EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered
into as of this 28th day of October 2003, by and between HFB Financial
Corporation, a Tennessee corporation (the "Company"), and HFB Merger Corp., a
Tennessee corporation ("Newco").
WITNESSETH
WHEREAS, the Company is a corporation duly incorporated and validly
existing under the laws of the State of Tennessee, with authorized capital stock
consisting of 6,000,000 total shares consisting of 5,000,000 shares are common
stock, par value of $1.00 per share, and $1,000,000 shares are preferred stock,
par value of $1.00 per share, of which 1,301,101 shares of common stock and no
shares of preferred stock are issued and outstanding as of the date hereof, and
288,202 shares are held as treasury stock; and
WHEREAS, Newco is a corporation duly organized and validly existing under
the laws of the State of Tennessee, with authorized capital stock consisting of
1,000 shares of common stock, no par value per share (the "Newco Stock"), of
which 1,000 shares are issued and outstanding; and
WHEREAS, the boards of directors of each of the Company and Newco, pursuant
to the authority given by and in accordance with the provisions of the Tennessee
Business Corporation Act (the "TBCA"), have approved this Agreement under which
Newco will be merged with and into the Company (the "Merger") with the Company
surviving the Merger and have authorized the execution hereof; and
WHEREAS, as and when required by the provisions of this Agreement, all such
actions as may be necessary or appropriate shall be taken by the Company and
Newco to consummate the Merger;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and undertakings contained herein, and for such other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:
ARTICLE I
MERGER
1.01. General. At the Effective Time (as defined in Article VIII below)
of the Merger and pursuant to the provisions of this Agreement, the corporate
existence of Newco will be merged with and into the Company (hereinafter
referred to as the "Surviving Corporation" whenever reference is made to it as
of the Effective Time or thereafter) and continued in the Surviving Corporation,
and the Surviving Corporation shall be deemed to be a continuation of the
entities and identities of Newco and the Company.
1.02. Name and Organization. The name of the Surviving Corporation shall
remain and thereafter be "HFB Financial Corporation" The Charter and Bylaws of
the Company in effect at the Effective Time shall remain the Charter and Bylaws
of the Surviving Corporation until changed as provided therein or by law. The
established offices and facilities of the Company shall remain the established
offices and facilities of the Surviving Corporation. The registered office and
registered agent of the Company shall remain the registered office and
registered agent of the Surviving Corporation.
1.03. Rights and Interests. At the Effective Time, all rights,
franchises, titles and interests of the Company and Newco, respectively, in and
to every type of property shall be transferred to and vested in the Surviving
Corporation by virtue of the Merger without any deed or other transfer. The
Surviving Corporation at the Effective Time, and without any order or other
action on the part of any court or otherwise, shall hold and enjoy all rights of
property, franchises, titles and interests, including appointments, powers,
designations, and nominations, and all other rights and interests as trustee,
executor, administrator, agent, transfer agent, registrar of stocks and bonds,
administrator of estates, assignee, and receiver, and in every other fiduciary
and
A-1
agency capacity in the same manner and to the same extent as such rights,
franchises, and interests were held or enjoyed by the Company and Newco,
respectively, immediately prior to the Effective Time.
1.04. Liabilities and Obligations. Except as otherwise provided herein,
the Surviving Corporation shall be liable for all liabilities of the Company and
Newco. All debts, liabilities, obligations, and contracts of the Company and
Newco, matured or unmatured, whether accrued, absolute, contingent, or
otherwise, and whether or not reflected or reserved against on the balance
sheets, books of account, or records of the Company or Newco, as the case may
be, shall be those of, and are hereby expressly assumed by, the Surviving
Corporation and shall not be released or impaired by the Merger. All rights of
creditors and other obligees and all liens on property of either the Company or
Newco shall be preserved unimpaired. At the Effective Time, a proceeding pending
by or against either Newco or the Company may be continued as if the Merger did
not occur, or the Surviving Corporation may be substituted by the proceedings.
1.05. Directors and Officers. The directors, advisory directors, and
officers of the Surviving Corporation at the Effective Time shall be those
persons who were directors, advisory directors, and officers, respectively, of
the Company immediately before the Effective Time and shall hold office from the
Effective Time until their respective successors are duly elected or appointed.
