, tangible or intangible, reflected in Sellers consolidated unaudited balance sheet as of September 30,
2016 or owned and acquired subsequent thereto (except for such assets and properties that have been disposed of for fair value in the ordinary course of business since September 30, 2016), subject to no encumbrances, liens, mortgages, security
interests or pledges, except (i) those items that secure liabilities that are reflected in said consolidated balance sheet or the notes thereto or have been incurred in the ordinary course of business after the date of such consolidated balance
sheet; (ii) statutory liens for amounts not yet delinquent or which are being contested in good faith and for which adequate reserves have been made in the Seller Financial Statements; (iii) liens for real property Taxes not yet due and
payable; (iv) such encumbrances, liens, mortgages, security interests, pledges and title imperfections that are not in the aggregate material to the business, operations, assets, liabilities, condition (financial or otherwise) or results of
operations of Seller and Seller Sub, taken individually or as a whole; and (v) with respect to owned real property, (x) easements, rights-of-way, covenants, consents, restrictions, encroachments, variations and other restrictions, charges
or encumbrances (whether recorded or not) that do not interfere materially with the ordinary course of Sellers business or the business of any Subsidiary at such property, (y) building restrictions, zoning laws and other Laws, now or at
any time hereafter adopted by any Governmental Entity having jurisdiction that do not materially interfere with the ordinary course of Sellers or Seller Subs business, or (z) imperfections or irregularities of title noted in title
reports delivered to Acquiror prior to the date hereof (items (i) (v) are collectively referred to herein as
Permitted Liens
). Seller and each of the Subsidiaries as lessees have the right under valid and
subsisting leases to occupy, use, possess and control all property leased by them in all respects as presently occupied, used, possessed and controlled by Seller and such Subsidiaries.
Seller Disclosure Schedule 3.14(a)
sets forth an
accurate listing of each lease pursuant to which Seller or any of the Subsidiaries acts as lessor or lessee, including the expiration date and the terms of any renewal options which relate to the same. Neither Seller nor any of the Subsidiaries has
any legal obligation, absolute or contingent, to any other person to sell or otherwise dispose of any substantial part of its assets or to sell or dispose of any of its assets except in the ordinary course of business consistent with past practices.
(b)
Seller Disclosure Schedule 3.14(b)
sets forth a list of all policies of fire, theft, public liability, business interruption
and other insurance (including fidelity bonds insurance) maintained by Seller and the Subsidiaries as of the date hereof. The business operations and all insurable properties and assets of Seller and the Subsidiaries are insured for their benefit
against all risks (including flood) which, to the Knowledge of Seller, should be insured against, in each case, under valid, binding and enforceable policies or bonds issued by insurers of recognized responsibility, in such amounts with such
deductibles and against such risks and losses as are, to the Knowledge of Seller, adequate for the business engaged in by Seller and such Subsidiaries. As of the date hereof, neither Seller nor any of the Subsidiaries has received any written notice
of cancellation or written notice of a material amendment of any such insurance policy or bond or is in default under such policy or bond, all
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premiums and other payments due under any such policy or bond have been paid, no coverage thereunder is being disputed, and all material claims thereunder have been or will be filed in a timely
fashion.
3.15
Environmental Matters
. For purposes of this Agreement, the following terms shall have the indicated meaning:
Environmental Law
means any Law, license, permit, authorization, approval, consent, order, judgment, decree, injunction or
agreement with any Governmental Entity relating to (1) the protection, preservation or restoration of the environment (including air, water vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource); and/or (2) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances. The term
Environmental
Law
includes (1) the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. Section 9601, et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901, et seq.;
the Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 9601, et
seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. Section 11001, et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq.; and all comparable state and local Laws, and (2) any common law (including
common law that may impose strict liability) that may impose liability or obligations for injuries or damages due to, or threatened as a result of, the presence of or exposure to any Hazardous Substance.
Hazardous Substance
means any substance presently listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any Environmental Law, whether by type or by quantity, including any regulated material containing any such substance as a component. Hazardous Substances include petroleum (including crude oil
or any fraction thereof), friable asbestos, radioactive material and polychlorinated biphenyls,
provided
, notwithstanding the foregoing or any other provision in this Agreement to the contrary, the words Hazardous Substance shall
not mean or include any of such naturally occurring in any ambient air, surface water, ground water, land surface or surface strata.
Loan Portfolio Properties and Other Properties Owned
means those properties owned, leased or operated by a person or its
subsidiaries or those properties which serve as collateral for loans owned by a person or its subsidiaries.
(i) Neither Seller nor any of
the Subsidiaries has been or is in violation of or liable under any Environmental Law, (ii) none of the Loan Portfolio Properties and Other Properties Owned by Seller or Seller Sub has been or is in violation of or, to the Knowledge of Seller,
liable under any Environmental Law, and (iii) there are no actions, suits, demands, written notices, claims, investigations or proceedings pending or, to the Knowledge of Seller, threatened, relating to the Loan Portfolio Properties and Other
Properties Owned by Seller or Seller Sub under any Environmental Law, including any notices, demand letters or written requests for information from any federal or state environmental agency relating to any such liabilities under or violations of
Environmental Law.
3.16
Allowance for Loan Losses and Real Estate Owned
. The allowance for loan losses reflected on Sellers
consolidated balance sheets included in the Seller Financial Statements is in compliance with Sellers existing methodology for determining the adequacy of its allowance for loan losses and was, at the time recorded, or will be in the case of
subsequently delivered financial statements, as the case may be, adequate in all material respects as of their respective dates under the requirements of GAAP and the standards formally established by applicable Governmental Entities to provide for
reasonably anticipated losses on outstanding loans net of recoveries. The real estate owned reflected on the consolidated balance sheets included in the Seller Financial Statements was, at the time recorded, or will be in the case of subsequently
delivered financial statements, as the case may be, carried at the lower of cost or fair value, or the lower of cost or net realizable value, as required by GAAP.
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3.17
Minute Books
. Since January 1, 2013, the minute books, including any attachments
thereto, of Seller and the Subsidiaries contain complete and accurate records in all material respects of all meetings and other material corporate action held or taken by their respective boards of directors or comparable governing bodies
(including committees thereof) and stockholders, members or trustees, as applicable.
3.18
Affiliate Transactions
. Except for
(i) deposit agreements entered into in the ordinary course of business with customers of Seller Sub; (ii) loans covered by the second sentence of Section 3.23(a); and (iii) obligations under employee benefit plans set forth on
Seller Disclosure Schedule 3.8(a)
, and except as specifically contemplated by this Agreement, since January 1, 2013, neither Seller nor any of the Subsidiaries has engaged in or agreed to engage in (whether in writing or orally) any
transaction with any
affiliate
, as such term is defined in Rule 405 under the 1933 Act.
3.19
Internal Controls
.
Seller and the Subsidiaries have implemented and maintain in accordance with applicable Law a system of internal controls over financial reporting sufficient to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP and which includes policies and procedures that (i) all transactions are recorded as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets, (ii) access to Sellers assets is permitted only in accordance with managements general or specific authorization, and (iii) the recorded accountability for assets is compared with
the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences. Seller has disclosed, based on its most recent evaluation prior to the date hereof, to its auditors and the audit committee of its board of
directors (i) any significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect in any material respect Sellers ability to record,
process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Sellers internal controls over financial reporting.
3.20
Risk Management Instruments
. All interest rate swaps, caps, floors, option agreements, futures and forward contracts (including
commitments to sell mortgage loans) and other similar risk management arrangements (collectively, the
Risk Management Instruments
), whether entered into for Sellers own account or for the account of one or more of Seller Sub
or its customers, were entered into, to the Knowledge of Seller, (i) in accordance with prudent business practices and all applicable Laws and (ii) with counterparties reasonably believed at the time to be financially responsible; and each
of the Risk Management Instruments are valid and legally binding obligations of Seller or Seller Sub; and are enforceable in accordance with their terms (except as limited by the Bankruptcy and Equity Exception), and are in full force and effect.
Except as would not reasonably be likely to result in a Seller Material Adverse Effect, Seller and its Subsidiaries have in place risk management policies and procedures sufficient in scope and operation to protect against risks of the type and in
amounts reasonably expected to be incurred by entities of similar size and in similar lines of business as Seller or the applicable Subsidiary. Seller and Seller Sub have duly performed in all material respects all of their obligations under Risk
Management Instruments to the extent such obligations to perform have accrued. To the Knowledge of Seller, there are no breaches, violations or defaults, or allegations or assertions thereof by any party thereunder. Without limiting the generality
of the foregoing, as of the date hereof, no events or circumstances have occurred, or are reasonably likely to occur prior to the Effective Time, that would require Seller or Seller Sub to repurchase any mortgage loans sold to secondary market
investors, nor has any such investor made any assertion to that effect.
3.21
Opinion
. Prior to the execution of this Agreement,
the board of directors of Seller has received the oral opinion (to be confirmed in writing) of its financial advisor, Raymond James & Associates, Inc., to the effect that, as of the date thereof and based upon and subject to the assumptions
and qualifications set forth therein, the Merger Consideration is fair, from a financial point of view, to the holders of Seller Common Stock. Seller shall furnish an accurate and complete copy of such opinion to Acquiror, solely for informational
purposes, as promptly as practicable following the execution of this Agreement. Such opinion has not been amended or rescinded as of the date of this Agreement.
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3.22
Broker Fees
. Except as set forth in
Seller Disclosure Schedule 3.22
, neither
Seller nor any of the Subsidiaries nor any of their respective directors or officers has employed any consultant, broker or finder or incurred any liability for any consultants, brokers or finders fees or commissions in connection
with any of the transactions contemplated by this Agreement.
3.23
Loans
.
(a) All of the loans and other evidences of indebtedness (including commitments to extend credit) held in Sellers, Seller Subs or
any Subsidiaries loan portfolio are valid and properly documented in all material respects by notes, agreements and other evidences of indebtedness and were solicited and originated, and are and have been administered and serviced, in the
ordinary course of business consistent with Seller and Seller Subs underwriting standards, and the security therefor, if any, is valid and properly perfected in all material respects, and no material collateral has been released from the lien
granted to Seller and Seller Sub with respect to any such loans unless approved by Seller and Seller Sub and documented in their files. All loans and extensions of credit that have been made by Seller Sub that are subject to Section 22(h) of
the Federal Reserve Act, as amended, and Regulation O (12 C.F.R. Part 215) promulgated thereunder, comply therewith in all material respects. There are no employee, officer, director or other affiliate loans on which the borrower is paying a rate
other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O. Neither the terms of such loans nor any of the loan documentation nor the
manner in which such loans have been originated, administered and serviced nor Sellers procedures and practices of approving or rejecting loan applications violates in any material respect any Law applicable thereto. Seller and Seller Sub have
full power and authority to hold such loans and have good and valid title to all such loans, free and clear of any liens (other than liens in the ordinary course of business to the FHLB or the Federal Reserve Bank of Atlanta), and the principal
balance of each such loan as shown on the books and records of Seller and Seller Sub is true and correct as of the last date shown thereon. To the Knowledge of Seller, each such loan is enforceable against the obligor(s) thereunder in accordance
with its terms, in each such case subject to the Bankruptcy and Equity Exception, except for such unenforceability which, individually or in the aggregate, would not reasonably be likely to result in a Seller Material Adverse Effect. All such loans
will continue in full force and effect immediately after the Effective Time, other than any loans that are paid or otherwise satisfied in full after the date hereof and prior to the Effective Time, except for such failure to be in full force and
effect which, individually or in the aggregate, would not reasonably be likely to result in a Seller Material Adverse Effect. For purposes of this Section 3.23, the term loans includes the documents relating in any way to such
loans, including loan applications, notes or borrowing arrangements (including leases, credit enhancements, commitments and interest-bearing assets), security agreements, deeds of trust, appraisals, credit reports, disclosures, titles to collateral,
verifications (including employment verification, deposit verification, etc.), mortgages, loan agreements, including building and loan agreements, guarantees, pledge agreements, financing statements, intercreditor agreements, participation
agreements, sureties and insurance policies (including title insurance policies) and all modifications, waivers and consents relating to any of the foregoing. The electronic data files delivered by Seller to Acquiror with respect to all outstanding
Seller loans are true, correct and complete in all material respects as of the date provided to or made available to Acquiror.
(b)
Neither Seller nor Seller Sub is a party to any agreement or arrangement with (or otherwise obligated to) any third party which obligates Seller or Seller Sub, as applicable, to repurchase from such third party any loan or other asset of Seller or
Seller Sub, as applicable, unless there is a material breach of a representation or covenant by Seller or Seller Sub, as applicable. None of the agreements pursuant to which Seller has sold loans or pools of loans or participations in loans or pools
of loans contains any obligation to repurchase such loans or interests therein or to pursue any other form of recourse against Seller solely on account of a payment default by the obligor(s) of such loans.
Seller Disclosure Schedule 3.23(b)
sets forth all claims made or, to the Knowledge of Seller, threatened, for repurchases of home mortgage loans sold to third parties.
(c)
Since January 1, 2013, neither Seller nor any of its Subsidiaries has foreclosed upon, or taken a deed or title to, any real estate (other than single-family residential properties) without complying in all material respects
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with all applicable FDIC environmental due diligence standards (including FDIC Bulletin FIL-14-93, and update FIL-98-2006) or foreclosed upon, or taken a deed or title to, any such real estate if
the environmental assessment indicates the liabilities under Environmental Laws are likely in excess of the assets value.
(d) Since
January 1, 2013, neither Seller nor any of its Subsidiaries has acquired or disposed of any pool of Seller loans, other than related to its mortgage purchase business in the ordinary course of business.
(e) Since January 1, 2013, neither Seller nor any of its Subsidiaries has been subject to any fine, suspension, settlement or other
contract or other administrative agreement or sanction by, or any reduction in any loan purchase commitment from, any Governmental Entity relating to the origination, sale or servicing of mortgage or consumer loans.
(f)
Seller Disclosure Schedule 3.23(f)
sets forth a list of (i) each Seller loan that as of September 30, 2016 had an
outstanding balance and/or unfunded commitment of $100,000 or more and that as of such date (A) was contractually past due 60 days or more in the payment of principal and/or interest or was in default of any other material provision,
(B) was on non-accrual status, (C) was classified as substandard, doubtful loss, classified, criticized, impaired or special mention (or words of similar
import) by Seller Sub or any Governmental Entity, (D) where the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the Seller loan was originally created due to concerns
regarding the borrowers ability to pay in accordance with such initial terms, (E) where a specific reserve allocation exists in connection therewith, (F) which is required to be accounted for as a troubled debt restructuring in
accordance with Accounting Standards Topic 310-40 or (G) which otherwise there exists a reasonable doubt regarding the collectability of all principal and interest on a timely basis; and (ii) each asset of Seller or any of its Subsidiaries
that as of September 30, 2016 was classified as other real estate owned, other repossessed assets or as an asset to satisfy Seller loans, and the book value thereof as of such date. For each Seller loan identified in
accordance with the immediately preceding sentence,
Seller Disclosure Schedule 3.23(f)
sets forth the outstanding balance, including accrued and unpaid interest and late fees, on each such loan and the identity of the borrower thereunder as
of September 30, 2016.
3.24
Investment Securities; BOLI
.
(a) Except for securities pledged for reverse repurchase agreements, interest rate swap, cap and floor contracts or pledged to secure public
trust funds, (i) none of the investments under the heading Securities available-for-sale, at fair value and none of the assets under the heading Cash and due from banks reflected in the audited consolidated balance sheet
of Seller as of December 31, 2015 and (ii) none of such investments or such assets acquired by Seller and the Subsidiaries since December 31, 2015 is subject to any restriction, whether contractual or statutory, that impairs the
ability of Seller or any of the Subsidiaries freely to dispose of such investment at any time. With respect to all repurchase agreements of which Seller or any of the Subsidiaries is a party, Seller or such Subsidiary, as the case may be, has a
valid, perfected first lien or security interest in or evidence of ownership in book entry form of the government securities or other collateral securing each such repurchase agreement, and the value of such collateral equals or exceeds the amount
of the debt secured thereby under such agreement.
(b)
Seller Disclosure Schedule 3.24(b)
sets forth a true, correct and complete
description of all bank owned life insurance (
BOLI
) owned by Seller, Seller Sub or any of the other Subsidiaries, including the value of its BOLI. Seller, Seller Sub and its other Subsidiaries have taken all actions necessary to
comply in all material respects with applicable Law in connection with the purchase of BOLI. The value of such BOLI is and has been fairly and accurately reflected in all material respects in the most recent balance sheet included in the financial
statements of Seller delivered pursuant to Section 5.5 hereof, in accordance with GAAP. All BOLI is owned solely by Seller, Seller Sub or another Subsidiary, and no other person has any ownership claims with respect to such BOLI or proceeds of
insurance derived therefrom and there is no split dollar or similar benefit under such BOLI. Neither Seller, Seller Sub nor any of the other Subsidiaries has any outstanding borrowings secured in whole or part by its BOLI.
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3.25
Employees; Compensation
.
(a) Seller has made available to Acquiror a complete and correct list of the name, date of birth, hire date, adjusted hire date, position,
rate of compensation and any incentive compensation arrangements, bonuses or commissions or fringe or other benefits, whether payable in cash or in kind, of (i) each director and employee of Seller, (ii) each independent contractor,
consultant and agent of Seller who has received or is entitled to payments and/or benefits of $25,000 or more on an annual basis during fiscal year 2016 or who is proposed to receive or be entitled to payments and/or benefits of $25,000 or more on
an annual basis during fiscal year 2017, and (iii) each other person to whom Seller pays or provides, or has an obligation, agreement (written or unwritten), policy or practice of paying or providing, retirement, health, welfare or other
benefits of any kind or description whatsoever.
(b) (i) Except to the extent a failure to comply would not, alone or with any other
failure, be reasonably likely to have a Seller Material Adverse Effect, (i) each of Seller and the Subsidiaries is and has been in compliance with all applicable Laws respecting employment and employment practices, terms and conditions of
employment, and wages and hours, including any Law relating to discrimination, fair labor standards and occupational health and safety, wrongful discharge or violation of the personal rights of employees, former employees or prospective employees;
and (ii) neither Seller nor any of the Subsidiaries is or has engaged in any unfair labor practices. Additionally, there are no strikes, slowdowns or work stoppages pending or, to the Knowledge of Seller, threatened with respect to the
employees; there is no representation claim or petition or complaint pending before the National Labor Relations Board or any state or local labor agency and, to the Knowledge of Seller, no question concerning representation has been raised or
threatened respecting the employees; to the Knowledge of Seller, no charges with respect to or relating to Sellers business are pending before the Equal Employment Opportunity Commission or Department of Labor, or any state or local agency
responsible for the prevention of unlawful employment practices, which would reasonably be likely to have a Seller Material Adverse Effect; and to the Knowledge of Seller, neither Seller nor any of the Subsidiaries has any obligations under any
federal, state, or local government contract. No employee of Seller or any of its Subsidiaries is an undocumented alien, and Seller has obtained a Form I-9 and all ancillary information required in connection therewith with respect to each such
employee.
(b) Except to the extent that such liability would not, alone or with any other failure, reasonably be likely to have a Seller
Material Adverse Effect, neither Seller nor any of the Subsidiaries has any direct or indirect liability with respect to any misclassification of any person as an independent contractor rather than a common law employee or with respect
to any person leased from another employer.
(c) Except to the extent a failure to comply would not, alone or with any other failure,
reasonably be likely to have a Seller Material Adverse Effect, Seller has complied (or will comply) prior to the Effective Time with all obligations existing on or before the Effective Time imposed by the Worker Adjustment and Retraining
Notification Act (
WARN Act
) and any applicable similar state or local law, including, but not limited to, providing all notices required thereunder.
3.26
Regulatory Matters
. Neither Seller nor any of the Subsidiaries has taken or agreed to take any action which could reasonably be
expected to materially impede or delay receipt of any unqualified consents of regulatory authorities referred to in Section 5.7 or result in failure of the condition in Section 7.1(c). No Seller Common Stock has been or will be acquired by
Seller Sub prior to and in connection with the Mergers.
3.27
Intellectual Property
.
(a)
Seller Disclosure Schedule 3.27
contains a complete and accurate list of all of Seller and each Subsidiarys material U.S. and
foreign (i) trademark or service mark registrations and applications, (ii) copyright registrations and applications, and (iii) Internet domain names. Neither Seller nor any of the Subsidiaries owns any patents or patent applications.
Seller or the applicable Subsidiary owns or has the valid right to use, in each
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case free and clear of all material liens (other than Permitted Liens), all applications, trademarks, service marks, trademark or service mark registrations and applications, trade names, logos,
designs, Internet domain names, slogans and general intangibles of like nature, together with all goodwill related to the foregoing, copyrights, copyright registrations, renewals and applications, Software, technology, trade secrets and other
confidential information, know-how, proprietary processes, formulae, algorithms, models and methodologies, licenses, agreements and all other material proprietary rights (collectively, the
Intellectual Property
) used in the
business of Seller and such Subsidiary as it currently is conducted.
Software
means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source
code or object code, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to design, plan, organize and
develop any of the foregoing, (iv) the technology supporting and content contained on any owned or operated Internet site(s), and (v) all documentation, including user manuals and training materials, relating to any of the foregoing.
Except as provided in
Seller Disclosure Schedule 3.27
, the ownership or right to use such material Intellectual Property or Software of Seller or the applicable Subsidiary (i) has not been challenged in any prior litigation to which
Seller or such Subsidiary was a party, (ii) is not being challenged in any pending litigation to which Seller or such Subsidiary is a party and (iii) to the Knowledge of Seller, is not the subject of any threatened or proposed litigation.
Provided that the required consents and prior notices described on
Seller Disclosure Schedule 3.27
are obtained or given (as the case may be), the consummation of the transactions contemplated hereby will not result in the loss or impairment
of any such Intellectual Property (other than goodwill associated with Seller or Seller Sub) or Software of Seller or any of the Subsidiaries.
(b) To the Knowledge of Seller, the conduct of the business of Seller and each of the Subsidiaries as currently conducted does not, in any
material respect, infringe upon (either directly or indirectly, such as through contributory infringement or inducement to infringe), dilute, misappropriate or otherwise violate any Intellectual Property owned and controlled by any third party.
(c) To the Knowledge of Seller, no third party is misappropriating, infringing, diluting or violating any Intellectual Property owned by or
licensed to or by Seller or any of the Subsidiaries, and no such claims have been made against a third party by Seller or any of the Subsidiaries.
(d) Each item of Software which is used by Seller or any of the Subsidiaries in connection with the operation of their businesses as currently
conducted is either (i) owned by Seller or the applicable Subsidiary, (ii) currently in the public domain or otherwise available to Seller without the need of a license, lease or consent of any third party, or (iii) used under rights
granted to Seller or such Subsidiary pursuant to a written agreement, license or lease from a third party.
3.28
Regulatory Capital;
Community Reinvestment Compliance
. Seller Sub is, and on the Closing Date, Seller Sub will be, well capitalized as such term is defined in the rules and regulations promulgated by the FDIC, and on the date hereof, Seller is, and on
the Closing Date, Seller will be, well capitalized as such term is defined in the rules and regulations promulgated by the FRB. Seller Sub is in material compliance with all applicable provisions of the Community Reinvestment Act of
1977, as amended (the
CRA
), and has received a CRA rating of Satisfactory in its most recent exam under the CRA. Seller has no Knowledge of the existence of any fact or circumstance or set of facts or circumstances
which would be reasonably expected to result in Seller or Seller Sub failing to be well-capitalized or having its current CRA rating lowered within the next 12 months.
3.29
Trust Matters
. Neither Seller nor any of its Subsidiaries currently provides, or at any time has provided, trust or fiduciary
services.
3.30
Broker-Dealer and Investment Advisory Matters
.
(a) None of Seller, its Subsidiaries or, to the Knowledge of Seller, any of their respective officers and employees are required to be
registered, licensed or qualified with the Commission or any securities or insurance
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commission or other Governmental Entity as a broker-dealer, investment adviser, futures commission merchant, municipal securities dealer, registered principal, registered representative, agent,
salesperson or investment adviser representative. Neither Seller nor any of its Subsidiaries has received any written notice of proceedings relating to any obligation to be so registered, licensed or qualified. Each of Seller and its Subsidiaries
and, to the Knowledge of Seller, their respective solicitors, third party administrators, managers, brokers and distributors, have marketed, sold and issued investment products and securities in accordance with all applicable Laws governing sales
processes and practices in all material respects.
(b) None of Seller nor any of its Subsidiaries is, or provides any investment
management or investment advisory or sub-advisory services to any person or entity that is registered as, an Investment Company under the Investment Company Act of 1940, as amended.
3.31
No Existing Discussions
. As of the date hereof, neither Seller nor Seller Sub is engaged, directly or indirectly, in any
negotiations or discussions with any other person with respect to an Acquisition Transaction.
3.32
Certain Business Practices
.
Neither Seller nor any of the Subsidiaries, and, to the Knowledge of Seller, no director, officer, agent or employee of Seller or any of the Subsidiaries, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or (iii) made any other unlawful payment.
3.33
Continuity of Business Enterpri
se. Seller operates at
least one significant historic business line or owns at least a significant portion of its historic business assets, in each case within the meaning of Treasury Regulations Section 1.368-1(d).
3.34
Indemnification
. No present or former director, officer, employee or agent of any of Seller or any of its Subsidiaries has any
claim for indemnification from any of Seller or its Subsidiaries. To the Knowledge of Seller, no action or failure to take action by any present or former director, officer, employee or agent of Seller or its Subsidiaries or other event has
occurred, or has been alleged to have occurred, which occurrence or allegation would give rise any claim by any such present or former director, officer, employee or agent for indemnification from any of Seller or its Subsidiaries.
3.35
Vote Required
. The only vote of the holders of any class or series of capital stock of Seller necessary or required in order to
adopt this Agreement or approve the transactions contemplated hereby, including the Parent Merger, is the adoption of this Agreement by the holders of a majority of the outstanding shares of Seller Common Stock entitled to vote on such matter (the
Seller Stockholder Approval
).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUIROR SUB
Except as (a) disclosed in writing in the correspondingly enumerated section or subsection of the disclosure schedule of Acquiror and
Acquiror Sub delivered herewith (the
Acquiror Disclosure Schedule
) (provided that each exception set forth in the Acquiror Disclosure Schedule shall be deemed to qualify any other representation and warranty to the extent that the
relevance of such exception to such other representation and warranty is reasonably apparent on the face of the disclosure (without need to examine underlying documentation)) or (b) disclosed in any publicly available report, schedule, form or
other document filed with the SEC by Acquiror prior to the date hereof and on or after the date on which Acquiror filed with the SEC its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (but excluding any risk factor
disclosures contained under the heading Risk Factors, any disclosure of risks included in any forward-looking statements disclaimer or any other statements that are similarly non-specific or predictive or forward-looking in
nature), Acquiror and
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Acquiror Sub, jointly and severally, represent and warrant as of the date hereof to Seller and Seller Sub as set forth in this Article IV. The Acquiror Disclosure Schedule is arranged in sections
corresponding to the numbered and lettered sections contained in this Article IV. The phrase
provided to Seller
,
delivered to Seller
or
made available to Seller
or any phrase of similar import
means that Acquiror or Acquiror Sub has delivered, provided access to or made certain items available for review and copying, or that such items are available on www.sec.gov, to Seller and its counsel. For purposes of this Article IV, the phrase
to the Knowledge of Acquiror
, the phrase
to Acquirors Knowledge
or any phrase of similar import shall be deemed to refer to the actual knowledge of the senior executive officers of Acquiror and Acquiror
Sub (i.e., the senior vice president level and above) after reasonable investigation.
4.1
Corporate Organization
.
(a) Acquiror is a corporation duly organized, validly existing and in good standing under the laws of the State of Mississippi. Acquiror has
the requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business and is in good standing in each jurisdiction in
which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good
standing, or to have such power or authority, individually or in the aggregate, would not have an Acquiror Material Adverse Effect. The term
Acquiror Material Adverse Effect
shall mean any change, state of facts, circumstance,
event or development, which, individually or in the aggregate, would reasonably be expected to either (i) materially impair Acquirors or Acquiror Subs ability to perform its obligations under this Agreement or consummate the Mergers
on a timely basis or (ii) have a material adverse effect on the business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of Acquiror and Acquiror Sub, taken individually or as a whole, other than,
as to subpart (ii), (A) effects resulting from the impact of any actions taken by Acquiror or any of its subsidiaries with the prior written consent of Seller or required expressly by this Agreement or any action not taken by Acquiror or any of
its subsidiaries to the extent such action is prohibited by this Agreement without the prior written consent of Seller and Seller has not consented to such action; (B) changes in Laws or interpretations thereof that are generally applicable to
the banking industry; (C) changes in GAAP or regulatory accounting requirements applicable to banks or their holding companies generally; (D) expenses incurred in connection with this Agreement and the Mergers including payments to be made
pursuant to employment and severance agreements and the termination of other benefit plans; (E) changes attributable to or resulting from changes that are the result of factors generally affecting financial institutions including changes in
interest rates; (F) changes in general economic, market, political or regulatory conditions in the United States; (G) a failure, in and of itself, to meet earnings projections or internal financial forecasts, but not including any
underlying causes thereof, or changes in the trading price of Acquiror Common Stock, in and of itself, but not including any underlying causes thereof; (H) any outbreak or escalation of hostilities, declared or undeclared acts of war or
terrorism; or (I) the impact of the announcement of this Agreement, the Mergers and the other transactions contemplated hereby;
provided
, that as to each of clauses (B), (C), (E), (F) or (H), such change, state of facts,
circumstance, event or development does not have a disproportionate effect on Acquiror or Acquiror Sub as compared to other financial institutions or their holding companies. Acquiror is registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended. Acquiror has furnished or made available to Seller true and complete copies of the articles of incorporation and bylaws (or comparable organizational documents) of Acquiror and Acquiror Sub as in effect on the date
hereof.
(b) Exhibit 21 to Acquirors Annual Report on Form 10-K for the year ended December 31, 2015 lists the direct and
indirect subsidiaries of Acquiror, in which Acquiror owns, directly or indirectly, all of the issued and outstanding shares or other equity interests therein. Acquiror Sub is a banking corporation duly organized, validly existing and in good
standing under the laws of the State of Mississippi. Acquiror Sub has the requisite corporate power and authority to own or lease all of its properties and assets and to conduct its business as it is now being conducted, and is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned
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or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing, or to have such power or authority, individually or in
the aggregate, would not have an Acquiror Material Adverse Effect.
(c) Each of Acquirors subsidiaries other than Acquiror Sub is
duly incorporated or duly organized, as applicable, validly existing and in good standing under the laws of its respective jurisdiction of organization. Each of such subsidiaries has the requisite corporate, limited liability company or trust power
and authority, as applicable, to own or lease all of its properties and assets and to conduct its business as it is now being conducted, and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the
nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing, or to
have such power or authority, individually or in the aggregate, would not have an Acquiror Material Adverse Effect.
