Filing Details

 

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No.     )*

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1 (e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

 

(1)         See Item 5 hereto.

 

2

 

 

(1)         See Item 5 hereto.

 

3

 

 

(1)         See Item 5 hereto.

 

4

 

 

(1)           See Item 5 hereto.

 

5

 

 

(1)           See Item 5 hereto.

 

6

 

 

(1)           See Item 5 hereto.

 

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Item 1.                                                         Security and Issuer

 

The title and class of equity security to which this statement on Schedule 13D relates is the Common Stock, no par value (Voting Common Stock) of Trinity Capital Corporation (the Issuer or the Company).

 

Item 2.                                                         Identity and Background

 

This statement on Schedule 13D is being jointly filed by the parties identified below. All of the filers of this Schedule 13D are collectively referred to as the Reporting Persons. The Joint Filing Agreement among the Reporting Persons is attached hereto as Exhibit 1 and incorporated herein by reference.

 

(a)-(c)               The following are the Reporting Persons: Castle Creek Capital Partners VI, LP, a Delaware limited partnership (Fund VI) and a private equity fund focused on investing in community banks throughout the United States of America; Castle Creek Capital VI LLC, a Delaware limited liability company (CCC VI), whose principal business is to serve as the sole general partner of, and manage, Fund VI; John M. Eggemeyer, J. Mikesell Thomas, Mark G. Merlo and John T. Pietrzak, each a managing principal of CCC VI.  The business address for each of the Reporting Persons is 6051 El Tordo, Rancho Santa Fe, CA 92067.

 

(d)                                 During the last five years, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors).

 

(e)                                  During the last five years, none of the Reporting Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

(f)                                   Each of Mr. Eggemeyer, Mr. Thomas, Mr. Merlo and Mr. Pietrzak is a citizen of the United States of America.

 

Item 3.                                                         Source and Amount of Funds or Other Consideration

 

The information in Items 4 and 6 is incorporated by reference.

 

As more fully described in Items 4 and 6 below, on September 8, 2016, Fund VI entered into a Stock Purchase Agreement with the Company and certain other institutional and accredited investors (the Purchase Agreement).  Pursuant to the Purchase Agreement, Fund VI acquired 909,567 shares of Voting Common Stock and 41,431 shares of the Companys Series C convertible perpetual preferred stock, no par value (the Series C Preferred Stock, and such acquired shares of Voting Common Stock and Series C Preferred Stock, the Purchased Shares).  The Purchased Shares were acquired by Fund VI with funds obtained from Fund VIs general and limited partners, including the other Reporting Persons, and the aggregate purchase price for the Purchased Shares was $24,000,168.25 (based on a per share purchase price of $4.75 per share of Voting Common Stock and $475.00 per share of Series C Preferred Stock).

 

In connection with the Purchase Agreement, as further described in Item 6, the Company intends to file the Articles of Amendment to the Amended and Restated Articles of Incorporation of the Company (the Articles of Amendment), which would result in the automatic conversion of each share of the Series C Preferred Stock into 100 shares of the Companys non-voting common stock, no par value (the Non-Voting Common Stock).  Following such conversion, subject to certain exceptions, each holder of the Non-Voting Common Stock will be permitted to convert, or upon written request of the Company will be required to convert, the Non-Voting Common Stock into an equal number of shares of Voting Common Stock, provided that such holder, together with its affiliates, will not thereafter own or control in the aggregate more than 9.9% of the Voting Common Stock.

 

Item 4.                                                         Purpose of Transaction

 

The information in Items 3 and 6 is incorporated by reference.

 

Fund VI acquired the Purchased Shares in the ordinary course of business because of its belief that the Purchased Shares (including the Voting Common Stock) represented an attractive investment in accordance with its investment strategy.  As described in Item 3 above, and further described in Item 6 below, upon the effectiveness of the Articles of Amendment, it is expected that the Series C Preferred Stock held by Fund VI will be converted into Non-Voting Common Stock of the Company.

 

Subject to the limitations imposed by the Purchase Agreement and the applicable federal and state securities laws, the Reporting Persons may dispose of the Purchased Shares from time to time, subject to market conditions and other investment considerations,

 

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and may cause the Purchased Shares to be distributed in kind to investors.  To the extent permitted by the Purchase Agreement and applicable bank regulatory limitations, each Reporting Person may directly or indirectly acquire additional shares of Voting Common Stock or associated rights or securities exercisable for or convertible into Voting Common Stock, depending upon an ongoing evaluation of its investment in the Voting Common Stock and securities exercisable for or convertible into Voting Common Stock, applicable legal restrictions, prevailing market conditions, liquidity requirements of such Reporting Person and/or investment considerations.