The committees of the Board of Directors of the Surviving Corporation at the
Effective Time shall be the same as, and shall be composed of the same persons
who were serving on, the committees appointed by the Board of Directors of the
Company as they existed immediately before the Effective Time.
1.06. Adoption. Unless contrary to the laws of the State of Tennessee or
the United States of America or other applicable laws, all corporate acts,
plans, policies, applications, agreements, orders, registrations, licenses,
approvals, and authorizations of the Company and Newco, their respective
shareholders, boards of directors, committees elected or appointed by their
boards of directors or officers, and agents that were valid and effective
immediately before the Effective Time shall be taken for all purposes at and
after the Effective Time as the acts, plans, policies, applications, agreements,
orders, registrations, licenses, approvals, and authorizations of the Surviving
Corporation and shall be effective and binding thereon as the same were with
respect to the Company and Newco immediately before the Effective Time.
ARTICLE II
TERMS OF THE MERGER
2.01 General. The manner of exchanging and converting the issued and
outstanding shares of Company Stock and Newco Stock shall be as hereinafter
provided in this Article II.
2.02 Conversion and Cancellation of Stock. At the Effective Time,
(a) all outstanding shares of Company Stock, whether Record Shares (as
hereinafter defined) or Street Shares (as hereinafter defined), held by a
Holder (as hereinafter defined) holding fewer than 250 shares of Company
Stock immediately prior to the Effective Time shall, without any action on
the part of the holder thereof, be canceled and converted into the right to
receive cash equal to $22.75 per share of Company Stock (the "Cash Merger
Consideration") other than shares for which dissenters' rights have been
perfected; provided, however, that the Company may presume that all Street
Shares are held by Holders holding fewer than 250 shares of Company Stock
immediately prior to the Effective Time unless the Holder or a beneficial
owner of Street Shares is able to demonstrate to the Company's satisfaction
that such shares are held beneficially by a Holder holding 250 or more
shares of Company Stock immediately prior to the Effective Time, in which
event such shares of Company Stock shall remain outstanding with all
rights, privileges, and powers existing immediately before the Effective
Time;
(b) all outstanding shares of Company Stock other than those described
in Section 2.02 (a) hereof as being converted into the right to receive the
Cash Merger Consideration shall remain outstanding with all rights,
privileges, and powers existing immediately before the Effective Time; and
(c) the outstanding shares of Newco Stock shall, without any action on
the part of the holder thereof, be canceled.
A-2
(d) Except as provided in Section 2.04, in no event shall any Holder
holding, of record or beneficially, immediately prior to the Effective Time
250 or more shares of Company Stock (including any combination of Record
Shares and Street Shares) in the aggregate be entitled to receive any Cash
Merger Consideration with respect to the shares of Company Stock so held.
It shall be a condition precedent to the right of any Holder to receive the
Cash Merger Consideration, if any, payable with respect to the shares of
Company Stock held by such Holder that such Holder certify to the Company
in the letter of transmittal delivered by the Company as described in
Section 2.03 that such Holder held, of record and beneficially, immediately
prior to the Effective Time fewer than 250 shares of Company Stock
(including any combination of Record Shares and Street Shares) in the
aggregate.
For purposes hereof,
(1) the term "Record Shares" shall mean shares of Company Stock other
than Street Shares and any Record Share shall be deemed to be held by the
registered holder thereof as reflected on the books of the Company;
(2) the term "Street Shares" shall mean shares of Company Stock held
of record in street name, and any Street Share shall be deemed to be held
by the beneficial owner thereof as reflected on the books of the nominee
holder thereof;
(3) the term "Holder" shall mean (i) any record holder or holders of
Record Shares who would be deemed, under Rule 12g5-1 promulgated under the
Securities Exchange Act of 1934, as amended, to be a single "person" for
purposes of determining the number of record shareholders of the Company,
and (ii) any other person or persons who would be deemed to be a "Holder"
under clause (i) above if the shares of Company Stock such person holds
beneficially either in street name were held of record by such person or
persons; and
(4) the term "Cash-Out Shares" shall mean any shares of Company Stock
that are converted into the right to receive the Cash Merger Consideration
pursuant to this Section 2.02.
