Item 1.01.
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Entry into a Material Definitive Agreement.
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On November 27, 2018, Golub Capital BDC, Inc., a Delaware corporation
(“GBDC”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Golub Capital Investment
Corporation, a Maryland corporation (“GCIC”), Fifth Ave Subsidiary Inc., a Maryland corporation and wholly owned subsidiary
of GBDC (“Merger Sub”), GC Advisors, LLC, a Delaware limited liability company and investment adviser to each of GBDC
and GCIC (“GC Advisors”), and, for certain limited purposes, Golub Capital LLC. The Merger Agreement provides that,
subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into GCIC, with GCIC continuing as
the surviving company and as a wholly-owned subsidiary of GBDC (the “Merger”) and, immediately thereafter, GCIC will
merge with and into GBDC, with GBDC continuing as the surviving company (together with the Merger, the “Mergers”).
The boards of directors of both GBDC and GCIC, including all of the respective independent directors, have approved the Merger
Agreement and the transactions contemplated therein. The parties to the Merger Agreement intend the Mergers to be treated as a
“reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
In the Merger, each share of GCIC common stock issued and outstanding
immediately prior to the effective time of the Merger will be converted into 0.865 shares of GBDC common stock (the “Exchange
Ratio”) in connection with the closing of the Merger. The Exchange Ratio will only be adjusted if, between the date of the
Merger Agreement and the effective time of the Merger, the respective outstanding shares of GBDC common stock or GCIC common stock
shall have been increased or decreased or changed into or exchanged for a different number or kind of shares or securities, in
each case, as a result of any reclassification, recapitalization, stock split, reverse stock split, split-up, combination or exchange
of shares, or if a stock dividend or dividend payable in any other securities shall be declared with a record date within such
period. No fractional shares of GBDC common stock will be issued, and holders of GCIC common stock will receive cash in lieu of
fractional shares.
The Merger Agreement contains representations, warranties and
covenants, including, among others, covenants relating to the operation of each of GBDC’s and GCIC’s businesses during
the period prior to the closing of the Merger. GBDC and GCIC have agreed to convene and hold stockholder meetings for the purpose
of obtaining the approvals required of GBDC’s and GCIC’s stockholders, respectively, and have agreed to recommend that
the stockholders approve the applicable proposals.
The Merger Agreement provides that each of GBDC and GCIC may
not solicit proposals relating to alternative transactions, or, subject to certain exceptions, enter into discussions or negotiations
or provide information in connection with any proposal for an alternative transaction. However, each of the GBDC board of directors
and the GCIC board of directors may, subject to certain conditions and in some instances payment of a termination fee of approximately
$29 million, change its recommendation to the applicable stockholders, terminate the Merger Agreement and enter into an agreement
with respect to a superior alternative proposal if it determines in its reasonable good faith judgment, after consultation with
its outside legal counsel, that the failure to take such action would be reasonably likely to breach its standard of conduct under
applicable law (taking into account any changes to the Merger Agreement proposed by GCIC or GBDC, as applicable).
Consummation of the Merger, which is currently anticipated
to occur during the first half of calendar year 2019 is subject to certain closing conditions, including (1) requisite
approvals of GBDC stockholders and GCIC stockholders, (2) approval of GBDC stockholders of an amendment to the investment
advisory agreement between GBDC and GC Advisors to be effective upon closing of the Merger, (3) the absence of certain legal
impediments to the consummation of the Merger, (4) effectiveness of the registration statement for the GBDC common stock to
be issued as consideration in the Merger, (5) subject to certain exceptions, the accuracy of the representations and
warranties and compliance with the covenants of each party to the Merger Agreement, (6) required regulatory approvals
(including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and
(7) a requirement that, as of a determination date that is within 48 hours (excluding Sundays and holidays) prior to the
closing of the Merger, both (a) the product of the Exchange Ratio and the greater of (i) the closing market price and (ii)
the net asset value (“NAV”) per share of the shares of GBDC common stock is greater than or equal to NAV per share of GCIC common stock and (b) the product of the Exchange Ratio and the NAV per
share of the GBDC common stock is less than or equal to the NAV per share of the GCIC common stock.
The Merger Agreement also contains certain termination rights
in favor of GBDC and GCIC, including if the Merger is not completed on or before November 27, 2019 or if the requisite approvals
of GBDC stockholders or GCIC stockholders are not obtained. The Merger Agreement also provides that, upon the termination of the
Merger Agreement under certain circumstances, GBDC may be required to pay GCIC, or GCIC may be required to pay GBDC, a termination
fee of approximately $29 million.
The description above is only a summary of the material provisions
of the Merger Agreement and is qualified in its entirety by reference to copies of the Merger Agreement, which is filed as Exhibit
10.1 to this Current Report on Form 8-K and incorporated by reference herein.
The representations and warranties and covenants set forth in
the Merger Agreement have been made only for purposes of such agreement and were solely for the benefit of the parties to the Merger
Agreement, may be subject to limitations agreed upon by the contracting parties, including qualification by confidential disclosures
made for purposes of allocating contractual risk between the parties to the Merger Agreement instead of 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. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding
the terms of the Merger Agreement, and not to provide investors with any factual information regarding the parties to the Merger
Agreement or their respective businesses.