BERKSHIRE HILLS BANCORP, INC. (NYSE:BHLB) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive Agreement |
On May 22, 2017, Berkshire Hills Bancorp, Inc. (the Company or
Berkshire Hills) and Commerce Bancshares Corp. (Commerce) entered
into an Agreement and Plan of Merger (the Merger Agreement) to
which Commerce will merge with and into Berkshire Hills (the
Merger). Immediately following the Merger, Commerce Bank and
Trust Company will merge with and into Berkshire Bank (the Bank
Merger).
Under the terms of the Merger Agreement, each outstanding share
of Commerce common stock will be converted into the right to
receive 0.93 shares of Company common stock; provided, however,
any Commerce stockholder, either individually or aggregated to 12
C.F.R. 225.41 of Regulation Y, who would exceed 9.9% of the
then-outstanding Company common stock as of the closing of the
Merger will receive 0.465 shares of Series B Non-Voting Company
Preferred Stock for each share of Commerce common stock in excess
of the 9.9% limitation. It is anticipated that the Company will
issue approximately 4.9 million shares of Company common stock
and approximately 500,000 shares of Series B Non-Voting Company
Preferred Stock, with an aggregate merger consideration value of
$209.0 million.
Following the closing of the Merger, the Company and Berkshire
Bank will appoint Pamela Massad and David Brunelle, who each
currently serve on the Commerce Board of Directors, to the Boards
of Directors of the Company and Berkshire Bank.
The proposed Merger is subject to customary closing conditions,
including the receipt of regulatory approvals and approval by the
stockholders of Commerce. The Merger is currently expected to be
completed in six to nine months.
The directors of Commerce have agreed to vote their shares in
favor of the approval of the Merger Agreement at the Commerce
stockholders meeting to be held to vote on the proposed
transaction. If the merger is not consummated under specified
circumstances, Commerce has agreed to pay the Company a
termination fee of $8.6 million. If the Company fails to obtain
regulatory approvals due to specified circumstances, the Company
has agreed to pay Commerce a termination fee of $4.3 million.
In addition, concurrent with the execution of the Merger
Agreement, David G. Massad, a majority-shareholder of Commerce,
entered into an agreement with the Company (the Shareholder
Agreement). The Agreement provides that, so long as Mr. Massad
and any affiliates or immediate family members (the Acting in
Concert Group) that collectively own 5% or more of the Company
from the date of the closing of the Merger, must (1) refrain from
acquiring shares of Company common stock in excess of the 9.9%
common stock ownership limit, (2) refrain from selling shares of
Company common stock without prior Company approval, except for
specified monthly amounts permissible under the terms of the
Shareholder Agreement, (3) vote up to 5% of the Acting in Concert
Groups outstanding Company common stock at their discretion and
any additional shares of Company common stock above 5% in favor
of Board nominees and proposals. The foregoing summary of the
Shareholder Agreement is qualified in its entirety by reference
to the complete text of such document, which is filed as Exhibit
10.1 to this Form 8-K and which is incorporated herein by
reference in its entirety.
The Merger Agreement also contains usual and customary
representations and warranties that the Company and Commerce have
made to each other as of specific dates. Each party has
also agreed to customary covenants, including, among other
things, covenants relating to the conduct of its business during
the interim period between the execution of the Merger Agreement
and the consummation of the Merger.
The foregoing summary of the Merger Agreement is qualified in its
entirety by reference to the complete text of such document,
which is filed as Exhibit 2.1 to this Form 8-K and which is
incorporated herein by reference in its entirety. The
representations, warranties and covenants of each party set forth
in the Merger Agreement have been made only for purposes of, and
were and are solely for the benefit of the parties to, the Merger
Agreement, may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of
establishing these matters as facts, and may be subject to
standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Accordingly, the
representations and warranties may not describe the actual state
of affairs at the date they were made or at any other time, and
investors should not rely on them as statements of fact. In
addition, such representations and warranties (1) will not
survive consummation of the Merger, unless otherwise specified
therein, and (2) were made only as of the date of the Merger
Agreement or such other date as is specified in the Merger
Agreement. Moreover, information concerning the subject matter of
the representations and warranties may change after the date of
the Merger Agreement, which subsequent information may or may not
be fully reflected in the parties public disclosures.
