VERITEX HOLDINGS,INC. (NASDAQ:VBTX) Files An 8-K Entry into a Material Definitive Agreement
Item 2.03 Entry into a Material Definitive Agreement and Item 2.03 Unregistered Sales of Equity Securities.

In connection with the completion of the acquisition (the “Merger”) by Veritex Holdings, Inc. (“Veritex”), a Texas corporation and parent company of Veritex Community Bank, of Sovereign Bancshares, Inc. (“Sovereign Bancshares”), a Texas corporation and parent company of Sovereign Bank, to that certain previously announced Agreement and Plan of Reorganization, dated December 14, 2016 (the “Agreement”), by and among Veritex, Spartan Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of Veritex, and Sovereign Bancshares, Veritex and Merger Sub entered into an Assignment and Assumption Agreement, dated August 1, 2017 (the “Assignment and Assumption Agreement”), with Sovereign Bancshares whereby Veritex assumed, among other things, the obligations of Sovereign Bancshares’ outstanding Senior Non-Cumulative Perpetual Preferred Stock, Series C (the “Sovereign Bancshares Series C Preferred Stock”) that was previously issued to the United States Department of the Treasury (the “Treasury Department”) to that certain Securities Purchase Agreement, dated as of September 22, 2011, by and between the Treasury Department and Sovereign Bancshares.

In connection therewith, Veritex issued 24,500 shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series D (the “Veritex Series D Preferred Stock”) to the Treasury Department in exchange for the 24,500 shares of Sovereign Bancshares Series C Preferred Stock held by the Treasury Department. The Veritex Series D Preferred Stock is senior to Veritex common stock with respect to dividend rights and rights upon liquidation, winding up and termination. Holders of the Veritex Series D Preferred Stock are entitled to (a) receive at the end of each quarterly dividend period an amount equal to one fourth of the applicable dividend rate (which will be 9% following the Merger) multiplied by the liquidation amount per share and (b) a liquidation preference equal to $1,000 per share ($24.5 million in the aggregate) plus any accrued and unpaid dividends. The shares of Veritex Series D Preferred Stock have no general voting rights other than as required by the laws of the State of Texas, but, unless the shares of Veritex Series D Preferred Stock are being redeemed, such shares have certain consent rights regarding the authorization of senior securities as regards dividends and liquidation preferences, any amendment to the statement of designation that would adversely affect the rights of the Veritex Series D Preferred Stock, certain share exchanges or reclassifications, the sale of all or substantially all the assets of Veritex and the consummation of certain change of control transactions. The holders of the Veritex Series D Preferred Stock have certain registration rights to which they can require Veritex to register with the Securities and Exchange Commission (the “SEC”) such shares for sale in a public offering. Holders of Veritex Series D Preferred Stock have no preemptive rights or rights to exchange or convert their shares of Veritex Series D Preferred Stock into any other securities of Veritex.

The Company has the option to redeem, in whole or in part, shares of Veritex Series D Preferred Stock, subject to any regulatory approval, for $1,000 per share (currently $24.5 million in the aggregate) plus accrued and unpaid dividends for the then quarterly dividend period up to the day before the redemption date. Veritex may not repurchase or redeem any of its shares of capital stock, including any equity securities or trust preferred securities issued by Veritex or any of its affiliates, unless after giving effect to such repurchase or redemption, Veritex’s Tier 1 capital would be at least equal to the Tier 1 dividend threshold and all dividends have been paid on the Veritex Series D Preferred Stock for the most recently completed quarterly dividend period (or sufficient funds have been reserved for that purpose). If Veritex does not declare and pay the required dividends on the Veritex Series D Preferred Stock, then for the period of time beginning on the last day of such quarterly dividend period until the last day of the third quarterly dividend period immediately following, Veritex will be prohibited from redeeming, purchasing, repurchasing or otherwise acquiring any shares of the Veritex capital stock at any time, subject to certain enumerated exceptions.

A majority of the outstanding shares of Veritex Series D Preferred Stock have the right to designate a representative to be invited to attend all meetings of the Veritex Board of Directors, in a nonvoting capacity, in the event that Veritex has failed to timely pay dividends due upon the Veritex Series D Preferred Stock for an aggregate of five quarterly dividend periods, whether or not consecutive. This right to select an observer terminates upon timely dividend payments for four consecutive quarterly dividend periods, but would be revived in the event there are additional failures to make timely dividend payments for five quarters, in the aggregate, following the termination of observer rights.

Whenever dividends on the Veritex Series D Preferred Stock have not been declared and timely paid in full for an aggregate of six quarterly dividend periods, whether or not consecutive, and the aggregate liquidation preference of the then-outstanding shares of Veritex Series D Preferred Stock is greater than or equal to $25 million, the authorized number of Veritex directors would be increased by two, and the holders of the Veritex Series D Preferred Stock, voting together as a single class, would have the right to elect two directors to fill those newly created directorships at either its next annual meeting (if one is to be held within thirty days) or at a special meeting of shareholders, and this right would continue until complete and timely dividend payments have been made for four consecutive quarterly dividend periods. This right to appoint directors revives in the event of any such future failure of Veritex to pay complete and timely dividends.