(d) Other than as
listed on Exhibit 21 to Acquirors Annual Report on Form 10-K for the year ended December 31, 2015 and Acquiror Subs ownership of stock of the Federal Home Loan Bank of Dallas, Acquiror does not own or control, directly or
indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any other entity material to the business, operations, assets, liabilities, condition (financial or otherwise) or results of
operations of Acquiror and Acquiror Sub, taken individually or as a whole.
4.2
Capitalization
. The authorized capital stock of
Acquiror consists of 150,000,000 shares of Acquiror Common Stock, of which 44,345,314 shares are issued and outstanding and 761,752 shares are held in treasury as of the date hereof, and 5,000,000 shares of preferred stock, par value $0.01 per
share, of which no shares are issued and outstanding on the date hereof. The authorized capital stock of Acquiror Sub consists of 772,822 shares of common stock, $5.00 par value per share, all of which are issued and outstanding. All issued and
outstanding shares of Acquiror Common Stock and all issued and outstanding shares of capital stock of Acquiror Sub have been duly authorized and validly issued and are fully paid, non-assessable and free of preemptive rights, and there are no voting
trusts, stockholder agreements, proxies or other agreements in effect with respect to Acquiror Common Stock or shares of capital stock of Acquiror Sub. None of the outstanding shares of capital stock or other securities of Acquiror has been issued
in violation of any preemptive rights of the current or past stockholders of Acquiror. All of the outstanding shares of capital stock of Acquiror Sub are owned by Acquiror free and clear of any liens, encumbrances, charges, restrictions or rights of
third parties of any kind whatsoever. Except for stock options issued under Acquirors long-term incentive compensation plan (and any stock options issued under any similar plan assumed by Acquiror in connection with prior business combination
transactions), neither Acquiror nor Acquiror Sub nor any of the other subsidiaries of either, has or is bound by any outstanding subscriptions, options, warrants, rights, calls, commitments or agreements of any character calling for the transfer,
purchase, redemption or issuance of any shares of Acquiror Common Stock or shares of capital stock of Acquiror Sub or any securities representing the right to purchase or otherwise receive any shares of such capital stock or any securities
convertible into or representing the right to purchase or subscribe for any such stock. As of the date of this Agreement, no bonds, debentures, notes or other indebtedness having the right to vote on any matters on which Acquiror stockholders may
vote are outstanding.
4.3
Authority; No Violation
.
(a) Acquiror and Acquiror Sub have all requisite corporate power and authority to execute and deliver this Agreement and the Merger Documents,
as applicable, and to consummate the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the Merger Documents and the consummation of the transactions
contemplated hereby and thereby, including the Mergers, have been duly and validly approved by the unanimous vote of the board of directors of Acquiror and Acquiror Sub, as applicable. No other corporate proceedings on the part of Acquiror or
Acquiror Sub are necessary to consummate the transactions so contemplated other than in the case of the Parent Merger, the filing
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of the Parent Merger Documents as contemplated in Section 1.2. No other corporate proceedings on the part of Acquiror Sub are necessary to consummate the transactions so contemplated other
than in the case of the Subsidiary Merger, the filing of the Subsidiary Merger Document as contemplated in Section 1.2. Subject to the receipt of the regulatory and other approvals described in this Agreement, this Agreement and the Merger
Documents have been, or will be, duly and validly executed and delivered by Acquiror and Acquiror Sub, as applicable, and constitute, or will constitute upon execution and delivery thereof, valid and binding obligations of Acquiror and Acquiror Sub,
as applicable, enforceable against Acquiror and Acquiror Sub, as applicable, in accordance with and subject to their terms, except as such enforceability may be limited by the Bankruptcy and Equity Exception.
(b) None of the execution and delivery of this Agreement and the Merger Documents by Acquiror and Acquiror Sub, as applicable, nor the
consummation by Acquiror and Acquiror Sub of the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof nor compliance by Acquiror or Acquiror Sub with any of the terms or provisions hereof or thereof, will
(i) violate any provision of the articles of incorporation or bylaws (or comparable organizational documents) of Acquiror, Acquiror Sub or any other subsidiary of Acquiror; (ii) assuming that the consents and approvals set forth in
Section 4.3(c) are duly obtained, violate any (A) Law to which Acquiror, Acquiror Sub or any of the other subsidiaries of Acquiror is subject or (B) any judgment, order, writ, decree or injunction applicable to Acquiror or Acquiror
Sub or any of their respective properties or assets; or (iii) assuming the consents and approvals set forth in Section 4.3(c) are duly obtained, violate, conflict with, result in a breach of any provisions of, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of, accelerate the performance required by, require the payment of any termination or like fee, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the respective properties or assets of Acquiror or Acquiror Sub under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, guarantee, deed of trust, license,
lease, agreement or other instrument or obligation to which Acquiror or Acquiror Sub is a party, or by which any of their respective properties or assets may be bound or affected, except, with respect to (ii) and (iii) above, such as
individually or in the aggregate will not have an Acquiror Material Adverse Effect.
(c) Except for consents and approvals of or filings
or effective registrations with or notices to the Secretary of State of the State of Mississippi, the Secretary of State of the State of Delaware, the MCB, the Commission, other applicable state and federal securities commissions, agencies and other
similar regulatory bodies (including Nasdaq, FINRA and other industry self-regulatory organizations), the FRB, the FDIC, the Federal Trade Commission, the Department of Justice, and the stockholders of Acquiror and Acquiror Sub, and such other
consents or approvals of or filings or effective registrations with or notices to any non-governmental third party which the failure to make or obtain, individually or in the aggregate, would not reasonably be likely to result in an Acquiror
Material Adverse Effect, no consents or approvals of or filings or effective registrations with or notices to any Governmental Entity or non-governmental third party are required on behalf of Acquiror or Acquiror Sub in connection with (i) the
execution and delivery of this Agreement and the Merger Documents by Acquiror and Acquiror Sub, as applicable, (ii) the consummation by Acquiror of the Parent Merger and the other transactions contemplated hereby and by the Parent Merger
Documents, and (iii) the consummation by Acquiror Sub of the Subsidiary Merger and the other transactions contemplated hereby and by the Subsidiary Merger Document.
4.4
Financial Statements
.
(a) Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in the Acquiror SEC Documents
(the
Acquiror Financial Statements
): (i) complied as to form in all material respects with the published rules and regulations of the Commission with respect thereto as of their respective dates; (ii) was prepared in
accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto and, in the case of unaudited interim financial statements, as may be permitted by the Commission for quarterly
reports on Form 10-Q); and (iii) fairly presented in all material respects the consolidated financial position of Acquiror and its consolidated subsidiaries
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at the respective dates thereof and the consolidated results of Acquiror operations and cash flows for the periods indicated therein, subject, in the case of unaudited interim financial
statements, to normal and year-end audit adjustments as permitted by GAAP and the applicable rules and regulations of the Commission.
(b)
Except to the extent reflected, disclosed or reserved against in the Acquiror Financial Statements or immaterial liabilities incurred since September 30, 2016 in the ordinary course of business and consistent with past practice (none of which
arises from breach of any contract or agreement, breach of warranty, tort, infringement, violation of any applicable Law or any litigation or other proceeding or is otherwise a loss contingency within the meaning of Accounting Standards
Codification Topic 450, Contingencies), neither Acquiror nor Acquiror Sub has any obligation or liability, whether absolute, accrued, contingent or otherwise, and whether due or to become due, that is material to the business, operations, assets,
liabilities, condition (financial or otherwise) or results of operations of Acquiror and Acquiror Sub, taken individually or as a whole.
(c) Since December 31, 2013, (i) neither Acquiror nor any of its subsidiaries nor, to the Knowledge of Acquiror, any director,
officer, employee, auditor, accountant or representative of it or any of its subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods of Acquiror or any of its subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Acquiror or any of
its subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing Acquiror or any of its subsidiaries, whether or not employed by Acquiror or any of its subsidiaries, has reported evidence of a
material violation of securities laws, breach of fiduciary duty or similar violation by Acquiror or any of its officers, directors, employees or agents to Acquirors board of directors or any committee thereof or to any of Acquirors
directors or officers.
(d) Acquiror and Acquiror Sub have maintained a system of internal controls over financial reporting
(as defined in Rules 13(a)-15(f) under 1934 Act) sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and which includes
policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Acquiror and Acquiror Sub, (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of Acquiror and Acquiror Sub are being made only in accordance with authorizations of
management and directors of Acquiror or Acquiror Sub, as applicable, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the assets of Acquiror or Acquiror Sub that
could have a material effect on the financial statements. Acquiror and Acquiror Sub have devised and maintained disclosure controls and procedures (as defined in Rules 13(a)-15(e) under the 1934 Act) effective for ensuring that
information Acquiror is required to disclose in reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Commissions rules and forms. Acquiror has disclosed,
based on its most recent evaluation, in the Acquiror SEC Documents and to its outside auditors and the audit committee of the Acquirors board of directors (x) all significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting (as defined in Rule 13a-15(f) under the 1934 Act) which are likely to adversely affect Acquirors ability to record, process, summarize and report financial data and (y) any fraud, whether or
not material, that involves management or other employees who have a significant role in Acquirors internal control over financial reporting.
4.5
Absence of Certain Changes or Events
. Except as disclosed in any publicly available report, schedule, form or other document filed
with the SEC by Acquiror, there has not been any material change in the business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of Acquiror and Acquiror Sub taken individually or as a whole since
September 30, 2016 other than in connection with: (i) any change in banking or similar Laws of general applicability to banks or their holding companies or interpretations thereof by Governmental Entities; (ii) changes in GAAP that
are generally applicable to the banking or savings industries; (iii) reasonable expenses incurred in connection with the transactions contemplated hereby; and (iv) changes
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attributable to or resulting from changes in general economic conditions, including changes in the prevailing level of interest rates.
4.6
Legal Proceedings
. None of Acquiror or any of its subsidiaries is a party to any, and there are no pending or, to the Knowledge of
Acquiror, threatened, legal, administrative, arbitration or other proceedings, claims, actions or governmental investigations of any nature against Acquiror or any of its subsidiaries other than routine litigation arising in the ordinary course of
business, which, individually or in the aggregate, would not have an Acquiror Material Adverse Effect. Neither Acquiror nor any of its subsidiaries is a party to any judgment, order, writ, decree or injunction which, individually or in the
aggregate, would have an Acquiror Material Adverse Effect.
4.7
Taxes and Tax Returns
.
(a) Each of Acquiror and its subsidiaries has duly and timely filed all income Tax Returns and all other material Tax Returns required to be
filed (taking into account all applicable extensions of time in which to file), and all such Tax Returns were correct and complete in all material respects. Each of Acquiror and its subsidiaries has duly paid all income Taxes and all other material
Taxes that were due and payable other than Taxes which (i) are being contested in good faith through appropriate proceedings and (ii) have not finally been determined. Acquiror and Acquiror Sub have established (and until the Effective
Time will establish) on their books and records reserves that are adequate for the payment of all Taxes not yet due and payable in accordance with GAAP. Except as set forth in
Acquiror Disclosure Schedule 4.7(a)
, no Tax Return filed by
Acquiror or any of its Subsidiaries is under examination by any Governmental Entity or is the subject of any administrative or judicial proceeding, and no written notice of assessment, proposed assessment or unpaid Tax deficiency has been received
by or asserted against Acquiror or any of its Subsidiaries by any Governmental Entity that has not been resolved. No written claim has been made by any Governmental Entity in any jurisdiction where Acquiror or any of its Subsidiaries does not file
Tax Returns that it is, or may be, subject to Tax in that jurisdiction that has not been resolved. The federal income Tax Returns of Acquiror and the Subsidiaries for all taxable periods ended on or prior to December 31, 2012 are closed to
examination due to the expiration of the applicable statute of limitations, and the Mississippi franchise Tax Returns of Acquiror and the Subsidiaries, as applicable, respectively, for all taxable periods ended on or prior to December 31, 2012
are closed to examination due to the expiration of the statute of limitations. Neither Acquiror nor any of its Subsidiaries has granted any extension or waiver of the limitation period for the assessment or collection of any Tax that remains in
effect.
(b) Neither Acquiror nor any of its Subsidiaries (i) has requested any extension of time within which to file any Tax Return
which Tax Return has not since been filed; (ii) is a party to any written or unwritten agreement, arrangement or understanding providing for the allocation or sharing of, or indemnification with respect to, Taxes, which agreement, arrangement
or understanding required Acquiror or any of its Subsidiaries to make payments after January 1, 2017 or could require Acquiror or any of its Subsidiaries to make any payments after the Effective Time (other than (x) such an agreement or
arrangement exclusively between or among the Acquiror and its Subsidiaries and (y) customary commercial agreements not primarily related to Taxes that contain agreements or arrangements relating to the apportionment, sharing, assignment or
allocation of Taxes, such as leases with Tax escalation provisions); (iii) has been a distributing corporation or a controlled corporation in a transaction intended to qualify under Section 355(a) of the Code within
the past five years; or (iv) has ever engaged in any listed transaction within the meaning of Treasury Regulation Section 1.6011-4(b)(2).
(c) No liens for Taxes exist upon any of the assets or properties of Acquiror or any of its subsidiaries, except for liens for Taxes not yet
due and payable.
(d) Acquiror and its subsidiaries have disclosed on their federal income Tax Returns all positions taken therein that
could reasonably be expected to give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.
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(e) Acquiror is not aware of any fact or circumstance that would reasonably be expected to
prevent the Parent Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
4.8
Securities Documents and Regulatory Reports
.
(a) Since January 1, 2014, Acquiror has filed or furnished on a timely basis
with the Commission all final registration statements, prospectuses, annual, quarterly or current reports and definitive proxy statements or other communications (other than general advertising materials), forms, reports, schedules, statements or
other documents required to be filed or furnished by it pursuant to the 1933 Act or the 1934 Act or the rules and regulations promulgated by the Commission (all such filed or furnished documents since January 1, 2014, together with all exhibits
and schedules thereto and all information incorporated therein by reference, the
Acquiror SEC Documents
). As of the respective dates of their filing or being furnished (and, in the case of registration statements and proxy
statements, as of the dates of their effectiveness and the dates of mailing, respectively), except to the extent that any Acquiror SEC Document has been amended or superseded by a subsequently filed Acquiror SEC Document prior to the date hereof, in
which case, as of the date of such amended or superseded filing, each such final registration statement, prospectus, annual, quarterly or current report and definitive proxy statement or other communication, form, report, schedule statement or other
document, as of its date, complied or, if not yet filed or furnished, will comply in all material respects with all Laws applicable to the Acquiror SEC Documents (including the 1933 Act, the 1934 Act and the Sarbanes-Oxley Act of 2002, as amended)
and did not, and any Acquiror SEC Documents filed with or furnished to the Commission subsequent to the date of this Agreement will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading;
provided
, that information as of a later date filed or furnished publicly prior to the date hereof shall be
deemed to modify information as of an earlier date.
(b) Since January 1, 2014, Acquiror and Acquiror Sub have duly filed in correct
form all monthly, quarterly and annual reports, forms, correspondence, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file with the MCB, FDIC, the FRB and any other
federal or state Governmental Entity having jurisdiction over Acquiror and/or Acquiror Sub, other than the Commission, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file (or furnish, as
applicable) such monthly, quarterly and annual reports, forms, correspondence, registrations and statements, individually or in the aggregate, is not reasonably likely to have an Acquiror Material Adverse Effect. As of their filing date, each such
report or other filing did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading. To the extent not prohibited by Law, Acquiror has delivered or made available to Seller accurate and complete copies of such reports, forms, correspondence, registrations and statements. Other than its normal examinations,
there is no proceeding, examination or investigation pending or, to the Knowledge of Seller, threatened by any Governmental Entity with respect to Acquirors or Acquiror Subs business or operations.
4.9
Acquiror Information
. None of the information relating to Acquiror and its subsidiaries to be provided by Acquiror or Acquiror Sub
for inclusion or incorporation by reference in the Proxy Statement/Prospectus and/or in the Registration Statement or in any application, notification or other document to be filed with any Governmental Entity in connection with the transactions
contemplated by this Agreement, will, as of the date the Proxy Statement/Prospectus is first mailed to Sellers stockholders or at the time of the Special Meeting, or at the time the Registration Statement becomes effective under the 1933 Act,
or at the time any such other application, notification or other document are so filed, as the case may be, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading (except that this representation shall not apply to any information in the Proxy Statement/Prospectus, the Registration Statement or such other
applications, notifications or other documents supplied by Seller or Seller Sub for inclusion or incorporation by
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reference therein), provided that information as of a later date shall be deemed to modify information as of an earlier date.
4.10
Compliance with Applicable Law
.
(a) Each of Acquiror and its subsidiaries has all permits, licenses, certificates of authority, orders and approvals of, and has made all
filings, applications and registrations with Governmental Entities that are required in order to permit it to carry on its business as it is presently being conducted and to own or lease its properties and assets, and all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect, except for such failures to have such permits, licenses, certificates of authority, orders and approvals of, to make all filings, applications and registrations with
Governmental Entities or to be in full force and effect which, individually or in the aggregate, would not reasonably be likely to result in an Acquiror Material Adverse Effect. To the Knowledge of Acquiror, no suspension or cancellation of any of
the same is threatened.
(b) Neither Acquiror nor any of its subsidiaries is (i) in violation of (A) its respective articles of
incorporation or bylaws (or comparable organizational documents) or any other governing instrument or (B) any Law of any Governmental Entity or (ii) in default with respect to any judgment, order, writ, decree or injunction of any court or
other Governmental Entity, except in the case of clauses (i)(A) and (ii) above, such violations or defaults which, individually or in the aggregate, would not reasonably be likely to result in an Acquiror Material Adverse Effect. Neither
Acquiror nor any of its subsidiaries has received any written notice from any Governmental Entity asserting that Acquiror or any of its subsidiaries is in violation of any of the foregoing, except for such violations which, individually or in the
aggregate, would not reasonably be likely to result in an Acquiror Material Adverse Effect. Neither Acquiror nor Acquiror Sub is subject to any regulatory or supervisory cease and desist order, agreement, written directive, memorandum of
understanding or written commitment (other than those of general applicability to all banks issued by Governmental Entities), and neither of them has received any written communication requesting that it enter into any of the foregoing, except for
such cease and desist orders, agreements, written directives, memorandums of understanding or written commitments which, individually or in the aggregate, would not reasonably be likely to result in an Acquiror Material Adverse Effect.
(c) Without limiting the generality of the foregoing, to the Knowledge of Acquiror, each of Acquiror and Acquiror Sub is in material
compliance with the Bank Secrecy Act and all regulations promulgated thereunder and has timely and properly filed and maintained in all material respects all requisite Currency Transaction Reports and Suspicious Activity Reports and has properly
monitored transaction activity (including, but not limited to, wire transfers). In addition, each of Acquiror and Acquiror Sub is in material compliance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT) Act, the GLB Act Privacy Provisions, Office of Foreign Assets Control Regulation, Bank Protection Act, all applicable Financial Crimes Enforcement Network requirements and all other related laws. Acquiror and
Acquiror Sub have neither had nor suspected any material incidents of fraud or defalcation during the last two years.
4.11
Employee
Benefit Plans
.
(a) For purposes of this Agreement, the following terms shall have the indicated meaning:
(i)
Acquiror Pension Plan
means each pension or retirement plan of Acquiror, including an employee pension benefit
plan within the meaning of Section 3(2) of ERISA;
(ii)
Acquiror Plans
means each employee benefit plan,
arrangement or agreement of Acquiror or any of its subsidiaries which is an employee benefit plan within the meaning of Section 3(3) of ERISA, and each bonus, deferred compensation, Acquiror Pension Plan, retirement, profit-sharing,
thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock and stock option plan and all other material fringe benefits, employee benefit plans, practices, arrangements or commitments under which either Acquiror or any
of
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its subsidiaries has any liability that cover current or former officers or employees or directors of Acquiror and any of the Subsidiaries, whether individually or in the aggregate or by group or
class, whether written or unwritten, qualified or non-qualified; and
(iii)
Qualified Acquiror Plan
means any Acquiror
Plan that is intended to be qualified under Section 401(a) of the Code.
(b) Except as disclosed in
Acquiror Disclosure Schedule
4.11(b)
: (i) each Acquiror Plan has been operated in compliance with the applicable provisions of ERISA, the Code, all regulations, rulings and announcements promulgated or issued thereunder, and all other applicable governmental Laws,
including but not limited to the Health Insurance Portability and Accountability Act of 1996, the Age Discrimination in Employment Act of 1967, the Family and Medical Leave Act of 1994, the Americans with Disabilities Act and the Americans with
Disabilities Amendments Act of 2008, the Patient Protection and Affordable Care Act of 2010, except for such instances of non-compliance that, either individually or in the aggregate, would not reasonably be expected to result in an Acquiror
Material Adverse Effect; (ii) at all times after December 31, 2004, each Acquiror Plan that constitutes a nonqualified plan of deferred compensation within the meaning of Section 409A of the Code has been operated in
compliance in all material respects with the applicable provisions of Section 409A of the Code and each Acquiror Plan has been timely amended to comply in all material respects with the applicable provisions of such section; (iii) each
Qualified Acquiror Plan has received a favorable determination letter from the IRS or is entitled to rely upon a letter issued to a prototype sponsor or volume submitter sponsor covering all required Tax Law provisions or has applied to the IRS for
such favorable determination letter within the applicable remedial amendment period under Section 401(b) of the Code and, to the Knowledge of Acquiror, no fact or event has occurred since the date of such letter that could reasonably be
expected to materially adversely affect the qualified status of any Qualified Acquiror Plan; (iv) except for such instances of non-compliance that, either individually or in the aggregate, would not reasonably be expected to result in a Seller
Material Adverse Effect, all filings required by ERISA and the Code to be made to the IRS or Department of Labor as to each Acquiror Plan have been timely filed, and all notices and disclosures to participants required by either ERISA or the Code,
including notice by any Acquiror Plan grandfathered under the Patient Protection and Affordable Care Act, have been timely provided; (v) neither Acquiror nor any of its subsidiaries has any liability to the IRS with respect to any Acquiror
Plan, including any liability imposed by Chapter 43 of the Code, and no amount or any asset of any Acquiror Plan is subject to tax as unrelated business taxable income; (vi) as of the date hereof, there is no pending or, to the Knowledge of
Acquiror, threatened claim, administrative proceeding or litigation relating to any Acquiror Plan except claims for benefits arising in the ordinary course of the administration of such plans; (vii) neither Acquiror nor any of its subsidiaries
has engaged in a transaction with respect to any Acquiror Plan subject to ERISA that could reasonably be expected to subject Acquiror or any of its subsidiaries to a Tax or penalty imposed by either Section 4975 of the Code or Sections 502(i)
and 4071 of ERISA; (viii) neither Acquiror nor any Acquiror ERISA Affiliate has within the last six (6) years sponsored, maintained, or contributed to a plan, including any Acquiror Plan, which is a defined benefit plan within
the meaning of Section 3(35) of ERISA or subject to Title IV of ERISA, and Acquiror has no Knowledge of any facts, circumstances, or reportable events that could reasonably be expected to give rise to any material liability of Acquiror to the
IRS or the Pension Benefit Guaranty Corporation under Title IV of ERISA, regardless of whether based on an Acquiror ERISA Affiliate; and (ix) neither Acquiror nor any of its subsidiaries has contributed to or been obligated to contribute to any
multi-employer plan within the meaning of Section 3(37) of ERISA or a multiple employer welfare arrangement within the meaning of Section 3(40) of ERISA, regardless of whether based on contributions of an Acquiror
ERISA Affiliate. For purposes of this Agreement, the term
Acquiror ERISA Affiliate
shall mean any entity, which together with Acquiror or any of its subsidiaries, as applicable, would be treated as a single employer under Code
Section 414 or ERISA Section 4001(b).
(c) All contributions required to be made by Acquiror or any of its subsidiaries under
the terms of any of their Acquiror Plans, as of the date hereof, have been timely made, and all obligations and liabilities under such Acquiror Plans that have accrued but are not due have been reflected in accordance with GAAP in the Acquiror
Financial Statements. No Acquiror Pension Plan has an accumulated funding deficiency (whether or not
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waived) within the meaning of Section 412 of the Code or Section 302 of ERISA and neither Acquiror nor any of its subsidiaries has an outstanding funding waiver. Neither Acquiror nor
any of its subsidiaries has provided, or is required to provide, security to any Acquiror Pension Plan pursuant to Section 401(a)(29) of the Code, and no such plan is or has been subject to any limitation on accelerated distributions or
amendments under Section 436 of the Code.
(d) Except as disclosed in
Acquiror Disclosure Schedule 4.11(d)
, neither Acquiror
nor any subsidiaries of Acquiror has any material obligation to provide medical, health, dental, vision, life insurance, or disability benefits under any Acquiror Plan for any period after termination of employment, except as may be required by
Section 4980B of the Code or Section 601 of ERISA or similar state or local Law. Acquiror may amend or terminate any health or life benefit plan maintained by it at any time without incurring any liability thereunder other than in respect
of vested benefits accrued and claims incurred prior to or in connection with such amendment or termination pursuant to the terms of such plans and other than administrative and other expenses normally and typically required as part of a similar
amendment or termination.
(e) Except as disclosed in
Acquiror Disclosure Schedule 4.11(e)
, for the current fiscal year, there has
been no amendment to, announcement by Acquiror or any of its subsidiaries relating to, or, to the Acquirors Knowledge, change in employee participation or coverage under, any Acquiror Plan which would materially increase the expense of
maintaining such Acquiror Plan, either individually or in the aggregate, in a material way. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (individually or in conjunction with any other event)
will (i) accelerate the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits or increase in the amounts payable or result in any other material obligation pursuant to
any Acquiror Plan; (ii) limit or restrict their right or, after the consummation of the transactions contemplated hereby, the right of Employer to merge, amend or terminate any Acquiror Plan; or (iii) cause Acquiror or any of its
subsidiaries to record additional compensation expense on their income statements with respect to any outstanding stock option or other equity-based award. Without limiting the generality of the foregoing, neither the execution of this Agreement nor
the consummation of the transactions contemplated hereby (individually or in conjunction with any other event) will result in amounts paid or payable by Acquiror that would constitute an excess parachute payment within the meaning of
Section 280G of the Code.
4.12
Deposit Insurance and Other Regulatory Matters
. The deposit accounts of Acquiror Sub are
insured by the FDIC to the maximum extent permitted by the FDIA, and Acquiror Sub has paid when due all premiums and assessments required by the FDIA and the regulations thereunder. No action, suit or proceeding is pending or, to the Knowledge of
Acquiror, has been threatened by the FDIC against Acquiror or Acquiror Sub with respect to the termination of such insurance. As of the date hereof, other than reciprocal deposit accounts obtained through Promontory Interfinancial Network, LLC, none
of Acquiror Subs deposits are brokered deposits (as such term is defined in 12 C.F.R. § 337.6(a)(2)) or are subject to any material encumbrance, legal restraint or other legal process (other than garnishments, pledges, liens,
levies, subpoenas, set off rights, escrow limitations and similar actions taken in the ordinary course of business).
4.13
Material
Contracts; Other Agreements
. Neither Acquiror nor Acquiror Sub is in default under any contract filed as an exhibit to its Annual Report on Form 10-K for the year ended December 31, 2015, or its Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, June 30, or September 30, 2016, other than defaults which would not reasonably be likely to result in, individually or in the aggregate, an Acquiror Material Adverse Effect.
4.14
Nasdaq
. Acquiror is in compliance in all material respects with the rules, regulations and policies of Nasdaq applicable to
Acquiror.
4.15
Broker Fees
. Except as set forth in
Acquiror Disclosure Schedule 4.15
, neither Acquiror nor any of its
subsidiaries nor any of their respective directors or officers has employed any consultant, broker or finder or
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incurred any liability for any consultants, brokers or finders fees or commissions in connection with any of the transactions contemplated by this Agreement.
4.16
Regulatory Matters
. Neither Acquiror nor any of its subsidiaries has taken or agreed to take any action which could reasonably be
expected to materially impede or delay receipt of any consents of regulatory authorities referred to in Section 5.7 or result in failure of the condition in Section 7.1(c).
4.17
Regulatory Capital; Community Reinvestment Act
. Acquiror Sub is, and on the Closing Date, Acquiror Sub will be, well
capitalized as such term is defined in the rules and regulations promulgated by the FDIC, and on the date hereof, Acquiror is, and on the Closing Date, Acquiror will be, well capitalized as such term is defined in the rules and
regulations promulgated by the FRB. Acquiror Sub is in material compliance with all applicable provisions of the CRA and has received a CRA rating of Satisfactory in its most recent exam under the CRA. Acquiror has no Knowledge of the
existence of any fact or circumstance or set of facts or circumstances which would be reasonably expected to result in Acquiror or Acquiror Sub failing to be well-capitalized or having its current CRA rating lowered within the next 12
months.
4.18
Acquiror Shares
. The shares of Acquiror Common Stock to be issued to pay the aggregate Merger Consideration pursuant
to this Agreement (i) will have been duly authorized by the Effective Time, and (ii) when issued in accordance with the terms of this Agreement, will be (A) validly issued, fully paid and non-assessable, (B) free and clear of all
liens, encumbrances, charges, restrictions or rights of third parties of any kind whatsoever, excluding restrictions under the 1933 Act, (C) issued in material compliance with all applicable securities Laws, and (D) in addition, such
issuances shall not be subject to any preemptive right of stockholders of Acquiror or to any right of stockholders of Acquiror or to any right of first refusal or other right in favor of any person which has not been observed or waived.
4.19
Opinion
. Prior to the execution of this Agreement, the board of directors of Acquiror has received the oral opinion (to be
confirmed in writing) of its financial advisor, Sandler ONeill & Partners, L.P., to the effect that, as of the date thereof and based upon and subject to the assumptions and qualifications set forth therein, the Merger Consideration
is fair, from a financial point of view, to Acquiror. Acquiror shall furnish an accurate and complete copy of such opinion to Seller, solely for informational purposes, as promptly as practicable following the execution of this Agreement. Such
opinion has not been amended or rescinded as of the date of this Agreement.
4.20
No Acquiror Vote Required
. No vote of the holders
of any class or series of capital stock of Acquiror is necessary or required in order to adopt this Agreement or approve the transactions contemplated hereby, including the Merger.
ARTICLE V
COVENANTS OF
THE PARTIES
5.1
Conduct of the Business of Seller and Seller Sub
.
