EXHIBIT 10.3
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of August 16, 2001, by and
among The South Financial Group, Inc. ("TSFG"), a South Carolina corporation,
and the individuals and entities set forth on the Signature Page hereof
(collectively, the "Group;" individually, a "Group Member").
RECITALS
The Group Members desire to sell all of their TSFG capital stock to TSFG. TSFG
believes that repurchase of its shares from the Group is in the best interests
of TSFG and its shareholders. TSFG and the Group also have agreed that it is in
their mutual interests to enter into this Agreement.
AGREEMENT
In consideration of the Recitals and the representations, warranties, covenants
and agreements contained herein and other good and valuable consideration, the
parties hereto agree as follows:
1. THE SALE. At the closing of the transactions contemplated herein, each
of the Group Members agrees to sell to TSFG (or the Broker if TSFG so
designates), and TSFG agrees to purchase (or to cause the Broker to
purchase) from the Group (the "Sale") all shares of common stock of
TSFG referenced on the Signature Page (collectively, the "Shares"). The
purchase price for the Shares shall be $18.75 per share. It is
contemplated that the Sale shall occur simultaneously with the
execution hereof. At closing, the Group Members shall deliver to Broker
certificates representing the Shares, duly endorsed (or accompanied by
duly executed stock powers), for transfer to TSFG (or TSFG's nominee),
and TSFG shall deliver the aggregate purchase price by wire transfer to
the Group Members.
2. REPRESENTATION AND WARRANTIES OF THE GROUP MEMBERS. Each of the Group
Members hereby represents and warrants to TSFG, as follows:
(a) Each Group Member has all requisite corporate and other power
and authority to execute, deliver and perform their respective
obligations under this Agreement. The execution, delivery and
performance of this Agreement by each Group Member and the
consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate
and other action (if applicable) on the part of any of the
Group Members.
(b) This Agreement has been duly executed and delivered by each
Group Member and constitutes the legal, valid and binding
obligation of such Group Member, enforceable against such
Group Member in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity.
(c) No governmental consent, approval, authorization, license or
clearance, or filing or registration with any governmental or
regulatory authority, is required in order to permit each
Group Member to perform their respective obligations under
this Agreement, except for such as have been obtained.
(d) The Shares set forth on the Signature Page represent all
shares of the capital stock of TSFG, if any, which are
beneficially owned or owned of record by each Group Member on
the date hereof. The Shares are owned free and clear of any
charge, claim, equitable interest, lien, option, pledge,
security interest, right of first refusal, encumbrance, or
similar restriction. None of the Group Members has a right to
vote any shares of the capital stock of TSFG other than those
set forth on the Signature Page with respect to such Group
Member, and no Group Member has granted any other person or
entity the right to vote the Shares.
(e) Each of the Group Members is an "accredited investor" within
the contemplation of federal securities laws. Each of the
Group Members is entering into this transaction voluntarily
and having made all inquiries of TSFG as such Group Member
deems appropriate.
3. REPRESENTATIONS AND WARRANTIES OF TSFG. TSFG hereby represents and
warrants to the Group, as follows:
(a) TSFG has all requisite corporate power and authority to
execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this
Agreement by TSFG and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite
corporate action on the part of TSFG.
(b) This Agreement has been duly executed and delivered by TSFG
and constitutes the legal, valid and binding obligation of
TSFG, enforceable against TSFG in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting
creditors' rights generally and by general principles of
equity.
(c) No governmental consent, approval, authorization, license or
clearance, or filing or registration with any governmental or
regulatory authority, is required in order to permit TSFG to
perform its obligations under this Agreement, except for such
as have been obtained.
4. COVENANTS. The Group and each Group Member covenants and agrees that
from the date hereof through the remainder of the term hereof:
(i) They shall not acquire, or offer or agree to acquire, or act
in concert with any affiliate, group or other person to
acquire, directly or indirectly, by purchase or otherwise,
beneficial ownership of, or the right to vote, any shares of
capital stock of TSFG or any securities convertible into such
capital stock.
(ii) They shall not directly or indirectly solicit, or act in
concert with any affiliate, group or other person to solicit,
"proxies", or directly or indirectly become a "participant" or
otherwise engage in any "solicitation" (as such terms are
defined in Regulation 14A under the Securities Exchange Act of
1934, as amended) with respect to any matter not recommended
or approved by a majority of the members of the Board of
Directors of TSFG then in office.
(iii) They shall not, nor shall they act in concert with any
affiliate, group or other person to (x) join with or assist
any person or entity, directly or indirectly in opposing, or
make any public statement in opposition to, any proposal
submitted by TSFG's management to a vote of TSFG's
shareholders or (y) join with or assist any person or entity,
directly or indirectly, in supporting or endorsing (including
supporting, requesting or joining in any request for a meeting
of shareholders in connection with), or make any statement in
favor of, or directly or indirectly solicit proxies (defined
as above) in favor of, any proposal submitted to a vote of
TSFG's shareholders that is opposed by TSFG's management.
(iv) They shall not directly or indirectly solicit or initiate any
communication regarding, or act in concert with any affiliate,
group or other person to solicit or initiate any communication
regarding, any acquisition offers for TSFG, whether by merger,
sale of assets, liquidation, exchange of shares or otherwise.
(v) They shall not directly or indirectly participate or act in
concert with any affiliate, group or other person to
participate, by encouragement or otherwise, in any litigation
against or derivatively on behalf of TSFG, its directors or
officers, except for testimony which may be required by law,
and except as may occur in the ordinary course of business
with respect to any loan, deposit or other transaction where
the Group Member or an affiliate is dealing with TSFG as a
customer.
