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): May 16, 2008
Flagstar Bancorp, Inc.
(Exact name of registrant as specified in its charter)
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| Michigan
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1-16577
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38-3150651 |
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(Commission File
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(I.R.S. Employer |
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Number)
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Identification No.) |
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| 5151 Corporate Drive, Troy, Michigan
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48098 |
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(Zip Code) |
(248) 312-2000
(Registrant’s telephone number, including area code)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 1.01. |
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Entry into a Material Definitive Agreement. |
Flagstar Bancorp, Inc. (the “Company”) entered into
a Purchase Agreement dated as of May 16,
2008 with seven institutional investors, (the “Institutional Investor Purchase Agreement”) and a Purchase
Agreement dated as of May 16, 2008 with Thomas J. Hammond, Chairman of the
Company and with Mark T.
Hammond, Vice Chairman, President and Chief Executive Officer (the “Hammond Purchase Agreement”
and, together with the Institutional Investor Purchase Agreement, the “Purchase Agreements”) pursuant to
which the Company raised, in the aggregate, approximately $100 million through direct sales to such
investors of equity securities of the Company (the “Offering”). The Offering is subject to
customary closing conditions and is expected to close on May 19, 2008.
Under the terms of the Purchase Agreements, the institutional investors agreed to purchase, in the
aggregate, 11,365,000 shares of the Company’s common stock at a purchase price of $4.25 per share,
and Mr. Thomas Hammond and Mr. Mark Hammond agreed to purchase 635,000 shares of the Company’s
common stock, in the aggregate, at a purchase price of $5.88 per share, which was the closing price
of the Company’s common stock on May 14, 2008. In addition, the Company issued 47,982 shares of
mandatory convertible non-cumulative perpetual preferred stock (“Preferred Stock”) to the
institutional investors at a purchase price and liquidation preference of $1,000 per share. After
the receipt of stockholder approval, as described in more detail below, the Preferred Stock will
automatically convert into the Company’s common stock at an initial conversion price of $4.25 per
share of common stock, subject to customary anti-dilution
adjustments. The
institutional investors have anti-dilution protection if the Company issues additional shares of
common stock in the next twelve months.
The
Purchase Agreements do not provide the investors of the Preferred Stock with any preemptive
rights in connection with future issuances of the Company’s capital stock. Pursuant to the
Purchase Agreements, the Company has agreed to file a registration statement covering the common
stock sold in the Offering or which may be acquired upon conversion of the Preferred Stock.
This description of the Purchase Agreements is a summary and does not purport to be complete
description of all of the terms of such agreements, and is qualified in its entirety by reference
to the form of the Purchase Agreements, attached hereto as Exhibit 10.1.
Terms of the Preferred Stock
The powers, designations, preferences and relative, participating, optional or other special rights
of the Preferred Stock will be set forth in the Certificate of Designations of Mandatory
Convertible Non-Cumulative Perpetual Preferred Stock, Series A of the Company (the “Certificate of
Designations”) to be filed with the Michigan Department of Labor and Economic Growth. The
Preferred Stock will be automatically convertible into shares of common stock upon the approval by
the holders of the Company’s common stock of the conversion of the Preferred Stock into common
stock as required by the applicable New York Stock Exchange rules. The Company has entered into a
voting agreement with stockholders holding approximately 45% of the outstanding common stock of the Company
pursuant to which those stockholders have agreed to vote for the conversion of the preferred stock
into the Company’s common stock.
Dividends on the Preferred Stock will be payable, on a non-cumulative basis, as and if declared by
the Company’s board of directors, in cash, on an as-converted basis. If the Preferred Stock has
not been converted into shares of common stock within 180 days of closing, dividends will be
payable at a rate of 5% of the liquidation preference of the
Preferred Stock for that 180-day period. The dividend rate
will increase to 12% of the liquidation preference if the Preferred Stock has not been
converted into shares of common stock within beginning on the
180th day following closing. The dividends will be payable
quarterly in arrears. The Company will be prohibited from paying any dividend with respect to
shares of common stock unless full dividends are paid on the Preferred Stock.
The Company will be also prohibited from repurchasing or redeeming shares of its common stock or
other junior securities unless full dividends are paid on the Preferred Stock. The Preferred Stock
will not be redeemable by the Company nor by the holders. The holders of Preferred Stock will not
be entitled to vote on any matter except as required by Michigan law.
This description of the terms of the Preferred Stock is a summary and does not purport to be a
complete description of all of the terms, and it is qualified in its entirety by reference to the
Certificate of Designations attached hereto as Exhibit 99.1.
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| Item 3.02 |
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Unregistered Sales of Equity Securities |
Pursuant to the Offering, the Company sold 11,365,000 shares of common stock at a price of $4.25
per share, 635,000 shares of common stock at the May 14, 2008 closing price of $5.88, and 47,982
shares of Preferred Stock at a purchase price and liquidation preference of $1,000 per share. The
Company will pay its placement agents a placement fee equal to
approximately $4.1 million. The common stock and
Preferred Stock were offered and sold to institutional investors in an offering exempt from the
Securities Act registration requirements under Section 4(2) of the Securities Act of 1933. As
described above in Item 1.01, upon approval of the holders of the Company’s common stock, each
share of Preferred Stock will automatically convert into the Company’s common stock at an initial
conversion price of $4.25 per share of common stock, subject to customary anti-dilution
adjustments. The institutional investors have anti-dilution protection if the Company
issues additional shares of common stock in the next twelve months.
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| Item 7.01. |
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Regulation FD Disclosure. |
On
May 16, 2008, the Company issued a press release announcing the Offering as described above. A
copy of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is
incorporated by reference herein.
The information in this Item 7.01, including the exhibit attached hereto, is furnished pursuant to
Item 7.01 and shall not be deemed “filed” for any other purpose, including for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liabilities of that Section. The information in this Item 7.01 of this Current
Report on Form 8-K shall not be deemed incorporated by reference into any filing under the
Securities Act of 1933 or the Exchange Act regardless of any general incorporation language in such
filing.
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| Item 9.01 |
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Financial Statements and Exhibits |
(c) The following exhibits are being furnished herewith:
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| Exhibit No. |
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Exhibit Description |
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| 10.1 |
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Form
of Purchase Agreement dated as of May 16, 2008 between Flagstar Bancorp, Inc. and
the purchasers named therein. |
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| 99.1 |
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Certificate of Designations of Mandatory Convertible Non-Cumulative Perpetual Preferred Stock,
Series A of Flagstar Bancorp, Inc. |
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| 99.2 |
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Press
Release dated May 16, 2008. |