(a) During the period from the date hereof to the Effective Time, except as expressly permitted by this Article V or as required by applicable
Law, Seller and Seller Sub shall, and shall cause the other Subsidiaries to, conduct their businesses only in the ordinary course and consistent with past practice (as well as with projections with respect to growth and the maintenance of capital
that have been communicated to Acquiror) and prudent banking practice or as required hereunder, except with the prior written consent of Acquiror, which consent shall not be unreasonably withheld, conditioned or delayed. Seller and Seller Sub shall
use their commercially reasonable efforts consistent with past practices to (i) maintain and preserve intact their business organization, their rights, franchises and other authorizations issued by Governmental Entities and their current
relationships with customers, regulators, employees and other persons with which they have business or other relationships;
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and (ii) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of any of the parties to obtain any necessary approvals of any
Governmental Entity required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby. During the period from the date hereof to the Effective
Time, Seller shall provide Acquiror with a true and complete copy of any agreement by Seller or Seller Sub to indemnify and/or hold harmless any director, officer, employee or agent of Seller or Seller Sub, except to the extent required under the
mandatory provisions of the certificate of incorporation or bylaws (or comparable organizational documents) of Seller or Seller Sub, as applicable, or under applicable Law, promptly (but in no event more than five days) after the date Seller
executes any such agreement.
(b) Seller and Seller Sub agree to promptly notify Acquiror and Acquiror Sub if after the date hereof Seller
or Seller Sub makes or acquires any loan or issues a commitment (or renews or extends an existing commitment) for any loan relationship having total credit exposure to the applicable borrower (and its affiliates), as calculated for applicable
loan-to-one borrower regulatory limitations, in excess of $3,500,000, or amends, renews, restructures or modifies in any material respect any existing loan relationship, that would result in total credit exposure to the applicable borrower (and its
affiliates), as calculated for applicable loan-to-one borrower regulatory limitations, in excess of $3,500,000.
5.2
Negative Covenants
of Seller and Seller Sub
. Seller and Seller Sub agree that from the date hereof to the Effective Time, except as otherwise approved in advance by Acquiror in writing, which approval shall not be unreasonably withheld, conditioned or delayed, as
permitted or required by this Agreement or required by applicable Law, each of Seller and Seller Sub will not, and shall not permit any other Subsidiary to:
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(i)
|
amend any provision of the certificate of incorporation or bylaws (or comparable organizational document) or other governing instrument of Seller or any of the Subsidiaries;
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|
(ii)
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as to each of Seller and the Subsidiaries, except for the issuance of Seller Common Stock pursuant to the present terms of the outstanding Seller Stock Options, (A) change the number of shares of its authorized or
issued capital stock or other equity interests, as applicable, (B) issue or grant (or commit to issue or grant) any shares of its capital stock or other equity interests, as applicable, or any option, warrant, call, commitment, subscription,
award, right to purchase or agreement of any character relating to its authorized or issued capital stock or other equity interests, as applicable, any security convertible into shares of such capital stock or other equity interests, as applicable,
or any stock or equity appreciation right, restricted unit or other equity-based compensation, (C) split, combine or reclassify any shares of its capital stock or other equity interests, as applicable, (D) redeem, purchase or otherwise
acquire any shares of its capital stock or other equity interests, as applicable, or (E) enter into any agreement, undertaking or arrangement with respect to the sale or voting of its capital stock or other equity interests, as applicable;
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(iii)
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(A) create or incur any indebtedness for borrowed money other than acceptance of deposits, purchases of Federal funds, short-term Federal Home Loan Bank borrowings, sales of certificates of deposit, issuances of
commercial paper and entering into repurchase agreements, each in the ordinary course of business consistent with past practice, including with respect to prices, terms and conditions;
provided
, that Seller Sub shall not accept any additional
brokered deposits (other than reciprocal Certificate of Deposit Account Registry Services products with terms to maturity not in excess of 120 days) or (B) assume, guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity, except, in the case of this clause (B), in connection with presentation of items for collection (e.g., personal or business checks) in the ordinary course of business consistent with
past practice;
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(iv)
|
set any record or payment dates for the payment of any dividends or other distributions on its capital stock or
other equity interests, or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the capital stock or other equity
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interests, as applicable, of Seller or any of the Subsidiaries, other than dividends from a wholly-owned Subsidiary to Seller or to another wholly-owned Subsidiary of Seller;
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(v)
|
except as required under applicable Law, the terms of any existing Seller Plan or pursuant to the terms of this Agreement, (A) alter or amend the terms of any Seller Plans existing as of the date hereof other than
renewals or other changes as reasonably necessary to continue the Seller Plan in the ordinary course, (B) enter into, adopt or terminate, or agree to enter into, adopt or terminate, any employee benefit plan, program or policy for the benefit
or welfare of any current or former employee, officer, director or consultant of Seller or any of the Subsidiaries, (C) amend any Seller Plan for the benefit or welfare of any current or former employee, officer, director or consultant of
Seller or any of the Subsidiaries other than in the ordinary course, (D) except as contemplated by this Agreement, grant or accelerate the vesting of any equity-based awards for the benefit of any such individual, (E) enter into any new,
or amend any existing, collective bargaining agreement or similar agreement with respect to Seller or any of the Subsidiaries, (F) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure
the payment of compensation or benefits under any Seller Plans, or (G) exchange, cancel, borrow from, surrender or increase or decrease the death benefit provided under, or otherwise amend or terminate, any existing bank or corporate-owned life
insurance covering any current or former employee, other than any increase in the death benefit in the ordinary course of business consistent with past practice, or any such change that is required by applicable Law;
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(vi)
|
(A) grant any severance, termination pay or other benefit payable upon the occurrence of a change in control (except as set forth on
Seller Disclosure Schedule 5.2(vi)(A)
or pursuant to contracts listed on
Seller Disclosure Schedule 3.13(a)
or any existing Seller Plan), to, or enter into or amend any employment, consulting or compensation agreement with, any of its directors, officers, employees or consultants, (B) award any increase in
compensation or benefits to its directors, officers, employees or consultants other than in the ordinary course of business consistent with past practices,
provided
, that the aggregate increase in directors, officers,
employees or consultants compensation shall not exceed 3.5% of the directors, officers, employees or consultants aggregate compensation prior to the increase, even if consistent with past practices, (C) hire,
transfer, promote or terminate the employment of any employee of Seller or any of the Subsidiaries who has a base annual compensation of $100,000 or more or (D) pay any bonus of any kind or amount to any director, officer, employee or
consultant other than in the ordinary course of business consistent with past practice (for purposes of this Agreement, payment of annual bonuses for performance during calendar year 2016 shall be considered payments in the ordinary course of
business consistent with past practice);
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(vii)
|
sell, lease, transfer, mortgage, encumber or otherwise dispose of any properties or other assets except (A) subject to Section 5.2(xvi), sales of loans, loan participations and sales of investment securities
in the ordinary course of business consistent with past practice to third parties who are not affiliates of Seller Sub, (B) as expressly required by contracts or agreements set forth on
Seller Disclosure Schedule 3.13(a)
, or
(C) sales of other real estate owned in the ordinary course of business consistent with past practice to third parties who are not affiliates of Seller Sub;
provided
, that, for the avoidance of doubt, the parties agree that any sale of a
loan for an amount less than 90% of its carrying value (as determined in accordance with GAAP and applicable Law), or any sale of other real estate owned for an amount less than 90% of its appraised value shall not, in either case, be considered a
sale in the ordinary course of business;
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(viii)
|
pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than, subject to Section 5.2(xviii), in the ordinary course of business
and consistent with past practice;
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(ix)
|
make, or commit to make, any capital expenditures in excess of $150,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof and expenditures necessary to maintain existing assets in
good repair;
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(x)
|
permit the commencement of any construction of new structures or facilities upon, or purchase or lease, any real property in respect of any branch or other facility, or file any application, or otherwise take any
action, to establish, relocate or terminate the operation of any banking office of Seller or Seller Sub;
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(xi)
|
other than changes required by GAAP as concurred in by Sellers independent accountants, (A) make any change in its accounting methods or practices or systems of internal accounting controls (or the manner in
which liabilities are accrued), (B) revalue in any material respect any of its assets, including writing-off notes or accounts receivable or (C) change any of its methods of reporting income and deductions for federal income tax purposes,
except as required by changes in Law;
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(xii)
|
except as may be required by applicable Laws or by the FDIC or other Governmental Entity, enter into any new line of business or change in any material respect any lending, deposit, investment, underwriting, risk and
asset liability management, interest rate or fee pricing with respect to loans or depository accounts (or waive any material fees with respect thereto), hedging and other material banking and operating policies or practices, including policies and
practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, loans;
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(xiii)
|
make, change or revoke any material Tax election, change an annual Tax accounting period or adopt or change any material Tax accounting method, file any amended material Tax Return or settle or compromise any Tax claim,
audit, assessment or dispute or surrender any right to claim a material refund of Taxes;
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(xiv)
|
engage in any transaction with an affiliate, other than in the ordinary course of Seller Subs business and in compliance with Regulation O;
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(xv)
|
enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to
changes in market rates of interest;
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(xvi)
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(A) materially restructure or materially change its investment securities portfolio, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, (B) invest in any
mortgage-backed or mortgage related securities which would be considered high-risk securities under applicable pronouncements of the FDIC or other Governmental Entities or (C) without previously notifying and consulting with
Acquiror, purchase or otherwise acquire any debt security with a remaining term as of the date of such purchase or acquisition of greater than five years for Seller or Seller Subs own account;
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(xvii)
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(A) merge or consolidate with any other business or entity, incorporate or organize any subsidiary, or make any other investment either by purchase of stock or securities, contributions to capital, property transfers or
purchase of any property or assets of any other person or entity, except, in either instance, in connection with a foreclosure of collateral or conveyance of such collateral in lieu of foreclosure taken in connection with collection of a loan in the
ordinary course of business consistent with past practice and with respect to loans made to third parties who are not affiliates of Seller Sub, or (B) restructure, reorganize or completely or partially liquidate or dissolve;
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(xviii)
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except as set forth on
Seller Disclosure Schedule 5.2(xviii)
, (A) settle any claim, action or proceeding other than claims, actions or proceedings in the ordinary course of business consistent with past
practice involving solely money damages not in excess of $75,000 individually or $125,000 in the aggregate, or waive, compromise, assign, cancel or release any material rights or claims or (B) agree or consent to the issuance of any judgment,
order, writ, decree or injunction restricting or otherwise affecting its business or operations;
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(xix)
|
knowingly take, or fail to take, any action that would be reasonably expected to adversely affect or delay the
ability of Seller or any of the Subsidiaries to perform their respective covenants and
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agreements on a timely basis under this Agreement or to consummate the transactions contemplated by this Agreement;
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(xx)
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knowingly take, or fail to take, any action that would reasonably be expected to result in any of Sellers and Seller Subs representations and warranties contained in Article III not being true and correct in
any material respect at the Effective Time;
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(xxi)
|
knowingly take, or fail to take, any action that would be reasonably expected to (i) prevent the Parent Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code
or (ii) adversely affect or delay the ability of Seller or Acquiror to obtain any necessary approvals, consents or waivers of any Governmental Entity required for the transactions contemplated hereby or result in any such approvals, consents or
waivers containing any condition or restriction that would materially impair the value of the transaction to Acquiror;
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(xxii)
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knowingly fail to comply with any Laws applicable to Seller or any of the Subsidiaries and to the conduct of the business of Seller and such Subsidiaries in a manner adverse to such business; or
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(xxiii)
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agree to, or make any commitment to, take, or adopt any resolutions of board of directors (or comparable governing body) of Seller or any of the Subsidiaries in support of, any of the actions prohibited by this
Section 5.2.
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5.3
No Solicitation
.
(a) Upon the execution of this Agreement, Seller shall, and shall cause its affiliates, directors, officers, employees, agents and
representatives (including any investment banker, financial advisor, attorney, accountant or other representative retained by Seller or any of its affiliates (each, a
Seller Representative
)) to, immediately cease and cause to be
terminated all discussions and negotiations, if any, that have taken place prior to the date hereof with any persons or that may be ongoing with respect to any Acquisition Proposal. Upon request by Acquiror, Seller shall request the return and
destruction of all confidential information provided to any such person. In addition, Seller shall not release any third party from, or waive any provisions of, any confidentiality or standstill agreements to which it is a party with respect to any
Acquisition Proposal. Except as otherwise provided below, from the date of this Agreement through the Effective Time, Seller shall not, and shall not authorize or permit any Seller Representative to, directly or indirectly through another person,
(i) solicit, initiate, or knowingly facilitate or encourage (including by way of furnishing information or assistance), or take any other action designed to solicit, initiate, knowingly facilitate or encourage any inquiries or the making of any
proposal that constitutes, or is reasonably likely to lead to, any Acquisition Proposal, (ii) participate in any discussions, negotiations or other communications regarding any Acquisition Proposal or (iii) provide any confidential or
nonpublic information or data to any person relating to an Acquisition Proposal;
provided
, that notwithstanding the foregoing, but subject to compliance with the other terms of this Section 5.3, Sellers board of directors may,
prior to the Special Meeting (but not after), take any of the actions described in Section 5.3(ii) or (iii) in response to an unsolicited bona fide written Acquisition Proposal (that did not result from a breach of this Section 5.3)
if and only to the extent that (x) Sellers board of directors concludes in good faith that the Acquisition Proposal constitutes or is reasonably likely to result in a Superior Proposal; (y) Sellers board of directors concludes
in good faith, after consultation with outside legal counsel and its financial advisor (as to financial matters), that failure to take such actions would be inconsistent with the directors fiduciary duties under applicable Law; and
(z) prior to providing any nonpublic information permitted to be provided pursuant to this proviso, Seller shall have provided both notice to Acquiror and Acquiror Sub of its intention to provide such information to the third party as well as
to Acquiror and Acquiror Sub (if not previously provided to Acquiror and Acquiror Sub), and Seller shall have entered into a confidentiality agreement with such third party on customary terms and conditions (including customary non-disclosure,
confidentiality, standstill and non-solicitation and no-hire provisions and not including any provisions giving such person any exclusive right to negotiate with Seller or prohibiting disclosure to Acquiror of the terms and conditions of any
Acquisition Proposal). Seller agrees that it will take the necessary steps to inform the Seller Representatives of the obligations undertaken in this Section 5.3.
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For purposes of this Agreement, the term
Acquisition Proposal
means any
inquiry, proposal or offer, filing of any regulatory application or notice (whether in draft or final form) or disclosure of an intention to do any of the foregoing from any person relating to any (i) direct or indirect acquisition or purchase
of a business that constitutes a substantial portion of the consolidated net revenues, net income or assets of Seller, (ii) direct or indirect acquisition or purchase of any class of equity securities representing 20% or more of the voting
power of any class of equity securities of Seller or 20% or more of the consolidated assets of Seller, (iii) tender offer or exchange offer that if consummated would result in any person beneficially owning 20% or more of the voting power of
any class of equity securities of Seller, or (iv) merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or similar transaction involving Seller, in each case other than the
transactions contemplated by this Agreement.
For purposes of this Agreement, the term
Superior Proposal
means an
unsolicited bona fide written Acquisition Proposal that Sellers board of directors concludes in good faith, after consultation with its outside legal counsel and financial advisor, taking into account all legal, financial, regulatory and other
aspects of such Acquisition Proposal and the person making such Acquisition Proposal (including any applicable termination fees, expense reimbursement provisions and conditions to consummation) that Sellers board of directors deems relevant as
well as the terms and conditions of this Agreement (as it may be proposed to be amended by Acquiror), is (i) more favorable to the stockholders of Seller from a financial point of view than the transactions contemplated by this Agreement, and
(ii) reasonably capable of being completed on the terms proposed;
provided
that, for purposes of this definition of Superior Proposal, the term Acquisition Proposal shall have the meaning assigned to such term in the paragraph
immediately above except that the reference to 20% or more in the definition of Acquisition Proposal shall be deemed to be a reference to 50% or more.
(b) Seller shall notify Acquiror as promptly as practicable (and in no event more than 24 hours) after receipt of any Acquisition Proposal,
any request for nonpublic information relating to Seller or any Subsidiary that could reasonably be expected to lead to an Acquisition Proposal, or any inquiry from any person seeking to have discussions, negotiations or other communications
relating to a possible Acquisition Proposal. Such notice shall be made orally and confirmed in writing and shall indicate the identity of the person making the Acquisition Proposal, inquiry or request and the material terms and conditions of any
inquiries, requests, proposals or offers (including a copy of the most recent proposed acquisition agreement, if any), except to the extent that such information both constitutes confidential information of the third party making such Acquisition
Proposal under an effective confidentiality agreement and is not related to the terms and conditions of such Acquisition Proposal. Seller agrees that it shall keep Acquiror and Acquiror Sub informed, on a reasonably current basis, of the status and
terms of any such proposal, offer, information request, negotiations or discussions (including any amendments or modifications to such proposal, offer or request).
(c) Except as expressly permitted by this Section 5.3, and after compliance with this Agreement, neither the board of directors of Seller
nor any committee thereof shall (i) withhold, withdraw, amend, modify or qualify (or propose publicly to withhold, withdraw, amend, modify or qualify), in a manner adverse in any respect to the interests of Acquiror, the Seller Recommendation
or take any action or make any statement in connection with the Special Meeting inconsistent with such approval or the Seller Recommendation or (ii) approve or recommend (or propose publicly to approve or recommend) any Acquisition Proposal
(either (i) or (ii), a
Change in the Seller Recommendation
). Except as expressly permitted by this Section 5.3, and after compliance with this Agreement, Seller shall not, and Sellers board of directors or any
committee thereof shall not cause Seller to, enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other similar agreement (other than a confidentiality agreement referred to
in Section 5.3(a) and in compliance with the terms thereof) relating to any Acquisition Transaction (each, a
Seller Acquisition Agreement
). For purposes of this Agreement, a Change in the Seller Recommendation shall include
any failure by Sellers board of directors to recommend against an Acquisition Proposal. Notwithstanding the foregoing, at any time prior to, but not after, obtaining the Seller Stockholder Approval, the board of directors of Seller (including
any committee thereof) may effect a Change in the Seller Recommendation (and, in the event that the board of directors of Seller determines such Acquisition Proposal to be a Superior Proposal in accordance with
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this Section 5.3, terminate this Agreement pursuant to Article VII hereof in order to concurrently enter into a Seller Acquisition Agreement with respect to such Superior Proposal), if the
board of directors of Seller determines in good faith, after consultation with outside legal counsel and its financial advisors (as to financial matters), that the failure to do so would be inconsistent with the directors fiduciary duties
under applicable Law;
provided
,
however
, that Seller may not take any such actions unless (y) Seller shall have complied in all respects with this Section 5.3 and Section 5.8 and (z):
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(i)
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Sellers board of directors determines in good faith, after consultation with its outside legal counsel and its financial advisor (as to financial matters), that such Acquisition Proposal is a Superior Proposal and
such Superior Proposal has been made and has not been withdrawn and continues to be a Superior Proposal after taking into account all adjustments to the terms of this Agreement that may be offered by Acquiror and Acquiror Sub under this
Section 5.3(c);
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(ii)
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Seller has given each of Acquiror and Acquiror Sub at least five Business Days prior written notice of its intention to take such action (which notice shall specify the material terms and conditions of any such
Superior Proposal (including the identity of the party making such Superior Proposal)) and has contemporaneously provided an unredacted copy of the relevant proposed transaction agreements with the person making such Superior Proposal;
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(iii)
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Before effecting such Change in the Seller Recommendation, Seller has negotiated, and has caused Seller Representatives to negotiate, in good faith with Acquiror and Acquiror Sub during such notice period, to the extent
Acquiror and Acquiror Sub wish to negotiate, to enable Acquiror and Acquiror Sub to propose revisions to the terms of this Agreement that obviate the need of Sellers board of directors to make a Change in the Seller Recommendation, including
in the case of a Superior Proposal, by proposing such terms so as to make such Superior Proposal no longer a Superior Proposal; and
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(iv)
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Sellers board of directors, following the end of such five Business Day period again determines in good faith, after consultation with its outside legal counsel and with its financial advisor (as to financial
matters) and having considered in good faith any changes to the terms of this Agreement proposed by Acquiror and any other information provided by Acquiror, that such Acquisition Proposal nonetheless continues to constitute a Superior Proposal and
that the failure to make a Change in the Seller Recommendation would be inconsistent with the directors fiduciary duties under applicable Law.
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If during such five Business Day period there are any material modifications to the financial terms (including any modifications to the form, amount or timing
of payment of consideration) or any other material terms of any Superior Proposal, Seller shall, in each case, deliver to Acquiror and Acquiror Sub as reasonably necessary a new written notice, the notice period shall have recommenced (except that
the length of the new notice period shall be reduced to the greater of the number of days remaining in the original five-day notice period or three Business Days) and Seller shall be required to comply with its obligations under this
Section 5.3(c) with respect to such new written notice. During the applicable notice period, Seller shall not terminate this Agreement unless Seller receives written notice from Acquiror that it does not intend to enter into negotiations with
Seller to propose revisions to the terms of this Agreement to match or better a Superior Proposal.
(d) Subject to Section 7.1(e)
(and in that case, only if Seller shall have complied with its obligations under this Section 5.3 and Section 5.8), nothing in this Section 5.3 shall permit Seller to terminate this Agreement or affect any other obligation of Seller
under this Agreement. Unless this Agreement has been terminated, Seller shall not submit to the vote of its stockholders any Acquisition Proposal other than the Merger.
(e) Nothing contained in this Section 5.3 shall prohibit Seller from taking and disclosing to its stockholders a position required by
Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act;
provided
,
however
, that compliance with such rules shall not in any way limit or modify the effect that any action taken pursuant to such rules has under any other
provision of this Agreement.
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5.4
Negative Covenants of Acquiror and Acquiror Sub
. Except as expressly provided in this
Agreement, or as set forth on
Acquiror Disclosure Schedule 5.4
, during the period from the date of this Agreement to the Effective Time, each of Acquiror and Acquiror Sub and their Subsidiaries and their respective boards of directors shall
not:
(a) other than in connection with this Agreement, and except as would not have an Acquiror Material Adverse Effect, fail to conduct
its business in the ordinary and usual course consistent with past practices and prudent banking practice, or fail to maintain and preserve intact its business organization, properties, leases, employees and advantageous business relationships and
retain the services of its officers and key employees;
(b) knowingly take, or fail to take, any action which would be reasonably expected
to adversely affect or delay the ability of Acquiror or Acquiror Sub to perform their respective covenants and agreements on a timely basis under this Agreement or to consummate the transactions contemplated by this Agreement;
(c) knowingly take, or fail to take, any action that would reasonably be expected to result in any of its representations and warranties
contained in Article IV not being true and correct in any material respect at the Effective Time;
(d) knowingly take, or fail to take,
any action which would be reasonably expected to adversely affect or delay the ability of Acquiror or Acquiror Sub to obtain any necessary approvals, consents or waivers of any Governmental Entity required for the transactions contemplated hereby or
which would reasonably be expected to result in any such approvals, consents or waivers containing any condition or restriction that would materially impair the value of the transaction to Acquiror;
(e) agree to, or make any commitment to, take, or adopt any resolutions of board of directors of Acquiror or Acquiror Sub in support of, any
of the actions prohibited by this Section 5.4;
(f) change any provision of Acquirors articles of incorporation in a way that
would reasonably be expected to adversely affect (i) Acquirors ability to perform its obligations under this Agreement or (ii) the rights of a holder of Acquiror Common Stock; or
(g) other than changes required by GAAP as concurred in by Acquirors independent accountants, (A) make any material change in its
accounting methods or practices or systems of internal accounting controls (or the manner in which liabilities are accrued), (B) revalue in any material respect any of its assets, including writing-off notes or accounts receivable or
(C) materially change any of its methods of reporting income and deductions for federal income tax purposes, except as required by changes in Law .
5.5
Current Information
. During the period from the date hereof to the Effective Time, the parties will cause one or more of each of
their designated representatives to confer on a monthly or more frequent basis with representatives of the other party regarding each of its business, operations, assets, liabilities, condition (financial or otherwise), results of operations or
matters relating to the completion of the transactions contemplated hereby. Without limiting the generality of the foregoing, (i) in such conferences with representatives of Acquiror the designated representative(s) of Seller and Seller Sub
shall provide updates with respect to loan charge-offs and sales of other real estate owned since the last conference, (ii) within 10 days after the end of each calendar month, Seller shall provide Acquiror with (A) an unaudited
consolidated balance sheet as of the end of such month, together with unaudited consolidated statements of income, stockholders equity and cash flows for the month and year-to-date period, which unaudited consolidated financial statements will
be prepared in accordance with GAAP and will fairly present, in all material respects, the financial position of Seller at the respective dates thereof and the results of Sellers operations and cash flows for the periods indicated therein,
subject to the omission of footnotes and normal and year-end audit adjustments as permitted by GAAP, none of which adjustments, to the extent they relate to Sellers or Seller Subs capital ratios, will be material, and (B) a schedule
of loans charged-off during such month and other real estate owned sold during such month. Within 30 days after
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the end of each fiscal quarter, Seller shall provide Acquiror with a copy of the FDIC Call Report filed with the FDIC; in addition, subject to applicable Laws (including relating to the exchange
of information), within five Business Days after filing Seller shall provide Acquiror a copy of all reports, forms, correspondence, registrations and statements, together with any amendments thereto, that Seller or Seller Sub files during the period
from the date of this Agreement to the Effective Time with the Secretary of State of the State of Delaware, the MCB, the FDIC, the FRB and any other federal or state Governmental Entity having jurisdiction over Seller and/or Seller Sub.
5.6
Access to Properties and Records; Confidentiality
.
(a) Each of the parties shall permit the other party and its representatives reasonable access to their properties and shall disclose and make
available to the other all books, papers and records relating to the assets, properties, operations, obligations and liabilities of the other party, including, but not limited to, all books of account (including the general ledger), tax records,
minute books of directors and stockholders meetings, organizational documents, bylaws, material contracts and agreements, filings with any regulatory authority, litigation files, plans affecting employees, and any other business
activities in which the other party may have an interest, except for such documents that such partys board of directors has been advised by its counsel that such disclosure, production or distribution may violate a confidentiality obligation,
fiduciary duty, any Law or regulation, or may result in a waiver of such partys attorney-client privilege. Neither party shall be required to provide access to or to disclose information where such access or disclosure would violate or
prejudice the rights of any customer or would contravene any Law, order or judgment. The parties will use their reasonable best efforts to obtain waivers of any such restriction and in any event make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding sentence apply. The parties shall make their respective executive officers available to confer with the other partys representatives, provided that such access shall be reasonably
related to the transactions contemplated hereby and not unduly interfere with normal operations.
(b) All information furnished previously
by the parties or any of their respective subsidiaries, or hereafter furnished prior to the Effective Time, in connection with the transactions contemplated by this Agreement or pursuant hereto shall be treated as the sole property of the party
furnishing the information until consummation of the Mergers and, if the Mergers shall not occur, the party receiving the information shall (i) at the request of the party which furnished such information, either return to the party which
furnished such information or destroy all documents or other materials containing, reflecting or referring to such information;
provided
, that the party receiving the information shall not be required to delete or erase such information from
its servers; (ii) use its best efforts to keep confidential all such information; (iii) use such information only for the purpose of consummating the transactions contemplated by this Agreement; and (iv) not directly or indirectly use
such information for any competitive or commercial purposes. The obligations of the parties to keep such information confidential shall continue for three years (except for any confidential customer information, which shall be kept confidential
indefinitely) from the date the Mergers are abandoned but shall not apply to (i) any information which (A) was already in the possession of the party receiving the information prior to the disclosure thereof to it by the party furnishing
the information; (B) was then generally known to the public; (C) became known to the public through no fault of the party receiving the information; or (D) was disclosed to the party receiving the information by a third-party not
known by the receiving party to be bound by an obligation of confidentiality; or (ii) disclosures pursuant to Law or in accordance with an order of a court of competent jurisdiction or any other Governmental Entity with authority to compel
disclosure.
5.7
Regulatory Matters
.
(a) Each of the parties hereto shall use their respective reasonable best efforts to (i) take, or cause to be taken, and assist and
cooperate with the other parties in taking, all actions reasonably necessary, proper or advisable to comply promptly with all legal requirements with respect to the transactions contemplated hereby, including obtaining any third-party consent or
waiver that may be required to be obtained in connection with the transactions contemplated hereby, and, to consummate the transactions contemplated hereby (including actions
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required in order to effect the Subsidiary Merger simultaneously with the Effective Time and to continue any contract or agreement of Seller or Seller Sub following Closing or to avoid any
penalty or other fee under such contracts and agreements, in each case arising in connection with the transactions contemplated hereby) and (ii) obtain (and assist and cooperate with the other parties in obtaining) any permit, consent, waiver,
approval and authorization of, or any exemption by, any Governmental Entity that is required or advisable in connection with the transactions contemplated by this Agreement, including the Mergers. The parties hereto shall cooperate with each other
and prepare and file, as promptly as possible after the date hereof, all necessary documentation, and effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, waivers, approvals and
authorizations of all third parties and Governmental Entities that are necessary or advisable to consummate the transactions contemplated by this Agreement.
(b) Each of the parties shall use their reasonable best efforts to resolve any objections that may be asserted by any Governmental Entity with
respect to this Agreement or the transactions contemplated by this Agreement. Such consents and approvals and the transactions contemplated hereby shall not have been contested by any Governmental Entity or any third party by formal proceeding. It
is understood that, if any such contest is brought by formal proceeding, Acquiror and Seller may, but shall not be obligated to, answer and defend such contest or otherwise pursue the Mergers and the transactions contemplated hereby over such
objection. Notwithstanding anything set forth in this Agreement, under no circumstances shall a party be required, and Seller and Seller Sub shall not be permitted (without Acquirors written consent in its sole discretion), to take any action,
or commit to take any action, or agree to any condition or restriction, in connection with obtaining the foregoing permits, consents, waivers, approvals and authorizations, that would have, or would be reasonably likely to have, individually or in
the aggregate, a Seller Material Adverse Effect or an Acquiror Material Adverse Effect, as the case may be (including, for the avoidance of doubt, any determination by a Governmental Entity that the Subsidiary Merger may not be consummated as
contemplated herein, including simultaneously with the Effective Time);
provided
, that, if requested by Acquiror, then Seller and Seller Sub will take or commit to take any such action, or agree to any such condition or restriction, so long
as such action, commitment, agreement, condition or restriction is binding on Seller and Seller Sub only in the event the Closing occurs.
(c) Subject to applicable Laws relating to the exchange of information, Acquiror and Seller shall, upon request, furnish each other with all
information concerning Acquiror, Seller, Acquiror Sub and Seller Sub and their respective Subsidiaries and their respective directors, officers and stockholders, as applicable, and such other matters as may be reasonably necessary in connection with
any statement, filing, notice or application made by or on behalf of Acquiror, Seller, Acquiror Sub and Seller Sub to any Governmental Entity in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each
of the parties hereto shall act reasonably and as promptly as practicable.
