SSB SouthState Corporation

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

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SOUTH STATE CORPORATION

1101 First Street South

Winter Haven, Florida 33880

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electronically by e-mail on an ongoing basis. For those who previously requested printed proxy materials or electronic materials on an ongoing basis, you will receive those materials as you requested.

YOUR VOTE IS IMPORTANT. PLEASE VOTE PROMPTLY BY TELEPHONE, THE INTERNET OR BY SIGNING THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.

If you have any questions about how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact our Corporate Secretary at (863) 293-4710, our or proxy solicitor, Innisfree M&A Incorporated, at (877) 717-3898 (toll-free for shareholders) or (212) 750-5833 (collect for banks and brokers).

Please vote as promptly as possible by telephone, over the Internet or by signing, dating and returning the Proxy Card.

We are monitoring the emerging public health impact of coronavirus (COVID-19). The health and safety of our shareholders, directors, officers, employees and other constituents are of paramount concern to the board of directors and management. We currently plan to hold the Annual Meeting as presented in this notice. However, if public health developments warrant, we may need to change the date, time or location of the Annual Meeting, add a virtual component to the Annual Meeting or, if permitted by applicable law, hold the Annual Meeting solely by means of remote location and not in a physical location. Any such changes will be publicly announced as promptly as practicable before the meeting by press release and posting on our website, as well as through an SEC filing. This notice also constitutes notice of any such change in the time, date or location of the Annual Meeting and incorporates any future press releases or public filings with respect to the date, time or location of the Annual Meeting.

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1101 First Street South

Winter Haven, Florida 33880

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OUR RECENT MERGER OF EQUALS TRANSACTION

On June 7, 2020, we completed our merger of equals transaction with CenterState Bank Corporation (“CenterState”), a Florida corporation, pursuant to the Agreement and Plan of Merger, dated as of January 25, 2020 (the “Merger Agreement”). Under the Merger Agreement, CenterState merged with and into the Company, with the Company as the surviving corporation (the “Merger”), and immediately following the Merger, South State Bank, a South Carolina banking corporation and wholly owned bank subsidiary of the Company (“South State Bank”), merged with and into CenterState Bank, N.A., a national banking association and wholly owned bank subsidiary of CenterState (“CenterState Bank”), with CenterState Bank continuing as the surviving bank (the “Bank Merger”). In connection with the Bank Merger, CenterState Bank changed its name to “South State Bank, National Association.”

Unless the context indicates otherwise, all references to the “Company,” “South State,” “we,” “us” and “our” in this Proxy Statement refer to South State Corporation, together with its subsidiaries, including South State Bank, National Association (the “Bank”). However, if the discussion relates to a period before the Bank Merger on June 7, 2020, the terms refer to South State Corporation, together with its subsidiaries, including South State Bank and references to the “Bank” refer to South State Bank.

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The presence in person or by proxy of the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting. If a share is represented for any purpose at the Annual Meeting by the presence of the registered owner or a person holding a valid proxy for the registered owner, it is deemed to be present for the purposes of establishing a quorum. Therefore, valid proxies which are marked “Abstain” or “Withhold” or as to which no vote is marked, including proxies submitted by brokers who are the record owners of shares but who lack the power to vote such shares (so-called “broker non-votes”), will be included in determining the number of votes present or represented at the Annual Meeting. The presiding officer of the Annual Meeting will determine all questions of order or procedure (and the presiding officer’s rulings will be final) and such presiding officer may, in his or her discretion, adjourn a meeting of shareholders regardless of whether a quorum is present. If any such adjournment is for a period of less than 30 days, no notice, other than an announcement at the Annual Meeting, is required to be given of the adjournment. If the adjournment is for 30 days or more, notice of the adjourned Annual Meeting will be given in accordance with our Bylaws. Directors, officers and regular employees of the Company, in addition to our proxy solicitor, may solicit proxies for the reconvened Annual Meeting in person or by mail, telephone or other means. At any such reconvened Annual Meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the Annual Meeting as originally noticed. Once a quorum has been established, it will not be destroyed by the departure of shares prior to the adjournment of the Annual Meeting.

Provided a quorum is established at the Annual Meeting, directors will be elected by a majority of the votes cast at the Annual Meeting. Our shareholders do not have cumulative voting rights. Abstentions, broker non-votes and the failure to return a signed proxy will have no effect on the outcome of this matter.

Proposal 2, the approval of an amendment to our Articles of Incorporation to eliminate the classified structure of the Board of Directors, requires the affirmative vote of the holders of at least eighty percent (80%) of our common stock issued and outstanding as of the record date. Abstentions, broker non-votes and the failure to return a signed proxy will have the same effect as a vote against this matter.

All other matters to be considered and acted upon at the Annual Meeting require that the number of shares of common stock voted in favor of the matter exceed the number of shares of common stock voted against the matter, provided a quorum has been established. Abstentions, broker non-votes and the failure to return a signed proxy will have no effect on the outcome of such matters.

Brokers are members of the New York Stock Exchange (the “NYSE”) which allows its member-brokers to vote shares held by them for their customers on matters the NYSE determines are routine, even though the brokers have not received voting instructions from their customers. If the NYSE does not consider a matter routine, then your broker is prohibited from voting your shares on the matter unless you have given voting instructions on that matter to your broker. Because the NYSE does not consider Proposals No. 1, 2, 3, 4 and 5 to be routine matters, it is important that you provide instructions to your bank or broker if your shares are held in street name so that your vote with respect to each of these matters is counted. If you do not give your bank or broker voting instructions with respect to Proposals No. 1, 2, 3, 4 and 5, your bank or broker may not vote on these matters.

ACTIONS TO BE TAKEN BY THE PROXIES

Each proxy, unless the shareholder otherwise specifies therein, will be voted according to the recommendations of the Board of Directors as follows:

Proposal One:FOR the election of the persons named in this Proxy Statement as the Board of Directors’ nominees for election to the Board of Directors; and

Proposal Two:  FOR the approval of an amendment to the Company’s Articles of Incorporation to eliminate the classified structure of the Board of Directors; and

Proposal Three:  FOR the proposal to amend and restate the Company’s Employee Stock Purchase Plan to increase the number of shares of our common stock that may be issued under the plan by up to 1,400,000 shares;

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Proposal Four:FOR the approval of the 2020 Omnibus Incentive Plan;

Proposal Five:FOR the approval of the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (the “SEC”), including the compensation discussion and analysis, the compensation tables and any related material disclosed in this Proxy Statement; and

Proposal Six:  FOR the ratification of the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.

In each case where you have appropriately specified how the proxy is to be voted, it will be voted in accordance with your specifications. As to any other matter of business that may be brought before the Annual Meeting, a vote may be cast pursuant to the accompanying proxy in accordance with the best judgment of the persons voting the same. However, the Board of Directors does not know of any such other business.

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Materials, if applicable, will be delivered to multiple shareholders sharing an address unless we have received contrary instructions from one or more of the shareholders. Shareholders who currently receive multiple copies of the proxy statement and annual report, or Notice Regarding the Availability of Proxy Materials, at their address and would like to request “householding” of their communications should contact their broker if they are beneficial owners or direct their request to our Corporate Secretary at the contact information below if they are registered holders.

If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, or Notice Regarding the Availability of Proxy Materials, please notify your broker, if you are a beneficial owner or, if you are a registered holder, direct your written request to our Corporate Secretary at the contact information below.

If requested, we will also promptly deliver, upon oral or written request, a separate copy of the proxy statement and annual report, or Notices Regarding the Availability of Proxy Materials, to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Beth S. DeSimone at South State Corporation, 1101 First Street South, Suite 202, Winter Haven, Florida 33880, Attention: Corporate Secretary, or by telephone at (863) 293-4710, or our proxy solicitor, Innisfree M&A Incorporated, at 501 Madison Avenue, 20th Floor, New York, NY 10022, (877) 717-3898 (toll-free for shareholders) or (212) 750-5833 (collect for banks and brokers).

ASSISTANCE

If you need assistance in completing your proxy card, have questions regarding the Annual Meeting, including directions to One Buckhead Plaza, or would like additional copies of the proxy materials, please contact Beth S. DeSimone at South State Corporation, 1101 First Street South, Suite 202, Winter Haven, Florida 33880, Attention: Corporate Secretary, or by telephone at (863) 293-4710, or our proxy solicitor, Innisfree M&A Incorporated, at 501 Madison Avenue, 20th Floor, New York, NY 10022, (877) 717-3898 (toll-free for shareholders) or (212) 750-5833 (collect for banks and brokers).

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BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth, as of July 27, 2020, the number and percentage of outstanding shares of common stock beneficially owned by (i) each director and nominee for director of the Company, (ii) each named executive officer of the Company, and (iii) all executive officers and directors of the Company as a group. Unless otherwise indicated, the mailing address for each beneficial owner is care of South State Corporation, 1101 First Street South, Winter Haven, Florida 33880.

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Director Nominees

At our Annual Meeting, you will be asked to vote for the election of eleven director nominees to serve for the terms specified below. The tables below set forth for each director nominee his or her name, age, year when first elected and year their current term expires, business experience for at least the past five years, and the qualifications that led to the conclusion that the individual should serve as a director.

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The Board of Directors unanimously recommends that shareholders vote “FOR” each of the above-referenced director nominees.

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FAMILY RELATIONSHIPS

There are no family relationships between any directors or executive officers of the Company, other than between Mr. Corbett and Stephen D. Young, our Senior Executive Vice President and Chief Strategy Officer, who are brothers-in-law.