Accordingly, the Merger Agreement is included with this filing
only to provide investors with information regarding the terms of
the Merger Agreement, and not to provide investors with other
factual information regarding Berkshire Hills or Commerce, their
respective affiliates or their respective businesses. The Merger
Agreement should not be read alone, but should instead be read in
conjunction with the other information regarding Berkshire Hills,
Commerce, their respective affiliates or their respective
businesses, that will be contained in, or incorporated by
reference into, the registration statement on Form S-4 that will
include a proxy statement of Commerce and a prospectus of
Berkshire Hills, as well as in the Forms 10-K, Forms 10-Q, Forms
8-K and other filings that Berkshire Hills makes with the
Securities and Exchange Commission (SEC).
| Item 7.01 | Regulation FD Disclosure |
An Investor Presentation containing additional information
regarding the Merger is included in this report as Exhibit99.1
and is furnished herewith, and shall not be deemed filed for any
purpose. The Company will conduct a conference call/webcast on
May 22, 2017 at 10:00 a.m., EST to discuss the acquisition of
Commerce. The webcast will be available on the Companys website
for an extended period of time.
| Item 8.01 | Other Events |
On May 22, 2017, Berkshire Hills issued a press release
announcing the execution of the Merger Agreement and the moving
of its corporate headquarters to Boston. A copy of the press
release is attached hereto as Exhibit 99.2.
Additional Information and Where to Find It
In connection with the proposed merger, Berkshire Hills will file
with the SEC a Registration Statement on Form S-4 that will
include a Proxy Statement of Commerce and a Prospectus of
Berkshire Hills, as well as other relevant documents
concerning the proposed merger. Investors and
stockholders are urged to read the Registration Statement and the
Proxy Statement/Prospectus regarding the proposed merger when it
becomes available and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information. Copies
of the Registration Statement and Proxy Statement/Prospectus and
the filings that will be incorporated by reference therein, as
well as other filings containing information about Berkshire
Hills and Commerce, when they become available, may be obtained
at the SECs Internet site (http://www.sec.gov). You will
also be able to obtain these documents, free of charge, from
Berkshire Hills at www.berkshirebank.com under the tab
Investor Relations.
Commerce and Berkshire Hills and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of Commerce
in connection with the proposed merger. Information about the
directors and executive officers of Berkshire Hills is set forth
in the proxy statement for the Berkshire Hills 2017 annual
meeting of stockholders, as filed with the SEC on Schedule 14A on
April 7, 2017. Information about the directors and executive
officers of Commerce will be included in the Proxy
Statement/Prospectus as filed with the SEC. Additional
information regarding the interests of those participants and
other persons who may be deemed participants in the transaction
and a description of their direct and indirect interests, by
security holdings or otherwise, may be obtained by reading the
Proxy Statement/Prospectus and other relevant documents regarding
the proposed merger to be filed with the SEC when they become
available. Free copies of these documents may be obtained as
described in the preceding paragraph.
Forward-Looking Statements
Certain statements contained in this Current Report on Form 8-K
that are not statements of historical fact constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the Act),
notwithstanding that such statements are not specifically
identified as such. In addition, certain statements may be
contained in our future filings with the SEC, in press releases,
and in oral and written statements made by us or with our
approval that are not statements of historical fact and
constitute forward-looking statements within the meaning of the
Act. Examples of forward-looking statements include, but are not
limited to: (i)projections of revenues, expenses, income or loss,
earnings or loss per share, the payment or nonpayment of
dividends, capital structure and other financial items;
(ii)statements of our plans, objectives and expectations or those
of our management or Board of Directors, including those relating
to products or services; (iii)statements of future economic
performance; and (iv) statements of assumptions underlying such
statements. Words such as believes, anticipates, expects,
intends, targeted, continue, remain, will, should, may and other
similar expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such
statements.
