SOUTH STATE CORPORATION (NASDAQ:SSB) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry Into a Material Definitive
Agreement.
On April26, 2017, South State Corporation, a South Carolina
corporation (South State), and Park Sterling Corporation,
a North Carolina corporation (Park Sterling), entered into
an Agreement and Plan of Merger (the Merger Agreement), to
which Park Sterling will merge with and into South State (the
Merger), with South State continuing as the surviving
entity in the Merger, subject to the terms and conditions set
forth therein. Immediately following the Merger, Park Sterlings
wholly owned bank subsidiary, Park Sterling Bank, will merge with
and into South States wholly owned bank subsidiary, South State
Bank (the Bank Merger), with South State Bank as the
surviving entity in the Bank Merger. The Merger Agreement was
unanimously approved by the Board of Directors of each of South
State and Park Sterling.
Subject to the terms and conditions of the Merger Agreement, at
the effective time of the Merger (the Effective Time),
Park Sterling shareholders will have 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)
for each share of common stock, par value $1.00 per share, of
Park Sterling (Park Sterling Common Stock) (such amount,
the Merger Consideration).
At the Effective Time, each stock option granted by Park
Sterling, whether vested or unvested, will be 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. Any stock options granted by Park Sterling with an
exercise price equal to or greater than the Cash Consideration
Value will be cancelled for no consideration. Additionally, at
the Effective Time, each award of restricted shares of Park
Sterling Common Stock will vest in full, the restrictions thereon
will lapse and each such award will be converted into the right
to receive the Merger Consideration in respect of each share of
Park Sterling Common Stock underlying such award.
The Merger Agreement also provides, among other things, that
immediately after the Effective Time, Mr.James C. Cherry and one
other current non-employee member of the board of directors of
Park Sterling agreed upon by the parties will be appointed to the
board of directors of South State.
The Merger Agreement contains customary representations and
warranties from both South State and Park Sterling, and each
party has agreed to customary covenants, including, among others,
covenants relating to the conduct of its business during the
interim period between the execution of the Merger Agreement and
the Effective Time, the obligation of each party, subject to
certain exceptions, to recommend that its shareholders approve
the Merger Agreement and the transactions contemplated therein
and, with respect to Park Sterling, its non-solicitation
obligations relating to alternative acquisition proposals. South
State and Park Sterling have also agreed to cooperate with each
other and to prepare and file, as promptly as possible, all
applications, notices, petitions and filings to obtain all
consents and approvals that are necessary or advisable to
consummate the transactions contemplated by the Merger Agreement.
The respective shareholders of South State and Park Sterling will
be asked to vote on the approval of the Merger Agreement at
special shareholder meetings that will be held as promptly as
practicable to applicable law and the parties governing
documents. The completion of the Merger is subject to the
approval of the Merger Agreement by the respective shareholders
of Park Sterling and South State and to other customary
conditions, including, among others, (1)the absence of any order,
injunction or other legal restraint preventing the completion of
the Merger or the other transactions contemplated by the Merger
Agreement or making the consummation of the Merger or the other
transactions contemplated by the Merger Agreement illegal, (2)the
absence of any objection by the NASDAQ Stock Market
(NASDAQ) to the listing of the shares of South State
Common Stock to be issued in the Merger, (3)the effectiveness of
the registration statement on FormS-4 for the issuance of the
shares of South State Common Stock to be issued in connection
with the Merger and (4)the receipt of required regulatory
approvals, including the approval of the Federal Reserve Board
and the Federal Deposit Insurance Corporation and South Carolina
and North Carolina bank regulatory approvals. Each partys
obligation to complete the Merger is also subject to certain
additional customary conditions, including (1)subject to certain
exceptions, the accuracy of the representations and warranties of
the other party, (2)performance in all material respects by the
other party of its obligations under the Merger Agreement and
(3)receipt by each party of an opinion from its counsel to the
effect that the Merger
will qualify as a reorganization within the meaning of
Section368(a)of the Internal Revenue Code of 1986, as amended
(the Code).
The Merger Agreement contains certain termination rights for
South State and Park Sterling. Upon termination of the Merger
Agreement under specified customary circumstances, South State
or Park Sterling may be required to pay to the other party a
termination fee of $25 million.
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 Exhibit2.1 and is incorporated herein by
reference.
