As filed with the Securities and Exchange Commission on January 3, 1996
Registration File No. ___________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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THE COMMERCIAL BANCORP, INC.
(Name of small business issuer in its charter)
Florida 6712 59-3396236
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(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
258 N. Nova Road
Ormond Beach, Florida 32174
(904) 672-3003
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(Address and telephone number
of principal executive offices)
Gary G. Campbell
President and Chief Financial Officer
258 N. Nova Road
Ormond Beach, Florida 32174
(904) 672-3003
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(Name, address and telephone number of agent for service)
Copies Requested to:
Herbert D. Haughton, Esq. or A. George Igler, Esq
Igler & Dougherty, P.A.
1501 Park Avenue East
Tallahassee, Florida 32301
(904) 878-2411
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to rule 415 under the Securities Act of
1933 check the following box. [X]
If this Form is filed to register additional securities for an Offering pursuant
to rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Proposed Proposed
each class Amount maximum maximum
of securities to be offering aggregate Amount of
to be registered registered(1) price per share(2) offering price(2) registration fee
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<S> <C> <C> <C> <C>
Common Stock $. 01 par value 1,200,000 shares $10.00 $12,000,000 $3,636.36
Warrants 450,000 $0.00 $0 $0.00
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</TABLE>
(1) Common Stock ("Shares") and Warrants are to be issued during the Initial
Offering Period in Units composed of one Share and one Warrant to purchase one
share of Common Stock. Units will not be issued or certificated and the minimum
number of Units which may be purchased is 100 Units. Shares and Warrants will be
detachable upon issuance and will be issued and certificated separately. Shares
issued after the Initial Offering Period will not have warrants attached.
(2) Estimated solely for the purpose of calculating the registration fee on the
basis of the proposed maximum offering price per unit.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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<PAGE>
COMMON STOCK AND WARRANTS
Minimum: 450,000 Shares ----- Maximum: 1,200,000 Shares
And 450,000 Warrants
[LOGO] THE COMMERCIAL BANCORP, INC.
A Proposed Bank Holding Company
for
THE COMMERCIAL BANK OF VOLUSIA COUNTY
ORMOND BEACH, FLORIDA
A Proposed State-Chartered Bank
The Commercial Bancorp, Inc., a Florida corporation ("Company"), hereby
offers for sale 1,200,000 shares of common stock at a price of $10.00 per share
(the "Offering"). The minimum number of Units or shares that may be purchased is
250. During the Initial Offering Period, which is defined as the 90 day period
following the effective date of the Registration Statement filed under the
Securities Act of 1933 ("33 Act"), as amended ("Effective Date") and any
extension by the Company in its sole discretion not to exceed 60 days, up to
450,000 shares will be offered in "Units". Each Unit consists of one share of
Common Stock, par value $0.01, of the Company ("Common Stock") and one stock
warrant ("Warrant") to purchase one share of Common Stock at $10.00 per share.
No fractional shares will be issued. Units will not be separately certificated
or transferable. Only certificates for Common Stock and Warrants will be issued
in connection with the Offering. Warrants will expire 36 months from the
Effective Date. The minimum number of Units offered is 450,000 and the
Organizers intend to purchase, in the aggregate, at least 108,500 Units or 24.1
% of the total minimum Offering. Warrants will not be included with shares
offered after the Initial Offering Period. The Company has reserved 450,000
shares of this Offering to be issued upon the execution of Warrants by the
holders of the Warrants. Actual sales of shares to the public are expected to be
made beginning on or about January , 1997, and ending on or about December ,
2000, but the Offering may be terminated earlier by the Company in its sole
discretion. The Offering will be made on a continuous basis for approximately 36
months following the Effective Date with multiple closings under Securities and
Exchange Commission ("SEC") Rule 415. The Units and shares are offered on a
best-efforts basis by certain directors and executive officers of the Company,
who will receive no commissions for such sales. All subscription funds tendered
during the Initial Offering Period will be deposited in an interest-bearing
escrow account with the Independent Banker's Bank of Florida ("Escrow Agent").
The Offering will be terminated and all subscription funds, together with any
interest earned thereon, will be promptly returned if all required conditional
regulatory approvals have not been obtained or the minimum number of Units have
not been subscribed to by the end of the Initial Offering Period. Subscriptions
obtained in the Offering may be accepted or rejected in whole or in part by the
Company for any reason. Once a subscription is accepted by the Company, however,
it cannot be withdrawn. See "TERMS OF THE OFFERING."
Once subscription funds have been released by the Escrow Agent and shares
of the Company's Common Stock are issued, in the event the Offering is
terminated because of the failure to obtain final regulatory approvals,
subscribers will not receive a full refund of their subscription payment. See
"TERMS OF THE OFFERING - Failure of Bank to Commence Operations."
The Company is a "development stage company" with no prior operating
history. See "Risk Factors - Start-up Enterprise. Prior to this Offering, there
has been no public market for the Common Stock. There can be no assurance that
an active trading market for such stock will develop since the Company presently
does not intend to seek to list the Common Stock on a national securities
exchange or to qualify such Common Stock for quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ").
INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD
NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF
THOSE RISKS THAT MANAGEMENT BELIEVES PRESENT THE SUBSTANTIAL RISKS TO AN
INVESTOR IN THIS OFFERING.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SEC PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
THIS OFFERING IS BEING MADE ON A 450,000 UNIT MINIMUM BASIS.
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Price Underwriting
to Discounts and Proceeds to
Public(1) Commissions(2) the Company(3)
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<S> <C> <C> <C>
Per Unit . . . . . . . . . . . . . . . . . $10.00 $0 $10.00
Minimum(4) . . . . . . . . . . . . . . . . $4,500,000 $0 $4,500,000
Maximum . . . . . . . . . . . . . . . . . $12,000,000 $0 $12,000,000
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</TABLE>
(See footnotes on inside Front Cover)
The date of this Prospectus is January ___, 1997.
<PAGE>
(Continuation of front cover)
(1) Prior to this Offering, there has been no established market for the shares
of the Company's Common Stock. The Offering price was arbitrarily
determined by the Board of Directors of the Company and does not bear any
relationship to the Company's assets, book value, net worth or any other
recognized criteria of value. In the event a market should develop for the
Common Stock after completion of this Offering, there can be no assurance
that the market price will equal or exceed the Offering price herein.
(2) The securities offered hereby will be sold on a best-efforts, minimum
450,000 Unit basis by certain directors and executive officers of the
Company and no commissions will be paid on such sales. See "TERMS OF THE
OFFERING."
(3) Before deducting Offering expenses, estimated to be approximately $26,000
including registration fees, legal and accounting fees, printing and other
expenses. See "USE OF PROCEEDS" for an itemized statement of expenses.
(4) These securities are offered on a best-efforts, 450,000 Unit minimum basis.
If payment in cash for 450,000 Units is not received prior to the end of
the Initial Offering Period the Offering will terminate and all
subscription funds, together with any interest earned thereon, will be
promptly returned to subscribers. The Organizers of the Company have
indicated that they may be willing to subscribe for additional Units in
this Offering, not to exceed an aggregate of 20,000 Units or 4.4% of the
minimum Offering, if necessary to help the Company sell the 450,000 Units
necessary to release subscription proceeds from the Subscription Escrow
Account, as defined herein and to continue the Offering. All purchases of
Units by the Company's Organizers will be subject to affiliate resale
limitations under the 33 Act, as amended, and will be made on the same
terms, including Warrant provisions, as those made by other investors. The
Organizers of the Company have represented to the Company that all
purchases of Common Stock will be made for investment purposes only and not
with a view to resell such shares. The maximum number of shares that will
be sold in the Offering will be 1,200,000 shares. See "RISK FACTORS,"
"TERMS OF THE OFFERING," and "ORGANIZERS AND PRINCIPAL SHAREHOLDERS."
The Company reserves the absolute right to cancel all subscriptions and
return all subscription funds, adjusted for any income thereon, realized from
the investment of such funds, for any reason whatsoever, at any time prior to
the time that the Company withdraws subscription funds from the Subscription
Escrow Account. See "TERMS OF THE OFFERING."
2
<PAGE>
AVAILABLE INFORMATION
Prior to the Offering, the Company has not been required to file
reports under the Securities Exchange Act of 1934 ("Exchange Act").
This Prospectus omits certain of the information contained in the
Registration Statement of which this Prospectus is a part, and reference is
hereby made to the Registration Statement and related exhibits for further
information with respect to the Company and the Shares and Units offered hereby.
The statements contained herein concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is made to the copy
of such document filed as an exhibit to the Registration Statement or otherwise
filed with the SEC. Such statement is qualified in its entirety by such
reference. Copies of exhibits may be obtained by written request addressed to:
Gary G. Campbell, 258 N. Nova Road, Ormond Beach, Florida 32174.
REPORTS TO SECURITY HOLDERS
The Company intends to furnish annual reports to its shareholders which
will contain audited financial statements and quarterly reports which contain
unaudited financial statements. In addition, the Company will be required, under
section 15(d) of the Exchange Act, to file annual reports with the SEC. Copies
of such reports will be available to the Company's shareholders.
3
<PAGE>
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified in its entirety by the more detailed information and
financial statements appearing elsewhere in this Prospectus. Prospective
Investors are urged to read the entire Prospectus carefully.
Risk Factors
The securities offered hereby may be deemed to be speculative and involve
certain risks such as:
<TABLE>
<CAPTION>
<S> <C>
Start-up Enterprise Intended Purchases by Organizers
Dependency on Key Management Anti-takeover Provision in Company's
Financial Position of the Company and Expected Articles of Incorporation
Lack of Initial Profitability No Established Market for Shares
Highly Competitive Banking Market Arbitrary Determination of Offering Price
Unpredictable Economic Conditions Absence of Preemptive Rights
Extensive Governmental Regulation Future Capital Needs of the Bank
No Plans to Pay Dividends in the No Underwriting of this Offering
Foreseeable Future Possible Dilution Resulting from Shares
Issued Under Warrant Plan
</TABLE>
For these and other reasons, the purchase of the Units and shares is highly
speculative and involves significant investment risks. A prospective investor
should be prepared to lose his or her entire investment. Prospective investors
should carefully consider the matters set forth under "RISK FACTORS."
The Company
The Commercial Bancorp, Inc. ("Company") was organized under the laws
of the State of Florida on August 15, 1996, for the purpose of operating as a
bank holding company pursuant to the Federal Bank Holding Company Act of 1956,
as amended ("BHC Act"). The Company intends to use the minimum net proceeds of
this Offering to purchase 100% of the common stock to be issued by The
Commercial Bank of Volusia County ("Bank"), to repay organizational expenses and
for other general corporate purposes. Neither the Company nor the Bank has
commenced business operations, and neither will do so until the Initial Offering
Period is completed and the requisite approvals of the Florida Department of
Banking and Finance ("Department"), the Federal Deposit Insurance Corporation
("FDIC") and the Board of Governors of the Federal Reserve System ("Federal
Reserve") are obtained. The main office of the Company and the Bank will be
located in Ormond Beach, Volusia County, Florida. It is anticipated that the
Bank will commence business operations sometime during the second quarter of
1997, or as soon thereafter a practicable. With the exception that it will have
no trust powers, the Bank will operate as a full service commercial bank with
primary emphasis upon high quality service to meet the financial needs of the
individuals and businesses residing and located in and around Ormond Beach,
Florida. The Company's mailing address is, 258 N. Nova Road, Ormond Beach,
Florida 32174 and the telephone number is (904) 672-3003. See "THE COMPANY".
Terms and Conditions of the Offering
Shares offered................................. Up to 1,200,000 shares are
being offered. A minimum of
450,000 shares are required
to be sold in this Offering.
See "TERMS OF THE OFFERING."
4
<PAGE>
Warrants....................................... During the Initial Offering
Period shares will be offered
in Units with a Unit
consisting of one share of
Common Stock and one Warrant.
Each Warrant will entitle the
holder thereof to purchase
one share of additional
Common Stock for $10.00 per
share during the 36 month
period following the
Effective Date of
Registration of the shares.
Warrants subscribed to in the
Initial Offering Period and
subsequently issued will
expire 36 months from the
Effective Date of
Registration. The Warrants
are transferrable in
accordance with the Warrant
Plan. See "TERMS OF THE
OFFERING-Warrants."
Common Stock
Outstanding After the
Offering....................................... Minimum - 450,000 shares
Maximum - 1,200,000 shares
Price.......................................... $10.00 per Unit or per share,
if applicable
Use of Proceeds................................ To purchase 100% of the
issued and outstanding
capital stock of the Bank; to
provide working capital for
the Bank to commence its
business operations
(including officers' and
employees' salaries); to pay
expenses in connection with
the formation of the Company,
the organization of the Bank,
and this Offering; and for
other corporate purposes of
the Company. Proceeds not
used to purchase Bank stock
will be retained by the
Company and will be used to
fund future capital
requirements of the Bank, as
well as for other permissible
investments for bank holding
companies, including the
possible acquisition of other
financial institutions. See
"USE OF PROCEEDS."
Conditions of the Offering..................... The Offering will be made on
a continuous basis under SEC
Rule 415. The Offering will
expire 36 months from the
Effective Date of
Registration. Funds received
by the Company during the
Initial Offering Period will
be deposited with the Escrow
Agent. Funds so deposited may
be released to the Company
only in accordance with the
terms of the Escrow Agreement
between the Company and the
Escrow Agent. The Offering
will be terminated by the
Company at the end of the
Initial Offering Period if
subscriptions for 450,000
Units have not been received
and deposited with the Escrow
Agent or if final regulatory
approvals have not been
received by the Company and
the Bank, or the Company has
canceled the Offering prior
to withdrawing funds from the
Subscription Account.
5
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS IN THE COMMON STOCK SHOULD GIVE CAREFUL ATTENTION TO
THE FOLLOWING STATEMENTS RESPECTING CERTAIN RISKS APPLICABLE TO THE OFFERING,
WHICH RISKS INCLUDE BUT ARE NOT LIMITED TO THOSE NOTED BELOW. OTHER FACTORS OF
IMPORTANCE ARE SET OUT ELSEWHERE IN THIS PROSPECTUS.
Start-up Enterprise
Neither the Company nor the Bank has commenced business operations, and
both are newly organized entities with no operating history. Thus, investors in
the Common Stock are subject to the risk of loss of all or a part of their
investment. Furthermore, final regulatory approval to commence banking
operations will not be obtained until the Company has expended a portion of the
proceeds of this Offering to employ personnel, rent temporary office space and
pay other pre-opening expenses. The Company is awaiting the Department's
conditional approval of the proposed Bank's charter application. The Company is
also awaiting conditional approval of its Application for Deposit Insurance from
the FDIC. Finally, the Company is awaiting approvals to become a one-bank
holding company from the Federal Reserve. The conditional charter approval from
the Department will require that final approval to commence banking operations
be obtained within twelve months after receipt of conditional approval. While
management of the Company is confident that all of the necessary regulatory
approvals will be obtained there can be no assurance that the foregoing
approvals will be obtained. In the event that the Company issues the shares of
Common Stock and final approval to commence banking operations is not granted
within twelve months after receipt of preliminary regulatory approvals, the
Company will solicit shareholder approval for its dissolution and liquidation.
In such event, the Company will promptly return to subscribers all subscription
funds and interest earned thereon, less all expenses incurred by the Company,
including the expenses of the Offering, the organizational and pre-opening
expenses of the Company and the Bank. In the event of dissolution and
liquidation, it is likely that subscribers will receive only a portion of their
initial investment due to the foregoing expenses. See "TERMS OF THE OFFERING -
Failure of Bank to Commence Operations."
Dependency on Key Management
Regulatory approval to establish and operate a state-chartered bank is,
among other things, dependent upon the Department's approval of such bank's
proposed chief executive officer. Generally, the chief executive officer of a
start-up financial institution is deemed to be vital to the potential success of
the new institution. The Bank's application for a charter filed with the
Department proposed Gary G. Campbell as the Bank's Chief Executive Officer. In
the event of death, disability, resignation or other event causing the
unavailability of Mr. Campbell, final regulatory approval to commence banking
operations would be delayed until such time as a suitable replacement is
approved by the Department. The Company has obtained "key-man" life insurance
for Mr. Campbell in the amount of $500,000 which will defray the expenses that
the Company and the Bank might incur if the opening of the Bank was delayed as a
result of his death. The Company is the beneficiary of the key man policy.
See "MANAGEMENT - Key Man Insurance".
Financial Position of the Company and Expected Lack of Initial Profitability
The initial activity of the Company will be to act as the sole shareholder
of the Bank. Thus, the profitability of the Company will be dependant upon the
successful operation of the Bank. Typically, new banks are not profitable in the
first year of operation and sometimes are not profitable for several years. The
Bank will incur significant expenses in establishing itself as a going concern
and there can be no assurance that the Bank will be operated profitably or that
future earnings, if any, will meet the levels of earnings prevailing in the
banking industry.
Highly Competitive Banking Market
With the exception that it will have no trust powers, the Bank will be a
full service commercial bank operating in Ormond Beach, Volusia County, Florida.
Competition among financial institutions in the Bank's primary market area is
intense. The Bank will compete with other state banks, consumer finance
companies, money market mutual funds, and other financial institutions which
have far greater financial resources than those available to the Bank.
Additionally, the Bank will compete with banks, savings institutions and credit
unions located in nearby markets who solicit business from the Bank's Primary
Service Area. For example, as a start-up financial institution, the Bank's
relatively small capital base may affect its ability to compete for certain
types of loans due to regulatory lending limitations. The Bank's size may also
impact its ability to compete effectively with larger institutions in offering
other services. If the Bank is unable to compete for deposits effectively in its
primary service area, such inability would likely have an adverse effect on the
Bank's potential for growth and profitability. See "BUSINESS OF THE BANK -
Market Area and Competition."
6
<PAGE>
Unpredictable Economic Conditions
Commercial banks and other financial institutions are affected by economic
and political conditions, both domestic and international, and by governmental
monetary policies. Conditions such as inflation, recession, unemployment, high
interest rates, short money supply, international disorders and other factors
beyond the control of the Company and the Bank may adversely affect their
profitability. See "BUSINESS OF THE BANK - Monetary Policies."
Extensive Governmental Regulation
The Company and the Bank will operate in a highly regulated environment and
will be subject to supervision by several governmental regulatory agencies,
including the Federal Reserve, the Department, the FDIC and the SEC. The Company
and the Bank will be vulnerable to future legislation and government policy,
including bank deregulation and interstate expansion, which could adversely
affect the banking industry as a whole, including the operations of the Company
and the Bank. See "SUPERVISION AND REGULATION."
No Plans to Pay Dividends in the Foreseeable Future
It is not anticipated that the Company will distribute any dividends to
shareholders in the foreseeable future. Earnings of the Bank, if any, are
expected to be retained by the Bank to enhance its capital structure or
distributed to the Company to defray its operating costs. Dividend distributions
of state banks are restricted by statute and regulation. See "DIVIDEND POLICY."
Intended Purchases by Organizers
The Organizers presently intend to purchase 108,500 Units in the Offering,
which will equal 24.1% of the minimum of 450,000 Units required in order to
release subscription proceeds from the Subscription Escrow Account. See
"ORGANIZERS AND PRINCIPAL SHAREHOLDERS." However, the Organizers have indicated
that they may be willing to subscribe for additional Units in the Offering if
necessary to help the Company complete the Offering and release proceeds from
the Subscription Escrow Account. Total purchases by the Organizers will not
exceed 128,500 Units in the aggregate, which will equal 28.6% of the 450,000
Units. The Organizers have represented to the Company that all purchases of
Common Stock will be made for investment purposes only and not with a view to
resell such shares.
Failure of the Bank to Commence Operations; Return of Subscription Funds
Before the Bank can open for business it must obtain final approval from
both the Department and the FDIC. In the event that the Company issues shares of
Common Stock and such approvals are not obtained, the Company will return to
subscribers only those funds remaining after deduction for expenses incurred by
the Company for this Offering and the organizational and preopening expenses of
the Company and the Bank. In the event final regulatory approvals are not
obtained, subscribers will be entitled to a return of only a portion of their
subscription funds. See, "TERMS OF THE OFFERING - Failure of Bank to Commence
Operations."
Possible Creditors Claims against the Company
Once the Company issues the shares of Common Stock offered hereby, the
Offering proceeds may be considered part of general corporate funds and thus may
be subject to the claims of creditors of the Company, including claims against
the Company that may arise out of actions of the Company's officers, directors,
or employees. It is possible, therefore, that one or more creditors may seek to
attach the proceeds of the Offering prior to the Bank's commencement of banking
operations. If such an attachment occurs and it becomes necessary to refund the
subscription proceeds to shareholders because of the failure to obtain the
required regulatory approvals, the refund process might be delayed and the
payment to shareholders might be further reduced.
Anti-Takeover Provisions
The Company's Articles of Incorporation ("Articles") contain provisions
requiring supermajority shareholder approval to effect certain extraordinary
corporate transactions which are not approved by the Board of Directors. The
effect of these provisions is to make it more difficult to effect a merger, sale
of control or similar transaction involving the Company even though a majority
of the Company's shareholders may vote in favor of such a transaction. In
addition, the Company's Articles provide for classes of Directors, whereby
one-third of the members of the Board of Directors shall be elected each year
and each director of the Company will serve for a term of three years. Finally,
the Company's Articles provide that Florida's Control- Share Acquisition Statute
shall apply to acquisitions of control shares, as defined therein, of the
Company's Common Stock. The
7
<PAGE>
effect of these provisions is to make it more difficult to effect a change in
control of the Company through the acquisition of a large block of the Company's
Common Stock. See "DESCRIPTION OF COMMON STOCK" and "Appendix A."
No Established Market for Shares
Presently there is no established market for the Common Stock. There can be
no assurance that an established public market will develop for such securities
upon completion of this Offering or whether substantial trading activity in the
Shares will occur for several years, if at all. Moreover, in the event that the
Organizers subscribe for additional Units in this Offering in order to achieve
the minimum subscription level necessary to release subscription proceeds from
the Subscription Escrow Account, an established public market of the Common
Stock will be less likely to develop. As a result, investors who may need or
wish to dispose of all or a part of their investment in the Common Stock may not
be able to do so except by private, direct negotiations with third parties. The
Company does not presently intend to seek to list the Common Stock on a national
securities exchange or to qualify such Common Stock for quotation on NASDAQ. At
such time as the Company's stock qualifies for registration on NASDAQ, the
Company may seek to register the Shares for quotation.
Arbitrary Determination of Offering Price
Prior to this Offering there has been no established market for the shares
of the Company's Common Stock. The Offering price was arbitrarily determined by
the Board of Directors of the Company, and does not bear any relationship to the
Company's assets, book value, net worth or any other recognized criteria of
value. In determining the Offering price of the shares, the Department's capital
requirements for the Bank and general market conditions for the sale of such
securities were considered. In the event a market should develop for the Common
Stock after completion of this Offering, there can be no assurance that the
market price will equal or exceed the Offering price herein.
Absence of Shareholder Preemptive Rights
No holder of the Common Stock of the Company will have preemptive rights
with respect to the issuance of shares of any class of stock. The total number
of shares of all classes of capital stock which the Company shall have the
authority to issue is 10,000,000 shares, consisting of shares of Common Stock,
par value $0.01 per share. Each share of Common Stock is entitled to one vote
per share in all matters requiring a vote of shareholders. The Board of
Directors of the Company could from time to time determine to issue additional
shares of the authorized Common Stock in addition to the shares offered hereby
and in such event the ownership interest of the subscribers in this Offering may
be diluted. The Company's Articles of incorporation do not contain a provision
authorizing any class of preferred stock.
Future Capital Needs of the Bank
The Board of Directors of the Company may determine from time to time to
obtain additional capital through the issuance of additional shares of the
authorized Common Stock of the Company. There can be no assurance that such
shares will be issued at prices or on terms equal to the initial Offering price
and terms of this Offering.
No Underwriter of This Offering
This Offering is being made without the services of an underwriter. Sales
will be solicited only by certain executive officers and directors of the
Company. Accordingly, there can be no assurance that all of the Units or shares
offered hereby will be sold at the expiration of the Offering period. See "TERMS
OF THE OFFERING."
Possible Dilution Resulting from Warrants
Warrants issued in this Offering are generally transferable. Shareholders
who do not, or are not able to, exercise warrants received in this Offering may
suffer a dilution of their investments in terms of book value and in the
percentage of total outstanding shares with respect to the shares received in
this Offering if other warrant holders exercise their Warrants and the book
value of the shares is greater than $10.00 at the time of such exercise. In
addition, an individual shareholder's percentage of ownership may also be
affected.
THE COMPANY
The Commercial Bancorp, Inc. ("Company") was incorporated under the laws of
the State of Florida on August 15, 1996, to operate as a bank holding company
pursuant to the BHC Act, and to purchase 100% of the issued and outstanding
capital stock
8
<PAGE>
of The Commercial Bank of Volusia County, a state-chartered commercial bank to
be organized under the laws of Florida ("Bank"), which will conduct a general
banking business in Ormond Beach, Florida. The Organizers filed an Application
for Authority to Organize with the Department on October 21, 1996. The Company
also filed its application for deposit insurance with the FDIC on November 27,
1996, and an application to become a one-bank holding company with the Federal
Reserve on _______________________, 1996. Upon obtaining regulatory approval,
the Company will be a registered bank holding company subject to regulation by
the Federal Reserve.
The Bank expects to commence operations sometime in the second quarter of
1997. See "BUSINESS OF THE BANK." The Organizers of the Company are five
individuals, all of whom reside in Volusia County, Florida. There are five (5)
additional persons who will serve as organizers of the Bank and who will serve
on the Board of Directors of the Bank, but not the Company, (hereinafter
collectively the "Organizers" and if individually "Organizer"). See "ORGANIZERS
AND PRINCIPAL SHAREHOLDERS." All of the Organizers of the Company will serve on
the initial Board of Directors of the Company and all but one of the Organizers
will serve on the initial Board of Directors of the Bank. See "MANAGEMENT."
The main offices of the Company and the Bank will be located at 258 North
Nova Road, Ormond Beach, Florida 32174. See "BUSINESS OF THE COMPANY -
Premises." The mailing address of the Company's present office, which it will
occupy until the Bank opens for business, is 258 N. Nova Road, Ormond Beach,
Florida 32174 and its telephone number is (904) 672- 3003.
TERMS OF THE OFFERING
General
The Company is Offering hereunder up to 1,200,000 Shares of its Common
Stock for cash at a price of $10.00 per share. A minimum subscription of 250
shares is required for each subscription hereunder. Individual investors, other
than the Organizers, may subscribe for up to a maximum of 44,500 Units in the
Initial Offering Period and up to a maximum of 74,500 shares thereafter. The
purchase price of $10.00 per Unit or share shall be paid in full upon execution
and delivery of the Subscription Agreement. All subscriptions tendered by
investors are subject to acceptance by the Board of Directors of the Company
through its duly authorized Subscription Committee, and the Company reserves the
absolute and unqualified right to reject or reduce any subscription for any
reason prior to acceptance. Furthermore, the Company reserves the right to
cancel this Offering at any time prior to the time the Company withdraws funds
from the Subscription Escrow Account, for any reason whatsoever.
Warrants
Each investor who subscribes during the Initial Offering Period will
receive a Warrant entitling the subscriber to purchase one share of Common Stock
for each Unit purchased. Warrants subscribed to during this 90 day period (or
150 day period if extended) will expire 36 months from the Effective Date of
Registration. Unexpired Warrants may be exchanged for shares upon the payment of
$10.00 per share to the Company, subject to the requirement that the minimum
number of shares which will be issued upon any single presentment will be 100
shares unless the Warrant presented is for less than 100 shares, at which time
all shares must be purchased. Certificated Warrants may be transferred by a
holder in accordance with the Warrant Plan.
No Established Market
Prior to this Offering there has been no established public market for the
shares of the Common Stock and/or Warrants and there can be no assurance that an
established market for such stock or Warrants will develop. The Offering price
has been arbitrarily determined and is not a reflection of the Company's book
value, net worth or any other such recognized criteria of value. In determining
the Offering price of the Common Stock, the capital requirements of the
Department for the Bank and general market conditions for the sale of such
securities were considered. There can be no assurance that, if a market should
develop for the Common Stock or Warrants, the post-Offering market price will
equal or exceed the initial Offering price.
Plan of Distribution
Pursuant to SEC Rule 415, (17 C.F.R. Section 230.415), the Company intends
to offer the Units and shares on a continuous basis for a period of up to three
years from the Effective Date. The Units and shares offered will be sold by
certain directors and executive officers of the Company pursuant to Rule 3a 4-1
of the Securities Exchange Act of 1934 ("34 Act"). None of the directors or
officers who intend to offer the Units and shares is subject to statutory
9
<PAGE>
disqualification within the meaning of Section 3(a)(39) of the 34 Act, nor are
any such persons now or have they been during the preceding 12 months, an
associated person of a broker or dealer or a registered broker-dealer. No such
person has sold securities for an issuer within the preceding year. Each person
offering the Units and shares will be registered with the Florida Department of
Banking and Finance, Division of Securities and Investor Protection as an
associated person of the Company prior to commencing the Offering.
Beginning on the Effective Date the Company will offer the shares in Units
to the public for a period of 90 days, unless extended by the Company for up to
60 days in its sole discretion (the Initial Offering Period). During this period
the Company will offer 450,000 shares of the total 1,200,000 shares offered.
Units will be offered by officers and directors of the Company primarily to
persons who work or reside in Volusia County, Florida. To a limited extent,
Units will be offered to friends, acquaintances and family members living
outside the Volusia County community some of whom may live outside of the State
of Florida. Persons indicating an interest in acquiring Units will be provided
with a copy of this Prospectus prior to the Company accepting subscription
funds. Subscriptions will be accepted only if accompanied by a proper
Subscription Agreement. During this Initial Offering Period the Company will
conduct its first Closing if the conditions required to Close have been met.
Units subscribed to during this period will consist of one share of Common Stock
and one Warrant to purchase one share of Common Stock.
Once the Initial Offering Period closes and for a 12 month period
thereafter the Company will offer up to 300,000 shares of Common Stock without
Warrants to the public. The price of these shares is $10.00 per share. A
Prospectus, as amended or supplemented will be provided by an executive officer
or director of the Company or the Bank to interested persons. Such persons will
be permitted to subscribe for up to 22,500 shares of the Common Stock by
executing and delivering to the Company a Stock Subscription Agreement, along
with the subscription price. A copy of the Stock Subscription Agreement is
attached to this Prospectus as Appendix C. During the period following the
Initial Offering Period in order to minimize the administrative costs of issuing
shares, the Company will conduct multiple Closings, in 30 day intervals, wherein
shares will be issued to subscribers. During these 30 day periods, subscription
funds received by the Company will be held in the Subscription Escrow Account
maintained at the Bank. Subscription funds will be transferred to the Company by
the Bank following receipt of a certification from the Company that shares
specifically subscribed for have been issued.
Warrant holders may acquire shares, subject to the minimum share purchase
limit, by executing a Warrant Certificate any time during the 36 months
following the Effective Date of Registration and delivering such Certificate,
along with the Warrant price of $10.00 per share, to the Company's Secretary at
its corporate office.
See "TERMS OF THE OFFERING - Conditions of the Offering."
Conditions of the Offering
The Offering will expire at 5:00 p.m. Eastern Time, on ______________, 1999
(the "Expiration Date"). The Offering is expressly conditioned upon fulfillment
of the following conditions ("Offering Conditions") within the Initial Offering
Period.
The Offering Conditions, which may not be waived, are as follows:
(a) Not less than $4,500,000 shall have been deposited with the Escrow
Agent in the Subscription Escrow Account within 90 days from the Effective Date
of Registration, unless extended by the Company for up to 60 days or not later
than ________________, 1997;
(b) The Company shall have received conditional approval from the Federal
Reserve of its application to become a one-bank holding company, the Organizers
shall have received conditional approval from the Department to charter the Bank
and the proposed Bank shall have received conditional approval of its
application for deposit insurance from the FDIC; and
(c) The Company shall not have canceled this Offering prior to the time
funds are withdrawn from the Subscription Escrow Account.
Escrow of Subscription Funds
All subscription funds and documents tendered by investors will be placed
in the Subscription Escrow Account with the Independent Bankers' Bank of
Florida, Orlando, Florida ("Escrow Agent"), pursuant to the terms of the Escrow
Agreement, the form of which is attached to this Prospectus as Appendix "B".
Upon receipt of a certification from the Company during the Initial Offering
Period that: (i) the required conditional regulatory approvals have been
received; and (ii) subscriptions totaling not less than $4,500,000 have been
received, the Escrow Agent will release all subscription funds, and any income
received thereon, to the Company.
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<PAGE>
Pending disposition of the Subscription Escrow Account under the Escrow
Agreement, the Escrow Agent is authorized, upon instructions to be given by
either Gary G. Campbell or James R. Peacock to invest subscription funds in
direct obligations of the United States Government, in short-term insured
certificates of deposit and/or money market management trusts for short-term
obligations of the United States Government, with maturities not to exceed 90
days. The Company will invest the subscription funds in a similar manner after
breaking escrow and prior to the time that the Company infuses capital into the
Bank. The Offering proceeds will be used to purchase capital stock of the Bank
and to repay expenses incurred in the organization of the Company and the Bank.
See "USE OF PROCEEDS."
In the event the Offering Conditions are not met within the Initial
Offering Period or the Offering is terminated by the Company prior to
withdrawing the Subscription Funds, the Escrow Agent shall promptly return to
the subscribers their subscription funds, together with their allocated share of
income, if any, earned on the investment of the Subscription Escrow Account.
Each Subscriber's proportionate share of Subscription Escrow Account earnings
shall be that fraction (i) the numerator of which is the dollar amount of such
subscriber's tendered subscription multiplied by the number of days between the
date of acceptance of the investor's subscription and the date of the
termination of the Offering, inclusive (the subscriber's "Time Subscription
Factor"), and (ii) the denominator of which is the aggregate Time Subscription
Factor of all investors depositing subscription funds in the Subscription Escrow
Account.
NO ASSURANCE CAN BE GIVEN THAT SUBSCRIPTION FUNDS CAN OR WILL BE INVESTED
AT THE HIGHEST RATE OF RETURN AVAILABLE OR THAT ANY INCOME WILL BE REALIZED FROM
THE INVESTMENT OF SUBSCRIPTION FUNDS.
If all Offering Conditions are satisfied, and the Company withdraws the
subscription funds from the Subscription Escrow Account, all earnings on such
account shall belong to the Company.
The Independent Bankers Bank of Florida, by accepting appointments as
Escrow Agent under the Escrow Agreement, in no way endorses the purchase of the
Company's securities by any person.
Failure of Bank to Commence Operations
The Department requires that a new state bank open for business (i.e.,
obtain a certificate of authorization) within 12 months after receipt of
preliminary approval from the Department. The Organizers anticipate that the
Bank will open for business sometime in the second quarter of 1997. Because
final approval of the Bank's charter is conditioned on the Company's raising
funds to capitalize the Bank at $4,028,000, the Company expects to issue the
shares of Common Stock before it has obtained all final regulatory approvals for
the Bank. In the event that the Company issues the shares of Common Stock and
the Department does not grant the Bank final regulatory approval to commence
banking operations within 12 months after the Bank's receipt of preliminary
approval from the Department, the Company will promptly return to subscribers
all subscription funds and interest earned thereon, less all expenses incurred
by the Company, including the expenses of the Offering and the organizational
and pre-opening expenses of the Company and the Bank. It is probable that this
return will be further reduced by amounts paid to satisfy claims of creditors,
as discussed in the following paragraph.
Once the Company issues the shares of Common Stock offered hereby, the
Offering proceeds may be considered part of general corporate funds and thus may
be subject to the claims of creditors of the Company, including claims against
the Company that may arise out of actions of the Company's officers, directors,
or employees. It is possible, therefore, that one or more creditors may seek to
attach the proceeds of the Offering prior to the Bank's commencement of banking
operations. If such an attachment occurs and it becomes necessary to pay the
subscription funds to shareholders because of failure to obtain all necessary
regulatory approvals, the payment process might by delayed; and if it becomes
necessary to pay creditors from the subscription funds, the payment to
shareholders might be further reduced.
Purchases by Organizers of the Company
The Organizers have indicated that they may be willing to subscribe for
additional Units in this Offering, if necessary, to help the Company complete
the Offering in order to release subscription proceeds from the Subscription
Escrow Account. The maximum aggregate number of Units which may be subscribed by
the Organizers in this Offering is 128,500 Units. Any such purchases of
additional shares by the Organizers will be subject to affiliate resale
limitations of the 33 Act, until such time as the Company is no longer subject
to the requirements of the Exchange Act and will be made on the same terms as
those made by other investors. The Organizers have represented to the Company
that any such purchases will be made for investment purposes only and not with a
view to resell such shares. If additional purchases, as described above, are not
necessary, the Organizers intend to purchase a minimum of 108,500 Units pursuant
11
<PAGE>
to this Offering, or 24.1% of the 450,000 minimum Units to be issued in this
Offering. If additional purchases as described above are necessary, the
Organizers will purchase additional Units and will then own, more than 24.1% of
the outstanding Common Stock of the Company, but no more than 28.6%. See
"ORGANIZERS AND PRINCIPAL SHAREHOLDERS."
Other Terms and Conditions/How to Subscribe
The Company may cancel this Offering for any reason at any time prior to
the release of subscription funds from the Subscription Escrow Account, and
accepted subscriptions are subject to cancellation in the event that the Company
elects to cancel the Offering in its entirety.
Units and shares will be marketed on a best-efforts basis exclusively
through certain directors and executive officers of the Company, none of whom
will receive any commissions or other form of remuneration based on the sale of
the Units or shares. However, in the event that the Offering Conditions have not
been satisfied by __________, 1997, the Company may engage an underwriter to
sell the Units on a best-efforts basis and such underwriter would receive a
commission based upon such sales. It is anticipated that commissions paid to
such underwriter, if retained, will not exceed 7% of the $10.00 per Unit sales
price and that other expenses of such underwriting will not exceed an aggregate
of $5,000. In the event the Company engages an underwriter to sell Units prior
to the expiration of the Initial Offering Period, a post-effective amendment to
the Registration Statement will be filed with the SEC containing the terms of
any agreements entered into with such underwriters and discussing any fees or
expenses associated with such agreements. In the event that the Offering
Conditions have not been satisfied by the end of the Initial Offering Period,
this Offering will be terminated and the subscription funds promptly returned to
the subscribers, together with their allocated share of earnings, if any, earned
on the investment of the Subscription Escrow Account as described herein. See
"TERMS OF THE Offering - Escrow of Subscription Funds."
As soon as practicable, but no more than ten-business days after receipt of
a subscription, the Company will accept or reject such subscription.
Subscriptions not rejected by the Company within this ten-day period shall be
deemed accepted. Once a subscription is accepted by the Company, it cannot be
withdrawn by the subscriber. Payment from any subscriber for Units in excess of
the number of Units allocated to such subscriber, if any, will be refunded by
mail, without interest within ten days of the date of rejection.
Certificates representing shares of Common Stock of the Company, duly
authorized and fully paid, will be issued as soon as practicable after
subscription funds are released to the Company from the Subscription Escrow
Account.
Subscriptions to purchase shares of Common Stock can be made by completing
the Stock Subscription Agreement attached to this Prospectus (Appendix C) and
delivering the same to the Company at its offices, 258 N. Nova Road, Ormond
Beach, Florida 32174, or mailing the same in the enclosed self-addressed
envelope. Full payment of the purchase price must accompany the subscription.
Failure to pay the full subscription price shall entitle the Company to
disregard the subscription. No Subscription Agreement is binding until accepted
by the Company, which may, in its sole discretion, refuse to accept any
subscription for Units, in whole or in part, for any reason whatsoever. After a
subscription is accepted and proper payment received, the Company shall not
cancel such subscription unless all accepted subscriptions are canceled. Unless
otherwise agreed by the Company, all subscription amounts must be paid in Unites
States currency by check, bank draft or money order payable to "IBBF, for TCB,
Inc. " A subscription will be accepted in writing by the Company only in the
Form of Acceptance attached to this Prospectus.
USE OF PROCEEDS
The gross proceeds from the sale of Units offered by the Company are
estimated to be a minimum of $4,500,000. This estimate is based upon the
assumption that the sale of 450,000 Units for cash occurs prior to the
expiration of the Initial Offering Period. However, if 450,000 Units are not
sold for cash, prior to the expiration of the Initial Offering Period, then the
Offering will terminate and all funds received from subscribers, adjusted for
any income thereon, will be promptly refunded. See "TERMS OF THE OFFERING."
12
<PAGE>
The estimated Organizational and Offering expenses of the Company are as
follows:
<TABLE>
<CAPTION>
Offering Organizational
-------- --------------
<S> <C> <C>
Registration fees, including blue
sky fees and expenses........................................... $ 5,000 None
Salaries and expenses............................................. None 2,000
Legal fees and expenses........................................... 15,000 5,000
Accounting fees ................................................. 1,000 None
Printing and mailing expenses..................................... 2,700 None
Advertising....................................................... 2,000 None
Interest.......................................................... None 7,000
Miscellaneous..................................................... None 1,000
------- --------
TOTAL............................................................. $25,700 $ 15,000
======= ========
</TABLE>
All of the above expenses will be incurred whether or not the Bank conducts
operations. If, however, the Offering is terminated prior to the release of
subscription funds by the Escrow Agent, none of these expenses will be deducted
from the funds to be returned to subscribers. If, however, subscription funds
are released by the Escrow Agent and the Bank does not commence business
operations all of the above expenses will be deducted from the subscription
funds. Expenses related to a successful Offering will be deducted from the
Offering proceeds and expenses related to organization of the Company will be
amortized over five years.
A substantial portion of the proceeds of this Offering ($4,500,000)
assuming the minimum number of Units is sold will be used by the Company for the
purchase of 100% of the issued and outstanding capital stock of the Bank and to
repay the expenses of this Offering and the expenses incurred in the
organization of the Company and the Bank.
The portion of the proceeds of this Offering in excess of the above amounts
will be retained by the Company for the purpose of funding any required
additions to the capital of the Bank. Since state banks are regulated with
respect to the ratio that their total assets may bear to their total capital, if
the Bank experiences greater growth than anticipated, it may require the
infusion of additional capital to support that growth. Management of the Company
anticipates that the proceeds of the Offering will be sufficient to support the
Bank's immediate capital needs and will seek, if necessary, long and short-term
debt financing to support any additional needs; however, management can give no
assurance that such financing, if needed, will be available or if available will
be on terms acceptable to management.
13
<PAGE>
<TABLE>
<CAPTION>
Net proceeds from the Offering will be applied as follows:
Minimum Maximum
Proceeds Proceeds
Assuming Sale Assuming Sale
of 450,000 of 1,200,000
Shares Shares
------ ------
<S> <C> <C>
Purchase of capital stock of the Bank..................... $4,150,000 $4,150,000
Organizational and Offering
expenses of the Company(2)........................... 40,700 45,700(1)
Working capital and funds available
for expansion of banking and
banking-related services(2)(3)....................... 309,300 7,804,300
-- -- ------- ---------
Net Proceeds $4,500,000 $12,000,000
========== ===========
</TABLE>
The following is a schedule of estimated expenditures to be made by the
Bank out of the proceeds from the sale of its capital stock to the Company,
including the Bank's operating expenses for its first twelve months of
operation.
