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of incorporation)
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File Number)
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Identification No.)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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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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Item 8.01
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Other Events.
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Item 9.01
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Financial Statements and Exhibits.
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99.1
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99.2
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99.3
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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REPUBLIC FIRST BANCORP, INC.
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Dated: July 12, 2022
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By:
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/s/ Frank A. Cavallaro
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Name:
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Frank A. Cavallaro
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Title:
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Executive Vice President and
Chief Financial Officer |
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Exhibit 99.1
Republic First Bancorp Appoints Benjamin C. Duster, IV to Board of Directors
Third Circuit Court of Appeals Overturns Lower Court Decision to Appoint Custodian to Oversee Company; Rules that Majority of In-Office Directors “Shall” Fill the Board Vacancy
CEO Vernon W. Hill Resigns
Special Meeting of Shareholders to Be Cancelled
PHILADELPHIA--(BUSINESS WIRE)--Republic First Bancorp, Inc. (NASDAQ: FRBK) (the “Company”) today announced that yesterday, Benjamin C. Duster, IV was appointed as an independent member of the Board of Directors (the “Board”), effective immediately.
Mr. Duster’s appointment follows the United States Court of Appeals for the Third Circuit (the “Third Circuit”) reversing the decision of the United States District Court for the Eastern District of Pennsylvania, which appointed a custodian to oversee the Company. The Third Circuit concluded that it is the responsibility of the Board to govern the Company and that the four directors who are not aligned with Chief Executive Officer Vernon W. Hill III (the so-called “Madonna Directors”) “were and are entitled to fill the vacancy” that resulted from the death of former director Theodore J. Flocco. As the Third Circuit explained, “[b]ecause the Madonna Directors make up a majority of the directors in office, they shall fill the vacancy.”
Harris Wildstein, Chairman of the Nominating and Governance Committee of the Board, said, “We are pleased that the Third Circuit recognizes the role of the current Board in overseeing the affairs of Republic First, and that four directors acting together can fill the vacant Board seat. That is what we did last night.”
Mr. Duster is a veteran independent public company director and a former investment banker. He currently serves as Chairman of the Audit Committee of the Board of Directors of Chesapeake Energy Corporation, where he is one of that Audit Committee’s financial experts, the Chairman of the Compensation Committee of the Board of Directors of Weatherford International, Inc., and a member of the Board of Directors of Diamond Offshore Drilling, Inc.
Mr. Wildstein continued, “To attract a professional of Ben’s caliber to the Board is a true testament to the strong potential he sees in the bank’s future. Ben’s extensive knowledge of public company governance and M&A processes as well as his financial expertise and business and legal background will be welcomed in the boardroom. His addition further enhances the Board’s mandate to responsibly manage the bank, while bringing fresh perspectives and objectivity to our most important duty as a Company: driving long-term value for our shareholders.”
Mr. Duster added, “I look forward to working collaboratively with the incumbent directors to position the bank for long-term success by adding my independent views to the boardroom discussion.”
The Company also announced today that Vernon W. Hill, III has submitted his resignation as CEO after claiming the Company breached his employment agreement. His resignation is effective August 8, 2022. The Board is evaluating candidates to serve as Interim CEO and will formally announce an appointment in due course.
As a result of the Third Circuit’s ruling and Mr. Duster’s filling the Board vacancy, the Company’s Special Meeting of Shareholders will be cancelled. The Company will announce the date and agenda for its 2022 Annual Meeting of Shareholders as soon as practicable.
About Ben Duster
Benjamin C. Duster, IV is Founder and CEO of Cormorant IV Corporation, LLC, a consulting firm specializing in operational turnarounds and organizational transformations. Mr. Duster previously served as CEO of the CenterLight Health System, a New York based diversified managed care and assisted living services organization. Mr. Duster serves as a member of the Board of Directors, and Chairman of the Audit Committee, of Chesapeake Energy Corporation (Nasdaq: CHK), as a member of the Board of Directors, and Chairman of the Compensation Committee, of Weatherford International, plc. (Nasdaq: WFRD), and as a member of the Board of Directors of Diamond Offshore Drilling, Inc. (Nasdaq: DO). Mr. Duster's extensive experience also includes service on the boards of Alaska Communications Systems Group, Inc. (Nasdaq: ALSK), Netia, S.A. (Warsaw Stock Exchange: NET), RCN Corporation (Nasdaq: RCN), and Multi-Fineline Electronics (Nasdaq: MFLX), among others. Mr. Duster is a 30-year veteran of Wall Street with extensive experience in M&A and Strategic Advisory Services in both developed and emerging markets. He earned a B.A. in Economics, with honors, from Yale University, a J.D. from Harvard Law School, and an M.B.A. from Harvard Business School.
