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Agreement and Plan of Merger |
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2004 |
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3 merger-agr.txt MERGER AGREEMENT
==============================================================================
AGREEMENT AND PLAN OF MERGER
between
THE SOUTH FINANCIAL GROUP, INC.
and
CNB FLORIDA BANCSHARES, INC.
Dated as of January 20, 2004
==============================================================================
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of January
20, 2004, between The South Financial Group, Inc., a South Carolina corporation
("TSFG") and CNB Florida Bancshares, Inc., a Florida corporation ("CNBFB").
Recitals
The Boards of Directors of TSFG and CNBFB have determined that it is in
the best interests of their respective companies and their shareholders to
consummate the business combination transaction provided for herein in which
CNBFB will, subject to the terms and conditions set forth herein, merge (the
"Merger") with and into TSFG.
The parties desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
Agreement
In consideration of the mutual covenants, representations, warranties
and agreements contained herein, and intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. The following terms shall have the indicated definitions.
Acquisition Proposal. Any tender offer or exchange offer or any
proposal for a merger, reorganization, consolidation, share exchange,
recapitalization, liquidation, dissolution or other business combination
involving CNBFB or any proposal or offer to acquire a substantial equity
interest in, or a substantial portion of the assets of, CNBFB, other than the
transaction contemplated by this Agreement.
Articles of Merger. The articles of merger complying with the FBCA and
the SCBCA reflecting the merger of CNBFB with and into TSFG.
BHC Act. The Bank Holding Company Act of 1956, as amended.
CNBFB Common Stock. The common stock, par value $0.01 per share, of
CNBFB.
CNBFB Option Plan. The CNBFB 1998 Performance-Based Incentive Plan, as
referenced in CNBFB's SEC filings.
CNBFB Stock Certificate. A certificate, which previous to the Merger
represented any shares of CNBFB Common Stock.
CNB National Bank. CNB National Bank, a wholly-owned subsidiary of
CNBFB.
DPC Shares. Shares held by CNBFB, TSFG or any of TSFG's Subsidiaries in
respect of a debt previously contracted.
Effective Time. The effective time of the Merger as specified in the
Articles of Merger.
Environmental Laws. Applicable federal, state and local laws, including
common law, regulations and ordinances, and all applicable decrees, orders and
contractual obligations relating to pollution or the discharge of, or exposure
to, Hazardous Materials in the environment or workplace.
ERISA. The Employee Retirement Income Security Act of 1974, as amended.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Exchange Agent. Registrar & Transfer Company or the successor stock
transfer agent of TSFG, which shall be responsible for the exchange of the
Merger Consideration for the CNBFB Common Stock.
Exchange Ratio. .84 shares of TSFG Common Stock for each share of CNBFB
Common Stock.
FBCA. The Florida Business Corporation Act, as amended.
2
FDIC. The Federal Deposit Insurance Corporation.
Fair Market Value. The average of the last reported sale price per
share of the TSFG Common Stock as reported on the NASDAQ/NMS (as reported in the
Wall Street Journal or another mutually agreeable authoritative source) for the
ten consecutive trading days immediately prior to the fifth business day prior
to the Effective Time.
Federal Reserve Board. The Board of Governors of the Federal Reserve
System.
Federal Reserve Consent. The consent of the Federal Reserve Board
necessary to consummation of the Merger.
GAAP. Generally accepted accounting principles consistently applied
during the periods involved.
Governmental Entity. Any court, administrative agency or commission or
other governmental authority or instrumentality.
Hazardous Materials. Any chemicals, pollutants, contaminants, wastes,
toxic substances, petroleum or other regulated substances or materials.
IRS. The Internal Revenue Service.
Loan Property. Any property in which CNBFB holds a security interest,
and, where required by the context, such term means the owner or operator of
such property.
Material Adverse Effect. With respect to TSFG or CNBFB, as the case may
be, a material adverse effect on (i) the business, results of operations or
financial condition of such party and its Subsidiaries taken as a whole, other
than any such effect attributable to or resulting from (t) any change in banking
or similar laws, rules or regulations of general applicability or
interpretations thereof by courts or governmental authorities, (u) any change in
GAAP or regulatory accounting principles applicable to banks, thrifts or their
holding companies generally, (v) any action or omission of the parties taken
with the prior written consent of the other parties hereto, (w) any events,
conditions or trends in business or financial conditions affecting the banking
industry, (x) any change or development in financial or securities markets or
the economy in general, including changes in interest rates, (y) the
announcement or execution of this Agreement, including any impact on
relationships with customers or employees, or (z) charges and expenses
contemplated in connection with the Merger and not otherwise in violation of
this Agreement, including those related to employment contracts and severance
payments; legal, accounting and investment banking fees; data processing
conversion costs; and accounting changes or charges taken pursuant to Section
7.13 or (ii) the ability of the parties to consummate the transactions
contemplated hereby.
Merger Consideration. The aggregate number of shares of TSFG Common
Stock issuable by TSFG upon conversion of the CNBFB Common Stock as provided
herein.
Participation Facility. Any facility in which CNBFB participates in the
management and, where required by the context, such term means the owner or
operator of such facility.
Per Share Merger Consideration. The shares of TSFG Common Stock
issuable hereunder for each share of CNBFB Common Stock, which is .84 shares of
TSFG Common Stock for each share of CNBFB Common Stock.
Regulatory Agencies. The Federal Reserve Board, the FDIC and any other
regulatory authority or applicable self-regulatory organization with
jurisdiction over the Merger.
