FOUR OAKS FINCORP, INC. (OTCMKTS:FOFN) Files An 8-K Entry into a Material Definitive Agreement

FOUR OAKS FINCORP, INC. (OTCMKTS:FOFN) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01


Entry into a Material Definitive Agreement.

On June 26, 2017, Four Oaks Fincorp, Inc. (the Company), the
holding company for Four Oaks Bank Trust Company (the Bank),
entered into an Agreement and Plan of Merger (the Merger
Agreement) with United Community Banks, Inc. (United), the
holding company for United Community Bank, Blairsville, Georgia.
Under the Merger Agreement, the Company will merge with and into
United (the Merger) and the Bank will merge with and into United
Community Bank, to which United and United Community Bank will be
the surviving entities.

Under the terms and subject to the conditions of the Merger
Agreement, at the effective time of the Merger (the Effective
Time), outstanding shares of common stock, $1.00 par value per
share, of the Company (Common Stock) will be converted into the
right to receive (i) $1.90 in cash, plus (ii) 0.6178 shares (the
Exchange Ratio) of Uniteds common stock, $1.00 per value per
share (UCBI Stock) together with cash in lieu of any fractional
shares. As of June 26, 2017, the Company had 6,771,359 shares of
Common Stock outstanding. The Merger Agreement also includes
provisions that address the treatment of the outstanding equity
awards of the Company in the Merger. The parties anticipate
closing the Merger during the fourth quarter of 2017.

The Merger Agreement has been unanimously approved by the boards
of directors of each of the Company and United. The closing of
the Merger is subject to the required approval of the Companys
shareholders, requisite regulatory approvals, the effectiveness
of the registration statement to be filed by United with respect
to the UCBI Stock to be issued in the Merger, and other customary
closing conditions.

The Merger Agreement contains usual and customary representations
and warranties that the Company and United 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 the Company and United, and may be subject
to important qualifications and limitations agreed to by the
parties in connection with negotiating its terms. Moreover, the
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 the
Company and United rather than establishing matters as facts.

The Merger Agreement provides certain termination rights for both
the Company and United and further provides that a termination
fee of $4 million (the Break-up Fee) will be payable by the
Company upon termination of the Merger Agreement if, prior to the
event giving rise to a termination right, an alternative
acquisition proposal (an Acquisition Proposal) is made known to
the Companys Board of Directors (the Board) or management, or
made directly to its shareholders and not withdrawn, and the
Merger Agreement is terminated (i) by the Company for any reason
other than a material breach of the Merger Agreement by United or
the occurrence of an event having a material adverse effect on
United, or (ii) by United if either (a) an event having a
material adverse effect on the Company occurs, (b) the Company
breaches (and fails to cure) any of its covenants or obligations
in the Merger Agreement, or (c) United learns that the Company
failed to disclose a material fact. If United terminates the
Merger Agreement after the Board changes its recommendation to
another transaction, but the Break-up Fee is not due based on the
terms of the Merger Agreement, the Company would instead be
required to pay United an amount equal to Uniteds transaction
expenses.

In connection with entering into the Merger Agreement, Mr.
Kenneth Lehman, a member of the Board, entered into a Support
Agreement (the “Support Agreement”) with United to which Mr.
Lehman agreed to vote certain of his shares to approve the Merger
Agreement and the Merger and against any Acquisition Proposal for
the Company, unless (i) the Merger Agreement has been terminated,
or (ii) the Board (a) withdraws, qualifies, or modifies in a
manner adverse to United its recommendation for the Merger or (b)
approves or recommends an Acquisition Proposal.


A copy of the Merger Agreement is attached as Exhibit 2.1 to this
Current Report on Form 8-K and is incorporated herein by
reference. The foregoing summary of the Merger Agreement does not
purport to be complete and is subject to and qualified in its
entirety by reference to the Merger Agreement.

Participants in the Merger Solicitation.