 

To the extent permitted under the Purchase Agreement and the passivity commitments that Fund VI has provided to the Board of Governors of the Federal Reserve System (the Federal Reserve) described in Item 6 below, and applicable laws, the Reporting Persons may engage in discussions with management, the Companys board of directors, other stockholders of the Company and other relevant parties concerning the business, operations, composition of the board of directors, management, strategy and future plans of the Company.

 

The foregoing references to and descriptions of the Purchase Agreement and the transactions contemplated thereby do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the full text of the Purchase Agreement, which is attached hereto as Exhibit 2 and incorporated herein by reference.

 

Other than as described in this Item 4, each of the Reporting Persons has no present plans or proposals that relate to or would result in any of the events set forth in Items 4(a) through (j) of Schedule 13D. However, each of the Reporting Persons reserves the right to change its plans at any time, as it deems appropriate, in light of its ongoing evaluation of (i) its business and liquidity objectives; (ii) the Companys financial condition, business, operations, competitive position, prospects and/or share price; (iii) industry, economic and/or securities markets conditions; (iv) alternative investment opportunities; and (v) other relevant factors.

 

Item 5.                                                         Interest in Securities of the Issuer

 

The information contained on the cover pages to this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4 and 6 is incorporated herein by reference.

 

(a) and (b)

 

										Sole Power to		Shared Power to
		Amount				Sole Power to		Shared Power		Dispose or to		Dispose or
		Beneficially		Percent of		Vote or Direct		to Vote or		Direct the		Direct the
Reporting Person		Owned		Class (3)		the Vote		Direct the Vote		Disposition		Disposition
Castle Creek Capital Partners VI, LP (1)		909,567		9.9	%	0		909,567		0		909,567
Castle Creek Capital VI LLC (2)		909,567		9.9	%	0		909,567		0		909,567
John M. Eggemeyer (2)		909,567		9.9	%	0		909,567		0		909,567
J. Mikesell Thomas (2)		909,567		9.9	%	0		909,567		0		909,567
Mark G. Merlo (2)		909,567		9.9	%	0		909,567		0		909,567
John T. Pietrzak (2)		909,567		9.9	%	0		909,567		0		909,567

 

(1)         Excludes 41,431 shares of Series C Preferred Stock owned by Fund VI, which is expected to be automatically converted into shares of Non-Voting Common Stock as described in Item 6 below.  Such Non-Voting Common Stock will be convertible into Voting Common Stock in the circumstances described in Item 6 below.  Since Fund VI does not presently, and will not within the next 60 days, have the right to acquire such Voting Common Stock or have voting or investment power over such Voting Common Stock, those underlying shares are not included in the amount reported herein.

 

(2)         Each of CCC VI, Mr. Eggemeyer, Mr. Thomas, Mr. Merlo and Mr. Pietrzak disclaims beneficial ownership of the Voting Common Stock owned by Fund VI, except to the extent of its or his pecuniary interest therein.

 

(3)         This calculation is based on 9,187,541 shares of Voting Common Stock outstanding upon consummation of the transactions contemplated by the Purchase Agreement, as reported by the Company.

 

(c)                                  None of the Reporting Persons had any transactions in the Voting Common Stock (or securities convertible into Voting Common Stock) during the past 60 days, except as described in Item 6 below.

 

(d)                                 Other than the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities of the Company referred to in this Item 5.

 

(e)                                  N/A.

 

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Item 6.                                                         Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

The information set forth in Items 3 and 4 is incorporated herein by reference.

 

On September 8, 2016, the Company, Fund VI and certain other institutional and accredited investors entered into the Purchase Agreement.  Pursuant to the Purchase Agreement, Fund VI purchased 909,567 shares of Voting Common Stock and 41,431 shares of Series C Preferred Stock on December 19, 2016.  The Series C Preferred Stock ranks pari passu with the Voting Common Stock with respect to payment of dividends or distributions and with respect to liquidation, winding up or dissolution of the Company (pro rata on an as-converted basis assuming all shares have been converted as described below).  The Series C Preferred Stock is also subject to certain customary adjustments, has no voting rights (except as otherwise required by law) and is not redeemable (though the Company may repurchase shares on a voluntary basis with holders of such Series C Preferred Stock, subject to compliance with applicable legal or regulatory requirements).

