Item 1.01.
Entry into a Material Definitive Agreement.
On
March
29,
2023,
CrossFirst
Bankshares,
Inc.
(the
“Company”)
entered
into
a
Securities
Purchase
Agreement
(the
"Purchase
Agreement") with certain investors qualified as "accredited investors," as such
term is defined in Rule 501(a) of Regulation D ("Regulation
D")
promulgated
under the
Securities Act
of 1933,
as amended
(the "Securities
Act"),
pursuant
to which
the Company
offered
and sold
shares
of
its
Series
A
Non-Cumulative
Perpetual
Preferred
Stock,
par
value
$0.01
per
share
(the
"Series
A
Preferred
Stock"),
for
an
aggregate purchase price
of $7,750,000. This amount
includes $6,150,000 paid
by directors and members
of the
senior leadership team
of
the Company
or CrossFirst
Bank (including
our executive
officers) and
their affiliates
to acquire
Series A Preferred Stock.
The offer
and
sale of the
Series A Preferred Stock by
the Company
was made in
reliance upon
the exemptions
from registration
available under
Section
4(a)(2)
of the
Securities Act
and
Rule
506(b)
of
Regulation
D. The
Purchase Agreement
includes
customary
representations,
warranties
and covenants of the Company.
On March
29, 2023,
the Company
filed a
Certificate of
Designations for
the Series A
Preferred Stock
(the "Certificate
of Designations")
with the Secretary
of State of
the State of
Kansas. The Certificate
of Designations establishes
the authorized number
of shares of
Series A
Preferred Stock as 15,000 and provides
for the powers, designations, preferences
and relative, participating, optional or other
special rights
of
the
Series
A Preferred
Stock
and
the
qualifications,
limitations
or
restrictions
thereof.
A copy
of
the
Certificate
of
Designations
is
attached hereto as Exhibit 3.1 and is incorporated herein by reference.
Pursuant to the Certificate of Designations, holders of the Series A Preferred Stock will be entitled to receive, only when, as and if declared
by the Company’s Board of
Directors or a duly authorized committee
thereof, non-cumulative cash dividends on
the liquidation preference
of
$1,000
per
share
of
Series
A
Preferred
Stock
at
a
rate
of
8.00%
per
annum,
payable
quarterly
in
arrears.
Such
dividends
are
not
mandatory or cumulative and are
payable only to the extent
declared by the Company’s
Board of Directors or a duly
authorized committee
thereof.
The
Series A Preferred
Stock
is not
convertible
into
any
other
class of
securities. The
Series A
Preferred
Stock
is
structured
to
qualify
as
Tier
1
capital.
So
long
as
any
Series
A
Preferred
Stock
remains
outstanding,
unless
full
dividends
for
the
most
recently
completed dividend period have been
declared and paid (or declared and a
sum sufficient for the payment thereof
has been set aside) on all
outstanding shares
of Series A Preferred Stock,
the Company
may not, subject
to certain exceptions,
declare, pay or
set aside for
payment
any
dividend
on
the
Company’s
common
stock
or
any
other
shares
of
capital
stock
ranking
junior
to
the
Series A
Preferred
Stock,
or
repurchase,
redeem
or
otherwise
acquire
for
consideration,
directly
or
indirectly,
the
Company’s
common
stock
or
any
other
shares
of
capital stock ranking
junior to or on a
parity with the Series A Preferred Stock.
Subject to the foregoing,
dividends (payable in
cash, stock,
or otherwise) may be
declared and paid on the
common stock and any other
class or series of capital
stock that ranks junior to
the Series A
Preferred Stock, and the holders of the Series A Preferred Stock will not be entitled to participate in any such dividend.
The Series A Preferred Stock is
perpetual and has
no maturity date
and is not
subject to any
mandatory redemption, sinking
fund, or other
similar
provisions.
The
holders
of
the
Series A Preferred
Stock
will not
have
any
right
to require
the redemption
or
repurchase
of
their
shares
of
Series A
Preferred
Stock.
The
Company
may,
at
its
option
and
subject
to
required
regulatory
approval,
redeem
the
Series A
Preferred Stock (i) in whole or in part, from time to
time, on March 29, 2028, or on any dividend payment
date on or after March 29, 2028,
or (ii) in
whole but not
in part at
any time within
90 days following
a “regulatory capital
treatment event” (as
defined in the
Certificate of
Designations)
in
each
case
at
a
redemption
price
equal
to
$1,000
per
share,
plus
the
per
share
amount
of
any
declared
and
unpaid
dividends, without accumulation of
any undeclared dividends. Upon the voluntary or
involuntary liquidation, dissolution, or winding-up
of
the
Company,
holders
of
outstanding
shares
of
Series
A
Preferred
Stock
are
entitled
to
be
paid
out
of
the
Company's
assets
legally
available for
distribution to
stockholders, subject
to the
rights of
holders of
any securities
then outstanding
ranking senior
to or
on parity
with Series
A Preferred
Stock with
respect to
distributions of
assets and
before any
distribution
of assets
is made
to holders
of common
stock or any other junior
stock, a liquidating distribution
in the amount of the
liquidation preference of $1,000
per share, plus any
declared
and
unpaid
dividends
prior
to
the
payment
of
the
liquidating
distribution,
without
accumulation
of
any
dividends
that
have
not
been
declared prior to the payment
of the liquidating distribution. Holders
of the Series A Preferred Stock will have no voting
rights except with
respect to certain changes in the terms of the Series A Preferred Stock, the issuance of capital stock ranking
senior to the Series A Preferred
Stock, certain fundamental business transactions and as otherwise required
by applicable law, subject to certain limitations.
The
Company
intends
to
use
the
net
proceeds
from
the
sale
of
the
Series A
Preferred
Stock
for
general
corporate
purposes,
including
providing
capital
to
support
strategic
growth
and
for
making
contributions
to
the
capital
of
CrossFirst
Bank,
to
support
its
lending,
investing and other banking activities.
The foregoing descriptions
of the Purchase Agreement and
the Series A Preferred Stock do not
purport to be
complete and are
qualified in
their
entirety
by
reference
to
the
form
of
the
Purchase
Agreement
attached
hereto
as
Exhibit
10.1
and
the
Certificate
of
Designations
attached hereto as Exhibit 3.1, respectively, and are incorporated herein by
reference.