The Company and United, and certain of their respective
directors, executive officers, and other members of management
and employees, may be deemed to be participants in the
solicitation of proxies from the shareholders of the Company in
respect of the Merger. Information regarding the directors and
executive officers of the Company and United and other persons
who may be deemed participants in the solicitation of the
shareholders of the Company in connection with the Merger will be
included in the proxy statement/prospectus for the Companys
special meeting of shareholders, which will be filed by the
Company with the Securities and Exchange Commission (the SEC).
Information about the Companys directors and executive officers
can also be found in the Companys definitive proxy statement in
connection with its 2017 annual meeting of shareholders, as filed
with the SEC on April 17, 2017, and other documents subsequently
filed by the Company with the SEC. Information about Uniteds
directors and executive officers can also be found in Uniteds
definitive proxy statement in connection with its 2017 annual
meeting of shareholders, as filed with the SEC on March 24, 2017,
and other documents subsequently filed by United with the SEC.
Additional information regarding the interests of such
participants will be included in the proxy statement/prospectus
and other relevant documents regarding the Merger filed with the
SEC when they become available.

Item 3.03 Material Modification to Rights of Security Holders.

Concurrently with the execution of the Merger Agreement, the
Company effected an amendment, dated June 26, 2017 (the Rights
Plan Amendment), to the Tax Asset Protection Plan, dated August
18, 2014 (the Rights Plan), by and between the Company and
Computershare Trust Company, N.A. (as successor to Registrar and
Transfer Company), as Rights Agent, to which the Rights Plan was
amended to provide that, among other things, (i) neither United
nor its affiliates will be deemed an Acquiring Person thereunder,
(ii) neither a Separation Time nor a Stock Acquisition Date
thereunder will be deemed to have occurred in connection with the
Merger, in each case, solely as a result of the execution,
delivery or performance of the Merger Agreement or the Support
Agreement or the consummation of the Merger and the other
transactions contemplated thereby, and (iii) the Rights Plan will
automatically expire at the Effective Time. The Rights Plan
Amendment will terminate automatically and will have no force or
effect upon a termination of the Merger Agreement.

A copy of the Rights Plan Amendment is attached as Exhibit 4.1 to
this Current Report on Form 8-K and is incorporated herein by
reference. The foregoing summary of the Rights Plan Amendment
does not purport to be complete and is subject to and qualified
in its entirety by reference to the Rights Plan Amendment.

Item 5.03. Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.

On June 26, 2017, the Board approved an amendment to the Bylaws
of the Company (the Bylaws) adding a new Section 9 to Article IX
of the Bylaws (the Bylaws Amendment). This new Section 9 became
effective immediately upon adoption and provides that, unless the
Company consents in writing to the selection of an alternative
forum, the sole and exclusive forum for the adjudication of
certain actions shall be the state courts of North Carolina or
the U.S. District Court for the Eastern District of North
Carolina. Section 9 further provides that actions filed in any
North Carolina state court shall be subject to designation or
assignment to the North Carolina Business Court.

A copy of the Bylaw Amendment is attached as Exhibit 3.1 to this
Current Report on Form 8-K and is incorporated herein by
reference. The foregoing summary of the Bylaw Amendment does not
purport to be complete and is subject to and qualified in its
entirety by reference to the Bylaw Amendment.


Item 8.01

Other Events.

On June 27, 2017, the Company and United issued a joint press
release announcing the execution of the Merger Agreement. The
complete text of the joint press release is attached to this
report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.

Exhibit No.

Description of Exhibit

2.1

Agreement and Plan of Merger, dated June 26, 2017, by and
between Four Oaks Fincorp, Inc. and United Community Banks,
Inc.*

3.1

Amendment to the Bylaws of the Four Oaks Fincorp, Inc.

4.1

Amendment No. 1 to the Tax Asset Protection Plan, dated as
of August 18, 2014, between Four Oaks Fincorp, Inc. and
Computershare Trust Company, N.A. (as successor to
Registrar and Transfer Company), as Rights Agent

99.1

Press Release issued on June 27, 2017


*


The Company has omitted schedules and other similar
attachments to such agreement to Item 601(b)(2) of
Regulation S-K. The Company will furnish a copy of such
omitted documents to the SEC upon request.

Cautionary Statements Regarding Forward-Looking Information.

This Current Report contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995.
In general, forward-looking statements usually use words such as
may, believe, expect, anticipate, intend, will, should, plan,
estimate, predict, continue and potential or the negative of
these terms or other comparable terminology. Forward-looking
statements represent managements beliefs, based upon information
available at the time the statements are made, with regard to the
matters addressed; they are not guarantees of future performance.
Forward-looking statements are subject to numerous assumptions,
risks and uncertainties that change over time and could cause
actual results or financial condition to differ materially from
those expressed in or implied by such statements.

