8-K
AMERISERV FINANCIAL INC /PA/ (ASRV)
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 15, 2023
AMERISERV FINANCIAL, Inc.
(exact name of registrant as specified in its charter)
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|---|---|---|---|---|
| Pennsylvania | | 0-11204 | | 25-1424278 |
| (State or other jurisdiction | | (Commission | | (IRS Employer |
| of incorporation) | | File Number) | | Identification No.) |
| | |
|---|---|
| Main and Franklin Streets, Johnstown, PA | 15901 |
| (address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: 814-533-5300
N/A
(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:
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
| Title Of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||
|---|---|---|---|---|
| Common Stock | | ASRV | | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Form 8-K
Item 8.01Other events.
On March 15, 2023, counsel to AmeriServ Financial, Inc. (the “Company”) notified counsel to Driver Opportunity Partners I LP (collectively with its affiliates, “Driver”) of certain deficiencies related to the Driver’s purported notice of shareholder nomination of individuals for election as directors at the Company’s 2023 annual meeting of shareholders (the “Annual Meeting”) and that Driver had failed to satisfy the requirements of the Company’s Amended and Restated Bylaws (the “Bylaws”). Pursuant to Article 1, Section 1.3(b) of the Bylaws, only such persons who are nominated pursuant to the procedures set forth in the Bylaws are eligible to stand for election to the Company’s board of directors. Driver failed to meet the requirements of Article 1, Section 1.3 of the Bylaws. Accordingly, the Company has determined that Driver’s purported notice of director candidate nominations is invalid. A copy of this letter is filed with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. The Company issued a related press release, a copy of which is filed with this Current Report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.
Important Additional Information
The Company intends to file a proxy statement and GOLD proxy card with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Annual Meeting and, in connection therewith, the Company, its directors and certain of its 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 GOLD 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 ANNUAL MEETING. The Company’s definitive proxy statement for the 2022 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.ameriserv.com/sec-filings/insider-filings 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, 2022 (when it becomes available). 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 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.ameriserv.com/sec-filings/documents..
Item 9.01Financial Statements and Exhibits.
(d) Exhibits:
99.1
Letter dated March 15, 2023 to counsel to Driver Opportunity Partners I LP
99.2
Press release dated March 15, 2023 of AmeriServ Financial, Inc.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).
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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|---|---|---|
| | AMERISERV FINANCIAL, Inc. | |
| | | |
| Date: March 15, 2023 | By | /s/Michael D. Lynch |
| | | Michael D. Lynch |
| | | EVP & CFO |
Exhibit 99.1
111 N. Sixth Street P.O. Box 679 Reading, PA 19603 (610) 478-2000 www.stevenslee.com
T: (610) 478-2184 F: (610) 988-0815 david.swartz@stevenslee.com
March 15, 2023
BY E-MAIL AND FEDERAL EXPRESS
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, New York 10019
afreedman@olshanlaw.com
Attention: Andrew Freedman, Esq.
Re: Purported Notice of Shareholder Nomination of Individuals for Election as Directors at the 2023 Annual Meeting of Shareholders of AmeriServ, Inc.
Dear Mr. Freedman:
We write on behalf of our client, AmeriServ Financial, Inc. (the “Company”), in response to the letter, dated January 17, 2023 (collectively with the exhibits thereto, the “Notice”), from your clients, Driver Opportunity Partners I LP (the “Nominating Shareholder”), Driver Management Company LLC (“Driver Management”) and J. Abbott Cooper (collectively with the Nominating Shareholder and Driver Management, “Driver”), purporting to serve as notice to the Company of the Nominating Shareholder’s intention to nominate Mr. Cooper, Julius D. Rudolph and Brandon L. Simmons (each a “Purported Nominee” and collectively, the “Purported Nominees”) for election to the Company’s Board of Directors (the “Board”) at the Company’s 2023 annual meeting of shareholders (the “Annual Meeting”).