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CORPORATE GOVERNANCE OVERVIEW

The Company and our Board of Directors are focused on our corporate governance practices and value independent Board oversight as an essential component of strong corporate performance to enhance shareholder value. Some of our key corporate governance policies are summarized in the bullets below:

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Corporate Governance Documents

The Board regularly reviews the Company’s corporate governance program in light of best practices, recent developments and the requirements of applicable laws and regulations. Copies of our key corporate governance documents, including our Code of Ethics and Corporate Governance Guidelines summarized below, can be found on our website at https://www.southstatebank.com/ under “Investor Relations.”  We will disclose any future amendments to, or waivers from, provisions of these documents on our website as promptly as practicable, as and to the extent required under The NASDAQ Stock Market listing standards and applicable SEC rules.

Code of Ethics—The Board and the Board of Directors of the Bank have adopted a Code of Ethics to provide ethical guidelines for the activities of our and our subsidiaries’ agents, attorneys, directors, officers, and employees (including, among others, our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and all managers reporting to these individuals who are responsible for accounting and financial reporting). The Code of Ethics is intended to promote, train, and encourage adherence in business and personal affairs to a high ethical standard and also to help maintain the Company as an institution that serves the public with honesty, integrity and fair-dealing. The Code of Ethics is designed to comply with the Sarbanes-Oxley Act of 2002 and certain other laws that provide guidelines in connection with possible breaches of fiduciary duty, dishonest efforts to undermine financial institution transactions and the intent to corrupt or reward a Company employee or other Company representative.

Corporate Governance Guidelines—The Board and the Board of Directors of the Bank have each adopted Corporate Governance Guidelines which govern their conduct and operation. Among other things, these guidelines outline the duties and responsibilities of each director and establish certain minimum requirements for director training. Each director is required to read, review and sign the Corporate Governance Guidelines on an annual basis.

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Annually Elected Board

After careful consideration, the Board has approved amendments to the Company’s Articles of Incorporation and Bylaws to provide for the annual election of directors, with each director to serve a one-year term, subject to approval by our shareholders of the proposed amendment to our Articles of Incorporation at our Annual Meeting.

Director Independence Review Process

The Governance and Nominating Committee, which was known as the Governance Committee prior to the Company’s Merger with CenterState, annually evaluates and makes a recommendation to the Board regarding the independence of each director. As a part of this evaluation process, the Governance and Nominating Committee considers, in addition to such other factors as it may deem appropriate, each director’s occupation, personal and affiliate transactions with the Company and its subsidiaries and other relevant direct and indirect relationships with the Company that may affect independence.

The Board has affirmatively determined that, of the 16 directors serving on the Board, the following ten directors do not have any relationships that would interfere with their exercising independent judgment in carrying out their responsibilities as a director of the Company and are independent in accordance with the requirements of The NASDAQ Stock Market:

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In addition, the Board has affirmatively determined that each member of the Audit, Compensation, Governance and Nominating, and Risk Committees is independent in accordance with the requirements of The NASDAQ Stock Market and applicable law.

The Board also affirmatively determined that each of Paula Harper Bethea, Thomas J. Johnson, Grey B. Murray, James W. Roquemore and Thomas E. Suggs, who resigned from our Board of Directors on June 7, 2020 in connection with the Merger, was independent in accordance with the requirements of The NASDAQ Stock Market for service on the Board and on the Committees on which he or she served. James C. Cherry, who also resigned from our Board on June 7, 2020 in connection with the Merger, was not considered an independent director under the requirements of The NASDAQ Stock Market.

Board Leadership Structure

The Board is led by the Executive Chairman. Pursuant to our Bylaws and Corporate Governance Guidelines, the Executive Chairman also serves as an officer of the Company, is elected by the Board, presides over each Board meeting and performs such other duties as may be incident to the office of the Executive Chairman. The Board is aware of the potential issues that may arise when an insider chairs the board of a company, but believes these concerns are mitigated by existing safeguards, including:

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In view of the Board’s extensive oversight responsibilities, we believe it is beneficial to have separate individuals serve in the roles of Executive Chairman and Chief Executive Officer. We believe it is the Chief Executive Officer’s responsibility to manage the Company and the Executive Chairman’s responsibility to guide the Board as the Board provides leadership to our executive management. Historically, both CenterState and the Company (prior to its merger with CenterState) maintained the separation of the roles of Chairman and Chief Executive Officer. In connection with the Merger with CenterState, the Company and CenterState agreed that John C. Corbett would serve as Chief Executive Officer and Robert R. Hill, Jr. would serve as Executive Chairman of the Company upon completion of the Merger. The Board believes that having Mr. Hill serve as Executive Chairman is valuable to the Board and the Company in view of Mr. Hill’s deep and significant experience with and knowledge of the Company, having served as its former Chief Executive Officer for over 15 years and as a member of the Board since 1996.

In addition, our Bylaws and Corporate Governance Guidelines provide for the appointment of a Lead Independent Director. Our Lead Independent Director facilitates independent oversight of management and promotes open dialogue among the independent directors during Board meetings, at executive sessions of the independent directors and between Board meetings.

We believe that this Board leadership structure enhances the effectiveness of Board oversight and provides a valuable perspective on our business that is independent from executive management. We recognize that different Board leadership structures may be appropriate for companies in different situations. We will continue to reexamine our corporate governance policies and leadership structures on an ongoing basis in an effort to ensure that they continue to meet our needs.

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Below is a summary of the respective duties and responsibilities of the Executive Chairman and the Lead Independent Director:

In accordance with our Bylaws, during the Specified Period, any removal of Mr. McPherson, as our Lead Director, Mr. Corbett, as our Chief Executive Officer, or Mr. Hill, as our Executive Chairman, requires the affirmative vote of at least 75% of the entire Board of Directors.

In accordance with our Corporate Governance Guidelines and the charters of the Board’s committees, the Board conducts its business as a group and through its standing and appointed committees. During 2019, each of our directors attended at least 75% of the aggregate of the total number of Board meetings and the total number of meetings held by the committees of the Board on which he or she served.

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There is no formal policy regarding director attendance at annual shareholder meetings, though we strongly encourage such attendance. We recognize that conflicts may occasionally arise that will prevent a director from attending an annual meeting. All of our directors serving as of our 2019 annual meeting attended our 2019 annual meeting of shareholders.

In addition to and outside of formal Board meetings, Board members have direct access to and regularly receive information from and engage with management. The Board and each of its standing committees also has the authority and resources to seek legal or other expert advice from sources independent of management.

The Board’s Role in Risk Oversight

The Board oversees risk through its various standing committees, principally the Audit Committee and the Risk Committee, which report directly to the Board. Our Audit Committee is primarily responsible for overseeing our accounting and financial reporting risk management processes on behalf of the full Board. The Audit Committee focuses on financial reporting risk and oversight of the internal audit process. It receives reports from management at least quarterly regarding our assessment of risks and the adequacy and effectiveness of internal control systems, and also reviews credit and market risk (including liquidity and interest rate risk), and operational risk (including compliance and legal risk). Our Chief Financial Officer meets with the Audit Committee on a quarterly basis in executive session to discuss any potential risks or control issues involving management. Our Chief Risk Officer meets with the Risk Committee each quarter to identify, assess, and monitor key business risks that may impact our operations and results.

Each of the Board’s standing committees, as described below, is involved to varying extents in the following:

The full Board focuses on the risks that it believes to be the most significant facing the Company and our general risk management strategy. The full Board also seeks to ensure that risks undertaken by the Company are consistent with the Board’s approved risk management strategies. While the Board oversees our risk management, management is responsible for the day-to-day risk management processes. We believe this division of responsibility is the most effective approach for addressing the risks facing our Company and that the Board’s leadership structure supports this approach.

Board Committees

A significant portion of the Board’s oversight responsibilities is carried out through its committees. Allocating responsibilities among committees increases the amount of attention that can be devoted to the Board’s oversight of the business and affairs of the Company.

Each Board committee operates pursuant to a written charter. These charters can be found on our website at https://www.southstatebank.com/ under “Investor Relations.”  Each Board committee annually reviews and assesses the adequacy of its charter and may recommend any changes to the Board.

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The key responsibilities of each Board committee are summarized below:

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The duties and responsibilities of the other committees maintained by the Board are summarized below:

Executive Committee:  The Executive Committee oversees the general loan committee and asset liability committee of the Company, including oversight of the identification, assessment and management of credit risk, monitoring of the Company’s capital planning, interest rate risk, liquidity risk and balance sheet management. The Executive Committee also oversees the correspondent banking committee and the management trust committee. The

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Executive Committee reviews and makes recommendations with respect to the proposed budget for the Company. The Executive Committee is authorized, between meetings of the Board, to exercise authority on behalf of the Board, except with respect to those matters specifically delegated to another Board committee and those matters required by law, the rules and regulations of any securities exchange on which the Company’s securities are listed, or the Company’s or the Bank’s charter or bylaws to be exercised by the full Board. During 2019, the Executive Committee held seven meetings.

Culture Committee:  In connection with the completion of the Merger, the Board established a Culture Committee to oversee the overall “tone at the top” of the Company, focusing on instilling our guiding core values into our leaders and employees, and developing a culture focused on enhancing engagement with all stakeholders, and on identifying, training and mentoring diverse leaders throughout the organization, including the Board. The establishment of a Culture Committee reflects the emphasis the Company places on communication of its core values to all stakeholders, on training and mentorship, and on the strategic initiative to inspire, recruit and reward high-quality employees.

