firstindependence8-k.htm
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): March 25,
2008
1st INDEPENDENCE
FINANCIAL GROUP, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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0-26570
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61-1284899
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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8620
Biggin Hill Lane
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Louisville,
Kentucky
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40220-4117
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(Address
of Principal
Executive
Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (502) 753-0500
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:
[X
] 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))
Section
5 – Corporate Governance and Management
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors ; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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(e)
As
previously disclosed by 1st
Independence Financial Group, Inc. (“1st
Independence”), 1st
Independence and its subsidiary, 1st
Independence Bank, Inc. (“1st Bank”),
have entered into that certain Agreement and Plan of Merger, dated as of
February 26, 2008, with MainSource Financial Group, Inc. (“MainSource”), which
merger agreement contemplates the merger of 1st
Independence with and into MainSource. As of March 25, 2008, 1st
Independence entered into the agreements required by Section 5.18 of the merger
agreement regarding the existing employment agreements between 1st
Independence and 1st Bank
and certain of their officers. These included, among others,
agreements regarding the employment agreements between 1st
Independence and 1st Bank
and the following executive officers of 1st
Independence and 1st
Bank: N. William White, President and CEO; R Michael Wilbourn,
Executive Vice President and CFO; and Kathy L. Beach, Executive Vice President
and Chief Operations Officer. These agreements provide that upon the
effective time of the merger, the existing employment agreement of each of these
officers will be terminated in consideration of a cash payment to be made to
such officer as provided in his or her employment agreement. The
existing employment agreements provide for a payment in the context of
termination of the officer’s employment in a change of control transaction such
as the merger equal to 2.99 times the officer’s “base amount” (as defined in
Section 280G(b)(3) of the Internal Revenue Code) less the value of any benefits
or rights accelerated by the merger, provided such payment may be reduced to
prevent the payment from constituting an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Code. Each
officer is agreeing to accept such payment at the effective time of the merger
in lieu of any amounts that might otherwise be payable to such officer, and
benefits to which such officer would otherwise be entitled, under his or her
existing employment agreement. The agreements also provide that upon
receipt of such payment at the effective time of the merger, each such officer
will generally release any claims he or she has or may have against 1st
Independence, 1st Bank or
MainSource and
their successors and assigns, subject to certain carve outs as specified in each
agreement. The foregoing description of the agreements entered into
with each of Messrs. White and Wilbourn and Ms. Beach is qualified in its
entirety by reference to the agreements attached hereto as Exhibits 10.1, 10.2
and 10.3 and incorporated herein by this reference. Each such
agreement will be null and void and of no force or effect in the event the
merger is not consummated for any reason.
Also as
required by Section 5.15 of the merger agreement, 1st
Independence has begun using its best efforts to obtain written consents from
the holders of outstanding options to purchase 1st
Independence stock issued under 1st
Independence’s 2004 Omnibus Stock Option Plan whereby such optionees consent to
the disposition of such options as provided in Section 2.01 of the merger
agreement unless the holder exercises the option in accordance with its terms
prior to the effective time of the merger. Section 2.01
of the
merger agreement provides each outstanding option will at the effective time of
the merger be converted into the right to receive from MainSource, less any
required tax withholdings, an amount in cash equal to the product of (A) the sum
of (i) (x) $5.475, subject to adjustment as provided in Section 2.02 of the
merger agreement (the “cash consideration”), plus (y) the product of the Average
Share Price of MainSource common stock (as defined below) multiplied by 0.881036
(which exchange ratio may be adjusted as provided in the merger agreement), less
(ii) the per share exercise price for each share of 1st Independence stock
subject to the option, multiplied by (B) the number of shares of 1st
Independence stock subject to such option. Upon such payment, the
option will be terminated. If the option is out of the money (i.e.,
the calculation described above results in a negative number), the option will
still be terminated at the effective time of the merger and no payment will be
made with respect thereto. The Average Share Price of MainSource
common stock shall be equal to the average per share closing prices of a share
of MainSource common stock as quoted on the Nasdaq Stock Market during the ten
trading days preceding the fifth calendar day preceding the effective time of
the merger.
Holders
of outstanding options include current and former directors, executive officers
and employees of 1st
Independence and 1st
Bank. The following table shows the number of the outstanding options
held by each of the current directors and the named executive officers of 1st
Independence, and the weighted average exercise price of those
options.
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Name
and Position
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Number
of Shares under Option
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Weighted
Average Exercise Price
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N.
William White, President & CEO
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15,500
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$13.01
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R.
