ITEM
1.01 Entry into a Material Definitive
Agreement
On
January 16, 2009, Carver Bancorp, Inc. (the “Company”), the holding company for
Carver Federal Savings Bank (the “Bank”), entered into a Letter Agreement as
part of the U.S. Department of the Treasury (the “Treasury”) Troubled Asset
Relief Program (“TARP”) Capital Purchase Program (“CPP”) and
a Securities Purchase Agreement – Standard Terms (“Securities
Purchase Agreement”) with the Treasury, pursuant to which the Company
issued and sold, and the Treasury agreed to purchase, 18,980 shares (the
“Preferred Shares”) of the Company’s Fixed Rate Cumulative Perpetual Preferred
Stock, Series A, having a liquidation preference of $1,000 per share, for $18.98
million in cash. Because the Bank is a certified Community
Development Financial Institution which conducts most of its activities in
disadvantaged communities, the Company was exempt from the CPP’s requirement to
issue warrants to the Treasury to purchase shares of its common
stock. Therefore, Treasury’s investment in the Company will not
dilute current shareholders. The description of the Securities
Purchase Agreement contained or incorporated herein is a summary and is
qualified in its entirety by reference to the full text of the Securities
Purchase Agreement attached as Exhibit 10.1 hereto, which is incorporated herein
by reference.
The
transaction closed on January 16, 2009 (the “Closing Date”). The
issuance and sale of the Preferred Shares was a private placement exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933. Under the
terms of the Securities Purchase Agreement, the Company has agreed to register
the Preferred Shares if requested by the Treasury. In addition, the
Preferred Shares may be required to be listed on a national exchange if
requested by the Treasury.
The
Preferred Shares will pay cumulative dividends at a rate of 5% per annum for the
first five years and 9% per annum thereafter. The Preferred Shares
have no maturity date, and rank senior to common stock with respect to dividends
and upon liquidation, dissolution, or winding up. The Company may
redeem the Preferred Shares, in whole or in part, at its liquidation preference
plus accrued and unpaid dividends prior to the first dividend payment date
falling after the third anniversary of the Closing Date only if (i) the Company
has raised aggregate gross proceeds in one or more Qualified Equity Offerings in
excess of $4,745,000 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 or common
stock that qualify as Tier I capital of the Company under the 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. The description of the
Preferred Shares contained herein is a summary and is qualified in its entirety
by reference to the full text of the Certificate of Designations, which is
attached as Exhibit 3.1 hereto and is incorporated herein by
reference.
The
Securities Purchase Agreement, pursuant to which the Preferred Shares were sold,
contains limitations on the payment of dividends on the common stock (including
with respect to the payment of cash dividends in excess of $0.10 per share,
which was the amount of the last regular dividend declared by the Company prior
to October 14, 2008) and on the Company’s ability to repurchase its common
stock, and subjects the Company to certain of the executive compensation
limitations included in the Emergency Economic Stabilization Act of 2008
(EESA). As a condition to the closing of the transaction, each of
Deborah C. Wright, Charles F. Koehler, Mark A. Ricca, James H. Bason, and Susan
M. Ifill, the Company’s Senior Executive Officers (as defined in the Securities
Purchase Agreement) (the “Senior Executive Officers”) 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. The Company has also effected changes
to its Benefits Plans as may be necessary to comply with the executive
compensation provisions of the EESA.
Item
3.02. Unregistered sales of equity
securities.
The
information set forth under “Item 1.01 Entry into a Material Definitive
Agreement” is incorporated herein by reference thereto.
Item
3.03. Material modification to rights of security
holders.
Prior to
January 16, 2012, unless the Company has redeemed the Preferred Shares or the
Treasury has transferred the Preferred Shares to a third party, the consent of
the Treasury will be required for the Company to (1) declare or pay any dividend
or make any distribution on its common stock (other than regular quarterly cash
dividends of not more than $0.10 per share) or (2) redeem, purchase or acquire
any shares of its common stock or other equity or capital securities, other than
in connection with benefit plans consistent with past practice and certain other
circumstances specified in the Securities Purchase Agreement.
In
addition, under the Certificate of Designations, the Company’s ability to
declare or pay dividends or repurchase its common stock or other equity or
capital securities will be subject to restrictions in the event that it fails to
declare and pay (or set aside for payment) full dividends on the Preferred
Shares.
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 herein by reference
thereto.
In
addition to the amendments made to the Benefit Plans as set forth under “Item
1.01 Entry into a Material Definitive Agreement”, Section 2.7(b) of Article II
of the 2006 Stock Incentive Plan was amended to comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended, regarding change
of control.
Item
5.03. Amendment to articles of incorporation or
bylaws; change in fiscal year.
On
January 14, 2008, the Company filed with the Secretary of State of Delaware, a
Certificate of Designations establishing the terms of the Fixed Rate Cumulative
Perpetual Preferred Stock, Series A. A copy of this Certificate of
Designations is included as an Exhibit to this 8-K and is
incorporated by reference into this item 5.03.
Item
7.01 Regulation FD Disclosure
On
January 20, 2009, the Company issued a press release announcing its
participation in the Treasury’s TARP CPP, the issuance of the Preferred Shares
and the receipt of $18.98 million in proceeds. A copy of this press
release is furnished as Exhibit 99.1 to the Current Report on Form
8-K. The information in this press release shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except as shall be expressly set forth by specific
reference.
Item
9.01. Financial Statements and
Exhibits.
(d)
Exhibits
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3.1
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Certificate
of Designations for the Fixed Rate Cumulative Perpetual Preferred Stock,
Series A.
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10.1
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Letter
Agreement dated January 16, 2009 between Carver Bancorp, Inc. and the
United States Department of the Treasury, including the Securities
Purchase Agreement – Standard Terms, with respect to the issuance and sale
of the Fixed Rate Cumulative Perpetual Preferred
Stock.
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10.2
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Form
of Waiver, executed by each of Deborah C. Wright, Charles F. Koehler, Mark
A. Ricca, James H. Bason and Susan M.
Ifill.
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99.1
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Press
release dated January 20, 2009.
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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 duly
authorized.
DATE:
January 22, 2009
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BY:
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/s/ Mark A. Ricca
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Mark
A. Ricca
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Executive
Vice President, Chief Risk Officer
and
General Counsel
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INDEX TO
EXHIBITS
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Exhibit
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Description
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Certificate of Designations for the Fixed Rate
Cumulative Perpetual Preferred Stock, Series A.
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Letter Agreement dated January 16, 2009 between
Carver Bancorp, Inc. and the United States Department of the Treasury,
including the Securities Purchase Agreement – Standard Terms, with respect
to the issuance and sale of the Fixed Rate Cumulative Perpetual Preferred
Stock.
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Form of Waiver, executed by each of Deborah C.
Wright, Charles F. Koehler, Mark A. Ricca, James H. Bason and Susan M.
Iffil.
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Press release dated January 20,
2009.
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5