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
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Date
of report (Date of earliest event reported)
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December
23, 2008
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(Exact
Name of Registrant as Specified in Charter)
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New
Jersey
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000-32891
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22-3665653
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(State
or Other Jurisdiction of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
Number)
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2650
Route 130 P.O. Box 634, Cranbury, New Jersey
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08512
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(609)
655-4500
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Not
Applicable
|
|
(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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR
240.13e-4(c))
Item
1.01 Entry into a
Material Definitive Agreement.
On
December 23, 2008, as part of the U.S. Department of the Treasury (the
“Treasury”) Troubled Asset Relief Program (“TARP”) Capital Purchase Program, 1st
Constitution Bancorp (the “Company”) entered into a Letter Agreement (“Letter
Agreement”) and a Securities Purchase Agreement – Standard Terms attached
thereto (“Securities Purchase Agreement”) with the Treasury, pursuant to which
the Company agreed to issue and sell, and the Treasury agreed to purchase 12,000
shares (the “Preferred Shares”) of the Company’s Fixed Rate Cumulative Perpetual
Preferred Stock, Series B, having a liquidation preference of $1,000 per share
for $12 million in cash. The Treasury was also issued a ten-year
warrant (the “Warrant”) to purchase up to 200,222 shares of the Company’s common
stock, no par value (“Common Stock”), at an exercise price of $8.99 per
share.
The
transaction closed on December 23, 2008 (the “Closing Date”). The issuance and
sale of these securities was a private placement exempt from registration under
the Securities Act of 1933, as amended (the “Act”), pursuant to
Section 4(2) of the Act.
Cumulative
dividends on the Preferred Shares 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, but will be paid only if, as and when declared by the
Company’s Board of Directors. The Preferred Shares have no maturity date and
rank 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. Subject to the approval of the Board of Governors of the Federal
Reserve System, the Preferred Shares are redeemable at the option of the Company
at 100% of their liquidation preference plus accrued and unpaid dividends,
provided that the Preferred Shares may be redeemed prior to the first dividend
payment date falling after the third anniversary of the Closing Date (December
23, 2011) only if (i) the Company has raised aggregate gross proceeds in
one or more Qualified Equity Offerings in excess of $3 million, and
(ii) the aggregate redemption price does not exceed the aggregate net
proceeds from such Qualified Equity Offerings. “Qualified Equity Offering” is
defined as the sale for cash by the Company after the Closing Date of shares of
preferred stock or common stock that qualify as Tier I
capital of the Company under the capital guidelines of the Company’s federal
banking agency. Thus if the Company raised net proceeds from the sale of
preferred stock or common stock in a public or private offering, it could redeem
all of the Preferred Shares. Furthermore, if the Company redeemed the
Preferred Stock and the Treasury still owned the Warrant, the Company could
repurchase the Warrant from the Treasury for its fair market
value. Unless both the holder and the Company agree otherwise, the
exercise of the Warrant will be a net exercise (i.e., the holder does not pay
cash but gives up shares with a market value at the time of exercise equal to
the exercise price, resulting in a net settlement with significantly fewer than
the 200,222 shares of Common Stock being issued).
The
Treasury may not transfer a portion or portions of the Warrant with respect to,
and/or exercise the Warrant for more than one-half of, the 200,222 shares of
Common Stock issuable upon exercise of the Warrant, in the aggregate, until the
earlier of (i) the date on which the Company has received aggregate gross
proceeds of not less than $12 million from one or more Qualified Equity
Offerings and (ii) December 31, 2009. 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 $12 million, the number of the shares of Common Stock
underlying the portion of the Warrant then held by the Treasury will be reduced
by one-half of the shares of Common Stock originally covered by the
Warrant.
