google.brand.edgar-online.com/EFX_dll/...ionID=-7aiWHPDse-1WA7
--------
Item 1.01 Entry into Material Definitive Agreement
Washington Mutual, Inc. (the “ Company ”) entered into an Investment Agreement, dated as of April 7, 2008 (the “ Investment Agreement ”) with investment vehicles managed by TPG Capital (“ TPG ”), and Purchase Agreements also dated as of April 7, 2008 (the “ Purchase Agreements ”) with qualified institutional buyers and institutional accredited investors (collectively with TPG, the “ Investors ”), pursuant to which the Company raised in the aggregate approximately $7 billion through direct sales to such investors of equity securities of the Company (the “ Capital Investment ”). TPG served as the anchor investor, and the investment includes several of the Company’s largest institutional shareholders.
Under the terms of the Investment Agreement, TPG agreed to purchase 822,857 shares of the Company’s common stock at a purchase price of $8.75 per share and 19,928 shares of a newly authorized series of the Company’s convertible preferred stock, designated as Series T Contingent Convertible Perpetual Non-Cumulative Preferred Stock (the “ Series T Preferred Stock ”) at a purchase price and liquidation preference of $100,000 per share. After the receipt of certain approvals, as described in more detail below, the Series T Preferred Stock will automatically convert into the Company’s common stock at an initial conversion price of $8.75 per share of common stock, subject to adjustment. As part of the Investment Agreement, one of the TPG vehicles has the right to nominate one director, and one board observer, to the Company’s board of directors. Subject to certain exceptions, none of the securities sold to TPG under the Investment Agreement may be transferred for a period of 18 months after closing, with a proportional release from the transfer restrictions over the following 18 months after closing.
In connection with its investment, TPG will receive warrants which, upon obtaining certain approvals, including shareholder approval, will become exercisable to purchase 57,142,857 shares of the Company’s common stock at a purchase price equal to the lower of (i) 115% of the average closing price of the Company’s common stock for the five trading-day period following the public announcement of the Company’s results for the first quarter of 2008, and (ii) $10.06. The warrant exercise price will be reduced by $0.50 on each six-month anniversary of the issue date of the warrants subject to a maximum reduction of $2.00, if certain shareholder or other approvals relating to the exercise of the warrants are not obtained. The term of the warrants is five years. At any time before the receipt of the approvals necessary to exercise the warrants, the warrants can be exchanged for Series T Preferred Stock.
Under the terms of the Purchase Agreements, the Investors (other than TPG) purchased, in the aggregate, 175,514,285 shares of the Company’s common stock at a purchase price of $8.75 per share and 36,642 shares of a newly authorized series of the Company’s convertible preferred stock, designated as Series S Contingent Convertible Perpetual Non-Cumulative Preferred Stock (the “ Series S Preferred Stock ” and together with the Series T Preferred Stock, the “ Preferred Stock ”) at a purchase price of $100,000 per share. In addition, the Company will also grant certain Investors (other than TPG) who have agreed to transfer restrictions on their shares, warrants to purchase 11,159,820 shares of the Company’s common stock in the aggregate. The warrants are on substantially the same terms as the warrants granted to TPG, except that the warrants granted to such non-TPG Investors will be exchangeable for shares of Series S Preferred Stock. Assuming conversion of the Preferred Stock and exercise of the warrants purchased in connection with the Capital Investment, approximately 100,000,000 shares of the Company’s common stock will be subject to nine-month transfer restrictions, not including all of TPG’s shares, which will be subject to the 18-month transfer restrictions described above. The material terms of the Purchase Agreements entered into by the Investors other than TPG are substantially similar to the Investment Agreement entered into by TPG, except that the Purchase Agreements do not contain the director nomination and observer rights granted to TPG and, as indicated above, certain of the Purchase Agreements contain transfer restrictions for the nine-month period following the closing.
In the event that, within eighteen months of the closing of the transactions under the Investment Agreement, the Company (i) sells more than $500 million of common stock or other equity-linked securities at a price less than $8.75, or (ii) the Company engages in a change of control transaction wherein the implied value of the Company’s common stock is less than $8.75, upon the occurrence of each such event the Company is required to pay to those Investors whose shares are subject to transfer restrictions an amount sufficient to compensate them for the dilution suffered by them as a result of the above-described actions of the Company.
This description of the Investment Agreement is a summary and does not purport to be complete description of all of the terms of such agreement, and is qualified in its entirety by reference to the Investment Agreement, attached hereto as Exhibit 10.1.
Terms of the Preferred Stock
The rights, preferences and privileges of the Preferred Stock are set forth in the Articles of Amendment of the Company filed with the Secretary of State of the State of Washington.
The Series T Preferred Stock is mandatorily convertible into shares of common stock on the final day of any calendar quarter in which the Company and/or the holders of Preferred Stock receive the following approvals: (i) the approval by the holders of the Company’s common stock of (A) the conversion of the Preferred Stock into common stock as required by the applicable NYSE rules, and (B) amendment to the Company’s Restated and Amended Articles of Incorporation to increase the number of authorized shares of common stock to permit the full conversion of the Preferred Stock into common stock, and (ii) the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or the competition or merger control laws of other jurisdictions. The Series S Preferred Stock is mandatorily convertible upon receipt of the shareholder approvals described above. The Preferred Stock is initially convertible to shares of common stock at a rate of $8.75 per share of common stock; provided, however , such conversion price shall be reduced by $0.50, subject to a maximum reduction of $2.00, on each six-month anniversary of the original issue date if the shareholder approval described above has not been obtained.
Dividends on the Preferred Stock are payable, on a non-cumulative basis, as and if declared by the Company’s board of directors, in cash, on an as-converted basis. If the Preferred Stock has not been converted into shares of common stock by June 30, 2008, dividends will be payable commencing with the dividend payment date on September 15, 2008 at a rate of 14% of the liquidation preference of the Preferred Stock and this rate will further increase to 15.5% of the liquidation preference commencing with the dividend payment date on March 15, 2009 and to 17% of the liquidation preference commencing with the dividend payment date on September 15, 2009. However, dividends on the Preferred Stock will always be paid at the higher of the amount payable in accordance with the applicable percentage rate described above and the dividend payable on an as-converted basis. The Company is prohibited from paying any dividend with respect to shares of common stock unless full dividends are paid on the Preferred Stock. The Company is also prohibited from repurchasing or redeeming shares of its common stock or other junior securities, subject to certain exceptions, while any shares of Preferred Stock are outstanding.
The Preferred Stock is neither redeemable by the Company nor by the holders. Holders of the Preferred Stock do not have any voting rights, including the right to elect any directors, other than limited voting rights with respect to matters affecting the rights and privileges of the Preferred Stock.
This description of the terms of the Preferred Stock is a summary and does not purport to be a complete description of all of the terms, and it is qualified in its entirety by reference to the Articles of Amendment attached hereto as Exhibit 4.1. Also see Item 5.03 below.
Zurück
