PACIFIC CONTINENTAL CORPORATION (NASDAQ:PCBK) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry Into a Material Definitive Agreement. |
On January9, 2017, Pacific Continental Corporation, an Oregon
corporation (PCC), entered into an Agreement and Plan of Merger
(the Merger Agreement) with Columbia Banking System, Inc., a
Washington corporation (Columbia), and a to-be-formed Oregon
corporation and a wholly owned subsidiary of Columbia (Merger
Sub). The Merger Agreement provides that, upon the terms and
subject to the conditions set forth therein, Merger Sub will
merge with and into PCC, with PCC as the surviving corporation
(the First Merger). Immediately following the First Merger, PCC
will merge with and into Columbia (the Subsequent Merger), with
Columbia continuing as the surviving corporation (the Surviving
Corporation). Immediately after the Subsequent Merger, Pacific
Continental Bank, an Oregon state-chartered bank and wholly owned
subsidiary of PCC (PCB), will merge with and into Columbia State
Bank, a Washington state-chartered bank and wholly owned
subsidiary of Columbia (Columbia State Bank) (the Bank Merger,
and together with the First Merger and Subsequent Merger, the
Mergers). The Merger Agreement was approved and adopted by the
Board of Directors of each of PCC and Columbia.
Subject to the terms and conditions of the Merger Agreement, at
the date and time when the First Merger becomes effective (the
Effective Time), PCC shareholders will have the right to receive,
in respect of each share of common stock of PCC (Pacific
Continental Common Stock), a number of common shares of Columbia
(Columbia Common Stock) equal to the Exchange Ratio (as defined
below), subject to any adjustments set forth in the Merger
Agreement (the Merger Consideration). Exchange Ratio means the
following: (i)if the average daily closing price of Columbia
Common Stock on Nasdaq (the Columbia Average Closing Price) for
the twenty (20)consecutive trading days prior to the fifth
business day immediately prior to the closing date (the
Determination Period) is greater than or equal to $27.76 and less
than or equal to $37.56, then the Exchange Ratio will be 0.6430;
(ii)if the Columbia Average Closing Price for the Determination
Period is greater than $37.56, and the Columbia Average Closing
Price for the Determination Period outperforms the Keefe,
Bruyette Woods Regional Banking Index (the Index) by greater than
fifteen percent (15%), then the Exchange Ratio will be the
quotient, rounded to the nearest ten-thousandth, obtained by
dividing (A)$24.151 by (B)the Columbia Average Closing Price for
the Determination Period; (iii)if the Columbia Average Closing
Price for the Determination Period is greater than $37.56, and
the Columbia Average Closing Price for the Determination Period
does not outperform the Index by greater than fifteen percent
(15%), then the Exchange Ratio will be 0.6430; (iv)if the
Columbia Average Closing Price for the Determination Period is
less than $27.76, and the Columbia Average Closing Price for the
Determination Period underperforms the Index by greater than
fifteen percent (15%), then the Exchange Ratio will be (A)the
quotient, rounded to the nearest ten-thousandth, obtained by
dividing $17.850 by the Columbia Average Closing Price for the
Determination Period if Columbia does not choose to adjust the
Merger Consideration in accordance with the Merger Agreement, or
(B)0.6430 if Columbia does choose to adjust the Merger
Consideration as set forth in the Merger Agreement and described
below; and (v)if the Columbia Average Closing Price for the
Determination Period is less than $27.76, and the Columbia
Average Closing Price for the Determination Period does not
underperform the Index by greater than fifteen percent (15%),
then the Exchange Ratio will be 0.6430. In connection with clause
(iv)above, if Columbia chooses to adjust the Merger
Consideration, which it may do in its sole discretion, the Merger
Consideration will include an amount in cash equal to (A)$17.850
minus (B)(x)0.6430 multiplied by (y)the Columbia Average Closing
Price for the Determination Period, and the Exchange Ratio will
be 0.6430.
The Merger Agreement may be terminated in certain circumstances,
including: (i)by mutual written consent of the parties; (ii)by
either party in the event that any required regulatory approval
is not obtained; (iii)by either party in the event that, under
certain circumstances, the First Merger will not have been
consummated by November9, 2017 which may be extended to January9,
2018 in certain circumstances; (iv)by either party in the event
of a breach by the other party of any covenant or agreement or
any representation or warranty that would result in the failure
of certain conditions to the Merger Agreement; (v)by either party
if the requisite Columbia shareholder approval or PCC shareholder
approval is not obtained; (vi)by Columbia in the event PCC fails
to recommend approval of the Merger Agreement to its
shareholders; (vii)by PCC, prior to PCC shareholder approval, to
enter into a superior proposal; and (viii)by either party in the
event the Columbia Average Closing Price for the Determination
Period is less than $26.13; provided, however, if Columbia
exercises its termination right described in clause (viii), PCC
will have the option of reinstating the First Merger by adjusting
the Exchange Ratio to 0.6430 and adding to the per share Merger
Consideration an amount in cash equal to $1.048.
