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As filed with the Securities and Exchange Commission on December 31, 1997
----
Registration No. 333-39609
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TARPON COAST BANCORP, INC.
(Name of Small Business Issuer as specified in its charter)
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FLORIDA 6712 65-0772718
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification Number)
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4055 TAMIAMI TRAIL
PORT CHARLOTTE, FLORIDA 33952
(941) 625-1744
(Address and telephone number of principal place of business)
LEWIS S. ALBERT
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
TARPON COAST BANCORP, INC.
4055 TAMIAMI TRAIL
PORT CHARLOTTE, FLORIDA 33952
(941) 625-1744
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
JOHN P. GREELEY, ESQUIRE CHESTER E. BACHELLER, ESQUIRE
SMITH, MACKINNON, GREELEY, HOLLAND & KNIGHT LLP
BOWDOIN & EDWARDS, P.A. 400 NORTH ASHLEY DRIVE
255 SOUTH ORANGE AVENUE SUITE 2300
SUITE 800 TAMPA, FLORIDA 33602-4300
ORLANDO, FLORIDA 32801 (813) 227-8500
(407) 843-7300 FACSIMILE (813) 229-0134
FACSIMILE (407) 843-2448
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
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. [ ]
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION. DATED DECEMBER 31, 1997
PROSPECTUS
1,000,000 SHARES
TARPON COAST BANCORP, INC.
(a holding company for Tarpon Coast National Bank, National Association)
Common Stock
All of the shares of common stock, par value $.01 per share (the "Common
Stock"), offered hereby are being sold by Tarpon Coast Bancorp, Inc. (the
"Company"), a Florida corporation and a proposed bank holding company organized
to own all of the common stock of Tarpon Coast National Bank, a national bank
association (in organization) to be located in Port Charlotte, Florida (the
"Bank"). Neither the Company nor the Bank has ever conducted any business
operations other than matters related to their initial organization and the
raising of capital. See "Business." There has been no public trading market for
the Common Stock. The Underwriter has advised the Company that it anticipates
making a market in the Common Stock following completion of this offering. See
"Underwriting" for a discussion of the factors considered in determining the
initial offering price. The Company expects that quotations for the Common Stock
will be reported on the OTC Bulletin Board under the symbol "____." Unless
otherwise waived by the Underwriter, shares of Common Stock will be sold only in
minimum lots of 250 shares ($2,500) and any one investor (together with the
investor's affiliates) will be permitted to purchase a maximum of 50,000 shares
($500,000).
THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK.
INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO
LOSE THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" ON PAGE _.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Underwriting Discounts and
Price to Public Commissions (1)(2) Proceeds to Company (3)
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Per Share $10.00 $0.825 $9.175
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Total (4) $10,000,000 $825,000 $9,175,000
=====================================================================================================
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(1) The Underwriter has agreed with the Company that there will be no
Underwriting Discounts and Commissions for sales to certain investors
identified to the Underwriter by the Company. See "Underwriting."
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated offering expenses payable by the Company of
$140,135, which amount does not include certain organizational expenses
which were $99,855 as of August 31, 1997, and which will continue to be
incurred until the Bank commences operations.
(4) The Company has granted the Underwriter a 30-day option to purchase up to
150,000 additional shares of its Common Stock solely to cover
over-allotments, if any. If the Underwriter exercises such option in full,
the total Price to Public, Underwriters Discounts and Commissions and
Proceeds to the Company will be $11,500,000, $948,750 and $10,551,250,
respectively.
The shares of Common Stock are offered by the Underwriter, subject to
prior sale, when, as and if delivered to and accepted by it, and subject to the
right of the Underwriter to withdraw, cancel or modify such offer and to reject
orders in whole or in part. It is expected that delivery of the certificates
representing shares of Common Stock will be made on or about _________ through
The Depository Trust Company or at the offices of Robert W. Baird & Co.
Incorporated, Milwaukee, Wisconsin.
ROBERT W. BAIRD & CO.
INCORPORATED
THE DATE OF THIS PROSPECTUS IS ______________________.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any State.
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[INSERT A MAP DEPICTING THE PROPOSED BANK'S PRIMARY MARKET AREA AND SITE OF ITS
MAIN OFFICE TOGETHER WITH A PROXIMITY MAP OF THE SOUTHERN PORTION OF FLORIDA
HIGHLIGHTING THE COUNTIES COMPRISING ITS EXTENDED MARKET AREA.]
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, ANY
OTHER GOVERNMENTAL AGENCY OR OTHERWISE.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK OF
THE COMPANY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT-COVERING TRANSACTIONS, AND PENALTY BIDS. ANY OF THE FOREGOING
TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
AVAILABLE INFORMATION
The Company is not currently a reporting company pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), but will file
the reports required to be filed thereunder for the Company's 1997 fiscal year
and for any other periods for which the Exchange Act's requirements apply to the
Company. The Company, which will use a December 31 fiscal year end, intends to
furnish its stockholders with annual reports containing audited financial
information and, for the first three quarters of each fiscal year, quarterly
reports containing unaudited financial information.
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PROSPECTUS SUMMARY
The following Summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context clearly suggests otherwise, references in this Prospectus to
the Company include the Bank. Except as otherwise indicated, all information in
this Prospectus assumes no exercise of the Underwriter's over-allotment options.
THE COMPANY
The Company is a proposed bank holding company organized in August, 1997
under Florida law to own all of the common stock of the Bank. The Bank is
organized as a national banking association with depository accounts to be
insured by the Federal Deposit Insurance Corporation (the "FDIC") to the extent
permitted by law. The Bank intends to offer a full range of commercial and
consumer banking services primarily in the communities of Port Charlotte and
Punta Gorda, Charlotte County; and North Port, Sarasota County, Florida as well
as the surrounding extended market in Charlotte and Sarasota Counties. The
Company and the Bank have filed applications with all necessary bank regulatory
agencies, and assuming timely approval of the applications and the successful
completion of this offering, currently anticipate commencing business in the
first quarter of 1998. On December 11, 1997, the Office of the Comptroller of
the Currency (the "OCC") approved the Bank's charter application, subject to
certain terms and conditions specified in such approval ("OCC Preliminary
Approval"). The Company currently maintains its offices at 4055 Tamiami Trail,
Suite A-6, Port Charlotte, Florida 33952. The Company has entered into a
contract to purchase the real estate on which it will construct its main
facility. Upon completion of this facility, the Bank's address will be 1490
Tamiami Trail, Port Charlotte, Florida 33948. The Company's phone number is
(941) 625-1744.
STRATEGY
The objective of the Bank's organizers and management is to create a
customer-driven financial institution focused on providing high value to clients
by delivering products and services matched directly to their needs. Management
of the Company believes that such a bank can attract those clients who prefer to
conduct business with a locally-managed institution that demonstrates an active
interest in their business and personal affairs.
With an experienced staff expected to provide a superior level of
personalized service, management believes it will be able to generate
competitively priced loans and deposits. The Company anticipates that this
experienced staff will have access to current data processing systems selected
to deliver high-quality products and provide responsive service to clients. The
Company anticipates the Bank will enter into agreements with third-party service
providers to provide customers with convenient electronic access to their
accounts and other bank products through debit cards, voice response and home
banking. The use of third-party service providers is intended to allow the Bank
to utilize current technology while minimizing the costs of delivery. This "high
touch-high tech" manner of operations is expected by management to be appealing
to clients who have been receiving banking services in the depersonalized
environment of the Bank's larger competitors. See "Business - Business
Strategy."
MARKET AREA
The Bank anticipates that the primary market area ("PMA") for its banking
services will be the northern part of Charlotte County, Florida (including the
communities of Port Charlotte and Punta Gorda) and the southeastern part of
Sarasota County, Florida (including the community of North Port). The Bank
anticipates that its extended market area ("Extended Market Area") will
encompass all of Charlotte and Sarasota Counties. The Bank's main office will be
located in Port Charlotte, Florida, which is bordered by the communities of
Punta Gorda and North Port, all of which surround Charlotte Harbor on the
southwest Florida coastline. According to the Charlotte County Chamber
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of Commerce, Inc. Statistical Prospectus, the U.S. Department of Commerce rated
the Punta Gorda Metropolitan Statistical Area ("MSA"), of which Port Charlotte
is a part, the "#1 Fastest growing metropolitan employment area in the United
States" for the period from 1993 through 2005. Punta Gorda has also been ranked
by Money Magazine as one of the top five places to live in the United States in
each of the last two years, ranking second in 1996 and fourth in 1997, and in
each case, number one in the Southern United States. For the period from 1990
through 1996, the rate of growth in each of Port Charlotte, Punta Gorda, and
North Port exceeded 15%.
The area's business economy is represented by the construction, real
estate, retail trade, business and personal services, tourism, health care,
government, and agriculture industries. Major employers include Charlotte
Regional Medical Center, Fawcett Memorial Hospital and St. Joseph Hospital, in
health services; WalMart, K-Mart, Target, Home Depot, Toys-R-US and Sears, among
others in the retail sector; and, Charlotte County Schools, Charlotte County
Government, and the cities of Punta Gorda and North Port in the public sector.
COMPETITION
The banking industry in the Bank's market area has experienced significant
consolidation in recent years principally as the result of the liberalization of
interstate banking and branching laws. Many of the area's former community banks
have been acquired by large regional organizations headquartered outside of the
Bank's market area. This consolidation has resulted in the repricing of products
and services, the elimination of local boards of directors, and changes in
management and branch personnel and, in the perception of the Company's
organizers, a decline in the level of customer service. Because of the recent
changes in interstate banking regulations, this type of consolidation is
expected to continue.
Management believes that this competitive situation, when coupled with the
area's household stability and growing economic business base, creates a
favorable opportunity for a new commercial bank. Management's experience
indicates that a locally-managed community bank can attract customers by
providing highly professional personalized attention, responding in a timely
manner to product and service requests and exhibiting an active interest in
customers' business and personal financial needs. Assuming the closing of a
pending acquisition, the Company expects the Bank will be the only independent
commercial bank headquartered in the PMA.
BANK PREMISES
The Company has entered into a real estate purchase contract to acquire
approximately 1.1 acres of commercially zoned land on which it will construct
its main banking facility. The site is located at the intersection of U.S.
Highway 41 and Murdock Circle, a major intersection in Charlotte County. The
surrounding area is composed of mixed use commercial and industrial properties
(including the regional Town Center Mall and the Port Charlotte Industrial Park)
and within one-half mile of the center of the area's residential development.
The banking facility is anticipated to consist of approximately 7,800
square feet of office space and a community meeting room/ board room. The
facility would have five inside teller stations, three customer service platform
stations, three drive through lanes and a drive up ATM lane. It is anticipated
that the land acquisition cost will be approximately $875,000; building
construction costs and improvements will be approximately $984,000; and the
costs to equip and furnish the facility will be approximately $278,000. It is
anticipated that the Bank will begin occupancy of the facility during the fourth
quarter of 1998.
The Bank expects to commence its operations in the first quarter of 1998
in a leased temporary modular facility to be located on the Bank's permanent
site during the period of construction of the Bank's permanent facility. The
temporary facility will consist of approximately 1,960 square feet and will
include a drive-up window. The rental
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costs, including equipment, will be approximately $4,500 per month. Site work
necessary to accommodate the temporary facility will be approximately $44,000.
See "Business - Bank Premises."
MANAGEMENT
The Company has assembled an experienced senior management team and board
of directors with a shared vision and commitment to the success of the Bank.
Certain of the officers and directors of the Company and the Bank have
significant banking experience and familiarity with the Bank's primary service
area, having previously worked with banks serving the Southwest Florida
community. Lewis S. Albert, Chairman and Chief Executive Officer of the Company
and the Bank, has 20 years of experience serving the banking industry both in
executive management capacities and as a service professional. Mr. Albert most
recently served as Senior Vice President & Chief Financial Officer of Southwest
Banks, Inc., a multi-bank holding company headquartered in Southwest Florida
which grew from approximately $150 million in assets to over $500 million in
assets during his four year tenure until its sale to F.N.B. Corporation in 1997.
Mr. Albert was previously a partner with Deloitte & Touche, an international
public accounting and consulting firm, during which time his emphasis was
providing audit, tax and consulting services to the financial institutions
industry; including assisting in the organization a number of community banks on
behalf of his clients. Todd H. Katz, Vice Chairman, President and General
Counsel of the Company and the Bank, recently served as General Counsel and
managed the Shareholder Relations Department at Southwest Banks, Inc.
Previously, he served as outside counsel to financial institutions through his
association with Miller, Hamilton, Snider & Odom, a regional banking law firm
based in Mobile, Alabama. The Company also intends to hire two additional
experienced individuals to serve as Senior Vice Presidents of the Bank. One such
individual will serve as the Bank's Senior Lending Officer and have experience
in that capacity within the Bank's market area. The second such individual will
serve as the Bank's Senior Operations Officer and have experience in that
capacity with community banks in the Southwest Florida area. The Company's
directors believe that the many years of experience and existing contacts of the
senior officers offer the Bank a substantial opportunity to attract new
relationships for the Bank.
The remaining directors are business people that have lived in the
Charlotte County area for many years or have otherwise had significant business
interests in the community and have developed a number of business and personal
relationships which they believe will add to the success of the Company and the
Bank. The Company's directors believe that their long-standing ties to the
community, coupled with their combined business and banking experience, provide
them with the unique perspective of the area's needs and the desire for a new
independent bank under local control. They further believe that the community
will react favorably to this new enterprise.
3
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THE OFFERING
Securities offered........... 1,000,000 shares of Common Stock
Minimum purchase........ 250 shares ($2,500)
Maximum purchase....... 50,000 shares ($500,000)
Common Stock to be
outstanding after this
offering........................ 1,000,000 shares
Use of proceeds by the
Company..................... The net proceeds to the Company from this offering (assuming
no exercise of the over-allotment option) are estimated to be
$9,034,865. The Company will contribute $7.5 million of the
net proceeds of this offering to the Bank to capitalize the Bank
by purchasing all of the Bank's common stock to be issued.
The Bank will use approximately $875,000 to purchase real
estate for its main banking facility site, approximately $984,000
for the construction of its main office including land
improvements, and approximately $278,000 to purchase
furniture, fixtures and equipment and other necessary assets for
the Bank's operations. The organizers of the Company have
advanced approximately $366,000 to the Company to cover
expenses of organizing the Bank. Under the terms of these
advances, on or about the closing of the offering, the organizers
will receive shares of Common Stock at the Price to Public to
repay such advances. The Company's organizers also have
indicated their present intention to purchase Common Stock in
this offering. It is currently anticipated that the balance of the
net proceeds by the Bank will be used to fund investments in
loans and securities and for the payment of operating expenses.
The remaining net proceeds (plus any net proceeds as a result
of the exercise of the Underwriter's over-allotment option) will
initially be invested by the Company in an overnight repurchase
agreement with the Bank secured by U.S. Treasury and Agency
issues and otherwise held by the Company as working capital
for general corporate purposes and to pay operating expenses,
as well as for possible future capital contributions to the Bank.
See "Use of Proceeds."
Risk factors................... The purchase of the securities offered hereby involves a high
degree of risk and should be considered only by persons who
can afford to sustain the total loss of their investment. See
"Risk Factors."
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SUMMARY FINANCIAL DATA
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AUGUST 31, 1997
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ACTUAL AS ADJUSTED (1)
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BALANCE SHEET DATA:
Cash.......................................... $ 179,874 $8,890,974
Total assets.................................. $ 224,910 $8,936,010
Total liabilities............................. $ 323,765 $ -0-
Shareholders' equity (deficit)................ $ (98,855) $8,936,010
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(1) Adjusted to reflect the application of the estimated net proceeds from the
shares offered hereby. See "Use of Proceeds."
5
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RISK FACTORS
The Common Stock offered hereby is speculative, involves a high degree
of risk and should be considered only by persons who can afford the loss of
their entire investment. The following constitute some of the potential risks of
an investment in the Common Stock and should be carefully considered by
prospective investors prior to purchasing shares of Common Stock. The order of
the following is not intended to be indicative of the relative importance of any
described risk nor is the following intended to be inclusive of all risks of an
investment in the Common Stock. Because the Company is only recently formed and
the Bank will only obtain the necessary regulatory approvals in the future but
will not have commenced banking operations as of the date hereof, prospective
investors do not have access to all of the information that, in assessing their
proposed investment, is available to the purchasers of securities of a financial
institution with a history of operations. The Company's profitability will
depend primarily upon the Bank's operations and there is no assurance that the
Bank will ever operate profitably.
LACK OF OPERATING HISTORY; SIGNIFICANT INITIAL LOSSES EXPECTED
Neither the Company nor the Bank has any operating history. The business
of the Company and the Bank is subject to the risks inherent in the
establishment of a new business enterprise. Because the Company is only recently
formed, the Company and the Bank have only recently applied for the necessary
regulatory approvals and the Bank has not commenced banking operations as of the
date hereof, prospective investors do not have access to all of the information
that, in assessing their proposed investment, is available to the purchasers of
securities of a financial institution with a history of operations. The
Company's profitability will depend primarily upon the Bank's operations and
there is no assurance that the Bank will ever operate profitably. As a result of
the substantial start-up expenditures that must be incurred by a new bank, the
Company can be expected to incur significant operating losses during its initial
years of operations.
FAILURE TO COMMENCE OPERATIONS
Although the Company and the Bank expect to commence operations in its
leased temporary modular facility in the first quarter of 1998, there can be no
assurance as to when, if at all, this will occur. As of August 31, 1997, the
Company's accumulated deficit was $99,855 ($153,411 as of November 30, 1997),
and the Company will continue to incur pre-opening expenses until the Bank
commences operations. Any delay in commencing operations will increase
pre-opening expenses and postpone realization by the Bank of potential revenues
and income. Absent the commencement of profitable operations, the Company's
accumulated deficit will continue to increase (and book value per share
decrease) as operating expenses such as rent on the Bank's proposed premises,
salaries and other administrative expenses continue to be incurred. After the
offering and prior to the time the Bank receives final approvals from the OCC
and the FDIC to commence banking operations, the proceeds from this offering
will be segregated, but will be available for certain organizational and
pre-opening expenses of the Company and the Bank. Although certain proceeds from
this offering may be segregated, these proceeds may still be subject to claims
of creditors of the Bank or the Company (including the claims of organizers who
have advanced proceeds to the Company in connection with the organization of the
Company and the Bank). On a liquidation basis, the Company is unlikely to
recover its full investment in furniture, fixtures and equipment. As a result,
if a liquidation of the Company were to occur, investors in this offering would
likely realize substantially less than the $10 per share public offering price
and would suffer a significant loss.
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POSSIBLE LOSS OF A PORTION OF INVESTMENT
If the Company satisfies the offering conditions and issues the shares of
Common Stock, but final approval to commence banking operations is not granted
within 18 months after the receipt of OCC Preliminary Approval, the Company will
solicit shareholder approval for its dissolution and liquidation in which event,
the Company will return to shareholders their investment, 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 and claims
of creditors (including the claims of organizers who have advanced proceeds to
the Company in connection with the organization of the Company and the Bank). In
the event of dissolution and liquidation following the issuance of shares of
Common Stock, it is possible that shareholders will receive only a portion of
their investment due to the foregoing expenses.
REGULATORY APPROVALS
Although the Company and the Bank have applied for all regulatory
approvals required to commence operations (and have received OCC Preliminary
Approval), no assurances can be given that such required final approvals will be
granted in a timely manner if at all. The closing of this offering is not
conditioned upon the Company and the Bank receiving final approval to commence
business; however the closing will not take place until the Company and the Bank
have received preliminary approval. Management believes that all such regulatory
approvals will be obtained after a reasonable period, subject to the
satisfaction of certain conditions. Such conditions may include, among other
things that: (i) beginning paid-in capital of the Bank be not less than $7.5
million; (ii) the Tier 1 capital-to-total-assets ratio of the Bank be not less
than 8.0% for the first three years of operations; (iii) without the prior
approval of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), no debt will be incurred by the Company for five years from the
date the Company acquires 100% of the Bank stock; (iv) there is no major
deviation from the operating plan submitted to the OCC with the application for
OCC Preliminary Approval; and (v) the OCC receives acceptable background checks
on Company directors and officers. The Company proposes to satisfy the Bank's
capital requirements by using $7.5 million of the proceeds from this offering to
purchase all of the capital stock of the Bank. See "Use of Proceeds." While the
organizers currently anticipate receiving bank and bank holding company
approvals during the first quarter of 1998, no assurance can be given that these
approvals will be granted in a timely manner, if at all. If such regulatory
approvals are substantially delayed, the Company's accumulated deficit will
continue to increase. If such regulatory approvals are not obtained, the Company
would not be able to commence its banking activities and would probably be
liquidated and dissolved. Upon liquidation, investors would likely realize a
substantial loss on their investment. See " Failure to Commence Operations."
COMPETITION
The Company and the Bank will face strong competition for deposits, loans
and other financial services from numerous Florida and out-of-state banks,
thrifts, credit unions and other financial institutions as well as other
entities which provide financial services. Some of the financial institutions
and financial services organizations with which the Bank will compete are not
subject to the same degree of regulation as the Bank. As of June, 1997,
approximately 24 branch bank offices, five thrift offices and one credit union
office were located within the PMA. See "Business General" and "Business -
Market Area". Many of these financial institutions aggressively compete for
business in the PMA. Most of these competitors have been in business for many
years, have established customer bases, are larger, have substantially higher
lending limits than the Bank and will be able to offer certain services,
including multiple branches and international banking services, that the Bank
can offer only through correspondents, if at all. In addition, most of these
entities have greater capital resources than the Bank, which, among other
things, may allow them to price their services at levels more favorable to the
customer and to provide larger credit facilities than could the Bank. See
"Business - Market Area" and "Business - Competition." Additionally, recently
enacted federal and Florida legislation regarding interstate branching and
banking may act to increase competition in the future from larger out-of-state
banks. See "Supervision and Regulation - Recent Regulatory Developments."
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NEED FOR CAPITAL
Although the Company does not currently anticipate the need for additional
capital in the next 12 months to commence its planned business activities,
additional capital beyond that which will be provided by this offering and any
amounts likely to be generated by the Bank's operations over the next four years
would probably be necessary before the Company could undertake any significant
acquisitions or other expansion of its operations. There can be no assurance
that any funds necessary to finance such acquisitions or expansion will be
available. Regulatory capital requirements and borrowing restrictions which will
apply to the Bank and the Company may have the effect of constraining future
growth. To the extent the Company relies upon the sale of additional equity
securities to finance future expansion, such sale could result in significant
dilution to the interests of investors purchasing shares in this offering.
GOVERNMENT REGULATION AND MONETARY POLICY
The Company and the Bank will be subject to extensive federal and state
government supervision and regulation. Existing federal and state banking laws
will subject the Bank to substantial limitations with respect to loans, purchase
of securities, payment of dividends and many other aspects of its banking
business. There can be no assurance that future legislation or government policy
will not adversely affect the banking industry or the operations of the Bank.
Federal economic and monetary policy may affect the Bank's ability to attract
deposits, make loans and achieve satisfactory interest spreads. See "Supervision
and Regulation."
DEPENDENCE ON MANAGEMENT
The Company and the Bank are, and for the foreseeable future will be,
dependent upon the services of Lewis S. Albert, the Chairman of the Board and
Chief Executive Officer of the Company and the Bank, and Todd H. Katz, Vice
Chairman, President and General Counsel of the Company and the Bank, as well as
other senior managers retained by the Company and the Bank. The loss of any of
these individuals could adversely affect the operations of the Company and the
Bank. The Company has entered into an employment agreements with Mr. Albert and
Mr. Katz, in an effort to assure the continued availability of their services to
the Bank and the Company, although these individuals are not precluded from
competing with the Bank upon termination of their employment with the Bank. In
light of the Company's dependence upon the banking expertise of its chief
executive officer and president, the Company has obtained a policy of key person
life insurance on both Mr. Albert and Mr. Katz in the amount of $500,000 each
payable to the Company, although there is no assurance such amount will
adequately compensate the Company for the loss of service of either or both
individuals. See "Business - Employees" and "Management."
LENDING RISKS AND LENDING LIMITS
The risk of nonpayment of loans is inherent in commercial banking, and
such nonpayment, if it occurs, may have a material adverse effect on the
Company's earnings and overall financial condition as well as the value of the
Common Stock. Moreover, the Bank expects to focus on small-to-medium sized
businesses, which may result in a larger concentration by the Bank of loans to
such businesses. As a result, the Bank may assume greater lending risks than
banks which have a lesser concentration of such loans and tend to make loans to
larger companies. Management will attempt to minimize the Bank's credit exposure
by carefully monitoring the concentration of its loans within specific
industries and through prudent loan application and approval procedures, but
there can be no assurance that such monitoring and procedures will reduce such
lending risks.
Based upon capitalization of $7.5 million, the Bank will be subject to a
limit of $1,125,000 in loans that it may make to any one borrower. The Board of
Directors will establish an "in-house" limit that will be somewhat lower
8
<PAGE> 13
than the Bank's legal lending limit. The Board may from time to time raise or
lower the "in-house" limit as it deems appropriate to comply with safe and sound
banking practices and respond to overall economic conditions. Accordingly, the
size of the loans which the Bank can offer to potential customers is less than
the size of loans that most of the Bank's competitors are able to offer.
Initially, this limit may adversely affect the ability of the Bank to seek
relationships with the area's larger businesses. The Bank expects to accommodate
loan volumes in excess of its lending limit through the sale of participations
in such loans to other banks. However, there can be no assurance that the Bank
will be successful in attracting or maintaining customers seeking larger loans
or that the Bank will be able to engage in the sale of participations in such
loans on terms favorable to the Bank.
The business economy of the Bank's PMA is represented primarily by the
retail trade, construction and real estate, entertainment services, finance and
insurance, health care, and agribusiness industries. The Bank may experience
concentrations of credit extended to one or more of these industry groups.
Adverse conditions in any one or more of the industries operating in the Bank's
PMA or a slowdown in general economic conditions could have an adverse effect on
the Bank, including on its ability to originate and collect loans. See "Business
- - Market Area."
IMPACT OF INTEREST RATES AND ECONOMIC CONDITIONS
The results of operations for financial institutions, including the Bank,
may be materially and adversely affected by changes in prevailing economic
conditions, including declines in real estate market values, rapid changes in
interest rates and the monetary and fiscal policies of the federal government.
See "Supervision and Regulation - General" and "Supervision and Regulation -
Recent Regulatory Developments." The Bank's profitability is in part a function
of the spread between the interest rates earned on investments and loans and the
interest rates paid on deposits and other interest-bearing liabilities. In the
early 1990s, many banking organizations experienced historically high interest
rate spreads. More recently, interest rate spreads have generally narrowed due
to changing market conditions and competitive pricing pressure, and there can be
no assurance that such factors will not continue to exert such pressure or that
such high interest rate spreads will return. Substantially all the Bank's loans
will be to businesses and individuals in the Southwest Florida area and any
decline in the economy of this area could have an adverse impact on the Bank.
Like most banking institutions, the Bank's net interest spread and margin will
be affected by general economic conditions and other factors that influence
market interest rates and the Bank's ability to respond to changes in such
rates. At any given time, the Bank's assets and liabilities will be such that
they are affected differently by a given change in interest rates. As a result,
an increase or decrease in rates, the length of loan terms or the mix of
adjustable and fixed rate loans in the Bank's portfolio could have a positive or
negative effect on the Bank's net income, capital and liquidity. There can be no
assurance that the positive trends or developments discussed in this Prospectus
will continue or that negative trends or developments will not have a material
adverse effect on the Bank.
NEED FOR TECHNOLOGICAL CHANGE
The banking industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs. The Company's
future success will depend in part on its ability to address the needs of its
clients by using technology to provide products and services that will satisfy
client demands for convenience as well as to create additional efficiencies in
the Bank's operations. Many of the Bank's competitors have substantially greater
resources to invest in technological improvements. There can be no assurance
that the Bank will be able to effectively implement new technology-driven
products and services or be successful in marketing such products and services
to its clients. See "Business - Business Strategy."
