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
Date of Report (Date of earliest event reported): September 25, 1997
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IBW Financial Corporation
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(Exact name of registrant as specified in its charter)
District of Columbia 0-28360 52-1943477
(State or other jurisdiction (Commission file number) (IRS Employer
of incorporation) Identification Number)
4812 Georgia Avenue, NW, Washington, DC 20011
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (202) 722-2000
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Item 5. Other Events.
On September 25, 1997, the shareholders of IBW Financial Corporation (the
"Company") approved the amendment of the Articles of Incorporation of the
Company to change the capital stock of the Company to eliminate the existing
class of 1,000,000 undesignated preferred stock, of which no shares were
outstanding, and to authorize the issuance of 500,000 shares of undesignated
voting preferred stock and 500,000 shares of undesignated non-voting preferred
stock. The complete composite text of the Articles of Incorporation of the
Company, as amended, is included as Exhibit 1 to this report, incorporated by
reference herein and made a part hereof.
On September 29, 1997, the Company completed the sale of 31,200 shares of
its common stock and 20,000 shares of its Series A Non-Voting Preferred Stock,
in a private placement transaction, to the Federal National Mortgage Association
("Fannie Mae"), at a price of $25.00 per share of common stock and $25.00 per
share of Series A Non-Voting Preferred Stock (the shares of common stock and
shares of Series A Non-Voting Preferred Stock sold to Fannie Mae referred to
collectively herein as the "Shares"), for a total purchase price of $1,280,000,
pursuant to an agreement dated August 15, 1997. The shares of common stock
issued to Fannie Mae represent approximately 4.67% of the outstanding shares of
the Company's common stock, and the shares of Series A Non-Voting Preferred
Stock represent all of the authorized shares of that series. The Series A
Non-Voting Preferred Stock, which is redeemable at any time by the Company at a
redemption price of $25.00 plus accrued but unpaid dividends to the date of
redemption, is entitled to annual dividends at a rate of five percent. The
complete terms of the Series A NonVoting Preferred Stock are attached as Exhibit
2 hereto, incorporated by reference herein and made a part hereof.
Under the stock purchase agreement, the Company is restricted from taking
any action, including the repurchase, redemption or other reduction in the
number of outstanding shares of capital stock, but not including the incurrence
of losses, which would result in the value of the Shares representing 10% or
more of the equity of the Company, or the shares of common stock sold to Fannie
Mae representing 5% or more of the outstanding common stock. The Company has
certain rights under the agreement to repurchase the Shares under certain
circumstances.
The Company will contribute $980,000 of the proceeds of the sale to
Industrial Bank, National Association, Oxon Hill, Maryland, the wholly owned
subsidiary of the Company, for use in connection with its mortgage and housing
related lending operations, and the promotion of affordable housing in its
market area. The remaining proceeds will be retained at the Company for general
corporate purposes.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. Not applicable.
(b) Pro Forma Financial Information. Not Applicable.
(c) Exhibits.
Number Description
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1 Articles of Incorporation of the Company, as amended
2 Designation of the Series A Non-Voting Preferred Stock
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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 hereunto duly authorized.
IBW FINANCIAL CORPORATION
By: /s/ B. Doyle Mitchell, Jr.
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B. Doyle Mitchell, Jr., President
Dated: October 6, 1997
Exhibit 1
ARTICLES OF INCORPORATION
OF
IBW FINANCIAL CORPORATION
as amended
ARTICLE I
The name of the corporation shall be "IBW Financial Corporation"
(hereinafter the "corporation"), and its principal offices shall be located at,
and its mailing address shall be, 4812 Georgia Avenue, N.W., Washington, D.C.
20011.
ARTICLE II
The purposes for which the corporation is organized are:
(a) To act as the holding company for one or more national banking
associations, state chartered commercial banking institutions, state or
federally chartered thrift institutions, or other financial institutions, and to
engage in any other activity determined, by statute, by decree or opinion of any
court of competent jurisdiction, or by rule, regulation, order, opinion, or
other proclamation, pronouncement or ruling of the Board of Governors of the
Federal Reserve System or other appropriate bank regulatory authority, to be
closely related to banking, or any activity which is otherwise authorized for,
or which is not prohibited to, bank holding companies.
