FBR& CO. (NYSE:FBR) Files An 8-K Entry into a Material Definitive Agreement

FBR& CO. (NYSE:FBR) Files An 8-K Entry into a Material Definitive Agreement

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Item1.01

Entry into a Material Definitive Agreement.

Merger Agreement

On February17, 2017, FBR Co. (the Company) entered into an
Agreement and Plan of Merger (the Merger Agreement) with
B. Riley Financial, Inc. (B. Riley), to which the Company
will merge with and into B. Riley (or a subsidiary of B. Riley),
with B. Riley (or its subsidiary) as the surviving corporation
(the Merger).

Subject to the terms and conditions of the Merger Agreement, at
the effective time of the Merger (the Effective Time),
each outstanding share of the Companys common stock, par value
$0.001 per share (Company Common Stock), excluding certain
specified shares, will be converted into the right to receive
0.671 of a share (the Share Consideration) of B. Rileys
common stock, par value $0.0001 per share (B. Riley Common
Stock
).

In addition, prior to the closing of the Merger, the board of
directors of the Company (the Company Board) may declare
and pay a cash dividend (the Pre-Closing Dividend) to
holders of Company Common Stock and Company equity awards. The
Pre-Closing Dividend on a per share basis will be equal to the
value of cash and certain specified investments on the Companys
balance sheet in excess of $33,500,000 divided by the total
number of fully diluted shares of Company Common Stock
outstanding (subject to certain adjustments if the Pre-Closing
Dividend would be equal to or more than $8.50 per fully diluted
share of Company Common Stock).

At the Effective Time, each outstanding option to purchase shares
of Company Common Stock granted under a Company stock plan will
vest and be converted into a number of shares of B. Riley Common
Stock having a value equal to the value of a share of Company
Common Stock prior to the payment of the Pre-Closing Dividend
(the Final Pre-Dividend Price), less the applicable
exercise price and subject to rounding. Any option that has an
exercise price that is greater than or equal to the Final
Pre-Dividend Price will be cancelled for no consideration.

At the Effective Time, (i)each outstanding share of Company
restricted stock will be converted into a number of restricted
shares of B. Riley Common Stock equal to the Share Consideration
and the right to receive the Pre-Closing Dividend, and (ii)each
outstanding Company restricted stock unit award and performance
stock unit award will be converted into (A)a restricted stock
unit award with respect to a number of shares of B. Riley Common
Stock equal to the number of shares of Company Common Stock
underlying the Company award (in the case of performance stock
units, with the number of shares deemed to be equal to the
greater of the number of shares that would be earned based on the
Companys actual performance for the most recently completed
fiscal quarter prior to the Effective Time, and the level of
achievement resulting in 50% of the number of shares being
earned) multiplied by the Share Consideration, and (B)a right to
receive the Pre-Closing Dividend in respect of each share of
Company Common Stock underlying such Company award. Each such B.
Riley restricted stock award and restricted stock unit award and
the right to the Pre-Closing Dividend will continue to be
governed by the same terms and conditions as were applicable to
the corresponding Company award immediately prior to the
Effective Time (except that performance-based vesting conditions
will no longer apply).

At the Effective Time, each outstanding option to purchase a
share of Company Common Stock held by a certain investor will be
converted into an option to purchase shares of B. Riley Common
Stock, with the number of shares and exercise price equitably
adjusted to reflect the Pre-Closing Dividend and the shares of B.
Riley Common Stock to be issued in the Merger (the Share
Issuance
). Each such B. Riley option will continue to be
governed by the same terms and conditions as were applicable to
the applicable Company award immediately prior to the Effective
Time.

The Company and B. Riley have made customary representations,
warranties and covenants in the Merger Agreement for a
transaction of this nature. The Company and B. Riley have also
agreed, among other things, to covenants relating to (i)the
conduct of their respective businesses during the interim period
between the execution of the Merger Agreement and the
consummation of the Merger, (ii)facilitating the Companys
shareholders and B. Rileys stockholders consideration of, and
voting upon, the adoption or approval of the Merger Agreement and
certain related matters (including, in the case of B. Riley, the
approval of the Share Issuance), (iii)the recommendation by the
Company Board in favor of the Merger Agreement, (iv)and the board
of directors of B. Rileys recommendation in favor of the approval
of the Share Issuance and certain related matters, and (v)the use
of their respective reasonable best efforts to obtain necessary
regulatory approvals and to do or cause to be done all things
reasonably necessary, proper or advisable to consummate and make
effective the Merger. In addition, the Company has agreed to
non-solicitation obligations relating to alternative business
combination transactions subject to certain exceptions.

