ITEM 1.01. Entry into a Material Definitive Agreement.
On January 23, 2020, CapStar Financial Holdings, Inc., a Tennessee corporation
("CapStar"), entered into an Agreement and Plan of Merger (the "FCB Merger
Agreement") with FCB Corporation, a Tennessee corporation ("FCB"). The FCB
Merger Agreement provides that, upon the terms and subject to the conditions set
forth therein, FCB will merge with and into CapStar (the "FCB Merger"), with
CapStar as the surviving entity in the FCB Merger. As soon as practicable
following the FCB Merger, FCB's wholly owned bank subsidiary, The First National
Bank of Manchester, a national banking association ("FNBM"), will merge with and
into CapStar's wholly owned bank subsidiary, CapStar Bank, a Tennessee chartered
bank (the "Bank Merger"), with CapStar Bank as the surviving entity in the Bank
Merger. The FCB Merger Agreement was approved by the board of directors of each
of CapStar and FCB.
Simultaneously with the entry into the FCB Merger Agreement, CapStar and CapStar
Bank entered into a Plan of Bank Merger (the "BOW Merger Agreement," and
together with the FCB Merger Agreement, the "Merger Agreements") with The Bank
of Waynesboro, a Tennessee chartered bank ("BOW"). As of January 23, 2020, FCB
owns 50.56% of the issued and outstanding shares of common stock, par value
$10.00 per share, of BOW ("BOW Common Stock"); other shareholders own the
remaining 49.44% of the issued and outstanding shares of BOW Common Stock. The
BOW Merger Agreement provides that, upon the terms and subject to the conditions
set forth therein, BOW will merge with and into CapStar Bank (the "BOW Merger,"
and together with the FCB Merger and the Bank Merger, the "Mergers"), as soon as
practicable following the FCB Merger, with CapStar Bank as the surviving bank in
the BOW Merger. The BOW Merger Agreement was approved by the board of directors
of each of CapStar, CapStar Bank and BOW (in the case of BOW, at the
recommendation of a special committee of the board of directors of BOW,
comprised only of directors unaffiliated with each of FCB, CapStar and CapStar
Bank).
The FCB Merger and the BOW Merger are cross-conditioned on each other, as
described more fully below.
FCB Merger Agreement
On the terms and subject to the conditions set forth in the FCB Merger
Agreement, at the effective time of the FCB Merger, holders of common stock (the
"FCB Common Stock"), par value $10.00 per share, of FCB will collectively have
the right to receive, without interest, 2,969,418 shares of voting common stock,
par value $1.00 per share, of CapStar ("CapStar Common Stock") and $21,570,701
in cash, subject to adjustments in accordance with the terms of the FCB Merger
Agreement.
The FCB Merger Agreement also provides, among other things, that effective as of
the effective time of the FCB Merger, one member of the current board of
directors of FCB, FNBM or BOW, selected by FCB in consultation with CapStar,
will be appointed to the boards of directors of both CapStar and CapStar Bank.
The FCB Merger Agreement contains customary representations and warranties from
both CapStar and FCB, 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 FCB Merger Agreement and
the effective time of the FCB Merger, and with respect to FCB, its obligation,
subject to certain exceptions, to recommend that its shareholders approve the
FCB Merger Agreement and the transactions contemplated therein and its
non-solicitation obligations relating to alternative acquisition proposals.
The completion of the FCB Merger is subject to the approval of the FCB Merger
Agreement by the shareholders of FCB and to other customary conditions,
including, among others, (1) the receipt of required regulatory approvals,
(2) the absence of any order, decree or injunction enjoining or prohibiting the
consummation of the Mergers, the absence of any proceedings initiated by a
government entity seeking to enjoin or prohibit the consummation of the Mergers
and the absence of law prohibiting or making illegal the consummation of the
Mergers, (3) the effectiveness of the registration statement on Form S-4 for the
CapStar Common Stock to be issued in the FCB Merger, (4) authorization for
listing on the Nasdaq Global Select Market of the shares of CapStar Common Stock
to be issued in the FCB Merger, (5) receipt by each party of an opinion from its
counsel to the effect that the FCB Merger will qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended, and (6) satisfaction or waiver of each of the conditions for the
consummation of the BOW Merger (other than the consummation of the FCB Merger).
Each party's obligation to complete the FCB Merger is also subject to certain
additional customary conditions, including (i) subject to certain exceptions,
the
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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 FCB Merger Agreement and (iii) absence of a material adverse effect on
the other party. In addition, CapStar's obligation to complete the FCB Merger is
subject to a condition that none of the requisite governmental approvals will
contain a requirement or condition that would have or would reasonably be
expected to have a material adverse effect to the business, financial condition
or results of operations of CapStar (as the entity surviving the FCB Merger) and
its subsidiaries, measured on a scale relative to FCB and its subsidiaries,
taken as a whole.