The Company has reviewed the Notice and has determined that it is defective because it fails to make certain disclosures required by Article 1, Section 1.3(b) of the Company’s Amended and Restated Bylaws (the “Bylaws”). Article 1, Section 1.3 of the Bylaws sets forth requirements for a shareholder to provide advance notice of its intention to nominate candidates to the Board and specifies, in detail, certain information that must be fully and accurately disclosed to satisfy these requirements (the “Advance Notice Provisions”). By the clear terms of the Bylaws, a shareholder may not nominate a candidate unless the shareholder complies with the Advance Notice Provisions. Article 1, Section 1.3(a) of the Bylaws states that a candidate and qualifying nomination notice must be delivered to the Company by January 26, 2023. Further, Article 1, Section 1.3(b) of the Bylaws provides that “[t]he presiding officer of the [Annual M]eeting may, in such officer’s sole discretion, refuse to acknowledge the nomination of any person which the presiding officer determines is not made in compliance with the … procedure” established by the Advance Notice Provisions. Advance notice provisions, such as those found in the Bylaws, are a
Allentown ● Bergen County ● Bala Cynwyd ● Cleveland ● Fort Lauderdale ● Harrisburg ● Lancaster ● New York Philadelphia ● Princeton ● Reading ● Rochester ● Scranton ● Valley Forge ● Wilkes-Barre ● Wilmington
A PROFESSIONAL CORPORATION
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common fixture in modern bylaws. Indeed, Pennsylvania’s Business Corporation Law explicitly permits corporations to require shareholders to comply with advance notice requirements for the nomination of director candidates.^1^
The Notice does not constitute valid notice of nominations for the Annual Meeting because the Notice fails to satisfy the requirements set forth in the Advance Notice Provisions in a number of material ways, as set forth herein and in Appendix A hereto, including the failure to provide the information that would have been required to be included in a proxy statement filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.
Among other material deficiencies, the Notice completely fails to disclose the existence of, or contain any disclosure about, transactions between the Company and immediate family members of the Purported Nominees that would be required to be disclosed under Item 7(b) of Schedule 14A. Pursuant to Article 1, Section 1.3(b)(vii) of the Bylaws, a shareholder notice of nominations is required to set forth “such other information regarding each [Purported Nominee] proposed by the Nominating Shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission [(the “SEC”)] had the [Purported Nominee] been nominated, or intended to be nominated, by the [Board],” which includes Item 7(b) of Schedule 14A. Item 7(b) of Schedule 14A requires the disclosure of the information required by Item 404(a) of Regulation S-K. Item 404(a) of Regulation S-K requires the disclosure of “any transaction, since the beginning of the registrant’s last fiscal year, or any currently proposed transaction, in which the registrant was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest” (emphasis added). When applied to a nominee for director, the related persons include such nominee for director and his or her immediate family members, which includes “any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such … nominee for director, and any person (other than a tenant or employee) sharing the household of such … nominee for director…” (emphasis added).
The Notice indicated that “no Participant or any of his, her or its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000.” However, the Notice failed to identify the existence at the time of the delivery date of the Notice of material transactions by immediate family members of the Purported Nominees, which are specifically required to be disclosed by Item 404 of Regulation S-K, or
^1^ 15 Pa. C.S.A § 1758(e) (providing that only candidates who have been duly nominated in accordance with an advance notice requirement in the corporation’s bylaws shall be eligible for election).
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Attention: Andrew Freedman, Esq.