(d) Subject to applicable Laws (including those relating to
the exchange of information), Seller and Acquiror shall keep each other apprised of the status of matters relating to the completion of the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, subject to
applicable Laws, the parties shall (i) promptly furnish each other with copies of notices or other communications received by the other party (or written summaries of communications received orally), from any third party or Governmental Entity
with respect to the transactions contemplated by this Agreement, (ii) provide the other party a reasonable opportunity to review in advance, and accept the reasonable comments of the other party in connection with, any proposed communication
to, including any filings with or other written materials submitted to, any Governmental Entity, and (iii) consider in good faith the other partys views with respect to, and confer in good faith with the other party to resolve, any
disagreement as to strategy with respect to any communication by the other party with any Governmental Entity or third party relating to the transactions contemplated by this Agreement. Seller shall not, and shall cause its Subsidiaries not to,
participate in any meeting or substantive discussion, either in person or by telephone, with any Governmental Entity in connection with the proposed transactions unless it consults with Acquiror in advance and, to the extent not prohibited by
applicable Laws, gives Acquiror the opportunity to attend and participate. Any such disclosures or rights to participate may be made on an outside counsel-only basis to the extent required under applicable Laws.
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5.8
Preparation of Registration Statement; Stockholder Approval
.
(a) Seller shall reasonably cooperate with Acquiror in order for Acquiror to prepare and file with the Commission as promptly as practicable
after the date hereof a proxy statement/prospectus (the
Proxy Statement/Prospectus
) to be mailed to the stockholders of Seller related to the Special Meeting and to be part of the Registration Statement to be filed by Acquiror
with the Commission pursuant to the 1933 Act with respect to the shares of Acquiror Common Stock to be issued in connection with the Parent Merger. The parties shall use their reasonable best efforts to cause the Registration Statement to be
declared effective by the SEC as promptly as practicable after its filing. The Proxy Statement/Prospectus, and any amendment thereto, shall include, subject to Section 5.3, the Seller Recommendation. Acquiror shall notify Seller promptly of the
receipt of any comments from the Commission or its staff and of any request by the Commission or its staff for amendments or supplements to the Proxy Statement/Prospectus or the Registration Statement or for additional information and shall supply
Seller with copies of all correspondence between it or any of its representatives, on the one hand, and the Commission or its staff, on the other hand, with respect thereto. If, at any time prior to the Special Meeting, any event occurs with respect
to any party hereto, or any change occurs with respect to other information supplied by a party for inclusion in the Proxy Statement/Prospectus or the Registration Statement, which is required to be described in an amendment of, or a supplement to,
the Proxy Statement/Prospectus or the Registration Statement, such party shall promptly notify the other party of such event, and cooperate in the prompt filing with the Commission of any necessary amendment or supplement thereto and, to the extent
required by applicable Laws, in disseminating the information contained in such amendment or supplement to the stockholders of Seller. Acquiror will advise Seller promptly after it receives notice thereof of the time when the Registration Statement
has become effective or any supplement or amendment thereto has been filed, of the issuance of any stop order, of the suspension of the qualification of the Acquiror Common Stock issuable in connection with the Parent Merger for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such purpose, or of any request by the Commission for the amendment or supplement of the Registration Statement or for additional information. When the Registration Statement or
any post-effective amendment thereto shall become effective, and at all times subsequent to such effectiveness, up to and including the Effective Time, such Registration Statement and all amendments or supplements thereto, with respect to all
information set forth therein furnished or to be furnished by Acquiror and Acquiror Sub relating to Acquiror and Acquiror Sub and by Seller and Seller Sub relating to Seller and or any of Sellers Subsidiaries, (i) will comply in all
material respects with the provisions of the 1933 Act and the rules and regulations of the Commission thereunder and (ii) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading. Acquiror also agrees to use commercially reasonable efforts to obtain any necessary state securities Law or blue sky permits and approvals required to carry out the
transactions contemplated by this Agreement.
(b) Seller shall, subject to the provisions of Section 5.3 and this Section 5.8,
(i) take all steps (including cooperating with Acquiror in the distribution of the Proxy Statement/Prospectus) necessary to duly call, give notice of, convene and hold a meeting of its stockholders (including any adjournments, the
Special Meeting
) as soon as reasonably practicable for the purposes of securing the Seller Stockholder Approval, (ii) recommend to its stockholders the approval of this Agreement, including the Parent Merger, and the
transactions contemplated hereby (the
Seller Recommendation
), and (iii) use its reasonable best efforts to obtain, as promptly as practicable, the Seller Stockholder Approval. Promptly following approval of this Agreement by
the stockholders of Seller, Seller, as the sole stockholder of Seller Sub, and Acquiror, as the sole stockholder of Acquiror Sub, each in such capacity, will approve the Subsidiary Merger Document, whether at a meeting or by written consent.
5.9
Legal Conditions to Merger
. Subject in all respects to Sections 5.1 and 5.4 of this Agreement, each of Seller and Acquiror shall,
and shall cause their respective Subsidiaries to, use their reasonable best efforts (a) to take, or cause to be taken, all actions reasonably necessary, proper or advisable to comply promptly with all legal requirements that may be imposed on
such party or its Subsidiaries with respect to the Mergers and, subject to the conditions set forth in Article VI, to consummate the transactions contemplated by this Agreement, and (b) to
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obtain (and to cooperate with the other party to obtain) any material consent, authorization, order or approval of, or any exemption by, any Governmental Entity and any other third party that is
required to be obtained by Seller or Acquiror or any of their respective Subsidiaries in connection with the Mergers and the other transactions contemplated by this Agreement.
5.10
Disclosure Supplements
. Between the date of this Agreement to the Effective Time, each party will supplement or amend its
respective Disclosure Schedules delivered pursuant hereto with respect to any matter hereafter arising which, if existing, occurring or known as of the date hereof, would have been required to be set forth or described in such Schedules or which is
necessary to correct any information in such Schedules which has been rendered inaccurate thereby;
provided
,
however
, that the inclusion of any information in any such amendment or supplement not included in the original Disclosure
Schedules which is necessary to correct any material inaccuracy in such Schedules shall not limit or impair any right which a party may have to terminate this Agreement pursuant to Section 7.1(c) due to failure to satisfy the conditions set
forth in Section 6.2(a) or Section 6.3(a), as the case may be.
5.11
Public Announcements
. Prior to the Effective Time,
the parties hereto shall approve in advance the substance, and cooperate with each other in the development and distribution, of all news releases and other public disclosures with respect to this Agreement or any of the transactions contemplated
hereby, except as may be otherwise required by Law and as to which the parties releasing such information have used their reasonable efforts to discuss with the other parties in advance.
5.12
Stock Exchange Listing
. Acquiror shall use all reasonable best efforts to cause the shares of Acquiror Common Stock to be issued
in the Parent Merger to be approved for listing on the Nasdaq Global Select Market, subject to official notice of issuance, as promptly as practicable, and in any event before the Closing Date.
5.13
Certain Post-Merger Agreements
.
The parties hereto agree to the following arrangements following the Effective Time:
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(a)
|
Employee Benefit Plans
.
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(i)
|
Subject to the provisions of this Section 5.13, following the Effective Time, Acquiror, in its discretion, will either maintain existing Seller Plans or shall offer coverage under applicable Acquiror Plans to
employees of Seller or any of the Subsidiaries who become employed by Acquiror, Acquiror Sub or any subsidiary or affiliate thereof (as the case may be,
Employer
) immediately following the Effective Time (
Transferred
Employees
). Notwithstanding the foregoing, Acquiror will honor the terms of Seller Plans to the extent of benefits accrued as of the Effective Time.
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(ii)
|
Following the Effective Time, Acquiror will provide continuation coverage under Section 4980B of the Code and Section 601 of ERISA and other applicable Law to all qualified beneficiaries (within
the meaning of Code Section 4980(g)) who were entitled to such coverage under Sellers or any Subsidiarys group health plan immediately prior to the Effective Time.
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(iii)
|
Acquiror shall provide credit to any Transferred Employee for periods of service with Seller and its Subsidiaries under the Acquiror Plans for eligibility and vesting purposes, and solely for purposes of seniority-based
benefits, such as vacation accrual and severance, accrual purposes, to the same extent as provided under the corresponding Seller Plans, provided that such service shall not operate to duplicate any benefit.
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(iv)
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Acquiror and Acquiror Sub agree that, to the extent waived, satisfied or inapplicable to any Transferred Employee
under the terms of any group health, group term life insurance or long-term disability plan maintained by Seller or any of the Subsidiaries at the Effective Time, any preexisting condition or similar limitation or exclusion contained in an
Employers group health, long-term
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disability or group term life insurance plans shall not apply to Transferred Employees or their covered dependents who are covered under similar plans maintained by Seller or any of the
Subsidiaries at the Effective Time and who then change coverage to the Employers group health, group term life insurance or long-term disability plan at the time such Transferred Employees are first given the option to enroll.
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(v)
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To the extent practicable, Transferred Employees shall be given credit for amounts paid under a corresponding Seller Plan during the same period during which such Transferred Employees commence participation in any
similar Acquiror Plans for purposes of applying deductibles, copayments and out-of-pocket maximums as though such amounts had been paid in accordance with the terms and conditions of the Acquiror Plans. Acquiror agrees to take such reasonable
measures as may be appropriate to mitigate the adverse consequences of a short plan year prior to transition to Acquiror Plans, such as extending the terms of the applicable Seller Plan to coincide with the plan year of the applicable Acquiror Plan.
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(vi)
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Subject to Acquirors or any of its subsidiaries right to terminate a Transferred Employee at any time after the Closing Date, the Transferred Employees shall, for a period of at least twelve months following
the Closing Date, receive no less favorable annual salary, hourly wages, annual bonus opportunities and equity incentives than similarly-situated employees of Acquiror or its subsidiaries.
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(vii)
|
Prior to the Effective Time, Seller shall have adopted resolutions of the Sellers board of directors to terminate its tax-qualified cash or deferred arrangement described in
Seller Disclosure
Schedule 3.8(a)
, effective as of the day prior to the Closing Date (contingent upon the Closing). Employer shall cause an Acquiror Plan intended to qualify under Section 401(a) of the Code to accept rollovers by Transferred Employees
from any similar Sellers Plan, including rollovers of any plan loans in such accounts.
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(viii)
|
Notwithstanding anything herein to the contrary, after the Effective Time, nothing contained herein shall restrict the ability of the Employer to amend, modify, terminate or replace any Seller Plan, in its discretion,
in accordance with the terms of the applicable Seller Plan.
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(ix)
|
No provision in this Agreement shall amend or modify or be deemed to modify or amend any Seller Plan or any similar plan, policy, arrangement or agreement maintained by Acquiror. Nothing contained herein shall be deemed
a guarantee of employment for any Transferred Employee, shall restrict the right of Acquiror, Acquiror Sub or affiliate thereof to terminate the employment of any Transferred Employee or constitute a guarantee of any type or amount of compensation
or benefits (except as otherwise provided in this Agreement).
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(b)
Indemnification of Officers and Directors
.
Acquiror shall indemnify and hold harmless each present and former director and officer of Seller (determined as of the Effective Time) and any of the Subsidiaries (determined as of the effective time of the Subsidiary Merger) and their heirs,
personal representatives and estates (collectively, the
Indemnified Parties
) against, and shall promptly upon request advance or reimburse, any and all costs or expenses (including reasonable attorneys fees), judgments,
interest, fines, losses, claims, damages, liabilities or amounts paid in settlement (collectively,
Costs
) as they are incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative, arbitrative or investigative (
Proceeding
), whether or not the Indemnified Party is a party to such Proceeding, based upon or arising from the Indemnified Partys acts or omissions as an officer or director of
Seller and/or any of the Subsidiaries, whether threatened, asserted or claimed prior to, at or after the Effective Time (collectively,
Claims
), to the same extent as the Indemnified Parties would have been indemnified under the
certificate of incorporation and/or bylaws of Seller or any Subsidiary as such documents were in effect on the date of this Agreement as if the Indemnified Parties were officers or directors of Seller or any Subsidiary at all relevant times, except
that no indemnity shall be provided by Acquiror hereunder with respect to any Claim arising on account of an Indemnified Partys service as an officer or director of another for-profit entity;
provided
, that the Indemnified Party to whom
any expenses are advanced must provide an undertaking (in a reasonable and
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customary form) to repay such advances if it is ultimately determined that such Indemnified Party is not entitled to indemnification. This indemnity shall be provided for six years following the
Effective Time; or if there shall be any Proceeding pending or threatened on the sixth anniversary of the Effective Time, such indemnity shall continue in full force and effect until such pending or threatened Proceeding is finally resolved.
The rights to indemnification granted by this Section 5.13(b) are subject to the following limitations: (i) a director or officer of
Seller or any of the Subsidiaries (determined as of the date of this Agreement and as of the Effective Time) who would otherwise be a member of the Indemnified Parties under this Section 5.13(b) shall not be entitled to the benefits hereof
unless such director or officer has executed a Joinder Agreement in the form of
Schedule 5.13(b)
hereto; and (ii) amounts otherwise required to be paid by Acquiror to the Indemnified Parties pursuant to this Section 5.13(b) shall be
reduced by any amounts that such Indemnified Parties recover from any third party.
(c)
Insurance
. Seller shall obtain on or prior
to the Effective Time a six-year tail prepaid directors and officers liability insurance policy(ies) covering each present and former director and officer of Seller and any of the Subsidiaries as set forth in
Section 5.13(b) at no cost to the beneficiaries thereof with respect to claims arising from facts or events which occurred prior to the Effective Time, in the same coverage amount as in effect under Sellers directors and
officers liability insurance policy(ies) (both primary and excess) immediately prior to the Effective Time,
provided
, that if the aggregate premium Seller would be required to pay for such tail policy(ies) is in excess of
300% of the premium for such coverage set forth in
Seller Disclosure Schedule 3.14
, then Seller shall purchase as much coverage as is reasonably practicable for 300% of the premium set forth in
Seller Disclosure Schedule 3.14
, unless
otherwise agreed in advance in writing by Acquiror. Such policy shall survive the Mergers.
(d)
Subsequent Events
. In the event
that the Surviving Corporation or any of its successors or assigns shall (i) consolidate with or merge into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfer all or substantially all its properties and assets to any entity, then, and in each such case, the Surviving Corporation shall cause proper provision to be made so that the successor and assign of the Surviving Corporation assumes
the obligations set forth in Sections 5.13(b) and (c). The provisions of Sections 5.13(b) and (c) shall survive consummation of the Mergers and are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or
her heirs and his or her legal representatives. This Section 5.13 may not be amended, altered or repealed after the Effective Time without the prior written consent of the affected Indemnified Party.
5.14
Takeover Laws; No Rights Triggered
. If any Takeover Law may become, or may purport to be, applicable to the transactions
contemplated hereby, each of the parties and the members of their respective Boards of Directors will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Law on any of the transactions contemplated by this Agreement.
5.15
Adoption of Accounting Policies
. As soon as practicable after the satisfaction or waiver of all conditions to the Closing set
forth in Article VI and at such time as consummation of the transactions contemplated by this Agreement seems reasonably assured and in any event prior to the Effective Time (unless this Agreement is terminated pursuant to Article VII), Seller and
Seller Sub shall take any and all necessary or appropriate actions to adopt all Acquiror accounting procedures and policies (including those policies pertaining to charged-off and non-accrual assets);
provided
,
however
, that no such
action taken by Seller or Seller Sub at the request of Acquiror pursuant to this section shall be deemed to be, or be deemed to cause, a breach of any representation or warranty made by Seller or Seller Sub herein.
5.16
Operating Functions
. Seller and Seller Sub shall cooperate with Acquiror and Acquiror Sub in connection with planning for the
efficient and orderly combination of the parties and the operation of the Subsidiary Surviving
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Bank after the Subsidiary Merger, and in preparing for the consolidation of appropriate operating functions to be effective on the Closing Date or such later date as Acquiror may decide. Seller
shall take, and shall use its reasonable best efforts to cause its data processing consultants and software providers to take, any action Acquiror may reasonably request prior to the Effective Time to facilitate the combination of the operations of
Seller Sub with Acquiror Sub. Without limiting the foregoing, Seller shall provide office space and support services (and other reasonably requested support and assistance) in connection with the foregoing, and senior officers of Seller and Acquiror
shall meet from time to time as Seller or Acquiror may reasonably request, to review the financial and operational affairs of Seller and Seller Sub, and Seller shall give due consideration to Acquirors input on such matters, with the
understanding that, notwithstanding any other provision contained in this Agreement, (i) neither Acquiror nor Acquiror Sub shall under any circumstance be permitted to exercise control of Seller, Seller Sub or any of Sellers other
Subsidiaries prior to the Effective Time, (ii) neither Seller nor any of its Subsidiaries shall be under any obligation to act in a manner that could reasonably be deemed to constitute anti-competitive behavior under federal or state antitrust
laws and (iii) neither Seller nor any of its Subsidiaries shall be required to agree to any material obligation that is not contingent upon the consummation of the Merger.
5.17
Certain Agreements
. As promptly as practicable after the date hereof (but no later than ten days following the date of this
Agreement), Seller and Seller Sub shall have each director of Seller and Seller Sub who is not an employee of Seller or Seller Sub, respectively, execute a Voting and Non-Competition Agreement in substantially the form of
Schedule 5.17-A
hereto and have each executive officer of Seller and Seller Sub who is also a director of Seller or Seller Sub, respectively, execute a Voting Agreement in substantially the form of
Schedule 5.17-B
hereto. In addition, as promptly as
practicable after the date hereof (but no later than ten days following the date of this Agreement), Seller and Seller Sub shall cause each of Columbia Equity Partners and Presidio Investors, LLC to executing a Voting Agreement containing
substantially the same obligations as those contained in the Voting Agreement attached as
Schedule 5.17-B
hereto.
5.18
Hold
Harmless
. Acquiror will indemnify and hold harmless Seller, Seller Sub, each of the directors and officers and each person, if any, who controls Seller or Seller Sub within the meaning of the 1933 Act against any losses, claims, damages or
liabilities, joint, several and solidary, to which they or any of them may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or in any amendment or supplement thereto, or arising out of or based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, and will pay or promptly reimburse such person for any legal or other expenses reasonably incurred by such person in connection with investigating or defending
any such action or claim;
provided
,
however
, that Acquiror shall not be liable in any such case to the extent that any such loss, claim, damage or liability (or actions in respect thereof) arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in the Registration Statement or any such amendment or supplement in reliance upon and in conformity with information furnished to Acquiror by Seller or Seller Sub for use
therein. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against Acquiror under this Section 5.18, notify Acquiror
in writing of the commencement thereof. In case any such action shall be brought against any indemnified party and it shall notify Acquiror of the commencement thereof, Acquiror shall be entitled to participate therein; and to the extent that it
shall wish to assume the defense thereof with counsel satisfactory to such indemnified party, and, after notice from Acquiror to such indemnified party of its election to so assume the defense thereof, Acquiror shall not be liable to such
indemnified party under this Section 5.18 for any legal expenses of other counsel or of any other expenses subsequently incurred by such indemnified party;
provided
, that, if Acquiror elects not to assume such defense or counsel for the
indemnified parties advises that there are substantive issues which raise conflicts of interest between Acquiror and the indemnified parties, the indemnified parties may retain one counsel satisfactory to them, and Acquiror shall pay all reasonable
fees and expenses of such counsel for such indemnified parties promptly as statements therefor are received.
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5.19
Stockholder Litigation
. Seller shall provide Acquiror the opportunity to participate
in the defense or settlement of any stockholder litigation against Seller and/or its directors relating to the transactions contemplated by this Agreement throughout the course of any such litigation, and Acquiror shall in good faith consider the
recommendations by Seller regarding such litigation. Seller shall not settle any stockholder litigation without Acquirors prior written consent (such consent not to be unreasonably withheld or delayed).
5.20
Severance
. An employee of Seller or any Subsidiary (other than any employee who is party to an employment agreement, severance
agreement or change-in-control agreement that provides for severance benefits) who has been employed by Seller or any Subsidiary for at least six months whose employment is terminated involuntarily other than for cause, in connection
with, or within six months after, the consummation of the Mergers shall be entitled to receive severance payments from Acquiror equal in amount to two weeks base pay (with such amount to be calculated based upon such employees base pay
as of termination of employment or, if greater, the Effective Time) for each full year (prorated for any partial year) such employee was employed by Seller or any Subsidiary or any successor or predecessor thereto, subject to a minimum of four
weeks severance and a maximum of 16 weeks severance, and,
provided
further
, that, as a condition to any payment, such terminated employee shall have entered into a release of claims against the Surviving Corporation, the
Surviving Bank, Seller, the Subsidiaries and their respective affiliates in a form mutually agreed to by Acquiror and Seller and such release shall have become irrevocable no later than 60 days after termination of the employees employment.
For purposes of this Section 5.20,
cause
shall mean termination because of the employees material personal dishonesty in the course and scope of his or her employment, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties or willful violation of any law, rule, or regulation (other than traffic violations or similar violations), base pay shall mean an employees annual salary or
annual compensation computed on an hourly basis, excluding bonuses, commissions, perquisites, benefits or similar payments, and year of credited service shall mean each full
12-month
period of
service from the date of hire. Severance shall be paid in a lump-sum on the date the release becomes irrevocable unless required to be paid on a subsequent date pursuant to Section 409A of the Code.
5.21
Seller Indebtedness
. Acquiror will execute and deliver, or cause to be executed and delivered, by or on behalf of the Surviving
Corporation, at or prior to the Effective Time, one or more supplemental indentures and other instruments required for the due assumption of Sellers 6.50% Fixed to Floating Rate Subordinated Notes due July 1, 2026.
5.22
Officer Agreements
.
Both Seller and Acquiror shall take such actions as are reasonably necessary to unilaterally terminate, effective as of the Effective Time,
each of the Employment Agreements between Seller and the respective executives set forth in
Seller Disclosure Schedule 5.22
(collectively the
Existing Officer Agreements
) in exchange for a cash payment at Closing in a
single lump sum in the amount set forth in
Seller Disclosure Schedule 5.22
opposite the executives name (net of applicable tax withholdings). The termination and liquidation of the Existing Officer Agreements shall be made consistent
with the provisions of Section 409A of the Code for termination and liquidation of a plan in connection with a change in control event under Section 409A of the Code, so as to avoid any additional tax, interest or penalties in connection
with the termination and liquidation of the Existing Officer Agreements. Effective as of the Closing Date, (i) Acquiror Sub and Curtis J. Gabardi, shall enter into an employment agreement substantially in the form attached hereto as
Schedule
5.22(i)
(the
Gabardi Agreement
) and (ii) the executives set forth in
Seller Disclosure Schedule 5.22
shall execute and deliver termination agreements, substantially in the form attached hereto as
Schedule
5.22(ii)
.
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ARTICLE VI
CLOSING CONDITIONS
6.1
Conditions to the Parties Obligations under this Agreement
. The respective obligations of the parties under this Agreement shall be subject to the fulfillment at or prior to the Effective Time of the following conditions:
(a) Each party shall (i) have received, subject to Section 5.7(a), the approval or consent, or waiver of approval or consent, of the
Mergers and the other transactions contemplated hereby from any and all Governmental Entities whose consent or approval (or waiver thereof) must be received and in full force and effect in order to consummate the Mergers and the transactions
contemplated hereby, and (ii) any statutory or regulatory waiting period necessary to effect the Mergers and the transactions contemplated hereby shall have expired. All notices, reports and other filings required to be made with any
Governmental Entity in connection with the Parent Merger prior to the Effective Time by Acquiror or Seller or in connection with the Subsidiary Merger prior to the Effective Time by Acquiror Sub or Seller Sub shall have been made and become final.
(b) The Seller Stockholder Approval shall have been obtained.
(c) None of the parties shall be subject to any Law, judgment, order, writ, decree or injunction which shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits, restricts or makes illegal the consummation of the Mergers or the other transactions contemplated hereby.
(d) All consents or approvals of all persons (other than Governmental Entities) required for consummation of the Mergers shall have been
obtained and shall be in full force and effect, unless the failure to obtain any such consent or approval would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect or an Acquiror Material Adverse
Effect, as applicable.
(e) The Registration Statement shall have become effective, and no stop order suspending the effectiveness of the
Registration Statement shall have been issued, and no proceedings for that purpose shall have been initiated or threatened by the Commission and not withdrawn.
(f) The shares of Acquiror Common Stock issuable to the holders of Seller Common Stock in the Parent Merger shall have been approved for
listing on the Nasdaq Global Select Market on or before the Closing Date, subject to official notice of issuance.
(g) Acquiror and Seller
shall have executed and delivered the Parent Merger Documents.
(h) Acquiror Sub and Seller Sub shall have executed and delivered the
Subsidiary Merger Document.
(i) Acquiror Sub and Curtis J. Gabardi shall have executed and delivered the Gabardi Agreement.
6.2
Conditions to the Obligations of Acquiror and Acquiror Sub under this Agreement
. The obligations of Acquiror and Acquiror Sub under
this Agreement shall be further subject to the satisfaction, at or prior to the Effective Time, of the following conditions, any one or more of which may be waived by Acquiror (on behalf of itself and Acquiror Sub) to the extent permitted by Law:
(a) (i) Each of the obligations of Seller and Seller Sub required to be performed by them at or prior to the Closing pursuant to the
terms of this Agreement shall have been duly performed and complied with in all material respects, and (ii) the representations and warranties of Seller and Seller Sub contained in this Agreement shall have been true and correct in all material
respects (without giving effect to any limitations as to materiality or Seller Material Adverse Effect set forth in any such representation or warranty so as to avoid the application of double or dual materiality within such
representation and warranty) as of the date hereof and as
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of the Effective Time as though made at and as of the Effective Time (other than any representation or warranty which specifically relates to an earlier date which shall be true and correct as of
such date), except in the case of the foregoing clause (ii) with respect to all representations and warranties (other than those set forth in Sections 3.11(c), 3.12 and 3.28), where the failure to be so true and correct, individually or in
the aggregate, has not had and would not reasonably be expected to have a Seller Material Adverse Effect.
(b) Seller or Sellers
board of directors shall have taken the actions described in Section 5.13(a)(ii).
(c) Holders of Seller Common Stock who exercise
their appraisal rights in the Parent Merger pursuant to Section 262 of the DGCL by meeting the requirements set forth therein shall not hold more than 5.0% of outstanding shares of Seller Common Stock immediately prior to the Effective Time.
(d) There shall not have been any Seller Material Adverse Effect between the date hereof and the Closing Date.
(e) Seller shall have delivered to Acquiror: (i) a certificate, dated as of the Effective Time and signed on its behalf by Sellers
chief executive officer and its chief financial officer, to the effect that the conditions set forth in Section 6.2(a) have been satisfied; and (ii) certified copies of resolutions duly adopted by the board of directors of Seller
evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, all in such reasonable detail as Acquiror and its counsel
shall reasonably request.
(f) Acquiror shall have received the opinion of Phelps Dunbar LLP, dated as of the Closing Date, which opinion
shall be satisfactory in form and substance to Acquiror, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion (which shall be consistent with the state of facts existing at the Closing
Date), the Parent Merger when consummated in accordance with the terms hereof will constitute a reorganization within the meaning of Section 368(a) of the Code. In rendering its opinion, counsel shall be entitled to require and rely
upon representation letters as to certain factual matters contained in certificates of officers of Acquiror and Seller, in form and substance reasonably satisfactory to such counsel and dated as of the date of such opinion.
(g) Seller shall have delivered to Acquiror a consent executed by the individuals set forth on
Schedule 6.2(g)
with respect to the
cancellation and payment of the Seller Stock Options as provided in Section 2.6(a) to the extent such individuals hold Seller Stock Options that are not exercised prior to Closing.
6.3
Conditions to the Obligations of Seller and Seller Sub under this Agreement
. The obligations of Seller and Seller Sub under this
Agreement shall be further subject to the satisfaction, at or prior to the Effective Time, of the following conditions, any one or more of which may be waived by Seller (on behalf of itself and Seller Sub) to the extent permitted by Law:
(a) (i) Each of the obligations of Acquiror and Acquiror Sub required to be performed by them at or prior to the Closing pursuant to the terms
of this Agreement shall have been duly performed and complied with in all material respects, and (ii) the representations and warranties of Acquiror and Acquiror Sub contained in this Agreement shall have been true and correct in all material
respects (without giving effect to any limitations as to materiality or Acquiror Material Adverse Effect set forth in any such representation or warranty so as to avoid the application of double or dual materiality within
such representation and warranty) as of the date hereof and as of the Effective Time as though made at and as of the Effective Time (other than any representation or warranty which specifically relates to an earlier date which shall be true and
correct as of such date), except in the case of the foregoing clause (ii) with respect to all representations and warranties (other than those set forth in Sections 4.10(c), 4.12 and 4.17), where the failure to be so true and correct,
individually or in the aggregate, has not had and would not reasonably be expected to have an Acquiror Material Adverse Effect.
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(b) Acquiror shall have delivered to Seller: (i) a certificate, dated as of the Effective
Time and signed on its behalf by Acquirors chief executive officer and its chief financial officer, to the effect that the conditions set forth in Section 6.3(a) have been satisfied; and (ii) certified copies of resolutions duly
adopted by the board of directors of Acquiror evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, all in such
reasonable detail as Seller and its counsel shall request.
(c) Seller shall have received the opinion of Troutman Sanders LLP, dated as
of the Closing Date, which opinion shall be satisfactory in form and substance to Seller, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion (which shall be consistent with the state
of facts existing at the Closing Date), the Parent Merger when consummated in accordance with the terms hereof will constitute a reorganization within the meaning of Section 368(a) of the Code. In rendering its opinion, counsel
shall be entitled to require and rely upon representation letters as to certain factual matters contained in certificates of officers of Acquiror and Seller, in form and substance reasonably satisfactory to such counsel and dated as of the date of
such opinion.
(d) There shall not have been any Acquiror Material Adverse Effect between the date hereof and the Closing Date.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER, ETC.
