fpt-8k072710.htm
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
Date of
Report (Date of earliest event reported): July 27, 2010
FIRST
PACTRUST BANCORP, INC.
(Exact
name of Registrant as specified in its Charter)
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Maryland
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000-49806
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04-3639825
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(State
or other jurisdiction
of
incorporation)
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(Commission
File No.)
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(IRS
Employer
Identification
No.)
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610
Bay Boulevard, Chula Vista, California
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91910
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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: (619) 691-1519
N/A
(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 (see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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x
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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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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¨
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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
Entry into a Material Definitive Agreement
On July
27, 2010, First PacTrust Bancorp, Inc. (the “Company”) entered into subscription
agreements (the “Subscription Agreements”) with selected institutional and other
accredited investors for the proposed sale for gross proceeds of $60.0 million
of the Company’s securities described below in a private placement (the “Private
Placement”) exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), pursuant to Section 4(2) and Regulation D
thereunder.
The Subscription Agreements provide
for, subject to the terms and conditions set forth therein, binding commitments
to purchase from the Company an aggregate of 4,529,075 shares of the
Company’s common stock, par value $.01 per share (“Voting Common Stock”) and an
aggregate of 925,470 shares of newly designated non-voting common stock, par
value $.01 per share, of the Company (the “Non-Voting Common Stock,” and
collectively with the Voting Common Stock, the “Common Stock”), at a price per
share of $11.00.
In addition, the Company intends to
enter into an employment agreement with Gregory Mitchell, who is expected to be
named Chief Executive Officer or President of the Company as soon as practicable
following the closing of the Private Placement, subject to regulatory
approval. Mr. Mitchell is the former Chief Executive Officer and
President of California National Bank and is currently a consultant to the
Company. Hans Ganz, currently the President and Chief Executive
Officer of the Company will remain as a member of the Company’s Board of
Directors and executive team, as well as President and Chief Executive Officer
of the Company’s subsidiary, Pacific Trust Bank. As soon as
practicable following the closing, the Company also intends to appoint Steven
Sugarman to the Board of Directors of the Company for a term to expire at the
Company’s annual meeting of stockholders to be held in 2013. Mr.
Sugarman is the managing member of COR Capital LLC.
The Subscription Agreements
provide for aggregate liquidated damages of $3.0 million payable to the
subscribers in the Private Placement if the transaction fails to close on or
before December 31, 2010 as a result of the Company’s breach of the Subscription
Agreements. In the event the transaction fails to close on or before December
31, 2010 as a result of a subscriber’s breach of its Subscription Agreement,
such subscriber must forfeit as liquidated damages 2.5% of the purchase price
for shares of Common Stock subscribed for by such subscriber. The transaction is
currently expected to be completed in the fourth quarter of 2010, subject to a
number of customary closing conditions, including the receipt of regulatory
approvals, if required, and the approval by the Company stockholders of the
issuance of the Common Stock in the transaction for purposes of Rule 5635 of the
NASDAQ Listing Rules. The Subscription Agreements may be terminated by the
Company or a subscriber under certain circumstances, including that the Company
or such subscriber, with respect to its subscription, may terminate if the
closing of the Private Placement has not occurred on or prior to
December 31, 2010.
As part of its subscription, at the
closing of the Private Placement, TCW Shared Opportunity Fund V, L.P., a
Delaware limited partnership, will be issued immediately exercisable warrants,
exercisable for a five-year term, to purchase 240,000 shares of Non-Voting
Common Stock at an exercise price of $11.00 per share. In addition, in
consideration for its consulting services to the Company preceding the closing
date of the Private Placement, COR Advisors LLC, a Delaware limited liability
company and an affiliate of COR Capital LLC, a Delaware limited liability
company and subscriber in the Private Placement, will be issued warrants to
purchase an aggregate of 1,560,000 shares of Non-Voting Common Stock at an
exercise price of $11.00 per share. COR Advisors LLC’s warrants
(together with the warrants issued to TCW Shared Opportunity Fund V, L.P., the
“Warrants”) will vest in equal amounts on a quarterly basis, with each tranche
exercisable for five years following the vesting date. In lieu of
Non-Voting Common Stock, shares of Voting Common Stock will be issued upon
exercise of the Warrants following the transfer of the Warrants to a third party
in a widely dispersed offering or in other limited circumstances set forth in
the Warrants. In addition, the Warrants held by TCW Shared
Opportunity Fund V, L.P. will be exercisable for Voting Common Stock in lieu of
Non-Voting Common Stock at TCW Shared Opportunity Fund V, L.P.’s election if it
then owns less than 4.99% of the outstanding shares of Voting Common Stock as a
result of dilution occurring from additional issuances of Voting Common Stock
subsequent to the Private Placement.