(b) To do any other lawful acts, matters and things necessary, useful,
suitable, proper or convenient for the furtherance or accomplishment of the
above-described purpose of the corporation.
(c) Notwithstanding anything to the contrary contained in this Article II,
and not in limitation of the activities of any lawfully authorized banking
subsidiary which the corporation may acquire or establish, the corporation shall
not engage in the business of a bank of savings or deposit.
ARTICLE III
The term for which the corporation shall exist shall be perpetual.
ARTICLE IV
The aggregate number of all classes of stock which the corporation shall
have authority to issue shall be two million shares (2,000,000), consisting of
one million shares of common stock, par value $1.00 per share, five hundred
thousand shares (500,000) of voting preferred stock, par value $1.00 per share
("voting preferred stock"), and five hundred thousand shares (500,000) of
non-voting preferred stock, par value $1.00 per share ("non-voting preferred
stock").
The shares of authorized common stock shall be of a single class and shall
be identical and have equal rights and privileges.
The Board of Directors, by action of a majority of the full Board of
Directors shall have the authority to issue the shares of voting preferred stock
from time to time on such terms as it may determine, and to divide the voting
preferred stock into one or more classes or series, and, in connection with the
creation of such classes or series to fix by resolution or resolutions the
designations, voting powers, preferences, participation, redemption, sinking
fund, conversion, dividend, and other optional or special rights of such classes
or series, and the qualifications, limitations or restrictions thereof.
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The Board of Directors, by action of a majority of the full Board of
Directors shall have the authority to issue the shares of non-voting preferred
stock from time to time on such terms as it may determine, and to divide the
non-voting preferred stock into one or more classes or series, and, in
connection with the creation of such classes or series to fix by resolution or
resolutions the designations, powers, preferences, participation, redemption,
sinking fund, conversion, dividend, and other optional or special rights of such
classes or series, and the qualifications, limitations or restrictions thereof.
Except as expressly required by the laws of the District of Columbia, shares of
non-voting preferred stock shall not be entitled to vote on any matter submitted
to the vote of shareholders, including but not limited to the election of
directors.
The holders of the capital stock of the corporation shall not have any
preemptive or preferential rights to purchase or otherwise acquire any shares of
any class of capital stock of the corporation, whether now or hereafter
authorized, or any unissued bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for shares of any class or
series or carrying any right to purchase shares of any class or series except as
the Board of Directors may specifically provide.
ARTICLE V
The minimum amount of capital with which the corporation shall commence
business shall not be less than One Thousand Dollars ($1,000.00).
ARTICLE VI
The street address of the initial registered office of the corporation is
4812 Georgia Avenue, N.W., Washington, D.C. 20011, and the name of the initial
registered agent of the corporation at such address is Massie S. Fleming.
ARTICLE VII
Regulation of the internal affairs of the corporation shall be governed by
the corporation's bylaws, as amended from time to time.
ARTICLE VIII
(a) The number of directors constituting the entire board shall be as set forth
in the bylaws of the corporation, as such may be amended from time to time,
provided that the number of directors shall be ten (10) until the bylaws shall
provide for a greater or lesser number of directors, and further provided that
any amendment of the bylaws which has the effect of reducing the number of
directors shall not act so as to shorten the term of any director then in
office.
(b) Notwithstanding any other provision of these Articles of Incorporation or
the bylaws of the corporation, and notwithstanding any provision of law
specifying a lesser percentage, any director or the entire board of directors
may be removed at any time for cause, upon the vote of two-thirds of the
directors constituting the entire board of directors, or upon the affirmative
vote of the holders of two-thirds or more of the total number of votes entitled
to be cast by holders of all outstanding shares of all classes of capital stock
entitled to vote generally in the election of directors, voting as a single
class. Notwithstanding the foregoing, and except as provided by law, where the
holders of any class or series of preferred stock, voting separately as a class,
have the right to elect one or more directors, the provision of this subsection
(b) shall apply with respect to such director or directors elected by such class
to the vote of the holders of the outstanding shares of such class of preferred
stock and not the vote of the outstanding shares of all the capital stock of the
corporation. This subsection (b) may be amended only by the affirmative vote of
the holders of two-thirds or more of the total number of votes entitled to be
cast by holders of all of the outstanding shares of capital stock entitled to
vote generally in the election of directors.