Organizational expenses of Bank including Application,
legal and consulting fees(2)............................ $ 150,000
Pre-opening expenses of Bank including salaries,
occupancy and other expenses,........................... 49,500
Purchase of leasehold improvements necessary for
banking office.......................................... 45,000
Bank premises - net occupancy expense..................... 35,000
Salaries and benefits for officers......................... 175,000
Salaries and benefits for other employees.................. 200,000
General and administrative expense
comprised primarily of data processing,
provision for loan losses, marketing and
advertising, telephone and casualty and deposit insurance 360,000
Furniture, fixtures and equipment.......................... 175,000
Working capital............................................. 2,960,500
---------
$4,150,000
==========
- --------
(1) The Company expects to incur additional expenses in connection
with the maximum offering of approximately $5,000. These
additional expenses will be incurred because the Offering is
projected to extend over a 36 month period and will necessitate
the filing of post-effective amendments to the Registration
Statement, printing costs in connection with prospectus
supplements and additional mailing costs.
(2) Amounts indicated do not include interest earned on investment of
net proceeds from this Offering during the Company's
organizational stage estimated to be approximately $35,000, nor
the capitalization of certain organizational costs under generally
accepted accounting procedures estimated to be approximately
$150,000.
(3) These funds will be retained by the Company to be used for
permissible investments for one-bank holding companies, as well as
possible future capital needs of the Bank. See "REGULATION AND
SUPERVISION - General."
14
<PAGE>
The above described expenses are estimates only and assume the Bank will
commence operations sometime during the second quarter of 1997, or as soon
thereafter as practicable. Actual expenses may exceed these amounts. Total
organizational expenses and deferred registration costs for both the Bank and
the Company as of November 30, 1996, amounted to approximately $120,700
Organizational expenses of the Bank will be capitalized and amortized over five
years while pre-opening expenses will be charged to expense when incurred.
DIVIDEND POLICY
As the Company and the Bank are both start-up operations, it will be the
policy of the Board of Directors of the Company to reinvest earnings for such
period of time as is necessary to ensure the successful operations of the
Company and of the Bank. There are no current plans to initiate payment of cash
dividends, and future dividend policy will depend on the Bank's earnings,
capital requirements, financial condition and other factors considered relevant
by the Board of Directors of the Company.
The Bank will be restricted in its ability to pay dividends under Florida
banking laws and by regulations of the Department. Pursuant to Section 658.37,
Florida Statutes, a state bank may not pay dividends from its capital. All
dividends must be paid out of current net profits then on hand plus retained net
profits of the preceding two years, after deducting bad debts, depreciation and
other worthless assets, and after making provision for reasonably anticipated
future losses on loans and other assets. Payments of dividends out of net
profits is further limited by Section 658.37, which prohibits a bank from
declaring a dividend on its shares of common stock until its surplus equals its
stated capital, unless there has been transferred to surplus not less than 20 %
of a bank's net profits for the preceding year (in the case of an annual
dividend). Finally, a state bank may not declare a dividend which would cause
the capital accounts of a bank to fall below the minimum amount required by law,
regulation, order or any written agreement with the Department or any Federal
regulatory agency.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is still in the development stage, and will remain in that
state until the Offering of the Company's Common Stock is complete. The Company
has funded its organizational costs and pre-opening expenses through a line of
credit in the amount of $250,000 from its Organizers and the sale of initial
stock in the Company to the Organizers in the amount of $15,000. At November 30,
1996, $140,875 has been advanced on the line and $109,125 remains available.
Through November 30, 1996, the Company has expended approximately $ 120,700 for
organizational expenses including attorney fees, consulting fees, travel
expenses, employee compensation, filing fees, site work, rent, etc. In addition,
the Company has made a $5,000 on the proposed headquarters office of the Bank
which it is currently occupying without charge. If the Bank odes not commence
operations by March 31, 1997, the Company will be required to vacate the
property or begin making regular monthly payments in accordance with the terms
of the lease. This deposit is subject to refund if the Bank does not continue to
operate at this location. The remaining funds will be used to fund costs and
expenses during the Offering Period. Subscription funds during the Initial
Offering Period contemplated herein will be placed in the Subscription Escrow
Account and invested in direct obligations of the United States Government, in
short-term insured certificates of deposits and/or money market Management
trusts for short-term obligations of the United States Government, with
maturities not to exceed 90 days.
Management of the Company believes that the net proceeds of $4,500,000 from
the Offering will satisfy the cash requirements of the Company and the Bank for
their respective first years of operation. It is not anticipated that the
Company will find it necessary to raise additional funds to meet expenditures
required to operate the business of the Company and the Bank over the next 12
months. All anticipated material expenditures for such period have been
identified and provided for out of the proceeds of this Offering. See "USE OF
PROCEEDS."
BUSINESS OF THE COMPANY
General
The Company was incorporated under the laws of the State of Florida on
August 15, 1996, for the purpose of organizing the Bank and purchasing 100% of
the outstanding capital stock of the Bank. The Company has been organized as a
mechanism to enhance the Bank's ability to serve its future customers'
requirements for financial services. The holding company structure will also
provide flexibility for expansion of the Company's banking business through
acquisition of other financial institutions and provision of additional
banking-related services which the traditional commercial bank may not provide
under present laws. Finally, banking regulations require that the Bank maintain
15
<PAGE>
a minimum ratio of capital to assets. In the event that the Bank's growth is
such that this minimum ratio is not maintained, the Company may borrow funds,
subject to the capital adequacy guidelines of the Federal Reserve, and
contribute them to the capital of the Bank and otherwise raise capital in a
manner which is unavailable to the Bank under existing banking regulations.
The Company has no present plans to acquire any operating subsidiaries
other than the Bank; however, it is expected that the Company may make
additional acquisitions in the event that the Bank becomes profitable and such
acquisitions are deemed to be in the best interest of the Company and its
shareholders. Such acquisitions, if any, will be subject to certain regulatory
approvals and requirements. See " SUPERVISION AND REGULATION."
Premises
The Company has entered into a lease agreement dated October 18, 1996, to
lease property located at 258 North Nova Road, Ormond Beach, Florida for an
approximate total annual cost of $47,000 from a party unaffiliated with the
Organizers or the Company. The lease is contingent upon obtaining final charter
approval for the Bank. The Bank intends to locate its permanent headquarters
building at this location. The building will contain a vault, six offices, three
teller stations, a boardroom/conference facility, a loan operations area, and an
area for the Bank's bookkeeping operations all consisting of approximately 3,350
square feet located in the Trails Shopping Center, which contains an established
Publix Store as the Anchor Tenant.
BUSINESS OF THE BANK
General
The Bank anticipates that it will commence business operations sometime in
the second quarter of 1997 in a leased facility located at 258 North Nova Road
in Ormond Beach, Florida. The Bank plans to offer community banking services
without trust powers. The Bank will offer a full range of interest-bearing and
noninterest-bearing accounts, including commercial and retail checking accounts,
money market accounts, individual retirement accounts, regular interest-bearing
statement savings accounts, certificates of deposit, commercial loans, real
estate loans, home equity loans and consumer installment loans. In addition, the
Bank will provide such consumer products and services as U.S. Savings Bonds,
travelers checks, cashiers checks, safe deposit boxes, bank by mail services,
direct deposit and ATM cards.
The philosophy of Management of the Bank with respect to its initial
operations will emphasize prompt and responsive personal service to members of
the business and professional communities of Ormond Beach, Ormond-by-the-Sea and
Holly Hill, Florida, in order to attract customers and acquire market share now
controlled by other financial institutions in the Bank's market area. The Bank's
prime location and range of banking services, as well as its emphasis on
personal attention and service, prompt decision making and consistency in
banking personnel, will be major tools in the Bank's efforts to capture such
market share. In addition, the Bank's proposed Officers have substantial banking
experience, which will be an asset in providing both products and services
designed to meet the needs of the Bank's customer base. The Organizers are
active members of the business community in Ormond Beach and continued active
community involvement will provide an opportunity to promote the Bank and its
products and services. The Organizers intend to utilize effective advertising
and superior selling efforts in order to build a distinct institutional image
for the Bank and to capture a customer base.
Market Area and Competition
The primary service area ("PSA") of the proposed Bank has been experiencing
steady growth in both jobs and banking deposits in recent years. Ormond Beach is
the primary commercial and residential center located in the Northeast part of
Volusia County, Florida. Volusia County maintains a steady tourist, industrial
and agricultural base, which has been expanding in recent years. The largest
employers in the County include: Volusia County School Board, Daytona Beach
Community College, West Volusia Memorial Hospital, Inc., Publix Super Markets,
Inc., Winn Dixie Stores, Inc., Volusia County Board of County Commissioners,
Boston Whaler, Inc., Homac Manufacturing Company, Sherwood Medical Company, and
the News-Journal Corporation. Agricultural activities in Volusia County center
around the cattle, fern, produce and saltwater fishing industries. Numerous
resorts, hotels and other tourist facilities are located in the PSA, as well as
a number of winter residences.
Competition among financial institutions in the Bank's primary service area
is intense. There are seven commercial banks with a total of 23 branches in
Ormond Beach. Of these seven banks are five affiliated with major bank holding
companies. There are no savings associations or credit unions headquartered in
Ormond Beach, however, two savings associations operate branches in Ormond Beach
and credit unions are located in nearby communities. The Organizers believe that
16
<PAGE>
the Bank will be able to effectively compete in its market, based upon the
Bank's philosophy which will be reflected in customer service, employee
attitudes and the products offered by the Bank.
Financial institutions primarily compete with one another for deposits. In
turn, a bank's deposit base directly affects such bank's loan activities and
general growth. Primary methods of competition include interest rates on
deposits and loans, service charges on deposit accounts and the availability of
unique financial services products. The Bank will be competing with financial
institutions which have much greater financial resources than the Bank, and
which may be able to offer more services and unique services and possibly better
terms to their customers. The Organizers, however, believe that the Bank will be
able to attract sufficient deposits to enable the Bank to compete effectively
with other area financial institutions.
The Bank will be in competition with existing area financial institutions
other than commercial banks and thrift institutions, including insurance
companies, consumer finance companies, brokerage houses, credit unions and other
business entities which have recently been targeting traditional banking
markets. Due to the growth of the Ormond Beach area, it can be anticipated that
additional competition will continue from new entrants to the market.
Deposits
The Bank will offer a wide range of interest-bearing and
noninterest-bearing deposit accounts, including commercial and retail checking
accounts, money market accounts, individual retirement accounts, regular
interest bearing statement savings accounts and certificates of deposit with
fixed and variable rates and a range of maturity date options. The sources of
deposits will be residents, businesses and employees of business within the
Bank's market area, obtained through the personal solicitation of the Bank's
officers and directors, direct mail solicitation and advertisements published in
the local media. The Bank intends to pay competitive interest rates on time and
savings deposits up to the maximum permitted by law or regulation. In addition,
the Bank will implement a service charge fee schedule competitive with other
financial institutions in the Bank's market area covering such matters as
maintenance fees on checking accounts, per item processing fees on checking
accounts and returned check charges.
Loan Portfolio
The Bank will offer a full complement of loans, including commercial,
consumer/installment and real estate loans. Initially, the Bank will have a
legal lending limit for unsecured loans of up to $600,000 and for secured loans
of up to $1,000,000.
Commercial loans, including construction loans secured by real estate, are
projected to be the primary component of the Bank's loan portfolio. Commercial
lending will be directed principally towards small businesses whose demands for
funds fall within the Bank's legal lending limits and which are potential
deposit customers of the Bank. This category of borrowers includes individual,
partnership or corporate borrowers, and will result in loans to such borrowers
for a variety of business purposes. Particular emphasis will be placed on loans
to small and medium sized businesses and professionals. Commercial loans will be
underwritten on the basis of cash flow, ability to service debt from earnings
and collateral offered. Terms are projected to be from 90 days to five years
with interest rates indexed to Wall Street Journal prime rate. Because of the
nature of these types of loans, i.e. dependancy on successful business
operations and generally on non-real estate collateral, there exists a higher
risk of loss in this category of loan. The Organizers expect that commercial
loans will account for approximately two-thirds of the Bank's estimated total
loan portfolio.
To a lesser extent the focus will be on the origination of 1-4 family
first, and to a limited extent, second real estate mortgage loans, typically
structured with fixed or adjustable interest rates based upon market conditions.
Generally the loan amount, as a percent of appraised value of the real property,
will not exceed 80%. In most cases where the loan to value ratio exceeds 80% the
amount in excess of 80% will be insured against loss by private mortgage
insurance ("PMI"). Fixed rate loans will usually have terms of five years or
less, with payments through the date of maturity generally based upon a 15 to 30
year amortization schedule. Adjustable rate loans will generally have a term of
between 15 to 30 years, with rates indexed to the one-year treasury bond. The
Bank intends to charge both discount points and an origination fee depending
upon market conditions. Because of the nature of the collateral, residential
real estate loans tend to have the lowest risk of loss when compared to other
types of loans such as commercial loans. In addition, to origination of loans
for the Bank's portfolio, the Bank will also originate real estate mortgage
loans for sale in the secondary market.
Based upon demand in the Bank's primary service area the Bank will make a
variety of consumer loans. The Bank's consumer loans will consist primarily of
installment loans to individuals for personal, family and household purposes,
including automobile loans, boat loans, recreational vehicle loans, and personal
lines of credit. Consumer loans will generally have terms ranging from six
months to ten years and will be made at market interest rates generally ranging
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from 10 to 18 % A.P.R. For the most part, consumer loans will be secured by such
collateral as automobiles, boats, recreational vehicles and so forth. It is not
expected that total consumer loans will exceed 15 % of the Bank's estimated
total loan portfolio. In the aggregate, the risk of loss on such loans tends to
be lower than that of commercial loans, but greater than that of loans secured
by residential real estate based upon the nature of the collateral for such
loans, as well as, the make-up of the borrowers and the source of repayment.
This category of loans will also include lines of credit and term loans secured
by second mortgages on the residences of borrowers for a variety of purposes
including home improvements, education and other personal expenditures.
While risk of loss in the Bank's loan portfolio is primarily tied to the
credit quality of the various borrowers, risk of loss may also increase due to
factors beyond the Bank's control, such as local, regional and/or national
economic downturns. General conditions in the real estate market may also impact
the relative risk in the Bank's real estate portfolio. Of the Bank's target
areas of lending activities, commercial loans are generally considered to have
greater risk than real estate loans or consumer installment loans.
Management of the Bank intends to originate loans and to participate
portions of loans to other banks with respect to loans which exceed the Bank's
lending limits. Management of the Bank does not believe that loan participation
will necessarily pose any greater risk of loss than loans which the Bank
originates.
Investments
At the close of its first year of operation, Management of the Bank
anticipates that investment securities will comprise approximately 35% of the
Bank's assets, other investments will comprise approximately 5% of the Bank's
assets and loans will comprise approximately 60% of the Bank's assets.
Initially, the Bank intends to invest primarily in direct obligations of the
United States, obligations guaranteed as to principal and interest by the United
States, obligations of agencies of the United States and certificates of deposit
issued by commercial banks. In addition, the Bank will enter into Federal Funds
transactions with its principal correspondent bank, and anticipates that it will
primarily act as a net seller of such funds. The sale of Federal Funds amounts
to a short-term loan from the Bank to another bank, usually overnight.
Asset/Liability Management
It will be the objective of the Bank to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash management, loan, investment, borrowing and capital
policies. Designated Officers of the Bank will be responsible for monitoring
policies and procedures that are designed to ensure acceptable composition of
the asset/liability mix, stability and leverage of all sources of funds while
adhering to prudent banking practices. It is the overall philosophy of
management to support asset growth primarily through growth of core deposits,
which include deposits of all categories made by individuals, partnerships and
corporations. Management of the Bank will seek to invest the largest portion of
the Bank's assets in commercial, consumer and real estate loans.
The Bank's asset/liability mix will likely be monitored on a daily basis
with a monthly report reflecting interest-sensitive assets and
interest-sensitive liabilities being prepared and presented to the Bank's Board
of Directors. The objective of this policy is to control interest-sensitive
assets and liabilities so as to minimize the impact of substantial movements in
interest rates on the Bank's earnings.
Correspondent Banking
Correspondent banking involves the providing of services by one bank to
another bank which cannot provide that service for itself from an economic or
practical standpoint. The Bank will likely purchase correspondent services
offered by larger banks, including some of the following: check collections,
purchase of Federal Funds, security safekeeping, investment services, coin and
currency supplies, overline and liquidity loan participations and sales of loans
to or participations with correspondent banks.
The Bank anticipates that it will sell loan participations to correspondent
banks with respect to loans which exceed the Bank's lending limit. As
compensation for services provided by a correspondent, the Bank may maintain
certain balances with such correspondents in non-interest bearing accounts.
Data Processing
The Bank plans to sign a data processing servicing agreement with an
outside service bureau. It is expected that this servicing agreement will
provide for the Bank to receive a full range of data processing services,
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including an automated general ledger, deposit accounting, commercial, real
estate and installment loan processing, payroll, central information file and
ATM processing and investment portfolio accounting.
Employees
In its first year of operation, the Bank anticipates that it will employ
nine persons on a full-time basis, including four officers, and one person on a
part-time basis. The Bank will hire additional persons as needed, including
additional tellers and financial service representatives.
Monetary Policies
The results of operations of the Bank will be affected by credit policies
of monetary authorities, particularly the Federal Reserve. The instruments of
monetary policy employed by the Federal Reserve include open market operations
in U.S. Government securities, changes in the discount rate on member bank
borrowings, changes in reserve requirements against member bank deposits and
limitations on interest rates which member banks may pay on time and savings
deposits. In the view of changing conditions in the national economy and in the
money markets, as well as the effect of action by monetary and fiscal
authorities, including the Federal Reserve, no accurate prediction can be made
as to possible future changes in interest rates, deposit levels, loan demand or
the business and earnings of the Bank.
REGULATION AND SUPERVISION
General
As a one-bank holding company registered under the BHC Act, the Company
will be subject to regulation and supervision by the Federal Reserve. Under the
BHC Act, the Company's activities and those of its Bank subsidiary are limited
to banking, managing or controlling banks, furnishing services to or performing
services for its subsidiaries or engaging in any other activity that the Federal
Reserve determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. As a state-chartered
commercial bank, the Bank will be subject to extensive regulation by the
Department and the FDIC.
The Company and the Bank will be required to file reports with the Federal
Reserve, the Department and the FDIC concerning their activities and financial
condition, in addition to obtaining regulatory approvals prior to entering into
certain transactions such as mergers with or acquisitions of other financial
institutions. Periodic examinations are performed by the Federal Reserve, the
Department and the FDIC to monitor the Company's and the Bank's compliance with
the various regulatory requirements. The Bank's deposits will be insured up to
the applicable limits by the FDIC under the Bank Insurance Fund ("BIF"). The
Bank will be subject to regulation of the Federal Reserve and the Department
with respect to reserves required to be maintained against transaction deposit
accounts and certain other matters.
Regulation of the Company
General. The BHC Act prohibits the Company from acquiring direct or
indirect control of more than 5% of any class of outstanding voting stock or
acquiring substantially all of the assets of any bank or merging or
consolidating with another bank holding company without prior approval of the
Federal Reserve. The BHC Act also prohibits the Company from acquiring control
of any bank operating outside the State of Florida, unless such action is
specifically authorized by the statutes of the state where the bank to be
acquired is located. Additionally, the BHC Act prohibits the Company from
engaging in or from acquiring ownership or control of more than 5% of the
outstanding voting stock of any company engaged in a non-banking business,
unless such business is determined by the Federal Reserve to be so closely
related to banking or managing or controlling banks as to be properly incident
thereto. The BHC Act generally does not place territorial restrictions on the
activities of such non-banking related activities.
Transactions between the Company and the Bank. The Company's authority to
engage in transactions with related parties or "affiliates," or to make loans to
certain insiders, is limited by certain provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). Specifically, Sections
23A and 23B of the Federal Reserve Act apply to all transactions by an
insured-state nonmember bank or a holding company with any affiliate. Sections
23A and 23B generally define an "affiliate" as any company that controls or is
under common control with an institution. Subsidiaries of a financial
institution, however, are generally exempted from the definition of "affiliate."
Section 23A limits the aggregate amount of transactions with any individual
affiliate to 10% of the capital and surplus of the Company and also limits the
aggregate amount of transactions with all affiliates to 24.1% of the Company's
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capital and surplus. Certain transactions with affiliates, such as loans to
affiliates or guarantees, acceptances and letters of credit issued on behalf of
affiliates, are required to be collateralized by collateral in an amount and of
a type described in the statute. The purchase of low quality assets from
affiliates is generally prohibited. Section 23B provides that certain
transactions with affiliates, including loans and asset purchases, must be on
terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to the institution as those
prevailing at the time for comparable transactions with nonaffiliated companies.
In the absence of comparable transactions, such transactions may only occur
under terms and circumstances, including credit standards, that in good faith
would be offered to or would apply to nonaffiliated companies. The Company does
not expect these provisions will have any effect on its proposed operations.
Support of Subsidiary Depository Institutions. The Company is expected to
act as a source of financial strength and to commit resources to support the
Bank. This support may be required at times when the Company might not be
inclined to provide such support. In addition, any capital loans by a bank
holding company to any of its subsidiary banks must be subordinate in right of
payment to deposits and to certain other indebtedness of such subsidiary banks.
In the event of bankruptcy, any commitment by a bank holding company to a
federal bank regulatory agency to maintain the capital of its subsidiary bank
will be assumed by the bankruptcy trustee and will be entitled to a priority of
payment.
Under the Federal Deposit Insurance Act ("FDIA") a subsidiary bank of a
bank holding company, can be held liable for any loss incurred by, or reasonably
expected to be incurred by the FDIC in connection with (i) the default of a
commonly controlled FDIC-insured depository institution or (ii) any assistance
provided by the FDIC to any commonly controlled FDIC insured depository
institution "in danger of default". "Default" is defined generally as the
appointment of a conservator or a receiver and "in danger of default" is defined
generally as the existence of certain conditions indicating that a default is
likely to occur in the absence of regulatory assistance.
Control of a Bank Holding Company. FRB Regulation Y, adopted pursuant to
Section 225.41 of 12 U.S.C. Section 1817(j), requires persons acting directly or
indirectly or in concert with one or more persons to give the Board of Governors
of the Federal Reserve 60 days advanced written notice before acquiring control
of a bank holding company. Under the Regulation, control is defined as the
ownership or control with the power to vote 25 % or more of any class of voting
securities of the Holding Company. The Regulation also provides for a
presumption of control if a person owns, controls, or holds with the power to
vote 10 % or more (but less than 25 %) of any class of voting securities, and
if: (i) the Holding Company's securities are registered securities under Section
12 of the Securities and Exchange Act of 1934; or (ii) no other person owns a
greater percentage of that class of voting securities. It is not anticipated
that any purchaser of the securities offered herein, including any of the
Organizers, will acquire 10% of more of the Company's Common Stock.
Legislation and Regulations of the Bank
General. From time to time, various bills are introduced in the United
States Congress with respect to the regulation of financial institutions. Recent
banking legislation, particularly the FIRREA and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), has broadened the regulatory
powers of the federal bank regulatory agencies and restructured the nation's
banking system. The following is a brief discussion of certain portions of these
laws and how they would effect the Company or the Bank.
The FDICIA revised sections of the FDIA affecting bank regulation, deposit
insurance and provisions for funding of the BIF administered by the FDIC. The
FDICIA also revised bank regulatory structures embodied in several other federal
banking statutes, strengthened the bank regulators' authority to intervene in
cases of deterioration of a bank's capital level, placed limits on real estate
lending and imposes detailed audit requirements.
Deposit Insurance Funds Act of 1996
On September 30, 1996, Congress passed and the President signed in to law
the Deposit Insurance Funds Act of 1996 ("DIFA"). Among other things, the DIFA,
and rules promulgated thereunder by the FDIC, provide for banks and thrifts to
share the annual interest expense for the Finance Corp. Bonds which were issued
in the late 1980s to help pay the costs of the savings and loan industry
restructuring. The approximate annual interest expense is $780 million of which
BIF insured banks are expected to pay approximately $322 million or 41%, while
SAIF insured thrifts will pay approximately $458 million or 59% of the interest
expense. It is estimated that the annual assessment for BIF insured institutions
will be approximately 1.2 cents per $100 of deposits, while SAIF insured
institutions will pay 6.5 cents per $100 of deposits. These payments are to
begin in 1997 and run through 1999. Beginning in the year 2000 and continuing
through the year 2017, banks and thrifts will each pay 2.43 cents per $100 of
deposits. These assessments will be in addition to any regular deposit insurance
assessments imposed by the FDIC under FDICIA. See REGULATION AND SUPERVISION -
Insurance on Deposit Accounts.
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Prompt and Corrective Action. The FDICIA required the federal banking
regulatory agencies to set certain capital and other criteria which would define
the category under which a particular financial institution would be classified.
The FDICIA imposes progressively more restrictive constraints on operations,
management, and capital distributions depending on the category in which an
institution is classified. Pursuant to the FDICIA, undercapitalized institutions
must submit recapitalization plans to their respective federal banking
regulatory agencies, and a company controlling a failing institution must
guarantee such institution's compliance with its plan in order for the plan to
be accepted.
The FDIC's prompt and corrective action regulations define, among other
things, the relevant capital measures for the five capital categories. For
example, a bank is deemed to be "well-capitalized" if it has a total risk-based
capital ratio (total capital to risk-weighted assets) of 10% or greater, a Tier
1 risk-based capital ratio (Tier 1 capital to risk-weighted assets) of 6% or
greater, and a Tier 1 leverage capital ratio (Tier 1 capital to adjusted total
assets) of 5% or greater, and is not subject to a regulatory order, agreement or
directive to meet and maintain a specific capital level for any capital measure.
A bank is deemed to be "adequately capitalized" if it has a total risk-based
capital ratio of 8% or greater, and (generally) a Tier 1 leverage capital ratio
of 4% or greater, and the bank does not meet the definition of a
"well-capitalized" institution. A bank is deemed to be "critically
undercapitalized" if it has a ratio of tangible equity (as defined in the
regulations) to total assets that is equal to or less than 2%. In addition, the
FDIC is authorized effectively to downgrade a bank to a lower capital category
than the bank's capital ratios would otherwise indicate, based upon safety and
soundness considerations (such as when the bank has received a less than
satisfactory examination rating for any of the CAMEL rating categories other
than capital: i.e. Asset Quality, Management, Earnings or Liquidity). As a bank
drops to lower capital levels, the extent of action to be taken by the
appropriate regulator increases, restricting the types of transactions in which
the bank may engage. The new capital standards are designed to bolster and
protect the deposit insurance fund. Based upon its proposed capital, the Bank
would be considered to be well capitalized.
Insurance on Deposit Accounts. In response to the requirements of the
FDICIA, the FDIC established a risk-based assessment system for insured
depository institutions that takes into account the risks attributable to
different categories and concentrations of assets and liabilities. The FDIC
assigns a financial institution to one of three capital categories based on the
institution's financial information, as of the reporting period ending seven
months before the assessment period. These categories consist of well
capitalized, adequately capitalized or undercapitalized, and one of three
supervisory subcategories within each capital group. The supervisory subgroup to
which an institution is assigned is based on a supervisory evaluation provided
to the FDIC by the financial institution's primary regulator, in the Bank's case
the Department, and information which the FDIC determines to be relevant to the
institution's primary federal regulator and information which the FDIC
determines to be relevant to the institution's financial condition and the risk
posed to the deposit insurance funds. A financial institution's assessment rate
depends on the capital category and supervisory category to which it is
assigned. There are nine assessment risk classifications (i.e., combinations of
capital groups and supervisory subgroups) to which different assessment rates
are applied. BIF assessment rates range from 0 basis points on deposits for a
financial institution in the highest category (i.e.. well-capitalized and
financially sound with only a few minor weaknesses) to 31 basis points on
deposits for an institution in the lowest category (i.e., undercapitalized and
posing a substantial probability of loss to the BIF, unless effective corrective
action is taken). The Bank's initial assessment is expected to be no more than
the minimum for its first year of operation.
Standards for Safety and Soundness. The FDICIA requires each federal
banking agency to prescribe for all insured depository institutions and their
holding companies standards relating to internal controls, information systems
and audit systems, loan documentation, credit underwriting, interest rate risk
exposure, asset growth, compensation, fees and benefits and such other
operational and managerial standards as the agency deems appropriate. In
addition, the federal banking regulatory agencies are required to prescribe by
regulation standards specifying: (i) maximum classified assets to capital
ratios; (ii) minimum earnings sufficient to absorb losses without impairing
capital; (iii) to the extent feasible, a minimum ratio of market value to book
value for publicly traded shares of depository institutions or the depository
institution holding companies; and (iv) such other standards relating to asset
quality, earnings and valuation as the agency deems appropriate. Finally, each
federal banking agency is required to prescribe standards for employment
contracts and other compensation arrangements of executive officers, employees,
directors and principal shareholders of insured depository institutions that
would prohibit compensation and benefits and other arrangements that are
excessive or that could lead to a material financial loss for the institution.
If an insured depository institution or its holding company fails to meet any of
its standards described above, it will be required to submit to the appropriate
federal banking agency a plan specifying the steps that will be taken to cure
the deficiency. If an institution fails to submit an acceptable plan or fails to
implement the plan, the appropriate federal banking agency will require the
institution or holding company, to correct the deficiency and until corrected,
may impose restrictions on the institution or the holding company including any
of the restrictions applicable under the prompt corrective action provisions of
the FDICIA.
The FDICIA also requires each appropriate federal banking agency to adopt
uniform regulations prescribing standards for extensions of credit secured by
real estate or made for the purpose of financing the construction of
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improvements on real estate. In prescribing these standards, the banking
agencies must consider the risk posed to the deposit insurance funds by real
estate loans, the need for safe and sound operation of insured depository
institutions and the availability of credit.
Capital Requirements. The Federal Reserve and the FDIC have adopted capital
regulations which establishes a Tier 1 core capital definition and a minimum 3%
leverage capital ratio requirement for the most highly-rated banks and holding
companies (i.e., those banks and holding companies with a composite CAMEL rating
of 1 under the Uniform Financial Institutions Rating System established by the
Federal Financial Institutions Examination Council) that are not anticipating or
experiencing significant growth. All other state nonmember banks are required to
meet a minimum leverage ratio that is at least 100 to 200 basis points above 3%.
A holding company or bank that is not in the highest-rated category or that is
anticipating or experiencing significant growth will have to meet a minimum
leverage ratio of at least 4%. The minimum capital with which the Bank will be
permitted to open is $4 million.
Under the Federal Reserve's and the FDIC's risk-based regulations, a
holding company or bank must classify its assets and certain off-balance sheet
activities into categories and maintain specified levels of capital for each
category. The least capital is required for the category deemed by the Federal
Reserve and the FDIC to have the least risk, and the most capital is required
for the category deemed by the Federal Reserve and the FDIC to have the greatest
risk. The regulations require a holding company or bank to have a total risk
based capital ratio of 8% and a Tier 1 risk based capital ratio of 4%. Under the
statement of policy, certain assets are required to be deducted from risk-based
capital. Such assets include intangible assets, unconsolidated banking and
finance subsidiaries, investments in securities subsidiaries, ineligible equity
investments and reciprocal holding of capital instruments with other banks. In
addition, the Federal Reserve or the FDIC may consider deducting other assets on
a case-by-case basis or investments in other subsidiaries on a case-by-case
basis or based on the general characteristics or functional nature of the
subsidiaries.
Loans to One Borrower. Florida law allows a state bank to extend credit to
any one borrower in an amount up to 25% of its capital accounts, which are
defined as unimpaired capital, surplus and undivided profits, provided that the
unsecured portion may not exceed 15% of the capital accounts of the bank. The
law permits exemptions for loans collateralized by accounts maintained with the
Bank and for loans guaranteed by the Small Business Administration, the Federal
Housing Administration and the Veterans Administration. The Bank will be subject
to these limits.
Payment of Dividends. While not the only source of income, the primary
source of income to the Company will be dividends from the Bank. A Florida
chartered commercial bank may not pay cash dividends that would cause the bank's
capital to fall below the minimum amount required by federal or Florida law.
Otherwise, a commercial bank may pay a dividend out of the total of current net
profits plus retained net profits of the preceding two years to the extent it
deems expedient, except as described below. Twenty percent of the net profits in
the preceding two year period may not be paid in dividends, but must be retained
to increase capital surplus until such surplus equals the amount of common and
preferred stock issued and outstanding. In addition, no bank may pay a dividend
at any time that net income in the current year when combined with retained net
income from the preceding two years produces a loss. The ability of the Bank to
pay dividends to the Company will depend in part on the FDIC capital
requirements in effect at such time and the ability of the Bank to comply with
such requirements.
Brokered Deposits. In accordance with the FDICIA, the FDIC has implemented
restrictions on the acceptance of brokered deposits. In general, an
"undercapitalized" institution may not accept, renew or roll over any brokered
deposits. "Adequately capitalized" institutions may request a waiver from the
FDIC to do so, while "well-capitalized" institutions may accept, renew or roll
over such deposits without restriction. The rule requires registration of
deposit brokers and imposes certain recordkeeping requirements. Institutions
that are not "well-capitalized" (even if meeting minimum capital requirements)
are subject to limits on rates of interest they may pay on brokered and other
deposits. The Bank does not expect to acquire any brokered deposits.
Liquidity. A state-chartered commercial bank is required under Florida law
to maintain a liquidity reserve of at least 15% of its total transaction
accounts and 8% of its total nontransaction accounts subject to certain
restrictions. This reserve may consist of cash-on-hand, demand deposits due from
correspondent banks, and other investments and short-term marketable securities.
The Bank will be subject to these requirements.
Community Reinvestment. Under the Community Reinvestment Act ("CRA"), as
implemented by Federal Reserve and FDIC regulations, holding companies and state
nonmember banks have a continuing and affirmative obligation consistent with
their safe and sound operation to help meet the credit needs of their entire
community, including low- and moderate-income neighborhoods. The CRA does not
establish specific lending requirements or programs for financial institutions
nor does it limit an institution's discretion to develop the types of products
and services that it believes are best suited to its particular community,
consistent with the CRA. The CRA requires the Federal Reserve and the FDIC, in
connection with their examination of holding companies or state nonmember banks,
to assess the Company's record of meeting the credit needs of their communities
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and to take such record into account in its evaluation of certain applications
by such institution. The FIRREA amended the CRA to require public disclosure of
an institution's CRA rating and to require that the Federal Reserve and the FDIC
provide a written evaluation of an institution's CRA performance utilizing a
four-tiered descriptive rating system in lieu of the then existing five-tiered
numerical rating system. The Company and the Bank will be subject to these
regulations.
Interstate Banking. Under the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, existing restrictions on interstate acquisitions of
banks by bank holding companies were repealed on September 29, 1995, such that
the Company and any other bank holding company would be able to acquire any
Florida-based bank, subject to certain deposit percentage and other
restrictions. The legislation also provides that, unless an individual state
elects beforehand either (i) to accelerate the effective date or (ii) to
prohibit out-of-state banks from operating interstate branches within its
territory, on or after June 1, 1997, adequately capitalized and managed bank
holding companies will be able to consolidate. De novo branching by an
out-of-state bank would be permitted only if it is expressly permitted by the
laws of the host state. The authority of a bank to establish and operate
branches within a state will continue to be subject to applicable state
branching laws. Florida has adopted legislation which will permit interstate
acquisitions and interstate branching effective June 1, 1997.
Department Assessment. State-chartered commercial banks are required by
Department regulation to pay assessments to the Department to fund the
operations of the Department. The general assessment, to be paid semiannually,
is computed upon a bank's total assets, including consolidated subsidiaries, as
reported in the bank's latest quarterly call report. The Bank will be required
to pay such assessments semi-annually.
The Federal Reserve System
The Federal Reserve regulations require banks to maintain non
interest-earning reserves against their transaction accounts (primarily NOW and
regular checking accounts). The Federal Reserve regulations generally require
that reserves of 3% must be maintained against aggregate transaction accounts of
$49.3 million or less (subject to adjustment by the Federal Reserve) and an
initial reserve of $1.5 million plus 10% (subject to adjustment by the Federal
Reserve between 8% and 14%) against that portion of total transaction accounts
in excess of $49.3 million. The first $4.4 million of otherwise reservable
balances (subject to adjustments by the Federal Reserve) are exempted from the
reserve requirements. The balances maintained to meet the reserve requirements
imposed by the Federal Reserve may be used to satisfy liquidity requirements.
Because required reserves must be maintained in the form of either vault cash, a
noninterest-bearing account at a Federal Reserve Bank or a pass-through account
as defined by the Federal Reserve, interest-earning assets of the Bank are
reduced. The Company and the Bank will be subject to these requirements.
Federal Securities Laws
The Company, in connection with this Offering, filed with the SEC a
registration statement under the Securities Act for the registration of the
Company's Common Stock. The registration under the Securities Act of shares of
the Common Stock issued in this Offering does not cover the resale of such
shares. Shares of the Common Stock purchased by persons who are not affiliates
of the Company may be resold without further registration. Shares purchased by
an affiliate of the Company will be subject to the resale restrictions of Rule
144 under the Securities Act. If the Company meets the current public
information requirements of Rule 144 under the Securities Act, each affiliate of
the Company who complies with the other conditions of Rule 144 (including the
holding period and those that require the affiliate's sale to be aggregated with
those of certain other persons) may be able to sell in the public market,
without registration, a number of shares not to exceed, in any three-month
period, the greater of (i) 1% of the outstanding shares of the Company, or (ii)
the average weekly volume of trading in such shares during the preceding four
calendar weeks. Provision may be made in the future by the Company to permit
affiliates to have their shares registered for sale under the Securities Act
under certain circumstances.
The scope of regulation, supervision and permissible activities of the
Company and the Bank is subject to change by future federal and state
legislation.
ORGANIZERS AND PRINCIPAL SHAREHOLDERS
Mr. Kirk T. Bauer is an Organizer of the Company only. The following
persons are Organizers of both the Company and the Bank: James R. Peacock; Larry
A. Kent; Christopher K. Likes and Gary G. Campbell. The following persons are
the Organizers of the Bank only: Stanley S. Bronski; Richard R. Dwyer; Thomas R.
Horton; Susan A. Nicholson and Charles W. Singletary. The Organizers, as a
group, intend to subscribe for 108,500 shares in the Offering which will equal
24.1% of the 450,000 minimum shares required to be sold in order to release
funds from the Subscription Escrow Agreement. In addition to the subscriptions
committed to by the Organizers, the Organizers have indicated that they may be
23
<PAGE>
willing to subscribe for additional shares in the Offering if necessary to help
the Company complete the Offering and release the proceeds from the Subscription
Escrow Account. In any event, total purchases by the Organizers will not exceed
128,500 Units in the aggregate, which would equal 28.6% of the 450,000 minimum
shares required to be sold in order to release funds from the Subscription
Escrow Account.
Upon commencement of the business of the Bank, Mr. Campbell will receive
options to purchase 10,000 shares of the Company's common stock at an option
price of $10.00 per share, exercisable at any time after the vesting period, for
ten years from the date of grant. See "MANAGEMENT - Executive Compensation."
All organizational expenses of the Company and the Bank have been financed
by loans from the Organizers to the Company or from the proceeds of the sale of
stock to the Company Organizers in a private Offering. The Organizers have
purchased a total of 1,500 shares of common stock at a price of $10.00 per share
in a private sale transaction in order to meet the net worth requirements of the
Florida Division of Securities imposed upon issuer's who sell common stock as
associated persons. This stock will be canceled and exchanged for Units issued
by the Company in the Offering. In the event that the requisite approvals are
obtained, a portion of the proceeds of the Offering will be used to repay these
loans to the extent such repayment is reasonable and not detrimental to the
operations of the Bank, and to the extent such repayment is allowed by the
Department and other appropriate bank regulatory authorities. See "USE OF
PROCEEDS."
Each of the Organizers intends to purchase the number of Units set forth in
the following Table, which also specifies the percentage of Common Stock to be
owned by the Organizers after completion of the Initial Offering Period.
<TABLE>
<CAPTION>
Actual Number of
Name of Number of Percent of Beneficial Percent of Percent of
Beneficial Owner Shares Minimum Shares(1) Minimum(2) Maximum(3)
---------------- ------ ------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Kirk T. Bauer 2,500 0.56 5,000 1.10 0.41
Stanley S. Bronski 5,000 1.20 10,000 2.20 0.83
Gary G. Campbell 1,000 0.22 12,000 2.67 0.99
Richard R. Dwyer 10,000 2.22 20,000 4.35 1.65
Thomas R. Horton 5,000 1.11 10,000 2.20 0.83
Larry A. Kent 30,000 6.67 60,000 12.50 4.96
Chris Likes 5,000 1.11 10,000 2.20 0.83
Susan A. Nicholson 5,000 1.11 10,000 2.20 0.83
James R. Peacock 40,000 8.89 80,000 16.33 6.61
Charles W. Singletary 5,000 1.11 10,000 2.20 0.83
----- ---- ------ ---- ----
TOTAL 108,500 24.10% 227,000 47.95% 18.77%
======= ===== ======= ===== =====
</TABLE>
- ------------------------------------
(1) Based upon Warrants for the Shares to be issued in connection with the
proposed purchase, as well as the proposed options for Mr. Campbell.
(2) Percentage based upon 450,000 shares outstanding, plus Warrants to be
acquired by the individual Organizers equal to the actual number of shares
proposed to be acquired by such Organizer and 10,000 shares to be issued to
Mr. Campbell under the proposed stock option plan.
(3) Percentage based upon 1,210,000 Shares which is the sum of 1,200,000
shares, the maximum number of Shares which can be issued in the Offering,
and 10,000 shares to be issued to Mr. Campbell under the proposed stock
option plan.
Each of the Organizers will acquire their Units during the Initial Offering
Period and, therefore, will acquire both Common Stock and Warrants exercisable
in accordance with the terms set forth herein While there can be no assurance
that the Organizers will exercise their Warrant rights, it can be assumed that
most or all will exercise such rights and will therefore acquire additional
Common Stock during the 36 month period following the Effective Date of
registration.
24
<PAGE>
MANAGEMENT
Directors and Executive Officers of the Company and the Bank
The proposed directors and executive officers for the Company and the Bank
are as follows:
<TABLE>
<CAPTION>
Position with Position with
Name Company Bank
---- ------- ----
<S> <C> <C>
Kirk T. Bauer Director and Secretary None
Stanley S. Bronski None Director
Gary G. Campbell Director, President and Director, President
Chief Financial Officer and Chief Executive
Officer
Richard R. Dwyer None Director
Thomas R. Horton None Director
Larry A. Kent Director and Director
Chairman of the Board
Christopher K. Likes Director Director
Susan A. Nicholson None Director
James R. Peacock Director and Vice Director and
Chairman of the Board Chairman of the Board
Charles W. Singletary None Director
Harvey E. Buckmaster None Senior Vice President
and Cashier
</TABLE>
Company. Each of the above persons has been a director of the Company
or a proposed director of the Bank since at least September, 1996. The initial
Board of Directors of the Company consists of five directors. The directors will
be divided into three classes, designated Class I, Class II and Class III. Each
class will consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board of Directors. The term of the
Company's initial directors will expire at the first meeting of shareholders at
which directors are elected. It is expected that the Company will hold an
organizational meeting of the shareholders shortly after the Bank commences
operations at which time the shareholders will be asked to elect Directors. The
Company intends to recommend that the shareholders elect the initial directors
to their respective terms set forth in the above Schedule. Following the
subsequent election of the Company's directors, the term of the Company's Class
I directors will expire at the Company's next annual meeting of shareholders;
the term of the Company's Class II directors will expire at the Company's second
annual meeting of shareholders; and the term of the Company's Class III
directors will expire at the Company's third annual meeting of shareholders. At
each annual meeting of shareholders, successors to the class of directors whose
term expires at the annual meeting will be elected for a three-year term. If the
number of directors is changed, an increase or decrease will be apportioned
among the classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional director of any class elected to
fill a vacancy resulting from an increase in such class will hold office for a
term that will coincide with the remaining term of that class, but in no event
will a decrease in the number of directors shorten the term of any incumbent
director. Any director elected to fill a vacancy not resulting in an increase in
the number of directors will have the same remaining term as that of his
predecessor. Except in the case of removal from office, any vacancy on the Board
of Directors will be filled by a majority vote of the remaining directors then
in office. The effect of the classified Board of Directors is to make it more
difficult for a person, entity or group to effect a change in control of the
Company through the acquisition of a large block of the Company's voting stock.
