Park Sterling Corporation (NASDAQ:PSTB) Files An 8-K Termination of a Material Definitive Agreement

ME Staff 8-k
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Park Sterling Corporation (NASDAQ:PSTB) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02 Termination of a Material Definitive Agreement.

As previously disclosed, on December18, 2015, Park Sterling entered into a Senior Term Loan Agreement (the “Loan Agreement”) with Capital Bank Corporation, under which Capital Bank Corporation provided a term loan of $30 million to Park Sterling due December18, 2022. On November30, 2017, in connection with the Merger, Park Sterling paid all fees and other amounts outstanding under the Loan Agreement and terminated the Loan Agreement. Other than in respect of the Loan Agreement, neither Park Sterling nor any of its affiliates has any material relationship with Capital Bank. There were no material prepayment fees or termination penalties in connection with the termination of the Loan Agreement.

Item 2.01. Completion of Acquisition or Disposition of Assets.

The information set forth in the Introductory Note is incorporated herein by reference.

On November30, 2017, to the terms of the Merger Agreement, Park Sterling merged with and into South State, with South State continuing as the surviving entity in the Merger. Immediately after the Merger, Park Sterling’s wholly owned bank subsidiary, Park Sterling Bank, merged with and into South State’s wholly owned bank subsidiary, South State Bank (the “Bank Merger”), with South State Bank as the surviving entity in the Bank Merger.

Under the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, par value $1.00 per share, of Park Sterling (“Park Sterling Common Stock”) (except for shares that were owned directly by South State or Park Sterling, subject to certain customary exceptions, which were cancelled in the Merger) was converted into the right to receive 0.14 shares (the “Exchange Ratio”) of common stock, par value $2.50 per share, of South State (“South State Common Stock”) (such amount, the “Merger Consideration”). No fractional shares of South State Common Stock were issued in the Merger, and Park Sterling shareholders became entitled to receive cash in lieu of fractional shares.

At the Effective Time, each stock option granted by Park Sterling, whether vested or unvested, was cancelled and converted into the right to receive a cash amount equal to the product of (a)the number of shares of Park Sterling Common Stock subject to such stock option immediately prior to the Effective Time and (b)the excess, if any, of (i)the product of (A)the average closing price per share for South State Common Stock for the ten full trading days ending on the day immediately preceding the closing date and (B)the Exchange Ratio (the “Cash Consideration Value”), over (ii)the exercise price of such option. At the Effective Time, any stock options granted by Park Sterling with an exercise price equal to or greater than the Cash Consideration Value were cancelled with no consideration. In addition, at the Effective Time, each award of restricted shares of Park Sterling Common Stock vested in full, and was converted into the right to receive the Merger Consideration in respect of each share of Park Sterling Common Stock underlying such award.

In connection with the Merger, South State assumed Park Sterling’s obligations as required by the indentures and certain related agreements with respect to Park Sterling’s outstanding trust preferred securities, which have an aggregate principal amount of $43.1 million (in each case before related acquisition accounting fair market value adjustments). Park Sterling had previously assumed the obligations with respect to such trust preferred securities in connection with its acquisitions of Community Capital Corporation, Citizens South Banking Corporation, Provident Community Bancshares,Inc. and First Capital Bancorp,Inc.

In connection with the Merger, James C. Cherry, Park Sterling’s chief executive officer and a director, entered into a Consulting and Noncompetition Agreement with South State Bank and each of Donald K. Truslow, Bryan F. Kennedy,III and Mark Ladnier, each named executive officers of Park Sterling immediately prior to the Effective Time, entered into an Employment and Noncompetition Agreement with South State Bank, in each case, effective at the Effective Time. Also, in connection with the Merger, Mr.Cherry and Jean E. Davis, a director on Park Sterling’s board of directors, were each appointed to the board of directors of South State immediately after the Effective Time.

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit2.1 to Park Sterling’s Current Report on Form8-K filed with the Securities and Exchange Commission (the “Commission”) on May1, 2017, and is incorporated by reference herein.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Ruleor Standard; Transfer of Listing.

On November30, 2017, in connection with the anticipated closing of the Merger, Park Sterling notified the NASDAQ Stock Market (the “NASDAQ”) that each share of Park Sterling Common Stock would be cancelled and converted into the right to receive the Merger Consideration, and requested that trading of Park Sterling Common Stock on the NASDAQ be suspended after the close of trading on November30, 2017. In addition, Park Sterling requested that the NASDAQ file with the Commission a Form25 (Notification of Removal from Listing and/or Registration under Section12(b)of the Securities Exchange Act of 1934) to delist Park Sterling’s common stock from the NASDAQ, and Park Sterling intends to file a Form15 with the Commission to terminate the registration of its common stock and suspend its reporting obligations under the Securities Exchange Act of 1934, as amended.

The Information set forth in Item 2.01 is incorporated herein by reference.

Item 3.03 Material Modification to Rights of Security Holders.

The information set forth in Items 2.01 and 3.01 is incorporated herein by reference.

Item 5.01 Change in Control of Registrant

The information set forth in Items 2.01 and 3.01 is incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the Merger, at the Effective Time, each of Park Sterling’s directors and executive officers ceased serving in such capacities.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

* The registrant has omitted schedules and similar attachments to the subject agreement to Item 601(b)(2)of Regulation S-K. South State agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or similar attachment upon request.


About Park Sterling Corporation (NASDAQ:PSTB)

Park Sterling Corporation is a holding company for Park Sterling Bank (the Bank). The Bank is a North Carolina-chartered commercial nonmember bank. The Company provides banking services to small and mid-sized businesses, real estate owners, residential builders, institutions, professionals and consumers doing business or residing within its target markets. It provides a range of banking products, including personal, non-profit checking accounts, interest on lawyer trust accounts, individual retirement accounts, business and personal money market accounts, time deposits, overdraft protection, and online and mobile banking. Its wealth management activities include investment management, private banking and investment brokerage services. Its cash management activities include remote deposit capture, lockbox services, sweep accounts and wire payments. Its capital markets activities include interest rate and currency risk management products, loan syndications and debt placements.