Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger and Reorganization
On June 1, 2021, Select Bancorp, Inc. ("Select"), entered into an Agreement and
Plan of Merger and Reorganization (the "Merger Agreement") with First Bancorp
("FBNC"), the holding company for First Bank, Southern Pines, North Carolina.
Under the Merger Agreement, Select will merge with and into FBNC (the "Merger")
and Select Bank & Trust Company, a wholly owned subsidiary of Select, will merge
with and into First Bank.
Subject to the terms and conditions of the Agreement, at the effective time of
the Merger, each share of Select's common stock will be converted into the right
to receive 0.408 of a share of FBNC common stock. Upon the closing of the
Merger, each outstanding and unexercised option to purchase shares of Select's
common stock, whether or not previously vested, will be cancelled in exchange
for a cash payment of $18.00 minus the exercise price for each share of Select
common stock subject to such stock option. The parties anticipate closing the
Merger during the fourth quarter of 2021.
The Merger Agreement has been unanimously approved by the board of directors of
each of Select and FBNC. The closing of the Merger is subject to the required
approval of Select's shareholders and FBNC's shareholders, requisite regulatory
approvals, the effectiveness of the registration statement to be filed by FBNC
with respect to the FBNC common stock to be issued in the Merger, and other
customary closing conditions.
The Merger Agreement contains usual and customary representations and warranties
that Select and FBNC made to each other as of specific dates. The assertions
embodied in those representations and warranties were made solely for purposes
of the contract between Select and FBNC, and may be subject to important
qualifications and limitations agreed to by the parties in connection with
negotiating its terms. Moreover, certain representations and warranties are
subject to a contractual standard of materiality that may be different from what
may be viewed as material to shareholders, and the representations and
warranties may have been used to allocate risk between Select and FBNC rather
than establishing matters as facts.
The Merger Agreement also provides that at the closing of the Merger, two
members of Select's current board of directors will join the boards of directors
of FBNC and First Bank.
The Merger Agreement may be terminated in certain circumstances, including: (i)
by mutual written agreement of the parties; (ii) by either party in the event of
a breach by the other party of any representation, warranty, covenant, or other
agreement contained in the Merger Agreement which has not been cured within 30
days and where such breach is reasonably likely to permit such party to refuse
to consummate the Merger; (iii) by either party in the event that any consent of
any required regulatory authority is denied by final action or any law or order
prohibiting the Merger becomes final and nonappealable; (iv) by either party if
the required shareholder approvals are not obtained; (v) by either party in the
event that the Merger is not consummated by March 31, 2022; (vi) by First
Bancorp in the event that Select's board of directors fails to recommend
approval of the Merger Agreement to its shareholders; or (vii) by Select, prior
to the approval of its shareholders, in order to enter into a superior proposal.
Upon termination of the Merger Agreement under certain circumstances, Select may
be required to pay First Bancorp a termination fee of $11.5 million.
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The foregoing summary of the Merger Agreement is qualified in its entirety by
reference to the complete text of such document, which is filed as Exhibit 2.1
to this Current Report on Form 8-K and which is incorporated herein by
reference. The related press release is filed as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
Support Agreements
In connection with entering into the Merger Agreement, each of the directors and
executive officers of Select has entered into a support agreement (collectively,
the "Support Agreements"). The Support Agreements generally require that the
shareholder party thereto vote all of his or her shares of Select's common stock
in favor of the Merger and against alternative transactions and generally
prohibit such shareholder from transferring his or her shares of Select's common
stock prior to the consummation of the Merger. The Support Agreements will
terminate upon the earlier of the consummation of the Merger and the termination
of the Merger Agreement in accordance with its terms.
The foregoing summary of the Support Agreements is qualified in its entirety by
reference to the complete text of such document, which is included as Exhibit B
to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K
and which is incorporated herein by reference.
Item 8.01. Other Events.
On June 1, 2021, Select and FBNC issued a press release announcing the execution
of the Merger Agreement. The complete text of the press release is attached to
this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by
reference.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description of Exhibit
2.1 Agreement and Plan of Merger and Reorganization, dated June 1,
2021, by and between Select Bancorp, Inc. and First Bancorp.
99.1 Press release dated June 1, 2021 announcing the Merger Agreement
with First Bancorp.
104 Cover page interactive data file (embedded within the Inline XBRL
document).