(vi) They shall not provide, nor shall they act in concert with any
person to provide, any funds, services or facilities, to any
person in support of any activity by such person that would be
a violation of their covenants under the provisions of this
Section 4 if undertaken by any of them.
(vii) Each Group Member hereby releases TSFG, its directors and
officers, from any claim, obligation, liability, or cause of
action arising out of each Group Member's ownership of TSFG
Shares and unrelated to a breach of this Agreement by TSFG,
except for banking transactions in the ordinary course of
business, such as loans to such Group Members and except as
provided herein.
5. REMEDIES. TSFG and the Group acknowledge and agree that a material
breach or threatened material breach by either party may give rise to
irreparable injury inadequately compensable in damages, and accordingly
each party shall be entitled to injunctive relief to prevent a material
breach of the provisions hereof and to enforce specifically the terms
and provisions hereof in any state or federal court having
jurisdiction, in addition to any other remedy to which such aggrieved
party may be entitled in law or at equity.
6. TERM. This Agreement shall be effective upon the execution hereof,
and will remain in effect through December 31, 2004.
7. RELATIONSHIP OF GROUP MEMBERS. The parties hereto confirm and
acknowledge that the execution of this Agreement by each Group Member
shall not constitute an admission by such Group Member or be construed
to provide evidence that he or she, either directly or indirectly, has
now or prior hereto acted in concert with any other Group Member
regarding the capital stock of TSFG or any other security or
investment.
8. PUBLICITY. Any press release or other publicity with respect to this
Agreement, or any provisions thereof, shall be prepared and issued by
TSFG, but subject to the reasonable and good faith approval of the
Managing Partner of Mid-Atlantic Investors. During the term hereof, no
Group Member shall cause, suffer or, to the extent within its control,
permit any press release or other publicity concerning TSFG or its
operations to be created, issued or circulated without the prior
reasonable and good faith approval of TSFG's management. In the event
one party does not receive a response from the other party within two
business days of delivery of such press release or other publicity, the
same shall be deemed approved.
9. NOTICES. All notice requirements and other communications indicated
shall be deemed given when personally delivered or on the third
succeeding business day after being mailed by registered or certified
mail, return receipt requested, addressed to the Group and TSFG below
(except for communications pursuant to Section 8 above which shall be
permitted to be given by facsimile):
The Group: Jerry Shearer
289 Hunters Blind Drive
Columbia, SC 29212
Fax 803-749-7090
with a copy to: Jerry Zucker
The InterTech Group, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Fax 843-747-4092
TSFG: The South Financial Group, Inc.
102 South Main Street
Greenville, SC 29601
Fax: 864-239-6423
with a copy to: Wyche, Burgess, Freeman & Parham, P.A.
44 East Camperdown Way
Greenville, SC 29601
Fax: 864-235-8900
Attn: William P. Crawford, Jr.
10. GOVERNING LAW AND CHOICE OF FORUM. South Carolina law, unless
applicable federal law or regulation is deemed controlling, shall
govern the construction and enforceability of this Agreement. Any and
all actions concerning any dispute arising hereunder shall be filed and
maintained in a state or federal court, as appropriate, sitting in the
State of South Carolina.
11. SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by an applicable banking regulator or a court of
competent jurisdiction to be invalid, void for unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the successors and
assigns, and transferees by operation of law, of the parties. Except as
otherwise expressly provided for herein, this Agreement shall not inure
to the benefit of, be enforceable by or create any right or cause of
action in any person, including any shareholder of TSFG, other than the
parties hereto.
13. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties, covenants and agreements made herein shall
survive the execution and delivery of this Agreement.
14. AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written
agreement executed by all of the parties hereto.
15. DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings indicated, unless the context otherwise requires:
(a) The term "acquire" means every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise.
(b) The term "acting in concert" means (i) knowing participation in
a joint activity or conscious parallel action towards a common
goal whether or not pursuant to an express agreement, or (ii) a
combination of pooling of voting or other interests in the
securities of an issuer for a common purpose pursuant to any
contract, understanding, relationship, agreement or other
arrangement, whether written or otherwise.
(c) The term "affiliate" means a person or entity that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, one or more of the
Group Members.
(d) The terms "beneficial ownership" or "beneficially owned" shall
have the same meaning as set forth in Rule 13d-3 promulgated
pursuant to the Securities Exchange Act of 1934.
(e) The term "Broker" shall mean Sandler O'Neill & Partners, L.P.
(f) The term "control" (including the terms "controlling," "controlled
by," and "under common control with") means the possession, direct
or indirect, or the power to direct or cause the direction of the
management, activities or policies of a person or organization,
whether through the ownership of capital stock, by contract, or by
other legally enforceable means.
(g) The term "person" includes an individual, group acting in concert,
a corporation, a partnership, an association, a joint stock
company, a trust, an unincorporated organization or similar
company, a syndicate, or any other group formed for the purpose of
acquiring, holding or disposing of the equity securities of TSFG.
(h) The term "vote" means to vote in person or by proxy, or to give or
authorize the giving of any consent as a shareholder on any
matter.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but each of which together shall
constitute on and the same agreement.
17. DUTY TO EXECUTE. Each party agrees to execute any and all documents,
and to do and perform any and all acts and things necessary or proper
to effectuate or further evidence the terms and provisions of this
Agreement.
SIGNATURE PAGE
This Agreement has been duly executed and delivered as of the day and year first
written above.
Shares of TSFG
GROUP MEMBERS Common Stock Owned
Mid-Atlantic Investors 7 shares
By: /s/ Jerry Shearer, Managing Partner
--------------------------------------
Jerry Shearer, an Individual 114,525 shares
/s/ Jerry Shearer
--------------------------
Jerry Zucker, an Individual 80,000 shares
/s/ Jerry Zucker
-----------------------------