Attached files
| file | filename |
|---|---|
| EX-4.2 - EXHIBIT 4.2 - UNITED COMMUNITY BANKS INC | ex4-2.htm |
| EX-1.3 - EXHIBIT 1.3 - UNITED COMMUNITY BANKS INC | ex1-3.htm |
| EX-1.2 - EXHIBIT 1.2 - UNITED COMMUNITY BANKS INC | ex1-2.htm |
| EX-1.1 - EXHIBIT 1.1 - UNITED COMMUNITY BANKS INC | ex1-1.htm |
| EX-4.1 - EXHIBIT 4.1 - UNITED COMMUNITY BANKS INC | ex4-1.htm |
| EX-99.1 - EXHIBIT 99.1 - UNITED COMMUNITY BANKS INC | ex99-1.htm |
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):
March 31,
2010
United
Community Banks, Inc.
(Exact
name of registrant as specified in its charter)
|
Georgia
|
No. 0-21656
|
No. 58-180-7304
|
|
(State
or other jurisdiction of
|
(Commission
File Number)
|
(IRS
Employer
|
|
incorporation)
|
Identification
No.)
|
63
Highway 515, P.O. Box 398
Blairsville,
Georgia 30512
(Address
of principal executive offices)
(706)
781-2265
(Registrant's
telephone number, including area code)
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:
|
q
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
q
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
q
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
q
|
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 April
1, 2010, United Community Bank (“Bank”), a
wholly owned subsidiary of United Community Banks, Inc. (“United” or
“Company”),
entered into an asset purchase and sale agreement (the “Asset Purchase
Agreement”) with Fletcher International Inc. and certain affiliates
thereof who will become parties thereto as purchasers (collectively, the “Purchasers”). Pursuant
to the Asset Purchase Agreement, Fletcher International Inc. will make a
$10 million deposit (the “Deposit”)
and Bank has agreed to sell to the Purchasers certain non-performing commercial
and residential mortgage loans and other real estate owned, or “OREO,”
properties (collectively, the “Purchased
Assets”) with an aggregate purchase price equal to Bank’s
carrying value of approximately $100 million with closing dates on
or around April 30, 2010 (the “Asset
Sale”). In connection with the Asset Sale, the Bank will loan
to the Purchasers 80% of the purchase price to acquire the Purchased Assets,
with the remaining 20% paid in cash by such Purchasers. The
Purchasers are required to have at least 17.5% of the carrying value of the
Purchased Assets, up front, to pre-fund the estimated three years’ worth of
carry costs related to such assets.
Also on
April 1, 2010, United and Fletcher International, Ltd. (“Fletcher”)
entered into a securities purchase agreement (the “Securities
Purchase Agreement”) pursuant to which Fletcher agrees to purchase from
the Company, and the Company agrees to issue and sell to Fletcher, 65,000 shares
of United’s Series C convertible preferred stock, par value $1.00 per share (the
“Convertible
Preferred Stock”), at a purchase price of $1,000 per share, for an
aggregate purchase price of $65 million. Fletcher is required to
purchase the Convertible Preferred Stock by May 26, 2012, subject to
limited extensions upon certain events specified in the Securities Purchase
Agreement (the “Securities
Sale”). The Convertible Preferred Stock will initially bear
interest at a rate equal to the lesser of 12% per annum and LIBOR + 8% per
annum. If at Company’s annual shareholders meeting, the Shareholder
Approval (as defined below) is received, the Convertible Preferred Stock will
bear interest at a rate equal to the lesser of 8% and LIBOR + 4% per
annum. If all conditions precedent to Fletcher's obligations to
purchase the Convertible Preferred Stock have been satisfied and Fletcher has
not purchased all of the Convertible Preferred Stock by May 26, 2011, it must
pay United 5% of the commitment amount not purchased by such date, and it must
pay United an additional 5% of the commitment amount not purchased by May 26,
2012.