March 15, 2023
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provide any disclosure relating to such transactions by immediate family members of the Purported Nominees as required under Item 404 of Regulation S-K.^2^
On February 8, 2023, thirteen days after the deadline for a shareholder to provide advance notice of its intention to nominate candidates to the Board at the Annual Meeting, Driver filed a preliminary proxy statement on Schedule 14A (the “Driver Preliminary Proxy Statement”), in which Driver disclosed, for the first time, that “Mr. Rudolph’s father, Bill Rudolph, has a personal line of credit with the Company in the amount of $4 million[, and] Mr. Rudolph’s brother-in-law has several commercial mortgages with the Company for the purchase of rental units.” Such information subsequently provided in the Driver Preliminary Proxy Statement stands in direct contradiction to the statements contained in the Notice, thereby rendering the Notice invalid. Pursuant to Article 1, Section 1.3(b)(vii) of the Bylaws, a shareholder’s notice of nomination must include “such … information … as would have been required to be included in a proxy statement filed pursuant to the proxy rules …” (emphasis added). Information provided in a shareholder’s notice of nominations that is required to be included in a proxy statement filed pursuant to the proxy rules of the SEC must be truthful and complete in all material respects.^3^ However, by failing to provide any disclosure about transactions between the Company and immediate family members of the Purported Nominees that would be required to be disclosed under Item 7(b) of Schedule 14A, the Notice failed to comply with the proxy rules requirements as it contains information that is materially false. Moreover, in addition to failing to disclose the existence of material related party transactions as required by Item 404 of Regulation S-K, we believe that the disclosure in the Driver Preliminary Proxy Statement related to these undisclosed transactions failed to satisfy Item 404(a) of Regulation S-K, as outlined in Appendix B hereto.
On February 10, 2023, fifteen days after the deadline for a shareholder to provide advance notice of its intention to nominate candidates to the Board at the Annual Meeting, Driver sent a letter (the “Supplemental Driver Letter”) to the Company which contained information purporting to be responsive to the numerous deficiencies contained in the Notice raised in the Company’s letter to Driver, dated January 31, 2023. In the Supplemental Driver Letter, Driver disclosed that:
Certain of Mr. Rudolph’s immediate family members have been a party to a transaction with the Company in the ordinary course of business since its last fiscal year in an amount that exceeds $120,000. Mr. Rudolph’s father, William C.
^2^ Driver has acknowledged that the term “associates” includes immediate family members. See Compl., p. 26, Driver Opportunity Partners I LP v. Max Briggs et al., Case No. 2023-0287 (“As the Board is well aware, or should have been aware, the term ‘associate’ under Rule 12b-2 of the Exchange Act includes ‘any relative or spouse.’”).
^3^ See 17 C.F.R. § 240.14a-9(a) (“No solicitation subject to … [R]egulation [14A] shall be made by means of any proxy statement, form of proxy, notice of meeting or other communication, written or oral, containing any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading …) (emphasis added).
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Attention: Andrew Freedman, Esq.
March 15, 2023
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Rudolph, has a personal line of credit with the Company in the amount of $4 million.^4^ Mr. Rudolph’s brother-in-law,^5^ […], has several commercial mortgage loans from the Company in connection with the purchase of rental units, which total, in the aggregate, [an amount exceeding several million dollars.]^6^
Despite Driver’s attempt to supplement and cure the deficiencies contained in the Notice identified by the Company, the Supplemental Driver Letter failed to include specific required information about the transactions between Mr. Rudolph’s brother-in-law and Mr. Rudolph’s father, Mr. William Rudolph, and the Company that would be required to be disclosed under Item 404(a) of Regulation S-K, as follows:
i. Item 404(a)(2) of Regulation S-K requires the disclosure of “[t]he related person’s interest in the transaction with the registrant, including the related person’s position(s) or relationship(s) with, or ownership in, a firm, corporation, or other entity that is a party to, or has an interest in, the transaction.” The Supplemental Driver Letter failed to provide such information for commercial mortgage loans to Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit.
ii. Item 404(a)(4) of Regulation S-K requires the disclosure of “[t]he approximate dollar value of the amount of the related person’s interest in the transaction, which shall be computed without regard to the amount of profit or loss.” The Supplemental Driver Letter failed to provide such information for the commercial mortgage loans to Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit.