Consummation of the Merger is subject to certain closing
conditions, including: (i)the approval of the Merger Agreement by
the holders of a majority of the outstanding shares of Company
Common Stock as of the applicable record date, (ii)the adoption
of the Merger Agreement by the holders of a majority of the
outstanding shares of Company Common Stock as of the applicable
record date, (iii)the approval of the Share Issuance by a
majority of the votes cast on the issuance, (iv)the absence of
any law or order prohibiting the Merger or the other transactions
contemplated by the Merger Agreement, (v)the receipt of certain
required regulatory approvals that do not contain materially
burdensome regulatory conditions, subject to certain exceptions
and (vi)effectiveness of the registration statement for the Share
Issuance. The obligation of each party to consummate the Merger
is also conditioned upon the accuracy of the other partys
representations and warranties (subject to customary materiality
qualifiers), the other partys performance in all material
respects of its obligations contained in the Merger Agreement and
the receipt by such party of a tax opinion to the effect that the
Merger will qualify as a reorganization within the meaning of
Section368(a) of the Internal Revenue Code of 1986, as amended.
The obligation of B. Riley to consummate the Merger is also
conditioned upon the Company having $33,500,000 in cash and
certain specified investments at the Effective Time.

The Merger Agreement contains certain termination rights for both
the Company and B. Riley, including (i)if the consummation of the
Merger is legally prohibited or enjoined, (ii)the failure of the
Merger to be consummated by September30, 2017 (the Outside
Date
) or (iii)in the event that the approval of the Companys
shareholders or B. Rileys stockholders is not obtained. In
addition, in certain circumstances, B. Riley may terminate the
Merger Agreement prior to the approval of the Companys
shareholders in the event that (A)the Company materially breaches
certain non-solicitation obligations relating to alternative
business combination transactions, (B)the Company Board changes
its recommendation or (C)the Company Board recommends a tender
offer or fails to recommend against such tender offer within 10
business days after commencement thereof. The Merger Agreement
also provides that the Company will be obligated to pay a
termination fee of $5 million to B. Riley if the Merger Agreement
(i)is terminated by B. Riley in the circumstances described in
the preceding sentence or (ii)(A) if an acquisition proposal is
made to the Company or to its shareholders publicly, (B)the
Merger Agreement is terminated for failure to consummate the
Merger by the Outside Date or for failure to obtain the approval
of the Companys shareholders and (C)the Company enters into a
definitive agreement with respect to or consummates certain
acquisition proposals within 12 months of termination of the
Merger Agreement.

The Merger Agreement further provides that, at or prior to the
Effective Time, the board of directors of B. Riley will be
increased by one, which vacancy will be filled by a current
member of the Company Board. to an employment agreement entered
into by B. Riley and Richard J. Hendrix (Chairman, President and
Chief Executive Officer of the Company), Mr. Hendrix will become
President and Chief Executive Officer of the combined investment
banking and brokerage business and will be appointed to the board
of directors of B. Riley, contingent on Mr. Hendrix remaining
employed by the Company through the closing of the Merger.

Voting Agreements

On February17, 2017, certain officers and directors of the
Company entered into voting agreements with B. Riley with respect
to shares of the Company Common Stock held by such officers or
directors, and certain officers and directors of B. Riley entered
into voting agreements with the Company with respect to shares of
B. Riley Common Stock held by such officers or directors
(collectively, the Voting Agreements) on substantially the
same terms, as described below.

The Voting Agreements generally require each person party thereto
(each, a Shareholder) in his or her capacity as a
shareholder, to vote all of the shares of common stock over which
such Shareholder has voting control in favor of the approval of
the Merger Agreement and certain related matters (including, in
the case of the B. Riley stockholders, the Share Issuance) and
against alternative transactions and generally prohibit them from
transferring their shares of common stock, subject to certain
exceptions. The Voting Agreements will terminate in certain
circumstances, including upon the consummation of the Merger or
the termination of the Merger Agreement in accordance with its
terms.

