8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 21, 2012

Middlefield Banc Corp.

(Exact name of registrant specified in its charter)

Ohio	000-32561	34-1585111
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
15985 East High Street Middlefield, Ohio		44062
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (440) 632-1666

not applicable

(Former name or former address, if changed since last report)

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 Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x 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(a): Entry into a Material Definitive Agreement

Sale of shares to investment fund. On March 21, 2012, Middlefield Banc Corp. (“Middlefield”) and Bank Opportunity Fund LLC (“BOF”) entered into a letter agreement pursuant to which they agreed to amend their Stock Purchase Agreement dated August 15, 2011 (the “Original Stock Purchase Agreement”). The transaction deadlines specified in Sections 4.05 and 8.01(d) of the Original Stock Purchase Agreement had previously been extended by Amendment No. 1 on September 29, 2011, by Amendment No. 2 on October 20, 2011, by Amendment No. 3 on November 28, 2011, and by Amendment No. 4 on December 21, 2011. Amendment No. 4 extended the transaction deadline to July 31, 2012 (the Original Stock Purchase Agreement, as so amended by Amendment No. 1 through Amendment No. 4, the “Stock Purchase Agreement”). The Stock Purchase Agreement currently provides for (i) BOF’s purchase of a number of shares of Middlefield common stock equal to 24.9% of Middlefield’s total outstanding shares of common stock (as of the date of closing) at a price of $16 per share, and (ii) a Warrant to purchase an aggregate number of shares of Middlefield common stock equal to 15% of the number of shares of Middlefield common stock to be purchased by BOF pursuant to clause (i) at an exercise price of $16 per share. The transaction is subject to approval by Middlefield’s stockholders under the Ohio Control Share Acquisition Act and to regulatory approval, among other conditions. The Stock Purchase Agreement also requires that Middlefield appoint prior to the closing one BOF designee to serve on the board of directors of Middlefield and on the board of directors of each of Middlefield’s two subsidiary banks.

The terms of the new amendment to the Stock Purchase Agreement, which were approved by Middlefield’s board of directors, will include a restructuring of BOF’s purchase of Middlefield common stock from one closing to three closings constituting three separate purchases that will incrementally increase BOF’s percentage ownership of the total outstanding shares of Middlefield common stock to 4.9% after the first closing, 9.9% after the second closing and 24.99% after the third closing. In addition, if BOF determines that necessary regulatory approvals can be obtained, Middlefield’s appointment of BOF’s designee to serve on the board of directors of Middlefield and on the board of directors of each of Middlefield’s two subsidiary banks will be a condition to the second closing rather than a condition to completion of the entire investment as currently set forth in the Stock Purchase Agreement. The terms of the amendment also remove the sale and purchase of the Warrant from the transaction. The amendment is conditioned upon BOF’s completion of a due diligence review of Middlefield and the execution of a definitive amendment to the Stock Purchase Agreement (such definitive amendment, “Amendment No. 5”).

Amendment No. 5 will provide for BOF’s purchase from Middlefield, at a price of $16.00 per share, shares of Middlefield common stock constituting 4.9% of Middlefield’s total outstanding shares of common stock (as of the date of such purchase) (the “Initial Investment”) immediately after execution of Amendment No. 5. The gross proceeds to Middlefield from the Initial Investment are expected to be approximately $1.5 million.

Amendment No. 5 will provide that subsequent to the Initial Investment, and on or before April 30, 2012, BOF will purchase from Middlefield, also at a price of $16.00 per share, additional shares of Middlefield common stock that, when added to the shares purchased in the Initial Investment, will increase BOF’s percentage ownership of the outstanding shares of Middlefield common stock to 9.9% (the “Follow-On Investment”). A condition to the Follow-On Investment is the approval of the Federal Reserve Bank of Cleveland, if BOF elects to request such approval, which election is at its sole discretion. In addition, if BOF determines that the necessary regulatory approval can be obtained, a condition to the closing of the Follow-On investment will be Middlefield’s appointment of BOF’s designee to serve on the board of directors of Middlefield and on the board of directors of each of Middlefield’s two subsidiary banks. The gross proceeds to Middlefield from the Follow-On Investment are expected to be approximately $1.7 million.

Amendment No. 5 will also provide that, upon approval of the Federal Reserve and the Ohio Division of Financial Institutions, BOF will purchase from Middlefield, at a price of $17.00 per share, additional shares of Middlefield common stock that, when added to the shares purchased in the Initial Investment and the Follow-On Investment, will increase BOF’s percentage ownership of the outstanding shares of Middlefield common stock to 24.99% (the “Subsequent Investment”). In addition to regulatory approval, the Subsequent Investment will also be conditioned upon, among other conditions, approval by the stockholders of Middlefield under the Ohio Control Share Acquisition Act. If BOF’s designee to serve on the board of directors of Middlefield and on the board of directors of each of Middlefield’s two subsidiary banks was not appointed in connection with the Follow-On Investment, then Middlefield’s appointment of such designee will be a condition to the closing of the Subsequent Investment. The gross proceeds to Middlefield from the Subsequent Investment are expected to be approximately $6.7 million. The total gross proceeds to Middlefield of the investments expected to be made by BOF under Amendment No. 5 total approximately $9.8 million.

