Item 1.01. Entry into a Material Definitive Agreement.
On
Under the terms and subject to the conditions of the Merger Agreement, at the
effective time of the Merger (the "Effective Time"), each share of the common
stock, no par value (the "Franklin Common Stock"), issued and outstanding
immediately prior to the Effective Time (except for certain shares of Franklin
Common Stock owned by Franklin as treasury stock or by FB Financial, as provided
in the Merger Agreement) will be converted, in accordance with the procedures
set forth in the Merger Agreement, into the right to receive, without
interest, (1) 0.9650 shares (the "Exchange Ratio") of common stock, par value
Under the terms and subject to the conditions of the Merger Agreement, at the
Effective Time, each option to purchase shares of Franklin Common Stock (a
"Franklin Option") that is outstanding and unexercised immediately prior to the
Effective Time will be converted automatically into right to receive the Merger
Consideration in respect of each Net Share (as defined below) of Franklin Common
Stock outstanding under the applicable Franklin Option. The Merger Agreement
defines the "Net Shares" as the number of shares determined by dividing (a) the
product of (1) the excess, if any, of the Per Share Cash Equivalent
Consideration (as defined below) over the per share exercise price of the
applicable Franklin Option multiplied by (2) the number of shares of Franklin
Common Stock subject to the applicable Franklin Option immediately prior to the
Effective Time, by (B) the Per Share Cash Equivalent Consideration. The Merger
Agreement defines the "Per Share Cash Equivalent Consideration" to mean the sum
of (a) the product (rounded to the nearest cent) obtained by multiplying (1) the
Exchange Ratio by (2) the average of the closing-sale prices of FB Financial
Common Stock on the
Under the terms and subject to the conditions of the Merger Agreement, FB Financial agreed to expand its board of directors by three directors and fill the resulting vacancies at the Effective Time with three then-current Franklin directors, to be selected by FB Financial in consultation with Franklin.
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The Merger Agreement contains customary representations and warranties from both Franklin and FB Financial, each with respect to its and its subsidiaries' businesses, 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. Franklin agreed to call a meeting of its shareholders to approve the Merger Agreement and the transactions contemplated thereby (the "Franklin Shareholder Approval") and, subject to certain customary exceptions, for the Board of Directors of Franklin to recommend that its shareholders vote in favor of such approvals. Franklin has also agreed to customary non-solicitation covenants relating to alternative acquisition proposals that prohibit Franklin from soliciting proposals relating to certain alternative acquisition proposals or entering into discussions or negotiations or providing confidential information in connection with certain proposals for an alternative acquisition, subject to certain customary exceptions. FB Financial agreed to call a meeting of its shareholders to approve the issuance of FB Financial Common Stock in the Merger (the "FB Financial Shareholder Approval") and, subject to certain customary exceptions, for the board of directors of FB Financial to recommend that its shareholders vote in favor of such approval. Notwithstanding any change in recommendation, the Merger Agreement requires the parties to convene their respective shareholder meetings and seek the requisite shareholder approval unless the Merger Agreement has been earlier terminated.
The completion of the Mergers is subject to customary conditions, including
(i) receipt of the Franklin Shareholder Approval and the FB Financial
Shareholder Approval, (ii) authorization for listing on the
The Merger Agreement provides certain termination rights for both FB Financial
and Franklin and further provides that a termination fee of
In connection with entering into the Merger Agreement, certain shareholders of
Franklin, including the directors of Franklin in their capacities as
shareholders, entered into voting and support agreements (the "Franklin Voting
Agreements") with FB Financial. Subject to the terms and conditions of the
Franklin Voting Agreements, each such shareholder agreed, among other things, to
vote their respective shares of Franklin Common Stock in favor of the approval
of the Merger Agreement and the transactions contemplated thereby, and against
alternative acquisition proposals. In connection with entering into the Merger
Agreement,
The foregoing descriptions of the Merger Agreement, the Ayers Voting Agreement and the Franklin Voting Agreements do not purport to be complete and each is qualified in its entirety by reference to the full text of the Merger Agreement, the Ayers Voting Agreement and the Franklin Voting Agreements, which are filed herewith as Exhibits 2.1, 10.1 and 10.2, and are incorporated herein by reference. The representations, warranties and covenants of each party set forth in the Merger Agreement have been made only for purposes of, and were and are solely for the benefit of the parties to, the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (i) will not survive consummation of the Mergers, and (ii) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties' public disclosures. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding FB Financial or Franklin, their respective affiliates or their respective businesses.