The foregoing description of the Merger Agreement and the Voting
Agreements do not purport to be complete and are qualified in
their entirety by reference to the respective agreements attached
hereto as Exhibits 2.1, 99.1 and 99.2, respectively, which are
incorporated by reference herein.

The Merger Agreement and Voting Agreements and the above
description of the Merger Agreement and Voting Agreements have
been included to provide investors and securityholders with
information regarding the terms of the Merger Agreement and
Voting Agreements. The Merger Agreement and Voting Agreements and
the above description are not intended to provide any other
factual information about the Company, B. Riley, or their
respective subsidiaries or affiliates. The representations,
warranties and covenants contained in the Merger Agreement were
made only for purposes of the Merger Agreement and as of specific
dates; were solely for the benefit of the parties to the Merger
Agreement; may be subject to limitations agreed upon by the
parties, including being qualified by confidential disclosures
made by each contracting party to the other for the purposes of
allocating contractual risk between them rather than 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. Investors are not third-party
beneficiaries under the Merger Agreement and should not rely on
the representations, warranties and covenants or any description
thereof as characterizations of the actual state of facts or
condition of the Company, B. Riley or any of their respective
subsidiaries, affiliates or businesses. Moreover, information
concerning the subject matter of the representations, warranties
and covenants may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in
public disclosures by the Company or B. Riley. The Merger
Agreement and Voting Agreements should not be read alone, but
should instead be read in conjunction with the other information
about the Company or B. Riley and their respective subsidiaries.
The Merger Agreement, and information about the Merger, 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 the Company and B. Riley, as well as in the
reports, statements and other filings each of the Company and B.
Riley make with the United States Securities and Exchange
Commission (the SEC).

Forward-Looking Statements

This Current Report on Form 8-K may contain forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than
statements of historical fact are forward-looking statements.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause B. Rileys or the
Companys performance or achievements to be materially different
from any expected future results, performance, or achievements.
Forward-looking statements speak only as of the date they are
made and neither B. Riley nor the Company assume any duty to
update forward looking statements. We caution readers that a
number of important factors could cause actual results to differ
materially from those expressed in, or implied or projected by,
such forward-looking statements. Such forward-looking statements
include, but are not limited to, statements about the benefits of
the Merger involving B. Riley and the Company, including future
financial and operating results, the combined companys plans,
objectives, expectations and intentions and other statements that
are not historical facts. The following factors, among others,
could cause actual results to differ from those set forth in the
forward-looking statements: (i) the possibility that the Merger
does not close when expected or at all because required
regulatory, stockholder or other approvals and other conditions
to closing are not received or satisfied on a timely basis or at
all; (ii) changes in B. Rileys share price before closing,
including as a result of the financial performance of the Company
prior to closing, or more generally due to broader stock market
movements, and the performance of financial companies and peer
group companies; (iii) the risk that the benefits from the
transaction may not be fully realized or may take longer to
realize than expected, including as a result of changes in
general economic and market conditions, interest and exchange
rates, monetary policy, laws and regulations and their
enforcement, and the degree of competition in the geographic and
business areas in which B. Riley and the Company operate; (iv)
the ability to promptly and effectively integrate the businesses
of B. Riley and the Company; (v) the reaction of the companies
customers, employees and counterparties to the transaction; (vi)
diversion of management time on transaction-related matters; and
(vii) other risks that are described in B. Rileys and the
Companys public filings with the SEC. For more information, see
the risk factors described in each of B. Rileys and the Companys
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
other filings with the SEC.

No Offer or Solicitation

This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation
of any vote or approval, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.

