<PAGE> 1
As filed with the Securities and Exchange Commission on July __, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FIRST NATIONAL BANCSHARES, INC..
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
FLORIDA 6710 Applied For
<S> <C> <C>
(State or Other Jurisdiction (Primary Standard Industrial (IRS Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
5817 MANATEE AVENUE WEST
BRADENTON, FLORIDA 34209
(941) 794-6969
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
MR. GLEN W. FAUSSET COPIES OF COMMUNICATIONS TO:
SECRETARY/TREASURER THOMAS C. BLANK, ESQ.
FIRST NATIONAL BANCSHARES, INC. WERNER & BLANK CO., L.P.A.
5817 MANATEE AVENUE WEST 7205 W. CENTRAL AVE.
BRADENTON, FLORIDA 434209 TOLEDO, OHIO 43617
(941) 794-6969 (419) 841-8051
(941) 795-4772 - FAX (419) 841-8380 - FAX
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Approximate date of commencement of proposed sale of the securities to the
public:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box:
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Class of Securities Amount to Offering Price Aggregate Offering Amount of
to be Registered be Registered Per Share(1) Price(1) Registration Fee(1)
- ------------------- ------------- ---------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.10 par value 1,429,430 $8.0202 $11,464,347 $3,474.04
</TABLE>
(1) The registration fee has been computed pursuant to Rule 457(f)(2) and (3)
based on the aggregate book value of all the outstanding shares of Common
Stock, $5.00 par value, of First National Bank of Manatee as of June 30,
1998, or $11,464,347 in the aggregate. The proposed maximum offering
price per share is determined by dividing the proposed maximum aggregate
offering price by the number of shares to be registered.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
FIRST NATIONAL BANK OF MANATEE
5817 Manatee Avenue West
Bradenton, Florida 34209
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD
________________, 1998
TO THE SHAREHOLDERS OF FIRST NATIONAL BANK OF MANATEE:
You are hereby notified that a special meeting of the shareholders of
First National Bank of Manatee (the "Bank") will be held on ______________,
1998 at _______ . m. (local time), at _______________________ Bradenton,
Florida 34209, for the purpose of considering and acting upon the following:
1. To consider and vote upon the formation of a holding company by the
adoption of a Consolidation Agreement (the "Agreement") which provides for
the consolidation of Bradenton Interim Bank, N.A. a subsidiary of First
National Bancshares, Inc., an Florida corporation (the "Company"), with
and into the Bank under the name and charter of First National Bank of
Manatee with shareholders of the Bank receiving two(2) shares of Company
stock for each share of Bank stock held by them.
2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
The Board of Directors has fixed ___________, 1998 as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting.
By order of the Board of Directors
Glen W. Fausset, President
The affirmative vote of the holders of two-thirds (2/3) of the outstanding
common stock of First National Bank of Manatee is required for approval of the
Agreement. Directors of the Bank beneficially owned __________ shares, or
_______ percent of the outstanding common stock of the Bank as of
____________________, 1998.
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. YOU MAY REVOKE YOUR EXECUTED PROXY AT ANY TIME BEFORE IT IS
EXERCISED AT THE SPECIAL MEETING OF SHAREHOLDERS BY NOTIFYING THE CHAIRMAN OF
THE MEETING OR THE SECRETARY OF THE BANK AT, OR PRIOR TO THE MEETING, OF YOUR
INTENTION. IF YOUR STOCK IS HELD IN MORE THAN ONE NAME, ALL PARTIES MUST SIGN
THE PROXY FORM.
<PAGE> 3
PROXY STATEMENT/PROSPECTUS
GENERAL INFORMATION
OFFERING OF 1,429,430 COMMON VOTING SHARES OF FIRST NATIONAL
BANCSHARES, INC.
This Proxy Statement/Prospectus and the accompanying form of proxy is
furnished in connection with the solicitation, by the Board of Directors of
First National Bank of Manatee, 5817 Manatee Avenue West, Bradenton, Florida
34209, (941) 794-6969, of proxies to be voted at the special meeting of
shareholders of First National Bank of Manatee to be held on ______________,
1998, at _______ . m. (local time), at ________________________ , Bradenton,
Florida 34209.
This Proxy Statement has been mailed to all holders of record of the
common stock of First National Bank of Manatee as of the close of business on
_______________, 1998. The cost of soliciting proxies will be borne by the
Company.
First National Bancshares, Inc., 5817 Manatee Avenue West, Bradenton,
Florida 34209, (941) 794-6969, has filed a Registration Statement with the
Securities and Exchange Commission concerning the securities to be issued by it
in connection with a plan of reorganization described in this Proxy Statement.
This Proxy Statement also constitutes a "prospectus" and has been filed with
the Securities and Exchange Commission as part of the Registration Statement.
Please see page 13 "Risk Factors" for a descriptions of certain risks in
connection with the shares of the Company.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE
OFFICE OF THE COMPTROLLER OF THE CURRENCY, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE OFFICE OF THE
COMPTROLLER OF THE CURRENCY PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF STOCK OF FIRST NATIONAL BANCSHARES, INC., OFFERED HEREBY, ARE NOT
BANK DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER AGENCY OR COMPANY. THE SECURITIES ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL INVESTED.
ADDITIONAL INFORMATION
This Prospectus and Proxy Statement constitutes part of the Registration
Statement covering the shares to be offered pursuant to the consolidation
transaction by the Company, as filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. This Prospectus and
Proxy Statement does not contain all the information set forth in such
Registration Statement and the exhibits thereto, certain portions of which have
been omitted pursuant to the rules and regulations of the Securities and
Exchange Commission.
1
<PAGE> 4
Such Registration Statement may be inspected, without charge, at the
principal office of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C., and copies of all or part thereof may be obtained from
the Securities and Exchange Commission upon payment of its prescribed fees.
The Securities and Exchange Commission also maintains a 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, including the Company.
THE BANK'S COMMON STOCK IS REGISTERED UNDER SECTION 12G OF THE SECURITIES
AND EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"), PURSUANT TO WHICH IT FILES
ANNUAL AND QUARTERLY FINANCIAL REPORTS WITH THE OFFICE OF THE COMPTROLLER OF
THE CURRENCY. THE BANK'S FORM 10-K ANNUAL REPORT WHICH INCLUDES FINANCIAL
STATEMENTS AND SCHEDULES, BY REFERENCE, IS FILED WITH THE OFFICE OF THE
COMPTROLLER OF THE CURRENCY IN WASHINGTON, D.C. A COPY OF THIS REPORT IS
AVAILABLE TO SHAREHOLDERS UPON REQUEST TO THE SECRETARY, FIRST NATIONAL BANK OF
MANATEE, 5817 MANATEE AVENUE WEST, BRADENTON, FLORIDA 34209, (941) 794-6969
THE FIRST COPY WILL BE PROVIDED WITHOUT CHARGE. NEITHER THE ANNUAL REPORT TO
SHAREHOLDERS NOR THE FORM 10-K ARE TO BE TREATED AS PART OF THE PROXY
SOLICITATION MATERIAL, NOR AS HAVING BEEN INCORPORATED HEREIN BY REFERENCE.
ADDITIONALLY SUCH FORM 10-K ANNUAL REPORT MAY BE INSPECTED AND COPIED AT THE
OFFICES OF THE OFFICE OF THE COMPTROLLER OF THE CURRENCY, 490 L'ENFANTE PLAZA,
S.W., WASHINGTON D. C., 20219.
The date of this Proxy Statement is ___________, 1998.
2
<PAGE> 5
TABLE OF CONTENTS
-------------------
<TABLE>
Page
----
<S> <C>
GENERAL 7
REVOCATION OF PROXIES 7
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF 8
THE PROPOSED REORGANIZATION TO FORM A
ONE-BANK HOLDING COMPANY 8
SUMMARY 8
General 8
Terms of the Consolidation Agreement 9
The Exchange Ratio and Market Value 9
Business of the Company, the Bank, and the New Bank 10
Management 10
Shareholders' Approval 10
Regulatory Approval 11
Dissenters' Rights 11
Differences Between Company Stock and Bank Stock 11
Tax Consequences 12
Reports 12
Antitakeover Measures 12
Risk Factors 13
Per Share Summary of the Bank and Pro Forma Per Share Summary
of the Company 14
PURPOSE OF THE MEETING 15
THE PROPOSED REORGANIZATION 15
Reasons for the Proposed Transaction 15
Description of the Reorganization 15
Conversion and Exchange of Stock 16
Negotiation of Terms of the Agreement 16
Affiliate Restrictions 17
Conditions of Consummation 17
Other Considerations 18
Expenses 18
Federal Tax Consequences 18
State Tax Consequences 19
Appraisal Rights of Dissenting Shareholders 19
Accounting Treatment 20
MARKET PRICES OF STOCK 21
The Company 21
The Bank 21
DIVIDENDS 22
The Company 22
The Bank 22
</TABLE>
3
<PAGE> 6
TABLE OF CONTENTS (CONT.)
<TABLE>
<S> <C>
CAPITALIZATION 22
FINANCIAL STATEMENTS 23
HISTORY AND BUSINESS OF THE COMPANY 25
General 25
Competition 25
Employees 25
Property 25
Board of Directors 26
Remuneration of Directors and Officers 26
Indemnification 26
HISTORY AND BUSINESS OF THE BANK 27
General 27
Competition 27
Employees 27
Property 28
Litigation 28
Board of Directors 28
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS 30
EXECUTIVE COMPENSATION AND OTHER INFORMATION 32
Summary of Cash and Certain Other Compensation 32
Change of Control Agreements 32
Directors' Compensation 32
401(k) Retirement Plan 32
Employee Vesting Schedule 33
Pension Plan 33
Stock Option Plans 34
CERTAIN TRANSACTIONS 36
SUPERVISION AND REGULATION 37
The Company 37
Bank 37
Capital 37
Additional Regulation 38
Dividend Regulation 38
Government Policies and Legislation 39
</TABLE>
4
<PAGE> 7
TABLE OF CONTENTS (CONT.)
<TABLE>
<S> <C>
DESCRIPTION OF COMMON STOCK--COMPARATIVE RIGHTS 39
General 39
Voting Rights 40
Right of Redemption 40
Liquidation Rights 40
Preemptive Rights 40
Dissenters' Rights 40
Cumulative Voting 41
Indemnification 41
Dividend Rights 42
Transfer and Assessability 42
Antitakeover Measures 42
ANTITAKEOVER MEASURES 43
Discussion of Fair Price and Supermajority Vote Provisions 43
Reasons for Fair Price and Supermajority Vote Provisions 44
Summary of Fair Price and Supermajority Vote Provisions 45
Comparison with Current Requirements 46
Classified Board of Directors and Supermajority Vote Required to Remove Directors 47
Additional Considerations 47
REPORTS 49
LEGAL OPINION 50
OTHER MATTERS 50
ADDITIONAL INFORMATION 50
CONSOLIDATION AGREEMENT Appendix I
DISSENTER'S STATUTE 12 U.S.C. Section 215 AND BANKING Appendix II
CIRCULAR 259
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF THE COMPANY Appendix III
</TABLE>
5
<PAGE> 8
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON. THIS PROXY
STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY OF THE SECURITIES OFFERED BY THIS PROXY
STATEMENT-PROSPECTUS IN ANY STATE TO ANY PERSON TO WHOM IT WOULD BE UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION. THE DELIVERY OF THIS PROXY
STATEMENT-PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE
OFFICE OF THE COMPTROLLER OF THE CURRENCY NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR THE OFFICE OF THE
COMPTROLLER OF THE CURRENCY PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
6
<PAGE> 9
GENERAL
This Proxy Statement is furnished to the shareholders of First National
Bank of Manatee ("Bank") in connection with the solicitation of proxies to be
used in voting at a special meeting of shareholders to be held on
______________, 1998 __________________________________, Bradenton, Florida
34209, at _______ . m. ("Meeting"). THE ENCLOSED PROXY IS SOLICITED BY THE
BOARD OF DIRECTORS (HEREINAFTER SOMETIMES REFERRED TO AS "MANAGEMENT") OF THE
BANK. This Proxy Statement and the enclosed form of proxy are first sent or
delivered to the Bank's shareholders on ___________, 1998.
The Meeting has been called for the purpose of: (i) acting on a proposal
to form a holding company; and (ii) considering such other matters as may
properly come before the Meeting.