Caution Regarding Forward-Looking Statements
This report, including the exhibits thereto, contains certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 regarding First Bancorp's and Select's expectations or predictions of
future financial or business performance or conditions. Forward-looking
statements are typically identified by words such as "believe," "expect,"
"anticipate," "intend," "target," "estimate," "continue," "positions,"
"prospects" or "potential," by future conditional verbs such as "will," "would,"
"should," "could" or "may", or by variations of such words or by similar
expressions. Such forward-looking statements include, but are not limited to,
statements about the benefits of the combination of First Bancorp and Select,
including future financial and operating results, expected cost savings,
expected impact on future earnings, the combined company's plans, objectives,
expectations and intentions and other statements that are not historical facts.
These forward-looking statements are subject to numerous assumptions, risks and
uncertainties which change over time. Forward-looking statements speak only as
of the date they are made and you are cautioned not to place undue reliance on
any forward-looking statements. Neither Select nor First Bancorp assume any duty
to update forward-looking statements.
In addition to factors previously disclosed in First Bancorp's and Select's
reports filed with the Securities and Exchange Commission, or the SEC, the
following factors, among others, could cause actual results to differ materially
from forward-looking statements: ability to obtain regulatory approvals and meet
other closing conditions to the merger, including approval by the shareholders
of each of First Bancorp and Select, on the expected terms and schedule; delay
in closing the merger; difficulties and delays in integrating the First Bancorp
and Select businesses or fully realizing cost savings and other benefits;
business disruption following the proposed transaction; changes in asset quality
and credit risk; the inability to sustain revenue and earnings growth; changes
in interest rates and capital markets; inflation; customer borrowing, repayment,
investment and deposit practices; the introduction, withdrawal, success and
timing of business initiatives; competitive conditions; the inability to realize
cost savings or revenues or to implement integration plans and other
consequences associated with mergers, acquisitions and divestitures; economic
conditions; the reaction to the transaction of the companies' customers,
employees and counterparties; and the impact, extent and timing of technological
changes, capital management activities, and other actions of the Board of
Governors of the Federal Reserve and legislative and regulatory actions and
reforms.
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Additional Information About the Proposed Transaction and Where to Find It
This communication is being made in respect of the proposed transaction
involving First Bancorp and Select. This material is not a solicitation of any
vote or approval by the shareholders of First Bancorp or Select and is not a
substitute for the joint proxy statement/prospectus or any other documents
which First Bancorp and Select may send in connection with the proposed
merger. This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
In connection with the proposed transaction, First Bancorp intends to file with
the SEC a Registration Statement on Form S-4 that will include a joint proxy
statement of First Bancorp and Select and a prospectus of First Bancorp, as
well as other relevant documents concerning the proposed transaction. Investors
and security holders are also urged to carefully review and consider each
of First Bancorp's and Select's public filings with the SEC, including but not
limited to their Annual Reports on Form 10-K, their proxy statements, their
Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The joint
proxy statement/prospectus will be mailed to First Bancorp and
Select's shareholders. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS,
INVESTORS AND SHAREHOLDERS OF FIRST BANCORP AND SELECT ARE URGED TO CAREFULLY
READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders may obtain a free copy of the joint
proxy statement/prospectus (when available) and other filings containing
information about First Bancorp and Select at the SEC's website at www.sec.gov.
Investors and security holders may also obtain free copies of the documents
filed with the SEC by First Bancorp on its website
at http://www.localfirstbank.com and by Select on its website
at www.selectbank.com.
First Bancorp, Select and certain of their respective directors and executive
officers, under the SEC's rules, may be deemed to be participants in the
solicitation of proxies of First Bancorp and Select's shareholders in
connection with the proposed transaction. Information about the directors and
executive officers of First Bancorp and their ownership of First Bancorp common
stock is set forth in the proxy statement for First Bancorp's 2021 Annual
Meeting of Shareholders, as filed with the SEC on Schedule 14A on March 23,
2021. Information about the directors and executive officers of Select and their
ownership of Select common stock is set forth in the proxy statement
for Select's 2021 Annual Meeting of Shareholders, as filed with the SEC on a
Schedule 14A on April 6, 2021. Additional information regarding the interests of
those participants and other persons who may be deemed participants in the
transaction may be obtained by reading the joint proxy statement/prospectus
regarding the proposed transaction when it becomes available. Free copies of
this document may be obtained as described in the preceding paragraph.
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