25
<PAGE>
Any director may be removed, with or without cause, at any regular or
special meeting of shareholders called for that purpose, and the position filled
by another person nominated and elected for that purpose by the affirmative vote
of the holders of at least 60% of the outstanding shares of the Company's Common
Stock. The Company's officers are appointed by the Board of Directors and hold
office at the will of the Board.
Bank. Each of the Bank's proposed directors will, upon approval of the
Department, serve until the Bank's first shareholders meeting, which meeting
will be held shortly after the Bank commences operations. It is anticipated that
each interim director will be nominated to serve as director of the Bank at that
meeting. After the first shareholders meeting, directors of the Bank will serve
for a term of one year and will be elected each year at the Bank's annual
meeting. The Bank's officers will be appointed by its Board of Directors and
will hold office at the will of the Board.
Initial Directors and Officers. The following is a brief description of the
business, civic and educational experience of the initial Directors and
Officers:
Company:
Kirk T. Bauer(1), age 36, is a licensed attorney in DeLand, Florida and
President of his firm, Biernacki & Bauer, P.A. Mr. Bauer graduated from Stetson
University in DeLand in 1982 with a degree in Political Science and from Stetson
University College of Law in 1984. He practiced with James, Zimmerman, & Paul
prior to beginning his own firm in 1992. Mr. Bauer is a member of the Florida
Bar and the American Bar Association. He served as President of the Volusia
County Bar Association from 1993-1994. He also served as Chairman of the Florida
Bar Grievance Committee (1992) and is currently a member of the Statewide
Nominating Commission for Worker's Compensation Judges. He is currently serving
as a member of the Volusia County Law Library Board of Directors. Outside of his
professional involvements, Mr. Bauer currently serves as Vice President of his
neighborhood's homeowners' association, Trails West. Mr. Bauer has lived in
DeLand since 1984.
Gary G. Campbell(3), age 43, has 20 years of banking experience. His
work experience began with Compass Bank (then Central Bank) in Birmingham,
Alabama, in 1976. After working with Compass as a commercial lender for five
years, he relocated to Bank of New Orleans in New Orleans, Louisiana, ("BNO")
and served there for two years from 1981-1983. His primary responsibility at BNO
was servicing national and regional accounts. In 1983, he returned to Alabama to
work for First State Bank of Decatur in Decatur where he was employed as a Vice
President, Commercial Loans. In 1986 he moved to DeLand, Florida to join Florida
National Bank and remained with that company until 1991. During his employment
with Florida National he worked as a Vice President, Commercial Loans in DeLand
for 15 months and was then promoted to President of FNB's $100 Million bank in
Sebring, Florida. Mr. Campbell served as President of that bank for four years
form 1987 until 1991. In 1992 he returned to Volusia County to work with First
State Bank of Florida and open their Ormond Beach office in July of that year.
He worked with First State Bank of Florida, first as a Senior Vice President and
then as Executive Vice President and Senior Loan Officer until 1996 when the
bank was sold to SouthTrust Bank of Volusia County. Mr. Campbell was responsible
for the growth and development of the Ormond Beach Branch. The Branch loans grew
to a total of $12.0 Million with total deposits of $11.5 million. Mr. Campbell
is a graduate of the University of Alabama (1976) where he was involved in an
international exchange program and worked with Wermlandsbanken in Stockholm,
Sweden, for six months. Mr. Campbell and his family have lived in Ormond Beach
since 1992 were he is active and well-known in the community. His civic and
social activities include the Lions Club (Past President), member of the Halifax
Club, the Florida Cracker Trail Association (Past President), the Ormond Beach
Chamber of Commerce (various committees), and the American Heart Association
(serving as local chairman and on the Statewide Finance committee).
Larry A. Kent(3), age 44, graduated from the University of Florida,
Gainesville in 1974 and moved to Deltona, Florida to begin business known as
Larry Kent Homes, Inc. Larry Kent Homes became one of the most successful home
building operations in the City of Deltona during the primary years of that
City's growth. Mr. Kent is currently the owner/operator of Burger King
franchises located in Deltona and Edgewater, Florida. In 1993, he "retired" from
the building business. Mr. Kent and a partner, Charles Ruttenberg, were the
majority shareholders and organizing Directors of Southland Bank which became
First State Bank. Mr. Kent served as Chairman of the Board for that Bank for
four years and served as a member of the board until the bank's sale to
SouthTrust. In addition to his Burger King franchises, Mr. Kent owns and manages
four parcels of commercial real estate (including the Deltona SouthTrust bank
building and a shopping center in Deltona).
Christopher K. Likes(3), age 46, a Certified Public Accountant owns and
operates his own firm in DeLand, Florida. Mr. Likes was born and raised in
Akron, Ohio and moved to DeLand where he attended Stetson University. His degree
in accounting was earned at Stetson in 1973 and he began his accounting career
with Coopers and Lybrand in New York City. Along with his commercial accounts,
Mr. Likes acted as a staff accountant and, later, supervising auditor for
Combank Corporation, a holding company with 7 banks and other subsidiaries. In
26
<PAGE>
1978 he left Coopers and Lybrand and returned to DeLand, Florida to open his own
firm. He has been practicing in DeLand since that time. Mr. Likes is a member of
the DeLand Kiwanis Club.
James R. Peacock(3), age 45. is a Chrysler Plymouth dealer in New
Smyrna Beach, Florida. Previous to his purchase of this dealership. Mr. Peacock
was the owner/operator of Jim Peacock Dodge, Inc. in Daytona Beach, Florida for
14 years which is located across the street from the Daytona International
Speedway. Mr. Peacock has lived in the east Volusia County area for the last 20
years. He started his first car dealership, Jim Peacock Dodge, Inc., in 1980 and
has successfully owned and operated numerous auto dealerships since that time.
Mr. Peacock is seeking to reduce his involvement in the day-to-day management of
the dealerships and has sold all but a minority interest in the Daytona Dodge
dealership and the Chrysler/Plymouth dealership. He owns numerous parcels of
undeveloped properties throughout the county. Mr. Peacock is expected to serve
as the Bank's first Chairman of the Board and as Vice Chairman of the Company.
Bank:
Stanley S. Bronski(2), age 74, has extensive business and banking
experience. Mr. Bronski graduated from Yale University in 1947 while he served a
concurrent 4-year term of service with the U.S. Navy from 1942-1946. He began
his employment with New England Electric System and later joined Lutz
Engineering in Rhode Island and then the George Ellis Company where he served as
president of their Hartford and New Haven offices until 1961. He also served as
President and owner of the Connecticut Air Conditioning Company from 1956 until
1979. While in Connecticut, he served as a Director of the Orange National Bank
and chaired the loan review committee. Orange National Bank was purchased by
Connecticut Bank and Trust Company in 1981 and he was appointed to the Bank's
Advisory board where he served until 1985, concurrent with his operation of the
air conditioning business and his Board membership with the Bank. He also served
as the Chairman of the Board of Finance - Town of Orange from 1972 until 1979.
Mr. Bronski currently resides in Deerfield Beach, Florida but owns commercial
property in the Company's PSA. He is very familiar with the commercial
marketplace in the Banks area. He is active in numerous civic and county clubs
including Rotary International, the Yale Class of '47 Executive Committee and
the Deer Creek Golf Club in Deerfield Beach.
Richard Dwyer(2), age 42, was born in the Bronx, N.Y. and raised in New
Jersey. He worked for Union Carbide Corporation after graduating from high
school from 1973 until 1981. In 1978 he attended college at Ocean County College
and joined M.J. Meehan & Company in 1981. M.J. Meehan has been a specialist
trading firm on the New York Stock Exchange since 1925. Mr. Dwyer worked as a
trader's assistant until 1985 when he became a member of the NYSE and a partner
in the company. For the past 11 years he traded specialty stocks including
General Motors, Citicorp, WalMart Stores, Caterpillar, John Deere, Stratus
Computers and Georgia Pacific. In June of 1996, Mr. Dwyer retired from M.J.
Meehan and moved from New Jersey to DeBary, Florida where he now lives. He is
attending Daytona Beach Community College with intentions of continuing at the
University of Central Florida and obtaining a degree in Education. He plans to
teach at the high school level.
Thomas R. Horton(2), age 70, is a Florida native and the former
Chairman and CEO of the American Management Association. Dr. Horton was born in
Fort Pierce, Florida and earned his Ph.D. in mathematics at the University of
Florida. Dr. Horton began his career in education in 1950 when he served as
assistant headmaster at the Bolles School in Jacksonville, Florida, and has
maintained an active interest in education throughout his life, having served as
a Trustee of the American Graduate School of International Management, Bethune
Cookman College, Pace University, and Stetson University. He is currently a
Fellow of the Academy of Management and of the International Academy of
Management. He is a member of the National Association of Corporate Directors'
Blue Ribbon Commission on Director Professionalism and of the NACD faculty.
Continuing his career, he left the Bolles School to spend 28 years with IBM
Corporation where, in his early years, he pioneered the application of computers
to the vehicular and air traffic control and to space computation, and later
became a Divisional General Manager and Vice President. After leaving IBM, Tom
joined the American Management Association in 1982 as President and CEO. He
retired from the AMA in 1992 as Chairman. Dr. Horton has served as a Director of
several public and private corporations and has advised numerous others. He is a
director of Stanhome, Inc. and chair of its organizing committee, and a former
director of American Precision Industries, Charlesbridge Publishing Company,
Med-Tech Corporation, and Perrigo Corporation. He currently serves on the
advisory boards to the Kirchman Corporation, and Who's Who in Finance and
Industry. He resigned his position on the advisory board of SunBank in Volusia
County on October 31, 1996, in order to serve as a director of the bank.
Susan A. Nicholson(2), age 46, holds degrees in Education, Mathematics,
and Interior Design. She has also taken post graduate courses in Financial
Analysis from the New York School of Credit and Finance, the University of
Oklahoma's Bank Management Program and numerous American Institute of Banking
courses. After graduation from college, Ms. Nicholson began a career in banking
as a credit analyst for the First National Bank of Atlanta (Atlanta, Georgia).
She later moved to Florida to work with Sun Bank and First Federal Savings and
27
<PAGE>
Loan Association of Orlando in Orlando, Florida in various capacities including
Commercial Lender, Branch Manager and Assistant Vice President. She currently
owns her own Interior Design firm in Ponce Inlet, Florida that specializes in
commercial interiors. She serves as Vice President of Professional Development
for the International Design Association in the State of Florida. She has taught
Business Practices classes at Daytona Beach Community College and has chaired a
large number of civic and charitable events of organizations including the
American Heart Association, Peso Council of the Arts, Ponce Inlet Community
Center, Ponce Inlet Women's Club, and the American Cancer Society.
Clarence W. Singletary(2), age 62, is a Florida native who obtained his
bachelor's degree from the University of Texas and returned to Florida State
University to obtain his masters degree in 1960. He began his career as a
management trainee with Sarasota Federal Savings & Loan in 1961. He moved to
Daytona Beach in 1963 to become an Assistant Vice President with First Federal
Savings and Loan of Daytona Beach, Florida. He remained with that institution,
working his way up to Executive Vice President and a member of their Board of
Directors until 1987. From 1980 to 1987 he served as President of Trails, Inc.,
a wholly-owned subsidiary of First Federal, that developed over 4,000 building
lots in 26 different subdivisions. This company also served as the Managing
Partner of 21 Joint Ventures with other developers. Trails, Inc. also developed,
leased and sold shopping centers, offices, and three golf country clubs. Mr.
Singletary retired from his position with First Federal and became a full-time
developer in 1987. He and his partner, Dr. Robert Merrell, have successfully
completed seven subdivisions and currently have three new subdivisions in
development. They also own and operate a Bono's Bar-B-Q franchise in Holly Hill,
Florida, located within our PSA. Mr. Singletary has been a member of the Ormond
Beach Rotary Club for 23 years (serving two board terms), the Daytona Beach
Chamber of Commerce for 26 years (serving three board terms), and a member of
the Committee of 100, Daytona Beach, for the past 15 years.
Harvey E. Buckmaster(4) age 49, will serve as the Bank's Senior Vice
President and Cashier. Mr. Buckmaster is a Florida native with a degree in
Accounting from the University of South Florida, Tampa. In 1975, he began his
career in operations and accounting in the financial industry working for
Southeast Banking Corporation in Sarasota and Naples. He subsequently spent six
years in the Savings and Loan industry working successively for: Naples Federal
Savings and Loan (1978 - 1981) in Naples, and First Family Federal Savings and
Loan (1981 - 1987) in Eustis. He then moved from Eustis to Deltona, Florida to
join First State Bank of Florida where he served as Senior Vice President of
Operations and Cashier until October 1996. At First State Bank, Mr. Buckmaster
was responsible for all accounting functions, purchasing, accounts payable,
payroll, data processing, and regulatory reporting. As part of the management
team at First State Bank, he also participated in Asset/Liability management and
management of the bank's investment portfolio.
- ------------------------------------
(1) Will serve as a Director of the Company, only.
(2) Will serve as a Director of the Bank, only.
(3) Will serve as a Director of both the Company and the Bank.
(4) Will serve as an Executive Officer of the Bank.
Executive Compensation
The Organizers entered into an at will employment agreement with Gary
G. Campbell in April of 1996, to assist the Organizers with the formation of the
Company and the Bank. Under the terms of the non-written Agreement, Mr. Campbell
will serve as a director and Chief Financial Officer of the Company and is being
paid a salary of $6,250 per month, plus an automobile allowance of $500 per
month, during the Bank's organizational phase. The understanding between the
Organizers and Mr. Campbell is that Mr. Campbell will be employed by the Company
as its President and Chief Financial Officer, and by the Bank as its President
and Chief Executive Officer at an annual base salary of $75,000, plus a
performance bonus based upon the achievement of certain goals and objectives
that will be established by the Board of Directors relating to the levels of
profitability and asset growth of the Bank. It is not expected that such bonus
would exceed 25% of Mr. Campbell's base salary. The Agreement which initially
will be for a term of two years, also contains a commitment to grant him an
option to purchase 10,000 shares of Company Common Stock at $10.00 per share.
Such option would vest at the rate of 20% per year over five years, would expire
10 years from the grant date and would be subject to the terms of a qualified
stock option plan adopted by the Company's Board of Directors and approved by
its shareholders. Mr. Campbell will be provided with an automobile, as well as
participation in such other benefit plans which the Bank makes available
generally to all employees. Mr. Campbell's employment will be at the will of the
Board and the Bank may terminate Mr. Campbell for any reason upon majority vote
of the Board of Directors. If, however, the termination is without cause, Mr.
Campbell will be entitled to severance pay in an amount not to exceed the
remainder due on his contract or three months which ever is greater. The
Agreement provides that upon termination, Mr. Campbell will not compete with the
Company or the Bank for a period of 3 months following termination.
28
<PAGE>
Transactions with Affiliates
The Agreement provides that upon termination Mr. Campbell will not
compete with the Company or the Bank for a period of 3 months following
termination. Messers Campbell, Bauer, and Likes are the only Organizers or
proposed directors of the Company that have received any cash compensation for
services rendered on behalf of the Company. See "MANAGEMENT - Executive
Compensation." Mr. Bauer has provided certain legal services to the Company and
the Organizers for which he has been paid $ 400 to date. It is not expected that
Mr. Bauer will receive more than $2,500 in total for such services. Mr. Likes
has provided certain accounting services to the Company and the Organizers for
which he has been paid nothing to date. It is not expected that Mr. Likes will
receive more than $2,500 in total for such services.
Once the Bank opens for business, it is anticipated that it will extend
loans to the Bank's and/or the Company's Directors, their associates or members
of the immediate families of the Directors of the Bank or the Company. Such
loans will be made on substantially the same terms and conditions, including
interest rates, collateral and credit underwriting procedures as those
prevailing at the time for comparable transactions by the Bank with other
persons.
Stock Option Plans
Incentive Stock Option Plan. The Company's Board of Directors has
adopted an Incentive Stock Option Plan ("Plan") for employees who are
contributing significantly to the management or operation of the business of the
Company or its subsidiaries as determined by the committee administering the
Plan. The Plan is contingent upon approval by the Company's shareholders. The
Plan provides for the grant of options at the discretion of a committee
designated by the Board of Directors to administer the Plan. No person may serve
as a member of the committee who is then eligible for a grant of options under
the Plan or has been so eligible for a period of one year prior to his service
on the committee. The option exercise price must be at least 100% (110% in the
case of a holder of 10% or more of the Common Stock) of the fair market value of
the stock on the date the option is granted, but in no case will the exercise
price be less than the offering price contained herein. The options are
exercisable by the holder thereof in full at any time following a vesting period
and prior to their expiration in accordance with the terms of the Plan. Stock
options granted pursuant to the Plan will expire on or before (i) the date which
is the tenth anniversary of the date the option is granted, or (ii) the date
which is the fifth anniversary of the date the option is granted in the event
that the option is granted to a key employee who owns more than 10% of the total
combined voting power of all classes of stock of the Company or any subsidiary
of the Company. Mr. Campbell's proposed Employment Contract contains a provision
whereby he will be granted an option to purchase 10,000 shares of the Company's
common stock. See "MANAGEMENT Executive Compensation."
The Committee may grant a Limited Right simultaneously with respect to
the grant of any stock option, with respect to all or some of the shares covered
under the stock option. A Limited Right may not be exercised before six months
from the date of the grant and may be exercised only if: (i) there is a change
in control of the Company; (ii) the underlying option is eligible to be
exercised; and (iii) the fair market value of the underlying shares on the day
of the exercise is greater than the exercise price of the related option. The
Limited Right may be for no more than 100% of the difference between the
exercise price and the fair market value of the common stock of the Company.
Directors Stock Option Plan. The Board of Directors may, at the
Company's first annual meeting of shareholders after the Bank opens for
business, propose for shareholder approval a directors' stock option plan, which
will be designed to provide incentive compensation to directors in the event
that the Company's common stock increases in value during the term of such
options. The detail of this directors' option plan have not yet been determined,
but such details would be disclosed to shareholders in the Company's Proxy
Statement issued in connection with solicitation of shareholder approval of such
a plan.
Key Man Insurance
The Company has purchased a key man life insurance policy ("Policy")
insuring the life of Mr. Campbell. The Company is both the owner and the
beneficiary of the Policy. The amount of the Policy is $500,000 and the proceeds
of the Policy would be used to defray the costs of any delay in the Application
and organization process caused by Mr. Campbell's death. Should Mr. Campbell die
during the organizational process the Company may elect to terminate the
Offering and refund all subscription proceeds to the Subscribers.
29
<PAGE>
ARTICLES OF INCORPORATION - SUMMARY
The authorized capital stock of the Company is 10,000,000 shares
consisting of 10,000,000 shares of Common Stock, par value, $0.01 per share, of
which 1,500 shares are presently issued and outstanding. See "ORGANIZERS AND
PRINCIPAL SHAREHOLDERS." No preferred stock has been authorized.
Common Stock
The holders of Common Stock are entitled to elect the members of the
Board of Directors of the Company and such holders are entitled to vote as a
class on all matters required or permitted to be submitted to the shareholders
of the Company. No holder of any class of stock of the Company has preemptive
rights with respect to the issuance of shares of that or any other class of
stock and the Common Stock is not entitled to cumulative voting rights with
respect to the election of directors.
The holders of Common Stock are entitled to dividends and other
distributions if, as, and when declared by the Board of Directors out of assets
legally available therefore. Upon the liquidation, dissolution or winding up of
the Company, the holder of each share of Common Stock will be entitled to share
equally in the distribution of the Company's assets. The holders of Common Stock
are not entitled to the benefit of any sinking fund provision. The shares of
Common Stock of the Company are not subject to any redemption provisions, nor
are they convertible into any other security or property of the Company. All
shares of Common Stock outstanding upon completion of this Offering will be,
fully paid and nonassessable.
The Company will require the payment of a $10.00 transfer fee with
regard to all requests for cancellation and re-issue of the Company's shares
after the initial issue of share certificates. No such fee will be required for
shares originally issued, or issued in exchange for Warrants.
Requirements for Super Majority Approval of Transactions
The Company's Articles contain provisions requiring super majority
shareholder approval to effect certain extraordinary corporate transactions
which are not approved by the Board of Directors. The Articles require the
affirmative vote or consent of the holders of at least two-thirds (66-2/3%) of
the shares of each class of Common Stock of the Company entitled to vote in
elections of directors to approve any merger, consolidation, disposition of all
or a substantial part of the assets of the Company or a subsidiary of the
Company, exchange of securities requiring shareholder approval or liquidation of
the Company ("Affiliated Transaction"), if any person who together with his
affiliates and associates owns beneficially 5% or more of any voting stock of
the Company ("Interested Shareholder") is a party to the transaction; provided
that a majority of the disinterested Directors of the Company has not approved
the transaction. In addition, the Articles require the separate approval by the
holders of a majority of the shares of each class of stock of the Company
entitled to vote in elections of directors which are not beneficially owned,
directly or indirectly, by an Interested Shareholder, of any merger,
consolidation, disposition of all or a substantial part of the assets of the
Company or a subsidiary of the Company, or exchange of securities requiring
shareholder approval ("Business Combination"), if an Interested Shareholder is a
party to such transaction; provided, that such approval is not required if: (i)
the consideration to be received by the holders of the stock of the Company
meets certain minimal levels determined by a formula under the Articles
(generally the highest price paid by the Interested Shareholder for any shares
acquired); (ii) there has been no reduction in the average dividend rate from
that which was obtained prior to the time the Interested Shareholder became
such; and (iii) the consideration to be received by the shareholders who are not
Interested Shareholders shall be paid in cash or in the same form as the
Interested Shareholder previously paid for shares of such class of stock. This
Article, as well as the Article establishing a classified Board of Directors,
may be amended, altered, or repealed only by the affirmative vote or consent of
the holders of at least 66-2/3% of the shares of each class of stock of the
Company entitled to vote in elections of directors.
Acquisition Offers
The Board of Directors of the Company, when evaluating any offer of
another Person (as defined in the Articles) to: (i) make a tender or exchange
offer for any equity security of the Company; (ii) merge or consolidate the
Company with another corporation or entity; or (iii) purchase or otherwise
acquire all or substantially all of the properties and assets of the Company,
shall, in connection with the exercise of its judgment in determining what is in
the best interest of the Company and its shareholders, give due consideration to
all relevant factors, including, without limitation: (i) the social and economic
effect of acceptance of such offer on the Company's present and future customers
and employees and those of its subsidiaries (as defined in the Articles); (ii)
on the communities in which the Company and its subsidiaries operate or are
located; (iii) on the ability of the Company to fulfill its corporate objectives
as a financial institution holding company; and (iv) on the ability of its
subsidiary financial institutions to fulfill the objectives of such institutions
under applicable statutes and regulations.
30
<PAGE>
Control Share Acquisitions
The Company's Articles provide that any person who acquires 20 % or
more of the Company's shares must comply with the Florida Statutes governing
control-share acquisitions. Generally a person intending to acquire such shares
must give the Company notice of such intent and request a meeting of the
shareholders at which shareholder's will be given an opportunity to vote on
whether such shares will be accorded full voting rights. Refusal by the
shareholders to accord full voting rights would result in the proposed acquiror
obtaining shares which could not be voted on any matters to come before the
shareholders. Certain acquisitions are exempt from the effects of the Article,
such as mergers or business combinations which have been approved by the
Company's Board of Directors as well as acquisitions of shares issued by the
Company in its Initial Offering or in subsequent Offerings approved by the
Board.
The effect of all of the above provisions is to make it more difficult
for a person, entity or group to effect a change in control of the Company
through the acquisition of a large block of the Company's voting stock.
LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or
the proposed Bank is a party or of which any of their properties are subject;
nor are there material proceedings known to the Company contemplated by any
governmental authority; nor are there material proceedings known to the Company,
pending or contemplated, in which any director, officer or affiliate or any
proposed principal security holder of the Company, or any associate of any of
the foregoing is a party or has an interest adverse to the Company or the Bank.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed upon for the Company by Igler & Dougherty, P.A.,
1501 Park Avenue East, Tallahassee, Florida 32301, counsel to the Company.
EXPERTS
The financial statements of the Company as of November 30, 1996, and
for the period from August 15, 1996, (date of incorporation) to November 30,
1996, included elsewhere in the Registration Statement have been included in
reliance upon the reports of Hacker, Johnson, Cohen & Grieb, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing matters.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission, 450
Fifth Street Northwest, Washington, D.C. 20549, a Form SB-2 Registration
Statement (herein, together with all amendments thereto, called the
"Registration Statement") under the 33 Act, as amended, with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all of
the information included in the Registration Statement. For further information
with respect to the Company and the Common Stock, reference is hereby made to
the Registration Statement and the exhibits and schedules thereto.
31
<PAGE>
FINANCIAL STATEMENTS
AND
NOTES THERETO
<PAGE>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Index to Financial Statements
Page
Independent Auditors' Report.................................................F-2
Balance Sheet at November 30, 1996...........................................F-3
Statement of Operations for the Period from August 15, 1996
(Date of Incorporation) to November 30, 1996 .......................F-4
Statement of Changes in Stockholders' Equity
for the period from August 15, 1996 (Date of Incorporation)
to November 30, 1996................................................F-5
Statement of Cash Flows for the Period from August 15, 1996
(Date of Incorporation) to November 30, 1996 .......................F-6
Notes to Financial Statements as of November 30, 1996 and
for the Period from August 15, 1996 (Date of Incorporation)
to November 30, 1996 .........................................F-7 - F-8
All schedules have been omitted because of the absence of the conditions under
which they are required or because the required information is included in the
financial statements and related notes.
F-1
<PAGE>
Independent Auditors' Report
Board of Directors
The Commercial Bancorp, Inc.:
We have audited the accompanying balance sheet of The Commercial Bancorp, Inc.
(a development stage company) (the "Company") at November 30, 1996, and the
related statement of operations, changes in stockholders' equity, and cash flows
for the period from August 15, 1996 (Date of Incorporation) to November 30,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company at November 30,
1996, and the results of its operations and its cash flows for the period from
August 15, 1996 (Date of Incorporation) to November 30, 1996, in conformity with
generally accepted accounting principles.
HACKER, JOHNSON, COHEN & GRIEB
Tampa, Florida
December 12, 1996
F-2
<PAGE>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Balance Sheet
November 30, 1996
Assets
Cash................................................................ $ 11,976
Organizational costs primarily of planned subsidiary bank........... 120,718
Other assets ............ 23,181
------
Total.............................................. $ 155,875
---------
Liabilities and Stockholders' Equity
Unsecured demand note payable to organizers......................... 140,875
-------
Commitments (Note 5)
Stockholders' equity:
Common stock, $.01 par value, 10,000,000 shares
authorized, 1,500 shares issued and outstanding.... 15
Additional paid-in capital................................. 14,985
------
Total stockholders' equity......................... 15,000
------
Total.............................................. $ 155,875
=========
See Accompanying Notes to Financial Statements.
F-3
<PAGE>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Statement of Operations
Period from August 15, 1996 (Date of Incorporation) to November 30, 1996
Interest income..................................................... $ -
----
Administrative expenses............................................. -
----
Interest expense.................................................... -
----
Total expenses............................................. -
----
Net earnings............................................... $ -
====
See Accompanying Notes to Financial Statements.
F-4
<PAGE>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
Period from August 15, 1996 (Date of Incorporation) to November 30, 1996
<TABLE>
<CAPTION>
Additional Total
Common Paid-In Stockholders'
Stock Capital Equity
----- ------- ------
<S> <C> <C> <C>
Balance at August 15, 1996 (date of incorporation).................... $ - - -
Sale of common stock.................................................. 15 14,985 15,000
-- ------ ------
Balance at November 30, 1996.......................................... $ 15 14,985 15,000
==== ====== ======
</TABLE>
See Accompanying Notes to Financial Statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Period from August 15, 1996
(Date of Incorporation) to November 30, 1996
<S> <C>
Cash flows used in administrative activities during the development stage:
Net earnings........................................................... $ -
Adjustments to reconcile net earnings to net cash
used by administrative activities during the
development stage
Increase in organizational costs............................... (120,718)
Increase in other assets....................................... (23,181)
Net cash used in administrative activities
of the development stage................................... (143,899)
--------
Cash flows from financing activities:
Advances on unsecured demand note payable to organizers................ 140,875
Proceeds from issuance of common stock................................. 15,000
--------
Net cash provided by financing activities.................... 155,875
--------
Net increase in cash............................................................ 11,976
--------
Cash at beginning of period..................................................... -
Cash at end of period........................................................... $ 11,976
========
Supplemental disclosures of cash flow information-Cash paid during period for:
Interest............................................................... $ 905
========
Income taxes........................................................... $ -
========
See Accompanying Notes to Financial Statements.
</TABLE>
F-6
<PAGE>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Notes to Financial Statements
November 30, 1996
(1) Summary of Significant Accounting Policies
General. The Commercial Bancorp, Inc. (the "Company") was incorporated
on August 15, 1996 in the State of Florida. The Company plans to apply
for approval from the Board of Governors of the Federal Reserve System
("Board of Governors") to become a one-bank holding company and plans
to acquire 100% of the outstanding shares of The Commercial Bank of
Volusia County (the "Bank"), which is planned to be incorporated and
organized in Ormond Beach, Florida. The operations of the Company,
which are intended to consist solely of the ownership of the Bank, have
not commenced as of November 30, 1996. Therefore, with the exception of
organizational costs and certain prepaid expenses, accounting policies
have not been established. The Company has adopted a fiscal year end of
December 31.
Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Common Stock Offering. As of November 30, 1996, the Company has sold
1,500 shares of common stock for an aggregate of $15,000.
Organizational Costs. The Company has incurred organizational costs
principally in connection with the preparation and filing of the Bank's
application to organize. At November 30, 1996, the Company had incurred
organizational cost of $120,718. It is intended that organizational
costs of the Bank will be transferred to the Bank and deferred and
amortized using the straight-line method over a period of not more than
five years, beginning in the period operations commence.
(2) Organization
On October 21, 1996, the Organizers of the Company filed an application
for authority to organize a state-chartered bank with the Comptroller
of the State of Florida, Department of Banking and Finance. The
approval of this application will be contingent upon certain conditions
being met. These conditions include, among other things, the
establishment of total capital accounts of not less than $4,028,000
with not less than $2,000,000 allocated to common capital, after all
organizational and preopening expenses, and the approval by the Board
of Governors of the Federal Reserve System of the Company's application
to acquire the stock of the Bank as a registered bank holding company.
(3) Related Parties
The Company has appointed one of its Organizers as the President and
Chief Executive Officer of the Company.
(4) Unsecured Demand Note Payable to Organizers
The Company has obtained a demand note payable (line of credit) in the
amount of $250,000 from certain Organizers of the Company. At November
30, 1996, the Company had advances of $140,875 against this line. These
amounts were used to fund organizational and other costs incurred by
the Company and the planned Bank. It is intended that the advances will
be repaid to the Organizers from the proceeds of the Company's common
stock offering.
(continued)
F-7
<PAGE>
THE COMMERCIAL BANCORP, INC.
(A Development Stage Company)
Notes to Financial Statements, Continued
(5) Commitments
Bank facilities are leased under an operating lease. Future minimum
rental commitments under noncancelable leases are as follows:
Year Ended December 31,
-----------------------
1997................................... $ 40,612
1998................................... 50,222
1999................................... 51,768
$ 142,602
(6) Sale of Common Shares and Warrants
The Company plans to offer a total of 1,200,000 shares of its common
stock to the public. (1) During the initial offering period shares will
be included in units with a unit consisting of one share of common
stock and one warrant. The price per unit is expected to be $10. A
total of 450,000 units will be offered for sale. Each warrant entitles
the holder thereof to purchase one share of additional common stock for
$10 per share during the 36 month period following the effective date
of the warrant certificate. (2) After the sale of 450,000 units has
been completed, 300,000 shares of common stock will be also offered for
sale. (3) Finally 450,000 shares will be available to holders of the
warrants. The Company expects to incur approximately $26,000 in
offering costs relating to this sale.
(7) Incentive Stock Option Plan
The Company's Board of Directors has adopted an Incentive Stock Option
Plan ("Plan"). The Plan is contingent upon approval by the Company's
shareholders. The Plan provides for the grant of options at the
discretion of a committee designated by the Board of Directors to
administer the Plan. The option exercise price must be at least 100%
(110% in the case of a holder of 10% or more of the Common Stock) of
the fair market value of the stock on the date the option is granted
and the options are exercisable by the holder thereof in full at any
time following a vesting period and prior to their expiration in
accordance with the terms of the Plan. The Company's president's
proposed Employment Contract contains a provision whereby he will be
granted an option to purchase 10,000 shares of the Company's common
stock under this plan.
F-8
<PAGE>
32
<PAGE>
APPENDIX "A"
ARTICLES OF INCORPORATION
33
<PAGE>
ARTICLES OF INCORPORATION
OF
THE COMMERCIAL BANCORP, INC.
The undersigned incorporators, for the purpose of forming a corporation
under the Florida Business Corporation Act, hereby adopt the following Articles
of Incorporation.
ARTICLE I - NAME
The name of the Corporation is The Commercial Bancorp, Inc.
("Corporation"). The principal place of business of the Corporation shall be 533
N. Nova Road, Suite 213A, Ormond Beach, Florida 32174 or at such other place
within the State of Florida as the Board of Directors may designate. The names
of the registered agent is Igler & Dougherty, P.A., 1501 Park Avenue East,
Tallahassee, Florida 32301, which address is also the address of the Registered
Office of the Corporation.
ARTICLE II - NATURE OF BUSINESS
The Corporation may engage in or transact any or all lawful activities
or business permitted under the laws of the United States and the State of
Florida, or any other state, county, territory or nation.
ARTICLE III - CAPITAL STOCK
The total number of shares of capital stock which the Corporation shall
have authority to issue is 10,000,000, consisting of 10,000,000 shares of common
stock, par value one cent ($0.01) per share ("Common Stock"). Each holder of
shares of Common Stock shall be entitled to one vote per share.
ARTICLE IV - TERM OF EXISTENCE
This Corporation is to exist perpetually.
ARTICLE V - OFFICERS AND DIRECTORS
The names and street addresses of the initial officers and directors
who shall hold office the first year of the
Corporation's existence or until their successors are elected are:
Name Address Title
- ---- ------- -----
Larry Kent 840-K Deltona Road Chairman of
Deltona, Florida 32725 The Board
James Peacock 1311 Turnbull St. Box 100 President and
New Smyrna Beach, FL 32168 Chief Executive
Officer
Gary G. Campbell 108 Oak Lane Chief Financial
Ormond Beach, Florida 32174 Officer
1
<PAGE>
Christopher Likes 228-B East New York Ave. Director
DeLand, Florida 32720
Kirk Bauer 223 S. Woodland Blvd. Director
DeLand, Florida 32721
ARTICLE VI - INCORPORATORS
The name and street address of the incorporator to these Articles of
Incorporation is Igler & Dougherty, P.A., 1501 Park Avenue East, Tallahassee,
Florida 32301.
ARTICLE VII - MANAGEMENT OF THE BUSINESS OF THE COMPANY
Section 1 - Authority of the Board. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. In addition to the powers and authority expressly conferred upon them
by the Florida Statutes or by these Articles of Incorporation or the Bylaws of
the Corporation, the directors are hereby empowered to exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation.
Section 2 - Action by Shareholders. Any action required or permitted to
be taken by the shareholders of the Corporation must be effected at a duly
called Annual or Special Meeting of Shareholders of the Corporation and may not
be effected by any consent in writing by such shareholders.
Section 3 - Special Meetings of Shareholders. Special Meetings of
shareholders of the Corporation may be called by the Board of Directors pursuant
to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board for
adoption), the Chairman of the Board or the President of the Corporation, or by
shareholders holding at least 20% of the outstanding shares of the Corporation.
ARTICLE VIII - NUMBER OF DIRECTORS
Section 1 - Number of Directors: The Board of Directors of the
Corporation shall be comprised of not less than three (3) nor more than fifteen
(15) directors and shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the Full Board as
set forth in the Corporation's Bylaws. The Board of Directors is authorized to
increase the number of directors by no more than two and to immediately appoint
persons to fill the new director positions until the next Annual Meeting of
Shareholders, at which meeting the new director positions shall be filled by
persons elected by the shareholders of the Corporation. However, this paragraph
shall not be construed to limit the authority of the shareholders of the
Corporation to increase the number of directors in accordance with the Bylaws of
the Corporation.
2
<PAGE>
Section 2 - Election and Term: Directors shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election at a
meeting at which a quorum is present. The term of the initial directors of the
Corporation expires at the first shareholders' meeting at which directors are
elected.
Section 3 - Classes: The directors shall be divided into three classes,
as nearly equal in number as reasonably possible, with the term of office of the
first class (Class I) to expire at the 1997 Annual Meeting of Shareholders, the
term of office of the second class (Class II) to expire at the 1998 Annual
Meeting of Shareholders and the term of office of the third class (Class III) to
expire at the 1999 Annual Meeting of Shareholders. At each Annual Meeting of
Shareholders following such initial classification and election, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding Annual Meeting of Shareholders
after their election.
Section 4 - Vacancies: Newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of the
directors then in office, though less than a quorum. Directors so chosen shall
hold office for a term expiring at the next Annual Meeting of Shareholders. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
Section 5 - Notice: Advance notice of shareholder nominations for the
election of directors and of business to be brought by shareholders before any
meeting of the shareholders of the Corporation shall be given in the manner
provided in the Bylaws of the Corporation.
Section 6 - Removal by Shareholders: Any director, or the entire Board
of Directors, may be removed from office at any time by the affirmative vote of
the holders of at least 60% of the voting power of all of the then-outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class.
ARTICLE IX - SPECIAL VOTING PROVISIONS FOR AFFILIATED
TRANSACTIONS AND BUSINESS COMBINATIONS
Section 1 - Definitions: The terms defined below shall apply for
purposes of this Article IX:
A."Affiliated Transaction," when used in reference to the
Corporation and any Interested Shareholder (as hereinafter
defined), means any of the following situations:
l. any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (I)
any Interested Shareholder or (ii) any other
corporation (whether or not itself an Interested
Shareholder) which is, or after such merger or
consolidation would be, an Affiliate of an
Interested Shareholder.
3
<PAGE>
2. any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction
or a series of transactions) of assets of the
Corporation or any Subsidiary of the Corporation
to or with any Interested Shareholder, or any
Affiliate or Associate of any Interested
Shareholder:
a. Having an aggregate fair market value
equal to 5% or more of the aggregate fair market
value of all assets, determined on a consolidated
basis, of the Corporation; or
b. Having an aggregate fair market value
equal to 5% or more of the aggregate fair market
value of all outstanding shares of the
Corporation; or
c. Representing 5% or more of the earning
power or net income determined on a consolidated
basis, of the Corporation.
3. the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of
transactions) of any shares of the Corporation or
any Subsidiary to any Interested Shareholder or
any Affiliate of any Interested Shareholder in
exchange for cash, securities or other property
(or a combination thereof) having an aggregate
Fair Market Value (as hereinafter defined)
equaling or exceeding 5% or more of all the
outstanding shares of the Corporation and its
Subsidiaries, except pursuant to the exercise of
warrants or rights to purchase stock offered, or
a dividend or distribution paid or made, pro rata
to all shareholders of the Corporation.
4. the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested
Shareholder.
5. any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of
the Corporation with any of its Subsidiaries or
any other transaction (whether or not with or
into or otherwise involving an Interested
Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share
of the outstanding shares of any class of equity
or convertible securities of the Corporation or
any Subsidiary which is directly or indirectly
owned by any Interested Shareholder or any
Affiliate of any Interested Shareholder. 6. any
receipt by the Interested Shareholder or any
Affiliate or Associate of the Interested
Shareholder of the benefit, directly or
indirectly (except proportionately as a
shareholder of the Corporation), of any loans,
advances, guaranties, pledges, or other financial
assistance or any tax credits or other tax
advantages provided by or through the
Corporation.
B."Interested Shareholder" means any Person who is the
Beneficial Owner, directly or indirectly, of more than 10% of
the outstanding voting shares of the corporation. However,
the term "Interested Shareholder" shall not include the
Corporation or any Subsidiary; any savings, employee stock
ownership, or other employee benefit plan of the Corporation
or any Subsidiary; or any fiduciary of any such plan when
acting in such capacity. For the purpose of determining
whether a person is an Interested Shareholder pursuant to
this Section, the number of shares of Voting Stock deemed to
be outstanding shall include shares deemed owned through
application of Article III, Section 3,
4
<PAGE>
but shall not include any other shares of Voting Stock that
may be issuable pursuant to any contract, arrangement or
understanding, upon exercise of conversion rights, warrants,
options, or otherwise.
C."Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for
the purposes of the definition of Interested Shareholder set
forth in Paragraph B of this Section 1, the term "Subsidiary"
shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by
the Corporation.
D."Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Shareholder
and was a member of the Board of Directors prior to the time
that the Interested Shareholder became an Interested
Shareholder, and any successor of a Disinterested Director
who is unaffiliated with the Interested Shareholder and is
recommended to succeed a Disinterested Director by a majority
of Disinterested Directors then on the Board of Directors.
E."Fair Market Value" means: (I) the Fair Market Value of a
share on the date in question shall be determined by a
majority of Disinterested Directors, appropriately adjusted
for any dividend or distribution in shares of such stock or
any combination or reclassification of outstanding shares of
such stock into a smaller number of shares of such stock; and
(ii) in the case of property other than cash or shares, the
Fair Market Value of such property on the date in question as
determined by a majority of the Disinterested Directors.
F.Reference to "Highest Per Share Price" shall in each case
with respect to any class of stock reflect an appropriate
adjustment for any dividend or distribution in shares of such
stock or any stock split or reclassification of outstanding
share of such stock into a greater number of shares of such
stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such
stock.
G."Affiliate" shall have the meaning set forth in Section
607.0901, Florida Statutes.
H."Person" shall mean any individual, a group acting in
concert, a corporation, a partnership, an association, a
joint venture, an investors' pool, a joint stock company, a
trust, an unincorporated organization or similar company, a
syndicate or any other group formed for the purpose of
acquiring, holding or disposing of the equity securities of
the Corporation.
I."Beneficial Ownership" is defined herein to mean a Person
who, directly or indirectly, has the:
1. voting power, which includes the power to vote or
to direct the voting of the "Voting Stock" as
that term is defined herein;
2. investment power, which includes the power to
dispose of or to direct the disposition of the
Voting Stock; or
3. the right to acquire the voting power or
investment power, whether such right is
exercisable immediately or only after the passage
of time, pursuant to any agreement, arrangement
or understanding or upon the exercise of
conversion rights, warrants or options, or
otherwise.
J."Acting in Concert" means (I) knowing participation in a
joint activity or conscious parallel action towards a common
goal whether or not pursuant to an express agreement; or (ii)
a combination or pooling of voting or 5
<PAGE>
other interests in the securities of an issuer for a common
purpose pursuant to any contract, understanding,
relationship, agreement or other arrangements, whether
written or otherwise.
K."Voting Stock" means the outstanding shares of all classes
or series of the Corporation entitled to vote generally in
the election of directors.