REVOCATION OF PROXIES
The names and addresses of Management's designated Proxy Committee are:
NAME ADDRESS
---- -------
Francis I. duPont, III 5817 Manatee Avenue West
Bradenton, Florida 34209
Glen W. Fausset 5817 Manatee Avenue West
Bradenton, Florida 34209
All shareholders who execute proxies retain the right to revoke them at
any time. Unless so revoked, the shares represented by such proxies will be
voted at the Meeting and all adjournments thereof. Proxies may be revoked at
any time before they are exercised at the special meeting by filing a written
notice with the Secretary of the Bank or by delivering to the Secretary of the
Bank a subsequently dated proxy prior to the commencement of the meeting. A
written notice of revocation of a proxy should be sent to the Secretary of
First National Bank of Manatee, 5817 Manatee Avenue West, Bradenton, Florida
34209. A previously submitted proxy will also be revoked if a shareholder
attends the Meeting and votes in person. In the event a shareholder attends
the special meeting and does not wish to have his/her proxy used, he/she should
notify the Secretary of the Bank prior to the start of the business meeting.
Proxies solicited by the Board of Directors of the Bank will be voted in
accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted in favor of each proposal set forth in this
Proxy Statement for consideration at the Meeting.
7
<PAGE> 10
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record as of the close of business on ___________, 1998,
are entitled to one vote for each share then held. As of July 31, 1998, the
Bank had 714,715 shares of common stock authorized, issued, outstanding and
entitled to vote.
Management of the Bank is not aware of any person who owns, beneficially
or of record, more than five percent (5%) of the Bank's outstanding common
stock except as listed below. Management is not aware of any changes in
control of the Bank which have occurred or of any arrangement which may, at a
subsequent date, result in a change in control of the Bank.
PERCENT OF CLASS
NAME AND POSITION AMOUNT BENEFICIALLY OWNED BENEFICIALLY OWNED
- ------------------- --------------------------- --------------------
Raymond Weigel, Jr. 63,980(1) 8.95%
9919 Spoonbill Road
Bradenton , Florida 34209
Shareholder
(1) Mr. Weigel owns 30,387 of these shares as joint tenants with his wife.
Mr. Weigel is the father of Raymond A. Weigel, III, currently a director of the
Bank.
THE PROPOSED REORGANIZATION TO FORM A
ONE-BANK HOLDING COMPANY
SUMMARY
This summary contains a brief description of the proposed reorganization.
This summary is not a complete statement of all the information contained in
the Proxy Statement or the Consolidation Agreement. A thorough reading of both
documents is recommended.
General
- -------
If this proposal is adopted, shareholders of the Bank would exchange their
current stock in the Bank for stock of the Company on a two-for-one basis; two
shares of the Company's stock will be exchanged for each one share of Bank
stock. The two-for-one exchange ratio was established by the Boards of
Directors of the Bank and the Company after a review of current market prices
of the Bank disclosed that market price for shares of the Company after the
consummation of the transaction would be in the range of $10.00-$15.00 per
share. The Boards of Directors believe that such a price will make the shares
affordable for a larger group of potential shareholders thus increasing the
liquidity of the shares. Please see page 21 "Average Trading Price During
Quarter" for the effect of such exchange ratio on the average selling price for
shares of the Bank. The terms of the transaction and the method of carrying it
into effect are more fully described below.
Shareholders of First National Bank of Manatee (the "Bank") are being
asked to vote on a proposal to reorganize the Bank into a one-bank holding
company. This section describes
8
<PAGE> 11
the proposal for the consolidation of Manatee Interim Bank, N.A. (the "New
Bank"), a new federally-chartered bank to be organized solely for the purpose
of this transaction, with the Bank under the charter of the Bank. At or
immediately prior to the consolidation, First National Bancshares, Inc. (the
"Company") will own all of the capital stock of the New Bank. Following
the consolidation of the Bank and the New Bank, the Company will own all of the
outstanding shares of common stock of the Bank and the New Bank combined, and
the Bank will continue to do business under the name of "First National Bank of
Manatee" (the "Resulting Bank"). As of the effective date of the
consolidation, the shares of New Bank will be redeemed and canceled with the
effect that the capital stock of the Resulting Bank at and after the effective
date of the consolidation will be equal to the capital structure of the Bank
immediately prior to the effective date of the consolidation. Assuming the
consolidation is approved, all shareholders of the Bank, except those
shareholders who properly exercise dissenters' rights, will become shareholders
of the Company.
The Bank's Board of Directors determined by resolution that an affiliation
with the Company will permit the Company and the Bank greater financial and
corporate flexibility in such areas as acquisitions and debt financing as well
as the possibility that the Company and the Bank may be able to offer new
services, provide them access to new markets, and provide them an opportunity
to participate in activities which are not permissible for the Bank to engage
in directly. (See "THE PROPOSED REORGANIZATION--Reasons for the Proposed
Transaction" and "SUPERVISION AND REGULATION--The Company.")
Terms of the Consolidation Agreement
------------------------------------
The Bank, the New Bank, and the Company have entered into a Consolidation
Agreement (the "Agreement"). The Agreement provides for the consolidation of
the New Bank and the Bank under the name and charter of the Bank, and for the
conversion of each share of the Bank's common stock outstanding on the
effective date of the consolidation into two (2) shares of common stock of the
Company. A copy of the Agreement is included as Appendix I to this Proxy
Statement.
The Exchange Ratio and Market Value
-----------------------------------
Each share of the common stock of the Bank outstanding on the effective
date of the proposed consolidation will be converted into two (2) shares of
common stock of the Company.
Stock of the Company has not been publicly traded as the Company is a new
company and has not engaged in any business activity prior to its intended
acquisition of the outstanding shares of the Bank. There is, therefore, no
published information as to the market price of Company stock. Because no
meaningful market can be said to exist for Company stock at this time, there
can be no assurance that an established market will develop for Company stock
after the consolidation. (See "MARKET PRICE OF STOCK--The Company.")
Bank stock is traded among Bank shareholders and customers mostly in the
Manatee County area. Trading, however, has not been sufficient to support an
established "over-the-counter" market. (See "MARKET PRICE OF STOCK--The
Bank.") There is no established
9
<PAGE> 12
market for the New Bank's stock as it is a nonoperating bank, formed solely for
the purpose of this transaction, nor is there any information about its market
price. (See "MARKET PRICE OF STOCK--The Bank.")
Further, as a result of the proposed consolidation, no market will exist
for the Resulting Bank's stock as the Company will be its sole shareholder.
Business of the Company, the Bank, and the New Bank
---------------------------------------------------
The Company is a business corporation formed under the laws of the State
of Florida on June 15, 1998. Since its incorporation, it has not engaged in
any business. Upon consummation of the reorganization, the Company will become
a registered bank holding company, whose principal asset will be its
shareholdings in the Resulting Bank. (See "HISTORY AND BUSINESS OF THE
COMPANY.")
The Bank is a federally-chartered bank incorporated under the banking laws
of the United States. The Bank engages in the commercial banking business in
the County of Manatee, Florida, and in the surrounding area. (See "HISTORY AND
BUSINESS OF THE BANK.")
The New Bank is a newly formed bank, chartered under the banking laws of
the United States solely for the purpose of this transaction. Prior to the
consummation of the transaction, the New Bank will not conduct any business.
At or prior to the consolidation, the Company will own all of the capital stock
of the New Bank. (See "THE PROPOSED REORGANIZATION--Description of the
Reorganization.")
Management
----------
Under the terms of the Agreement, the Directors and officers of the Bank,
immediately prior to the effective date of the proposed consolidation, will
continue to be Directors and officers of the Resulting Bank following the
consolidation. It is also anticipated that, upon completion of the
reorganization, the present directors of the Bank will constitute the first
Board of Directors of the Company. Thereafter, the replacement for the Board
of Directors of the Company whose terms have expired, will be elected by
shareholders of the Company each year.
Shareholders' Approval
----------------------
The banking laws of the United States require that the Agreement be
ratified and confirmed by the holders of at least two-thirds (2/3) of the
issued and outstanding shares of common stock of the Bank. All of the
Directors of the Bank have signed the Agreement and therefore have agreed to
vote the shares of Bank stock owned by them, personally, in favor of the
reorganization. (See "THE PROPOSED REORGANIZATION--Conditions of Consummation"
and "Appraisal Rights of Dissenting Shareholders.") As of ________________,
1998, the record date, the Board of Directors and management of the Bank owned
in the aggregate ___________ shares of _____% of the outstanding shares of the
Bank. It is expected that all members of management also will vote their
shares in favor of the transaction.
10
<PAGE> 13
Regulatory Approval
-------------------
The proposed transaction is subject to regulatory approval. An
application to charter the New Bank and consolidate the New Bank with the Bank
was filed with the Office of the Comptroller of the Currency ("OCC"). The OCC
authorized the organization of Manatee Interim Bank on ____________, 1998. It
is anticipated that the OCC will approve the transaction before the end of
_____________, 1998. In addition, an application was filed with the Board of
Governors of the Federal Reserve System ("FRS") for the acquisition of the Bank
by the Company. The application was accepted for processing on ____________,
1998. Approval of the application is expected by the Federal Reserve by
_____________, 1998.
Dissenters' Rights
------------------
Under the provisions of Section 215 of Title 12, of the United States
Code, any stockholder who has voted against the Consolidation at the Annual
Meeting of Stockholders, or who has given notice in writing at or prior to such
meeting to the Bank that such stockholder dissents from the Consolidation,
shall be entitled to receive the value of the Bank Common Stock held by such
stockholder. Failure to follow the procedures enumerated in Section 215 of
Title 12 of the United States Code which is Appendix II of this Proxy Statement
(the Dissenters Statute), will waive the shareholder's right of appraisal.
(See "THE PROPOSED REORGANIZATION--Appraisal Rights of Dissenting
Shareholders.")
Differences Between Company Stock and Bank Stock
------------------------------------------------
Shareholders of the common stock of the Company will have rights generally
comparable to those rights which they now have as shareholders of the common
stock of the Bank. Shareholders of the Company will not have preemptive rights
and shareholders of the Bank currently do not have preemptive rights.
Preemptive rights permit a shareholder to subscribe to a sufficient number of
shares so as to maintain their relative pro rata ownership upon the issuance of
additional shares by a corporation, except in certain circumstances. The lack
of preemptive rights will remove the ability of a shareholder to assure
themselves that they will continue to own the same percentage of the
outstanding shares of the Company after an issuance of additional shares by the
Company. Shareholders of the Company will not have the right to vote
cumulatively in the election of directors as provided by Florida law unlike the
stockholders of the Bank which currently have the right to cumulate their
shares in the election of directors. A shareholder voting cumulatively may
cast the number of shares he owns times the number of Directors to be elected
in favor of one nominee or allocate such votes among the nominees as he
determines. The Articles of Incorporation and Bylaws of the Company contain
certain "antitakeover" provisions as detailed herein. Further, shareholders
will be affected by certain differences between Florida law governing
corporations and federal law governing banks. Shareholders will also be
affected by differing provisions of the Articles of Incorporation and Bylaws of
the Company and the Articles of Association and Bylaws of the Bank. For a more
complete discussion regarding preemptive rights and cumulative voting, see
DESCRIPTION OF COMMON STOCK-COMPARATIVE RIGHTS-"Preemptive Rights" and
"Cumulative Voting" and "ANTITAKEOVER MEASURES" below. There are also
differences as to the availability
11
<PAGE> 14
of funds for the payment of dividends by a bank organized under federal law and
a corporation organized under the laws of the State of Florida. (See
"DIVIDENDS").
Tax Consequences
----------------
An opinion of special legal counsel, Werner & Blank Co., L.P.A., has been
obtained that states, among other things, that no gains or losses will be
recognized by either the Bank or the Company or their respective shareholders
as a result of the consolidation, except for those shareholders who perfect
their dissenters' rights and receive cash for their shares. (See "THE PROPOSED
REORGANIZATION-- Federal Tax Consequences.")
EACH BANK SHAREHOLDER SHOULD RELY UPON HIS OWN TAX ADVISOR WITH RESPECT TO
THE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION.
Reports
-------
The Bank currently files periodic reports with the Office of the
Comptroller of the Currency ("OCC") pursuant to Section 12g of the Securities
Exchange Act of 1934 (the "1934 Act") as a "reporting company." Subsequent to
the consummation of the transaction, the Company as "successor" to the Bank
will file similar annual and quarterly reports with the Securities and Exchange
Commission ("SEC"). The Company will deliver to the shareholders of the
Company an annual report containing auditedfinancial information as required
under the 1934 Act. While the Company will file quarterly reports with the
SEC, copies of which may be obtained from the SEC, the Company is not
obligated and does not currently intend to provide copies of such quarterly
reports to shareholders.