The Company (along with any other person or entity to which it may delegate
or assign any responsibility or task with respect thereto) shall have full
discretion and exclusive authority (subject to its right and power to so
delegate or assign such authority) to (i) make such inquiries, whether of any
shareholder(s) or otherwise, as it may deem appropriate for purposes of this
Section 2.02 and (ii) resolve and determine, in its sole discretion, all
ambiguities, questions of fact and interpretive and other matters relating to
this Section 2.02, including, without limitation, any questions as to the number
of shares of Company Stock held by any Holder immediately prior to the Effective
Time. All determinations by the Company under this Section 2.02 shall be final
and binding on all parties, and no person or entity shall have any recourse
against the Company or any other person or entity with respect thereto.
For purposes of this Section 2.02, the Company may in its sole discretion,
but shall not have any obligation to do so, (i) presume that any shares of
Company Stock held in a discrete account (whether record or beneficial) are held
by a person distinct from any other person, notwithstanding that the registered
or beneficial holder of a separate discrete account has the same or a similar
name as the holder of a separate discrete account; and (ii) aggregate the shares
of Company Stock held (whether of record or beneficially) by any person or
persons that the Company determines to constitute a single Holder for purposes
of determining the number of shares of Company Stock held by such Holder.
2.03 Exchange of Certificates.
(a) Payment Procedure. Promptly after the Effective Time, the Surviving
Corporation will mail to each holder of a certificate or certificates which
immediately prior to the Effective Time evidenced outstanding shares of Company
Stock that appear, based on information available to the Company, may have been
converted into the right to receive the Cash Merger Consideration (other than
shares of Company Stock as to which rights of dissent have been perfected as
provided in Section 2.04) (the "Certificates"), a letter of transmittal (which
shall include the certification described in Section 2.02 and such other matters
as the Surviving Corporation may determine and shall specify that delivery shall
be effected, and risk of loss and title
A-3
to the Certificates shall pass, only upon delivery of the Certificates to the
Surviving Corporation) and instructions to effect the surrender of the
Certificates in exchange for the Cash Merger Consideration, if any, payable with
respect to such Certificates. Upon surrender of a Certificate for cancellation
to the Surviving Corporation, together with such letter of transmittal, duly
completed and executed and containing the certification contemplated by Section
2.02, and such other customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall, subject to the provisions of
Section 2.02, be entitled to receive in exchange therefor the Cash Merger
Consideration payable with respect to the shares of Company Stock formerly
represented by such Certificate and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of shares of
Company Stock which is not registered in the share transfer records of the
Company, the Cash Merger Consideration, if any, payable in respect thereof may
be paid or issued to the transferee if the Certificate representing such shares
of Company Stock is presented to the Surviving Corporation, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid.
(b) Abandoned Property Laws. The Surviving Corporation shall not be liable
to any holder of a Certificate for any cash properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
2.04. Appraisal Rights of Shareholders. Shareholders may dissent from the
Merger and exercise their appraisal rights pursuant to and subject to the
provisions of Chapter 23 of the Tennessee Business Corporation Act.
ARTICLE III
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE COMPANY
The Company hereby represents, warrants, and covenants to and with Newco as
of the date of this Agreement and as of the Closing Date (as defined in Article
VIII below) as follows:
3.01. Organization. The Company is a business corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Tennessee. The Company has full corporate power and authority to conduct its
business as is now conducted and is qualified to do business in every
jurisdiction in which the character and location of the assets owned by it or
the nature of the business transacted by it requires qualification. The Company
has full corporate power and authority to make this Agreement and, subject to
the requisite approval of the shareholders to consummate the transactions
contemplated herein. This Agreement has been duly executed and delivered by the
Company as, subject to such shareholder approval, is a valid and binding
agreement of the Company in accordance with the its terms and subject to laws
relating to Creditors' rights generally.
3.02. Authorized and Outstanding Stock. The authorized capital stock of
the Company consists of 5,000,000 shares of common stock and 1,000,000 shares of
preferred stock, par value $1.00 per share. As of the date hereof, 1,301,101
shares of Company common stock are fully paid, validly issued, nonassessable and
outstanding, and 288,202 shares of common stock are held as treasury stock. No
shares of preferred stock are issued or outstanding.
3.03. Consents, Approvals, Filings, etc. of Governmental
Authorities. Neither the business nor operations of the Company requires any
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority in connection with the execution
and delivery of this Agreement, and the consummation of the transactions
contemplated herein, except for (i) such filings with the Securities and
Exchange Commission required for "going private" transactions; (ii) filings and
approvals required by the Federal Reserve Board, if any, and; (iii) the filing
of this Agreement together with articles of merger with corporate and regulatory
authorities, as appropriate.