Section 2 - Affiliated Transactions: In addition to any affirmative vote
required by law or these Articles of Incorporation, and except as otherwise
expressly provided in this Section, any Affiliated Transaction shall be approved
by the affirmative vote of the holders of two-thirds of the Voting Stock, voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required or that a lesser
percentage may be specified by law or in any agreement with any national
securities exchange or otherwise.
Section 3 - Exceptions: The voting provisions of Section 2 of this Article
IX shall not be applicable to a particular Affiliated Transaction if all of the
conditions specified in either of the following Paragraphs A and B are met:
A.The Affiliated Transaction has been approved by a majority
of the Disinterested Directors; or
B.In the Affiliated Transaction, consideration shall be paid
to the holders of each class of voting shares and all of the
following conditions shall be met:
1.The aggregate amount of the cash and the Fair Market
Value, as of the valuation date of consideration, other
than cash to be received per share by the holders of Common
Stock in such Affiliated Transaction are at least equal to
the higher of the following:
a.if applicable, the Highest Per Share Price (as
previously defined herein), including any brokerage
commissions, transfer taxes and soliciting dealers' fees,
paid by the Interested Shareholder for any shares of
Common Stock acquired by it (I) within the two-year
period immediately prior to the first public announcement
date of the Affiliated Transaction ("Announcement Date"),
or (ii) in the transaction in which it became an
Interested Shareholder, whichever is higher;
b.the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (such latter
date is referred to in this Article IX as the
"Determination Date"), whichever is higher;
c.if applicable, the price per share equal to the Fair
Market Value per share of such class or series determined
pursuant to sub-paragraph (b) of this Section 3,
multiplied by the ratio of the Highest Per Share Price,
including any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested
Shareholder for any shares of Voting Stock acquired by it
within the two-year period immediately prior the
Announcement Date (the numerator), to the Fair Market
Value per share of such class or series on the first day
in such two-year period on which the Interested
Shareholder acquired the Voting Stock (the denominator);
or
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d.if applicable, the highest preferential amount per share
to which the holders of shares of such Voting Stock are
entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation.
2. The consideration to be received by holders of a
particular class of outstanding Voting Stock (including
Common Stock) shall be in cash or in the same form as the
Interested Shareholder has previously paid for shares of such
Voting Stock. If the Interested Shareholder has paid for
shares of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of
Voting Stock shall be either cash or the form used to acquire
the largest number of shares of such class of Voting Stock
previously acquired by it. The consideration to be received
pursuant to this provision shall be subject to appropriate
adjustment in the event of any stock dividend, stock split,
combination of shares or similar event.
3. During such portion of the three-year period
preceding the announcement date that such Interested
Shareholder has become an Interested Shareholder and except as
approved by a majority of the Disinterested Directors:
a.there shall have been no failure to declare and pay at
the regular date any full quarterly dividends (whether or
not cumulative) on any outstanding stock having
preference over the Common Stock as to dividends or
liquidation;
b.there shall have been (I) no reduction in the annual rate
of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common
Stock), and (ii) an increase in such annual rate of
dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the
effect of reducing the number of outstanding shares of
the Common Stock, and (iii) no such Interested
Shareholder who has become the Beneficial Owner of any
additional shares of Voting Stock except as part of the
transaction which results in such Interested Shareholder
becoming an Interested Shareholder.
4. Unless approved by a majority of the
Disinterested Directors, no Interested Shareholder shall have
received the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such
Affiliated Transaction or otherwise, during the three-year
period preceding the date the Interested Shareholder became
an Interested Shareholder.
5. A proxy or information statement describing the
proposed Affiliated Transaction and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to
shareholders of the Corporation at least 30 days prior to the
consummation of such business combination (whether or not such
proxy or information statement is required to be mailed
pursuant to such Act or subsequent provisions).
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Section 4 - Board Discretion: A majority of the Disinterested Directors of
the Corporation shall have the power and duty to determine for the purposes of
this Article IX, on the basis of information known to them after reasonable
inquiry, (I) whether a person is an Interested Shareholder; (ii) the number of
shares of Voting Stock beneficially owned by any person; (iii) whether a person
is an Affiliate or Associate of another; and (iv) whether the assets which are
the subject of any Affiliated Transaction have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Affiliated Transaction has, an aggregate Fair Market Value
equal to or greater than 25% of the combined assets of the Corporation and its
Subsidiaries. A majority of the Disinterested Directors shall have the further
power to interpret all of the terms and provisions of this Article IX.
Section 5 - Interested Shareholder's Duty: Nothing contained in this
Article IX shall be construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
Section 6 - Amendment: Notwithstanding any other provisions of these
Articles of Incorporation or any provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of the Voting Stock required by law, or these
Articles of Incorporation, the affirmative vote of the holders of at least 66%
of the voting power of all of the then-outstanding shares of the Voting Stock
(after giving effect to the provisions of Article III of these Articles of
Incorporation), voting together as a single class, shall be required to alter,
amend or repeal this Article IX.
ARTICLE X - CONTROL SHARE ACQUISITIONS
It is the intent of the Organizers of the Corporation that the
provisions of the "Florida Control-Share Acquisitions" statute, Section 607.0902
Florida Statutes (1994 Supp.) shall apply to acquisitions of the Corporation's
shares by a person acting alone or as part of a group which would result in an
Acquiring Person, as defined herein, owning Control Shares of the Company,
except for those acquisitions defined in Section 1(f)(2) and (3) of this
Article.
SECTION 1 - Definitions: The following terms when used in this section
shall mean:
(a) "Acquiring Person" means a person who makes or proposes to make, or
persons acting as a "group" as defined in sec. 13(d)(3) of the Securities
Exchange Act of 1934 who make or propose to make, a Control-Share Acquisition;
but "Acquiring Person" does not include the Corporation.
(b) "Acquiring Person Statement" means the statement provided for in
Section 607.0902(6), Florida Statutes (1994 Supp.) which shall set forth all of
the following:
(1) The identity of the Acquiring Person and each other member of
any group of which the Acquiring Person is a part for purposes of determining
Control Shares.
(2) A statement that the Acquiring Person Statement is given
pursuant to Section 607.0902(6), Florida Statutes (1994 Supp.).
(3) The number of shares of the Corporation owned, directly or
indirectly following the acquisition, by the Acquiring Person and each other
member of the group.
(4) The range of voting power under which the Control-Share
Acquisition falls or would, if consummated, fall.
(5) If the Control-Share Acquisition has not taken place:
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(I) A description in reasonable detail of the terms of the
proposed Control-Share Acquisition; and
(ii) Representations of the Acquiring Person, together with a
statement, in reasonable detail of the facts upon which they are based, that the
proposed Control-Share Acquisition, if consummated, will not be contrary to law
and that the Acquiring Person, has the financial capacity to make the proposed
Control-Share Acquisition, including the acquisition of dissenter's shares, if
any.
(c) "Affiliate" means a person who directly or indirectly controls the
Corporation. "Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the Corporation,
whether through the ownership of voting securities, by contract, or otherwise. A
person's beneficial ownership of ten percent or more of the voting power of a
Corporation's outstanding shares entitled to vote in the election of directors
(except a person holding voting power in good faith as an agent, bank, broker,
nominee, custodian or trustee for one or more beneficial owners who do not
individually or as a group control the Corporation) creates a presumption that
the person controls the Corporation.
(d) "All voting power" means the aggregate voting power that the
shareholders of the Corporation would have in the election of directors, except
for this Article.
(e) "Control Shares" means issued and outstanding shares of the
Corporation that, except for this section, would have voting power when added to
all other shares of the Corporation owned of record or beneficially by an
Acquiring Person or in respect to which that Acquiring Person may exercise or
direct the exercise of voting power, that would entitle the Acquiring Person,
immediately after acquisition of the shares (directly or indirectly), to
exercise or direct the exercise of the voting power of the Corporation in the
election of directors within any of the following ranges of voting power:
(1) One-fifth (1/5) or more but less than one-third (1/3) of all
voting power;
(2) One-third (1/3) or more but less than a majority of all
voting power; or
(3) A majority or more of all voting power.
(f)(1) "Control-Share Acquisition" means acquisition by any person of
ownership of, or the power to direct the exercise of voting power with respect
to, Control Shares.
(2) A person who acquires shares in the ordinary course of business
for the benefit of others in good faith and not for the purpose of circumventing
this section has not made a Control-Shares Acquisition of shares in respect of
which that person is not able to exercise or direct the exercise of votes
without further instruction from others.
(3) The acquisition of any Control Shares does not constitute a
Control-Share Acquisition if the acquisition is made in good faith and not for
the purpose of circumventing this section in any of the following circumstances:
A. Shares acquired in any distribution conducted by the Corporation
through any public or private offering or acquired pursuant to any warrant
certificate, stock option plan or other employee benefit plan.
B. Pursuant to the laws of descent and distribution.
C. By a donee under an inter vivos gift.
D. Pursuant to a transfer between or among immediate family members,
or between or among persons under direct common control. An "immediate family
member" is any relative or spouse of a person, or any relative of such spouse,
who has the same home as such person.
E. Pursuant to the satisfaction of a pledge or other security
interest.
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F. Pursuant to a merger or plan of consolidation or share exchange
effected in compliance with Florida Statute, if the Corporation is a party to
the agreement of merger or plan of consolidation or share exchange.
G. From any person whose previous acquisition of Control Shares would
have constituted a Control-Shares Acquisition but for this Section 1(e)(3)
(other than this subsection 1(e)(3)(G), provided the acquisition does not result
in the Acquiring Person holding voting power within a higher range of voting
power than that of the person from whom the Control Shares were acquired.
H. Acquisition by a person of additional shares within the range of
voting power for which such person has received approval pursuant to the Control
Share Statute or within the range of voting power resulting from shares acquired
in a transaction described in this Section 1(e)(3).
I. An increase in voting power resulting from any action taken by the
Corporation, provided the person whose voting power is thereby affected is not
an Affiliate of the Corporation.
J. Pursuant to the solicitation of proxies subject to Regulation 14A
under the Securities Exchange Act of 1934 or Chapter 607 of the Florida
Statutes.
(g) "Interested Shares" means the shares of the Corporation in respect
of which any of the following persons may exercise or direct the exercise, as of
the applicable record date, of the voting power of the Corporation in the
election of directors, other than solely by the authority of a revocable proxy:
(1) The Acquiring Person.
(2) Any officer of the Corporation.
(3) Any employee of the Corporation who is also a director of the
Corporation.
(h) "Person" means any individual, Corporation, partnership,
unincorporated association or other entity.
SECTION 2 - Voting Rights: Control Shares of the Corporation acquired
in a Control-Share Acquisition shall have only such voting rights as are granted
by resolution approved by the holders of other than Interested Shares of the
Corporation, as provided for in Section 607.0902(a), Florida Statutes (1994
Supp).
SECTION 3. - Redemption of Control Shares by the Company: Control
Shares acquired in a Control-Share Acquisition with respect to which no
Acquiring Person Statement has been filed with the Corporation are subject to
redemption by the Corporation at any time during the period ending 60 days after
the last acquisition of Control Shares by such Acquiring Person or persons. Such
shares are also subject to redemption by the Corporation in the event the
Control Shares are not accorded full voting rights by the shareholders as
provided for in Section 607.0902 (10)(b) and Section 607.0902(9) of the Florida
Statutes (1994 Supp.). Such shares shall be subject to redemption at the fair
value thereof. Fair value shall be the higher of, the average price paid for all
shares of the Corporation, exclusive of the Control Shares, for the 90 days
prior to the date of redemption by the Corporation or book value of the
Corporation's shares on the last day of the month preceding the date of
redemption by the Corporation, as calculated by Generally Accepted Accounting
Procedures ("GAAP").
SECTION 4 - Rights of Dissenting Shareholders: If the Control-Share
Acquisition is approved by the required vote at the meeting of shareholders at
which it was voted upon, then any shareholder who did not vote in favor of the
Control-Share Acquisition shall have the right to file with the Corporation a
written demand for payment for his/her shares within ten (10) days after the
date of the shareholder meeting. A shareholder may demand payment for less than
all of the shares registered in his/her name. The Corporation shall deliver all
such demands for payment to the Acquiring Person immediately following the
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expiration of the ten (10) day period. The Acquiring Person shall then be
obligated to purchase all shares subject to the demand for payment for the
highest amount he has proposed to pay per share in the Control-Share
Acquisition. Payment to shareholders making demand must be made on the day upon
which the Control-Share Acquisition is consummated or upon surrender of the
certificate or certificates representing shares for which demand has been made
to the Acquiring Person, whichever is later. Any shareholder failing to make
demand within the applicable ten (10) day period shall remain a shareholder of
the Corporation.
SECTION 5 - Alteration or Repeal of this Section: This Section shall
not be altered, amended, or repealed, except by an affirmative vote of at least
662/3 percent of the total number of shares of the Corporation entitled to vote
on such matter.
ARTICLE XI - ACQUISITION OFFERS
The Board of Directors of the Corporation, when evaluating any offer of
another Person to (I) make a tender or exchange offer for any equity security of
the Corporation, (ii) merge or consolidate the Corporation with another
corporation or entity or (iii) purchase or otherwise acquire all or
substantially all of the properties and assets of the Corporation, shall, in
connection with the exercise of its judgment in determining what is in the best
interest of the Corporation and its shareholders, give due consideration to all
relevant factors, including, without limitation, the social and economic effect
of acceptance of such offer on the Corporation's present and future customers
and employees and those of its Subsidiaries (as defined in Article IX); on the
communities in which the Corporation and its Subsidiaries operate or are
located; on the ability of the Corporation to fulfill its corporate objectives
as a financial institution holding company and on the ability of its subsidiary
financial institutions to fulfill the objectives of such institutions under
applicable statutes and regulations.
ARTICLE XII - INDEMNIFICATION
Section 1 - General: The Corporation shall indemnify any officer,
director, employee or agent of the Corporation to the fullest extent authorized
by Section 607.0850 of the Florida Business Corporation Act as it now exists or
may hereafter be amended (the "FBCA") but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment. This includes, but is not limited to, any
person who was or is made a party or is threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative ("Proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such Proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent,
reasonably incurred or suffered by such person in connection therewith. Such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that the Corporation shall
indemnify any such person seeking indemnity in connection with an action, suit
or Proceeding (or part thereof) initiated by such person only if such action,
suit or Proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. Such right shall be a contract right and shall include the
right to be paid by the Corporation for all expenses incurred in defending any
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such proceeding in advance of its final disposition; provided, however, that,
the payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of such proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it should be determined ultimately that such
director or officer is not entitled to be indemnified under this Article or
otherwise.
Section 2 - Failure to Pay Claim: If a claim under Section 1 of this
Article is not paid in full by the Corporation within 90 days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the FBCA for the Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the FBCA, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its shareholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that claimant has not met the applicable
standard of conduct.
Section 3 - Other Rights: The rights conferred on any individual by
Sections 1 and 2 of this Article shall not be exclusive of any other right which
such individual may have or hereafter acquire under any statute, provision of
these Articles of Incorporation, Bylaws of the Corporation, agreement, vote of
shareholders or Disinterested Directors or otherwise.
Section 4 - Insurance: The Corporation may maintain insurance, at its
expense, to protect itself and any such director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the FBCA.
Section 5 - Personal Liability: A director of the Corporation shall not
be personally liable to the Corporation or its shareholders for monetary damages
for any statement, vote, decision or failure to act regarding corporate
management or policy except as provided in the FBCA. If the FBCA is amended
after adoption of these Articles of Incorporation and such amendment further
eliminates or limits the personal liability of directors, then the liability of
a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the FBCA, as so amended.
Any repeal or modification of the foregoing paragraph by the
shareholders or the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE XIII - AMENDMENT
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The Corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation in the manner prescribed by the
laws of the State of Florida, and all rights conferred upon shareholders are
granted subject to this reservation; provided, however, that, notwithstanding
any other provision of these Articles of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, the affirmative vote of
the holders of at least 66% of the voting power of all of the then-outstanding
shares of the capital stock of the Corporation entitled to vote generally in the
election of directors (after giving effect to the provisions of Article III),
voting together as a single class, shall be required to amend or repeal this
Article XIII, Section 3 of Article VII, Article VIII, Article IX, Article X or
Article XI.
In witness of the foregoing, the undersigned has executed these
Articles of Incorporation on behalf of the Board of Directors this 14th day of
August, 1996.
/s/ Herbert D. Haughton
------------------------
Herbert D. Haughton
General Counsel
STATE OF FLORIDA )
COUNTY OF LEON )
BEFORE ME, the undersigned Notary Public, in and for the State of
Florida at large, personally appeared Herbert D. Haughton, known personally to
me to be the individual described in and who executed the foregoing Amended
Articles of Incorporation of The Commercial Bancorp, Inc. and after being duly
sworn, acknowledged that he executed the same for the uses and purposes therein
expressed.
(Seal) /s/ Shannon H. Rivera
----------------------
Notary Public
Shannon H. Rivera
-----------------
Name Typed or Printed
My commission expires:
May 25, 1997
------------
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CERTIFICATE DESIGNATING
REGISTERED AGENT/REGISTERED OFFICE
In accordance with Section 48.091, Florida Statutes, the following
designation and acceptance are being submitted in compliance thereof.
DESIGNATION:
Pursuant to the provision of Section 607.0501, Florida Statutes, The
Commercial Bancorp, Inc. desires to organize under the laws of the State of
Florida, and in connection therewith, hereby designates Igler & Dougherty, P.A.
as its registered agent whose address is 1501 Park Avenue East, Tallahassee,
Florida 32301, which address shall also be the address of the Registered Office
of the Corporation.
ACCEPTANCE:
Having been named to accept service of process for the above-stated
corporation, at the place designated in this certificate, we hereby agree to act
in this capacity, and we further agree to comply with the provisions of all
statutes relative to the proper and complete performance of our duties, and we
accept the duties and obligations of Section 607.0501, Florida Statutes.
IGLER & DOUGHERTY, P.A.
By: /s/ Herbert D. Haughton
-------------------------
Herbert D. Haughton
Dated: August 14, 1996
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APPENDIX "B"
ESCROW AGREEMENT
15
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Independent Bankers' Bank of Florida
ESCROW AGREEMENT
This Escrow Agreement is entered into and effective this 26th day of
August , 1996 , by and between The Commercial Bancorp, Inc., a Florida
corporation ( the "Company") and the Independent Bankers' Bank of Florida
("Escrow Agent" or "Agent").
WITNESSETH:
WHEREAS, the Company, proposes to offer for sale up to 750,000 shares
of its $ 0.01 par value common stock (the "Common Stock"), which shares shall be
registered under the Securities Act of 1933, as amended, at a price of $10.00
each, in minimum subscriptions of 250 shares ("Offering"); and
WHEREAS, the Company has requested the Escrow Agent to serve as the
depository for the payment of subscription proceeds ('Payments") received by the
Company from investor(s) who are subscribing to purchase shares of Common Stock
in the Company pursuant to, and in accordance with, the terms and conditions
contained in the Company's Prospectus and Subscription Agreements thereto; and
WHEREAS, the Offering will terminate at 5:00 P.M. Eastern Time, 90 Days
after the Effective Date of the Company's Registration Statement, unless
extended by the Company for up to an additional 60 days ( "Initial Offering
Period"), and, if during the Initial Offering Period the minimum number of
shares have been subscribed to, the Offering will continue until the earlier of
: (i) the maximum number of shares are subscribed to, or (ii) one year after the
Effective Date of the Company's Registration Statement.
NOW THEREFORE, in consideration of the premises and understandings contained
herein, the parties agree as follows:
(1) The Company hereby appoints and designates the Escrow Agent for the
Purposes set forth herein. The Escrow Agent acknowledges and accepts said
appointment and designation. The Company understands that the Escrow Agent, by
accepting said appointment and designation, in no way endorses the merits of the
offering of the shares described herein. The Company agrees to notify any person
acting on its behalf that the position of Escrow Agent does not constitute such
an endorsement, and to prohibit said persons from the use of the Agent's name as
an endorser of such offering. The Company further agrees to allow the Escrow
Agent to review any sales literature in which the Agent's name appears and which
is used in connection with such offering.
(3) The Company shall deliver all payments received (the "Subscription
Funds") to the Escrow Agent (Independent Bankers' Bank of Florida, Attn:
Customer Service Group) in the form in which they are received by noon of the
fifth (5th) business day after their receipt by the Company, and the Company
shall deliver to the Escrow Agent within ten(10) calendar days copies of written
acceptances of the Company for shares in the Company for which the Subscription
Funds represent payment. Upon receipt of such written acceptance by the Company,
the Escrow Agent shall deposit such funds into the escrow account. The Company
shall also deliver to the Escrow Agent completed copies of Subscription
Agreements for each subscriber, along with such subscriber's name, address,
number of shares subscribed and social security or taxpayer identification
number.
(4) Subscription Funds shall be held and disbursed by the Escrow Agent
in accordance with the terms of this Agreement.
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(5) In the event any Subscription Funds are dishonored for payment for
any reason, the Escrow Agent agrees to orally notify the Company thereof as soon
as practicable and to confirm same in writing and to return due dishonored
Subscription Funds to the Company in the form in which they were delivered.
(6) Should the Company elect to accept a subscription for less than the
number of shares shown in the purchaser's Subscription Agreement, by indicating
such lesser number of shares on the written acceptance of the Company
transmitted to the Escrow Agent, the Agent shall deposit such payment in the
escrow account and then, upon separate instruction from the Company, remit
within ten (10) days after such deposit to such subscriber at the address shown
in his Subscription Agreement that amount of his Subscription Funds in excess of
the amount which constitutes full payment for the number of subscribed shares
accepted by the Company as shown in the Company's written acceptance, without
interest or diminution. Said address shall be provided by the Company to the
Escrow Agent as requested.
(7) Definitions as used herein:
(a) "Total Receipts" shall mean the sum of all Subscription
Funds delivered to the Escrow Agent pursuant to Paragraph (3) hereof, less (i)
all Subscription Funds returned pursuant to Paragraphs (5) and (6) hereof and
(ii) all Subscription Funds which have not been paid by the financial
institution upon which they are drawn.
(b) "Expiration Date" shall mean 5:00 P.M., Eastern Time, 90
days after the Effective Date of the Company's Registration Statement; provided,
however, in the event that the Escrow Agent is given oral notification followed
in writing, by the Company that it has elected to extend the offering to a date
not later than 60 additional days, then the Expiration Date shall mean 5:00
P.M., Eastern Time, on the date to which the offering has been extended. The
Company will notify the Escrow Agent of the effective date of the Offering
Circular as soon as practicable after such date has been determined.
(c) "Closing Date" shall mean the business day on which the
Company, after determining that all of the Offering conditions have been met,
selects in its sole discretion. The Closing Date shall be confirmed to the
Escrow Agent in writing by the Company.
(d) "Escrow Release Conditions" shall mean that (i) the
Company has not canceled the Offering, and (ii) that the Company has received
preliminary approval from the appropriate regulatory entity to charter the Bank
as well as preliminary approval for deposit insurance from the FDIC.
(8) If, on or before the Expiration Date, (i) the Total Receipts held
by the Escrow Agent equal or exceed $4,500,000 and (ii) the Company has
certified to the Agent that, upon receipt of the net proceeds of the offering
(after the deduction of all fees, commissions, and other expenses of the
offering): (a) the Company will have stockholders' equity of at least
$4,250,000; and (b) the Escrow Release Conditions have been consummated, the
Escrow Agent shall :
(a) No later than 10:00 A.M., Eastern Time, one day prior to
Closing Date (as that term is defined herein), deliver to the Company all
Subscription Agreements provided to the Escrow Agent; and
(b) On the Closing Date, no later than 10:00 o'clock A.M.,
Eastern Time, upon receipt of 24-hour written instructions from the Company,
remit all amounts representing Subscription Funds, plus any profits or earnings,
held by the Escrow Agent pursuant hereto to the Company in accordance with such
instructions.
(9) If (i) the Escrow Release Conditions are not met by the Expiration
Date, or (ii) the offering is canceled by the company at any time prior to the
Expiration Date, then the Escrow Agent shall promptly remit to each subscriber
at the address set forth in his Subscription Agreement an amount equal to the
amount of his Subscription Funds thereunder, plus any profits or earnings
thereon. The earnings accruing to any individual subscriber under this paragraph
shall be a prorated share of the gross earnings on all funds under escrow,
weighted by the amount and the duration of the funds tendered for the individual
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subscription. Under no circumstances will earnings accrue to any subscription
canceled for any reason other than those provided for in this paragraph.
(10) Pending disposition of the Subscription Funds under this
Agreement, the Escrow Agent will invest collected Subscription Funds, in $1,000
increments above a maintained balance of $50,000, in overnight repurchase
agreements collateralized at 102% with obligations of the United States Treasury
or United States Government Agencies. These repurchase agreement transactions
will earn interest at a rate of 35 basis points below the daily Overnight Fed
Funds Sold rate.
(11) The obligations as Escrow Agent hereunder shall terminate upon the
Agents transferring all funds held hereunder pursuant to the terms of Paragraphs
(7) or (8) herein, as applicable.
(12) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, or other
paper or document which the Agent believes to be genuine and what it purports to
be.
(13) The Escrow Agent shall not be liable for anything which the Agent
may do or refrain from doing in connection with this Escrow Agreement, except
for the Agent's own gross negligence or willful misconduct.
(14) The Escrow Agent may confer with legal counsel in the event of any
dispute or questions as to the construction of any of the provisions hereof, or
the Agent's duties hereunder, and shall incur no liability and shall be fully
protected in acting in accordance with the opinions and instructions of such
counsel. Any and all expenses and legal fees in this regard will be paid by the
Company.
(15) In the event of any disagreement between the Company and any other
person resulting in adverse claims and demands being made in connection with any
Subscription Funds involved herein or affected hereby, the Agent shall be
entitled to refuse to comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no delivery or other
disposition of any Subscription Funds then held under this Agreement, and in so
doing shall be entitled to continue to refrain from acting until (a) the right
of adverse claimants shall have been finally settled by binding arbitration or
finally adjudicated in a court in Orange County, Florida assuming and having
jurisdiction of the Subscription Funds involved herein or affected hereby or (b)
all differences shall have been adjusted by agreement and the Agent shall have
been notified in writing of such agreement signed by the parties hereto. In the
event of such disagreement, the Agent may, but need not, tender into the
registry or custody of any court of competent jurisdiction in Orange County,
Florida all money or property in the Agent's hands under the terms of this
Agreement, together with such legal proceedings as the Agent deems appropriate
and thereupon to be discharged from all further duties under this Agreement. The
filing of any such legal proceeding shall not deprive the Agent of compensation
earned prior to such filing. The Escrow Agent shall have no obligation to take
any legal action in connection with this Agreement or towards its enforcement,
or to appear in, prosecute or defend any action or legal proceeding which would
or might involve the Agent in any cost, expense, loss or liability unless
indemnification shall be furnished.
(16) The Escrow Agent may resign for any reason, upon thirty (30) days
written notice to the Company. Upon the expiration of such thirty (30) day
notice period, the Escrow Agent may deliver all Subscription Funds and
Subscription Agreements in possession under this Escrow Agreement to any
successor Escrow Agent appointed by the Company, or if no successor Escrow Agent
has been appointed, to any court of competent jurisdiction. Upon either such
delivery, the Escrow Agent shall be released from any and all liability under
this Escrow Agreement. A termination under this paragraph shall in no way change
the terms of Paragraphs (15) and (17) affecting reimbursement of expenses,
indemnity and fees.
(17) The Escrow Agent will charge the Company for services hereunder a
fee of $1,500.00, plus an additional fee of $5.00 for each check issued, $10.00
for each wire and $.50 for each photo copy necessitated in the performance of
duties, with total fees for services not to exceed $2,500.00. All actual
expenses and costs incurred by the Agent in performing obligations under this
Page 3 of 5
<PAGE>
Escrow Agreement will be paid by the Company. All fees and expenses shall be
paid on the Closing Date by the Company. Any subsequent fees and expenses will
be paid by the Company upon receipt of invoice.
(18) All notices and communications hereunder shall be in writing and
shall be deemed to be duly given if sent by registered or certified mail, return
receipt requested, to the respective addresses set forth herein. The Escrow
Agent shall not be charged with knowledge of any fact, including but not limited
to performance or non-performance of any condition, unless the Escrow Agent has
actually received written notice thereof from the Company or its authorized
representative clearly referring to this Escrow Agreement.
(19) The rights created by this Escrow agreement shall inure to the
benefit of, and the obligations created hereby shall be binding upon the
successors and assigns of the Escrow Agent and the parties hereto.
(20) This Escrow Agreement shall be construed and enforced according
to the laws of the State of Florida.
(21) This Escrow Agreement shall terminate and the Escrow Agent shall
be discharged of all responsibility hereunder at such time as the Escrow Agent
shall have completed all duties hereunder.
(22) This Escrow Agreement may be executed in several counterparts,
which taken together shall constitute a single document.
(23) This Escrow Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the transactions described
herein and supersedes all prior agreements or understandings, written or oral,
between the parties with respect thereto.
(24) If any provision of this Escrow Agreement is declared by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
(25) The Company shall provide the Escrow Agent with its Employer
Identification Number as assigned by the Internal Revenue Service. Additionally,
the Company shall complete and return to the Escrow Agent any and all tax forms
or reports required to be maintained or obtained by the Escrow Agent.
(26) The authorized signature of the Escrow Agent hereto is consent
that a signed copy hereof may be filed with the various regulatory authorities
of the State of Florida and with any Federal Government agencies or regulatory
authorities.
Page 4 of 5
<PAGE>
In Agreement and acceptance of the Independent Bankers' Bank of Florida Escrow
Agreement between The Commercial Bancorp, Inc. (Company), for the purpose of
organizing a financial institution to be known as The Commercial Bank Of Volusia
County, and the Independent Bankers' Bank of Florida (Escrow Agent).
The Commercial Bancorp, Inc.
Company
Address: P.O. Box 730428
Ormond Beach, Florida 32173-0428
Fax: (904) 672-3003
Phone: (904) 672-2094
By: /s/ Gary G. Campbell
---------------------
Authorized Signature
Title: Gary G. Campbell, Chief Financial Officer
-----------------------------------------
(Type Name and Title)
Attest: 9/18/96
-------
Date ADDITIONAL AUTHORIZED SIGNER
By: /s/ Josephine B. Vern Name: /s/ Larry A. Kent
---------------------- -----------------------------
Additional Authorized Signature
Title: Title: Larry A. Kent, Chairman
----------------------- ------------------------------
(Type Name and Title)
(SEAL)
INDEPENDENT BANKERS' BANK OF FLORIDA
------------------------------------
Address: 109 E. Church Street, Suite BB,
or
P.O. Box 4998
Orlando, Florida 32802-4998
Attest: Fax: (407) 843-4817
------------------------
Date
By: By: /s/ James H. McKillop
------------------------ ----------------------------------------
Authorized Signature
Title: Title: James H. McKillop, Senior Vice President
------------------------ ----------------------------------------
(Type Name and Title)
(CORPORATE SEAL)
Page 5 of 5
<PAGE>
APPENDIX "C"
STOCK SUBSCRIPTION AGREEMENT
Page 6 of 5
<PAGE>
THE COMMERCIAL BANCORP, INC.
SUBSCRIPTION AGREEMENT
To: The Commercial Bancorp, Inc.
258 N. Nova Road
Ormond Beach, Florida 32174
Gentlemen:
You have informed me that The Commercial Bancorp, Inc.("TCB, Inc."), a
Florida corporation ("Company"), is offering during an Initial Offering Period
which will end on ____________, 199_ up to a maximum of 450,000 Units, each
consisting of one share of the Company's $0.01 par value common stock ("Common
Stock") and one Warrant to purchase one share of Common Stock, at a price of
$10.00 per Unit as described in and offered pursuant to the Prospectus dated
December , 1996, ("Prospectus") which has been furnished to the undersigned. In
addition, you have informed me that the minimum subscription is 250 Units.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby tenders this Subscription Agreement ("Agreement"), together
with payment in United States currency by check, bank stock draft or money order
payable to "IBBF, Escrow Agent for TCB, Inc."(the "Funds"), representing the
payment of $10.00 per Unit for the number of Units indicated below.
2. Acceptance of Subscription. It is understood and agreed that the
Company shall have the right to accept or reject this subscription in whole or
in part, for any reason whatsoever. The Company shall reject this subscription,
if at all, in writing within five business days after receipt of this Agreement.
The Company may reduce the number of Units for which the undersigned has
subscribed, indicating acceptance of less than all of the Units subscribed on
the Company's written Form of Acceptance.
3. Acknowledgments. The undersigned hereby acknowledges that he/she has
received a copy of the Prospectus and agrees to be bound by the terms of this
Agreement and the Subscription Escrow Agreement.
4. Revocation. The undersigned agrees that once this Agreement is
accepted by the Company, it may not be withdrawn. Therefore, until the earlier
of the expiration of five business days after receipt by the Company of this
Agreement or acceptance of this Agreement by the Company, the undersigned may
withdraw his/her subscription and receive a full refund of the subscription
price. The undersigned agrees that, except as provided in this Section 4, he/she
shall not cancel, terminate or revoke this Agreement or any agreement of the
undersigned made hereunder and that this Agreement shall survive the death or
disability of the undersigned.
Page 7 of 5
<PAGE>
The Shares to be issued in connection with this subscription are not
insured by the Federal Deposit Insurance Corporation or any other Federal or
State agency. By executing this Agreement, the subscriber is not waiving any
rights the subscriber may have under federal securities laws, including the 33
Act and the Securities Exchange Act of 1934.
Please fill in the information requested below, make your check payable to
"IBBF, Escrow Agent for TCB, Inc.," and mail the Agreement, Stock Certificate
Registration Instructions and payment to the attention of: Gary G. Campbell,
President and CFO, The Commercial Bancorp, Inc., 258 N. Nova Road, Ormond Beach,
Florida 32174.
- -------------------- ---------------------------------------
No. of Units Subscribed (Signature of Subscriber)
---------------------------------------
(Signature of Subscriber)
- -------------------- ---------------------------------------
Fund Tendered ($10.00 Name(s) (Please Print or Type)
per Unit subscribed)
Date: ____________________________
Phone Number:
__________________________(Home)
__________________________(Office)
Residence Address:
---------------------------------
---------------------------------
---------------------------------
City, State and Zip Code
Page 8 of 5
<PAGE>
STOCK CERTIFICATE REGISTRATION INSTRUCTIONS
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Additional Name if Tenant in Common, Joint Tenant or Tenants by the Entireties
(see below).
Mailing Address:
----------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Social Security Number or other Taxpayer Identification Number:
-----------------
Number of Shares to be registered in above name(s):
----------------------------
Legal form of ownership:
___ Individual ___ Joint Tenants with Rights of Survivorship
___ Tenants in Common ___ Uniform Gift to Minors
___ Tenants by the Entirety ___ Other ______________________
(Husband and wife only)
<TABLE>
<CAPTION>
INFORMATION AS TO BANKING INTERESTS
1. As a prospective shareholder I would be interested in the following services checked below:
PERSONAL BUSINESS
<S> <C> <C> <C>
(a) Checking Account ___ ___
(b) Savings Account ___ ___
(c) Certificates of Deposit ___ ___
(d) Individual Retirement Accounts ___ ___
(e) Checking Account Overdraft ___ ___
Protection
(f) Consumer Loans (Auto, etc.) ___ ___
(g) Commercial Loans ___ ___
(h) Equity Line of Credit ___ ___
(i) Mortgage Loans ___ ___
(j) Revolving personal Credit Line ___ ___
(k) Safe Deposit Box ___ ___
(l) Automatic Teller Machines (ATM's) ___ ___
(m) Debit Card ___ ___
(n) Visa/MasterCard ___ ___
(o) Future Trust Services ___ ___
2. I would like our new bank to provide the following additional services:
--------------------------------------------------------------------
--------------------------------------------------------------------
</TABLE>
Page 9 of 5
<PAGE>
FORM OF ACCEPTANCE
The Commercial Bancorp, Inc.
258 N. Nova Road
Ormond Beach, Florida 32174
To:
Dear Subscriber:
The Commercial Bancorp, Inc., ("Company") acknowledges receipt of your
subscription for _______ Units, each consisting of one share of its $0.01 par
value Common Stock and one Warrant to purchase one share of Common Stock and
your check in the amount of $________________.
The Company hereby accepts your subscription for the purchase of
_________ Units, for an aggregate amount of $______________, effective as of the
date of this letter.
YOUR STOCK CERTIFICATE(S) REPRESENTING SHARES OF COMMON STOCK DULY
AUTHORIZED AND FULLY PAID ALONG WITH YOUR WARRANT CERTIFICATE WILL BE ISSUED TO
YOU AS SOON AS PRACTICABLE AFTER ALL SUBSCRIPTION FUNDS ARE RELEASED TO THE
COMPANY FROM THE SUBSCRIPTION ESCROW ACCOUNT, AS DESCRIBED IN THE SUBSCRIPTION
AGREEMENT EXECUTED BY YOU AND IN THE PROSPECTUS WHICH YOU HAVE BEEN FURNISHED.
IN THE EVENT THAT: (i) THE OFFERING IS CANCELED; OR (ii) THE MINIMUM NUMBER OF
SUBSCRIPTIONS (450,000 UNITS) IS NOT OBTAINED; OR (iii) THE COMPANY SHALL NOT
HAVE RECEIVED APPROVAL FROM THE FEDERAL RESERVE TO BECOME A BANK HOLDING
COMPANY; OR (iv) THE BANK SHALL NOT HAVE RECEIVED FINAL CHARTER APPROVAL FROM
THE FLORIDA COMPTROLLER AND APPROVAL FOR DEPOSIT INSURANCE FROM THE FEDERAL
DEPOSIT INSURANCE CORPORATION, YOUR SUBSCRIPTION FUNDS WILL BE RETURNED TO YOU,
TOGETHER WITH ANY PRO RATA PORTION OF INTEREST EARNED THEREON, IF ANY, AS
DESCRIBED IN THE PROSPECTUS.
If this acceptance is for a lesser number of Units than that number
subscribed by you as indicated in your Subscription Agreement, your payment for
shares of Units in excess of the number of Units accepted hereby will be
refunded to you by mail, without interest, within ten (10) days of the date
hereof.
Very truly yours,
THE COMMERCIAL BANCORP, INC.
BY: _______________________________________
Gary G. Campbell
President & Chief Financial Officer
<PAGE>
- --------------------------------------------------------------------------------
No dealer, salesperson or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or an offer to buy, any
securities other than the Units to which it relates, or any offer of such Units
to any person in any state or other jurisdiction in which such offer is
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall under any circumstances create any implication that there has been no
change in the affairs of the Company since the date hereof or that information
contained herein is correct as of any time subsequent to any of the dates as of
offers or sales are being made hereunder, the Company is required to update the
Prospectus to reflect any facts or events arising after the effective date of
the Registration Statement filed with the Securities and Exchange Commission
which represent a fundamental change in the information set forth in the
Registration Statement.
Until ____________, 1997, all dealers effecting transactions in the Units,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This delivery requirement is in addition to the obligation of
dealers to deliver a Prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Prospectus Summary............................. 5
Risk Factors................................... 7
The Company.................................... 10
Terms of the Offering.......................... 10
Use of Proceeds................................ 13
Dividend Policy................................ 16
Management's Discussion and Analysis
of Financial Condition and Results
of Operations ............................ 16
Business of the Company........................ 16
Business of the Bank........................... 17
Regulation and Supervision..................... 20
Organizers and Principal Shareholders.......... 25
Management..................................... 27
Articles of Incorporation - Summary............ 31
Legal Proceedings.............................. 33
Legal Matters.................................. 33
Experts........................................ 33
Additional Information......................... 33
Index to Financial Statements.................. F-1
Appendix A - Articles of Incorporation
Appendix B - Escrow Agreement
Appendix C - Stock Subscription Agreement
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Minimum 450,000 Shares
Maximum 1,200,000 Shares
[LOGO]
THE COMMERCIAL
BANCORP, INC.
Each Unit consists of One Share of
Common Stock and One
Warrant to Purchase One
Share of Common Stock
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
January ___, 1996
----------------------------------------------------------
<PAGE>
PART-II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24: Indemnification of Directors and Officers
As provided under Florida law, the Company's Directors shall not be
personally liable to the Company or its stockholders for monetary damages for
breach of duty of care or any other duty owed to the Company as a director,
unless the breach of or failure to perform those duties constitutes: (i) a
violation of criminal law, unless the director had reasonable cause to believe
his conduct was lawful, or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which the director received an improper
personal benefit; (iii) for unlawful corporate distributions; or (iv) an act or
omission which involves a conscious disregard for the best interests of the
Corporation or which involves willful misconduct; or (v) an act of recklessness
or an act or omission which was committed in bad faith or with malicious purpose
or in a manner exhibiting wanton and willful disregard of human rights, safety,
or property.
Article XII of the Company's Articles of Incorporation provides that the
Company shall indemnify a director who has been successful in the defense of any
proceeding to which he was a party or in defense of any claim, issue or matter
therein because he is or was a director of the Company, against reasonable
expenses incurred by him in connection with such defense.
The Company's Articles of Incorporation also provide that the Company is
required to indemnify any director, officer, employee or agent made a party to a
proceeding because he is or was a director, employee or agent against liability
incurred in the proceeding if he acted in a manner he believed in good faith or
to be in or not opposed to the best interests of the Company and, in the case of
any criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. Determination concerning whether or not the applicable standard of
conduct has been met can be made by: (i) a disinterested majority of the Board
of Directors; (ii) a majority of a committee of disinterested directors; (iii)
independent legal counsel; or (iv) an affirmative vote of a majority of shares
held by disinterested stockholders. No indemnification may be made to or on
behalf of a director, officer, disinterested stockholder, employee or agent in
connection with a proceeding by or in the right of the Company in which such
person was adjudged liable to the Company or in connection with any other
proceeding in which such person was adjudged liable on the basis that personal
benefit was improperly received by him.
<PAGE>
Item 25: Other Expenses of Issuance and Distribution
The following table sets forth all expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered, other than the underwriting discounts and commissions, if any. All
of the amounts shown are estimated except for the registration fees of the SEC.
SEC Registration Fees............................ $ 4,175
Blue Sky Registration Fees & Expenses............ 825
Legal fees and expenses.......................... 15,000
Accounting Fees.................................. 1,000
Printing and Engraving expenses.................. 2,700
Advertising...................................... 2,000
Total..................................... $25,700
Item 26: Recent Sales of Unregistered Securities.
During the organizational phase of the Company, and in order to meet the
net worth requirements of a Florida issuer, the Company issued 1,500 shares of
Common Stock in a private Offering to its directors for $10.00 per share. These
shares will be exchanged for an equal number of Units to be issued in this
Offering. The exchange will not occur until the Conditions of the Offering have
been met.
<PAGE>
Item 27: Exhibits and Financial Statement Schedules
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
3.1 Articles of Incorporation of the Company (Appendix A to Prospectus).
3.2 By-Laws of the Company.
4.1 Specimen Common Stock Certificate.
4.2 Specimen Warrant Certificate.
4.3 Escrow Agreement with Independent Bankers' Bank of Florida
(Appendix B of prospectus).
4.4 Warrant Plan adopted by the Company on August 7, 1996.
5.1 Opinion of Igler & Dougherty, P.A.
10.1 Proposed Employment Agreement between the Bank and Gary G. Campbell.
10.2 Lease Agreement.
23.1 Consent of Igler & Dougherty, P.A., included in the Opinion Letter
23.2 Consent of Hacker, Johnson, Cohen & Grieb
24 Power of Attorney (included in signature page to this Registration
Statement).
27 Financial Data Schedule
- ------------------------------------
<PAGE>
Item 28. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (ss. 230.424[b] of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(c) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set forth the
results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms different from those
set forth on the cover page of the prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
<PAGE>
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the 33 Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form SB-2 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in Ormond
Beach, State of Florida, on the thirtieth day of December 1996.