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<PAGE> 14
ANTI-TAKEOVER PROVISIONS
Under the Federal Change in Bank Control Act (the "Control Act"), a notice
must be submitted to the Federal Reserve if any natural person or, generally, a
group of natural persons acting in concert seeks to acquire 10% or more of any
class of outstanding voting securities of a bank holding company, including the
Company, unless the Federal Reserve determines that the acquisition will not
result in a change of control of the Company. Under the Control Act, the Federal
Reserve reviews the acquisition to determine if it will result in a change of
control of the Company. Under the Control Act, the Federal Reserve has sixty
days within which to act on such notice, taking into consideration certain
factors, including the financial and managerial resources of the acquirer, the
convenience and needs of the community to be served by the bank holding company
and its subsidiary banks, and the antitrust effects of the acquisition. Under
the Bank Holding Company Act of 1956, as amended (the "BHC Act"), a company
generally is required to obtain prior approval of the Federal Reserve before it
may obtain control of a bank holding company. "Control" is generally described
as the beneficial ownership of 25% or more of all outstanding voting securities
of a bank holding company, but may be as low as 5% under certain circumstances.
See "Supervision and Regulation."
Florida law contains certain provisions which may have the effect of
deterring unsolicited attempts to acquire the Company. Further, the Company's
Articles of Incorporation divide the Board of Directors into three classes with
the term of office of one class expiring each year, and also authorize the Board
of Directors to issue shares of preferred stock, with such rights as the
directors may determine upon issuance. These provisions may have the effect of
delaying or preventing a change in control of the Company without action by the
shareholders. These provisions also could result in the Company being less
attractive to a potential acquiror or result in shareholders receiving less for
their shares than otherwise might be available in the event of a change in
control of the Company. See "Description of Capital Stock - Certain
Anti-Takeover, Indemnification and Limited Liability Provisions."
NO ASSURANCE OF DIVIDENDS
It is anticipated that no dividends will be paid on the Common Stock for
the immediately foreseeable future. It is likely that the Company will be
largely dependent upon dividends paid by the Bank for funds to pay dividends on
the Common Stock, if and when such dividends are declared. The Bank does not
anticipate paying dividends during at least the first three years of its
operations. No assurance can be given that future earnings of the Bank, and any
resulting dividends to the Company, will be sufficient to permit the legal
payment of dividends to Company stockholders at any time in the future. Even if
the Company may legally declare dividends, the amount and timing of such
dividends will be at the discretion of the Company's Board of Directors. The
Board may in its sole discretion decide not to declare dividends. For a more
detailed discussion of other regulatory limitations on the payment of cash
dividends by the Company. See "Dividend Policy."
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation and Bylaws provide for the
indemnification of its officers and directors and insulate its officers and
directors from liability for certain breaches of the duty of care. It is
possible that the indemnification obligations imposed under these provisions
could result in a charge against the Company's earnings and thereby affect the
availability of funds for payment of dividends to the Company's stockholders.
The Bank's bylaws will contain similar provisions. See "Description of Common
Stock - Anti-Takeover, Indemnification and Limited Liability Provisions."
10
<PAGE> 15
DETERMINATION OF OFFERING PRICE
The initial public offering price of $10.00 per share was determined by
negotiations between the Company and Robert W. Baird & Co. Incorporated, the
underwriter of this offering (the "Underwriter"). This price is not based upon
earnings or any history of operations and should not be construed as indicative
of the present or anticipated future value of the Common Stock. See
"Underwriting."
CONTROL BY MANAGEMENT
Although the combined ownership and control over the Company's Common
Stock by the Company's officers and directors is likely to be less than 10%
after this offering, such individuals will be able to exert a significant
measure of control over the affairs and policies of the Company. Such control
could be used, for example, to help prevent an acquisition of the Company,
thereby precluding shareholders from possibly realizing any premium which may be
offered for the Company's Common Stock by a potential acquiror. See "Principal
Stockholders."
NO PRIOR PUBLIC MARKET; LIMITED TRADING MARKET EXPECTED
Prior to this offering, there has been no public trading market for the
Common Stock. The offering price of $10 per share has been determined by
negotiations between the Company and the Underwriter and may be greater than the
market price for the Common Stock following this offering. The Company expects
that the quotations for the Common Stock will be reported on the OTC Bulletin
Board under the symbol "____." The Underwriter has also advised the Company
that, upon completion of this offering, it presently intends to act as a market
maker in the Common Stock, subject to applicable laws and regulatory
requirements. Making a market in securities involves maintaining bid and ask
quotations and being able, as principal, to effect transactions in reasonable
quantities at those quoted prices, subject to various securities laws and other
regulatory requirements. The development of a public trading market depends,
however, upon the existence of willing buyers and sellers, the presence of which
is not within the control of the Company, the Bank or any market maker. Even
with a market maker, factors such as the limited size of this offering, the lack
of earnings history for the Company and the absence of a reasonable expectation
of dividends within the near future mean that there can be no assurance of the
development in the foreseeable future of an active and liquid market for the
Common Stock. Even if a market develops, there can be no assurance that a market
will continue, or that shareholders will be able to sell their shares at or
above the offering price of $10 per share. Furthermore, the Underwriter has no
obligation to make a market in the Common Stock and, if commenced, may cease
market making activities at any time. The potential size of a secondary market
for the Common Stock might, at least initially, be limited to some extent by the
requirement of a $2,500 minimum investment imposed in connection with this
offering. The minimum investment requirement may act to restrict the number of
shareholders and make subsequent trading of small numbers of shares less likely.
Purchasers of Common Stock should carefully consider the potentially illiquid
and long-term nature of their investment in the shares being offered hereby.
RECENT DEVELOPMENTS
Since August 31, 1997, the date of the Company's most recent audited
financial statements, the Company has continued to incur pre-opening expenses.
As of November 30, 1997, the Company's accumulated deficit was $153,411. The
additional expenses incurred related principally to legal and professional fees
incurred in the regulatory application process and in connection with this
offering, salaries and supplies.
11
<PAGE> 16
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,000,000 shares of
Common Stock offered hereby are estimated to be $9,034,865 ($10,411,115) if the
Underwriter's over-allotment option is exercised in full), after deduction of
the underwriting discounts and commissions and estimated offering expenses. Such
net proceeds have not been reduced by the amount of the Company's organizational
and other operating expenses which were $153,411 as of November 30, 1997. The
net proceeds of this offering will be segregated until the Bank's receipt of
final approvals from the OCC and the FDIC to commence banking operations, but
will be available for certain organizational and pre-opening expenses of the
Company and the Bank.
Approximately $7.5 million of the net proceeds of this offering will be
invested by the Company in shares of Common Stock of the Bank to provide the
Bank's initial capitalization. The Bank expects to use approximately $2,137,000
of these funds to acquire, construct, furnish and equip the permanent premises
in which it is anticipated that the Bank will be located, and approximately
$132,000 to cover occupancy expenses and necessary furniture, fixtures and
equipment expense for the Bank's temporary offices during the period of
construction of its main facility. It is currently anticipated that the
remaining amount will be used by the Bank to fund investments in loans and U.S.
government and agency securities, federal funds sold and for payment of
operating expenses.
The balance of the net proceeds of this offering, after capitalizing the
Bank with $7.5 million, is estimated to be approximately $1,534,865. A total of
approximately $366,000 has been advanced by the organizers to the Company to
cover expenses of organizing the Bank. Under the terms of these advances, the
organizers will receive repayment in full, on or about the closing of this
offering, in shares of Common Stock valued at the Price to Public. The Company's
organizers also have indicated their present intention to purchase shares of
Common Stock in this offering. See "Principal Stockholders." The remaining
amount of net proceeds (plus any net proceeds as a result of the exercise of the
Underwriter's over-allotment option) will be held by the Company as working
capital for general corporate purposes as well as for possible future capital
contributions to the Bank to support asset growth. The Company believes that the
net proceeds of the offering will satisfy the Company's cash requirements for at
least the first 12 month period following the opening of the Bank.
DIVIDEND POLICY
The Company initially expects that all Company and Bank earnings, if any,
will be retained to finance the growth of the Company and the Bank and that no
cash dividends will be paid for the foreseeable future. If and when dividends
are declared, the Company will probably be largely dependent upon dividends paid
by the Bank for funds to pay dividends on the Common Stock. It is also possible,
however, that the Company will pay dividends in the future generated from
investment income and other activities of the Company. Under Federal regulation,
the Bank will be restricted as to the maximum amount of dividends it may pay on
its common stock. Moreover, the approval of the OCC is required for the payment
of any dividend if the aggregate amount of all dividends paid by the Bank during
such calendar year would exceed the sum of: (i) the total net profits of the
Bank for that year; and (ii) the retained net profits of the Bank for the
previous two years less any required transfer to surplus. The OCC and the FDIC
are also authorized under certain circumstances to prohibit the payment of
dividends by the Bank. Under federal law and Federal Reserve policy, a bank
holding company is required to serve as a source of financial strength to its
subsidiary bank and to commit resources to support the bank. Consistent with
this requirement the Federal Reserve has stated that, as a matter of prudent
banking, a bank holding company generally should not pay cash dividends unless
the available net income of the bank holding company is sufficient to fully fund
the dividends, and the prospective rate of earnings retention appears to be
consistent with the company's needs, asset quality and overall financial
condition.
12
<PAGE> 17
For additional information regarding restrictions on payment of dividends, see
"Supervision and Regulation - Dividends."
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
August 31, 1997, and as adjusted to reflect the sale of the shares of Common
Stock offered hereby:
<TABLE>
<CAPTION>
August 31, 1997
-----------------------------
Actual As Adjusted
------------ -----------
<S> <C> <C>
Long-term and short-term debt....................................................$ 323,765 $ -0-
============ ===========
Stockholders' equity:
Preferred Stock; no stated par; 2,000,000 shares authorized; no shares
issued or outstanding......................................................
Common Stock; $.01 par value, 10,000,000 shares authorized; 100 shares
issued and outstanding (1,000,000 shares as adjusted) (1).................. 1 10,000
Additional paid-in capital....................................................... 999 9,025,865
Accumulated deficit (2).......................................................... ( 99,855) ( 99,855)
------------ -----------
Total stockholders' equity.......................................................$ ( 98,855) $8,936,010
============ ===========
</TABLE>
(1) Does not include 60,000 shares of Common Stock issuable upon exercise of
outstanding options under the Company's incentive stock option plan and
96,443 shares of Common Stock issuable under certain warrants granted to
the Company's organizers. See "Management - Incentive Stock Option Plan"
and "Management - Organizers' Warrants."
(2) The accumulated deficit as of August 31, 1997, is comprised primarily of
pre-opening expenses related principally to legal and professional fees
incurred in the regulatory application process, creation of the holding
company, office occupancy costs and supplies. In addition, Lewis S. Albert
and Todd H. Katz have been receiving consulting fees from the Company
since June 15, 1997. The accumulated deficit will continue to increase
prior to the Bank's commencement of operations, and will then increase
further as expected initial operating losses are incurred. Additional
employees will be hired prior to the opening of the Bank and further
salary expenses and training costs will be incurred at such time.
Additional professional fees will also be incurred in connection with this
offering and other corporate matters.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The Company is still in a development stage and will remain in that stage
until the offering of the Company's Common Stock is completed and the Bank
commences operations. The Company has funded its start-up and organization
costs through $366,000 in advances from the organizers to the Company. Under
the terms of these advances, the organizers will receive repayment in full on or
about the closing of this offering, in shares of Common Stock valued at the
Price to Public. The net proceeds of the offering will be segregated until the
Bank's receipt of final approvals from the OCC and the FDIC to commence banking
operations, but will be available for certain organizational and pre-opening
expenses of the Company and the Bank. The Company believes that the net
proceeds of the offering will satisfy the Company's cash requirements for at
least the first 12 month period following the opening of the Bank. Accordingly,
the Company does not anticipate that it will be necessary to raise additional
funds for the operation of the Company and the Bank over the next twelve months.
For additional information regarding material expenditures during such period,
see "Use of Proceeds." For information regarding the increase in Company
employees following the opening of the Bank, see "Business - Employees." For
additional information regarding the plan of operations for the Company and the
Bank see "Business" and "Management."
BUSINESS
GENERAL
The Company was incorporated under the laws of the State of Florida on
August 7, 1997 under the name Gulf Coast Bancorp, Inc. and changed its name to
Tarpon Coast Bancorp., Inc. on December 23, 1997. The Company was formed to own
all of the common stock of the Bank and to engage in the business of a bank
holding company under the BHC Act. The Bank is organizing as a national banking
association with depository accounts to be insured by the FDIC to the extent
permitted by law. The Bank intends to offer a full range of commercial and
consumer banking services primarily within the Bank's designated PMA. The PMA
includes the northern part of Charlotte County, Florida (including the
communities of Port Charlotte and Punta Gorda) and the southeastern part of
Sarasota County (including the community of North Port). The Bank's Extended
Market Area encompasses all of Charlotte
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<PAGE> 18
and Sarasota Counties. The Company and the Bank have applied for all necessary
regulatory approvals. Assuming such regulatory approvals are received and the
successful completion of this offering, the Company and the Bank anticipate
commencing business in a leased temporary modular facility in the first quarter
of 1998 to be located in Port Charlotte. On December 11, 1997, the Bank received
OCC Preliminary Approval. This date is only an estimate and is subject to many
factors inherent in the regulatory approval process. The Bank intends to
commence business as soon as reasonably possible upon completion of the offering
and satisfaction of conditions to which certain of its regulatory approvals is
subject. See "Risk Factors - Governmental Regulation and Monetary Policy". The
Company currently maintains its offices at 4055 Tamiami Trail, Suite A-6, Port
Charlotte, Florida 33952. Upon completion of the Bank's facility, the address
will be 1490 Tamiami Trail, Port Charlotte, Florida 33948. The Company's
telephone number is (941) 625-1744.
BACKGROUND
The liberalization of Federal and State of Florida interstate banking
laws in recent years has led to substantial consolidation of the banking
industry in Florida and the Southwest Florida area. Since the early 1980s,
several of the area's locally owned or locally managed financial institutions
have been acquired by large regional bank holding companies. Members of the
Board, all of whom have been participants or observers of the local banking
scene for many years, have noticed the need for a locally owned, highly
service-oriented banking organization to fill a void created by this
consolidation in the banking industry. Specifically, the Board believes that the
area could greatly benefit from a financial institution whose focus would be to
serve the business and personal banking needs of local entrepreneurs and local
business owners. The Board also believes that this niche is currently being
under-served by other banks.
In the opinion of the Company's management, this situation has created a
favorable opportunity for a new commercial bank with headquarters in the Port
Charlotte area. Management of the Company believes that such a bank can attract
those clients who prefer to conduct business with a locally-managed institution
that demonstrates an active interest in their businesses and personal financial
affairs. The Company believes that a locally managed institution will be better
able to deliver more timely responses to client requests, provide customized
financial products or services addressing out-of-the-ordinary matters and offer
the personal attention of senior banking officers. The Bank will seek to take
advantage of this opportunity by emphasizing in its marketing plan the Bank's
local management and the Bank's ties and commitment to the local community.
The Company and the Bank to date have conducted no business other than
matters incidental to their organization, including negotiations with additional
prospective executive officers. Following completion of this offering and before
commencement of operations, the Bank intends to occupy and furnish its temporary
office, hire and train staff, purchase or lease and install equipment necessary
to transact business, establish correspondent banking relationships and make
other arrangements for necessary services
BUSINESS STRATEGY
The Bank intends to concentrate on the financial services needs of
individuals and local businesses. A cornerstone of the Bank's business strategy
will be to emphasize the Bank's local management and its commitment to the
Bank's market area. Lewis S. Albert, the Chairman of the Board and Chief
Executive Officer of the Company and the Bank, has 20 years of experience
serving the banking industry both in executive management capacities and as a
service professional. Mr. Albert most recently served as Senior Vice President
and Chief Financial Officer of Southwest Banks, Inc. a community multi-bank
holding company headquartered in Southwest Florida until its acquisition by
F.N.B. Corporation in 1997. Todd H. Katz, Vice Chairman, President and General
Counsel of the Company and the Bank, recently served as General Counsel and
managed the Shareholder Relations Department at Southwest Banks,
14
<PAGE> 19
Inc. The directors of the Company believe that the officers of the Company
represent a range of business, banking and investment knowledge and expertise.
The Company directors believe that the years of experience and existing contacts
of the senior officers offer the Bank a substantial opportunity to attract new
relationships for the Bank.
In addition, the Company intends to hire two additional experienced
individuals to serve as Senior Vice Presidents of the Bank. One such individual
will serve as the Bank's Senior Lending Officer and has experience in that
capacity within the Bank's market area. The second such individual will serve as
the Bank's Senior Operations Officer and have experience in that capacity with
community banks in the Southwest Florida area.
The Bank intends to encourage its employees to be active in the civic,
charitable and social organizations located in the local communities. Most of
the Company's directors currently hold, and have held in the past, leadership
positions in a number of community organizations, and intend to continue this
active involvement in future years. Other members of the management team will
also be encouraged to volunteer for such positions.
The Company's goal is to create a "customer-driven" organization focused
on providing high value to clients by promptly delivering products and services
matched directly to their needs. The Bank will strive to establish a high
standard of quality in each service it provides and the employees of the Bank
will be expected to emphasize service in their dealings with clients. Because
the Bank intends to commence operations with a staff of fewer than 15 full time
employees, these employees will need to be flexible in the duties they perform
in an effort to satisfy clients. However, management believes that the use of
current technology will permit each employee to devote more time and attention
to personal service, respond more quickly to a client's requests and deliver
services in the most timely manner possible. Management expects this "high
touch-high tech" manner of operations to be appealing to clients.
Upon its opening, the Bank is planning to undertake a marketing campaign
utilizing an officer calling program and community-based promotions. The
campaign will emphasize the Bank's independence, local management and special
focus on client service. All employees will be expected to actively market the
Bank's services.
The Bank's initial legal lending limit will be approximately $1,125,000.
The Board of Directors will establish an "in-house" limit that will be somewhat
lower than the Bank's legal lending limit. The Board may from time to time raise
or lower the "in-house" limit as it deems appropriate to comply with safe and
sound banking practices and respond to overall economic conditions. Initially,
this limit will affect to a degree the ability of the Bank to seek relationships
with the area's larger businesses. However, in light of senior management's
previous experience and the relationships with a number of the region's other
financial institutions, the Bank may originate loan volumes in excess of its
lending limit and sell participations in such loans to other banks. Likewise, it
is quite possible that the Bank will purchase participations from other area
institutions. See "Risk Factors - Lending Risks and Lending Limits".
PRODUCTS AND SERVICES
It is anticipated that the Bank's hours of operation will initially be
8:30 a.m. to 6:00 p.m., Monday through Friday and from 8:30 to 12:30 on
Saturday. In addition, the Bank's employees will be available to clients wishing
to make appointments outside traditional banking hours, either at the Bank or at
the clients' homes or businesses. By providing "appointment banking," the Bank
intends to demonstrate its high level of responsiveness and service to its
clients.
The Bank intends to offer a range of deposit services, including checking
accounts, NOW accounts, savings accounts and time deposits of various types. The
transaction accounts and time certificates will be tailored to the principal
market area at rates competitive with those offered in the area. All deposit
accounts will be insured by the
15
<PAGE> 20
FDIC up to the maximum amount permitted by law. The Bank intends to solicit
these accounts from individuals, businesses, associations, organizations,
financial institutions and government authorities. It does not intend to accept
brokered deposits. The Bank may also use alternative funding sources as needed,
including advances from Federal Home Loan Banks, conduit financing and the
packaging of loans for securitization and sale.
The Bank will offer a range of short to intermediate term personal and
commercial loans. The Bank intends to make personal loans directly to
individuals for various purposes, including purchases of automobiles, mobile
homes, boats and other recreational vehicles, home improvements, education and
personal investments. The Bank anticipates that it will retain substantially all
of such loans. The Bank intends initially to offer only balloon payment and
adjustable rate mortgages. It does not anticipate offering long-term fixed rate
mortgage products, except through an arrangement with outside providers. The
Bank expects that any fixed rate residential mortgage loans it generates will be
sold to third party investors, though with respect to some of such loans, the
Bank may continue to service the loans for a fee. Commercial loans are expected
to be made primarily to small and mid-sized businesses. These loans will be both
secured and unsecured and will be available for general operating purposes,
acquisition of fixed assets, including real estate, purchases of equipment and
machinery, financing of inventory and accounts receivable as well as any other
purpose considered appropriate.
The Bank currently plans to offer other services, including credit cards,
money orders, traveler's checks, automated teller services with access to one or
more regional or national automated teller networks and safe deposit services.
Although the Bank has been involved in discussions with a number of vendors
regarding the provision of such services, the Bank does not expect to make final
decisions with respect to the providers of such services until approximately 60
days before its commencement of business. The Bank also intends to establish
relationships with correspondent banks and other financial institutions to
provide other services for its clients, including requesting correspondent banks
to participate in loans where the loan amount exceeds the Bank's policies or
legal lending limit.
Many of the data processing services, including on-line teller service,
will be purchased on a contract basis, reducing the number of persons otherwise
required to handle the operational functions of the Bank. The Bank is in the
process of discussing arrangements with potential data processing companies.
ASSET/LIABILITY MANAGEMENT
It will be the objective of the Company and the Bank to manage assets and
liabilities to provide a satisfactory, consistent level of profitability within
the framework of established cash, loan, investment, borrowing and capital
policies. Certain of the officers of the Bank will be responsible for monitoring
policies and procedures that are designed to insure acceptable composition of
the asset/liability mix, and stability and leverage of all sources of funds
while adhering to prudent banking practices. It also will be the overall
philosophy of management to support asset growth primarily through growth of
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 its assets in commercial, consumer and real estate loans.
Bank management also will view the Bank's investment portfolio as a source of
liquidity and as a means to balance its asset/liability mix. The Bank will
invest primarily in obligations of the United States or obligations guaranteed
as to principal and interest by the United States, or other taxable securities
and in certain obligations of states and municipalities. The Bank also will
enter into Federal Funds transactions with its principal correspondent banks,
which represent a short term (generally overnight) loan from one bank to
another, to balance its liquidity needs.
The Bank intends to monitor its asset/liability mix on a daily basis and a
quarterly report reflecting interest-sensitive assets and interest-sensitive
liabilities will be prepared and presented to the Bank's Asset and Liability
16
<PAGE> 21
Management Committee. The objective of this policy will be to manage liquidity
and control interest-sensitive assets and liabilities so as to minimize the
impact of substantial movements in interest rates on the Bank's earnings.
MARKET AREA
Overview
The Bank anticipates that the PMA for its services will be the Northern
part of Charlotte County, Florida and the Southeastern part of Sarasota County,
Florida. The communities of Port Charlotte and North Port are located in
Charlotte County and Sarasota County, respectively, on the Southwest coast of
Florida. Port Charlotte is part of the Punta Gorda MSA and North Port is part of
the Sarasota-Bradenton MSA. However, the Port Charlotte and North Port areas are
contiguous and form one market area, which the Bank considers its PMA. The PMA
is located approximately 40 miles south of Sarasota and 40 miles north of Ft.
Myers. Port Charlotte is unincorporated and North Port is incorporated. Both
communities were created and developed in the late 1950s. The PMA encompasses an
area of approximately 120 square miles.
The population of Charlotte County (which is also in the Punta Gorda MSA)
was 132,000 in 1996 and the population of Port Charlotte, at 48,000, comprised
36% of the County and the MSA. The population of North Port was 15,000, or 5% of
Sarasota County's population and 3% of the population of the Sarasota-Bradenton
MSA. The total population of the PMA in 1996 was 63,000, with 76% of the
population in Port Charlotte and 24% in North Port. The Bank's Extended Market
Area encompasses all of Charlotte and Sarasota Counties.
The Primary and Extended Market Areas offer recreational facilities,
cultural events, resorts, commercial office parks, residential developments,
major transportation routes, shopping centers, and entertainment areas. Access
to the area is by Interstate 75 and U.S. 41. Air service is through the
Sarasota/Bradenton International Airport and the Southwest Florida International
Airport in Ft. Myers, both less than an hour's drive from the area. The area's
annual average temperature of 75(0) provides comfortable year-round living.
Population
According to the Charlotte County Chamber of Commerce, Inc. Statistical
Prospectus, the U.S. Department of Commerce rated the Punta Gorda MSA, of which
Port Charlotte is a part, the "#1 Fastest growing metropolitan employment area
in the United States, for the period from 1993 through 2005." Seasonal
population, which includes part-time residents who may live for several months
in Charlotte County while maintaining another residence elsewhere, increases
from January through April, thereby increasing the population of the PMA during
that time.
The historical growth rate for the past five years was 15.3% in Port
Charlotte and 28.3% in North Port. These growth rates are higher than the
historical growth rates during the past five years of 6.6% for the United States
and 10.8% for Florida. In Charlotte County approximately 48% of the population
is over 55. This is reflective of the populations in the PMA. However, low
taxes, a below average cost of living, and a healthy business environment are
attracting young professionals to the area, as well as retirees.
Industry and Employment
Port Charlotte and North Port are part of one of the fastest growing areas
of the country. Business and entertainment service industries, retail trade,
government, construction, real estate, finance/ insurance, health care and
transportation/communication/ utility form the basis for the area's business
economy. Commercial construction of small shopping centers and small office
parks are in progress throughout the area (and throughout the Extended
17
<PAGE> 22
Market Area). Until the late 1950s and early 1960s, agriculture was a major
economic basis for the area. Although not as important as it once was,
agriculture remains a part of the area's industry, with citrus crops, nurseries,
and vegetables making up the bulk of the agriculture business.
The largest employers in Charlotte County are the Charlotte County
Schools, the Charlotte Regional Medical Center, Fawcett Memorial Hospital,
Publix Super Market, the Charlotte Corrections Institute, and St. Joseph
Hospital. Other large employers include WalMart, K-Mart, and Sears. The
Charlotte County Government and the City of Punta Gorda also employ a
significant number of people. Many North Port residents work in Charlotte
County. However, North Port's major business areas include Trott Circle, a small
business park, and North Port Industrial Park, a 150+ acre complex anchored by
Florida Power & Light.
Management believes that this diverse and growing commercial base provides
potential for business banking services, together with personal banking services
for owners and employees of these enterprises.
COMPETITION
The Bank's intended market area is competitive. There are currently 13
banks and thrifts with 29 offices in the PMA and 24 banks and thrifts
representing 151 offices in the Extended Market Area. The Bank will also face
competition from finance companies, insurance companies, mortgage companies,
securities brokerage firms, money market funds, loan production offices and
other providers of financial services. Most of the Bank's competitors have been
in business for many years, have established customer bases, are substantially
larger, have substantially larger lending limits than the Bank and can offer
certain services, including multiple branches and international banking
services, that the Bank will be able to offer only through correspondent banks,
if at all. In addition, most of these entities have greater capital resources
than the Bank, which among other things, may allow them to price their services
at levels more favorable to clients and to provide larger credit facilities than
could the Bank. The Company anticipates that the Bank's legal lending limit of
approximately $1,125,000 will be adequate to satisfy the credit needs of most of
its clients and that the needs of its clients in excess of this amount will be
met through loan participation arrangements with correspondent banks and others.
The Bank will compete for loans principally through the range and quality
of the services it will provide, interest rates and loan fees. The Company
believes that its personal service philosophy will enhance the Bank's ability to
compete favorably in attracting individuals and local businesses. The Bank will
actively solicit deposit related clients and will compete for deposits by
offering clients personal attention, professional service and competitive
interest rates.
BANK PREMISES
The Company currently leases its premises at 4055 Tamiami Trail, Port
Charlotte, Florida 33952. The Company has entered into a contract to purchase
approximately 1.1 acres of commercially zoned land on which it will build the
Bank's main facility, which will also serve as the Company's executive offices.