iii. Item 404(a)(5) of Regulation S-K requires that, in the case of indebtedness, “disclosure of the amount involved in the transaction shall include the largest aggregate amount of principal outstanding during the period for which disclosure is provided, the amount thereof outstanding as of the latest practicable date, the amount of principal paid during the periods for which disclosure is provided, the amount of interest paid during the period for which disclosure is provided, and the rate or amount of interest payable on the indebtedness.” The Supplemental Driver Letter failed to provide such information for the commercial mortgage loans to Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit.^7^
^4^ The Company believes that Mr. William Rudolph has two lines of credit that exceed $4 million in the aggregate. Driver provided materially false information in the Driver Supplemental Letter by stating that Mr. William Rudolph has only one line of credit with the Company totaling $4 million.
^5^ The Company believes that Driver provided the incorrect name for Mr. Rudolph’s brother-in-law in the Driver Supplemental Letter.
^6^ Amount based on publicly available information.
^7^The Company believes that the total outstanding balance on Mr. William Rudolph’s two personal lines of credit exceeds $4 million. Such information is material to shareholders.
Olshan Frome Wolosky LLP
Attention: Andrew Freedman, Esq.
March 15, 2023
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iv. Item 404(a)(6) of Regulation S-K requires the disclosure of “[a]ny other information regarding the transaction or the related person in the context of the transaction that is material to investors in light of the circumstances of the particular transaction.” The Supplemental Driver Letter failed to provide information related to the commercial mortgage loans to Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit that is material to the Company’s shareholders, including whether Mr. William Rudolph has drawn on his personal line of credit.
v. Instruction 4 to Item 404(a) of Regulation S-K provides that, in the case of a transaction involving indebtedness where the lender is a bank, and the loans are not disclosed as past due, nonaccrual or troubled debt restructurings in the consolidated financial statements, disclosure under Item 404(a) of Regulation S-K “may consist of a statement, if such is the case, that the loans to such persons: … (ii) [w]ere made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender; and (iii) [d]id not involve more than the normal risk of collectibility or present other unfavorable features.” To the extent that Instruction 4 to Item 404(a) of Regulation S-K applies, the Supplemental Driver Letter failed to include the disclosure permitted by the Instruction regarding the transactions between the Company and Mr. Rudolph’s immediate family members in lieu of the Item 404(a) of Regulation S-K required disclosure.
By the clear terms of the Bylaws, a shareholder may not nominate a candidate for election to the Board unless the shareholder complies with the Advance Notice Provisions. To be timely, a full and complete nomination notice must have been received by the Company by January 26, 2023 in order for Driver to nominate the Purported Nominees. As this date has passed, Driver does not have the right to nominate any candidates for election as directors at the Annual Meeting, notwithstanding the additional, yet deficient, disclosures contained in the Supplemental Driver Letter, which further support the Company’s conclusions regarding the defectiveness and untimeliness of Driver’s purported attempt to submit qualifying nominations. Additional information, and in this case deficient information, delivered after the Bylaws mandated submission date does not and cannot remedy or otherwise cure, amend or alter the already non-compliant Notice. As a result of the false and misleading disclosures, the Notice fails to satisfy the Advance Notice Provisions.
Further, Article 2, Section 2.14 of the Bylaws provides that “[n]o person shall be eligible for election, re-election, appointment or re-appointment to the Board … if such person is or within the preceding five years has been a director of any other depository institution unless such person is approved by a majority of the Board …” (the “Interlocks Provision”). On March 9, 2023, the First of Long Island Corporation (the “First of Long Island”), the parent company of the First National Bank of Long Island, nominated Mr. Cooper for election by shareholders as a Class I director at the First of Long Island’s 2023 annual meeting of shareholders with a term expiring at
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the First of Long Island’s 2025 annual meeting of shareholders.^8^ As of April 18, 2023, we expect that Mr. Cooper will be a member of the board of directors of the First of Long Island. Therefore, going forward, Mr. Cooper will be ineligible for election to the Board at the Annual Meeting pursuant to the terms of the Interlocks Provision prohibiting concurrent directorships at any other depository institution without the approval of a majority of the Board. As such, upon such election and without the approval of a majority of the Board, Mr. Cooper will be ineligible to serve as a director of the Company.