Antitakeover Measures
---------------------
The Company's Amended and Restated Articles of Incorporation contain a
"fair price and super vote" provision. If the transaction is approved, such
provisions will require the affirmative vote of the holders of Eighty percent
(80%) of the shares of the Company entitled to vote to approve certain business
combination transactions, unless the transaction is authorized and approved by
the "Continuing Directors" as defined in the Company's Amended and Restated
Articles of Incorporation. Certain other conditions must also be met which
result in a "fair price" being paid to all shareholders. The Board of
Directors of the Bank believes that the inclusion of this provision in the
corporate structure of the Company will aid in assuring that shareholders are
treated fairly in any offer for their investment in the Company. The Company
has certain other provisions which are also "antitakeover" in nature such as a
classified election system for the election of directors and a supermajority
provision for removal of one or all of the directors.
The Board of Directors of the Company and the Bank believe that the
conversion to a holding company form of ownership is the appropriate time to
implement such antitakeover provisions. The adoption of such provisions is not
in response to any attempted takeover of the Bank or the Company. The Bank has
not been the target of an attempted takeover in the past. The further reasons
behind the adoption of the antitakeover provisions are discussed below. (See
"ANTITAKEOVER MEASURES.")
12
<PAGE> 15
The presence of these "antitakeover" provisions may have the effect of
discouraging outside offers for the shares of the Company and may also give
management more control over the acceptance or rejection of these business
combination transactions, than otherwise. Such provisions may have certain
negative effects. One such negative effect could be protecting the incumbent
Board of Directors and management by discouraging takeover attempts which are
not supported by the Board but which may be supported by the majority of
shareholders. (See "ANTITAKEOVER MEASURES.")
Risk Factors
------------
The transactions contemplated by the Agreement are principally designed to
reorganize the corporate structure of the Bank in order to conduct the business
of the Bank as a wholly owned subsidiary of a registered bank holding company.
The transaction, if consummated, does not represent any material change in the
nature of the business conducted by the Bank.
Presented below are certain "risk factors" associated with the combined
business of the Company and the Bank which may be present as a result of the
Bank's reorganizing its business structure, through the consummation of the
transaction contemplated by the Agreement, into a subsidiary of the Company.
These risk factors represent those identified by the Board of Directors of the
Bank and may not represent all of the risk factors associated with the
transaction contemplated by the Agreement.
COMPANY'S FINANCIAL CONDITION. Shareholders electing to receive Company
stock for Bank stock do so without the ability of analyzing the historical
financial performance of the Company. The Company is a newly formed Florida
corporation and has no history of financial performance. The Company's
financial condition immediately following the effective date of the
consolidation contemplated by the Agreement will depend on the operation and
profitability of the Bank at the time of and after the effective date of the
reorganization. As the Company continues to operate in the future, additional
factors may affect its profitability including, among others: (i) businesses
started or acquired by the Company other than the Bank; (ii) the nature of
federal or state laws and regulations applicable to the Company; and (iii) the
effect of management. While the Company intends to operate the Bank in
substantially the same manner that it has been operated to date, changes to the
operations of the Bank and/or commencing additional businesses could have an
impact upon the financial performance and condition of the Company as a whole
and the return to shareholders of the Company.
BANKING INSTITUTIONS. The financial services industry and banking in
particular has undergone a complex deregulation process. Interest rate
limitations on what banks may pay to depositors have been phased out;
interstate banking, allowing financial institutions to cross state lines have
been and will continue to be enacted nationally and in many states; and
competition has increased among banks and other companies to provide
traditional banking services. These changes have resulted in increased
competition for a market share of the financial services industry. The Company
and the Bank will continue to be affected by these changes in the future. The
conduct of the Bank's business as a subsidiary of the Company may increase the
ability to compete in this newly deregulated environment, but there can be no
assurance that the
13
<PAGE> 16
organization of the holding company will shelter the Company and the Bank from
such increased competition.
ANTITAKEOVER PROVISIONS. The Company's Articles of Incorporation and
Bylaws contain provisions intended to be "antitakeover" in nature as discussed
above, including a supermajority vote provision, fair price provision,
STAGGERED TERMS FOR THE BOARD OF DIRECTORS, SUPERMAJORITY REMOVAL CLAUSE FOR
THE BOARD OF DIRECTORS and additional items. The presence of all of these
provisions and additional provisions of Florida law may have the effect of
discouraging outside offers for the shares of the Company and may also give
management more control over the acceptance or rejection of business
combination transactions, than otherwise. Such provisions may have certain
negative effects. One such negative effect could be protecting the incumbent
Board of Directors and management by discouraging takeover attempts which are
not supported by the Board but which may be supported by the majority of
shareholders. Such antitakeover provisions also may have the effect of
reducing the likelihood of an acquisition of the Company by another entity and
thus restraining the price of the shares of the Company. (See "DESCRIPTION OF
COMMON STOCK--COMPARATIVE RIGHTS and "ANTITAKEOVER MEASURES.")
Per Share Summary of the Bank and Pro Forma Per Share Summary of the Company
----------------------------------------------------------------------------
Presented below is certain per share financial information of the Bank.
Certain pro forma per share information is provided for the Company, assuming
there are no dissenters to the transaction and each share of the Bank's common
stock is exchanged for two (2) shares of the Company's common stock.
<TABLE>
<Cation>
PER SHARE DATA
YEAR ENDED DECEMBER 31
<S> <C> <C> <C> <C> <C>
First National Bank of Manatee(1) 1997 1996 1995 1994 1993
Net Income (Loss) $0.81 $0.69 $ 0.72 $0.76 $1.08
Cash Dividend Declared N.A. N.A. N.A. N.A. N.A.
Book Value (at period end) $15.63 $14.87 $14.47 $13.05 $12.84
- ----------------------------------------------------------------------------------------------------------------
Pro Forma First National
Bancshares, Inc.(2)
Net Income (Loss) $0.41 $0.35 $0.36 $0.38 $0.54
Cash Dividends Declared N.A. N.A. N.A. N.A. N.A.
Book Value (at period end) $7.82 $7.44 $7.24 $6.53 $6.42
</TABLE>
(1) Based on 711,200 shares outstanding and 706,538 average shares outstanding
for the year-end 1997.
(2) Based on 1,422,400 shares outstanding and 1,413,076 average shares
outstanding for the year-end 1997.
14
<PAGE> 17
PURPOSE OF THE MEETING
The purpose of the meeting, as set forth in the notice of the special
meeting, is to vote upon a proposed reorganization by which the New Bank, a
subsidiary of the Company, will consolidate with the Bank under the name and
charter of the Bank. The effect of approving the reorganization would be the
exchange of each share of the Bank's stock for two (2) shares of the Company's
stock, and the acquisition of control of the Bank by the Company. The Bank
would then continue to do business as a wholly owned subsidiary of the Company,
and shareholders of the Bank would become shareholders of the Company.
The Board of Directors of the Bank unanimously approved the Agreement and
recommends that shareholders vote in favor of the Agreement. This Proxy
Statement/Prospectus is being solicited by the Board of Directors of the Bank.
THE PROPOSED REORGANIZATION
The Board of Directors of the Bank approved a plan of reorganization under
which the business of the Bank would be conducted as a wholly owned subsidiary
of Company.
Reasons for the Proposed Transaction
------------------------------------
A bank holding company form of organization will increase the corporate
and financial flexibility of the business operated by the Bank through the
combined business of the Bank and the Company, such as increased structural
alternatives in the area of acquisitions, the ability to augment capital by
means of the incurrence of debt and the ability of the Company to redeem its
own stock, subject to, in certain instances, notice to and approval by the
Board of Governors of the Federal Reserve.
A bank holding company can engage in certain bank-related activities in
which the Bank cannot presently engage; thus this reorganization would broaden
the scope of services which could be offered to the public. The Company has
not made any specific determination as to which of these types of activities it
may engage in after consummation of the proposed transaction. Furthermore, a
bank holding company is not subject to the same geographical limitations as to
where it may carry on its business whereas the Bank is currently limited. (See
"SUPERVISION AND REGULATION--The Company.")
Description of the Reorganization
---------------------------------
The Company will subscribe for and will hold all of the One Thousand
(1,000) authorized shares of common stock of the New Bank, an interim bank, to
be chartered under the laws of the United States, solely for the purpose of
this transaction. The Bank will consolidate with the New Bank under the name
and charter of the Bank, pursuant to the terms of the Agreement. (See Appendix
I of this Proxy Statement.) Upon consummation of the transaction, the
consolidated banks (the "Resulting Bank") will redeem and cancel the shares
used to capitalize the New Bank.
After the consolidation, the business of the Bank will be conducted by the
Resulting Bank under the name "First National Bank of Manatee." All of the
outstanding shares of stock of the
15
<PAGE> 18
Resulting Bank will be owned by the Company. The Resulting Bank will have the
same directors, officers, interests and properties as those of the Bank
immediately prior to the consolidation. The Resulting Bank will continue to be
subject to regulation and supervision by the Office of the Comptroller of the
Currency, to the same extent as the Bank and, in addition, as a subsidiary of
the Company, will be subject to examination and regulation bythe Board of
Governors of the Federal Reserve System. (See "SUPERVISION AND REGULATION.")
Conversion and Exchange of Stock
--------------------------------
Upon consummation of the reorganization, each outstanding share of the
Bank's common stock will be converted into two (2) shares of the Company's
common stock. Each holder of Bank stock certificates, which immediately prior
to the reorganization represented shares of the Bank's common stock, upon
surrender of such certificates for cancellation, will be entitled to receive
certificates representing the number of shares of the Company's common stock
into which such shares shall have been converted.
The Company anticipates that the stock certificates representing shares of
the Company's common stock will be distributed to shareholders of the Bank by
approximately ____________, 1998, assuming approval of the organization of the
holding company at the special meeting. However, the distribution of stock
certificates to a particular shareholder will be dependent upon the date of
receipt by the Company of such shareholder's Bank stock certificate for
exchange and, therefore, there is no final date by which all Company stock
certificates will be mailed. Shareholders of the Bank will continue to be
entitled to sell or transfer their common stock in the Bank through the date of
consummation of the Consolidation, which is expected to occur as of
____________, 1998. Further, sales of stock in the Company may be made after
the effective date of the Consolidation but before receipt of certificates
representing shares in the Company. Such sales or transfers will require
presentation of the shareholder's Bank stock certificate(s).
Until so surrendered, certificates nominally representing the Bank's
common stock will be deemed, for all corporate purposes, to evidence the number
of shares of the Company's common stock which the holder thereof would be
entitled to receive upon surrender. AT THE DIRECTION OF THE BOARD OF DIRECTORS
OF THE COMPANY, NO DIVIDENDS WILL BE PAID UPON THE CERTIFICATES NOMINALLY
REPRESENTING THE BANK'S COMMON STOCK AFTER CONSUMMATION OF THE REORGANIZATION,
BUT SUCH DIVIDENDS WILL BE ACCUMULATED AND PAID, WITHOUT INTEREST, AT THE TIME
OF SURRENDER OF SUCH CERTIFICATES FOR CERTIFICATES REPRESENTING THE COMPANY
STOCK.
Negotiation of Terms of the Agreement
-------------------------------------
The terms of the Agreement were agreed upon by the Boards of Directors of
the Bank, the New Bank and the Company. Since the management and Boards of
Directors of these three (3) organizations are substantially the same, the
terms of the Agreement were not a result of arms length negotiations.
16
<PAGE> 19
Affiliate Restrictions
----------------------
The shares of stock to be issued upon consummation of the Agreement by the
Company will be registered pursuant to the 1933 Securities Act ("Act").
However, the resale of such shares by the Directors, principal officers and
principal shareholders of the Bank presently and of the Company upon
consummation of the Agreement may be restricted by the Act and by the rules
promulgated by the Securities and Exchange Commission if such Directors,
principal officers and principal shareholders are deemed to be "affiliates" as
that term is defined by the Act and appropriate SEC rules.
Persons considered to be in control of an issuer are known as "affiliates"
and may include officers, Directors and shareholders who own 10 percent or more
of the outstanding stock. Shares of common stock of the Company received after
the transaction by "affiliates" of the Bank or the Company will be "control
stock," which can only be sold if they are registered or in a transaction
exempt from registration under the Act, such as pursuant to Rules 144 and 145,
or pursuant to a private placement. Rules 144 and 145 generally require that
before an affiliate can sell his "control stock":
(1) There must be on file with the Securities and Exchange Commission public
information filed by the issuer;
(2) The affiliate must sell his stock in a routine unsolicited broker's
transaction or directly to a market maker in the stock; and
(3) During any three-month period, the amount of the securities that can be
sold is limited to the greater of one percent of the outstanding stock of
the company or the average weekly trading volume during the four calendar
weeks preceding the receipt of an order to sell by the broker or the sale
to a market maker.