Governance and Nominating Committees:  In accordance with our Bylaws, during the Specified Period, all vacancies resulting from the cessation of service by any current director of the Company who also either (a) served as a director of the Company or CenterState immediately prior to the completion of the Merger or (b) was nominated after the completion of the Merger by the Legacy South State Directors Nominating Committee or the Legacy CenterState Directors Nominating Committee, as applicable for any reason will be filled by the Board with a nominee selected by the Legacy South State Directors Nominating Committee or the Legacy CenterState Directors Nominating Committee, as applicable, in accordance with our Bylaws. In addition, during the Specified Period, the Legacy South State Directors Nominating Committee and the Legacy CenterState Directors Nominating Committee has the exclusive authority to nominate, on behalf of the Board, directors for election at each annual meeting, or at any special meeting at which directors are to be elected, to fill each seat previously held by a Legacy South State Director or a Legacy CenterState Director, as applicable. In all other circumstances, the Governance and Nominating Committee acts as the nominating committee for the purpose of recommending to the Board nominees for election to the Board, including with respect to any vacancy resulting from any increase in the number of directors.

The Legacy South State Directors Nominating Committee, the Legacy CenterState Directors Nominating Committee and the Governance and Nominating Committee, are referred to together as the “Nominating Committees” and each as a “Nominating Committee.”  The Nominating Committees have not established any specific, minimum qualifications that must be met for a person to be nominated to serve as a director, and the Nominating Committees have not identified any specific qualities or skills that they believe are necessary to be nominated as a director. The Legacy South State Directors Nominating Committee and the Legacy CenterState Directors Nominating Committee operate pursuant to the provisions of the Governance and Nominating Committee charter with respect to the identification and evaluation of director nominees. Potential candidates for the Board, including any recommendation by a shareholder of a candidate for director, will be reviewed by the Nominating Committees and selected based on a number of criteria, including a proposed nominee’s independence, age, skills, occupation, diversity, experience and any other factors beneficial to the Company in the context of the needs of the Board. When evaluating candidates recommended by others (including shareholders of the Company), the Nominating Committees may also consider whether the candidate would represent the interests of all shareholders and not serve for the purpose of favoring or advancing the interests of any particular shareholder group or other constituency.

The Nominating Committees have not adopted a formal policy with regard to the consideration of diversity in identifying director nominees. In determining whether to recommend a director nominee, each Nominating Committee considers and its members discuss diversity, among other factors, with a view toward the needs of the Board of Directors as a whole. Nominating Committee members generally conceptualize diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoints, education, work experiences professional skills and other qualities or attributes that contribute to Board heterogeneity when identifying and recommending director nominees. The Nominating Committees believe that the inclusion of diversity as one of many factors considered in selecting director nominees is consistent with the goal of creating a Board of Directors that best serves our needs and the interest of our shareholders.

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other members of the Board, and believes that the current members of the Board, including the director nominees, as a whole, possess a variety of complementary skills and characteristics, including the following:

Each individual director has qualifications and skills that the Nominating Committees believe, together as a whole, create a strong, well-balanced Board. The experience and qualifications of our directors are found in the tables above.

Each Nominating Committee will consider director nominees identified by its members, other directors, our officers and employees and other persons, including our shareholders. To be considered by the Nominating Committees, any recommendation by a shareholder of a candidate for director must be addressed to the Governance and Nominating Committee and must contain the information called for by the Governance and Nominating Committee charter, which includes all of the following information about the recommended candidate:

A Nominating Committee may require that any recommended candidate complete one or more questionnaires or otherwise provide additional information.

The Board has the authority to establish additional committees as needed, subject to the vote of at 75% of the entire Board in the case of any new committees established during the Specified Period.

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The Legacy South State Directors Nominating Committee and the Legacy CenterState Directors Nominating Committee are comprised of the Legacy South State Directors and the Legacy CenterState Directors, respectively, who satisfy the NASDAQ Stock Market independence requirements for nominating committee membership.

Stock Ownership Requirements

Pursuant to our Corporate Governance Guidelines, directors are required to own a minimum of $125,000 in market value of the Company’s stock (including restricted stock and stock underlying or issuable pursuant to restricted stock units or deferred compensation plans) by the end of the third anniversary of being elected to the Board and $250,000 in market value of the Company’s stock by the end of the sixth anniversary of being elected to the Board. After the threshold is attained, future changes in market value do not require the director to purchase additional stock.

Anti-Hedging and Anti-Pledging Policies

Pursuant to our Insider Trading Policy, directors, officers and employees are prohibited from:  (1) engaging in hedging, monetizing or similar transactions that are designed to offset a decrease in the market value of any securities of the Company and (2) holding securities of the Company in a margin account or otherwise pledging securities of the Company as collateral for a loan. A copy of our Insider Trading Policy can be found on our website at https://www.southstatebank.com/ under “Investor Relations.”

Mandatory Director Retirement Age

Pursuant to our Corporate Governance Guidelines and Bylaws, except for any directors as to whom such age requirement has been waived in accordance with our Bylaws, or those directors appointed to serve on the Board upon the completion of the Merger in accordance with the Bylaws, directors must be shareholders not over 72 years of age at the time of the shareholders’ meeting at which they are elected by the shareholders. In the event that a director attains age 72 during his or her term of office, he or she will serve until the end of his or her then-current term of office after his or her 72nd birthday.

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Board and Committee Annual Self-Assessments

On an annual basis, the Board and each of its committees evaluates its performance and identifies opportunities for improvement. The Board’s self-assessment process is managed by our Governance and Nominating Committee and the Lead Independent Director and each committee conducts its performance evaluation in such manner as it deems appropriate and reports the evaluation results to the Board. To facilitate the Board’s evaluation process, directors are presented with a written questionnaire requesting feedback from each director about his or her individual service and the effectiveness of the Board and each committee on which the director serves. The feedback collected from the questionnaires is then discussed among the full Board and its committees, as applicable.

Director Education

Pursuant to our Corporate Governance Guidelines, in addition to the orientation training they receive upon joining the Board, directors are required to complete a minimum of six hours of continuing education each year. Continuing education is offered in the form of an Annual Board Training Day, presentations by various speakers at regularly scheduled Board meetings, local conferences and other opportunities. This program provides education on the Company’s products, services and lines of business, compliance and regulatory topics and other topics identified by the Board.

Because each of Mr. Hill, Mr. Corbett and Mr. Pollok also serves on our Board of Directors, we have provided biographical information for them above. All positions held by each of our other executive officers, including the period each such position has been held, a brief account of their business experience during at least the past five years and certain other information is provided below. Information concerning directorships, committee assignments, minor positions and peripheral business interests has not been included.

William E. Matthews, V, age 56, was appointed as our Chief Financial Officer on June 7, 2020 in connection with the Merger. Before that, he served as Executive Vice President and Chief Financial Officer of CenterState and CenterState Bank, N.A. (2019 to June 7, 2020); President and Chief Financial Officer of NCOM (2018 to 2019); Chief Financial Officer of NCOM and NBC (2011 to 2019); NCOM Board member (2010 to 2019), Vice Chair (2012 to 2019); Board member of NBC (2012-2019); Partner at New Capital Partners, Birmingham, Alabama (2009 to 2011); Chief Financial Officer of RBC Bank (USA) (2008 to 2009); Executive Vice President and Chief Financial Officer of Alabama National Bancorporation (1998 to 2008).

Renee R. Brooks, age 50, was appointed as our Chief Operating Officer in 2018. Before that, she served as the Company’s Chief Risk Officer (2016 to 2017); Chief Administrative Officer (2012 to 2017) and as Corporate Secretary (2009 to 2014).

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Greg Lapointe, age 56, was appointed as our Chief Banking Officer on June 7, 2020 in connection with the Merger. Before that, he served as President of the Bank from 2018 to June 7, 2020, as the Northern Group President (2013 to 2018), and Western Group President (2009 to 2013). Prior to joining the Bank, Mr. Lapointe served in various leadership positions with Wells Fargo & Company and Bank of America, N.A. and their respective predecessor banks (1985 to 2009).

Richard Murray, IV, age 58, was appointed as our President on June 7, 2020 in connection with the Merger. Before that, he served as Executive Vice President and Chief Executive Officer of CenterState Bank, N.A. (2019 to June 7, 2020); Chair and Chief Executive Officer of NCOM (May 2017 to April 2019); NCOM Board member (2010 to April 2019); President and Chief Executive Officer of National Bank of Commerce (NBC) (2012 to 2018); President and Chief Operating Officer of the NCOM (2010 to 2017) and NBC (2010 to 2012); Regional President (Alabama and Florida) of RBC Bank (USA) (2008 to 2009); and President and Chief Operating Officer of Alabama National Bancorporation (2000 to 2008).

Stephen D. Young, age 44, was appointed as our Senior Executive Vice President and Chief Strategy Officer on June 7, 2020 in connection with the Merger. Before that, he served as Executive Vice President, and Chief Operating Officer of CenterState (2016 to June 7, 2020) and CenterState Bank, N.A. (May 2010 to June 7, 2020); Executive Vice President and Chief Financial Officer of CenterState Bank, N.A. (2002 to 2010); and senior auditor with Deloitte & Touche LLP (1998 to 2001).