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
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, warranties and covenants 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 any other factual information regarding South
State or Park Sterling, 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 South State, Park Sterling, their
respective affiliates and their respective businesses, the
other documents that will be contained in, or incorporated by
reference into, the Registration Statement on FormS-4 that will
include a joint proxy statement of South State and Park
Sterling and a prospectus of South State, as well as in the
Forms 10-K, Forms 10-Q and other filings that each of South
State and Park Sterling make with the Securities and Exchange
Commission (SEC).
Item8.01 Other Events.
In connection with the execution of the Merger Agreement, South
State entered into a consulting agreement with Mr.Cherry, Park
Sterlings Chief Executive Officer, and entered into employment
agreements with Mr.Donald K. Truslow, Park Sterlings Chief
Financial Officer, and Mr.Bryan F. Kennedy III, Park Sterlings
President. Each such agreement will be effective on and subject
to the closing of the Merger. The employment and consulting
agreements set forth the terms and conditions of each key
executives service to South State following the closing of the
Merger and will supersede the existing employment agreements
between such executives and Park Sterling.
Simultaneous with the execution of the Merger Agreement, South
State entered into voting agreements (each, a Voting
Agreement, and collectively, the Voting Agreements)
with Park Sterlings directors and named executive officers, in
which each such person agreed, among other things, to vote the
shares of Park Sterling Common Stock owned beneficially or of
record by him or her in favor of the Merger and against any
proposal made in competition with the Merger, as well as to
certain other customary restrictions with respect to the voting
and transfer of his or her shares of Park Sterling Common
Stock. The foregoing description of the Voting Agreements does
not purport to be complete and is qualified in its entirety by
reference to the full text of the Voting Agreements, a form of
which is included as ExhibitA to the Merger Agreement attached
hereto as Exhibit2.1 and is incorporated herein by reference.
* * * *
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Statements included in this communication which are not
historical in nature or do not relate to current facts are
intended to be, and are hereby identified as, forward-looking
statements for purposes of the safe harbor provided by
Section27A of the Securities Act of 1933 and Section21E of the
Securities Exchange Act of 1934. The words may, will,
anticipate, could, should, would, believe, contemplate, expect,
estimate, continue, plan, project and intend, as well as other
similar words and expressions of the future, are intended to
identify forward-looking statements. South State Corporation
(South State) and Park Sterling Corporation (Park
Sterling) caution readers that forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from anticipated results.
Such risks and uncertainties, include, among others, the
following possibilities: the occurrence of any event, change or
other circumstances that could give rise to the right of one or
both of the parties to terminate the definitive merger
agreement between South State and Park Sterling; the outcome of
any legal proceedings that may be instituted against South
State or Park Sterling; the failure to obtain necessary
regulatory approvals (and the risk that such approvals may
result in the imposition of conditions that could adversely
affect the combined company or the expected benefits of the
transaction), and shareholder approvals or to satisfy any of
the other conditions to the transaction on a timely basis or at
all; the possibility that the anticipated benefits of the
transaction are not realized when expected or at all, including
as a result of the impact of, or problems arising from, the
integration of the two companies or as a result of the strength
of the economy and competitive factors in the areas where South
State and Park Sterling do business; the possibility that the
transaction may be more expensive to complete than anticipated,
including as a result of unexpected factors or events;
diversion of managements attention from ongoing business
operations and opportunities; potential adverse reactions or
changes to business or employee relationships, including those
resulting from the announcement or completion of the
transaction; South States ability to complete the acquisition
and integration of Park Sterling successfully; credit risk
associated with commercial real estate, commercial business and
construction lending; interest risk involving the effect of a
change in interest rates on both of South States and Park
Sterlings earnings and the market value of the portfolio
equity; liquidity risk affecting each banks ability to meet its
obligations when they come due; price risk focusing on changes
in market factors that may affect the value of traded
instruments; transaction risk arising from problems with
service or product delivery; compliance risk involving risk to
earnings or capital resulting from violations of or
nonconformance with laws, rules, regulations, prescribed
practices, or ethical standards; strategic risk resulting from
adverse business decisions or improper implementation of
business decisions; reputation risk that adversely affects
earnings or capital arising from negative public opinion;
cybersecurity risk related to the dependence of South State and
