does not imply that the Company is aware of any disagreement by the Company with Pricewaterhouse Coopers LLP or any problem with PricewaterhouseCoopers LLP’s performance. Furthermore, for at least the next ten years, the Company will ensure compliance with the obligation of its external auditor to rotate its primary audit partner at least every five years.
a. For dismissal of the derivative claims contained in the Actions and release and settlement of all Released Derivative Claims against all Released Defendant Persons. “Released Derivative Claims” means any and all claims of any nature or description under statutory or common law of the federal government or any state (including without limitation claims arising under South Carolina law, the federal securities laws, or any rules or regulations promulgated thereunder, and claims within the exclusive jurisdiction
of federal courts), liabilities, obligations, causes of action, expenses, damages, losses or any other matters, whether known or unknown, foreseen or unforeseeable, certain or contingent, that have been or could have been asserted derivatively on behalf of TSFG or any of its subsidiaries in state or federal court or in arbitration or similar proceedings that are based on, relate in any manner to or arise out of the allegations, facts, events, transactions, acts, occurrences, statements, representations, misrepresentations, omissions or any other matter, thing or cause whatsoever, or any series thereof that (1) were involved, recited, described or referenced in the Actions5 or (2) otherwise arise out of, recite, describe, involve, refer to or relate to the compensation and benefits provided to Whittle by the Company, the Company’s reimbursement of Whittle’s expenses, Whittle’s severance package, or any matters alleged in the complaints in the Actions. “Released Defendant Persons” means Defendants, their respective predecessors, successors, parents, subsidiaries, affiliates, and their respective officers, employees, agents, attorneys, advisors, accountants, directors, heirs, personal representatives, beneficiaries and assigns.
b. For a release and settlement of all known and unknown claims of any Defendant for damages, injunctive relief, or any other remedies against plaintiffs, their attorneys, respective predecessors, successors, parents, subsidiaries, affiliates, and agents based upon, arising from, or related to the subject matter of the Actions;
c. For plaintiff Mercier’s dismissal of the class claims contained in the Mercier Action and release and settlement of all Released Class Claims against all Released Defendant Persons. “Released Class Claims” means any and all claims of any nature or description under statutory or common law of the federal government or any state (including without limitation claims arising under South Carolina law, the federal securities laws, or any rules or regulations promulgated thereunder), liabilities, obligations, causes of action, expenses, damages, losses or any other matters, whether known or unknown, foreseen or unforeseeable, certain or contingent, that have been or could have been asserted by any member of the settlement class in state or federal court or in arbitration or similar proceedings that are based on, relate in any manner to or arise out of the allegations, facts, events, transactions, acts, occurrences, statements, representations, misrepresentations, omissions or any other matter, thing or cause whatsoever, or any series thereof that (1) were involved, recited, described or referenced in the Actions6 or (2) otherwise arise out of, recite, describe, involve, refer to or relate to the compensation and benefits provided to Whittle by the Company, the Company’s reimbursement of Whittle’s expenses, Whittle’s severance package, or any matters alleged in the complaints in the Actions.
d. That in connection with the dismissal of the class claims asserted by plaintiff Mercier, (i) the parties to the Mercier Action will stipulate to a temporary settlement class consisting of all current shareholders of TSFG, for the purposes of settling and dismissing the claims of that class and (ii) the parties to the Mercier Action will further stipulate that, in the event that the settlement is not consummated, the stipulation as to the settlement class will be withdrawn and rendered void ab initio, the parties to the Mercier Action will jointly withdraw any pending motion for certification and request that the court de-certify any class certified pursuant to the Stipulation, and Defendants shall retain the right thereafter to object to class certification.