The
Securities Purchase Agreement provides that the Company shall not effect any
conversion or redemption of the Convertible Preferred Stock, and Fletcher shall
not have the right to convert or redeem any portion of the Convertible Preferred
Stock, into Common Stock to the extent such conversion or redemption would
result in aggregate issuances to Fletcher of in excess of 9.75% (which may be
reduced by Fletcher) of the number of shares of Common Stock that would be
outstanding after giving effect to such conversion or redemption. In
the event that the Company cannot effect a conversion or redemption of the
Convertible Preferred Stock into Common Stock due to the limit described in the
immediately preceding sentence, the conversion or redemption shall be effected
into an equal number of shares of Junior Preferred Stock; provided, however,
that in no event shall the Company effect any conversion or redemption of the
Convertible Preferred Stock or exercise of the Warrant to the extent such
conversion, redemption or exercise would result in aggregate issuances to
Fletcher of in excess of thirty-three and thirty-three one hundredths percent
(33.33%) of the Total Equity of the Company. For purposes of the
preceding sentence, “Total Equity” means the value as reflected on the balance
sheet of the Company of all shares of common, preferred and other equity capital
of the Company outstanding as of the date of determination.
The
Convertible Preferred Stock is redeemable by Fletcher at any time into common
stock, par value $1.00 per share (“Common
Stock”), or Junior Preferred Stock, at $5.25 per share of Common Stock or
one-hundredth of a share of Junior Preferred Stock (equal to 12,380,952 shares
of Common Stock), subject to certain adjustments (the “Redemption
Price”). After May 26, 2015, on any date on which the average
closing stock price for United's Common Stock for the twenty five business days
ending on and including the third business day before such date exceeds the
Conversion Price by one hundred percent (100%), United will have the option to
convert all of the then outstanding Convertible Preferred Stock into Common
Stock or Junior Preferred Stock at $6.02 per share of Common Stock or
one-hundredth of a share of Junior Preferred Stock, subject to certain
adjustments (equal to 10,797,342 shares of Common Stock). Each share
of Junior Preferred Stock will be convertible into one hundred shares of
United’s Common Stock after United receives shareholder approval to authorize
additional Common Stock for issuance.
Concurrently
with payment of the Deposit under the Asset Purchase Agreement by Fletcher
International Inc., Fletcher will receive a warrant (the “Warrant”)
to purchase non-voting Common Stock Equivalent Junior Preferred Stock, par value
$1.00 per share, of the Company (“Junior Preferred
Stock”). The warrant amount shall initially equal $15
million. The warrant amount will (i) be increased by $.15
for each $1.00 of assets purchased pursuant to the Asset Purchase Agreement up
to a total increase of $15 million and (ii) be increased on a dollar for dollar
basis by the aggregate dollar amount of the Convertible Preferred Stock
purchased under the Securities Purchase Agreement in excess of $30
million. The warrant price for the first $30 million of the warrant
amount shall be $4.25 for each one-hundredth of a share of Junior Preferred
Stock (equal to 3,529,412 shares of Common Stock). The warrant price
for the warrant amount in excess of $30 million shall be $6.02 for each
one-hundredth of a share of Junior Preferred Stock (equal to 5,813,953 shares of
Common Stock). The Warrant may only be exercised via cashless
exercise and is exercisable for nine years following its issuance, subject to
limited extension upon certain events specified in the Warrant.