It may be advisable for those shareholders of the Bank who may be
"affiliates" of the Company to confer with legal counsel of their own choosing
prior to the sale of any Company stock received as a result of this
transaction.
Conditions of Consummation
--------------------------
Federal Banking Law provides that a consolidation of a bank with another
bank requires the approval of a consolidation agreement by a majority of both
banks' Boards of Directors and by shareholders holding two-thirds (2/3) of the
outstanding common stock of each bank.
Acquisition of the voting shares of the Bank by the Company must be
approved by the Board of Governors of the Federal Reserve System. The
reorganization must also be approved by the Office of the Comptroller of the
Currency.
The obligation of the Bank and the Company to consummate the
reorganization is conditioned further upon the following: (i) the absence of
any action, suit, proceeding or claim, made or threatened, related to the
proposed consolidation, or any other reason which makes
17
<PAGE> 20
consummation of the consolidation inadvisable in the opinion of the Board of
Directors of the Bank or the New Bank; (ii) receipt of a favorable opinion of
counsel with respect to the tax consequences of the consolidation (see "THE
PROPOSED REORGANIZATION--Federal Tax Consequences"); (iii) the receipt of all
necessary regulatory approvals and the expiration of all required waiting
periods; and (iv) the performance of all covenants and agreements. The Boards
of Directors of the Bank, the New Bank and the Company may, in their discretion,
terminate the Agreement before or after approval by the shareholders of the
Bank if they deem such termination advisable.
Other Considerations
--------------------
The Company is a business corporation formed under the general corporation
laws of the State of Florida. As a general "for profit" corporation, the
Company will have greater flexibility in certain corporate procedures than the
Bank (which is subject to Banking Laws of the United States and is regulated by
the Office of the Comptroller of the Currency) including, but not limited to,
the ability to incur debt for leveraged growth, redeem its own common stock to
create greater flexibility for trading of such common stock, and operate
related financially oriented businesses.
Upon consummation of the reorganization, the Company will become a
registered bank holding company and will become subject to the Federal Bank
Holding Company Act of 1956, as amended. As a bank holding company under
federal law, the Company will be permitted to carry on a wider range of
business activities than the Bank presently can under state and federal law.
(See "SUPERVISION AND REGULATION.")
Expenses
--------
Expenses to be incurred in implementing the reorganization are estimated
at $60,000, of which approximately $30,000 can be attributed to legal fees paid
in connection with the transaction. The remaining amount of expenses can be
attributed to application fees, printing costs and other miscellaneous
expenses. The Company has paid the costs associated with the transaction and
borrowed the funds to do so from an unaffiliated third party bank, the
repayment of which loan has been personally guaranteed by certain persons, each
of whom is a Director of the Company and the Bank. In the event the
transaction is approved and consummates, the Bank will pay a special dividend
to the Company which will be used by the Company to retire the debt incurred to
pay such expenses.
Federal Tax Consequences
------------------------
An opinion of special legal counsel, Werner & Blank Co., L.P.A., has been
obtained to the following effect: (i) the transaction will qualify as a
reorganization within the meaning of Internal Revenue Code Section 368(a)(1)(A)
and (a)(2)(E); (ii) no gain or loss will be recognized for federal income tax
purposes by shareholders of the Bank upon conversion of the common stock of the
Bank into common stock of the Company, except for those shareholders of the
Bank who dissent from the plan of reorganization and perfect their appraisal
rights (see "THE PROPOSED REORGANIZATION--Appraisal Rights of Dissenting
Shareholders"); (iii) the tax
18
<PAGE> 21
basis of the common stock of the Company received by the shareholders of
the Bank will be the same as the tax basis of the common stock of the Bank
surrendered by the shareholders; and (iv) the holding period of the common stock
of the Company received by shareholders of the Bank will include the holding
period of the common stock of the Bank surrendered by shareholders, provided
that the stock of the Bank is held as a capital asset by shareholders on the
date of consummation of the consolidation. Shareholders who dissent from the
transaction and receive cash in exchange for their Bank shares will recognize
taxable gain or loss on the exchange of the shares in an amount equal to the
difference between their basis in the shares held by them and the amount of cash
received for such shares.
Gain or loss for federal and other income tax purposes may be recognized
upon the receipt of cash by dissenting shareholders, if any. THE TAX TREATMENT
OF SUCH GAIN OR LOSS MAY VARY WITH THE PARTICULAR CIRCUMSTANCES OF EACH
DISSENTING SHAREHOLDER.
State Tax Consequences
----------------------
Depending upon the state of residence of a Bank shareholder, the
transaction may be subject to certain state law provisions relating to capital
gains tax.
Shares of the common stock of the Bank may in some jurisdictions have
certain advantages not available to shares of common stock of the Company, such
as exemption from personal property taxes, exemption from taxation on dividend
income, and qualification as a legal investment for various categories of
investors. For shareholders who are residents of the State of Florida, there
are no material differences in the state tax treatment of gains, losses and
distributions from the Bank or the Company nor are there any other significant
differences as to the tax treatment of shares of the Bank or the Company.
SHAREHOLDERS ARE URGED TO REVIEW THEIR TAX STATUS UNDER ANY STATE OR LOCAL
TAX LAWS WITH THEIR OWN TAX ADVISORS.
Appraisal Rights of Dissenting Stockholders
-------------------------------------------
Pursuant to the provisions of Section 215 of Title 12 of the United States
Code, the Consolidation Agreement provides that any stockholder of the Bank who
has voted against the Consolidation Agreement at the Special Meeting of Bank's
stockholders, or who has given notice in writing at or prior to such meeting to
the presiding officer that such stockholder dissents from the Consolidation,
shall be entitled to receive the value of the Bank Common Stock so held by such
stockholder. The relevant portions of Section 215 of Title 12 of the United
States Code are hereto attached as Appendix II. A failure to vote against the
Consolidation Agreement or to give such notice in writing at or prior to the
meeting will be deemed a waiver of a stockholder's right of appraisal. Any
stockholder of the Bank who votes against the Consolidation Agreement at the
Special Meeting of the Bank's stockholders, or who gives a notice in writing at
or prior to such meeting to the presiding officer that such stockholder
dissents, will be notified in writing of the date of consummation of the
Consolidation.
19
<PAGE> 22
In order to receive the value of the Bank Common Stock held, a stockholder
must make a written request for payment to the continuing bank at any time
before thirty days after the date of consummation of the Consolidation,
accompanied by the surrender of such stockholder's stock certificates. This
written request for payment should be sent to: First National Bank of Manatee,
5817 Manatee Avenue West, Bradenton, Florida 34209, Attention: Secretary.
The value of the shares of any dissenting stockholder will be ascertained,
as of the effective date of the Consolidation, by an appraisal made by a
committee of three persons comprised of (1) one selected by the vote of the
holders of the majority of the stock, the owners of which are entitled to
payment in cash (by reason of such request for appraisal); (2) one selected by
the directors of the continuing bank; and (3) one selected by the two so
selected. The valuation agreed upon by any two of the three appraisers shall
govern.
If the value so fixed shall not be satisfactory to any dissenting
stockholder who has requested payment, that stockholder may, within five days
after being notified of the appraised value of such shares, appeal to the
Office of the Comptroller of the Currency ("OCC"), which shall cause a
reappraisal to be made which shall be final and binding as to the value of the
shares of the dissenting stockholder. If within ninety days from the date of
consummation of the Consolidation, for any reason one or more of the appraisers
is not selected as above provided, or if the appraisers fail to determine the
value of such shares, the OCC shall, upon written request of any interested
party, cause an appraisal to be made which shall be final and binding on all
parties. The expenses of the OCC in making the reappraisal or the appraisal,
as the case may be, shall be paid by the continuing bank. The value of the
shares ascertained shall be promptly paid to the dissenting stockholders by the
continuing bank. In performing the appraisal or reappraisal, the OCC selects
an appropriate valuation method, or combination of methods, after reviewing the
facts of each case to establish a reasonable estimate of the value of the
shares. The OCC may review the market value of the shares being appraised, the
investment value of the shares based upon earnings of the bank and similarly
situated banks, and the adjusted book value of the shares. A combination of
methods may be used with the OCC applying varying weights to the different
methods. SEE APPENDIX II TO THIS PROXY STATEMENT/PROSPECTUS FOR A MORE
DETAILED DESCRIPTION OF THE VALUATION METHODS USED BY THE OCC TO ESTIMATE THE
VALUE OF A BANK'S SHARES WHEN THE BANK IS INVOLVED IN A TRANSACTION SUCH AS THE
CONSOLIDATION.
The foregoing summary of Section 215 does not purport to be complete and
is qualified in its entirety by reference to Section 215. The failure of a
stockholder to follow the procedures set forth in Section 215 will terminate
such stockholder's appraisal rights. As a consequence, each stockholder of the
Bank who desires to exercise such rights should review Section 215 and follow
its provisions.
Accounting Treatment
The consolidation of Bank and New Bank will be accounted for in an method
similar to a pooling of interest.
20
<PAGE> 23
MARKET PRICES OF STOCK
The Company
-----------
First National Bancshares, Inc. was incorporated on June 15, 1998. No
shares of the Company have been publicly traded since the date of its
incorporation to the present time. Therefore, no meaningful market exists at
this time for the Company's stock. Bank shareholders will exchange their Bank
stock for Company stock. Currently, no established "over-the-counter" market
exists for Bank stock. Assuming the market for Company stock will be the same
as for Bank stock, it is not anticipated that an established "over-the-counter"
market will develop for Company stock.
The Bank
--------
There has been only a limited over-the-counter market for the Bank's
common stock. The Bank's common stock is not listed on the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ") or any
other exchange. The Bank had approximately 516 shareholders as of June 30,
1998. The Bank is not aware of any securities dealer which is appropriate to
classify as a "market maker" in shares of the Bank. The latest trade known to
management was for 100 shares at a price of $26 per share on May 19, 1998. The
average trading price of shares of the Bank's Common Stock of which the Bank is
aware over the past three (3) years is as follows:
<TABLE>
<CAPTION>
Quarter Ended: Average Trading Price During Pro Forma Effect of 2 for 1
- -------------- Quarter: Exchange Ratio on Average
-------- Trading Price During Quarter
-----------------------------
<S> <C> <C>
June 30, 1995 16.25 32.50
September 30, 1995 16.13 32.26
December 31, 1995 16.00 32.00
March 31, 1996 16.00 32.00
June 30, 1996 16.25 32.50
September 30, 1996 N/A N/A
December 31, 1996 17.00 34.00
March 31, 1997 17.00 34.00
June 30, 1997 17.00 34.00
September 30, 1997 19.68 39.36
December 31, 1997 20.00 40.00
March 31, 1998 21.20 42.40
June 30, 1998 24.33 48.66
</TABLE>
21
<PAGE> 24
DIVIDENDS
The Company
-----------
Since the date of its incorporation, the Company has paid no dividends.
After consummation of the reorganization, the amount and timing of future
dividends will be determined by its Board of Directors and will substantially
depend upon the earnings and financial condition of its principal subsidiary,
the Resulting Bank. At the present time, the Company has no established
dividend policy. The ability of the Company to obtain funds for the payment of
dividends and for other cash requirements is largely dependent on the amount of
dividends which may be declared by its subsidiary, the Bank. Generally, a
national bank may not declare a dividend, without the approval of the OCC if
the total of dividends declared by such bank in a calendar year exceeds the
total of its net profits for that year combined with its retained profits of
the preceding two years. The amount of dividends paid to the Company by the
Bank will have a direct impact upon the Company's ability to pay dividends to
its shareholders and engage in the additional activities available to a holding
company.
The Bank
--------
The Bank last paid a cash dividend to shareholders in 1990 in the amount of
$0.15 per share. Since 1994, the Bank has adopted a policy of regularly paying
a 5% stock dividend, as opposed to cash dividends, in each year. The Bank's
Board of Directors most recently declared a 5% stock dividend to shareholders
of record as of July 31, 1998 payable on August 31, 1998. The Company
anticipates continuing to pay such stock dividends in the future and has no
current plans to pay cash dividends to its shareholders.
The amount and timing of future dividends will be determined by the Board
of Directors of the Bank, and will depend upon the Bank's earnings and
financial condition, as well as upon federal economic policies and other
relevant factors. (See "SUPERVISION AND REGULATION.")
CAPITALIZATION
The following table sets forth the capitalization of the Bank as of June
30, 1998 and the pro forma capitalization of the Company as of June 30, 1998,
assuming that the reorganization had been consummated at such date, that no
shareholder of the Bank had exercised dissenters' rights, and that the Company
had redeemed and canceled the shares of New Bank issued to the Company in
connection with its formation at the price paid therefore.
