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Provident Bankshares Corp · S-4/A · On 3/12/04

Filed On 3/12/04 1:05pm ET   ·   SEC File 333-112083   ·   Accession Number 1193125-4-40195

  in   Show  and 
  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 3/12/04  Provident Bankshares Corp         S-4/A                 10:258                                    RR Donnelley/FA

Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction   ·   Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4/A       Amendment #1 to Form S-4                            HTML  1,736K 
 2: EX-5        Opinion re: Legality                                HTML     16K 
 3: EX-8.1      Opinion re: Tax Matters                             HTML     17K 
 4: EX-23.3     Consent of Experts or Counsel                       HTML      7K 
 5: EX-23.4     Consent of Experts or Counsel                       HTML      8K 
 6: EX-23.5     Consent of Experts or Counsel                       HTML      8K 
 7: EX-23.6     Consent of Experts or Counsel                       HTML      8K 
 8: EX-23.8     Consent of Experts or Counsel                       HTML      7K 
 9: EX-99.3     Miscellaneous Exhibit                               HTML     23K 
10: EX-99.4     Miscellaneous Exhibit                               HTML     14K 


S-4/A   ·   Amendment #1 to Form S-4
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page
"Table of Contents
"Questions and Answers About the Merger
"Summary
"Comparative Per Share Data
"Selected Historical Consolidated Financial Information
"Selected Historical Financial Information for Provident Bankshares
"Selected Historical Financial Information for Southern Financial
"Summary Selected Pro Forma Combined Data
"Market Price and Dividend Information
"Annual Meeting of Provident Bankshares Shareholders
"General
"Purpose of the Meeting
"Record Date for Voting at the Meeting
"Quorum and Shareholder Vote Required
"Voting of Proxies
"How to Revoke a Proxy
"Solicitation of Proxies
"Shares Held by Provident Bankshares Officers and Directors and by Southern Financial
"Participants in Provident Bank s 401(k) Plan
"Recommendation of Provident Bankshares Board of Directors
"Special Meeting of Southern Financial Shareholders
"Shares Held by Southern Financial s Officers and Directors and by Provident Bankshares
"Recommendation of Southern Financial s Board of Directors
"Ownership of Provident Bankshares Common Stock
"Ownership of Southern Financial Common Stock
"The Merger
"About the Parties to the Merger
"Form of the Merger
"Exchange of Southern Financial Stock Certificates
"Provident Bankshares Shareholders Are Not Required to Exchange Stock Certificates
"Treatment of Southern Financial Stock Options
"Material Federal Income Tax Consequences of the Merger
"Background of the Merger
"Recommendation of the Provident Bankshares Board; Provident Bankshares Reasons for the Merger
"Recommendation of the Southern Financial Board and Southern Financial s Reasons for the Merger
"Opinion of Provident Bankshares Financial Advisor
"Opinion of Southern Financial s Financial Advisor
"Dissenters Rights
"Interests of Southern Financial Directors and Executive Officers in the Merger that Differ From the Interests
"Regulatory Approvals Needed to Complete the Merger
"Accounting Treatment of the Merger
"Resale of Provident Bankshares Common Stock
"The Merger Agreement
"Terms of the Merger
"When the Merger Will be Completed
"Conditions to Completing the Merger
"Conduct of Business Before the Merger
"Covenants of Southern Financial and Provident Bankshares in the Merger Agreement
"Representations and Warranties Made by Provident Bankshares and Southern Financial in the Merger Agreement
"Terminating the Merger Agreement
"Termination Fee
"Expenses
"Changing the Terms of the Merger Agreement
"Management and Operations Following the Merger
"Board of Directors
"Management
"Operations
"Pro Forma Financial Information
"A Warning About Forward-Looking Statements
"Description of Provident Bankshares Common Stock
"Common Stock
"Preferred Stock
"Shareholder Protection Rights Agreement
"Comparison of Rights of Shareholders
"Authorized Stock
"Corporate Governance
"Voting Rights
"Required Vote for Authorization of Certain Actions
"Dividends
"Appraisal Rights
"Shareholders Meetings
"Action by Shareholders Without a Meeting
"Limitation of Personal Liability of Directors
"Shareholder Rights Plan
"Amendment of the Bylaws
"Amendment of the Articles of Incorporation
"Selected Provisions in the Articles of Incorporation and Bylaws of Provident Bankshares
"Business Combinations with Interested Shareholders
"Special Meetings of Shareholders
"Advance Notice Provisions for Shareholder Nominations and Proposals