7.1
Termination
. This Agreement may be terminated and the Mergers may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of Seller:
(a) by mutual written consent of each of Seller and Acquiror;
(b) by either Acquiror (on behalf of itself and Acquiror Sub) or Seller (on behalf of itself and Seller Sub):
(i) (A) if the Effective Time shall not have occurred on or prior to December 31, 2017 (the
Outside
Date
) unless approval by a Governmental Entity pursuant to Section 6.1(a) is pending and has not been finally resolved or any stockholder litigation referenced in Section 5.19 has not been resolved (by dismissal, settlement or
otherwise), in which event such date shall be automatically extended to March 31, 2018; or (B) if a vote of the stockholders of Seller is taken and Seller fails to obtain the Seller Stockholder Approval;
provided
, that, neither
party shall have the right to terminate this Agreement pursuant to this Section 7.1(b)(i) if the failure of such occurrence shall be due to the failure of the party seeking to terminate this Agreement to perform or observe its agreements set
forth herein to be performed or observed by such party at or before the Effective Time or such vote, as the case may be;
(ii) upon written notice to the other party (A) (x) 30 or more days after the date upon which any application for a
regulatory or governmental approval necessary to consummate the Mergers and the other transactions contemplated hereby shall have been denied or withdrawn at the request or recommendation of the applicable Governmental Entity, unless within such
30-day period a petition for rehearing or an amended application is filed or noticed, or (y) 30 or more days after any petition for rehearing or amended application filed pursuant to clause (A)(x) is denied;
provided
,
however
,
that no party hereto shall have the right to terminate this Agreement pursuant to this Section 7.1(b)(ii) if such denial or request or recommendation for withdrawal shall be due to the failure of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such party set forth herein; and in each case the time period for appeals and requests for reconsideration has run; or (B) if any Governmental Entity of competent jurisdiction shall have issued
a final non-appealable order enjoining or otherwise prohibiting the consummation of the Mergers or the other transactions contemplated by this Agreement;
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(c) by Acquiror (on behalf of itself and Acquiror Sub) in writing if Seller or Seller Sub has, or
by Seller (on behalf of itself and Seller Sub) in writing if Acquiror or Acquiror Sub has, breached or failed to perform any of its representations, warranties, covenants or undertakings contained herein, which breach or failure to perform would
result in the failure to satisfy the closing conditions set forth in Section 6.2(a) or 6.3(a), as the case may be, and cannot be or has not been cured within 30 days after the giving of written notice of such breach to the non-terminating
party;
(d) by Acquiror (on behalf of itself and Acquiror Sub) if (i) Acquiror notifies Seller in accordance with Section 5.3(c)
that it does not intend to enter into negotiations with Seller to propose revisions to the terms of this Agreement to match or better a Superior Proposal or (ii)(A) Sellers board of directors fails to make the Seller Recommendation in the
Proxy Statement/Prospectus, (B) after making the Seller Recommendation in the Proxy Statement/Prospectus, Seller effects a Change in the Seller Recommendation, (C) Seller breaches its obligations under this Agreement by failing to prepare
and mail to its stockholders the Proxy Statement/Prospectus or failing to call or convene the Special Meeting in accordance with Section 5.8 (except to the extent such failure is a result of Acquirors breach of its obligations hereunder)
or (D) Sellers board of directors has authorized, recommended or publicly announced its intention to authorize or recommend any Acquisition Proposal with any persons other than Acquiror or Acquiror Sub or if Seller otherwise breaches, in
any material respect, its obligations under Section 5.3 of this Agreement;
(e) by Seller, at any time prior to the approval of this
Agreement by the stockholders of Seller, for the purpose of entering into a definitive agreement with respect to a Superior Proposal,
provided
, that Seller is not in breach of any of its obligations under Section 5.3 or Section 5.8
of this Agreement; and,
provided
,
further
, that any such purported termination pursuant to this Section 7.1(e) shall be void and of no force or effect unless Seller has paid the Termination Fee and the Expense Fee in accordance
with Section 7.4; or
(f) by Acquiror (on behalf of itself and Acquiror Sub) if holders of more than 5.0% of the shares of Seller
Common Stock outstanding at any time prior to the Closing Date exercise appraisal rights pursuant to Section 262 of the DGCL.
7.2
Effect of Termination
. In the event of termination of this Agreement pursuant to Article VII, no party to this Agreement shall have any liability or further obligation hereunder to the other party hereto, except that this Section 7.2,
Section 5.6(b), Section 7.4 and Article VIII shall survive any termination of this Agreement, and termination will not relieve a breaching party from liability for any willful breach of any covenant, undertaking, representation or warranty
in this Agreement giving rise to such termination.
7.3
Amendment, Extension and Waiver
.
(a) Subject to applicable Law, at any time prior to the consummation of the Parent Merger, whether before or after approval thereof by the
stockholders of Seller, the parties may (i) amend this Agreement; (ii) extend the time for the performance of any of the obligations or other acts of the other parties hereto; (iii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto; or (iv) waive compliance with any of the agreements or conditions contained herein (other than required stockholder and regulatory approval);
provided
,
however
, that after any approval of the Parent Merger by the stockholders of Seller, there may not be, without further approval of such stockholders, any amendment or waiver of this Agreement that requires further stockholder approval under
applicable Law.
(b) This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
Any agreement on the part of a party hereto to any extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party and which has been authorized by or under the direction of its board of directors; but
such waiver or failure to insist on strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other matter.
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7.4
Termination Fees
.
(a) In the event that (A) a Pre-Termination Takeover Proposal Event shall occur after the date of this Agreement and thereafter this
Agreement is terminated by either Acquiror or Seller pursuant to Section 7.1(b)(i)(B) or by Acquiror pursuant to Section 7.1(c) as a result of a willful breach by Seller and (B) prior to the date that is one year after the date of
such termination Seller enters into a definitive agreement with respect to, or consummates, an Acquisition Proposal with the party that gave rise to the Pre-Termination Takeover Proposal Event, then Seller shall, on the earlier of the date of such
definitive agreement is executed or such Acquisition Proposal is consummated, pay Acquiror a fee equal to the sum of (i) $6,800,000 plus (ii) all reasonable costs and documented expenses incurred by Acquiror in connection with this
Agreement and the transactions contemplated hereby, including legal, accounting, investment banking, travel and printing expenses up to $650,000 (collectively, the
Termination Fee
). The Termination Fee shall be paid by wire
transfer of same-day funds.
(b) In the event that this Agreement is terminated by Acquiror pursuant to Section 7.1(d) or by Seller
pursuant to Section 7.1(e), then concurrently with such termination, if terminated by Seller, or within two Business Days after termination, if terminated by Acquiror, Seller shall pay to Acquiror the Termination Fee by wire transfer of
same-day funds, and such termination shall not be deemed effective hereunder until payment by Seller of such fee. In no event shall Seller be required to pay the Termination Fee under both this Section 7.4(b) and Section 7.4(a).
(c) For purposes of this Section 7.4, a
Pre-Termination Takeover Proposal Event
shall be deemed to occur if, prior to
the event giving rise to the right to terminate this Agreement, an Acquisition Proposal shall have been made known to the senior management or board of directors of Seller or shall have been made directly to its stockholders generally, or any person
reasonably qualified to consummate an Acquisition Proposal shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal, and such Acquisition Proposal or public announcement shall not have been irrevocably
withdrawn not less than five Business Days prior to the Special Meeting and Sellers stockholders fail to approve this Agreement at such meeting (with respect to a termination pursuant to Section 7.1(b)(i)(B)) or the date of termination
(with respect to a termination pursuant to Section 7.1(c).
(d) Each party acknowledges that the agreements contained in this
Section 7.4 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, each party would not enter into this Agreement; accordingly, if Seller fails to pay promptly the Termination Fee pursuant to
this Section 7.4 and, in order to obtain such payment, the other party commences a suit which results in a judgment against the other for the fee set forth in this Section 7.4, the non-successful party shall pay to the other party its
costs and expenses (including reasonable attorneys fees and expenses) in connection with such suit, together with interest on the amount of the fee at a rate per annum equal to the prime rate published in
The Wall Street Journal
on the
date such payment was required to be made, plus 300 basis points.
(e) The parties agree that the payment of the Termination Fee shall be
the sole and exclusive remedy available to Acquiror and Acquiror Sub with respect to this Agreement in the event any such payment becomes due and payable and is paid, and, upon payment of the Termination Fee, Seller and Seller Sub (and Sellers
and Seller Subs affiliates and its and their respective directors, officers, employees, stockholders and representatives) shall have no further liability to Acquiror and Acquiror Sub under this Agreement;
provided
,
however
, that
Seller and Seller Sub shall not be relieved or released from any liabilities or damages arising out of their willful and material breach of this Agreement;
provided
,
further
, that the aggregate amount of any damages determined by a
court to be payable by Seller and Seller Sub pursuant to the foregoing proviso shall be reduced by the amount of any Termination Fee previously paid to Acquiror pursuant to this Section 7.4.
(f) For purposes of this Section 7.4, all references in the definition of Acquisition Proposal to 20% shall instead refer to
50%.
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ARTICLE VIII
MISCELLANEOUS
8.1
Expenses
. Except as provided in Section 7.4, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby (including legal, accounting, investment banking and printing expenses) shall be
borne by the party incurring such costs and expenses,
provided
, that Acquiror and Seller shall each bear one-half of all costs of printing, mailing and filing the Proxy Statement/Prospectus and the Registration Statement and all filing and
similar fees relating to the Mergers.
8.2
Survival
. None of the representations, warranties, covenants and agreements in this
Agreement shall survive the Effective Time, except for (a) those covenants and agreements contained herein that by their terms apply or are to be performed in whole or in part after the Effective Time and (b) those covenants and agreements
set forth in this Article VIII.
8.3
Notices
. All notices and other communications hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if delivered personally, or if mailed by certified mail, overnight courier, return receipt requested, postage prepaid, or sent by written telecommunication, as follows:
(a) If to Acquiror or Acquiror Sub:
Renasant Corporation
209 Troy Street
Tupelo, Mississippi 38804-4827
Attention: E. Robinson McGraw
Facsimile: (662) 680-1230
with a copy (which shall not constitute notice) to:
Phelps Dunbar LLP
365 Canal Street, Suite 2000
New Orleans, Louisiana 70130
Attention: Mark A. Fullmer
Facsimile: (504) 568-9130
(b) If to Seller or Seller Sub:
Metropolitan BancGroup, Inc.
1069 Highland Colony Parkway
Ridgeland, Mississippi 39157
Attention: Curtis J. Gabardi
with a copy (which shall not constitute notice) to:
Troutman Sanders LLP
600 Peachtree Street, Suite 5200
Atlanta, Georgia 30308
Attention: David W. Ghegan
Facsimile: (404) 962-6599
or to such other address or telecommunication number as such party may hereafter specify for the purpose by notice to the other party. All notices and other
communications shall be deemed to have been given (i) when
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received if given in person, (ii) on the date of electronic confirmation of receipt if sent by facsimile, (iii) four Business Days after being deposited in the U.S. mail, certified or
registered mail, postage prepaid, or (iv) one Business Day after being deposited with a reputable overnight courier.
8.4
Parties
in Interest
. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns;
provided
,
however
, that (i) neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other party and, (ii) except as otherwise expressly provided in Sections 2.7, 5.13 and 5.18, that nothing in this Agreement is
intended to confer, expressly or by implication, upon any other person any rights or remedies under or by reason of this Agreement.
8.5
Complete Agreement
. This Agreement (including the Seller Disclosure Schedule and the Acquiror Disclosure Schedule), including the documents and other writings referred to herein or therein or delivered pursuant hereto or thereto, contain the
entire agreement and understanding of the parties with respect to the subject matter hereof and shall supersede all prior agreements and understandings by and among the parties, both written and oral, with respect to such subject matter, including
that certain letter agreement by and between Acquiror and Seller dated December 22, 2016. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings by and among the parties other than those
expressly set forth herein or therein.
8.6
Counterparts
. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and each of which shall be deemed an original. Delivery of a copy of this Agreement bearing an original signature by facsimile transmission or by electronic mail in portable document format
form shall have the same effect as physical delivery of the paper document bearing the original signature.
8.7
Governing Law; Venue;
Waiver of Jury Trial
.
(a) This Agreement shall be governed by the laws of the State of Mississippi, without giving effect to the
principles of conflicts of laws thereof (except that matters relating to the fiduciary duty of Sellers board of directors shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflicts of laws
thereof).
(b) Each party agrees that it will bring any action or proceeding in respect of any claim arising out of or related to this
Agreement or the transactions contemplated hereby exclusively in any federal or state court sitting in the State of Mississippi, and, solely in connection with claims arising under this Agreement or the Mergers that are the subject of this
Agreement, (i) irrevocably submits to the exclusive jurisdiction of such Mississippi courts, (ii) waives any objection to laying venue in any such action or proceeding in the Mississippi courts, (iii) waives any objection that the
Mississippi courts are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in accordance with
Section 8.3.
(c) Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives, to the extent permitted by applicable Law at the time of institution of the applicable litigation, any right such party may have to a
trial by jury in respect of any litigation directly or indirectly arising out of or relating to this Agreement or the transactions contemplated by this Agreement. Each party certifies and acknowledges that: (i) no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver; (ii) it understands and has considered the implications of this waiver;
(iii) it makes this waiver voluntarily; and (iv) it has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 8.7.
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8.8
Interpretation
. For the purposes of this Agreement, (i) words in the singular
shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (ii) the terms hereof, herein, and herewith and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Disclosure Schedules and Exhibits to this Agreement) and not to any particular provision of this Agreement, and Article, Section,
Disclosure Schedule and Exhibit references are to the Articles, Sections, Disclosure Schedules and Exhibits to this Agreement unless otherwise specified, (iii) whenever the words include, includes or
including are used in this Agreement, they shall be deemed to be followed by the words without limitation, (iv) the word or shall not be exclusive and (v) all references to any period of days shall be
deemed to be to the relevant number of calendar days unless otherwise specified. This Agreement shall not be interpreted or construed to require any person or entity to take any action, or fail to take any action, if to do so would violate
applicable Law.
The parties intend that each representation, warranty and covenant contained herein shall have independent significance.
If any party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of
specificity) that the party has not breached shall not detract from or mitigate the fact that the party is in breach of the first representation, warranty or covenant. Further, it is understood and agreed that the specification of any dollar amount
in the representations and warranties contained in this Agreement or the inclusion of any specific item in the Seller Disclosure Schedule or the Acquiror Disclosure Schedule is not intended to imply that such amounts or higher or lower amounts, or
the items so included or other items, are or are not material or would have a Seller Material Adverse Effect or an Acquiror Material Adverse Effect, as the case may be, and neither party shall use the fact of the setting of such amounts or the fact
of the inclusion of any such item in the Seller Disclosure Schedule or the Acquiror Disclosure Schedule in any dispute or controversy between the parties as to whether any obligation, item or matter not described in this Agreement or included in the
Seller Disclosure Schedule or the Acquiror Disclosure Schedule is or is not material for purposes of this Agreement.
8.9
Specific
Performance
. The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that, subject to Section 7.4(e), the parties shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. The parties agree to waive any requirements for the securing or posting of
any bond in connection with any remedy described in this Section 8.9 (except to the extent required by Law).
8.10
Severability
. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective only to the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
8.11
Additional Actions
. If at any time
after the Effective Time the Surviving Corporation shall consider that any further assignments or assurances in Law or any other acts are necessary or desirable to carry out the purposes of this Agreement, Seller and its proper officers and
directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such proper deeds, assignments and assurances in Law and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties and assets in the Surviving Corporation and otherwise to carry out the purposes of this Agreement; and the proper officers and directors of the Surviving Corporation are fully authorized in
the name of Seller or otherwise to any and all such actions after the Effective Time.
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8.12
Alternative Structure
. Notwithstanding anything to the contrary contained in this
Agreement, before the Effective Time, Acquiror may at any time change the method of effecting the business combination contemplated by this Agreement if and to the extent that it deems such a change to be necessary, appropriate or desirable;
provided
, that (a) any such change shall not result in any adverse federal income tax consequences of the Mergers to holders of Seller Common Stock or to Acquiror, Acquiror Sub, Seller or Seller Sub and (b) no such change shall
(i) alter or change the amount or kind of the Merger Consideration or (ii) jeopardize or materially delay the receipt of any required regulatory approvals of the Merger or the satisfaction of any other conditions set forth in Article VI
hereof. In the event Acquiror elects to make such a change, the parties agree to execute appropriate documents to reflect the change.
[The remainder of this page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF
, the parties have caused this Agreement to be executed by their duly
authorized officers as of the day and year first above written.
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RENASANT CORPORATION
|
|
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By:
|
|
/s/ E. Robinson McGraw
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Name: E. Robinson McGraw
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Title: Chief Executive Officer
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RENASANT BANK
|
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By:
|
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/s/ E. Robinson McGraw
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Name: E. Robinson McGraw
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Title: Chief Executive Officer
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METROPOLITAN BANCGROUP, INC.
|
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By:
|
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/s/ Curtis J. Gabardi
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Name: Curtis J. Gabardi
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Title: President and Chief Executive Officer
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METROPOLITAN BANK
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By:
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/s/ Curtis J. Gabardi
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Name: Curtis J. Gabardi
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Title: President and Chief Executive Officer
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Signature Page to Agreement
and Plan of Merger
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EXHIBIT A
PARENT MERGER DOCUMENTS
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PLAN OF MERGER
This Plan of Merger (
Plan of Merger
) is dated as of
by and between Renasant Corporation, a Mississippi corporation (
Acquiror
), and Metropolitan BancGroup, Inc., a
Delaware corporation (
Seller
). Each of Acquiror and Seller is a
party
to this Plan of Merger, and one or more of them are
parties
hereto, as the context may require.
WITNESSETH:
WHEREAS
, Acquiror, Renasant Bank, a Mississippi banking corporation, Seller and Metropolitan Bank, a Mississippi banking corporation,
have entered into an Agreement and Plan of Merger dated as of January 17, 2017 (the
Merger Agreement
); and
WHEREAS
, pursuant to the Merger Agreement and this Plan of Merger, and subject to the terms and conditions set forth therein and
herein, Seller shall be merged with and into Acquiror, with Acquiror being the surviving corporation in such merger.
NOW,
THEREFORE
, in consideration of the premises and the mutual covenants and agreements contained herein and in the Merger Agreement, the parties hereto do mutually agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:
Effective Time
shall mean the date and time at which the Merger becomes effective as provided in Section 2.2 of this
Plan of Merger.
Merger
shall refer to the merger of Seller with and into Acquiror as provided in Section 2.1 of
this Plan of Merger.
Merging Corporations
shall mean Acquiror and Seller.
Seller Common Stock
shall mean the common stock, $0.01 par value per share, of Seller.
Stockholder Meeting
shall mean the meeting of the stockholders of Seller held pursuant to Section 5.8 of the Merger
Agreement.
Surviving Corporation
shall mean Acquiror as the surviving corporation in the Merger.
ARTICLE II
TERMS OF THE
MERGER
2.1 THE MERGER. Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time, Seller shall be
merged with and into Acquiror pursuant to and in accordance with the Mississippi Business Corporation Act, as amended (the
MBCA
), and the Delaware General Corporation Law, as amended (the
DGCL
). Acquiror shall
be the Surviving Corporation in the Merger and shall continue to be governed by the
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laws of the State of Mississippi. At the Effective Time, the separate existence and corporate organization of Seller shall cease, and all right, title and interest in and to all real estate and
other property owned by, and every contract right possessed by, Seller shall be vested in Acquiror as the Surviving Corporation, without reversion or impairment, without further act or deed and without any transfer or assignment having occurred (but
subject to any existing liens or other encumbrances thereon), and all liabilities of Seller shall be vested in Acquiror as the Surviving Corporation, as the primary obligor therefor, and, except as set forth in the Merger Agreement, no other person
shall be liable therefor, and all proceedings pending by or against either of the Merging Corporations shall be continued by or against Acquiror as the Surviving Corporation, and all liabilities, obligations, assets or rights associated with such
proceedings shall be vested in Acquiror as the Surviving Corporation.
2.2 EFFECTIVE TIME. The Merger shall become effective on the later
of the dates and times that the Articles of Merger are filed with the Secretary of State of the State of Mississippi pursuant to Section 79-4-11.06 of the MBCA and with the Delaware Secretary of State pursuant to Section 252(c) of the
DGCL.
2.3 NAME OF THE SURVIVING CORPORATION. The name of the Surviving Corporation shall be Renasant Corporation.
2.4 ARTICLES OF INCORPORATION. On and after the Effective Time, the Articles of Incorporation of the Surviving Corporation shall be the
Articles of Incorporation of Acquiror as in effect immediately prior to the Effective Time until thereafter amended in accordance with applicable law.
2.5 BYLAWS. On and after the Effective Time, the Bylaws of the Surviving Corporation shall be the Restated Bylaws of Acquiror as in effect
immediately prior to the Effective Time until thereafter amended in accordance with applicable law.
ARTICLE III
CONVERSION OF SHARES
3.1
CONVERSION OF SHARES. At the Effective Time, automatically by virtue of the Merger and without any action on the part of Acquiror, Seller or the holders of any of the following securities:
(a) Each share of Acquiror Common Stock (as defined below) issued and outstanding immediately prior to the Effective Time shall remain issued
and outstanding after the Effective Time and shall be unaffected by the Merger.
(b) Subject to the other provisions of this
Section 3.1, each share of Seller Common Stock issued and outstanding immediately prior to the Effective Time (other than any shares of Seller Common Stock to be canceled in accordance with Section 3.1(e) and shares of Seller Common Stock
held by stockholders who exercise and maintain their appraisal rights pursuant to Section 262 of the DGCL) shall, subject to adjustment pursuant to Section 3.1(d), be converted automatically into and thereafter represent the right to
receive the number of shares (or a fraction thereof) of Acquiror Common Stock, rounded to the nearest four decimals, equal to the Exchange Ratio (the
Merger Consideration
). As used in this Plan of Merger, the term
Acquiror Common Stock
means the common stock, $5.00 par value per share, of Acquiror, and the term
Exchange Ratio
means 0.6066.
(c) Certificates previously evidencing shares of Seller Common Stock shall be exchanged for certificates evidencing the Merger Consideration.
Notwithstanding the foregoing, however, no fractional shares of Acquiror Common Stock shall be issued, and, in lieu thereof, a cash payment shall be made pursuant to Section 3.1(f).
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(d) If at any time during the period between the date of this Plan of Merger and the Effective
Time, any change in the number of outstanding shares of capital stock of Acquiror or Seller, respectively, shall occur (or for which the relevant record date will occur) as a result of any reclassification, recapitalization, stock split (including a
reverse stock split) or other subdivision, combination or readjustment of shares, or as a result of any stock dividend or stock distribution with a record date during such period, the Exchange Ratio shall be equitably and proportionately adjusted,
if necessary and without duplication, to reflect such change.
(e) Each share of Seller Common Stock held in the treasury of Seller and
each share of Seller Common Stock issued and outstanding prior to the Effective Time that is owned by Acquiror or any subsidiary of Acquiror or Seller (other than shares held in trust accounts, managed accounts, mutual funds and the like or
otherwise in a fiduciary capacity or as a result of debts previously contracted) shall automatically be cancelled and extinguished without any conversion thereof and no Merger Consideration or other consideration shall be delivered in exchange
therefor.
(f) No certificates or scrip representing fractional shares of Acquiror Common Stock will be issued as a result of the Merger.
In lieu of the issuance of fractional shares pursuant to Section 3.1(b), cash adjustments (without interest) will be paid to the holder of Seller Common Stock in respect of any fraction of a share of Acquiror Common Stock that would otherwise
be issuable to such holder of Seller Common Stock, and the amount of such cash adjustment shall be determined by multiplying (x) the fraction of a share of Acquiror Common Stock otherwise issuable by (y) the weighted average of the closing
sales prices of one share of Acquiror Common Stock as reported on the Nasdaq Global Select Market for the 15 consecutive trading days ending on the trading day immediately prior to the Closing Date. No such holder shall be entitled to dividends,
voting rights or any other right of stockholders in respect of any fractional share.
3.2 EXCHANGE OF CERTIFICATES FOR STOCK. After the
Effective Time, each holder of a certificate previously representing outstanding shares of Seller Common Stock (other than holders who have exercised and maintained their appraisal rights pursuant to Section 262 of the DGCL) shall surrender and
exchange such certificates for the Merger Consideration in the manner provided in Section 2.2 of the Merger Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 CONDITIONS PRECEDENT. The respective obligations of each party under this Plan of Merger shall be subject to the satisfaction, or waiver
by the party permitted to do so, of the conditions set forth in Article VI of the Merger Agreement.
4.2 TERMINATION. This Plan of Merger
shall be terminated automatically without further act or deed of either of the parties in the event of the termination of the Merger Agreement in accordance with Article VII thereof.
4.3. AMENDMENTS. To the extent permitted by the MBCA and the DGCL, this Plan of Merger may be amended by a subsequent writing signed by each
of the parties hereto upon the approval of the Board of Directors of each of the parties hereto; provided, however, that the provisions of Article III of this Plan of Merger relating to the consideration to be paid for the shares of Seller Common
Stock shall not be amended after the Stockholder Meeting so as to modify either the amount or the form of such consideration or to otherwise materially adversely affect the stockholders of Seller without the approval of the stockholders of Seller.
4.4 SUCCESSORS. This Plan of Merger shall be binding on the successors of Acquiror and Seller.
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IN WITNESS WHEREOF
, Acquiror and Seller have caused this Plan of Merger to be executed by
their duly authorized officers as of the day and year first above written.
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RENASANT CORPORATION
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By:
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Name: E. Robinson McGraw
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Title: Chief Executive Officer
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METROPOLITAN BANCGROUP, INC.
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By:
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Name: Curtis J. Gabardi
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Title: President and Chief Executive Officer
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STATE OF DELAWARE
CERTIFICATE OF MERGER
OF
METROPOLITAN BANCGROUP, INC.
WITH AND INTO
RENASANT
CORPORATION
The undersigned corporation, Renasant Corporation, a Mississippi corporation, acting pursuant to Section 252(c) of
the Delaware General Corporation Law and Section 79-4-11.06 of the Mississippi Business Corporation Act, does hereby certify that:
FIRST:
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The name and state of incorporation of each of the constituent corporations (
Constituent Corporations
) that are parties to the merger is as follows:
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Name
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State of Incorporation/Organization
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Metropolitan BancGroup, Inc.
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Delaware
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Renasant Corporation
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Mississippi
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SECOND:
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An Agreement and Plan of Merger by and among the Constituent Corporations, Renasant Bank and Metropolitan Bank providing for, among other things, the merger (the
Merger
) of Metropolitan BancGroup, Inc. with and into Renasant
Corporation (the
Surviving Corporation
) has been duly approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with Title 8, Section 252(c) of the Delaware General
Corporation Law and Section 79-4-11.04 of the Mississippi Business Corporation Act, as applicable.
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THIRD:
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The name of the surviving corporation shall be Renasant Corporation.
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FOURTH:
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The Articles of Incorporation and Bylaws of Renasant Corporation as in effect immediately prior to the Effective Time (as defined below) shall continue in full force and effect as the Articles of Incorporation and Bylaws of the Surviving
Corporation, until altered, amended or repealed as provided therein or by law.
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FIFTH:
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The executed Agreement and Plan of Merger is on file at the principal place of business of the Surviving Corporation at 209 Troy Street, Tupelo, Mississippi 38804-4827.
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SIXTH:
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A copy of the Agreement and Plan of Merger will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of either of the Constituent Corporations.
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SEVENTH:
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The Merger shall be effective on (the
Effective Time
).
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EIGHTH:
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The Surviving Corporation hereby agrees that it may be served with process in the State of Delaware in any proceeding for enforcement of any obligation of either Constituent Corporation in the State of Delaware, as well as for enforcement of any
obligation of the Surviving Corporation arising from the Merger, and the Surviving Corporation hereby appoints the Secretary of State of the State of Delaware as its agent to accept service of process in any such suit or other proceedings. A copy of
any such process shall be mailed by the Secretary of State of the State of Delaware to the Surviving Corporation at 209 Troy Street, Tupelo, Mississippi 38804-4827, Attn.: Secretary.
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This Certificate of Merger is executed by Renasant Corporation, acting through its duly
authorized representative, on .
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RENASANT CORPORATION
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By:
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Name:
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EXHIBIT B
SUBSIDIARY MERGER DOCUMENT
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ARTICLES OF MERGER
These Articles of Merger (
Articles of Merger
) dated as of
, are made by and between Renasant Bank, a Mississippi banking corporation (
Acquiror
Sub
), and Metropolitan Bank, a Mississippi banking corporation (
Seller Sub
). Each of Acquiror Sub and Seller Sub is a
party
to these Articles of Merger, and one or more of them are
parties
hereto, as the context may require.
WITNESSETH:
WHEREAS
, Renasant Corporation, a Mississippi corporation, Acquiror Sub, Metropolitan BancGroup, Inc., a Delaware corporation, and
Seller Sub have entered into an Agreement and Plan of Merger, dated as of January 17, 2017 (as amended, the
Merger Agreement
); and
WHEREAS
, pursuant to the Merger Agreement and these Articles of Merger, and subject to the terms and conditions set forth therein and
herein, Seller Sub shall be merged with and into Acquiror Sub, with Acquiror Sub being the surviving banking corporation in such merger.
NOW, THEREFORE
, in consideration of the premises and the mutual covenants and agreements contained herein and in the Merger Agreement,
the parties hereto do mutually agree as follows:
ARTICLE I
DEFINITIONS
Except as
otherwise provided herein, the capitalized terms set forth below shall have the following meanings:
Effective Time
shall mean the date and time at which the Merger becomes effective as provided in Section 2.2 of these Articles of Merger.
Merger
shall refer to the merger of Seller Sub with and into Acquiror Sub as provided in Section 2.1 of these Articles
of Merger.
Merging Banks
shall mean Acquiror Sub and Seller Sub.
Seller Sub Common Stock
shall mean the common stock, par value $5.00 per share, of Seller Sub.
Surviving Bank
shall mean Acquiror Sub as the surviving banking corporation in the Merger.
ARTICLE II
TERMS OF THE
MERGER
2.1 THE MERGER. Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time, Seller Sub shall
be merged with and into Acquiror Sub in accordance with Title 81 of the Mississippi Code of 1972, as amended (the
Mississippi Code
). Acquiror Sub shall be the Surviving Bank in the Merger and shall continue to be governed by the
laws of the State of Mississippi. At the Effective Time, the Merger shall have the effects set forth in Mississippi Code Annotated Section 81-5-85 and the separate existence and corporate organization of Seller Sub shall cease, and all right,
title and interest in and to all real estate and other property owned by, and every contract right possessed by, Seller Sub shall be vested in Acquiror Sub as the Surviving Bank, without reversion or impairment, without further act or deed and
without any transfer or assignment having occurred (but subject to any existing liens or other encumbrances thereon), and all liabilities of Seller Sub shall be vested in Acquiror Sub as the Surviving Bank, as the primary obligor therefor, and,
except as set forth in
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the Merger Agreement, no other person shall be liable therefor, and all proceedings pending by or against Seller Sub shall be continued by or against Acquiror Sub as the Surviving Bank, and all
liabilities, obligations, assets or rights associated with such proceedings shall be vested in Acquiror Sub as the Surviving Bank.
2.2
EFFECTIVE TIME. The Merger shall become effective upon the date and time stated in the Certificate of Merger Approval issued by the Mississippi Commissioner of Banking and Consumer Finance (
MCB
).
2.3 NAME OF THE SURVIVING BANK. The name of the Surviving Bank shall be Renasant Bank.
2.4 CHARTER OF INCORPORATION. On and after the Effective Time, the Charter of Incorporation of the Surviving Bank shall be the Charter of
Incorporation of Acquiror Sub as in effect immediately prior to the Effective Time until thereafter amended in accordance with applicable law.
2.5 BYLAWS. On and after the Effective Time, the Bylaws of the Surviving Bank shall be the Bylaws of Acquiror Sub as in effect immediately
prior to the Effective Time until thereafter amended in accordance with applicable law.