About Republic Bank
Republic Bank is the operating name for Republic First Bank. Republic First Bank is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its 34 offices located in Atlantic, Burlington, Camden and Gloucester Counties in New Jersey; Bucks, Delaware, Montgomery and Philadelphia Counties in Pennsylvania and New York County in New York. The bank also offers a wide range of residential mortgage products through its mortgage division, Oak Mortgage Company. For more information about Republic Bank, please visit www.myrepublicbank.com.
Forward Looking Statements
Republic First Bancorp, Inc. ("the Company") may from time to time make written or oral "forward-looking statements", including statements contained in this release and in the Company's filings with the Securities and Exchange Commission. These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. These factors include competition, timing, credit risks of lending activities, changes in general economic conditions, price pressures on loan and deposit products, and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", and similar expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.
Important Additional Information
The Company intends to file a proxy statement and may file a proxy card with the Securities and Exchange Commission (the "SEC") in connection with the Company's 2022 Annual Meeting of Shareholders (the "2022 Annual Meeting") and, in connection therewith, the Company, certain of its directors and executive officers will be participants in the solicitation of proxies from the Company's shareholders in connection with such meeting. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE 2022 ANNUAL MEETING. The Company's definitive proxy statement for the 2021 annual meeting of shareholders contains information regarding the direct and indirect interests, by security holdings or otherwise, of the Company's directors and executive officers in the Company's securities. Information regarding subsequent changes to their holdings of the Company's securities can be found in the SEC filings on Forms 3, 4, and 5, which are available on the Company's website at http://investors.myrepublicbank.com/ or through the SEC's website at www.sec.gov. Information can also be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 on file with the SEC. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2022 Annual Meeting. Shareholders will be able to obtain the definitive proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Company's website at http://investors.myrepublicbank.com.
Contacts
Gasthalter & Co.
Jonathan Gasthalter/Amanda Shpiner
(212) 257-4170
Exhibit 99.2
July 6, 2022
To: Harry Madonna and the Board of Directors of Republic First Bancorp., Inc.
From: Vernon W. Hill, II
I hereby write to provide notice that Mr. Madonna and the Board of Directors have breached my March 1, 2021 Employment Agreement (the “Agreement”) and have violated their fiduciary duties to Republic First Bancorp, Inc. (“FRBK”), as well as Pennsylvania and federal law. These violations include but are not limited to:
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The Board’s refusal on February 23, 2022 to authorize the solicitation of proxies on behalf of the Company’s Board approved slate of directors, which, among other things, demonstrates an intent to violate Section 4(c)(i) of my Agreement, which provides that I am to be given at least thirty (30) days’ prior written notice of FRBK’s intention to terminate my position as Chairman of the Boards. |
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The issuance of a letter on March 1, 2022, by Schulte Roth & Zabel LLP, counsel for Mr. Madonna, Andrew Cohen, Lisa Jacobs, and Harris Wildstein, asserting unfounded allegations that I engaged in self-dealing. As the Board is well aware, there were no amendments to employment contracts pending before the Board, and every transaction that occurred was vetted and approved by the Board in full. The allegations against me in the March 1, 2022 letter were demonstrably false, as Mr. Madonna later admitted and as the independent counsel to the audit committee has preliminarily found. |
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The issuance of a press release on March 4, 2022 (the “March 4 Press Release”), raising the same unfounded allegations of self-dealing contained in the March 1, 2022 letter. The press release was a clear attempt to solicit proxies, as Mr. Madonna admitted when he stated that the allegations against me were factually unfounded and nothing more than “electioneering hyperbole.” Therefore, this press release, which was issued before FRBK filed a preliminary or definitive proxy statement with the Securities and Exchange Commission (“SEC”) or received or issued audited financial statements, constituted an unlawful proxy statement pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). Mr. Madonna only underscored his admission that the Board violated the Exchange Act when he refused to provide the written assurances required by FRBK’s independent auditors at Crowe unless I and other Directors agreed not to: (1) take legal action based on his admission that the March 4 Press Release contained false allegations; and (2) disclose his admission publicly. In threatening not to provide these written assurances to Crowe, Mr. Madonna risked FRBK losing its certification to participate in federal mortgage lending programs. |
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Mr. Madonna’s decision to schedule a special meeting of the Board on May 13, 2022, which was a plain attempt—and an unseemly one—to profiteer from the death of Theodore J. Flocco, Jr. on May 10, 2022 by taking advantage of FRBK’s bylaw provision that a vote may only take place when a quorum comprising a majority of the Board is present. During that special meeting, despite not achieving the requisite quorum, Mr. Madonna, Mr. Cohen, Ms. Jacobs, and Mr. Wildstein purported to appoint Mr. Madonna as Chairman of the Board and purported to fire me from my position as Chairman of the Boards without any notice, in violation of Section 4(c)(i) of my Agreement. |
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The issuance of a press release on May 13, 2022 (the “May 13 Press Release”), which was also filed with the SEC, stating that FRBK had appointed Mr. Madonna as interim Chairman of the Board and Ms. Jacobs as Corporate Secretary; that FRBK intended to file a proxy statement in connection with FRBK’s 2022 Annual Meeting of Shareholders; and that certain of FRBK’s directors and executive officers will be participants in the solicitation of proxies from the FRBK’s shareholders. The May 13 Press Release, like the March 4 Press Release, constitutes an unlawful proxy statement pursuant to Section 14(a) of the Exchange Act because FRBK had not yet filed a preliminary or definitive proxy statement with the SEC, nor had FRBK received or issued audited financial statements. |
These plain and repeated attempts to oust me from FRBK have far-reaching consequences that are not in the best interests of FRBK or its shareholders. In Mr. Madonna’s efforts to gain control over FRBK, he and the Board have publicized and distorted confidential FRBK information and engaged in numerous other actions that were motivated solely by self-interest. These breaches of fiduciary duty to FRBK violate Pennsylvania law, as well as federal law as enforced by the Federal Deposit Insurance Corporation (“FDIC”) and the SEC. In addition, as addressed above, Mr. Madonna and the Board have violated the Agreement, including but not limited to in their attempts to terminate me from my position as Chairman of the Boards and thereby reduce my authority, position, and title, in violation of Section 4(c)(i) of my Agreement.