Rights. Subscriptions, options, warrants, calls, commitments or
agreements of any character to purchase capital stock.
SCBCA. The South Carolina Business Corporation Act, as amended.
SEC. The Securities and Exchange Commission.
Subsidiary. The word "Subsidiary" (1) when used with respect to CNBFB
shall mean any corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes, and (2) when used with respect to TSFG shall mean
each Subsidiary of TSFG that is a "Significant Subsidiary" within the meaning of
Rule 1-02 of Regulation S-X of the SEC.
Superior Proposal. With respect to CNBFB, any written Acquisition
Proposal made by a person other than TSFG which is for (i) (a) a merger,
reorganization, consolidation, share exchange, business combination,
recapitalization or similar transaction involving CNBFB, (b) a sale, lease,
exchange, transfer, or other disposition of at least 50% of the assets of CNBFB,
in a single transaction or a series of related transactions, or (c) the
3
acquisition, directly or indirectly, by a person of beneficial ownership of 50%
or more of CNBFB Common Stock whether by merger, consolidation, share exchange,
business combination, tender, or exchange offer or otherwise, and (ii) which is
otherwise on terms which the Board of Directors of CNBFB in good faith concludes
(after consultation with its financial advisors and outside counsel) would, if
consummated, result in a transaction that (a) is more favorable to its
stockholders (in their capacities as stockholders), from a financial point of
view, than the transactions contemplated by this Agreement (b) is reasonably
capable of being completed, and (c) that if not accepted by CNBFB's Board of
Directors, would result in a breach of the fiduciary duties of the CNBFB Board
of Directors.
Surviving Corporation. The surviving corporation to the Merger, which
shall be TSFG.
Taxes. Taxes shall mean all taxes, charges, fees, levies, penalties or
other assessments imposed by any United States federal, state, local or foreign
taxing authority, including, but not limited to income, excise, property, sales,
transfer, franchise, payroll, withholding, social security or other taxes,
including any interest, penalties or additions attributable thereto.
Tax Return. Any return, report, information return or other document
(including any related or supporting information) with respect to Taxes.
Trust Account Shares. Shares of CNBFB Common Stock or TSFG Common Stock
held directly or indirectly in trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity for the benefit of third parties.
TSFG Common Stock. The common stock, par value $1.00 per share, of
TSFG.
1.2 Terms Defined Elsewhere. The capitalized terms set forth below are
defined in the following sections:
"Agreement" Preamble
"Benefit Agreements" Section 7.8(c)
"CNBFB" Preamble
"CNBFB Contract" Section 4.16(a)
"CNBFB Director" Section 7.12
"CNBFB Disclosure Schedule" Section 3.1
"CNBFB Financial Statements" Section 4.8
"CNBFB Reports" Section 4.6
"Closing" Section 10.1
"Closing Date" Section 10.1
"Code" Section 2.3
"Company Director" Section 7.11
"ERISA Affiliate" Section 4.13(a)
"Exchange Fund" Section 2.8
"Hovde Financial" Section 4.9
"Injunction" Section 8.1(e)
"Loans" Section 4.21(a)
"Maximum Amount" Section 7.9
"Merger" Recitals
"Plans" Section 4.13(a)
"Proxy Statement/Prospectus" Section 4.4
"Regulatory Agreement" Section 4.17
"Representatives" Section 7.3(a)
"Requisite Regulatory Approvals" Section 8.1(c)
"S-4" Section 4.14
"Securities Act" Section 2.11(b)
"State Banking Approvals" Section 4.4
"TSFG" Preamble
"TSFG's Counsel" Section 8.2(d)
"TSFG Disclosure Schedule" Section 3.1
"TSFG Financial Statements" Section 5.7
4
"TSFG Preferred Stock" Section 5.2
"TSFG Reports" Section 5.5
"Termination Fee Amount" Section 9.2(b)
1.3 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The phrases "the date
hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to the date of this Agreement. No provision of this
Agreement shall be construed to require CNBFB, TSFG or any of their respective
affiliates to take any action that would violate any applicable law (including
common law), rule or regulation.
ARTICLE II
PLAN OF MERGER
2.1 The Merger. Subject to the terms and conditions of this Agreement,
in accordance with the FBCA and SCBCA, at the Effective Time, CNBFB shall merge
with and into TSFG. TSFG shall be the Surviving Corporation, and shall continue
its corporate existence under the laws of the State of South Carolina. The name
of the Surviving Corporation shall continue to be "The South Financial Group,
Inc." Upon consummation of the Merger, the separate corporate existence of CNBFB
shall terminate.
2.2 Effective Time and Effects of the Merger. Subject to the provisions
of this Agreement, on the Closing Date, the Articles of Merger shall be duly
prepared, executed and delivered for filing with the Secretaries of State of the
State of Florida and the State of South Carolina. The Merger shall become
effective at the Effective Time. At and after the Effective Time, the Merger
shall have the effects set forth in the FBCA and SCBCA.
2.3 Tax Consequences. It is intended that the Merger shall constitute 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 a plan
of reorganization for the purposes of Sections 354 and 361 of the Code.
2.4 Conversion of CNBFB Common Stock.
(a) At the Effective Time, subject to Section 2.9(e), each share of
CNBFB Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares of CNBFB Common Stock held directly or indirectly by
CNBFB, TSFG or any of TSFG's Subsidiaries (except for Trust Account Shares and
DPC Shares)) shall, by virtue of this Agreement and without any action on the
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