Michael Wilbourn, Executive Vice President and CEO
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8,750
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$13.49
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Kathy
L. Beach, Executive Vice President and Chief Operations
Officer
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5,000
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$17.72
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Steven
R. Manecke, Director
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5,000
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$8.00
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Charles
L. Moore, Director
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3,400
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$8.00
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Ronald
L. Receveur, Director
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3,400
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$8.00
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As of the
date of this Form 8-K, there are an additional 22,000 options outstanding and
held by persons other than current directors and named executive officers of
1st
Independence. Such options have a weighted average exercise price of
$13.48 per share.
Because
the Average Share Price of MainSource common stock will not be determined
until the fifth calendar day immediately preceding the consummation of the
merger as well as the possibility of an adjustment to the cash consideration
and/or the exchange ratio as described above and provided for in the merger
agreement, the amount of the payment due any optionee for such optionee’s
options should the optionee enter into the agreement regarding stock options and
not exercise their options prior to the merger cannot be determined at the time
of filing of this Form 8-K.
The
foregoing description of the form of the agreement regarding stock options that
1st Independence
is asking each optionee to sign to consent to the foregoing is qualified in its
entirety by reference to the copy of such form attached hereto as Exhibit 10.4
and incorporated herein by this reference.
1st
Independence began entering into the agreements regarding stock options with
optionees on March 27, 2008. If the merger does not occur and
the merger agreement is terminated, these agreements regarding stock options
will be null and void and the options subject thereto will not be terminated or
cancelled.
Additional
Information about the Merger and Where to Find It
The
merger will be submitted to 1st Independence's shareholders for their
consideration. MainSource will file a registration statement, which willinclude
a proxy statement/prospectus to be sent to 1st Independence's shareholders, and
each of 1st Independence and MainSource may file other relevant documents
concerning the merger with the SEC. Shareholders are urged to read the
registration statement and the proxy statement/prospectus regarding the merger
when they become available and any other relevant documents filed with the SEC,
as well as any amendments or supplements to those documents, because they will
contain important information. You will be able to obtain a free copy of the
proxy statement/prospectus, as well as other filings containing information
about 1st Independence and MainSource including all recent proxy statements and
annual reports at the SEC's website (http://www.sec.gov). In
addition, documents filed with the SEC by 1st Independence will be
available free of charge from the Secretary of 1st Independence at 8620 Biggin
Hill Lane, Louisville, Kentucky40220, telephone (502) 753-2265. Documents filed
with the SEC by MainSource will be available free of charge from the Secretary
of MainSource at 2105 N. State Road 3 Bypass, Greensburg, IN 47240, telephone
(812)663-6734, or on MainSource's website at www.mainsourcefinancial.com.
Forward
Looking Statements Safe Harbor
This
Report contains comments or information that constitute forward-looking
statements within the context of the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve significant risks and uncertainties. Actual results may differ
materially from the results discussed in the forward-looking statements. Factors
that may cause such a difference include: risks that the merger will not be
consummated on the terms disclosed or at all; risks resulting from the potential
adverse effect on 1st Independence's business and operations of the covenants
1st Independence made in the merger agreement; risks resulting from the decrease
in the amount of time and attention that management can devote to1st
Independence's business while also devoting its attention to completing the
proposed merger; risks associated with the increases in operating costs
resulting from the additional expenses 1st Independence has incurred and will
continue to incur relating to the proposed merger; changes in interest rates and
interest-rate relationships; demand for products and services; the degree of
competition by traditional and non-traditional competitors; changes in banking
regulations; changes in tax laws; changes in prices, levies, and assessments;
the impact of technological advances; governmental and regulatory policy
changes; the outcomes of contingencies; trends in customer behavior and their
ability to repay loans; changes in the national and local economy; and other
factors included in 1st Independence's filings with the SEC, available free
online at the SEC's website (http://www.sec.gov). 1st Independence assumes no
responsibility to update forward-looking statements.
Section
9 – Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of
Exhibit
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10.1
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Agreement
Relating to N. William White Employment Agreement and
Release
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10.2
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Agreement
Relating to R. Michael Wilbourn Employment Agreement and
Release
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10.3
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Agreement
Relating to Kathy L. Beach Employment Agreement and
Release
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10.4
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Form
of Agreement Regarding Stock
Options
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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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Dated: March
28, 2008
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1st
Independence Financial Group, Inc.
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By:
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/s/ N. William
White
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N.
William White
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President
and
Chief
Executive Officer
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INDEX
TO EXHIBITS
Exhibit
Number Description
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10.1
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Agreement
Relating to N. William White Employment Agreement and
Release
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10.2
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Agreement
Relating to R. Michael Wilbourn Employment Agreement and
Release
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10.3
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Agreement
Relating to Kathy L. Beach Employment Agreement and
Release
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10.4
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Agreement
Concerning Stock Options
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