The
Securities Purchase Agreement, pursuant to which the Preferred Shares and the
Warrant were sold, contains limitations on the payment of dividends on the
Common Stock and on the Company’s ability to repurchase its Common Stock and
repurchase or redeem its trust preferred securities, and subjects the Company to
certain of the executive compensation limitations included in the Emergency
Economic Stabilization
Act of 2008 (the “EESA”). As a condition to the closing of the transaction, each
of Messrs. Robert Mangano and Joseph M. Reardon, the Company’s Senior Executive
Officers (as defined in the Securities Purchase Agreement) (the “Senior
Executive Officers”), (i) executed a waiver (the “Waiver”) voluntarily
waiving any claim against the 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 the Treasury under the TARP Capital Purchase
Program 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 the Treasury holds
any equity or debt securities of the Company acquired through the TARP Capital
Purchase Program; and (ii) entered into a senior executive officer
agreement (“Senior Executive Officer Agreement”) with the Company amending the
Benefit Plans with respect to such Senior Executive Officer as may be necessary,
during the period that the Treasury owns any debt or equity securities of the
Company acquired pursuant to the Securities Purchase Agreement or the Warrant,
to comply with Section 111(b) of the EESA.
The
Securities Purchase Agreement and all related documents may be amended
unilaterally by the Treasury to the extent required to comply with any changes
in applicable federal statutes after the execution thereof.
Copies of
the Letter Agreement (including the Securities Purchase Agreement), the form of
Warrant, the Certificate of Amendment to the Certificate of Incorporation
establishing the terms of the Preferred Shares, the form of Waiver executed by
the Senior Executive Officers, the form of the Senior Executive Officer
Agreement executed by the Senior Executive Officers, and the press release
announcing the completion of the transactions described above are included as
exhibits to this Form 8-K and are incorporated by reference into these Items
1.01, 3.02, 3.03, 5.02 and 5.03. The foregoing is a summary of certain
provisions of these documents, is not complete and is qualified in its
entirety by reference to these documents.
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.
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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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The
information 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 or Bylaws; Change in Fiscal Year.
On
December 18, 2008, the Company filed with the State of New Jersey a Certificate
of Amendment to the Certificate of Incorporation increasing the number of shares
constituting the “Series A Junior Participating Preferred Stock” from 28,966 to
40,000 and a Certificate of Amendment to the Certificate of Incorporation
establishing the terms of the Preferred Shares. Copies of the Certificates of
Amendment are included as exhibits to this Form 8-K and are incorporated by
reference into this Item 5.03.
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits
The
following exhibits are being filed herewith:
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Exhibit
No.
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Description
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3.1
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Certificate
of Amendment to the Certificate of Incorporation increasing the number of
shares constituting the Series A Junior Preferred Stock
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3.2
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Certificate
of Amendment to the Certificate of Incorporation establishing the terms of
the Preferred Stock
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3.3
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Warrant
to Purchase up to 200,222 shares of Common Stock
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10.1
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Letter
Agreement, dated December 23, 2008, including Securities Purchase
Agreement –Standard Terms incorporated by reference therein, between the
Company and the UnitedStates Department of the Treasury
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10.2
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Form
of Waiver, executed by each of Messrs. Robert Mangano and Joseph M.
Reardon
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10.3
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Form
of Senior Executive Officer Agreement, executed by each of Messrs. Robert
Mangano and Joseph M. Reardon
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99.1
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Press
Release
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SIGNATURE
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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1ST CONSTITUTION
BANCORP |
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Date:
December 23, 2008
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By:
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/s/ JOSEPH
M. REARDON |
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Name:
Joseph
M. Reardon |
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Title:
Senior
Vice President and Treasurer |
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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3.1
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Certificate
of Amendment to the Certificate of Incorporation increasing the number of
shares constituting the Series A Junior Preferred Stock
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| |
|
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| 3.2 |
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Certificate
of Amendment to the Certificate of Incorporation establishing the terms of
the Preferred Stock
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| |
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| 3.3 |
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Warrant
to Purchase up to 200,222 shares of Common Stock
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| |
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| 10.1 |
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Letter
Agreement, dated December 23, 2008, including Securities Purchase
Agreement –Standard Terms incorporated by reference therein, between the
Company and the UnitedStates Department of the Treasury
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| |
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| 10.2 |
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Form
of Waiver, executed by each of Messrs. Robert Mangano and Joseph M.
Reardon
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| 10.3 |
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Form
of Senior Executive Officer Agreement, executed by each of Messrs. Robert
Mangano and Joseph M. Reardon
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| 99.1 |
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Press
Release
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