22
<PAGE> 25
<TABLE>
Bank New Bank Adjustments Company
(Actual) (Actual) (Pro Forma) (Pro Forma)(2)(3)
-------------- ---------- -------------- -----------------
<S> <C> <C> <C> <C>
Shareholders' Equity
Common 3,573,575 100,000(1) (100,000)(1) 3,573,575
Surplus 4,154,358 20,000(1) (20,000)(1) 4,154,358
Undivided Profits 3,779,291 0 (3,779,291) 0
Undistributed Profits of
Subsidiary 0 3,779,291 3,779,291
Unrealized loss on
Investments Securities (42,877)(4) (42,877)
---------- ------- -------- ----------
Total Shareholders Equity 11,464,347 120,000 (120,000) 11,464,347
</TABLE>
- -------------------------------------------------------------------------------
(1) Represents the capitalization of the New Bank in accordance with federal
banking law which requires minimum capitalization of $120,000, which
capital will be immediately withdrawn through a redemption of such stock
by the Bank. The capital of the Resulting Bank and the Company therefore
will be equal to the capital of the Bank immediately before the
transaction and will not be affected by the temporary capitalization of
the New Bank.
(2) Reflects that the capital stock of the Bank is the sole investment of the
Company upon the consummation of the transaction.
(3) Does not reflect the effect of the incurrence of debt by the Company to
pay organizational costs estimated at $60,000. The Company has a line of
credit which entitles the Company to borrow up to $200,000 from an
unaffiliated bank for the purpose of paying expenses relating to the
transaction contemplated by the Agreement. Upon consummation of the
transaction, the Resulting Bank will pay a dividend to the Company which
will be used to retire this debt.
(4) Represents unrealized loss on Investment securities classified as
"Available for Sale" under Statement of Financial Accounting Standards No.
115 "Accounting for Certain Investments in Debt and Equity Securities"
which became effective January 1, 1994.
FINANCIAL STATEMENTS
The Bank's audited Balance Sheets as of December 31, 1997, and 1996, the
related audited Statements of Income, Statements of Changes in Shareholders'
Equity, and Statements of Cash Flows for each of the three years ended December
31, 1997, are included in the Bank's Annual Report, which was sent to each
shareholder in connection with the annual meeting of shareholders held May 7,
1998. Financial statements of the Bank are not included herein as they are not
deemed material to the exercise of prudent judgment by shareholders with
respect to the matters to be acted upon at the Special Meeting. If any
shareholder so desires, he may obtain an additional copy of such financial
statements upon written request to Glen W. Fausset, President, First National
Bank of Manatee, 5817 Manatee Avenue West, Bradenton, Florida 34209.
Provided below is a five-year summary of selected financial data of the
Bank.
23
<PAGE> 26
SELECTED FINANCIAL DATA OF FIRST NATIONAL BANK OF MANATEE
AS OF OR FOR THE PERIOD ENDED DECEMBER 31,
(000'S EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS DATA: 1997 1996 1995 1994 1993
- ------------------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
TOTAL INTEREST INCOME $ 9,277 $ 7,139 $ 6,254 $ 5,221 $ 5,006
TOTAL INTEREST EXPENSE $ 4,904 $ 3,686 $ 3,091 $ 2,272 $ 2,241
-------- -------- ------- ------- -------
NET INTEREST INCOME $ 4,373 $ 3,453 $ 3,163 $ 2,949 $ 2,765
PROVISION FOR LOAN LOSSES $ 255 $ 83 $ 167 $ 53 $ 157
--- -- --- -- ---
NET INTEREST INCOME (NET
PROVISION) $ 4,118 $ 3,370 $ 2,996 $ 2,896 $ 2,608
NONINTEREST INCOME $ 711 $ 541 $ 450 $ 209 $ 668
NONINTEREST EXPENSE (NET) $ 3,986 $ 3,249 $ 2,826 $ 2,465 $ 2,366
SECURITIES GAIN & (LOSS) $ 3 $ 7 $ 4 $ 1 $ 0
PENSION PLAN CURTAILMENT GAIN $ 0 $ 0 $ 0 $ 0 $ 0
TAX $ 269 $ 188 $ 141 $ 138 $ 203
ACCOUNTING CHANGE $ 0 $ 0 $ 0 $ 0 $ 0
- - - - -
NET INCOME $ 574 $ 473 $ 478 $ 502 $ 707
PER SHARE DATA (1):
- -------------------
NET INCOME $ 0.81 $ 0.69 $ 0.72 $ 0.76 $ 1.08
BOOK VALUE $ 15.63 $ 14.87 $ 14.47 $ 13.05 $ 12.84
CASH DIVIDENDS N.A. N.A. N.A. N.A. N.A.
BALANCE SHEET DATA:
- -------------------
TOTAL ASSETS $140,988 $111,974 $94,650 $80,892 $80,033
TOTAL DEPOSITS $121,188 $ 96,978 $79,800 $68,716 $69,709
TOTAL NET LOANS $ 82,814 $ 58,912 $50,372 $40,567 $40,960
ALLOWANCE FOR LOAN LOSSES $ 915 $ 653 $ 562 $ 474 $ 431
SHAREHOLDER'S EQUITY $ 11,117 $ 10,321 $ 9,694 $ 8,602 $ 8,466
</TABLE>
(1) PER SHARE INFORMATION ADJUSTED TO ACCOUNT FOR 5% STOCK DIVIDEND IN EACH
YEAR FROM 1994 THROUGH 1997.
24
<PAGE> 27
HISTORY AND BUSINESS OF THE COMPANY
General
-------
The Company was incorporated under the laws of the State of Florida on
June 15, 1998, at the direction of management of the Bank, for the purpose of
becoming a bank holding company by acquiring all of the outstanding shares of
the Bank. Immediately prior to consummation of the reorganization, the Company
will own all of the stock of the New Bank except for shares held by directors
as qualifying shares. Thereafter, the New Bank will consolidate with the Bank.
Shareholders of the Bank will become shareholders of the Company (subject to
their dissenters' rights; see "THE PROPOSED REORGANIZATION--Appraisal Rights of
Dissenting Shareholders") and the Company will become the sole shareholder of
the Resulting Bank. The Resulting Bank will carry on the business of the Bank
and the New Bank under the name "First National Bank of Manatee," without
interruption. The principal office of the Company is located at 5817 Manatee
Avenue West, Bradenton, Florida 34209. A copy of the Company's Articles of
Incorporation is attached as Appendix III.
Competition
-----------
As the Company is a bank holding company in formation and currently
controls no banking subsidiaries, it is not engaged in competition with any
other bank or corporation. However, upon consummation of the reorganization,
the Bank will become a wholly owned subsidiary of the Company, and the
Company's competition will primarily be the same as that of the Bank. (See
"HISTORY AND BUSINESS OF THE BANK--Competition.")
Employees
---------
The Company has no employees other than its officers, each of whom is also
an employee and officer of the Bank and who serve in their capacity as officers
of the Company without additional compensation. Upon consummation of the
reorganization, the Company, whose sole business function will be to hold one
hundred percent (100%) of the Bank's stock, does not anticipate any immediate
change in the number of or status of its employee officers. The status of the
Bank's current employees is not expected to be affected by the reorganization.
Property
--------
The Company is not currently engaged in any business activity and
currently owns no property. Upon consummation of the reorganization, the
Company will conduct its business from the Bank's offices. It is anticipated
that the Company will continue to operate its business from the offices of the
Bank immediately following the consummation of the acquisition of the Bank by
the Company. Because initially following the consummation of the transaction
the Company will not conduct any business other than its ownership of the
Bank's stock, the Company will not compensate the Bank for the use of office
space in the Bank's main office facility.
25
<PAGE> 28
Board of Directors
------------------
The present Directors of the Company are the same individuals who are
presently Directors of the Bank. (For information regarding the present
Directors of the Company, See "HISTORY AND BUSINESS OF THE BANK-Board of
Directors.") Directors of the Bank are elected annually. Directors of the
Company are elected to staggered three-year terms. Upon consummation of the
reorganization, the Directors of the Company will own the same percentage of
Company stock, as they currently own of Bank stock, assuming there are no
dissenters to the transaction who elect to receive the value of their shares in
cash.
Remuneration of Directors and Officers
--------------------------------------
The Company has paid no remuneration, direct or otherwise, to its officers
and/or directors since its incorporation. Furthermore, it is not anticipated
that the Company's officers and Directors will initially be paid any additional
compensation by the Company other than that currently paid to them by the Bank.
Indemnification
---------------
Article IX of the Company's Amended and Restated Articles of Incorporation
provides as follows:
ARTICLE IX
INDEMNIFICATION
---------------
In addition to any and all rights and duties under applicable law, the
Corporation shall indemnify and hold harmless all of its directors, officers,
employees and agents, and former directors, officers, employees and agents from
and against all liabilities and obligations, including attorneys' fees,
incurred in connection with any actions taken or failed to be taken by said
directors, officers, employees and agents in their capacity as such to the
fullest extent possible under law.
The Bylaws of the Company further expand the provisions of indemnification
for directors, officers, employees and agents.
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 THE SECURITIES ACT OF
1933, AND IS THEREFORE UNENFORCEABLE.
Additionally, the provisions regarding indemnification may not be
applicable under certain federal banking laws and regulations. For a complete
description of the provisions regarding indemnification provided by the Company
see "DESCRIPTION OF COMMON STOCK--COMPARATIVE RIGHTS, Indemnification" of this
Proxy Statement.
26
<PAGE> 29
The Company's provisions regarding indemnification are for the personal
benefit of the directors, officers, employees and agents of the Company.
The reorganization of the Bank into a subsidiary of the Company is not
expected to have any effect, positive or negative, on the Bank nor the
Company's ability to obtain officers and directors indemnification insurance
nor the rates at which such insurance is available.
HISTORY AND BUSINESS OF THE BANK
General
-------
The Bank opened for business on July 18, 1986 and has been headquartered
at 5817 Manatee Avenue West, Bradenton, Florida since its organization after
operating in a temporary trailer for a brief period.
The Bank provides customary retail and commercial banking services to its
customers, including checking and savings accounts, time deposits, safe deposit
facilities, personal loans, real estate mortgage loans, installment loans, IRAs
and night depository facilities. The Bank also operates a trust department.
The Bank is located in Bradenton, Florida, a community approximately 50 miles
from Tampa in Manatee County. The area served by the Bank includes the City of
Bradenton and commuter/suburban and agricultural areas surrounding the City of
Bradenton.
The Bank's deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") to applicable legal limits and the Bank is supervised and
regulated by the FDIC and OCC.
Competition
-----------
The Bank operates in a highly competitive industry, due to the Florida and
federal laws permitting statewide and national branching by banks and savings
and loan associations, and credit unions. The Bank's main competition comes
from other commercial banks, national or state savings and loan institutions,
security dealers, mortgage bankers, financial companies and insurance
companies.
Banks generally compete with other financial institutions through the
banking products and services offered, the pricing of services, the level of
service provided, the convenience and availability of services, and the degree
of expertise and personal manner in which these services are offered. The Bank
encounters strong competition from most of the financial institutions in the
Bank's extended market area.
Employees
---------
As of June 30, 1998, the Bank had 51 full-time employees and 5 part-time
employees. The Bank provides a number of benefits for its full-time employees,
including health and life
27
<PAGE> 30
insurance, workers' compensation, social security, paid vacations, numerous
bank services and 401(k) and defined benefit retirement plans.
Property
--------
The Bank operates its main office at 5817 Manatee Avenue West, Bradenton,
Florida 34209 pursuant to a 20 year lease with an unaffiliated Florida General
Partnership. The lease also has four (4) five year renewal options. During
1997, the total lease payments pursuant to the lease amounted to $196,500. In
addition the Bank operates the following branches, listed in the order in which
they were opened. All of the branches are owned by the Bank.
COMMON NAME OF OFFICE ADDRESS
--------------------- -------
Island Office 5324 Gulf Drive, Holmes Beach, FL
State Road 64 Office 502 48th Street, Ct. E., Bradenton, FL
State Road 70 Office 9000 State Road 70 East, Bradenton, FL
The Bank also has purchased additional land in the Lakewood Ranch development
in Bradenton for future expansion. It is not anticipated that the Bank will
open a branch on such site until at least 1999 and the Bank has not applied to
the OCC for approval to open a branch as of this date.