Factors that could cause or contribute to such differences
include, but are not limited to, the possibility that expected
benefits may not materialize in the time frames expected or at
all, or may be more costly to achieve; that the Merger may not be
timely completed, if at all; that prior to completion of the
Merger or thereafter, the parties respective businesses may not
perform as expected due to transaction-related uncertainties or
other factors; that the parties are unable to implement
successful integration strategies; that the required regulatory,
shareholder, or other closing conditions are not satisfied in a
timely manner, or at all; reputational risks and the reaction of
the parties customers to the Merger; diversion of management time
to Merger-related issues; and other factors and risk influences
contained in the cautionary language included under the headings
Managements Discussion and Analysis of Financial Condition and
Results of Operations and Risk Factors in the Companys Form 10-K
for the year ended December 31, 2016, as amended, and other
documents subsequently filed by the Company with the SEC.
Consequently, no forward-looking statement can be guaranteed.
Neither the Company nor United undertakes any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. For any
forward-looking statements made in this Current Report on Form
8-K, the exhibits hereto or any related documents, the Company
and United claim protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.


Additional Information and Where to Find It.

This communication is being made in respect of the Merger
involving the Company and United. 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. In
connection with the Merger, United will file with the SEC a
registration statement on Form S-4 that will include a proxy
statement/prospectus for the shareholders of the Company. United
also plans to file other documents with the SEC regarding the
Merger with the Company. The Company will mail the final proxy
statement/prospectus to its shareholders. BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION, INVESTORS AND SHAREHOLDERS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER
AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE MERGER. The proxy statement/prospectus, as
well as other filings containing information about the Company
and United, will be available without charge, at the SECs website
(http://www.sec.gov). Copies of the proxy
statement/prospectus and other documents filed with the SEC in
connection with the Merger can also be obtained, when available,
without charge, from the Companys website
(https://www.fouroaksbank.com/) and Uniteds website
(http://www.ucbi.com).


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.
FOUR OAKS FINCORP, INC.

By:
/s/ Deanna W. Hart
Deanna W. Hart
Executive Vice President, Chief Financial Officer
Date: June 27, 2017


EXHIBIT INDEX

Exhibit No.

Description of Exhibit

2.1

Agreement and Plan of Merger, dated June 26, 2017, by and
between Four Oaks Fincorp, Inc. and United Community Banks,
Inc.*

3.1

Amendment to the Bylaws of the Four Oaks Fincorp, Inc.

4.1

Amendment No. 1 to the Tax Asset Protection Plan, dated as
of August 18, 2014, between Four Oaks Fincorp, Inc. and
Computershare Trust Company, N.A. (as successor to
Registrar and Transfer Company), as Rights Agent

99.1

Press Release issued on June 27, 2017


*


The Company has omitted schedules and other similar
attachments to such agreement



FOUR OAKS FINCORP INC Exhibit
EX-2.1 2 a51580707_ex21.htm EXHIBIT 2.1 Exhibit 2.1     AGREEMENT AND PLAN OF MERGER   by and between   FOUR OAKS FINCORP,…
To view the full exhibit click here
About FOUR OAKS FINCORP, INC. (OTCMKTS:FOFN)

Four Oaks Fincorp, Inc. is a bank holding company. The Company’s primary function is to serve as the holding company for its subsidiaries, Four Oaks Bank & Trust Company, Inc. (the Bank) and Four Oaks Mortgage Services, L.L.C. The Bank operates over 16 offices in eastern and central North Carolina. In addition, the Company has an interest in Four Oaks Statutory Trust I. The Bank is a community-focused bank engaged in commercial banking business. The Bank provides a range of banking services, including deposit accounts, loan products, wealth management, bank access services and merchant services. The Bank offers deposit accounts, such as checking, savings, free checking and savings program, certificates of deposit (CD), e-statements and mobile check capture. It offers wealth management products, such as financial planning services, wealth management services, life insurance, long-term care and annuities. It offers Internet banking, telephone banking and mobile banking.

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