A-4
ARTICLE IV
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF NEWCO
Newco hereby represents, warrants, and covenants to and with the Company as
of the date of this Agreement and as of the Closing Date as follows:
4.01. Organization. Newco is a business corporation duly incorporated,
validly existing, and in good standing under the laws of the State of Tennessee.
Newco has full corporate power and authority to enter into this Agreement and,
subject to the requisite approval of its sole shareholder, to consummate the
transactions contemplated herein. Newco has the corporate power and authority to
carry on its business as is presently being conducted and is qualified to do
business in every jurisdiction in which the character and location of the assets
owned by it or the nature of the businesses conducted by it requires
qualification. This Agreement has been duly executed and delivered by Newco and,
subject to such shareholder approval, is a valid and binding agreement of Newco
in accordance with the its terms and subject to laws relating to creditors'
rights generally.
4.02. Capital Stock. The authorized capital stock of Newco consists of
1,000 shares of common stock, no par value per share. As of the date hereof,
1,000 shares of Newco are fully paid, validly issued, nonassessable and
outstanding.
4.03. Consents, Approvals, Filings, etc. of Governmental
Authorities. Neither the business nor operations of Newco requires any consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority in connection with the execution and
delivery of this Agreement, and the consummation of the transactions
contemplated herein, except for the filing of this Agreement together with
articles of merger with corporate and regulatory authorities, as appropriate.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF NEWCO
The obligations of Newco to cause the Merger to be consummated shall be
subject to the satisfaction on or before the Closing Date of all of the
following conditions, except as Newco may waive such conditions in writing:
5.01. Shareholder Approval. This Agreement shall have been approved by
the sole shareholder of Newco, which cannot be waived.
5.02. Litigation. On the Closing Date, there shall not be pending or
threatened litigation in any court or any proceeding by any governmental
commission, board, or agency with a view to seeking, or in which it is sought,
to restrain or prohibit consummation of the Merger, or in which it is sought to
obtain divestiture, rescission, or damages in connection with the Merger or the
consummation of the Merger, and to the knowledge of any of the parties hereto,
no investigation by any governmental agency shall be pending or threatened that
might result in any such suit, action, or other proceeding.
5.03. Representations and Warranties. All representations and warranties
of the Company contained in this Agreement, other than any representations and
warranties as to future events, shall be true in all material respects on and as
of the Closing Date as if such representations and warranties were made on and
as of the Closing Date, and the Company shall have performed all agreements and
covenants required by this Agreement to be performed by it on or prior to the
Closing Date.
A-5
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to cause the Merger to be consummated shall
be subject to the satisfaction on or before the Closing Date of all the
following conditions, except as the Company may waive such conditions in
writing:
6.01. Litigation. On the Closing Date, there shall not be pending or
threatened litigation in any court or any proceeding by any governmental
commission, board, or agency with a view to seeking, or in which it is sought,
to restrain or prohibit consummation of the Merger, or in which it is sought to
obtain divestiture, rescission, or damages in connection with the Merger or the
consummation of the Merger, and to the knowledge of any of the parties hereto,
no investigation by any governmental agency shall be pending or threatened that
might result in any such suit, action, or other proceeding.
6.02. Representations and Warranties. All representations and warranties
of Newco contained in this Agreement, other than any representations and
warranties as to future events, shall be true in all material respects on and as
of the Closing Date as if such representations and warranties were made on and
as of the Closing Date, and Newco shall have performed all agreements and
covenants required by this Agreement to be performed by it on or prior to the
Closing Date.
6.03. Shareholder Approval. This Agreement shall have been approved by a
vote of the holders of not less than a majority of the outstanding shares of
Company Stock, which cannot be waived.
6.04. Dissenting and Cash-Out Shares. The aggregate number of Cash-Out
Shares and shares of Company Stock held by shareholders who shall have delivered
notice of their intent to exercise their dissenters' rights with respect to the
Merger shall not exceed 131,868.
ARTICLE VII
EXPENSES
Costs and expenses relating to the negotiation and drafting of this
Agreement and the transactions contemplated hereby shall be borne and paid by
the Company.