BOW Merger Agreement
On the terms and subject to the conditions set forth in the BOW Merger
Agreement, at the effective time of the BOW Merger, holders of BOW Common Stock
other than CapStar (such shareholders, the "BOW Minority Shareholders"), will
collectively have the right to receive, without interest, 664,800 shares of
CapStar Common Stock and $4,829,299 in cash, subject to certain adjustments in
accordance with the terms of the BOW Merger Agreement. Each share of BOW Common
Stock held by CapStar will be converted into the number of shares of CapStar
Common Stock equal in value to the per share merger consideration received by
the BOW Minority Shareholders.
The BOW Merger Agreement contains customary representations and warranties from
each of CapStar, CapStar Bank and BOW, 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 BOW Merger
Agreement and the effective time of the BOW Merger, and with respect to BOW, its
obligation, subject to certain exceptions, to recommend that its shareholders,
including the BOW Minority Shareholders, approve the BOW Merger Agreement and
the transactions contemplated therein and its non-solicitation obligations
relating to alternative acquisition proposals.
The completion of the BOW Merger is subject to the approval of the BOW Merger
Agreement by the shareholders of BOW and the BOW Minority Shareholders, and to
other customary conditions, including, among others, (1) the receipt of required
regulatory approvals, (2) the absence of any order, decree or injunction
enjoining or prohibiting the consummation of the BOW Merger, the absence of any
proceedings initiated by a government entity seeking to enjoin or prohibit the
consummation of the BOW Merger and the absence of law prohibiting or making
illegal the consummation of the BOW Merger, (3) the effectiveness of the
registration statement on Form S-4 for the CapStar Common Stock to be issued in
the BOW Merger, (4) authorization for listing on the Nasdaq Global Select Market
of the shares of CapStar Common Stock to be issued in the BOW Merger,
(5) receipt by each party of an opinion from its counsel to the effect that the
BOW Merger will qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended, and
(6) completion of the FCB Merger. CapStar's and CapStar Bank's obligations, on
the one hand, and BOW's obligation, on the other hand, to complete the BOW
Merger are also subject to certain additional customary conditions, including
(i) subject to certain exceptions, the accuracy of the representations and
warranties of the other side, (ii) performance in all material respects by the
other side of its obligations under the BOW Merger Agreement and (iii) absence
of a material adverse effect on the other side. In addition, CapStar's and
CapStar Bank's obligations to complete the BOW Merger are subject to a condition
that none of the requisite governmental approvals will contain a requirement or
condition that would have or would reasonably be expected to have a material
adverse effect to the business, financial condition or results of operations of
CapStar (as the entity surviving the FCB Merger) and its subsidiaries, measured
on a scale relative to BOW and its subsidiaries, taken as a whole.
The foregoing descriptions of the Merger Agreements do not purport to be
complete and are qualified in their entirety by reference to the full text of
the Merger Agreements, which are attached hereto as Exhibit 2.1 and Exhibit 2.2
and are incorporated herein by reference. The representations, warranties and
covenants of each party set forth in the Merger Agreements have been made only
for purposes of, and were and are solely for the benefit of the respective
parties to, the Merger Agreements, may be subject to limitations agreed upon by
. . .
ITEM 8.01. Other Events.
Voting and Support Agreements of Certain FCB Shareholders
Concurrently with the execution of the FCB Merger Agreement, each of CapStar and
FCB entered into voting and support agreements (the "FCB Voting and Support
Agreements") with all the directors of FCB (in their capacities as shareholders
of FCB) and a shareholder of FCB, in which each such person agreed, on the terms
and subject to the conditions set forth therein, to vote the shares of FCB
Common Stock beneficially owned by him or her (subject to certain adjustments in
the case of the directors of FCB (in their capacities as shareholders of FCB))
in favor of the FCB Merger Agreement and against any proposal made in
competition with the FCB Merger, as well as to certain other customary
restrictions with respect to the voting and transfer of his or her shares of FCB
Common Stock. The foregoing description of the FCB Voting and Support Agreements
does not purport to be complete and is qualified in its entirety by reference to
the full text of the FCB Voting and Support Agreements, forms of which for
directors of FCB and a shareholder of FCB are included as Exhibit A-1 and
Exhibit A-2, respectively, to the FCB Merger Agreement attached hereto as
Exhibit 2.1 and are incorporated herein by reference.