For the reasons set forth herein, the Notice, which was dated January 17, 2023, failed to satisfy the Bylaw requirements and is thus invalid. As set forth in Article 1, Section 1.3(a), the deadline for delivering notice of intention to nominate candidates for election as directors at the Annual Meeting was January 26, 2023. Further, the Supplemental Driver Letter does not remedy or otherwise cure the Notice. Any further attempts to supplement an already deemed non-compliant notice will fail to satisfy the requirements of the Advance Notice Provisions. The deadline for a timely and proper notice of intention to nominate candidates for election as directors at the Annual Meeting has passed. Therefore, Driver does not have the right to nominate any candidates for election as directors at the Annual Meeting. Please confirm Driver will withdraw its candidates by the close of business on Thursday, March 16, 2023.
* * *
^8^ See the First of Long Island’s 2023 Definitive Proxy Statement filed with the SEC on March 9, 2023. First of Long Island announced its intention to nominate Mr. Cooper on January 9, 2023. See First of Long Island’s Form 8-K filed with the SEC on January 9, 2023.
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Attention: Andrew Freedman, Esq.
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This letter is being sent on behalf of the Company, while expressly reserving, and without waiving, any and all rights and defenses that the Company may have with respect to this matter.
Very truly yours,
STEVENS & LEE
/s/ David W. Swartz
David W. Swartz
DWS:rlox
cc: Stacey A. Scrivani (stacey.scrivani@stevenslee.com)
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Appendix A
Deficiencies in the Notice
Pursuant to Article 1, Section 1.3(b)(vii) of the Bylaws, the Notice is required to set forth “such other information regarding each [Nominee] proposed by the Nominating Shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the [SEC] had the [Nominee] been nominated, or intended to be nominated, by the [Board],” which includes Item 5(b)(1)(ii) of Schedule 14A. Item 5(b)(1)(ii) of Schedule 14A requires the disclosure of each Nominee’s “present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is carried on…” (emphasis added). The Notice states that Mr. Rudolph currently serves as the Chief Executive Officer and President of Development and Acquisitions of McKnight Realty Partners, LLC (“McKnight Realty Partners”). While the Notice provides an “address” for Mr. Rudolph, the Notice fails to clarify or confirm that such address is also the address of McKnight Realty Partners, as required by Item 5(b)(1)(ii) of Schedule 14A. Further, the Notice states that Mr. Simmons currently serves as the President and Chairman of Let Our Vision Evolve Inc. (“Let Our Vision Evolve”) and as an investor and advisor of GameOn Technology, Inc. (“GameOn”). While the Notice provides an “address” for Mr. Simmons, the Notice fails to provide the addresses of Let Our Vision Evolve and GameOn or confirm whether their addresses are the same as the address provided for Mr. Simmons, as required by Item 5(b)(1)(ii) of Schedule 14A.
Pursuant to Article 1, Section 1.3(b)(vii) of the Bylaws, the Notice is required to set forth “such other information regarding each [Nominee] proposed by the Nominating Shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the [SEC] had the [Nominee] been nominated, or intended to be nominated, by the [Board],” which includes Item 5(b)(1)(vi) of Schedule 14A. Item 5(b)(1)(vi) of Schedule 14A requires the Notice to “[s]tate with respect to all securities of the registrant purchased or sold within the past two years, the dates on which they were purchased or sold and the amount purchased or sold on each such date.” The Notice provides that “[a]s of the date hereof, […] none of the Nominees have entered into any transactions in the securities of the Company during the past two years.” However, Exhibit A discloses numerous transactions by Mr. Rudolph. The Notice fails to address this inconsistency. Separate and distinct from the above, the Notice fails to state whether McKnight Realty Partners, of which Mr. Rudolph currently serves as Chief Executive Officer, or any of its principals or affiliates has purchased or sold any securities of the Company during the past two years.