The site is located at 1490 Tamiami Trail, which is at the intersection of U.S.
Highway 41 and Murdock Circle, a major intersection in Charlotte County. The
surrounding area is mixed-use commercial and industrial properties, including
the regional Town Center Mall and Port Charlotte Industrial Park. The
intersection is within one-half mile of the center of the area's residential
development.
The banking facility is anticipated to consist of approximately 7,800
square feet of office space and will include a community meeting / board room.
The facility will have five inside teller stations, three customer service
platform stations, three drive-through lanes, and one drive-up ATM lane.
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<PAGE> 23
A temporary banking facility comprising 1,960 square feet will be leased
and located on the site and will be utilized during the construction of the
permanent facility. This facility will be leased for a period of one year with
monthly lease payments, including equipment, estimated at $4,500 per month,
together with a one time $3,700 charge to deliver, install and remove the
facility. Site work necessary to accommodate the temporary facility will cost
approximately $44,000.
It is anticipated that the estimated land acquisition cost and
improvements will total approximately $875,000; building construction costs will
total approximately $984,000; and total costs for equipment and furnishings for
the building will total approximately $278,000. The Company has not entered into
any agreement with respect to the foregoing expenditures and, accordingly, there
is no insurance that the amounts actually incurred by the Company in connection
with the foregoing will not exceed the foregoing estimates.
EMPLOYEES
The Bank intends to commence operations with a staff of fewer than 15
full-time equivalent employees. Lewis S. Albert will serve as the Chairman of
the Board, Chief Executive Officer, and Treasurer of the Company and the Bank.
Todd H. Katz will serve as Vice Chairman, President, Secretary and General
Counsel of the Company and the Bank. The Bank has also identified and obtained
employment commitments with its remaining executive officers which are comprised
of a Senior Vice President-Senior Lending Officer and a Senior Vice
President-Cashier. At present, Messrs. Albert and Katz are the only employees
actively involved in the organization of the Company and the Bank and,
commencing in June 1997, have each been receiving a monthly consulting fee of
$7,000. This fee will be continued until such time as the Bank is authorized to
enter into employment agreements. See "Management Employment Agreements."
The Company will hire additional officers and employees prior to
commencement of the Bank's operations. Company management anticipates that the
Company will increase its staff from 15 to 21 full-time equivalent employees
during the second year of its operations in order to provide for anticipated
growth. The Company plans to employ as officers and employees of the Bank
primarily persons from the Bank's market areas who have experience in banking.
The Company intends to pay competitive salaries to attract and retain such
officers and employees.
MANAGEMENT
DIRECTORS AND OFFICERS
The directors and officers of the Company as of the date hereof, are as
follows:
<TABLE>
<CAPTION>
Positions Positions
Name Age with the Company with the Bank
- ---- --- ---------------- -------------
<S> <C> <C>
Lewis S. Albert... .............. 45 Chairman of the Board, Chairman of the Board,
Treasurer, and Chief and Chief Executive Officer
Executive Officer
Todd H. Katz..................... 32 Vice Chairman, President, Vice Chairman, President,
Secretary and General Counsel Secretary and General Counsel
Mark O. Asperilla, M.D.... 43 Director Director
</TABLE>
19
<PAGE> 24
<TABLE>
<S> <C> <C> <C>
James R. Baker................. 60 Director Director
Billie A. Barger................. 69 Director Director
James C. Brown................ 58 Director Director
Gerald P. Flagel ................ 61 Director Director
Gina D. Hahn.................... 65 Director Director
Larry A. Tenbusch............ 40 Director Director
</TABLE>
The Company has a classified board of directors, with directors serving
staggered three-year terms. The terms of Mr. Brown, Mrs. Hahn and Mr. Tenbusch,
as Class I directors, expire in April, 1998, the terms of Messrs. Albert,
Asperilla and Flagel, as Class II directors, expire in April, 1999, and the
terms of Messrs. Baker, Barger and Katz, as Class III directors, expire in
April, 2000. There are no family relationships among any of the Company'
directors, officers or key personnel, except that Gina D. Hahn is the
mother-in-law of Todd H. Katz . Officers of the Company and the Bank will be
elected annually by their respective Boards of Directors.
COMMITTEES OF THE BANK
The Board of Directors will establish various working committees of its
members. Committees will meet routinely and will report directly to the entire
Board of Directors. The Board Committees will include:
Asset - Liability Management Committee - Responsible for (i) overall
investment strategy, including liquidity and risk management, (ii) monitoring
deposit level trends and pricing, (iii) monitoring asset level trends and
pricing, and (iv) portfolio investment decisions, and (v) establishing
appropriate levels of insurance.
Audit, Compliance and CRA Committee - Responsible for (i) insuring the
Board receives objective information regarding policies, procedures and controls
of the Bank including auditing, accounting, internal accounting controls,
financial reporting, (ii) recommending the appointment of an independent auditor
on an annual basis, (iii) reviewing independent auditor's report and
management's response, (iv) reviewing all reports from regulatory authorities
and management's response, (v) establishing independent reviews and audits (vi)
insuring the Bank is in full compliance with all pertinent regulations and laws;
(vii) establishing an appropriate and independent testing program for
compliance, (viii) developing a proactive CRA program, (ix) developing programs
to insure compliance with Fair Lending Laws, and (x) establishing appropriate
levels of insurance.
Compensation Committee - Responsible for (i) establishing appropriate
levels of compensation throughout the Bank, (ii) analyzing compensation levels
on an annual basis, (iii) recommending overall compensation increases and
changes in benefits to the Board for approval, (iv) establishing policies with
regard to compensation and benefits at the Bank; and (v) recommending all
compensation increases, benefit changes and bonuses for senior officers to the
Board for approval.
Loan Committee - Responsible for (i) establishing, in conjunction with
management, and approving all major policies and procedures pertaining to
credit, (ii) establishing a loan approval system, (iii) reviewing all loans in
excess of specific amounts determined in policies and procedures, (iv) reviewing
all past due reports, rated loan reports, real estate owned, non-accrual
reports, and other indicators of overall loan portfolio quality, (v) assuring
adequate funding
20
<PAGE> 25
of the loan loss reserve exists, and (v) handling other matters pertaining to
the credit function, such as yields and loan concentrations.
EXPERIENCE OF DIRECTORS AND OFFICERS
The experience and backgrounds of the directors and executive officers of
the Company and the Bank are summarized below.
DIRECTOR, CHAIRMAN AND CHIEF EXECUTIVE OFFICER - LEWIS S. ALBERT
Mr. Albert will be the Chairman, Treasurer and CEO for the Company and the
Bank. He is a Certified Public Accountant with 17 years experience at Deloitte
and Touche. From 1993 until May 1997, Mr. Albert was the Senior Vice President
and Chief Financial Officer for a $750 million multi-bank holding company in
Florida, Southwest Banks, Inc., that was acquired by an out-of-state holding
company. At Southwest Banks, Mr. Albert was responsible for financial and
regulatory reporting, tax planning and compliance, strategic financial planning,
investor relations, merger and acquisition analysis and implementation, capital
formation, budget management, and supervision of all affiliate financial,
corporate legal, compliance and internal audit functions. Mr. Albert also was
involved with retail and support functions at Southwest Banks, including product
selection and pricing, systems development and modification, employee benefit
plan issues and executive compensation matters. From 1992 until 1993, Mr. Albert
was President of Trebla Sales, Inc., a distributor of medical diagnostic
equipment and supplies. Mr. Albert has been actively involved in the South
Florida business community, having served as Secretary/Treasurer of the Board
for the South Florida Manufacturers Association, a member of the Fort Lauderdale
Chamber of Commerce, a member of the South Florida Business Council, and as
Chairman of the Chamber's Florida Industry Appreciation Week Committee.
DIRECTOR, VICE CHAIRMAN AND PRESIDENt - TODD H. KATZ
Mr. Katz, a banking attorney with both private practice and in-house
experience, will be the Vice Chairman, President, Secretary and General Counsel
of the Company and the Bank. He served as General Counsel of Southwest Banks,
Inc. from February 1993 to May 1997, with oversight of the holding company's and
its subsidiaries' legal and regulatory affairs, while directing the holding
company's shareholder relations and services departments. While at Southwest
Banks, Inc., Mr. Katz was involved in various financial, retail and planning
aspects for the holding company and its banks, including extensive involvement
in structuring the holding company's acquisition and branching objectives. From
January through December 1992, Mr. Katz directed the political campaign for Rob
Quartel, a candidate vying to represent Florida in the U.S. Senate. Prior to
organizing the campaign, Mr. Katz was an attorney with the banking firm of
Miller, Hamilton, Snider, and Odom. Mr. Katz has been active in the Southwest
Florida community through his service as a board member of the Collier County
Humane Society and the Youth Development Board and as an active member of the
Collier County Bar Association and the Florida Bar.
DIRECTORS
MARK O. ASPERILLA, M.D. - Born in Manila, Philippines, Dr. Asperilla is a
U.S. citizen who has lived in Charlotte County since 1991, when he formed his
current medical practice. Dr. Asperilla attended the University of St. Thomas,
Manila, Phillippines for his undergraduate and medical degrees. In addition to
managing his own medical practice, where he specializes in infectious disease
and internal medicine, Dr. Asperilla serves on the Executive Boards of St.
Joseph's Hospital and Fawcett Medical Center Hospital and is presently the
Secretary of the Charlotte County Medical Society. In addition to serving as a
Fellow of the American Board of Internal Medicine,
21
<PAGE> 26
Dr. Asperilla is the President of two commercial citrus growing entities located
in the area, Emerald Groves and A&M Groves.
JAMES R. BAKER - Mr. Baker moved to Charlotte County in 1969 and
established his bio-solids management operations company, J&J Baker Enterprises,
in 1984. J&J Baker Enterprises is one of the largest privately owned
corporations of its type in Florida, with offices and divisions throughout the
State. Mr. Baker has served as President of that concern since its inception and
is actively involved in community and business associations, including the
Florida Cattleman's Association, the Charlotte County Chamber of Commerce, the
Charlotte County Economic Development Council, Charlotte County Pop Warner
Football Program, and the Charlotte County Fair Association Livestock and Cattle
Sale.
BILLIE A. BARGER - Mr. Barger has spent over 30 years in the banking and
thrift industries, most recently serving as Director, President and Chief
Executive Officer of Murdock Florida Bank in Charlotte County, Florida. He has
served in various Board of Director capacities for two other institutions in
Southwest Florida, having participated in the organization of Seminole Savings
Bank in St. Petersburg, Florida in 1983. Mr. Barger has also held Executive
Management positions with four institutions since 1974. Since 1989, Mr. Barger
has served as President of Bar-ton of Pinellas, Inc. d/b/a Northwest Mobile
Marts. He has been active in area civic groups including the Rotary Club of
Charlotte County as a member of the Board of Directors, and the Charlotte County
Chamber of Commerce and Economic Development Committee. He has also served as
past president for a number of civic groups including the Greater Seminole Area
Chamber of Commerce and the Southwest Florida Council for the Boy Scouts of
America.
JAMES C. BROWN - Mr. Brown moved to Charlotte County in 1982 from his home
state of Ohio to expand his concrete manufacturing company, Miami-Valley
Concrete, for which he has served as President since 1975. The company has
plants in Ohio and Florida and is a supplier of concrete products to
construction and real estate development concerns. Mr. Brown is an active member
of the North Port Builders Association, the Charlotte Building Contractors
Association, and the Florida Independent Concrete and Associated Products, Inc.
GERALD P. FLAGEL - Mr. Flagel graduated from Northwestern University and
the Ohio State University College of Law. He is an attorney and CPA specializing
in tax matters. He was the managing partner of a regional CPA firm in Dayton,
Ohio, his native state, until 1989 when he relocated to Naples, Florida, where
he has since practiced under Gerald P. Flagel, P.A., a tax and accounting firm.
Mr. Flagel helped found the Jewish Federation of Collier County and was that
organization's first president, and he currently sits on its board. He is active
in Temple Shalom and the Naples Philharmonic Center for the Arts.
GINA D. HAHN - A New Jersey native and a seasonal visitor to Southwest
Florida since 1969, Ms. Hahn relocated to Naples, Florida, in 1978. With her
husband, she founded Jewel Equities Corporation, a real estate development and
operating company located in upstate New York that recently purchased
substantial acreage in North Port. Ms. Hahn has overseen Jewel Equities
Corporation's operations as Vice President since 1968. Ms. Hahn served as the
Republican Party's Chairman of the 14th Congressional District from 1995 through
1996 and served two terms as the President of the 200 member Women's Republican
Club of Naples. She has served as the Second Vice President of the Florida
Federation of Republican Women since January 1997 and has been re-elected to
four-year terms as Republican State Committeewoman from Collier County since
1982.
LARRY A. TENBUSCH - Born in Michigan, Mr. Tenbusch moved to North Port in
1975 and, with his father, founded Tenbusch Construction. He has served as
President of the company since 1983, which is a high quality custom homebuilder.
He also served as the founding President of the North Port Contractors
Association. Mr. Tenbusch currently serves as Chairman of both the Certificate
Licensing Board and the Building and Construction Advisory Board for the City of
North Port.
22
<PAGE> 27
EXECUTIVE OFFICERS OF THE BANK
In addition to Messrs. Albert and Katz, the Company also anticipates that
the Bank will hire two additional experienced individuals to serve as Senior
Vice Presidents of the Bank. One such individual will serve as the Bank's Senior
Lending Officer and have experience in that capacity within the Bank's PMA. The
second such individual will serve as the Bank's Senior Operations Officer and
will have experience in that capacity with community banks in the Southwest
Florida area.
EMPLOYMENT AGREEMENTS
The Company intends to enter into employment agreements with Messrs.
Albert and Katz. Each contract will be for a term effective upon the date
employment commences and run through the second anniversary from the date the
Bank receives its charter from the OCC. Unless renewed prior to the end of the
term, the contracts will provide that they be treated as a termination "without
cause" requiring severance benefits as discussed in the paragraph that follows.
The agreements further will provide for participation in the Company's health,
life, disability and retirement plans and the payment of club membership dues.
The agreements also will provide for the grant of options to purchase shares of
Common Stock under the Company's stock option plan. See " Incentive Stock Option
Plan."
The employment agreements will be terminable at any time by the Company's
Board of Directors. The agreements will provide severance benefits in the event
the executive is terminated "without cause" or his employment contract is not
renewed at the end of its term, including severance compensation equal to 100%
of his then current annual salary (including any incentive compensation) paid
during the full year preceding the notice of termination, together with the
value (if any) of stock options held by the executive whether or not vested. The
Company may terminate the agreements at any time for "cause" without incurring
any post-termination obligations. Upon a change in control, as defined, each
executive may, at his option, be paid severance benefits on the same basis as
discussed above. The agreements also will provide for the issuance of Incentive
Stock Options to the Executive Officers of the Company and the Bank at an
exercise price equal to that in this offering of Common Stock of $10 per share.
See "Incentive Stock Option Plan."
INCENTIVE STOCK OPTION PLAN
The Company's Board of Directors and initial stockholders have adopted an
Incentive Stock Option Plan to promote equity ownership of the Company by
selected officers and employees of the Company and the Bank, to increase their
proprietary interest in the success of the Company and to encourage them to
remain in the employ of the Company.
ADMINISTRATION. The Stock Incentive Plan will be administered by the
Company's Compensation Committee (the "Committee"), which is comprised of at
least two non-employee directors appointed by the Company's Board of Directors.
The Committee will have the authority to select the officers and employees to
whom awards may be granted, to determine the terms of each award, to interpret
the provisions of the Incentive Stock Option Plan and to make all other
determinations that it may deem necessary or advisable for the administration of
the Incentive Stock Option Plan.
The Stock Incentive Plan provides for the grant of "incentive stock
options," as defined under Section 422(b) of the Internal Revenue Code of 1986,
as amended. The Board of Directors has reserved 125,000 shares of Common Stock
for issuance under the Stock Incentive Plan. In general, if any award granted
under the Stock Incentive Plan expires, terminates, is forfeited or is canceled
for any reason, the shares of Common Stock allocable to such award may again be
made subject to an award granted under the Incentive Stock Option Plan.
23
<PAGE> 28
AWARDS. Officers and policy-making employees of the Company and the Bank
are eligible to receive grants under the Incentive Stock Option Plan. Awards may
be granted subject to a vesting requirement and in any event will become fully
vested upon a merger or change of control of the Company. The exercise price of
incentive stock options must at least equal the fair market value of the Common
Stock subject to the option (determined as provided in the plan) on the date the
option is granted.
An incentive stock option granted under the Incentive Stock Option Plan to
an employee owning more than 10% of the total combined voting power of all
classes of capital stock of the Company is subject to the further restriction
that such option must have an exercise price of at least 110% of the fair market
value of the shares of Common Stock, issuable upon exercise of the option
(determined as of the date the option is granted) and may not have an exercise
term of more than five years. Incentive stock options are also subject to the
further restriction that the aggregate fair market value (determined as of the
date of grant) of Common Stock as to which any such incentive stock option first
becomes exercisable in any calendar year, is limited to $100,000. To the extent
options covering more than $100,000 worth of Common Stock first become
exercisable in any one calendar year, the excess will be nonstatutory options.
For purposes of determining which, if any, options have been granted in excess
of the $100,000 limit, options will be considered to become exercisable in the
order granted.
Each officer and key employee eligible to participate in the Incentive
Stock Option Plan will be notified by the Committee. To receive an award under
the Incentive Stock Option Plan, an award agreement must be executed which
specifies the type of award to be granted, the number of shares of Common Stock
to which the award relates, the terms and conditions of the award and the date
granted. In the case of an award of options, the award agreement will also
specify the price at which the shares of Common Stock subject to the option may
be purchased, and the date(s) on which the option becomes exercisable.
The full exercise price for all shares of Common Stock purchased upon the
exercise of options granted under the Incentive Stock Option Plan must be paid
by cash, personal check, personal note, award surrender or Common Stock owned at
the time of exercise. Incentive stock options granted to employees under the
Incentive Stock Option Plan may remain outstanding and exercisable for 10 years
from the date of grant or until the expiration of 90 days (or such lesser period
as the Committee may determine) from the date on which the person to whom they
were granted ceases to be employed by the Company. Options granted under the
Plan are exercisable in increments of 10% per year commencing on the date of
grant.
INCOME TAX. Incentive stock options granted under the Stock Incentive Plan
have certain advantageous tax attributes to the recipient under the income tax
laws. No taxable income is recognized by the option holder for income tax
purposes at the time of the grant or exercise of an incentive stock option,
although neither is there any income tax deduction available to the Company as a
result of such a grant or exercise. Any gain or loss recognized by an option
holder on the later disposition of shares of Common Stock acquired pursuant to
the exercise of an incentive stock option generally will be treated as capital
gain or loss if such disposition does not occur prior to one year after the date
of exercise of the option.
AMENDMENT AND TERMINATION. The Incentive Stock Option Plan expires 10
years after its adoption, unless sooner terminated by the Board of Directors.
The Board of Directors has authority to amend the Plan in such manner as it
deems advisable. The Plan provides for appropriate adjustment, as determined by
the Committee, in the number and kind of shares subject to unexercised options,
in the event of any change in the outstanding shares of Common Stock by reason
of a stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger or similar event.
24
<PAGE> 29
ORGANIZERS' WARRANTS
The Company's Board of Directors and its initial stockholders have adopted
a warrant plan to compensate its non-employee organizers for their efforts in
and funding of the organization of the Company and the Bank. The Company intends
to issue warrants to purchase 0.34 shares of Common Stock for each share of
Common Stock purchased by such organizers prior to commencement by the Bank of
its banking business. The exercise price will be $10 per share, the offering
price of the Common Stock being offered herein. The warrants will vest over a
four year period (25% per year) commencing at the date of issuance and will have
a term of 10 years from the issuance date at which time they will expire. The
warrant agreement further provides for a call provision in the event the Bank is
determined to require additional capitalization under supervisory order, and if
not honored when called, will terminate at that time. The Company has reserved
96,443 shares of its Common Stock for issuance thereunder.
CERTAIN TRANSACTIONS
ORGANIZATIONAL ADVANCES
The organizers of the Company and the Bank have advanced to the Company an
aggregate of $366,000 for use in connection with organizational and capital
raising expenses. All such amounts advanced to the Company from its organizers
do not bear interest. Such advances will be repaid in the form of shares of
Common Stock sold in this offering, valued at the offering price of $10 per
share. In compensation for their efforts in and funding of the organization of
the Company and the Bank, the Company will grant certain warrants to the
non-employee organizers to purchase Common Stock of the Company for $10 per
share. See "Principal Shareholders" and "Management - Organizers' Warrants."
BANKING TRANSACTIONS
It is anticipated that the directors and officers of the Company and the
Bank and the companies with which they are associated will have banking and
other transactions with the Company and the Bank in the ordinary course of
business. All transactions between the Company and affiliated persons, including
5% stockholders, will be on terms no less favorable to the Company than could be
obtained from independent third parties. Any loans and commitments to lend to
such affiliated persons or entities included in such transactions will be made
in accordance with all applicable laws and regulations and on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with unaffiliated parties of similar
creditworthiness.
INDEMNIFICATION
The Articles of Incorporation and Bylaws of the Company provide for the
indemnification of directors and officers of the Company and the Bank, including
reasonable legal fees, incurred by such directors and officers while acting for
or on behalf of the Company or the Bank as a director, officer, employee or
agent, subject to certain limitations. See "Description of Capital Stock -
Certain Anti-Takeover, Indemnification and Limited Liability Provisions." The
Company expects to purchase directors' and officers' liability insurance for
directors and officers of the Company and the Bank.
25
<PAGE> 30
PRINCIPAL SHAREHOLDERS
Except for 100 shares issued to Lewis S. Albert and Todd H. Katz for the
sole purpose of incorporating the Company and electing its directors, the
Company has not yet issued any Common Stock. These organizational shares will be
repurchased by the Company at their $1,000 cost concurrently with the closing of
this offering. See "Description of Capital Stock - Common Stock." The following
table sets forth certain information with respect to the anticipated beneficial
ownership of Common Stock after the sale of shares offered hereby, by: (i) each
person expected by the Company to beneficially own more than 5% of the
outstanding Common Stock; (ii) each of the current directors and executive
officers of the Company and the contemplated directors and executive officers of
the Bank; and (iii) all such directors and executive officers of the Company and
the Bank as a group. All share numbers are provided based upon estimates,
supplied to the Company by the persons listed below, of the number of shares of
Common Stock expected to be purchased in this offering by such persons,
including shares which may be issued to certain directors in full or partial
satisfaction of advances made to the Company. See "Certain Transactions
Organizational Advances." Depending upon their individual circumstances at the
time, each of such individuals may purchase a greater or fewer number of shares
than indicated in the following table.
<TABLE>
<CAPTION>
Number of shares
beneficially owned Percentage of outstanding
Name after this offering (1) shares owned after this offering
- ---- ----------------------- --------------------------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Lewis S. Albert 4,500 0.45%
Mark O. Asperilla 13,017 1.30%
James R. Baker 10,847 1.08%
Billie A. Barger 1,084 0.11%
James C. Brown 10,847 1.08%
Gerald P. Flagel 21,695 2.17%
Gina D. Hahn 10,847 1.08%
Todd H. Katz 4,500 0.45%
Larry A. Tenbusch 6,508 0.65%
------ ----
Directors and executive officers as a group (9 83,845 8.30%
individuals)
</TABLE>
(1) The information contained in this column is based upon information
furnished to the Company by the persons named above and the members of the
designated group. The nature of beneficial ownership for shares shown in
this column is sole voting and investment power. Inclusion of shares shall
not constitute an admission of beneficial ownership or voting or
investment power over included shares. The shares set forth above also
include as to each director the number of shares listed below, which
represents shares the individual will have the right to acquire pursuant
to then presently exercisable options and warrants.
<TABLE>
<CAPTION>
Name of Individual Number of Shares
------------------ ----------------
<S> <C>
Lewis S. Albert 2,000
Mark O. Asperilla 1,017
James R. Baker 847
Billie A. Barger 84
James C. Brown 847
</TABLE>
26
<PAGE> 31
<TABLE>
<S> <C>
Gerald P. Flagel 1,695
Gina D. Hahn 847
Todd D. Katz 2,000
Larry A. Tenbusch 508
-------
9,845
</TABLE>
SUPERVISION AND REGULATION
Banks and their holding companies, and many of their affiliates, are
extensively regulated under both federal and state law. The following is a brief
summary of certain statutes, rules, and regulations affecting the Company and
the Bank. This summary is qualified in its entirety by reference to the
particular statutory and regulatory provisions referred to below and is not
intended to be an exhaustive description of the statutes or regulations
applicable to the business of the Company and the Bank. Any change in the
applicable law or regulation may have a material effect on the business and
prospects of the Company and the Bank. See "Risk Factors -- Government
Regulation and Monetary Policy." Supervision, regulation, and examination of
banks by regulatory agencies are intended primarily for the protection of
depositors, rather than shareholders.
Bank Holding Company Regulation. The Company is a bank holding company
registered with the Federal Reserve under the BHC Act. As such, the Company is
subject to the supervision, examination and reporting requirements of the BHC
Act and the regulations of the Federal Reserve. The Company is required to
furnish to the Federal Reserve an annual report of its operations at the end of
each fiscal year, and such additional information as the Federal Reserve may
require pursuant to the BHC Act. The BHC Act requires that a bank holding
company obtain the prior approval of the Federal Reserve before (i) acquiring
direct or indirect ownership or control of more than 5% of the voting shares of
any bank, (ii) taking any action that causes a bank to become a subsidiary of
the bank holding company, or (iii) merging or consolidating with any other bank
holding company.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy and consideration of convenience and needs issues includes the parties'
performance under the Community Reinvestment Act of 1977 (the "CRA"), both of
which are discussed below.
The BHC Act generally prohibits a bank holding company from engaging in
activities other than banking, or managing or controlling banks or other
permissible subsidiaries, and from acquiring or retaining direct or indirect
control of any company engaged in any activities other than those activities
determined by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In determining
whether a particular activity is permissible, the Federal Reserve must consider
whether the performance of such an activity can reasonably be expected to
produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency that outweigh possible adverse effects, such
as undue concentration of resources, decreased or unfair competition, conflicts
of interest, or unsound banking practices. For example, factoring accounts
receivable, acquiring or servicing loans, leasing personal property, conducting
securities brokerage activities, performing certain data processing services,
acting as agent or broker in selling credit life insurance and certain other
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<PAGE> 32
types of insurance in connection with credit transactions, and certain insurance
underwriting activities have all been determined by regulations of the Federal
Reserve to be permissible activities of bank holding companies. Despite prior
approval, the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or terminate its ownership or control of
any subsidiary, when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.
Banks are subject to the provisions of the CRA. Under the terms of the
CRA, the appropriate federal bank regulatory agency is required, in connection
with its examination of a bank, to assess such bank's record in meeting the
credit needs of the community served by that bank, including low- and
moderate-income neighborhoods. The regulatory agency's assessment of the bank's
record is made available to the public. Further, such assessment is required of
any bank which has applied to (i) charter a national bank, (ii) obtain deposit
insurance coverage for a newly chartered institution, (iii) establish a new
branch office that will accept deposits, (iv) relocate an office, or (v) merge
or consolidate with, or acquire the assets or assume the liabilities of, a
federally regulated financial institution. In the case of a bank holding company
applying for approval to acquire a bank or other bank holding company, the
Federal Reserve will assess the record of each subsidiary bank of the applicant
bank holding company, and such records may be the basis for denying the
application.
