Gas Natural Inc. (NASDAQ:EGAS) Files An 8-K Other Events

Gas Natural Inc. (NASDAQ:EGAS) Files An 8-K Other Events

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Item8.01

Other Events

As previously announced, on October8, 2016, Gas Natural Inc.
(Company) entered into an Agreement and Plan of Merger (Merger
Agreement), by and among the Company, FR Bison Holdings, Inc.
(Parent) and FR Bison Merger Sub, Inc. (Merger Sub), to which
Merger Sub will merge with and into the Company (Merger), on the
terms and subject to the conditions set forth in the Merger
Agreement. In connection with the Merger, the Company filed with
the SEC a definitive proxy statement on November23, 2016
(Definitive Proxy Statement).

In this Current Report on Form 8-K, the Company is providing
additional disclosures to supplement those contained in the
Definitive Proxy Statement mailed on or about November23, 2016,
to the Companys shareholders of record as of the close of
business on the same date in connection with the solicitation of
proxies for use at the special meeting of shareholders to be held
on December28, 2016 at 11:00 a.m. at Fairfield Inn Suites,
located at 628 CC Camp Road / 268 Bypass, Elkin, North Carolina
28621. The purpose of the special meeting is to consider and vote
on (i)a proposal to approve the Merger and the other transactions
contemplated by the Merger Agreement, to which Merger Sub will
merge with and into the Company and the Companys shareholders
will have the right to receive $13.10 in cash without interest
and less any applicable withholding taxes, for each share of
common stock, $0.15 par value per share, of the Company that they
own immediately prior to the effective time of the Merger; (ii)a
proposal to approve, on a non-binding, advisory basis,
the merger-related compensation that may be paid by the Company
to its named executive officers; and (iii)a proposal to approve
an adjournment of the special meeting to a later date or time, if
necessary or appropriate, including for the purpose of soliciting
additional votes in favor of the proposal to approve the Merger,
and the other transactions contemplated by the Merger
Agreement.

Capitalized terms
used in this Current Report on Form 8-K but not otherwise defined
herein have the meanings ascribed to those terms in the
Definitive Proxy Statement.

Litigation
Related to the Merger

As previously
described on page 55 of the Definitive Proxy Statement, on
November3, 2016, a putative derivative and class action lawsuit
was filed in the Cuyahoga County Court of Common Pleas, Case
Number CV16871400, captioned Alison D. Sunny Masters vs.
Michael B. Bender et. al.
(Masters Case), naming our board
of directors, certain current and former officers, Parent, Merger
Sub, First Reserve, Anita G. Zucker, individually, and as trustee
of the Article 6 Marital Trust, Under the First Amended and
Restated Jerry Zucker Revocable Trust dated April2, 2007, The
InterTech Group, Inc., and NIL Funding Corporation as defendants
and the Company as a nominal defendant. On November17, 2016,
plaintiff filed an amended complaint. On November28, 2016, all
defendants removed the Masters Case to the United States District
Court for the Northern District of Ohio, Case Number
1:16-CV-02880. The Company agreed to provide expedited discovery
to the plaintiff.

On December23,
2016, the Company entered into a Memorandum of Understanding with
the plaintiff providing for the settlement of the Masters Case.
In the Memorandum of Understanding, the Company agreed to make
certain supplemental disclosures to the Definitive Proxy
Statement

solely for the
purpose of minimizing the time, burden, and expense of
litigation. The Memorandum of Understanding provides that, in
exchange for making these disclosures, defendants will receive,
after notice to potential class members and upon court approval,
a customary release of claims relating to the Merger.

The Company
believes that no further disclosure is required to supplement the
Definitive Proxy Statement under applicable laws and provides the
supplemental disclosures set forth below solely to avoid the
expense and distraction of further litigation and to avoid
delaying the special meeting and shareholder vote. Without
admitting any liability or wrongdoing, the Company agreed to make
certain supplemental disclosures to the Definitive Proxy
Statement as set forth below. Nothing in the supplemental
disclosures shall be deemed an admission of the legal necessity
or materiality under applicable laws of any of these disclosures.
The Company cannot guarantee that the Merger will be consummated
in a timely manner, or at all, that the Company will enter into a
settlement that the court will approve or the outcome of the
Masters Case and its effect on the Merger if the court does not
approve a settlement.