The Merger Agreement provides that all PCC restricted stock
units, PCC stock options and PCC stock appreciation rights,
whether cash-settled or stock-settled, will be canceled and paid
out in cash. The Merger Agreement also provides that all PCC
restricted stock awards (subject to certain exceptions) will vest
immediately prior to closing and be treated the same as all other
shares of PCC common stock as described above. Consummation of
the Mergers is subject to customary conditions, including, among
others, approval by PCC and Columbia shareholders and receipt of
required regulatory approvals.
Upon consummation of the Mergers, the Board of Directors of the
Surviving Corporation will consist of the directors serving on
the Board of Directors of Columbia prior to the effective time of
the First Merger plus one community-based independent director
from the Board of Directors of PCC, to be selected by Columbias
Nominating and Corporate Governance Committee.
The foregoing description of the Merger Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Merger Agreement, which is
attached hereto as Exhibit 2.1 and is incorporated herein by
reference. The Merger Agreement should not be read alone, but
should instead be read in conjunction with the other information
regarding PCC, Columbia, their respective affiliates or their
respective businesses, the Merger Agreement and the Mergers that
will be contained in, or incorporated by reference into, the
Joint Proxy Statement of PCC and Columbia and the Registration
Statement on Form S-4 of Columbia, which will include PCC and
Columbias Joint Proxy Statement and a Prospectus of Columbia, as
well as in the Forms 10-K, Forms 10-Q and other filings that each
of PCC and Columbia make with the Securities and Exchange
Commission (the SEC).
The Merger Agreement has been included to provide investors with
information regarding its terms. It is not intended to provide
any other factual information about PCC, Columbia or their
respective subsidiaries or affiliates. The representations,
warranties and covenants contained in the Merger Agreement were
made only for purposes of the Merger Agreement and as of specific
dates, were 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. Investors are not
third-party beneficiaries under the Merger Agreement and should
not rely on the representations, warranties and
covenants or any descriptions thereof as characterizations of the
actual state of facts or condition of the parties thereto or any
of their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of representations and
warranties may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in
PCCs and Columbias public disclosures.
Concurrently with the execution of the Merger Agreement, each of
the directors of PCC have entered into a Voting and
Non-Competition Agreement with PCC and Columbia to which such
directors have agreed, subject to the terms set forth therein
(and subject to certain exceptions), to vote their shares of PCC
common stock in favor of the Mergers and related matters, and to
become subject to transfer, non-solicitation and non-competition
restrictions. In addition, concurrently with the execution of the
Merger Agreement, the directors of Columbia have entered into a
Voting Agreement with PCC, to which such directors have agreed,
among other things, to vote their shares of Columbia Common Stock
in favor of approval of the issuance of Columbia Common Stock to
the Merger Agreement and to become subject to certain transfer
restrictions. Each of these agreements terminates in accordance
with its terms if the Merger Agreement is terminated and in other
specified circumstances.
The foregoing summary of the agreements described above does not
purport to be complete and is qualified in its entirety by the
text of such agreements, which are attached as Exhibit 99.1 (Form
of Voting and Non-Competition Agreement by and among Columbia and
the members of the PCC Board dated January9, 2017) and Exhibit
99.2 (Form of Voting Agreement by and among PCC and the members
of the Columbia Board, dated January9, 2017) hereto and are
incorporated herein by reference.
Item7.01 |
Regulation FD Disclosure. |
On January9, 2017, PCC and Columbia issued a joint press release
announcing the entry into the Merger Agreement. A copy of the
press release is attached hereto as Exhibit 99.3 and is
incorporated herein by reference.
On January10, 2017, PCC and Columbia intend to hold a joint
investor conference call regarding the Mergers. On the call, PCC
and Columbia intend to discuss certain financial and other
information relating to the Mergers and the Merger Agreement.
Slides that will be made available in connection with the
conference call are attached hereto as Exhibit 99.4 and are
incorporated into this Item7.01 in its entirety by reference.
The information in this Item7.01 and Exhibits 99.3 and 99.4
attached hereto is furnished and shall not be deemed filed for
purposes of Section18 of the Securities Exchange Act of 1934, as
amended, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, except as
shall be expressly set forth by specific reference in such
document or filing.
Item8.01 |
Other Events. |
To the extent required, information included in Item7.01 of this
Form 8-K is hereby incorporated by reference into this Item8.01.