Bank Regulation. The Bank will be chartered by the OCC under the National
Banking Act. The Bank's deposits will be insured by the FDIC to the extent
provided by law. The Bank will be subject to comprehensive regulation,
examination and supervision by the OCC. The Bank also will be subject to other
laws and regulations applicable to banks. Such regulations include limitations
on loans to a single borrower and to its directors, officers and employees;
restrictions on the opening and closing of branch offices; the maintenance of
required capital and liquidity ratios; the granting of credit under equal and
fair conditions; and the disclosure of the costs and terms of such credit. The
Bank will be examined periodically by the OCC, to whom the Bank will submit
periodic reports regarding its financial condition and other matters. The OCC
has a broad range of powers to enforce regulations under its jurisdiction, and
to take discretionary actions determined to be for the protection and safety and
soundness of banks, including the institution of cease and desist orders and the
removal of directors and officers. The OCC also has the authority to approve or
disapprove mergers, consolidations, and similar corporate actions.
Under federal law, federally insured banks are subject, with certain
exceptions, to certain restrictions on any extension of credit to their parent
holding companies or other affiliates, on investment in the stock or other
securities of affiliates, and on the taking of such stock or securities as
collateral from any borrower. In addition, banks are prohibited from engaging in
certain tie-in arrangements in connection with any extension of credit or the
providing of any property or service.
In 1989, the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA") was enacted. FIRREA contains major regulatory reforms,
stronger capital standards for savings and loan associations and stronger civil
and criminal enforcement provisions. FIRREA also provides that a depository
institution insured by the FDIC can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC after August 9, 1989 in
connection with (i) the default of a commonly controlled FDIC insured depository
institution, or (ii) any assistance provided by the FDIC to a commonly
controlled FDIC insured institution in danger of default.
In 1991, the FDIC Improvement Act of 1991 ("FDICIA") was enacted. FDICIA
made a number of reforms addressing the safety and soundness of deposit
insurance funds, supervision, accounting, and prompt regulatory action, and also
implemented other regulatory improvements. Annual full-scope, on-site
examinations are required of all insured depository institutions. The cost for
conducting an examination of an institution may be assessed to that institution,
with special consideration given to affiliates and any penalties imposed for
failure to provide information
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<PAGE> 33
requested. Insured state banks also are precluded from engaging as principal in
any type of activity that is impermissible for a national bank, including
activities relating to insurance and equity investments. FDICIA also recodified
current law restricting extensions of credit to insiders under the Federal
Reserve Act.
Transactions with Affiliates. There are various legal restrictions on the
extent to which the Company and any future nonbank subsidiaries can borrow or
otherwise obtain credit from the Bank. There also are legal restrictions on the
Bank's purchase of or investments in the securities of and purchases of assets
from the Company and any of its future nonbank subsidiaries, the Bank's loans or
extensions of credit to third parties collateralized by the securities or
obligations of the Company and any of its future nonbank subsidiaries, the
issuance of guarantees, acceptances, and letters of credit on behalf of the
Company and any of its future nonbank subsidiaries, and certain bank
transactions with the Company and any of its future nonbank subsidiaries, or
with respect to which the Company and nonbank subsidiaries act as agent,
participate or have a financial interest. Subject to certain limited exceptions,
the Bank may not extend credit to the Company or to any other affiliate in an
amount which exceeds 10% of the Bank's capital stock and surplus and may not
extend credit in the aggregate to such affiliates in an amount which exceeds 20%
of its capital stock and surplus. Further, there are legal requirements as to
the type, amount and quality of collateral which must secure such extensions of
credit transactions between the Bank and the Company or such other affiliates,
and such transactions must be on terms and under circumstances, including credit
standards, that are substantially the same or at least as favorable to the Bank
as those prevailing at the time for comparable transactions with non-affiliated
companies. Also, the Company and its subsidiaries are prohibited from engaging
in certain tie-in arrangements in connection with any extension of credit, lease
or sale of property or furnishing of services.
Dividends. Dividends from the Bank constitute the primary source of funds
for dividends to be paid by the Company. For additional information, see " Risk
Factors - No Assurance of Dividends" and "Dividend Policy." There also are
various statutory and contractual limitations on the ability of the Bank to pay
dividends, extend credit, or otherwise supply funds to the Company. As a
national bank, the Bank may not pay dividends from its paid-in surplus. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock until
its surplus equals its stated capital, unless there has been transferred to
surplus no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the OCC is required if the total of all dividends declared by a national bank
in any calendar year exceeds the total of its net profits for that year combined
with its retained net profits for the preceding two years, less any required
transfers to surplus. Florida law applicable to companies (including the
Company) provides that dividends may be declared and paid only if, after giving
it effect, (i) the company is able to pay its debts as they become due in the
usual course of business, and (ii) the company's total assets would be greater
than the sum of its total liabilities plus the amount that would be needed if
the company were to be dissolved at the time of the dividend to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the dividend.
Capital Requirements. The federal bank regulatory authorities have adopted
risk-based capital guidelines for banks and bank holding companies that are
designed to make regulatory capital requirements more sensitive to differences
in risk profile among banks and bank holding companies. The resulting capital
ratios represent qualifying capital as a percentage of total risk-weighted
assets and off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and bank holding companies contemplating
significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain all ratios well in excess of the minimums.
The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common stockholders' equity, qualifying perpetual preferred stock, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
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<PAGE> 34
lease losses. Tier 2 capital includes the excess of any preferred stock not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
FDICIA contains "prompt corrective action" provisions pursuant to which
banks are to be classified into one of five categories based upon capital
adequacy, ranging from "well capitalized" to "critically undercapitalized" and
which require (subject to certain exceptions) the appropriate federal banking
agency to take prompt corrective action with respect to an institution which
becomes "significantly undercapitalized" or "critically undercapitalized".
The OCC has issued final regulations to implement the "prompt corrective
action" provisions of FDICIA. In general, the regulations define the five
capital categories as follows: (i) an institution is "well capitalized" if it
has a total risk-based capital ratio of 10% or greater, has a Tier 1 risk-based
capital ratio of 6% or greater, has a leverage ratio of 5% or greater and is not
subject to any written capital order or directive to meet and maintain a
specific capital level for any capital measures; (ii) an institution is
"adequately capitalized" if it has a total risk-based capital ratio of 8% or
greater, has a Tier 1 risk-based capital ratio of 4% or greater, and has a
leverage ratio of 4% or greater; (iii) an institution is "undercapitalized" if
it has a total risk-based capital ratio of less than 8%, has a Tier 1 risk-based
capital ratio that is less than 4% or has a leverage ratio that is less than 4%;
(iv) an institution is "significantly undercapitalized" if it has a total
risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio
that is less than 3% or a leverage ratio that is less than 3%; and (v) an
institution is "critically undercapitalized" if its "tangible equity" is equal
to or less than 2% of its total assets. The OCC also, after an opportunity for a
hearing, has authority to downgrade an institution from "well capitalized" to
"adequately capitalized" or to subject an "adequately capitalized" or
"undercapitalized" institution to the supervisory actions applicable to the next
lower category, for supervisory concerns. The degree of regulatory scrutiny of a
financial institution will increase, and the permissible activities of the
institution will decrease, as it moves downward through the capital categories.
Institutions that fall into one of the three undercapitalized categories may be
required to (i) submit a capital restoration plan; (ii) raise additional
capital; (iii) restrict their growth, deposit interest rates, and other
activities; (iv) improve their management; (v) eliminate management fees; or
(vi) divest themselves of all or part of their operations. Bank holding
companies controlling financial institutions can be called upon to boost the
institutions' capital and to partially guarantee the institutions' performance
under their capital restoration plans. These capital guidelines can affect the
Company in several ways. After completion of this offering, the Company's
capital levels will be in excess of those required to be maintained by a "well
capitalized" financial institution. However, rapid growth, poor loan portfolio
performance, or poor earnings performance, or a combination of these factors,
could change the Company's capital position in a relatively short period of
time, making an additional capital infusion necessary.
Additionally, FDICIA requires, among other things, that (i) only a "well
capitalized" depository institution may accept brokered deposits without prior
regulatory approval and (ii) the appropriate federal banking agency annually
examine all insured depository institutions, with some exceptions for small,
"well capitalized" institutions and state-chartered institutions examined by
state regulators. FDICIA also contains a number of consumer banking provisions,
including disclosure requirements and substantiative contractual limitations
with respect to deposit accounts.
Enforcement Powers. Congress has provided the federal bank regulatory
agencies with an array of powers to enforce laws, rules, regulations and orders.
Among other things, the agencies may require that institutions cease and desist
from certain activities, may preclude persons from participating in the affairs
of insured depository institutions, may suspend or remove deposit insurance, and
may impose civil money penalties against institution-affiliated parties for
certain violations.
Maximum Legal Interest Rates. Like the laws of many states, Florida law
contains provisions on interest rates that may be charged by banks and other
lenders on certain types of loans. Numerous exceptions exist to the general
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<PAGE> 35
interest limitations imposed by Florida law. The relative importance of these
interest limitation laws to the financial operations of the Bank will vary from
time to time, depending on a number of factors, including conditions in the
money markets, the costs and availability of funds, and prevailing interest
rates.
Bank Branching. Banks in Florida are permitted to branch state wide. Such
branch banking by national banks, however, is subject to prior approval by the
OCC. Any such approval would take into consideration several factors, including
the bank's level of capital, the prospects and economics of the proposed branch
office, and other conditions deemed relevant by the OCC for purposes of
determining whether approval should be granted to open a branch office. For
information regarding legislation on interstate branching in Florida, see "--
Interstate Banking" below.
Change of Control. Federal law restricts the amount of voting stock of a
bank holding company and a bank that a person may acquire without the prior
approval of banking regulators. The overall effect of such laws is to make it
more difficult to acquire a bank holding company and a bank by tender offer or
similar means than it might be to acquire control of another type of
corporation. Consequently, shareholders of the Company may be less likely to
benefit from the rapid increases in stock prices that may result from tender
offers or similar efforts to acquire control of other companies. Federal law
also imposes restrictions on acquisitions of stock in a bank holding company and
a state bank. Under the federal Change in Bank Control Act and the regulations
thereunder, a person or group must give advance notice to the Federal Reserve
before acquiring control of any bank holding company and the OCC before
acquiring control of any national bank (such as the Bank). Upon receipt of such
notice, the Federal Reserve or the OCC, as the case may be, may approve or
disapprove the acquisition. The Change in Bank Control Act creates a rebuttable
presumption of control if a member or group acquires a certain percentage or
more of a bank holding company's or state bank's voting stock, or if one or more
other control factors set forth in the Act are present.
Interstate Banking. The Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, provides for nationwide interstate banking and
branching. Under the law, interstate acquisitions of banks or bank holding
companies in any state by bank holding companies in any other state are
permissible subject to certain limitations. Florida also has a law that allows
out-of-state bank holding companies (located in states that allow Florida bank
holding companies to acquire banks and bank holding companies in that state) to
acquire Florida banks and Florida bank holding companies. The law essentially
provides for out-of-state entry by acquisition only (and not by interstate
branching) and requires the acquired Florida bank to have been in existence for
at least three years. Interstate branching and consolidation of existing bank
subsidiaries in different states is permissible. A Florida bank also may
establish, maintain, and operate one or more branches in a state other than
Florida pursuant to an interstate merger transaction in which the Florida bank
is the resulting bank. An interstate merger transaction resulting in the
acquisition by an out-of-state bank of a Florida bank is not permitted unless
the Florida bank has been in existence and continuously operating, on the date
of the acquisition, for more than three years.
Effect of Governmental Policies. The earnings and businesses of the
Company and the Bank are affected by the policies of various regulatory
authorities of the United States, especially the Federal Reserve. The Federal
Reserve, among other things, regulates the supply of credit and deals with
general economic conditions within the United States. The instruments of
monetary policy employed by the Federal Reserve for those purposes influence in
various ways the overall level of investments, loans, other extensions of
credit, and deposits, and the interest rates paid on liabilities and received on
assets.
INDUSTRY RESTRUCTURING
For well over a decade, the banking industry has been undergoing a
restructuring process which is anticipated to continue. The restructuring has
been caused by product and technological innovations in the financial services
industry, deregulation of interest rates, and increased competition from foreign
and nontraditional banking
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<PAGE> 36
competitors, and has been characterized principally by the gradual erosion of
geographic barriers to intrastate and interstate banking and the gradual
expansion of investment and lending authorities for bank institutions.
Members of Congress and the administration have indicated their intention
to consider additional legislation designed to institute reforms to promote the
viability of the industry. Certain of the proposals would revise the federal
regulatory structure for insured depository institutions; others would affect
the nature of products, services, and activities that bank holding companies and
their subsidiaries may offer or engage in, and the types of entities that may
control depository institutions. There can be no assurance as to whether or in
what form any such proposed legislation might be enacted, or what impact such
legislation might have upon the Company.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company presently consists of
10,000,000 shares of Common Stock, par value $.01 per share, and 2,000,000
shares of preferred stock, par value not stated (the "Preferred Stock").
COMMON STOCK
As of the date of this Prospectus, there were 100 shares of Common Stock
issued and outstanding of which Messrs. Albert And Katz held 50 shares each.
These shares were issued at a price of $10.00 per share for the sole purpose of
incorporating the Company, and for other organizational purposes, and they will
be redeemed at cost and canceled concurrently with the closing of this offering.
All outstanding shares of Common Stock offered hereby will be fully paid and
nonassessable. The holders of Common Stock are entitled to one vote for each
share held of record on all matters voted upon by stockholders. Subject to
preferences that may be applicable to any outstanding shares of Preferred Stock,
each share of outstanding Common Stock is entitled to participate equally in any
distribution of net assets made to the stockholders in liquidation, dissolution
or winding up the Company and is entitled to participate equally in dividends as
and when declared by the Company's Board of Directors. There are no redemption,
sinking fund, conversion or preemptive rights with respect to the shares of
Common Stock. All shares of Common Stock have equal rights and preferences. The
transfer agent and registrar for the Common Stock is American Stock Transfer &
Trust Company.
PREFERRED STOCK
As of the date of this Prospectus, no shares of Preferred Stock were
issued or outstanding. The Board of Directors is authorized to fix or alter the
rights, preferences, privileges and restrictions of any wholly unissued series
of Preferred Stock, including the dividend rights, original issue price,
conversion rights, voting rights, terms of redemption, liquidation preferences
and sinking fund terms thereof, and the number of shares constituting any such
series and the designation thereof and to increase or decrease the number of
shares of such series subsequent to the issuance of shares of such series (but
not below the number of shares then outstanding).
CERTAIN ANTI-TAKEOVER, INDEMNIFICATION AND LIMITED LIABILITY PROVISIONS
The Company's Board of Directors may authorize the issuance of additional
shares of Common Stock or Preferred Stock without further action by the Company
shareholders, unless such action is required in a particular case by applicable
laws or regulation. The authority to issue additional Common Stock or Preferred
Stock provides the Company with the flexibility necessary to meet its future
needs without the delay resulting from seeking shareholder approval. The
unissued Common Stock or Preferred Stock may be issued from time to time for any
corporate
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<PAGE> 37
purposes, including without limitation, stock splits, stock dividends, employee
benefit and compensation plans, acquisitions and public and private sales for
cash as a means of raising capital. Such shares could be used to dilute the
stock ownership of persons seeking to obtain control of the Company. In
addition, the sale of a substantial number of shares of Common Stock or
Preferred Stock to persons who have an understanding with the Company concerning
the voting of such shares, or the distribution or dividend of Common Stock or
Preferred Stock (or right to receive such shares) to the Company's shareholders,
may have the effect of discouraging or otherwise increasing the cost of
unsolicited attempts to acquire control of the Company. Further, because the
Company's Board has the power to determine the voting, conversion or other
rights of the Preferred Stock, the issuance of a series of Preferred Stock to
persons friendly to management could effectively discourage or preclude
consummation of a change in control transaction or have the effect of
maintaining the position of the Company's incumbent management. The Company does
not currently have any plans or commitments to use its authority to effect any
such issuance, but reserves the right to take any action that the Board of
Directors deems to be in the best interests of the Company and its shareholders.
The Company's Bylaws also contain provisions that provide that the Board
of Directors shall be divided into three classes as nearly equal in number as
the then total number of directors constituting the Board permits, with the
total of office of one class expiring each year. The classification of directors
has the effect of making it more difficult to change the composition of the
Board of Directors. At least two shareholder meetings, instead of one, is
required to effect a change in a majority of the Board. The Board believes that
the longer time required to elect a majority of a classified Board will help to
assure the continuity and stability of the Company's directors and policies in
the future, since a majority of the directors at any given time will have prior
experience as directors of the Company. The classification provision applies for
every election of directors, regardless of whether a change in the Board might
arguably be beneficial to the Company and its shareholders and whether or not a
majority of the Company's shareholders believes that such a change would be
desirable.
The Company is subject to several provisions under Florida law which may
deter or frustrate unsolicited attempts to acquire certain Florida corporations.
These statutes, commonly referred to as the "Control Share Act" and the "Fair
Price Act," apply to most public corporations organized in Florida unless the
corporation has specifically elected to opt out of such provisions. The Company
has not elected to opt out of these provisions. The Fair Price Act generally
requires that certain transactions between a public corporation and an affiliate
must be approved by two-thirds of the disinterested directors or shareholders
(not including those shares beneficially owned by an "interested shareholder").
The Control Share Act generally provides that shares of a public corporation
acquired in excess of certain specified thresholds will not posses any voting
rights unless such voting rights are approved by a majority vote of the
corporation's disinterested shareholders. These anti-takeover provisions of
Florida law could result in the Company being less attractive to a potential
acquiror and/or result in shareholders receiving less for their shares than
might otherwise might be available in the event an unsolicited takeover attempt.
The Florida Business Corporation Act authorizes a company to indemnify its
directors and officers in certain instances against certain liabilities which
they may incur by virtue of their relationship with the company. A company may
indemnify any director, officer, employee or agent against judgments, fines,
penalties, amounts paid in settlement, and expenses incurred in any pending,
threatened or completed civil, criminal, administrative, or investigative
proceeding (except an action by the company) against him in his capacity as a
director, officer, employee, or agent of the company, or another company if
serving in such capacity at the company's request if he (i) acted in good faith;
(ii) acted in a manner which he reasonably believed to be in or not opposed to
the best interests of the company; and (iii) with respect to a criminal action,
had no reasonable cause to believe his conduct was unlawful. Furthermore, a
company may indemnify any director, officer, agent or employee against expenses
incurred in defense or settlement of any proceeding brought by the company
against him in his capacity as a director, officer, employee or agent of the
company, or another company if serving in such capacity at the company's
request, if he:
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<PAGE> 38
(i) acted in good faith; (ii) acted in a manner which he reasonably believed to
be in or not opposed to the best interests of the company; and (iii) is not
adjudged to be liable to the company (unless the court finds that he is
nevertheless reasonably entitled to indemnity for expenses which the court
deems proper). A company must repay the expenses of any director, officer,
employee or agent who is successful on the merits of an action against him in
his capacity as such.
A Florida company is authorized to make any other or further
indemnification or advancement of expenses of any of its directors, officers,
employees, or agents, except for acts or omissions which constitute (i) a
violation of the criminal law (unless the individual had reasonable cause to
believe it was lawful); (ii) a transaction in which the individual derived an
improper personal benefit; (iii) in the case of a director, a circumstance
under which certain liability provisions of the Florida Business Corporation
Act are applicable (related to payment of dividends or other distributions or
repurchases of shares in violation of such Act); or (iv) willful misconduct or
a conscious disregard for the best interest of the company in a proceeding by
the company, or a company shareholder. A Florida company also is authorized to
purchase and maintain liability insurance for its directors, officers,
employees and agents.
The Company's Articles of Incorporation and Bylaws provide that the
Company shall indemnify each of its directors and officers to the fullest
extent permitted by law, and that the indemnity will include advances for
expenses and costs incurred by such director or officer related to any action
in regard to which indemnity is permitted. At present, the Company maintains
directors' and officers' liability insurance covering its directors and
officers against expenses and liabilities arising from certain actions to which
they may become subject by reason of having served in such role. Such insurance
is subject to the coverage amounts, exceptions, deductibles and other
conditions set forth in the policy. There is no assurance that the Company will
maintain liability insurance for its directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Directors, officers, or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company expects to have 1,000,000
shares of its Common Stock outstanding. The 1,000,000 shares of the Company's
Common Stock purchased in this offering (plus any additional shares sold upon
the Underwriter's exercise of its over-allotment option) have been registered
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), and may generally be
resold without registration under the Securities Act unless they were acquired
by directors, executive officers, or other affiliates of the Company or the
Bank (collectively, "Affiliates"). Affiliates of the Company may generally only
sell shares of the Common Stock pursuant to the Commission's Rule 144.
In general, under Rule 144 as currently in effect, an affiliate (as
defined in Rule 144) of the Company may sell shares of Common Stock within any
three-month period in an amount limited to the greater of 1% of the outstanding
shares of the Company's Common Stock (10,000 shares immediately after the
completion of this offering) or the average weekly trading volume in the
Company's Common Stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about
the Company.
The Company and the directors and officers of the Company and the Bank
(who are expected to hold an aggregate of approximately 74,000 shares after
this offering), have agreed, or will agree, that they will not issue, offer
34
<PAGE> 39
for sale, sell, grant any options for the sale of or otherwise dispose of any
shares of Common Stock or any rights to purchase shares of Common Stock, in the
open market or otherwise, without the prior written consent of the Underwriter
for a period of 180 days from the date of this Prospectus. Prior to this
offering, there has been no public trading market for the Common Stock, and no
predictions can be made as to the effect, if any, that sales of shares or the
availability of shares for sale will have on the prevailing market price of the
Common Stock after completion of this offering. Nevertheless, sales of
substantial amounts of Common Stock in the public market could have an adverse
effect on prevailing market prices.
UNDERWRITING
Subject to the terms and conditions contained in an Underwriting
Agreement, Robert W. Baird & Co. Incorporated, as Underwriter, has agreed to
purchase from the Company an aggregate of up to 1,000,000 shares of Common
Stock at the Price to Public less the Underwriting Discounts and Commissions
set forth on the cover page of this Prospectus.
The Underwriting Agreement provides that the Underwriter's obligation
thereunder is subject to approval of certain legal matters by its counsel and
various other conditions. The Underwriter is obligated to purchase all such
shares, excluding shares covered by the over-allotment option granted to the
Underwriter, if any are purchased.
The Company has been advised by the Underwriter that it proposes to offer
the Common Stock to the public at the initial public offering price set forth
on the cover page of this Prospectus and to certain dealers at such price, less
a concession not in excess of $0.825 per share. However, no underwriting
discounts or commissions will be assessed with respect to sales to certain
investors identified by the Company to the Underwriter, in writing, prior to
the effectiveness of the registration statement, and that the Underwriter and
such dealers may reallow a concession not in excess of $_________ per share to
other dealers. The public offering price and concessions and reallowances to
dealers may be changed by the Underwriter after the initial public offering.
Unless waived by the Company, shares of Common Stock will be sold to the
public only in minimum lots of 250 shares ($2,500) and any one investor
(together with the investor's affiliates) will be permitted to purchase a
maximum of 50,000 shares ($500,000).
The Underwriter has informed the Company that it does not intend to
confirm sales of the shares of Common Stock offered hereby to any accounts over
which it exercises discretionary authority.
The Company has granted the Underwriter an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of 150,000
additional shares of Common Stock to cover over-allotments, if any, at the same
price per share to be paid by the Underwriter for the other shares of Common
Stock offered hereby. The Underwriter may exercise such option only for the
purpose of covering any over-allotments of the 1,000,000 shares of Common Stock
offered hereby.
The Company, its directors and executive officers and those of the Bank
agreed or will agree with the Underwriter, for a period of 180 days after the
date of this Prospectus, not to issue, sell, offer to sell, grant any options
for the sale of, or otherwise dispose of any shares of Common Stock or any
rights to purchase shares of Common Stock, in the open market or otherwise,
without the prior written consent of the Underwriter.
The Underwriter has advised the Company that it presently intends to make
a market in the Common Stock after the commencement of the offering, but no
assurance can be made as to the liquidity of the Common Stock or that an
35
<PAGE> 40
active and liquid trading market will develop or, if developed, that it will be
sustained. The Underwriter will have no obligation to make a market in the
Common Stock, however, and may cause market-making activities, if commenced, to
cease at any time.
The Company and the Underwriter have agreed to indemnify, or to
contribute to payments made by, each other against civil liabilities, including
civil liabilities under the Securities Act.
There has been no public trading market for the Common Stock. The
offering price of $10 per share was determined by negotiations between the
Company and the Underwriter. This price is not based upon earnings or any
history of operations and should not be construed as indicative of the present
or anticipated future value of the Common Stock. Several factors were
considered in determining the initial offering price of the Common Stock, among
them the size of the offering, the desire that the security being offered be
attractive to individuals and the Underwriter's experience in dealing with
initial public offerings for financial institutions.
William H. Elett, an employee of the Underwriter, is one of the Bank's
organizers. In connection with Mr. Elett's advancement of funds to the Bank for
organization expenses, as well as anticipated shares to be purchased by him in
the offering, he could receive warrants to purchase up to 14,577 shares of the
Common Stock having an exercise price of $10.00 per share.
In connection with the offering of the Common Stock, the Underwriter and
any selling group members and their respective affiliates may engage in
over-allotment, stabilizing transactions, syndicate covering transactions, and
penalty bids effected in accordance with Rule 104 of the SEC's Regulation M.
Over-allotment is a transaction in which the Underwriter creates a short
position for its own account by selling more Common Stock than it is committed
to purchase from the Company. To cover all or part of a short position, the
Underwriter may exercise the over-allotment option described above or may
purchase Common Stock in the open market following completion of the initial
offering of the Common Stock. In stabilizing transactions, the Underwriter may
bid for, and purchase, shares of the Common Stock at a level above that which
might otherwise prevail in the open market for the purpose of preventing or
retarding a decline in the market price of the Common Stock. Syndicate covering
transactions involve purchases of Common Stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Underwriter to reclaim a selling concession from a
syndicate member when the Common Stock originally sold by such syndicate member
is purchased in a syndicate covering transaction to cover syndicate short
positions. Such over-allotment, stabilizing transactions, syndicate covering
transactions, and penalty bids may cause the price of the Common Stock to be
higher than it would otherwise be in the absence of such a transaction. The
Underwriter is required to engage in any of the foregoing transactions, and, if
commenced, may be discontinued at any time.
LEGAL PROCEEDINGS
Neither the Bank nor the Company is a party to any pending legal
proceeding. Management believes there is no litigation threatened in which the
Company or the Bank faces potential loss or exposure or which will materially
affect stockholders' equity or the Company's business or financial condition
upon completion of this offering.
LEGAL OPINIONS
The legality of the shares of Common Stock being offered hereby will be
passed upon for the Company by Smith, Mackinnon, Greeley, Bowdoin & Edwards,
P.A., Orlando, Florida. Holland & Knight LLP, Tampa, Florida
36
<PAGE> 41
is acting as counsel for the Underwriter in connection with certain legal
matters relating to the shares of Common Stock offered hereby.
EXPERTS
The financial statements of the Company included in this Prospectus have
been audited by Hill, Barth & King, Inc., independent public accountants, as
indicated in their report with respect thereto. Such financial statements have
been included herein and in the Registration Statement in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement with the Commission in
accordance with the provisions of the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and regulations
of the Commission. For further information pertaining to the shares of Common
Stock offered hereby and to the Company, reference is made to the Registration
Statement, including the Exhibits filed as a part thereof, copies of which can
be inspected at and copied at the prescribed rates at the Public Reference
Section of the Commission Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Commission's regional offices: Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York, 10048; and
Midwest Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. In addition, the Company is required to file electronic versions of
these documents with the Commission through the Commission's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system. The Commission maintains a
World Wide Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission.
37
<PAGE> 42
FINANCIAL STATEMENTS
TARPON COAST BANCORP, INC.