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The Merger Agreement should not be read alone, but should instead be read in
conjunction with the other information regarding Franklin, FB Financial, their
respective affiliates or their respective businesses, the Merger Agreement and
the Mergers that will be contained in, or incorporated by reference into, the
registration statement on Form S-4 that will include a joint proxy statement of
FB Financial and Franklin and a prospectus of FB Financial, as well as in the
Forms 10-K, Forms 10-Q, Forms 8-K and other filings that each of Franklin and FB
Financial make with the
Item 9.01. Financial Statements and Exhibits.
Exhibit Number Description of Exhibit 2.1 Agreement and Plan of Merger, dated as ofJanuary 21, 2021 , by and amongFranklin Financial Network, Inc. , FB Financial Corporation, andPaisley Acquisition Corporation 10.1 Voting and Support Agreement, dated as ofJanuary 21, 2020 , by and betweenFranklin Financial Network, Inc. and James W. Ayers 10.2 Form of Voting and Support Agreement, dated as ofJanuary 21, 2020 , by and among FB Financial Corporation and the members of the board of directors ofFranklin Financial Network, Inc.
IMPORTANT INFORMATION FOR SHAREHOLDERS AND INVESTORS
In connection with the proposed merger, FB Financial will file a registration
statement on Form S-4 with the
PARTICIPANTS IN THE SOLICITATION
FB Financial, Franklin, and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from FB
Financial and Franklin shareholders in connection with the proposed merger under
the rules of the
FORWARD-LOOKING STATEMENTS
Certain statements contained in this report may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements relating to the timing, benefits, costs, and synergies of the proposed merger with FB Financial (which we refer to as the "FB Financial merger"), and FB Financial's and Franklin's future plans, results, strategies, and expectations. These statements can generally be identified by the use of the words and phrases "may," "will," "should," "could," "would," "goal," "plan," "potential," "estimate," "project," "believe," "intend,"
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"anticipate," "expect," "target," "aim," "predict," "continue," "seek,"
"projection," and other variations of such words and phrases and similar
expressions. These forward-looking statements are not historical facts, and are
based upon current expectations, estimates, and projections, many of which, by
their nature, are inherently uncertain and beyond FB Financial's or Franklin's
control. The inclusion of these forward-looking statements should not be
regarded as a representation by FB Financial, Franklin or any other person that
such expectations, estimates, and projections will be achieved. Accordingly, FB
Financial and Franklin caution shareholders and investors that any such
forward-looking statements are not guarantees of future performance and are
subject to risks, assumptions, and uncertainties that are difficult to predict.
Actual results may prove to be materially different from the results expressed
or implied by the forward-looking statements. A number of factors could cause
actual results to differ materially from those contemplated by the
forward-looking statements including, without limitation, (1) the risk that the
cost savings and any revenue synergies from the proposed FB Financial merger may
not be realized or may take longer than anticipated to be realized,
(2) disruption from the proposed FB Financial merger with customer, supplier, or
employee relationships, (3) the occurrence of any event, change, or other
circumstances that could give rise to the termination of the merger agreement
with FB Financial, (4) the failure to obtain necessary regulatory approvals for
the FB Financial merger, (5) the failure to obtain the approval of FB Financial
and Franklin's shareholders in connection with the FB Financial merger, (6) the
possibility that the costs, fees, expenses, and charges related to the FB
Financial merger may be greater than anticipated, including as a result of
unexpected or unknown factors, events, or liabilities, (7) the failure of the
conditions to the FB Financial merger to be satisfied, (8) the risks related to
the integration of the combined businesses (as well as FB Financial's pending
acquisition of
Many of these factors are beyond FB Financial's and Franklin's ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this report, and neither FB Financial nor Franklin undertakes any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for FB Financial or Franklin to predict their occurrence or how they will affect FB Financial or Franklin.
FB Financial and Franklin qualifies all of their forward-looking statements by these cautionary statements.
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