Attached files
file | filename |
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EX-3.1 - EX-3.1 - CENTRAL BANCORP INC /MA/ | b87906exv3w1.htm |
EX-99.1 - EX-99.1 - CENTRAL BANCORP INC /MA/ | b87906exv99w1.htm |
EX-10.2 - EX-10.2 - CENTRAL BANCORP INC /MA/ | b87906exv10w2.htm |
EX-10.1 - EX-10.1 - CENTRAL BANCORP INC /MA/ | b87906exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 23, 2011
CENTRAL BANCORP, INC.
(Exact Name Of Registrant As Specified In Charter)
Massachusetts | 0-25251 | 04-3447594 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
399 Highland Avenue, Somerville, Massachusetts 02144
(Address of principal executive offices, including zip code)
(Address of principal executive offices, including zip code)
Registrants telephone number, including area code: (617) 628-4000
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 (17 CFR 240.14d-2(b))
o 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.
Issuance of Preferred Stock Under Small Business Lending Fund. On August 25, 2011, Central
Bancorp, Inc. (the Company) entered into and consummated a Securities Purchase Agreement (the
Purchase Agreement) with the Secretary of the Treasury (the Secretary), pursuant to which the
Company issued 10,000 shares of the Companys Senior Non-Cumulative Perpetual Preferred Stock,
Series B (the Series B Preferred Stock), having a liquidation amount per share equal to $1,000,
for a total purchase price of $10,000,000. The Purchase Agreement was entered into, and the Series
B Preferred Stock was issued, pursuant to the Small Business Lending Fund program, a $30 billion
fund established under the Small Business Jobs Act of 2010, that encourages lending to small
businesses by providing capital to qualified community banks with assets of less than $10 billion.
The Series B Preferred Stock is entitled to receive non-cumulative dividends, payable
quarterly, on each January 1, April 1, July 1 and October 1, beginning October 1, 2011. The
dividend rate, as a percentage of the liquidation amount, can fluctuate on a quarterly basis during
the first 10 quarters during which the Series B Preferred Stock is outstanding, based upon changes
in the level of Qualified Small Business Lending or QSBL (as defined in the Purchase
Agreement) by the Companys wholly owned subsidiary Central Co-operative Bank (the Bank). Based
upon the increase in the Banks level of QSBL over the baseline level calculated under the terms of
the Purchase Agreement, the dividend rate for the initial dividend period has been set at five
percent (5%). For the second through ninth calendar quarters, the dividend rate may be adjusted to
between one percent (1%) and five percent (5%) per annum, to reflect the amount of change in the
Banks level of QSBL. If the level of the Banks qualified small business loans declines so that
the percentage increase in QSBL as compared to the baseline level is less than 10%, then the
dividend rate payable on the Series B Preferred Stock would increase. For the tenth calendar
quarter through four and one half years after issuance, the dividend rate will be fixed at between
one percent (1%) and seven percent (7%) based upon the increase in QSBL as compared to the
baseline. After four and one half years from issuance, the dividend rate will increase to 9%
(including a quarterly lending incentive fee of 0.5%). In addition, beginning on January 1, 2014,
and on all Series B Preferred Stock dividend payment dates thereafter ending on April 1, 2016, the
Company will be required to pay to the Secretary, on each share of Series B Preferred Stock, but
only out of assets legally available therefor, a fee equal to 0.5% of the liquidation amount per
share of Series B Preferred Stock.
The Series B Preferred Stock is non-voting, except in limited circumstances. In the event
that the Company misses five dividend payments, whether or not consecutive, the holder of the
Series B Preferred Stock will have the right, but not the obligation, to appoint a representative
as an observer on the Companys Board of Directors. In the event that the Company misses six
dividend payments, whether or not consecutive, and if the then outstanding aggregate liquidation
amount of the Series B Preferred Stock is at least $25,000,000, then the holder of the Series B
Preferred Stock will have the right to designate two directors to the Board of Directors of the
Company.
The Series B Preferred Stock may be redeemed at any time at the Companys option, at a
redemption price of 100% of the liquidation amount plus accrued but unpaid dividends to the date of
redemption for the current period, subject to the approval of its federal banking regulator.
