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Item 1.01
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Entry into a Material Definitive Agreement.
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On July 22, 2021, South State Corporation, a South Carolina corporation
(“SouthState”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Atlantic Capital Bancshares,
Inc., a Georgia corporation (“Atlantic Capital”). The Merger Agreement provides that, upon the terms and subject to the conditions
set forth therein, Atlantic Capital will merge with and into SouthState (the “Merger”), with SouthState continuing as the
surviving corporation in the Merger (the “Surviving Entity”). Following the Merger, Atlantic Capital’s wholly
owned banking subsidiary, Atlantic Capital Bank, N.A., will merge with and into SouthState’s wholly owned banking subsidiary, South
State Bank, N.A. (the “Bank Merger”), which will continue as the surviving bank in the Bank Merger (the “Surviving Bank”).
The Merger Agreement was unanimously approved by the Board of Directors of each of SouthState and Atlantic Capital.
Upon the terms and subject to the conditions set forth in the Merger
Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, no par value per share,
of Atlantic Capital (“Atlantic Capital Common Stock”) outstanding immediately prior to the Effective Time, other than certain
shares held by Atlantic Capital or SouthState, will be converted into the right to receive 0.36 shares of common stock (the “Exchange
Ratio”), par value $2.50 per share, of SouthState (“SouthState Common Stock”). Holders of Atlantic Capital Common Stock
will receive cash in lieu of fractional shares.
At the Effective Time, each outstanding option to purchase shares of
Atlantic Capital Common Stock (an “Atlantic Capital Option”), whether vested or unvested, will be converted into an option
to purchase shares of SouthState Common Stock (a “SouthState Option”), with the number of shares underlying such SouthState
Option and the applicable exercise price adjusted based on the Exchange Ratio. At the Effective Time, each outstanding restricted stock
award in respect of shares of Atlantic Capital Common Stock (an “Atlantic Capital Restricted Share”) will be converted into
a restricted stock award in respect of shares of SouthState Common Stock (a “SouthState Restricted Share”), with the number
of South State Restricted Shares adjusted based on the Exchange Ratio. At the Effective Time, each outstanding performance award in respect
of shares of Atlantic Capital Common Stock (a “Atlantic Capital Performance Share Award”) will be converted into a time-vesting
restricted stock unit award in respect of shares of SouthState Common Stock (a “SouthState Stock-Based RSU”), with the number
of shares underlying such SouthState Stock-Based RSU determined assuming performance goals are satisfied at the greater of target and
actual levels of performance as of immediately prior to the Effective Time and adjusted based on the Exchange Ratio. Following the Effective
Time, SouthState Options, SouthState Shares and SouthState Stock-Based RSUs will remain subject to the same terms and conditions as were
applicable to the corresponding Atlantic Capital Options, Atlantic Capital Restricted Shares and Atlantic Capital Performance Share Awards
immediately prior to the Effective Time, except that each SouthState Stock-Based RSU that was an Atlantic Capital Performance Share Award
will be subject only to time-vesting.
The Merger Agreement also provides, among other things, that effective
as of the Effective Time, Douglas L. Williams, the current President and Chief Executive Officer of Atlantic Capital, will serve as the
President of the Atlanta Banking Group and Head of Corporate Banking for SouthState Bank and a member of the Executive Management Committee
of SouthState Bank; Kurt Shreiner, the President of the Corporate Financial Services Division of Atlantic Capital, will serve in the
same position at SouthState Bank, and Rich Oglesby, the President of the Atlanta Division of Atlantic Capital, will serve in the same
position at SouthState Bank. Pursuant to the Merger Agreement, the Board of Directors of SouthState and SouthState Bank will increase
to 18 members and two directors of Atlantic Capital of SouthState’s choosing will join each of the SouthState and SouthState Bank
Boards at the Effective Time.
The Merger Agreement contains customary representations and warranties
from both Atlantic Capital and SouthState, and each party has agreed to customary covenants, including, among others, covenants relating
to the conduct of its business during the interim period between the execution of the Merger Agreement and the Effective Time. Atlantic
Capital also has agreed to covenants relating to its obligation to call a meeting of its shareholders to approve the Merger Agreement,
and, subject to certain exceptions, to recommend that its shareholders approve the Merger Agreement, and its non-solicitation obligations
related to alternative business combination proposals.
The completion of the Merger is subject to customary conditions, including
(1) approval of the Merger Agreement by Atlantic Capital’s shareholders, (2) authorization for listing on the Nasdaq Global Select
Market of the shares of SouthState Common Stock to be issued in the Merger, subject to official notice of issuance, (3) the receipt of
required regulatory approvals, including the approval of the Board of Governors of the Federal Reserve System, and the Office of the Comptroller
of the Currency, (4) effectiveness of the registration statement on Form S-4 for the SouthState Common Stock to be issued in the Merger,
and (5) the absence of any order, injunction, decree or other legal restraint preventing the completion of the Merger or making the completion
of the Merger illegal. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions,
including (i) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (ii) performance in
all material respects by the other party of its obligations under the Merger Agreement and (iii) receipt by such party of an opinion from
counsel to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the “Code”).
The Merger Agreement provides certain termination rights for both
Atlantic Capital and SouthState and further provides that a termination fee of $16,500,000 will be payable by Atlantic Capital upon
termination of the Merger Agreement under certain circumstances.
The foregoing description of the Merger Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit
2.1 and is incorporated herein by reference.
The representations, warranties and covenants
of each party set forth in the Merger Agreement have been made only for the purposes of, and were and are solely for the benefit of the
parties to, the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors.
Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other
time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (1) will not survive
consummation of the Merger, and (2) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger
Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the
Merger Agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures. Accordingly,
the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement,
and not to provide investors with any factual information regarding Atlantic Capital or SouthState, their respective affiliates or their
respective businesses. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information
regarding Atlantic Capital, SouthState, their respective affiliates or their respective businesses, the Merger Agreement and the Merger
that will be contained in, or incorporated by reference into, the registration statement on Form S-4 that will include a proxy statement
of Atlantic Capital and also constitute a prospectus of SouthState, as well as in the Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and other filings that each of Atlantic Capital and SouthState make with the Securities and Exchange Commission (the “SEC”).