I reserve all rights to assert any claims and seek any and all damages against Mr. Madonna, Ms. Jacobs, Mr. Wildstein and Mr. Cohen, including but not limited to for claims of breach of contract, defamation, and for your violations of your fiduciary duties and the substantial damage your actions have caused to the Company. I further reserve all rights to seek reimbursement of my expenses to enforce the Agreement pursuant to Section 9 of the Agreement, as well as compensation owed to me pursuant to Sections 4(c)(iii) and 6 of the Agreement.
It is most unfortunate that I am in the position of needing to send this notice of breach, but you have made this turn of events completely unavoidable by, among other things, the above-listed actions.
Exhibit 99.3
July 7, 2022
To: Harry Madonna and the Board of Directors of Republic First Bancorp., Inc.
From: Vernon W. Hill, II
As required by Section 4(d)(i)(1) of my March 1, 2021 Employment Agreement (the “Agreement”), I hereby write to provide thirty (30) days’ notice that my last day with Republic First Bancorp, Inc. (“FRBK”) will be on Monday, August 8, 2022.
My departure from FRBK is necessitated by a number of actions by the Board that are in clear violation of my Agreement, the Board’s fiduciary duties, and Pennsylvania and federal law, of which I provided a non-exhaustive list in my July 6, 2022 letter to the Board. The numerous attempts of Mr. Madonna, Mr. Cohen, Ms. Jacobs, and Mr. Wildstein to remove me from FRBK— including but not limited to in their attempts to cause a change in control of FRBK by reducing my authority, position, and title—constitute a termination for Good Reason, otherwise treated and/or known as a termination Without Cause (and without appropriate notice), pursuant to Paragraph 4(d) or (c) of my Agreement, respectively.
Because your actions have necessarily terminated my Agreement without cause (without notice) and/or provide ample basis for me to terminate the agreement for Good Reason, I am entitled to and demand that you provide the following: (1) my base salary earned through my termination; (2) any unpaid bonus from last year; (3) a lump sum severance payment of three times my base salary of $500,000.00; (4) the continuation of my employment benefits at cost to FRBK for a period of one year from the termination of my Agreement; and (5) vesting of any outstanding options. I am entitled to and demand the payments which I am owed, which total no less than $2,500,000.00 and include but are not limited to a payment of $1,525,786.00 as outlined in the 2022 Annual Proxy Statement. I reserve all rights to seek payment of any and all payments I am owed, including but not limited to reimbursement of my expenses to enforce the Agreement pursuant to Section 9 of the Agreement, as well as the above-listed compensation owed to me pursuant to Sections 4(c)(iii) and 6 of the Agreement.
By and through your actions as detailed in this letter and in my July 6, 2022 letter to the Board, you have compelled my departure from FRBK against the best interests of the Company and its shareholders.
Document And Entity Information |
Jul. 06, 2022 |
|---|---|
| Document Information [Line Items] | |
| Entity, Registrant Name | REPUBLIC FIRST BANCORP, INC. |
| Document, Type | 8-K |
| Document, Period End Date | Jul. 06, 2022 |
| Entity, Incorporation, State or Country Code | PA |
| Entity, File Number | 000-17007 |
| Entity, Tax Identification Number | 23-2486815 |
| Entity, Address, Address Line One | 50 South 16th Street, Suite 2400 |
| Entity, Address, City or Town | Philadelphia |
| Entity, Address, State or Province | PA |
| Entity, Address, Postal Zip Code | 19102 |
| City Area Code | 215 |
| Local Phone Number | 735-4422 |
| Written Communications | false |
| Soliciting Material | true |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock |
| Trading Symbol | FRBK |
| Security Exchange Name | NASDAQ |
| Entity, Emerging Growth Company | false |
| Amendment Flag | false |
| Entity, Central Index Key | 0000834285 |