UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
December 8, 2006
Date of Report (Date of earliest event reported)
First American Capital Corporation
(Exact Name of Registrant as specified in its charter)
Kansas 0-25679 48-1187574
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
1303 S.W. First American Place
Topeka, Kansas 66044
(Address of Principal Executive Offices)
(785) 267-7077
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a- 12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
- --------------------------------------------------------------------------------
Item 1.01. Entry into a Material Definitive Agreement.
Closing of Stock Purchase and Sale Agreement
- --------------------------------------------
On December 8, 2006, First American Capital Corporation (the "Company") closed
(the "Closing") on a Stock Purchase and Sale Agreement (the "Agreement") with
Brooke Corporation ("Brooke") of Overland Park, Kansas. Pursuant to the
Agreement, the Company will, through a series of steps, sell shares of common
stock that equate to 55% of the outstanding shares of the Company (the
"Transaction") to Brooke for $3,000,000 in cash and execution of a Brokerage
Agreement (as defined below).
At Closing, the Company issued 3,742,943 shares of common stock to Brooke,
representing approximately 46.8% of the Company's authorized and issued common
stock (the "Initial Shares"), to Brooke for $2,552,182 and execution of the
Brokerage Agreement. As part of the Closing, the Company also issued Brooke a
warrant (the "Warrant") to purchase an additional 1,643,460 shares of common
stock to be authorized for issuance pursuant to forthcoming amendments to the
Company's Articles of Incorporation (the "Amendments"). The Warrant is
exercisable at a price of $447,818. Upon approval of the Amendment, Brooke will
exercise the Warrant, thereby bringing Brooke's aggregate ownership to 55% of
the then outstanding shares of common stock on a fully diluted basis.
Attached hereto as Exhibit 99.1 is the joint press release dated December 8,
2006 announcing the Closing of the Stock Purchase and Sale Agreement.
Brokerage Agreement
- -------------------
On December 8, 2006, as part of the consideration under the Agreement, First
Life Brokerage, Inc. ("FLB"), a subsidiary of the Company, and CJD & Associates,
L.L.C. ("CJD"), Brooke's brokerage subsidiary, entered into an agreement by
which, as of that date, FLB began transacting all new managing general agent
loan brokerage business (the "Brokerage Agreement"). CJD operated such a
business prior to Closing and, as part of the Brokerage Agreement, agreed not to
engage in any new managing general agent loan brokerage business. Pursuant to
the terms of the Agreement, Brooke will contribute funds to the Company as
additional consideration for the issuance of the shares of the Company's common
stock acquired pursuant to the Agreement, to the extent the pretax profits of
FLB over a three year period beginning on December 8, 2006, are less than
$6,000,000 in accordance with the schedule set forth in the Agreement.
Shared Services Agreement
- -------------------------
On December 8, 2006, contemporaneously with the Closing, the Company entered
into a Shared Services Agreement (the "Services Agreement") with Brooke,
pursuant to which Brooke will provide many administrative and public-company
compliance services to the Company, including, but not limited to, human
resource services, payroll accounting, legal services, accounting, tax and
auditing services, risk management, and corporate marketing services. The $5,000
monthly cost for these services should provide material cost savings to the
Company. The Servicing Agreement terminates December 31, 2007.
John Van Engelen Employment Agreement
- -------------------------------------
On December 8, 2006, contemporaneously with the Closing, John Van Engelen,
President of First Life America Corporation ("FLAC"), entered into an employment
agreement with the Company to continue to serve as President of FLAC (the "Van
Engelen Agreement"). The Van Engelen Agreement runs through June 30, 2007,
paying Mr. Van Engelen $144,800 annually in addition to a performance based
bonus carried over from Mr. Van Engelen's previous employment agreement with the
Company. Mr. Van Engelen's success fees related to the Transaction included an
advancement of the performance bonus for 2006 which was paid out at Closing.
Mike Hess Employment Agreement
- ------------------------------
On December 8, 2006, contemporaneously with the Closing, Mike Hess entered into
an employment agreement with the Company to serve as President of First Life
Brokerage, Inc. (the "Hess Agreement"). The Hess Agreement is effective on
January 1, 2007 and will pay Mr. Hess $130,000 annually in addition to other
fringe benefits.
Item 3.02. Unregistered Sales of Equity Securities.
On December 8, 2006, pursuant to the terms of the Agreement, the Company sold
the Initial Shares and the Warrant to Brooke for $2,552,182 and execution of the
Brokerage Agreement. The Warrant gives Brooke the ability, if exercised, to buy
an additional 1,643,460 shares of common stock in the Company (the "Warrant
Shares") for an exercise price of $447,818. Brooke will exercise the Warrant as
soon as practicable after approval of the Amendments. In this transaction, the
Company, as issuer, is selling shares of common stock to another public
corporation in a private transaction, not in a public offering. As such, the
Company claims exemption from registration pursuant to Section 4(2) of the
Securities Act of 1933 and Regulation D promulgated pursuant thereto.
Item 5.02. Departure of Directors of Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
John Van Engelen Employment Agreement
- -------------------------------------
See description in Item 1.01 above.
Item 9.01. Exhibits.
(d) Exhibits
99.1 Joint Press Release issued by First American Capital Corporation and Brooke
Corporation, dated December 8, 2006, entitled "Brooke Corporation and First
American Capital Corporation Close Stock Transaction" is attached hereto as
Exhibit 99.1.
SIGNATURE
Pursuant 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.
First American Capital Corporation
Date: December 8, 2006
By: /s/ Harland Priddle
-----------------------------------------
Name: Harland Priddle
Title: Chairman of the Board of Directors