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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 29, 2009
Flagstar Bancorp, Inc.
(Exact name of registrant as specified in its charter)
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Michigan
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1-16577
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38-3150651 |
(State or other jurisdiction of
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(Commission File
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(I.R.S. Employer |
incorporation)
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Number)
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Identification No.) |
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5151 Corporate Drive, Troy, Michigan
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48098 |
(Address of principal executive offices)
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(Zip Code) |
(248) 312-2000
(Registrants telephone number, including area code)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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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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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
Departure of Directors or Certain Officers
On September 30, 2009, Mark T. Hammond stepped down as President and Chief Executive Officer of the
Company and its wholly-owned subsidiary, Flagstar Bank, FSB (the Bank). As previously announced,
Mr. Hammond continues to serve as Vice-Chairman of the Board of Directors of both companies and to
be employed as a non-officer Executive Advisor of the Company.
On September 29, 2009, B. Brian Tauber resigned as a member of the Boards of Directors of the
Company and the Bank.
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On September 29, 2009, the Boards of Directors of the Company and the Bank approved the employment
agreement (Employment Agreement) of Joseph P. Campanelli to serve as President and Chief
Executive Officer of both companies. On September 29, 2009, the Boards of Directors of the Company
and the Bank also elected Mr. Campanelli as a member of the Boards of Directors of both companies.
Mr. Campanelli was appointed for a term to expire at the Companys 2010 Annual Meeting of
Stockholders. Mr. Campanelli will not be compensated for his services as a director.
Mr. Campanelli, age 53, was President and Chief Executive Officer and a member of the Board of
Directors of Sovereign Bancorp, Inc. and Sovereign Bank until September 30, 2008. From October 1,
2008 until joining Flagstar, Mr. Campanelli advised various investment groups on banking matters.
Mr. Campanelli originally joined Sovereign Bank in 1997 when it acquired Fleet Financial Groups
indirect auto lending business, which he headed. He became President and Chief Operating Officer
of Sovereigns New England Division in 1999 when Sovereign acquired 268 branches that Fleet
divested after its merger with Bank Boston Corp. Mr. Campanelli played an active role in the
branches acquisition and integration, which at the time was the largest branch and business
divestiture in U.S. banking history. Prior to his employment by Sovereign, Mr. Campanelli spent
nearly 20 years serving in a variety of executive positions with both Fleet and Shawmut Bank. He
began his banking career in Hartford, Connecticut in 1979.
The significant terms of the Employment Agreement are summarized below:
Term. The Employment Agreement continues through December 31, 2009 (the Stub
Period) and from the end of the Stub Period to December 31, 2012 (the Initial Term).
Thereafter, it shall continue for successive terms of one (1) year following the Initial Term. The
Stub Period, the Initial Term and each one-year term thereafter are collectively referred to as the
Term. The Company and Mr. Campanelli may terminate the Employment Agreement by giving notice two
months prior to the end of the Initial Term and any subsequent year.
Salary. Mr. Campanellis base salary under the Employment Agreement during the
Stub Period is $158,333 per month and during the Initial Term is $1,900,000 annually. Following
the Initial Term, the annual base salary shall be reviewed for adjustment at the discretion of the
Board of Directors annually (but may not be decreased below $1,100,000). Mr. Campanellis share
salary under the Employment Agreement during the Stub Period is $62,500 per month and during the
Initial Term is $750,000 annually. Following the Initial Term, the annual share salary shall be
reviewed for increase (but not decrease) at the discretion of the Board of Directors annually. The
share salary shall be paid in shares of the Companys common stock.
Discretionary Shares. The Company may grant to Mr. Campanelli (as determined by
the Board of Directors or a committee thereof, in its sole discretion) restricted shares of the
Companys common stock in an amount equal up to 33% of his annual compensation (as defined in the
Emergency Economic Stabilization Act of 2008, as amended, and the regulations promulgated
thereunder (the TARP Rules)) at the Companys discretion.
Supplemental Retirement Pension. On the last day of each of the first 60 months of the Term, the
Company will accrue for the benefit of Mr. Campanelli, a supplemental retirement accrual equal to
1.022% of the sum of the
base salary and share salary, provided Mr. Campanelli is still employed by the Company on
the date of each such monthly accrual.
Share Purchase. In accordance with the terms of the Employment Agreement, the
Company and Mr. Campanelli entered into a purchase agreement, dated as of September 29, 2009 (the
Purchase Agreement), pursuant to which Mr. Campanelli will purchase 1,987,500 shares of the
Common Stock at a purchase price of $1.05 per share (the closing price of the Common Stock on
September 28, 2009). Mr. Campanelli will purchase 375,000 shares of Common Stock after the
effectiveness of the Employment Agreement, will purchase 150,000 shares of Common Stock on December
31, 2009, and will purchase 243,750 shares of Common Stock on each June 30 and December 31 in 2010,
2011 and 2012.
Business Expenses and Fringe Benefits. During the Term, Mr. Campanelli will be
entitled to reimbursement of all business expenses that are reasonable and appropriate. In
addition, Mr. Campanelli will receive such fringe and other benefits and prerequisites as are
regularly and generally provided to other senior executives of the Company, subject to, among other
things, the TARP Rules.
Covenant not to Compete or Solicit. Mr. Campanelli has agreed that during the term
of the Employment Agreement and for a period of one year following termination of his employment
with the Company other than for Good Reason (as defined in Section 2.08 of the Employment
Agreement) or any termination of Mr. Campanellis employment by the Company, Mr. Campanelli will
not, directly or indirectly, on behalf of himself or any other person or entity, hire, engage or
solicit to hire for employment or consulting or other provision of services, any person who is
actively employed (or in the six months preceding Mr. Campanellis termination of employment with
the Company was actively employed) by the Company, except for rehire by the Company.
Agreement Subject to TARP. So long as the Company is subject to the TARP Rules,
the provisions of the Employment Agreement are subject to and shall be interpreted to be consistent
with such requirements.
The foregoing summary of the Employment Agreement, including the Purchase Agreement attached as
Exhibit A thereto, does not purport to be complete and is qualified in its entirety by a copy of
the Employment Agreement, including the Purchase Agreement attached as Exhibit A thereto, which is
attached hereto and filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated
herein by reference.
Item 7.01. Regulation FD Disclosure.
On October 1, 2009, the Company issued a press release announcing that Joseph P. Campanelli was
appointed President and Chief Executive Officer of the Company and the Bank and elected as a member
of the Board of Directors of the Company and the Bank. A copy of the press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Item 7.01, including the exhibit attached hereto, is furnished pursuant to
Item 7.01 and shall not be deemed filed for any other purpose, including for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise
subject to the liabilities of that Section. The information in this Item 7.01 of this Current
Report on Form 8-K shall not be deemed incorporated by reference into any filing under the
Securities Act of 1933 or the Exchange Act regardless of any general incorporation language in such
filing unless specifically provided otherwise.
Item 9.01 Financial Statements and Exhibits
(c) The following exhibits are being furnished herewith:
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Exhibit No. |
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Exhibit Description |
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10.1
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Employment Agreement dated September 29, 2009 |
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99.1
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Press Release dated October 1, 2009 |
SIGNATURE
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, hereunto duly authorized.
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FLAGSTAR BANCORP, INC.
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Dated: October 2, 2009 |
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/s/ Paul D. Borja
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Paul D. Borja |
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Executive Vice-President and CFO |
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