Supplemental
Disclosure to the Definitive Proxy Statement

Important
information concerning the proposed Merger is set forth in the
Definitive Proxy Statement. The Definitive Proxy Statement should
be read in conjunction with the information set forth in this
Current Report on Form 8-K and the Support Agreement described
below. The description of the Support Agreement in this Current
Report is qualified in its entirety by reference to the Support
Agreement, which is attached to this Current Report on Form 8-K
as Exhibit 99.1 and is incorporated herein by reference. Without
admitting any liability or wrongdoing, the Company makes the
following supplemental disclosures to the Definitive Proxy
Statement:

Supplemental
Disclosure No.1

On page 4 of
the Definitive Proxy Statement, the discussion in the third full
paragraph captioned Support Agreement is hereby supplemented and
restated with the following:

One of our
shareholders representing approximately 9.89% of our common
stock, Anita G. Zucker as trustee of the Article 6 Marital Trust,
Under the First Amended and Restated Jerry Zucker Revocable Trust
dated April2, 2007 (Zucker Trust), has entered into a support
agreement with Parent to which the Zucker Trust agreed to vote in
favor of the merger and the transactions contemplated by the
merger agreement, unless our board no longer supports the merger.
Any additional shares of our common stock that the Zucker Trust
acquires after October10, 2016 will be subject to the terms of
the support agreement. The support agreement does not contain any
restrictions on the transfer of our common stock beneficially
owned by the Zucker Trust. The support agreement will terminate
upon the earliest to occur of (i)the effective time of the
merger; (ii)the termination of the merger agreement to its terms;
(iii)the written agreement of the Zucker Trust and Parent to
terminate the support agreement; and (iv)the date on which the
merger agreement is amended unless the Zucker Trust has agreed in
writing to the continuation of the obligations contained in the
support agreement.

Supplemental
Disclosure No.2

On page 47 of
the Definitive Proxy Statement, the discussion in the third full
paragraph captioned New Employment Arrangements is hereby
supplemented and restated with the following:

As of December23,
2016, none of our executive officers has entered into any
agreement, arrangement or understanding with First Reserve,
Parent or any of their subsidiaries regarding employment with, or
the right to purchase or participate in the equity of, First
Reserve, Parent or the surviving company. Although no such
agreement, arrangement or understanding exists as of December23,
2016, and there have been no discussions concerning such an
agreement, arrangement or understanding, certain of our executive
officers may, prior to the closing of the merger, enter into new
arrangements with First Reserve, Parent or their subsidiaries
regarding employment with, or the right to purchase or
participate in the equity of, First Reserve, Parent, their
subsidiaries or the surviving company. In addition, our named
executive officers currently have employment agreements that will
continue in effect with the surviving company after the merger is
completed. These employment agreements contain change-in-control
provisions and the merger will constitute a change-in-control as
defined in these provisions. For more information regarding the
named executive officers employment agreements please see the
discussion in the section entitled Merger-Related Compensation
for Our Named Executive Officers beginning on page 43 in this
proxy statement.

Supplemental
Disclosure No.3

On page 48 of
the Definitive Proxy Statement, the discussion in the first full
paragraph captioned Support Agreement is hereby supplemented and
restated with the following:

On October10,
2016, one of our shareholders, Anita G. Zucker as trustee of the
Zucker Trust, entered into a support agreement with Parent to
which the Zucker Trust agreed, among other things, to vote in
favor of the merger and the transactions contemplated by the
merger agreement unless the board has made an adverse
recommendation change that has not been rescinded or otherwise
withdrawn, in favor of the adoption of the merger and the
transactions contemplated by the merger agreement. Any additional
shares of our common stock that the Zucker Trust acquires after
October10, 2016 will be subject to the terms of the support
agreement. The support agreement does not contain any
restrictions on the transfer of our common stock beneficially
owned by the Zucker Trust. The support agreement will terminate
upon the earliest to occur of (i)the effective time of the
merger; (ii)the termination of the merger agreement to its terms;
(iii)the written agreement of the Zucker Trust and Parent to
terminate the support agreement; and (iv)the date on which the
merger agreement is amended unless the Zucker Trust has agreed in
writing to the continuation of the obligations contained in the
support agreement. As of the record date, November23, 2016, the
Zucker Trust beneficially owned approximately 9.89% of our
outstanding common stock and the Company understands that since
then the Zucker Trust has not sold or acquired any shares of our
common stock. The Zucker Trust has no other agreements or
arrangements with Parent or First Reserve that provide it with
additional interests in the merger and is entitled to receive the
$13.10 merger consideration in the same manner as the other
shareholders.

Forward-Looking
Statements

Some portions
of this Current Report and the Definitive Proxy Statement filed
with the Securities and Exchange Commission as described herein,
contain certain statements that are forward-looking within the
meaning of Section 21E of the Exchange Act. Forward-looking
statements are all statements other than statements of historical
fact, including, without limitation, those that are identified by
the use of the words may, could, would, should, will, believe,
expect, anticipate, plan, predict, estimate, target, project,
intend, or similar expressions. These statements include, among
others, statements regarding our current expectations, estimates
and projections about future events and financial trends
affecting the financial condition and operations of our business.
These statements are inherently subject to a variety of risks and
uncertainties that could cause actual results to differ
materially from those expressed. Readers of this Current Report
and the Definitive Proxy Statement should not rely solely on the
forward-looking statements and should consider all uncertainties
and risks throughout this document. Forward-looking statements
are only predictions and not guarantees of performance and speak
only as of the date they are made. We undertake no obligation to
update any forward-looking statement in light of new information
or future events.