"Code of Business Conduct and Ethics
"Meetings of the Board of Directors
"Committees of the Board of Directors
"Corporate Governance Committee Procedures
"Shareholder Communications
"Directors Compensation
"Independent Directors
"Election of Directors
"Approval of the Provident Bankshares Corporation 2004 Equity Compensation Plan
"Proposed Action Regarding the 2004 Equity Compensation Plan
"Summary Description of the 2004 Equity Compensation Plan
"Federal Income Tax Treatment of Awards Under the 2004 Equity Compensation Plan
"Specific Benefits Under the 2004 Equity Compensation Plan
"Equity Compensation Plan Information
"Ratification of Appointment of Independent Auditors
"Audit Fees
"Report of the Audit Committee
"Executive Compensation
"Summary Compensation Table
"Option Grants in Last Fiscal Year
"Aggregated Option Exercises in Last Fiscal Year and Option Value at Fiscal Year End
"Pension Plans
"Report of the Compensation Committee
"Compensation Committee Interlocks and Insider Participation
"Performance Graph
"Other Information Relating to Directors and Executive Officers of Provident Bankshares
"Section 16(a) Beneficial Ownership Reporting Compliance
"Transactions With Management
"Submission of Future Shareholder Proposals and Nominations
"Provident
"Southern Financial
"Miscellaneous
"Legal Matters
"Experts
"Where You Can Find More Information
"APPENDIX A Agreement and Plan of Reorganization
"Merger
"Articles of Incorporation, Bylaws and Facilities of Continuing Corporation
"Board of Directors and Officers of Continuing Corporation
"Effect of Merger
"Liabilities of Continuing Corporation
"Ratification by Shareholders
"Tax Consequences
"Consideration and Exchange Procedures
"Merger Consideration
"Dissenting Shares
"Exchange of Shares
"Representations and Warranties of Southern Financial
"Organization
"Capitalization
"Approvals; Authority
"Investments
"Financial Statements
"Loan Portfolio
"Certain Loans and Related Matters
"Real Property Owned or Leased
"Personal Property
"Environmental Laws
"Litigation and Other Proceedings
"Taxes
"Contracts and Commitments
"Insurance
"No Conflict With Other Instruments
"Laws and Regulatory Filings
"Absence of Certain Changes
"Employment Relations
"Employee Benefit Plans
"Deferred Compensation Arrangements
"Brokers and Finders
"Accounting Controls
"Securities and Exchange Commission Reporting Obligations
"Outstanding Trust Preferred Securities of Subsidiary Trusts
"Community Reinvestment Act
"Shareholders List
"Fairness Opinion
"Pending Acquisitions
"Southern Financial Information
"Representations and Warranties of Bankshares
"Bankshares Employee Benefit Plans
"Regulatory Approvals; Tax Opinion
"Allowance for Loan Losses
"Environmental Matters
"Ability to Pay Merger Consideration
"Bankshares Information
"Covenants of Southern Financial
"Shareholder Approval and Reasonable Best Efforts
"Activities of Southern Financial Pending Closing
"Access to Properties and Records
"Information for Regulatory Applications and SEC Filings
"Standstill Provision
"Affiliates Letters
"Certain Policies and Actions of Southern Financial
"Completion of the Essex Merger
"Trust Preferred Issues
"Covenants of Bankshares
"Shareholder Approval and Best Efforts
"Activities of Bankshares Pending Closing
"Information for Regulatory Applications and Proxy Solicitation
"Registration Statement
"Applications
"Nasdaq Listing
"Rule 144 Compliance
"Issuance of Bankshares Common Stock
"Indemnification; Insurance
"Assumption of Southern Financial Stock Options
"Supplemental Indentures
"Certain Employee Matters
"Appointment of Directors
"Mutual Covenants of Bankshares and Southern Financial
"Notification; Updated Disclosure Schedules
"Confidentiality
"Publicity
"Closing
"Effective Time
"Termination
"Effect of Termination
"Conditions to Obligations of Bankshares
"Compliance with Representations and Warranties
"Performance of Obligations
"The Essex Merger
"Conditions to Obligations of Southern Financial
"Conditions to Respective Obligations of Bankshares and Southern Financial
"Government Approvals
"Shareholder Approval
"Tax Opinion
"Registration of Bankshares Common Stock
"Listing of Bankshares Common Stock
"Definitions
"Non-Survival of Representations and Warranties
"Amendments
"Notices
"Controlling Law
"Headings
"Modifications or Waiver
"Severability
"Assignment
"Consolidation of Agreements
"Counterparts
"Binding on Successors
"Gender
"Disclosures
"APPENDIX B Fairness Opinion of Keefe, Bruyette & Woods, Inc
"APPENDIX D Article 15 of the Virginia Code on Dissenters Rights
"APPENDIX E Audit Committee Charter of Provident Bankshares Corporation
"APPENDIX F Provident Bankshares Corporation 2004 Equity Compensation Plan