Beth S. DeSimone, age 60, was appointed as our Chief Risk Officer and General Counsel on June 7, 2020 in connection with the Merger, Before that, she served as Executive Vice President, Chief Risk Officer and General Counsel of CenterState and CenterState Bank, N.A. (2018 to June 7, 2020); as General Counsel of CenterState and CenterState Bank, N.A. (November 2016 to 2018); Executive Vice President, General Counsel and Secretary, CommunityOne Bancorp and CommunityOne Bank (Nov. 2011 – Oct. 2016); and Counsel, Arnold & Porter, LLP, Washington, D.C. (1986-2011).

Daniel E. Bockhorst, age 56, was appointed as our Chief Credit Officer on June 7, 2020 in connection with the Merger. Before that, he served as Executive Vice President and Chief Credit Officer of CenterState (2017 to June 7, 2020) and CenterState Bank, N.A. (2010 to 2017), and as Chief Risk Officer of CenterState (2010 – 2017); director of special loans, Florida, for the Royal Bank of Canada, USA (2008 – 2010); Executive Vice President and Senior Lender for Indian River National Bank (2004 – 2008); and Senior Vice President Commercial Lender, Fifth Third Bank (1986 – 2004).

Sara Arana, age 37, was appointed as our Chief Accounting Officer on June 7, 2020 in connection with the Merger. Before that, she served as Senior Vice President and Chief Accounting Officer of CenterState Bank, N.A. (2018 to June 7, 2020). Ms. Arana joined CenterState in 2005 where she served in several leadership positions in the Finance and Accounting department of CenterState and CenterState Bank, N.A.

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Conditional Bylaw Amendment

In connection with its approval of resolutions to amend the Articles of Incorporation to eliminate the classified board structure, the Board also approved Amended and Restated Bylaws to conform to the changes that would be made to the Articles of Incorporation by the Articles of Amendment, if adopted by the shareholders. These Amended and Restated Bylaws will become effective only following approval by the shareholders of the Declassification Amendment, the subsequent filing of the Articles of Amendment with the Secretary of State of the State of South Carolina to give effect to the Declassification Amendment, and the implementation of the Accelerated Declassification Plan.

Vote Required

Approval of the adoption of the Declassification Amendment to eliminate the classified board structure requires the affirmative vote of the holders of at least eighty percent (80%) of our common stock issued and outstanding as of the Record Date.

The Board of Directors unanimously recommends that shareholders vote FOR the approval of the Declassification Amendment.

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Available Shares

The total number of shares of our common stock authorized for purchase under the ESPP, prior to the proposed amendment and restatement of the ESPP, is 363,825, of which 329,729 shares had been sold as of July 27, 2020. Accordingly, as of July 27, 2020, only 34,096 shares remained authorized for future issuance under the ESPP. The number of shares of our common stock authorized for issuance under the ESPP reflects adjustments in accordance with the terms of the ESPP resulting from prior stock dividends.

If shareholders approve the increase in the number of shares available for issuance under the ESPP, a total of 1,434,096 shares would be available for future purchases under the ESPP, subject to adjustment in the event of future stock dividends, stock splits and certain other changes to our capital structure. This represents an increase of up to 1,400,000 shares that will be available for future purchases under the ESPP in the absence of shareholder approval of the amended and restated ESPP.

Participants are generally protected against dilution in the event of certain capital changes such as a stock dividend, stock split, or combination of shares, recapitalization or other change in our capitalization, or other distribution with respect to holders of our common stock other than normal cash dividends.

Administration

The ESPP is administered by the Compensation Committee of the Board. The Compensation Committee has the power in its sole and absolute discretion to interpret the ESPP, adopt rules and regulations for administering the ESPP and make all other determinations necessary or advisable for administering the ESPP. The Compensation Committee or the Board may from time to time adopt amendments to the ESPP. However, unless approved by our shareholders (if shareholder approval is necessary to satisfy the applicable requirements of federal securities laws, the Code or the rules of any stock exchange on which our common stock is then listed), no amendment may materially affect the ESPP’s eligibility requirements, increase the number of shares available for issuance under the ESPP, or materially increase the benefits to employees who participate in ESPP. In addition, no employee’s existing rights with respect to options that have been granted under the ESPP may be adversely affected (unless required by law) by any amendment without the employee’s consent. The Compensation Committee may also terminate ESPP at any time, including during an option period. If ESPP is terminated, each participant’s account will be refunded in cash.

Eligibility

Any employee who is eligible to participate in our 401(k)-employee savings plan and who customarily is scheduled to work at least 20 hours per week is eligible to participate in the ESPP. Notwithstanding the foregoing, no employee who owns five percent or more of our total outstanding shares of common stock may participate in the ESPP. As of July 27, 2020, 564 employees participated in the ESPP, and approximately 5,500 were eligible to participate.

Consultants and non-employee directors are not eligible to participate in the ESPP.

Participation; Quarterly Offering Periods

Under the ESPP, eligible employees may elect to have payroll deductions made in whole percentages of not more than 10% of their compensation. At the end of each quarterly option period (which begin on the first day and end on the last day of each calendar quarter), each participant’s payroll deductions will be used to acquire our common stock at a price equal to 95% of the fair market value of the stock on either the first or last day of the quarterly option period, whichever is lower. Under the ESPP, “fair market value” means the closing price of the common stock on the Nasdaq Stock Market (or such other stock exchange or over-the-counter market which constitutes the primary market for the common stock) as of the last business day prior to the date as of which a valuation is being made. No employee may purchase more than 10,000 shares during any quarterly option period. In addition, no employee may purchase during any year shares worth more than $25,000, determined as of the beginning of each quarterly option period.

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Eligible employees may elect to participate by delivering a completed requested form to the administrator of the ESPP. A request form will remain in effect until the administrator of the ESPP receives a subsequent request form or the ESPP terminates. A participant may increase or decrease his or her payroll deduction by submitting to the administrator a new request form. The change in payroll deduction will be effective on the first pay period commencing in the month following the administrator’s receipt of the new request form by the administrator (or earlier if approved by the administrator), and will remain in effect until subsequently changed. A participant who discontinues his or her payroll deductions may elect to have the balance in his or her account returned to him or her or used to purchase stock under the ESPP, and must wait at least six months before again participating in the ESPP. A participant who retires in accordance with our retirement policy, becomes disabled or dies may elect to have his or her account returned to him or her (or his or her estate) or used to purchase stock under the ESPP. If a participant’s employment is terminated for any reason other than retirement, disability or death, his or her account will be returned to him or her and not used to purchase stock under the ESPP.

There are no Company matching contributions under the ESPP.

Plan Benefits

Participation in the ESPP is voluntary and is dependent on each eligible employee’s election to participate and on each participant’s determination as to the level of his or her payroll deductions (subject to the limitations set forth in the ESPP). Accordingly, future purchases under the ESPP are not determinable.

The following table contains certain information as of December 31, 2019, relating to securities authorized for issuance under our equity compensation plans:

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Included within the 1,011,669 number of securities available for future issuance in Column C of the table above are 961,355 shares remaining for future grant from the 1,000,000 of authorized shares under our 2019 Omnibus Incentive Plan and 50,314 shares remaining for future grant from the 363,825 of authorized shares under our ESPP as of December 31, 2019. Shares issued in respect of restricted stock and restricted stock units granted under the 2019 Omnibus Incentive Plan count as one share for every share/unit granted under the plan. All securities totals for the outstanding and remaining available for future issuance amounts described in the table above have been adjusted to give effect to stock dividends paid on March 23, 2007, January 1, 2005 and December 6, 2002.

Merger; Share Exchange; Asset Sale

In the event of a merger or share exchange in which we are the surviving company, the right to purchase shares through an offering will continue. In the event of our dissolution or liquidation, or a merger or share exchange in which we are not the surviving company, or a sale of all or substantially all of our assets, the ESPP and any offerings under it will terminate on the effective date of such liquidation, dissolution, merger, share exchange or asset sale, and the balance then standing to the credit of each participant in his or her account will be refunded promptly.

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Termination of ESPP

The ESPP will terminate on June 30, 2022, unless it is terminated by the Compensation Committee before that time. The Company currently expects that, prior to June 30, 2022, the Compensation Committee will amend the ESPP to extend the date of its termination.

Federal Income Tax Consequences

The following discussion briefly summarizes certain U.S. federal income tax consequences to participants who may receive grants of awards under the ESPP. The discussion is based upon current interpretations of the Code, and the regulations promulgated thereunder as of such date. This summary describes the general tax principles that apply and is provided only for general information. Certain types of taxes, such as state and local income taxes, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. The summary does not discuss all aspects of income taxation that may be relevant to a participant in light of his or her personal investment circumstances. This summarized tax information is not tax advice.

The ESPP is not qualified under Section 401 of the Code, but is intended to meet the requirements of an employee stock purchase plan under Section 423 of the Code. An employee pays no tax when the employee enrolls in the ESPP, when the employee purchases shares of common stock pursuant to the ESPP or when the employee receives shares of common stock. After-tax payroll deductions under the ESPP are used to purchase shares of common stock. An employee will have a taxable gain or loss when any shares of common stock purchased through the ESPP are sold.

If an employee sells the stock within two years of the date of grant of the option or within one year of the actual purchase (“exercise”) of the shares under the ESPP (each, a “disqualifying disposition”), then the excess of the fair market value of the shares on the exercise date over the purchase price will be taxed as ordinary income. The amount of such difference will be added to the basis of the shares for purposes of determining the amount of gain or loss on the sale of such shares, and such gain or loss will be long-term or short-term capital gain or loss for income tax purposes depending upon how long such shares were held. The Company will be entitled to a deduction from income in an amount equal to the ordinary income reported by the employee arising from a disqualifying disposition.