(A Development Stage Company)
August 31, 1997
- - - o o O o o - - -
C O N T E N T S
<TABLE>
<CAPTION>
P A G E
- - - -
<S> <C>
Independent Auditors' Report - - - - - - - - - - - - - - F-2
Balance Sheet - - - - - - - - - - - - - - - - - - - - - F-3
Statement of Operations - - - - - - - - - - - - - - - - F-4
Statement of Changes in Shareholders Deficit - - - - - F-5
Statement of Cash Flows - - - - - - - - - - - - - - - - F-6
Notes to Financial Statements - - - - - - - - - - - - - F-7-9
</TABLE>
- - - o o O o o - - -
F-1
<PAGE> 43
[HILL, BARTH & KING, INC. LETTERHEAD]
Board of Directors
Tarpon Coast Bancorp, Inc.
Naples, Florida
Independent Auditors' Report
We have audited the accompanying balance sheet of Tarpon Coast Bancorp,
Inc. formerly known as Gulf Coast Bancorp, Inc. (the Company) as of August 31,
1997 and the related statements of operations, shareholders deficit and cash
flows for the period from May 1, 1997 (date of inception) to August 31, 1997.
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 Tarpon Coast
Bancorp, Inc. as of August 31, 1997, and the results of its operations and its
cash flows for the period from May 1, 1997 (date of inception) to August 31,
1997 in conformity with generally accepted accounting principles.
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
September 18, 1997, except for Note F,
as to which the date is December 23, 1997
F-2
<PAGE> 44
TARPON COAST BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
August 31, 1997
<TABLE>
<CAPTION>
November 30, 1997
August 31, 1997 (unaudited)
--------------- -----------------
<S> <C> <C>
A S S E T S
Cash and due from banks $ 179,874 $ 119,442
--------- ---------
TOTAL CASH AND CASH EQUIVALENTS 179,874 $ 119,442
--------- ---------
Equipment - NOTE B 10,666 75,188
Deferred offering costs 2,100 26,000
Prepaid expenses 7,095 1,575
Other assets 25,175 175
--------- ---------
$ 224,910 $ 222,380
========= =========
LIABILITIES AND SHAREHOLDERS DEFICIT
Liabilities:
Advances from organizers - Note C $ 307,000 $ 365,835
Accrued expenses and other liabilities 16,765 8,956
--------- ---------
TOTAL LIABILITIES 323,765 $ 374,791
--------- ---------
Shareholders Deficit:
Preferred stock, no stated par,
2,000,000 shares authorized; no shares
issued and outstanding -- --
Common stock, par value $.01 per share,
10,000,000 shares authorized;
100 shares issued and outstanding 1 1
Additional paid-in capital 999 999
Deficit accumulated during the
development stage (99,855) (153,411)
--------- ---------
TOTAL SHAREHOLDERS DEFICIT (98,855) (152,411)
--------- ---------
$ 224,910 $ 222,380
========= =========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 45
TARPON COAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period from May 1, 1997 (date of inception) to August 31, 1997
<TABLE>
<CAPTION>
Seven months
Four months ended
ended November 30, 1997
August 31, 1997 (unaudited)
--------------- -----------------
<S> <C> <C>
INCOME
Interest income $ 0 $ 2
EXPENSES
Consulting fees 42,000 84,000
Professional fees 44,890 46,707
Other expenses 12,965 22,706
-------- ---------
TOTAL EXPENSES 99,855 153,413
-------- ---------
NET LOSS $(99,855) $(153,411)
======== =========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 46
TARPON COAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS DEFICIT Period
from May 1, 1997 (date of inception) to August 31, 1997
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the Total
Common Paid-in Development Total November 30, 1997
Stock Capital Stage August 31, 1997 (unaudited)
------- ---------- ------------ --------------- -----------------
<S> <C> <C> <C> <C> <C>
Balance
May 1, 1997 $0 $ 0 $ 0 $ 0 $ 0
Proceeds from
issuance of
common stock 1 999 0 1,000 1,000
Net loss 0 0 (99,855) (99,855) (153,411)
-- ---- -------- --------- ---------
Balance (deficit)
August 31, 1997 $1 $999 $(99,855) $ (98,855 $(152,411)
== ==== ======== ========= =========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 47
TARPON COAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period from May 1, 1997 (date of inception) to August 31, 1997
<TABLE>
<CAPTION>
Seven months
Four months ended
ended November 30, 1997
August 31, 1997 (unaudited)
--------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (99,855) $(153,411)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation 288 759
Increase in prepaid expenses (7,095) (1,575)
Increase in other assets (27,275) (26,175)
Increase in accounts payable 16,765 8,956
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (117,172) (18,035)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (10,954) (75,947)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (10,954) (75,947)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 1,000 1,000
NET CASH PROVIDED BY FINANCING ACTIVITIES 308,000 366,835
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 179,874 119,442
CASH AND CASH EQUIVALENTS
Beginning of period 0 0
--------- ---------
End of period $ 179,874 $ 119,442
========= =========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE> 48
TARPON COAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization:
Tarpon Coast Bancorp, Inc. formerly known as Gulf Coast Bancorp, Inc.
(the Company) was incorporated under the laws of the state of Florida on August
7, 1997 with an initial capitalization of $1,000. The company is the successor
entity to Gulf Coast Community Partners, organized on May 1, 1997 as a general
partnership. The Company's activities to date have been limited to the
organization of Tarpon Coast National Bank formerly known as Gulf Coast
Community Bank, National Association, (the Bank), as well as preparation for a
$10,000,000 common stock offering (the Offering). A substantial portion of the
proceeds of the Offering will be used by the Company to provide the initial
capitalization of the Bank. The start-up of the Bank is contingent upon
receiving the approval of various banking regulatory authorities and also a
successful completion of the Offering.
Nature of Business:
The Bank intends to offer a full range of commercial and consumer
banking services primarily within the Port Charlotte and Punta Gorda, Florida
area.
Use of 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.
Cash and Cash Equivalents:
Cash, demand balances due from banks and interest bearing deposits in
banks are considered cash and cash equivalents for cash flow reporting
purposes.
Deferred Offering Costs:
Deferred offering costs consist of legal and accounting fees related
to the initial public stock offering and will be offset against the offering
proceeds when received.
F-7
<PAGE> 49
TARPON COAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 1997
NOTE B - EQUIPMENT
Equipment at August 31, 1997 consists of the following:
<TABLE>
<S> <C> <C>
EDP equipment $ 9,393
Construction in progress 1,561
--------
10,954
Less accumulated depreciation 288
--------
TOTAL $ 10,666
========
</TABLE>
Depreciation is computed on the straight-line method over the
estimated useful lives of the depreciable assets. Depreciation expense was $288
for the period ended August 31, 1997.
NOTE C - ADVANCES FROM ORGANIZERS
The Company arranged a series of advances from certain individual
organizers in the aggregate amount of $307,000 to pay organizational and
pre-opening expenses for the Bank and the Company. The foregoing advances bear
no interest and will be converted into the Company's common stock on the
closing date of the Offering. In the event that the Bank's charter is denied,
each Organizer will receive back only their pro rata share of monies remaining
in the organization expense account after all organizing expenses and expenses
related to closing down the organizational project are paid.
Subsequent to the balance sheet date, the Company obtained additional
advances from certain organizers in the aggregate amount of $58,835 to pay
additional expenses for the Bank and the Company. Terms of these advances are
the same as those previously disclosed above.
NOTE D - COMMITMENTS AND CONTINGENCIES
The Company has committed to lease a temporary facility to house its
main office location. The proposed lease has a term of one year with the option
to renew on a month-to-month basis at the current market rate; to begin on the
earlier of February 1, 1998 or 60 days from the date preliminary OCC approval
is obtained. The aggregate annual lease payment is $45,000 plus applicable
sales tax. The Company has also entered into a short-term lease for office
space to conduct its activities during the development stage. The lease has a
term of six months ending November 30, 1997 with the option for one 3-month
renewal period.
F-8
<PAGE> 50
TARPON COAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 1997
NOTE D - COMMITMENTS AND CONTINGENCIES (CONTINUED)
The Company has entered into a contract to purchase 1.09 acres of land
for $875,000 to be used to build the Banks permanent facility; closing to occur
within 15 days of receiving FDIC and OCC approval but in any event no later
than January 30, 1998.
NOTE E - STOCK OPTIONS AND WARRANTS
The Board of Directors of the Company has reserved 125,000 shares of
common stock for issuance under an Incentive Stock Option Plan. The Board has
designated 60,000 of these shares for options to be granted to various
executive officers upon the execution of their respective employment
agreements. The shares are exercisable at $10.00 per share and in increments of
10% of the number of shares subject to the Option on each anniversary of the
date of grant until all shares subject to the Option have become exercisable,
with 10% of the shares becoming exercisable on the date of the grant.
The Board of Directors of the Company have also agreed to grant Stock
Purchase Warrants in consideration of the Organizers efforts in organizing the
Company and the Bank. The Company intends to issue warrants to purchase 0.34
shares of Common Stock for each share of Common Stock purchased by each
organizer from the Offering. The Warrants will vest in equal increments of 25%
commencing on the date of grant and on each anniversary date thereafter until
fully vested. Warrants may be exercised in whole or in part for $10.00 per
share beginning on the date of grant and expiring 10 years after the grant
date. The Company has reserved 96,443 shares of its Common Stock for issuance
thereunder.
NOTE F - SUBSEQUENT EVENT
As of December 23, 1997, the Company amended its Articles of
Incorporation to change its name from Gulf Coast Bancorp, Inc. to Tarpon Coast
Bancorp, Inc. The name change was executed solely to avoid potential trademark
infringement issues which were discovered subsequent to the original
incorporation and balance sheet date.
F-9
<PAGE> 51
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIEF UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
TABLE OF CONTENTS
Prospectus Summary.......................................................
Risk Factors.............................................................
Recent Developments .....................................................
Use of Proceeds..........................................................
Dividend Policy..........................................................
Capitalization...........................................................
Management's Discussions and Analysis of Financial Condition and
Results of Operations...................................................
Business.................................................................
Management...............................................................
Certain Transactions.....................................................
Principal Stockholders...................................................
Supervision and Regulation...............................................
Description of Capital Stock.............................................
Shares Eligible for Future Sale..........................................
Underwriting.............................................................
Legal Proceedings........................................................
Legal Opinions...........................................................
Experts..................................................................
Additional Information...................................................
Index to Financial Statements.........................................F-1
UNTIL ___________, 199__, ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON
STOCK, 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.
1,000,000 SHARES
TARPON COAST BANCORP, INC.
COMMON STOCK
PROSPECTUS
ROBERT W. BAIRD & CO.
INCORPORATED
______________, 199__
<PAGE> 52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850, Florida Statutes, grants a corporation the power to
indemnify its directors, officers, employees, and agents for various expenses
incurred resulting from various actions taken by its directors, officers,
employees, or agents on behalf of the corporation. In general, if an individual
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the action was
unlawful, then the corporation has the power to indemnify said individual who
was or is a party to any proceeding (including, in the absence of an
adjudication of liability (unless the court otherwise determines), any
proceeding by or in the right of the corporation) against liability expenses,
including counsel fees, incurred in connection with such proceeding, including
any appeal thereof (and, as to actions by or in the right of the corporation,
against expenses and amounts paid in settlement not exceeding, in the judgment
of the board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof). To the extent that
a director, officer, employee, or agent has been successful on the merits or
otherwise in defense of any proceeding, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith. The term
"proceeding" includes any threatened, pending, or completed action, suit, or
other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Any indemnification in connection with the foregoing, unless pursuant to a
determination by a court, shall be made by the corporation upon a determination
that indemnification is proper in the circumstances because the individual has
met the applicable standard of conduct. The determination shall be made (i) by
the board of directors by a majority vote of a quorum consisting of directors
who are not parties to such proceeding; (ii) by majority vote of a committee
duly designated by the board of directors consisting solely of two or more
directors not at the time parties to the proceeding; (iii) by independent legal
counsel selected by the board of directors or such committee; or (iv) by the
shareholders by a majority vote of a quorum consisting of shareholders who are
not parties to such proceeding. Evaluation of the reasonableness of expenses and
authorization of indemnification shall be made in the same manner as the
determination that indemnification is permissible. However, if the determination
of permissibility is made by independent legal counsel, then the directors or
the committee shall evaluate the reasonableness of expenses and may authorize
indemnification. Expenses incurred by an officer or director in defending a
civil or criminal proceeding may be paid by the corporation in advance of the
final disposition of the proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount if he is ultimately found
not to be entitled to indemnification by the corporation. Expenses incurred by
other employees and agents may be paid in advance upon such terms or conditions
that the board of directors deems appropriate.
Section 607.0850 also provides that the indemnification and advancement of
expenses provided pursuant to that Section are not exclusive, and a corporation
may make any other or further indemnification or advancement of expenses of any
of its directors, officers, employees, or agents, under any bylaw, agreement,
vote of shareholders or disinterested directors, or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office. However, indemnification or advancement of expenses may not be made if a
judgment or other final adjudication established that the individual's actions,
or omissions to act, were material to the cause of action so adjudicated and
constitute (i) a violation of the criminal law (unless the individual 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 individual
derived an improper personal benefit; (iii) in the case of a director, a
circumstance under which the liability provisions of Section 607.0834 are
applicable; or (iv) willful misconduct or a conscious disregard for the
II-1
<PAGE> 53
best interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor in a proceeding by or in the
right of a shareholder. Indemnification and advancement of expenses shall
continue as, unless otherwise provided when authorized or ratified, to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such person, unless
otherwise provided when authorized or ratified.
Section 607.0850 further provides that unless the corporation's articles
of incorporation provide otherwise, then notwithstanding the failure of a
corporation to provide indemnification, and despite any contrary determination
of the board or of the shareholders in the specific case, a director, officer,
employee, or agent of the corporation who is or was a party to a proceeding may
apply for indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice that it considers necessary, may order indemnification and
advancement of expenses, including expenses incurred in seeking court-ordered
indemnification or advancement of expenses, if it determines that (i) the
individual is entitled to mandatory indemnification under Section 607.0850 (in
which case the court shall also order the corporation to pay the director
reasonable expenses incurred in obtaining court-ordered indemnification or
advancement of expenses); (ii) the individual is entitled to indemnification or
advancement of expenses, or both, by virtue of the exercise by the corporation
of its power under Section 607.0850; or (iii) the individual is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether the person met the
standard of conduct set forth in Section 607.0850. Further, a corporation is
granted the power to purchase and maintain indemnification insurance.
Article VI of the Company's Articles of Incorporation and Article VI of
the Company's Bylaws provide for indemnification of the Company's officers and
directors and advancement of expenses. The text of the indemnification
provisions contained in the Company's Articles and Bylaws is set forth in
Exhibits 3.1 and 3.2, respectively, to this Registration Statement. Among other
things, indemnification is granted to each person who is or was a director,
officer or employee of the Company and each person who is or was serving at the
request of the Company as a director, officer or employee of another corporation
to the full extent authorized by law. Article VI of the Company's Bylaws also
sets forth certain conditions in connection with any advancement of expenses and
provision by the Company of any other indemnification rights and remedies. The
Company also is authorized to purchase insurance on behalf of any person against
liability asserted whether or not the Company would have the power to indemnify
such person under the Bylaws. Pursuant to such authority, the Company has
purchased directors and officers liability insurance although there is no
assurance that the Company will maintain such insurance or, if so, the amount of
insurance that it will so maintain.
Pursuant to the Underwriting Agreement, the Company and the Underwriters
have agreed to indemnify each other under certain circumstances and conditions
against and from certain liabilities, including liabilities under the Securities
Act of 1933, as amended. Reference is made to Section 10 of the Underwriting
Agreement filed as Exhibit 1.1 hereto.
II-2
<PAGE> 54
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 3,485
NASD Filing Fee............................................. 1,650
Transfer Agent and Registration Fees........................ 4,000
Printing and Engraving Expenses............................. 45,000
Accounting Fees and Expenses................................ 15,000
Legal Fees and Expenses..................................... 35,000
Blue Sky Fees and Expenses.................................. 31,000
Miscellaneous............................................... 5,000
---------
Total................................................... $ 140,135
---------
</TABLE>
* To be furnished by amendment
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On August 8, 1997, the Company issued 100 shares of Common Stock to its
Chief Executive Officer and President solely to facilitate the organization of
the Company. The foregoing sale of Common Stock by the Company was exempt from
the registration requirements of the Securities Act by operation of Section 4(2)
thereof, the provision which exempts private offerings. No underwriter or
independent selling agent was used and no compensation or commission were paid
in connection with the sale of Common Stock.
II-3
<PAGE> 55
ITEM 27. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
(a) NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
<S> <C> <C>
1.1 - Form of Underwriting Agreement
3.1 - Articles of Incorporation *
3.2 - Articles of Amendment to Articles of
Incorporation
3.3 - Bylaws *
4.1 - See Exhibits 3.1 and 3.2 for provisions of
the Articles of Incorporation and Bylaws of
the Company defining rights of holders of
the Company's Common Shares.
4.2 - Specimen Common Stock Certificate *
5 - Form of Legal Opinion of Smith, Mackinnon,
Greeley, Bowdoin & Edwards, P.A. with
respect to the validity of the Common Stock
being offered hereby *
10.1 - 1997 Stock Option Plan and Form of Stock
Option Agreement *
10.2 - Form of Employment Agreement to be entered
into between the Company and Lewis S. Albert
*
10.3 - Form of Employment Agreement to be entered
into between the Company and Todd H. Katz *
10.4 - Financial Facilities Lease Agreement dated
August 6, 1997 between the Company and SON
Corporation *
10.5 - Form of Stock Purchase Warrant *
10.6 - Real Estate Sales Agreement dated August 6,
1997 between GMRI, Inc. and the Company *
10.7 - Preorganization Agreement and Amendment
thereto between Company Organizers
21 - List of subsidiaries of the Company *
23.1 - Consent of Hill, Barth & King, Inc.
23.2 - Consent of Smith, Mackinnon, Greeley,
Bowdoin & Edwards, P.A. (included in Exhibit
5) *
</TABLE>
II-4
<PAGE> 56
24 - Power of Attorney (contained in the
Signature Section of the Registration
Statement) *
27 - Financial Data Schedule *
* Previously filed
II-5
<PAGE> 57
ITEM 28. UNDERTAKINGS
The Registrant will provide to the Underwriter at the closing specified
in the underwriting agreement certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") 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 Securities and
Exchange 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 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.
The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of the
Registration Statement in reliance on Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed part of the Registration Statement as of the time
it was declared effective; and
(2) For purposes of determining liability under the Act, each
post-effective amendment that contains a form of prospectus 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.
II-6
<PAGE> 58
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment to
Registration Statement to be signed in its behalf by the undersigned, in the
City of Port Charlotte, State of Florida, on December 31, 1997.
TARPON COAST BANCORP, INC.
/s/ Lewis S. Albert
-------------------------------------------
Lewis S. Albert
Chairman and Chief Executive Officer
/s/ Todd H. Katz
-------------------------------------------
Todd H. Katz, Vice Chairman and President
II-7
<PAGE> 59
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Lewis S. Albert
- ------------------------- Chairman of the Board, Chief December 31, 1997
Lewis S. Albert Executive Officer and Director,
(Principal Financial Officer and
Principal Accounting Officer)
/s/ Todd H. Katz
- ------------------------ Vice Chairman of the Board, December 31, 1997
Todd H. Katz President and Director
Mark O. Asperilla, M.D. Director
James R. Baker Director
Billie A. Barger Director
James C. Brown Director
Gerald P. Flagel, CPA, JD Director
Gina D. Hahn Director
Larry A. Tenbusch Director
By: /s/ Lewis S. Albert
----------------------------------------------
Lewis S. Albert, acting pursuant to Power of Attorney, has signed this
Amendment to Registration Statement for and on behalf of the persons
indicated above as such persons' true and lawful attorney-in-fact and in
their names, places and stead, in the capacities indicated above and on
the date indicated below.
December 31, 1997
II-8
</TABLE>
<PAGE> 1
EXHIBIT 1.1
TARPON COAST BANCORP, INC.
1,000,000 Shares of Common Stock(1)
UNDERWRITING AGREEMENT
November __, 1997
ROBERT W. BAIRD & CO. INCORPORATED
As Representative of the Several Underwriters
Identified in Schedule I Annexed Hereto
c/o Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Ladies and Gentlemen:
1. Introductory. Tarpon Coast Bancorp, Inc., a Florida corporation
(the "Company") proposes to sell 1,000,000 shares (the "Firm Shares") of common
stock, $.01 par value per share (the "Common Stock"), to the several
underwriters identified in Schedule I annexed hereto (the "Underwriters"), who
are acting severally and not jointly. In addition, the Company has agreed to
grant to the Underwriters an option to purchase up to 150,000 additional shares
of Common Stock (the "Optional Shares") as provided in section 5 hereof. The
Firm Shares and, to the extent such option is exercised, the Optional Shares are
hereinafter collectively referred to as the "Shares."
You, as representative of the Underwriters (the "Representative"), have
advised the Company that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon hereafter as in your judgment is
advisable and that the public offering price of the Shares initially will be
$10.00 per share.
The Company hereby confirms its agreement with the Underwriters as
follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters, and shall
be deemed to represent and warrant to the several Underwriters on each Closing
Date (as hereinafter defined), that:
(a) The Company has been duly incorporated and is validly
existing as a corporation and its status is active under the laws of its
jurisdiction of incorporation, and, subject to section 1(e) hereof and the
commencement of business of Tarpon Coast Community Bank, N.A., a national bank
(in organization) to be located in Port Charlotte, Florida (the "Bank"), is duly
registered under Section 3(a)(1) of the Bank Holding Company Act of 1956, as
amended (the "Bank Holding Company Act") with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
presently conducted and described in the Prospectus (as hereinafter defined) and
the Registration Statement (as defined in subsection 2(n), below; the Company is
duly registered and qualified to do business as a foreign corporation under the
laws of, and is in good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the failure to so
register or qualify would not have a material adverse effect on the condition
(financial or other), business, property, net worth or results of operations of
the Company, taken as a whole ("Material Adverse Effect"); and no proceeding has
been
- ------------------
1 Plus an option to acquire up to 150,000 additional shares of Common
Stock from the Company, to cover over-allotments.
- 1 -
<PAGE> 2
instituted in any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification. Complete
and correct copies of the articles of incorporation and by-laws, as amended or
restated ("Articles of Incorporation" and "By-laws," respectively), of the
Company as in effect on the date hereof have been delivered to the
Representative, and no changes thereto will be made on or subsequent to the date
hereof and prior to each Closing Date.
(b) The shares of Common Stock issued and outstanding immediately
prior to the issuance and sale of the Shares to be sold by the Company hereunder
as set forth in the Prospectus have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description thereof contained in
the Prospectus and the Registration Statement. There are no preemptive,
preferential or, except as described in the Prospectus, other rights to
subscribe for or purchase any shares of Common Stock (including the Shares), and
no shares of Common Stock have been issued in violation of such rights. The
Shares to be issued and sold by the Company to the Underwriters have been duly
authorized and, when issued, delivered and paid for pursuant to this Agreement,
will be validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus and the Registration Statement.
The delivery of certificates for the Shares to be issued and sold by the Company
hereunder and payment therefor pursuant to the terms of this Agreement will pass
valid title to such Shares to the Underwriters, free and clear of any lien,
claim, encumbrance or defect in title. Except as described in the Prospectus,
there are no outstanding options, warrants or other rights of any description,
contractual or otherwise, entitling any person to be issued any class of
security by the Company, and there are no holders of Common Stock or other
securities of the Company, or of securities that are convertible or exchangeable
into Common Stock or other securities of the Company, that have rights to the
registration of such Common Stock or securities under the Securities Act of
1933, as amended, and the regulations thereunder (together, the "Act") or the
securities laws or regulations of any of the states (the "Blue Sky Laws").
(c) The Company does not currently have and never has had any
subsidiaries and does not own any equity interest in or control, directly or
indirectly, any other corporation, limited liability company, partnership,
limited liability partnership, joint venture, association, trust or other
business organization, other than the Bank. With respect to the representations
and warranties contained in this section 2, the Company shall be deemed to have
knowledge of anything known to the officers and directors of the Bank.
(d) The Company has full corporate power and authority to enter into
and perform this Agreement, and the execution and delivery by the Company of
this Agreement and the performance by the Company of its obligations hereunder
and the consummation of the transactions described herein, have been duly
authorized with respect to the Company by all necessary corporate action and
will not: (i) violate any provisions of the Articles of Incorporation or By-laws
of the Company; (ii) violate any provisions of, or result in the breach,
modification or termination of, or constitute a default under, any provision of
any agreement, lease, franchise, license, indenture, permit, mortgage, deed of
trust, evidence of indebtedness or other instrument to which the Company is a
party or by which the Company, or any property owned or leased by the Company,
may be bound or affected which violation, breach or default could have a
Material Adverse Effect; (iii) violate any statute, ordinance, rule or
regulation applicable to the Company, or order or decree of any court,
regulatory or governmental body, arbitrator, administrative agency or
instrumentality of the United States or other country or jurisdiction having
jurisdiction over the Company; or (iv) result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company. No
consent, approval, authorization or other order of any court, regulatory or
governmental body, arbitrator, administrative agency or instrumentality of the
United States or other country or jurisdiction is required for the execution and
delivery of this Agreement by the Company, the performance of its obligations
hereunder or the consummation of the transactions contemplated hereby, except
for compliance with the Act, the Securities Exchange Act of 1934, as amended,
and the regulations thereunder (together, the "Exchange Act"), the Blue Sky Laws
applicable to the public offering of the Shares by the several Underwriters and
the clearance of such offering and the underwriting arrangements evidenced
hereby with the National Association of Securities Dealers, Inc. (the "NASD").
This Agreement has been duly executed and delivered by and on behalf of the
Company and is a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except that rights to indemnity or
contribution may be limited by applicable law and except as enforceability may
- 2 -
<PAGE> 3
be limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws generally affecting the rights of creditors and by equitable principles
limiting the right to specific performance or other equitable relief.
(e) The Company has prepared and filed with the Board of Governors of
the Federal Reserve System (the "FRB") in accordance with Section 3(a)(1) of the
Bank Holding Company Act, and Section 225.15 of Regulation Y promulgated by the
FRB, an application to become a bank holding company which, together with all
exhibits, schedules, amendments, and supplements thereto, hereinafter, is
referred to as the "Holding Company Application". On ____________, 1997, the FRB
approved the Company's application to become a bank holding company through the
acquisition of 100% of the voting stock of the Bank (the "Holding Company
Approval"), effective upon the Company's compliance with commitments and
representations made in connection with the Holding Company Application. The
Holding Company Approval provides that the acquisition by the Company of the
Bank must be made within a "window" commencing 30 days after ___________, 1997,
and ending three months after such date, unless the period is extended by the
FRB. The Holding Company Approval further requires that the FRB be provided,
within 30 days of the Company's acquisition of the Bank's voting stock, certain
further information as set forth therein. In the event that the Company files
with the FRB an amendment or supplement to the Holding Company Application, the
term "Holding Company Application" shall refer to such amended or supplemented
Holding Company Application from and after the time it is filed with the FRB.
(f) The Company does not own any equity interest in, or control,
directly or indirectly, any corporation, limited liability company, association,
partnership, joint venture, trust or other business entity, except that as of
the First Closing Date and the Second Closing Date (as each such term is defined
in section 5 hereof), the Company will either own or have the sole right to
acquire all of the outstanding capital stock of the Bank. Upon the contribution
by the Company to the Bank of $7,500,000 of the net proceeds from the sale of
the Common Stock to the Underwriters pursuant to this Agreement, all of the
authorized capital stock of the Bank will be issued to the Company and upon such
issuance will have been duly authorized and validly issued, will be fully paid
and non-assessable and will be owned by the Company free and clear of any lien,
claim, encumbrance, defect in title, security interest, or restriction on
transfer (except for any restrictions under federal or state banking laws); and
no options, warrants, or other rights to purchase, agreements or other
obligations to issue or rights to convert any obligations into shares of capital
stock or ownership interest in the Bank are, or will as of the First Closing
Date and the Second Closing Date be, outstanding.
