Item 1.01 Entry into a Material Definitive Agreement
On
Subject to the terms and conditions of the Merger Agreement, which has been approved by the Board of Directors of Seacoast and Fourth Street, upon completion of the Merger, each outstanding share of Fourth Street common stock will be converted into the right to receive 0.1275 (the "Exchange Ratio") of a share of Seacoast common stock, subject to the payment of cash in lieu of fractional shares (the "Merger Consideration").
Prior to the effective time of the Merger, Fourth Street will take all actions necessary to cause each issued and outstanding Fourth Street equity award to be terminated in exchange for an amount in cash equal to the product of (i) the aggregate number of shares of Fourth Street common stock subject to such Fourth Street equity awards immediately prior to its termination multiplied by (ii) the excess, if any, of (A) the value of the average closing price multiplied by the Exchange Ratio, as finally determined as of the effective time of the Merger over (B) the exercise price per share for the applicable Fourth Street equity award. Each outstanding share of Seacoast common stock will remain outstanding and be unaffected by the Merger.
The Merger Agreement contains customary representations and warranties from both Seacoast and Fourth Street and each have agreed to customary covenants, including, among others, covenants on the part of Fourth Street relating to: (1) the conduct of Fourth Street's businesses during the interim period between the execution of the Merger Agreement and the completion of the Merger, (2) Fourth Street's obligation to convene and hold a meeting of its shareholders to consider and vote upon the approval of the Merger Agreement, and (3) subject to certain exceptions, the recommendation by the Board of Directors of Fourth Street in favor of the approval by its shareholders of the Merger Agreement and the transactions contemplated thereby (including the Merger). Fourth Street has also agreed not to, and to cause its directors, officers, employees and representatives and affiliates not to, (1) initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect to any acquisition proposal, (2) engage or participate in any negotiations concerning, or with, any person relating to, any acquisition proposal or (3) subject to certain exceptions, provide any confidential or nonpublic information or data to, or have or participate in any discussions with any person relating to any acquisition proposal.
Completion of the Merger is subject to certain customary conditions, including, among others, (1) adoption of the Merger Agreement by Fourth Street's shareholders, (2) required regulatory consents shall have been obtained or made and be in full force and effect and all waiting periods required by law shall have expired and such required regulatory consents shall not be subject to any condition or consequence that would, after the effective time of the Merger, have a material adverse effect on Seacoast or any of its subsidiaries, including Fourth Street, (3) the absence of any order issued by any governmental authority preventing the consummation of the Merger and the absence of any law or order enacted, entered, promulgated or enforced by any governmental entity that prohibits, restrains or makes illegal the consummation of the Merger, (4) the effectiveness of the registration statement for the Seacoast common stock to be issued in the Merger and (5) the approval for listing of the Seacoast common stock to be issued in the Merger on NASDAQ.
Each party's 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, (3) corporate authorization, and (4) since the date of the Merger Agreement, no fact, circumstance or event has occurred or is reasonably likely to have a material adverse effect.
In addition, Seacoast's obligation to complete the Merger is subject to the
satisfaction of certain conditions by Fourth Street, including (1) the receipt
of all consents required as a result of the Merger pursuant to certain
contracts, (2) the holders of no more than 5% of Fourth Street common stock
shall have exercised their dissenters' rights, (3) receipt by Seacoast of an
opinion from its counsel to the effect that the Merger will qualify as a
reorganization within the meaning of the Internal Revenue Code of 1986, as
amended, (4) Seacoast's receipt of executed claims letters and restrictive
covenant agreements by certain officers and/or directors of Fourth Street, (5)
Fourth Street's consolidated tangible shareholders' equity must be not less than
The Merger Agreement provides certain termination rights for both Seacoast and
Fourth Street and further provides that a termination fee of
Fourth Street may terminate the Merger Agreement if (A) (i) the average closing
price of Seacoast's common stock at any time during the five day period
commencing with the earlier of (x) the date on which the last required
regulatory approval is obtained or (y) the date on which Fourth Street
shareholder approval is obtained, is less than (ii) 85% of the average closing
price of Seacoast's common stock for the 10 trading days ending on
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 is filed as Exhibit 2.1 hereto, and is incorporated into this report by reference thereto. The Merger Agreement has been attached as an exhibit to this report in order to provide investors and shareholders with information regarding its terms. It is not intended to provide any other financial information about Seacoast, Fourth Street, or their respective subsidiaries and affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates, are solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the 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 parties that differ from those applicable to investors. Investors should not rely on the representations, warranties, or covenants or any description thereof as characterizations of the actual state of facts or condition of Seacoast, Fourth Street or any of their respective subsidiaries or affiliates. 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 public disclosures by Seacoast.
Additional Information
Seacoast and Fourth Street will file a proxy statement/prospectus and other
relevant documents concerning the Merger with the
Investors will be able to obtain these documents free of charge at the
The directors, executive officers, and certain other members of management and employees of Fourth Street are participants in the solicitation of proxies in favor of the Merger from the Fourth Street shareholders.
Important Information for Investors and Shareholders
Seacoast will file with the
Fourth Street, its directors and executive officers and other members of
management and employees may be considered participants in the solicitation of
proxies in connection with the proposed merger. 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
proxy statement/prospectus and other relevant materials to be filed with the
Cautionary Notice Regarding Forward-Looking Statements
This current report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is intended to be protected by the safe harbor provided by the same. These statements are subject to numerous risks and uncertainties. These risks and uncertainties include, but are not limited to, the following: failure to obtain the approval of shareholders of Fourth Street in connection with the merger; the timing to consummate the proposed merger; the risk that a condition to the closing of the proposed merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed merger is not obtained or is obtained subject to conditions that are not anticipated; the parties' ability to achieve the synergies and value creation contemplated by the proposed merger; the parties' ability to promptly and effectively integrate the businesses of Seacoast and Fourth Street, including unexpected transaction costs, the costs of integrating operations, severance, professional fees and other expenses; the diversion of management time on issues related to the merger; the failure to consummate or any delay in consummating the merger for other reasons; changes in laws or regulations; the risks of customer and employee loss and business disruption, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures and solicitations of customers and employees by competitors; the difficulties and risks inherent with entering new markets; and changes in general economic conditions. For additional information concerning factors that could cause actual conditions, events or results to materially differ from those described in the forward-looking statements, please refer to the factors set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Seacoast's most recent Form 10-K report, Form 10-Q report and Form 8-K reports, which are available online at www.sec.gov. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Seacoast or Fourth Street.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits. Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as ofJanuary 23, 2020 , by and amongSeacoast Banking Corporation of Florida ,Seacoast National Bank ,Fourth Street Banking Company andFreedom Bank . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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