Under its Subscription Agreements with
TCW Shared Opportunity Fund V, L.P. and certain other subscribers, the Company
has agreed to use commercially reasonable best efforts to provide the applicable
subscriber, so long as it still holds at least 90% of the Common Stock purchased
under the applicable Subscription Agreement, with preemptive rights with respect
to public or private offerings of the Common Stock (or securities convertible
into Common Stock) during a three year period after the closing of the Private
Placement to enable TCW Shared Opportunity Fund V, L.P. and such subscribers to
maintain their percentage interests of Common Stock beneficially owned, subject
to certain exceptions, including exceptions that permits the Company to grant or
permit the exercise of ordinary course employee stock options and to issue
capital stock in consideration for certain strategic and non-financing
transactions. The Company has also agreed to use commercially
reasonable best efforts to provide TCW Shared Opportunity Fund V, L.P. and such
subscribers the opportunity to participate in future public or private offerings
of the Company’s other debt, equity or trust preferred securities, provided that
the Company will not be required to incur any expense, delay or risk to any such
offerings in connection therewith.
The
Company expects to use the net proceeds from the Private Placement for general
corporate purposes, which may include, without limitation, providing capital to
support the strength and growth of its subsidiary, Pacific Trust Bank, and
pursuing other strategic business opportunities in the Company’s
markets. The Company also intends to use approximately $19.3 million
of the net proceeds to redeem preferred stock issued to the U.S. Treasury under
the TARP Capital Purchase Program, upon receipt of required regulatory
approvals. If the Company redeems the preferred stock issued under
the TARP Capital Purchase Program, the Company intends to enter into agreements
with certain of its executive officers providing for the payment to these
officers of one-half of the amounts to which they would have been entitled under
their existing severance agreements with Pacific Trust Bank if the Private
Placement had constituted a “change in control” under such severance agreements
and the employment of the officers had ceased (other than for
cause). The pre-tax cost of such payments is estimated to be
approximately $1.6 million. Should any of these officers actually
cease employment with Pacific Trust Bank (other than a termination by Pacific
Trust Bank for cause) within three years following the closing of the Private
Placement, they would be entitled to the balance of the severance amounts under
their existing severance agreements.
In
addition, pursuant to the Subscription Agreements, subject to certain
limitations, the Company has agreed to prepare and file a registration statement
with the Securities and Exchange Commission within 30 business days following
the closing of the Private Placement to provide for the resale, from time to
time, of the Common Stock issued in the Private Placement and the shares of
Common Stock issuable upon exercise of the Warrants, and to use it reasonable
best efforts to cause such registration statement to be declared effective under
the Securities Act as soon as possible thereafter.
The
foregoing descriptions of the terms of the Subscription Agreements and Warrants
do not purport to be complete and are qualified in their entirety by reference
to such documents, forms of which are filed herewith as Exhibits 10.1, 10.2 and
10.3 and 4.1 and 4.2, respectively.
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
7.01 Regulation FD Disclosure
The materials furnished herewith as
Exhibit 99.1 hereto and incorporated by reference in this Item 7.01 have
been excerpted from materials made available to investors in connection with the
Private Placement.
Item
8.01 Other Events
On July 27, 2010, the Company issued
the press release announcing the Private Placement filed herewith as Exhibit
99.2.
In connection with the Private
Placement, the Company provided investors with “Risk Factors” updated from the
Company’s Annual Report on Form 10-K for the year ended December 31,
2009. The Company’s updated “Risk Factors” are filed herewith as
Exhibit 99.3.
