United
States
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
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Date
of report (Date of earliest event reported): January 23,
2009
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(Exact
Name of Registrant as Specified in Its Charter)
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Indiana
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0-6233
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35-1068133
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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100
North Michigan Street, South Bend, Indiana
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46601
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(574)235-2000
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(Registrant’s
Telephone Number, Including Area Code)
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N/A
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(Former
Name or Former Address, if Changed Since Last
Report)
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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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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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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
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On
January 23, 2009, 1st Source Corporation (the “Registrant”) entered into a
Letter Agreement (the “Purchase Agreement”) with the United States Department of
the Treasury (“Treasury”), pursuant to which the Registrant agreed to issue and
sell (i) 111,000 shares of the Registrant’s Fixed Rate Cumulative Perpetual
Preferred Stock, Series A (the “Series A Preferred Stock”) and (ii) a
warrant (the “Warrant”) to purchase 837,947 shares of the Registrant’s common
stock, without par value (the “Common Stock”), for an aggregate purchase price
of $111,000,000 in cash. The Purchase Agreement is attached as Exhibit 10.1 hereto
and is incorporated herein by reference.
The
Series A Preferred Stock will qualify as Tier 1 capital and will pay cumulative
dividends at a rate of 5% per annum for the first five years, and
9% per annum thereafter. The Series A Preferred Stock is non-voting except
with respect to certain matters affecting the rights of the holders thereof, and
may be redeemed by the Registrant after three years. Prior to the end of three
years, the Series A Preferred Stock may be redeemed by the Registrant only with
proceeds from the sale of qualifying equity securities of the Registrant (a
“Qualified Equity Offering”). The restrictions on redemption are set forth in
the Certificate of Designations described in Item 5.03 below.
The
Warrant has a 10-year term and is immediately exercisable upon its issuance,
with an exercise price, subject to anti-dilution adjustments, equal to $19.87
per share of the Common Stock. The Warrant is attached as Exhibit 4.2 hereto
and is incorporated herein by reference. If the Registrant receives aggregate
gross cash proceeds of not less than $111,000,000 from Qualified Equity
Offerings on or prior to December 31, 2009, the number of shares of Common Stock
issuable pursuant to Treasury’s exercise of the Warrant will be reduced by one
half of the original number of shares, taking into account all adjustments,
underlying the Warrant. Pursuant to the Purchase Agreement, Treasury has agreed
not to exercise voting power with respect to any shares of Common Stock issued
upon exercise of the Warrant.
The
Series A Preferred Stock and the Warrant were issued in a private placement
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended. The Registrant has agreed to register the Warrant and the shares of
Common Stock underlying the Warrant (the “Warrant Shares”) as soon as
practicable after the date of the issuance of the Warrant. Neither the Series A
Preferred Stock nor the Warrant will be subject to any contractual restrictions
on transfer, except that Treasury may only transfer or exercise an aggregate of
one-half of the Warrant Shares prior to the earlier of the redemption of 100% of
the shares of Series A Preferred Stock and December 31, 2009. A transferee
will be able to exercise voting powers with respect to any Warrant Shares it
acquires.
In the
Purchase Agreement, the Registrant agreed that, until such time as Treasury
ceases to own any debt or equity securities of the Registrant acquired pursuant
to the Purchase Agreement, the Registrant will take all necessary action to
ensure that its benefit plans with respect to its senior executive officers
comply with Section 111(b) of the Emergency Economic Stabilization Act of
2008 (the “EESA”) as implemented by any guidance or regulation under the EESA
that has been issued and is in effect as of the date of issuance of the Series A
Preferred Stock and the Warrant, and has agreed not to adopt any benefit plans
with respect to, or which cover, its senior executive officers that do not
comply with the EESA, and the applicable executives have consented to the
foregoing.
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Item
3.02. Unregistered
Sales of Equity Securities
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The
information set forth under “Item 1.01 Entry into a Material Definitive
Agreement” is incorporated by reference into this Item 3.02.
