Item 2.02 Results of Operations and Financial Condition.
On January 20, 2020, First Defiance Financial Corp. ("FDEF") issued a press
release regarding its earnings for the quarter ended December 31, 2019. A copy
of the press release is attached as Exhibit 99.1.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
This Current Report on Form 8-K is being filed in connection with the previously
announced proposed merger of equals transaction (the "Merger") between FDEF and
United Community Financial Corp., an Ohio corporation ("UCFC"). The Merger is
expected to close on January 31, 2020, subject to the satisfaction of customary
closing conditions.
Appointment and Resignation of Directors in connection with the Merger
On January 20, 2020, in accordance with the terms of the previously disclosed
Agreement and Plan of Merger, dated September 9, 2019, between FDEF and UCFC
(the "Merger Agreement"), the board of directors of FDEF (the "Board") accepted
the resignation of each of Robert E. Beach, Dr. Douglas A. Burgei, Thomas K.
Herman, Barbara A. Mitzel, and Thomas A. Reineke from the Board and appointed
six current UCFC directors designated by UCFC to the Board, in each case subject
to and effective upon the closing of the Merger.
Accordingly, upon the closing of the Merger, the Board will be comprised of
seven current members of the Board (consisting of Donald P. Hileman, John L.
Bookmyer, Terri A. Bettinger, Jean A. Hubbard, Charles D. Niehaus, Mark A.
Robison and Samuel S. Strausbaugh) and the six UCFC directors designated by UCFC
(consisting of Gary M. Small, Richard J. Schiraldi, Marty E. Adams, Zahid Afzal,
Louis M. Altman and Lee Burdman). As previously disclosed, Mr. Bookmyer will
continue to serve as the Chairman of the Board, and Mr. Schiraldi will become
and serve as the Vice Chairman of the Board upon the closing of the Merger.
John L. Bookmyer, Zahid Afzal, Louis M. Altman and Terri A. Bettinger will serve
as Class I directors for a term expiring at the annual meeting of shareholders
in 2022. Marty E. Adams, Donald P. Hileman, Gary M. Small and Samuel S.
Strausbaugh will serve as Class II directors for a term expiring at the annual
meeting of shareholders in 2021. Richard J. Schiraldi, Lee Burdman, Jean A.
Hubbard, Charles D. Niehaus and Mark A. Robison will serve as Class III
directors for a term expiring at the annual meeting of shareholders in 2020.
Individual appointments to the various committees of the Board, effective upon
the closing of the Merger, are as follows:
Audit Compensation Nominating and Governance
Samuel S. Strausbaugh (Chair) Marty E. Adams (Chair) Richard J. Schiraldi (Chair)
Louis M. Altman Terri A. Bettinger Marty E. Adams
Mark A. Robison Lee Burdman Jean A. Hubbard
Richard J. Schiraldi Jean A. Hubbard Charles D. Niehaus
Executive Risk
John L. Bookmyer (Chair) Charles D. Niehaus (Chair)
Marty E. Adams Zahid Afzal
Donald P. Hileman Terri A. Bettinger
Richard J. Schiraldi Lee Burdman
Gary M. Small Donald P. Hileman
Samuel S. Strausbaugh Gary M. Small
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The information relating to FDEF's existing director compensation program set
forth under the heading "Proposal 1 Election of Directors-Board and Board
Committee Meetings-Director Compensation," included in FDEF's definitive
proxy statement filed on March 8, 2019 , is hereby incorporated by reference.
In connection with the completion of the proposed Merger, FDEFs director
compensation program may be modified in light of the increased size and
complexity of the combined organization.
Appointment of President in connection with the Merger
On January 20, 2020, in accordance with the terms of the Merger Agreement, the
Board appointed Gary M. Small as President of the Company and the Company's
banking subsidiary, First Federal Bank of the Midwest (the "Bank"), effective
upon the closing of the Merger. Donald P. Hileman will continue to serve as
Chief Executive Officer of the Company and the Bank after the Merger through the
agreed-to transition period following the Merger, and Paul D. Nungester, Jr.
will continue to serve as Chief Financial Officer of the Company and the Bank
after the Merger.
Gary M. Small, age 59, is currently the President and Chief Executive Officer
and a director of UCFC and UCFC's subsidiary bank, Home Savings Bank, and he has
held these positions since 2014. Prior to holding these positions, he served as
Senior Executive Vice President and Chief Banking Officer for S&T Bank, located
in Indiana, Pennsylvania, from January 2013 to March 2014, where he had
responsibility for wealth management, retail banking and insurance business
groups. He also held various senior executive officer positions with Jackson
Hewitt Tax Services, including as Senior Vice President of Customer Operations
from May 2011 to December 2012 and as Chief Operating Officer from January 2009
to May 2011. Previous positions also include Executive Vice President and
Regional Banking Group President for Huntington National Bank and Executive Vice
President and Head of Regional Banking for Sky Financial Group. He also has 20
years of experience in a number of senior operating and financial roles with
National City Corporation and its predecessor Merchants National Corporation,
including four years as Executive Vice President and Retail Network Executive
with responsibility for over 200 branch locations across the Midwest.