Litigation
----------
There is no material pending litigation to which the Company, the Bank or
the New Bank is a party, other than routine litigation incidental to the
business of the Bank. Further, there is no material legal proceeding in which
any Director, executive officer, principal shareholder, or affiliate of the
Company, the Bank or the New Bank or any associate of any such Director,
executive officer, or principal shareholder is a party and has a material
interest adverse to the Company, the Bank or the New Bank. None of the routine
litigation in which the Bank is involved is expected to have a material adverse
impact upon the financial position or results of operations of the Company, the
Bank or the New Bank.
Board of Directors
------------------
The Bank's Board of Directors is presently composed of 10 members, each of
whom stand for election each year.
The following table sets forth for each of the directors, name, age (as of
June 30, 1998), principal occupation(s) during the past five years, the year
they first became a director, and the number of shares of the Bank beneficially
owned by such person.
28
<PAGE> 31
<TABLE>
SHARES OF
BANK STOCK
BENEFICIALLY PERCENT OF
OWNED AS OF TOTAL DIRECTOR PRINCIPAL
NAME AGE 6/30/98 OUTSTANDING SINCE OCCUPATION
<S> <C> <C> <C> <C> <C>
Beverly Beall 53 3,949 0.5% Customer Service
Manager of Beall's,
Inc.
Robert G. Blalock 59 18,731(1) 2.62% Senior Law Partner,
Blalock, Landers,
Walters and Vogler,
P.A.
Allen J. Butler 52 18,849(2) 2.64% President, H.
Butler Footwear,
Inc.
Rosemary C. Carlson 50 200 0.03% VP and General
Manager of Time
Warner
Communications
Francis I. duPont, III 53 36,433(3) 4.93% Chairman of the
Board and CEO of
the Bank
Glen W. Fausset 49 17,730 2.4% President, COO and
Secretary of the
Bank
Stephen J. Korcheck, 65 242(4) 0.03% Retired President of
Ph.D. Manatee Community
College
William J. Thompson 66 10,330(5) 1.4% Orthodontist
Raymond A. Weigel, III 53 5,956(6) 0.8% President of CLB
Consulting, Inc.
Dan C. Zoller 59 1,769 0.2% President of
Zoller, Najjar,
Shroyer, Inc.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 3,470 shares which Mr. Blalock owns as joint tenant with his
wife, 5,304 shares held in trusts of which Mr. Blalock is either sole trustee or
co-trustee. His wife owns 607 shares solely in her name which are included but
in which Mr. Blalock disclaims any interest. An additional 9,350 of such
shares are owned by Mr. Blaloch in "street name."
(2) Mr. Butler owns these shares as joint tenant with his wife.
(3) Mr. duPont's shares include 18,232 shares of common stock which may be
acquired immediately or within 60 days upon exercise of certain stock options.
His wife owns 2,661 shares solely in her name which are included but in which
Mr. duPont disclaims any interest.
(4) Dr. Korcheck owns these shares as joint tenant with his wife.
(5) Dr. Thompson owns 7,900 shares as joint tenant with his wife. His wife
owns 2,430 shares solely in her name which are included but in which Dr.
Thompson disclaims any interest.
(6) Includes 3,442 owned individually by Mr. Weigel and 1,996 owned as
custodian for his daughter. His wife owns 518 shares solely in her name which
are included but in which Mr. Weigel disclaims any interest.
29
<PAGE> 32
The following is a list of executive officers of the Bank other than
Francis I. duPont, III and Glen W. Fausset, who are listed above, together with
share ownership information:
<TABLE>
<CAPTION>
NO. OF SHARES
BENEFICIALLY OWNED IN
OFFICERS TITLE BANK AS OF 6/30/98 % OWNERSHIP
- ----------------- ------------------------- --------------------- -----------
<S> <C> <C> <C>
Maryellen Brennan Sr. V.P. Branch 2,408 0.34%
Administration
Thomas Hodgson Sr. V.P. Loans 1,997 0.28%
Robert Matejcek Sr. V.P. and Cashier 929 0.13%
Steve Mills Sr. V.P. Trust -0- -0-
Paul Welsh Sr. V.P. Marketing -0- -0-
</TABLE>
As of ___________, 1998, The Board of Directors and executive officers of the
Bank owned in the aggregate 119,523 shares or 16.1% of the outstanding shares
of the Bank.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Bank's Board of Directors held twelve (12) regular meetings in 1997.
During the year that ended December 31, 1997, no director attended fewer than
75% of the aggregate of the total number of meetings of the Board plus the
total number of meetings of all the committees of the Board on which he or she
served.
In 1997 the bank had eight standing committees: The Executive Committee;
Loan Review, Audit & Compliance Committee; Loan Committee; Nomination
Committee; Planning Committee; CRA Committee; Compensation and Benefits
Committee; and Trust Committee.
The Executive Committee was comprised of Messrs. Blalock, Butler, duPont,
Fausset and Thompson. The committee met twelve (12) times in 1997. The
principal function of the Executive Committee is to act on behalf of and to
exercise all of the powers of the Board of Directors when the Board is not in
session, except those powers specifically reserved to the Board under the
Bank's Bylaws or applicable law.
The Loan Review, Audit & Compliance Committee is comprised of Ms. Beall
and Messrs. Butler and Zoller, none of whom are officers of the Bank. The
committee met four (4) times during 1997. The principal functions of this
committee are to:
1. Recommend to the Board the engagement of the Bank's independent
auditors.
2. Review the scope of the annual audit prior to publication.
30
<PAGE> 33
3. Review the results of the audit with the independent auditors.
4. Determine that no restrictions are placed by management on
the scope or implementation of the independent auditors' examination
of the Bank.
5. Report the results of such examination in writing to the
Board at a regular meeting.
6. Review the adequacy of the system of internal accounting
controls.
7. Review internal audit reports.
8. Review internal loan review reports.
The Loan Committee, which is comprised of Ms. Beall, and Messrs. Blalock,
Butler, duPont, Fausset and Zoller, met twenty (20) times during 1997. The
principal functions of the Loan Committee are to:
1. Examine and approve loans and discounts.
2. Buy and sell bills of exchange.
3. Discount and purchase bills, notes, and other evidences of debt.
The Nominating Committee is comprised of the entire Board of Directors of
the Bank. The full Board of Directors acted on nominations in 1997 but held no
meetings for this special purpose outside of the regular board meetings.
The Planning Committee, comprised of Mrs. Carlson, and Messrs. Blalock,
Butler, duPont, Fausset, Korcheck, and Weigel, met once in 1997. The principal
function of the Planning committee is to develop a strategic plan for the Bank.
The Community Reinvestment Act Committee (CRA), comprised of Mrs. Carlson
and Messrs. duPont, Fausset, Korcheck and Weigel, and officers and employees of
the bank, met three (3) times in 1997. The principal function of this
committee is to monitor the Bank's compliance with the Community Reinvestment
Act.
The Compensation and Benefits Committee met three (3) times in 1997. It
is comprised of Ms. Beall and Messrs. Korcheck, Thompson and Zoller. The
principal function of this committee is to review the compensation and benefits
package of the Bank to ensure the hiring and retention of qualified officers
and employees for the Bank. The committee also reviews the performance of the
Executive Officers of the Bank annually and makes salary recommendations to the
Board.
31
<PAGE> 34
The Trust Committee, is comprised of Mrs. Carlson and Messrs. Korcheck,
Thompson, and Weigel. It met six (6) times in 1997. The principal function of
this committee is to monitor the trust activities of the trust department of
the Bank.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
----------------------------------------------
The following table provides certain summary information concerning
compensation paid or accrued by the Corporation and/or its subsidiaries, to or
on behalf of the Bank's Chairman and Chief Executive Officer and President and
Chief Operating Officer, respectively, for the fiscal years ended December 31,
1997, 1996 and 1995, and to all executive officers as a group during 1997:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Name and Principal Other Annual All Other
Position Year Salary ($) Bonus ($) Compensation(1) Awards SARs LTIP Payouts Compensation
($) ($) ($) ($) on ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Francis I. duPont, 1997 129,448 10,000 7,621
III, Chairman of 1996 123,284 5,000 6,857 0 0 0 0
the Board & CEO 1995 119,000 5,000 7,295 0 0 0 0
Glen W. Fausset, 1997 97,026 5,000 7,636
President & COO 1996 97,026 2,500 5,872 0 0 0 0
1995 97,026 0 5,912 0 0 0 0
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes value of bank car allocated to personal use and bank paid premiums
on life, medical, dental, and disability insurances.
Change of Control Agreements
----------------------------
In 1997, the Board of Directors of the Bank entered into agreements with
Messrs. duPont and Fausset providing for compensation to them in the event of a
change of the controlling interest of the Bank or dismissal without cause. The
agreements provide for the payment of up to three times base compensation upon
a change of control of the Bank or dismissal without cause.
Directors' Compensation
-----------------------
Directors who are not also employees receive $750.00 for each board
meeting attended (including one paid absence). In addition, such Directors are
paid $225.00 for the first of each committee meeting attended and $50.00 for
each subsequent committee meeting attending during the month. There is no
intent by the Company or the Bank to materially change the compensation
received by the Directors as a result of the formation of the holding company.
401(k) Retirement Plan
----------------------
The Bank has a 401(k) Retirement Plan (the "401K Plan") which covers
substantially all of its employees. The 401K Plan was originally adopted
effective January 1, 1995. The purpose
32
<PAGE> 35
of the 401K Plan is to allow the employees of the Bank the opportunity to
provide for their retirement through a tax deferred program to which the Bank
also may contribute. An employee may participate in the 401K Plan after having
worked for the Bank for one year and after having reached the age of 21. The
contributions to the 401K Plan are made by the employee and are limited to the
lesser of 15% of the employees' income or $10,000. The Bank may, but is not
required to, "match" contributions made by the employees. During 1997, the Bank
contributed $0.50 for each $1.00 contributed by the employee on the first 6% of
the employee's income. The Bank also has the right under the 401K Plan to make
additional discretionary contributions on behalf of employees. The employees
have the option of investing in various funds to met their investment
objectives, including the Bank's stock. The employee is entitled to the full
value of their 401K Plan at the time of retirement, death or permanent
disability. An employee is entitled to receive the full "vested" portion of his
or her account upon other termination from the Bank but forfeits the unvested
portion.
Employee Vesting Schedule
-------------------------
Number of Years of Service Percentage
- -------------------------- ----------
Less than one year 0%
One to two years 33%
Two to three years 66%
More than three years 100%
As of December 31, 1997, 25 employees were participating in the 401K Plan.
During 1997, the Bank contributed $30,800 to the Plan.
Pension Plan
------------
The Bank has a qualified, contributory defined benefit retirement plan
which is administered by the Bank and an advisory committee appointed by the
Board of Directors. Employees of the Bank are eligible to participate in the
Bank's qualified pension plan after they have completed six months of service
and have attained age 21. Contributions are to be made by the Bank annually in
amounts determined by the plan's actuary as necessary to fund retirement
benefits under the plan.
The plan provides for monthly retirement benefits to, or on behalf of,
each covered employee or beneficiary upon death or retirement at age 65. At
age 65, such retirement benefits will be equal to 56% of an employee's average
earnings (defined as the average of his monthly base salary during the best
paid 60 consecutive month period). Benefits under the plan begin to vest after
three years of service and do not fully vest until completion of seven years of
credited service. Benefits are reduced for employees who retire with less than
28 years of service.
33
<PAGE> 36
The following table illustrates annual benefits which would be payable to
employees upon reaching the age of 65 for various levels of compensation and
years of service.
COMPENSATION 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- ----------------------------------------------------
$10,000 $2,000 $4,000 $5,600 $5,600
- ----------------------------------------------------
20,000 4,000 8,000 11,200 11,200
- ----------------------------------------------------
30,000 6,000 12,000 16,800 16,800
- ----------------------------------------------------
40,000 8,000 16,000 22,400 22,400
- ----------------------------------------------------
50,000 10,000 20,000 28,000 28,000
- ----------------------------------------------------
60,000 12,000 24,000 33,600 33,600
- ----------------------------------------------------
Stock Option Plans
------------------
On July 17, 1986, the Bank adopted an Incentive Stock Option Plan ("Option
Plan"), which authorizes the Bank's Stock Option Plan Committee to grant to
officers and other key employees of the Bank nontransferable options to
purchase an aggregate of 75,000 shares of the Bank's Common Stock (subject to
adjustment pursuant to anti-dilution provisions). This plan expired on July
17, 1996.
At the 1995 Annual Meeting of the Shareholders of the Bank, the
shareholders of the Bank voted in favor of the ratification of a replacement
successor plan which will expire in 5 years from its approval (April 20, 2000).
