-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UHbyCuAGXGeX6QFZjRJqWL6U7/To1u76kBkEq8XRvp7cFmIWCbwzSuFOifp3adiO 0b9BIlX/whcreZ96Zur5/Q== 0000950124-05-006705.txt : 20051202 0000950124-05-006705.hdr.sgml : 20051202 20051202173109 ACCESSION NUMBER: 0000950124-05-006705 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051202 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051202 DATE AS OF CHANGE: 20051202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLAGSTAR BANCORP INC CENTRAL INDEX KEY: 0001033012 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 383150651 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16577 FILM NUMBER: 051242031 BUSINESS ADDRESS: STREET 1: 5151 CORPORATE DRIVE CITY: TROY STATE: MI ZIP: 48098-2639 BUSINESS PHONE: 248-312-2000 MAIL ADDRESS: STREET 1: 5151 CORPORATE DRIVE CITY: TROY STATE: MI ZIP: 48098-2639 8-K 1 k00519e8vk.txt CURRENT REPORT, DATED DECEMBER 2, 2005 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: December 2, 2005 FLAGSTAR BANCORP, INC. (Exact name of registrant as specified in its charter) MICHIGAN 1-16577 38-3150651 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation) Number) Identification No.) 5151 CORPORATE DRIVE, TROY, MICHIGAN 48098 (Address of principal executive offices) (Zip Code) (248) 312-2000 (Registrant's telephone number, including area 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: [ ] 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)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT On November 29, 2005, the Board of Directors of Flagstar Bank (the "Company") approved the acceleration of vesting of unvested and "out-of-the-money" stock options previously awarded to members of the Board of Directors, executive officers and current employees that had exercise prices per share of $19.35 or higher. The Board of Directors believes that it is in the best interest of the shareholders to accelerate these options, as it will have a positive effect on future earnings of the Company by reducing the impact of recording compensation expense upon the implementation of Financial Accounting Standards No. 123 (revised 2004), " Share-Based Payment" (SFAS 123R). The following table summarized the options subject to acceleration:
Weighted Average Aggregate Number of Shares Issuable Under Exercise Price Per Accelerated Options Share - ---------------------------------------- ------------------------------------------- ------------------------ Non-employee Directors 17,500 $19.78 - ---------------------------------------- ------------------------------------------- ------------------------ Executive Officers as a group 452,496 $21.47 - ---------------------------------------- ------------------------------------------- ------------------------ Other employees 359,903 $23.13 - ---------------------------------------- ------------------------------------------- ------------------------ Total 829,899 $22.16 - ---------------------------------------- ------------------------------------------- ------------------------
The Board of Directors' decision to accelerate the vesting of these options was in anticipation of compensation expense to be recorded upon the implementation of SFAS 123R. SFAS 123R will require that compensation costs related to share-based payment transactions, including the issuance of stock options, be recognized in the financial statements based on their fair value at grant date. Flagstar Bank is required to adopt the revised standard in the first quarter of 2006. Currently, the Company accounts for its share-based payment transactions under the provision of APB 25, which does not necessarily require the recognition of compensation cost in the consolidated statement of earnings in the financial statements. It is estimated that the future compensation expense that would have been recorded in the consolidated statement of earnings and which will not be recorded, based on the Company's implementation date for SFAS 123R of January 1, 2006, is approximately $3 million (pre-tax) based on value calculations using the Black-Scholes methodology. The Company will report the impact of the acceleration as a fourth quarter event and in its 2005 financial statements as pro forma footnote disclosures, as permitted under the transition guidance provided by the Financial Accounting Standards Board. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) The following exhibit is being furnished herewith:
Exhibit No. Exhibit Description - ----------- ------------------- 99.1 Press release of Flagstar Bancorp, Inc. dated December 2, 2005.
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. FLAGSTAR BANCORP, INC. Dated: December 2, 2005 By: /s/ Paul D. Borja ------------------------------ Paul D. Borja Executive Vice President, Chief Financial Officer 2 EXHIBIT INDEX
Exhibit No. Exhibit Description - ----------- ------------------- 99.1 Press release of Flagstar Bancorp, Inc. dated December 2, 2005.
EX-99.1 2 k00519exv99w1.txt PRESS RELEASE DATED DECEMBER 2, 2005 EXHIBIT 99.1 FLAGSTAR BANCORP ANNOUNCES ACCELERATION OF STOCK OPTION VESTING TROY, MICHIGAN - December 2, 2005 - Flagstar Bancorp, Inc. (NYSE: FBC), announced today that, in response to the upcoming change in the accounting treatment of stock awards and consistent with the actions of numerous other companies, on November 29, 2005, it accelerated the vesting of its unvested and "out-of-the-money" stock options awarded to its employees, executive members and Board members under its stock option plan. The acceleration applies only to options with an exercise price of $19.35 per share or higher. The options considered to be "out-of-the-money" have exercise prices greater that Flagstar's stock closing sales price on November 29, 2005, which was $15.20 per share. Outstanding unvested options that are "in-the-money" will not be subject to acceleration and will continue to vest on their normal schedule. Options to purchase 829,899 shares of Flagstar common stock, which would otherwise have vested over the next four years, will become fully vested, including 452,496 options held by executive officers, 17,500 options held by non-employee directors and 359,903 options held by other employees. These options represent about 24% of the total options outstanding. The total weighted average exercise price per share is $22.16. The closing price of Flagstar Bank stock on November 29, 2005 was $15.20. In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" (SFAS 123R). Beginning January 1, 2006, SFAS 123R will require Flagstar to apply the expense recognition provisions. As a result of the accelerated vesting of "out-of-the-money" stock options, Flagstar believes it will reduce its compensation charge it would otherwise be expected to record. The reduction in pre-tax expense is expected to be approximately $3 million based on value calculations using the Black-Scholes methodology. This consists of a $1.5 million reduction in fiscal 2006 and approximately $1.5 million thereafter. Flagstar Bancorp, which has $15.4 billion in total assets, is the largest publicly-held savings bank in the Midwest. Flagstar operates more than 130 banking centers in Michigan, Indiana and Georgia, home loan centers in 24 states and correspondent lending offices across the country. Flagstar is one of the nation's leading originators of residential mortgage loans. The information contained in this release is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information. This release contains certain statements that may constitute "forward-looking statements" within the meaning of federal securities laws. These forward-looking statements include statements about the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions, that are subject to significant risks and uncertainties, and are subject to change based upon various factors (some of which may be beyond the Company's control). The words "may," "could," "should," "would," "believe," and similar expressions are intended to identify forward-looking statements. Additional information about Flagstar may be accessed via the Internet at http://www.flagstar.com. -----END PRIVACY-ENHANCED MESSAGE-----