ARTICLE VIII
CLOSING DATE AND EFFECTIVE TIME
The closing of this Agreement and the transactions contemplated hereby
shall be held on the Closing Date (as defined in this Article VIII) at such time
and place as the parties hereto may mutually agree upon. The "Closing Date"
shall be such date as the Presidents of the Company and Newco, respectively, may
agree upon. Subject to the terms and upon satisfaction on or before the Closing
Date of all requirements of law and conditions specified in this Agreement, the
Company and Newco shall, at the Closing Date, execute, acknowledge, and deliver
such other documents and instruments and take such further action as may be
necessary or appropriate to consummate the Merger. The "Effective Time" is the
date on which the Merger is effective, which shall be on the date the articles
of merger are filed with the Secretary of State of Tennessee.
ARTICLE IX
AMENDMENTS
This Agreement may be amended only by written agreement duly authorized by
the boards of directors of the parties hereto prior to the Closing Date.
A-6
ARTICLE X
TERMINATION
This Agreement may be terminated by either the Company or Newco at any time
prior to the Effective Time. In the event of a termination of this Agreement,
this Agreement shall become void and shall have no effect and create no
liability on the part of any of the parties hereto or their respective
directors, officers, or shareholders.
ARTICLE XI
NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given at the
time either personally delivered or sent by registered or certified mail,
postage prepaid, as follows:
If to the Company, at 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
If to Newco, at 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
ARTICLE XII
MISCELLANEOUS
12.01. Further Assurances. Each party hereto agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
12.02. Severability. In the event that any of the provisions, or portions
thereof, of this Agreement are held to be illegal, unenforceable, or invalid by
any court of competent jurisdiction, the legality, enforceability, and validity
of the remaining provisions, or portions thereof, shall not be affected thereby,
and, in lieu of the illegal, unenforceable, or invalid provision, or portion
thereof, there shall be added a new legal, enforceable, and valid provision as
similar in scope and effect as is necessary to effectuate the results intended
by the deleted provision or portion.
12.03. Construction. Whenever used herein, the singular number shall
include the plural, and the plural number shall include the singular.
12.04. Gender. Any references herein to the masculine gender, or to the
masculine form of any noun, adjective, or possessive, shall be construed to
include the feminine or neuter gender and form, and vice versa.
12.05. Headings. The headings contained in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
of any of the provisions contained herein.
12.06. Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
12.07. Governing Law. THIS AGREEMENT HAS BEEN EXECUTED IN AND SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TENNESSEE, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES THEREOF OR OF ANY STATE. ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT OF THE SUBJECT MATTER HEREOF
SHALL BE BROUGHT AND ENFORCED EXCLUSIVELY IN COMPETENT COURTS OF XXXXXXXX
COUNTY, TENNESSEE AND THE PARTIES HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION
OF SUCH COURTS IN RESPECT OF SUCH ACTION OR PROCEEDING.
12.08. Court Costs and Attorneys' Fees. If any action at law or in
equity, including an action for declaratory relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing party shall
A-7
be entitled to recover costs of court and reasonable attorneys' fees from the
other party or parties to such action, which fees may be set by the court in the
trial of such action or may be enforced in a separate action brought for that
purpose, and which fees shall be in addition to any other relief that may be
awarded.
12.09. Inurement. Subject to any restrictions against transfer or
assignment as may be contained herein, the provisions of this Agreement shall
inure to the benefit of, and shall be binding on, the assigns and successors in
interest of each of the parties hereto.
12.10. Waivers. No waiver of any provision or condition of this Agreement
shall be valid unless executed in writing and signed by the party to be bound
thereby, and then only to the extent specified in such waiver. No waiver of any
provision or condition of this Agreement shall be construed as a waiver of any
other provision or condition of this Agreement, and no present waiver of any
provision or condition of this Agreement shall be construed as a future waiver
of such provision or condition.
12.11. Entire Agreement. This Agreement contains the entire understanding
between the parties hereto concerning the subject matter contained herein. There
are no representations, agreements, arrangements, or understandings, oral or
written, between or among the parties hereto relating to the subject matter of
this Agreement that are not fully expressed herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by as of the date first written above.
HFB FINANCIAL CORPORATION
By: /s/ XXXXX X. XXXX
------------------------------------
Xxxxx X. Xxxx
Its: President
HFB MERGER CORP.
By: /s/ XXXXX X. XXXX
------------------------------------
Xxxxx X. Xxxx
Its: President
A-8