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  AMENDMENT #1 TO FORM S-4  
Table of Contents

As filed with the Securities and Exchange Commission on March 12, 2004.

Registration No. 333-112083


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


AMENDMENT NO. 1

FORM S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933


PROVIDENT BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

Maryland   6022   52-1518642

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

  (I.R.S. Employer
Identification Number)

114 East Lexington Street

Baltimore, Maryland 21202

(410) 281-7000

(Address, including ZIP Code, and telephone number, including area code, of registrant’s principle executive offices)


Robert L. Davis, Esq.

General Counsel

114 East Lexington Street

Baltimore, Maryland 21202

(410) 281-7000

(Name, address, including ZIP Code, and telephone number, including area code, of agent for service)


Copies to:

Paul M. Aguggia, Esq.

Aaron M. Kaslow, Esq.

Muldoon Murphy Faucette & Aguggia LLP

5101 Wisconsin Avenue, N.W.

Washington, D.C. 20016

(202) 362-0840

 

William T. Luedke IV, Esq.

Charlotte M. Rasche, Esq.

Bracewell & Patterson, L.L.P.

South Tower Pennzoil Place

711 Louisiana Street, Suite 2900

Houston, Texas 77002-2781

(713) 223-2900


Approximate date of commencement of proposed sale of the securities to the public:    As soon as practicable after the effectiveness of this registration statement and the satisfaction or waiver of all other conditions to the Merger described in

the 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.  ¨


Calculation of Registration Fee


Title of each class of

securities to be registered

  

Amount

to be

registered (1)

  

Proposed maximum

offering price

per unit (2)

  

Proposed maximum

aggregate offering

price (2)

  

Amount of

registration

fee (2)

 

 

Common stock, par value $1.00 per share

   8,800,000    N/A    $ 152,911,349    $ 12,371 (3)

(1) Represents the estimated maximum number of shares of common stock, par value $1.00 per share, issuable by Provident Bankshares Corporation (“Provident Bankshares”) upon the consummation of the merger with Southern Financial Bancorp, Inc. and computed based on the estimated maximum number of such shares (7,781,748) including shares issuable upon the exercise of outstanding stock options, that may be exchanged for the securities being registered. This number also includes 337,349 additional shares available to be issued in the event certain adjustments called for in the merger agreement are required before the effective time of the merger. Pursuant to Rule 416, this registration statement also covers an indeterminate number of shares of common stock as may become issuable as a result of stock splits, stock dividends or similar transactions.
(2) Pursuant to Rule 457(f)(1), the registration fee for the Provident Bankshares common stock is based on the average of the high and low market value of Southern Financial Bancorp, Inc. common stock, par value $.01 per share, on January 20, 2004 ($30.775). Pursuant to Rule 457(f)(3), the maximum cash portion of the merger consideration to be paid by Provident Bankshares in connection with the transaction has been deducted from the value of securities to be received by Provident Bankshares in the transaction.
(3) Previously paid.

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 that specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) or the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.



Table of Contents

The information in this joint proxy-prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement-prospectus is not an offer to sell these securities, and we are not soliciting to buy these securities, in any state where the offer or sale is not permitted.

