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): January 16, 2009
METROCORP BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
| Texas | 000-25141 | 76-0579161 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
9600 Bellaire Boulevard, Suite 252
Houston, Texas 77036
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: (713) 776-3876
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):
| ¨ | 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)) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 16, 2009, MetroCorp Bancshares, Inc. (the “Company”) entered into a Letter Agreement (including the Securities Purchase Agreement – Standard Terms incorporated by reference therein, the “Purchase Agreement”) with the United States Department of the Treasury (“Treasury”), pursuant to which the Company issued and sold to Treasury (i) 45,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par value $1.00 per share, with a liquidation value of $1,000 per share (the “Series A Preferred Stock”), for a purchase price of $45,000,000, and (ii) a warrant to purchase up to 771,429 shares of the Company’s common stock, par value $1.00 per share (the “Common Stock”), at an exercise price of $8.75 per share (the “Warrant”).
Cumulative dividends on the Series A Preferred Stock will accrue on the liquidation preference at a rate of 5% per annum for the first five years, and at a rate of 9% per annum thereafter. The Series A Preferred Stock has no maturity date and ranks senior to the Common Stock with respect to the payment of dividends and distributions and amounts payable upon liquidation, dissolution and winding up of the Company. The Series A Preferred Stock generally is non-voting.
The Company may redeem the Series A Preferred Stock, in whole or in part, at par plus accrued and unpaid dividends after February 15, 2012. Prior to this date, the Company may redeem the Series A Preferred Stock, in whole or in part, at par plus accrued and unpaid dividends if (i) the Company has received aggregate gross proceeds in one or more Qualified Equity Offerings (as defined in the Purchase Agreement and set forth below) in excess of $11,250,000, and (ii) the aggregate redemption price does not exceed the aggregate net proceeds from such Qualified Equity Offerings. Any redemption is subject to the approval of the Board of Governors of the Federal Reserve System.
The Purchase Agreement defines a “Qualified Equity Offering” to mean the sale and issuance for cash by the Company, to persons other than the Company or any Company subsidiary after the closing date of the sale of the Series A Preferred Stock, of shares of perpetual preferred stock, Common Stock or any combination of such stock, that, in each case, qualify as and may be included in Tier 1 capital of the Company at the time of issuance under the applicable risk-based capital guidelines of the Company’s federal banking agency (other than any such sales and issuances made pursuant to agreements or arrangements entered into, or pursuant to financing plans which were publicly announced, on or prior to October 13, 2008).
Prior to January 16, 2012, unless the Company has redeemed the Series A Preferred Stock or the Treasury has transferred the Series A Preferred Stock to a third party, the consent of the Treasury will be required for the Company to (i) declare or pay any dividend or make any distribution on the Common Stock (other than regular quarterly cash dividends of not more than $0.04 per share) or (ii) redeem, purchase or acquire any shares of Common Stock or other equity or capital securities of the Company, or any trust preferred securities issued by the Company or an affiliate of the Company, other than (a) the Series A Preferred Stock, (b) in connection with benefit plans consistent with past practice and (c) certain other circumstances specified in the Purchase Agreement.
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The Series A Preferred Stock and the Warrant were issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended. Upon the request of Treasury at any time, the Company has agreed to promptly enter into a deposit arrangement pursuant to which the Series A Preferred Stock may be deposited and depositary shares (“Depositary Shares”), representing fractional shares of Series A Preferred Stock, may be issued. The Company has also agreed to register the resale of the Series A Preferred Stock and the Depositary Shares, if any, and the Warrant, and the issuance of shares of Common Stock upon exercise of the Warrant (the “Warrant Shares”), as soon as practicable after the date of the issuance of the Series A Preferred Stock and the Warrant. Neither the Series A Preferred Stock, the Warrant nor the Warrant Shares are subject to any contractual restrictions on transfer, except that Treasury may only transfer or exercise an aggregate of one-half of the Warrant Shares prior to the earlier of (i) the date on which the Company has received aggregate gross proceeds of not less than $45,000,000 from one or more Qualified Equity Offerings and (ii) December 31, 2009.
The Warrant is immediately exercisable. In the event the Company completes one or more Qualified Equity Offerings on or prior to December 31, 2009 that result in the Company receiving aggregate gross proceeds of not less than $45,000,000, the number of the shares of Common Stock underlying the portion of the Warrant then held by Treasury will be reduced by one-half of the shares of Common Stock originally covered by the Warrant. Pursuant to the Purchase Agreement, the Treasury has agreed not to exercise voting power with respect to any shares of Common Stock issued upon exercise of the Warrant.
In the Purchase Agreement, the Company agreed that, until such time as Treasury ceases to own any debt or equity securities of the Company acquired pursuant to the Purchase Agreement, the Company will take all necessary action to ensure that its benefit plans with respect to its senior executive officers comply with Section 111(b) of the Emergency Economic Stabilization Act of 2008 (the “EESA”) as implemented by any guidance or regulation under the EESA that has been issued and is in effect as of the date of issuance of the Series A Preferred Stock and the Warrant, and has agreed to not adopt any benefit plans with respect to, or which cover, its senior executive officers that do not comply with the EESA.