(g) The incorporators of the Bank have prepared and filed with the
United States Comptroller of the Currency (the "OCC") in accordance with the
National Bank Act (the "Bank Act") an Application to Organize a National Bank
which, together with all exhibits, schedules, amendments and supplements
thereto, is hereinafter referred to as the "Charter Application." On
_____________, 1997, the OCC approved the Charter Application for authority to
organize the Bank, subject to certain terms and conditions specified in such
approval (the "Charter Approval"). The Charter Approval remains in full force
and effect as of the date hereof. In the event that the Company or the Bank
files with the OCC an amendment or supplement to the Charter Application, the
term "Charter Application" shall refer to such amended or supplemented Charter
Application from and after the time it is filed with the OCC.
(h) The incorporators of the Bank have, on behalf of the Bank,
prepared and filed with the Federal Deposit Insurance Corporation (the "FDIC")
in accordance with Section 5(a)(1) of the Federal Deposit Insurance Act, as
amended (the "Federal Deposit Insurance Act"), an Application for Federal
Deposit Insurance which, together with all exhibits, schedules, amendments, and
supplements thereto, hereinafter is referred to as the "Deposit Insurance
Application". On ____________, 1997, the FDIC approved the Deposit Insurance
Application, subject to certain terms and conditions specified in such approval
(the "Approval of Deposit Insurance"). In the event that the Bank files with the
FDIC an amendment or supplement to the Deposit Insurance Application, the term
"Deposit Insurance Application" shall refer to such amended or supplemented
Deposit Insurance Application from and after the time it is filed with the FDIC.
- 3 -
<PAGE> 4
(i) The Company has previously provided the Underwriter with true and
complete copies of the Charter Application, the Holding Company Application, and
the Deposit Insurance Application, as each has been amended or supplemented from
time to time (the "Applications"), and the Charter Approval, Holding Company
Approval, and Approval of Deposit Insurance, as each has been amended or
supplemented in writing from time to time (the "Approvals"). As of the
respective times the Applications were filed with the respective authorities,
upon the filing or first delivery to the Underwriter of the Prospectus, as of
the date hereof and at the First Closing Date and the Second Closing Date: (i)
such Applications each conformed and will conform in all material respects to
the respective applicable requirements of the Bank Act, the Bank Holding Company
Act, the Federal Deposit Insurance Act and the rules and regulations promulgated
by the respective authorities thereunder; and (ii) none of the Applications
contained or will contain any untrue statement of a material fact or omitted or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(j) As of the First Closing Date and the Second Closing Date, as the
case may be, subject to the capital contribution to the Bank by the Company of
$7,500,000 of the net proceeds from the sale of the Shares to the Underwriters
pursuant to this Agreement, and the satisfaction of the conditions set forth in
the Charter Approval and the Approval of Deposit Insurance, the Bank will be
duly organized and validly existing and in good standing under the laws of the
United States as a commercial bank, and will have full power and authority
(corporate and other) to own, lease, and operate its properties and to conduct
its business as described in the Registration Statement, the Prospectus, the
Applications, and the Approvals, and is not required to be qualified as a
foreign corporation in any jurisdiction, except where the failure so to qualify
would not reasonably be expected to have a Material Adverse Effect on the
Company and the Bank considered as one enterprise or of the Bank considered
separately, and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
qualification.
(k) As of the First Closing Date and the Second Closing Date, as the
case may be, the Bank will have received the Charter Approval and the Approval
of Deposit Insurance (collectively, the "Bank Approvals") from, respectively,
the OCC and the FDIC and, as of such respective dates: (i) the Bank Approvals
will be in full force and effect and no action to suspend or revoke any of the
Bank Approvals will have been taken, or proceedings therefor initiated or
threatened, by the OCC or the FDIC; (ii) the Bank will not be in breach or
default under any condition precedent of or commitment contained in any of the
Bank Approvals that can be satisfied as of such date; and (iii) the Bank will
have satisfied all conditions precedent to the Bank Approvals that can be
satisfied as of such date.
(l) As of the First Closing Date and the Second Closing Date, as the
case may be, the Company will have received the Holding Company Approval from
the FRB and, as of such representative dates: (i) the Holding Company Approval
will be in full force and effect and no action to suspend or revoke the Holding
Company approval will have been taken by the FRB or proceedings therefor
initiated or threatened by the FRB; (ii) the Company will not be in breach or
default under any condition of or commitment contained in the Holding Company
Approval that can be satisfied as of such date; and (iii) the Company will have
satisfied all conditions precedent to the Holding Company Approval that can be
satisfied as of such date.
(m) In addition to the representations regarding federal deposit
insurance herein, the Company and the Bank maintain all other insurance of the
types and in the amounts generally deemed adequate in their respective
businesses and as required by the rules and regulations of all governmental
agencies having jurisdiction over the Company or the Bank, all of which
insurance is in full force and effect. The Company has a key person life
insurance policy on the life of Lewis S. Albert in the amount of $___________
and Todd H. Katz in the amount of $_________, payable to the Company, which
insurance is in full force and effect.
(n) A registration statement on Form SB-2 (Reg. No. 333-_____) with
respect to the Shares (the "Registration Statement"), including a preliminary
form of prospectus, has been carefully prepared by the Company in conformity
with the requirements of the Act and has been filed with the Securities and
Exchange Commission (the "Commission"). If the Company files a registration
statement to register a portion of the Shares and relies on
- 4 -
<PAGE> 5
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462(b) Registration Statement"), then any reference to
the "Registration Statement" (as defined below) shall be deemed to include the
Rule 462(b) Registration Statement, as amended from time to time. Such
registration statement, as finally amended and revised at the time such
registration statement was or is declared effective by the Commission (including
the information contained in the form of final prospectus, if any, filed with
the Commission pursuant to Rule 424(b) and Rule 430A under the Act and deemed to
be part of the registration statement if the registration statement has been
declared effective pursuant to Rule 430A(b)) and as thereafter amended by
post-effective amendment, if any, is herein referred to as the "Registration
Statement." The related final prospectus in the form first filed with the
Commission pursuant to Rule 424(b) or, if no such filing is required, as
included in the Registration Statement, or any supplement thereto, is herein
referred to as the "Prospectus." The prospectus subject to completion in the
form included in the Registration Statement at the time of the initial filing of
the Registration Statement with the Commission, and each such prospectus as
amended from time to time until the date of the Prospectus, is referred to
herein as the "Preliminary Prospectus." The Company has prepared and filed such
amendments to the Registration Statement since its initial filing with the
Commission, if any, as may have been required to the date hereof, and will file
such additional amendments thereto as may hereafter be required. There have been
delivered to the Representative two signed copies of the Registration Statement
and each amendment thereto, if any, together with two copies of each exhibit
filed therewith, and such number of conformed copies for each of the
Underwriters of the Registration Statement and each amendment thereto, if any
(but without exhibits), and of each Preliminary Prospectus and of the Prospectus
as the Representative has requested. The Company is a "small business issuer" as
such term is defined in Rule 504 and Regulation SB under the Act.
(o) Neither the Commission nor any state securities commission has
issued any order preventing or suspending the use of any Preliminary Prospectus,
nor, to the knowledge of the Company, have any proceedings for that purpose been
initiated or threatened, and each Preliminary Prospectus filed with the
Commission as part of the Registration Statement (excluding from this
representation the information referred to in section 3), as originally filed or
as part of any amendment or supplement thereto complied when so filed with the
requirements of the Act and, as of its date, did not include any untrue
statement of a material fact or omit to state , a material fact required to be
stated therein or necessary to make the statements therein not misleading. As of
the effective date of the Registration Statement, and at all times subsequent
thereto up to each Closing Date, the Registration Statement and the Prospectus
contained or will contain all statements that are required to be stated therein
in accordance with the Act and conformed or will conform in all respects to the
requirements of the Act, and neither the Registration Statement nor the
Prospectus (excluding from this representation the information referred to in
section 3), included or will include any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the Company,
nor any person that controls, is controlled by or is under common control with
the Company, has distributed or will distribute prior to each Closing Date any
offering material in connection with the offering and sale of the Shares other
than a Preliminary Prospectus, the Prospectus, the Registration Statement, or
other materials permitted by the Act and provided to the Representative.
(p) Hill, Barth & King, Inc., which has expressed its opinion with
respect to the financial statements and schedules filed with the Commission and
included as a part of each Preliminary Prospectus, the Prospectus, or the
Registration Statement, are independent accountants as required by the Act.
(q) The financial statements and the related notes and schedules
thereto included in each Preliminary Prospectus, the Prospectus, and the
Registration Statement present fairly the financial position, results of
operations, and cash flows of the Company as of their respective dates or for
the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved. The financial statement schedules, if any, included in the
Registration Statement present fairly the information required to be stated
therein on a basis consistent with the combined financial statements of the
Company contained therein. The Company had an outstanding capitalization as set
forth in the Registration Statement and under "Capitalization" in the Prospectus
as of the date indicated therein, and there has been no material change thereto
since such date except as disclosed in the Prospectus. The financial and
statistical information and data relating to the Company
- 5 -
<PAGE> 6
in each Preliminary Prospectus, the Prospectus, and the Registration Statement
are accurately presented and prepared on a basis consistent with the audited
combined financial statements and books and records of the Company. The combined
financial statements and schedules and the related notes thereto included in
each Preliminary Prospectus, the Prospectus, or the Registration Statement are
the only such financial statements and schedules required under the Act to be
set forth therein.
(r) Neither the Company nor the Bank is currently, nor with the giving
of notice or passage of time or both, would be, in violation or in breach of:
(i) its Articles of Incorporation or By-laws; (ii) any statute, ordinance,
injunction, judgment, rule or regulation, license, permit, approval, or
authorization applicable to the Company or the Bank; (iii) any statute,
ordinance, order, rule or regulation applicable to the Company; (iv) any order
or decree of any court, regulatory body, arbitrator, administrative agency, or
other instrumentality of the United States or other country or jurisdiction
having jurisdiction over the Company; (v) any condition of or commitment
contained in any of the Applications, if such condition or commitment can be
performed as of such date; or (vi) any provision of any agreement, lease,
franchise, license, indenture, permit, mortgage, deed of trust, evidence of
indebtedness, or other instrument to which the Company or the Bank is a party or
by which any property owned or leased by either is bound or affected. Neither
the Company nor the Bank has received notice of any violation of any applicable
statute, ordinance, order, rule or regulation applicable to the Company or the
Bank. Neither the Company nor the Bank is nor have they been (by virtue of any
action, omission to act, contract to which it is a party or other occurrence) in
violation of any applicable foreign, federal, state, municipal or local
statutes, laws, ordinances, rules, regulations, or orders (including those
relating to environmental protection, occupational safety and health and equal
employment practices) heretofore or currently in effect, except any such
violation that has been fully cured or satisfied without recourse.
(s) Other than the routine processing of the Application, there are no
legal or governmental proceedings or investigations pending or, to the knowledge
of the Company or the Bank, threatened to which the Company, the Bank, Lewis S.
Albert, Todd H. Katz, or other key members of management, is or may be a party
or to which any property owned or leased by the Company or the Bank is or may be
subject, including, without limitation, any such proceedings that are related to
environmental or employment discrimination matters, that are required to be
described in the Registration Statement or the Prospectus that are not so
described, or that question the validity of this Agreement or any action taken
or to be taken pursuant hereto. Except as described in the Registration
Statement or the Prospectus, neither the Company nor the Bank: (i) is in
violation of any statute, ordinance, rule or regulation, or any decision, order
or decree of any court, regulatory body, arbitrator, administrative agency, or
other instrumentality of the United States or other country or jurisdiction
having jurisdiction over the Company or the Bank relating to the use, disposal,
or release of hazardous or toxic substances, or relating to the protection or
restoration of the environmental or human exposure to hazardous or toxic
substances (collectively, "environmental laws"); (ii) owns or operates any real
property contaminated with any substance that is subject to any environmental
laws; (iii) is liable for any off-site disposal or contamination pursuant to any
environmental laws; or (iv) is subject to any claim relating to any
environmental laws.
(t) There is no transaction, relationship, obligation, agreement, or
other document required to be described in the Registration Statement or the
Prospectus or to be filed or deemed to be filed as an exhibit to the
Registration Statement by the Act, which has not been described or filed as
required. All such contracts or agreements to which the Company or the Bank is a
party have been duly authorized, executed, and delivered by the Company or the
Bank, constitute valid and binding agreements of the Company or the Bank, comply
with applicable regulations of the OCC and the FRB and are enforceable by and
against the Company or the Bank, in accordance with the respective terms
thereof.
(u) The Company and the Bank have good and valid title to all property
and assets reflected as owned by the Company or the Bank, respectively, in the
Company's financial statements included in the Registration Statement (or
elsewhere in the Registration Statement or the Prospectus), free and clear of
all liens, claims, mortgages, security interests, or other encumbrance of any
kind or nature whatsoever except those, if any, reflected in such financial
statements (or elsewhere in the Registration Statement or the Prospectus). All
property (real
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<PAGE> 7
and personal) held or used by the Company or the Bank under leases, licenses,
franchises, or other agreements is held by the Company or the Bank,
respectively, under valid, subsisting, binding and enforceable leases,
franchises, licenses, or other agreements.
(v) Neither the Company nor any person that controls, is controlled by
(including the Bank) or is under common control with the Company has taken or
will take, directly or indirectly, any action designed to cause or result in, or
which constituted, or which could cause or result in, stabilization or
manipulation, under the Exchange Act or otherwise, of the price of any security
of the Company to facilitate the sale or resale of the Common Stock.
(w) Except as described in the Registration Statement or the
Prospectus, since the respective dates as of which information is given in the
Registration Statement or the Prospectus and prior to each Closing Date: (i) the
Company and the Bank have not or will not have incurred any liability or
obligation, direct or contingent, or entered into any transaction, that is
material to the Company, except as in the ordinary course of business; (ii) the
Company and the Bank have not and will not have paid or declared any dividend or
other distribution with respect to their respective capital stock and the
Company and the Bank have not or will not be delinquent in the payment of
principal or interest on any outstanding debt obligation; and (iii) there has
not been and will not have been any change in the capital stock, any material
change in the indebtedness of the Company or the Bank, or any change or
development involving or that could be expected to involve, a Material Adverse
Effect, whether or not arising from transactions in the ordinary course of
business.
(x) Neither the Company nor any person that controls, is controlled by
(including the Bank) or is under common control with the Company has, directly
or indirectly: (i) made any unlawful contribution to any candidate for political
office, or failed to disclose fully any contribution in violation of law; or
(ii) made any payment to any federal, state, or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof or applicable foreign jurisdictions.
(y) The Company and the Bank own or possess adequate rights to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, and licenses presently
used in or necessary for the conduct of their respective business or ownership
of their properties and the Company has not violated or infringed upon the
rights of others or received any notice of conflict with the asserted rights of
others, in respect thereof.
(z) The Company and the Bank have in place and effective such policies
of insurance, with limits of liability in such amounts, as are normal and
prudent in the ordinary course of the business of the Company and the Bank.
(aa) No labor dispute with the employees of the Company or the Bank
exists or, to the knowledge of the Company or the Bank, is imminent, and the
Company or the Bank are not parties to any collective bargaining agreement and,
to the knowledge of the Company and the Bank, no union organizational attempts
have occurred or are pending. There has been no change in the relationship of
the Company or the Bank with any of its principal suppliers, manufacturers,
contractors, or customers resulting in or that could be expected to result in a
Material Adverse Effect.
(ab) The Company is not an "investment company", an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended.
(ac) All federal, state, and local tax returns required to be filed by
or on behalf of the Company and the Bank have been filed (or are the subject of
valid extension) with the appropriate federal, state, and local authorities, and
all such tax returns, as filed, are accurate in all material respects; all
federal, state, and local taxes (including estimated tax payments) required to
be shown on all such tax returns or claimed to be due from or with respect to
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<PAGE> 8
the business of the Company have been paid or reflected as a liability on the
financial statements of the Company for appropriate periods; all deficiencies
asserted as a result of any federal, state, or local tax audits have been paid
or finally settled, and no issue has been raised in any such audit which, by
application of the same or similar principles, reasonably could be expected to
result in a proposed deficiency for any other period not so audited; no state of
facts exist or has existed that would constitute grounds for the assessment of
any tax liability with respect to the periods that have not been audited by
appropriate federal, state, or local authorities; there are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any federal, state, or local tax return of any period; and the Company has never
been a member of an affiliated group of corporations filing consolidated federal
income tax returns, other than a group of which the Company is and has been the
common parent. The Company has not made an S Corporation election and has not at
any time been and is not qualified as an S Corporation.
(ad) Upon the satisfaction of the conditions set forth in the
Approvals, the Company and the Bank will hold and will be in compliance with all
permits, certificates, licenses, approvals, registrations, consents, and
authorizations required under all laws, rules, and regulations in connection
with their businesses, and all of such permits, certificates, licenses,
approvals, registrations, consents, and authorizations will be in full force and
effect; and neither the Company nor the Bank has received any notice of
threatened proceedings relating to the revocation or modification of any such
permit, certificate, license, approval, registration, consent, or authorization.
Neither the Company nor the Bank is, and neither has been (by virtue of any
action, omission to act, contract to which it is a party or any occurrence or
state of facts whatsoever) in violation of any applicable federal, state,
municipal or local statutes, laws, ordinances, rules, regulations, or orders
issued pursuant to foreign, federal, state, municipal, or local statutes, laws,
ordinances, rules, or regulations (including those relating to environmental
protection, occupational safety and health and employment practices) heretofore
or currently in effect, except any such violations that have been fully cured or
satisfied without recourse or that would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
(ae) Neither the Company nor the Bank is a participating employer or
plan sponsor with respect to any employee pension benefit plan as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any employee welfare benefit plan as defined in Section 3(1) of
ERISA, including, without limitation, any multi-employer welfare or pension
plan. With respect to each defined benefit retirement plan, such plan does not
have benefit liabilities (as defined in Section 4001(a)(16) of ERISA) exceeding
the assets of the plan. The Company or the Bank or the administrator of each of
any employee benefit plans (the "Plans"), as the case may be, has timely filed
the reports required to be filed by ERISA and the Code in connection with the
maintenance of the Plans, and no facts, including, without limitation, any
"reportable event" as defined by ERISA and the regulations thereunder, exist in
connection with the Plans which, under applicable law, would constitute grounds
for the termination of any of the Plans by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States District
Court of a trustee to administer any of the Plans.
(af) The Company and the Bank maintain a system of internal accounting
controls sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and with
the regulations of the OCC, FRB and the FDIC and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorizations; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(ag) Neither the Company nor the Bank, nor any officer or director of
the Company or the Bank, or any person who owns of record or beneficially any
class of securities issued by the Company is: (i) an officer, director, or
partner of any brokerage firm, broker or dealer that is a member of the NASD
("NASD Member"); or (ii) directly or indirectly, a "person associated with" an
NASD member or an "affiliate" of an NASD member, as such terms are used in the
NASD Rules of Fair Practice. In addition, neither the Company nor the Bank has
issued or transferred any Common Stock, warrants, options, or other securities,
or any other items of value, to the
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<PAGE> 9
Underwriter or any "related person" of any Underwriter, as such term is used in
the NASD Rules of Fair Practice, except as provided in this Agreement.
(ah) The Company has prepared and filed with the Commission a
registration statement for the Common Stock pursuant to Section 12(g) of the
Exchange Act. Such registration statement either has been declared effective by
the Commission under the Exchange Act or will be declared effective by the
Commission prior to or concurrently with the commencement of the public offering
of the Shares.
(ai) Neither the Company, nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075 of the Florida Statutes, and the
Company agrees to comply with such section if, prior to the completion of the
distribution of the Shares, the Company, or any affiliate of the Company
commences doing such business.
(aj) All offers and sales of the securities of the Company prior to the
date hereof were made in compliance with the Act and all other applicable state
and federal laws or regulations. Except pursuant to this Agreement, the Company
knows of no outstanding claims for finder's, origination, or underwriting fees
with respect to the sale of the Common Stock.
(ak) The Company has obtained for the benefit of the Underwriters the
agreement, enforceable by Robert W. Baird & Co. Incorporated ("Baird"), of each
of the officers and directors of the Company, and each of the current
shareholders of the Company that for a period of 180 days after the date of the
Prospectus, such persons will not, without the prior written consent of Baird,
except for the repurchase of 100 shares of Common Stock in the aggregate (the
"Organizational Shares") from Lewis S. Albert and Todd H. Katz, directly or
indirectly, offer, sell, transfer, or pledge, contract to sell, transfer or
pledge, or cause or in any way permit to be sold, transferred, pledged, or
otherwise disposed of, any: (i) shares of Common Stock; (ii) rights to purchase
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by any such shareholder in
accordance with the applicable regulations of the Commission and shares of
Common Stock that may be issued upon the exercise of a stock option, warrant, or
other convertible security); or (iii) securities that are convertible or
exchangeable into shares of Common Stock.
A certificate signed by any officer of the Company and delivered
to the Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby. A certificate delivered by the Company to its counsel for
purposes of enabling such counsel to render the opinion referred to in section
10(d) will also be furnished to the Representative and counsel for the
Underwriters and shall be deemed to be additional representations and warranties
to the Underwriters by the Company as to the matters covered thereby.
3. Representative of Underwriters. The Representative will act as the
representatives for the several Underwriters in connection with the public
offering of the Shares, and any action under or in respect of this Agreement
taken by the Representative will be binding upon all of the Underwriters.
4. Information Furnished by the Underwriters. The information set forth in
the last paragraph on the outside front cover page of the Prospectus concerning
the terms of the offering by the Underwriters, the paragraph on the inside front
cover page of the Prospectus relating to stabilization practices, and the
concession and reallowance amounts appearing under the caption "Underwriting" in
the Prospectus constitute all of the information furnished to the Company by and
on behalf of the Underwriters for use in connection with the preparation of the
Registration Statement and the Prospectus, as such information is referred to in
this Agreement.
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<PAGE> 10
5. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriters identified in Schedule I annexed
hereto 1,000,000 Firm Shares, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company the number of Firm Shares as
hereinafter set forth at the price per share of $9.175, except as provided in
the following sentence. The purchase price will be increased to $10.00 with
respect to sales of Common Stock to any organizer, director or officer of the
Company or the Bank whose name, address, and telephone number are on a list
furnished to the Underwriters by the Company prior to the effectiveness of the
Company's registration statement pertaining to the Shares on Form SB-2. The
obligation of each Underwriter to the Company shall be to purchase from the
Company that number of full Firm Shares which (as nearly as practicable in full
shares as determined by the Representative) bears the same proportion to the
number of Firm Shares to be sold by the Company as the number of shares set
forth opposite the name of such Underwriter in Schedule I annexed hereto bears
to the total number of Firm Shares to be purchased by all of the Underwriters
under this Agreement.
(b) On the First Closing Date (as hereinafter defined), the Company
will deliver to the Representative, at the offices of Baird, 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, or through the facilities of The Depository
Trust Company, for the accounts of the several Underwriters, certificates
representing the Firm Shares to be sold by it against payment in Milwaukee,
Wisconsin of the purchase price therefor by certified or official bank check or
checks in New York Clearing House (next day) funds payable to the order of the
Company with respect to the Firm Shares being sold by the Company. As referred
to in this Agreement, the "First Closing Date" shall be on the third full
business day after the date of the Prospectus, at 9:00 a.m., Milwaukee,
Wisconsin time, or at such other date or time not later than ten full business
days after the date of the Prospectus as the Representative and the Company may
agree. The certificates for the Firm Shares to be so delivered will be in
denominations and registered in such names as the Representative requests by
notice to the Company prior to the First Closing Date, and such certificates
will be made available for checking and packaging at 9:00 a.m., Milwaukee,
Wisconsin time on the first full business day preceding the First Closing Date
at a location to be designated by the Representative.
(c) In addition, on the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Company hereby agrees to sell to the Underwriters, and the
Underwriters, severally and not jointly, shall have the right at any time within
thirty days after the date of the Prospectus to purchase up to 150,000 Optional
Shares from the Company, at the purchase price per share of $9.175 for use
solely in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
upon notice by the Representative to the Company within thirty days after the
date of the Prospectus setting forth the aggregate number of Optional Shares to
be purchased by the Underwriters and sold by the Company, the names and
denominations in which the certificates for such shares are to be registered and
the date and place at which such certificates will be delivered. Such date of
delivery (the "Second Closing Date") shall be determined by the Representative,
provided that the Second Closing Date, which may be the same as the First
Closing Date, shall not be earlier than the First Closing Date and, if after the
First Closing Date, shall not be earlier than three nor later than ten full
business days after delivery of such notice to exercise. Certificates for the
Optional Shares will be made available for checking and packaging at 9:00 a.m.,
Milwaukee, Wisconsin time, on the first full business day preceding the Second
Closing Date at a location to be designated by the Representative. The manner of
payment for and delivery of (including the denominations of and the names in
which certificates are to be registered) the Optional Shares shall be the same
as for the Firm Shares.
(d) The Representative has advised the Company that each Underwriter
has authorized the Representative to accept delivery of the Shares and to make
payment therefor. It is understood that the Representative, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by the Representative by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such
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<PAGE> 11
Underwriter, but any such payment shall not relieve such Underwriter from any
obligation under this Agreement. As referred to in this Agreement, "Closing
Date" shall mean either the First Closing Date or the Second Closing Date.
(e) Notwithstanding anything contained herein to the contrary, if
prior to the First Closing Date or the Second Closing Date the Company shall not
have received Holding Company Approval and the Bank shall not have received
Charter Approval or Approval of Deposit Insurance, then the net offering
proceeds shall be held in escrow by a nationally-chartered, FDIC-insured bank of
the Company's choice pursuant to the terms of an escrow agreement in
substantially the form of Exhibit A (the "Escrow Agreement").
6. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) If the effective time of the Registration Statement is not prior
to the execution and delivery of this Agreement, the Company will use its best
efforts to cause the Registration Statement to become effective at the earliest
possible time and, upon notification from the Commission that the Registration
Statement has become effective, will so advise the Representative and counsel to
the Underwriters immediately. If the effective time of the Registration
Statement is prior to the execution and delivery of this Agreement and any
information shall have been omitted therefrom in reliance upon Rule 430A, the
Company, at the earliest possible time, will furnish the Representative with a
copy of the Prospectus to be filed by the Company with the Commission to comply
with Rule 424(b) and Rule 430A under the Act and, if the Representative does not
object to the contents thereof, will comply with such Rules. Upon compliance
with such Rules, the Company will so advise the Representative promptly. The
Company will advise the Representative and counsel to the Underwriters
immediately of the issuance by the Commission or any state securities commission
of any stop order suspending the effectiveness of the Registration Statement or
of the institution of any proceedings for that purpose, or of any notification
of the suspension of qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceedings for that purpose, and will also
advise the Representative and counsel to the Underwriters immediately of any
request of the Commission for amendment or supplement of the Registration
Statement, of any Preliminary Prospectus or of the Prospectus, or for additional
information, and the Company will not file any amendment or supplement to the
Registration Statement (either before or after it becomes effective), to any
Preliminary Prospectus or to the Prospectus (including a prospectus filed
pursuant to Rule 424(b)) if the Representative has not been furnished with a
copy prior to such filing (with a reasonable opportunity to review such
amendment or supplement) or if the Representative objects to such filing.
(b) If, at any time when a prospectus relating to the Shares is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact, or would omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to supplement the Prospectus to comply with the Act,
the Company promptly will advise the Representative and counsel to the
Underwriters and the Attorneys-in-Fact thereof and will promptly prepare and
file with the Commission, at its expense, an amendment to the Registration
Statement that will correct such statement or omission or an amendment that will
effect such compliance; and, if any Underwriter is required to deliver a
prospectus nine months or more after the effective date of the Registration
Statement, the Company, upon request of the Representative but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as may
be necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act. The Company consents to the use, in accordance with the provisions of
the Act and with the Blue Sky Laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers, of each Preliminary
Prospectus.