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MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

The boards of directors of Provident Bankshares Corporation and Southern Financial Bancorp, Inc. have agreed to a merger of our companies. If the merger is completed, each share of Southern Financial common stock will be converted into 1.0875 shares of Provident Bankshares common stock (plus cash instead of any fractional shares) and $11.125 in cash without interest. Provident Bankshares’ shareholders will continue to own their existing shares. After completion of the merger, we expect that current Provident Bankshares shareholders will own approximately 75% of the combined company and Southern Financial shareholders will own approximately 25% of the combined company. Provident Bankshares common stock is listed on the Nasdaq National Market under the symbol “PBKS.” Based on the closing price of Provident Bankshares common stock on March 10, 2004 of $30.83, Southern Financial shareholders would receive merger consideration with a value of approximately $44.65 for each share of Southern Financial common stock they own.

As a result of Southern Financial shareholders receiving a combination of Provident Bankshares common stock and cash in exchange for Southern Financial common stock, Southern Financial shareholders will recognize gain, but not loss, equal to the lesser of the amount of cash received or the amount of gain realized in the exchange. The merger will be a tax-free transaction for Provident Bankshares shareholders.

We cannot complete the merger unless we obtain the necessary government approvals and unless the shareholders of both companies approve the merger agreement. Each of us is asking our shareholders to consider and vote on this merger proposal at our respective companies’ meetings of shareholders. Whether or not you plan to attend your company’s meeting, please take the time to vote by completing and mailing the enclosed proxy card to the appropriate company. If you sign, date and mail your proxy card without indicating how you want to vote, your proxy will be counted as a vote “FOR” the merger agreement. If you do not return your proxy card, or if you do not instruct your broker how to vote any shares held for you in “street name,” the effect will be a vote against the merger agreement.

The places, dates and times of the shareholders’ meetings are as follows:

 

For Provident Bankshares shareholders:   For Southern Financial shareholders:

Provident Bankshares

 

Fauquier Springs Country Club

114 East Lexington Street

 

Springs Road

Baltimore, Maryland

 

Warrenton, Virginia

April 21, 2004

 

April 29, 2004

10:00 a.m, local time

 

3:00 p.m., local time

This document contains a more complete description of the shareholders meetings and the terms of the merger. We urge you to review this entire document carefully. You may also obtain information about Provident Bankshares and Southern Financial from documents each company has filed with the Securities and Exchange Commission. We enthusiastically support the merger and recommend that you vote in favor of the merger agreement.

Picture -- LOGO

 

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Gary N. Geisel

Chairman and Chief Executive Officer

 

Georgia S. Derrico

Chairman and Chief Executive Officer

Provident Bankshares Corporation

 

Southern Financial Bancorp, Inc.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this joint proxy statement - prospectus or determined if this joint proxy statement-prospectus is accurate or adequate. Any representation to the contrary is a criminal offense. The securities we are offering through this document are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either of our companies, and they are not insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund, the Bank Insurance Fund or any other governmental agency.

Joint Proxy Statement-Prospectus dated March 12, 2004

and first mailed to the shareholders of Provident Bankshares on or about March 17, 2004

and to the shareholders of Southern Financial on or about March 18, 2004

 


Table of Contents

This document incorporates important business and financial information about Provident Bankshares and Southern Financial from documents filed with the Securities and Exchange Commission that have not been included in or delivered with this document. You may read and copy these documents at the SEC’s public reference facilities. Please call the SEC at 1-800-SEC-0330 for information about these facilities. This information is also available at the Internet site the SEC maintains at http://www.sec.gov. Reports and other information relating to Provident Bankshares and Southern Financial are also available at the offices of the National Association of Securities Dealers. See “Where You Can Find More Information” on page 111.

 

You also may request copies of these documents from Provident Bankshares and Southern Financial. Provident Bankshares and Southern Financial will provide you with copies of these documents, without charge, upon written or oral request to:

 

Provident Bankshares Corporation

114 East Lexington Street

Baltimore, Maryland 21201

Attention: Robert L. Davis, General Counsel and Corporate Secretary

Telephone: (410) 277-7000

 

Southern Financial Bancorp, Inc.