ARTICLE III
CANCELLATION OF SHARES
3.1 CANCELLATION OF SHARES. At the Effective Time, each share of Seller Sub Common Stock issued and outstanding immediately prior to the
Effective Time shall be automatically cancelled and the certificate or certificates therefor shall be surrendered and cancelled. There shall be no conversion, exchange or consideration for such Seller Sub Common Stock. All of the shares of Acquiror
Sub issued and outstanding immediately prior to the effective time of the Merger shall remain issued and outstanding after the Effective Time of and shall be unaffected by the Merger. The authorized capital stock of Acquiror Sub as the Surviving
Bank following the Effective Time of the Merger shall be 772,822 shares of common stock, $5.00 par value per share, unless and until the same shall be changed in accordance with applicable Mississippi law.
ARTICLE IV
FILING OF
ARTICLES OF MERGER
The approval of these Articles of Merger by the respective sole stockholders of Acquiror Sub and Seller Sub shall
be certified in Articles of Merger which shall be signed and acknowledged by the President or Vice President of each of the Merging Banks. Thereafter, an original of the Articles of Merger, so certified, signed and acknowledged, shall be delivered
to the MCB for filing and recordation in the manner required by law.
ARTICLE V
MISCELLANEOUS
5.1
CONDITIONS PRECEDENT. The respective obligations of each party under these Articles of Merger shall be subject to the satisfaction, or waiver by the party permitted to do so, of the conditions set forth in Article VI of the Merger Agreement.
5.2 TERMINATION. These Articles of Merger shall be terminated automatically without further act or deed of either of the parties in the event
of the termination of the Merger Agreement in accordance with Article VII thereof.
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5.3. AMENDMENTS. To the extent permitted by the Mississippi Code, these Articles of Merger may be
amended by a subsequent writing signed by each of the parties hereto upon the approval of the Board of Directors of each of the parties.
5.4 SUCCESSORS. These Articles of Merger shall be binding on the successors of Acquiror Sub and Seller Sub.
IN WITNESS WHEREOF
, Acquiror Sub and Seller Sub have caused these Articles of Merger to be executed by their duly authorized officers
as of the day and year first above written.
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RENASANT BANK
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By:
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Name: E. Robinson McGraw
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Title: Chief Executive Officer
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METROPOLITAN BANK
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By:
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Name: Curtis J. Gabardi
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Title: President and Chief Executive Officer
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SCHEDULE 5.13(b)
JOINDER AGREEMENT
THIS
AGREEMENT is made and executed as of , 2017 between Renasant Corporation, a Mississippi corporation
(
Acquiror
), and the undersigned individual officer and/or director (
Metropolitan Official
) of Metropolitan BancGroup, Inc., a Delaware corporation (
Metropolitan
), and/or Metropolitan Bank, a
Mississippi banking corporation (
Metropolitan Bank
).
RECITALS:
WHEREAS, Acquiror, Renasant Bank, a Mississippi banking corporation (the
Acquiror Bank
), Metropolitan and Metropolitan Bank
have entered into an Agreement and Plan of Merger (the
Merger Agreement
) pursuant to which Metropolitan will be merged into Acquiror and Acquiror shall be the surviving entity on the terms and subject to the conditions set forth
in the Merger Agreement and Metropolitan Bank will be merged into Acquiror Bank and Acquiror Bank shall be the surviving entity on the terms and subject to the conditions set forth in the Merger Agreement; and
WHEREAS, in consideration of the agreements made by Metropolitan in connection with the Merger Agreement, Acquiror has agreed to indemnify the
Metropolitan Official under certain circumstances set forth in the Merger Agreement.
NOW, THEREFORE, in consideration of Acquirors
agreement to indemnify the Metropolitan Official and the expenses and costs that may be incurred by Acquiror in connection with such indemnification, the Metropolitan Official hereby agrees as follows:
1.
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Assumption of and Cooperation in Defense
.
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1.1
Notice and Assumption of Defense
.
In the event a claim arises for which indemnification is or may be sought by the Metropolitan Official, the Metropolitan Official shall promptly notify Acquiror, in writing at the address set forth in Section 3 hereof, of the commencement of
such legal action or existence of and facts relating to such claim. Upon receipt of such notice, or at any time thereafter, Acquiror shall be entitled to participate therein and, in its sole discretion, to assume the defense of such claim, with
counsel of its choice, subject to the reasonable approval of the Metropolitan Official, and to consider and decide on any proposed settlement, subject to the reasonable approval of the Metropolitan Official. In any and all events, Acquiror shall
have the right to reasonable control over the nature and extent of expenses incurred in connection with such claim(s). Acquiror shall notify the Metropolitan Official of its assumption of the defense of such claim; and after such notice from
Acquiror to the Metropolitan Official, Acquiror shall not be liable to the Metropolitan Official for indemnification under Section 5.13(b) of the Merger Agreement for any legal expenses of other counsel or any other expenses of defense
subsequently incurred by such indemnified party.
1.2
Cooperation in Defense
. The Metropolitan Official agrees to cooperate in the
defense of any action for which indemnification is sought under Section 5.13(b) of the Merger Agreement. Such cooperation shall include, but not be limited to, providing Acquiror and its counsel copies of any and all relevant documents relating
to the claim, consulting with Acquiror and its counsel with regard to the claim, providing testimony, either in deposition or at trial or both, regarding the facts relating to the claim, making himself available at reasonable times for consultation,
testimony and fact-finding and otherwise furnishing such information to Acquiror and its counsel as the Metropolitan Official would provide to his own counsel in the event he were defending the action himself. Except as expressly permitted by
Acquiror, the Metropolitan Official shall not object to the production or use of any documents heretofore prepared by or of information provided to Acquiror legal counsel on the basis of any claim of privilege that is available only to Metropolitan
or Acquiror;
provided
,
however
, that Acquiror
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agrees that it will not, without the consent of the Metropolitan Official, waive any applicable privilege of the Metropolitan Official. Such cooperation shall be provided regardless of whether
Acquiror assumes the defense of the action.
2.
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Duplication of Payment; Limitations; Presumptions
.
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2.1
No Duplication of
Payments
. Acquiror shall not be liable under this Agreement to make any payment in connection with any claim against the Metropolitan Official to the extent the Metropolitan Official has otherwise actually received payment (under any insurance
policy, certificate of incorporation, bylaw provision or otherwise) of amounts otherwise indemnifiable hereunder.
2.2
No
Presumption
. For purposes of this Agreement, the termination of any claim, action, suit or proceeding by judgment, order, settlement (whether with or without court approval) shall not of itself create a presumption that the Metropolitan Official
did or did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.
3.
Notices
. All notices or other communications which are required or permitted hereunder shall be delivered in accordance with
Section 8.3 of the Merger Agreement, at the addresses listed below:
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If to Acquiror:
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Renasant Corporation
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209 Troy Street
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Tupelo, Mississippi 38804-4827
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Attention: E. Robinson McGraw
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If to the Metropolitan Official:
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4.
Execution in Counterparts
. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and each of which shall be deemed an original. Transmission by facsimile of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart, and
such facsimile shall be deemed to be an original counterpart of this Agreement.
5.
Governing Law
. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the State of Mississippi applicable to agreements made and entirely to be performed within such State, except as federal law may be applicable.
6.
Amendment
. This Agreement may only be amended by a written instrument signed by both parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first
above written.
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RENASANT CORPORATION
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By:
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Name: E. Robinson McGraw
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Title: Chief Executive Officer
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METROPOLITAN OFFICIAL
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Print Name:
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SCHEDULE 5.17-A
VOTING AND NON-COMPETITION AGREEMENT
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VOTING AND NON-COMPETITION AGREEMENT
This Voting and Non-Competition Agreement (this
Agreement
) is made and executed as of the day of
, 2017, between Renasant Corporation, a Mississippi corporation (
Acquiror
), and the undersigned non-employee director
(
Metropolitan Official
) of Metropolitan BancGroup, Inc., a Delaware corporation (
Metropolitan
), or Metropolitan Bank, a Mississippi banking corporation (
Metropolitan Bank
).
Acquiror, Renasant Bank, a Mississippi banking corporation (
Acquiror Bank
), Metropolitan and Metropolitan Bank have entered
into an Agreement and Plan of Merger (the
Plan of Merger
), pursuant to which the parties thereto agree that (i) Metropolitan will merge with and into Acquiror (the
Merger
), and Acquiror shall be the
surviving entity of the Merger, and (ii) Metropolitan Bank will merge with and into Acquiror Bank (the
Bank Merger
), and Acquiror Bank shall be the surviving entity of the Bank Merger. In consideration of the expenses that
Acquiror will incur in connection with the transactions contemplated by the Plan of Merger, and in order to preserve the value of the franchise to be purchased by Acquiror and induce Acquiror to proceed to incur such expenses, the Metropolitan
Official makes the following agreements in favor of Acquiror:
1.
Undertakings of Metropolitan Official
.
1.1 The Metropolitan Official agrees and undertakes during the term of this Agreement to vote or cause to be voted in favor of the Plan of
Merger all shares of common stock of Metropolitan, $0.01 par value per share (the
Metropolitan Stock
), as to which he has voting power (other than shares held in a fiduciary capacity), which amount of shares is shown on the
schedule attached hereto and made a part hereof (the
Shares
), at any meeting or meetings of the stockholders of Metropolitan at which such matters are considered (including any and all adjournments thereof). The parties hereto
acknowledge and agree that nothing in this section or this Agreement is intended to dictate or require that the Metropolitan Official vote as a director in any manner, and nothing in this Agreement: (i) will limit or affect any actions or
omissions taken by the Metropolitan Official as such a director, including in exercising rights under the Plan of Merger, and no such actions or omissions shall be deemed a breach of this Agreement or (ii) will be construed to prohibit, limit
or restrict the Metropolitan Official from exercising Metropolitan Officials fiduciary duties as a director of Metropolitan.
1.2
The Metropolitan Official further agrees that during the term of this Agreement, he will not transfer any of the Shares, except (i) for transfers by operation of law and (ii) for transfers in connection with which Acquiror has consented to
the transfer and the transferee shall agree in writing with Acquiror to be bound by this Agreement as fully as the undersigned.
1.3 This
Agreement shall terminate upon the earliest to occur of (i) the Effective Time and (ii) the date on which the Plan of Merger terminates in accordance with its terms.
2.
Noncompetition Obligations of Metropolitan Official
.
2.1 Metropolitan Official will not:
(a)
directly or indirectly, for himself or in affiliation with any business or entity in which he owns an equity or financial interest (except as to not more than five percent (5%) of the outstanding stock of any corporation, the securities of
which are regularly traded on a nationally recognized securities exchange or over-the-counter market), carry on or engage in any Competitive Business (as hereinafter defined) within the Restricted Area (as hereinafter defined); or
(b) directly or indirectly, in affiliation with any individual or any business or entity not covered by (a) above, whether as a partner,
employee, contractor, consultant or otherwise, carry on or engage in any Competitive Business in the Restricted Area; or
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(c) directly or indirectly, solicit or cause to be solicited any customers of Acquiror or
Acquiror Bank, with respect to any Competitive Business in the Restricted Area; or
(d) directly or indirectly, solicit or cause to be
solicited any employees, contractors or agents of Acquiror or Acquiror Bank to terminate their employment, contract or relationship with Acquiror or Acquiror Bank.
For purposes of this Agreement, the term Restricted Area shall mean the State of Mississippi and the State of Tennessee, and the
term Competitive Business shall mean the business of banking, including, without limitation, checking and savings accounts, business and personal loans, interim construction and residential loans, student loans, automated tellers
machines, internet banking services and accounts receivable financing.
2.2. The noncompetition obligations set forth in Section 2.1
shall extend until the second anniversary of the Closing (as defined in the Plan of Merger) (the
Restricted Period
).
2.3. Acquiror and the Metropolitan Official agree that the foregoing restrictions are reasonable under the circumstances and that any breach
of the covenants contained in this Section 2 would cause irreparable injury to Acquiror. The Metropolitan Official understands that the foregoing restrictions may limit the Metropolitan Officials ability to engage in certain businesses
during the period provided for above in the Restricted Area, but acknowledges that the Metropolitan Official will receive sufficient remuneration and other benefits under the Plan of Merger to justify such restriction. Further, the Metropolitan
Official acknowledges that his skills are such that he can be gainfully employed in non-competitive employment, and that the agreement not to compete will in no way prevent him from earning a living. If any of the aforesaid restrictions are found by
a court of competent jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by the court making such determination so as to
be reasonable and enforceable and, as so modified, to be fully enforced. By agreeing to this contractual modification prospectively at this time, the parties intend to make this provision enforceable under the laws of Mississippi in the Restricted
Area so that the entire agreement not to compete and this Agreement as prospectively modified shall remain in full force and effect and shall not be rendered void or illegal.
3.
Miscellaneous
.
3.1 The Metropolitan
Official acknowledges that money damages would not be an adequate remedy for any breach of this Agreement by the Metropolitan Official, and Acquiror shall be entitled to seek to enforce the provisions of this Agreement by specific performance and
injunctive relief as remedies for such breach or any threatened breach, without any requirement for the securing or posting of any bond or giving any other undertaking (except to the extent required by law). Such remedies shall not be deemed the
exclusive remedies for a breach of this Agreement, but shall be in addition to all remedies available at law or in equity to Acquiror, including, without limitation, the recovery of damages from the Metropolitan Official and his or her agents
involved in such breach.
3.2 The Metropolitan Official acknowledges and agrees that this Agreement is executed in connection with the
sale of all of the business of Metropolitan. The Metropolitan Official further acknowledges and represents that the provisions of this Agreement will not work a hardship on him and will not prevent him from engaging in his occupation.
3.3 To the extent permitted under applicable law, any provision of this Agreement may be amended or modified at any time, either before or
after its approval by an agreement in writing among the parties hereto.
3.4 This Agreement may be executed in counterparts, each of which
shall be deemed to constitute an original. Each such counterpart shall become effective when one counterpart has been signed by each party hereto. Delivery of a copy of this Agreement bearing an original signature by facsimile transmission or by
electronic mail in portable document format form shall have the same effect as physical delivery of the paper document bearing the original signature.
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3.5 This Agreement shall be governed by, and interpreted in accordance with, the laws of the
State of Mississippi applicable to agreements made and entirely to be performed within such State, except as federal law may be applicable.
3.6 The Metropolitan Official may not assign any of his rights or obligations under this Agreement to any other person.
3.7 This Agreement supersedes any and all oral or written agreements and understandings heretofore made between the parties hereto relating to
the subject matter hereof and contains the entire agreement of the parties relating to the subject matter hereof;
provided
,
however
, that notwithstanding the foregoing, this Agreement does not modify or amend any stock option
agreement, employment agreement, option or similar employee benefit agreement between Metropolitan or an affiliate of Metropolitan and the Metropolitan Official. The terms and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors, heirs and legatees.
3.8 In the event that any party institutes any legal suit,
action or proceeding against the other party to enforce the covenants contained in this Agreement (or obtain any other remedy in respect of any breach of this Agreement), the prevailing party in the suit, action or proceeding shall be entitled to
receive in addition to all other damages to which it may be entitled, the costs incurred by such party in conducting the suit, action or proceeding, including reasonable attorneys fees and expenses and court costs.
IN WITNESS WHEREOF, the parties have signed this Agreement effective as of the date first set forth above.
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RENASANT CORPORATION
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By:
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Name:
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E. Robinson McGraw
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Title:
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Chief Executive Officer
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METROPOLITAN OFFICIAL
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Print Name:
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SCHEDULE TO
VOTING AND NON-COMPETITION AGREEMENT
Number of shares of common stock, $0.01 par value per share, of Metropolitan BancGroup, Inc. owned by the Metropolitan Official:
shares.
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SCHEDULE 5.17-B
VOTING AGREEMENT
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VOTING AGREEMENT
This Voting Agreement (this
Agreement
) is made and executed as of the day of
, 2017, between Renasant Corporation, a Mississippi corporation (
Acquiror
), and the undersigned individual executive officer and
director (
Metropolitan Official
) of Metropolitan BancGroup, Inc., a Delaware corporation (
Metropolitan
), or Metropolitan Bank, a Mississippi banking corporation (
Metropolitan Bank
).
Acquiror, Renasant Bank, a Mississippi banking corporation (
Acquiror Bank
), Metropolitan and Metropolitan Bank have entered
into an Agreement and Plan of Merger (the
Plan of Merger
), pursuant to which the parties thereto agree that (i) Metropolitan will merge with and into Acquiror (the
Merger
), and Acquiror shall be the
surviving entity of the Merger, and (ii) Metropolitan Bank will merge with and into Acquiror Bank (the
Bank Merger
), and Acquiror Bank shall be the surviving entity of the Bank Merger. In consideration of the expenses that
Acquiror will incur in connection with the transactions contemplated by the Plan of Merger and in order to preserve the value of the franchise to be purchased by Acquiror and induce Acquiror to proceed to incur such expenses, the Metropolitan
Official makes the following agreements in favor of Acquiror:
1.
Undertakings of Metropolitan Official
.
1.1 The Metropolitan Official agrees and undertakes during the term of this Agreement to vote or cause to be voted in favor of the Plan of
Merger all shares of common stock of Metropolitan, $0.01 par value per share (the
Metropolitan Stock
), as to which he has voting power (other than shares held in a fiduciary capacity), which amount of shares is shown on the
schedule attached hereto and made a part hereof (the
Shares
), at any meeting or meetings of the stockholders of Metropolitan at which such matters are considered (including any and all adjournments thereof). The parties hereto
acknowledge and agree that nothing in this section or this Agreement is intended to dictate or require that the Metropolitan Official vote as a director in any manner, and nothing in this Agreement: (i) will limit or affect any actions or
omissions taken by the Metropolitan Official as such a director, including in exercising rights under the Plan of Merger, and no such actions or omissions shall be deemed a breach of this Agreement or (ii) will be construed to prohibit, limit
or restrict the Metropolitan Official from exercising Metropolitan Officials fiduciary duties as a director of Metropolitan.
1.2
The Metropolitan Official further agrees that during the term of this Agreement, he will not transfer any of the Shares, except (i) for transfers by operation of law, and (ii) for transfers in connection with which Acquiror has consented
to the transfer and the transferee shall agree in writing with Acquiror to be bound by this Agreement as fully as the undersigned.
1.3
This Agreement shall terminate upon the earliest to occur of (i) the Effective Time (as defined in the Plan of Merger) and (ii) the date on which the Plan of Merger terminates in accordance with its terms.
2. [Reserved]
3.
Miscellaneous
.
3.1 The Metropolitan Official acknowledges that money damages would not be an adequate remedy for any breach of this Agreement by the
Metropolitan Official, and Acquiror shall be entitled to seek to enforce the provisions of this Agreement by specific performance and injunctive relief as remedies for such breach or any threatened breach, without any requirement for the securing or
posting of any bond or giving any other undertaking (except to the extent required by law). Such remedies shall not be deemed the exclusive remedies for a breach of this Agreement, but shall be in addition to all remedies available at law or in
equity to Acquiror, including, without limitation, the recovery of damages from the Metropolitan Official and his or her agents involved in such breach.
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3.2 The Metropolitan Official acknowledges and agrees that this Agreement is executed in
connection with the sale of all of the business of Metropolitan.
3.3 To the extent permitted under applicable law, any provision of this
Agreement may be amended or modified at any time, either before or after its approval by an agreement in writing among the parties hereto.
3.4 This Agreement may be executed in counterparts, each of which shall be deemed to constitute an original. Each such counterpart shall
become effective when one counterpart has been signed by each party hereto. Delivery of a copy of this Agreement bearing an original signature by facsimile transmission or by electronic mail in portable document format form shall have
the same effect as physical delivery of the paper document bearing the original signature.
3.5 This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Mississippi applicable to agreement made and entirely to be performed within such State, except as federal law may be applicable.
3.6 The Metropolitan Official may not assign any of his rights or obligations under this Agreement to any other person.
3.7 This Agreement supersedes any and all oral or written agreements and understandings heretofore made between the parties hereto relating to
the subject matter hereof and contains the entire agreement of the parties relating to the subject matter hereof;
provided
,
however
, that notwithstanding the foregoing, this Agreement does not modify or amend any stock option
agreement, employment agreement, option or similar employee benefit agreement between Metropolitan and the Metropolitan Official. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto, and
their respective successors, heirs and legatees.
3.8 In the event that any party institutes any legal suit, action or proceeding against
the other party to enforce the covenants contained in this Agreement (or obtain any other remedy in respect of any breach of this Agreement), the prevailing party in the suit, action or proceeding shall be entitled to receive in addition to all
other damages to which it may be entitled, the costs incurred by such party in conducting the suit, action or proceeding, including reasonable attorneys fees and expenses and court costs.
IN WITNESS WHEREOF, the parties have signed this Agreement effective as of the date first set forth above.
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RENASANT CORPORATION
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By:
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Name:
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E. Robinson McGraw
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Title:
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Chief Executive Officer
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METROPOLITAN OFFICIAL
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Print Name:
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SCHEDULE TO
VOTING AGREEMENT
Number of shares of
common stock, $0.01 par value per share, of Metropolitan BancGroup, Inc. owned by the Metropolitan Official: shares.
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SCHEDULE 5.22(i)
GABARDI AGREEMENT
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RENASANT BANK
EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT
(the Agreement) is made and entered into by and between Curtis J. Gabardi (Executive) and Renasant Bank, a financial institution with its principal place of business in Tupelo, Mississippi
(the Bank).
1. Effectiveness.
This Agreement shall be effective as of the Effective Time, as defined in that certain
Agreement and Plan of Merger by and among Renasant Corporation (the Company), the Bank, Metropolitan BancGroup, Inc. and Metropolitan Bank (the Metropolitan entities collectively, the Metropolitan Entities) dated as of
January 17, 2017 (the Merger Agreement),
provided that
if the Effective Time shall not occur as contemplated under the Merger Agreement, this Agreement shall be deemed void and of no force and effect.
2. Employment; Term and Renewal:
2.1 Position.
The Bank shall employ and retain Executive as its President, Chief Banking Officer, or in such other capacity or capacities as shall be mutually agreed upon, from time to time, by Executive and the Bank, and Executive agrees to be so employed,
subject to the terms and conditions set forth herein. Executives duties and responsibilities shall be those assigned to him, from time to time, by the Bank and shall include such duties as are the type and nature normally assigned to similarly
situated officers of a financial institution of the size, type and stature of the Bank. Executive shall report to the Chief Executive Officer of the Bank.
2.2 Full Time and Attention.
During the Employment Term (as defined below), Executive shall devote his full time, attention and energies to the
business of the Bank and will not, without the prior written consent of the Banks Chief Executive Officer, be engaged (whether or not during normal business hours) in any other business or professional activity, whether or not such activities
are pursued for gain, profit or other pecuniary advantage. Notwithstanding the foregoing, Executive shall not be prevented from: (a) engaging in any civic or charitable activity for which Executive receives no compensation or other pecuniary
advantage; (b) investing his personal assets in businesses which do not compete with the Bank,
provided that
such investment is solely that of an investor; or (c) purchasing securities in any corporation whose securities are
regularly traded on an established market,
provided that
such purchases will not result in Executive owning beneficially at any time 5% or more of the equity securities of any corporation engaged in a business competitive with that of the
Company or the Bank and Executives investment is solely that of an investor.
2.3 Term; Renewal.
Executives employment under this
Agreement shall commence as of the Effective Date and shall terminate on the two-year anniversary thereof (the Initial Term). At the end of the Initial Term and on each anniversary of such date thereafter (each a Renewal
Date), this Agreement shall be automatically extended for an additional one-year period (a Renewal Term), unless either party shall provide written notice to the other that this Agreement shall not be extended, such notice to be
provided not less than 60 days prior to any Renewal Date or the expiration of the Initial Term, as the case may be (the Initial Term and any Renewal Term referred to as Executives Employment Term).
3. Compensation and Benefits:
3.1 Base
Compensation.
The Bank shall pay Executive an annual salary in an amount of $425,000, which amount shall be prorated and paid in equal installments in accordance with the Banks regular payroll practices and policies (Executives
Base Compensation). Such compensation shall be reviewed and may be adjusted no less often than annually;
provided that
such compensation shall not be reduced unless part of a reduction applicable to all or substantially all
similarly situated executives.
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3.2 Benefits and Perquisites.
Executive shall further be eligible to receive the following benefits and
perquisites:
a.
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Participation in the Companys Performance Based Rewards Plan, as the same may be amended, restated or replaced from time to time (the PBRP);
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b.
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Grants and awards under the Companys 2011 Long-Term Incentive Compensation Plan, as the same may be amended, restated or replaced from time to time (the LTIP, which reference shall include the terms of
any individual incentive agreement issued thereunder);
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c.
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Not less than four weeks of paid annual leave, subject to the Banks standard policies and practices, with usage, forfeiture, and accrual determination in accordance with such policies and practices;
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d.
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A transportation benefit to be paid monthly in the amount of $ , which the parties agree shall be sufficient to compensate Executive for his
ownership or lease of a vehicle, including the cost of maintenance, insurance, repairs and fuel with respect thereto;
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e.
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Reimbursement or payment of dues and capital assessments for membership in the country club designated by Executive;
provided that
if any bond or capital or similar payment made by the Bank is repaid to
Executive, Executive shall promptly remit to the Bank the amount thereof; and
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f.
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Reimbursement for such reasonable and necessary expenses as are incurred by Executive in carrying out his duties hereunder, consistent with the Banks standard policies and annual budget. The Banks obligation
to reimburse Executive hereunder shall be contingent upon the timely presentment by Executive of an itemized accounting of such expenditures in accordance with the Banks policies.
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Executive may be further eligible to participate in such plans, policies, and programs as may be maintained, from time to time, by the Company, the Bank or
their affiliates for the benefit of executives or employees, including, without limitation, any nonqualified deferred compensation or similar executive benefit plans, fringe benefit plans, profit sharing, life insurance and group medical and other
welfare benefit plans. Any such participation shall be determined in accordance with the specific terms and conditions of the documents evidencing any such plans, policies, and programs. Executive agrees that nothing contained herein shall be deemed
to require the Company, the Bank or any affiliate thereof to maintain any particular plan, policy, or program for any particular period, and nothing shall be deemed to prohibit the amendment, modification, replacement or termination of any such
plan, policy or program. References herein to a plan, policy or program or arrangement shall be deemed to include and refer to any amendment or successor thereto or replacement thereof.
3.3 Retention Award.
In further consideration of the services to be rendered by Executive hereunder, Executive shall be awarded 5,000 shares of common
stock issued by Renasant Corporation, $5.00 par value per share, subject to the limitations and restrictions set forth on Exhibit A hereto.
4.
Executives Separation From Service:
4.1 Condition Precedent.
Except for the payment of the Mandated Amounts (as defined below), as a
condition of the receipt of any payment or the provision of any benefit described in this Section 4, Executive shall timely execute and deliver to the Bank a waiver and release, substantially in form attached hereto as Exhibit B, subject to
such modification as the Bank may deem necessary or appropriate, from time to time (a Release), which shall be provided to Executive not later than on the Executives Separation Date (as defined in Section 4.2).
4.2 Separation on Account of Death or Disability
. If Executive dies or becomes Disabled, this Agreement and Executives employment hereunder shall
terminate (the date of such termination for any reason described herein, Executives Separation Date), and the Company shall pay to Executive (or to his estate): (a) the Mandated Amounts; and (b) any Accrued Cash Bonus.
As used herein, the Mandated Amounts shall consist of: (a) any Base Compensation accrued but unpaid as of Executives Separation
Date; (b) any amount that is accrued, vested and not otherwise subject to forfeiture under
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any separate employee or executive benefit plan, policy or program in which Executive participated or was covered as of his Separation Date; (c) any amount, other than an Accrued Cash Bonus,
that is not subject to forfeiture and is subject to payment under the LTIP or PBRP in accordance with the terms thereof; and (d) any additional amounts or benefits required by law to be provided, which cannot be waived. Payment or provision of
the Mandated Amounts shall be made at the time or times and in the form prescribed under the applicable governing documents or in accordance with governing law, as the case may be.
As used herein, the term Accrued Cash Bonus shall mean the amount payable, if any, under the PBRP for the most recently completed fiscal year
preceding the year in which Executives Separation Date occurs, which amount has not been paid as of Executives Separation Date; such amount, if any, shall be paid at the time such bonuses are ordinarily paid under the PBRP.
As used herein, the term Disabled or Disability or words of similar import shall mean that Executive is: (a) unable to engage in
any substantial gainful activity due to a medically-determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least 12 months, as determined by a physician appointed by the Bank or
reasonably satisfactory to the Bank; (b) receiving benefits under the Banks or an affiliates separate long-term disability plan for a period of at least three months as a result of a medically-determinable physical or mental
impairment; or (c) has been determined eligible to receive Social Security disability benefits.
4.3 Involuntary Separation for Cause.
This
Agreement may be terminated and Executives employment hereunder may be involuntarily separated by the Bank on account of Cause. In the event of a separation for Cause hereunder, the Bank shall provide written notice to Executive, including a
description of the specific reasons for its determination of Cause and any cure period that may be available to remedy the events giving rise to such determination. As of Executives Separation Date, which may be the date on which such notice
is provided to Executive or the date on which the Bank reasonably determines that the events giving rise to Cause have not been cured to its reasonable satisfaction (to the extent a cure period has been provided in the discretion of the Bank), the
Bank shall pay or provide to Executive the Mandated Amounts and shall have no further obligation hereunder.
As used herein, the term Cause
shall mean and be deemed to have occurred if Executive:
a.
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Commits an intentional act of fraud, embezzlement or theft in the course of his employment or otherwise engaged in any intentional misconduct, which is materially injurious to the financial condition or business
reputation of the Company or the Bank;
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b.
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Commits intentional damage to the property of the Company or the Bank, which is materially injurious to the financial condition or business reputation of the Company or the Bank;
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c.
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Is indicted for the commission of a felony or a crime involving moral turpitude;
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d.
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Willfully and substantially refuses to perform the essential duties of his position, which has not been cured within 30 days following written notice by the Bank;
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e.
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Commits a material breach of this Agreement, which has not been cured within 30 days following written notice by the Bank;
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f.
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Intentionally or recklessly violates any material provision of any code of ethics, code of conduct or equivalent code or policy of the Company or the Bank applicable to him; or
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g.
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Intentionally or recklessly violates any material provision of the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any of the rules adopted by the Securities and
Exchange Commission or any other governmental agency implementing the provisions of these laws.
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No act or failure to act on the part of Executive shall be deemed intentional if it is due primarily
to an error in judgment or negligence, but will be deemed intentional only if done or omitted to be done by Executive not in good faith and without reasonable belief that his action(s) or omission(s) are in the best interest of the
Company, the Bank or an affiliate thereof.
4.4 Executives Constructive Termination.
Executive may terminate this Agreement and his
employment hereunder on account of Constructive Termination. In such event, the Company shall pay or provide to Executive:
b.
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Any Accrued Cash Bonus.
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c.
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A cash payment in an aggregate amount equal to: (i) Executives Base Compensation in effect prior to his Separation Date, determined without regard to any reduction thereof giving rise to Executives
Constructive Termination, for the remainder of the Employment Term but not less than 12 months; and (ii) Executives target bonus payable under the PBRP for the year in which Executives Separation Date occurs, prorated to reflect
Executives period of service during such year; such aggregate amount to be paid in the form of a single-sum not more than 60 days following Executives Separation Date.