Forward-looking statements involve risks and uncertainties that
may cause actual results to differ materially from those in such
statements. Factors that could cause actual results to differ
from those discussed in the forward-looking statements include,
but are not limited to: the businesses of Berkshire Hills and
Commerce may not be combined successfully, or such combination
may take longer to accomplish than expected; the cost savings
from the Merger may not be fully realized or may take longer to
realize than expected; operating costs, customer loss and
business disruption following the Merger, including adverse
effects on relationships with
employees, may be greater than expected; governmental approvals
of the Merger may not be obtained, or adverse regulatory
conditions may be imposed in connection with governmental
approvals of the Merger; the stockholders of Commerce may fail to
approve the Merger; adverse local, regional, national and
international economic conditions and the impact they may have on
us and our customers and our assessment of that impact; changes
in the level of non-performing assets and charge-offs; changes in
estimates of future reserve requirements based upon the periodic
review thereof under relevant regulatory and accounting
requirements; the effects of and changes in trade and monetary
and fiscal policies and laws, including the interest rate
policies of the Federal Reserve Board; inflation, interest rate,
securities market and monetary fluctuations; political
instability; acts of war or terrorism; the timely development and
acceptance of new products and services and perceived overall
value of these products and services by users; changes in
consumer spending, borrowings and savings habits; changes in the
financial performance and/or condition of the Companys borrowers;
technological changes; acquisitions and integration of acquired
businesses; the ability to increase market share and control
expenses; changes in the competitive environment among financial
holding companies and other financial service providers; the
quality and composition of the Companys loan or investment
portfolio; the effect of changes in laws and regulations
(including laws and regulations concerning taxes, banking,
securities and insurance) with which the Company and its
subsidiaries must comply; the effect of changes in accounting
policies and practices, as may be adopted by the regulatory
agencies, as well as the Public Company Accounting Oversight
Board, the Financial Accounting Standards Board and other
accounting standard setters; changes in the Companys
organization, compensation and benefit plans; the costs and
effects of legal and regulatory developments, including the
resolution of legal proceedings or regulatory or other
governmental inquiries and the results of regulatory examinations
or reviews; greater than expected costs or difficulties related
to the opening of new branch offices or the integration of new
products and lines of business, or both; and/or the Companys
success at managing the risk involved in the foregoing items.
| Item 9.01. | Financial Statements and Exhibits |
| (d) | Exhibits. |
| Exhibit 2.1 |
Agreement and Plan of Merger dated as of May 22, 2017 by and between Berkshire Hills Bancorp, Inc. and Commerce Bancshares Corp.* |
| Exhibit 10.1 |
Agreement by and between David G. Massad and Berkshire Hills Bancorp, Inc. |
| Exhibit 99.1 | Investor Presentation dated May 22, 2017 |
| Exhibit 99.2 | News Release dated May 22, 2017 |
*Schedules and exhibits have been omitted to Item601(b)(2) of
Regulation S-K
About BERKSHIRE HILLS BANCORP, INC. (NYSE:BHLB)
Berkshire Hills Bancorp, Inc. (Berkshire) is a holding company for Berkshire Bank (the Bank) and Berkshire Insurance Group. Berkshire offers a range of deposit, lending, insurance and wealth management products to retail, commercial, not-for-profit and municipal customers in its market areas. Berkshire product offerings also include retail and commercial electronic banking, commercial cash management and commercial interest rate swaps. The Bank’s loan portfolio consists of commercial loans, which include residential mortgages, commercial real estate, commercial and industrial loans, and consumer loans. The Bank’s securities available for sale include municipal bonds and obligations, mortgage-backed securities, other bonds and obligations, and marketable equity securities. As of December 5, 2016, the Bank had 99 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania. BERKSHIRE HILLS BANCORP, INC. (NYSE:BHLB) Recent Trading Information
BERKSHIRE HILLS BANCORP, INC. (NYSE:BHLB) closed its last trading session 00.00 at 35.55 with 145,979 shares trading hands.