37 East Main Street

Warrenton, Virginia 20186

Attention: Patricia A. Ferrick, Chief Financial Officer

Telephone: (540) 349-3900

 

If you are a Provident Bankshares shareholder and would like to request documents from Provident Bankshares or Southern Financial, please do so by April 14, 2004 to receive them before the Provident Bankshares annual meeting. If you are a Southern Financial shareholder and would like to request documents from Provident Bankshares or Southern Financial, please do so by April 22, 2004 to receive them before the Southern Financial special meeting.


Table of Contents

Provident Bankshares Corporation

114 East Lexington Street

Baltimore, Maryland 21201

(410) 277-7000

 


 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 


 

The annual meeting of shareholders of Provident Bankshares Corporation will be held on April 21, 2004 at 10 :00 a.m., local time, at the offices of Provident Bankshares, 114 East Lexington Street, Baltimore, Maryland, for the following purposes:

 

  1. To approve and adopt the Agreement and Plan of Reorganization, dated as of November 3, 2003, by and between Provident Bankshares Corporation and Southern Financial Bancorp, Inc., pursuant to which Southern Financial will merge with and into Provident Bankshares, all on and subject to the terms and conditions contained therein;

 

  2. To elect six directors to a three-year term of office;

 

  3. To approve the Provident Bankshares Corporation 2004 Equity Compensation Plan;

 

  4. To ratify the appointment of KPMG LLP as independent auditors of Provident Bankshares for the fiscal year ending December 31, 2004; and

 

  5. To transact any other business as may properly come before the meeting or any adjournment or postponement.

 

Only shareholders of record at the close of business on March 1, 2004 will be entitled to notice of and to vote at the meeting and at any adjournment or postponement of the meeting.

 

By Order of the Board of Directors

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Gary N. Geisel

Chairman and Chief Executive Officer

 

Baltimore, Maryland

March 17, 2004

 

Provident Bankshares’ board of directors unanimously recommends that you vote “FOR” the listed proposals. Whether or not you plan to attend the meeting, please complete, sign, date and return the enclosed proxy in the accompanying pre-addressed postage-paid envelope.


Table of Contents

Southern Financial Bancorp, Inc.

37 East Main Street

Warrenton, Virginia 20186

(540) 349-3900

 


 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 


 

A special meeting of shareholders of Southern Financial Bancorp, Inc. will be held on April 29, 2004 at 3:00 p.m., local time, at the Fauquier Springs Country Club, Springs Road, Warrenton, Virginia, for the following purposes:

 

  1. To approve and adopt the Agreement and Plan of Reorganization, dated as of November 3, 2003, by and between Provident Bankshares Corporation and Southern Financial Bancorp, Inc., pursuant to which Southern Financial will merge with and into Provident Bankshares, all on and subject to the terms and conditions contained therein; and

 

  2. To transact any other business as may properly come before the meeting or any adjournment or postponement.

 

Only shareholders of record at the close of business on March 8, 2004 will be entitled to notice of and to vote at the meeting and at any adjournment or postponement of the meeting.

 

Southern Financial shareholders have the right to dissent from the merger and obtain payment in cash of the fair value of their shares of Southern Financial common stock under applicable provisions of Virginia law. To perfect dissenters’ rights, Southern Financial shareholders must file a written notice of intent to demand payment before the taking of the vote on the merger at the special meeting, must not vote in favor of the merger and must file a written demand with Provident Bankshares for payment for the shares of Southern Financial stock and for an appraisal of the value of those shares. A copy of the applicable Virginia statutory provisions is included as Appendix D to the accompanying joint proxy statement-prospectus and a summary of the provisions can be found under the caption “The Merger—Dissenters’ Rights.”

 

By Order of the Board of Directors

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Richard P. Steele

Secretary

 

Warrenton, Virginia

March 18, 2004

 

Southern Financial’s board of directors unanimously recommends that you vote “FOR” the approval and adoption of the merger agreement. Whether or not you plan to attend the meeting, please complete, sign, date and return the enclosed proxy in the accompanying pre-addressed postage-paid envelope.


