|
Item 1.01
|
Entry into a Material Definitive Agreement
|
On June 27, 2018, SmartFinancial, Inc. ("
SmartFinancial
") entered into an Agreement and Plan of Merger (the "
Merger Agreement
") with Foothills Bancorp, Inc., a Tennessee corporation
("
Foothills Bancorp
"), and Foothills Bank & Trust, a Tennessee-chartered commercial bank and wholly owned subsidiary of Foothills Bancorp ("
Foothills Bank
"),
pursuant to which, on the terms and subject to the conditions set forth therein,
Foothills Bancorp
will merge with and into SmartFinancial (the "
Merger
"), with SmartFinancial to survive the Merger.
Simultaneously with the execution of, and as contemplated by, the Merger Agreement, SmartBank, a Tennessee-charted commercial bank and wholly owned subsidiary of SmartFinancial ("
SmartBank
"), entered into an agreement and plan of merger with Foothills Bank pursuant to which, on the terms and subject to the conditions set forth therein, Foothills Bank will merge with and into SmartBank with
SmartBank to be the surviving banking corporation.
Under the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of
Foothills Bancorp
common stock, par value of $1.00 per share (other than certain excluded and dissenting shares), will be converted into the right to receive $1.75 in cash and 0.666 shares of SmartFinancial common stock, par value of $1.00 per share (the "
Stock Consideration
"). As of June 26, 2018, Foothills Bancorp had 1,776,925 shares of common stock outstanding.
The Merger Agreement contains customary representations, warranties, and covenants by all parties. Conditions to each party's obligation to consummate the Merger include the following, as well as other customary conditions: (1) approval of the Merger Agreement by the holders of Foothills Bancorp common stock, (2) approval of the Merger by regulatory authorities, (3) effectiveness of a registration statement for the shares issued as Stock Consideration, and (4) authorization to list the shares to be issued as Stock Consideration on the Nasdaq Capital Market. Conditions to SmartFinancial's obligation to consummate the Merger include holders of not more than 10% of the outstanding shares of Foothills Bancorp common stock having perfected and not withdrawn or lost their rights to dissent from the Merger.
The Merger Agreement provides certain termination rights for both SmartFinancial and Foothills Bancorp and further provides that, upon termination of the Merger Agreement under certain circumstances, Foothills Bancorp will be obligated to pay SmartFinancial a termination fee of
$1,450,000
.
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 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 (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 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 the parties, 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 SmartFinancial and its affiliates and 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 Foothills Bancorp and a prospectus of SmartFinancial, as well as in the Forms 10-K, Forms 10-Q and other filings that SmartFinancial makes with the Securities and Exchange Commission ("
SEC
").