 

Each share of the Series C Preferred Stock will automatically convert into 100 shares of Non-Voting Common Stock on the mandatory conversion date, defined as the effective date of the Articles of Amendment (the Mandatory Conversion Date).  Until such shares have been converted on the Mandatory Conversion Date, subject to certain exceptions, Fund VI would be permitted to convert, or upon the request of the Company required to convert, each share of Series C Preferred Stock into 100 shares of Voting Common Stock, so long as upon conversion Fund VI did not own more than 9.9% of the Voting Common Stock.  Fund VI currently owns 9.9% of the Voting Common Stock and therefore would not be permitted to convert such Series C Preferred Stock into Voting Common Stock.  Additionally, the shares of Series C Preferred Stock will automatically convert into 100 shares of Voting Common Stock upon a transfer of the shares to a non-affiliate of Fund VI in a permissible transfer, as defined in the Articles of Amendment.

 

The Non-Voting Common Stock ranks pari passu with the Voting Common Stock with respect to payment of dividends or distributions and with respect to liquidation, winding up or dissolution of the Company.  The Non-Voting Common Stock is also subject to certain customary adjustments, has no voting rights (except as otherwise required by law) and is not redeemable (though the Company may repurchase shares on a voluntary basis with holders of such Non-Voting Common Stock, subject to compliance with applicable legal or regulatory requirements).

 

Upon the issuance of the Non-Voting Common Stock, subject to certain exceptions, Fund VI would be permitted to convert, or upon the request of the Company required to convert, the shares of Non-Voting Common Stock into an equal number of shares of Voting Common Stock, so long as upon conversion Fund VI did not own more than 9.9% of the Voting Common Stock.  Fund VI currently owns 9.9% of the Voting Common Stock and therefore would not be permitted to convert such Non-Voting Common Stock into Voting Common Stock.  Additionally, the shares of Non-Voting Common Stock will automatically convert into an equal number of shares of Voting Common Stock upon a transfer of the shares to a non-affiliate of Fund VI in a permissible transfer, as defined in the Articles of Amendment.

 

For further information, please refer to the Articles of Amendment, which is attached hereto as Exhibit 3 and incorporated herein by reference.

 

The following is a description of certain terms of the Purchase Agreement:

 

Representations and Warranties.  The Company made customary representations and warranties to Fund VI relating to the Company, its business, the issuance of the Purchased Shares, certain securities law matters and exemption from any anti-takeover provisions.  Fund VI also made customary representations and warranties to the Company regarding Fund VIs valid organization and authorization to enter into the transaction.

 

Transfer Restrictions.  Fund VI acknowledged that it had acquired the Purchased Shares solely for investment purposes with no intent to distribute them to any person in violation of the Securities Act.  Fund VI agreed not to sell or dispose of the Purchased Shares unless doing so was in compliance with the registration requirements or exemptions of the Securities Act and applicable state securities laws.  Subject to compliance with applicable securities laws, however, Fund VI is permitted to transfer, sell, assign or otherwise dispose of the Purchased Shares at anytime, provided that the transferee agree in writing to be bound by the terms of the Purchase Agreement and the Registration Rights Agreement (as defined below).

 

Pursuant to the Articles of Amendment, Fund VI may not, however, sell or transfer any shares of capital stock of the Company other than to an affiliate or to the Company if, as a result of the transfer, Fund VI, together with its affiliates, would have owned, sold, or transferred to persons other than affiliates of Fund VI or the Company in the aggregate, since the date of the Articles of Amendment, ownership or control of 33.3 percent or more of any class of the Companys voting securities.

 

Avoidance of Control.  Fund VI agreed that neither it nor its affiliates shall have the ability to purchase shares of Voting Common Stock that would result in Fund VI becoming, directly or indirectly, the beneficial owner of more than 9.9% of the Companys issued and outstanding voting securities.  Neither the Company nor any of its subsidiaries is permitted under the Purchase Agreement to take

 

