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Georgia
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No.
0-21656
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No.
58-180-7304
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(State
or other jurisdiction of
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(Commission
File Number)
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(IRS
Employer
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incorporation)
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Identification
No.)
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q
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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q
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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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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q
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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
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Entry
into a material definitive agreement.
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On
December 5, 2008, as part of the United States Department of the
Treasury’s (the “UST”) Capital Purchase Program (the “CPP”), United
Community Banks, Inc. (the “Registrant”) entered into an Agreement (the
“Purchase Agreement”) with the UST, pursuant to which the Registrant
agreed to issue and sell (i) 180,000 shares of the Registrant’s Fixed
Rate Cumulative Preferred Stock, Series B (the “Series B Preferred Stock”)
and (ii) a warrant (the “Warrant”) to purchase 2,132,701 shares of
the Registrant’s common stock, par value $1.00 per share (the “Common
Stock”), for an aggregate purchase price of $180,000,000 in
cash. The Purchase Agreement is attached as Exhibit 10.1
hereto and is incorporated herein by reference and a form of the
certificate for the Series B Preferred Stock is attached as
Exhibit 4.1.
The
Series B 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 B Preferred Stock may
be redeemed by the Registrant after three years for the per share
liquidation amount of $1,000 plus any accrued and unpaid
dividends. Prior to the end of three years, the Series B
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 Amendment to the Registrant’s Restated Articles of Incorporation,
as amended (the “Amendment”) described in Item 5.03
below. The Series B Preferred Stock will be non-voting except
for class voting rights on matters that would adversely affect the rights
of the holders of the Series B Preferred Stock.
As
part of its purchase of the Series B Preferred Stock, the UST received the
Warrant. 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 $12.66 per share of the Common
Stock. If the Registrant receives aggregate gross cash proceeds
of not less than $180,000,000 from Qualified Equity Offerings on or prior
to December 31, 2009, the number of shares of Common Stock issuable
pursuant to the UST’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, the
UST has agreed not to exercise voting power with respect to any shares of
Common Stock issued upon exercise of the Warrant. The Warrant
is attached as Exhibit 4.2 hereto and is incorporated herein by
reference.
The
Series B 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. Upon the request of the UST
at any time, the Registrant has agreed to promptly enter into a deposit
arrangement pursuant to which the Series B Preferred Stock may be
deposited and depositary shares (“Depositary Shares”), representing
fractional shares of Series B Preferred Stock, may be
issued. The Registrant has agreed to register the Series B
Preferred Stock, the Warrant, the shares of Common Stock underlying the
Warrant (the “Warrant Shares”) and the Depositary Shares, if any, as soon
as practicable after the date of the issuance of the Series B Preferred
Stock and the Warrant. Neither the Series B Preferred Stock nor
the Warrant will be subject to any contractual restrictions on transfer,
except that the UST 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 B Preferred Stock and December 31,
2009.
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In
the Purchase Agreement, the Registrant agreed that, until such time as the
UST 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 B Preferred Stock and the
Warrant, and has agreed to not adopt any benefit plans with respect to, or
which covers, its senior executive officers that do not comply with the
EESA, and the applicable executives have consented to the
foregoing. Each of the Registrant’s senior executive officers
executed a waiver voluntarily waiving any claim against the UST or the
Registrant for any changes to such senior executive officer’s compensation
or benefits that are required to comply with the limitations contained in
the EESA or any regulation thereunder.
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Item
3.02.
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Unregistered
sales of equity securities.
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The
information set forth above 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
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Material
modification to rights of securityholders.
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Upon
issuance of the Series B Preferred Stock on December 5, 2008, 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 and Series A Non-Cumulative Preferred Stock (the “Series A
Preferred Stock”) will be subject to restrictions, including the
Registrant’s restriction against increasing dividends from the last
quarterly cash dividend per share, as adjusted for the Registrant’s
subsequent stock dividends and other similar actions, ($0.089) declared on
the Common Stock prior to December 5, 2008. The redemption,
purchase or other acquisition of the Registrant’s 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 Purchase Agreement, also will be restricted. These
restrictions will terminate on the earlier of (i) the third
anniversary of the date of issuance of the Series B Preferred Stock and
(ii) the date on which the Series B Preferred Stock has been redeemed
in whole or the UST has transferred all of the Series B Preferred Stock to
third parties. The restrictions described in this paragraph are
set forth in the Purchase Agreement.
In
addition, pursuant to the Amendment, 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 and Series
A Preferred 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 B Preferred
Stock. These restrictions are set forth in the Amendment
described in Item 5.03.
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Item
5.02.
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Departure
of directors or certain officers; election of directors; appointment of
certain officers; compensatory arrangements of certain
officers.
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The
information concerning executive compensation set forth under “Item 1.01.
Entry into a Material Definitive Agreement” is incorporated by reference
into this Item 5.02.
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Item
5.03
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Amendment
to articles of incorporation or bylaws; change in fiscal
year.
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On
December 4, 2008, the Registrant filed the Amendment with the Georgia
Secretary of State for the purposes of amending its Restated Articles of
Incorporation, as amended, to fix the designations, preferences,
limitations and relative rights of the Series B Preferred
Stock. The Series B Preferred Stock has a liquidation
preference of $1,000 per share. The Amendment is attached
hereto as Exhibit 3.1 and is incorporated by reference
herein.
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Item
8.01
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Other
events.
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On
December 5, 2008 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 herein
by reference.
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Item
9.01
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Financial
statements and exhibits.
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(d)
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Exhibits
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Exhibit
No.
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Description
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3.1
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Amendment
to the Amended and Restated Articles of Incorporation
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4.1
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Form
of Certificate for the Series B 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 December 5, 2008, between the Registrant and the UST,
with respect to the issuance and sale of the Series B Preferred Stock and
the Warrant
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99.1
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Press
Release dated December 5, 2008
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/s/ Rex S. Schuette
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Rex
S. Schuette
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Executive
Vice President and
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Chief
Financial Officer
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