Amendment No. 5 will also include Middlefield’s waiver of the Stock Purchase Agreement requirement that BOF prepare and file with the Federal Reserve and the Ohio Division of Financial Institutions certain applications by February 29, 2012.

Amendment No. 5 will also provide that, upon the closing of the Initial Investment, Middlefield will reimburse BOF or its affiliate for legal expenses up to $25,000, and Middlefield will also reimburse BOF’s expenses associated with attendance by BOF’s representative at meetings of the board of directors of Middlefield and its subsidiary banks.

Middlefield and BOF expect to enter into Amendment No. 5 within the next few weeks.

The foregoing description of the Stock Purchase Agreement is qualified in its entirety by reference to (x) the Original Stock Purchase Agreement, which is Exhibit 10.26 to Middlefield’s Form 10-K Annual Report for the year ended December 31, 2011, (y) Stock Purchase Agreement Amendments Nos. 1 through 4, which are Exhibits 10.26.1 through 10.26.4, respectively, to Middlefield’s Form 10-K Annual Report for the year ended December 31, 2011, and (z) the March 21, 2012 letter agreement between Middlefield and BOF, which is attached to this Form 8-K as Exhibit 10.26.5, each of which is incorporated herein by this reference.

An institutional investor that acquired 4.9% of Middlefield’s common stock in August of 2011 also has the right under its subscription agreement to purchase from Middlefield additional shares at $16 per share in order to maintain the institutional investor’s 4.9% interest.

Forward-looking statements. This Form 8-K Current Report includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to statements about anticipated operating and financial performance, such as loan originations, operating efficiencies, loan sales, charge-offs and loan loss provisions, growth opportunities, interest rates, and deposit growth. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “project,” “plan,” and similar expressions are intended to identify forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation delays in obtaining or failure to receive required regulatory approvals, including approval by the Superintendent of the Ohio Division of Financial Institutions and by the Board of Governors of the Federal Reserve System, the possibility that fewer than the required number of the Middlefield’s stockholders vote in accordance with the Ohio Control Share Acquisition Act to approve the sale of shares to BOF, the occurrence of events that would have a material adverse effect on Middlefield as described in the amended Stock Purchase Agreement, and other uncertainties associated with the transactions described in this Form 8-K Current Report. Additional factors that could cause actual results to differ materially are discussed in Middlefield’s filings with the Securities and Exchange Commission, including without limitation Middlefield’s Form 10-K Annual Report, its Form 10-Q Quarterly Reports, and its Form 8-K Current Reports. Forward-looking statements are based on Middlefield’s beliefs, plans, objectives, goals, assumptions, expectations, estimates, and intentions as of the date the statements are made. You must exercise caution because Middlefield cannot give any assurance that its beliefs, plans, objectives, goals, assumptions, expectations, estimates, and intentions will be realized. Middlefield does not undertake a duty to update any forward-looking statements in this Form 8-K.

Additional information and where to find it. This communication may be deemed to be solicitation material. Middlefield will file with the SEC a proxy statement and other documents regarding the transaction described in this Form 8-K. MIDDLEFIELD STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, INCLUDING MIDDLEFIELD’S PROXY STATEMENT, BECAUSE THE PROXY STATEMENT AND OTHER DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION ABOUT THE TRANSACTION WITH BANK OPPORTUNITY FUND LLC. Members of the public will be able to obtain the proxy statement and other relevant documents free of charge at the SEC’s website, http://www.sec.gov, and Middlefield’s stockholders will receive information at an appropriate time about how to obtain the proxy statement and other transaction-related documents for free from Middlefield. The proxy statement and other documents are not currently available. Middlefield and its directors, executive officers, certain members of management, and employees may have interests in the transaction or be deemed to be participants in the solicitation of proxies of Middlefield’s stockholders to approve the transaction with BOF. Information regarding the participants and their interest in the solicitation is set forth in the proxy statement filed by Middlefield with the SEC on April 4, 2011 for the 2011 Annual Meeting. Stockholders may obtain additional information regarding the interests of participants by reading the proxy statement relating to the transaction when the proxy statement becomes available.

Item 9.01(d)	Exhibits.
Exhibit 10.26.5	March 21, 2012 letter agreement between Bank Opportunity Fund LLC and Middlefield Banc Corp.

Signatures

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.

	Middlefield Banc Corp.
Date: March 27, 2012	/s/ James R. Heslop, II
	Executive Vice President and Chief
	Operating Officer

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
Exhibit 10.26.5	March 21, 2012 letter agreement between Bank Opportunity Fund LLC and Middlefield Banc Corp.

EX-10.26.5

Exhibit 10.26.5

March 21, 2012

Mr. Thomas G. Caldwell

President and Chief Executive Officer

Middlefield Banc Corp.