Pursuant to Article 1, Section 1.3(b)(vii) of the Bylaws, the Notice is required to set forth “such other information regarding each [Nominee] proposed by the Nominating Shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the [SEC] had the [Nominee] been nominated, or intended to be nominated, by the
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[Board],” which includes Item 7(b) of Schedule 14A. Item 7(b) of Schedule 14A requires the disclosure of the information required by Item 404(a) of Regulation S-K. Item 404(a) of Regulation S-K requires the disclosure of “any transaction, since the beginning of the registrant’s last fiscal year, or any currently proposed transaction, in which the registrant was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest” (emphasis added). When applied to a nominee for director, the related persons include such nominee for director and his or her immediate family members, as such term is defined in Item 404(a) of Regulation S-K. The Notice provides that “no Participant or any of his, her or its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000,” but fails to provide such disclosure for any immediate family members of any of the Nominees.
- Pursuant to Article 1, Section 1.3(b)(vii) of the Bylaws, the Notice is required to set forth “such other information regarding each [Nominee] proposed by the Nominating Shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the [SEC] had the [Nominee] been nominated, or intended to be nominated, by the [Board],” which includes Item 8 of Schedule 14A. Item 8 of Schedule 14A requires, with respect to the Nominees and their associates, the disclosure of the information required by Item 402 of Regulation S-K (Executive Compensation). The Notice fails to provide this required disclosure.
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Appendix B
Deficiencies in the Driver Preliminary Proxy Statement with Respect to Disclosure of Transactions between the Company and the Purported Nominees
- Under Item 7(b) of Schedule 14A, the Preliminary Proxy Statement must include the information required by Item 404(a) of Regulation S-K. Item 404(a) of Regulation S-K requires the disclosure of certain information regarding “any transaction, since the beginning of the registrant’s last fiscal year, or any currently proposed transaction, in which the registrant was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest.” The Preliminary Proxy Statement provides “Mr. Rudolph’s father, Bill Rudolph, has a personal line of credit with the Company in the amount of $4 million^9^ [, and] Mr. Rudolph’s brother-in-law has several commercial mortgages with the Company for the purchase of rental units.” However, the Preliminary Proxy Statement failed to include certain information about each such transaction in violation of Item 404(a) of Regulation S-K.
(a) Item 404(a)(1) of Regulation S-K requires the disclosure of “[t]he name of the related person and the basis on which the person is a related person.” The Driver Preliminary Proxy Statement failed to provide the name of Mr. Rudolph’s brother-in-law.
(b) Item 404(a)(2) of Regulation S-K requires the disclosure of “[t] related person’s interest in the transaction with the registrant, including the related person’s position(s) or relationship(s) with, or ownership in, a firm, corporation, or other entity that is a party to, or has an interest in, the transaction.” The Driver Preliminary Proxy Statement failed to provide such information for the transaction with Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit.
(c) Item 404(a)(3) of Regulation S-K requires the disclosure of “[t]he approximate dollar value of the amount involved in the transaction.” The Driver Preliminary Proxy Statement failed to provide such information for the transaction with Mr. Rudolph’s brother-in-law.
(d) Item 404(a)(4) of Regulation S-K requires the disclosure of “[t]he approximate dollar value of the amount of the related person’s interest in the transaction, which shall be computed without regard to the amount of profit or loss.” The Driver Preliminary Proxy Statement failed to provide such information for the transaction with Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit.
^9^ The Company believes that Mr. William Rudolph has two lines of credit that exceed $4 million in the aggregate. Driver provided materially false information in the Driver Preliminary Proxy Statement by stating that Mr. William Rudolph has only one line of credit with the Company totaling $4 million.
