EBTX Encore Bancshares, Inc. (MM)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): May 1, 2012

Encore Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (713) 787-3100

(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 (see General Instruction A.2. below):

Item 8.01. Other Events.  

This Form 8-K is being filed pursuant to a memorandum of understanding regarding the settlement of certain litigation relating to the Agreement and Plan of Merger, dated as of March 5, 2012 (the “Merger Agreement”), by and among Encore Bancshares, Inc., a Texas corporation (“Encore”), Cadence Bancorp, LLC, a Delaware limited liability company (“Cadence”), and EMS Sub I, Inc., a Texas corporation and wholly owned subsidiary of Cadence (“Merger Sub”).

Settlement of Certain Litigation  

Encore and the members of its board of directors have been named as defendants in a putative class and derivative action filed on behalf of Encore shareholders filed in the Supreme Court of the State of New York for the County of New York (the “ Court ”), captioned Reliant Equities v . D’Agostino, et. al. , challenging, among other things, the Merger Agreement and the proposed merger of Merger Sub with and into Encore, with Encore surviving the merger as a wholly owned subsidiary of Cadence (the “ Merger ”).    

On May 1, 2012, following settlement discussions, the defendants entered into a memorandum of understanding with the plaintiffs regarding the settlement of the Reliant action.  In connection with the settlement contemplated by the memorandum of understanding, in consideration for the full settlement and release of all claims under the Reliant action, Encore agreed to make certain additional disclosures related to the proposed Merger, which are contained in this Current Report on Form 8-K.  The memorandum of understanding contemplates that the parties will negotiate in good faith and use their reasonable best efforts to enter into a stipulation of settlement.

The stipulation of settlement will be subject to customary conditions, including court approval following notice to Encore’s shareholders.  In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Court will consider the settlement.  There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Court will approve the settlement even if the parties were to enter into such stipulation.  In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated.

SUPPLEMENT TO THE PROXY STATEMENT

In connection with the settlement of certain outstanding shareholder litigation as described in this Current Report on Form 8-K, Encore has agreed to make these supplemental disclosures to its definitive proxy statement filed with the Securities and Exchange Commission on April 12, 2012 (the “Proxy Statement”), without admitting in any way that the disclosures below are material or otherwise required by law.  This supplemental information should be read in conjunction with the Proxy Statement, which should be read in its entirety.  All page references in the information below are to pages in the Proxy Statement, and terms used below have the meanings set forth in the Proxy Statement, unless otherwise defined below. 

The following disclosure supplements the information set forth in the first full paragraph on page 29 of the Proxy Statement, under the heading “Interests of Encore’s Directors and Executive Officers in the Merger—Treatment of Outstanding Equity Awards,” by adding the following after the table:

The following table summarizes, as of April 24, 2012, the value (based on the merger consideration of $20.62) of shares of restricted stock that vest in connection with the merger for each non-employee director:

The following new section is added to page 31 of the Proxy Statement at the end of the section titled “Interests of Encore’s Directors and Executive Officers in the Merger—Indemnification of Directors and Officers; Directors' and Officers’ Insurance”:

Other Interests

            Encore Bank has made loans in the ordinary course of business to certain of the directors and executive officers of Encore and Encore Bank and their associates, all of which were on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons unaffiliated with Encore, and these loans did not involve more than the normal risk of collectability or present other unfavorable features.  These loans are subject to limitations contained in the Federal Reserve Act, the principal effect of which is to require that extensions of credit by Encore Bank to executive officers, directors and certain shareholders of Encore and Encore Bank satisfy the foregoing standards.  The aggregate balance of such loans to Encore directors at December 31, 2011 was $2,034,640, which represented 1.45% of Encore’s Tier 1 capital.  The merger is not expected to modify or otherwise impact these loans.

            In addition, Encore Bank currently leases one of its private client offices pursuant to a lease agreement between Encore Bank and Memorial Hermann Medical Plaza, L.P.  Walter M. Mischer, Jr., a director of Encore, serves as the manager of the sole general partner of Mischer Healthcare Services IV, L.P., which is the sole general partner of Memorial Hermann Medical Plaza, L.P.  The term of the lease is for ten years and expires in 2016, with options to extend the lease for two additional terms of ten years each.  The aggregate rental payments under the lease in 2011 were approximately $147,672.  The merger is not expected to modify or otherwise impact the terms of the lease.  

Forward-Looking Statements

This Current Report on Form 8-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Encore’s or Cadence’s actual results, performance or achievements to be materially different from any expected future results, performance or achievements.  Forward-looking statements speak only as of the date they are made and neither Encore nor Cadence assumes any duty to update forward-looking statements.  Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Encore and Cadence, including future financial and operating results, the new company’s plans, objectives, expectations and intentions and other statements that are not historical facts.  The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements:  the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, the ability to promptly and effectively integrate the businesses of Encore and Cadence; the reaction of the companies’ customers to the transaction; and diversion of management time on merger-related issues.  For more information, see the risk factors described in Encore’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission (the “ SEC ”).  

Important Additional Information

Encore has filed a proxy statement and other relevant documents concerning the proposed Merger with the SEC.  ENCORE SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Shareholders may obtain these documents free of charge at the SEC’s Internet site (www.sec.gov).  In addition, documents filed with the SEC by Encore can be obtained, when available, without charge, by directing a request to Encore Bancshares, Inc., Attention: Corporate Secretary, Nine Greenway Plaza, Suite 1000, Houston, TX, 77046, by phone at (713) 787-3100 or on Encore’s Internet site at www.encorebank.com  under the tab “About Encore” then under the tab “Investor Relations” and then under the tab “SEC Filings.”  

Encore and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from Encore’s shareholders in respect of the proposed Merger.  Information about the directors and executive officers of Encore is included in Amendment No. 1 to Encore’s Annual Report on Form 10-K, which was filed with the SEC on April 27, 2012.  Additional information regarding the interests of such potential participants is included in the proxy statement and the other relevant documents filed with the SEC.

SIGNATURES

            Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.

Encore Bancshares, Inc.

Date:  May 1, 2012                                                   By:      /s/ James S. D’Agostino, Jr.                     

James S. D’Agostino, Jr.

Chairman and Chief Executive Officer