The plan authorizes the Bank's Board of Directors to grant officers and other
key employees of the Bank non-transferable options to purchase an aggregate of
25,000 shares of the Bank's common stock (subject to adjustment pursuant to the
anti-dilution provisions).
The purpose of the Option Plan is to advance the interests of the Bank by
providing officers and other key employees who have substantial responsibility
for the direction and management of the Bank with additional incentive to
promote the success of the business, to increase their proprietary interest in
the success of the Bank, and to encourage them to remain in its employ. All
options granted under the Option Plan are intended to qualify as "incentive
stock options" pursuant to Section 422A of the Internal Revenue Code of 1986,
as amended.
The Stock Option Plan is administered by the entire Board of Directors of
the Bank. The Board determines, subject to the provisions of the Option Plan,
in its sole discretion, to whom options will be granted, the time at which
options will be granted, the option price (as specified below) of the shares
subject to each option, the time when each option will be exercisable and the
duration of the exercise period, and interpretations of the Option Plan. All
recipients must agree in writing to remain in the employ of the Bank for a
period of at least three years from the date of grant.
The Option Plan provides that the exercise price of the stock options will
be determined by the Stock Option Plan Committee at the date of grant, but in
no event will the purchase price be less than 100% of the fair market value (as
defined in the Option Plan) of the Bank's Common Stock on such date.
34
<PAGE> 37
Each option granted under the Option Plan becomes exercisable only after
one year continued employment of the optionee with the Bank immediately
following the date of grant. No option may be exercised unless the optionee is,
at the time of exercise, in the employ of the Bank and shall have been
continuously so employed since the date of grant of the option. In no event,
however, will an option under the original plan be exercisable after ten years
from the date of grant or, under the successor plan, after five years from the
date of grant.
The Option Plan provides that an optionee may exercise his option by
surrendering case, certified bank check, or Common Stock of the Bank which the
optionee owns at its then fair market value in payment of the exercise price of
the option. If an optionee exercises his stock option rights (other than as a
result of certain events set forth in the Option Plan), such optionee will be
subject to a restrictive covenant not to compete with the Bank within Manatee
County, Florida for a period of two years after such exercise of his stock
option rights.
The Option Plan provides that if a change of control of the Bank occurs,
the options will be immediately exercisable by the optionee. The Option Plan
also provides that no option will be exercisable more than three months after
termination of the optionee's employment with the Bank unless such termination
of employment occurs by reason of disability or death. In the event of the
disability or death of a recipient of options while an employee of the Bank (or
his death within three months after retirement), the options which were
otherwise exercisable on the date of disability or death, as the case may be,
will be exercisable by the optionee or the estate of the optionee or by any
person who acquires such option by bequest or inheritance from the optionee at
any time prior to the expiration of one year from the date of his disability or
death.
The Board of Directors of the Bank has the right to amend, suspend, or
terminate the Option Plan at any time, but no such action will affect or impair
the rights of a recipient under any option previously granted under the Option
Plan. The original Option Plan terminates ten years from its effective date
and the successor Option Plan terminates five years from its effective date, or
at such earlier time as the Board of Directors of the Bank may determine, as to
any shares not at the time subject to options.
Since 1986, the Board of Directors has granted options to 6 current
executive officers of the Bank to purchase 48,539 shares of Common Stock. At
December 31, 1997, options to purchase 27,660 shares (including accrued stock
dividends) remained outstanding. The following table shows the stock options
granted to its current named executive officers.
The Bank has also granted options to thirteen other current key employees
of the Bank. Options to purchase a total of 6,072 shares of Common Stock
remain outstanding. The option exercise price for each option share was 100%
of the fair market value of the Common Stock on the date of the grant.
35
<PAGE> 38
AGGREGATED OPTION/SAR EXERCISES
IN FISCAL 1997 AND FISCAL YEAR END OPTION VALUES1
<TABLE>
<CAPTION>
Value of Unexercised
Number of in-the-money
Shares Acquired Value Unexercised Options Options at
Name on Exercise (#) Realized at 12/31/97(2) 12/31/97(3)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Francis I. duPont, III 0 0 18,232 $128,389
- ---------------------------------------------------------------------------------------------
Glen W. Fausset 11,576 $96,798 6,077 $ 59,040
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) The bank does not have a stock appreciation rights (SAR) plan.
(2) Includes additional shares accrued due to stock dividends.
(3) Based on a market value of $20 per share at year end, 1997 which represents
the last known trade before year end.
CERTAIN TRANSACTIONS
There are no existing or proposed material transactions between the Bank
and any of the Bank's officers, directors, or the immediate family or
associates of any of the foregoing persons, except as indicated below.
Robert G. Blalock, a director of the Bank, is a member of the law firm on
Blalock, Landers, Walters and Vogler, P.A., which does the majority of the
Bank's legal work relating to litigation on defaulted loans. The Bank has
reviewed the fees and believes they are competitive within the market place.
Fees paid by the Bank were less than 5% of the law firm's revenues.
Mr. Ray Weigel, III, a Director of the Bank and is the son of Mr. Ray
Weigel, Jr. who owns greater than 5% of the outstanding stock of the Bank.
This statement is made to comply with securities disclosures and has no bearing
upon the operation of the business of the Bank.
Some of the directors of the Bank, as well as the companies with which
such directors are associated, are customers of, and have had banking
transactions with the Bank in the ordinary course of the Bank's business and
the Bank expects to have such ordinary banking transactions with such persons
in the future. In the opinion of management of the Bank, all loans and
commitments to lend included in such transactions were made in compliance with
applicable laws on substantially the same terms, including interest rates and
collateral, as those prevailing for comparable transactions with other persons
of similar creditworthiness and did not involve more than a normal risk of
collectability or present other unfavorable features. During 1997, none of the
Bank's directors or principal officers had outstanding indebtedness that
exceeded ten percent (10%) of the Bank's equity capital accounts.
The Bank expects to have in the future, banking transactions, in the
ordinary course of its business with directors, officers, principal
shareholders, and their associates, on substantially the same terms, including
interest rates and collateral on loans, as those prevailing at the same time
for comparable transactions with others and which do not involve more than the
normal risk of collectability or present other unfavorable features.
36
<PAGE> 39
SUPERVISION AND REGULATION
The following is a summary of certain statutes and regulations affecting
the Company. This summary is qualified in its entirety by such statutes and
regulations.
The Company
-----------
The Company will be a registered bank holding company under the Bank
Holding Company Act of 1956 (the "Banking Act") as amended, and as such will be
subject to regulation by the Federal Reserve Board (FRB). A bank holding
company is required to file with the FRB annual reports and other information
regarding its business operations and those of its subsidiaries. A bank
holding company and its subsidiary banks are also subject to examination by the
FRB.
The Banking Act requires every bank holding company to obtain the prior
approval of the FRB before acquiring substantially all the assets of any bank
or bank holding company or ownership or control of any voting shares of any
bank or bank holding company, if, after such acquisition, it would own or
control, directly or indirectly, more than five percent (5%) of the voting
shares of such bank or bank holding company.
In approving acquisitions by bank holding companies of companies engaged
in banking-related activities, the FRB considers whether the performance of any
such activity by a subsidiary of the holding company reasonably can be expected
to produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, which outweigh possible adverse effects,
such as overconcentration of resources, decrease of competition, conflicts of
interest, or unsound banking practices.
Bank holding companies are restricted in, and subject to, limitations
regarding transactions with subsidiaries and other affiliates.
Bank
----
The Bank is regulated by the Office of the Comptroller of the Currency
("OCC") as a national banking association organized under the laws of the
United States. Deposits of the Bank are insured by the Federal Deposit
Insurance Corporation ("FDIC") and thus the Bank is subject to certain FDIC
rules and regulations. The regulatory agencies have the authority to regularly
examine the Bank and the Bank is subject to the regulations promulgated by its
supervisory agencies.
Capital
-------
The FRB, OCC, and FDIC require banks and holding companies to maintain
minimum capital ratios.
In December 1988, the FRB approved final "risk-adjusted" capital
guidelines for bank holding companies. The new guidelines became fully
implemented as of December 31, 1992.
37
<PAGE> 40
The FDIC has adopted substantially similar risk-based capital guidelines.
These ratios involve a mathematical process of assigning various risk weights to
different classes of assets, then evaluating the sum of the risk-weighted
balance sheet structure against the Company's capital base. The rules set the
minimum guidelines for the ratio of capital to risk-weighted assets (including
certain off-balance sheet activities, such as standby letters of credit) at 8
percent. At least half of the total capital is to be composed of common equity,
retained earnings, and a limited amount of perpetual preferred stock less
certain goodwill items ("Tier 1 Capital"). The remainder may consist of a
limited amount of subordinated debt, other preferred stock, or a limited amount
of loan loss reserves. At June 30, 1998, on a pro forma basis as if the
transaction had been consummated on such date, the Company's consolidated
risk-adjusted Tier 1 Capital and total capital, as defined by the regulatory
agencies based on the fully phased in 1992 guidelines, were 13.1 percent and
14.2 percent of risk-weighted assets, respectively, well above the 4 percent and
8 percent minimum standards mandated by the regulatory agencies.
In addition, the federal banking regulatory agencies have adopted leverage
capital guidelines for banks and bank holding companies. Under these
guidelines, banks and bank holding companies must maintain a minimum ratio of
three percent (3%), Tier 1 Capital (as defined for purposes of the year-end
1992 risk-based capital guidelines) to total assets. However, most banking
organizations are expected to maintain capital ratios well in excess of the
minimum levels and generally must keep such Tier 1 ratio at or above 5 percent.
As of June 30, 1998, on a pro forma basis as if the transaction had been
consummated on such date, the Company's leverage ratio was 7.8 percent, well
above the regulatory minimum.
Regulatory authorities may increase such minimum requirements for all
banks and bank holding companies or for specified banks or bank holding
companies. Increases in the minimum required ratios could adversely affect the
Bank and the Company, including their ability to pay dividends.
Additional Regulation
---------------------
The Bank is also subject to federal regulation as to such matters as
required reserves, limitation as to the nature and amount of its loans and
investments, regulatory approval of any consolidation or consolidation,
issuance or retirement by the Bank of its own securities, limitations upon the
payment of dividends and other aspects of banking operations. In addition, the
activities and operations of the Bank are subject to a number of additional
detailed, complex and sometimes overlapping laws and regulations. These
include state usury and consumer credit laws, laws relating to fiduciaries, the
Federal Truth-in-Lending Act and Regulation Z, the Federal Equal Credit
Opportunity Act and Regulation B, the Fair Credit Reporting Act, the Truth in
Savings Act, the Community Reinvestment Act, antiredlining legislation and
antitrust laws.
Dividend Regulation
-------------------
The ability of the Company to obtain funds for the payment of dividends
and for other cash requirements is largely dependent on the amount of dividends
which may be declared by its subsidiary, the Bank. Generally, a national
banking association may not declare a dividend, without the approval of the OCC
if the total of dividends declared by such bank in a calendar
38
<PAGE> 41
year exceeds the total of its net profits for that year combined with its
retained profits of the preceding two years. In addition, national banks are
subject to dividend regulation by their primary federal bank regulatory agency
in connection with general supervisory authority as it relates to a bank's
requirement to maintain adequate capital.
Government Policies and Legislation
-----------------------------------
The policies of regulatory authorities, including the OCC, FRB, FDIC and
the Depository Institutions Deregulation Committee, have had a significant
effect on the operating results of commercial banks in the past and are expected
to do so in the future. An important function of the Federal Reserve System is
to regulate aggregate national credit and money supply through such means as
open market dealings in securities, establishment of the discount rate on member
bank borrowings, and changes in reserve requirements against member bank
deposits. Policies of these agencies may be influenced by many factors,
including inflation, unemployment, short- term and long-term changes in
the international trade balance and fiscal policies of the United States
government.
The United States Congress has periodically considered and adopted
legislation which has resulted in further deregulation of both banks and other
financial institutions, including mutual funds, securities brokerage firms and
investment banking firms. No assurance can be given as to whether any
additional legislation will be adopted or as to the effect such legislation
would have on the business of the Bank or the Company. In addition to the
relaxation or elimination of geographic restrictions on banks and bank holding
companies, a number of regulatory and legislative initiatives have the
potential for eliminating many of the product line barriers presently
separating the services offered by commercial banks from those offered by
nonbanking institutions.
DESCRIPTION OF COMMON STOCK--COMPARATIVE RIGHTS
General
-------
The authorized common stock of the Company consists of two million five
hundred thousand (2,500,000) shares of voting common stock, with $0.10 par
value per share. The authorized capital stock of the Bank consists of one
million (1,000,000) shares of Five Dollar ($5.00) par value per share, 714,715
of which were outstanding as of July 31, 1998. Upon the consolidation of the
Bank and the New Bank becoming effective, 1,429,430 shares of the Company stock
will be exchanged for all of the outstanding shares of Bank stock, subject to
the exercise of dissenters' rights of appraisal.