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March 15, 2023
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(e) Item 404(a)(5) of Regulation S-K requires that, in the case of indebtedness, “disclosure of the amount involved in the transaction shall include the largest aggregate amount of principal outstanding during the period for which disclosure is provided, the amount thereof outstanding as of the latest practicable date, the amount of principal paid during the periods for which disclosure is provided, the amount of interest paid during the period for which disclosure is provided, and the rate or amount of interest payable on the indebtedness.” The Driver Preliminary Proxy Statement failed to provide such information for the transaction with Mr. Rudolph’s brother-in-law and Mr. William Rudolph’s personal line of credit.
(f) Instruction 4 to Item 404(a) of Regulation S-K provides that, in the case of a transaction involving indebtedness where the lender is a bank, and the loans are not disclosed as past due, nonaccrual or troubled debt restructurings in the consolidated financial statements, disclosure under Item 404(a) of Regulation S-K “may consist of a statement, if such is the case, that the loans to such persons: (i) [w]ere made in the ordinary course of business; (ii) [w]ere made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the lender; and (iii) [d]id not involve more than the normal risk of collectibility or present other unfavorable features.” To the extent that Instruction 4 to Item 404(a) of Regulation S-K applies, the Driver Preliminary Proxy Statement failed to include the disclosure permitted by the Instruction regarding the transactions between the Company and Mr. Rudolph’s immediate family members in lieu of the Item 404(a) of Regulation S-K required disclosure.
Exhibit 99.2
AmeriServ Financial Discloses That Driver’s Notice of Director Candidate Nominations is Invalid
Activist Fund’s Notice Contains Material Deficiencies and Fails to Comply with Company’s Bylaws, Including Those Pertaining to Conflicts of Interest
JOHNSTOWN, Pa., March 15, 2023 /PRNewswire/ -- AmeriServ Financial, Inc. (“AmeriServ” or the "Company") (NASDAQ: ASRV) today announced that its Board of Directors (the “Board”) has determined that the notice of intent to nominate directors (the “Notice”) submitted on January 17, 2023 by Driver Management Company LLC, Driver Opportunity Partners I LP and J. Abbott Cooper (collectively, “Driver”) for the Company’s 2023 Annual Meeting of Shareholders (the “Annual Meeting”) is invalid.
The Notice submitted by Driver contains material defects, including a lack of disclosure pertaining to one director candidate’s immediate family members – one of whom has several commercial mortgage loans with AmeriServ, which in total exceed several million dollars, and another of whom has a personal line of credit with the Company in the amount of $4 million. This disclosure was required to be made by Driver under the Company's clear and unambiguous bylaws, which require that nominating shareholders disclose to the Company certain important information regarding director nominees. Additionally, the Notice’s purported nomination of Mr. Cooper – who is set to become a director of New York-based First of Long Island Corporation – does not comply with AmeriServ’s interlocks bylaw that prohibits Board members and nominees to the Board from, among other things, concurrent directorships with other depository institutions.
AmeriServ’s bylaws exist to protect the interests of the Company and all of its stakeholders, including shareholders, customers and employees. The bylaws are readily available for review and plainly state the requirements a shareholder must meet for valid nominations of director candidates. A copy of AmeriServ’s counsel’s letter to Driver’s counsel, which outlines the aforementioned deficiencies in detail, will be disclosed via a Form 8-K with the U.S. Securities and Exchange Commission (the “SEC”).