THE COMMERCIAL BANCORP, INC.
By: /s/ Gary G. Campbell
------------------------------------
Gary G. Campbell
President & Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gary G. Campbell and Larry Kent and each of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him in his name , place and stead, in any
and all capacities, to sign any and all amendments (including post effective
amendments) to this Registration Statement, and to file same, with all exhibits
thereto, and other documents in connection therewith, with the SEC, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises as fully and to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the 33 Act, this Registration Statement
has been signed by the following persons in the capacities and as of the dates
indicated:
Signature Title Date
/s/ Kirk T. Bauer Director December 30, 1996
- ----------------------------
Kirk T. Bauer
/s/ Gary G. Campbell Director December 30, 1996
- ----------------------------
Gary G. Campbell President and
Chief Financial Officer
/s/ Larry A. Kent Director December 30, 1996
- ----------------------------
Larry A. Kent Chairman of the Board
/s/ Christopher K. Likes Director December 30, 1996
- ----------------------------
Christopher K. Likes
/s/ James R. Peacock Director December 30, 1996
- ----------------------------
James R. Peacock Vice Chairman of the Board
<PAGE>
--------------------------------------------------------------
EXHIBITS FILED WITH
FORM SB-2
--------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit Sequential
Number Description of Exhibit Page Number
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
3.1 Articles of Incorporation of the Company (Appendix A
to Prospectus)
3.2 By-Laws of the Company
4.1 Specimen Common Stock Certificate
4.2 Specimen Warrant Certificate
4.3 Stock Subscription Agreement (Appendix C to Prospectus)
4.4 Escrow Agreement with Independent Bankers' Bank of Florida
(Appendix B of prospectus).
4.5 Warrant Plan adopted by the Company on August 7, 1996
5.1 Opinion of Igler & Dougherty, P.A.
10.1 Proposed Employment Agreement between the Bank and Gary G.
Campbell
10.2 Lease Agreement - including assignment to Bank
23.1 Consent of Igler & Dougherty, P.A., included in the Opinion Letter
23.2 Consent of Hacker, Johnson, Cohen & Grieb
24 Power of Attorney (included in signature page to this Registration
Statement)
27 Financial Data Schedule
------------------------------------
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from financial
statements at November 30, 1996 and for the period from August 15, 1996 (date of
incorporation) to November 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> NOV-30-1996
<CASH> 12
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 156
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 141
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 15
<TOTAL-LIABILITIES-AND-EQUITY> 156
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 0
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE>
Exhibit 3.2
By-Laws of the Company
<PAGE>
BYLAWS
of
THE COMMERCIAL BANCORP, INC.
Article I. Meeting of Shareholders
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Section 1. Annual Meeting. Unless otherwise determined by the Board of
Directors, the annual meeting of the shareholders for the election of
Directors, and for the transaction of such other business as may properly
come before the meeting, shall be held at the principal office of The
Commercial Bancorp, Inc. ("Corporation"), at 2:00 p.m., on the 3rd Tuesday
of April following the close of each fiscal year, if such day is not a
legal holiday. If such day is a legal holiday, the annual meeting will be
held on the first following day that is not a legal holiday or on such date
and at such time chosen by the Board of Directors. Failure to hold the
annual meeting at the designated time shall not work any forfeiture or a
dissolution of the Corporation.
Section 2. Special Meetings. Special meetings of the shareholders of the
Corporation may be called by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented to
the Board for adoption), the Chairman of the Board or the President of the
Corporation, or by shareholders holding twenty (20%) percent of the
outstanding shares of the Corporation.
Section 3. Place Of Meeting. Unless otherwise directed by the Board of
Directors, meetings of the shareholders shall be held at the principal
offices of the Corporation in the State of Florida.
Section 4. Notice Of Meeting. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered to each shareholder of
record entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the meeting, either personally or by mail, by
or at the direction of the Chairman of the Board, the President and Chief
Executive Officer, the Secretary, or the officer or persons calling the
meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at his
address as it appears on the stock transfer books of the Corporation, with
postage thereon prepaid.
Section 5. Waiver of Notice of Meeting of Shareholders. Any notice required to
be given to any shareholder of the Corporation by law or under the
provisions of the Articles of Incorporation of the Corporation or these
Bylaws may be waived by a waiver in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein.
Attendance of a person at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends the meeting for the express
purpose of objectives, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or conveyed.
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Section 6. Notice of Adjourned Meetings. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is taken, and any
business may be transacted at the adjourned meeting that might have been
transacted on the original date of the meeting. If, however, after the
adjournment, the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given as
provided in Section 4 of these Bylaws to each shareholder of record on the
new record date entitled to vote at such meeting.
Section 7. Closing Of Transfer Books and Fixing Record Date. For the purpose of
determining shareholders entitled to notice or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment or
any dividend, or in order to make a determination of shareholders for any
other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case,
sixty (60) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice or to vote at a
meeting of shareholders, such books shall be closed for at least ten (10)
days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may fix
in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than sixty (60) days
and, in case of a meeting of shareholders, not less than ten (10) days
prior to the date on which the particular action, requiring such
determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice or to vote at a
meeting of shareholders, or shareholders entitled to receive payment of
dividend, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such
determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, unless the Board of Directors fixes
a new record date for the adjourned meeting.
Section 8. Voting Record. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least ten (10)
days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
with their address and the number, class and series of shares, if any, held
by each. Such list shall be kept on file at the registered office of the
Corporation, at the principal place of business of the Corporation or at
the office of the transfer agent or registrar of the Corporation for a
period of ten (10) days prior to such meeting and shall be subject to
inspection by any shareholder at any time during normal business hours.
Such list shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder at any
time during the meeting.
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If the requirements of this Section have not been substantially complied
with, the meeting shall be adjourned on the demand of any stockholder in
person or by proxy until the requirements are complied with. If no such
demand is made, failure to comply with the requirements of this Section
shall not affect the validity of any action taken at such meeting.
Section 9. Shareholder Quorum and Voting. A majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at a
meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item
of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall
be the act of the shareholders, unless the vote of a greater number or
voting by classes is required.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum,
shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 10. Voting Of Shares. The holders of common stock shall possess and
exercise exclusive voting rights. Each outstanding share of common stock
shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of this Corporation's own stock owned by another
corporation, the majority of the voting stock of which is owned or
controlled by this Corporation, and shares of this Corporation's own stock
held by it in a fiduciary capacity shall not be voted, directly or
indirectly, at any meeting, and shall not be counted in determining the
total number of outstanding shares at any given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or his duly authorized attorney-in-fact.
At the election for directors, every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be
elected at that time and for whose election he has a right to vote.
Shares entitled to vote standing in the name of another corporations,
domestic or foreign, may be voted by the officer, agent, or proxy
designated by the Bylaws of the corporate shareholder. In the absence of
any such designation, or in case of conflicting designation by the
corporate shareholders, the Chairman of the Board, President, any Vice
President, Secretary and Treasurer of the corporate shareholder shall be
presumed to possess, in that order, authority to vote such shares.
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Shares entitled to vote held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy, without a
transfer of such shares into his name. Shares entitled to vote standing in
the name of a trustee may be voted by him, either in person or by proxy,
but a trustee shall not be entitled to vote shares held by him without a
transfer of such shares into his name.
Shares entitled to vote standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name, if
authority to do so is contained in an appropriate order of the court by
which such receiver was appointed.
A shareholder otherwise entitled to vote whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter, the pledgee or his nominee shall
be entitled to vote the shares so transferred.
Shares shall not be entitled to vote on any matter and shall not be deemed
to be outstanding shares if on or after the date on which written notice or
redemption of redeemable shares has been mailed to the holders thereof and
a sum sufficient to redeem such shares has been deposited with a bank or
trust company with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates.
Section 11. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or the express consent or dissent without a meeting or his
duly authorized attorney-in-fact may authorize another person or persons to
act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of six (6) months from the date
thereof, unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the shareholder executing it, except as
otherwise provided by law.
The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of
such incompetence or of such death is received by the corporate officer
responsible for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more persons
and does not otherwise require a majority of them to be present at the
meeting, or if only one is present then that one may exercise all the
powers conferred by the proxy; but if the proxy holders present at the
meeting are equally divided as to the right and manner of voting in any
particular case, the voting of such shares shall be prorated.
Any proxy holder may appoint in writing a substitute to act in his place,
if expressly provided for in the proxy.
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Section 12. Voting Trusts. Any number of shareholders of this Corporation may
create a voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares, as provided
by law, for a period not to exceed five (5) years. Where the counterpart of
a voting trust agreement and the copy of the record of the holders of
voting trust certificates have been deposited with the Corporation, the
Corporation is to treat the shareholders of record as entitled to vote the
shares standing in their names.
A transferee of shares of this Corporation shall be bound by any such
shareholder's agreement if he takes the shares subject to such agreement
with notice thereof.
Section 13. Shareholders' Agreements. Two or more shareholders of this
Corporation may enter into an agreement if in writing and signed by the
parties thereof, providing for the exercise of voting rights in the manner
provided in the Agreement, or as they may agree, or as determined in
accordance with procedures agreed upon by them. Nothing therein shall
impair the right of the Corporation to treat the shareholders of record as
entitled to vote the shares standing in their names.
A transferee of shares of this Corporation shall be bound by any such
shareholder's Agreement if he takes the shares subject to such Agreement
with notice thereof.
Section 14. Shareholder Proposals and New Business. To be considered for
inclusion in the proxy statement and proxy relating to the annual meeting
of shareholders, a shareholder proposal must be received by the Corporate
Secretary of the Corporation by no later than one hundred twenty (120)
calendar days in advance of the date (month and date) of the Corporation's
proxy statement released to shareholders in connection with the previous
year's annual meeting, except if no annual meeting was held in the previous
year, such proposal must be received by the Corporation at a reasonable
time before a solicitation for the upcoming annual meeting of shareholders
is made.
A shareholder may place on the agenda certain new business to be considered
at an annual meeting, including the nominations for directors, provided the
shareholder has given proper written notice to the Corporate Secretary of
not less than ten business days before the time originally fixed for such
meeting.
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Article II. Directors.
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Section 1. Function. All corporate powers shall be exercised by or under the
authority of the Board of Directors, and the business and affairs of this
Corporation shall be managed under the direction of the Board of Directors.
Section 2. Qualification. The directors are required to be shareholders of this
Corporation.
Section 3. Compensation. The Board of Directors shall have authority to fix the
compensation of directors.
Section 4. Duties Of Directors. A director shall perform his duties as a
director, including his duties as a member of any committee of the Board
upon which he may serve, in good faith, in a manner he reasonable believes
to be in the best interests of the corporation, and with such care as an
ordinarily prudent person in a like position would use under similar
circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by:
(a). One or more officers or employees of the Corporation whom
the director reasonably believes to be reliable and
competent in the matters presented; or
(b). Counsel, public accountants or other persons as to matters
which the director reasonably believes to be within such
persons' professional or expert competence; or
(c). A committee or the Board upon which he does not serve,
duly designated in accordance with a provision of the
Articles of Incorporation or these Bylaws, as to matters
within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall have
no liability by reason of being or having been a director of the
Corporation.
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Section 5. Presumption Of Assent. A director of the Corporation, who is present
at a meeting of its Board of Directors at which action on any corporate
matter is taken, shall be presumed to have assented to the action taken
unless he votes against such action or abstains from voting in respect
thereto because of an asserted conflict of interest.
Section 6. Number. The business and affairs of the Corporation shall be managed
under the direction of the Board numbering not less than three (3) members
nor more than fifteen (15) members. The number of directors may be
increased or decreased from time to time by action of the Board of
Directors, but no decrease shall have the effect of shortening the terms of
any incumbent director. If the number of directors is changed, any increase
or decrease in directorships shall be so apportioned among the classes as
to make all classes as nearly equal in number as possible.
Section 7. Election and Term. Directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at
which a quorum is present. The term of the initial directors of the
Corporation expires at the first shareholders' meeting at which directors
are elected. The terms of subsequent directors shall expire in accordance
with the expiration of their Class.
Section 8. Director Committees.
(a) The board of Directors may create one or more committees and appoint
members of the board of directors to serve on them. Each committee must
have three or more members, who shall serve at the pleasure of the board of
directors.
(b) The creation of a committee and appointment of members to it must be
approved by a majority of all the directors in office when the action is
taken.
(c) Each committee shall exercise those aspects of the authority of the
board of directors which the board of directors confers upon such committee
in the resolution creating the committee. Provided, however, no committee
may:
(i) authorize distributions including dividends;
(ii) approve or propose to shareholders any action that the Florida
Business Corporation Act requires to be approved by shareholders;
(iii) fill vacancies on the board of directors or on any of its
committees;
(iv) adopt, amend, or repeal bylaws;
(v) approve a plan of merger not requiring shareholder approval;
(vi) authorize or approve any reacquisition of shares; or
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(vii) authorize or approve the issuance or sale or contract for sale of
shares or determine the designation and relative rights, preferences, and
limitations of a class or series of shares.
Section 9. Executive Committee. The board of directors by resolution adopted by
a majority of the full board, may designate three or more of its members to
constitute an executive committee and designate one of whom shall be
chairman. The designation of such committee and the delegation thereto of
authority shall not operate to relieve the board of directors, or any
member thereof, of any responsibility imposed by law.
(a) The executive committee shall have and may exercise all of the
authority of the board of directors except to the extent, if any, that such
authority shall be limited by these bylaws.
(b) Each member of the executive committee shall hold office until the
next regular annual meeting of the board of directors following his
designation or until his successor is designated, elected and qualified.
(c) Regular meetings of the executive committee may be held without
notice at such times and places as the executive committee may fix from
time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating
the place, date and hour of the meeting. Any member of the executive
committee may waive notice of any meeting and no notice of any meeting need
be given to any member who attends in person. The notice of a meeting of
the executive committee need not state the business proposed to be
transacted at the meeting.
(d) Three members of the executive committee shall constitute a quorum
for the transaction of business at any meeting thereof, and action of the
executive committee must be authorized by the affirmative vote of a
majority of the members present at a meeting at which a quorum is present.
(e) Any action required or permitted to be taken by the executive
committee at a meeting may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
members of the executive committee.
(f) Any member of the executive committee may be removed at any time
with or without cause by resolution adopted by a majority of the full board
of directors. Any member of the executive committee may resign from the
executive committee at any time by giving written notice to the president
or secretary of the corporation, and unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
(g) The executive committee may fix its own rules of procedure which
shall not be inconsistent with these Bylaws. It shall keep regular minutes
of its proceedings and report the same to the board of directors for its
information at the director's meeting held next after the proceedings have
been taken.
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Section 10. Alternate Committee Members. The Board of Directors, by resolution
adopted in accordance with this Section, may designate one or more
directors as alternate members of any committee, who may act in the place
and instead of any absent member or members at any meeting of such
committee.
Section 11. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors. A
director elected to fill a vacancy shall hold office only until the next
election of directors by the shareholders.
Section 12. Removal Of Directors. Directors may be removed for:
(a). Any reason at a meeting of stockholders, noticed and called
expressly for that purpose, by a vote of the holders of not less than 60%
of the shares then entitled to vote at an election of directors; or
(b). "Cause", by a vote of not less than 60% of the Disinterested
Directors entitled to vote, at a meeting noticed and called expressly for
that purpose. The term "cause" is defined to mean the commission of an act
of willful misconduct, self-dealing, malfeasance, gross negligence,
personal dishonesty, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, or willful violation of any
law, rule or regulation (other than traffic violations or similar
offenses). A "Disinterested Director" is defined to be a director who is
not the subject of the removal action.
Section 13. Director Quorum and Voting. A majority of the number of directors,
fixed by these Bylaws, shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting, at
which a quorum is present, shall be the act of the Board of Directors.
Section 14. Director Conflicts Of Interest. No contract or other transaction
between this Corporation and one or more of its directors or any other
corporation, firm, association or entity in which one or more of its
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because
such director or directors are present at the meeting or the Board of
Directors of a committee thereof which authorized, approves or ratifiers
such contract or transaction or because his or their votes are counted for
such purpose, if:
(a). The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies
the contract or transaction by a vote or consent; or
(b). The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written consent; or
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(c). The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the Board, a committee, or the
shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction.
Section 14. Time, Notice, and Call of Directors' Meetings. Regular meetings of
the Board of Directors, if held, shall be held without notice at such
stated time as the Chairman of the Board, the President and Chief Executive
Officer of the Corporation, or any two directors shall direct.
Special meetings of the Board of Directors may be called at any time by the
Chairman of the Board, by the President and Chief Executive Officer of the
Corporation, or by any two directors. Written notice of the time and place
of special meetings of the Board of Directors shall be given to each
director either by personal delivery or by mail, telegram or facsimile at
least two days before the meeting.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
Section 15. Waiver Of Notice. Notice of a meeting of the Board of Directors need
not be given to any director who signs a waiver of notice either before or
after the meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting and waiver of any and all objections to
the place of the meeting, the time of the meeting, or the manner in which
it has been called or convened, except when a director states, at the
beginning of the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened.
Section 16. Adjournments. A majority of the directors present, whether or not a
quorum exists, may adjourn any meeting of the Board of Directors to another
time and place. Notice of any such adjourned meeting shall be given to the
directors who were not present at the time of the adjournment and, unless
the time and place of the adjoined meeting are announced at the time of the
adjournment, to the other directors.
Section 17. Participation by Conference Telephone. Members of the Board of
Directors of any committee thereof may participate in a meeting of such
Board or Committee by way of a conference telephone or similar
communicating equipment, provided all the participants at the meeting can
hear each other at the same time. Participation by such means shall
constitute presence in person at such meeting.
Section 18. Action Without a Meeting. Any action required by law to be taken at
a meeting of the directors of the Corporation, or any action which may be
taken at a meeting of the directors or a committee thereof, may be taken
without a meeting if a consent in writing, setting forth the action so to
be take, signed by all of the directors, or all of the members of the
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committee, as the case may be, is filed in the minutes of the proceedings
of the Board or the committee. Such consent shall have the same effect as a
unanimous vote.
Article III. Officers
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Section 1. Officers, Election and Terms Of Office. The Principal officers of
this Corporation shall consist of a President and Chief Executive Officer,
and may consist of one or more Vice Presidents, a Secretary, a Treasurer,
and (at the discretion of the Board of Directors) a Chairman of the Board,
each of whom shall be elected by the Board of Directors at the first
meeting of directors immediately following the annual meeting of
shareholders of this Corporation; and shall hold their respective offices
from the date of the meeting at which elected until the time of the next
succeeding meeting of the Board following the annual meeting of the
shareholders. The Board of Directors shall have the power to elect or
appoint, for such term as it may see fit, such other officers and assistant
officers and agents as it my deem necessary, and to prescribe such duties
for them to perform as it may deem advisable. Any two or more offices may
be held by the same person. Failure to elect a Chairman of the Board,
President, Vice President, Secretary or Treasurer shall not affect the
existence of the Corporation.
Section 2. Removal Of Officers. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board whenever, in its judgment,
the best interests of the Corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Removal of any officer shall be without prejudice to the contract rights,
if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
Section 3. Vacancies. Any vacancy, however occurring, in any office may be
filled by the Board of Directors.
Section 4. Chairman Of the Board. At its discretion, the Board of Directors may
elect one of its members to serve as Chairman of the Board. The Chairman of
the Board shall coordinate and supervise the activities of all other
officers of the Corporation. The Chairman of the Board shall from time to
time call special meetings of the Board of Directors whenever he deems it
necessary to do so or whenever the requisite number of the members of the
Board of Directors shall request him in writing to do so. He or she shall
preside at all meetings of the shareholders and the Board of Directors and
shall generally perform such other duties as are delegated to him by the
Board of Directors.
Section 5. President and Chief Executive Officer. Except as otherwise provided
in these Bylaws, the President and Chief Executive Officer, subject to the
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directions of and limitations imposed by the Board of Directors, shall
perform all the duties and have all the power usually pertaining and
attributed by law or otherwise to the office of the President and Chief
Executive Officer of the Corporation. He or she shall, in the absence of
the Chairman of the Board, preside at all meetings of the shareholders and
the Board of Directors. The President and Chief Executive Officer, unless
some other person is thereunto expressly authorized by resolution of the
Board of Directors, shall sign all certificates of stock, execute all
contracts, deeds, notes, mortgages, bonds and other instruments and papers
in the name of the Corporation and on its behalf, subject to the control of
the Board of Directors. He or she shall, at each annual meeting, present a
report of the business and affairs of the Corporation, and shall from time
to time, whenever requested, report to the Board all matters within his
knowledge, which the interest of the Corporation may require to be brought
to the notice of the directors.
The President and Chief Executive Officer, after consultation with the
Board of Directors, shall have the power to employ and terminate the
employment of all such subordinate officers, agents, clerks and other
employees not herein provided to be selected by the Board, as he may find
necessary to transact the business of the Corporation, and shall have the
right, after consultation with the Board to fix the compensation thereof.
Section 6. Vice President. The Corporation may have one or more Vice Presidents.
Each Vice President shall have the powers and perform such duties as may be
delegated to him or her by the Board of Directors, or in the absence or
such action by the Board, then by the Chairman of the Board or by the
President and Chief Executive Officer. In case of the death, absence, or
inability of the President and Chief Executive Officer to act, except as
may be expressly limited by action of the Board of Directors, the Board of
Directors shall designate a Vice President and Chief Executive Officer
following such death of the President and Chief Executive Officer or during
the absence or inability of the President and Chief Executive Officer to
act; and, in such case, concurrently with the President and Chief Executive
Officer, shall at all times have the power to sign all certificates of
stock, execute all contracts, deeds, notes, mortgages, bonds and other
instruments and documents in the name of the Corporation in its behalf
which the President and Chief Executive Officer is authorized to do, but
subject to the control and authority at all times of the Board of
Directors.
Section 7. Secretary. The Secretary shall keep the minutes of all meetings of
the shareholders and the Board of Directors in a book or books to be kept
for such purposes, and also, when so requested, the minutes of all meetings
of committees in a book or books to be kept for such purposes. He or she
shall attend to the giving and serving of all notices, and he shall have
charge of all books and papers of the Corporation, except those hereinafter
directed to be in the charge of the Treasurer, or except as otherwise
expressly directed by the Board of Directors. He or she shall keep the
stock certificate book or books. The Secretary shall be the custodian of
the seal of the Corporation. The Treasurer shall sign with the President
and Chief Executive Officer all certificates of stock as the Treasurer of
this Corporation and the Secretary shall affix or cause to be affixed
thereto the seal of the Corporation. The Secretary may sign as Secretary of
the Corporation, with the President and Chief Executive Officer in the name
of the Corporation and on its behalf, all contracts, deeds, mortgages,
bonds, notes and other papers, instruments and documents, except as
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otherwise expressly provided by the Board of Directors, and as such
Secretary he shall affix the seal of the Corporation thereto. Under the
direction of the Chief Executive Officer, the Secretary shall perform all
the duties usually pertaining to the office of Secretary; and he shall
perform such other duties as may be prescribed by the Board of Directors or
the President and Chief Executive Officer.
Section 8. Treasurer. The Treasurer shall have the custody of all the funds and
securities of the Corporation except as may be otherwise provided by the
Board of Directors, and he shall make such disposition of the funds and
other assets of the Corporation as may be directed by the Board of
Directors. He or she shall keep or cause to be kept a record of all money
received and paid out, and all vouchers and receipt given therefor, and all
other financial transactions of the Corporation. The Treasurer shall have
general charge of all financial books vouchers and papers belonging to the
Corporation or pertaining to its business. He or she shall render an
account of the Corporation's funds at the first meeting of the Board of
Directors immediately following the annual meeting of shareholders of this
Corporation and at such other meetings as he or she may be requested, and
he or she shall make an annual statement of the finances of the
Corporation. If at any time there is a person designated as Comptroller of
the Corporation, the Treasurer may delegate to such Comptroller such duties
and powers as to the Treasurer may seem proper. The Treasurer shall perform
such other duties as are usually incident by law or otherwise to the office
of the Treasurer, and as he or she may be directed or required by the Board
of Directors, the Chairman of the Board or the President.
Article IV. Dividends
---------------------
The Board of Directors of this Corporation may, from time to time, declare
and the Corporation may pay dividends on its shares in cash, property or
its own shares, except when the Corporation is insolvent or when the
declaration or payment thereof would be contrary to any restrictions
contained in the Articles of Incorporation or contrary to any provision in
the Florida Statutes, subject to the following provisions:
(a). Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
howsoever arising but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share
paid from such surplus shall be disclosed to the shareholders receiving
the same concurrently with the distribution.
(b). Dividends may be declared and paid in the Corporation's own
treasury shares.
(c).Dividends may be declared and paid in the Corporation's own
authorized but unissued shares out of any unreserved and unrestricted
surplus of the Corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall
13
<PAGE>
be transferred to stated capital at the time such dividend is paid an
amount of surplus at least equal to the aggregate par value of the
shares to be issued as a dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of
Directors by resolution adopted at the time such dividend is declared,
and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus at least equal to the aggregate
stated value so fixed in respect of such shares; and the amount per
share so transferred to stated capital shall be disclosed to the
shareholders receiving such dividend concurrently with the payment
thereof.
(d). No dividend payable in shares of any class shall be paid to the holders
of shares of any other class unless the Articles of Incorporation so
provide or such payment is authorized by the affirmative vote or the
written consent of the holders of at least a majority of the outstanding
shares of the class in which the payment is to be made.
(e). A split or division of the issued shares of any class into a greater
number of shares of the same class without increasing the stated capital
of the Corporation shall not be construed to be a share dividend within
the meaning of this section.
Article V. Stock Certificates
-----------------------------
Section 1. Issuance. Every holder of shares in this Corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this Corporation shall
be signed by the President and Chief Executive Officer and the Treasurer and may
be sealed with the seal of this Corporation or a facsimile thereof. The
signatures of the President and Chief Executive Officer and the Treasurer may be
facsimiles if the certificate is manually signed on behalf of a transfer agent
or a registrar, other than the Corporation itself or an employee of the
Corporation. In case any officer, who signed or whose facsimile signature has
been placed upon such certificate, is removed from or leaves office, the
certificate may be issued by the Corporation with the same effect as if he were
such officer at the date of its issuance.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize the
restrictions upon the certificate, or shall state that the Corporation will
furnish to any shareholder upon request and without charge a full statement of
such restrictions.
Each certificate representing shares shall state upon the face thereof: the
name of the Corporation; that the Corporation is organized under the laws of the
14
<PAGE>
State of Florida; the name of the person or persons to whom issued; the number
and class of shares; and the designation of the series, if any, which such
certificate represents.
Section 3. Transfer Of Stock. Transfers of stock shall be made only on the
books of the Corporation upon surrender of the original certificate of stock (as
between the holder and the Corporation) by the holder, in person, or by an
attorney-in-fact under a power of attorney duly executed by the shareholder and
filed with the Secretary with written direction for the transfer, and the
payment of a $10.00 transfer fee and shall not be regarded as evidence of
ownership of the same in any person other than the registered owner until the
transfer thereof is duly made on the books of the Corporation. No transfer of
stock shall be valid against the Corporation until it has been effected and
registered upon the Corporation's books in the manner herein provided.
On the transfer of any shares, each certificate shall be receipted for and
such receipt shall be attached to the margin or stub of such certificate in the
certificate book. When such certificate is delivered by the Corporation by
registered or certified mail, such delivery shall be sufficient as the receipt
herein provided for. All certificates exchanged or surrendered to the
Corporation shall be cancelled by the Secretary and affixed in their original
places in the certificate book, and no new certificates shall be issued until
the certificate for which it is exchanged has been cancelled and returned to its
original place in said book, except as provided in Section 4 of this article
pertaining to lost or destroyed certificates.
If any holder of any stock of the Corporation has entered into an agreement
with any other holder of any stock of the Corporation or with the Corporation,
or both, relating to a sale or sales or transfer of any shares of stock of the
Corporation, or wherein or whereby any restriction or condition is imposed or
placed upon or in connection with the sale or transfer of any share of stock of
the Corporation, and if a duly executed or certified copy thereof shall have
been filed with the Secretary of the Corporation, none of the shares of stock
covered by such agreement or to which it relates, of any such contracting
shareholder, shall be transferred upon the books of the Corporation until there
has been filed with the Secretary of the Corporation evidence satisfactory to
the Secretary of the Corporation of compliance with such agreement, and any
evidence of any kind or quality of compliance with the terms of such agreement
which the Secretary deems satisfactory or sufficient shall be conclusive upon
all parties interested; provided, however, that neither the Corporation nor any
director, officer, employee or transfer agent thereof shall be liable for
transferring or effecting or permitting the transfer of any such shares of stock
contrary to or inconsistent with the terms of any such agreement, in the absence
of proof of willful disregard thereof or fraud, bad faith or gross negligence on
the part of the party to be charged; provided, further, that the certificate of
the Secretary, under the seal of the Corporation, bearing the date of its
issuance by the Secretary, certifying that such an agreement is or is not on
file with the Secretary, shall be conclusive as to such fact so certified for a
period of five (5) days from the date of such certificate, with respect to the
rights of any innocent purchaser or transferee for value of any such shares
without actual notice of the existence of any restrictive agreement.
Section 4. Lost Certificates. Any shareholder claiming a certificate of
15
<PAGE>
stock to be lost or destroyed shall make an affidavit or affirmation to that
fact and affirm that he or she is the owner and holder thereof, give notice of
the loss or destruction of same in such manner as the Board of Directors may
require, and shall give the Corporation a bond of indemnity in form, and with
one or more sureties satisfactory to the Board of Directors, which shall be at
least equal to the book value of all the shares of stock represented by such
certificate, payable as may be required by the Board of Directors to protect the
Corporation and any person injured by the issuance of the new certificate from
any liability or expense which it or they may be put to or incur by reason of
the original certificate remaining outstanding; whereupon the President and the
Treasurer may cause to be issued a new certificate in the same tenor as the one
alleged to be lost or destroyed, but always subject to approval of the Board of
Directors.
Article VI. Books and Records
-----------------------------
Section 1. Books and Records. This Corporation shall keep correct and
complete books and records of accounts and shall keep minutes of the proceedings
of its shareholders, Board of Directors and committees.
This Corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of its
shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. A shareholder of the
Corporation is entitled to inspect and extract during regular business hours, at
the Corporation's principal office, any of the corporate records described in
Section 607.160, Florida Statutes, if the shareholder gives written notice of
his or her demand at least five (5) business days before the date of inspection.
The written demand must state the purpose of the request. The Corporation may
impose a reasonable charge to cover the costs of labor and material for copies
of any documents provided to the shareholder. The charge may not exceed the
estimated cost of production or reproduction of the records.
Section 3. Financial Information. No later than four (4) months after the
close of each fiscal year, this Corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the Corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of its operations during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the Corporation in this state shall be kept for at least
16
<PAGE>
five (5) years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VII. Seal
-----------------
The seal of this Corporation shall be circular and shall have inscribed
thereon the name of the Corporation and such other words and figures and in such
design as may be prescribed by the Board of Directors, and may be facsimile,
engraved, printed or an impression or other type seal.
Article VIII. Amendment of Bylaws
---------------------------------
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted, by the Board of Directors.
17
<PAGE>
CERTIFICATE OF ADOPTION
I hereby certify that the foregoing Bylaws were duly adopted pursuant
to action taken by the Board of Directors dated the 5th day of September 1996.
/s/ Kirk T. Bauer
------------------------------
Kirk T. Bauer
Corporate Secretary
18
<PAGE>
Exhibit 4.1
Specimen Common Stock Certificate
19
<PAGE>
NUMBER SHARES
- ---------- ----------
THE COMMERCIAL BANCORP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
COMMON STOCK
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of:
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK $.01 PAR
VALUE PER SHARE OF:
THE COMMERCIAL BANCORP, INC. The shares represented by this Certificate are
transferable only on the stock transfer books of the Corporation by the holder
of record hereof, or by his duly authorized attorney or legal representative,
upon the surrender of this Certificate properly endorsed. This Certificate and
the shares represented hereby are issued and shall be held subject to all the
provisions of the Articles of Incorporation of the Corporation and any
amendments thereto (copies of which are on file with the Secretary of the
Corporation), to all of which provisions the holder by acceptance hereof,
assents. The shares evidenced by this Certificate are not of an insurable type
and are not insured by the Federal Deposit Insurance Corporation.
IN WITNESS WHEREOF, THE COMMERCIAL BANCORP, INC. has caused this
Certificate to be executed by the signature of its duly authorized officers and
has caused its corporate seal to be hereunto affixed.
Dated:
SEAL
- ----------------------------------- -------------------------------------
President Secretary/Treasurer
<PAGE>
The Board of Directors of the Corporation is authorized by resolution
or resolutions, from time to time adopted, to provide for the issuance of common
stock.
The following abbreviations, when used in the inscription of the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants in common
UNIF TRANS MIN ACT -- ______ as Custodian for ______
(Cust) (Minor)
under the ___________ Uniform
(State)
Transfers to Minors Act_______
(Shares)
Additional abbreviations may also be used though not in the above list.
For value received hereby sell, assign and transfer unto:
Please insert social security number or other identifying number of assignee:
- --------------------------------------------------------------------------------
(Please print or typewrite name and address
including postal zip code of assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------- shares
represented by the within certificate, and do hereby irrevocably constitute and
appoint________________________ as the Attorney to transfer the said shares on
the books of the within named Corporation with full power of substitution in the
premises.
Date , 19
------------------- ---
------------------------------
Signature
Notice: The signature to this assignment must correspond with the name as
written upon the face of the Certificate in every particular without alteration
or enlargement or any change whatever.
Exhibit 4.2
Specimen Warrant Certificate
<PAGE>
[ DEFINITIVE FORM OF WARRANT CERTIFICATE ]
Certificate No. ____________ Number of Warrants:___________
WARRANT CERTIFICATE FOR PURCHASE OF
COMMON STOCK OF THE COMMERCIAL BANCORP, INC.
(See Reverse side for Summary of Terms of Warrant Plan)
THIS CERTIFIES THAT, for value received,
_____________________________________________________, or registered assigns, is
the owner of the number of Warrants set forth above, each of which entitles the
owner to purchase, subject to the terms and conditions hereof and of the Warrant
Plan referred to herein, at any time after the date hereof and prior to the
Expiration Date (as herein defined), one share of Common Stock, par value $0.01
per share ("Shares"), of The Commercial Bancorp, Inc., a Florida corporation
("Company") at $10.00 per share ("Exercise Price"), payable in cash, or by
cashiers check or other official bank check, payable to the Company. Warrants
may be exercised by delivery and surrender of this Warrant Certificate, along
with the form of Election to Exercise on the reverse hereof duly completed and
executed together with payment of the Exercise Price at the office of the
Company or its duly appointed agent.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject to all of the terms, provisions and conditions of
that certain Warrant Plan dated as of _____________, 1996 (hereinafter called
the "Warrant Plan"), adopted by the Company, to all of which terms, provisions
and conditions the registered holder of this Warrant Certificate consents by
acceptance hereof. The Warrant Plan and the summary of its terms set forth on
the reverse side of this Warrant Certificate are hereby incorporated into this
Warrant Certificate by reference and made a part hereof. The Warrant Plan sets
forth the terms and conditions under which the exercise price for a Warrant, the
number of shares to be received upon exercise of a Warrant, or both, may be
adjusted. Reference is hereby made to the Warrant Plan for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Company and the holders of the Warrant Certificates or Warrants. In the
event of any conflict between the provisions of this Warrant Certificate and the
Warrant Plan, the provisions of the Warrant Plan shall control.
Copies of the Warrant Plan are available for inspection at the
Company's Office, or may be obtained upon written request addressed to the
Secretary, The Commercial Bancorp, Inc., 258 N. Nova Road, Ormond Beach, Florida
32174. The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of Warrants or Shares,
but shall make adjustments therefor in cash on the basis of the current market
value of any fractional interest as provided in the Warrant Plan.
The Warrants evidenced by this Warrant Certificate shall expire at 5:00
p.m. Local Time on _______________. The day and time of expiration is referred
to herein as the "Expiration Date".
IN WITNESS WHEREOF, THE COMMERCIAL BANCORP, INC. has caused this
certificate to be executed by the signature of its duly authorized officers and
has caused its corporate seal to be hereunto affixed.
Dated:
SEAL
- ------------------------------------ ---------------------------------------
President Secretary/Treasurer
<PAGE>
Summary of Terms of Warrant Plan
The Warrant Plan provides that, upon the occurrence of certain events,
the initial exercise price set forth on the face of this Warrant Certificate
may, subject to specified conditions, be adjusted (such exercise price, as
initially established or as adjusted from time to time, is referred to herein as
the "Exercise Price"). If the Exercise Price is adjusted, the Warrant Plan
provides that the number of shares which can be purchased upon the exercise of
each Warrant represented by this Warrant Certificate and the type of securities
or other property subject to purchase upon the exercise of each Warrant
represented by this Warrant Certificate are subject to modification or
adjustment.
The Warrants evidenced by this Warrant Certificate shall be exercisable
until 5:00 p.m. Local Time on ____________.
In the event that upon any exercise the number of Warrants exercised
shall be fewer than the total number of Warrants represented hereby, there shall
be issued to the holder hereof or his assignee a new Warrant Certificate
evidencing the Warrants not so exercised.
No payment or adjustment will be made for any cash dividends, whether
paid or declared, on any shares issuable upon exercise of a Warrant. The Company
shall not be required to issue fractions of shares or any certificates which
evidence fractional shares. In lieu of a fractional share, if any, there shall
be paid to the registered holder of a Warrant with regard to which the
fractional share would be issuable, an amount in cash equal to the same fraction
of the current market value (as determined pursuant to the Warrant Plan) of a
share.
The Company may deem and treat the registered holder of this Warrant
Certificate as the absolute owner hereof and of the Warrants represented by this
Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone) for the purposes of any exercise of such Warrants and for
all other purposes, and the Company shall not be affected by an notice to the
contrary.
Prior to the exercise of the Warrants represented hereby, the
registered holder of this Warrant Certificate, shall not be entitled to vote on
or be deemed the holder of Common Stock or any other securities of the Company
which may at any time be issuable on the exercise hereof for any purpose, and
nothing contained in the Warrant Plan or herein shall be construed to confer
upon the holder of this Warrant Certificate, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issue of
stock, reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger, conveyance or otherwise) or to receive notice
of meetings or other actions affecting stockholders or to receive dividends or
subscription rights or otherwise.
Upon surrender of this Warrant Certificate with the form of Assignment
below duly completed and executed, and subject to the transfer restrictions
contained in the Warrant Plan, a new Warrant Certificate or Certificates
representing the Warrants represented by this Warrant Certificate will be issued
to the transferee; provided, however, that if the registered holder of this
Warrant Certificate elects to transfer fewer than all Warrants represented by
this Warrant Certificate, a new Warrant Certificate for the Warrants not so
transferred will be issued to such registered holder. This Warrant Certificate,
together with other Warrant Certificates, may be exchanged by the registered
holder for another Warrant Certificate or Certificates of different
denominations, of like tenor and representing in the aggregate Warrants equal in
number to the same full number of Warrants represented by this Warrant
Certificate and any other Warrant Certificate so exchanged.
<PAGE>
[Form of Assignment]
For value received______hereby sells, assigns and transfers
unto_______this Warrant Certificate and all right, title and interest therein,
and to the Warrants represented thereby, and does hereby irrevocably constitute
and appoint________ attorney, to transfer said Warrant represented by Warrant
Certificate number ________of The Commercial Bancorp, Inc. on the books of The
Company with full power of substitution in the premises.
Dated: ..............................................199_.
..........................................................
NOTE: The above signature must correspond with the name
written upon the face of this Warrant Certificate in every
particular, without alteration or enlargement or any change
whatever.
Signature Guaranteed:
[Form Of Election To Exercise]
The undersigned hereby irrevocably elects to exercise______Warrants evidenced
by this Warrant Certificate, to purchase_______full shares of the Common Stock
of the Company ("Shares") and herewith tenders payment for such Shares in the
amount of $________in accordance with the terms hereof. The undersigned hereby
acknowledges receipt of a Prospectus, including amendments and supplements
thereto relating to the Offering of the Common Stock to be acquired in
connection with this transaction. The undersigned requests that a certificate
representing such shares be registered in the name of_________and that the
Certificate be delivered to_______, whose address is________. If said Shares are
fewer than all the Shares purchasable hereunder, the undersigned requests that a
new Warrant Certificate evidencing the right to purchase the balance of the
Shares be registered in the name of________, whose address is________and
delivered to________, whose address is .
Dated: ..................................19__.
..................................................
Social Security Number
Name of Registered holder of Warrant............................................
(Please Print)
Address: .......................................................................
(Please Print)
Signature.......................................................................
NOTE: The above signature must correspond with the name as written upon
the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatever. If the holder hereof
is hereby electing to exercise fewer than all Warrants represented by
this Warrant Certificate and is requesting that a new Warrant
Certificate evidencing the Warrants not exercised be registered in a
name other than that in which this Warrant Certificate is registered,
the signature of the holder of this Warrant Certificate must be
guaranteed.
Signature Guaranteed:
Exhibit 4.5
Warrant Plan adopted by the Company
on August 7, 1996
<PAGE>
WARRANT PLAN
AS
ADOPTED BY THE BOARD OF DIRECTORS
OF
THE COMMERCIAL BANCORP, INC.
ON
OCTOBER 10, 1996
- --------------------------------------------------------------------------------
ARTICLE I
PURPOSE OF THE PLAN
The Board of Directors of The Commercial Bancorp, Inc. ("Company") has
determined that it is in the best interests of the Company to issue Warrants to
purchase the Company's Common Stock in connection with the Company's initial
minimum public offering of Common Stock. The Company proposes to issue 450,000
shares of Common Stock and Warrants to purchase Common Stock in Units. Each Unit
will contain one share of Common Stock and one Warrant which will entitle the
holder thereof to purchase one share of Common Stock. Therefore the Board of
Directors, in order to provide for the above, has adopted this Warrant Plan
("Plan") on the date set forth herein.
ARTICLE II
SCOPE OF THE PLAN
Section 1. Definitions.
Unless the context clearly indicates otherwise, the following terms have the
meanings set forth below:
a. "Board" means the Board of Directors of the Company.
b. "Common Stock" means the $0.01 par value common stock of the
Company.
c. "Expiration Date" shall be 5:00 p.m. Eastern Standard Time on
the third annual anniversary date of the date of the Warrant
Certificate.
d. "Plan" means this Warrant Plan as adopted by the Board on
October 10, 1996 as set forth herein and as amended from time
to time.
e. "Warrant" means the right to purchase additional shares of
Common Stock.
f. "Warrant Certificate" means the evidence of ownership of
Warrants, as executed and issued by the Company in
substantially the form attached hereto as Exhibit A.
Section 2. Form of Warrants. The certificates evidencing the Warrants (the
"Warrant Certificates") shall be substantially in the form set forth in Exhibit
A attached hereto, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with provisions of this Plan, or as may be required
to comply with any law, or with any rule or regulation made pursuant thereto, or
to conform to usage. Each Warrant Certificate shall entitle the registered
holder thereof, subject to the provisions of this Agreement and of such Warrant
Certificate, to purchase one fully paid and non-assessable share of Common Stock
for each Warrant evidenced by such Warrant Certificate, at $10.00 per share.
Section 3. Issuance of Warrants. The Warrant Certificates when issued shall
be dated and signed on behalf of the Company, manually or by facsimile
<PAGE>
signature, by its Chairman of the Board or President, and by its Secretary or an
Assistant Secretary under its corporate seal, if any. The seal of the Company,
if any, may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrants.
