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): March 31, 2009
FEDERAL TRUST CORPORATION
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(Exact name of registrant as specified in its charter)
Florida 000-23449 59-2935028
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(State or other jurisdiction Commission File Number (I.R.S. Employer
of incorporation) Identification No.)
312 West First Street
Sanford, Florida 32771
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(address of principal executive offices) (zip code)
(407) 323-1833
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(Registrant's telephone number, including areas 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 (see General Instructions A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
FORWARD-LOOKING STATEMENTS
This current report may contain forward-looking statements, which can be
identified by the use of words such as "estimate," "project," "believe,"
"intend," "anticipate," "plan," "seek," "expect" and words of similar meaning.
These forward-looking statements are based on current beliefs and
expectations of our management and are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of
which are beyond our control. In addition, these forward-looking statements are
subject to assumptions with respect to strategic objectives, anticipated
financial results, future business prospects and decisions that are subject to
change.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements:
o general economic conditions, either nationally or in our market areas,
that are worse than expected;
o changes in laws or government regulations or policies affecting
financial institutions, including changes in regulatory fees and
capital requirements;
o competition among depository and other financial institutions;
o inflation and changes in the interest rate environment that reduce our
margins or reduce the fair value of financial instruments;
o adverse changes in the securities markets;
o materially adverse changes in the financial condition of Federal Trust
Corporation;
o the risk that the merger (the "Merger") with a subsidiary of The
Hartford Financial Services Group, Inc. ("The Hartford") will not be
consummated in a timely manner, if at all; and
o conditions to the closing of the Merger may not be satisfied or the
Agreement and Plan of Merger, dated as of November 14, 2008, by and
between The Hartford, FT Acquisition Corporation and Federal Trust
Corporation (the "Merger Agreement") may be terminated prior to
closing.
Because of these and other uncertainties, our actual future results may be
materially different from the results indicated by these forward-looking
statements.
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ITEM 1.01. Entry Into a Material Definitive Agreement
ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On March 31, 2009, Federal Trust Corporation (the "Company") and Federal
Trust Bank entered into a Note Purchase Agreement (the "Agreement") with The
Hartford Financial Services Group, Inc. ("The Hartford"). Pursuant to the
Agreement, the Company has issued and sold a note (the "Note") to The Hartford
with a principal amount of $20.0 million. The Note bears interest at a rate of
10.0% per year, and is due March 31, 2010. The purchase price of the Note is
$20.0 million.
The proceeds from the Note have been contributed by the Company to Federal
Trust Bank.
Under the Note, each of the following is considered an "Event of Default":
(a) the Company fails to pay any interest or principal on the Note
when due and payable; or
(b) the entry of a decree or order by a court having competent
jurisdiction adjudging the Company as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the
Issuer under applicable law, or appointing a receiver,
liquidator, assignee, or sequestrator (or other similar official)
of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs; or
(c) the institution by the Company of proceedings to be adjudicated
as bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or the filing
by it of a petition or answer or consent seeking reorganization
or relief under applicable insolvency law, or the consent by it
to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee or sequestrator (or
similar official) of the Company or of any substantial part of
its property, respectively, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due,
or the taking of any action by the Issuer in furtherance of any
such action; or
(d) the appointment of a conservator or receiver for Federal Trust
Bank; or
(e) the exercise by the Company of any right to terminate the Merger
Agreement; or
(f) the breach of (i) any representation and warranty made by the
Company or Federal Trust Bank in Article 4 of the Note Purchase
Agreement or (ii) any covenant made by the Company or Federal
Trust Bank in the Note Purchase Agreement.
If any Event of Default set forth in (a) through (d), above, occurs, all
unpaid principal of the Note, together with all accrued and unpaid interest
thereon, shall automatically become due and payable without any declaration or
other act on the part of The Hartford. If any Event of Default set forth in (e)
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or (f) above occurs, The Hartford may elect that all unpaid principal of the
Note, together with all accrued and unpaid interest thereon, shall become due
and payable. If an Event of Default occurs, and the Note is due and payable or
has been declared due and payable and such declaration and its consequences have
not been rescinded and annulled, The Hartford may, to the extent permitted by
applicable law, exercise one or more of the following rights, privileges and
remedies:
(i) institute proceedings for the collection of all amounts then
payable on the Note, whether by declaration or otherwise, enforce
any judgment obtained, and collect from the Issuer monies
adjudged due; and
(ii) exercise any other rights and remedies that may be available at
law or in equity.
Under Section 8.1(c) of the Merger Agreement, the Company has the right to
terminate the Merger Agreement if the Merger is not consummated by April 27,
2009. However, under the Agreement the Company has agreed to waive until March
31, 2010 its right to terminate the Merger Agreement under Section 8.1(c)
thereof.
In addition, on March 31, 2009, the Office of Thrift Supervision modified
the Prompt Corrective Action Directive issued to Federal Trust Bank to extend to
June 30, 2009 the date by which Federal Trust Bank must either (i) merge with or
be acquired by another financial institution, financial holding company or
"other entity" (as defined in the Prompt Corrective Action Directive) or (ii)
sell all or substantially all of its assets and liabilities to another financial
institution, financial holding company or "other entity."
ITEM 9.01. Financial Statements and Exhibits
Not applicable.
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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.
Date: April 2, 2009
Federal Trust Corporation
(Registrant)
By: \s\ Dennis T. Ward
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Dennis T. Ward
President and
Chief Executive Officer