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Item 1.01
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Entry into a Material Definitive Agreement
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On November 20, 2017, First Guaranty Bancshares, Inc. (the “Company” or “we”) entered into a Distribution Agreement (the “Agreement”) with Sandler O’Neill & Partners, L.P., as sales agent (“Sandler O’Neill”), pursuant to which the Company may offer and sell, from time to time through Sandler O’Neill, shares of our common stock, par value $1.00 per share (the “Common Stock”), having an aggregate gross sales price of up to $25.0 million.
Any sales of our Common Stock made under the Agreement will be sales deemed to be “at-the-market offerings,” as defined in Rule 415 under the Securities Act of 1933, as amended. These sales will be made by means of ordinary broker transactions on the NASDAQ Global Market at market prices prevailing at the time, at prices related to the prevailing market prices, or at negotiated prices. We will pay Sandler O’Neill a commission rate of 3.0% of the aggregate purchase price of each sale of shares of Common Stock.
We are not obligated to make any sales of Common Stock under the Agreement. We also may instruct Sandler O’Neill as to the maximum number of shares of Common Stock it may sell on any given day, as well as the minimum price per share.
The Distribution Agreement contains representations and warranties and covenants that are customary for transactions of this type. In addition, the Company has agreed to indemnify Sandler O’Neill against certain liabilities on customary terms, subject to limitations on such arrangements imposed by applicable law and regulation. In the ordinary course of its business, Sandler O’Neill and/or their affiliates have engaged and may engage in commercial and investment banking transactions, financial advisory and other transactions with the Company. Sandler O’Neill has received, or may receive, customary compensation and expenses in connection with such other transactions.
The Agreement may be terminated by either the Company or Sandler O’Neill, each in its sole discretion, by giving written notice to the other party as provided for in the Agreement. The Agreement will automatically terminate following the sale of shares of Common Stock having an aggregate gross sales price of $25.0 million.
In addition, we also may sell shares of Common Stock to Sandler O’Neill as principal for its own account, at a price agreed upon at the time of sale. If we sell shares to Sandler O’Neill as principal or other than in accordance with the Agreement, we will enter into a separate agreement setting forth the terms of such transaction.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement. The Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The description of the Agreement has been included to provide information regarding its terms. It is not intended to provide any other factual information about the Company. In particular, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates.