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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Plan of Merger"), dated as
of
November 16, 2004, is entered into by and
between CB Merger Company ("Merger
Co.") and Commercial National Financial
Corporation ("Commercial").
Merger Co. is a corporation, duly organized and validly existing
under
the laws of the State of Michigan. As of
the date of this Plan of Merger, the
authorized capital stock of Merger Co.
consists of 60,000 shares of common
stock, no par value ("Merger Co. Common
Stock"), of which 100 shares are issued
and outstanding. All of Merger Co.'s
outstanding shares are owned by Commercial.
Commercial is a corporation, duly organized
and validly existing under the laws
of the State of Michigan. As of the date of
this Plan of Merger, the authorized
capital stock of Commercial consists of its
common stock, no par value
("Commercial Common Stock"), of which
5,000,000 shares are authorized and of
which 4,097,973 shares are issued and
outstanding. The respective Boards of
Directors of Commercial and Merger Co. deem
this Plan of Merger advisable and in
the best interests of each such corporation
and their respective shareholders.
The respective Boards of Directors of
Commercial and Merger Co. have each
adopted the Plan of Merger, directed that
this Plan of Merger be submitted for
approval by their respective shareholders,
and recommended that the Plan of
Merger be approved by their respective
shareholders.
Merger Co. and Commercial agree:
ARTICLE I THE
MERGER
1.1 THE MERGER. Subject to the terms and conditions of this Plan
of
Merger, and in accordance with the Michigan
Business Corporation Act (the
"Act"), at the Effective Time (as defined
in Section 1.2), Merger Co. will merge
with and into Commercial (the "Merger").
Commercial will survive the Merger and
will continue its corporate existence
(referred to after the Merger as the
"Surviving Corporation") under the laws of
the State of Michigan. Upon
consummation of the Merger, the separate
corporate existence of Merger Co. will
terminate and the name of the Surviving
Corporation will be "Commercial National
Financial Corporation."
1.2 EFFECTIVE TIME. After approval of this Plan of Merger by
the
shareholders of Merger Co. and Commercial,
a certificate of merger will be filed
with the Michigan Department of Labor and
Economic Growth for approval. The
Merger will become effective (the
"Effective Time") when the certificate of
merger has been filed with the Michigan
Department of Labor and Economic Growth
or as of any later time specified in the
certificate of merger.
1.3 EFFECTS OF THE MERGER. At and after the Effective Time, the
Merger
will have the effects set forth in the Act
and in this Plan of Merger.
1.4 TREATMENT OF COMMON STOCK.
(a) At the Effective Time, by virtue of the Merger and without
any shareholder action, the following will
occur:
(i) all outstanding shares of Commercial Common Stock
(other than shares of Commercial Common
Stock, the holders of which exercise and
perfect dissenters' rights as set forth in
Article III), whether Record Shares
(as hereinafter defined), or Street Shares
(as hereinafter defined), held by a
Holder (as hereinafter defined) holding
fewer than 4,000 shares of Commercial
Common Stock immediately before the
Effective Time (a "Nonqualified Holder")
shall, without any action on the part of
the holder thereof, be canceled and
converted into the right to receive cash
equal to $12.50 per share of Commercial
Common Stock (the "Cash Consideration");
provided, however, that Commercial may
presume that all Street Shares are held by
Holders holding fewer than 4,000
shares of Commercial Common Stock
immediately before the Effective Time unless
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either Commercial or a beneficial owner of
Street Shares are able to demonstrate
to Commercial's satisfaction that such
shares are held beneficially by a Holder
holding 4,000 or more shares of Commercial
Common Stock immediately before the
Effective Time, in which event such shares
shall remain outstanding with all
rights, privileges, and powers existing
immediately before the Effective Time;
(ii) all outstanding shares of Commercial Common
Stock other than those described in
subparagraph 1.4(a)(i) as being converted
into the right to receive the Commercial
Cash Consideration, shall remain
outstanding with all rights, privileges,
and powers existing immediately before
the Effective Time; and
(iii) the outstanding shares of Merger Co. Common
Stock shall, without any action on the part
of the holder thereof, be canceled.
In no event shall any Holder holding, of record or
beneficially, immediately before the
Effective Time, 4,000 or more shares of
Commercial Common Stock (a "Qualified
Holder") (including any combination of
Record Shares and Street Shares) in the
aggregate be entitled to receive any
Cash Consideration with respect to the
shares of Commercial Common Stock so
held. It shall be a condition precedent to
the right of any Holder to receive
the Cash Consideration, if any, payable
with respect to the shares of Commercial
Common Stock held by such Holder that such
Holder certify to Commercial in the
letter of transmittal delivered by
Commercial as described in Section 2.2 that
such Holder held, of record or
beneficially, immediately before the Effective
Time fewer than 4,000 shares of Commercial
Common Stock (including any
combination of Record Shares and Street
Shares) in the aggregate.
1.5 CERTAIN DEFINITIONS. For purposes hereof:
(a)
The term "Record Shares" shall mean shares of Commercial
Common Stock other than Street Shares, and
any Record Share shall be deemed to
be held by the registered holder thereof as
reflect
