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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 10, 2016

(Exact name of registrant as specified in its charter)

 

 

Registrant's telephone number, including area code: (972) 720-9000

 

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):

 

 

 

 

 

 

 

On November 10, 2016, T Bancshares, Inc., a Texas corporation (the "Company"), entered into an Agreement and Plan of Merger (the "Agreement") with T Acquisition, Inc., a Texas corporation ("Parent"), and joined in by Tectonic Advisors, LLC, a Texas limited liability company ("Tectonic").  Subject to the terms and conditions of the Agreement, which have been approved by the boards of directors of the Company, Parent and Tectonic, Parent will acquire the Company through the merger of a wholly-owned subsidiary of Parent ("Merger Sub") with and into the Company, with the Company being the surviving corporation (the "Merger").

Under the Agreement, at the effective time of the Merger (the "Effective Time"), each outstanding share of Company common stock will be converted into the right to receive an amount in cash consisting of two payments that, based on Company's Adjusted Equity (as defined by the merger agreement), would have totaled approximately $10.00 per share at September 30, 2016. A special dividend will be paid by the Company immediately prior to the Effective Time in an amount by which the Company's Adjusted Equity exceeds $20,000,000.  Based on the Company's shareholders' equity as of September 30, 2016, the special dividend would have equaled approximately $1.97 per share. The special dividend will increase (or decrease) based on the Company's net income (or net losses) from September 30, 2016 to a date just prior to the Effective Time. In addition to the special dividend, at or promptly following the Effective Time, shareholders will be entitled to receive from Parent approximately $8.03 per share, subject to adjustment.

The Agreement contains representations and warranties customary for transactions of this type.  In addition, the Company has agreed to various customary covenants and agreements, including, among others, (i) to conduct its business in the ordinary course consistent with past practice during the interim period between the execution of the Agreement and the Effective Time, (ii) not to engage in certain kinds of transactions during this period, (iii) to convene and hold a meeting of its shareholders to consider and vote upon the Merger, notwithstanding any acquisition proposal arising after signing, (iv) to recommend approval of the Merger to its shareholders and, subject to certain exceptions, not make any changes to such recommendation, (v) not to solicit, initiate, or knowingly encourage any alternative proposal to acquire the Company; and (vi) subject to certain exceptions, not to provide any non-public information in connection with any such proposal, or engage in any discussions or negotiations regarding any such proposal.

The Merger is expected to close in the first quarter of 2017.  The consummation of the Merger is subject to customary conditions, including receipt of regulatory approvals, receipt of the requisite approval of the shareholders of the Company and the absence of any law or order prohibiting the closing of the Merger.  In addition, each party's obligation to consummate the Merger is subject to certain other conditions, including the accuracy of the representations and warranties of the other party and compliance of the other party with its covenants, in each case subject to certain materiality standards.

The Agreement contains customary termination rights for the parties, including the right to terminate if the other party suffers a material adverse effect after the date of the Agreement.  In addition, each party is entitled to a termination fee in the amount of $1,500,000 if, in the case of the Company, Parent is unable to obtain the necessary financing to pay the aggregate merger consideration and, in the case of Parent, the Company accepts a superior proposal prior to the approval of the Merger by its shareholders, fails to recommend approval of the Merger to its shareholders and to abide by its covenants not to solicit or engage in any alternative proposal or enters into an alternative acquisition proposal within 12 months after the date of termination of the Agreement, in each case, subject to the other conditions triggering such payment as provided in the Agreement.  Tectonic joined in the Agreement for the purpose of guaranteeing Parent's ability to pay any termination fee due under the Agreement.

The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated by reference herein.  The Agreement has been attached as an exhibit to provide investors and shareholders with information regarding its terms.  It is not intended to provide any other financial information about the Company, Parent, Tectonic or their respective subsidiaries or affiliates.  The representations, warranties and covenants contained in the Agreement were made only for purposes of that agreement and as of specific dates, are solely for the benefit of the parties to the Agreement, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors.  Investors should not rely on the representations, warranties, or covenants or any description thereof as characterizations of the actual state of facts or condition of the Company, Parent, Tectonic or any of their respective subsidiaries or affiliates.  Moreover, information concerning the subject matter of the representations, warranties, and covenants may change after the date of the Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company.

On November 10, 2016, the Company and T Acquisition, Inc. issued a joint press release to announce the execution of the Agreement.  A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

FORWARD-LOOKING STATEMENTS

Additional Information and Where to Find It

In connection with the proposed Merger, the Company will file with the SEC a definitive proxy statement on Schedule 14A (the "Proxy Statement"), as well as other relevant documents concerning the proposed Merger.  Shareholders are urged to read the Proxy Statement when it becomes 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, as well as other filings containing information about the Company, Parent and Tectonic, at the SEC's Internet site (www.sec.gov).  You may also obtain these documents by contacting the Company's Corporate Secretary, at T Bancshares, Inc., 16200 Dallas Parkway, Suite 190, Dallas, Texas  75248, or via e-mail to sjensen@tbank.com.  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.

Participants in Solicitation

The Company and its directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Merger. Information concerning the Company participants is set forth in the Company's definitive proxy statement, dated April 29, 2016, for its 2016 annual meeting of shareholders as filed with the SEC on Schedule 14A.  Additional information regarding the interests of participants of the Company in the solicitation of proxies in respect of the proposed Merger will be included in the Proxy Statement to be filed with the SEC.

 

(d) Exhibits.

 

  

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.

EXHIBIT INDEX