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Item 1.01
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Entry into a Material Definitive Agreement.
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Agreement and Plan of Merger
On November 16, 2017, Ameris Bancorp, a
Georgia corporation (“Ameris”), and Atlantic Coast Financial Corporation, a Maryland corporation (“Atlantic”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Atlantic will merge into Ameris,
with Ameris as the surviving entity (the “Merger”). The Merger Agreement provides that, immediately following the Merger,
Atlantic Coast Bank, a Florida bank wholly owned by Atlantic, will be merged into Ameris Bank, a Georgia bank wholly owned by Ameris,
with Ameris Bank as the surviving entity (the “Bank Merger”).
Under the terms and subject to the conditions
of the Merger Agreement, Atlantic’s stockholders will have the right to receive $1.39 in cash and 0.17 shares of Ameris common
stock for each share of the common stock of Atlantic they hold. The Merger Agreement provides that immediately prior to the closing
of the Merger, Atlantic’s outstanding restricted stock awards will fully vest and be converted into the right to receive
the same merger consideration per share as other outstanding shares of Atlantic common stock.
The Merger Agreement has been unanimously
approved by the boards of directors of Ameris and Atlantic. The closing of the Merger is subject to the required approval of Atlantic’s
stockholders, requisite regulatory approvals, the effectiveness of the registration statement to be filed by Ameris with respect
to the stock to be issued in the Merger and other customary closing conditions. The Merger is expected to close during the second
quarter of 2018.
The Merger Agreement contains usual and
customary representations and warranties that Ameris and Atlantic made to each other as of specific dates. The assertions embodied
in those representations and warranties were made solely for purposes of the contract between Ameris and Atlantic and may be subject
to important qualifications and limitations agreed to by the parties in connection with negotiating its terms. Moreover, the representations
and warranties are subject to a contractual standard of materiality that may be different from what may be viewed as material to
stockholders, and the representations and warranties may have been used to allocate risk between Ameris and Atlantic rather than
establishing matters as facts.
The Merger Agreement may be terminated
in certain circumstances, including the following: (i) by either party in the event that events having a material adverse effect
on the other party occur and are continuing; (ii) by either party in the event of a breach by the other party of any covenant,
agreement or obligation contained in the Merger Agreement which has not been cured within twenty days; (iii) by Ameris in the event
that Ameris learns of any fact or condition that would be expected to have a material adverse effect and which Atlantic was required,
but failed, to disclose; (iv) by either party if a regulatory agency whose approval is required for the Merger or the Bank Merger
denies the requested approval or any governmental authority issues a final, nonappealable injunction permanently enjoining or otherwise
prohibiting the contemplated transactions; (v) by either party in the event that, under certain circumstances, the Merger shall
not have been consummated by June 30, 2018 (provided that either party may extend such date for an additional period of three months,
in which event the aggregate cash portion of the merger consideration to be received by Atlantic’s stockholders will be increased
by the amount of Atlantic’s after-tax net income for January 1, 2018 through June 30, 2018); (vi) by either party if the
requisite Atlantic stockholder approval is not obtained; (vii) by Atlantic, prior to receipt of the Atlantic stockholder approval,
to enter into another proposed offer; and (viii) by Atlantic in the event that the price of Ameris common stock decreases in comparison
to the specified ratio provided in the Merger Agreement and Ameris elects not to increase the merger consideration to be received
by Atlantic’s stockholders. The Merger Agreement further provides that a termination fee of $5.75 million will be payable
by Atlantic to Ameris upon termination of the Merger Agreement under certain circumstances, including if Atlantic or Ameris terminates
the Merger Agreement under certain circumstances while another proposed offer is outstanding or after such an offer has been accepted.
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 such document, which
is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
Voting Agreement
In connection with entering into the Merger
Agreement, the directors and certain officers of Atlantic have entered into a Voting and Support Agreement (the “Voting Agreement”)
with Ameris and Atlantic. The Voting Agreement generally requires that such stockholders agree to vote their shares of Atlantic
common stock in favor of the Merger and against any action or agreement that would be reasonably likely to impair the ability of
Ameris or Atlantic to complete the Merger, or that would otherwise impede or delay the consummation of the transactions contemplated
by the Merger Agreement, and against any alternative acquisition proposal.
The foregoing description of the Voting
Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document, a form
of which is included as Exhibit A to the Merger Agreement filed as Exhibit 2.1 hereto and which is incorporated herein by reference.
Director Non-Solicitation Agreements
Simultaneously with the execution of the
Merger Agreement, each of the directors of Atlantic and Atlantic Coast Bank entered into a Director Non-Solicitation Agreement
with Ameris that contains provisions related to non-disclosure of confidential information, non-recruitment of employees and non-solicitation
of customers.
The foregoing description of the Director
Non-Solicitation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such
document, a form of which is included as Exhibit C to the Merger Agreement filed as Exhibit 2.1 hereto and which is incorporated
herein by reference.
Executive Non-Competition Agreement
Simultaneously with the execution of the
Merger Agreement, John K. Stephens, Jr., the President and Chief Executive Officer of Atlantic and Atlantic Coast Bank, entered
into an Executive Non-Competition Agreement with Ameris that contains provisions related to non-disclosure of confidential information,
non-recruitment of employees, non-solicitation of customers and non-competition, and provides for the payment to Mr. Stephens of
the sum of $605,000, to be paid in equal installments over a period of eighteen months.
The foregoing description of the Executive
Non-Competition Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such
document, a form of which is included as Exhibit D to the Merger Agreement filed as Exhibit 2.1 hereto and which is incorporated
herein by reference.
Participants in the Merger Solicitation
Ameris and Atlantic, and certain of their
respective directors, executive officers and other members of management and employees, may be deemed to be participants in the
solicitation of proxies from the stockholders of Atlantic in respect of the Merger. Information regarding the directors and executive
officers of Ameris and Atlantic and other persons who may be deemed participants in the solicitation of the stockholders of Atlantic
in connection with the Merger will be included in the proxy statement/prospectus for Atlantic’s special meeting of stockholders,
which will be filed by Ameris with the Securities and Exchange Commission (the “SEC”). Information about Ameris’s
directors and executive officers can also be found in Ameris’s definitive proxy statement in connection with its 2017 annual
meeting of shareholders, as filed with the SEC on April 3, 2017, and other documents subsequently filed by Ameris with the SEC.
Information about Atlantic’s directors and executive officers can also be found in Atlantic’s definitive proxy statement
in connection with its 2017 annual meeting of stockholders, as filed with the SEC on April 18, 2017, and other documents subsequently
filed by Atlantic with the SEC. Additional information regarding the interests of such participants will be included in the proxy
statement/prospectus and other relevant documents regarding the Merger filed with the SEC when they become available.