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d.
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The vesting or settlement of any outstanding grant or award under the LTIP that would otherwise vest or be deemed free of restriction on account of an involuntary termination of employment, without Cause, as if
Executives Construction Termination hereunder constitutes such an event.
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e.
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If Executive and/or his dependents timely elect to continue coverage under any group medical, dental or vision plan maintained by the Bank, in accordance with Section 4980B(f)(2) of the Internal Revenue Code of
1986, as amended (the Code) (other than a health flexible spending account under a self-insured medical reimbursement plan described in Code Section 125), the amount of the applicable continuation coverage premium therefore, payable
on the first day of each month, for the lesser of 18 months or the actual period of such coverage as determined in accordance with Code Section 4980B.
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As used herein, the term Constructive Termination shall mean:
a.
|
A material reduction (other than a reduction in pay uniformly applicable to similarly situated executives) in the amount of Executives Base Compensation;
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b.
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A material reduction in Executives authority, duties or responsibilities from those contemplated in Section 2.1 of this Agreement;
provided that
a reduction in title, unaccompanied by a material
reduction in actual authority, duties, or responsibilities shall not give rise to a Constructive Termination hereunder;
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c.
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A material breach of this Agreement by the Bank;
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d.
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A requirement by the Bank that Executive shall change the location of his primary place of employment to a location more than 30 miles from the Jackson, Mississippi metropolitan statistical area; or
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e.
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Any attempt on the part of the Bank to require Executive to perform (or omit to perform) any act or to engage (or omit to engage) in any conduct that would constitute illegal action or inaction on the part of Executive.
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No event or condition described in this Section 4.4 shall be deemed to constitute a Constructive Termination unless:
(a) Executive promptly gives written notice of his objection to such event or condition, which notice shall be provided no later than 30 days after Executive first knows, or should first know, of its occurrence; (b) such event or condition
is not reasonably corrected by the Bank promptly after receipt of such notice, but in no event more than 30 days thereafter; and (c) Executive thereafter separates from service, such separation occurring not more than 30 days following the
expiration of the 30-day correction period described in subparagraph (b) hereof.
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4.5 Involuntary Separation by the Bank, Without Cause.
The Bank may terminate this Agreement and
involuntarily separate Executives employment hereunder, without Cause, upon 60 days prior written notice to Executive, or such shorter period as may be agreed upon by Executive and the Bank. In such event, the Bank shall provide to
Executive those amounts and benefits described in Section 4.4 hereof, as if Executives Constructive Termination had occurred.
4.6
Separation by Executive.
Executive may terminate this Agreement and separate from service hereunder, other than on account of Constructive Termination, upon 60 days prior written notice to the Bank, or such shorter period as may be agreed
upon by the Bank and Executive. In such event, the Bank shall pay or provide the Mandated Amounts and shall have no further obligation hereunder.
4.7
Expiration of Agreement.
If this Agreement shall expire by notice of nonrenewal in accordance with Section 2 hereof and:
a.
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Executive shall contemporaneously separate from service: (i) if such notice is furnished by the Bank during the five-year period following the Effective Date, the Bank shall pay or provide to Executive the amounts
and benefits described in Section 4.5 hereof, as if such separation was involuntary without Cause; or (ii) if such notice is furnished by the Bank after the expiration of such period, or at any time by Executive, he shall be paid or
provided the Mandated Amounts.
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b.
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Executive shall continue to perform services for the benefit of the Company, he shall thereafter be deemed an at will employee.
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In either such event, the rights and obligations of the parties hereunder shall cease, except to the extent provided in Section 7.14 hereof.
4.8 Return of Property.
Upon termination or expiration of this Agreement and the employment of Executive hereunder for any reason, Executive or his
estate shall promptly return to the Bank all of the property of the Bank and its affiliates, including, without limitation, equipment, computers, mobile telephones, software, credit cards, manuals, customer lists, financial data, letters, notes,
notebooks, reports and copies of any of the above and any Confidential Information (as defined below) in the possession or under the control of Executive, regardless of the form in which maintained.
5. Change In Control:
5.1 Condition Precedent.
Except for the payment of the Mandated Amounts, as a condition of the receipt of any payment or the provision of any benefit hereunder, Executive shall timely execute and deliver to the Bank a Release, which shall be provided to Executive not
later than on the Executives Separation Date (as defined in Section 4.2). Executive shall further acknowledge and agree that any payment or benefit under this Section 5 shall be in lieu of, and not in addition to, any severance
payment, separation pay or other benefit or cash award payable to Executive on account of his separation from service, whether under this Agreement or otherwise, such that there shall be no duplication of payments or benefits hereunder.
5.2 Executives Separation From Service Following a Change in Control.
If Executive separates from service during the 24-month period following a
Change in Control (as defined in the LTIP), either involuntarily without Cause, or on account of his Constructive Termination, the Bank shall pay or provide to Executive:
b.
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Any Accrued Cash Bonus.
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c.
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A cash payment equal to
two times
the aggregate of Executives: (i) Base Compensation in effect
prior to the Change in Control, determined without regard to any reduction thereof giving rise to Constructive Termination; and (ii) average bonus paid under the PBRP with respect to the Companys two whole fiscal
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years preceding such Change in Control; such aggregate amount to be paid in the form of a single-sum not more than 60 days following Executives Separation Date.
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d.
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If Executive and/or his dependents timely elect to continue group medical, dental or vision coverage within the meaning of Code Section 4980B(f)(2) with respect to a plan sponsored by the Bank (other than a health
flexible spending account under a self-insured medical reimbursement plan described in Code Section 125), the amount of the applicable continuation coverage premium therefore, payable on the first day of each month, for the lesser of 18 months
or the period of such coverage as determined in accordance with Code Section 4980B.
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e.
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Any outstanding award or grant shall vest, or be deemed free of restriction or otherwise settled as provided under the terms the LTIP.
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5.3 Limitation.
Notwithstanding any provision of this Agreement to the contrary, if the aggregate of all payments and benefits due to Executive
hereunder, including any payment or benefit provided to Executive under a separate plan or arrangement (collectively, the Aggregate Payments) would result in any such payment being a parachute payment within the meaning of
Code Section 280G, such payments shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of such payments and benefits, as so reduced, shall be deemed to constitute an excess parachute
payment. For this purpose:
a.
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The determination of whether any reduction in the Aggregate Payments is required hereunder shall be made at the expense of the Bank and by the Banks independent accountants or another independent accountant agreed
upon by Executive and the Bank.
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b.
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In the event that any portion of the Aggregate Payments is required to be reduced hereunder, then the reduction shall occur in the following order: (i) reduction of the amount payable under Section 5.2c
hereof; (ii) reduction of Accrued Cash Bonus; and (iii) forfeiture of any grant or award under the LTIP. Within any of the foregoing categories, a reduction shall occur first with respect to amounts that are not deemed to constitute
deferral of compensation within the meaning of and subject to Code Section 409A (Nonqualified Deferred Compensation) and then with respect to amounts that are treated as Nonqualified Deferred Compensation, with such
reduction being applied in each case to the payments in the reverse order in which they would otherwise be made (that is, later payments shall be reduced before earlier payments).
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6. Limitations On Activities:
6.1 Consideration for
Limitation on Activities.
Executive acknowledges that the execution of this Agreement constitutes consideration for the covenants contained herein, the sufficiency of which is hereby acknowledged by Executive.
6.2 Confidential Information.
Executive recognizes and acknowledges that during the Employment Term and at all times thereafter, Executive will have
access to or possess confidential, proprietary, non-public information concerning the Company, the Bank, their affiliates, and their predecessors, including but not limited to the Metropolitan Entities (collectively, the Protected
Entities), whether or not considered a trade secret under applicable law (Confidential Information), which may include, without limitation: (a) books, records and policies relating to operations, finance,
accounting, personnel and management; (b) information related to any business entered into by the Protected Entities; (c) credit policies and practices, databases, customer and prospective customer lists, depositor and prospective
depositor lists, and information obtained on competitors and tactics; (d) various other non-public trade or business information, including business opportunities and expansion or acquisition strategies, marketing, business diversification
plans, methods and processes; and (e) retail marketing and operating policies and practices, including without limitation, policies and practices concerning the identity, solicitation, acquisition, management, resale or cancellation of
unsecured or secured credit card accounts, loan or lease accounts, other accounts relating to consumer products and services and depository arrangements.
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Executive agrees that Confidential Information is the property of and owned by the Bank and the Company.
Executive further agrees that he will not, whether during the Employment Term or at any time afterwards, make any independent use of, or disclose to any other person or organization, any Confidential Information,
except
: (a) as may be
customarily required in the course of his employment with the Bank; (b) as may be expressly authorized by the Bank; (c) as may be required by law or legal process,
provided that
Executive shall furnish to the Bank not less than five
business days prior to such disclosure, or such shorter period as may be necessitated by facts and circumstances, written notice of such law or process, including a copy of all relevant documents, and shall cooperate with the Bank to object to or to
limit such disclosure or to place such disclosure under seal; or (d) if and to the extent such information shall have become public information, other than on account of Executives breach of this covenant. Notwithstanding the foregoing,
subsection (c) shall not limit Executives ability to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing documents or
other information, without notice to the Bank or the Company.
6.3 Non-Solicitation.
Executive agrees that during the two-year period commencing on
his Separation Date (regardless of the reason therefore), he shall not, directly or indirectly, for his own benefit, on behalf of another, or to the Bank or the Companys detriment:
a.
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Solicit for any business purpose, hire or offer to hire, or participate in the business solicitation or hiring of, any officer or employee of a Protected Entity, including officers and employees of the Bank during the
24-month period preceding Executives Separation Date;
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b.
|
Persuade, or attempt to persuade, in any manner any officer, employee, agent or consultant of a Protected Entity to discontinue any relationship with a Protected Entity; or
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c.
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Solicit or divert, or attempt to solicit or divert, any customer or depositor of the Bank, as determined during the 24-month period preceding Executives Separation Date, including any prospective or potential
customer or depositor of the Bank with respect to which the Bank has expended material efforts to solicit before his Separation Date.
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6.4 Non-Competition
. Executive agrees that he shall not, for a period of two years following his Separation Date in respect of a separation described
in Section 5.2 hereof, or for a period of one year following his Separation Date in respect of any other reason therefore, whether as an employee, officer, director, shareholder, owner, partner, joint venturer, independent contractor,
consultant or in another managerial capacity, engage in the Banking Business within the Restricted Area. For purposes of this Section 6.4, the term Banking Business shall mean the management and/or operation of a retail bank or
other financial institution, securities brokerage, or insurance agency or brokerage. The term Restricted Area shall mean area within the 50-mile radius of any geographic location in which the Bank has a substantial branch or office on
Executives Separation Date. The parties agree that Executives ownership of not more than 5% of the equity securities of any financial institution shall not constitute a breach of this covenant, provided that Executive is solely an
investor with respect thereto.
6.5 Business Reputation.
Executive agrees that during the Employment Term and at all times thereafter, he shall
refrain from making or publishing any adverse, untrue or misleading statement which has, or may reasonably be anticipated to have, the effect of demeaning the name or business reputation of the Company or the Bank,
except
to the extent true
and required by law or legal process.
6.6 Reformation.
The parties agree that each of the covenants set forth herein is intended to constitute a
separate restriction. Should any covenant be declared invalid or unenforceable, such covenant shall be deemed severable from and shall not affect the remainder thereof. The parties further agree that each of the covenants contained herein is
reasonable in both time and geographic scope. If and to the extent a court of competent jurisdiction or an arbitrator, as the case may be, determines that any of the covenants is unreasonable, then it is the intention of the parties that such
covenant or covenants be enforced to the fullest extent that such court or arbitrator deems reasonable and that this Agreement shall be deemed reformed to the extent necessary to permit such enforcement.
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6.7 Remedies.
In the event of a breach or threatened breach by Executive of the provisions of this
Section 6, Executive agrees that the Bank shall be entitled to seek a temporary restraining order or a preliminary injunction without the necessity of posting bond in connection therewith, whether in a court of law or by means of arbitration,
in the Banks discretion. Nothing contained herein shall be construed as prohibiting the Bank from pursuing any other remedy available to it for such breach or threatened breach, whether in law or equity, including the recovery of damages from
Executive.
Executive further agrees that upon the issuance of a temporary restraining order, the Bank may, in its discretion, suspend any payments or
benefits due to Executive or his dependents under this Agreement;
provided that
such payments shall be resumed when the Bank reasonably determines that such breach or threatened breach has been corrected or cured, to the extent that such
breach is susceptible of correction or cure. The Bank shall provide to Executive written notice of the events giving rise to Executives breach or threatened breach of the provisions of this Agreement, including a statement as to whether the
Bank reasonably believes that such breach or threatened breach is susceptible of cure, at least two business days before seeking a temporary restraining order hereunder. Thereafter, Executive may correct such breach or threatened breach to the
reasonable satisfaction of the Bank;
provided that
if Executive fails to correct such breach or threatened breach within such two-day period, nothing contained herein shall preclude or delay the Banks ability to seek a temporary
restraining order hereunder.
7. Miscellaneous:
7.1 Mitigation Not Required.
As a condition of any payment hereunder, Executive shall not be required to mitigate the amount of such payment by seeking
other employment or otherwise, nor will any profits, income, earnings or other benefits from any source whatsoever create any mitigation, offset, reduction or any other obligation on the part of Executive under this Agreement.
7.2 Enforcement of This Agreement.
In addition to the equitable remedies provided under Section 6 hereof, which need not be exclusively resolved
by arbitration in the discretion of the Bank, in the event that any legal dispute arises in connection with, relating to, or concerning this Agreement, or in the event of any claim for breach or violation of any provision of this Agreement,
Executive agrees that such dispute or claim will be resolved by arbitration. Any such arbitration proceeding shall be conducted in accordance with the rules of the American Arbitration Association (AAA) concerning the resolution of
employment disputes. Any such dispute or claim will be presented to a single arbitrator selected by mutual agreement of the Executive and the Bank (or the arbitrator will be selected in accordance with the rules of the AAA). All determinations of
the arbitrator will be final and binding upon the Executive and the Bank. Except as provided in Section 7.3 hereof, each party to the arbitration proceeding will bear its own fees and costs in connection with such arbitration proceedings,
except that
unless otherwise paid by the Bank in accordance with such section, the costs and expenses of the arbitrator will be divided evenly between the parties. The venue for any arbitration proceeding and for any judicial proceeding
related to this arbitration provision (including a judicial proceeding to enforce this provision) will be in Jackson, Mississippi.
7.3 Attorneys
Fees.
In the event any dispute in connection with this Agreement arises with respect to obligations of Executive or the Bank, as the case may be, the successful or prevailing party shall be entitled to recover its reasonable attorneys
fees, costs, and all expenses incurred in that action or proceeding.
7.4 No Set-Off or Defense.
There shall be no right of
set-off
or counterclaim in respect of any claim, debt or obligation against any payment to Executive provided for in this Agreement. Executives claim that the Bank has breached this Agreement shall not
constitute a justification or defense for Executives breach of any provision hereof.
7.5 Assistance with Litigation.
For a period of two
years after his Separation Date, Executive will furnish such information and provide such assistance as may be reasonably necessary in connection with any litigation in which the Bank (or an affiliate) is then or may become involved, without the
payment of a fee or charge, except reimbursement of his direct expenses.
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7.6 Headings.
Section and other headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
7.7 Entire Agreement.
This Agreement constitutes the final and
complete understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no other agreements, understandings, restrictions, representations or warranties among the parties other than those set forth
herein. Executive acknowledges that this Agreement replaces in their entirety any prior agreements between Executive and the Company, the Bank or an affiliate thereof, including any predecessor thereto, concerning the subject covered by this
Agreement.
7.8 Amendments.
This Agreement may be amended or modified at any time in any or all respects, but only by an instrument in writing
executed by the parties hereto.
7.9 Choice of Law.
The validity of this Agreement, the construction of its terms, and the determination of the
rights and duties of the parties hereto shall be governed by and construed in accordance with the internal laws of the State of Mississippi applicable to contracts made to be performed wholly within such state, without regard to the choice of law
provisions thereof.
7.10 Notices.
All notices and other communications under this Agreement must be in writing and will be deemed to have been
duly given when (a) delivered by hand, (b) sent by a nationally recognized overnight delivery service (receipt requested), or (c) when received by the addressee, if sent in another manner, in each case as follows:
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If to Executive:
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If to the Bank or its affiliates:
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Curt Gabardi
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Renasant Bank
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Most Recent Address on File
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209 Troy Street
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Tupelo, MS 38802
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Attn: General Counsel
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scorban@renasant.com
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or to such other addresses as a party may designate by notice to the other party.
7.11 Successors; Assignment.
This Agreement is personal to Executive and shall not be assigned by him without the prior written consent of the Bank.
This Agreement will inure to the benefit of and be binding upon the Bank, its affiliates, successors and assigns, including, without limitation, any person, partnership, company, corporation or other entity that may acquire substantially all of the
Banks assets or business or with or into which the Bank may be liquidated, consolidated, merged or otherwise combined. This Agreement will inure to the benefit of and be binding upon Executive, his heirs, estate, legatees and legal
representatives. Any payment due to Executive hereunder shall be paid to his surviving spouse, or if Executive is not survived by a spouse, to his estate after his death.
7.12 Severability.
Each provision of this Agreement is intended to be severable. In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable, the same shall not affect the validity or enforceability of any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision was not contained herein. Notwithstanding the foregoing, however, no provision shall be severed if it is clearly apparent under the circumstances that the parties would not have entered into this Agreement without such
provision.
7.13 Withholding.
The Bank or an affiliate may withhold from any payment hereunder any federal, state or local taxes required to be
withheld.
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7.14 Survival.
Notwithstanding any provision of this Agreement to the contrary, the obligation of the Bank
to make any payment or provide any benefit as of Executives Separation Date under Section 4 or 5 hereof shall survive the termination or expiration of this Agreement, as the case may be. The covenants imposed on Executive under
Section 6 hereof shall remain operative and in full force and effect in accordance with their terms, regardless of the expiration or termination of this Agreement or Executives separation from employment hereunder. The parties further
agree that the provisions of this Section 7 shall survive the termination or expiration of this Agreement for any reason.
7.15
Waiver.
The failure of either party to insist in any one or more instances upon performance of any terms or conditions of this Agreement will not be construed as a waiver of future performance of any such term, covenant, or condition and the
obligations of either party with respect to such term, covenant or condition will continue in full force and effect.
7.16 Code Section 409A.
To the extent applicable, the parties intend that this Agreement shall be interpreted and construed in a manner consistent with the applicable provisions of Code Section 409A, including any regulations or other guidance promulgated
thereunder. For purposes thereof: (a) each payment under this Agreement shall be treated as a separate payment; (b) the exclusions for short-term deferrals and payments on account of involuntary termination of employment shall be applied
to the fullest extent applicable; (c) payments to be made upon a termination of employment or on account of Executives Separation Date that are deemed to constitute deferred compensation within the meaning of Code Section 409A shall
be made upon Executives separation from service as determined thereunder; (d) any reference herein to the termination of Executives employment or to Executives termination date or words of similar import shall mean
and be deemed to refer to the date of his separation from service within the meaning of Code Section 409A; (e) if Executive is a specified employee within the meaning of Code Section 409A, payments that are
deemed to constitute deferred compensation within the meaning of Code Section 409A and that are payable on account of Executives separation from service, shall be delayed for six months as required under Code Section 409A, and shall
be made when first permitted, without liability for interest or loss of investment opportunity thereon; (f) to the extent they constitute deferred compensation within the meaning of Code Section 409A, all reimbursements and in-kind
payments to be provided hereunder during one calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (g) any reimbursement of an eligible expense shall be made
promptly after proper substantiation of such expenses, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred and the right to reimbursement or in-kind benefits shall not be subject
to liquidation or exchange for any other benefit.
7.17 Construction.
The language in all parts of this Agreement shall be construed as a whole,
according to fair meaning, and not strictly for or against any party. In drafting this Agreement, Executive has been represented by counsel of Executives choosing, and the terms of this Agreement have been fully negotiated by the parties
hereto. The parties agree that, in the event of any ambiguity, this Agreement should not be construed against the Bank solely as a result of being drafted by counsel for the Bank.
7.18 Execution.
This Agreement may be executed in any number of separate counterparts, each of which when so executed shall be deemed to be an
original, and all of which taken together shall constitute one and the same agreement. Facsimile or PDF transmissions of any executed original document and/or retransmission of any executed facsimile or PDF transmission shall
be deemed to be the same as the delivery of an executed original.
Signature Page to Follow
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THIS EXECUTIVE EMPLOYMENT AGREEMENT
has been executed by the parties hereto as of the dates set forth
below, to be effective as provided herein.
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RENASANT BANK
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EXECUTIVE
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By:
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Its: President
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Curtis J.
Gabardi
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Date:
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Date:
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Exhibit A Retention Shares
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Exhibit B Form of Waiver and Release
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EXHIBIT A
TERMS OF RETENTION AWARD
Your Retention Award is made in
consideration of the terms of paragraph 3.3 of that certain Employment Agreement by and between you and Renasant Bank, effective as of the date on which the transactions under that certain Agreement and Plan of Merger by and among Renasant
Corporation (the Company), Renasant Bank, Metropolitan BancGroup, Inc. and Metropolitan Bank, are consummated (your Employment Agreement), the terms of which are incorporated herein by this reference.
Effective as of the effectiveness of your Employment Agreement, the Board of Directors of Renasant Corporation (the Company) has awarded to you
5,000
shares of the Companys common stock, $5.00 par value per share, under the Companys 2011 Long-Term Incentive Compensation Plan, as amended (the Plan) (your Retention Award), such shares to be issued in
book entry form. The terms and conditions of your Retention Award are set forth herein and are qualified in their entirety by the terms of the Plan.
1. Definitions
. As used herein:
a.
Forfeiture Restrictions shall mean a prohibition on the sale, assignment, transfer, pledge, hypothecation, mortgage or disposition of the shares represented by your Retention Award.
b. Retention Period shall mean the period commencing as of the Effective Date and ending on December 31, 2018.
Otherwise, capitalized terms used herein shall have the meanings ascribed to them in the Plan.
2. Settlement.
At the end of the Retention Period, your Retention Award shall vest, the Forfeiture Restrictions shall lapse, and your Retention Award
shall otherwise be settled,
provided tha
t you have then been continuously employed by Renasant Bank and are not in breach of the terms of your Employment Agreement as of such date.
3. Shareholder Rights.
During the Retention Period, you shall possess the right the right to vote the shares represented by your Retention Award and to
receive dividends in respect of such shares as and when declared by the Companys Board of Directors.
4. Separation From Service.
If you
Separate From Service (as defined in the Plan) before the end of the Retention Period, the number of shares of Common Stock representing the portion of your Retention Award that is not yet settled (the Remaining Shares) will be forfeited
to and cancelled by the Company, without any compensation or payment. Notwithstanding the foregoing, if your separation is involuntary by the Bank, without Cause (as such terms are defined your Employment Agreement), you die or become Disabled (as
defined in the Plan) during the Retention Period, your Retention Award shall vest, the Forfeiture Restrictions shall lapse, and your Retention Award shall otherwise be settled,
provided tha
t you have then been continuously employed by
Renasant Bank and are not in breach of the terms of your Employment Agreement as of such date.
5. Change in Control
. If a Change in Control (as
defined in the Plan) is consummated during the Retention Period, your Retention Award will vest and be settled as of the earlier of: (a) the end of the Retention Period; or (b) the date of your Permitted Separation. The term
Permitted Separation means that, during the 24-month period following the consummation of a Change in Control, your Separation From Service is involuntary, other than on account of Cause (including Good Reason as contemplated under the
Plan). For avoidance of doubt, nothing contained herein is intended to otherwise modify the provisions of paragraph 4 hereof, which will be applicable in the event of your separation, other than a Permitted Separation, following a Change in Control.
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6. Additional Provisions.
Your Retention Award and Common Stock issued hereunder are subject to the
following additional provisions:
a. The terms of the Plan, some of which have been omitted.
b. Common Stock issued hereunder may bear such legends as the Committee or the Company deems necessary or appropriate, whether to comply with
applicable federal or state securities laws or to reflect the terms of this Notice or the Plan.
c. Your Retention Award shall not be
subject to the Further Holding Period imposed under paragraph 9.15 of the Plan.
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RENASANT CORPORATION
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E. Robinson McGraw
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Its: Chief Executive Officer
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Date: , 2017
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A-98
EXHIBIT B
[FORM OF] WAIVER AND RELEASE
Notice Date:
Separation Date:
THIS WAIVER AND RELEASE
(the
Release) is made in consideration and as a condition of the receipt of the separation payments described in that certain Employment Agreement entered into by and between Renasant Bank (with its parents, subsidiaries, affiliates,
divisions and operating units, collectively, the Bank), and Curtis J. Gabardi (Executive), first effective as of the Effective Date (as defined therein) (the Employment Agreement), the sufficiency of which is
acknowledged (the Consideration).
1.
Executive understands that signing this Release is an important legal act; in
connection with such execution, Executive:
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a.
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Acknowledges that he has been advised to consult an attorney before signing this Release and that Executive has done so.
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b.
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That he has 21 calendar days after the Notice Date (above) to consider whether to sign this Release, without alteration, and return it to the Bank in accordance with the notice provisions set forth in the Employment
Agreement, and that if he executes and delivers this Release before the expiration of the 21-day period, Executive will be deemed to have waived the balance of the period. Executive agrees that any negotiation or modification of this release shall
not extend such 21-day period.
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c.
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Acknowledges that he has been given an opportunity to review this Release, that he fully understand its provisions, and that he has voluntarily entered into this Release.
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d.
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Understands that he may revoke this Release by providing written notice to the Bank by hand delivery or by U.S. mail, postage prepaid in accordance with the notice provisions of Executives Employment Agreement,
during the seven-day period following its execution; thereafter, this Release shall be irrevocable. Executive acknowledges that if he revokes this Release, the Bank shall have no obligation to provide the Consideration, and that the Bank shall have
no obligation to pay the Consideration until this Release shall become irrevocable in accordance with its terms.
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e.
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Acknowledges that payment of the Consideration is voluntary on the part of the Bank and is not required by any legal obligation of the Bank, other than under the terms of the Employment Agreement and this Release.
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f.
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Agrees that if this Release is not executed and delivered to the Bank before the end of the 21-day period described in subsection b hereof, the Banks obligation in respect of the payment of the Consideration shall
be deemed void and of no effect.
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g.
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Agrees that this Release shall not be executed and delivered to the Bank before Executives Separation Date (above).
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2.
Executive, on his behalf and on behalf of his heirs, successors and assigns (collectively, the Releasing Parties),
hereby releases and discharges the Bank, including their respective past, present, or future parents, subsidiaries and affiliates, regardless of the form of entity in which maintained, shareholders, officers, directors, managers, members, owners,
agents, trustees, administrators, insurers, attorneys, employees, and employee benefit plans or funds and fiduciaries, including any predecessors, successors and/or assigns thereto (collectively, the Parties Released), from any claims,
demands, causes of action and liabilities of any kind (including attorneys fees and costs), whether based in law or equity, whether contractual, common-law, statutory, federal, state, local, or otherwise, whether known or unknown, and whether
arising by reason of any act, omission, transaction or occurrence, which the Releasing Parties had, may now have, or hereafter may have, against the Parties Released up to and including the date of the execution of this Release,
other than
the claims expressly
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retained as provided in Section 3 below. Without limiting the generality of the foregoing, the Releasing Parties hereby specifically release and discharge the Parties Released from:
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a.
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Any claims relating to Executives employment with Parties Released, including any consideration payable with respect thereto or the termination thereof, the terms and conditions of such employment, employee
benefits related to such employment, and Executives separation from such employment, and/or any of the events relating, directly or indirectly, to or surrounding such separation, including, but not limited to, claims for discriminatory,
wrongful or retaliatory discharge, breach of contract, tort, defamation, slander, and emotional distress; and
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b.
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Any claims of discrimination, harassment, whistle blowing or retaliation in connection with Executives employment, whether arising under federal, state or local law, including, without limitation, all claims
arising under Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Reconstruction Era Civil Rights Act of 1866, 42 USC §§ 1981-86, as amended, the Rehabilitation Act
of 1973, the Equal Pay Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act of 1974, as amended, the Sarbanes-Oxley Act of 2002, the Age Discrimination in Employment Act of 1967, as amended, and the Older Workers
Benefit Protection Act of 1990, as amended.
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3.
Notwithstanding the generality of Section 2 hereof,
Executive
does not waive or release
: (a) any right or claim arising after the date on which Executive executes this Release; (b) ordinary claims for benefits accrued and vested or due as of his Separation Date or thereafter under any benefit
plan subject to ERISA or other benefit plan or arrangement sponsored and maintained by the Bank; (c) any compensation or benefit due to him under the Employment Agreement on account of his separation; and (d) any claim for compensation due
under applicable law that cannot be waived as a matter of policy.
4.
Should any of the provisions set forth in this Release be
determined to be invalid by a court or other tribunal of competent jurisdiction, it is agreed that such determination shall not affect the enforceability of other provisions of this Release.
5.
Nothing contained herein shall be deemed to prevent Executive from filing a charge or complaint, including a challenge to the
validity of this Release, with the Equal Employment Opportunity Commission (EEOC), or from participating in any investigation or proceeding conducted by the EEOC; provided that Executive understands and agrees that he shall not be
entitled to any damages or other type or form of award relating to any event that occurred prior to his execution of this Release.
6.
Executive further agrees that in the event of his material breach of this Release, in addition to any other legal or equitable remedy, the Company shall be entitled to recover any payments made under the Employment Agreement, subject to any
restrictions on such recovery or as may be imposed under applicable law or as may be required to ensure that this Release is and remains valid and enforceable.
7.
Executive agrees that the general provisions of Section 7 of his Employment Agreement, including the arbitration provisions
thereof, shall be deemed incorporated herein by this reference and shall be and remain in full force and effect.
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CURTIS J. GABARDI
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WITNESS:
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By:
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Date:
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Print Name:
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Date:
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SCHEDULE 5.22(ii)
TERMINATION AGREEMENTS
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TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT
(this Agreement) is entered into by and between Metropolitan BancGroup, Inc., a Delaware corporation (the
Company), Metropolitan Bank, a state non-member bank organized under the laws of the State of Mississippi (collectively, the Metropolitan Entities), and
[TO COME]
(Executive).
1.
Recitals:
This Agreement is made in consideration of the following:
a. Executive entered into that certain Employment Agreement by and between the Company and Executive originally dated
[TO COME]
, which
employment agreement was most recently amended and restated in the form of an Amendment and Restated Employment Agreement by and between Executive and the Metropolitan Entities, dated as of
[TO COME]
(collectively, the Employment
Agreement).
b. The Metropolitan Entities have now entered into that certain Agreement and Plan of Merger by and between the
Metropolitan Entities and Renasant Corporation and Renasant Bank, dated as of January 17, 2017, pursuant to which the Company will merge with and into Renasant Corporation, with Reansant Corporation continuing as the surviving entity
thereafter, and Metropolitan Bank will merge with and into Renasant Bank, with Renasant Bank continuing as the surviving entity thereafter (the Merger Agreement).
c. As a condition of the consummation of the transactions contemplated under the Merger Agreement, the Metropolitan Entities and Renasant
Corporation and Renasant Bank have agreed to unilaterally terminate the Employment Agreement and make a certain payment to Executive, as more fully provided herein.