If an employee sells the stock after the applicable holding period described above, then the lesser of (i) the excess of the fair market value of the shares on the date of grant over the purchase price at exercise or (ii) the excess of the amount realized on sale of the shares over the purchase price at exercise will be taxed as ordinary income, and the balance of the employee’s gain, if any, will be long-term capital gain. The Company will not be entitled to a deduction from income with respect to the disposition of shares under these circumstances. If the shares held for the periods described above are sold and the sale price is less than the purchase price, there is no ordinary income and the participating employee has a long-term capital loss equal to the difference between the sale price and the purchase price.

Vote Required

Approval of the amended and restated ESPP requires that the number of shares voted in favor of the proposal exceed the number of shares voted against the proposal.

The Board of Directors unanimously recommends that shareholders vote FOR the approval of the amended and restated ESPP.

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Corporate Governance Aspects of the 2020 Plan

The Board believes that the design of the 2020 Plan and the number of shares to be authorized for issuance under the plan are consistent with the interests of shareholders and good corporate governance practices. In adopting and approving the 2020 Plan, the Board was mindful of investor considerations relating to the plan, including the following:

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Description of the 2020 Plan

The following is a description of the 2020 Plan. This description is qualified in its entirety by reference to the full text of the 2020 Plan, which is attached as Annex C to this Proxy Statement and incorporated herein by reference.

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General

Awards granted under the 2020 Plan may be in the form of non-qualified stock options, incentive stock options, SARs, restricted stock, restricted stock units, cash awards, other stock‑based awards or any combination of those awards. The 2020 Plan provides that awards may be made under the 2020 Plan for ten years following the adoption of the 2020 Plan by the Company’s board of directors.

Administration

Under the terms of the 2020 Plan, the 2020 Plan will be administered by the Compensation Committee of the board of directors or such other committee as the board of directors may designate (the “committee”). The committee will consist entirely of two or more “outside directors” who are “non-employee directors” as defined in Rule 16b-3 under the Exchange Act. Under the terms of the 2020 Plan, the committee can make rules and regulations and establish such procedures for the administration of the 2020 Plan as it deems appropriate. Any determination made by the committee under the 2020 Plan will be made in the sole discretion of the committee and such determinations will be final and binding on all persons.

Eligibility

The 2020 Plan provides for awards to the directors, officers, employees and consultants of the Company and its subsidiaries and affiliates. As of June 30, 2020, there were approximately 14 non-employee directors, 5,500 employees (including 16 executive officers), and no consultants eligible to participate in the 2020 Plan. The Company has traditionally not granted equity awards to consultants and has no current intention to do so.

Shares Available

The 2020 Plan provides that the aggregate number of shares of the Company’s common stock available for delivery pursuant to awards granted under the 2020 Plan is 1,500,000 shares, plus any shares that are available for grant under the 2019 Plan as of the Plan Effective Date, subject to adjustment in certain circumstances to prevent dilution or enlargement. At July 27, 2020, 585,457 shares of common stock remained available for future grants under the 2019 Plan. The maximum number of shares that may be granted pursuant to incentive stock options under the 2020 Plan is 1,500,000.

As described above, if the 2020 Plan is approved by the Company’s shareholders, no new awards will be granted under the 2019 Plan or any other Prior Plan. However, awards previously granted and outstanding under the Prior Plans will remain in full force and effect under such plans according to their respective terms, and to the extent that any such award is forfeited, terminates, expires or lapses without being exercised (to the extent applicable), or is settled for cash, shares of common stock of the Company subject to such award which are not delivered as a result will be available for awards under the 2020 Plan.

Shares underlying awards that expire or are forfeited or terminated without being exercised or awards that are settled for cash will again be available for the grant of additional awards within the limits provided by the 2020 Plan. Shares withheld by or delivered to the Company to satisfy the exercise price of options or SARs or tax withholding obligations with respect to any award granted under the 2020 Plan will nonetheless be deemed to have been issued under the 2020 Plan. Shares purchased on the open market with the proceeds of the exercise price of an option shall not be available for issuance in connection with other awards under the 2020 Plan.

Stock Options

Subject to the terms and provisions of the 2020 Plan, options to purchase shares of Company common stock may be granted to eligible individuals at any time and from time to time as determined by the committee. An option may be granted with or without a related SAR. Options may be granted as incentive stock options, which are intended to qualify for favorable treatment to the recipient under Federal tax law, or as non-qualified stock options, which do not qualify for this favorable tax treatment. Subject to the limits provided in the 2020 Plan, the committee determines the number of options granted to each recipient. Each option grant will be evidenced by a stock option agreement that specifies the option

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exercise price, whether the options are intended to be incentive stock options or non-qualified stock options, the duration of the options, the number of shares to which the options pertain, the vesting terms and such additional limitations, terms and conditions as the committee may determine.

The committee determines the exercise price for each option granted, except that the option exercise price may not be less than 100% of the fair market value of a share of Company common stock on the date of grant. As of July 27, 2020, the fair market value (as that term is defined under the 2020 Plan) of a share of Company common stock was $46.89. All options granted under the 2020 Plan will expire no later than ten years from the date of grant. The methods of exercising an option granted under the 2020 Plan is set forth in the 2020 Plan. Stock options are nontransferable except by will or by the laws of descent and distribution. The granting of an option does not accord the recipient the rights of a shareholder, and such rights accrue only after the exercise of an option and the registration of shares of Company common stock in the recipient’s name.

Stock Appreciation Rights

A SAR will entitle the holder to receive, with respect to each share of Company common stock covered by the SAR, the amount by which the fair market value of one share of Company common stock at the time of exercise exceeds the fair market value of one share of Company common stock on the date of grant. A SAR may be granted with or without a related option. The exercise price of a SAR shall not be less than 100% of the fair market value of a share of Company common stock on the date of grant. All SARs granted under the 2020 Plan will expire no later than ten years from the date of grant.

Each SAR will be evidenced by an award agreement that specifies the exercise price (or base price), the number of shares to which the SAR pertains and such additional limitations, terms and conditions as the committee may determine. The Company may make payment of the amount to which the participant exercising SARs is entitled by delivering shares of Company common stock, cash or a combination of common stock and cash as set forth in the award agreement relating to the SARs. The method of exercising a SAR granted under the 2020 Plan is set forth in the 2020 Plan. SARs are not transferable except by will or the laws of descent and distribution. Each SAR will be evidenced by an award agreement that specifies the date and terms of the award and such additional limitations, terms and conditions as the committee may determine.

Restricted Stock

The 2020 Plan provides for the award of shares of Company common stock that are subject to forfeiture and restrictions on transferability as set forth in the 2020 Plan and as may be otherwise determined by the committee. Each grant of restricted stock will be evidenced by an award agreement that specifies the number of shares of restricted stock and such additional limitations, terms and conditions as the committee may determine. Except for these restrictions and any others imposed by the committee, upon the grant of restricted stock, the recipient will have rights of a shareholder with respect to the restricted stock, including the right to vote the restricted stock and to receive all dividends and other distributions paid or made with respect to the restricted stock (which dividends relating to restricted stock subject to performance vesting conditions will only vest upon the vesting of the restricted stock relating to such dividends). During the restriction period set by the committee, the recipient may not sell, transfer, pledge, exchange or otherwise encumber the restricted stock.

Restricted Stock Units

The 2020 Plan authorizes the committee to grant restricted stock units and deferred share rights. Restricted stock units and deferred share rights are not shares of Company common stock and do not entitle the recipients to the rights of a shareholder. Each grant of restricted stock units will be evidenced by an award agreement that specifies the number of restricted stock units and such additional limitations, terms and conditions as the committee may determine. Restricted stock units granted under the 2020 Plan may or may not be subject to performance conditions. The committee may provide for dividend equivalents; provided, however, that dividend equivalents credited with respect to any award of restricted stock units shall be subject to the same vesting conditions applicable to such award and shall, if vested, be delivered or paid at the same time as such award. The recipient may not sell, transfer, pledge or otherwise encumber restricted stock

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units granted under the 2020 Plan prior to their vesting. Restricted stock units will be settled in cash or shares of Company common stock, in an amount based on the fair market value of Company common stock on the settlement date.

Cash Awards

The 2020 Plan provides for the award of cash awards on such terms and conditions determined by the committee, including, without limitation, performance goals that must be satisfied and the applicable performance period.

Other Stock‑Based Awards

The 2020 Plan also provides for the award of shares of Company common stock and other awards that are valued by reference to Company common stock, including unrestricted stock, dividend equivalents and convertible debentures.

Performance Goals

The 2020 Plan provides that performance goals may be established by the committee in connection with the grant of any award under the 2020 Plan.