The foregoing exchange of the Veritex Series D Preferred Stock was made in reliance upon an exemption from the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”), set forth in Section 4(2) thereof, relative to sales by an issuer not involving a public offering, and the rules and regulations promulgated thereunder.

The Assignment and Assumption Agreement and the related Securities Purchase Agreement are attached as Exhibit 10.1 to this Current Report on Form 8-K.

Item 2.03 Completion of Acquisition or Disposition of Assets.

On August 1, 2017, Veritex completed the Merger to the terms of the Agreement. At the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into Sovereign Bancshares, with Sovereign Bancshares surviving the Merger as a wholly-owned subsidiary of Veritex. Following the Effective Time, Sovereign Bancshares merged with and into Veritex, with Veritex surviving the merger and thereafter, Sovereign Bank merged with and into Veritex Community Bank, with Veritex Community Bank surviving the merger.

to the Agreement, at the Effective Time each outstanding share of Sovereign Bancshares common stock was converted into the right to receive (i) 0.9596 shares of common stock, par value $0.01 per share, of Veritex, and (ii) $10.54 in cash. In the aggregate, Veritex issued 5,117,647 shares of its common stock and paid $56,209,647 in cash to former holders of Sovereign Bancshares’ common stock.

Sovereign Bancshares’ (i) Gross Transaction Expenses (as defined in the Agreement) were $16,889,853, and (ii) Tangible Common Equity (as defined in the Agreement) was $87,929,785, and such amounts were calculated in accordance with the terms of the Agreement.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.

In connection with the Merger, to that certain First Supplemental Indenture, dated as of August 1, 2017 (the “Supplemental Indenture”), by and among Veritex, Sovereign Bancshares and Wilmington Trust Company, as trustee (the “Trustee”), the Company assumed Sovereign Bancshares’ rights, title and obligations under the Indenture, dated as of May 29, 2008 (the “Indenture”), by and between Sovereign Bancshares and the Trustee, to which Indenture, Sovereign Bancshares had issued $8,609,000 of its Floating Rate Junior Subordinated Deferrable Interest Notes due July 1, 2038.The transaction documents governing such securities, including the Supplemental Indenture and the Indenture, have not been filed herewith to Item 601(b)(4)(v) of Regulation S-K under the Securities Act. Veritex agrees to furnish a copy of such documents to the SEC upon request.

Item 2.03 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

In connection with the Merger, the Veritex Board of Directors appointed on July 28, 2017 (i) T.J. Falgout as a director of both Veritex and Veritex Community Bank, as well as a Vice Chairman of both Veritex and Veritex Community Bank, and (ii) Thomas J. Mastor as a director of both Veritex and Veritex Community Bank, to be effective as of the Effective Time, in accordance with the terms of the Agreement.

Messrs. Falgout and Mastor will participate in Veritex’s standard compensation arrangements for non-employee directors as described in Veritex’s definitive proxy statement relating to its 2017 Annual Meeting of Shareholders filed with the SEC on April 10, 2017.Other than to the Agreement, there are no other arrangements or understandings between Messrs. Falgout and Mastor and any other person to which they were selected as directors.Since the beginning of the last fiscal year, there have been no related party transactions between Veritex and Messrs. Falgout or Mastor that would be reportable under Item 404(a) of Regulation S-K.

Item 2.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On July 28, 2017, Veritex amended its Certificate of Formation by filing a Statement of Designation (the “Statement of Designation”) with the Secretary of State of the State of Texas designating the Veritex Series D Preferred Stock as a series of its authorized preferred stock, such series having 24,500 authorized shares.

The Statement of Designation for the Veritex Series D Preferred Stock is attached as Exhibit 3.1 to this Current Report on Form 8-K. Such shares of Veritex Series D Preferred Stock were issued to the Treasury Department as described under Item 2.03 above.

Item 2.03 Regulation FD Disclosure.

On August 1, 2017, Veritex issued a press release announcing the closing of the Merger. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.03, including Exhibit 99.1, is being furnished to Item 2.03 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.

Item 2.03 Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired.

(b)Pro Forma Financial Information.

(c) Shell Company Transactions

(d)Exhibits.

Veritex Holdings, Inc. Exhibit
EX-3.1 2 exhibit31-stmtofdesignatio.htm EXHIBIT 3.1 Exhibit Exhibit 3.1 STATEMENT OF DESIGNATIONOFSENIOR NON-CUMULATIVE PERPETUAL PREFERRED STOCK,…
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About VERITEX HOLDINGS,INC. (NASDAQ:VBTX)

Veritex Holdings, Inc. is a bank holding company. The Company, through its subsidiary, Veritex Community Bank (the Bank), a Texas state chartered bank, provides relationship-driven commercial banking products and services tailored to meet the needs of small to medium-sized businesses and professionals. The Company operates through community banking segment. The Bank provides a range of banking services to individual and corporate customers, which include commercial and retail lending, and the acceptance of checking and savings deposits. It offers a full suite of online banking solutions, including access to account balances, online transfers, online bill payment and electronic delivery of customer statements, as well as automated teller machines (ATMs), and banking by telephone, mail and personal appointment. The Bank also offers debit cards, night depository, direct deposit, cashier’s checks and letters of credit, as well as treasury management services.