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any action (including any redemption, repurchase, rescission or recapitalization of Voting Common Stock or securities or rights to purchase or that may become convertible into Voting Common Stock, in each case, where Fund VI is not given the right to the extent of Fund VIs pro rata portion), that would reasonably be expected to pose a substantial risk that (i) the equity in the Company owned by Fund VI and its affiliates (as such term is used under the Bank Holding Company Act (the BHCA)) would exceed 33.3% of the Companys total equity or (ii) Fund VIs and its affiliates ownership of any class of voting securities of the Company would exceed 9.9% of such class, in each case without the prior written consent of Fund VI.  Finally, the Company may not take any action that would cause Fund VIs ownership to increase to an amount that would constitute control under the BHCA, the Change in Bank Control Act, or any rules or regulations promulgated thereunder, or otherwise cause Fund VI to control the company for purposes of any of the foregoing laws and regulations.  Additionally, Fund VI shall not have the ability to purchase more than 33.3% of the Companys total equity or exercise any voting rights in excess of 9.9% of the total outstanding voting securities of the Company.  In the event that Fund VI breaches any of these obligations, or believes that it is reasonably likely to breach such obligations, Fund VI agreed to notify the other parties to the Purchase Agreement and to cooperate in good faith with such parties to modify ownership or take any other action necessary to cure or avoid such breach.

 

Most Favored Nation.  The Company agreed not to enter into any additional agreements, or modify existing agreements, with any purchaser in a manner more favorable in any material respect to that purchaser than the rights and benefits established in favor of Fund VI under the Purchase Agreement, unless Fund VI has been provided such rights and benefits.

 

Gross-up Rights.  As long as Fund VI and its affiliates own 5.0% or more of the outstanding shares of Voting Common Stock (as calculated pursuant to the directions in the Purchase Agreement), upon any public or nonpublic offerings or sale of any equity security by the Company (or securities convertible into equity or possessing an equity component), subject to the exceptions specified in the Purchase Agreement, Fund VI has a preemptive right to purchase the new securities up to Fund VIs pro rata ownership percentage of the Voting Common Stock prior to the offering or sale.  Fund VIs gross-up right does not apply in certain circumstances, including (i) Voting Common Stock or other shares issued upon conversion of securities issued (or contemplated to be issued and disclosed to Fund VI) prior to the date of the Purchase Agreement; (ii) certain securities issued as compensation to employees; (iii) capital stock issued as consideration for a merger (or similar transaction); or (iv) within one year following the transactions contemplated by the Purchase Agreement, up to $10,000,000 of shares issued to existing shareholders at the same price as the shares issued in the Purchase Agreement.   Furthermore, Fund VI shall not have the right to purchase new securities to the extent it would cause Fund VI to own more than 9.9% of the voting securities or more than 33.3% of the total equity outstanding of the Company.   Upon exercising its gross-up rights, Fund VI may require the Company to issue the securities in non-voting securities; provided that the Company is not required to issue securities in excess of the applicable ownership limitation set forth in the Purchase Agreement.

 

Board Representation.  The Company agreed to cause a representative of Fund VI (the Board Representative) to be elected or appointed to the board of directors of the Company and the board of directors of Los Alamos National Bank, a subsidiary of the Company (the Bank), in each case subject to satisfaction of all legal and regulatory requirements, for so long as Fund VI owns either (i) 50% or more of all of the Purchased Shares or (ii) 5.0% or more of the Voting Common Stock then outstanding (as calculated in accordance with the Purchase Agreement) (the Minimum Ownership Interest).  The Company also agreed to recommend to its shareholders the election of the Board Representative for so long as Fund VI meets the Minimum Ownership Interest.  If Fund VI fails to meet the Minimum Ownership Interest, Fund VI agreed to use commercially reasonable efforts to cause the Board Representative to resign from the board of directors of each of the Company and the Bank.

 

The Purchase Agreement also provides that for so long as Fund VI has a Minimum Ownership Interest, the Company shall invite a person designated by Fund VI to attend meetings of the board of directors of the Company and the Bank in a nonvoting, nonparticipating observer capacity (the Board Observer).

 

Passivity Commitments.  In connection with the Purchase Agreement, Fund VI made certain customary passivity commitments to the Federal Reserve to ensure that Fund VI and its affiliates will not, among other things, exercise or attempt to exercise a controlling influence over the management or policies of the Company or any of its subsidiaries.

 

ERISA Matters.  Fund VI was provided customary VCOC rights pursuant to the VCOC Letter Agreement, dated as of December 19, 2016, by and between Fund VI and the Company (the VCOC Letter Agreement), including the right to receive regular financial reports (including, but not limited to, audited annual and quarterly financial reports) and information regarding significant corporate actions, the right to inspect the books and records of the Company and the right to consult with management of the Company on matters relating to the business and affairs of the Company; provided, however, that this provision does not entitle the VCOC Investor to consult with management of the Company on matters relating to the business and affairs of the Company more than once per calendar year.  The Company also agreed to consider, in good faith, the recommendations of the VCOC Investor or its designated representative in connection with the matters on which it is consulted as described above, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Company and each of the Companys subsidiaries, as the case may be.  The VCOC Letter Agreement is attached hereto as Exhibit 4 and incorporated herein by reference.

