SOUTHSTATE CORPORATION Item 1.01. Entry into a Material Definitive Agreement.
On
Upon the terms and subject to the conditions set forth in the Merger Agreement,
at the effective time of the Merger (the "Effective Time"), each share of common
stock, par value
At the Effective Time, each outstanding option to purchase shares of CenterState Common Stock (a "CenterState Option"), whether vested or unvested, will vest and be converted into a vested option to purchase shares of South State Common Stock (a "South State Option"), with the number of shares underlying such South State Option and the applicable exercise price adjusted based on the Exchange Ratio. At the Effective Time, each outstanding warrant to purchase shares of CenterState Common Stock (a "CenterState Warrant") will be converted into a warrant to purchase shares of South State Common Stock (a "South State Warrant"), with the number of shares underlying such South State Warrant and the applicable exercise price adjusted based on the Exchange Ratio. At the Effective Time, each outstanding restricted stock award in respect of shares of CenterState Common Stock (a "CenterState Restricted Stock Award") and each outstanding time-vesting restricted stock unit award in respect of shares of CenterState Common Stock (a "CenterState RSU Award") will be converted into a corresponding restricted stock award or time-vesting restricted stock unit award, as applicable, in respect of shares of South State Common Stock (as applicable, a "South State Restricted Stock Award" or "South State RSU Award"), with the number of shares underlying such South State Restricted Stock Award or South State RSU Award adjusted based on the Exchange Ratio. At the Effective Time, each outstanding performance-vesting restricted stock unit award in respect of shares of CenterState Common Stock (a "CenterState PSU Award") will be converted into a time-vesting South State RSU Award, with the number of shares underlying such South State RSU Award determined assuming performance goals are satisfied at the greater of target and actual levels of performance as of immediately prior to the Effective Time and adjusted based on the Exchange Ratio. Following the Effective Time, South State Options, South State Warrants, South State Restricted Stock Awards and South State RSU Awards will remain subject to the same terms and conditions as were applicable to the corresponding CenterState Options, CenterState Warrants, CenterState Restricted Stock Awards, CenterState RSU Awards and CenterState PSU Awards immediately prior to the Effective Time, except that each South State Option and South State Warrant will remain exercisable through the remainder of the original term of the corresponding CenterState Option or CenterState Warrant and each South State RSU Award that was a CenterState PSU Award will continue to vest based solely on continued service following the Effective Time. Following the Effective Time, South State Restricted Stock Awards and South State RSU Awards in respect of converted CenterState Restricted Stock Awards, CenterState RSU Awards and CenterState PSU Awards will vest on a "double-trigger" basis upon a termination of employment by the Surviving Entity without "cause" or by the holder of such award for "good reason" (as such terms are defined in the applicable award agreement) within three years following the Effective Time.
At the Effective Time, each South State Option, South State Restricted Stock
Award and performance-based restricted stock unit award in respect of shares of
South State Common Stock that was outstanding as of
The Merger Agreement also provides, among other things, that effective as of the
Effective Time,
The Merger Agreement provides that, as of the Effective Time, the name of the
Surviving Entity will be "South State" and the
In connection with the completion of the Merger, South State's articles of incorporation will also be amended to increase the number of authorized shares of South State Common Stock from 80 million to 160 million (the "Articles Amendment").
The Merger Agreement contains customary representations and warranties from both South State and CenterState, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of its business during the interim period between the execution of the Merger Agreement and the Effective Time, (2) its obligation to call a meeting of its shareholders to approve the Merger Agreement, and, subject to certain exceptions, to recommend that its shareholders approve the Merger Agreement, and (3) its non-solicitation obligations related to alternative business combination proposals.
The completion of the Merger is subject to customary conditions, including (1) approval of the Merger Agreement and the Articles Amendment by South State's shareholders and approval of the Merger Agreement by CenterState's shareholders, (2) authorization for listing on the Nasdaq Global Select Market of the shares . . .
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
South State has entered into amended and restated employment agreements with
Messrs. Hill and Pollok, and
The base salaries and short-term and long-term incentive opportunities
(expressed as a percentage of annual base salary) contained in the employment
agreements are as follows:
If an executive officer's employment is terminated by South State or
· In the case of Messrs. Hill and Pollok, in addition to certain accrued
benefits, the following payments and benefits: (a) a cash payment equal to a
multiple (in the case of a termination of Mr. Hill's employment prior to a
change in control or a termination of Mr. Pollok's employment during the
Employment Term, two times, and in the case of Mr. Hill's termination of
employment within 12 months following a change in control that occurs after
the Effective Time, two and one-half times) the executive officer's "total
compensation" (as defined below), (b) a prorated annual bonus for the fiscal
year of termination based on actual performance (in the case of Mr. Pollok ,
only if termination occurs in 2020), (c) payment in full of the Pay to
Integrate Award, to the extent not previously paid, (d) immediate vesting of
the Pay to Lead Award, to the extent not previously vested, and (e) immediate
vesting of any outstanding equity awards granted following the Effective Time,
with performance-based awards remaining subject to applicable performance
metrics. If Mr. Pollok's services are terminated during the Consulting Term,
in lieu of the above cash payment, he would be entitled to a cash payment
equal to all unpaid consulting fees that would have been paid had he continued
providing services until December 31, 2024 . The term "total compensation"
means the sum of the executive officer's base salary, annual bonus (based on
the greatest of the executive officer's target bonus, actual bonus paid in
respect of the fiscal year preceding the year of termination and the average
annual bonus for the three fiscal years preceding the year of termination) and
annual health, medical, dental and vision insurance premiums (and, in the case
of Mr. Hill, fringe benefits).