15985 East High Street

Middlefield, Ohio 44062

Re: Amendment to Stock Purchase Agreement

Gentlemen:

Hovde Private Equity Advisors LLC (“Hovde”) is pleased to submit on behalf of Bank Opportunity Fund (the “Fund”) this proposed agreement to amend the Stock Purchase Agreement dated August 15, 2011 entered into by and between Middlefield Banc Corp. (the “Company”) and the Fund (the “SPA”), as amended by the First Amendment to the SPA, dated as of September 29, 2011, the Second Amendment to the SPA, dated as of October 20, 2011, the Third Amendment to the SPA, dated as of November 28, 2011, and the Fourth Amendment to the SPA, dated as of December 21, 2011 (collectively, with the SPA, the “Amended SPA”) in connection with the proposed investment by the Fund in Company as contemplated by the Amended SPA. Due to unforeseen delays in the bank regulatory process, the Fund and Middlefield have agreed to modify the terms of the investment. We hope that this letter will provide a basis for consummating the initial investments that do not require regulatory approval or non-objection as described below. Capitalized terms used but not otherwise defined herein shall have the meanings attributed to them in the Amended SPA.

The principal terms, conditions and understandings of our proposal are as follows:

1. Summary of Transaction. Pursuant to an amendment to the Amended SPA, the Fund would be issued shares in exchange for an investment of up to $10 million (or such other amount in the sole discretion of the Fund so as to cause the investment to equal less than 25% of the outstanding common shares), no par value, of Middlefield (“Common Shares”) issued and outstanding on a pro forma basis, at a price to be determined as set forth below, assuming that there are 1,771,687 MBCN current shares issued and outstanding. We expect the Fund’s pro forma ownership of Common Shares to be no more than 24.99% of the issued and outstanding Common Shares as of the effective time of the closing of the Subsequent Investment (as hereafter defined).

2. Issue Structure, Price and Amount. Pursuant to the Amended SPA, the Fund will immediately invest approximately $1,460,800 in the Company to acquire up to a 4.9% ownership interest (the “Initial Investment”). Upon Federal Reserve Board approval if the Fund elects to request such approval and concurrent with the appointment of the nominee of the Fund to the boards of directors as articulated in Section 4 below, but in any event on or before April 30, 2012, the Fund will invest an additional amount in the Company equal to $1,654,400 to acquire additional Common Shares, which, when added to the Common Shares purchased in the Initial Investment will equal an aggregate interest 9.9% ownership (the “Follow-On Investment”). The offering price of the newly issued Common Shares (the “Issue Price”) in connection with the Initial Investment and the Follow-On Investment will be $16.00 per share. The Fund will be afforded anti-dilution protection on any new stock offerings for a period of 24 months from closing of each of the Initial Investment and the Follow-On Investment.

Upon approval of the change in control application by the Federal Reserve and fulfillment of all conditions in the SPA, the Fund will invest an additional amount to acquire aggregate ownership of up to 24.99% of the Common Shares as originally contemplated by the Amended SPA (the “Subsequent Investment”). The Common Shares purchased in the Subsequent Investment will be priced at $17.00 per share.

3. Warrant Allocation to Hovde. The Fund will not receive any warrants in connection with the investments described above.

4. Revised Governance Structure. As a condition precedent to the consummation of the Follow-On Investment, but only if the Fund determines that the necessary approval can be obtained from the appropriate regulators, the Fund shall be entitled to one (1) nominee to Middlefield’s Board, as well as one (1) nominee on the boards of directors of each of MB and EB, subject to regulatory approval. The Director nominee is proposed to be Joseph J. Thomas. If the Fund does not obtain a seat on the boards of directors as described above, then the Fund shall be entitled to have its nominee on the boards of directors as originally contemplated in the Amended SPA.

5. Confirmatory Due Diligence. The financial terms and other proposals set forth in this Letter are predicated on our having completed final financial, credit and legal due diligence review of Middlefield.

6. Fees and Expense Reimbursement. Middlefield agrees to reimburse Hovde and/or the Fund up to an aggregate amount of $25,000 for reasonable and documented legal expenses upon closing of the Initial Investment. Middlefield also agrees to reimburse the Fund for reasonable and documented out-of-pocket expenses incurred from the date of this letter for attendance by the Fund’s Director nominee as an observer or board member at meetings of the board of directors of Middlefield, MB, and EB.

7. Other Conditions and Requirements of the Transaction. Middlefield agrees to formally waive the requirement set forth at Section 4.05 of the Amended SPA that requires that the Fund must prepare and file with the Federal Reserve and ODFI certain applications by February 29, 2012.

If you are amenable to proceeding further, we request a response to this Letter not later than COB March 21, 2012.

We are prepared to commence our confirmatory due diligence at your earliest convenience and close the initial investment as soon as possible.

We are excited about the opportunity to partner with Middlefield. This represents a truly unique and exciting opportunity for both of our organizations. We look forward to your favorable response.

Sincerely,

/s/ Joseph J. Thomas

Joseph J. Thomas, on behalf of

Bank Opportunity Fund LLC

Acknowledged and accepted:

Middlefield Banc Corp.

By:	/s/ Thomas G. Caldwell
	Thomas G. Caldwell
	President and Chief Executive Officer