The
issuance of the securities described above and the increase in the Company's
authorized Common Stock in connection with such issuances require Company
shareholder approval pursuant to the Listing Requirements of the Nasdaq Global
Select Market (the “Shareholder
Approval”), which will be sought at United’s Annual Meeting of
shareholders to be held on May 26, 2010. All dates described in this
Form 8-K assume the receipt of the Shareholder Approval at such
meeting. If the Shareholder Approval is not received, the Securities
Purchase Agreement provides that the Company shall not effect any conversion or
redemption of the Convertible Preferred Stock or any exercise of the Warrant,
and Fletcher shall not have the right to convert or redeem the Convertible
Preferred Stock or exercise any portion of the Warrant, to the extent such
action would result in issuances to Fletcher of Common Stock and Junior
Preferred Stock (measured on an as converted basis) in excess of 19.99% of the
shares of Common Stock outstanding as of the date of the Securities Purchase
Agreement. Further, the Securities Purchase Agreement provides that
the Company shall not effect any conversion or redemption of the Convertible
Preferred Stock or any exercise of the Warrant, and Fletcher shall not have the
right to convert or redeem the Convertible Preferred Stock or exercise any
portion of the Warrant, to the extent the number of shares of Common Stock and
Junior Preferred Stock beneficially owned by Fletcher immediately following such
action would exceed 9.90% (which may be increased by Fletcher) of aggregate
number of shares of Common Stock and Junior Preferred Stock (measured on an as
converted basis) outstanding after giving effect to such action.
The
descriptions of the Asset Purchase Agreement, Securities Purchase Agreement and
Warrant above are summaries and are qualified in their entirety by reference to
the full text of such agreements, which are attached hereto as
Exhibits 1.1, 1.2 and 1.3, respectively, and are incorporated herein by
reference.
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
Effective March
31, 2010, in connection with the Securities Sale, United filed with the
Secretary of State of the State of Georgia a Certificate of Designation of the
Junior Preferred Stock (the “Certificate of
Designation”) amending the Articles of Incorporation of United to create,
authorize and provide for the issuance of the Junior Preferred Stock as a new
series of United’s existing preferred stock. As authorized and
approved by Board of Directors of United, the Certificate of Designation
authorizes the issuance of 1,000,000 shares of Junior Preferred Stock having the
powers, preferences, participation and other special rights, qualifications,
limitations, restrictions and other designations as set forth in the Certificate
of Designation. United also filed on such date with the Secretary of
State of the State of Georgia a Certificate of Rights and Preferences (the
“Certificate of
Rights and Preferences”) of the Convertible Preferred Stock, amending the
Articles of Incorporation of United to create, authorize and provide for the
issuance of the Convertible Preferred Stock as a new series of United’s existing
preferred stock. As authorized and approved by Board of Directors of
United, the Certificate of Rights and Preferences authorizes the issuance of
65,000 shares of Convertible Preferred Stock having the powers, preferences,
participation and other special rights, qualifications, limitations,
restrictions and other designations as set forth in the Certificate of Rights
and Preferences.
The
Certificate of Designation and Certificate of Rights and Preferences are
attached hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated
herein by reference.
Item
8.01 Other
Events
On April
1, 2010, Company issued a press release that announced the Asset Sale and
Securities Sale described above. A copy of the press release is
furnished as Exhibit 99.1 hereto and incorporated by reference
herein.
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Discription
|
1.1
|
Asset
Purchase Agreement, dated April 1, 2010 by and among United Community Bank
and Fletcher International, Inc., and certain affiliates thereof who may
become parties thereto as purchasers.
|
||
|
1.2
|
Securities
Purchase Agreement, dated April 1, 2010 between United Community Banks,
Inc. and Fletcher International, Ltd.
|
||
|
1.3
|
Form
of Warrant to be granted by United Community Banks, Inc. to Fletcher
International, Ltd.
|
||
|
4.1
|
Certificate
of Designation of the Common Stock Equivalent Junior Preferred Stock,
dated March 31, 2010.
|
||
|
4.2
|
Form
of Certificate of Rights and Preferences of the Series C Convertible
Preferred Stock.
|
||
|
99.1
|
Press
Release of United Community Banks, Inc., dated April 1,
2010.
|
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.
/s/ Rex S. Schuette
Rex
S. Schuette
Executive Vice President and
Chief Financial Officer
April 1,
2010