Although we
believe that the expectations, estimates and projections
reflected in the forward-looking statements are based on
reasonable assumptions when they are made, we can give no
assurance that these expectations, estimates and projections can
be achieved. We believe the forward-looking statements in this
Current Report and the Definitive Proxy Statement are reasonable;
however, you should not place undue reliance on any
forward-looking statement, as they are based on current
expectations. Future events and actual results may differ
materially from those discussed in the forward-looking
statements. Factors that may affect forward-looking statements
and the Companys business generally include, but are not limited
to: the Companys ability to complete the proposed transaction;
any event, change or circumstance that might give rise to the
termination of the merger agreement; the effect of the
announcement of the proposed transaction on the Companys
relationships with its customers, operating results and business
generally; the risk that the proposed transaction will not be
consummated in a timely manner; the failure to receive, on a
timely basis or otherwise, approval of the merger, and the other
transactions contemplated by the merger agreement, by the
Companys shareholders or the approval of government or regulatory
agencies with regard to the merger; the failure of one or more
conditions to the closing of the merger to be satisfied; risks
arising from the mergers diversion of managements attention from
our ongoing business operations; risks that the Companys stock
price may decline significantly if the merger is not completed;
the Companys ability to successfully integrate the operations of
the companies it has acquired and consummate additional
acquisitions; the Companys continued ability to make dividend
payments; the Companys ability to implement its business plan,
grow earnings and improve returns on investment; fluctuating
energy commodity prices; the possibility that regulators may not
permit the Company to pass through all of its increased costs to
its customers; changes in the utility regulatory environment;
wholesale and retail competition; the Companys ability to satisfy
its debt obligations, including compliance with financial
covenants; weather conditions; litigation risks; and various
other matters, many of which are beyond the Companys control; the
risk factors and cautionary statements made in the Companys
public filings with the Securities and Exchange Commission (the
SEC); and other factors that the Company is currently unable to
identify or quantify, but may exist in the future. The Company
expressly undertakes no obligation

to update or
revise any forward-looking statement contained herein to reflect
any change in the Companys expectations with regard thereto or
any change in events, conditions or circumstances on which any
such statement is based. Additional factors that may affect the
future results of the Company are set forth in its filings with
the SEC, including its Annual Report on Form 10-K for the year
ended December31, 2015 and recent Quarterly Reports on Form10-Q
and Current Reports on Form8-K filed with the SEC, which are
available on the SECs website atwww.sec.gov. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date thereof.

Additional
Information and Where to Find It:

The Company will
hold a special meeting of shareholders on December28, 2016, to
approve the Merger and other transactions contemplated by Merger
Agreement, dated October8, 2016, among the Company, Parent, and
Merger Sub, to which Merger Sub will merge with and into the
Company. This communication may be deemed to be solicitation
material in respect of the Merger and the special meeting. In
connection with the special meeting, the Company filed with the
SEC on November23, 2016 and mailed to its shareholders a
Definitive Proxy Statement that contains important information
about the proposed Merger and the special meeting. Investors are
urged to read the Definitive Proxy Statement and other relevant
documents carefully and in their entirety when they become
available because they will contain important information about
the Merger and related matters. Investors may obtain a free copy
of these materials (when they are available) and other documents
filed by the Company with the SEC at the SECs website at
www.sec.gov, at the Companys website at www.egas.net or by
writing to the Companys Corporate Secretary at Gas Natural Inc.,
1375 East 9th St., Suite 3100, Cleveland, Ohio 44114, or by
calling the Companys Corporate Secretary at (216)
202-1509.

Security holders
also may read and copy any reports, statements and other
information filed by the Company with the SEC at the SEC public
reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 or visit the
SECs website for further information on its public reference
room.

Participants in the
Solicitation

The Company and its directors,
executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
Merger. Information regarding the Companys directors and
executive officers is available in the Companys proxy statement
filed with the SEC on June20, 2016 in connection with its 2016
annual meeting of shareholders. Additional information regarding
persons who may be deemed participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, is contained in the Definitive
Proxy Statement.

Item9.01 Financial Statements and Exhibits.
(d) Exhibits.

Exhibit

No.

Description
99.1 Support Agreement, dated October10, 2016, by and among FR
Bison Holdings, Inc., and Anita G. Zucker, Trustee of the
Article 6 Marital Trust, Under the First Amended and Restated
Jerry Zucker Revocable Trust dated April2, 2007


About Gas Natural Inc. (NASDAQ:EGAS)


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