Section 4. Registration of Warrant Certificates; Registered Owners. The
Company shall maintain or cause to be maintained books for registration of
ownership and transfer of ownership of the Warrant Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Warrant Certificates and the number of Warrants evidenced by each
such Warrant Certificate. The Company may deem and treat the registered holder
of a Warrant Certificate as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notation of ownership or other writing
thereon made by anyone), for the purpose of any exercise of such Warrants and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
Section 5. Registration of Transfers and Exchanges. Warrants may be
transferred by a holder. The Company shall transfer from time to time, any
outstanding Warrants upon the books to be maintained by the Company for that
purpose, upon surrender of the Warrant Certificate evidencing such Warrants,
with the Form of Assignment duly filled in and executed, to the Company, at its
office in Ormond Beach, Florida at any time prior to the Expiration Date. Upon
receipt of a Warrant Certificate, with the Form of Assignment duly completed and
executed, the Company shall promptly deliver a Warrant Certificate or
Certificates representing an equal aggregate full number of Warrants to the
transferee; provided, however, in case the registered holder of any Warrant
Certificate shall elect to transfer fewer than all of the Warrants evidenced by
such Warrant Certificate, the Company in addition shall promptly deliver to such
registered holder a new Warrant Certificate or Certificates for the full number
of Warrants not so transferred.
Subject to Section 7 hereof, any Warrant Certificate or Certificates may be
exchanged at the option of the holder thereof for Warrant Certificates of
different denominations (subject to a minimum denomination of 100 warrants), of
like tenor and representing in the aggregate the same number of Warrants, upon
surrender of such Warrant Certificate or Certificates, with the Form of
Assignment duly completed and executed, on or prior to the Expiration Date.
The Company shall not effect any transfer or exchange which will result in
the issuance of a Warrant Certificate for a fraction of a Warrant.
Section 6. Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Upon
receipt by the Company of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of any Warrant Certificate, and, in the case of
loss, theft or destruction, receipt by the Company of indemnity or security
reasonably satisfactory to them, and reimbursement to them of all reasonable
expenses incidental thereto, and, in the case of mutilation, upon surrender and
cancellation of the Warrant Certificate, the Company shall deliver a new Warrant
Certificate of like tenor representing in the aggregate the same number of
Warrants.
Section 7. Payment of Taxes. With respect to any Warrant, the Company will
pay all documentary stamp taxes attributable to the initial issuance of shares
of Common Stock upon the exercise of the Warrant; provided, however, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant or any certificates
for shares of Common Stock in a name other than that of the registered holder of
the Warrant or Warrant Certificate surrendered upon the exercise of a Warrant,
and the Company shall not be required to issue or deliver such Warrant or
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax if any, or shall
have established to the satisfaction of the Company that such tax if required,
has been paid.
Section 8. Exercise, Purchase Price and Duration of Warrants. Subject to the
provisions of this Agreement, the holder of a Warrant shall have the right to
purchase from the Company (and the Company shall issue and sell to that holder)
one fully paid and non-assessable share of Common Stock for each Warrant at the
initial exercise price of $10.00 per share (subject to adjustment as provided in
Section 12 hereof), upon the surrender of the Warrant Certificate evidencing
<PAGE>
such Warrant Agent on any business day prior to 5:00 p.m. Eastern Standard Time
on the Expiration Date, with the Form of Election to Exercise on the reverse
thereof duly completed and executed, and payment of the Exercise Price in lawful
money of the United States of America in cash or by cashiers' or certified check
payable to the Company. The exercise price and the shares of Common Stock
issuable upon exercise of a Warrant shall be subject to adjustment from time to
time in the manner specified in Section 12 and, as initially established or as
so adjusted, are referred to herein as the "Exercise Price" and the "Shares",
respectively. The Warrants shall be so exercisable either as an entirety or from
time to time in part at the election of the registered holder thereof except
that the Company shall not be required to issue certificates in denominations of
less than 50 shares. In the event that fewer than all Warrants evidenced by a
Warrant Certificate are exercised at any time prior to 5:00 p.m. Eastern
Standard Time on the Expiration Date a new Warrant Certificate will be issued
for the Warrants not so exercised.
No payments or adjustments shall be made for any cash dividends, whether paid
or declared, on Shares issuable on the exercise of a Warrant.
No fractional shares of Common Stock shall be issued upon exercise of a
Warrant, but, in lieu thereof, there shall paid to the registered holder of the
Warrant Certificate evidencing such Warrant or other person designated on the
Form of Election to Exercise as soon as practicable after date of surrender, an
amount in cash equal to the fraction of the current market value of a share of
Common Stock equal to the fraction of a share to which such Warrant related. For
such purpose, the current market value of a share of Common Stock shall be the
book value of the Common Stock as of the last day of the month immediately
preceding the date of the Election to Exercise.
Subject to Section 7 hereof, upon surrender of a Warrant Certificate, with
the Form of Election to Exercise duly completed and executed, together with
payment of the Exercise Price, the Company shall issue and deliver the full
number of Shares issuable upon exercise of the Warrants tendered for exercise.
Shares shall be deemed to have been issued, and any person so designated by the
registered holder shall be deemed to have become the holder of record of a
Share, as of the date of the surrender of the Warrant Certificate to which the
Share relates and payment of the appropriate Exercise Price; provided, however,
if the date of surrender of a Warrant Certificate shall occur within any period
during which the transfer books for the Company's Common Stock are closed for
any purpose, such person shall not be deemed to have become a holder of record
of a Share until the opening of business on the day of reopening said transfer
books, and certificates representing such Shares shall not be issuable until
such day.
Section 9. Reservation of Shares. The Company will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock, for the purpose of enabling it to satisfy
any obligation to issue Shares upon exercise of Warrants, through the close of
business on the Expiration Date, the number of Shares deliverable upon the
exercise of all outstanding Warrants.
The Company covenants that all Shares issued upon exercise of the Warrants
will, upon issuance in accordance with the terms of this Agreement, be fully
paid and non-assessable.
The shares allocated for such Warrants will be included for Registration
under the Securities Act of 1993, and Rule 415 adopted thereunder, in a
registration of securities expected to be filed by the Company with the
Securities and Exchange Commission in December, 1996.
Section 10. Adjustment of Exercise Price and Number of Shares Purchasable.
The Exercise Price and the number of Shares which may be purchased upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence, after the date hereof, if the Company shall (i) declare a dividend
on the Common Stock payable in shares of common stock, (ii) subdivide the
outstanding Common Stock into a greater number of shares or (iii) combine the
outstanding Common Stock into a smaller number of shares, then the Exercise
Price in effect on the record date for that dividend or on the effective date of
that subdivision or combination, and/or the number and kind of shares of capital
stock issuable on that date, shall be proportionately adjusted so that the
holder of any Warrant exercised after such time shall be entitled to receive
solely the aggregate number and kind of shares of capital stock which, if the
Warrant had been exercised immediately prior to that date, such holder would
<PAGE>
have owned upon exercise and been entitled to receive by virtue of that
dividend, subdivision, or combination. The foregoing adjustments shall be made
by the Company successively whenever any event listed above shall occur.
Section 11. Notices to Warrantholders. Upon any adjustment to the Exercise
Price pursuant to Section 10 hereof, the Company within twenty calendar days
thereafter shall cause to be given to the registered holders of outstanding
Warrant Certificates at their respective addresses appearing on the Warrant
Certificate register written notice of the adjustments by first-class mail,
postage prepaid. Where appropriate, the notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 11.
Section 12. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the consent or concurrence of or
notice to any holders of Warrant Certificates or Warrants in order to cure any
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, to correct any defective
provision, clerical omission, mistake or manifest error herein contained, or to
make any other provision with respect to matters or questions arising under this
Agreement which shall not inconsistent with the provisions of the Warrant
Certificates; provided that such action shall not adversely affect the interests
of the holders of the Warrant Certificates or Warrants. Other amendments to this
Agreement may be approved by a vote of at least 662/3 percent of the Company's
shares.
Section 13. Governing Law. This Plan and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Florida and for all purposes shall be governed by, construed and enforced in
accordance with the laws of said State.
Section 14. Benefits of This Plan. Nothing in this Plan shall be construed to
give to any person or corporation other than the Company and the registered
holders of the Warrant Certificates or Warrants any legal or equitable right,
remedy or claim under this Plan; this Plan shall be for the sole and exclusive
benefit of the Company and the registered holders of the Warrant Certificates.
Adopted by the Board of Directors of The Commercial Bancorp, Inc. on the 10th
day of October, 1996.
ATTEST:
-------------------------
Exhibit 5.1 Opinion of Igler
& Dougherty, P.A.
<PAGE>
IGLER & DOUGHERTY, P.A.
Attorneys at Law
1501 PARK AVENUE EAST
TALLAHASSEE, FLORIDA 32301
--------
(904) 878-2411 TELEPHONE (904) 878-1230 FACSIMILE
January 2, 1996
Board of Directors
The Commercial Bancorp, Inc.
258 North Nova Road
Ormond Beach, FL 32174
Gentlemen:
You have requested our opinion in connection with the proposed stock
offering of up to 1,200,000 shares of Common Stock, par value $.01 per share
(the "Common Stock") by The Commercial Bancorp, Inc., ("Company") through a
public offering.
In preparation of this opinion, we have reviewed the Company's Articles
of Incorporation, its Bylaws, Registration Statement on Form SB-2 filed on
behalf of the Company with the Securities and Exchange Commission ("SEC") on
January 3, 1996, and all exhibits thereto (the "Registration Statement"). We
have also examined the originals or copies, certified or otherwise identified to
our satisfaction, of such documents and corporate and other records, have
obtained such certificates, letters, representations, and information from the
officers and directors of the Company and from others, and made such
examinations of law as we have deemed necessary. In connection with rendering
the opinions set forth below, we have assumed that the Company will conduct
business primarily in Florida.
Based upon the foregoing, it is our opinion that:
1. The Company has been duly organized and is validly existing in good
standing as a corporation under the laws of Florida, with corporate power and
authority to own its property and conduct its business as now conducted as
described in the Registration Statement;
2. The shares of Common Stock of the Company to be issued in accordance
with the terms set forth in the Prospectus constituting a part of the
Registration Statement are validly authorized and, when (a) the pertinent
provisions of the Securities Act of 1933 and such "blue-sky" and securities law
as may be applicable have been complied with, (b) the subscription agreements
for such shares have been properly accepted, and (c) such shares have been duly
delivered against payment therefore as contemplated by the Prospectus, such
shares will be validly issued, fully paid, and nonassessable.
We understand that you may wish to include this Opinion as an exhibit
to the Registration Statement, and we consent to such inclusion. Furthermore, we
consent to the references to this firm's name in the Company's Prospectus and
any and all amendments thereto.
Sincerely,
Igler & Dougherty, P.A.
/s/ Igler & Dougherty, P.A.
Exhibit 10.1
Proposed Employment Agreement
between the Bank and Gary G. Campbell
<PAGE>
EMPLOYMENT AGREEMENT
BY AND BETWEEN
THE COMMERCIAL BANK OF VOLUSIA COUNTY
AND
GARY G. CAMPBELL
THIS EMPLOYMENT AGREEMENT ("Agreement") is made, effective this ____
day of ____________, 1996, by and between The Commercial Bank of Volusia County,
a state-chartered commercial bank with its principal office in Ormond Beach,
Florida ("Bank", "Employer", "we" or "us") and Gary G. Campbell ("Employee" or
"you") (collectively, the Employer and the Employee are sometimes referred to as
the "Parties").
RECITAL
We wish to retain you as our President and Chief Executive Officer to
perform the duties and responsibilities as are described in this Agreement and
as our Board of Directors ("Board") may assign to you from time to time. You
wish to become employed by us and act as our President and Chief Executive
Officer in accordance with the terms and provisions of this Agreement. This
Agreement contains all of the terms and provisions of the employment
relationship.
OPERATIVE TERMS:
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto represent, warrant, undertake,
covenant and agree as follows:
1. Employment and Term. We shall employ you and you shall be employed
by us pursuant to the terms of this Agreement to perform the services specified
in Section 2 of this Agreement on our behalf. This Agreement shall be effective
on (the "Commencement Date") and terminate on the day immediately preceding two
(2) years from the Commencement Date (the "Term"), unless terminated earlier
pursuant to the provisions of Sections 8, 9 or 10 of this Agreement. The Board
shall review this Agreement and the Employee's performance hereunder on or
before December 31, 1998, and annually thereafter, in order to determine whether
to extend the Agreement for an additional 12 month period. The decision to
extend the term of this Agreement for an additional year is within the sole
discretion of the Board. Any such renewal shall be on the same terms and
provisions set forth herein. For purposes of this Agreement, the word "Term"
shall include any renewal or extension of the initial two-year term of this
Agreement.
2. Position, Responsibilities and Duties. During the Term, you shall
serve in the following capacities and shall fulfill the following
responsibilities and duties:
(a) President and Chief Executive Officer: You shall serve in
the position of our President and Chief Executive Officer, through
election by our Board. In such capacity, you shall have the same
powers, duties and responsibilities of supervision and management of
the Bank usually accorded to the President and Chief Executive Officer
of similar financial institutions. In addition, you shall use your best
efforts to perform the duties and responsibilities enumerated in this
Agreement and any other duties assigned to you by our Board and to
utilize and develop contacts and customers to enhance the business of
the Bank. Specifically, you shall devote your full business time and
attention and use your best efforts to accomplish and fulfill the
following duties and responsibilities as well as other duties assigned
to you from time to time by the Board:
1
<PAGE>
(i) manage all personnel of the Bank;
(ii) serve as a member of the Board of Directors,
if and when elected to such a position;
(iii) serve on such committees of the Board as you
are appointed from time to time;
(iv) keep the Board informed of important
developments concerning the Bank, industry
developments and regulatory initiatives
affecting the Bank;
(v) maintain adequate expense records relating
to your activities on our behalf;
(vi) establish and implement marketing efforts to
increase the business of the Bank;
(vii) supervise all loans and assist in their
proper servicing and resolution through the
management of our human and financial
resources;
(viii) coordinate with our attorneys and
accountants and other service providers to
the extent necessary to further the business
of the Bank, keeping in compliance with
government laws and regulations and
otherwise keeping the Bank in as good a
financial and legal posture as possible; and
(ix) conduct and undertake all other activities,
responsibilities, and duties normally
expected to be undertaken and accomplished
by the President and Chief Executive Officer
of a financial institution similar in scope
and operation to our business.
(b) General Duties: During the Term, and except for illness,
vacation periods and leaves of absences, you shall devote all of your
working time, attention, skill and best efforts to accomplish and
faithfully perform all of the duties assigned to you on a full-time
basis. You shall, at all times, conduct yourself in a manner that will
reflect positively upon us. You shall obtain such licenses,
certificates, accreditations and professional memberships and
designations as we may reasonably require from time to time. You shall
join and maintain membership in such social and civic organizations as
you or we deem appropriate to foster your contacts and business network
in the community.
(c) Policies and Manual: You agree to comply with the policies
and procedures that we adopt and implement from time to time as
described in our Employee Manual, including any policies relating to a
"drug fee work place". In that regard you agree to submit to the same
testing procedures, if any, which apply to all Bank employees. You have
read and understand the contents of the Employee Manual and acknowledge
that we may modify, amend, supplement and update the Employee Manual
from time to time as we determine appropriate.
2
<PAGE>
3. Compensation. During the Term, we shall compensate you by paying you
in accordance with the following provisions:
(a) Base Salary: We will pay you a monthly salary of Six
Thousand Two Hundred Fifty Dollars ($6,250) (the "Base Salary") in
accordance with our regular payroll practices reduced appropriately by
deductions for federal income withholding taxes, social security taxes
and other deductions required by applicable laws. We may adjust the
Base Salary from time to time based upon our evaluation of your
performance, but not below a monthly salary of Six Thousand Two Hundred
Fifty Dollars ($6,250) without your written concurrence.
(b) Incentive Stock Options: We will designate you as a key
employee eligible for the grant of incentive stock options under the
Commercial Bancorp, Inc., 1997 Stock Option Plan (the "Stock Option
Plan") which will be adopted by the Company prior to June 30, 1997. In
that connection, we will grant to you under the terms of the Stock
Option Plan, options to acquire 10,000 shares of the Company's common
stock, over a ten-year period. The option will vest 20 percent each
year beginning at the conclusion of one year from the date of grant
until fully vested. The grant of the stock options shall be made
strictly in accordance with the terms of the Stock Option Plan and in
accordance with the Company's standard form of Stock Option Agreement.
(c) Bonus: We may pay you a bonus when, in our sole
discretion, we determine that your performance merits special
compensation. We will consider a bonus at the conclusion of each
calendar year for which you are employed based on achievement of goals
pre-established by the Board, payable on such terms and conditions as
we determine.
4. Payment of Business Expenses. You are authorized to incur reasonable
expenses in performing your duties hereunder. We will reimburse you for
authorized expenses, according to our established policies, promptly after your
presentation to us of an itemized account of such expenditures.
5. Vacation. You are entitled to take up to two (2) weeks paid vacation
time each year following the effective date of this Agreement.
6. Fringe Benefits.
(a) Medical Benefits: You are entitled to participate in all
medical and health care benefit plans through health insurance, medical
reimbursement plans or other plans, if any, provided, or to be
provided, by us for our employees on the same basis as is typically
provided by us to our other employees.
(b) Other Benefit Plans: You are entitled to participate in
all of our employee benefit programs, if any, including without
limitation, pension plans, profit-sharing plans, 401(k) plans, medical
insurance plans, group life insurance plans, thrift plans, disability
plans, deferred compensation plans, stock option plans, education
programs and general bonus payments as may be in effect from time to
time or at any time, if any, provided, or to be provided, by us for our
employees on the same basis as is typically provided by us to our
employees. Nothing contained herein shall be deemed to, or have an
effect that would, exclude you from (i) any supplemental compensation
or other benefits you might become entitled to as our employee, and
(ii) special incentive compensation programs designed solely for you.
3
<PAGE>
(c) Automobile : We will provide you with an automobile and
will reimburse you for expenses you may incur for the business use of
such automobile.
(d) Country Club Membership: Employer will pay for a full
membership for Employee at a country club and/or social club mutually
acceptable to both parties. Employer shall establish such policies and
procedures in order for Employee to comply with applicable federal
income tax laws and regulations governing Employee's personal use of
the country club in order to reduce the amount of income that may be
attributable to Employee for the use of such facilities. Employee will
comply with the policies and procedures established by Employer in this
regard.
7. Disability/Illness.
(a) Illness: We shall pay you the full portion of the Base
Salary for any period of your illness or incapacity: provided that such
illness or incapacity does not render you unable to perform your duties
under this Agreement for a period longer than three (3) consecutive
months or for lesser consecutive periods which in the aggregate total
three months in any one calendar year. At the end of such three-month
period, or at such time that your periods of illness or incapacity
total in the aggregate more than three months in any one calendar year,
we may terminate your employment and this Agreement.
(b) Disability: If we terminate your employment pursuant to
your disability as determined under subsection 7(a) above, then we
shall pay to you, as a disability payment, an amount equal to your
monthly Base Salary, payable in accordance with our standard payroll
practices, commencing on the effective date of your termination and
ending on the earlier of:
(i) the date you return to full time employment
with us in the same capacity as you were
employed prior to your termination for
disability:
(ii) your full time employment by another
employer;
(iii) three (3) months after the date of such
termination, after which you will be
entitled to receive benefits under any
disability insurance plan provided by the
Bank; or
(iv) the date of your death.
We may satisfy our obligations to you in this Section of this Agreement, at our
option, through the purchase of disability insurance; and, if we decide to do
so, the provisions of the policy will control the amounts paid to you. Such
disability payments will be coordinated with any disability plans made available
to you pursuant to Section 6 of this Agreement.
(c) Continuation of Coverages: During any period of illness or
disability, we will continue any other life, health and disability
coverages for you substantially identical to the coverage maintained by
us for you prior to your termination for disability or the onset of
your illness. However, such coverages shall cease upon the earlier of:
(i) your full time employment by another
employer;
4
<PAGE>
(ii) one (1) year after the date of such
termination (with the exception of
disability insurance coverage); or
(iii) the date of your death.
(d) No Reduction in Base Salary: During the period in which
you are disabled or subject to illness or incapacity, there shall be no
reduction in your Base Salary, other than as described in this
Agreement.
8. Death During Employment. If you die during the Term, this Agreement
shall terminate and we will pay your estate the portion of your compensation
which would be payable to you up to the first working day of the first month
after your death occurs. After such payment, we shall have no further financial
obligation to you or to your estate under this Agreement; except that any
compensation payable to you under any benefit plan maintained by us will be paid
pursuant to its terms.
9. Termination.
(a) Death, Illness or Incapacity: This Agreement and your
employment shall terminate upon your death, illness or incapacity in
accordance with the provisions of Sections 7 and 8 of this Agreement.
(b) Termination Without Cause: We may terminate this Agreement
and your employment at any time for any reason without prior notice.
However, if we terminate your employment for any reason other than for
"good cause" (as defined under Subsection 9(c) below), we will pay to
you as severance the full portion of the Base Salary we then pay to you
for the remaining term of the Agreement or 3 months, whichever is
greater.
(c) Termination for Good Cause: We may, at any time, terminate
this Agreement and your employment without notice for "good cause". If
we terminate your employment for good cause, we shall not be obligated
to pay to you any severance. The term "good cause" shall mean any of
the following acts committed by you:
(i) Personal dishonesty;
(ii) Incompetence;
(iii) A pattern of socially unacceptable behavior
(iv) Willful misconduct:
(v) Breach of fiduciary duty involving personal
profit;
(vi) Intentional failure to perform stated
duties;
(vii) Willful violation of any law, rule or
regulation (other than traffic violations or
similar offenses) or any final
cease-and-desist order; or
(viii) Material breach of any provision of this
Agreement.
5
<PAGE>
(d) Effective Date of Termination: The termination of this
Agreement and your employment shall be effective upon our delivery to
you of written notice or at such later time as may be specified in such
notice, and you shall immediately vacate our premises on or before such
effective date.
(e) Post-Termination Obligations: We shall pay to you such
compensation as is otherwise required by us to pay to you after the
termination of your employment pursuant to this Agreement. However, any
such payment to you shall be subject to your providing us with
post-termination cooperation. Such cooperation shall include the
following:
(i) you shall furnish such information and
assistance to us as may be reasonably
required by us in connection with any
litigation or settlement of any dispute
between us, a borrower and/or any other
third parties (including without limitation
serving as a witness in court or other
proceedings);
(ii) you shall provide such information or
assistance to us in connection with any
regulatory examination by any state or
federal regulatory agency;
(iii) you shall keep our trade secrets and other
proprietary or confidential information
secret to the fullest extent practicable,
subject to compliance with all applicable
laws.
10. Required Provisions by Regulation. The Parties mutually acknowledge
that the laws and regulations governing us require that certain provisions by
provided in each employment agreement with officers and employees of the Bank.
The Parties agree to be bound by all of the following provisions:
(a) Suspension/Temporary Prohibition: If you are suspended
and/or temporarily prohibited from participating in the conduct of our
affairs by a notice served under section 8(e) or (g)(1) of the Federal
Deposit Insurance Act [12 U.S.C. ss.1818(e)(3) and (g)(1)] our
obligations under this Agreement shall be suspended as of the date of
such service unless stayed by appropriate proceedings. If the charges
and the notice are dismissed, we may in our discretion:
(i) pay you all or part of your compensation
withheld while the obligations under this
Agreement are suspended; and
(ii) reinstate (in whole or part) any of our
obligations which were suspended.
(b) Permanent Prohibition: If you are removed and/or
permanently prohibited from participating in the conduct of our affairs
by an order issued under section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act [12 U.S.C. ss.1818(e)(4) or (g)(1)], all of our
obligations under this Agreement shall terminate as of the effective
date of the order, but your vested rights, if any shall not be
affected.
(c) Default Under FDIA: If we are in default [as defined in
section 3(x)(1) of the Federal Deposit Insurance Act], all obligations
6
<PAGE>
under this Agreement shall terminate as of the date of default, but
this subsection of this Agreement shall not affect your vested rights
if any.
(d) Regulatory Termination: All obligations under this
Agreement shall be terminated, except to the extent that a
determination has been made that continuation of this Agreement is
necessary for continued operation of the Bank:
(i) by the Director or his or her designee, at
the time the Federal Deposit Insurance
Corporation ("FDIC") enters into an
agreement to provide assistance to or on
behalf of the Bank under the authority
contained in Section 13(c) of the Federal
Deposit Insurance Act; or
(ii) by the Director or his or her designee, at
the time the Director or his or her designee
approves a supervisory merger to resolve
problems related to operation of the Bank or
when the Bank's determined by the Director
to be in unsafe or unsound condition. For
purposes of this subsection of this
Agreement, the term "Director" shall mean
the Director of the FDIC. Any of your rights
that have already vested, however, shall not
be affected by such action.
(e) Golden Parachute: Any payments made to the Employee
pursuant to this Agreement, or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C. Section 1828(k) and
any regulations promulgated thereunder.
11. Fees and Kickbacks. It shall be considered a material breach of
this Agreement if you receive: (i) either directly or indirectly any fee,
kickback, or thing of value in connection with any loan made by us; or (ii) any
portion, split or percentage of any charge, either directly or indirectly, given
to or accepted by us or any subsidiary or affiliate, in connection with any loan
made by us or our affiliates; or (iii) any fee, kickback or compensation of any
kind in connection with the participation by us in any loan from any other
source.
12. Indebtedness. If during the Term you become indebted to us for any
reason, we may, at our election, set off and collect any sums due us from you,
out of any amounts which we may owe to you from your Base Salary or other
compensation.
13. Maintenance of Trade Secrets and Confidential Information. You
shall use your best efforts and utmost diligence to guard and protect all of our
trade secrets and confidential information. You shall not, either during the
Term or after termination of this Agreement, for whatever reason, use for
yourself or for any other Person, in any capacity, or divulge or disclose in any
manner to any Person, the identity of our customers, or our customer lists,
methods of operation, marketing and promotional methods, processes, techniques,
systems, formulas, programs or other trade secrets or confidential information
relating to our business. Upon termination of this Agreement or your employment,
for any reason, you shall immediately return and deliver to us all records and
papers and all matters of whatever nature which bear trade secrets or
confidential information.
14. Competitive Activities.
7
<PAGE>
(a) You agree that during the term of your employment
hereunder, except with the express consent of the Board of Directors,
you will not, directly or indirectly, engage or participate in, become
a director of, or render advisory or other services for, or in
connection with, or become interested in, or make any financial
investment in any firm, corporation, business entity or business
enterprise competitive with or to any business of the Bank; provided,
however, that you shall not hereby be precluded or prohibited from
owning passive investments, including investments in the securities of
other financial institutions, so long as such ownership does not
require you to devote substantial time to management or control of the
business or activities in which you have invested.
(b) You agree and acknowledge that by virtue of your
employment hereunder, you will acquire an intimate knowledge of the
activities and affairs of the Bank, including trade secrets and other
confidential matters. Because of the special, unique, and extraordinary
services that you are capable of performing for the Bank or one of its
competitors, you recognize that the services to be rendered by you
hereunder are of a character giving them a peculiar value, the loss of
which cannot be adequately or reasonably compensated for by damages.
You, therefore, agree that during the term of this Agreement, and for a
period of three (3) months after termination of this Agreement, you
shall not become employed, directly or indirectly, whether as an
employee, independent contractor, consultant, or otherwise, in the
financial services industry with any business enterprise or business
entity currently then operating, or by a Person whose intent is to
organize another financial institution within the Bank's Primary
Service Areas ("PSA's") in which it is currently then operating, as
such PSA's are defined in the Bank's applications to either organize or
branch as filed with the appropriate regulatory agencies.
You hereby agree that the duration of the anti-competitive
covenant set forth herein is reasonable, and its geographic scope is
not unduly restrictive.
15. Discoveries, Inventions and Improvements.
(a) Our Rights: You shall report to us all of your
discoveries, inventions, improvements, programs or ideas of whatever
nature, conceived or made by you relating to our business during the
Term. All such discoveries, inventions, improvements, programs or ideas
of whatever nature which are applicable in any way to our business
shall be our sole and exclusive property. You shall deliver to us all
of the original copies of such discoveries, inventions, improvements,
programs or ideas upon the termination of your employment. In addition,
at our request you will sign and deliver to us whatever documents,
assignments, bills of sale, or conveyances that we consider necessary
in order to perfect our property rights described in this Section 15.
(b) Copyrights and Patents: We have the absolute right to
obtain copyrights, trademarks or patents with respect to any of the
discoveries, inventions, improvements, programs or ideas you develop
during the Term or any derivative products from the foregoing, and that
all such copyrights, trademarks, or patents shall be our sole and
exclusive property. At our request, you will sign and deliver to us any
documents that we consider necessary for the protection of our
interests in discoveries, inventions, improvements, trade secrets and
confidential information, or to further our business.
(c) Licenses: We have the sole and exclusive right to license
other Persons to use the products, ideas, improvements, discoveries or
8
<PAGE>
inventions produced by you pursuant to your employment under this
Agreement, and all monies derived therefrom shall be our sole and
exclusive property.
(d) Development Rights: We have the exclusive right to
develop, refine, enhance, modify and/or implement any ideas concepts,
programs, strategies or improvements, developed by you during the Term.
(e) Property of Employer: All programs, documentation,
customer lists, manuals, products, reports and any other information,
whatsoever, pertaining to our business are our sole property. You shall
refrain from use, disclosure or sale, directly or indirectly, of such
programs, product, documentation, customer lists, manuals, reports and
other information.
9
<PAGE>
16. Remedies for Breach.
(a) Arbitration: The Parties Agree that, except for the
specific remedies for Injunctive Relief and other equitable relief
contained in Subsection 16(b) and (c) below, any controversy or claim
arising out of or relating to this Agreement or any breach thereof,
including, without limitation, any claim that this Agreement or any
portion thereof is invalid, illegal or otherwise voidable, shall be
submitted to binding arbitration before and in accordance with the
rules of the American Arbitration Association and judgment upon the
determination and/or award of such arbitrator may be entered in any
court having jurisdiction thereof. Provided, however, that this clause
shall not be construed to permit the award of punitive damages to
either party. The prevailing party to said arbitration shall be
entitled to an award of reasonable attorney's fees. The situs of
arbitration shall be in Volusia County, Florida.
(b) Injunctive Relief: The Parties acknowledge and agree that
the services to be performed by you are special and unique and that
money damages cannot fully compensate us in the event of your violation
of the provisions of Sections 13, 14 and 15 of this Agreement. Thus, in
the event of a breach of any of the provisions of such Sections, you
agree that we, upon application to a court of competent jurisdiction,
shall be entitled to an injunction restraining you from any breach of
the terms and provision of such Sections of this Agreement. If we
prevail in an action seeking an injunction restraining you, you shall
pay all costs and reasonable attorneys fees incurred by us in and
relating to obtaining such injunction. Such injunctive relief may be
obtained without bond and your sole remedy, in the event of the entry
of such injunction, shall be the dissolution of such injunction, if
warranted, upon hearing duly had. You hereby waive any and all claims
for damages by reason of the wrongful issuance of any such injunction.
(c) Cumulative Remedies: Notwithstanding any other provision
of this Agreement, the injunctive relief described in subsection 16(a)
above and all other remedies provided for in this Agreement which are
available to us as a result of your breach of this Agreement, are in
addition to and shall not limit any and all remedies existing at or in
equity which are also available to us.
17. Assignment. We may assign this Agreement to any other Person at any
time upon such terms and conditions as we consider appropriate, if such
assignment is made in conjunction with an acquisition of control of the Bank.
Upon such assignment, all of our rights herein shall inure to the benefit of the
assignee. Your rights and obligations herein are personal to you and therefore
none of your rights or obligations hereunder are assignable to anyone else.
18. Miscellaneous.
(a) Amendment of Agreement: Unless as otherwise provided
herein, this Agreement may not be modified or amended except in writing
signed by both Parties.
(b) Certain Definitions: For purposes of this Agreement, the
following terms whenever capitalized herein shall have the following
meanings:
(i) "Person" shall mean any natural person,
corporation, partnership (general or
limited), trust, bank or any other business
entity.
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(ii) "Affiliate" shall mean a Person that,
directly or indirectly, through one or more
intermediaries, controls, is controlled by,
or is under common control with, such
Person. With respect to the Employee, the
term includes his spouse, parents, lineal
descendants, brothers and sister.
(iii) "Attorneys Fees" shall include the legal
fees and disbursements charged by attorneys
and their related travel and lodging
expenses, court costs, paralegal fees, etc.
incurred in settlement, trial, appeal or in
bankruptcy proceedings.
(iv) "Term" shall include the time period
specified in Section 1 of this Agreement and
include any renewals or extensions thereof.
(c) Headings for Reference Only: The headings of paragraphs,
sections and subsections herein are included solely for convenient
reference and shall not control the meaning of the interpretation of
any of the provisions of this Agreement.
(d) Governing Law/Jurisdiction: This Agreement shall be
construed in accordance with and governed by the laws of the State of
Florida. Any and all litigation involving the Parties and their rights
and obligations herein shall be brought in the appropriate federal or
state courts in Volusia County, Florida, and the Parties hereby consent
to the jurisdiction of such courts. The Parties hereto expressly waive
their right to a jury trial.
(e) Severability: If any of the provisions of this Agreement
shall be held invalid for any reason, the remainder of this Agreement
shall not be affected thereby and shall remain in full force and effect
in accordance with the remainder of its terms.
(f) Entire Agreement: Waiver: This Agreement and all other
documents incorporated or referred to herein, contain the entire
agreement of the Parties and there are no representations, inducements
or other provisions other than those expressed in writing herein. No
modification, waiver or discharge of any provision or any breach of
this Agreement shall be effective unless it is in writing signed by
both Parties. Our waiver of your breach of any provision of this
Agreement, shall not operate, or be construed, as a waiver of any
subsequent breach by you of that provision or of any other provision of
this Agreement.
(g) Pronouns: As used herein, words in the singular include
the plural, and the masculine include the feminine and neuter gender,
as appropriate.
(h) Successors and Assigns: Except as otherwise provided
herein, the rights and obligations of the Parties under this Agreement
shall inure to the benefit of and shall be binding upon their
successors and assigns.
(i) Prior Agreements: This Agreement amends, supplants and
supersedes any and all prior agreements between the Parties whether
verbal or written.
(k) Notices: Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing, and hand
delivered or if sent by regular mail or reputable
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commercial next-day air carrier (e.g. Federal Express) to the Employee
at the address for him in our records or, to us at our principal
office, Attn: Secretary to the Board of Directors. Such notices shall
be deemed received on the next business day following mailing or
depositing with the carrier.
(l) Recital: The Recital set forth at the beginning of this
Agreement shall be deemed to be incorporated into this Agreement by
this reference as if fully set forth herein, and this Agreement shall
be interpreted with reference to and in light of such Recital.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
THE COMMERCIAL BANK OF
VOLUSIA COUNTY
_________________________________ By: ___________________________________
Witness James R. Peacock
Chairman of the Board
EMPLOYEE
- --------------------------------- ---------------------------------------
Witness Gary G. Campbell
12
Exhibit 10.2
Agreement to Lease Real Property
<PAGE>
Trails Shopping Center
THIS LEASE, (the "Lease") made and entered into as of the 18th day of
October , 1996, by and between Sterling Tequesta/Trails Limited Partnership
("Landlord") and The Commercial Bancorp, Inc. ("Tenant").
WITNESSETH:
ARTICLE I
REFERENCE PROVISIONS, AND ENUMERATION OF EXHIBITS
Section 1.1 REFERENCE PROVISIONS. Where used in this Lease, the
designated terms hereinafter set forth shall have the meanings ascribed by the
provisions of this Section 1.1:
(a) "SHOPPING CENTER" - that certain real property generally known as
Trails Shopping Center (the "Shopping Center") more particularly described in
Exhibit "A" attached hereto and by this reference incorporated herein together
with all improvements now located or hereafter erected thereon, less any
deletions pursuant to this Lease, plus such additions as the Landlord may from
time to time designate as comprising part of the Shopping Center.
(b) "LEASED PREMISES" - that certain space located in a building
erected or to be erected on the Shopping Center containing approximately 3,347
square feet as shown Exhibit "B" attached hereto; Bay 38 and 41.
(c) "TENANT'S TRADE NAME" - The Commercial Bank.
(d) 'TERM" - the period of time commencing as of the date hereof and
ending, unless extended or sooner terminated as herein provided, at 12 o'clock
(midnight) on the fifth (5th) annual anniversary of the Rental Commencement Date
as herein below defined.
(e) "LEASE YEAR" - each period (during the Term) of twelve (12)
calendar months which begins on the Rental Commencement Date or on any annual
anniversary thereof, or such shorter period (if any) which begins as aforesaid
and ends on the date of the termination of this Lease.
(f) "MINIMUM RENT" - the Minimum Rent shall be $35,082.00 per year
payable monthly in advance in equal installments of $2,923.50 each beginning on
the "Rental Commence Date." The Minimum Rent for each Lease Year commencing with
the second Lease Year shall be four percent (4%) more than the Minimum Rental
for the preceding Lease Year.
(g) "PERCENTAGE RENT. - There shall be no Percentage Rent due under
this Lease. All references to Percentage Rent are hereby deleted.
(h) "TENANT'S SHARE OF OPERATING EXPENSES" - this is a fully net lease
and Tenant shall pay its pro rata share of Operating Expenses as set forth in
Section 2.6. Initially, Tenant shall pay $962.26 monthly toward Tenant's share
of Operating Expenses.
(i) ANCHOR TENANT(S) - Publix, Eckerds.
(j) "USE" - Tenant shall use the Leased Premises solely for the purpose
of a bank.
(k) "COMMON AREA" - all areas and facilities in the Shopping Center
designated for the general use, in common, of occupants of the Shopping Center,
including the Tenant hereunder, its officers, agents, employees and customers.
Common Areas shall include the parking areas, sidewalks, canopies, roadways,
loading platforms, washrooms, ramps and landscaped areas.
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(l) "INITIAL DEPOSIT" - in the amount of $8,885.76 shall be paid to
Landlord upon Tenant's execution of this Lease of which $5,000.00 is to be a
"SECURITY DEPOSIT" applied as provided in Section 11.3 and the balance of
$3,885.76 represents the first Full Month's Minimum Rent, including Tenant's
Share of Operating Expenses and 6% Florida sales tax.
(m) "CONSTRUCTION OBLIGATIONS" - as specified in Article III and
Exhibit "C" attached hereto.
(n) "ADDRESSES FOR NOTICE" -
TO LANDLORD: Sterling Tequesta/Trails
Limited Partnership
209 Phipps Plaza
Palm Beach, Florida 33480
(407) 835-1810
TO TENANT: The Commercial Bancorp, Inc.
P.O. Box 730428
Ormond Beach, FL 32173
Telephone 904-672-3003
(o) "ADDRESS FOR PAYMENTS"- Unless otherwise directed by Landlord, all
payments hereunder or required by this Lease shall be made to:
Trails Shopping Center
209 Phipps Plaza
Palm Beach, Florida 33480
(p) "MONTHLY MERCHANTS ASSOCIATION DUES" of $0.00 per month.
(q) "BROKERS" - Sterling Realty Services, LC.
Section 1.2 GRANTING OF THE LEASED PREMISES. Landlord hereby leases to
Tenant and Tenant hereby rents from Landlord the Leased Premises. Provided
Tenant is not in default hereunder, Tenant shall be entitled to use the Common
Areas in common with the Landlord and other tenants of the Shopping Center
throughout the Term of this Lease. Landlord may reduce or change the number,
dimensions or location of the improvements comprising the Shopping Center or any
of them in any manner whatsoever as Landlord shall deem proper. It is expressly
understood and agreed that nothing herein contained shall be construed as a
grant or rental of or a conveyance of any rights in the roof or exterior of the
building or buildings of which the Leased Premises constitute a part; the air
space (occupied or not) above a horizontal elevation plane coterminous with the
bottom edge of the structural steel framework supporting the roof of the Leased
Premises: the Common Areas (except as herein before specifically provided to the
contrary); the air space (occupied or not) below a horizontal elevation plane
coterminous with the finished floor level of the Leased Premises; or of the land
upon which the Leased Premises are located.
Section 1.3 FLOOR AREA. The term "Floor Area" as used in this Lease
shall mean the actual number of square feet of floor space within the Leased
Premises and any area outside the Leased Premises which is exclusively
appropriated for use by Tenant; subject, however, to the limitations of Section
1.2 hereof. The Floor Area of the Leased Premises shall be finally determined by
Landlord on or before the "Rental Commencement Date" (as herein below defined),
and shall be calculated by measuring from the center line of interior or party
walls and from the exterior faces of exterior walls.
Section 1.4 ACCEPTANCE OF LEASED PREMISES. By opening for business,
Tenant shall be deemed to have accepted the Leased Premises, to have
acknowledged that the same are in condition called for hereunder and to have
agreed that as of that date all of the obligations imposed upon Landlord under
this Lease have been fully performed.
Section 1.5 QUIET ENJOYMENT. Tenant, upon paying the rents herein
reserved and performing and observing all other terms, covenants and conditions
of this Lease on Tenant's part to be performed and observed, shall peaceable and
quietly have, hold and enjoy the Leased Premises during the Term, subject
nevertheless to the terms of this Lease and to any mortgages, ground or
underlying leases, agreements and encumbrances to which this Lease is or may be
subordinated.
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Section 1.6 RENTAL COMMENCEMENT DATE. Except as herein provided to the
contrary, the phrase "Rental Commencement Date" shall be 3/1/97.
ARTICLE II
RENT AND OTHER CHARGES
Section 2.1 MINIMUM RENT. Tenant shall pay to Landlord without previous
demand therefor and without any setoff or deduction whatsoever except as
expressly provided in this Lease, the Minimum Rent provided in Section 1.1(f),
as adjusted in 2.1 hereof, payable in equal monthly installments, in advance, on
the first day of each and every calendar month throughout the Term. The Minimum
Rent shall commence to accrue on the Rental Commencement Date. The first full
payment date hereunder shall be the first day of the first calendar month
following the Rental Commencement Date and on that date Tenant shall pay to
Landlord the Minimum rent set forth in Section 1.1(f) for the month beginning on
such date plus a proportionate amount thereof for the period, if any, beginning
on the Rental Commencement Date and ending on the day preceding such first full
rental payment date hereunder. Unless otherwise directed by Landlord, all
payments hereunder or required by this Lease shall be made to the address as set
forth in Section 1.1(o).
Section 2.2 OPERATING EXPENSES. In addition to the monthly Base Rent
due pursuant to Section 2.1, herein, Tenant agrees to pay as additional rent to
Lessor, Lessee's proportionate share of the Shopping Center's "Operating
Expenses." The term "Proportionate Share" shall mean that fraction, the
numerator of which is the total number of rentable square feet of space
contained within the Leased Premises and the denominator of which is the total
area of the Shopping Center less the area leased to the Anchor Tenants. The term
"Operating Expenses" shall mean all costs of operation, servicing, management
and maintenance of the Shopping Center containing the Leased Premises less the
sums paid for such costs by the Anchor Tenants, and more particularly but
without restricting the generality of the foregoing, shall include the cost of:
(a) Employees. Salaries, wages, medical, surgical and general
welfare benefits, group life insurance, pension payments,
payroll taxes, workmen's compensation and unemployment
insurance contributions and reimbursable expenses on behalf of
employees.
(b) Utilities. Water and sewer charges, common electric, common
power and fuel and other utilities.