· In the case of Ms. Brooks , the following payments and benefits: (a) a cash
payment equal to the sum of her base salary plus target annual bonus
opportunity, (b) continued employer-paid medical and dental insurance premiums
for 12 months, (c) payment in full of the Pay to Integrate Award, to the
extent not previously paid, and (d) immediate vesting of the Pay to Lead
Award, to the extent not previously vested. However, if such termination
occurred within 12 months following a change in control that occurs after the
Effective Time, in lieu of the cash payment described in the immediately
preceding sentence, Ms. Brooks would be entitled to a cash payment equal to
the sum of 2.5 times the sum of Ms. Brooks' base salary plus the highest
annual bonus earned in the three years immediately preceding the year in which
the change in control occurs.
If an executive officer's employment is terminated by reason of death or
disability, he or she would be entitled to substantially the same payments and
benefits as would be payable upon a termination without cause or for good
reason, excluding the cash severance payment. In the case of
If the services of Mr. Hill or
In consideration for the foregoing payments and benefits payable upon a
termination by South State or
The foregoing summary of the employment agreements does not purport to be
complete and is qualified in its entirety by reference to the full text of the
employment agreements, which will be filed as exhibits to South State's Annual
Report on Form 10-K for the fiscal year ended
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
Agreement and Plan of Merger, dated as of January 25, 2020 , by
2.1 and between CenterState Bank Corporation and South State
Corporation .*
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL.
*Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar
attachments have been omitted. The registrant hereby agrees to furnish a copy of
any omitted schedule or similar attachment to the
Forward-Looking Statements
Information in this communication, other than statements of historical facts, may constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about the benefits of the proposed merger of South State and CenterState, including future financial and operating results (including the anticipated impact of the transaction on South State's and CenterState's respective earnings and tangible book value), statements related to the expected timing of the completion of the merger, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Forward-looking statements may be identified by terminology such as "may," "will," "should," "scheduled," "plans," "intends," "anticipates," "expects," "believes," "estimates," "potential," or "continue" or negatives of such terms or other comparable terminology.
All forward-looking statements are subject to risks, uncertainties and other
factors that may cause the actual results, performance or achievements of South
State or CenterState to differ materially from any results expressed or implied
by such forward-looking statements. Such factors include, among others, (1) the
risk that the cost savings and any revenue synergies from the merger may not be
fully realized or may take longer than anticipated to be realized, (2)
disruption to the parties' businesses as a result of the announcement and
pendency of the merger, (3) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger agreement,
(4) the risk that the integration of each party's operations will be materially
delayed or will be more costly or difficult than expected or that the parties
are otherwise unable to successfully integrate each party's businesses into the
other's businesses, (5) the failure to obtain the necessary approvals by the
shareholders of South State or CenterState, (6) the amount of the costs, fees,
expenses and charges related to the merger, (7) the ability by each of South
State and CenterState to obtain required governmental approvals of the merger
(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), (8) reputational risk and the reaction of each company's
customers, suppliers, employees or other business partners to the merger, (9)
the failure of the closing conditions in the merger agreement to be satisfied,
or any unexpected delay in closing the merger, (10) the possibility that the
merger may be more expensive to complete than anticipated, including as a result
of unexpected factors or events, (11) the dilution caused by South State's
issuance of additional shares of its common stock in the merger, (12) general
competitive, economic, political and market conditions, and (13) other factors
that may affect future results of CenterState and South State including changes
in asset quality and credit risk; the inability to sustain revenue and earnings
growth; changes in interest rates and capital markets; inflation; customer
borrowing, repayment, investment and deposit practices; the impact, extent and
timing of technological changes; capital management activities; and other
actions of the
Important Information About the Merger and Where to Find It
South State intends to file a registration statement on Form S-4 with the
South State Corporation CenterState Bank Corporation520 Gervais Street 1101 First Street South , Suite 202
(863) 293-4710
Before making any voting or investment decision, investors and security holders of South State and CenterState are urged to read carefully the entire registration statement and joint proxy statement/prospectus when they become available, including any amendments thereto, because they will contain important information about the proposed transaction. Free copies of these documents may be obtained as described above.
Participants in Solicitation
South State, CenterState and certain of their directors and executive officers
may be deemed participants in the solicitation of proxies from the shareholders
of each of South State and CenterState in connection with the merger.
Information regarding the directors and executive officers of South State and
CenterState and other persons who may be deemed participants in the solicitation
of the shareholders of South State or of CenterState in connection with the
merger will be included in the joint proxy statement/prospectus related to the
proposed merger, which will be filed by South State with the
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