Item 1.01. Entry into a Material Definitive Agreement.
On December 23, 2008, M&T Bank Corporation, a New York corporation (the
"Company"), entered into a letter agreement, including a Securities Purchase
Agreement-Standard Terms incorporated therein (collectively, the "Agreement"),
with the U.S. Department of the Treasury (the "Treasury") pursuant to the
Troubled Asset Relief Program Capital Purchase Program. A copy of the Agreement
is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Under the Agreement, the Company issued to the Treasury, on December 23,
2008, 600,000 shares of Preferred Stock (as defined below) and a ten-year
warrant (the "Warrant") to purchase up to 1,218,522 shares of the Company's
common stock, par value $0.50 per share ("Common Stock"), at an initial exercise
price of $73.86 per share, subject to certain anti-dilution and other
adjustments, for an aggregate purchase price of $600 million in cash. A copy of
the Warrant is attached hereto as Exhibit 4.1 and is incorporated herein by
reference.
The issuance and sale of the Preferred Stock and the Warrant are exempt from
the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 4(2) of the Securities Act.
The Preferred Stock, which qualifies as Tier 1 capital, will bear cumulative
compounding dividends at a rate of 5% per year for the first five years and 9%
per year thereafter, in each case, applied to the liquidation preference
thereof, but will only be paid when, as and if declared by the Company's Board
of Directors out of funds legally available therefor. The Company may not redeem
the Preferred Stock for the first three years except with the proceeds from one
or more "Qualified Equity Offerings" (as defined in the amendment to the
Company's Certificate of Incorporation described in Item 5.03). After three
years, the Company may redeem shares of the Preferred Stock for the per share
liquidation preference plus any accrued and unpaid dividends.
The Agreement contains limitations on certain actions of the Company,
including but not limited to, the payment of cash dividends on Common Stock in
excess of the current quarterly cash dividend of $0.70 per share and the
repurchase of Common Stock during the first three years, unless all of the
Preferred Stock has been redeemed or transferred to third parties or the
Treasury otherwise consents, and grants the holders of the Preferred Stock, the
Warrant and the Common Stock to be issued under the Warrant certain registration
rights.
In the Agreement, the Company agreed that, until such time as the Treasury
ceases to own any securities acquired pursuant to the Agreement, the Company's
employee benefit plans and other executive compensation arrangements for its
senior executive officers must comply in all respects with Section 111(b) of the
Emergency Economic Stabilization Act of 2008 (the "EESA"). In connection
therewith, the applicable executives consented to the amendment of any such
plans or arrangements and waived any and all claims against the Treasury and the
Company for any such amendments necessary for the Company to comply with the
requirements of Section 111(b) of the EESA.
The foregoing description of the Agreement does not purport to be complete
and is qualified in its entirety by reference to the Agreement, which is
attached hereto as Exhibit 10.1, and is incorporated herein by reference.
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Item 5.03. Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal
Year.
On December 19, 2008, the Company filed with the New York State Department of
State a Certificate of Amendment to Certificate of Incorporation for the purpose
of fixing the designations, preferences, limitations and relative rights of a
new series of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, par
value $1.00 per share and liquidation preference of $1,000 per share (the
"Preferred Stock") in connection with the Agreement. The Certificate of
Amendment to Certificate of Incorporation was effective immediately upon filing.
A copy of the Certificate of Amendment to Certificate of Incorporation is
attached hereto as Exhibit 3.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
3.1 Certificate of Amendment to Certificate of Incorporation with respect to
Fixed Rate Cumulative Perpetual Preferred Stock, Series A dated
December 19, 2008.
4.1 Warrant to Purchase Shares of M&T Bank Corporation Common Stock dated
December 23, 2008.
10.1 Letter Agreement including the Securities Purchase Agreement-Standard
Terms incorporated therein, between M&T Bank Corporation and the U.S.
Department of the Treasury, dated December 23, 2008.
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