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ARTICLE IX
In the event the board of directors shall evaluate a business combination,
the directors may consider, among other things, the following factors: the
effect of the business combination on the corporation and its subsidiaries, and
their respective stockholders, employees, customers and the communities which
they serve; the timing of the proposed business combination; the risk that the
proposed business combination will not be consummated; the reputation,
management capability and performance history of the person proposing the
business combination; the current market price of the corporation's capital
stock; the relation of the price offered to the current value of the corporation
in a freely negotiated transaction and in relation to the directors' estimate of
the future value of the corporation and its subsidiaries as an independent
entity or entities; tax consequences of the business combination to the
corporation and its stockholders; and such other factors deemed by the directors
to be relevant. In such considerations, the board of directors may consider all
or certain of such factors as a whole and may or may not assign relative weights
to any of them. The foregoing is not intended as a definitive list of factors
which may be considered by the board of directors in the discharge of their
fiduciary responsibility to the corporation and its stockholders, but rather to
guide such consideration and to provide specific authority for the consideration
by the board of directors of factors which are not purely economic in nature in
light of the circumstances of the corporation and its subsidiaries at the time
of such proposed business combination.
ARTICLE X
The corporation may to the fullest extent permitted by the Business
Corporation Act of the District of Columbia (including, without limitation,
Section 29-304 (16) thereof), as the same may be amended from time to time,
indemnify any and all of its directors or officers or former directors or
officers or any person who may have served at its request as a director or
officer of another corporation in which it owns shares of capital stock or of
which it is a creditor, against expenses actually and necessarily incurred by
them in connection with the defense of any action, suit, or proceeding in which
they, or any of them, are made parties, or a party, by reason of being or having
been directors or officers or a director or officer of the corporation, or of
such other corporation. Such indemnification shall not be deemed exclusive of
any other rights to which those indemnified may be entitled, under any bylaw,
agreement, vote of stockholders, or otherwise.
ARTICLE XI
The corporation reserves the right to repeal, alter, amend or rescind any
provision contained in these Articles of Incorporation in the manner now or
hereinafter prescribed by law, and all rights granted to shareholders herein are
granted subject to this reservation. Notwithstanding the foregoing, except as
otherwise expressly provided in these Articles of Incorporation, these Articles
of Incorporation may be amended upon the affirmative vote of a majority of the
total number of votes entitled to be cast on any such amendment.
Exhibit 2
DESIGNATION OF THE SERIES A NON-VOTING PREFERRED STOCK
Series A Non-Voting Preferred Stock. (a) Designation. The series of
non-voting preferred stock shall be designated and known as "Series A Non-Voting
Preferred Stock."
(b) Number of Shares. The Series A Non-Voting Preferred Stock shall consist
of twenty thousand (20,000) shares of the authorized non-voting preferred stock,
$1.00 par value, of the Company.
(c) Rank. The Series A Non-Voting Preferred Stock shall rank prior to
common stock of all classes (collectively, the "Common Stock") of the Company
and, except as provided below, to all other classes and series of equity
securities of the Company now or hereafter authorized, issued or outstanding
(the Common Stock and such other classes and series of equity securities of the
Company are collectively referred to herein as the "Junior Stock"), other than
any class or series of equity securities of the Company expressly designated as
ranking on a parity with (the "Parity Stock") or senior to (the "Senior Stock")
the Series A Non-Voting Preferred Stock as to dividend rights and rights and
payment of assets upon liquidation, winding up or dissolution of the Company.
The Series A NonVoting Preferred Stock shall be on a parity with all other
series of non-voting preferred stock and voting preferred stock of the Company.
