Item 1.01 Entry into a Material Definitive Agreement.
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The Merger Agreement provides that, upon the terms and subject to the conditions
set forth in the Merger Agreement, Community Shores will be merged with and into
ChoiceOne, with ChoiceOne as the surviving corporation (the "Merger"). Subject
to the terms and conditions of the Merger Agreement, upon completion of the
Merger, each share of Community Shores common stock outstanding immediately
prior to the Merger will be converted into the right to receive, at the election
of each Community Shores shareholder, an amount of cash equal to
The Merger Agreement contains customary representations and warranties that the parties have made to each other as of specific dates. Except for its status as a contractual document that establishes and governs the legal relations among the parties with respect to the Merger, the Merger Agreement is not intended to be a source of factual, business or operational information about the parties. The representations and warranties contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates, may be subject to a contractual standard of materiality different from what a shareholder might view as material, may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts, may have been qualified by certain disclosures not reflected in the Merger Agreement that were made to the other party in connection with the negotiation of the Merger Agreement and generally were solely for the benefit of the parties to the Merger Agreement.
The Merger Agreement contains customary covenants of ChoiceOne and Community Shores including, among others, that Community Shores shall (i) conduct its business in the ordinary course generally consistent with past practice during the period between the date of the Merger Agreement and the effective time of the Merger or earlier termination of the Merger Agreement, (ii) through its board of directors, recommend that its shareholders approve the Merger Agreement (subject to certain exceptions as provided in the Merger Agreement), (iii) call and hold a special shareholders' meeting to approve the Merger Agreement, (iv) solicit shareholder approval of the Merger Agreement (subject to certain exceptions as provided in the Merger Agreement), and (v) use commercially reasonable efforts to obtain any regulatory approvals necessary for the Merger.
Community Shores has agreed not to, subject to certain exceptions generally related to its board of directors' exercise of its fiduciary duties (as set forth in the Merger Agreement), solicit, initiate, encourage or facilitate inquiries or proposals with respect to, engage in any discussions or negotiations concerning, or provide any confidential information relating to, any alternative business combination transactions.
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If the Merger Agreement is terminated under certain circumstances, including
termination of the Merger Agreement to accept an alternative business
combination transaction as permitted by and subject to the terms of the Merger
Agreement, Community Shores is required to pay to ChoiceOne a termination fee of
Completion of the Merger is subject to certain customary closing conditions, including, among others, receipt of the requisite approval by the Community Shores shareholders, receipt of required regulatory approvals, the absence of any law or order prohibiting completion of the Merger, the effectiveness of the registration statement to be filed by ChoiceOne with respect to the shares of ChoiceOne common stock to be issued in the Merger and the absence of a material adverse effect (as defined in the Merger Agreement).
In connection with the Merger Agreement, ChoiceOne entered into a Voting Agreement with the directors of Community Shores and certain other shareholders, each in their capacities as shareholders. Each director and shareholder who is party to the Voting Agreement has agreed to vote in favor of the approval of the Merger Agreement, subject to the exceptions set forth in the Voting Agreement. The Voting Agreement is attached to this report as Exhibit 99.1 and is incorporated herein by reference.
The disclosure under this Item 1.01 is qualified in its entirety by reference to the Merger Agreement, which is filed with this report as Exhibit 2.1 and is incorporated herein by reference.
Item 8.01 Other Events.
On
Attached as Exhibit 99.3 to this report is an investor presentation regarding the Merger and is incorporated herein by reference.
Forward-Looking Statements
This report contains forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," "may," "could," "look forward," "continue", "future" and variations of such words and similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the outlook and expectations of ChoiceOne and Community Shores with respect to their planned merger, the strategic benefits and financial benefits of the merger, including the expected impact of the transaction on the combined company's future financial performance (including anticipated accretion to earnings per share, cost savings, the tangible book value earn-back period and other operating and return metrics), and the timing of the closing of the transaction. These statements reflect current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements. Furthermore, neither ChoiceOne nor Community Shores undertake any obligation to
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update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. Such risks, uncertainties and assumptions, include, among others, the following:
· the failure to obtain necessary regulatory approvals when expected or at all
(and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction);
· the failure of Community Shores to obtain shareholder approval, or to satisfy
any of the other closing conditions to the transaction, on a timely basis or at
all;
· the occurrence of any event, change or other circumstances that could give rise
to the right of one or both of the parties to terminate the merger agreement;
· the possibility that the anticipated benefits of the transaction, including
anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where ChoiceOne and Community Shores do business, or as a result of other unexpected factors or events;
· the impact of purchase accounting with respect to the transaction, or any
change in the assumptions used regarding the assets purchased and liabilities
assumed to determine their fair value;
· diversion of management's attention from ongoing business operations and
opportunities;
· potential adverse reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of the
transaction; and
· the outcome of any legal proceedings that may be instituted against ChoiceOne
or Community Shores.
Additional risk factors include, but are not limited to, the risk factors
described in Item 1A in
Important Additional Information and Where to Find It
This communication is being made in respect of the proposed merger transaction
between ChoiceOne and Community Shores. In connection with the proposed merger,
ChoiceOne will file with the
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 such jurisdiction.
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A free copy of the Proxy Statement/Prospectus, once available, as well as other
filings containing information about ChoiceOne and Community Shores, may be
obtained at the
Participants in Solicitation
Community Shores and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from Community Shores shareholders in respect of the transaction described in the Proxy Statement/Prospectus. 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 Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
Item 9.01 Financial Statements and Exhibits. (d) Exhibits: 2.1 Agreement and Plan of Merger betweenChoiceOne Financial Services, Inc. and Community Shores Bank Corporation datedJanuary 3, 2020 . (The schedules to the Agreement and Plan of Merger have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted schedules to theSEC upon request.) 99.1 Voting Agreement. 99.2 Press Release datedJanuary 6, 2020 . 99.3 Investor Presentation. 4
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