Change of Control

Unless otherwise determined by the committee, immediately prior to consummation of a change of control (as defined below) unless the award is replaced in the change of control transaction, (a) all outstanding options and SARs will become fully vested and exercisable and (b) all restrictions on any restricted stock, restricted stock units, cash awards or other stock‑based awards that are not subject to performance goals will lapse, and these awards will become free of all restrictions and become fully vested and transferable to the full extent of the original grant and (c) all restrictions on any restricted stock, restricted stock units, cash awards or other stock‑based awards that are subject to performance goals shall be deemed to be earned and payable in an amount equal to the full value of such performance-based award (with all applicable performance goals deemed achieved at the greater of (i) the applicable target level and (ii) the level of achievement as determined by the committee not later than the date of the change of control, taking into account performance through the latest date preceding the change of control. With respect to awards that are replaced in the change of control transaction upon a termination of service of a participant by the Company other than for cause or by the participant for good reason, within twenty-four months following a change of control, such replaced awards shall vest in full, be free of restrictions, and be deemed to be earned in full and with respect to awards subject to performance goals, unless otherwise agreed in connection with the change of control, at the greater of (x) the applicable target level and (y) the level of achievement of the performance goals for the award as determined by the committee taking into account performance through the latest date preceding the termination of service as to which performance can, as a practical matter, be determined. Under the 2020 Plan, a “change of control” will be deemed to have taken place if:

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Amendment

The committee may amend, alter, or discontinue the 2020 Plan or an award, but no amendment, alteration or discontinuation will be made that materially impairs the rights of a participant with respect to a previously granted award without such participant’s consent, except such an amendment made to comply with applicable law, including without limitation Section 409A of the Code, stock exchange rules or accounting rules. In addition, no such amendment will be made without the approval of the Company’s shareholders (a) to decrease the exercise price of any stock option or SAR, or to take any other action that would be treated under applicable exchange listing standards or for accounting purposes as a repricing of such stock option or SAR, or (b) to the extent such approval is required by applicable law or the listing standards of the applicable stock exchange.

Federal Income Tax Consequences

The following discussion briefly summarizes certain U.S. federal income tax consequences of awards under the 2020 Plan. The discussion is based upon current interpretations of the Code, and the regulations promulgated thereunder as of such date. This summary describes the general tax principles that apply and is provided only for general information. Certain types of taxes, such as state and local income taxes, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. The summary does not discuss all aspects of income taxation that may be relevant to a participant in light of his or her personal investment circumstances. This summarized tax information is not tax advice.

Non-Qualified Stock Options

A participant will not recognize taxable income at the time of grant of a non-qualified stock option, and the Company will not be entitled to a tax deduction at such time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) upon exercise of a non-qualified stock option equal to the excess of the fair market value of the shares purchased over their exercise price, and the Company generally will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code.

Incentive Stock Options

A participant will not recognize taxable income at the time of grant of an incentive stock option. A participant will not recognize taxable income (except for purposes of the alternative minimum tax) upon exercise of an incentive stock option. If the shares acquired by exercise of an incentive stock option are held for the longer of two years from the date the option was granted and one year from the date the shares were transferred, any gain or loss arising from a subsequent disposition of such shares will be taxed as long-term capital gain or loss, and the Company will not be entitled to any deduction. If, however, such shares are disposed of within such two- or one-year periods, then in the year of such disposition the participant will recognize compensation taxable as ordinary income equal to the excess of the lesser of the amount realized upon such disposition and the fair market value of such shares on the date of exercise over the exercise price, and the Company generally will be entitled to a corresponding deduction. The excess of the amount realized through the disposition date over the fair market value of the stock on the exercise date will be treated as capital gain.

SARs

A participant will not recognize taxable income at the time of grant of a SAR, and the Company will not be entitled to a tax deduction at such time. Upon exercise, a participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) equal to the fair market value of any shares delivered and for the amount of cash paid by the Company, and the Company will generally be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code.

Restricted Stock

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Code to be taxed at the time of grant. If such election is made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time of grant equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares. If such election is not made, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time the restrictions lapse in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares. The Company is entitled to a corresponding deduction at the time the ordinary income is recognized by the participant, except to the extent the deduction limits of Section 162(m) of the Code apply. In addition, a participant receiving dividends with respect to restricted stock for which the above‑ described election has not been made and prior to the time the restrictions lapse will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee), rather than dividend income. The Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply.

Restricted Stock Units

A participant will not recognize taxable income at the time of grant of a restricted stock unit, and the Company will not be entitled to a tax deduction at such time. A participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) at the time of settlement of the award equal to the fair market value of any shares delivered and the amount of cash paid by the Company, and the Company will be entitled to a corresponding deduction, except to the extent the deduction limits of Section 162(m) of the Code apply.

Estimate of Plan Benefits

No equity-based awards have been granted or received under the 2020 Plan through the date of this proxy statement. Because benefits under the 2020 Plan will depend on the compensation committee’s actions and the fair market value of our common stock at various future dates, the benefits payable under the 2020 Plan and the benefits that would have been payable had the 2020 Plan been in effect during the most recent fiscal year are not determinable.

For a table showing information related to securities authorized for issuance under our equity compensation plans as of December 31, 2019, see “Proposal No. 3:  Approval of Amended and Restated Employee Stock Repurchase Plan—Plan Benefits” on page 30.

Vote Required

Approval of the 2020 Plan requires that the number of shares voted in favor of the proposal exceed the number of shares voted against the proposal.

The Board of Directors unanimously recommends that shareholders vote FOR the approval of the 2020 Plan.

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PROPOSAL NO. 6: RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Although we are not required to seek shareholder ratification of the selection of our accountants, we believe obtaining shareholder ratification is desirable. If our shareholders do not ratify the appointment of Dixon Hughes Goodman LLP, our Audit Committee will re-evaluate the engagement of our independent auditors. Even if the shareholders do ratify the appointment, our Audit Committee has the discretion to appoint a different independent registered public accounting firm at any time during the year if our Audit Committee believes that such a change would be in our best interest and our shareholders.

Vote Required

If a quorum is present, the number of shares of common stock voted in favor of this proposal must exceed the number of shares voted against it for approval of this proposal.

The Board of Directors unanimously recommends that shareholders vote FOR the ratification of the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.

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The following summarizes certain significant events for us in 2019:

Additionally, on January 25, 2020, we entered into the Merger Agreement with CenterState. On June 7, 2020, the Company and CenterState combined their respective companies in an all-stock merger of equals, pursuant to which CenterState merged with and into the Company, with the Company continuing as the surviving entity. Following the Merger, our total assets exceeded $34 billion and we became the eighth largest bank headquartered in the Southeast.

We believe that key 2019 indicators of soundness, profitability and growth include the following:

Soundness – Our loan portfolio is our largest asset and having a sound loan portfolio is a foundation of our business model.

For 2019:

As discussed below, our performance-based annual cash incentive plan included a metric related to regulatory soundness, which included an asset quality component, weighed at 25%.

Profitability – We believe earnings per share (EPS) is generally highly correlated with value creation for our shareholders.

For 2019:

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As discussed below, our performance-based annual cash incentive plan included a profitability metric of adjusted EPS, weighted at 75%. Our long-term incentive plan also includes profitability metrics of adjusted EPS (weighted at 67%) and adjusted ROATCE (weighted at 33%).

*Please see “Non-GAAP Financial Measures” beginning on page 43 in our Annual Report on Form 10-K for the year ended December 31, 2019, for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

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Growth – Growth results in potentially higher profitability and is measured by loans, deposits and total assets.

For 2019:

Key 2019 Compensation Decisions by the Compensation Committee

Our Compensation Committee made the following key compensation decisions during 2019:

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Consistent with our compensation philosophy, our NEO compensation is focused on performance-based compensation that is variable and subject to the attainment of specified performance metrics. The chart below shows the average pay mix for the Chief Executive Officer and the average of our other NEOs compared to recent peer practices. As reflected in the chart, the pay mix for our Chief Executive Officer and other NEOs was more weighted toward performance-based compensation than at peer companies.

For 2019, we paid CEO cash incentives at 73.12% of the maximum grant level and paid between 72.90% to 74.50% of the maximum grant level for our other NEOs, based on results for the year as set forth under the annual cash incentive component of the 2019 Executive Incentive Plan described below.

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Part 2—South State Executive Compensation Process

Compensation Philosophy

In 2019, the Compensation Committee reviewed and validated its compensation philosophy with the assistance of the Compensation Committee’s independent compensation consultant. The purpose of the review was to ensure that compensation decisions made by the Compensation Committee and the Board of Directors were consistent with this philosophy. The fundamental philosophy of our compensation program is to offer competitive compensation opportunities for executive officers that:

Our philosophy is to structure compensation that is designed to retain and reward executive officers who are capable of leading us in achieving our business objectives. The Compensation Committee considers this philosophy as it develops incentive plans. Cash incentives for 2019 were designed to reward executives for achieving annual financial and performance goals based on soundness and profitability, reflecting this focus. Long-term equity awards for 2019 were designed to reward our executive officers for the achievement of business objectives that benefit shareholders, to align their interests with those of our shareholders and to support the retention of a talented management team over time. When making compensation determinations for our executive officers, the Compensation Committee considers many factors in establishing executive officer compensation levels, including peer data and individual roles, responsibilities, tenure, and performance.

Role of the Compensation Committee

The Compensation Committee is responsible for the design, implementation and administration of the compensation programs for our executive officers and directors in a manner consistent with our compensation philosophy. The Compensation Committee keeps the full Board of Directors apprised of its decisions and activities, and when appropriate, makes recommendations to the Board of Directors on items that require approval by the full Board of Directors.

Under the Compensation Committee’s Charter, the committee, among other things, annually:

The Compensation Committee may receive recommendations from the chairman of the Board of Directors with respect to the Chief Executive Officer’s performance in light of the goals and objectives relevant to the compensation of

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our Chief Executive Officer. As part of the Compensation Committee’s review and approval of the compensation of the other NEOs, the Chief Executive Officer reviews the performance of the other NEOs with the Compensation Committee and makes recommendations to the Compensation Committee about the total compensation of the other NEOs. The Chief Executive Officer does not participate in, and is not present during, deliberations or approvals by the Compensation Committee or the Board of Directors with respect to his own compensation.