The Series A Non-Voting Preferred Stock shall be junior to the creditors of the
Company. The Series A Non-Voting Preferred Stock shall be subject to the
creation of Senior Stock, Parity Stock and Junior Stock to the extent not
expressly prohibited herein, by the Articles of Incorporation of the Company or
by other agreements entered into by the Company.
The number of shares of Series A Non-Voting Preferred Stock may not be
increased or decreased without the prior written consent of the holders of the
outstanding shares of Series A Non-Voting Preferred Stock. Notwithstanding the
immediately preceding sentence, in no event shall any decrease of the number of
shares of Series A Non-Voting Preferred Stock reduce the number of shares of
Series A Non-Voting Preferred Stock to a number less than the number of shares
of Series A Non-Voting Preferred Stock then outstanding plus the number of
shares reserved for issuance upon the exercise of any outstanding options,
rights or warrants, if any, to purchase shares of Series A Non-Voting Preferred
Stock, or upon the conversion of any outstanding securities issued by the
Company convertible into shares of Series A Non-Voting Preferred Stock.
(d) Dividends and Distributions. Subject to the prior or superior rights of
the holders of Senior Stock, whether now existing or hereafter created, the
holders of shares of Series A Non-Voting Preferred Stock shall be entitled to
receive prior to payment of any cash dividends on any class of Junior Stock
during the quarter to which such dividend relates, out of funds legally
available therefore, cumulative cash dividends per share at an annual rate of
five percent (5%) of the Liquidation Amount of the Series A Non-Voting Preferred
Stock (as hereinafter defined) payable in equal quarterly installments on the
fifteenth day of January, April, July and October of each year (each a "Dividend
Payment Date") to the record holder of the Series A Non-Voting Preferred Stock
as of the last day of the month immediately preceding the Dividend Payment Date,
commencing on the first Dividend Payment Date following the first issuance of
any shares of Series A Non-Voting Preferred Stock. In the event that any share
of Series A Non-Voting Preferred Stock is outstanding for only a part of the
quarterly period preceding any Dividend Payment Date, then the dividend payable
with respect to such share shall be prorated for the period such share was
outstanding during such period. Dividends declared and paid in an amount less
than the total amount payable on all shares of Series A Non-Voting Preferred
Stock shall be allocated pro rata among the shares of Series A NonVoting
Preferred Stock outstanding.
No full dividends shall be declared or paid or set apart for payment on any
Parity Stock or Junior Stock for any quarterly period unless full dividends have
been or contemporaneously are declared and paid (or declared and a sum
sufficient for the payment thereof set apart for such payment) on the Series A
Non-Voting Preferred Stock for such period.
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In addition to the foregoing restriction, the Company shall not declare,
pay or set apart funds for any dividends of other distributions (other than in
Common Stock or other Junior Stock) with respect to any Common Stock or other
Junior Stock of the Company, or repurchase, redeem or otherwise acquire, or set
apart funds for repurchase, redemption or other acquisition of any Common Stock
or other Junior Stock through a sinking fund or otherwise, unless and until (i)
the Company shall have paid full dividends on the Series A Non-Voting Preferred
Stock for the most recent preceding quarterly period or funds have been paid
over to the dividend disbursing agent of the Company for payment of such
dividends, and (ii) the Company has declared a cash dividend on the Series A
Non-Voting Preferred Stock for the current quarterly period, and sufficient
funds have been paid over to the dividend disbursing agent for the Company for
the payment of such cash dividend for such current quarterly period.
(e) Voting Rights. Except as may be expressly required by the laws of the
District of Columbia, the holders of the Series A Non-Voting Preferred Stock
shall not be entitled to vote on any matter submitted for the vote of
stockholders, including but not limited to the election of directors.