(c) Insurance. Premiums paid by Landlord and attributable to the
fire insurance with standard extended coverage and any other
risks as Landlord may elect or be required to carry covering
all portions of the building or buildings in the Shopping
Center including all improvements, betterments, fixtures,
equipment and machinery installed in such building or
buildings either by Landlord or by the occupants of the
Shopping Center, but excluding the common areas therein and
any personal property, movable trade fixtures and contents
owned by the respective tenants occupying the Shopping Center
(d) Building Maintenance. General Building maintenance, including
any painting, repairs and replacements for the common areas,
roof, walls, upkeep and servicing of the equipment therein,
including all supplies, equipment, tools and materials
required.
(e) Management. The management fee paid to the management company
managing the Shopping Center for the Landlord.
(f) Taxes and Fees. All taxes and assessments and governmental
charges and fees imposed upon the Shopping Center, including
without limitation any occupancy, gross receipts or rental
taxes paid by Landlord, but no income or franchise tax or any
other taxes imposed or measured by Landlord's income or
profits unless the same is in lieu of real estate taxes.
(g) Maintenance of Open Space and Related Expenses. Landscape and
lawn care, sprinkler system service, maintenance of street
lights, power broom sweeping power lot surface and drives,
relining of and sealing of asphalt surface areas, maintenance
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of signs lake banks of lake and growth at waters edge, trash
structures and in general any and all items related to the
asphalt surface space, landscape, sodded areas, sidewalks and
lake and retention areas, including property adjoining or near
the Shopping Center that is maintained by the Shopping Center.
Prior to the commencement of this Lease and during each year
thereafter, Landlord shall furnish to Tenant a written estimate of the Operating
Expenses and Tenant's proportionate Share for the ensuing year or portion
thereof, the annual charge shall be completed on the basis of periods of twelve
( 12) consecutive months as designated by Landlord. Tenant shall pay such
estimated amount to Landlord in equal monthly installments with payments of
Minimum Annual Rent. After the end of each year, Landlord shall furnish to
Tenant a statement setting forth in reasonable detail the actual Operating
Expenses during such period and Landlord and Tenant shall within thirty (30)
days thereafter made such payment or allowance necessary to adjust estimated
payment to Tenant's actual share of Operating Expenses as shown on such
statement. Any amount due Tenant shall be credited against installments next
coming due pursuant to this Section 2.2 or by payment to Tenant when adjustment
is to be made in the last year of the Lease. The calculation of Operating
Expenses for less than a full calendar year shall be based upon the pro-rata
share of Operating Expenses for the calendar year in which the Lease commences
and expires. If at any time during any year of the Lease the rates of any
Operating Expenses items for the Shopping Center are increased to rate(s) or
amount(s) greater than that used in calculating the estimated Operating Expenses
for such year, Tenant's estimated share of such Operating Expenses shall be
increased for the month in which such increase becomes effective and for
succeeding months by increasing Tenant's proportionate Share of Operating
Expenses to reflect such increase as applicable. Upon receipt of notice of such
increase in rate or amount, Landlord shall give Tenant written notice of amount
or estimated amount of increase, the month in which it shall become effective
and Tenant's monthly share thereof: Tenant shall pay such increases to Landlord
as part of Tenant's monthly payments of estimated Operating Expenses as provided
in this Section 2.2 commencing with the month in which such increase shall be
effective. If Landlord shall eliminate the payment of any Operating Expense
item, as a result of the installation of labor-saving devices or by any other
means, the corresponding savings shall be deducted from that year's Operating
Expenses.
Landlord agrees to keep true and accurate records in accordance with
accepted accounting principles of Operating Expenses for each year. Each
Landlord's Operating Expense Statement shall set forth in reasonable sufficient
detail the Operating Expense for said year. Tenant shall have the right during
reasonable business hours and upon not less than five (5) business days prior
written notice to Landlord to such effect to examine and to audit any Landlord's
Operating Expense Statement within six (6) months after the receipt by Tenant of
any such Landlord's Expense Statement. Upon expiration of such six (6) month
audit period Landlord's Operating Expense Statement shall be deemed conclusive
by the Tenant.
Section 2.3 UTILITIES CHARGE. Tenant shall pay promptly, as additional
rents, as and when the same become due and payable all water rents rates and
charges, all sewer rents and all charges for electricity, gas heat, steam hot
and/or chilled water, air conditioning, ventilating, lighting systems, and other
utilities supplied to the Leased Premises. If any such utilities are not
separately metered or assessed or are only partially separately metered or
assessed and are used in common with other tenants in the Shopping Center.
Tenant will pay to Landlord a proportionate share of such charge for the
utilities used in common as set forth in Section 2.2 in addition to Tenant's
payments of the separately metered charges. In addition, Tenant shall pay all
"tap" and "impact" fees charged for connection of utilities to the Leased
Premises, as well as its proportionate share of any and all security deposits
charged by the providers of such utilities.
ARTICLE III
CONSTRUCTION OF LEASED PREMISES
The Leased premises shall be constructed by Landlord and Tenant in
accordance with the provisions of Exhibit "C" annexed hereto and made a part
hereof.
ARTICLE IV
USE OF LEASED PREMISES
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Section 4.1 USE OF LEASED PREMISES. Tenant agrees to use the Leased
Premises only for the permitted uses set forth in Section 1.1j and for no other
purpose. Tenant covenants that the Leased Premises shall during the Term of this
Lease, be used only and exclusively for lawful and moral purposes, and no part
of the Leased Premises or improvements thereon shall be used in any manner
whatsoever for any purposes in violation of the laws, ordinances, regulations,
or orders of the United States, or of the State, County and/or City where the
Leased Premises are located. Tenant shall comply with all such laws, ordinances
regulations or orders now in effect or hereafter enacted or passed during the
Term of this Lease insofar as the Leased Premises and any signs of the Tenant
are concerned, including, but not limited to zoning ordinances, building codes
and fire codes, and shall make it Tenant's own cost and expense all additions
and alterations to the Leased Premises ordered or required by such authorities,
whether in order to meet the special needs of tenant or by reason of the
occupancy of tenant, or otherwise; provided, however, Tenant shall not be
required to make structural alterations to the Leased Premises of the building
in which the Leased Premises are located unless made necessary by reason of the
nature of Tenant's business, work performed in the Leased Premises, or the
manner of operation thereof
Section 4.2 CONTINUOUS OPERATION BY TENANT. Tenant agrees that a
shopping center is an interdependent enterprise, that the Shopping Center's
success is dependent on the continued operation of Tenant's business for the
benefit of all involved, and that maintenance of the character and quality of
the Shopping Center is enhanced by the continued occupancy of the Leased
Premises and the regular conduct of Tenant's business therein. Accordingly,
Tenant agrees to open the Leased Premises for business on the commencement date
provided in Section 1.6 hereof and operate one hundred percent ( 100%) of the
Leased Premises during the entire Term under the name set forth in this Lease or
such other name as Landlord may approve in writing, with due diligence and
efficiency so as to produce all the Gross Sales which may be produced by such
manner of operation. Tenant shall carry at all times in said Leased Premises a
stock of merchandise of such size, character and quality as shall be reasonably
designed to produce maximum Gross Sales.
Section 4.3 ADDITIONAL COVENANTS OF TENANT. Tenant's use of the Leased
Premises and the common areas shall be subject at all times during the Term to
reasonable rules and regulations adopted by Landlord not in conflict with any of
the express provisions hereof governing the use of the parking areas, malls
walks, driveways, passageways, signs, exteriors of building, lighting and other
matters affected other tenants in and the general management and appearance of
the Shopping Center. Tenant agrees to comply with all such rules and regulations
upon notice to Tenant from Landlord Tenant expressly agrees as follows:
(a) All deliveries to or from the Leased Premises shall be done
only at such times, in the areas and through the entrances
designated for such purposes by Landlord.
(b) All garbage and refuse shall be kept inside the Leased
Premises in the kind of container specified by Landlord, and
shall be placed outside of the Leased Premises prepared for
collection in the manner and at the times and places specified
by Landlord. If Landlord shall provide or designate a service
for picking up refuse and garbage, Tenant shall use same at
Tenant's cost. Tenant shall pay the cost of removal of any of
Tenant's refuse and garbage and maintain all common loading
areas in a clean manner satisfactory to the Landlord. If any
part of the Tenant's business shall consist of the preparation
and/or sale of food, including without limitation the
operation of a restaurant, snack shop or food market, Tenant
shall provide refrigerated garbage containers at Tenant's
expenses for the disposal of food scraps and refuse. Tenant
shall use any trash compactor Landlord provides for the
general use of Tenant or tenants in a designated area of the
Shopping Center.
(c) No radio or television aerial or other device shall be erected
on the roof or exterior walls of the Leased Premises or the
building in which the Leased Premises are located without
first obtaining in each instance the Landlord's consent in
writing. Any aerial or device installed without such written
consent shall be subject to removal at Tenant's expense
without notice at any time.
(d) No loud speakers, televisions, phonographs, radios, tape
players or other devices shall be used in a manner so as to be
heard or seen outside of the Leased Premises without the prior
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written consent of Landlord, nor shall Tenant solicit business
or distribute advertising or promotional material in the
common areas.
(e) The plumbing facilities shall not be used for any other
purpose than that for which they are constructed; no foreign
substance of any kind shall be thrown therein, and the expense
of any breakage, stoppage, or damage resulting from a
violation of this provision shall be borne by Tenant. All
grease traps, if any, shall be installed and maintained in
accordance with applicable law and in accordance with
Landlord's requirements.
(f) Tenant at its expense shall contract for termite and pest
extermination services covering the Leased premises, to be
rendered semimonthly.
(g) Tenant shall not burn any trash or garbage of any kind in the
Leased Premises, the Shopping Center or within three (3) miles
of Shopping Center.
(h) Tenant shall keep and maintain the Leased Premises (including,
without limitation, exterior and interior portions of all
windows, doors and all other glass) in a neat and clean
condition.
(i) Tenant at its expense shall participate in any reasonable
window cleaning program that may be established by Landlord
for all or substantially all other stores in the Shopping
Center.
(j) Tenant shall take no action which would violate Landlord's
labor contracts, if any, affecting the Shopping Center, nor
create any work stoppage, picketing, labor disruptions or
dispute, or any interference with the business of Landlord or
any other Tenant or occupant in the Shopping Center or with
the rights and privileges of any customer or either person(s)
lawfully in and upon said Shopping Center, nor shall Tenant
cause any impairment or reduction of the good will of the
Shopping Center.
(k) Tenant shall pay before delinquency all license or permit fees
and charges of a similar nature for the conduct of any
business in the Leased Premises.
(m) Tenant shall store and/or stock in the Leased Premises only
such merchandise Tenant is permitted to offer for sale in the
Leased Premises pursuant to the Lease.
(n) Tenant shall not conduct or permit any fire, bankruptcy,
auction or "going out of business" sale (whether real or
fictitious) in the Leased Premises, or utilize any unethical
method of business operation.
(o) Tenant shall not perform any act or carry on any practice
which may damage mar or deface the Leased Premises or any
other part of the Shopping Center.
(p) Tenant shall not use any forklift truck, tow truck or any
other powered machine for handling freight in the Shopping
Center except in such manner and in those areas in the
Shopping Center as may be approved by Landlord in writing. All
such equipment shall have rubber wheels only.
(q) Tenant shall not place a load on any floor in the interior
delivery system, if any, or in the Leased Premises, or in any
area of the Shopping Center exceeding the floor load which
such floor was designed to carry, nor shall Tenant install,
operate or maintain therein any heave item or equipment except
in such manner as to achieve a proper distribution of weight.
(r) Tenant shall not install, operate or maintain in the Leased
Premises or in any other area of the Shopping Center any
electrical equipment which does not bear underwriter's
approval, or which would overload the electrical system or any
part hereof beyond its capacity for proper and safe operation
as determined by the Landlord.
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(s) Tenant shall not suffer, allow or permit any vibration, noise,
light, odor or other effect to emanate from the Leased
Premises, or from any machine or other installation therein,
or otherwise suffer, allow or permit the same to constitute a
nuisance or otherwise interfere with the safety, comfort and
convenience of Landlord or any of the other occupants of the
Shopping Center or their customers, agents or invitees or any
others lawfully in or upon the Shopping Center. Upon notice by
Landlord to Tenant that any of the aforesaid is occurring,
Tenant agrees to forthwith remove or control the same.
(t) Tenant shall not use or occupy the Leased Premises in any
manner or for any purpose which would injure the reputation or
impair the present or future value of the Leased Premises the
Shopping Center and/or the neighborhood in which the Shopping
Center is located.
(u) Tenant shall not store, display, sell or distribute any
alcoholic beverage or any dangerous materials (including
without limitation fireworks) unless specifically permitted in
this Lease.
(v) Tenant shall not use or occupy the Leased Premises or do or
permit anything to be done thereon in any manner which shall
prevent Landlord and/or Tenant from obtaining at standard
rates any insurance required or desired, or which would
invalidate or increase the cost to Landlord of any existing
insurance, or which might cause structural injury to any
building, or which would constitute a public or private
nuisance or which would violate any present or future laws,
regulations, ordinances or requirements (ordinary or
extraordinary foreseen or unforeseen) of the federal state or
municipal governments or of any department, subdivisions,
bureaus or of offices thereof, or of any other governmental
public or quasi-public authorities now existing or hereafter
created having jurisdiction in the Leased Premises or the
Shopping Center or which they form a part.
(w) Tenant shall not operate on the Leased Premises or in any part
of the Shopping Center any coin or token operated vending
machine or similar device (including, without limitation, pay
telephone, pay lockers, pay toilets, scales, amusement devices
and machines for the sale of beverages, foods, candy,
cigarettes or other merchandise and/or commodities), except
for the sole and exclusive use of Tenant's employees.
(x) Tenant shall conduct no business related activity in the
Common Area.
(y) Tenant and its employees shall park in the employee parking
areas as designated by Landlord.
Section 4.4 SIGNS, AWNINGS AND CANOPIES. Landlord shall erect and
maintain such suitable signs as in its sole discretion may deem appropriate in
the Shopping Center. Tenant shall erect and maintain only such sign as Landlord
may approve in accordance with the criteria set forth on Exhibit "D" attached
hereto. Tenant shall submit to Landlord detailed drawings of its sign for review
and approval by Landlord prior to erecting said sign on the Leased Premises.
Tenant shall keep insured and maintain such sign in good condition,
repair and operating order at all times. If any damage is done to Tenant's sign
Tenant shall commence to repair same within five (5) days or Landlord may at its
option repair same at Tenant's expense.
Tenant shall not place or permit to be placed or maintained on any
door, exterior wall or window of the Leased Premises any sign, awning, or canopy
or advertising matter or other thing of any kind, and shall not place or
maintain any decoration, lettering or advertising matter on the glass of any
window or door of the Leased Premises without first obtaining Landlord's written
consent. Tenant further agrees to maintain any such signs, awnings, canopies,
decorations, lettering, advertising matter or other things as may be approved by
Landlord in good condition, operating order and repair at all times. All signs
of tenant visible from the common areas of the Shopping Center shall be in good
taste and shall conform to the standards of design, motif, and decor from time
to the established by Landlord for the Shopping Center. No flashing signs shall
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be permitted. No credit card signs or advertisements nor any hand lettered signs
shall be visible from the common areas. Tenant shall install professionally
lettered name signs on its service doors.
ARTICLE V
INSURANCE REQUIRED OF TENANT
Section 5.1 INSURANCE REQUIRED OF TENANT.
(a) Tenant shall obtain and provide, on or before the earlier of
the commencement of the Term or Tenant's entering the Leased
Premises for any purpose, and keep in force at all times
thereafter the following insurance coverages with respect to
the Leased Premises:
(i) Comprehensive General Liability Insurance, with
contractual liability endorsement, relating to the
Leased Premises and its appurtenances on an
occurrence basis with a minimum single limit of One
Million Dollars ($ 1,000,000).
(ii) Fire and lightning, Extended Coverage, Vandalism and
Malicious Mischief, Flood (if "required by Landlord,
any mortgage or governmental authority) and War Risk
(if obtainable) Insurance in an amount adequate to
cover the replacement cost of all personal property,
decorations, trade fixtures, furnishings, equipment,
and all contents therein.
(iii) Boiler or Machinery Insurance covering all pressure
vessels, boilers, air conditioning equipment or
similar equipment, if any, in, on, adjoining. above
or beneath the Leased Premises, in an amount of One
Million Dollars ($1,000,000).
(iv) Plate Glass Insurance
(v) Workmen's Compensation Insurance covering all persons
employed, directly or indirectly, in connection with
any finish work performed by Tenant or any repair or
alteration authorization by this Lease or consented
to by Landlord, and all employees and agents of
Tenant with respect to whom death or bodily injury
claims could be asserted against Landlord or Tenant,
as required by the laws of the State where the Leased
Premises are located.
(vi) Rent Insurance covering those risks referred to in
(ii) in an amount equal to all Minimum Annual Rent
and other sums payable under this Lease for a period
of twenty-four (24) months commencing with the date
of loss.
(vii) Such other insurance as may be carried on the Leased
Premises and Tenant's operation thereof, as may be
reasonably determined by Landlord.
(b) Before undertaking any alterations, additions, improvements or
constructions, Tenant shall obtain at its expense a public
liability insurance policy insuring Tenant and Landlord
against any liability which may arise on account of such
proposed alterations, additions, improvements or construction
on an occurrence basis with the minimum limits set forth in
this Section 5.1.
(c) All of the aforesaid insurance except the Workmen's
Compensation Insurance required by subparagraph (a) (v) above
shall be written in the name of Landlord (and any designee(s)
of Landlord) and Tenant and shall be written by one or more
responsible insurance companies satisfactory to Landlord and
in form satisfactory to Landlord; all such insurance may be
carried under a blanket policy covering the Leased Premises
and any other of Tenant's stores; all such insurance shall
contain endorsements that: such insurance may not be canceled
or amended with respect to Landlord (and any such designees)
by the insurance company; Tenant shall be solely responsible
for payment of premiums and that Landlord (or its designees)
shall not be required to pay any premium for such insurance;
in the event of payment of any loss covered by such policy,
Landlord (or its designees) shall be paid first by the
insurance company for Landlord's loss. The minimum limits of
the comprehensive general liability policy of insurance shall
in no way limit or diminish Tenant's liability hereunder.
Tenant shall deliver to Landlord at least fifteen (15) days
prior to the time such insurance is first required to be
carried by Tenant, and thereafter at least fifteen ( 15) days
prior to the expiration of such policy, in compliance with its
obligations hereunder, together with evidence satisfactory to
Landlord of the payment of the premiums therefor. If Tenant
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fails to obtain and provide any or all of the aforesaid
insurance, then Landlord may, but shall not be required to,
purchase such insurance on behalf of Tenant and add the cost
of such insurance as additional rent payable with the next
installment of Minimum Annual rent.
(d) The minimum limits of the comprehensive general liability
policy of insurance shall be subject to increase at any time,
and from time to time, after the commencement of the fifth
(5th) full year of the Term if Landlord shall deem same
necessary for adequate protection. Within thirty (30) days
after demand therefor by Landlord, Tenant shall furnish
Landlord with evidence of Tenant's compliance with such
demand.
(e) Tenant agrees to notify Landlord in writing not less than
thirty (30) days prior to the date Tenant opens for business
in the Leased Premises of the actual cost of all permanent
leasehold improvements and betterments installed or to be
installed by tenant in the Leased Premises (whether same have
been paid for entirely or partially by Tenant), but exclusive
of Tenant's personal property, movable trade fixtures and
contents, in order that Landlord can insure said improvements
and betterments from and after the date Tenant opens for
business in the Leased Premises against fire, standard
extended coverage risks and such other risks as Landlord may
elect or be required to insure. Similar notifications shall be
given to Landlord not less than thirty (30) days prior to the
commencement of any proposed alterations, additions or
improvements to the Leased Premises by Tenant (it same are
permitted under the terms of this Lease) subsequent to the
initial construction of the Leased Premises. If on account of
the failure of Tenant to comply with the foregoing provisions,
Landlord is adjudged a co-insurer by its insurance carrier,
then any loss or damage Landlord shall sustain by reason
thereof shall be borne by Tenant and shall be immediately paid
by Tenant upon receipt of bill therefor and evidence of such
loss.
Section 5.2 FIRE INSURANCE RATE AND REQUIREMENTS
(a) Tenant agrees, at its own cost and expense, to comply with all
of the rules and regulations of the Fire Insurance Rating
Organization having jurisdiction and any similar body. If, at
any time and from time to time, as a result of or in
connection with any failure by Tenant to comply with the
forgoing sentence or any act of omission or commission by
Tenant, its employees, agents, contractors or licensees, or as
a result of or in connection with the use to which the Leased
Premises are put (notwithstanding that such use may be for the
purposes herein before permitted or that such use may have
been consented to by Landlord), the fire insurance rate(s)
applicable to the Leased Premises, or the building in which
same are located, or to any other premises in said building,
or to any adjacent property owned or controlled by Landlord,
or an affiliate of Landlord, and/or to the contents in any or
all of the aforesaid properties (including rent insurance
relating thereto) shall be higher than that which would be
applicable for the least hazardous type of' occupancy legally
permitted therein, Tenant agrees that it will pay to Landlord,
on demand, as additional rent, such portion of the premiums
for all fire insurance policies in force with respect to the
aforesaid properties (including rent insurance relating
thereto) shall be higher than that which would be applicable
for the least hazardous type of occupancy legally permitted
therein, Tenant agrees that it will pay to Landlord on demand
as additional rent such portion the premiums for all fire
insurance policies in force with respect to the aforesaid
properties (including rent insurance relating thereto) and the
contents of any occupant thereof as shall be attributable to
such higher rate(s). If Tenant installs any electrical
equipment that overloads the lines in the Leased Premises or
the building in which the Leased Premises are located, Tenant
shall, at its own cost and expenses, promptly make whatever
changes are necessary to remedy such condition and to comply
with all requirements of the Landlord and the Board of Fire
Insurance Underwriters and any similar body and any
governmental authority having jurisdiction thereof shall be
deemed to be conclusive.
(b) In the event that this Lease so permits and Tenant engages in
the preparation of food or packaged foods or engages in the
use, sale or storage of inflammable or combustible material,
Tenant shall install chemical extinguishing devices (such as
annul) approved by the Fire Insurance Rating Organization and
shall keep such devices under service as required by such
organization.
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(c) If gas is used in the Leased Premises Tenant shall install at
its expense gas cutoff devices (manual
and automatic).
Section 5.3 WAIVER OF SUBROGATION. Landlord shall not be liable to
Tenant for any damage by fire or other peril; whether or not included in the
coverage afforded by the standard form of fire insurance policy with extended
coverage endorsement attached (whether or not such coverage is in effect), no
matter how caused, it being understood that the Tenant will look solely to its
insurer for reimbursement. Tenant shall not be liable to Landlord for any damage
by fire or other peril, whether or not included in the coverage afforded by the
standard form of fire insurance policy with extended coverage endorsement
attached (whether or not such coverage is in effect), no matter how caused, it
being understood that Landlord will look solely to its insurer for
reimbursement. Any waiver of Landlord's rights against Tenant contained in this
Section shall be ineffective if such waiver shall cause Landlord's insurance to
be unobtainable, or result in an increase in the cost of Landlord's insurance,
unless Tenant shall pay such increase within ten (10) days after notice thereof.
ARTICLE Vl
REPAIRS AND MAINTENANCE
Section 6.1 REPAIRS BY LANDLORD. Within a reasonable period after
receipt of written notice from Tenant, Landlord shall make necessary structural
repairs to the exterior walls (excluding the exterior of and the frames
surrounding all window, doors, plate glass, store fronts and signs); necessary
repairs to the root foundations, load bearing items, plumbing, pipes, and
conduits located outside the Leased Premises and/or in the common areas, and
necessary repairs to sidewalks, malls, parking areas and curbs. Landlord shall
not be required to make any repairs where same were made necessary by any act or
omission or negligence of tenant, any subtenant or concessionaire, or by fire or
other casualty of condemnation, except as provided in Article VIII.
Section 6.2 REPAIRS AND MAINTENANCE BY TENANT. Tenant shall make and
pay for all repairs to the Leased Premises and all equipment and systems serving
the Leased Premises exclusively and shall replace all things which are necessary
to keep the same in good state of repair and operating order, such as (but not
limited to) all fixtures, furnishings, lighting and store signs of Tenant.
Tenant shall also maintain, replace and keep in good repair and operating order
all air conditioning, ventilating, plumbing, sprinkling, heating and electrical
installations, ceilings, inside walls and carpeting and floor surfaces serving
the Leased Premises whether located within or without the Leased Premises.
Tenant shall at all times keep the Leased Premises and all exterior entrances,
exterior walls, glass and show moldings, partitions, doors, floor surfaces,
fixtures,, equipment and appurtenances thereof in good order, condition and
repair and in a reasonable satisfactory condition of cleanliness, including
reasonably periodic painting of the Leased Premises, and Tenant shall make such
other necessary repairs in or to the Leased Premises not specified in Section
6.1 hereof as being the responsibility of Landlord. Tenant shall at its expense
replace all broken or damaged glass or substitutes therefor, as the case may be.
The provisions of this Section 6.2 shall not limit Landlord's obligation to
restore or repair under Article VIII hereof in the event of fire or other
casualty.
If (i) Tenant does not repair properly as required hereunder and to the
reasonable satisfaction of landlord, or (ii) Landlord, in the exercise of this
sole discretion, determines that emergency repairs are necessary or (iii)
repairs or replacements to the Shopping Center and/or common areas of the Leased
Premises are made necessary by any act or omission or negligence of Tenant, its
employees, subtenants, assignees, concessionaires, contractors invitees,
licensees or visitors, then in any of such events Landlord may make such repairs
without liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures, or other property or to Tenant's business by reason
thereof, and upon completion thereof, Tenant shall pay Landlord's costs for
making such repairs plus twenty percent (20%) for overhead, upon presentation of
a bill therefor, as additional rent. Said bill shall include interest from the
date such repairs were billed by the contractors making such repairs. Tenant
agrees to repair and maintain in good order and condition the non-structural
interior portions of the Leased Premises, including the store front, show
windows, doors, windows, plate and window glass, floor covering plumbing,
heating, air conditioning electrical and sewerage system, facilities and
appliances. Tenant at its sole cost, shall maintain the air conditioning
(including heating units(s) for the Leased Premises) in good condition and
repair throughout the term of this Lease. As a part of this air conditioning
maintenance obligation, Tenant shall enter into an annual contract with an air
conditioning repair from fully licensed to repair air conditioning units in the
State of Florida, which firm shall:
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(1) Regularly service the air conditioning unit(s) on the
Leased Premises on a monthly basis, changing belts,
filters and other parts as required;
(2) Perform emergency and extraordinary repairs on the
air conditioning unit(s);
(3) Keep a detailed record of all services performed on
the Leased Premises and prepare a yearly service
report to be furnished to the Tenant at the end of
each calendar year.
Tenant shall furnish to Landlord, at the end of each calendar year, a
copy of said yearly service report. Not later than thirty (30) days prior to the
date of commencement of the term of this Lease and annually thereafter, Tenant
shall furnish to Landlord a copy of the air conditioning maintenance contract
described above, and proof that the annual premium for the maintenance contract
has been paid. Nothing stated herein above shall limit Tenant's obligation to
maintain the air conditioning unit(s) in good condition and repair throughout
the term of this Lease.
Section 6.3 INSPECTION. Landlord or its representative shall have the
right to enter the Leased Premises during any business day (and in emergency at
all times) during the Term.
Section 6.4 OBSTRUCTIONS. Tenant agrees to keep its loading facilities,
if any, and the sidewalks and mall areas immediately adjoining the Leased
Premises free from trash, litter or obstructions, and in addition, if the Leased
Premises open onto an outside area, to keep outside sidewalk area immediately
adjoining the Leased Premises free from ice and snow.
ARTICLE VII
ADDITIONS AND ALTERATIONS
Section 7.1 BY LANDLORD. Landlord hereby reserves the right at any time
and from time to time, providing visibility of an access to the Leased Premises
are not materially and adversely affected, to make alterations or addition to
the building in which the Leased Premises are contained, and to construct other
buildings adjoining the same. Landlord also reserves to construct other
buildings or improvements in the Shopping Center, provided, however, that such
construction or additions shall not unreasonably interfere with the operations
of Tenant's business whereunder except when such work is necessitated by
emergency.
If an excavation shall be made upon land adjacent to the Leased
Premises, Tenant shall permit the person authorized to cause such excavation a
license to enter upon the Leased Premises for the purpose of doing such work as
such person deems necessary to preserve the wall of the building of which the
Leased Premises form a part from damage and to support the same by proper
foundations and Tenant shall not be entitled to any claim for damages or
indemnification against Landlord.
Section 7.2 BY TENANT. Provided that tenant shall not then be in
default, Tenant may from time to time, at its own expense and upon compliance
with the requirements of the last paragraph of Section 6.2 hereof, alter,
renovate or improve the Leased Premises provided the same be performed in a good
and workmanlike manner, in accordance with accepted building practices and
applicable laws, including, but not limited to, building codes and zoning
ordinances; and so as not to weaken or impair the strength or lessen the value
of the building in which the Leased Premises are located. No changes,
alterations or improvements affecting the exterior of the Leased Premises or the
structure of the building within which the Leased Premises are located shall he
made by Tenant Prior to commencement of all the such work, Tenant shall obtain
Landlord's prior written approval of the plans and specifications thereof and
shall cause Landlord's requirements for bonding, insurance and other contractor
requirements to be satisfied. Any work done by Tenant under the provisions of
this Section 7.2 shall be so conducted so as not to interfere with the use by
other tenants of their premises in the Shopping Center.
ARTICLE VIII
DAMAGE, DESTRUCTION OR CONDEMNATION OF THE LEASED PREMISES
Section 8.1 DAMAGE OR DESTRUCTION. If all or any part of the Leased
Premises shall be damaged or destroyed by fire or other casualty, the Lease
shall continue in full Force and effect, unless terminated as hereinafter
provided, and landlord shall repair, restore or rebuild the Leased Premises to
their condition as initially constructed by Landlord in accordance with Exhibit
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"B" hereof, provided, however, Landlord shall not be obligated to continence
such repair, restoration or rebuilding until insurance proceeds are received by
Landlord, and Landlord's obligation hereunder shall be limited to the proceeds
actually received by Landlord under any insurance policy or policies, if any
which have not been required to be applied towards the seduction of any
indebtedness secured by a mortgage covering the Shopping Center or any portion
thereof.
Landlord's obligations under this Article VIII to repair, replace
and/or rebuild the Leased Premises shall not apply to any permanent leasehold
improvements and betterments to be installed or to be installed by Tenant on the
Leased Premises (the same having been paid for entirely or partially by Tenant),
or Tenant's personal property, movable trade fixtures and contents.
Tenant covenants and agrees to reopen for business in the Leased
Premises within thirty (30) days after notice from Landlord that the Leased
Premises are ready for re occupancy. No damage or destruction to the Leased
Premises shall allow Tenant to surrender possession of the Leased Premises nor
affect Tenant's liability for the payment of rents or charges or any other
covenants herein contained except as may be specifically provided in this Lease
Notwithstanding anything to the contrary contained in this Section 8.1
or elsewhere in this Lease, Landlord, at its option, may decline to repair the
Leased Premises and terminate this Lease on thirty (30) days notice to Tenant
if:
(a) The Leased Premises or the building in which the Leased
Premises are located shall be damaged or destroyed as a result
of an occurrence which is not covered by Landlord's insurance;
or
(b) The Leased Premises shall be damaged or destroyed during the
last three (3) years of the Term or any renewals thereof; or
(c) Any or all of the Leased Premises, buildings or common areas
of the Shopping Center are damaged (whether or not the Leased
Premises are damaged) to such extent that the Landlord, in its
sole judgment decides it does not wish to continue operation
of the Shopping Center or that portion of which the Leased
Premises is a part.
If the Leased Premises shall be damaged or destroyed and in the event
that Landlord has elected to continue this Lease, Landlord and Tenant shall
commence their respective obligations under this Article as soon as is
reasonably possible and prosecute the same to completion with all due diligence.
In the event of any termination of this Lease under the Provisions of
this Section 8.1, this Lease shall terminate at the end of the calendar in which
such notice of termination is given.
The Minimum Rent shall be abated proportionately with the degree to
which Tenant's use of the Leased Premises is unpaired during the period of any
damage, repair or restoration provided for in this Article VIII provided further
that in the event Landlord elects to repair any damage as herein contemplated,
any abatement of Minimum Rent shall end fifteen (15) days after notice by
Landlord to Tenant that the Leased Premises during any such period to the extent
reasonably practicable from the standpoint of prudent business management, and
any obligation of Tenant under the Lease to pay Percentage Rent shall remain in
full force and nothing in this Section shall be construed to abate Percentage
Rent. Except for the abatement of Minimum Rent herein above provided, Tenant
shall not be entitled to any compensation or damage for loss in the use of the
whole or any part of the Leased Premises and/or any inconvenience or annoyance
occasioned by any damage, destruction, repair or restoration.
Unless this Lease is terminated by Landlord, Tenant shall repair and
refixture all parts of the Leased Premises not insured under any insurance
policies insuring Landlord in a manner and to a condition equal to that existing
prior to its destruction or damage, including, without limitation, all exterior
signs, trade fixtures, equipment, display cases, furniture furnishings and other
installations of personally of Tenant. The proceeds of all insurance carried by
Tenant on its property and improvements shall be held in trust by Tenant for the
purpose of said repair and replacement.
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Tenant shall give to Landlord prompt written notice of any damage to or
destruction of any portion of the Leased Premises resulting from fire or other
casualty.
Section 8.2 CONDEMNATION. In the event that the whole of the Leased
Premises shall be taken under the power of eminent domain, or proceedings in
lieu thereof, this Lease shall thereupon terminate as of the date possession
shall be so taken.
Anything in this Lease to the contrary notwithstanding, in the event
more than twenty percent (20%) of the Leased Premises or more than twenty-five
percent (25%) of the then existing paved parking spaces of the Shopping Center
shall be taken or conveyance made in lieu thereof either party shall have the
right to cancel and terminate this Lease as of the date of such taking upon
giving notice to the other of such election within thirty (30) days after the
date of such taking. In the event of such cancellation, the parties shall
thereupon be released from any further liability under this Lease, except for
obligations existing on the effective date of such termination; provided,
however, that if more than twenty-five percent (25%) of the then existing paved
parking spaces shall be appropriated or taken, or conveyance made in lieu
thereof, Landlord may at its option nullify and vacate Tenant's right to cancel
this Lease as herein before provided by giving Tenant notice within thirty (30)
days after the date of such taking that it will provide substitute parking on or
adjacent to the Shopping Center sufficient to equal to at least seventy-five
percent (75%) of the number of spaces prior to such taking, or conveyance made
in lieu thereof, in which event the Lease shall remain in full force and effect.
If a portion of the Leased Premises is taken, and if this Lease shall
not be terminated as provided in the preceding paragraph, then the provisions of
this Lease shall remain in full force and effect, except that the Minimum Rent
shall be reduced in the same proportion that the amount of Floor Area remaining
after such taking bears to the total Floor Area immediately prior to such
taking, and Landlord shall, upon receipt of the award in confirmation, or
proceedings in lieu thereof; make all necessary repairs or alterations to the
building in which the Leased Premises are located so as to constitute the
portion of the building not taken a complete architectural unit, but Landlord
shall not be required to spend for such work an amount in excess of the net
amount received by Landlord as damages for the part of the building within which
the Leased Premises are located so taken. "Amount received by Landlord" shall
mean that part of the award in condemnation or proceedings in lieu thereof,
which is free and clear to Landlord of any collection by mortgagees for the
value of the diminished fee. Tenant at its over cost and expense shall restore
and refixture such part of the Leased Premises as is not taken to as near its
former condition as the circumstances will permit, including, without
limitation, all exterior signs, trade fixtures, equipment, display cases,
furniture furnishings and other installations of personally of Tenant.
All compensation awarded or paid upon such a total or partial taking of
the Leased Premises or the building within which the Leased Premises are located
shall belong to and be the property of Landlord without any participation by
Tenant. Tenant shall, however, be entitled to claim, prove and receive in such
condemnation proceedings such award as may be allowed for relocation costs,
fixtures and other equipment installed by it but only to the extent that the
same shall not reduce Landlords award and only if such award shall be in
addition to the award for the land and building (or portion thereof) containing
the Leased Premises. To the extent that the Tenant has a claim in condemnation
proceedings, as aforesaid, Tenant may claim from condemnors, but not from
Landlord, such compensation as may be recoverable by Tenant.
It is mutually agreed that (i) any reduction in the parking lot area,
number of parking spaces in the Shopping Center, or the imposition of any
restriction on the number of motor vehicles that may enter the Shopping Center
by action or order of any governmental authority, quasi-governmental authority,
or by any court having jurisdiction in the premises (other than by actual
exercise of the power of eminent domain such that title passes to the condemning
agency) shall not constitute such a taking or condemnation under this Lease that
would entitle Tenant to terminate the Lease, (ii) any such environmental
condemnation or compliance by Landlord with any order, rule or regulation of any
such authority, with any such judicial decree, or any such existing or future
law shall not constitute a default under this Lease by Landlord so as to entitle
Tenant to terminate the Lease and the Lease shall remain in full force and
effect, and (iii) as between Landlord and Tenant, Landlord may but shall not be
obligated to comply with any such order, rule, regulation, judicial decree or
law.
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ARTICLE IX
SUBORDINATION, ESTOPPEL CERTIFICATES AND LANDLORD'S FINANCING REQUIREMENTS
Section 9.1 SUBORDINATION. This Lease is subordinate, junior and
inferior to all ground and underlying leases, all first mortgages and deeds of
trust and at the election of landlord to all junior mortgages and deeds of
trust, which now or hereafter affect the Premises and to any and all
advancements to be made thereunder and to all renewals, modification,
consolidations, replacements, and extensions thereof and Tenant, if requested by
Landlord, shall subordinate this Lease and all interest of Tenant to all ground
and underlying leases and mortgages and deeds of trust which may now or
hereafter effect the Premises and to any and all advances to be made thereunder
and all renewals, modification, consolidations, replacements and extensions
thereof.
Section 9.2 ESTOPPEL CERTIFICATE . Tenant shall, without charge, at any
time and from time to time, within ten (10) days after request by Landlord
deliver a written instrument to Landlord or any other person, firm or
corporation specified by Landlord, duly executed and acknowledged, certifying
that this Lease is unmodified, and is in full force and effect or if their has
been any modification, that the same is in full force and effect as so modified,
and identifying any such modifications, whether or not there are then existing
any set-offs or defenses in favor of Tenant against the enforcement of any of
the terms, covenants and conditions of this Lease by Landlord, and if so,
specifying the same, and also whether or not Landlord has observed and performed
all of the terms, covenants and conditions on the part of Landlord to be
observed and performed, and if not, specifying the same, the dates to which
Minimum Rent, Percentage Rent Additional Rent and all other charges hereunder
have been paid.
Section 9.3 LANDLORD'S FINANCING REQUIREMENT. Anything in this Lease to
the contrary notwithstanding, it is agreed that in the event the lender or
lenders which Landlord selects to provide construction financing, permanent
financing or any construction or permanent loan refinancing during the term
hereof of any renewal requests modifications of any of the provisions of this
Lease (except those concerning the size and location of the Premises, the term,
hereof; and the rental and other charges payable by Tenant under this Lease) and
Tenant shall refuse to approve in writing any such modification within fifteen
(15) days after Landlords request therefore, Landlord shall have the right to
terminate this Lease by written notice to Tenant. If Landlord's right to
terminate this Lease is exercised as aforesaid, this Lease shall be thereafter
null and void; any money or security deposited hereunder shall be resumed to
Tenant and neither party shall have any liability to the other by reason of such
cancellation.
Section 9.4 ATTORNMENT. Tenant shall, in the event any proceedings are
brought for the foreclosure of said Premises, or in the event of exercise of
power of sale under any mortgage or deed of trust made by the Landlord covering
the Premises, or in the event of a sale by Landlord of its fee or leasehold
interest in the Shopping Center or its interest in this Lease, attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as
Landlord under this Lease.
ARTICLE X
DEFAULT
Section 10.1 EVENTS OF DEFAULT. Any of the following shall constitute
an Event Default under this Lease:
(a) The failure of Tenant to pay any Minimum Rent or Percentage
Rent within 10 days of its due date;
(b) The failure of Tenant to make any other payment provided for
under this Lease within 10 days of its due date;
(c) Abandonment of the premises as defined in Section 10.4;
(d) The failure of Tenant to perform or observe any obligation,
covenant, or term required to be performed or observed by
Tenant under this Lease other than the payment of money;
(e) The insolvency of Tenant;
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(f) Tenant is generally not paying Tenant's debts as such debts
become due;
(g) A receiver is appointed to take charge of Tenant's assets,
including the Leased Premises or the contents of the Leased
Premises, or both;
(h) Tenant makes an assignment for the benefit of Tenant's
creditors;
(i) A petition or other proceeding is filed by or against Tenant
under the Bankruptcy laws of the United States, or under the
insolvency laws of any state; and
(j) Except as otherwise expressly provided in this Lease, Tenant's
interest in this Lease, or right to possession of the Leased
Premises, or both, passes to or devolves upon, by operation of
law or otherwise, one other than Tenant.
Section 10.2 LANDLORD'S RIGHTS TO DEFAULT.
(a) Non monetary Default. Upon the occurrence of any Event of
Default itemized in Section 10.1 (other than (a), (b) and (c),
Landlord may give written notice of such Event of Default to
Tenant, and in such event, Tenant shall immediately upon the
giving of such written notice and continually and diligently
thereafter, pursue Tenant's obligations in question and seek
to cure such Event of Default, but in any event Tenant shall
have a maximum of ninety (90) days in which to cure the
complaint of Event or Events of Default. Upon of the failure
of Tenant to cure any Event of Default within the time herein
before provided, or if Tenant shall fail to diligently and
continually seek to remedy any complaint of Event of Default
(other than (a) or (b) or (c) of Section 10.1. Landlord may
declare the rights of Tenant under this Lease terminated and
at an end by giving written notice of such termination of
Tenant's rights to Tenant and Tenant shall thereupon
immediately quit and surrender the Leased Premises to
Landlord, remaining liable, nevertheless, to Landlord as
hereinafter provided Upon Landlord's termination of Tenant's
rights hereunder, landlord shall be entitled to apply the
security deposit specified in Section 1.1(n) hereof to its own
purposes without thereby diminishing or affecting any of
Tenant's obligations hereunder for the payment of Minimum Rent
or Percentage Rent or other charges, the Landlord may
immediately, or at any time thereafter, reenter the Leased
Premises and remove all persons and all or any property
therefrom, by any suitable action or proceeding at law, or
otherwise, without being liable for any prosecution therefor
or damages resulting therefrom, and repossess and enjoy the
Leased Premises, together with all additions, alterations and
improvements, to which remedies and acts Tenant specifically
consents. In the event of such reentry, Landlord may, at its
option, repair, alter, remodel and change the character of the
Leased Premises as it may deem fit, and at any time release
the Leased Premises or any part or parts thereof, as the agent
of Tenant or otherwise.