Additionally, each of Messrs. George M. Lee, David C. Choi, Mitchell W. Kitayama, David Tai and Terrance J. Tangen (the “Senior Executive Officers”), (i) executed a waiver (the “Waiver”) voluntarily waiving any claim against Treasury or the Company for any changes to such Senior Executive Officer’s compensation or benefits that are required to comply with the regulation issued by Treasury under the Capital Purchase Program as published in the Federal Register on October 20, 2008 and acknowledging that the regulation may require modification of the compensation, bonus, incentive and other benefit plans, arrangements and policies and agreements (including so-called “golden parachute” agreements) (collectively, “Benefit Plans”) as they relate to the period Treasury holds any equity or debt securities of the Company acquired through the Capital Purchase Program and (ii) entered into a letter agreement (the “Letter Agreement”) with the Company amending the Benefit Plans with respect to such Senior Executive Officer as may be necessary, during the period that Treasury owns any debt or equity securities of the Company acquired pursuant to the Purchase Agreement or the Warrant, to comply with Section 111(b) of the EESA.
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Copies of the Statement of Designations with respect to the Series A Preferred Stock, the Warrant, the form of Series A Preferred Stock Certificate, the Purchase Agreement, the form of Waiver executed by the Senior Executive Officers and the form of Letter Agreement are included as Exhibits 3.1, 4.1, 4.2, 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated by reference herein. The foregoing summary of certain provisions of these documents is qualified in its entirety by reference thereto.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth under “Item 1.01 Entry into a Material Definitive Agreement” is incorporated by reference into this Item 3.02.
| Item 3.03 | Material Modification to Rights of Security Holders. |
The information set forth under “Item 1.01 Entry into a Material Definitive Agreement” is incorporated by reference into this Item 3.03.
Additionally, pursuant to the Statement of Designations described in Item 5.03, the Company’s ability to declare or pay dividends on or redeem, repurchase or acquire its Common Stock or any other shares of Junior Stock or Parity Stock (as defined in the Statement of Designations) will be subject to restrictions in the event the Company fails to declare and pay (or set aside for payment) full dividends on the Series A Preferred Stock.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
The information concerning executive compensation set forth under “Item 1.01 Entry into a Material Definitive Agreement” is incorporated by reference into this Item 5.02.
| Item 5.03 | Amendments to Articles of Incorporation of Bylaws; Change in Fiscal Year. |
On January 12, 2009, the Company filed a Statement of Designations establishing the terms of the Series A Preferred Stock with the Secretary of State for the State of Texas. A copy of the Statement of Designations is included as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 5.03.
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| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits. The following is filed as an exhibit to this Current Report on Form 8-K:
| Exhibit |
Description of Exhibit | |
| 3.1 | Statement of Designations establishing the terms of the Series A Preferred Stock. | |
| 4.1 | Warrant to Purchase up to 771,429 shares of Common Stock. | |
| 4.2 | Form of Series A Preferred Stock Certificate. | |
| 10.1 | Letter Agreement dated January 16, 2009, including the Securities Purchase Agreement – Standard Terms incorporated by reference therein, between the Company and the United States Department of the Treasury. | |
| 10.2 | Form of Waiver, executed by each of Messrs. George M. Lee, David C. Choi, Mitchell W. Kitayama, David Tai and Terrance J. Tangen. | |
| 10.3 | Form of Letter Agreement, executed by each of Messrs. George M. Lee, David C. Choi, Mitchell W. Kitayama, David Tai and Terrance J. Tangen. | |
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SIGNATURES
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.
| METROCORP BANCSHARES, INC. | ||||||
| (Registrant) | ||||||
| Dated: January 21, 2009 | By: | /s/ George M. Lee | ||||
| George M. Lee | ||||||
| Executive Vice Chairman, President and Chief Executive Officer | ||||||
EXHIBIT INDEX
| Exhibit |
Description of Exhibit | |
| 3.1 | Statement of Designations establishing the terms of the Series A Preferred Stock. | |
| 4.1 | Warrant to Purchase up to 771,429 shares of Common Stock. | |
| 4.2 | Form of Series A Preferred Stock Certificate. | |
| 10.1 | Letter Agreement dated January 16, 2009, including the Securities Purchase Agreement – Standard Terms incorporated by reference therein, between the Company and the United States Department of the Treasury. | |
| 10.2 | Form of Waiver, executed by each of Messrs. George M. Lee, David C. Choi, Mitchell W. Kitayama, David Tai and Terrance J. Tangen. | |
| 10.3 | Form of Letter Agreement, executed by each of Messrs. George M. Lee, David C. Choi, Mitchell W. Kitayama, David Tai and Terrance J. Tangen. | |