(f) Redemption. (i) Shares of the Series A Non-Voting Preferred Stock may
be redeemed, in whole or in part, at the option and in the sole discretion only
of the Company, at any time or from time to time, at a redemption price (the
"Redemption Price") equal to the Liquidation Amount of the Series A Non-Voting
Preferred Stock, plus the amount of any dividends which are accrued but unpaid
as of the date set for such redemption (including, if the date set for
redemption is not a Dividend Payment Date, dividends at the rate of five percent
(5%) per year from the most recent Dividend Payment Date to the date set for
redemption). At the time of such redemption as specified in the resolution of
the Board of Directors authorizing such redemption, all rights of the holders of
the Series A NonVoting Preferred Stock redeemed shall terminate, except for the
right to receive the Redemption Price. If less than all of the outstanding
shares of Series A Non-Voting Preferred Stock are to be redeemed, the Company
shall select those shares to be redeemed pro rata.
(ii) Notice of any redemption, setting forth (i) the date and place fixed
for said redemption, (ii) the redemption price and (iii) a statement that
dividends on the shares of Series A Non-Voting Preferred Stock to be redeemed by
the Company will cease to accrue on such redemption date, shall be mailed,
postage prepaid, at least thirty (30) days, but not more than sixty (60) days,
prior to said redemption date to each holder of record of Series A Non-Voting
Preferred Stock to be redeemed at his or her address as the same shall appear on
the stock transfer records of the Company. If less than all of the shares of
Series A Non-Voting Preferred Stock owned by such holder are then to be
redeemed, such notice shall specify the number of shares thereof that are to be
redeemed and the numbers of the certificates representing such shares. Notice of
any redemption shall be given by first class mail, postage prepaid. Neither
failure to mail such notice, nor any defect therein or in the mailing thereof,
to any particular holder shall affect the sufficiency of the notice or the
validity of the proceedings for redemption with respect to the other holders.
Any notice which was mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the holder receives such notice.
(g) Conversion. The Series A Non-Voting Preferred Stock shall not be
convertible into or otherwise exchangeable for shares of any other class of
stock or securities of the Company.
(h) Liquidation, Dissolution or Winding Up. Subject to the prior or
superior rights of the holders of any shares of Senior Stock, whether now
existing or hereafter created, upon any liquidation, dissolution or winding up
of the Company, the holders of the Series A Non-Voting Preferred Stock shall be
entitled to receive, prior to the payment of any amounts in liquidation,
dissolution or winding up in respect of any Junior Stock, but after the payment
or provision for all amounts due to creditors of the Company, an amount per
share equal to the "Liquidation Amount of the Series A Non-Voting Preferred
Stock", plus the amount of any dividends accrued but unpaid to the date set of
distribution of such amounts in liquidation, dissolution or winding up of the
Company. Following receipt of such amounts, the holders of the Series A
Non-Voting Preferred Stock shall have no right to receive any other amounts in
connection with the liquidation, dissolution or winding up of the Company. For
purposes hereof, the Liquidation Amount of the Series A Non-Voting Preferred
Stock shall mean $25.00 per share, the purchase price at which the Series A
Non-Voting Preferred Stock was originally issued by the Company, as
proportionally adjusted
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after the date of issuance of the Series A Non-Voting Preferred Stock to reflect
any stock split or other subdivision of the Series A Non-Voting Preferred Stock,
stock dividend on the Series A Non-Voting Preferred Stock payable in shares of
Series A Non-Voting Preferred Stock or other subdivision, combination or
reclassification of the shares of Series A Non-Voting Preferred Stock.
If the amounts available for distribution in respect of shares of Series A
Non-Voting Preferred Stock and any outstanding Parity Stock are not sufficient
to satisfy the full liquidation rights of all of the outstanding shares of
Series A Non-Voting Preferred Stock and such Parity Stock, then the holders of
such outstanding shares shall share ratably in any such distribution of assets
in proportion to the full respective preferential amounts to which they are
entitled. All distributions made in respect of Series A Non-Voting Preferred
Stock in connection with such liquidation, dissolution or winding up of the
Company shall be made pro rata to the holders entitled thereto.
(i) Preemptive Rights. The holders of the Series A Non-Voting Preferred
Stock shall not have any preemptive or preferential right to acquire any shares
of any class of capital stock of the Company, whether now or hereafter
authorized, except as the Board of Directors may specifically provide."