e. That TSFG and each of the Individual Defendants have denied and continue to deny all of the claims in the Actions and have denied and continue to deny having committed, aided, or attempted to commit any violations of law or breach of any duty of any kind, or otherwise having acted in any improper manner;
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5 Notwithstanding any background references to TSFG financial data in the Actions, plaintiffs do not release any fraud-based claims related to any future accounting restatement. Plaintiffs have no reason to suspect that any such restatement will occur
6 Notwithstanding any background references to TSFG financial data in the Actions, plaintiffs do not release any fraud-based claims related to any future accounting restatement. Plaintiffs have no reason to suspect that any such restatement will occur
f. That Defendants and plaintiffs are entering into the Stipulation because the proposed Settlement would eliminate the expenses, burdens, and risks associated with further litigation of the Actions;
g. That TSFG is further entering into this Stipulation because it believes that the proposed Settlement is in the best interests of TSFG and all of its shareholders;
h. That neither the Settlement nor any of its terms shall constitute an admission or finding of wrongful conduct, acts, or omissions;
i. That TSFG shareholders shall be notified of the proposed settlement by individual notice, by publication of a summary of the settlement in a national business publication, and by filing a Form 8-K with the Securities and Exchange Commission summarizing the settlement and attaching a copy of the proposed Settlement Documents; and
j. That, subject to the order of the State of South Carolina, County of Greenville, in the Court of Common Pleas for the Thirteenth Judicial Circuit (the “Court”)7, until judgment approving or rejecting the Settlement provided for in the Stipulation becomes Final, plaintiffs, and any and all other shareholders of TSFG, are barred and enjoined from commencing, prosecuting, instigating, or in any way participating in the commencement or prosecution of any action asserting any Released Derivative Claims or Released Class Claims, either directly, representatively, derivatively, or in any other capacity, against TSFG, any Individual Defendant, or any Released Defendant Person.
4. Subject to prior Court approval of the form of the Settlement Documents and the approval of the Settlement Documents by TSFG’s Board, the parties to the Actions will present the Settlement to the Court for hearing and approval as soon as practicable and for an Order dismissing the Actions with prejudice and barring all Released Derivative Claims and Released Class Claims, as provided in paragraph 3 above, without costs to any party (other than counsel fees and expenses as provided in paragraph 5 below). Parties to the Mercier Action will also request an Order certifying the class for settlement purposes only, as provided in paragraph 3 above. TSFG shall disseminate notice of the Settlement to its shareholders in such form and manner as approved by the Court and shall be solely responsible to pay, up to a maximum amount of $75,000, the costs and expenses related to providing such notice, with plaintiff’s counsel being responsible to pay any costs and expenses above that amount.
5. Upon execution and filing of the Stipulation, plaintiffs shall promptly apply to the Court for preliminary approval of the Settlement and the scheduling of a hearing for final approval of the Settlement and the application by plaintiffs’ counsel for an award of attorneys’ fees and expenses. The parties agree that the Stipulation will provide for the payment of attorneys’ fees, costs, and expenses to plaintiffs’ counsel in an amount of $500,000, subject to Court approval, to be paid $200,000 in the form of TSFG common stock, valued based on the average closing price of the TSFG common stock for the 10 trading day period ending the trading day immediately preceding the final settlement hearing, and $300,000 to be paid in cash, on behalf of the Individual Defendants by the Company’s D&O insurance carrier. Such payment shall be made in the manner directed by the Court and agreed by plaintiffs’ counsel, within ten business days of the date of the Court’s approval of the Settlement, including the fees and expenses, becomes Final. Except as expressly provided herein, plaintiffs’ counsel shall bear their own fees, costs, and expenses, and no Defendant shall assert any claim for expenses, costs, or fees against plaintiffs or plaintiffs’ counsel. A ruling or judgment of the Court approving the Settlement shall become “Final” for purposes of this AIP on the later of: (i) if there is an appeal from the ruling, the date of final affirmance of the ruling or judgment approving the Settlement on appeal and the expiration of the time for any further judicial review whether by appeal or reconsideration and, if further appeal is granted, the date of final affirmance of the ruling or judgment approving the Settlement following review pursuant to the grant; or (ii) the expiration of the time for the filing or noticing of any appeal from the ruling.
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7 Both the Mercier Action and the McMullen Action have been assigned to the Business Court Pilot Program of the South Carolina Circuit Courts before the Hon. Edward W. Miller.