AmeriServ has sought in good faith to interview Driver’s proposed director candidates and solicit Driver’s views on director refreshment and contemplated governance enhancements. Ultimately, in light of Driver’s unwillingness to engage in a productive and private dialogue, the Board was unable to factor Driver’s full feedback into the Company’s recently announced Board refreshment. The Company’s refreshed slate of director candidates for this year’s Annual Meeting includes the following individuals:
| ● | Richard "Rick" Bloomingdale **–**Mr. Bloomingdale is the recently retired President of the Pennsylvania American Federation of Labor and Congress of Industrial Organizations ("Pennsylvania AFL-CIO"). In addition to holding the President role for 12 years, he previously served as Secretary-Treasurer of the Pennsylvania AFL-CIO and has a more than four-decade career in labor relations. The Board believes Mr. Bloomingdale's finance and labor experience will strengthen AmeriServ's human capital management efforts and position the Company to further expand its union business throughout Pennsylvania. |
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| ● | David Hickton – Mr. Hickton is currently the Founding Director of the Institute for Cyber Law, Policy and Security at the University of Pittsburgh. Previously, he was the U.S. Attorney for the Western District of Pennsylvania. The Board believes Mr. Hickton's experience in legal affairs, regulatory matters, and data security and privacy approaches will directly benefit the Company as it meets customers' expectations for online and mobile services. |
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| ● | Daniel Onorato – Mr. Onorato has been a Board member at AmeriServ since 2020 and is an executive at Pittsburgh-based Highmark Health. He is a former two-term Chief Executive of Allegheny County and previously held the position of Allegheny County Controller. The Board |
| --- | --- |
Exhibit 99.2
| believes Mr. Onorato's valuable knowledge of AmeriServ and its markets as well as relevant experience across the accounting and legal fields has been additive in the boardroom. |
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About AmeriServ Financial, Inc.
AmeriServ Financial, Inc. is the parent of AmeriServ Financial Bank and AmeriServ Trust and Financial Services Company in Johnstown, Pennsylvania. The Company's subsidiaries provide full-service banking and wealth management services through 17 community offices in southwestern Pennsylvania and Hagerstown, Maryland. The Company also operates loan production offices in Altoona and Monroeville, Pennsylvania. On December 31, 2022, AmeriServ had total assets of $1.4 billion and a book value of $6.20 per common share. For more information, visit www.ameriserv.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology, market conditions, dividend program, and future payment obligations. These statements may be identified by such forward-looking terminology as "continuing," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy," or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, unanticipated changes in the financial markets, the level of inflation, and the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; competition levels; loan and investment prepayments differing from our assumptions; insufficient allowance for credit losses; a higher level of loan charge-offs and delinquencies than anticipated; material adverse changes in our operations or earnings; a decline in the economy in our market areas; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume or an inability to close loans currently in the pipeline; changes in laws and regulations; adoption, interpretation and implementation of accounting pronouncements; operational risks, including the risk of fraud by employees, customers or outsiders; unanticipated effects of our banking platform; risks and uncertainties relating to the duration of the COVID-19 pandemic, and actions that may be taken by governmental authorities to contain the pandemic or to treat its impact; and the inability to successfully implement or expand new lines of business or new products and services. These forward-looking statements involve risks and uncertainties that could cause AmeriServ's results to differ materially from management's current expectations. Such risks and uncertainties are detailed in AmeriServ's filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022 (when it becomes available). Forward-looking statements are based on the beliefs and assumptions of AmeriServ's management and on currently available information. The statements in this press release are made as of the date of this press release, even if subsequently made available by AmeriServ on its website or otherwise. AmeriServ undertakes no responsibility to publicly update or revise any forward-looking statement.
IMPORTANT ADDITIONAL INFORMATION
The Company intends to file a proxy statement and GOLD proxy card with the SEC in connection with the Annual Meeting and, in connection therewith, the Company, its directors and certain of its 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 GOLD PROXY CARD AND ALL OTHER DOCUMENTS FILED
Exhibit 99.2
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING. The Company's definitive proxy statement for the 2022 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.ameriserv.com/sec-filings/insider-filings 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, 2022 (when it becomes available). 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 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.ameriserv.com/sec-filings/documents.
CONTACTS
Longacre Square Partners
Joe Germani / Miller Winston
jgermani@longacresquare.com / mwinston@longacre.com