First Community Corporation (NASDAQ:FCCO) Files An 8-K Entry into a Material Definitive Agreement

ITEM 1.01. Entry into a Material Definitive Agreement

On April 11, 2017, First Community Corporation (First Community),
the parent holding company for First Community Bank, and
Cornerstone Bancorp (Cornerstone), the parent holding company for
Cornerstone National Bank, entered into an Agreement and Plan of
Merger (the Agreement), which provides that, subject to the terms
and conditions set forth in the Agreement, Cornerstone will merge
with and into First Community with First Community being the
surviving corporation in the merger. In addition, concurrently
with or as soon as practicable following the merger of
Cornerstone with and into First Community, Cornerstone National
Bank will be merged with and into First Community Bank.

Subject to the terms and conditions of the Agreement, each share
of Cornerstone common stock will be converted into the right to
receive one of the following: (i) $11.00 in cash, (ii) a number
of shares of First Community common stock equal to the exchange
ratio (described below), or (iii) a combination of cash and First
Community common stock, subject to the limitations that,
excluding any dissenting shares, 70% of Cornerstones outstanding
shares of common stock will be exchanged for First Community
common stock and 30% of Cornerstones outstanding shares of common
stock will be exchanged for cash. Cash will also be paid in lieu
of fractional shares. The exchange ratio will be 0.54 shares of
First Community common stock per one share of Cornerstone common
stock.

The Agreement contains customary representations and warranties
from First Community and Cornerstone, and First Community and
Cornerstone have agreed to customary covenants and agreements,
including, among others, covenants and agreements relating to (1)
the conduct of their respective businesses during the interim
period between the execution of the Agreement and the closing or
the merger, (2) Cornerstones obligation to facilitate its
shareholders consideration of, and voting upon, the necessary
approval of the Agreement, (3) the recommendation by the board of
directors of Cornerstone in favor of the necessary approval by
its shareholders, and (4) Cornerstones non-solicitation
obligations relating to alternative business combination
transactions.

The boards of directors of First Community and Cornerstone have
approved the Agreement. The Agreement and the transactions
contemplated thereby are subject to the approval of the
shareholders of Cornerstone, regulatory approvals, and other
customary closing conditions. The Agreement provides certain
termination rights for both First Community and Cornerstone and
further provides that upon termination of the Agreement under
certain circumstances, Cornerstone will be obligated to pay First
Community a termination fee of $950,000.

The foregoing description of the Agreement does not purport to be
complete and is qualified in its entirety by reference to the
complete text of the Agreement, which is set forth below as
Exhibit 2.1 hereto and is incorporated herein by reference. The
Agreement has been attached as an exhibit to this report in order
to provide investors and security holders with information
regarding its terms. It is not intended to provide any other
financial information about First Community, Cornerstone or their
respective subsidiaries and affiliates. The representations,
warranties and covenants contained in the Agreement were made
only for purposes of that agreement and as of specific dates, are
solely for the benefit of the parties to the Agreement, may be
subject to waiver by the parties and limitations agreed upon by
the parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Agreement instead of establishing
these matters as facts, and may be subject to standards of
materiality applicable to the parties that differ from those
applicable to investors. Investors should not rely on the
representations, warranties or covenants or any description
thereof as characterizations of the actual state of facts or
condition of the First Community, Cornerstone or any of their
respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of the representations, warranties
and covenants may change after the date of the Agreement, which
subsequent information may or may not be fully reflected in
public disclosures by First Community.

In connection with entering into the Agreement, Cornerstone has
agreed to use its reasonable best efforts to cause each of the
directors and executive officers of Cornerstone to enter into a
voting and support agreement (collectively, the Support
Agreements). The parties to the Support Agreements beneficially
own in the aggregate approximately 22.3% of the outstanding
shares of Cornerstone common stock. The Support Agreements
generally require that the shareholders party thereto vote all of
their shares of Cornerstone common stock in favor of the merger
and against alternative transactions and generally prohibit such
shareholders from transferring their shares of Cornerstone common
stock prior to the consummation of the merger. The Support
Agreements will terminate upon the earlier of the consummation of
the merger and the termination of the Agreement in accordance
with its terms. The foregoing description of the Support
Agreements does not purport to be complete and is qualified in
its entirety by reference to the form of Support Agreement, which
is included as Exhibit F to the Agreement, filed as Exhibit 2.1
of this Form 8-K, and incorporated by reference herein.