(c) The Company will not, prior to the Second Closing Date, if any,
incur any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business, or enter
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<PAGE> 12
into any transaction with an "affiliate," as defined in Rule 405 under the Act,
which is required to be described in the Prospectus pursuant to Item 404 of
Regulation S-B under the Act, except as described in the Prospectus.
(d) Other than the repurchase of the Organizational Shares, the
Company will not, prior to the Second Closing Date, if any, acquire any of the
Common Stock nor will the Company declare or pay any dividend or make any other
distribution upon its Common Stock payable to shareholders of record on a date
prior to such earlier date, except as described in the Prospectus.
(e) The Company will make generally available to its security holders
and the Representative an earnings statement as soon as practicable, but in no
event later than sixty days after the end of its fiscal quarter in which the
first anniversary of the effective date of the Registration Statement occurs,
covering a period of twelve consecutive calendar months beginning after the
effective date of the Registration Statement, which will satisfy the provisions
of the last paragraph of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(f) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company will
furnish to the Representative at the expense of the Company, copies of the
Registration Statement, the Prospectus, any Preliminary Prospectus, and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as the Representative may reasonably request.
(g) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder for the purposes set forth in the Prospectus.
(h) The Company will cooperate with the Representative and counsel to
the Underwriters in qualifying or registering the Shares for sale under the Blue
Sky Laws of such jurisdictions as the Representative designate, and will
continue such qualifications or registrations in effect so long as reasonably
requested by the Representative to effect the distribution of the Shares. The
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such jurisdiction where it is not
presently qualified. In each jurisdiction where any of the Shares shall have
been qualified as provided above, the Company will file such reports and
statements as may be required to continue such qualification for a period of not
less than one year from the date of the Prospectus. The Company shall promptly
prepare and file with the Commission, from time to time, such reports as may be
required to be filed by the Act and the Exchange Act, and the Company shall
comply in all respects with the undertakings given by the Company in connection
with the qualification or registration of the Shares for offering and sale under
the Blue Sky Laws.
(i) During the period of five years from the date of the Prospectus,
the Company will furnish to each of the Representative and to each of the other
Underwriters who may so request, as soon as available, each report, statement or
other document of the Company or its Board of Directors mailed to its
shareholders or filed with the Commission, and such other information concerning
the Company as the Representative may reasonably request.
(j) Except for the sale of the Common Stock pursuant to this
Agreement, without the prior written consent of Baird, the Company will not,
during the period of 180 days from the date of the Prospectus, directly or
indirectly, except for the issuance of warrants to certain non-employee
organizers of the Bank as described in the Company's prospectus pertaining to
the Shares, and the issuance of stock options to certain employees of the Bank,
which will not be exercisable for six months from the date of grant, issue,
offer, sell, grant any option for the sale of, or otherwise dispose of, contract
to sell or otherwise dispose of, or cause or in any way permit to be sold or
otherwise disposed of, any: (i) shares of Common Stock; (ii) rights to purchase
shares of Common Stock; or (iii) securities that are convertible or exchangeable
into shares of Common Stock.
(k) The Company will maintain a transfer agent and, if required by law
or the rules of The Nasdaq Stock Market or any national securities exchange on
which the Common Stock is listed, a registrar (which, if permitted by applicable
laws and rules, may be the same entity as the transfer agent) for its Common
Stock.
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<PAGE> 13
(l) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any rumor, publication or event relating
to of affecting the Company shall occur as a result of which, in the opinion of
Baird, the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to the Prospectus), the Company will, after written
notice from Baird advising the Company of any of the matters set forth above,
promptly consult with Baird concerning the advisability and substance of, and,
if the Company and Baird determine that it is appropriate, disseminate, a press
release or other public statement responding to or commenting on, such rumor,
publication or event.
(m) If the sale to the Underwriters of the Shares is not consummated
on or before ___________ __, 1997 because (i) the Company decides not to proceed
with the Offering and the Underwriters are prepared to proceed with an offering,
or (ii) the Underwriters decide not to proceed with the Offering due to a
material, adverse change in the financial condition, results of operations,
business, or prospects of the Company, which, in the reasonable opinion of the
Underwriters, would adversely affect the Offering, the Company agrees to
reimburse the Underwriters for all of their out-of-pocket expenses incurred in
connection with the Offering, including without limitation, fees and expenses of
counsel for the Underwriters, and the provisions of sections 7 and 10 hereof
shall at all times be effective and apply. Notwithstanding the foregoing, if the
sale to the Underwriters of the Shares is not consummated for any reason other
than termination of this Agreement by the Underwriters pursuant to section 11
hereof, and the Company or any of the shareholders of the Company enter into an
agreement on or before one year from the date of this Agreement with respect to
the sale, lease, disposition, or other transfer of all or substantially all of
the Company's assets or a majority interest in its capital stock, directly or
indirectly, by merger, share exchange, business combination or otherwise (such
sale, lease, disposition, or other transfer of assets or stock is hereinafter
referred to as a "Business Combination"), then the Company shall engage the
Representative as its financial advisor for any such Business Combination and
the Company shall pay the Representative a financial advisory fee in the amount
of $______ in immediately available funds upon consummation of such Business
Combination for financial advisory services to be rendered by the Representative
in connection therewith.
(n) The Company will comply or cause to be complied with the
conditions to the obligations of the Underwriters in sections 8(a), (b)(i), (d),
(e), (g), (h), (i), and (j) hereof.
(o) The Company shall deliver the requisite notice of issuance to the
NASD and shall take all necessary and appropriate action within its power to
cause or permit trading and listing of the Common Stock on the OTC Bulletin
Board for a period of at least 36 months after the date of this Agreement,
except during such period(s) in which the Company's Common Stock shall be listed
for trading on any of the: (i) Nasdaq Small Cap Market; (ii) the Nasdaq National
Market System; (iii) the American Stock Exchange; or (iv) the New York Stock
Exchange; or with the prior written consent of Baird.
(p) The Company shall promptly prepare and file with the Commission,
from time to time, such reports as may be required to be filed by the Company
under the Act, the Exchange Act or the Rules and Regulations thereunder.
(q) The Company will apply the net proceeds from the sale of the
Common Stock to be sold by it hereunder for the purposes set forth in the
Prospectus.
(r) Neither the Company nor the Bank shall file any amendment or
supplement to any of the Applications of which the Underwriters shall not
previously have been advised and furnished with a copy or as to which the
Underwriters shall have objected in writing promptly after reasonable notice
thereof. In addition, the Company will advise the Underwriters promptly of any
of the following events: (i) the issuance by the OCC, the FRB or the FDIC of any
amendment to any of the Approvals; (ii) the receipt of any comments from the
OCC, the FRB or the FDIC concerning any of the Applications or the Approvals;
(iii) any request by the OCC, the FRB or the FDIC for any amendment or
supplement to any of the Applications or for additional information; and (iv)
the issuance by the OCC, the FRB or the FDIC of any order suspending any of the
Approvals or the initiation or
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<PAGE> 14
threatening of any proceedings for that purpose.
7. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective, or if this
Agreement is terminated for any reason, the Company will pay the costs, fees,
and expenses incurred in connection with the public offering of the Shares. Such
costs, fees and expenses to be paid by the Company include, without limitation:
(a) All costs, fees, and expenses (excluding the expenses
incurred by the Underwriters and the legal fees and disbursements of counsel for
the Underwriters, but including such fees and disbursements described in
subsection (b) of this section 7) incurred in connection with the performance of
the Company's obligations hereunder, including without limiting the generality
of the foregoing: the registration fees related to the filing of the
Registration Statement with the Commission; the fees and expenses related to the
quotation of the Shares on the OTC Bulletin Board; the fees and expenses of the
Company's counsel, accountants, transfer agent and registrar; the costs and
expenses incurred in connection with the preparation, printing, shipping, and
delivery of the Registration Statement, each Preliminary Prospectus and the
Prospectus (including all exhibits and financial statements) and all agreements
and supplements provided for herein, this Agreement and the Preliminary and
Supplemental Blue Sky Memoranda, including, without limitation, shipping
expenses via overnight delivery or courier service to comply with applicable
prospectus delivery requirements; and the costs and expenses associated with the
production of materials related to, and travel expenses incurred by the
management of the Company in connection with, the various meetings to be held
between the Company's management and prospective investors.
(b) All registration fees and expenses, including legal fees
(which in no event shall exceed $20,000) and disbursements of counsel for the
Underwriters incurred in connection with qualifying or registering all or any
part of the Shares for offer and sale under the Blue Sky Laws (including
applicable Canadian securities laws, if any) and the clearing of the public
offering and the underwriting arrangements evidenced hereby with the NASD.
(c) All fees and expenses related to printing of the
certificates for the Shares, and all transfer taxes, if any, with respect to the
sale and delivery of the Shares.
8. Conditions to the Obligations of the Underwriters. The obligations
of the several Underwriters under this Agreement shall be subject to the
accuracy of the representations and warranties on the part of the Company herein
set forth as of the date hereof and as of each Closing Date, to the accuracy of
the statements of the Company's officers made pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder, and to the
following additional conditions, unless waived in writing by the Representative:
(a) The Registration Statement shall have been declared
effective by the Commission not later than 5:30 p.m., Washington, D. C. time, on
the date of this Agreement, or such later time as shall have been consented to
by the Representative, which consent shall be deemed to have been given if the
Registration Statement shall have been declared effective on or before the date
and time requested in the acceleration request submitted on behalf of the
Representative pursuant to Rule 461 under the Act; all filings required by Rules
424(b) and 430A under the Act shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the Commission or any state securities commission nor, to the
knowledge of the Company, shall any proceedings for that purpose have been
initiated or threatened; and any request of the Commission or any state
securities commission for inclusion of additional information in the
Registration Statement, or otherwise, shall have been complied with to the
satisfaction of the Representative.
(b) Since the dates as of which information is given in the
Registration Statement:
(i) there shall not have occurred any change or development
involving, or which could be expected to involve, a Material
Adverse Effect whether or not arising from transactions in the
ordinary course of business in the ability of the Company or the
Bank to conduct its business; and
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<PAGE> 15
(ii) the Company shall not have sustained any loss or
interference from any labor dispute, strike, fire, flood,
windstorm, hurricane, accident or other calamity (whether or not
insured) or from any court or governmental action, order or
decree,
the effect of which on the Company, in any such case described in clause (i) or
(ii) above, is in the opinion of the Representative so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus.
(c) The Representative shall not have advised the Company that
the Registration Statement or the Prospectus contains an untrue statement of
fact that, in the opinion of the Representative or counsel for the Underwriters,
is material, or omits to state a fact that, in the opinion of the Representative
or such counsel, is material and is required to be stated therein or necessary
to make the statements therein not misleading.
(d) The Representative shall have received an opinion of Smith,
MacKinnon, Greeley, Bowdoin & Edwards, P.A., counsel for the Company addressed
to the Representative, as the representatives of the Underwriters, and dated the
First Closing Date or the Second Closing Date, as the case may be, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation and whose status is active under the
laws of Florida, and has received the approval of the FRB to
become a bank holding under Section 3(a)(1) of the Bank Holding
Company Act, with full corporate power and authority to own,
lease, and operate its properties and conduct its business as
presently conducted and as described in the Prospectus and the
Registration Statement; and to the knowledge of such counsel after
investigation, the Company is duly registered and qualified to do
business as a foreign corporation under the laws of, and is in
good standing as such in, each jurisdiction in which such
registration or qualification is required, except where the
failure to so register or qualify would not have a Material
Adverse Effect;
(ii) The authorized capital stock of the Company consists of
10,000,000 shares of Common Stock, par value $0.01 per share, and
2,000,000 shares of Preferred Stock, par value $0.01 per share,
and all such stock conforms as to legal matters to the
descriptions thereof in the Prospectus and the Registration
Statement;
(iii) The issued and outstanding shares of capital stock of the
Company immediately prior to the issuance and sale of the Shares
to be sold by the Company hereunder have been duly authorized and
validly issued, are fully paid and nonassessable, and there are no
preemptive, preferential or, except as described in the Prospectus
and to such counsel's knowledge after investigation, other rights
to subscribe for or purchase any shares of capital stock of the
Company, and to such counsel's knowledge after investigation, no
shares of capital stock of the Company have been issued in
violation of such rights;
(iv) Upon the satisfaction of the conditions set forth in the
Approvals, and upon contribution by the Company to the Bank of
$7,500,000 of the net proceeds from the sale of the Common Stock
to the Underwriter pursuant to this Agreement, all of the capital
stock of the Bank will be duly authorized and validly issued, will
be fully paid and non-assessable and will be owned by the Company
free and clear of any lien, encumbrance, equity, security
interest, or claim; and to such counsel's knowledge, no options,
warrants, or other rights to purchase, agreements or other
obligations to issue or rights to convert any obligations into
shares of capital stock or ownership interest in the Bank are, or
will as of the First closing Date and the Second Closing Date be,
outstanding;
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<PAGE> 16
(v) As of the time the Holding Company Application was filed with
the FRB and as of the First Closing Date and the Second Closing
Date, as the case may be: (A) such application conformed in all
material respects to the applicable requirements of the Bank
Holding Company Act and the rules and regulations thereunder; and
(B) to such counsel's knowledge after investigation, as of any
such times such application contained no untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading;
(vi) The Bank has received the Approvals from the OCC and the FDIC
and, to the knowledge of such counsel after investigation, as of
the date hereof: (A) such Approvals are in full force and effect
and no action to suspend or revoke any of such Approvals has been
taken, or, proceedings therefor initiated or threatened, by the
OCC or the FDIC; (B) the Bank is not in breach or default under
any condition contained in any of such Approvals that can be
satisfied as of such date; and (C) the Bank has satisfied all
conditions precedent to such Approvals which can be satisfied as
of such date;
(vii) The Company has received Holding Company Approval from the
FRB and, to the knowledge of such counsel after investigation, as
of the date hereof: (A) the Holding Company Approval is in full
force and effect and no action to suspend or revoke the Holding
Company Approval has been taken by the FRB or proceedings therefor
initiated or threatened by the FRB; (B) the Company is not in
breach or default under any condition of or commitment that may be
satisfied as of the date hereof contained in the Holding Company
Approval; and (C) the Company has satisfied all conditions
precedent to the Holding Company Approval that can be satisfied as
of such date;
(viii) The Company does not own or control any subsidiary or other
affiliate other than the Bank, and does not, to such counsel's
knowledge after investigation, own any equity interest in or
control, directly or indirectly, any other corporation, limited
liability company, partnership, limited liability partnership,
joint venture, association, trust or other business organization,
except as described in the Prospectus and the Registration
Statement;
(ix) The certificates for the Shares to be delivered hereunder are
in due and proper form and conform to the requirements of
applicable law including the Bank Act; and when duly countersigned
by the Company's transfer agent, and delivered to the
Representative or upon the order of the Representative against
payment of the agreed consideration therefor in accordance with
the provisions of this Agreement, the Shares to be sold by the
Company represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, and free of any preemptive,
preferential or other rights to subscribe for or purchase shares
of Common Stock and, upon delivery to the Underwriters or upon the
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Underwriters
will acquire good and marketable title thereto, free and clear of
any lien, claim, security interest, encumbrance, or restriction on
transfer (except for any restriction under the Act, the Blue Sky
Laws, and applicable banking laws);
(x) The Registration Statement has become effective under the Act,
and to such counsel's knowledge after investigation, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
initiated or are threatened under the Act or any Blue Sky Law; the
Registration Statement and the Prospectus and any amendment or
supplement thereto (except for the financial statements and other
statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act; no facts have come to
the attention of such counsel which lead it to believe that the
Registration Statement or the Prospectus or any amendment or
supplement (if any) thereto, contains any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as
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<PAGE> 17
of the First Closing Date or the Second Closing Date, as the case
may be, contained any untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light
of the circumstances under which they were made (except, in each
case, for the financial statements and other statistical or
financial data included therein as to which such counsel need
express no opinion); to such counsel's knowledge after
investigation, there are no legal or governmental proceedings
pending or threatened, including, without limitation, any such
proceedings that are related to environmental or employment
discrimination matters, required to be described in the
Registration Statement or the Prospectus which are not so
described or which question the validity of this Agreement or any
action taken or to be taken pursuant thereto, nor is there any
transaction, relationship, agreement, contract or other document
of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement by the Act, which is not described or filed
as required;
(xi) The Company has full corporate power and authority to enter
into and perform this Agreement; the performance of the Company's
obligations hereunder and the consummation of the transactions
described herein have been duly authorized by the Company by all
necessary corporate action and this Agreement has been duly
executed and delivered by and on behalf of the Company, and is a
legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except that
rights to indemnity or contribution may be limited by applicable
law and except as enforceability of this Agreement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, and by equitable
principles limiting the right to specific performance or other
equitable relief; no consent, approval, authorization or other
order or decree of any court, regulatory or governmental body,
arbitrator, administrative agency or other instrumentality of the
United States, Florida, or to the knowledge of such counsel, any
other jurisdiction having jurisdiction over the Company or the
Bank is required for the execution and delivery of this Agreement
or the consummation of the transactions contemplated by this
Agreement (except for compliance with the Act, the Exchange Act,
applicable Blue Sky Laws and the clearance of the underwriting
arrangements by the NASD);
(xii) The execution, delivery and performance of this Agreement by
the Company will not: (A) violate any provisions of the Articles
of Incorporation, Articles of Association, or By-laws of the
Company or the Bank; (B) violate any provisions of, or result in
the breach, modification or termination of, or constitute a
default under, any agreement, lease, franchise, license,
indenture, permit, mortgage, deed of trust, other evidence of
indebtedness or other instrument known to such counsel after
investigation, to which the Company or the Bank is a party or by
which the Company or the Bank, or any of their respective owned or
leased property is bound, and which is filed as an exhibit to the
Registration Statement; or (C) violate any statute, ordinance,
order, rule, decree or regulation of any court, regulatory or
governmental body, arbitrator, administrative agency or other
instrumentality of the United States, Florida, or to the knowledge
of such counsel, any other jurisdiction having jurisdiction over
the Company or the Bank (assuming compliance with all applicable
federal and state securities laws);
(xiii) Subject to the capital contribution by the Company to the
Bank of $7,500,000 of the net proceeds from the sale of the Common
Shares to the Underwriters pursuant to this Agreement, and the
satisfaction of the conditions set forth in the Charter Approval
and the Approval of Deposit Insurance, the Bank will be duly
organized and validly existing under the laws of the United States
as a commercial bank and will have all requisite corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement,
the Prospectus and the Applications, and is not required to be
duly qualified as a foreign corporation in any state, except where
the failure so to qualify would not have a Material Adverse Effect
on the conditions or earnings of the Company and the Bank
considered as one enterprise or of the Bank
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<PAGE> 18
considered separately, and no proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such qualification;
(xiv) As of the respective times the Charter Application and the
Deposit Insurance Application were filed with the respective
authorities and as of the First Closing Date and the Second
Closing Date, as the case may be: (A) such applications each
conformed in all material respects to the respective applicable
requirements of the OCC, the Federal Deposit Insurance Act and the
rules and regulations promulgated by the respective authorities
thereunder; and (B) to such counsel's knowledge, such Applications
contained no untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(xv) To such counsel's knowledge after investigation, except as
described in the Prospectus, there are no holders of Common Stock
or other securities of the Company, or securities that are
convertible or exchangeable into Common Stock or other securities
of the Company, that have rights to the registration of such
securities under the Act or any Blue Sky Laws;
(xvi) The Common Stock is registered under the Exchange Act;
(xvii) The Company is not, nor with the giving of notice or
passage of time or both would be, in violation of its Articles of
Incorporation or By-laws or, to such counsel's knowledge after
investigation, in default in any material respect in the
performance of any agreement, lease, franchise, license, permit,
mortgage, deed of trust, evidence of indebtedness or other
instrument or document that is filed as an exhibit to the
Registration Statement, to which the Company is subject or bound;
(xviii) The Company is not an "investment company", an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended, and, upon its receipt of any
proceeds from the sale of the Shares, assuming application of the
proceeds in the manner set forth under the caption "Use of
Proceeds" in the Prospectus, the Company will not become or be
deemed to be an "investment company" thereunder;
(xix) The description in the Registration Statement and the
Prospectus of statutes, law, regulations, legal and governmental
proceedings, and contracts and other legal documents described
therein fairly and correctly presents, in all material respects,
the information required to be included therein by the Act; and
(xx) All offers and sales by the Company of its capital stock
before the date hereof were at all relevant times duly registered
under or exempt from the registration requirements of the Act, and
were duly registered under or the subject of an available
exemption from the registration requirements of any applicable
Blue Sky Laws.
In rendering such opinion, counsel for the Company may rely, to the
extent counsel deems such reliance proper, as to matters of fact upon
certificates of officers of the Company and of governmental officials, and
copies of all such certificates shall be furnished to the Representative and for
the Underwriters on or before each Closing Date.
(e) The Representative shall have received an opinion of Holland &
Knight LLP, counsel for the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the issuance and sale
of the Shares by the Company, the Registration Statement and other related
matters as the Representative may require, and the Company shall have furnished
to such counsel such documents and shall have
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<PAGE> 19
exhibited to them such papers and records as they request for the purpose of
enabling them to pass upon such matters.
(f) The Representative shall have received on each Closing Date, a
certificate of Lewis S. Albert, in his capacity as Chief Executive Officer and
as principal financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company set forth
in section 2 hereof are true and correct in all material respects
as of the date of this Agreement and as of the date of such
certificate, and the Company has complied with all the agreements
and satisfied all the conditions to be performed or satisfied by
it at or prior to the date of such certificate;
(ii) The Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus
or any amendment or supplement thereto; no stop order suspending
the effectiveness of the Registration Statement has been issued;
and to the knowledge of the respective signatories, no proceedings
for that purpose have been initiated or are pending or
contemplated under the Act or under the Blue Sky Laws of any
jurisdiction;
(iii) Each of the respective signatories has carefully examined
the Registration Statement and the Prospectus, and any amendment
or supplement thereto, and such documents contain all statements
required to be stated therein, and do not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and since the date on which the
Registration Statement was initially filed, no event has occurred
that was required to be set forth in an amended or supplemented
prospectus or in an amendment to the Registration Statement that
has not been so set forth; and
(iv) Since the date on which the Registration Statement was
initially filed with the Commission, there shall not have occurred
any change or development involving, a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business relating to the organization of the Company or the Bank,
except as disclosed in the Prospectus and the Registration
Statement as heretofore amended or (but only if the Representative
expressly consents thereto in writing) as disclosed in an
amendment or supplement thereto filed with the Commission and
delivered to the Representative after the execution of this
Agreement; since such date and except as so disclosed or in the
ordinary course of business, the Company has not incurred any
liability or obligation, direct or indirect, or entered into any
transaction which is material to the Company; since such date and
except as so disclosed, there has not been any change in the
outstanding capital stock of the Company, or any change that is
material to the Company in the short-term debt or long-term debt
of the Company; since such date and except as so disclosed (and
except for the sale to the Company of the Organizational Shares by
Lewis S. Albert and Todd H. Katz), the Company has not acquired
any of the Common Stock or other capital stock of the Company nor
has the Company declared or paid any dividend, or made any other
distribution, upon its outstanding Common Stock payable to
shareholders of record on a date prior to such Closing Date; since
such date and except as so disclosed, the Company has not incurred
any material contingent obligations, and no material litigation is
pending or threatened against the Company; and, since such date
and except as so disclosed, the Company has not sustained any
material loss or interference from any strike, fire, flood,
windstorm, accident or other calamity (whether or not insured) or
from any court or governmental action, order or decree.
The delivery of the certificate provided for in this subsection (f)
shall be and constitute a representation and warranty of the Company as to the
facts required in the immediately foregoing clauses (i), (ii), (iii), and (iv)
to be set forth in the certificate.
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<PAGE> 20
(g) At the time this Agreement is executed and also on each
Closing Date, there shall be delivered to the Representative a letter addressed
to the Representative, as the representative of the Underwriters, from Hill,
Barth & King, Inc., the Company's independent accountants, the first letter to
be dated the date of this Agreement, the second letter to be dated the First
Closing Date and the third letter (if applicable) to be dated the Second Closing
Date, which shall be in form and substance satisfactory to the Representative
and shall contain information as of a date within five days of the date of such
letter. There shall not have been any change or decrease set forth in any of the
letters referred to in this subsection (g) which makes it impracticable or
inadvisable in the judgment of the Representative to proceed with the public
offering or purchase of the Shares as contemplated hereby.
(h) The Shares shall have been qualified or registered for sale
under the Blue Sky Laws of such jurisdictions as shall have been specified by
the Representative, the underwriting terms and arrangements for the offering
shall have been cleared by the NASD, and the Common Stock shall have been
approved for listing on the OTC Bulletin Board and shall have been registered
under the Exchange Act.
(i) Such further certificates and documents as the
Representative may reasonably request (including certificates of officers of the
Company).
(j) A written agreement or agreements signed by officers and
directors of the Company to the effect that such persons will not offer to sell,
sell, grant any option for the sale, of, or otherwise dispose of any shares of
Common Stock, or any rights to purchase shares of Common Stock, in the open
market or otherwise, for a period of 180 days after the date of the Prospectus,
except with the prior written consent of the Underwriter and except for the sale
to the Company of the Organizational Shares by Lewis S. Albert and Todd H. Katz.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to the
Representative and to Holland & Knight LLP, counsel for the Underwriters. The
Company shall furnish the Representative with such manually signed or conformed
copies of such opinions, certificates, letters and documents as the
Representative may reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at either Closing Date is not so satisfied when and as
required by this Agreement, this Agreement at the election of the Representative
will terminate upon notification to the Company without liability on the part of
any Underwriter, including the Representative or the Company except for the
provisions of section 6(m) hereof, the expenses to be paid by the Company
pursuant to section 7 hereof and except to the extent provided in section 10
hereof.
9. Maintain Effectiveness of Registration Statement. The Company will
use its best efforts to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement, and, if such stop order is issued,
to obtain as soon as possible the lifting thereof.
10. Indemnification.
(a) The Company subject to the last paragraph of this section
10, agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of the Act or the Exchange
Act, from and against any losses, claims, damages, expenses, liabilities, or
actions in respect thereof ("Claims"), joint or several, to which such
Underwriter or each such controlling person may become subject under the Act,
the Exchange Act, Blue Sky Laws, or other federal or state statutory laws or
regulations, at common law or otherwise (including payments made in settlement
of any litigation), insofar as such Claims arise out of or are based upon any
breach of any representation, warranty, or covenant made by the Company in this
Agreement, or any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or in any application filed
under any Blue Sky Law or other document executed by the Company for that
purpose or based upon written information furnished by the Company and filed in
any state or other jurisdiction to qualify any or all of the Shares under the
securities laws thereof (any such document, application, or information being
hereinafter called a "Blue Sky
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<PAGE> 21
Application") or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Company, subject to the last
paragraph of this section 10, agrees to reimburse each Underwriter and each such
controlling person for any legal fees or other expenses incurred by such
Underwriter or any such controlling person in connection with investigating or
defending any such Claim; provided, however, that the Company will not be liable
in any such case to the extent that: (i) any such Claim arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus or supplement thereto or in any Blue Sky Application in reliance
upon and in conformity with the written information furnished to the Company
pursuant to section 4 of this Agreement; or (ii) such statement or omission was
contained or made in any Preliminary Prospectus and corrected in the Prospectus
and (1) any such Claim suffered or incurred by any Underwriter (or any person
who controls any Underwriter) resulted from an action, claim or suit by any
person who purchased Shares that are the subject thereof from such Underwriter
in the offering, and (2) such Underwriter failed to deliver or provide a copy of
the Prospectus to such person at or prior to the confirmation of the sale of
such Shares in any case where such delivery is required by the Act, unless such
failure was due to failure by the Company to provide copies of the Prospectus to
the Underwriters as required by this Agreement. The indemnification obligations
of the Company as provided above are in addition to and in no way limit any
liabilities the Company may otherwise have.