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Item
3.03 Material
Modification to Rights of Securityholders
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Upon
issuance of the Series A Preferred Stock on January 23, 2009, the ability of the
Registrant to declare or pay dividends or distributions on, or purchase, redeem
or otherwise acquire for consideration, shares of its Common Stock will be
subject to restrictions, including the Registrant’s restriction against
increasing dividends from the last quarterly cash dividend per share ($0.16)
declared on the Common Stock prior to the issue date of the Series A Preferred
Stock and Warrant. The redemption, purchase or other acquisition of trust
preferred securities of the Registrant or its affiliates also will be
restricted. These restrictions will terminate on the earlier of (a) the
third anniversary of the date of issuance of the Series A Preferred Stock and
(b) the date on which the Series A Preferred Stock has been redeemed in
whole or Treasury has transferred all of the Series A Preferred Stock to third
parties. The restrictions described in this paragraph are set forth in the
Purchase Agreement.
In
addition, pursuant to the Certificate of Designations, the ability of the
Registrant to declare or pay dividends or distributions on, or repurchase,
redeem or otherwise acquire for consideration, shares of its Common Stock will
be subject to restrictions in the event that the Registrant fails to declare and
pay full dividends (or declare and set aside a sum sufficient for payment
thereof) on its Series A Preferred Stock. These restrictions are set forth in
the Certificate of Designations described in Item 5.03.
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Item
5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
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In
connection with the events described above under “Item 1.01 Entry into a
Material Definitive Agreement,” which is incorporated by reference into this
Item 5.02, on January 23, 2009, each of the Registrant’s Senior Executive
Officers entered in a CCP Compensation Limitation Agreement with the Registrant
for the purpose of amending their respective compensation, bonus, incentive and
other benefit plans, arrangements and agreements (including golden parachute,
severance and employment agreements) in order to comply with the executive
compensation and corporate governance requirements of Section 111(b) of the
EESA. Each Senior Executive Officer also executed a Waiver voluntarily waiving
any claim against the Registrant or Treasury for any changes to such person’s
compensation and benefits required to comply with Section 111(b) of the EESA.
The form of the CCP Compensation Limitation Agreement is attached as Exhibit 10.2 and the
form of Waiver is attached as Exhibit 10.3 hereto,
and each is incorporated by reference into this Item 5.02.
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Item
5.03. Amendment
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
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On
January 21, 2009, the Registrant filed a Certificate of Designations (the
“Certificate of Designations”) with the Indiana Secretary of State for the
purpose of amending its Articles of Incorporation to fix the designations,
preferences, limitations and relative rights of the Series A Preferred Stock.
The Series A Preferred Stock has a liquidation preference of $1,000 per share.
The Certificate of Designations is attached hereto as Exhibit 3.1 and is
incorporated by reference herein.
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Item
8.01. Other
Events
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On
January 23, 2009, the Registrant issued a press release announcing the
consummation of the transactions described above under “Item 1.01 Entry into a
Material Definitive Agreement.” A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated by reference
herein.
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Item
9.01. Financial
Statements and Exhibits
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(d)
Exhibits.
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Exhibit
No.
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Description
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3.1
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Certificate
of Designations for Series A Preferred Stock
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4.1
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Form
of Certificate for Series A Preferred Stock
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4.2
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Warrant
for Purchase of Shares of Common Stock
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10.1
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Letter
Agreement dated January 23, 2009 by and between the Registrant and the
United States Department of the Treasury, including the Securities
Purchase Agreement - Standard Terms incorporated by reference
therein
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10.2
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Form
of CPP Compensation
Limitation Agreement
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10.3
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Form
of Waiver
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99.1
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Press
Release dated January 23,
2009
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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 hereto
duly authorized.
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Date:
January 23, 2009
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1st
Source Corporation
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By:
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/s/
Christopher J. Murphy III
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Christopher
J. Murphy III
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Chairman,
President and Chief Executive
Officer
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