Additional Proxy Soliciting Materials (definitive) (defa14a)
September 26 2017 - 6:10AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or
15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported)
September 25, 2017
Independence
Bancshares, Inc.
(Exact name of registrant
as
specified in its charter)
South Carolina
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333-121485
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20-1734180
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(State or other
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(Commission
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(I.R.S. Employer
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jurisdiction of
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File Number)
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Identification No.)
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incorporation)
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500 East Washington
Street, Greenville, South Carolina, 29601
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(Address of principal executive
offices) (Zip
Code)
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Registrant's telephone
number, including area code:
(864)
672-1776
Not
Applicable
(Former name or former address, if changed since
last report)
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):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[X]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01. Entry into a
Material Definitive Agreement
On September 25, 2017,
Independence Bancshares, Inc. (the Company), the holding company for
Independence National Bank, Greenville, South Carolina, entered into an
Agreement and Plan of Merger (the Merger Agreement) with First Reliance
Bancshares, Inc. (First Reliance), the holding company for First Reliance
Bank, Florence, South Carolina, which provides that, subject to the terms and
conditions set forth in the Merger Agreement, the Company will merge with and
into First Reliance, with First Reliance as the surviving corporation (the
Merger). In addition, concurrently with or as soon as practicable following
the Merger, Independence National Bank (the Bank) will be merged with and into
First Reliance Bank.
Under the terms and subject
to the conditions of the Merger Agreement, at the effective time of the Merger
(the Effective Time), each outstanding share of common stock, $0.01 par value
per share, of the Company (Independence Common Stock) will be converted into
the right to receive cash in the amount of $0.125 (the Per Common Share Merger
Price). Immediately prior to the Effective Time, each outstanding share of
Series A Preferred Stock, $0.01 par value per share, of the Company (the
Independence Preferred Stock) will be redeemed for its stated per share
redemption price by the payment of cash in the amount of $1,000. As of September
25, 2017, the Company had 20,502,760 shares of Independence Common Stock
outstanding and 8,425 shares of Independence Preferred 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 first quarter of 2018.
The Merger Agreement has
been unanimously approved by the boards of directors of each of the Company and
First Reliance. The closing of the Merger is subject to the required approval of
the Companys shareholders, requisite regulatory approvals, and other customary
closing conditions.
The Merger Agreement
contains usual and customary representations and warranties that the Company and
First Reliance 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 First Reliance, 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 First Reliance rather
than establishing matters as facts.
The Merger Agreement
provides certain termination rights for both the Company and First Reliance and
further provides that a termination fee of $500,000 will be payable by the
Company upon termination of the Merger Agreement under certain circumstances,
including if the Company or its board of directors withdraws or modifies or
qualifies in a manner adverse to First Reliance, its recommendation that its
shareholders vote in favor of the Merger Agreement and the transactions
contemplated thereby.
The foregoing summary of
the Merger Agreement is qualified in its entirety by reference to the complete
text of such document, which is filed as Exhibit 2.1 to this Current Report on
Form 8-K and which is incorporated herein by reference. The related press
release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Participants in the
Merger Solicitation.
The Company and First Reliance, 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 First Reliance 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 for the Companys special meeting of shareholders, which
will be filed by the Company with the SEC. Information about the Companys
directors and executive officers can also be found in the Companys Form 10-K
for the fiscal year ended December 31, 2016, as filed with the SEC on March 24,
2017, and other documents subsequently filed by the Company with the SEC.
Additional information regarding the interests of such participants will be
included in the proxy statement and other relevant documents
regarding the Merger filed with the SEC when they become available.
Item 5.02(e).
Compensatory Arrangements of Certain Officers.
On September 25, 2017,
Lawrence R. Miller, the Chief Executive Officer of the Company, entered into an
amendment to his Amended and Restated Employment Agreement with the Company and
the Bank that will become effective upon the consummation of the Mergers. This
amendment provides that Mr. Millers Amended and Restated Employment Agreement
may be terminated effective immediately following a change of control, but that
(subject to payment of severance) a one-year restrictive covenant term would
then apply following such change of control.