The exercise by Landlord of any right granted hereunder shall
not relieve Tenant from the obligation to make all payments of
Minimum Rent, Percentage Rent or other charges, and to fulfill
all other covenants required by this Lease, at the time and in
the manner provided herein Tenant throughout the remainder of
the Term hereof shall pay Landlord, no later than the last day
of each month during the Term, and then current excess, if
any, of the sum of the unpaid rentals and costs to Landlord
resulting from such default by Tenant over the proceeds, if
any, received by Landlord from a reletting of Leased Premises,
if any Landlord shall not be required to relet the Leased
Premises nor exercise any other right granted to Landlord
hereunder, nor shall Landlord be under any obligation to
minimize Tenant's loss as a result of Tenant's default. If
Landlord attempts to relet the Leased Premises, Landlord shall
be the sole judge as to whether or not a proposed tenant is
suitable and acceptable. Recovery of possession for the
account of Tenant shall not waive or impair Landlord's
absolute right to thereafter terminate this Lease at any time
without further notice to Tenant
In addition to the foregoing rights and remedies of
the Landlord upon termination of Tenant's rights under the
Lease the landlord shall have the option to accelerate all
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current and future monetary obligations of the Tenant,
including remaining installments of rent, and such accelerated
amounts, less the fair rental value of the premises for the
residue of the term, shall be construed as liquidated damages
and shall constitute a debt provable in bankruptcy or
receivership. For purposes of this subparagraph, "fair rental
value" for the premises shall be deemed to be, at any time
during the term of this Lease, seventy-five Percent (75%) of
the minimum rent as provided in Article 1. Such accelerated
unpaid rent shall accrue interest at the highest rate allowed
by law until paid in full.
This section 10.2 shall apply to any renewal or
extension of this Lease; and if Tenant shall default hereunder
prior to the date fixed as the commencement of any renewal or
extension of this Lease, Landlord may cancel such renewal or
extension agreement by ten (10) days written notice to Tenant.
(b) Monetary Default. Upon Tenant's failure to pay the Minimum
Rent or Percentage Rent or any other payment provided under
the Lease (whether or not treated as additional rents) within
ten (10) days of its due date (i.e., Events of Default (a) and
(b) of Section 10.1, Landlord shall provide three (3) days
written notice to Tenant requiring payment in full of all sums
then due and owing or possession of the Leased Premises.
Unless payment of delinquent sums be forthcoming from Tenant
within said three-day period, in cash or cashier's check drawn
on local funds, Landlord shall have the absolute right to
immediately file legal proceedings to recover possession of
the Leased Premises as well as any unpaid rents or other sums
owing from Tenant. In any possessory action by landlord based
upon Tenant's nonpayment of rent or other charges as required
hereunder, Tenant expressly waives any defense other than
payment Tenant's obligation to pay rent is independent of any
duty or obligation of the Landlord under this Lease. In
addition, Landlord shall be entitled, as a matter of strict
legal right, to enforce his rights as Landlord under the
distress for rent proceedings provided by Florida Statutes,
Section 83.11 et. seq., and in furtherance thereof, Tenant
hereby expressly waives any right to personal service of the
writ of distress and consents and agrees that such writ shall
be binding and legally enforceable on Tenant if the same is
served upon Tenant by posting the writ of distress on the main
door of the Leased Premises or if the writ is served as
provided for in the manner of delivery of other notices under
Section 11.14, hereafter. The rights of Landlord under this
Subsection (b) of Section 10.2, including the right of rental
acceleration, and any other rights or remedies provided under
the law.
Section 10.3 NON-WAIVER OF PROVISIONS. The failure of Landlord to
insist upon strict performance of any of the terms, conditions and covenants
herein shall not be deemed to be a waiver of any right or remedies that Landlord
may have and shall not be deemed a waiver of any subsequent breach or default in
the terms and covenants herein contained except as may be expressly waived in
writing.
The maintenance of any action or proceeding to recover possession of
the Leased Premises, or any installment or installments of minimum Rent,
Percentage Rent or any other moneys that may be due or become due from Tenant to
Landlord, shall not preclude Landlord from thereafter instituting and
maintaining subsequent actions or proceedings for the recovery of possession of
the Leased Premises or of any other moneys that may be due or become due from
Tenant Any entry or reentry by Landlord shall not be deemed to absolve or
discharge Tenant from liability hereunder.
Section 10.4 ABANDONMENT OF PREMISES. "Abandonment" hereunder shall be
deemed to include but shall not be limited to either (a) any vacancy of the
Leased Premises by Tenant for ten (10) consecutive days without Landlord's
proper written consent, or (b) non-operation of the Tenant's business in the
Leased Premises for a period often (10) consecutive days without Landlord's
prior written consent.
In the event of Tenant's abandonment of the premises, as herein above
defined, Landlord shall provide Tenant with ten (10) days written notice of
Landlord's intention to reenter and repossess the premises, said notice to also
be conspicuously posted on the premises, without recourse to further legal
proceedings, unless Tenant objects within said ten (10) day period. Should
Tenant not object within the said ten (10) day period, Landlord shall have the
absolute right to reenter the Leased Premises without legal proceedings and
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without being liable for any prosecution therefore or damage resulting
therefrom, and repossess and enjoy the Leased Premises, together will all
additions, alterations and improvements, to which remedies and acts the Tenant
specifically consents. Thereafter, Landlord shall he entitled to the same rights
and remedies as if said reentry and repossession had occurred pursuant to legal
action and as more specifically consents. Thereafter, Landlord shall be entitled
to the same rights and remedies as if said reentry and repossession had occurred
pursuant to legal action and as more specifically defined in Section 10.2(a).
Section 10.5 ABANDON OF PERSONAL PROPERTY. Should Tenant fail to remove
its personal property upon abandonment, expiration, termination or recovery of
possession by the Landlord, then upon such abandonment, expiration, termination
or recovery of possession and after ten (10) days written notice to Tenant to
remove its property, said notice to also be conspicuously posted on the
premises, all personal property of any nature then remaining on the premises
shall be deemed abandoned and title thereto shall best exclusively in the
Landlord. Landlord may thereafter remove and dispose of or liquidate said
personal property as Landlord may deem proper in its sole and absolute
discretion, provided, however, the proceeds of any sale or liquidation of such
property shall be applied first to reduce any sums owed by Tenant to Landlord,
including storage costs, attorney's fees and any other expenses incurred by
Landlord resulting from such abandonment and any sums remaining shall be resumed
to Tenant. Tenant hereby waives and agrees to and hold Landlord harmless from
any claim loss or damage arising from Landlord's dealing with Tenant's property
pursuant to the terms of this paragraph.
Section 10.6 INABILITY TO PERFORM. Landlord and/or Tenant shall be
excused for the period of any delay and shall not be deemed in default with
respect to the performance of any of the terms, covenants and conditions of this
Lease when prevented from so doing by cause or causes beyond the Landlord's
and/or Tenant's control, which shall include, without limitation, all labor
disputes, governmental regulations or controls, fire or other casually,
inability to obtain material or services, acts of God, or any other cause, not
within the reasonable control of the Landlord and/or Tenant.
Section 10.7 DEFAULT BY LANDLORD. Landlord shall in no event be in
default in the performance of any of its obligations contained in this Lease
unless and until Landlord shall have failed to perform such obligation within
thirty (30) days, or such additional time as is reasonably required to correct
any such default, after notice by Tenant to Landlord properly specifying wherein
Landlord has failed to perform any such obligation. Notwithstanding any default
by Landlord, Tenant shall not be excused from the obligation to pay all rents
and charges required under this Lease as the same become due.
Section 10.8 ATTORNEY'S FEES. If either party heretofore shall at any
time be in default hereunder, and if the other party hereto shall deem it
necessary to engage attorneys to enforce such other party's rights hereunder,
the determination of such necessity to be in the sole discretion of such other
party, the defaulting party will reimburse such other party for the reasonable
expenses incurred thereby, including, but not limited to, court costs and
reasonable attorney's fees, including appellate proceedings.
ARTICLE Xl
OTHER PROVISIONS
Section 11.1 DEFINITION AND LIABILITY OF LANDLORD. The term "Landlord"
as used in this Lease shall mean only the owner or mortgage in possession for
the time being of the building in which the Leased Premises are located or the
owner of a leasehold interest in said building or the land thereunder so that in
the event of sale of said building or leasehold interest or an assignment of
this Lease, or a demise of said building or land Landlord shall be and in hereby
entirely freed and relieved of all obligations of Landlord subsequently
accruing. It is specifically understood and agreed that there shall be no
personal liability of Landlord in respect to any of the covenants, conditions or
provisions of this Lease; in the event of a breach or default by Landlord of any
of its obligations under this Lease, Tenant shall look solely to the equity of
the Landlord in the Shopping Center for the satisfaction of Tenant's remedies.
Section 11.2 RELATIONS OF THE PARTIES. Nothing contained in this Lease
shall be deemed or construed as creating the relationship of principal and agent
or a partnership or joint venture between the parties hereto, it being
understood and agreed that neither the method of computing rents nor any other
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provision contained herein nor any acts of the parties hereto shall be deemed to
create any relationship between the parties other than that of Landlord and
Tenant.
Section 11.3 SECURITY DEPOSIT. Tenant has deposited with Landlord the
sums set forth in Paragraph 1.1 (l) as security for the performance by Tenant of
its obligations under this Lease. Landlord shall use, retain or apply all or any
part of such Security Deposit, without obligation for interest, to the extent
required to cure any default by Tenant under this Lease. If Tenant complies with
all of the terms and conditions of this Lease, the Security Deposit or balance
thereof; shall be resumed to Tenant at the expiration of the Term. In the event
of a sale of the Shopping Center or assignment of this Lease by Landlord to any
person other than a mortgagee, Landlord shall have the right to transfer the
security to its vendee or assignee, subject to the provisions of this Lease, and
thereupon Landlord shall be released from any liability with respect to such
security deposit, such vendee or assignee to be solely responsible to Tenant
therefore. Tenant shall not assign or encumber its interest in the security
deposit, and neither Landlord nor its successors and assigns shall be bound by
any attempted assignment or encumbrance.
Section 11.4 INDEMNITY. Tenant, during the Term, any extension or
renewal thereof, and any period in which Tenant occupies or uses the Leased
Premises, shall indemnify and save harmless Landlord, its agents, servants and
employees and Landlord's lessor, if any, from and against any and all claims and
demands whether for injuries to persons or loss of life, or damage to property,
related to or arising in any manner whatsoever out of the use and occupancy of
the Leased Premises by Tenant or occasioned wholly or in part by any act or
omission of Tenant, its agents, contractors, employees, servants, lessees,
concessionaires, invitees, licensees and customers. In the event Landlord shall,
without fault on its part, be made a party to any litigation commenced by or
against Tenant, then Tenant shall protect and hold Landlord harmless and shall
pay all costs, expenses and attorney's fees incurred by Landlord in connection
with such litigation.
Section 11.5 DAMAGE TO PROPERTY OR PERSONS. Except with respect to the
gross negligence or the willful and wanton acts of Landlord, its agents and
employees, Landlord shall not be liable for any loss of or damage to property of
Tenant or of others located in the Leased Premises or the Shopping Center, by
theft or otherwise, nor for any loss or damage whatsoever to any property which
Tenant could remove at the end of the Term as provided in Section 11.7 hereof,
Landlord shall not be liable for any injury or damage to persons or property or
to the interior or the Leased Premises resulting from fire, explosion, failing
plaster, steam, gas, electricity, water, rain or snow or leaks from any part of
the Leased Premises or from the pipes, appliances or plumbing works or from the
roof; street or subsurface of from any other place or by dampness or by any
other cause of whatever nature; Landlord shall not be liable for any such injury
or damage caused by other tenants or any person(s) either in the Leased Premises
or elsewhere in the Shopping Center, or by occupants of property adjacent to the
Shopping Center, or by the Public, or by operations in the construction of any
private, public, or quasi-public work; Landlord shall not be liable for any
latent defect in construction except for a period of one (1) year from the date
of the general construction of the Leased Premises (the parties agree that any
liability of Landlord under the preceding clause shall be limited to cost of
repair only; Landlord shall not be responsible for damage or loss of property of
Tenant kept or stored on the Leased Premises.
Section 11.6 ASSIGN OR SUBLETTING . Tenant shall not assign this Lease
or sublet all or any part of the Leased Premises without the prior written
consent of Landlord and upon such terms and conditions as may be mutually agreed
upon by the parties. Any assignment or sublease by Tenant shall be only for the
purposes specified in Section 1.1 hereof and for no other purpose, and in no
event shall any assignment or sublease of the Leased Premises release or relieve
Tenant from any of its obligations under this Lease. Consent of Landlord to any
assignment or subletting shall be in Landlord's sole and absolute discretion.
In the event Tenant shall assign its interest in this Lease or sublet
the Leased Premises for rentals in excess of those rentals served thereunder,
Tenant shall pay all of such excess rent to Landlord as additional rent.
Any proposed assignee or subtenant of tenant shall assume Tenant's
obligations hereunder and deliver to Landlord an assumption agreement in form
satisfactory to Landlord within ten (10) days after the effective date of the
assignment.
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Section 11.7 SURRENDER OF PREMISES. At the expiration or termination of
the tenancy hereby created, Tenant shall surrender the Leased Premises in good
condition and repair, reasonable wear and tear excepted, and Tenant shall
surrender all keys for the Leased Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations, on locks,
safes and vaults, if any, in the Leased Premises. Tenant's obligations to
observe or perform this covenant shall survive the expiration or other
termination of this Lease.
Prior to the expiration or sooner termination of this Lease, Tenant
shall remove any and all trade fixtures, equipment and other unattached items
which Tenant may have installed, in the Leased Premises, including, but not
limited to, counters, shelving, show cases, chairs and unattached movable
machinery purchased or provided by Tenant and which are susceptible of being
moved without damage to the building of which the Leased Premises are a part.
Tenant shall repair any, damage to the Leased Premises caused by its removal of
such fixtures and movable. In the event Tenant does not make such repairs,
Tenant shall be liable for and agrees to pay Landlord's cost and expenses in
making such repairs, together with a sum equal to twenty percent (20%) of such
costs and expense to cover Landlord's overhead in making such repairs for
Tenant. Tenant shall not remove any plumbing or electrical fixtures or
equipment, heating or air conditioning equipment, floor coverings (including but
not limited to wall-to-wall carpeting), walls or ceilings, all of which shall be
deemed to constitute a part of the interest and estate of Landlord nor shall
Tenant remove any fixtures or machinery that were furnished or paid for by
Landlord whether initially installed or replaced. The Leased Premises shall be
left in a broom-clean condition. If Tenant shall fail to remove its trade
fixtures or other property as provided in this Section 11.7, such fixtures and
other property not removed by Tenant shall be deemed abandoned by Tenant and at
the option of Landlord shall become the property of Landlord's option may be
removed by Landlord at Tenant's expense plus twenty percent (20%) as herein
before provided, or placed in storage at Tenant's expense, or sold or otherwise
disposed of, in which event the proceeds of such sale or other disposition shall
belong to Landlord.
Section 11.8 HOLDOVER BY TENANT. In the event that the Tenant shall
hold the Leased Premises after the expiration of the Term without the express
written consent of Landlord, and provided further that the Landlord has accepted
rental from the Tenant during the holdover period, such holding over shall he
deemed to have created a tenancy from month to month terminable on fifteen (15)
days written notice by either party to the other, upon a monthly rental basis,
and otherwise subject to all the terms and provisions of this Lease, except as
contemplated to the contrary in this Section 11.8. Such monthly rental shall be
computed on the basis of one-sixth (1/6) of the sum of all rents payable to
Tenant to Landlord during the preceding twelve (12) months of the Term
(including, but not limited to, Minimum Rent and Percentage Rent) and all other
additional charges provided by this Lease. During such monthly tenancy Landlord
shall have the right at any time to enter the Leased Premises to show the Leased
Premises to prospective tenants.
If Tenant fails to surrender the Leased Premises upon the expiration of
the Term, in addition to other liabilities to Landlord accruing therefrom,
Tenant shall indemnify and hold Landlord harmless from loss or liability
resulting from such failure, including without limitation, any claims made by
any succeeding tenant founded on such failure.
Section 11.9 LIEN OF LANDLORD FOR RENTS, TAXES AND OTHER SUMS. Landlord
shall have and Tenant hereby grants, a security interest in any furnishings,
equipment, fixtures, retail merchandise and other property of any kind belonging
to Tenant, or the equity of Tenant therein, located on or derived from
activities conducted in or upon the Leased Premises. The security interest is
granted for the purposes of securing the payment of Minimum Rent, Percentage
Rent, other charges, assessments, penalties and damages herein covenanted to be
paid by Tenant, and for the purposes of securing the performance of all other
obligations of Tenant hereunder. Upon Tenant's default or breach of any
covenants of this Lease, Landlord shall have all remedies available under the
law of the State of Florida, including, but not limited to, the right to enforce
this lien pursuant to distress proceedings as provided in Chapter 83, Florida
Statutes.
Section 11.10 LIENS. Tenant shall discharge any lien filed against the
Shopping Center or any part thereof for work done or materials furnished at
Tenant's request with respect to the Leased Premises within ten (10) days after
such lien is filed. If Tenant fails to keep this covenant, in addition to any
other remedies available to Landlord under this Lease or Tenant agrees to pay
Landlord a sum equal to the amount of the lien thus discharged by Landlord plus
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all costs and expenses, including, without limitation, attorney's fees and court
costs, incurred by Landlord in discharging such lien.
Tenant shall never, under any circumstances, have the power to subject
the interest of the Landlord in the Premises to any construction, mechanics' or
materialmen's lien or liens of any kind, nor shall any provision in this Lease
ever by construed as empowering the Tenant to encumber or cause the Landlord to
encumber the title or interest of Landlord in the Premises. In order to comply
with the provisions of Section 713.10, Florida Statues, it is specifically
provided that neither the Tenant nor anyone claiming by, through or under the
Tenant, including but not limited to, contractors, subcontractors, materialmen,
mechanics and laborers, shall have any right to file or place any construction,
mechanics' or materialmen's liens of any kind whatsoever upon the Premises nor
upon any building or improvement thereon, nor upon the interest of the Landlord
in the Premises or any building or improvement thereon, and any such liens are
specifically prohibited. All parties with whom the Tenant may deal are put on
notice that the Tenant has no power to subject the Landlord's interest to any
claim or lien or any kind of character, and all such persons who are dealing
with the Tenant may look solely to the credit of the Tenant, and not to the
Landlord's interest or assets.
Section 11.11 LATE CHARGE. Tenant acknowledges that late payment by
Tenant to Landlord or rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount which would be
extremely difficult and impractical to ascertain. Such costs include, but are
not limited to, processing and accounting charges. Therefor, in the event Tenant
shall fail to pay any installment of rent or any sums due hereunder after such
amount is due Tenant shall pay to Landlord as additional rent a late charge
equal to 5% of all sums past due and said charge shall be due and payable
immediately as additional rent. In addition, any amounts due pursuant to the
terms of this Lease and any late charges not paid within thirty (30) days of the
due date shall incur interest at the rate of twelve percent (12%) per annum.
Section 11.12 CONSENTS. With respect to any provisions of this Lease
which either provides or is held to provide that Landlord shall not unreasonably
withhold or unreasonably delay any consent or approval Tenant shall not be
entitled to make any claim for, and Tenant hereby expressly waives any claim for
damages incurred by Tenant by reason of Landlord's failure to comply therewith,
it being understood and agreed that Tenant's sold remedy therefor shall be an
action for specific performance.
Section 11.13 WAIVER OF RIGHT OF REDEMPTION. Tenant hereby expressly
waives any and all rights of redemption conferred by statute or otherwise.
Section 11.14 NOTICES. Unless specified to the contrary elsewhere in
the Lease, whenever notice or any other communication shall or may he given or
served to either of the parties by the other, each such notice or communication
shall be sent by registered or certified mail with return receipt requested to
the respective addresses of the parties as contained herein or to such other
address as either party may from time to designate in writing to the other. Any
notice or communication under this Lease shall be deemed to have been given or
served at the time it is placed in the mails with sufficient postage prepaid and
shall he valid and binding, regardless of whether such notice is resumed
undeliverable or the receipt of such notice is otherwise unacknowledged.
Section 11.15 RECORDING AND SHORT FORM LEASE. Tenant agrees not to
record this Lease without the express prior written consent of Landlord and
further agrees to execute, acknowledge and deliver at any time after the date of
this Lease, at the request of landlord, "Short Form Lease" for recording. All
recording costs, fees or charges due and payable upon the recording of such Form
Lease (including, without limitation, any and all taxes due or collectible upon
such recording) shall be payable in full by the party recording same.
Section 11.16 ENTIRE AND BINDING AGREEMENT: APPLICABLE LAW. This Lease
contains all of the agreements between the parties hereto, and it may not be
modified in any manner other than by agreement in writing, signed by all the
parties hereto or their successors in interest The terms, covenants and
conditions contained herein shall inure to the benefit of an be binding upon
Landlord and Tenant and their respective successors and assigns, except as may
be otherwise expressly provided in this Lease. This Lease and the rights and
duties of the parties hereunder, shall be construed in accordance with the laws
of the State of Florida.
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Section 11.17 PROVISIONS SEVERAL. If any term or provisions of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be held to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of this Lease, or the application of such term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable shall not be affected thereby and each term and provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.
Section 11.18. CAPTIONS. The captions contained herein are for
convenience and reference only and shall not be deemed a part of this Lease or
construed as in any manner limiting or exemplifying the terms and provisions of
this Lease to which they relate.
Section 11.19 RADON GAS. Florida Statute 404.056(8). Radon gas is a
naturally occurring radioactive gas that when it is accumulated in a building in
sufficient quantities may present health risks to persons who are exposed to it
over time. Levels of Radon that exceed federal and state guidelines have been
found in building in Florida. Additional information regarding radon and radon
testing may be obtained from your county health unit.
Section 11.20 NO OPTION. The submission by Landlord to Tenant of this
Lease shall be deemed solely for Tenant's consideration and not for acceptance.
Such submission shall have no binding force or effect, shall not constitute any
rights or impose any obligations upon either party. The execution and return of
this Lease by Tenant to Landlord shall be deemed Tenant's offer to lease the
Leased Premises. This Lease shall have no binding force and effect unless and
until Tenant and Landlord have executed this Lease and a duplicate executed
original hereof shall have been returned by Landlord to Tenant.
Section 11.21 BROKERS COMMISSION. The Tenant represents and warrants to
Landlord that there are not claims for brokerage commissions or finders fees in
connection with the execution of this Lease, except as listed below, and agrees
to indemnify, defend and save the Landlord harmless from all liabilities arising
from any such claim (including, without limitation, the cost of counsel fees in
connection therewith) except as set forth in Section 1.1(q).
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IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease
as of the day and year first above written, each acknowledging receipt of any
executed counterpart hereof.
Signed, Sealed and Delivered in the Presence Of:
LANDLORD: Sterling Tequesta/Trails
Limited Partnership
Sterling I Florida, L.C.,
Its General Partner
/s/ Michael Fimiani By: /s/Duane J. Stiller
- -------------------- --------------------------------
ITS: Member
DATE: 10/18/96
------------------------------
TENANT:The Commercial Bancorp, Inc.
/s/ Michael Fimiani By: Gary G. Campbell
- -------------------- --------------------------------
/s/ Harvey Buckmaster ITS: President
DATE: 10/18/96
------------------------------
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LEASE RIDER
LANDLORD: Sterling Tequesta/Trails, Limited Partnership
TENANT: The Commercial Bancorp, Inc.
DATE OF LEASE: October 18, 1986
The provisions of this Rider shall take precedence over any conflict between the
provisions of this Rider and the provisions of the Lease attached hereto:
SECTION 1. OPTION TO RENEW: Provided Tenant is not in default under any of the
terms and conditions of this Lease agreement or Rider section, Landlord grants
to Tenant One ( I ) option to extend the term of this Lease agreement for Five
(5) years, which options shall be exercised by Tenant giving written notice to
Landlord at least one hundred eighty ( 180) days prior to the expiration of the
original Lease Term, and if applicable, any extended term. Time is of the
essence with respect to Tenant's delivery of said written notice to Landlord.
The terms during the option period shall be the same as the terms of the Lease,
except that the Minimum Rent will equal the then adjusted annual rent as
provided for in this Lease and there will be no Rental Credit.
SECTION 2. TERMINATION OF EXISTING LEASE: If Landlord is unable to terminate the
Lease with the existing Tenant, First State Bank, by November I, l 996 this
Lease shall become null and void.
SECTION 3. TENANT'S RIGHT TO TERMINATE: Notwithstanding the date herein
definitely fixed for the end and expiration of the term of this Lease, at the
end of the third (3rd) anniversary of the Rent Commencement Date, Tenant will
have the absolute and unconditional right to terminate the Lease as modified
hereby, and end the term hereof, provided Tenant give Landlord not fewer than
one hundred and twenty ( 120) days' prior written notice of said termination,
which notice will set forth the termination date; on such date the Lease as
modified hereby, and the term hereof will end and expire as fully and completely
as if such date were the day herein definitely fixed for the end and expiration
of the Lease as modified hereby, and Tenant will then vacate and surrender the
Premises to Landlord in the condition required by the Lease as modified hereby.
If the date of termination is not the last day of a calendar month, Minimum
Annual Rent and additional rent for the month in which such date occurs will be
appropriately apportioned. Tenant acknowledges that if it does exercise its one
time right to terminate as set forth above on the termination of the Lease as
modified hereby, Landlord will be paid within thirty days of the Termination
Date an amount which will be equal to one year's payment of Minimum Rent as
described in Section l .1 (f) and all operating expenses as described in Section
2.6 for one year being the fourth (4th) year of the primary term. Accordingly,
if Tenant holds over after the termination of the Lease as modified hereby,
Tenant will pay to Landlord, in addition to the aforementioned sum commencing
the day after the termination a charge for use and occupancy of the Premises as
outlined in the Lease. Tenant's payment for such use and occupancy is not be
construed as giving Tenant the right to occupy all or any part of the Premises
after the termination of the Lease as modified hereby.
SECTION 4. REGULATORY AUTHORITY APPROVAL AND TAKEOVER: Notwithstanding any other
provisions contained in this lease, in the event the Lessee is closed or taken
over by the banking authority of the State of Florida, or other bank or
association supervisory authority, the Lessor may terminate the lease only with
the concurrence of such banking authority or other bank supervisory authority
and any such authority shall in any event have the election either to continue
or to terminate the lease: Provided, that in the event this lease is terminated,
the maximum claim of Lessor for damages or indemnity for injury resulting from
the rejection or abandonment of the unexpired term of the lease shall in no
event be in an amount exceeding the rent reserved by the lease, without
acceleration, for the year next succeeding the date of reentry of the Lessor,
whichever first occurs whether before or after the closing of the bank or
association, plus an amount equal to the unpaid rent accrued, without
acceleration up to such date.
23
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Signed this 18th day of October , 1996.
WITNESS: LANDLORD: STERLING TEQUESTA/
TRAILS LIMITED PARTNERSHIP
Sterling I Florida, L.C.
/s/ Michael Fimiani General Partner
- ------------------------------
BY: /s/ Duane J. Stiller
- ------------------------------ ----------------------------------
Duane J. Stiller
ITS: Member
Date: 10/18/96
--------------------------------
WITNESS: TENANT: THE COMMERCIAL
BANCORP, INC.
/s/ Michael Fimiani BY: /s/ Gary G. Campbell
- ------------------------------ ----------------------------------
Gary G. Campbell
ITS: President
/s/ Harvey Buckmaster DATE: 10/18/96
- ------------------------------ ----------------------------------
24
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EXHIBIT "A"
LEGAL DESCRIPTION
THE TRAILS SHOPPING CENTER
PARCEL 1
Part of Government Lots 2 and 3, Section 16, Township 14 South, Range 32 East;
part of the Henry Yonge Grant, Section 41, T14S, I 32E and part of Lots 3 and 4,
THE TRAILS SUBDIVISION, UNIT 3, as shown on map in Map Book 33, Page 156 of the
Public Records of Volusia County, Florida, and being more particularly described
as follows: Beginning at the Southeast corner of Lot 4, said TRAILS SUBDIVISION,
UNIT 3, said point of beginning being also the Southwesterly corner of
Government Lot 3, Section 16, T14S, R32E; thence N. 89 14'52" E 172.33 feet
along the said Government Lot 3 Southerly line to the Westerly Right-of Way line
of NOVA ROAD, a 100-foot R/W road; thence NO 40'50" E 50.10 feet along the said
NOVA ROAD Westerly R/W line; thence S 89 14'52" W 174.75 feet to the said
Government Lot 3 Westerly line; thence N 0 04'53" W 100 feet along the said
Government Lot 3 Westerly line; thence N 89 14'52" E 179.58 feet to the Westerly
R/W line of said NOVA ROAD: thence NO 40'50" E 67.70 feet along the said NOVA
ROAD Westerly R/W line to a S.D. concrete monument marking the point of
curvature of a curve concave to the West with a central angle of 28 22'14" and a
radius of 1860.08 feet thence Northerly along the said curve and NOVA ROAD
Westerly R/W line for an arc distance of 921.04 feet to a SRD concrete monument
marking the point of tangency thereof; thence N25 39'57" W 223.56 feet along the
said NOVA ROAD Westerly R/W line to its intersection with the Southerly Right-of
Way line of THE TRAIL, as shown on map of THE TRAILS SUBDIVISION, UNIT 3 PARTIAL
REPLAT, recorded in Map Book 33, page 189 of the Public Records of Volusia
County, Florida; thence N74 06'28" W119.53 feet along the said TRAIL Southerly
R/W line; thence N89 33'17" W 253.75 feet along the said TRAIL Southerly R/W
line to the point of curvature of a curve concave to the South with a central
angle of 16 18'37" and a radius of 614.81 feet; thence Westerly along the said
curve and TRAIL Southerly R/W line for an arc distance of 175.02 feet to the
point of compound curvature of a curve concave to the Southeast with a central
angle of 76 07'55" and a radius of 15 feel, the said point also being the point
of intersection of the Easterly Right of Way line of STONEHAVEN TRAIL, as shown
on map of THE TRAILS SUBDIVISION, UNIT 7, recorded in map Book 34, Page 90 of
the Public Records of Volusia County, Florida; thence Southerly along the said
curve and STONEHAVEN TRAIL Easterly R/W line for an arc distance of 19.93 feet
to the point of compound curvature of a curve concave to the East with a central
angle of 25 29'49" and a radius of 409.23 feet; thence Southerly along the said
curve and STONEHAVEN TRAIL Easterly R/W line for an arc distance of 182.11 feet
to the point of tangency thereof; thence S 27 29'38" E 474.31 feet along the
said STONEHAVEN TRAIL Easterly R/W line to the point of curvature of a curve
concave to the Southwest with a central angle of 5 24' 29" and a radius of 275
feet; thence Southerly along the said curve and STONEHAVEN TRAIL Easterly R/W
line for an arc distance of 25.96 feet; thence N 62 30' 22" E 31 feet; thence S
27 29'38" E 30 feet; thence S 62 30'22" W 35.52 feet to a point on a non tangent
curve concave to the West with a central angle of 1 59'56" and a radius of 275
feet, said point also being on the said STONEHAVEN TRAIL Easterly R/W line;
thence Southerly along the said curve and STONEHAVEN TRAIL Easterly R/W line for
an arc distance of 9.59 feet to a point on a non tangent curve concave to the
West with a central angle of 17 28'07" and a radius of 1360.08 feet; thence
Southerly along the said curve for a arc distance of 414.67 feet to the point of
tangency thereof; thence S 2 40'50" W 250.79 feet to the Southerly line of said
Lot 4, THE TRAILS, UNIT 3; thence N 88 45' 46" E 328.45 feet along said Lot 4
Southerly line to the point of beginning. Less and except that parcel for
Security First Federal described below. Exception for Security First Federal
Savings and Loan. Being a part of Section 41, Township 14 South, Range 32 East
(Henry Yonge Grant), U.S. Gov't. Lot 3, Section 16, Township 14 South, Range 32
East and U.S. Gov't Lot 2, Section 17, Township 14 South, Range 32 East and
being more particularly described as follows; Commence at the Intersection of
the Westerly right of way of Nova Road (SR415) a 100 foot right-of-way and the
Southerly line of U.S. Govt. Lot 3, Section 16. Township 14 South, Range 32
East; thence along the Westerly right of way of Nova Road N 02 40'50" E, 218.00
feet to a point of curvature, thence continue on said right of way by a curve
concave to the Southwest having a radius of 1860.08 feet a central angle of 14
27'06", an arc length of 469.16 feet, said arc being subtended by a chord
bearing of North 04 32'43" West 467.92 feet for the point of beginning, thence
South 78 13'44" West, 40.65 feet, thence North 59'15'58" West 138.22 feet;
thence North 19 30'12" East, 61.36 feet; thence North 68 30'12" East 105.00 feet
to a point in the Westerly right of way of Nova Road; thence along said Westerly
right of way being a curve concaye to the Southwest having a radius of 1860
25
<PAGE>
feet, a central angle of 5'02'42", for a arc length of 163.78 feet, said arc
being subtended by a chord bearing of South 14 17'37" East, 163.73 feet to the
point of beginning.
PARCEL 2
LAKE AREA
- ---------
Lying in U.S. Government Lot 2, Section 17, Township 14 South; Range 32 East,
and being a part of Lot 3, The Trails Subdivision, Unit 3, as shown on map in
Map Book 33, Page 156 of the Public Records of Volusia County, Florida. Lying
Westerly of Stonehaven Trail and Easterly of Woodridge as shown on map in Map
Book 35, Pages 159 and 160 of the Public Records of Volusia County Florida.
Begin at the Southeast corner of Woodridge as previously described said point
being on the Northerly right-of' way of Stonehaven Trail a 50 foot right-of way
as per plat The Trails Subdivision, Unit 7, as shown on map in Map Book 34, Page
90 of the Public Records of Volusia County, Florida: thence along said right
of-way of Stonehaven Trail for the (3) following courses and distances: (1)
Thence N 80 44'11" E 58.33 feet to a point of curvature of a curve being concave
to the Northwest; (2) Thence along said curve having a radius of 225.00 feet, a
central angle of 108 13'49" for an arc length of 425.02 feet said arc being
subtended by a chord bearing of N 26 37'] 6" E a distance of 364.59 feet to the
point of tangency of said curve; (3) Thence along the tangent of the previously
described curve N 27 29'38" W - 332.91 feet; Thence along the easterly boundary
of Woodridge for the (10) following courses and distances; (4) Thence S 62
30'22" W 121 feet; (5) Thence S 18 30'22" W - 80.00 feet; (6) Thence S 30 29'38"
E 77.37 feet; (7) Thence S 04 29'37" W - 63.97 feet; (8) Thence S 00 45 '49" E
45.00 feet; (9) Thence S 10 45'49" E 113.00 feet; (10) Thence S 18 14'11" W
36.00 feet; (11) Thence S 01 45'49: E 105.00 feet; (12) Thence S 42 15'49" E -
27 feet; (13) Thence S 09 15'49" E - 22.00 feet to the POINT OF BEGINNING.
PARCEL 3
LEGAL FOR SHOPPING CENTER ACCESS INGRESS AND EGRESS FOR VEHICLE STORAGE AREA .
A part of The Trails Subdivision, Unit No. 3, per Map Book 33, Page 156 of the
Public Records of Volusia County, Florida. A part of U.S. Government Lot 2,
Section 17, Township 14 South. Range 32 East and being more particularly
described as follows:Commence at the Southeast corner of Section 17, Township 14
South, Range 32 East; Thence S 88 45'46" W along the southline of Section 17, a
distance of 328.45 feet; Thence N 02 40'50" E 250.79 feet for the point of
beginning; Thence N 80 42'39" W 25.79 feet; Thence N 67 51'18" W 108.52 feet;
Thence N 02 44'03" W 92.94 feet to a point in the Southerly right of way of
Stonehaven Trail a 50 foot right-of-way; Thence along said right of way by a
non-tangent curve being concave to the Northwest having a radius of 275 feet a
central angle of 62 43'~ 3", for an arc length of 301.04 feet, said arc being
subtended by a chord bearing of N 17 35'52" a distance of 286.24 fee'; Thence
leaving said last described line by a non radial curve, said arc being concave
to the West having a radius of 1360.08 feet a central angle of 17 28'07" for an
arc length of 414.67 feet, said arc being subtended by a chord bearing of S 06
05'40 E a distance of 413.08 feet.
26
<PAGE>
EXHIBIT "C"
CONSTRUCTION OF LEASED PREMISES
SECTION "A": INITIAL CONDITION OF THE PREMISES
- ------------------------------------------------
Tenant has inspected the leased Premises and by executing this Lease Tenant
shall be deemed to have accepted the Leased Premises, in an "as is" condition,
and Landlord shall have no other obligations hereunder.
SECTION "B": WORK BY TENANT IN PREMISES AT TENANT'S EXPENSE
- -----------------------------------------------------------
All work by Tenant in the Premises shall be performed by Contractors approved in
advance by Landlord per the plans submitted by Tenant and approved by the
Landlord.
1. Utilities: Tenant shall directly arrange for utilities at the Tenant's
expense shall include, but are not limited to the following:
(a) All building, plumbing, occupancy and other required permits,
and furnish copies to the Landlord.
(b) Telephone outlet hook-up throughout bay.
(c) All required utility meters and fees.
2. Non-Combustible Construction: All Tenant construction shall be
non-combustible.
3. Discipline: Tenant shall enforce strict discipline and good order among the
employees of Tenant's contractors and subcontractors.
4. Tenant's Work: Tenant shall commence Tenant's Work and diligently and
continually proceed to complete the Premises in accordance with the approved
Final Plans and permits.
5. Permits: Tenant shall obtain all necessary permits from the jurisdictional
authority and forward a copy of the permits to the Landlord prior to the start
of any work in the Premises.
6. Certificate of Occupancy: Tenant shall secure an occupancy permit from the
jurisdictional authorities, and provide a copy to Landlord upon receipt.
7. Sub-Contractors: Tenant shall provide Landlord with a list of all
contractors, suppliers and sub-contractors, prior to commencing any
improvements.
8. Insurance: Tenant shall provide Landlord with copies of Certificate of
insurance and Competency from all contractors and sub-contractors.
9. Release of Liens: Tenant shall provide Landlord with releases of lien in a
form acceptable to Landlord naming Landlord and others as designated by Landlord
as progress payments are made.
Upon completion of the work Tenant shall obtain Final Release of Liens from
all sub-contractors and contractors within ten (10) working days of completion
of work prior to final acceptance by Landlord.
SECTION "C": WORK BY LANDLORD IN PREMISES AT TENANT'S EXPENSE:
- --------------------------------------------------------------
1. Roof Openings Any roof opening required, will be performed by l Landlords
roofing contractor, at Tenant's expense. Such openings will include supporting
27
<PAGE>
structures, angles, curies, flashing, ducts, vents and grills. I Landlord may
refuse to approve any openings which, in Landlord's judgment exceed the
capability of the structural system.
SECTION "D": PROCEDURE
- ----------------------
1. Tenant Coordinator: Landlord's Tenant Coordinator shall be responsible for
the review of each Tenant's Design Drawings and Final Plans. All questions
pertaining to the design and construction of Tenant's Premises and all plans
submittals shall be directed to the Tenant Coordinator at the following address:
Duane J. Stiller
THE STERLING COMPANIES
303 Royal Poinciana Plaza
Palm Beach, Florida 33480
(407) 835-1810
2. Plans: Tenant shall supply Landlord with two (2) sets of plans and
specifications for Landlord's approval. These plans should include reflected
ceiling plan, interior layout and finishes, plumbing, mechanical and electrical
plans. If Landlord does not approve the plans Landlord shall note their reasons
for such disapproval and Tenant shall, within ten (10) days after receipt of
such "disapproval" Plans, correct any deficiencies noted by Landlord and
re-submit the revised Plans to Landlord, for Landlord's approval. Tenant's work
shall be performed only in accordance with the approved plans.
3. Cleaning of Premises: Tenant shall maintain the Premises and surrounding
areas in a clean and orderly condition during construction and merchandising.
Tenant shall promptly remove all unused construction materials, equipment,
shipping containers, packaging, debris, and flammable waste, resulting from
Tenant's construction at Tenant's Expense.
4. Violations: In the event the Tenant is notified of any violations of codes,
ordinance regulations, requirements or guidelines, either by Jurisdictional
authorities or by the Landlord, Tenant shall immediately notify Landlord and, at
its expense, correct such violations within ten (10) calendar days after such
notification or within a reasonable period of time.
28
<PAGE>
TRAILS SHOPPING CENTER
EXHIBIT "D
SIGN CRITERIA
A. SIGN CRITERIA
-------------
1. All signs shall be positioned over the storefront as directed in these
sign criteria.
2. All wording of signs shall not include the product sold unless it is in
the company name.
3. No animated, flashing, audible or smoke emitting signs will be
permitted.
4. No exposed lamps or tubing will be permitted.
5. No signs shall bear the UL label, and their installation shall comply
with all local building and electrical codes.
6. No exposed raceways, crossovers or conduits will be permitted.
7. All cabinets, conductors, transformers and other equipment shall be
concealed. Visible fasteners will not be permitted.
8. Electrical service to all signs shall be on Tenant's meter.
9. Tenant shall remove all previous signs and shall patch and paint fascia
to match existing building color prior to installation of Tenant's
signage.
B. SIGN SIZES
----------
1. The overall length of the sign shall not exceed 2/3 of the width of the
storefront. Maximum height shall be 18 inches.
2. Major Tenant signage: Size will be at Landlord's discretion and subject
to its approval, and will be mounted as directed by these sign
criteria.
C. SIGN TYPES
----------
1. Tenant shall provide the following sign types at Tenant's expense prior
to opening for business:
(a) One (1) Individual illuminated channel letter canopy sign with
bronze metal returns to be placed on the canopy above the
storefront. Color of faces to be subject to prior approval of
Landlord. Color of faces must be requested by Tenant as part
of Tenant's Sign Plans submission.
(b) One (1) under canopy hanging sign with the Tenant's same name
identification and script as the Tenant's canopy sign per
Landlord's design specifications.
29
<PAGE>
(c) One (1) storefront identification sign at the entrance to the
Leased Premises with the Tenant's same name identification and
script as the Tenant's canopy sign per Landlord's design
specifications.
D. CONSTRUCTION REQUIREMENTS
-------------------------
1. All signs, cabinets, fastenings and clips shall be of enameling iron
with porcelain enamel finish, stainless steel, aluminum, brass or
bronze, or carbon-bearing steel with factory painted finish. No black
iron material or any type will be permitted.
2. All letters and/or cabinets shall be fabricated using full welded
construction.
3. All penetrations of the building structure required for sign
installation shall be neatly sealed.
4. No labels will be permitted on the exposed surface of signs except
those required by local ordinance, which shall be applied in an
inconspicuous location.
5. Tenant's sign contractor shall repair and/or replace any damage caused
by his work.
6. Tenant shall be fully responsible for work performed by Tenant's sign
contractor.
7. Corrosion resistant threaded rods or anchor bolts with sleeves shall be
used to mount letters. Angle clips attached to sides of letters will
not be permitted.
E. APPROVALS
---------
1. All permits for signs and their installation shall be obtained by
Tenant or its representative, if required.
2. Tenant shall submit to Landlord for approval, before fabrication, one
(1) sepia and four (4) prints of detail drawings indicating the
location, size, layout, design and color of the proposed sign,
including all lettering.
3. Tenant shall be responsible for the fulfillment of all requirements of
these sign criteria, and shall submit samples of sign materials if
requested by Landlord.
30
<PAGE>
Exhibit 23.1
Consent of Igler & Dougherty, P.A.,
(Included in the Opinion Letter)
31
<PAGE>
Exhibit 23.2
Consent of Hacker, Johnson, Cohen & Grieb
32
<PAGE>
Accountant's Consent
The Commercial Bancorp, Inc.
Ormond Beach, Florida:
We consent to the use of our report dated December 12, 1996 on the balance sheet
of The Commercial Bancorp, Inc. as of November 30, 1996 and the related
statements of operations, stockholders' equity and cash flows for the period
from August 15, 1996 to November 30, 1996, included in the Prospectus included
in the Registration Statement of The Commercial Bancorp, Inc. on Form SB-2 and
to the reference to our firm under the heading "Experts" in the Prospectus.
HACKER, JOHNSON, COHEN & GRIEB
Tampa, Florida
January 2, 1997