Forward-Looking Statement Safe Harbor
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(PSLRA). Such forward-looking statements include but are not
limited to statements about the benefits of the business
combination transaction involving PCC and Columbia, including
future financial and operating results, the combined companys
plans, objectives, expectations and intentions, expectations
regarding the timing of the closing of the transaction and its
impact on PCCs earnings, expectations regarding pro forma
combined assets, loans and deposits and other statements that are
not historical facts. These forward-looking statements are
subject to risks and uncertainties that may cause actual results
to differ materially from those projected, including but not
limited to the following: the possibility that the merger does
not close when expected or at all because required regulatory,
shareholder or other approvals and other conditions to closing
are not received or satisfied on a timely basis or at all; the
risk that the benefits from the transaction may not be fully
realized or may take longer to realize than expected, including
as a result of changes in general economic and market conditions,
interest and exchange rates, monetary policy, laws and
regulations and their enforcement, and the degree of competition
in the geographic and business areas in which PCC and Columbia
operate; the ability to promptly and effectively integrate the
businesses of PCB and Columbia State Bank; the reaction to the
transaction of the companies customers, employees, and
counterparties; the diversion of management time on
merger-related issues; and other risks that are described in each
of Columbias and PCCs public filings with the SEC. For more
information, see the risk factors described in each of Columbias
and PCCs Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and other filings with the SEC. Readers are cautioned not to
place undue reliance on the forward-looking statements, which
speak only as of the date on which they are made and reflect
managements current estimates, projections, expectations and
beliefs. PCC undertakes no obligation to publicly revise or
update the forward-looking statements to reflect events or
circumstances that arise after the date of this release. This
statement is included for the express purpose of invoking PSLRAs
safe harbor provisions.
Additional Information about the Merger and Where to Find
It
Shareholders are urged to carefully review and consider each of
Columbias and PCCs public filings with the SEC, including but not
limited to their Annual Reports on Form 10-K, their proxy
statements, their Current Reports on Form 8-K and their Quarterly
Reports on Form 10-Q. In connection with the proposed
transaction, Columbia will file with the SEC a Registration
Statement on Form S-4 that will include a Joint Proxy Statement
of Columbia and PCC and a Prospectus of Columbia, as well as
other relevant documents concerning the proposed transaction.
Shareholders of Columbia and PCC are urged to carefully read the
Registration Statement and the Joint Proxy Statement/Prospectus
regarding the transaction in their entirety when they become
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. A definitive Joint Proxy
Statement/Prospectus will be sent to the shareholders of each
institution seeking any required shareholder approvals. The Joint
Proxy Statement/Prospectus and other relevant materials (when
they become available) filed with the SEC may be obtained free of
charge at the SECs website at http://www.sec.gov. Both Columbia
and PCC shareholders are urged to read the Joint Proxy
Statement/Prospectus and the other relevant materials before
voting on the transaction.
Investors will also be able to obtain these documents, free of
charge, from PCC by accessing its website at www.therightbank.com
under the link to Investor Relations. Copies can also be
obtained, free of charge, by directing a written request to
Pacific Continental Corporation, Attention: Corporate Secretary
111 West Seventh Avenue, P.O. Box 10727, Eugene, Oregon
97440-2727.
Participants in Solicitation
PCC and Columbia and their directors and executive officers and
certain other persons may be deemed to be participants in the
solicitation of proxies from the shareholders of Columbia and PCC
in connection with the Mergers. Information about the directors
and executive officers of Columbia and their ownership of
Columbia common stock is set forth in the proxy statement for
Columbias 2016 annual meeting of shareholders, as filed with the
SEC on a Schedule 14A on March16, 2016. Information about the
directors and executive officers of PCC and their ownership of
PCC common stock is set forth in the proxy statement for PCCs
2016 annual meeting of shareholders, as filed with the SEC on a
Schedule 14A on March15, 2016. Additional information regarding
the interests of those participants and other persons who may be
deemed participants in the transaction may be obtained by reading
the Joint Proxy Statement/Prospectus regarding the mergers when
it becomes available. Free copies of this document may be
obtained as described in the preceding paragraph.
Item9.01. |
Financial Statements and Exhibits. |
Exhibits
2.1 Agreement and Plan of Merger, dated as of January9, 2017, by
and between Columbia Banking System, Inc. and Pacific Continental
Corporation (the disclosure schedules and certain exhibits have
been omitted to Item601(b)(2) of Regulation S-K).
99.1 Form of Voting and Non-Competition Agreement by and among
Pacific Continental Corporation, Columbia Banking System, Inc.
and the directors of Pacific Continental Corporation dated
January9, 2017.
99.2 Form of Voting Agreement by and among Pacific Continental
Corporation, and the members of the board of directors of
Columbia Banking System, Inc., dated January9, 2017.
99.3 |
Joint Press Release dated January9, 2017 announcing the Merger. |
99.4 Slide Presentation to be made available in connection with
investor conference call to be held on January10, 2017.
About PACIFIC CONTINENTAL CORPORATION (NASDAQ:PCBK)
Pacific Continental Corporation is a bank holding company. The Company’s principal business activities are conducted through its subsidiary, Pacific Continental Bank (the Bank), an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation (FDIC). The Bank operates in over three primary markets, including Eugene, Oregon, Portland; Oregon/Southwest Washington, and Seattle, Washington. The Bank primarily operates in large commercial markets and provides banking and related services designed for community-based businesses, nonprofit organizations, professional service providers, and banking services for business owners. The Company provides traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services, debit and automated teller machine (ATM) cards, automated clearing house (ACH) transactions, savings bonds, cashier’s checks, notary services and others. PACIFIC CONTINENTAL CORPORATION (NASDAQ:PCBK) Recent Trading Information
PACIFIC CONTINENTAL CORPORATION (NASDAQ:PCBK) closed its last trading session down -0.15 at 20.80 with 38,151 shares trading hands.