The above is a summary of
the amendment to the Amended and Restated Employment Agreement and is qualified
by reference in its entirety to this amendment, which is attached hereto as
Exhibit 10.1 and incorporated herein by reference.
On September 25, 2017,
Martha L. Long, the Chief Financial Officer of the Company, and E. Fred Moore,
the Chief Credit Officer of the Company, each entered into an a non-solicitation
agreement with First Reliance that will prohibit them from recruiting employees
and soliciting customers of First Reliance until the later of two years after
the Merger or one year following the termination of their service as an employee
or consultant of First Reliance Bank. They will both also be subject to
confidentiality obligations during this term, which will become effective upon
the consummation of the Mergers.
The above are summaries of
the Non-Solicitation Agreements with Ms. Long and Mr. Moore and are qualified by
reference in their entirety to the agreements, which are attached hereto as
Exhibits 10.2 and 10.3, respectively, and incorporated herein by
reference.
Item 5.03. Amendments to
Articles of Incorporation or Bylaws; Change in Fiscal Year
On September 25, 2017, the
Companys board of directors approved an Amendment to its Amended and Restated
bylaws (the Amendment) to add Article 9, which requires that certain types of
actions, including certain actions brought against the Company or its directors
or officers, be brought in South Carolina courts. The foregoing description of
the Amendment is qualified in its entirety by reference to the full text of the
Amendment, which is attached as Exhibit 3.1 hereto and is incorporated herein by
reference.
Item 8.01. Other
Events
On September 25, 2017, the Company and First Reliance 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.
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Description
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2.1
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Agreement and Plan of Merger, dated as of
September 25, 2017, by and among First Reliance Bancshares, Inc., FR
Merger Subsidiary, Inc., and the Company
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3.1
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Amendment to
Amended and Restated Bylaws of the Company, dated as of September 25,
2017
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10.1
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Amendment to Amended and Restated Employment
Agreement, dated as of September 25, 2017, by and among the Company, the
Bank and Lawrence R. Miller
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10.2
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Non-Solicitation Agreement, dated as of
September 25, 2017, by and between First Reliance Bancshares, Inc. and
Martha L. Long
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10.3
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Non-Solicitation Agreement, dated as of
September 25, 2017, by and between First Reliance Bancshares, Inc. and E.
Fred Moore
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99.1
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Press
release dated September 25, 2017 announcing the Merger
Agreement
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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 and other documents subsequently filed by the
Company with the SEC. Consequently, no forward-looking statement can be
guaranteed. Neither the Company nor First Reliance 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 First Reliance 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 First Reliance. 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, Independence will file with the Securities and
Exchange Commission (the SEC) a proxy statement for the shareholders of the
Company. The Company will mail the final proxy statement to its shareholders.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SHAREHOLDERS ARE
URGED TO READ THE PROXY STATEMENT 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, as
well as other filings containing information about the Company, will be
available without charge, at the SECs website (
http://www.sec.gov
). Copies of the proxy statement 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.independencenb.com/
).
SIGNATURES
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.
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INDEPENDENCE BANCSHARES, INC.
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Dated:
September 25, 2017
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By:
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/s/ Lawrence R.
Miller
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Name: Lawrence R. Miller
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Title:
Interim Chief Executive Officer
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EXHIBIT
INDEX
Exhibit
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Number
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Description
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2.1
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Agreement and Plan of Merger, dated as of
September 25, 2017, by and among First Reliance Bancshares, Inc., FR
Merger Subsidiary, Inc., and the Company
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3.1
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Amendment to Amended and Restated Bylaws of the Company, dated as of September 25,
2017
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10.1
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Amendment to Amended and Restated
Employment Agreement, dated as of September 25, 2017, by and among the
Company, the Bank and Lawrence R. Miller
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10.2
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Non-Solicitation Agreement, dated as of September 25, 2017, by and
between First Reliance Bancshares, Inc. and Martha L. Long
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10.3
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Non-Solicitation Agreement, dated as of
September 25, 2017, by and between First Reliance Bancshares, Inc. and E.
Fred Moore
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99.1
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Press
release dated September 25, 2017 announcing the Merger
Agreement
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