Park Sterling on internal computer systems and the technology
of outside service providers, as well as the potential impacts
of third-party security breaches, which subjects each company
to potential business disruptions or financial losses resulting
from deliberate attacks or unintentional events; economic
downturn risk resulting from changes in the credit markets,
greater than expected noninterest expenses, excessive loan
losses and other factors and the implementation of federal
spending cuts currently scheduled to go into effect; and other
factors that may affect future results of South State and Park
Sterling. Additional factors that could cause results to differ
materially from those described above can be found in South
States Annual Report on Form10-K for the year ended December31,
2016, which is on file with the Securities and Exchange
Commission (the SEC) and available in the Investor
Relations section of South States website,
http://www.southstatebank.com, under the heading SEC Filings
and in other documents South State files with the SEC, and in
Park Sterlings Annual Report on Form10-K for the year ended
December31, 2016, which is on file with the SEC and available
on the Investor Relations pagelinked to Park Sterlings website,
http://www.parksterlingbank.com, under the heading Regulatory
Filings and in other documents Park Sterling files with the
SEC.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
Neither South State nor Park Sterling assumes any obligation to
update forward-looking statements to reflect circumstances or
events that occur after the date the forward-looking statements
were made or to reflect the occurrence of unanticipated events
except as required by federal securities laws. As
forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing
undue reliance on such statements.
IMPORTANT ADDITIONAL INFORMATION
In connection with the proposed transaction between South State
and Park Sterling, South State will file with the SEC a
Registration Statement on FormS-4 that will include a Joint
Proxy Statement of South State and Park Sterling and a
Prospectus of South State, as well as other relevant documents
concerning the proposed transaction. The proposed transaction
involving South State and Park Sterling will be submitted to
Park Sterlings shareholders and South States shareholders for
their consideration. This communication shall not constitute an
offer to sell or the solicitation of an offer to buy any
securities nor shall there be any sale of securities in any
jurisdiction in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
jurisdiction. Shareholders of South State and
shareholders of Park Sterling are urged to read the
registration statement and the joint proxy statement/prospectus
regarding the transaction 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.
Shareholders will be able to obtain a free copy of the
definitive joint proxy statement/prospectus, as well as other
filings containing information about South State and Park
Sterling, without charge, at the SECs website
(http://www.sec.gov). Copies of the joint proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by
directing a request to South State Corporation, 520 Gervais
Street, Columbia, South Carolina 29201, Attention: John C.
Pollok, Senior Executive Vice President, CFO and COO, (800)
277-2175 or to Park Sterling Corporation, 1043 E. Morehead
Street, Suite 201, Charlotte, North Carolina 28204, Attention:
Donald K. Truslow, (704) 323-4292.
PARTICIPANTS IN THE SOLICITATION
South State, Park Sterling and certain of their respective
directors, executive officers and employees may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding South States
directors and executive officers is available in its definitive
proxy statement, which was filed with the SEC on March6, 2017,
and certain of its Current Reports on Form8-K. Information
regarding Park Sterlings directors and executive officers is
available in its definitive proxy statement, which was filed
with the SEC on April13, 2017, and certain of its Current
Reports on Form8-K. Other information regarding the
participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials filed with
the SEC. Free copies of this document may be obtained as
described in the preceding paragraph.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits.
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ExhibitNo. |
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DescriptionofExhibit |
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2.1 |
Agreement and Plan of Merger, dated as of April26, 2017, |
* South State has omitted schedules and similar attachments to
the subject agreement to Item 601(b)(2)of Regulation S-K. South
State hereby agrees to furnish supplementally to the SEC a copy
of any omitted schedule or similar attachment upon request.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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SOUTH STATE CORPORATION |
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By: |
/s/ John C. Pollok |
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John C. Pollok |
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Senior Executive Vice President, Chief Financial Officer |
Date: May1, 2017
EXHIBITINDEX
|
ExhibitNo. |
|
DescriptionofExhibit |
|
2.1 |
Agreement and Plan of Merger, dated as of April26, 2017, |
* South State has omitted schedules and similar attachments to
the subject agreement
SOUTH STATE CORPORATION (NASDAQ:SSB) Recent Trading Information
SOUTH STATE CORPORATION (NASDAQ:SSB) closed its last trading session down -0.20 at 87.95 with 146,821 shares trading hands.