Voting and Support Agreements of Certain BOW Shareholders
Concurrently with the execution of the BOW Merger Agreement, each of CapStar and
BOW entered into voting and support agreements (the "BOW Voting and Support
Agreements") with all the directors of BOW (in their capacities as shareholders
of BOW), in which each such person agreed, on the terms and subject to the
conditions set forth therein, to vote the shares of BOW Common Stock
beneficially owned by him or her in favor of the BOW Merger Agreement and
against any proposal made in competition with the BOW Merger, as well as to
certain other customary restrictions with respect to the voting and transfer of
his or her shares of BOW Common Stock. The foregoing description of the BOW
Voting and Support Agreements does not purport to be complete and is qualified
in its entirety by reference to the full text of the BOW Voting and Support
Agreements, a form of which is included as Exhibit A to the BOW Merger Agreement
attached hereto as Exhibit 2.2 and is incorporated herein by reference.
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* * *
Forward Looking Statements
This communication contains "forward-looking statements" within the meaning of
the federal securities laws, including 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 may include: management plans relating
to the proposed transactions; the expected timing of the completion of the
proposed transactions; the ability to complete the proposed transactions; the
ability to obtain the required regulatory, shareholder or other approvals; any
statements of the plans and objectives of management for future operations,
products or services, including the execution of integration plans relating to
the proposed transactions; any statements of expectation or belief; projections
related to certain financial metrics or other benefits of the proposed
transactions; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements are typically identified by words such as "believe,"
"expect," "anticipate," "intend," "seek," "plan," "will," "would," "target,"
"outlook," "estimate," "forecast," "project" and other similar words and
expressions or negatives of these words. Forward-looking statements are subject
to numerous assumptions, risks and uncertainties, which change over time and are
beyond CapStar's control. Because forward-looking statements are by their
nature, to different degrees, uncertain and subject to assumptions, actual
results or future events could differ, possibly materially, from those that
CapStar anticipated in its forward-looking statements, and future results could
differ materially from historical performance. Factors that could cause or
contribute to such differences include, but are not limited to, those included
under Item 1A "Risk Factors" in CapStar's Annual Report on Form 10-K for the
year ended December 31, 2018 and those disclosed in CapStar's other periodic
reports filed with the SEC, as well as the possibility that expected benefits of
the proposed transactions may not materialize in the time frame expected or at
all, or may be more costly to achieve; the proposed transactions may not be
timely completed, if at all; that prior to the completion of the proposed
transactions or thereafter, CapStar's, FCB's and BOW's respective businesses may
not perform as expected due to transaction-related uncertainty or other factors;
that the parties are unable to successfully implement integration strategies
related to the proposed transactions; that required regulatory, shareholder or
other approvals are not obtained or other customary closing conditions are not
satisfied in a timely manner or at all; reputational risks and the reaction of
the companies' shareholders, customers, employees or other constituents to the
proposed transactions; and diversion of management time on merger-related
matters. These risks, as well as other risks associated with the proposed
transactions, will be more fully discussed in the registration statement on Form
S-4 that will be filed with the SEC in connection with the proposed
transactions. While the list of factors presented here is, and the list of
factors presented in the registration statement on Form S-4 will be, considered
representative, no such lists should be considered to be a complete statement of
all potential risks and uncertainties. Unlisted factors may present significant
additional obstacles to the realization of forward-looking statements. For any
forward-looking statements made in this communication or in any documents,
CapStar claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements speak only as of the date they are made. CapStar does
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date on which the forward-looking
statement is made.
Important Additional Information and Where to Find It
In connection with the proposed transactions, CapStar will file with the SEC a
registration statement on Form S-4 to register the shares of CapStar Common
Stock to be issued in connection with the proposed transactions. The
registration statement will include a proxy statements/prospectus, which will be
sent to the shareholders of FCB and BOW seeking their approval of the proposed
transactions.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON
FORM S-4, THE PROXY STATEMENTS/PROSPECTUS INCLUDED WITHIN THE REGISTRATION
STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH
THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTIONS WHEN THEY BECOME AVAILABLE
BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT CAPSTAR,
FCB, BOW AND THE PROPOSED TRANSACTIONS.
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When filed, this document and other documents relating to the proposed
transactions filed by CapStar with the SEC can be obtained free of charge from
the SEC's website at www.sec.gov. These documents also can be obtained free of
charge by accessing CapStar's website at https://ir.capstarbank.com/ under the
tab "Financials & Filings." Alternatively, these documents, when available, can
be obtained free of charge from CapStar upon written request to CapStar
Financial Holdings, Inc., 1201 Demonbreun Street, Suite 700, Nashville,
Tennessee 37203, Attention: Investor Relations or by calling (615) 732-6455.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of January 23, 2020, by and
between CapStar Financial Holdings, Inc. and FCB Corporation*
2.2 Plan of Bank Merger, dated as of January 23, 2020, by and among
CapStar Financial Holdings, Inc., CapStar Bank and The Bank of
Waynesboro*
* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. The registrant agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the SEC upon request.
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