The information related to the employment agreement Mr. Small entered into with
FDEF in connection with the Merger included in FDEF's Current Report on Form 8-K
filed on September 10, 2019, is hereby incorporated by reference.
Amendment of Equity Plan Awards
As previously disclosed, pursuant to executive employment or change in control
agreements with Messrs. Hileman, Nungester, John R. Reisner, Dennis E. Rose,
Jr., and Gregory R. Allen, the Merger is a "change in control" for the purpose
of their respective agreements and FDEF equity plans. Although Timothy K. Harris
has no such agreement in place, to align treatment of UCFC and FDEF directors
and employees, the Merger Agreement provides FDEF with discretion to deem the
Merger a change in control under its equity plans and applicable award
agreements with all FDEF employees and non-employee directors, including Mr.
Harris.
In addition, as previously disclosed, FDEF executives and non-employee directors
currently hold outstanding awards under the equity plans, including awards of
performance-based and time-based restricted stock units. The Merger is
anticipated to close during the performance periods set forth in applicable
performance-based award agreements, and due to the effects of the Merger,
performance measurements under the applicable award agreements for periods
before and after the Merger will not be comparable and, therefore, not readily
determinable.
On January 20, 2020, the compensation committee of the Board exercised
discretion provided in the Merger Agreement to deem the Merger a change in
control under FDEF equity plans, subject to consummation of the Merger, for
. . .
Item 7.01 Regulation FD Disclosure.
On January 20, 2020, FDEF issued a press release that included announcement of a
cash dividend. A copy of the press release is attached as Exhibit 99.1 and
incorporated herein by reference.
Item 8.01 Other Events.
On January 20, 2020, FDEF and UCFC jointly announced the receipt of all required
regulatory approvals for the Merger. The Merger is expected to close on
January 31, 2020, subject to the satisfaction of customary closing conditions. A
copy of the press release is attached as Exhibit 99.2 to this Current Report on
Form 8-K and is incorporated herein by reference.
Cautionary Statements Regarding Forward-Looking Information
Certain statements contained in this report which are not statements of
historical fact constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, certain plans, expectations, goals, projections and benefits
relating to the Merger between FDEF and UCFC, which are subject to numerous
assumptions, risks and uncertainties. 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, as well as similar expressions, are intended to identify
forward-looking statements but are not the exclusive means of identifying such
statements. Please refer to each of FDEF's and UCFC's Annual Report on
Form 10-K for the year ended December 31, 2018, as well as their other filings
with the SEC, for a more detailed discussion of risks, uncertainties and factors
that could cause actual results to differ from those discussed in the
forward-looking statements.
Forward-looking statements are not historical facts but instead express only
management's beliefs regarding future results or events, many of which, by their
nature, are inherently uncertain and outside of the management's control. It is
possible that actual results and outcomes may differ, possibly materially, from
the anticipated results or outcomes indicated in these forward-looking
statements. In addition to factors disclosed in reports filed by FDEF and UCFC
with the SEC, risks and uncertainties for FDEF, UCFC and the combined company
include, but are not limited to: the possibility that any of the anticipated
benefits of the proposed Merger will not be realized or will not be realized
within the expected time period; the risk that integration of UCFC's operations
with those of FDEF will be materially delayed or will be more costly or
difficult than expected; the parties' inability to meet expectations regarding
the timing, completion and accounting and tax treatments of the Merger; the
failure to satisfy
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conditions to completion of the Merger; the failure of the proposed Merger to
close for any other reason; diversion of management's attention from ongoing
business operations and opportunities due to the Merger; the challenges of
integrating and retaining key employees; the effect of the announcement of the
Merger on FDEF's, UCFC's or the combined company's respective customer and
employee relationships and operating results; the possibility that the Merger
may be more expensive to complete than anticipated, including as a result of
unexpected factors or events; dilution caused by FDEF's issuance of additional
shares of FDEF common stock in connection with the Merger; and general
competitive, economic, political and market conditions and fluctuations. All
forward-looking statements included in this filing are made as of the date
hereof and are based on information available at the time of the filing. Except
as required by law, neither FDEF nor UCFC assumes any obligation to update any
forward-looking statement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Form of Amendment to Performance-Based Restricted Stock Unit Award
Agreements by and between First Defiance Financial Corp. and Donald P.
Hileman
10.2 Form of Amendment to Performance-Based Restricted Stock Unit Award
Agreements - Long Term Growth by and between First Defiance Financial
Corp. and Donald P. Hileman
10.3 Form of Amendment to Performance-Based Restricted Stock Unit Award
Agreements
10.4 Form of Amendment to Performance-Based Restricted Stock Unit Award
Agreements - Long Term Growth
99.1 Press Release dated January 20, 2020
99.2 Joint press release of First Defiance Financial Corp. and United
Community Financial Corp., dated January 20, 2020
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