6. The Settlement set forth in his AIP shall not become effective until the first date on which all of the following conditions have been satisfied, unless one or more of the conditions is expressly waived in writing by counsel for each of the parties:
a. Approval by the TSFG Board of the Stipulation and other Settlement Documents;
b. Plaintiffs’ counsel’s determination, following the completion of reasonable confirmatory discovery, that the Settlement is fair, reasonable, and adequate;
c. The entry of judgment by the Court in the Actions approving the Settlement and dismissing with prejudice the Actions without awarding costs to any party, except as provided herein; and
| d. | The judgment referred to in subparagraph (c) above shall have become Final. |
7. This AIP shall be null and void and of no force and effect if any of the conditions set forth in paragraph 6 are not met. In the event the Settlement is not consummated for any reason: (a) the parties will revert to their litigation positions immediately prior to the execution of this AIP; (b) the fact and terms of this Settlement shall not be admissible in any trial, summary judgment, or other determination in these Actions; (c) this AIP shall not be deemed to prejudice in any way the positions of the parties with respect to the Actions or to constitute an admission of fact by any party in any respect and shall not entitle any party to recover any costs or expenses incurred in connection with the implementation of this AIP; and (d) none of the terms of this AIP shall be effective or enforceable, except for this Paragraph.
8. This AIP may be executed in counterparts, including by signature transmitted by facsimile. Each counterpart when so executed shall be deemed to be an original, and all such counterparts together shall constitute the same instrument. The undersigned signatories represent that they have authority from their respective clients to release their respective claims and to execute this AIP. The terms of this AIP shall inure to and be binding upon the parties and their respective agents, executors, heirs, personal representatives, successors, and assigns, subject to the conditions set forth herein.
9. This AIP and the Settlement contemplated by it shall be governed by, and construed in accordance with, the laws of the State of South Carolina, without regard to conflict of laws principles.
10. Each of the attorneys executing this AIP has been duly empowered and authorized by his/her respective client(s) to do so.
11. Except as provided herein, neither TSFG nor any Individual Defendant shall bear any expenses, costs, damages, or fees alleged or incurred by plaintiffs, or the attorneys, experts, advisors, agents, or representatives of the plaintiffs.
| 12. | This AIP may be modified or amended only by a writing signed by the signatories hereto. |
13. Neither the existence of this AIP nor the provisions contained herein shall be deemed a presumption, concession, or admission by TSFG , any Individual Defendant, or any Released Defendant Person of any breach of duty, liability, default, or wrongdoing as to any facts or claims alleged or asserted in the Actions, or in any other actions or proceedings, and shall not be interpreted, construed, deemed, invoked, offered, or received in evidence or otherwise used in the Actions or any other action or proceeding of any nature whatsoever, provided, however, that TSFG, the Individual Defendants, and/or any Released Defendant Person may file or offer into evidence the Stipulation, the Final Judgment, and/or the releases executed pursuant thereto in any action or proceeding that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good-faith settlement, judgment bar, reduction, or any other theory of claim preclusion or issue preclusion or defense or counterclaim similar to claim or issue preclusion.
IT IS HEREBY AGREED by the undersigned as dated below.
DATED: March 24, 2009 | WHETSTONE, MYERS, PERKINS |
| Charles W. Whetstone, Jr. |
| 601 Devine Street (In the Vista) |
| Columbia, South Carolina 29202 |
| Attorneys for Plaintiff Vernon A. Mercier |
DATED: March 24, 2009 | MOTLEY RICE LLC |
| Attorneys for Plaintiff John S. McMullen |
DATED: March 24, 2009 WYCHE BURGESS FREEMAN
& PARHAM, P.A.
Henry L. Parr, Jr.
Wallace K. Lightsey
J. Theodore Gentry
David H. Koysza
44 East Camperdown Way, 29601
Post Office Box 728
Greenville, S.C. 29602-0728
Tel: (864) 242-8200
Fax: (864) 235-8900
Attorneys for Defendants The South Financial Group, Inc., William P. Brant, J.W. Davis, M. Dexter Hagy,William S. Hummers, III, Challis M. Lowe, Darla D.Moore, Jon W. Pritchett, H. Earle Russell, Jr., Edward J. Sebastian, John C.B. Smith, Jr., William R. Timmons, III, David C. Wakefield, III, Michael R. Hogan, and WilliamP. Crawford, Jr.
DATED: March 24, 2009 | NEXSEN PRUET, LLC |
William W. Wilkins
201 W. McBee Avenue
Suite 400
Greenville, S.C. 29601
Tel: (864) 282-1199
Fax: (864) 477-2699
Attorneys for Defendant Mack I. Whittle, Jr.
