Item 1.01
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Entry into a Material Definitive Agreement
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On May 11, 2018, Cadence Bancorporation, a Delaware
corporation (
Cadence
), entered into an Agreement and Plan of Merger (the
Merger Agreement
) with State Bank Financial Corporation, a Georgia corporation (
State Bank
). The Merger Agreement
provides that, upon the terms and subject to the conditions set forth therein, State Bank will merge with and into Cadence (the
Merger
), with Cadence surviving the Merger. Immediately following the Merger, State Banks wholly
owned bank subsidiary, State Bank and Trust Company, will merge with and into Cadences wholly owned bank subsidiary, Cadence Bank, N.A. (
Cadence Bank
) (the
Bank Merger
). Cadence Bank will be the surviving
entity in the Bank Merger. The Merger Agreement was unanimously approved by the Board of Directors of each of Cadence and State Bank.
Subject to the
terms and conditions of the Merger Agreement, at the effective time of the Merger (the
Effective Time
), State Bank shareholders will have the right to receive 1.160 shares (the
Exchange Ratio
) of Class A
common stock, par value $0.01 per share, of Cadence (
Cadence Common Stock
) for each share of common stock, par value $0.01 per share, of State Bank (
State Bank Common Stock
). Each State Bank restricted stock
award will vest and be cancelled and converted automatically at the Effective Time into the right to receive 1.160 shares of Cadence Common Stock in respect of each share of State Bank Common Stock underlying such award. Each State Bank warrant will
be converted automatically at the Effective Time into a warrant to purchase shares of Cadence Common Stock, with the number of underlying shares and per share exercise price adjusted to reflect the Exchange Ratio.
The Merger Agreement provides that, effective immediately after the Effective Time, the respective Boards of Directors of Cadence and Cadence Bank will each
be increased in size by three, and three current members of the Board of Directors of State Bank, which members will be mutually agreed by Cadence and State Bank, will be appointed to fill the resulting vacancies. In furtherance of the foregoing,
effective immediately after the Effective Time, Joseph W. Evans, the current Chairman of State Bank, will be appointed the Vice Chairman of Cadence, and J. Thomas Wiley, Jr., the current Vice Chairman and Chief Executive Officer of State Bank, will
be appointed the Chairman of Cadence Bank.
The Merger Agreement contains customary representations and warranties from both Cadence and State Bank, and
each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of Cadences and State Banks businesses during the interim period between the execution of the Merger Agreement and the
Effective Time, (2) the obligation of Cadence to obtain a consent of Cadence Bancorp, LLC, its controlling stockholder, constituting the approval of Cadence stockholders required to adopt the Merger Agreement and approve the issuance of Cadence
Common Stock in the Merger, which consent was obtained immediately after the execution of the Merger Agreement, (3) the obligation of State Bank 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 (4) State Banks
non-solicitation
obligations relating to alternative acquisition proposals. Cadence and State Bank
have agreed to use their commercially reasonable efforts to prepare and file all applications, notices, and other documents to obtain all necessary consents and approvals for consummation of the transactions contemplated by the Merger Agreement.
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The completion of the Merger is subject to customary conditions, including (1) approval of the Merger
Agreement by State Banks shareholders, (2) authorization for listing on the New York Stock Exchange of the shares of Cadence Common Stock to be issued in the Merger, (3) the receipt of required regulatory approvals, including the
approval of the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, (4) effectiveness of the registration statement on Form
S-4
for the Cadence Common Stock
to be issued in the Merger, and (5) the absence of any order, injunction or other legal restraint preventing the completion of the Merger or making the completion of the Merger illegal. Each partys obligation to complete the Merger is
also subject to certain additional customary conditions, including (a) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (b) performance in all material respects by the other party of its
obligations under the Merger Agreement, (c) the absence of a material adverse effect with respect to the other party during a specified period of time prior to the consummation of the Merger and (d) receipt by such party of an opinion from
its counsel to the effect that the Merger will qualify as a reorganization for U.S. federal income tax purposes.
The Merger Agreement
provides certain termination rights for both Cadence and State Bank and further provides that a termination fee of $37,500,000 will be payable by State Bank upon termination of the Merger Agreement under certain circumstances and that an expense
reimbursement amount of $2,000,000 will be payable by Cadence upon termination of the Merger Agreement under certain circumstances.
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
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 any other factual information regarding Cadence or State Bank, 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
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information regarding Cadence, State Bank, their respective affiliates or their respective businesses, the Merger Agreement and the Merger that will be contained in, or incorporated by reference
into, the Registration Statement on Form
S-4
that will include a joint information statement of Cadence and proxy statement of State Bank and a prospectus of Cadence (although Cadence may elect to separately
file the information statement of Cadence), as well as in the Forms
10-K,
Forms
10-Q
and other filings that each of Cadence and State Bank make with the Securities and
Exchange Commission.