Table of Contents

 Table of Contents

 

QUESTIONS AND ANSWERS ABOUT THE MERGER

   1

Summary

   4

Comparative Per Share Data

   14

Selected Historical Consolidated Financial Information

   15

Selected Historical Financial Information for Provident Bankshares

   16

Selected Historical Financial Information for Southern Financial

   18

Summary Selected Pro Forma Combined Data

   20

Market Price and Dividend Information

   21

Annual Meeting of Provident Bankshares Shareholders

   22

General

   22

Purpose of the Meeting

   22

Record Date for Voting at the Meeting

   22

Quorum and Shareholder Vote Required

   22

Voting of Proxies

   23

How to Revoke a Proxy

   24

Solicitation of Proxies

   24

Shares Held by Provident Bankshares Officers and Directors and by Southern Financial

   24

Participants in Provident Bank’s 401(k) Plan

   24

Recommendation of Provident Bankshares’ Board of Directors

   24

Special Meeting of Southern Financial Shareholders

   25

General

   25

Purpose of the Meeting

   25

Record Date for Voting at the Meeting

   25

Quorum and Shareholder Vote Required

   25

Voting of Proxies

   25

How to Revoke a Proxy

   26

Solicitation of Proxies

   26

Shares Held by Southern Financial’s Officers and Directors and by Provident Bankshares

   27

Recommendation of Southern Financial’s Board of Directors

   27

Ownership of Provident Bankshares Common Stock

   28

Ownership of Southern Financial Common Stock

   30

The Merger

   32

About the Parties to the Merger

   32

Form of the Merger

   33

Exchange of Southern Financial Stock Certificates

   33

Provident Bankshares Shareholders Are Not Required to Exchange Stock Certificates

   34

Treatment of Southern Financial Stock Options

   34

Material Federal Income Tax Consequences of the Merger

   34

Background of the Merger

   37

Recommendation of the Provident Bankshares Board; Provident Bankshares’ Reasons for the Merger

   38

Recommendation of the Southern Financial Board and Southern Financial’s Reasons for the Merger

   40

Opinion of Provident Bankshares’ Financial Advisor

   41

Opinion of Southern Financial’s Financial Advisor

   46

 

i


Table of Contents

Dissenters’ Rights

   54

Interests of Southern Financial Directors and Executive Officers in the Merger that Differ From the Interests of Southern Financial Shareholders

   56

Regulatory Approvals Needed to Complete the Merger

   58

Accounting Treatment of the Merger

   59

Resale of Provident Bankshares Common Stock

   59

The Merger Agreement

   60

Terms of the Merger

   60

When the Merger Will be Completed

   60

Conditions to Completing the Merger

   60

Conduct of Business Before the Merger

   61

Covenants of Southern Financial and Provident Bankshares in the Merger Agreement

   64

Representations and Warranties Made by Provident Bankshares and Southern Financial in the Merger Agreement

   66

Terminating the Merger Agreement

   66

Termination Fee

   67

Expenses

   67

Changing the Terms of the Merger Agreement

   67

Management and Operations Following the Merger

   68

Board of Directors

   68

Management

   68

Operations

   68

Pro Forma Financial Information

   69

A Warning About Forward-Looking Statements

   76

Description of Provident Bankshares Common Stock

   77

Common Stock

   77

Preferred Stock

   77

Shareholder Protection Rights Agreement

   78

Comparison of Rights of Shareholders

   80

Authorized Stock

   80

Corporate Governance

   80

Voting Rights

   80

Required Vote for Authorization of Certain Actions

   81

Dividends

   81

Appraisal Rights

   81

Shareholders’ Meetings

   82

Action by Shareholders Without a Meeting

   83

Board of Directors

   83

Limitation of Personal Liability of Directors

   84

Shareholder Rights Plan

   85

Amendment of the Bylaws

   85

Amendment of the Articles of Incorporation

   85

Selected Provisions in the Articles of Incorporation and Bylaws of Provident Bankshares

   86

Business Combinations with Interested Shareholders

   86

Board of Directors

   87

Special Meetings of Shareholders

   87

Advance Notice Provisions for Shareholder Nominations and Proposals

   87

Preferred Stock

   87

 

ii


Table of Contents

Corporate Governance of Provident Bankshares

   88

General

   88

Code of Business Conduct and Ethics

   88

Meetings of the Board of Directors

   88

Committees of the Board of Directors

   88

Corporate Governance Committee Procedures

   89

Shareholder Communications

   90

Directors’ Compensation

   91

Independent Directors

   91