In connection with the merger, subject to the terms and
conditions of the Agreement, each outstanding Cornerstone stock
option will be cancelled in exchange for a cash payment. In
addition, in connection with the merger, subject to the terms and
conditions of the Agreement, Cornerstone will use its reasonable
best efforts to redeem, subject to regulatory approval, all of
its outstanding shares of Series A Preferred Stock prior to the
closing of the merger. If the Series A Preferred Stock is not
redeemed prior to closing, then at closing each outstanding share
of Series A Preferred Stock will be automatically converted into
one share of preferred stock of First Community having the same
rights, preferences, privileges, and voting powers and
limitations and restrictions as the Series A Preferred Stock
immediately prior to closing.

to the Agreement, the directors of Cornerstone in office
immediately prior to the closing of the merger will be invited to
serve on First Community Banks Upstate Advisory Board for at
least two years.

FORWARD-LOOKING STATEMENTS

This Form 8-K contains certain forward-looking statements,
including certain plans, expectations, goals, and projections,
and including statements about the benefits of the merger between
First Community and Cornerstone, which are subject to numerous
assumptions, risks, and uncertainties. Actual results could
differ materially from those anticipated by such statements for a
variety of factors including, without limitation: the businesses
of First Community and Cornerstone may not be integrated
successfully or such integration may take longer to accomplish
than expected; the expected cost savings and any revenue
synergies from the merger may not be fully realized within the
expected timeframes or at all; disruption from the merger may
make it more difficult to maintain relationships with clients,
associates, or suppliers; the required governmental approvals of
the merger may not be obtained on the proposed terms and schedule
or at all; Cornerstone shareholders may not approve the merger;
changes in economic conditions; movements in interest rates;
competitive pressures on product pricing and services; success
and timing of other business strategies; the nature, extent, and
timing of governmental actions and reforms; and extended
disruption of vital infrastructure; and other factors described
in First Communitys Annual Report on Form 10-K filed on March 13,
2017 and documents subsequently filed by First Community with the
Securities and Exchange Commission. All forward-looking
statements included in this Form 8-K are based on information
available at the time of the filing. First Community assumes no
obligation to update any forward-looking statement.

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT

In connection with the proposed merger, First Community will file
with the Securities and Exchange Commission a registration
statement on Form S-4 that will include a proxy
statement/prospectus for the shareholders of Cornerstone. First
Community also plans to file other documents with the Securities
and Exchange Commission regarding the merger with Cornerstone.
Cornerstone will mail the final proxy statement/prospectus to its
shareholders. BEFORE MAKING ANY INVESTMENT OR VOTING DECISION,
CORNERSTONE INVESTORS ARE URGED TO READ THE PROXY STATEMENT/
PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS
CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. The proxy
statement/prospectus, as well as other filings containing
information about First Community, will be available, without
charge, at the SECs website (http://www.sec.gov). Copies of the
proxy statement/prospectus and the filings with the Securities
and Exchange Commission that will be incorporated by reference in
the proxy statement/ prospectus can also be obtained, without
charge, by directing a request to First Community Corporation,
5455 Sunset Blvd., Lexington, SC 29072, Attention: Michael
Crapps.

This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful under the securities laws of any such
jurisdiction.

ITEM 5.03. Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year

On April 11, 2017, First Communitys board of directors amended
and restated First Communitys bylaws (the Amended Bylaws) to add
Article 9, which requires that certain types of actions,
including certain actions brought against First Community or its
directors or officers, be brought in South Carolina courts. The
foregoing description of the Amended Bylaws is qualified in its
entirety by reference to the full text of the Amended Bylaws,
which is included as Exhibit 3.1 hereto and is incorporated
herein by reference.

ITEM 8.01. Other Events

On April 12, 2017, First Community issued a press release
announcing the execution of the Agreement with Cornerstone. The
complete text of the press release is attached to this report as
Exhibit 99.1. In addition, First Community is providing
supplemental information regarding the proposed merger in the
investor presentation slides attached hereto as Exhibit 99.2.

ITEM 9.01 Financial Statements and Exhibits

(c)Exhibits.

The following exhibits are filed as part of this report:

About First Community Corporation (NASDAQ:FCCO)

First Community Corporation is a bank holding company for First Community Bank (the Bank). The Bank offers commercial and retail banking services to small-to-medium sized businesses, professional concerns and individuals, primarily in Richland, Lexington, Kershaw and Newberry Counties of South Carolina and the surrounding areas. The Bank offers a range of traditional banking products and services for professionals and small-to medium-sized businesses, including consumer and commercial, mortgage, brokerage and investment, and insurance services. The Bank also offers online banking to its customers. Its other services include Internet banking, cash management services, safe deposit boxes, traveler checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. The Bank offers non-deposit investment products and other investment brokerage services through a registered representative with an affiliation through LPL Financial.

First Community Corporation (NASDAQ:FCCO) Recent Trading Information

First Community Corporation (NASDAQ:FCCO) closed its last trading session 00.00 at 20.70 with 765 shares trading hands.