(b) The Company agrees to indemnify and hold harmless each Underwriter
and each controlling person from and against any Claims to which such
Underwriter or each such controlling person may become subject under the Act,
the Exchange Act, Blue Sky Laws or other federal or state statutory laws or
regulations, at common law or otherwise (including payments made in settlement
of any litigation), insofar as such Claims arise out of or are based upon any
breach of any representations, warranty or covenant made by such parties in this
Agreement.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors and each of its officers who
sign the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act, against any Claim to
which the Company, or any such director, officer, or controlling person may
become subject under the Act, the Exchange Act, Blue Sky Laws or other federal
or state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation, if such settlement is effected
with the written consent of such Underwriter), insofar as such Claim arises out
of or is based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any Blue Sky
Application, or arises out of or is based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any Blue Sky Application, in reliance solely upon and in conformity with
the written information furnished by the Representative to the Company pursuant
to section 4 of this Agreement. Each Underwriter will severally reimburse any
legal fees or other expenses incurred by the Company, or any such director,
officer, or controlling person in connection with investigating or defending any
such Claim, and from any and all Claims solely resulting from failure of an
Underwriter to deliver a Prospectus, if the person asserting such Claim
purchased Shares from such Underwriter and a copy of the Prospectus (as then
amended if the Company shall have furnished any amendments thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim. The indemnification obligations of
each Underwriter as provided above are in addition to any liabilities any such
Underwriter may otherwise have. Notwithstanding the provisions of this section,
no Underwriter shall be required to indemnify or reimburse the Company, or any
officer, director or controlling person in an aggregate amount in excess of the
total price at which the Shares purchased by any such Underwriter hereunder were
offered to the public, less the amount of any damages such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
- 21 -
<PAGE> 22
(d) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action in respect of a Claim, such
indemnified party will, if a Claim in respect thereof is to be made against an
indemnifying party under this section, notify the indemnifying party in writing
of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve an indemnifying party from any liability it may have to
any indemnified party under this section or otherwise. In case any such action
is brought against any indemnified party, and such indemnified party notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in and, to the extent that he, she or it may wish,
jointly with all other indemnifying parties, similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and any indemnifying party and the indemnified party shall
have been advised by counsel that there may be legal defenses available to the
indemnified party that are different from or additional to those available to
any indemnifying party and in the reasonable judgment of such counsel it is
advisable for the indemnified party to employ separate counsel, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party will not be
liable for any settlement of any proceeding effected without its written
consent, which shall not be unreasonably withheld.
(e) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this section for any legal fees or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, unless:
(i) the indemnified party shall have employed separate counsel
in connection with the assumption of legal defenses in accordance
with subsection (d) of this section (it being understood, however,
that the indemnifying party shall not be liable for the legal fees
and expenses of more than one separate counsel, approved by the
Representative, if one or more of the Underwriters or their
controlling persons are the indemnified parties);
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the indemnified
party's notice to the indemnifying party of commencement of the
action; or
(iii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(f) If the indemnification provided for in this section is unavailable
to an indemnified party under subsection (a), (b), or (c) hereof in respect of
any Claim referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Underwriters
from the offering of the Shares; or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause
(i) above, but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which
resulted in such Claim, as well as any other relevant equitable
considerations.
The relative benefits received by each of the Company and the
Underwriters shall be deemed to be in such proportion so that the Underwriters
are responsible for that portion represented by the percentage that the amount
of the underwriting discounts and commissions per share appearing on the cover
page of the Prospectus
- 22 -
<PAGE> 23
bears to the public offering price per share appearing thereon, and the Company
(including its officers and directors and controlling persons) is responsible
for the remaining portion. The relative fault of the Company and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the Claims referred to
above shall be deemed to include, subject to the limitations set forth in
subsections (e) and (e) of this section, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
(g) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this section were determined by
pro rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method or allocation which does not
take into account the equitable considerations referred to in subsection (f) of
this section. Notwithstanding the other provisions of this section, no
Underwriter shall be required to contribute any amount that is greater than the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this section are several in proportion to their
respective underwriting commitments and not joint.
11. Default of Underwriters. It shall be a condition to the
obligations of each Underwriter to purchase the Shares in the manner as
described herein, that, except as hereinafter provided in this section, each of
the Underwriters shall purchase and pay for all the Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representative of all
such Shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Shares hereunder on either
the First Closing Date or the Second Closing Date and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent of the total number of Shares that the
Underwriters are obligated to purchase on such Closing Date, the Representative
may make arrangements for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date the nondefaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Shares
which such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number of
Shares with respect to which such default or defaults occur is greater than ten
percent of the total number of Shares which the Underwriters are obligated to
purchase on such Closing Date, and arrangements satisfactory to the
Representative for the purchase of such Shares by other persons are not made
within thirty-six hours after such default, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter or the Company,
except for the expenses to be paid by the Company pursuant to section 7 hereof,
and except to the extent provided in section 10 hereof.
In the event that Shares to which a default relates are to be purchased
by the nondefaulting Underwriters or by another party or parties, the
Representative shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, for not more than seven business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
12. Effective Date. This Agreement shall become effective upon the
execution and delivery of this Agreement by the parties hereto. Such execution
and delivery shall include an executed copy of this Agreement sent by
telecopier, facsimile transmission or other means of transmitting written
documents.
- 23 -
<PAGE> 24
13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Representative prior to or on the First Closing Date and the
over-allotment option from the Company referred to in section 5 hereof, if
exercised, may be cancelled by the Representative at any time prior to or on the
Second Closing Date, if in the judgment of the Representative, payment for and
delivery of the Shares is rendered impracticable or inadvisable because:
(a) additional governmental restrictions, not in force and
effect on the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally established on
the New York Stock Exchange or the American Stock Exchange, or trading in
securities generally shall have been suspended or materially limited on either
such exchange or on The Nasdaq Stock Market or OTC Bulletin Board or a general
banking moratorium shall have been established by either federal or state
authorities in New York, Florida or Wisconsin;
(b) any development or prospective development involving
particularly the business or properties or securities of the Company or the Bank
or transactions contemplated by this Agreement has occurred that, in the
judgment of the Representative makes it impractical or inadvisable to offer or
deliver the Shares; including, but not limited to, events set forth in section
8(b); or
(c) an outbreak or escalation of hostilities or other national
or international calamity or any substantial change in political, financial, or
economic conditions shall have occurred or shall have accelerated to such
extent, in the judgment of the Representative, as to have a material adverse
effect on the financial markets of the United States, or to make it
impracticable or inadvisable to proceed with completion of the sale of and
payment for the Shares as provided in this Agreement.
Any termination pursuant to this section shall be without
liability on the part of any Underwriter to the Company, or on the part of the
Company to any Underwriter, except for expenses to be paid by the Company
pursuant to section 7 hereof or reimbursed by the Company pursuant to section
6(m) hereof and except as to indemnification to the extent provided in section
10 hereof.
14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company, of its officers or directors, and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of their partners, officers, directors
or any controlling person, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
15. Notices. All communications hereunder will be in writing and, if
sent to the Representative, will be mailed, delivered, telecopied (with receipt
confirmed) or telegraphed and confirmed to Robert W. Baird & Co. Incorporated at
777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, Attention: Steven P. Kent,
Managing Director, with a copy to Chester E. Bacheller, Esq., Holland & Knight
LLP, 400 North Ashley Drive, Suite 2300, Tampa, Florida, 33602 and if sent to
the Company, will be mailed, delivered, telecopied (with receipt confirmed) or
telegraphed and confirmed to the Company at 4055 Tamiami Trail, Suite A-6, Port
Charlotte, Florida 33952, Attention: Lewis S. Albert, with a copy to John P.
Greeley, Smith, MacKinnon, Greeley, Bowdoin & Edwards, P.A., Suite 800, Citrus
Center, 255 South Orange Avenue, Orlando, Florida 32801.
16. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors
and controlling persons referred to in section 10 hereof and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Shares as such from any of the Underwriters merely
by reason of such purchase.
- 24 -
<PAGE> 25
17. Partial Unenforceability. If any section, paragraph, clause or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph clause or provision hereof.
18. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Florida
without reference to conflict of law principles thereunder. This Agreement may
be signed in various counterparts which together shall constitute one and the
same instrument, and shall be effective when at least one counterpart hereof
shall have been executed by or on behalf of each party hereto.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters, including the Representative, all in accordance with its terms.
Very truly yours,
TARPON COAST BANCORP, INC.
By:
--------------------------------------
Lewis S. Albert,
Chief Executive Officer
- 25 -
<PAGE> 26
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
By: ROBERT W. BAIRD & CO. INCORPORATED
Acting as Representative of the several
Underwriters (including themselves) identified
in Schedule I annexed hereto.
By:
-----------------------------------------------
Authorized Representative
- 26 -
<PAGE> 27
Tarpon Coast Bancorp, Inc.
Schedule I
<TABLE>
<CAPTION>
Number of Firm
Shares to
Name of Underwriter be Purchased
------------------- ------------
<S> <C>
Robert W. Baird & Co. Incorporated
</TABLE>
-----------------
Total
- 27 -
<PAGE> 28
EXHIBIT A
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is entered into by and
between _________________________, a nationally-chartered bank with its
principal office in Port Charlotte, Florida (the "Escrow Agent"), Tarpon Coast
Bancorp, Inc., a Florida corporation (the "Company"), and Gulf Coast Community
Bank, N.A., a national banking organization, to be located in Port Charlotte,
Florida (the "Bank").
BACKGROUND
The Company has prepared and filed with the Board of Governors of the
Federal Reserve System an application to become a bank holding company (the
"Holding Company Application"). Organizers of the Bank, on behalf of the Bank,
have filed (i) an application to organize a National Bank with the United States
Comptroller of the Currency and (ii) an Application for Federal Deposit
Insurance with the Federal Deposit Insurance Corporation (collectively the "Bank
Applications" and together with the Holding Company Application the "Regulatory
Applications"). The Company proposes to sell up to 1,150,000 shares of its
common stock, par value $.01 per share (the "Offering") to Robert W. Baird & Co.
Incorporated, as representative of the several underwriters (the
"Representative"), identified on Schedule I to an underwriting agreement between
the Company and the Representatives dated _________ __, 199_. The parties desire
that the Offering proceeds (the "Proceeds") plus interest and earnings thereon
(together with the Proceeds, the "Escrow Funds") shall be held in an escrow
account at a nationally-chartered, FDIC-insured bank until such time as the Bank
and the Company receive all approvals from the Federal Deposit Insurance
Corporation and the United States Comptroller of the Currency of the Bank
Applications (the "Bank "Approvals") and from the Board of Governors of the
Federal Reserve System of the Holding Company Application (collectively, with
the Bank Approvals, the "Regulatory Approvals").
THEREFORE, in consideration of the mutual covenants contained in this
Escrow Agreement, the parties agree as follows:
TERMS
1. If on the closing date of the Offering or the closing date
pertaining to the exercise of the underwriters' over-allotment option in the
Offering, the Company and the Bank have not received the Regulatory Approvals,
the Company and the Bank will deliver the Proceeds to the Escrow Agent to be
held by the Escrow Agent pursuant to the terms of this Escrow Agreement.
2. The Escrow Funds are to be invested by the Escrow Agent in
Permitted Investments. Interest and earnings on the Escrow Funds will be deemed
earned by the Company and the Company's federal tax identification number will
be used to establish any accounts for reporting such interest and earnings. The
term "Permitted Investments" means the following investments so long as they
have maturities of 90 days or less: (a) obligations issued or guaranteed by the
United States or by any person controlled or supervised by or acting as an
instrumentality of the United States or by any person controlled or supervised
by or acting as an instrumentality of the United States pursuant to authority
granted by Congress; (b) commercial or finance paper which is rated either
Prime-1 or higher or an equivalent by Moody's Investors Service, Inc. or A-1 or
higher or an equivalent by Standard & Poor's Corporation, both of New York, New
York, or their successors; and (c) certificates of deposit or time deposits of
banks or trust companies, organized under the laws of the United States, having
a minimum equity of $500,000,000.
3. The Escrow Funds must be disbursed in accordance with paragraph 4
hereof as a condition precedent to the Company and the Bank having any right,
title, or interest (legal or equitable) in any of the Escrow
<PAGE> 29
Funds. The Company acknowledges and agrees that its rights under this Escrow
Agreement are valid and sufficient consideration for the issuance of the
Company's Common Stock in the Offering.
4. The Company may obtain disbursements of Escrow Funds for general
operating and pre-opening expenses, including site acquisition, development and
construction costs and the payment of any obligations incurred to fund any such
expenses. The Escrow Agent will release Escrow Funds permitted to be disbursed
by it hereunder in the amount specified in writing by the Company, upon receipt
by the Escrow Agent of written certification from the Company that the Escrow
Funds are being disbursed for the purposes described in the preceding sentence.
The Company must also provide the Representative with a copy of such written
certification. Upon receipt of written certification from the Company that it
and the Bank have received all necessary Regulatory Approvals to conduct their
respective business, the Escrow Agent shall promptly release and pay to the
Company the Escrow Funds, net of the Escrow Agent's fees for services provided
by it under this Agreement and any amounts previously distributed by the Escrow
Agent pursuant to this paragraph 4.
5. If the Company and the Bank have not received all of the
Regulatory Approvals by _______________, 199_, the Escrow Agent will disburse
the Escrow Funds to the shareholders of record on such date pro rata based on
the amount that the Company common stock held by each shareholder bears to the
total amount of Company common stock outstanding on such date. The Company will
cause the Company's registrar and transfer agent to cooperate with the Escrow
Agent to identify such shareholders.
6. The Company and the Bank shall have the right to inspect and
obtain copies of the records of the Escrow Agent and to receive monthly reports
of the status of the Escrow Funds.
7. The Escrow Agent may resign as escrow agent by notice to the other
parties hereto (the "Resignation Notice"). If, prior to the expiration of 60
business days after the delivery of the Resignation Notice, the Escrow Agent
shall not have received written instructions from the Company or the Bank
designating a banking corporation or trust company organized either under the
laws of the United States or of any state meeting the minimum capital and
surplus requirements as successor escrow agent and consented to in writing by
such successor escrow agent, the Escrow Agent may apply to a court of competent
jurisdiction to appoint a successor escrow agent. Alternatively, if the Escrow
Agent shall have received such written instructions, it shall promptly transfer
the Escrow Funds to such successor escrow agent. Upon the appointment of a
successor escrow agent and the transfer of the Escrow Funds thereto, the duties
of the Escrow Agent hereunder shall terminate.
8. In the event of a dispute between the parties as to the proper
disposition of the Escrow Funds which continues for 90 days or more, the Escrow
Agent shall be entitled to submit the dispute to a court of competent
jurisdiction and shall thereupon be relieved of any obligations or liability.
9. The Company shall pay the Escrow Agent reasonable compensation for
its services hereunder and reimburse the Escrow Agent for all disbursements and
advances incurred or made by it in the performance of its duties hereunder
(including, without limitation, the reasonable fees, expenses and disbursements
of its counsel) and to indemnify and hold the Escrow Agent harmless from and
against any and all taxes, expenses (including reasonable counsel fees),
assessments, liabilities, claims, damages, actions, suits or other charges
incurred by or assessed against it for any thing done or omitted by it in the
performance of its duties hereunder, except as a result of its own gross
negligence or willful misconduct. The agreement contained in this paragraph
shall survive any termination of the duties of the Escrow Agent hereunder.
10. The Escrow Agent shall have no duties or responsibilities, except
those expressly set forth herein. The Escrow Agent may consult with counsel,
shall be fully protected with respect to any action taken or omitted in good
faith on advice of counsel and shall have no liability hereunder except for
willful misconduct or negligence. The Escrow Agent shall have no responsibility
as to the validity, collectibility or value of the Escrow Funds or for
investment losses related thereto, provided the Escrow Funds have been invested
in accordance with paragraph 2 above, and it may rely on any notice,
instruction, certificate, statement, request, consent, confirmation, agreement
2
<PAGE> 30
or other instrument that it believes to be genuine and to have been signed or
presented by a proper person or persons. If the Escrow Agent shall be uncertain
as to its duties or rights hereunder or shall receive instructions from any of
the undersigned with respect to the Escrow Funds, which, in its opinion, are in
conflict with any of the provisions of this Agreement, it shall be entitled to
refrain from taking any action until it shall be directed otherwise in writing
by all of the other parties hereto or by order of a court of competent
jurisdiction. Notwithstanding any provision to the contrary contained in any
other agreement between any of the parties hereto, the Escrow Agent shall have
no interest in the Escrow Funds except as provided in this Agreement.
11. This Agreement shall be binding upon and inure to the benefit of
the parties named herein and their respective successors and permitted assigns.
No party may assign either this Agreement or any of its rights, interest, or
obligations hereunder without the prior written approval of the other parties.
12. Each of the parties submits to the jurisdiction of any state or
federal court sitting in Charlotte County, Florida, in any action or proceeding
arising out of or relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and determined in any such
court. Each of the parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other party with respect
thereto. Any party may make service on the other party by sending or delivering
a copy of the process to the party to be served at the address and in the manner
provided for the giving of notices in paragraph 13 below. Nothing in this
paragraph 12, however, shall affect the right of any party to serve legal
process in any other manner permitted by law or in equity. Each party agrees
that a final judgment in any action or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment or in any other manner provided by
law or in equity.
13. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
Escrow Agent: Company:
- -------------------------- -------------------------------------------------
- -------------------------- -------------------------------------------------
- -------------------------- -------------------------------------------------
Bank: Baird:
- -------------------------- -------------------------------------------------
- -------------------------- -------------------------------------------------
- -------------------------- -------------------------------------------------
With copy in each case to:
Chester E. Bacheller, Esq. Jack A. Greeley, Esq.
Holland & Knight LLP Smith, MacKinnon,
400 North Ashley Drive, Greeley, Bowdoin,
Suite 2300 & Edwards, P.A.
Tampa, FL 33602 255 S. Orange Ave.
Suite 2254
Orlando, FL 32801
3
<PAGE> 31
14. This Escrow Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
15. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
16. This Escrow Agreement shall continue until such time as all Escrow
Funds, including any earnings thereon, have been distributed or refunded
pursuant to the terms of this Escrow Agreement.
Dated this ______ day of November, 1997.
TARPON COAST BANCORP, INC.
By:
----------------------------
Its:
----------------------------
GULF COAST COMMUNITY BANK, N.A.
By:
----------------------------
Its:
----------------------------
---------------------------
(Escrow Agent)
By:
----------------------------
Its:
----------------------------
4
<PAGE> 1
EXHIBIT 3.2
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
GULF COAST BANCORP, INC.
Pursuant to Section 607.1006, Florida Statutes, the Articles of
Incorporation of GULF COAST BANCORP, INC. are hereby amended as follows:
FIRST: Article I of the Articles of Incorporation is hereby amended by
deleting the text of such provision in its entirety and substituting the
following provision in lieu thereof:
ARTICLE I. NAME
The name of the Corporation is Tarpon Coast Bancorp, Inc.
SECOND: The foregoing amendment was adopted by the holders of all the
outstanding shares of common stock, being the sole voting group entitled to vote
on the amendment, on December 12, 1997 and the number of votes cast for the
amendment was sufficient for approval by the holders of common stock.
IN WITNESS WHEREOF, the undersigned has caused these Articles of
Amendment to be executed and attested to by its duly authorized officer as of
this 12th day of December, 1997.
GULF COAST BANCORP, INC.
By: /s/ Lewis S. Albert
------------------------------------
Lewis S. Albert
Chairman and Chief Executive Officer
STATE OF FLORIDA )
COUNTY OF CHARLOTTE )
The foregoing instrument was acknowledged before me this 12th day of
December, 1997, by LEWIS S. ALBERT, Chairman and Chief Executive Officer of GULF
COAST BANCORP, INC., a Florida corporation, on behalf of the corporation. He is
personally known to me and did not take an oath.
/s/ Marjorie A. Davis
----------------------------------------
Printed Name: Marjorie A. Davis
-----------------------
Notary Public, State of Florida
My Commission Expires: August 15, 1999
----------------
<PAGE> 1
EXHIBIT 10.7
PREORGANIZATION AGREEMENT
THIS AGREEMENT, dated this ______ day of __________, 1997, by and among
the undersigned as reflected by the attached signature pages (hereinafter
referred to individually as "Organizer" and collectively as the "Organizers").
W I T N E S S E T H:
WHEREAS, the Organizers intend to submit an application to the Office
of the Comptroller of the State of Florida (the "Comptroller") to procure a
charter for a community bank (the "New Bank") and to the Federal Deposit
Insurance Corporation (the "FDIC") to procure the insurance of the deposits of
the New Bank;
WHEREAS, the Organizers recognize that certain expenses will be
incurred in connection with the organization of the New Bank and the raising of
capital regarding same;
WHEREAS, the Organizers desire to provide for the sharing of such
expenses, to determine by agreement the initial investment of each Organizer in
the New Bank and to provide for certain other matters; and
WHEREAS, each Organizer has signed this Agreement upon the reliance of
each and every other Organizer signing this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. ORGANIZERS TO BE SHAREHOLDERS OF THE NEW BANK. In the event that
preliminary approval to charter the New Bank is granted by the Comptroller
<PAGE> 2
and the application for insurance of the deposits of the New Bank is granted by
the FDIC, each of the Organizers shall make an initial investment in the New
Bank's capital stock in an amount indicated below his/her signature hereto. It
is understood and agreed that each Organizer's commitment for his or her initial
investment as indicated below his/her signature herein is binding subject to
such limitations, if any, as may be imposed by applicable regulatory
authorities. In the event a limitation is imposed as to any Organizer's initial
investment, then that Organizer's initial investment shall be reduced to such
amount. The purchase price for shares of the New Bank stock shall be $5.00 per
share. The maximum number of shares of capital stock which may be purchased by
an Organizer shall be 400,000 shares.
2. ORGANIZATION EXPENSES. Each Organizer shall advance a portion of his
or her initial investment in proportion to the aggregate initial investment of
all participating Organizers such that a working fund of $300,000.00 is
established.
3. CERTAIN ORGANIZERS TO BE INITIAL DIRECTORS OF NEW BANK; OFFICERS AND
DIRECTORS OF THE NEW BANK. Certain of the Organizers will be asked to be initial
directors of the New Bank in the event that a charter for the establishment of
the New Bank is granted by the Comptroller. The New Bank Board, in the event
that approval to become a bank is obtained from the Comptroller and the FDIC,
will consist of not more than twenty (20) members, of which two (2) seats are to
be reserved for Lewis S. Albert and Todd H. Katz. In the event that a charter
for the New Bank is granted, it is anticipated that the Board of Directors of
the New Bank shall elect Lewis S. Albert as Chairman and Chief Executive Officer
and Todd H. Katz as President and General Counsel of the New Bank.
<PAGE> 3
4. CONSULTANT'S FEES. Beginning on ____________, 1997, Lewis S. Albert
and Todd H. Katz, for services they shall render to the New Bank, including the
raising of the necessary funds and the processing of all aspects of the
application to meet the regulatory requirements of the Comptroller and FDIC,
shall each be paid a monthly consultant's fee of $7,000.00 until the date that
the New Bank commences business or until such time as the Organizers have been
notified that a charter for the New Bank will not be granted.
5. SUBSTITUTION OF ORGANIZERS. Each of the Organizers recognize that
his/her position as an Organizer, shareholder, director and/or officer of the
proposed New Bank is subject to approval by the Comptroller and the FDIC. In the
event that any Organizer is disapproved in any capacity whatsoever by the
Comptroller or the FDIC and is barred from participation in the future
operations of the proposed New Bank, then and in such event the Organizers
specifically agree as follows:
(a) Such Organizer shall withdraw immediately from
participation in all organizational activities and efforts of the remaining
Organizers, and shall take no action which would in any way jeopardize the
remaining Organizers' efforts to obtain a charter or FDIC insurance coverage for
the proposed New Bank.
(b) The withdrawing Organizer shall be entitled to receive
from the remaining Organizers (if the New Bank is approved by the appropriate
regulatory authorities) an amount equivalent to his/her pro rata share of the
organization expense monies remaining and unused at the time of his or her
withdrawal as an Organizer.
(c) Except for payment of the pro rata share of the remaining
and unused organization expense monies as specified in subparagraph (b) above,
the remaining Organizers shall not be liable for any other expenses or damages
incurred by the withdrawing Organizer in connection with this Agreement among
the Organizers of the proposed New Bank.
<PAGE> 4
(d) In the event that any other individual becomes an
Organizer in substitution for the withdrawing Organizer at any time prior to the
date the New Bank commences business, such individual shall agree in writing to
be bound by all terms and conditions of this Agreement and shall become a party
hereto.
(e) In the event the New Bank should be disapproved by any
appropriate regulatory authority based upon an Organizer's background, which
background information had not previously been disclosed to the other
Organizers, then such disqualified Organizer shall be liable for all expenses
incurred by the Organizers, including, but not limited to, their initial
deposit, in filing for approval.
6. MISCELLANEOUS.
(a) Any and all notices or other communications under or
relating to this Agreement shall be in writing and the same be deemed given when
personally served, or when sent by certified mail, return receipt requested,
postage and fees prepaid, and addressed to the appropriate party at his address
set forth beneath his signature hereto, or to such substitute address notice of
which shall be previously have been given pursuant hereto by a party to all
other parties hereto.
(b) This Agreement has been made and entered into in the State
of Florida, and shall be construed in accordance with and governed by the laws
of the State of Florida, as amended from time to time.
(c) Each Organizer recognizes the inherent risk associated
herein and understands that if the charter or insurance coverage is denied, each
Organizer will receive back only their pro rata share of monies remaining in the
organization expense account after all organizing expenses and expenses related
to closing down the organizational project are paid.
(d) This Agreement constitutes the entire agreement among the
parties hereto and any additions, changes or corrections thereof must be in
writing executed by all the parties hereto or their successors, transferees and
assigns.
<PAGE> 5
(e) This Agreement is binding upon each signatory and such
signatory's heirs and executors, and except as otherwise provided herein or by
operation of law, this Agreement shall not be transferred, assigned, sold or in
any manner hypothecated or pledged by any party unless written consent to such
act is first obtained from all other parties hereto.
(f) If any portion of this Agreement be legally adjudicated
invalid or unenforceable, the parties hereto do covenant and agree that such
portion or portions are absolutely and completely severable from all other
portions of this Agreement and such other provisions shall constitute the
agreement of the parties.
(g) Except as otherwise provided herein, the rights and
remedies of each party provided in this Agreement are cumulative to each other
and to any rights or remedies available to such party at law or in equity. No
failure on the part of any party hereto to exercise, and no delay in exercising,
any right shall operate as waiver thereof, nor shall any single or partial
exercise by such party of any right preclude any other future exercise thereof
or the exercise of any other right, except as otherwise provided.
(h) Attached hereto as an exhibit A is a pro forma of
organizational expenses.
(i) All Organizers hereby agree that upon commencement of
business of the New Bank, the New Bank shall sponsor and approve an incentive
stock option plan (the "Plan") for the purpose of attracting qualified banking
professionals and providing shareholder value added incentive compensation. The
Plan shall, by its terms, reserve an aggregate of 250,000 shares of the New
Bank's common stock for issuance thereunder.
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have signed and sealed this Agreement on
the date set forth below their signatures hereto, effective as of the date above
written.
_______________________ Signature______________________________
Witness
Initial Investment_____________________
Address________________________________
________________________________
Date___________________________________
<PAGE> 1
EXHIBIT 23.1
CONSENT OF HILL, BARTH & KING, INC., INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on the Pre-Effective Amendment No. 1 to Form SB-2 and
related Prospectus of Tarpon Coast Bancorp, Inc. formerly known as Gulf Coast
Bancorp, Inc. for the registration of 1,150,000 shares of its common stock and
to the incorporation therein of our report dated September 18, 1997 except for
Note F, as to which the date is December 23, 1997 relating to the financial
statements of Tarpon Coast Bancorp, Inc. as of August 31, 1997 and for the
period from May 1, 1997 (date of inception) to August 31, 1997.
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
December 29, 1997