Compensation Consultant

During 2019, the Compensation Committee engaged the services of McLagan, an Aon company, to provide independent compensation consulting services for both directors and executive management of the Company. McLagan reports directly to the Compensation Committee. The Compensation Committee has the sole authority to hire consultants and set the engagements and the related fees of those consultants.

The following consulting services were provided to the Compensation Committee in 2019:

Compensation Committee’s Relationship with its Independent Compensation Consultant

The Compensation Committee considered the independence of McLagan in light of applicable SEC rules and The Nasdaq Stock Market listing standards. The Compensation Committee requested and received a report from McLagan addressing the independence of McLagan and its senior advisors. The following factors were considered: (1) services other than compensation consulting provided to us by McLagan; (2) fees paid by us as a percentage of McLagan’s total revenue; (3) policies or procedures maintained by McLagan that are designed to prevent a conflict of interest; (4) any business or personal relationships between the senior advisors of McLagan and a member of our Compensation Committee; (5) any stock of the Company owned by the senior advisors of McLagan; and (6) any business or personal relationships between our executive officers and the senior advisors of McLagan. The Compensation Committee discussed these considerations and concluded that the work performed by McLagan and McLagan’s senior advisors involved in the engagements did not raise any conflict of interest.

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Compensation Benchmarking and Compensation Committee Functions

Each year, with assistance from McLagan, the Compensation Committee reviews the compensation practices of our peers in order to assess the competitiveness of the compensation arrangements of our NEOs. Although benchmarking is an active tool used to measure compensation structures among peers, it is only one of the tools used by the Compensation Committee to determine total compensation. Benchmarking is used by the Compensation Committee primarily to ascertain competitive total compensation levels (including base salary, equity awards, cash incentives, etc.) with comparable institutions. Using this data as a reference point, the Compensation Committee addresses pay-for-performance (meritocracy) as discussed further in the sections below on cash incentives and long-term retention. Peer performance, market factors, our performance and personal performance are all factors that the Compensation Committee considers when establishing total compensation, including incentives. This practice is in line with our meritocracy philosophy of pay. The Compensation Committee, at its discretion, may determine that it is in our best interest to negotiate total compensation packages that deviate from regular compensation and incentive levels in order to attract and retain specific talent.

The Compensation Committee reviews the composition of the peer group annually, at a minimum, and may change it as a result of mergers, changes to banks within the group, or changes within the Company. For 2019, the Company elected to maintain the 2018 peer group, with three peers excluded due to acquisition. The criteria used to select the 2018 peer group are as follows:

When making compensation determinations for our NEOs, our Compensation Committee uses many factors, peer data being one of them. In addition to peer pay data, we also assess individual roles, responsibilities, tenure, and performance to set NEO pay levels. When considering compensation decisions disclosed herein, the Compensation Committee reviewed a group of 23 peers with median assets of $14.3 billion. The specific members of the peer group selected for reference in determining 2019 compensation were as follows:

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Part 3—Key Components of Executive Compensation

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Base Salary

The Compensation Committee, with the assistance of McLagan, determines base salaries based on historical and anticipated individual contribution and performance, and reviews base salaries in the context of comparability with the key executives of our peer group. Effective January 1, 2019, the Compensation Committee provided the following merit increases in base salary to our NEOs as a result of our 2018 performance and to maintain competitive salaries within our peer group:  Mr. Hill (8.68%); Mr. Lapointe (15.95%); Mr. Goettee (2.75%); Mr. Pollok (10%); and Mrs. Brooks (17.16%). The increase in base salary for Mr. Lapointe was also due to his new role as President of the Bank.

2019 Executive Incentive Plan

The 2019 Executive Incentive Plan was composed of two elements—(1) the Annual Cash Incentive Plan, and (2) the Long-Term Equity Incentive Awards, with grants made under the 2012 Omnibus Stock and Performance Plan, as amended and restated (the “Omnibus Plan”), each weighted at 50% of the NEOs incentive opportunity, as follows:

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Annual Cash Incentive Plan (AIP)

Under our AIP, each year the Compensation Committee selects eligible employees who will participate in the AIP and sets the amount of each participant’s threshold, target and maximum award that can be awarded under the AIP, determined as a percentage of the participant’s base salary. For 2019, the Compensation Committee set the potential cash incentive payment, expressed as a percentage of each NEO’s base salary, as follows:

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For 2019, the Compensation Committee chose the following two metrics:

The Compensation Committee chose the profitability metric because it believes this metric is a key component in building shareholder value and chose the soundness measure to ensure that our regulatory soundness was not sacrificed at the expense of our growth or profitability. The Compensation Committee established threshold, target and maximum performance goals for the profitability metric, with threshold representing the minimum level of performance for which the NEO would earn a payment. Actual performance between threshold, target and maximum performance levels is interpolated linearly to determine the exact level of achievement (provided the minimum performance triggers are achieved).

The soundness measure is considered a “yes/no” objective, as the level of performance is either met or is not met. If the soundness measure is met, the Compensation Committee determined that each NEO would receive the maximum performance level for this metric.

In addition to the performance metrics referenced above, each of the following “minimum performance triggers” were required to be achieved for each NEO to receive any cash incentives under the AIP (both of which were achieved):

The goals and the actual results of the AIP are outlined in the table below:

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Long-Term Equity Incentive Plan

We do not disclose forward-looking goals for our multi-year incentive programs, because we do not provide forward-looking guidance to our investors with respect to multi-year periods and this information is competitively sensitive. Consistent with our past and current practice, we disclose multi-year performance goals in full after the close of the performance period.

The PRSUs granted in 2019 vest based on the attainment of the following pre-established performance goals over the three-year period ending December 31, 2021, if the NEO remains employed through the performance period subject to certain exceptions.

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The grants are reported in the “Summary Compensation Table” on page 60 at target level, in accordance with FASB ASC Topic 718.

Results of 2017 Long-Term Incentive Plan Which Ended in 2019

On January 1, 2017, the Compensation Committee granted PRSUs to each of our NEOs. The vesting of 67% of these PRSUs was dependent on achieving pre-determined levels of cumulative adjusted EPS, with the remaining 33% vesting based on adjusted ROATCE. Both objectives were measured over the three-year performance period from January 1, 2017 through December 31, 2019. Vesting also required achievement of positive earnings sufficient to cover dividends for the performance period and a minimum specified regulatory rating as of the end of the performance period (both of which were achieved). The Compensation Committee determined that payouts with respect to the performance goals were earned at 100% of the maximum award on December 31, 2019, as indicated in the table below.

The PRSUs that have been earned and have vested are shown in the Option Exercises and Stock Vested table on page 64.

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Part 4—Other Aspects of Our Executive Compensation Program

Benefits

During 2019, we maintained various employee benefit plans that constitute a portion of the total compensation package available to the NEOs and all eligible employees. These plans consisted of the following:

The employee benefits for the NEOs discussed in the subsection above are determined by the same criteria applicable to all of our employees. These benefits help keep us competitive in attracting and retaining employees. We believe that our employee benefits are generally competitive with benefits provided by our peer group and are consistent with industry standards.

See the discussion entitled “Deferred Compensation Plan” for additional information.

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Role of Shareholder Say on Pay Vote

As required by Dodd-Frank, we held an annual advisory vote on the compensation of our executive officers, or a Say on Pay vote, at our 2019 annual meeting of shareholders. At the 2019 annual meeting of shareholders, 93.89% of the votes cast on the Say on Pay proposal were cast in support of the compensation of our named executive officers. While the 2019 shareholder vote reflected strong support for our executive compensation programs, the Compensation Committee, Board of Directors and executive management have evaluated compensation programs each year to ensure the plans have continued to align the interest of the executives with those of our shareholders and continued to strengthen the linkage of pay to performance. We engaged with proxy advisors during 2019 on compensation and we regularly participate in investor outreach regarding company performance.

At the Annual Meeting, we are submitting an advisory Say on Pay proposal for shareholders to vote on. See Proposal No. 5 for more information on the Say on Pay proposal.

Clawback Policy

The Compensation Committee is committed to adopting a formal clawback provision for adjustment or recovery of incentive awards or payments in the event the performance measures upon which they are based are restated or otherwise adjusted in a manner that would reduce the size of an award or payment. The Compensation Committee intends to fully comply with Dodd-Frank regarding this issue once rulemaking has been completed with respect to these provisions. Until formal guidance is available, the Compensation Committee will seek to address any situation that may arise and determine the proper and appropriate course of action in fairness to shareholders and NEO award recipients.

Share Ownership Guidelines

Our stock ownership guidelines call for NEOs to own equity representing a multiple of their salary and to retain this equity throughout their tenure with the Company. The specific share ownership guidelines are:

Our NEOs have five years from being named an NEO to comply with the stock ownership guidelines. As of the end of 2019, all of our NEOs exceeded their required ownership levels. Beneficially owned shares include shares held by a named executive officer, directly or indirectly, and unvested shares of restricted stock, as to which the executive officer has full voting privileges, but excludes vested and unexercised stock options. Until the stock ownership guidelines are achieved, the sale of shares of our common stock is restricted.

Equity Grant Practices

To address volatility concerns, the 30-day moving average of our stock was utilized to determine the number of PRSUs to be issued under the LTIP for 2019. The 30-day average is defined as the 30 trading days immediately preceding the last business day of the prior month. Beginning with the 2018 Long-Term Incentive Plan, the issuance of stock options was no longer a component of the long-term incentive plan.