2.
Effectiveness.
As of the effective time of the consummation of the transactions contemplated under the Merger Agreement (the Effective
Time) and except as specifically provided herein, the Employment Agreement shall terminate and be extinguished in its entirety, the Metropolitan Entities shall have no further obligations thereunder, and such Employment Agreement shall be of
no further force and effect;
provided, however
, that should the transactions contemplated under the terms of the Merger Agreement not be consummated as provided thereunder, the Employment Agreement will not terminate and will continue in
accordance with its terms. The termination of the Employment Agreement is being effected by the unilateral action of the Metropolitan Entities and as directed by Renasant Corporation and Renasant Bank pursuant to the Merger Agreement.
3.
Payment.
Upon termination of the Employment Agreement, the Company (including any successor thereto) shall (i) pay to Executive in a single
lump sum, subject to applicable withholdings, as soon as practicable after the Effective Time, but in no event later than 10 business days thereafter, the aggregate amount Executive would have received under the Employment Agreement had the
Employment Agreement not been terminated and the Company had terminated Executives employment without cause immediately after the change in control resulting under the Merger Agreement (the Payment), and (ii) cause Executive
to receive such other amounts or benefits to which Executive would be entitled under such same circumstances. The preliminary estimate of the Payment and a description of such other benefits and amounts are set forth on the attached
Exhibit
A
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Notwithstanding the foregoing, the parties agree that the amount of the Payment cannot be finally determined until after the Effective Time.
Accordingly: (a) if the preliminary estimate of the Payment is in excess of the amount finally payable under the Employment Agreement, Executive shall not be entitled to receive or shall return the excess; and (b) if the preliminary
estimate of the Payment is less than the amount actually payable under the Employment Agreement, the Company shall pay the shortfall. For purposes hereof:
a. The determination of whether any amount is payable hereunder and the amount of such payment, if any, shall be made at the expense of the
Company and by the Companys independent accountants. Such determination shall be made as soon as administratively practicable and no later than 60 days after the later of:
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(i) the Effective Time; or (ii) the date on which amounts payable under the Companys 2015 Long-Term Cash Incentive Plan have been determined, but in any event no later than one
year after the Effective Time.
b. Any amount payable hereunder shall be paid no later than ten business days following the date on which
the determination of the Companys independent accountants is provided to the parties, but in no event later than one year after the Effective Time.
4. Survival
. Notwithstanding the termination of the Employment Agreement as provided herein, those certain covenants contained in Sections 5, 6, 7, and
8 of the Employment Agreement, including the remedies for breach thereof contained in Section 9 of the Employment Agreement, shall survive the termination of such agreement and be and remain enforceable in accordance with their terms, assuming
that any amount payable under the Employment Agreement as a condition of the enforcement thereof had been paid and Executives separation from service occurred as contemplated under Section 3.3 of such agreement.
5.
Executives Acknowledgement.
Executive is entering into this Agreement solely to acknowledge that the Company will make the Payment to
Executive as the result of the unilateral termination of the Employment Agreement in connection with consummation of the transactions contemplated under the Merger Agreement and to acknowledge the survival of the covenants contained in
Section 5, 6, 7, and 8 thereof. Executive also acknowledges that, subject to adjustment as provided in paragraph 3 hereof, the amount of the Payment equals what Executive would be entitled to receive under the Employment Agreement had the
agreement not been terminated and Executives employment been terminated by the Company without cause immediately after the change in control resulting under the Merger Agreement. Neither the Metropolitan Entities nor Renasant Corporation
and/or Renasant Bank have solicited Executives consent to termination of the Employment Agreement nor is such termination contingent upon the Executives consent.
6.
General:
a. This Agreement shall be
governed by, construed and interpreted in accordance with the laws of the State of Georgia applicable to contracts wholly performed in such state, without giving effect to the conflicts of law principles thereof.
b. In the event that any legal dispute arises in connection with, relating to, or concerning this Agreement the parties agree that such
dispute or claim will be resolved by arbitration. Any such arbitration proceeding shall be conducted in accordance with the rules of the American Arbitration Association (AAA) concerning the resolution of employment disputes. Any such
dispute or claim will be presented to a single arbitrator selected by mutual agreement of the Executive and the Metropolitan Entities (including any successors thereto), or the arbitrator will be selected in accordance with the rules of the AAA. All
determinations of the arbitrator will be final and binding upon the parties hereto. Each party to the arbitration proceeding will bear its own fees and costs in connection with such proceedings, and the costs and expenses of the arbitrator will be
divided evenly between the parties. The venue for any arbitration proceeding, and for any judicial proceeding related to this arbitration provision (including a judicial proceeding to enforce this provision), will be in Atlanta, Georgia.
c. Executive agrees that there shall no presumption that any ambiguity contained herein is to be resolved against the Metropolitan Entities
solely because they are considered a drafting party. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to their fair meaning, and not strictly for or against any of the parties.
d. This Agreement will inure to the benefit of and be binding upon the Metropolitan Entities, including their successors, and assigns,
including, without limitation, Renasant Corporation and Renasant Bank. This Agreement will inure to the benefit of and be binding upon Executive, his heirs, estate, beneficiaries, legatees and legal representatives. The Payment due to Executive
hereunder shall be paid to his surviving spouse after his death, or if Executive is not survived by a spouse, to his estate.
A-103
e. This Agreement constitutes the final and complete understanding and agreement among the
parties hereto with respect to the subject matter hereof, and there are no other agreements, understandings, restrictions, representations or warranties among the parties.
f. Each provision of this Agreement is intended to be severable. In the event that any one or more of the provisions contained herein shall
for any reason be held to be invalid, illegal or unenforceable, the same shall not affect the validity or enforceability of any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable
provision was not contained herein and shall be deemed reformed to the extent necessary to permit such construction. Notwithstanding the foregoing, no provision hereof shall be severed if it is clearly apparent under the circumstances that the
parties would not have entered into this Agreement without such provision.
g. All notices and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered by hand, (b) sent by a nationally recognized overnight delivery service (receipt requested), or (c) when received by the addressee, if sent in another
manner, in each case as follows:
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If to Executive:
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If to the Metropolitan Entities:
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Most Recent Address on
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C/O Renasant Bank
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File With the Metropolitan Entities
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209 Troy Street
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Tupelo, MS 38802
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Attn: General Counsel
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scorban@renasant.com
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or to such other addresses as a party may designate by notice to the other party.
h. The termination and payment under this Agreement is intended to comply with the exception under Section 409A of the Internal Revenue
Code of 1986, as amended (the Section 409A) for termination of nonqualified deferred compensation plans within the meaning of Section 409A upon a change in control of the employer. Accordingly, this Agreement will be construed and
administered in all events consistent with that intent. Notwithstanding the foregoing, nothing herein is intended as an admission that the Employment Agreement is subject to Section 409A as a non-exempt nonqualified deferred compensation
arrangement.
A-104
THIS TERMINATION AGREEMENT
has been executed by the parties hereto as of the dates set forth below, to be
effective as provided herein.
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METROPOLITAN BANCGROUP, INC.:
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METROPOLITAN BANK:
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By:
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By:
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Its:
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Its:
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Date:
, 2017
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Date:
, 2017
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EXECUTIVE:
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Date:
, 2017
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A-105
ANNEX B
OPINION OF RAYMOND JAMES & ASSOCIATES, INC.
Annex B
January 16, 2017
Board of
Directors
Metropolitan BancGroup, Inc.
1069 Highland Colony
Parkway
Ridgeland, MS 39157
Members of the Board of
Directors:
We understand that Renasant Corporation (Renasant) and Metropolitan BancGroup, Inc. (the Company), propose to enter
into the Agreement (defined below) pursuant to which, among other things, the Company will be merged with and into Renasant (the Transaction) and that, in connection with the Transaction, each outstanding share of common stock, par value
$0.01 per share, of the Company (the Common Shares) will be converted into the right to receive 0.6066 shares of common stock, par value $5.00 per share (Renasant Common Stock) of Renasant (the Transaction
Consideration). The Board of Directors of the Company (the Board) has requested that Raymond James & Associates, Inc. (Raymond James) provide an opinion (the Opinion) to the Board as to whether, as of
the date hereof, the Transaction Consideration to be received by the holders of the Common Shares in the Transaction pursuant to the Agreement is fair from a financial point of view to such holders. For purposes of this Opinion, and with your
consent, we have assumed that the Transaction Consideration is $24.49 per share.
In connection with our review of the proposed Transaction and the
preparation of this Opinion, we have, among other things:
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1.
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Reviewed the financial terms and conditions as contained in the draft Agreement by and among Renasant, Renasant Bank, the Company and Metropolitan Bank dated January 15, 2017 (the Agreement);
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2.
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reviewed certain information related to the historical, current and future operations, financial condition and prospects of the Company made available to us by the Company, including, but not limited to, financial
projections prepared by the management of the Company relating to the Company for the fiscal years ending December 31, 2016 through December 31, 2021, as approved for our use by the Company (the Projections);
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3.
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reviewed the Companys recent public filings and certain other publicly available information regarding the Company;
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4.
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reviewed financial, operating and other information regarding the Company and the industry in which it operates;
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5.
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reviewed the financial and operating performance of the Company and those of selected public companies that we deemed to be relevant;
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6.
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considered the publicly available financial terms of certain transactions we deemed to be relevant;
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7.
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reviewed the current and historical market prices and trading volume for Renasant, and the current market prices of the publicly traded securities of certain other companies that we deemed to be relevant;
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8.
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conducted such other financial studies, analyses and inquiries and considered such other information and factors as we deemed appropriate; and
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9.
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discussed with members of the senior management of the Company certain information relating to the aforementioned and any other matters which we have deemed relevant to our inquiry.
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B-1
Board of Directors
Metropolitan BancGroup, Inc.
January 16, 2017
Page 2
With your consent, we have assumed and relied upon the accuracy and completeness of all information supplied by or on behalf of the Company or otherwise
reviewed by or discussed with us, and we have undertaken no duty or responsibility to, nor did we, independently verify any of such information. We have not made or obtained an independent appraisal of the assets or liabilities (contingent or
otherwise) of the Company. With respect to the Projections and any other information and data provided to or otherwise reviewed by or discussed with us, we have, with your consent, assumed that the Projections and such other information and data
have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of the Company, and we have relied upon the Company to advise us promptly if any information previously provided
became inaccurate or was required to be updated during the period of our review. We express no opinion with respect to the Projections or the assumptions on which they are based. We have assumed that the final form of the Agreement will be
substantially similar to the draft reviewed by us, and that the Transaction will be consummated in accordance with the terms of the Agreement without waiver or amendment of any conditions thereto. Furthermore, we have assumed, in all respects
material to our analysis, that the representations and warranties of each party contained in the Agreement are true and correct and that each such party will perform all of the covenants and agreements required to be performed by it under the
Agreement without being waived. We have relied upon and assumed, without independent verification, that (i) the Transaction will be consummated in a manner that complies in all respects with all applicable international, federal and state statutes,
rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Transaction will be obtained and that no delay, limitations, restrictions or conditions will be imposed or
amendments, modifications or waivers made that would have an effect on the Transaction or the Company that would be material to our analyses or this Opinion.
We have relied upon, without independent verification, the assessment of the Companys management and its legal, tax, accounting and regulatory advisors
with respect to all legal, tax, accounting and regulatory matters, including without limitation that the Transaction will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
Our opinion is based upon market, economic, financial and other circumstances and conditions existing and disclosed to us as of January 16, 2017 and any
material change in such circumstances and conditions would require a reevaluation of this Opinion, which we are under no obligation to undertake. We have relied upon and assumed, without independent verification, that there has been no change in the
business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to us that
would be material to our analyses or this Opinion, and that there is no information or any facts that would make any of the information reviewed by us incomplete or misleading in any material respect.
We express no opinion as to the underlying business decision to effect the Transaction, the structure or tax consequences of the Transaction or the
availability or advisability of any alternatives to the Transaction. We provided advice to the Board with respect to the proposed Transaction. We did not, however, recommend any specific amount of consideration or that any specific
consideration constituted the only appropriate consideration for the Transaction. We did not solicit indications of interest with respect to a transaction involving the Company. This letter does not express any opinion as to the likely trading range
of Renasant stock following the Transaction, which may vary depending on numerous factors that generally impact the price of securities or on the financial condition of Renasant at that time. Our opinion is limited to the fairness, from a financial
point of view, of the Transaction Consideration to be received by the holders of the Common Shares.
We express no opinion with respect to any other
reasons, legal, business, or otherwise, that may support the decision of the Board of Directors to approve or consummate the Transaction. Furthermore, no opinion, counsel
B-2
Board of Directors
Metropolitan BancGroup, Inc.
January 16, 2017
Page 3
or interpretation is intended by Raymond James on matters that require legal, accounting or tax advice. It is assumed that such opinions, counsel or
interpretations have been or will be obtained from the appropriate professional sources. Furthermore, we have relied, with the consent of the Board, on the fact that the Company has been assisted by legal, accounting and tax advisors and we have,
with the consent of the Board, relied upon and assumed the accuracy and completeness of the assessments by the Company and its advisors as to all legal, accounting and tax matters with respect to the Company and the Transaction.
In formulating our opinion, we have considered only what we understand to be the consideration to be received by the holders of Common Shares as is described
above and we did not consider and we express no opinion on the fairness of the amount or nature of any compensation to be paid or payable to any of the Companys officers, directors or employees, or class of such persons, whether relative to
the compensation received by the holders of the Common Shares or otherwise. We have not been requested to opine as to, and this Opinion does not express an opinion as to or otherwise address, among other things: (1) the fairness of the Transaction
to the holders of any class of securities, creditors, or other constituencies of the Company, or to any other party, except and only to the extent expressly set forth in the last sentence of this Opinion or (2) the fairness of the Transaction to any
one class or group of the Companys or any other partys security holders or other constituencies vis-à-vis any other class or group of the Companys or such other partys security holders or other constituents (including,
without limitation, the allocation of any consideration to be received in the Transaction amongst or within such classes or groups of security holders or other constituents). We are not expressing any opinion as to the impact of the Transaction
on the solvency or viability of the Company or Renasant or the ability of the Company or Renasant to pay their respective obligations when they come due.
The delivery of this opinion was approved by an opinion committee of Raymond James.
Raymond James has been engaged to render financial advisory services to the Company in connection with the proposed Transaction and has received a retainer
and will receive a fee for such services, a substantial portion of which is contingent upon consummation of the Transaction. Raymond James will also receive a fee upon the delivery of this Opinion, which is not contingent upon the successful
completion of the Transaction or on the conclusion reached herein. In addition, the Company has agreed to reimburse certain of our expenses and to indemnify us against certain liabilities arising out of our engagement.
In the ordinary course of our business, Raymond James may trade in the securities of Renasant for our own account or for the accounts of our customers and,
accordingly, may at any time hold a long or short position in such securities. Raymond James has provided certain services to Renasant (in the previous two years), including serving as an underwriter in its $78.9 million follow-on offering of common
equity in December of 2016, serving as underwriter in its $100.0 million offering of subordinated debt in August of 2016, serving as financial advisor and rendering a fairness opinion in connection with its acquisition of KeyWorth Bank (announced in
October of 2015), and serving as financial advisor and rendering a fairness opinion in connection with its acquisition of Heritage Financial Group, Inc. (announced in December of 2014), for which it has been paid fees. Additionally, Raymond James
and its affiliates have in the past provided and are currently providing other financial services to Renasant for which Raymond James or its affiliates have received, or would expect to receive, compensation, including, during the past two years,
having provided advisory services to Renasant with respect to portfolios of fixed income securities held or managed by Renasant. Furthermore, Raymond James may provide investment banking, financial advisory and other financial services to the
Company and/or Renasant or other participants in the Transaction in the future, for which Raymond James may receive compensation. Finally, two members of the Raymond James deal team assigned to this engagement are owners of 20,000 and 11,776 of the
Companys Common Shares, respectively.
B-3
Board of Directors
Metropolitan BancGroup, Inc.
January 16, 2017
Page 4
It is understood that this letter is for the information of the Board of Directors of the Company (solely in each directors capacity as such) in evaluating the
proposed Transaction and does not constitute a recommendation to any shareholder of the Company regarding how said shareholder should vote on the proposed Transaction, nor is this letter intended to confer rights or remedies upon shareholders of the
Company.
Furthermore, this letter should not be construed as creating any fiduciary duty on the part of Raymond James to any such party. This Opinion may not be reproduced or used for any other purpose without our prior written consent,
except that this Opinion may be disclosed in and filed with a proxy statement used in connection with the Transaction that is required to be filed with the Securities and Exchange Commission, provided that this Opinion is quoted in full in such
proxy statement.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Transaction Consideration to be received by
the holders of the Common Shares in the Transaction pursuant to the Agreement is fair, from a financial point of view, to such holders.
Very truly yours,
RAYMOND JAMES & ASSOCIATES, INC.
B-4
ANNEX C
SECTION 262 OF THE
DELAWARE GENERAL CORPORATION LAW
Appraisal Rights
(a) Any stockholder of
a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an
appraisal by the Court of Chancery of the fair value of the stockholders shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word stockholder means a
holder of record of stock in a stock corporation and also a member of record of a nonstock corporation; the words stock and share mean and include what is ordinarily meant by those words and also membership or membership
interest of a member of a nonstock corporation; and the words depository receipt mean a receipt or other instrument issued by a depository representing an interest in one or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series
of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title), § 252, § 254, § 257, § 258, § 263 or § 264
of this title:
(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class
or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything
except:
a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository
receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph;
or
d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary
Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
Annex C Page 1
(c) Any corporation may provide in its certificate of incorporation that appraisal rights under
this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all
or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as
is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to
subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such
stockholders shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholders shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholders shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to §228 or §253 of this title, then either a constituent corporation before
the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal
rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such
notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days
after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holders shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal of such holders shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent
corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date
of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20
days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holders shares in accordance with this subsection. An affidavit
of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For
purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is
given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the
day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation, the
surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is
Annex C Page 2
otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the
right to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholders written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section
hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such persons own name,
file a petition or request from the corporation the statement described in this subsection.
(f) Upon the filing of any such petition by a
stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof
shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the stockholders
who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates
of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.
(h) After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the
rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its
discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including
any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. Upon application by the surviving or resulting corporation or by any stockholder entitled to
participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the
surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholders certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until
it is finally determined that such stockholder is not entitled to appraisal rights under this section.
Annex C Page 3
(i) The Court shall direct the payment of the fair value of the shares, together with interest,
if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by
certificates upon the surrender to the corporation of the certificates representing such stock. The Courts decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a
corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed upon the parties as
the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation,
reasonable attorneys fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in
subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholders demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be
dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however, that this provision shall not affect the right of any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the
merger or consolidation, as set forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
Annex C Page 4
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20.
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Indemnification of Directors and Officers.
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Mississippi Business Corporation Act
The Mississippi Business Corporation Act (MBCA) empowers a Mississippi corporation such as Renasant Corporation (the
Registrant) to indemnify an individual who was, is or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding of any kind because he is a director of the corporation, or because he served at
the corporations request as a director, officer, manager, trustee, partner, employee or agent of another entity or employee benefit plan, against a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an
employee benefit plan) or reasonable expenses incurred in the proceeding, if:
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he conducted himself in good faith;
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he reasonably believed, in the case of conduct in his official capacity, that his conduct was in the best interests of the corporation, and, in all other cases, that his conduct was at least not opposed to the best
interests of the corporation (with respect to an employee benefit plan, this means the directors conduct was reasonably believed to be in the best interests of the plans participants and beneficiaries); and
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in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
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A corporation may also indemnify an individual who engaged in conduct for which broader indemnification has been made permissible or
obligatory under a provision of the articles of incorporation as authorized by Section
79-4-2.02(b)(5)
of the MBCA. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the relevant standard of conduct.
Unless ordered by a court under
Section 79-4-8.54
of the
MBCA, a corporation may not indemnify a director in connection with:
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a proceeding by or in the right of the corporation except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under the MBCA
described above; or
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any proceeding with respect to conduct for which he was adjudged liable on the basis that he received a financial benefit to which he was not entitled, whether or not involving action in his official capacity.
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The MBCA further provides that a corporation shall indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party because he was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding.
A corporation may not indemnify a director as described above unless authorized by:
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the board of directors if there are two or more qualified directors, by a majority vote of all the qualified directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a
committee of two or more qualified directors appointed by such a vote;
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special legal counsel selected in accordance with the MBCA; or
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the stockholders, but shares owned by or voted under the control of a director who at the time does not qualify as a qualified director may not be voted on the authorization.
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In addition, a director may apply for indemnification and/or an advance of expenses to the court conducting the proceeding to which the director is a party in
accordance with
Section 79-4-8.54
of the MBCA.
Part II Page 1
A corporation may, before final disposition of a proceeding, advance funds to pay for or
reimburse the reasonable expenses incurred by a director who is a party to a proceeding because he is a director. The director must deliver to the corporation: (1) a signed written affirmation of his good faith belief that he has met the
relevant standard of conduct under the MBCA described above or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation as authorized by the MBCA; and (2) his written
undertaking to repay any funds advanced if he is not entitled to mandatory indemnification under the MBCA and it is ultimately determined under the MBCA that he has not met the relevant standard of conduct described in the MBCA. The undertaking
required must be an unlimited general obligation of the director. It need not be secured and may be accepted without reference to the financial ability of the director to make repayment.
A corporation may also indemnify and advance expenses to an officer of the corporation who is a party to a proceeding because he is an officer
to the same extent as for a director and, if the officer is not a director or is a party to the proceeding solely on the basis of his acts or omissions as an officer, to such further extent as provided in the corporations articles of
incorporation or bylaws or a resolution of the corporations board of directors or by contract. Notwithstanding the foregoing, an officer may not be indemnified for conduct for which a director may not be indemnified as provided above or for an
intentional violation of law or infliction of harm on the corporation or its stockholders.
Renasant Bylaws
The Restated Bylaws of Renasant Corporation, as amended, contain indemnification provisions that require the Registrant to indemnify any
director or officer made party to any proceeding if such director or officer met the requisite standard of conduct set forth in the bylaws and such indemnification is not otherwise prohibited by Mississippi or federal law. The required standard of
conduct under the bylaws is the same as that under the MBCA. Under the bylaws, the determination whether a director or officer met the required standard of conduct is made by the board of directors, special legal counsel, if there are fewer than two
disinterested directors on the board of directors, or by the Registrants stockholders. The advancement of expenses is also mandatory under the Registrants bylaws, provided that the director or officer makes deliveries analogous to those
required under the MBCA and such advancement is authorized as provided under the MBCA. Similarly, the Registrant is prohibited from indemnifying a director or officer under the same circumstances as provided in the MBCA. The indemnification and
insurance provisions in the Registrants bylaws are subject to the limitations and prohibitions imposed by federal law including, without limitation, the Securities Act of 1933, as amended, and the Federal Deposit Insurance Act, as amended, and
any implementing regulations concerning indemnification.
The Registrant also maintains an insurance policy insuring the Registrant and
its directors and officers against certain liabilities.
Part II Page 2
Item 21.
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Exhibits and Financial Statement Schedules.
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(a) Exhibits.
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Exhibit
No.
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Description of Exhibit
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2.1
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Agreement and Plan of Merger dated as of January 17, 2017 by and among Renasant Corporation, Renasant Bank, Metropolitan BancGroup, Inc. and Metropolitan Bank (the Merger Agreement) (attached as Annex A to the proxy
statement/prospectus which is part of this registration statement)
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3.1
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Articles of Incorporation of Renasant Corporation, as amended (filed as Exhibit 3.1 to the Registrants Form
10-Q
filed with the Securities and Exchange Commission (the
Commission) on May 10, 2016 and incorporated herein by reference)
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3.2
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Restated Bylaws of Renasant Corporation, as amended (filed as Exhibit 3.2 to the
Pre-Effective
Amendment No. 1 to Form
S-4
of the Registrant (File
No. 333-208753)
filed with the Commission on January 29, 2016 and incorporated herein by reference)
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4.1
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Articles of Incorporation of Renasant Corporation, as amended (filed as Exhibit 3.1 to the Registrants Form
10-Q
filed with the Commission on May 10, 2016 and incorporated herein by
reference)
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4.2
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Restated Bylaws of Renasant Corporation, as amended (filed as Exhibit 3.2 to the
Pre-Effective
Amendment No. 1 to Form
S-4
of the Registrant (File
No. 333-208753)
filed with the Commission on January 29, 2016 and incorporated herein by reference)
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5.1
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Opinion of Phelps Dunbar LLP as to the legality of the shares of Renasant Corporation common stock being registered
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8.1
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Opinion of Phelps Dunbar LLP as to certain tax matters*
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8.2
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Opinion of Troutman Sanders LLP as to certain tax matters*
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10.1
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Form of Executive Employment Agreement between the Registrant and Curtis J. Gabardi (included as schedule 5.22(i) to the Merger Agreement attached as Annex A to the proxy statement/prospectus which is a part of this registration
statement)
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10.2
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Form of voting agreements between the Registrant and the directors of Metropolitan BancGroup, Inc. (included as schedules
5.17-A
and
5.17-B
to the
Merger Agreement attached as Annex A to the proxy statement/prospectus which is a part of this registration statement)
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23.1
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Consent of HORNE LLP
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23.2
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Consent of Phelps Dunbar LLP (included in Exhibit 5.1)
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23.3
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Consent of Phelps Dunbar LLP (included in Exhibit 8.1)*
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23.4
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Consent of Troutman Sanders LLP (included in Exhibit 8.2)*
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24.1
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Power of Attorney*
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99.1
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Consent of Raymond James & Associates, Inc.*
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99.2
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Form of Proxy Card of Metropolitan Bank
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Pursuant to Item 602(b)(2) of Regulation
S-K,
the Registrant agrees to furnish supplementally a copy of any omitted schedule to the Merger Agreement to the Commission upon
request.
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The Registrant does not have any long-term debt instruments under which securities are authorized exceeding ten percent of the
average assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant will furnish to the Commission, upon its request, a copy of all long-term debt instruments.
Part II Page 3
(b) Financial Statement Schedules.
All schedules have been omitted because they are either not applicable or the required information has been included in the consolidated financial statements
or notes thereto incorporated by reference into this registration statement.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective
registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities
Act of 1933, to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule
430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first
use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424
(§230.424 of this chapter);
Part II Page 4
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(7) That, prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a
part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), such reoffering prospectus will contain the information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(8) That every prospectus: (i) that is filed pursuant to paragraph (7) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(9) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by reference into the proxy statement/prospectus pursuant to Items 4, 10(b), 11, or 13 of Form
S-4,
within one business day of receipt of such request,
and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the
request.
(c) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
Part II Page 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Pre-Effective Amendment No. 1 to Registration
Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tupelo, State of Mississippi, on April 26, 2017.
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RENASANT CORPORATION
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by:
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/s/ E. Robinson McGraw
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E. Robinson McGraw
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Chairman of the Board and Chief Executive
Officer
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Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective Amendment No. 1 to
Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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Date: April 26, 2017
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by:
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*
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George H. Booth, II, Director
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Date: April 26, 2017
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by:
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*
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Frank B. Brooks, Director
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Date: April 26, 2017
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by:
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*
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Kevin D. Chapman, Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer)
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Date: April 26, 2017
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by:
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*
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Hollis C. Cheek, Director
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Date: April 26, 2017
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by:
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*
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John M. Creekmore, Director
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Date: April 26, 2017
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by:
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*
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Albert J. Dale, III, Director
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Date: April 26, 2017
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by:
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*
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Jill V. Deer, Director
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Date: April 26, 2017
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by:
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*
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Marshall H. Dickerson, Director
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Date: April 26, 2017
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by:
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*
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John T. Foy, Director
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Date: April 26, 2017
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by:
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*
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R. Rick Hart, Executive Vice President
and Director
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Date: April 26, 2017
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by:
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*
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Richard L. Heyer, Jr.,
Director
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Date: April 26, 2017
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by:
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*
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Neal A. Holland, Jr., Director
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Date: April 26, 2017
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by:
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/s/ E. Robinson McGraw
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E. Robinson McGraw, Chairman of the
Board and Chief Executive Officer
(Principal Executive Officer)
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Date: April 26, 2017
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by:
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*
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J. Niles McNeel, Director
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Date: April 26, 2017
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by:
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*
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Hugh S. Potts, Jr., Director
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Date: April 26, 2017
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by:
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*
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Fred F. Sharpe, Director
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Date: April 26, 2017
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by:
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*
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Michael D. Shmerling, Director
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* By:
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/s/ E. Robinson McGraw
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E. Robinson McGraw
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Attorney-in-fact
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April 26, 2017
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EXHIBIT INDEX
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Exhibit
No.
|
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Description of Exhibit
|
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2.1
|
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Agreement and Plan of Merger dated as of January 17, 2017, by and among Renasant Corporation, Renasant Bank, Metropolitan BancGroup, Inc. and Metropolitan Bank (the Merger Agreement) (attached as Annex A to the
proxy statement/prospectus which is part of this registration statement)
|
|
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5.1
|
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Opinion of Phelps Dunbar LLP as to the legality of the shares of Renasant Corporation common stock being registered
|
|
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8.1
|
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Opinion of Phelps Dunbar LLP as to certain tax matters*
|
|
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8.2
|
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Opinion of Troutman Sanders LLP as to certain tax matters*
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|
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10.1
|
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Form of Executive Employment Agreement between the Registrant and Curtis J. Gabardi (included as schedule 5.22(i) to the Merger Agreement attached as Annex A to the proxy statement/prospectus which is a part of this registration
statement)
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10.2
|
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Form of voting agreements between the Registrant and each of the directors of Metropolitan BancGroup, Inc. (included as schedules
5.17-A
and
5.17-B
to
the Merger Agreement attached as Annex A to the proxy statement/prospectus which is a part of this registration statement)
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23.1
|
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Consent of HORNE LLP
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23.2
|
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Consent of Phelps Dunbar LLP (included in Exhibit 5.1)
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23.3
|
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Consent of Phelps Dunbar LLP (included in Exhibit 8.1)*
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23.4
|
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Consent of Troutman Sanders LLP (included in Exhibit 8.2)*
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24.1
|
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Power of Attorney*
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99.1
|
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Consent of Raymond James & Associates, Inc.*
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99.2
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Form of Proxy Card of Metropolitan Bank
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Pursuant to Item 602(b)(2) of Regulation
S-K,
the Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Agreement and Plan of Merger to the
Commission upon request.
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