The Series B Preferred Stock was issued in a private placement exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended. The Company has agreed to
register the Series B Preferred Stock under certain circumstances set forth in Annex E to the
Purchase Agreement. The Series B Preferred Stock is not subject to any contractual restrictions on
transfer.
A copy of the Purchase Agreement is attached as Exhibit 10.1 hereto and incorporated by
reference herein. A copy of the Articles of Amendment for the Series B Preferred Stock is attached
as Exhibit 3.1 hereto and incorporated by reference herein.
Redemption of Series A Preferred Stock. On August 25, 2011, the Company entered into and
consummated a letter agreement (the Repurchase Letter) with the United States Department of the
Treasury (the Treasury), pursuant to which the Company redeemed, out of the proceeds of the
issuance of the Series B Preferred Stock, all 10,000 outstanding shares of its Fixed Rate
Cumulative Perpetual Preferred Stock, Series A, liquidation amount $1,000 per share (the Series A
Preferred Stock), for a redemption price of $10,013,888.89, including accrued but unpaid dividends
to the date of redemption.
The Treasury also holds a warrant (the Warrant) to purchase 234,742 shares of the Companys
common stock at an exercise price of $6.39 per share. Under the terms of the Repurchase Letter, if
the Company does not provide notice of intent to repurchase the
Warrant by September 9, 2011,
Treasury will be deemed to have provided the Company notice of its intention to sell the Warrant.
The Company has not reached a final determination with respect to the repurchase of the Warrant.
A copy of the Repurchase Letter is included as Exhibit 10.2 hereto and incorporated by
reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 under the caption Issuance of Preferred Stock Under
Small Business Lending Fund is incorporated by reference under this Item.
Item 3.03 Material Modification of Rights of Security Holders.
The terms of the Series B Preferred Stock impose limits on the ability of the Company to pay
dividends and repurchase shares of common stock. Under the terms of the Series B Preferred Stock,
no repurchases may be effected, and no dividends may be declared or paid on preferred shares
ranking pari passu with the Series B Preferred Stock, junior preferred shares, or other junior
securities (including the common stock) during the current quarter and for the next three quarters
following the failure to declare and pay dividends on the Series B Preferred Stock, except that, in
any such quarter in which the dividend is paid, dividend payments on shares ranking pari passu may
be paid to the extent necessary to avoid any resulting material covenant breach.
Under the terms of the Series B Preferred Stock, the Company may only declare and pay a
dividend on the common stock or other stock junior to the Series B Preferred Stock, or repurchase
shares of any such class or series of stock, if, after payment of such dividend, the dollar amount
of the Companys Tier 1 Capital would be at least 90% of the Signing Date Tier 1 Capital, as set
forth in the Articles of Amendment relating to the Series B Preferred Stock, excluding any
subsequent net charge-offs and any redemption of the Series B Preferred Stock (the Tier 1 Dividend
Threshold). The Tier 1 Dividend Threshold is subject to reduction, beginning on the second
anniversary of issuance and ending on the tenth anniversary, by 10% for each one percent increase
in QSBL over the baseline level.
Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On August 23, 2011, the Company filed Articles of Amendment to the Companys Articles of
Organization with the Secretary of the Commonwealth of Massachusetts for the purpose of designating
the terms, preferences, limitations and relative rights of the Series B Preferred Stock. A copy of
the Articles of Amendment for the Series B Preferred Stock is attached hereto as Exhibit 3.1 hereto
and incorporated by reference herein.
Item 8.01 Other Events.
On August 25, 2011, the Company issues a press release regarding the issuance of the Series B
Preferred Stock and the repurchase of the Series A Preferred Stock.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Number | Description | |
3.1
|
Articles of Amendment to the Articles of Organization of the Company for the Series B Preferred Stock | |
10.1
|
Securities Purchase Agreement, dated August 25, 2011, between the Company and the Secretary of the Treasury with respect to the Series B Preferred Stock | |
10.2
|
Repurchase Letter, dated August 25, 2011, between the Company and the United States Department of the Treasury, with respect to the Series A Preferred Stock | |
99.1
|
Press Release dated August 25, 2011 |
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.
CENTRAL BANCORP, INC. |
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Date: August 29, 2011 | By: | /s/ Paul S. Feeley | ||
Paul S. Feeley | ||||
Senior Vice President, Treasurer and Chief Financial Officer |
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