Important
Information
Certain
investments discussed above involve the sale of securities in private
transactions that will not be registered under the Securities Act and will be
subject to the resale restrictions thereunder. Such securities may not be
offered or sold absent registration or an applicable exemption from
registration. This document does not constitute an offer to sell or a
solicitation of an offer to buy any securities, nor shall there be any sale of
securities in any state or jurisdiction in which such an offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
In
connection with the proposed Private Placement, the Company plans to file with
the Securities and Exchange Commission (the “SEC”) and mail to its stockholders
a proxy statement. The proxy statement related to the Private Placement will
contain important information about the proposed transaction, the Company and
related matters, including the current security holdings of the Company’s
officers and directors. Security holders of the Company are strongly encouraged
to carefully read the proxy statement and any other relevant documents filed
with the SEC related to the Private Placement.
The
Company and its respective directors and executive officers may be deemed to
participate in the solicitation of proxies in respect of the proposed
transaction. Information regarding the Company’s directors and executive
officers is available in the Company’s proxy statement for its 2010 annual
meeting of stockholders, which was filed with the SEC on March 22, 2010, and
will be contained in the proxy statement related to the Private
Placement.
The final
proxy statement will be mailed to stockholders of the Company. Investors and
security holders will be able to obtain copies of the documents free of charge
at the SEC’s website, www.sec.gov.
Cautionary
Notice Regarding Forward-Looking Statements
Certain information presented above
includes forward-looking statements within the meaning of the “Safe-Harbor”
provisions of the Private Securities Litigation Reform Act of 1995. These
statements are necessarily subject to risk and uncertainty and actual results
could differ materially due to various risk factors, including those set forth
from time to time in our other filings with the SEC. You should not place undue
reliance on forward-looking statements and we undertake no obligation to update
any such statements. In the information presented above we make forward-looking
statements about our ability to complete the sale of the Common Stock and our
intended use of proceeds from the sale of the Common Stock. Specific risks that
could cause results to differ from the forward-looking statements are set forth
in our filings with the SEC and include, without limitation, that we may not be
able to complete the sale of the Common Stock within the expected time frame,
that the requisite stockholder approval for the sale of the Common Stock and/or
any required regulatory approvals may not be obtained and that a deterioration
in the economy or our loan portfolio or other developments could alter our
intended use of the capital. The Company does not undertake any obligation to
update any forward-looking statement to reflect circumstances or events that
occur after the date on which the forward-looking statement is
made.
Item
9.01 – Financial Statements and Exhibits
(d) Exhibits:
The following exhibits are being
provided herewith:
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4.1
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Form
of Warrant to be issued to TCW Shared Opportunity Fund V,
L.P.
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4.2
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Form
of Warrant to be issued to COR Advisors LLC
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10.1
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Standard
Form of Subscription Agreement
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10.2
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Subscription
Agreement with TCW Shared Opportunity Fund V, L.P.
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10.3
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Subscription
Agreement with COR Capital LLC
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99.1
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Excerpted
Investor Material
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99.2
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Press
release dated July 27, 2010 announcing the Private
Placement
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99.3
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Updated
Risk Factors
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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 thereunto
duly authorized.
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FIRST
PACTRUST BANCORP, INC.
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Date:
July 27, 2010
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By:
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/s/
James P. Sheehy
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James
P. Sheehy
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Executive
Vice President, Treasurer and Secretary
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EXHIBIT
INDEX
Exhibit
No. Description
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4.1
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Form
of Warrant to be issued to TCW Shared Opportunity Fund V,
L.P.
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4.2
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Form
of Warrant to be issued to COR Advisors
LLC
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10.1
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Standard
Form of Subscription Agreement
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10.2
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Subscription
Agreement with TCW Shared Opportunity Fund V,
L.P.
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10.3
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Subscription
Agreement with COR Capital LLC
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99.1
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Excerpted
Investor Material
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99.2 Press
release dated July 27, 2010 announcing the Private Placement
99.3 Updated
Risk Factors