Additional Information about the Merger and Where to Find
It

Investors are urged to carefully review and consider each of B.
Rileys and the Companys 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. In connection with the proposed
transaction, B. Riley will file with the SEC a Registration
Statement on Form S-4 that will include a Joint Proxy Statement
of B. Riley and the Company and a Prospectus of B. Riley (the
Joint Proxy/Prospectus), as well as other relevant
documents concerning the proposed transaction. Investors are
urged to carefully read the Registration Statement and the Joint
Proxy/Prospectus regarding the transaction in their entirety when
they become 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. A
definitive Joint Proxy/Prospectus will be sent to the
stockholders of B. Riley and shareholders of the Company. In
addition, investors will be able to obtain free copies of the
Registration Statement and the Joint Proxy Statement/Prospectus
from the Company by going to its investor relations page on its
corporate web site at www.fbr.com or by contacting the
Companys investor relations department at (703) 312-9715 and from
B. Riley by going to its investor relations page on its corporate
web site at www.brileyco.com or by contacting B. Rileys
investor relations department at (310) 689-5235. Copies of the
Joint Proxy Statement/Prospectus and the filings with the SEC
that will be incorporated by reference in the Joint Proxy
Statement/Prospectus can also be obtained, without charge, by
directing a written request to B. Riley, Attention: Corporate
Secretary, 21255 Burbank Boulevard, Suite 400, Woodland Hills,
California 91367 or to the Company, Attention: Corporate
Secretary, 1300 North Seventeenth Street, Arlington, Virginia
22209.

Participants in Solicitation

B. Riley and the Company and their directors and executive
officers and certain other persons may be deemed to be
participants in the solicitation of proxies from the security
holders of the Company or B. Riley in connection with the Merger.
Information about the directors and executive officers of B.
Riley and their ownership of B. Riley Common Stock is available
in B. Rileys definitive proxy statement, which was filed with the
SEC on April 19, 2016. Information about the directors and
executive officers of the Company and their ownership of the
Company Common Stock is available in the Companys definitive
proxy statement, which was filed with the SEC on May 9, 2016.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained
in the Joint Proxy Statement/Prospectus and other relevant
materials filed with the SEC. Free copies of this document may be
obtained as described in the preceding paragraph.

Item9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number

Description

2.1 Agreement and Plan of Merger, dated as of February 17, 2017,
by and between FBR Co. and B. Riley Financial, Inc.*
99.1 Form of Voting Agreement, dated February 17, 2017, by and
between B. Riley Financial, Inc. and certain shareholders of
FBR Co.
99.2 Form of Voting Agreement, dated February 17, 2017, by and
between FBR Co. and certain stockholders of B. Riley
Financial, Inc.

* Certain schedules and exhibits have been omitted to
Item601(b)(2) of Regulation S-K. The Company agrees to furnish
supplementally a copy of any omitted schedule or exhibit to the
SEC upon request.

to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.

FBR CO.
Date: February 21, 2017 By: /s/ Bradley J. Wright

Bradley J. Wright

Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number

Description

2.1 Agreement and Plan of Merger, dated as of February 17, 2017,
by and between FBR Co. and B. Riley Financial, Inc.*
99.1 Form of Voting Agreement, dated February 17, 2017, by and
between B. Riley Financial, Inc. and certain shareholders of
FBR Co.
99.2 Form of Voting Agreement, dated February 17, 2017, by and
between FBR Co. and certain stockholders of B. Riley
Financial, Inc.

* Certain schedules and exhibits have been omitted


About FBR & CO. (NYSE:FBR)

Fibria Celulose S.A. (Fibria) is a forestry company, which is engaged in the production of eucalyptus pulp. The Company is engaged in the production and sale of short fiber pulp from its pulp production facilities located in the cities of Aracruz (State of Espirito Santo), Tres Lagoas (State of Mato Grosso do Sul), Jacarei (State of Sao Paulo) and Eunapolis (State of Bahia). The Company’s activities are focused on the growth of renewable and forests, and the manufacture and sale of bleached eucalyptus kraft pulp. The Company’s annual production capacity is approximately 5.3 million tons of pulp. Fibria has over 969,000 hectares of forests, with approximately 568,000 hectares of planted forests, over 338,000 hectares of environmental preservation and conservation areas, and approximately 63,000 hectares destined for other uses. The pulp produced by Fibria is exported to approximately 40 countries. The pulp produced for export is delivered to customers by sea and through various ports.

FBR & CO. (NYSE:FBR) Recent Trading Information

FBR & CO. (NYSE:FBR) closed its last trading session down -0.11 at 9.00 with 1,109,518 shares trading hands.

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