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Employment and Non-Competition Agreements

Employment and Non-Competition Agreements in Effect as of December 31, 2019

We entered into amended and restated employment agreements with Messrs. Hill and Pollok in 2008 and we entered into employment agreements with Mrs. Brooks and Messrs. Lapointe and Goette in 2011. These employment agreements were in effect until the Merger closed on June 7, 2020. On the June 7, 2020 effective date of the Merger, new employment agreements became effective for each NEO, as described below under “—Employment and Non-Competition Agreements—New Employment and Non-Competition Agreements Effective as of June 7, 2020.”

The purpose of our NEO employment agreements was to attract and retain highly qualified executive officers, recognizing that termination and change in control protections are commonly provided at comparable financial institutions with which we compete for executive talent. In addition, the Compensation Committee believes change in control protections enhance the impartiality and objectivity of the NEOs in the event of a change in control transaction and better ensure that shareholder interests are protected. Finally, these agreements included non-competition provisions to protect us should the NEO elect to pursue other employment opportunities. The employment agreements in effect as of December 31, 2019 provided for the following:

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See the discussion entitled “Potential Payments upon Termination or Change in Control,” which provides the amount of compensation each executive would receive under various termination events based upon the employment agreements.

New Employment and Non-Competition Agreements Effective as of June 7, 2020

In connection with the execution of the Merger Agreement between the Company and CenterState, the Company entered into amended and restated employment agreements with Messrs. Hill and Pollok, and the Bank entered into new employment agreements with Mrs. Brooks and Messrs. Lapointe and Goettee, in each case setting forth the terms of the NEO’s employment with the Company or the Bank, as applicable, following the June 7, 2020 effective time of the merger (the “effective time”). The employment agreement with Mr. Hill is for an initial term beginning June 7, 2020 until December 31st of the fifth full calendar year following the effective time, and the employment agreements with Mrs. Brooks and Messrs. Lapointe and Goettee are for an initial term of three years following the June 7, 2020 effective time, subject to extension for an additional year on December 31st of the fourth full calendar year following the effective time (in the case of Mr. Hill) or on the first anniversary of the effective time (in the case of Mrs. Brooks and Messrs. Lapointe and Goettee), unless either party provides notice of non-renewal before such anniversary date. Mr. Pollok’s employment agreement provides that he will serve as an employee until July 5, 2021 and thereafter will serve as a consultant until December 31, 2024.

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: Mr. Hill—$585,000, 115% and 280%; Mr. Pollok—$615,000 (while serving as an employee) or $375,000 (while serving as a consultant), 120% (for 2020 only) and 120% (for 2020 only); Mrs. Brooks—$500,000, 70% and 100%; Mr. Lapointe—$500,000, 70% and 100%; and Mr. Goettee—$425,000, 70% and 70%. The employment agreements each provide for payment of a one-time lump-sum cash payment payable within thirty days following successful completion of the systems conversion of the Company and CenterState (the “Pay to Integrate Award”) as follows:  Mr. Hill—$3,300,000; Mr. Pollok—$1,600,000; and Mrs. Brooks and Messrs. Lapointe and Goettee—$330,000. The employment agreements with Messrs. Hill, Lapointe and Goettee and Mrs. Brooks also provide for the grant of a Company RSU (the “Pay to Lead Award”), which will vest in full on the second anniversary of the effective time subject to the NEO’s continued employment through such date (except as otherwise described below), with a grant date fair value for Mr. Hill of $3,300,000 and for Mrs. Brooks and Messrs. Lapointe and Goettee of $670,000. In addition, on June 7, 2020, a payment was credited to a deferred compensation account maintained for Mr. Hill equal of $6,187,000 and for Mr. Pollok of $3,336,300, in respect of each of their contractually entitled payments at the effective time of the Merger.

Under the employment agreements, if an NEO’s employment is terminated by the Company or the Bank, as applicable, without cause or the NEO resigns for good reason, he or she would be entitled to the following payments and benefits:

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If an NEO’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 Mrs. Brooks and Messrs. Lapointe and Goettee, the NEO would not be entitled to the employer-paid medical and dental benefits described above in the case of disability, but his or her family would be entitled to such benefits for twelve months following death.

If the services of Mr. Hill or Mr. Pollok are terminated by reason of retirement after age 55 and ten years of service to the Company, the applicable NEO would be entitled to full vesting of outstanding equity awards granted following the effective time, with performance-based awards remaining subject to applicable performance metrics, and to a prorated annual bonus for the year of retirement (in the case of Mr. Pollok, payment of a prorated annual bonus is only available if retirement occurs in 2020) based on actual performance. A termination of Mr. Hill’s employment on or following the expiration of the term of his employment agreement and the termination of Mr. Pollok’s services at the end of his consulting term would each be treated as a retirement for purposes of the employment agreements.

In consideration for the foregoing payments and benefits payable upon a termination by the Company or the Bank, as applicable, without cause or by the NEO for good reason (and, in the case of Messrs. Hill and Pollok, benefits payable upon termination due to death, disability or retirement), each of the NEOs is required to execute a release of claims in favor of the Company or the Bank, as applicable. In addition, the employment agreements contain restrictive covenants concerning nondisclosure of confidential information at any time following a termination of employment, mutual nondisparagement of either party at any time following a termination of employment (in the case of Mrs. Brooks and Messrs. Lapointe and Goettee), noncompetition (for a period of two years in the case of Messrs. Hill and Pollok and one year in the case of Mrs. Brooks and Messrs. Lapointe and Goettee) and nonsolicitation of customers and employees for a period of two years following termination of employment. The severance benefits (and, in the case of Messrs. Hill and Pollok, the retirement benefits) described above are also contingent on the NEO’s compliance with the restrictive covenants. In the event that payments to Messrs. Hill and Pollok become subject to Sections 280G and 4999 of the Code (a) as a result of the Merger, the indemnification provisions in their prior employment agreements with the Company would apply or (b) as a result of a change in control that occurs following the effective time of the Merger, such payments would be reduced if such reduction would leave the NEO better off on an after-tax basis. In the event that payments to Mrs. Brooks or Messrs. Lapointe or Goettee become subject to Sections 280G and 4999 of the Code, such payments would be reduced if such reduction would leave such NEO better off on an after-tax basis.

Tax Deductibility of Compensation

Section 162(m) of the Code limits our ability to deduct certain compensation in excess of $1,000,000 paid to our Chief Executive Officer and to certain other executives. Prior to 2018, this limitation generally did not apply to compensation that qualified under applicable regulations as “performance-based.” In line with this, we historically aimed to design and approve the performance-based compensation paid to our NEOs so that such compensation would satisfy

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the requirements for deductibility under Section 162(m). Prior to 2018, the Compensation Committee considered Section 162(m) when making compensation decisions. However, other considerations, such as providing our NEOs with competitive and adequate incentives to remain with us and increase our business operations, financial performance and prospects, as well as rewarding extraordinary contributions, also significantly factored into the Compensation Committee’s decisions.

In December 2017, the Tax Cuts and Jobs Act was enacted. Under the Tax Cuts and Jobs Act, the qualified performance-based compensation exception to Section 162(m) that generally provided for the continued deductibility of performance-based compensation was repealed, effective for tax years commencing on or after January 1, 2018. Accordingly, commencing with our fiscal year ended December 31, 2018, compensation to our NEOs in excess of $1,000,000 will not be deductible unless it is paid pursuant to a written binding contract that was in effect on November 2, 2017, and not modified in any material respect on or after such date. Performance-based compensation awarded to our NEOs for periods prior to November 2, 2017, such as PRSUs granted in 2017 and prior years that have not yet been settled into shares of common stock, may potentially continue to qualify for the performance-based compensation exemption under Section 162(m). The United States Treasury has not yet issued comprehensive guidance on limitations on the continued deductibility of these awards. Accordingly, the future deductibility of these grandfathered awards is uncertain and cannot be guaranteed.

Governance of Compensation Programs

During 2018, a new incentive governance process was developed for the oversight of the Bank’s incentive plans to be compliant with the Federal Reserve’s guidance on Sound Incentive Compensation Practices. This included development of new incentive compensation policies and procedures along with a more robust risk review process. The Compensation Committee has ultimate authority regarding all incentive plans. This updated process includes the addition of an Incentive Steering Committee that reviews and recommends approval of annual incentive plans or changes to incentive plans to the Compensation Committee. The Incentive Steering Committee is also responsible for the annual risk review process of incentive plans. The Incentive Steering committee is co-chaired by the Chief Risk Officer and the Director of Human Resources.

At the January 2019 and 2020 meetings of the Compensation Committee, the Chief Risk Officer and the Director of Human Resources presented the incentive plan and risk review analysis for 2019 and 2020, respectively. Based on the Compensation Committee’s deliberations, the Compensation Committee concluded that our compensation policy and practices for 2019 and 2020 do not create risks that are likely to have a material adverse effect that would cause plan participants to take unnecessary risks.

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This report is provided by the following independent directors, who serve on the Compensation Committee as of the date of this Proxy Statement and who served on the Compensation Committee during 2019: Cynthia A. Hartley and Jean E. Davis.

Paula Harper Bethea, Thomas J. Johnson and James W. Roquemore, each of whom were independent directors, also served on the Compensation Committee during 2019, but each ceased to be members of the Board of Directors and the Compensation Committee on June 7, 2020 in connection with the Merger. David Saylers and Joshua Snively, each of whom are independent directors, joined the Board of Directors and Compensation Committee on June 7, 2020 in connection with the Merger and did not participate in the review, discussion or recommendation with respect to the Compensation Discussion and Analysis included in this Proxy Statement.