 

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Registration Rights.  In connection with the Purchase Agreement, Fund VI entered into the Registration Rights Agreement, dated as of December 19, 2016, by and among the Company, Fund VI and the other purchasers party thereto (the Registration Rights Agreement).  Pursuant to the Registration Rights Agreement, the Company granted Fund VI customary registration rights with respect to the Purchased Shares.  Pursuant to such registration rights, the Company has agreed to prepare and file with the Securities and Exchange Commission (the SEC) a registration statement covering the resale of the Purchased Shares no more than three years from the closing date of the acquisition of the Purchased Shares, and to prepare and file such post-effective amendments and supplements as may be necessary to keep such registration statement continuously effective.  The Company is required to use its commercially reasonable efforts to cause each registration statement to be declared effective and to remain effective until all securities are sold or the Rule 144 restrictions have lapsed (as determined by the Companys counsel in a written opinion letter), whichever is earlier.  In the event that the SEC informs the Company that all registrable securities cannot be registered on a single registration statement, the Company agreed to amend the registration statement and/or file a new registration statement to cover the maximum number of registrable securities permitted to be registered.  The Registration Rights Agreement also provides Fund VI with customary piggyback registration rights, and also requires the Company, upon receiving notice from Fund VI that Fund VI intends to sell all or part of its registrable securities included on a shelf registration statement, to amend or supplement the shelf registration statement as may be necessary to permit such registrable securities to be distributed pursuant to the shelf registration statement.  The Registration Rights Agreement is attached hereto as Exhibit 5 and incorporated herein by reference.

 

The foregoing reference to and description of the Purchase Agreement, the Articles of Amendment, the VCOC Letter Agreement and the Registration Rights Agreement, and the transactions contemplated thereby, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the full text of the Purchase Agreement, the Articles of Amendment, the VCOC Letter Agreement and the Registration Rights Agreement which are attached hereto as Exhibits 2, 3, 4 and 5 respectively, and incorporated herein by reference.

 

Item 7.                                                         Material to Be Filed as Exhibits

 

Exhibit		Description
Exhibit 1		Joint Filing Agreement, dated as of December 20, 2016, by and among Castle Creek Capital Partners VI, LP, Castle Creek Capital VI LLC, John M. Eggemeyer, J. Mikesell Thomas, Mark G. Merlo, and John T. Pietrzak.
Exhibit 2		Stock Purchase Agreement, dated as of September 8, 2016, by and among Trinity Capital Corporation, Castle Creek Capital Partners VI, LP and certain other institutional and accredited investors (incorporated by reference to Exhibit 10.1 to Trinity Capital Corporations Current Report on Form 8-K filed on September 9, 2016).
Exhibit 3		Ninth Amendment to the Trinity Capital Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Trinity Capital Corporation's Current Report on Form 8-K/A filed on December 20, 2016).
Exhibit 4		VCOC Letter Agreement, dated as of December 19, 2016, by and between Trinity Capital Corporation and Castle Creek Capital Partners VI, LP.
Exhibit 5		Registration Rights Agreement, dated as of December 19, 2016, by and among Trinity Capital Corporation, Castle Creek Capital Partners VI, LP and certain other institutional and accredited investors.

 

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SIGNATURES

 

After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: December 20, 2016

 

	CASTLE CREEK CAPITAL PARTNERS VI, LP
	By:	/s/ John M. Eggemeyer
	Name:	John M. Eggemeyer
	Title:	Managing Principal
	CASTLE CREEK CAPITAL VI, LLC
	By:	/s/ John M. Eggemeyer
	Name:	John M. Eggemeyer
	Title:	Managing Principal
	JOHN M. EGGEMEYER
	By:	/s/ John M. Eggemeyer
	Name:	John M. Eggemeyer
	J. MIKESELL THOMAS
	By:	/s/ J. Mikesell Thomas
	Name:	J. Mikesell Thomas
	MARK G. MERLO
	By:	/s/ Mark G. Merlo
	Name:	Mark G. Merlo
	JOHN T. PIETRZAK
	By:	/s/ John T. Pietrzak
	Name:	John T. Pietrzak

 

SIGNATURE PAGE TO SCHEDULE 13D (TRINITY CAPITAL CORPORATION)

 

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