Assuming the consummation of the transaction contemplated by the
Agreement, the Company will issue 1,429,430 shares of its $0.10 par value
common stock to existing shareholders of the Bank on the basis of two (2)
shares of Company common stock for each share of $5.00 par value common stock
of the Bank. Assuming no dissenters to the transaction, the Company will,
immediately upon the effective date of the transaction contemplated by the
Agreement, have a capital structure of two million five hundred thousand
(2,500,000) authorized
39
<PAGE> 42
shares of $0.10 par value common stock of which 1,429,430 shares would then be
issued and outstanding.
Voting Rights
-------------
Each share of common stock of the Company and the Bank entitles the holder
thereof to one (1) vote on all matters including the election of directors.
Under Florida General Corporation Law and the Articles of Incorporation of the
Company, shareholders of the Company will not have cumulative voting rights.
(See "DESCRIPTION OF COMMON STOCK COMPARATIVE RIGHTS--Cumulative Voting.")
Pursuant to the Company's Bylaws, the affirmative vote of 75% of the shares
represented at a duly called meeting for such purpose may remove any one or all
of the directors of the Company. Pursuant to federal banking law, a majority
of shares represented may remove any one or all of the directors of the Bank.
A special meeting of shareholders of the Bank may be called by shareholders of
the Bank who own not less than twenty-five percent (25%) of the voting power of
the Bank. A special meeting of shareholders of the Bank may be called by
shareholders who own in the aggregate not less than fifty percent (50%) of the
stock of the Company.
Right of Redemption
-------------------
The Bank has limited ability to buy its outstanding shares (redeem its
shares) from its shareholders. The Company is specifically empowered by its
Articles of Incorporation and Florida General Corporation Law to buy its shares
of outstanding common stock from its shareholders, at the mutual accord of the
shareholder and Company.
Liquidation Rights
------------------
In the event of liquidation, holders of common stock of the Company and
the Bank are entitled to similar rights as to assets distributable to
shareholders on a pro rata basis.
Preemptive Rights
-----------------
Holders of common stock of the Company will not have the preemptive right
to subscribe for or to purchase any additional securities which may be issued
by the Company as provided by the Florida General Corporation Law. Holders of
common stock of the Bank currently do not have preemptive rights to subscribe
for or to purchase additional securities issued by the Bank as provided by
federal banking law and the Articles of Association of the Bank.
Preemptive rights permit a shareholder to subscribe to a sufficient number
of shares so as to maintain their relative pro rata ownership upon the issuance
of additional shares by a corporation, except in certain circumstances.
Dissenters' Rights
------------------
Shareholders of the Corporation and the Bank have similar dissenters'
rights in certain transactions pursuant to federal banking and Florida general
corporate law. Under Section
40
<PAGE> 43
607.1301 et. seq. of the Florida Business Corporation Act, and Section 215 of
Title 12 of the United States Code, shareholders of the Company and the Bank may
elect to dissent from a merger, consolidation or sale of substantially all of
the assets of a Florida corporation and a national bank and receive the fair
cash value of their shares.
Cumulative Voting
-----------------
Each share of common stock of the Bank entitles the holder thereof to one
(1) vote on all matters except for the election of directors where shareholders
are entitled to vote cumulatively. The shareholders of the Company will have a
right to one vote on all matters, including the election of directors, and will
not have the right to cumulate their shares in the election of Directors. A
shareholder voting cumulatively may cast the number of shares he owns times the
number of Directors to be elected in favor of one nominee or allocate such
votes among the nominees as he determines.
Indemnification
---------------
The Company's Articles of Incorporation and Bylaws provide for
indemnification of officers, directors, employees and agents to the fullest
extent permitted by Florida law. Similarly, the Articles of Association of the
Bank provide for indemnification of directors and officers of the Bank.
Florida law provides for indemnification in both derivative and nonderivative
actions.
Florida law generally provides for the payment of expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually
and reasonable incurred by the indemnities provided such person 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 if he had no reasonable cause to believe his conduct was unlawful.
However, in derivative suits, if the suit is lost, no indemnification is
permitted in respect of any claim, issue or matter as to which the prospective
indemnitee is adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation and then only if, and only to the
extent that, a court of competent jurisdiction determines upon view of all the
circumstances of the case, the prospective indemnitee is fairly and reasonable
entitled to indemnity for such expenses as the court deems proper. Further,
this indemnity in derivative suits is limited to expenses incurred in defending
the suit, not the amount of any judgment, fine or other penalty levied against
the prospective indemnitee. Finally, no indemnification may be provided in any
action or suit in which the only liability asserted against a director is
pursuant to a statutory provision outlawing loans. dividends, and distribution
of assets under certain circumstances.
The provisions regarding indemnification may not be applicable under
certain federal banking and securities laws and regulations.
41
<PAGE> 44
Dividend Rights
---------------
Dividends may be paid on common stock of the Company as are declared by
the Board of Directors out of funds legally available therefor. Dividends may
not exceed the surplus of the Company, as defined by the Florida General
Corporation Act, and may not be declared if the Company is insolvent or would
thereby be made insolvent. (See "SUPERVISION, REGULATION AND LEGISLATION--The
Company.")
Dividends may be paid on common stock of the Bank as are declared by the
Board of Directors out of funds legally available therefor. Dividends paid by
the Bank on its common stock must be declared out of the net profits of the
Bank.
Transfer and Assessability
--------------------------
Transfer of common stock of the Company may not be restricted by the
Company and, when issued, common stock of the Company is fully paid and
nonassessable.
The transfer of common stock of the Bank may not be restricted, except as
is reasonably calculated by the Bank to simplify the work of the Bank with
respect to stock transfers, voting at shareholders' meetings and related
matters, and to protect it against fraudulent transfers. The common stock of
the Bank is subject to assessment by the Board of Directors in order to restore
capital impaired by losses or otherwise, and shares owned by public
shareholders who fail to pay any assessment may be sold at public or private
sale.
Antitakeover Measures
---------------------
A vote of the holders of at least two-thirds (2/3) of the issued and
outstanding common shares of capital stock of the Bank is required to
effectuate a voluntary liquidation of the Bank, reorganization of the Bank,
consolidation or consolidation of the Bank with another bank, or the increase
or decrease of the Bank's authorized or outstanding capital stock. A
two-thirds (2/3) vote of the issued and outstanding stock is also required for
such transactions of the Company, unless a higher or lower voting requirement
is established in the Company's Articles of Incorporation. Pursuant to the
Articles of Incorporation of the Company, a majority vote of the issued and
outstanding shares is sufficient to amend the Articles of Incorporation of the
Company, other than Article XIII. In accordance with Article XIII of the
Articles of Incorporation of the Company a "business combination" (which
includes any consolidation or consolidation; sale, lease exchange, mortgage,
pledge or other disposition of greater than 10 percent of the assets of the
Company; issuance or sale of any securities of the Company; adoption of a plan
of liquidation by the Company) requires the approval of eighty percent (80%) of
the total outstanding shares of common stock and sixty-six and two-thirds
percent (66 2/3%) of the outstanding shares of common stock held by the
Independent Shareholders (as defined in Article XIII), unless such "Business
Combination" has been approved by the "Continuing Directors." In addition,
amendment of Article XIII of the Company's Articles of Incorporation may also
require the vote of eighty percent (80%) of the Company's outstanding shares
and shares held by sixty-six and two-thirds percent (66 2/3%) of the
Independent Shareholders if such amendment is not approved by the Continuing
Directors as defined by Article XIII.
42
<PAGE> 45
Because the Executive officers and Directors of the Company will own
approximately _____% percent of the shares of the Company (assuming consummation
of the proposed consolidation and assuming there are no dissenting shareholders
to the transaction), a "Business Combination" with an Interested Shareholder may
be difficult to approve without the consent of the Continuing Directors (as such
term is defined by Article XIII) and Management. The Bank currently has no
antitakeover provision which is substantially similar to Article XIII of the
Company's Articles of Incorporation. (See "ANTITAKEOVER MEASURES.")
ANTITAKEOVER MEASURES
Discussion of Fair Price and Supermajority Vote Provisions
- ----------------------------------------------------------
The Company's Amended and Restated Articles of Incorporation contain a
"Fair Price" and "Supermajority Vote" provision. Such provision has been
included in the Company's Articles of Incorporation based on the fact that
certain tactics have become relatively common in corporate takeover practice,
including the accumulation of a substantial block of stock as a prelude to an
attempted takeover or proxy fight or the use of a partial tender offer followed
by a second step consolidation or Business Combination involving less favorable
considerations than were offered in the partial tender offer. The Board
considers that such tactics can be highly disruptive and can result in
dissimilar and unfair treatment of shareholders.
The Fair Price and Supermajority Vote provisions are designed to encourage
potential takeover bidders to negotiate at arms length with the Board of
Directors. In the absence of such negotiations, the provisions are intended to
achieve a measure of assurance that any multistep attempt to take over the
Company is made on terms that offer similar treatment to all shareholders.
Neither the proposed fair price provision nor the supermajority vote provision
will impede a takeover that is approved by a majority of the directors of the
Company who are unaffiliated with a 10 percent or more shareholder.
The Board of Directors is not aware of any current efforts to obtain
control of the Bank or to effect substantial accumulations of its common
shares. The provisions are proposed in order to have in place appropriate
safeguards to protect the shareholders in light of numerous two-step takeover
attempts for public corporations and in light of developments in legislation
regarding interstate banking.
An effect of the Fair Price provision and the Supermajority Vote provision
is to make more difficult the consummation of a Business Combination with a 10
percent or more shareholder in the absence of the approval of the Board of
Directors of the Company. Accordingly, the provisions may discourage takeover
attempts which are not supported by the Board of Directors even in transactions
which may be supported by a majority of shareholders. (See "Purpose and Effect
of Amendments to Articles of Incorporation Concerning Fair Price and
Supermajority Vote Provisions.")
43
<PAGE> 46
Reasons for Fair Price and Supermajority Vote Provisions
- --------------------------------------------------------
The Board of Directors of the Bank and the Company (which Boards are
comprised of the same individuals and, therefore, the Agreement was not the
result of any arms-length negotiation) unanimously approved the Agreement (the
law requires a simple majority of the Bank's Board of Directors approve such an
agreement), which Agreement provides for the exchange of Company common shares
for Bank common shares. Company common shares are subject to the provisions of
its Articles of Incorporation, including Article XIII, which Articles of
Incorporation were adopted at the direction of and with the approval of the
Bank's and Company's Boards of Directors. The so-called "Fair Price" and
"Supermajority Vote" provision would be applicable in the case of certain
Business Combinations with a shareholder owning ten percent (10%) or more of
the voting stock of the Company. The Board of Directors determined that the
provisions are desirable to assure all shareholders fair and equitable
treatment in the event of certain types of "two-step" acquisition transactions.
There have been a number of takeovers of publicly owned corporations
accomplished by the purchase of a control block of stock by means of open
market purchases or by means of a tender offer made directly to a target
corporation's shareholders at a price above the prevailing market price,
followed by a second-step consolidation or other Business Combination. The
value of the consideration given for the acquired corporation's shares in the
second step of such an acquisition may be, and frequently is, less than the
value paid in the first step and/or the form of the consideration in the first
step. The Board of Directors is concerned that the interest of all
shareholders may not be adequately protected in such a two-step acquisition.
The Bank has a large number of long-term shareholders who individually
hold a small number of Bank common shares. The Board believes that
sophisticated arbitrageurs and other market professionals are generally in a
better position to take advantage of the more lucrative first step transaction,
while long-term shareholders will often, as a practical matter, be compelled to
accept the less favorable consideration payable in the second step
consolidation or other Business Combination. Although the remaining
shareholders subject to the second step may have available certain legal
remedies in such a situation, including the right to dissent under Florida law
in a consolidation and certain other Business Combinations, the enforcement of
such rights or remedies by a minority shareholder may involve significant
expense, delay and uncertainty.
The potential for future use of the two-step acquisition and further
expansion of interstate banking have convinced the Board of Directors of the
Bank and the Company that these provisions are desirable in order to preserve
for the shareholders the benefits which will accrue to the Company and its
subsidiary, the Bank, including its increased ability to compete in the
significantly deregulated banking industry.
44
<PAGE> 47
Summary of Fair Price and Supermajority Vote Provisions
- -------------------------------------------------------
The following summary is qualified by reference to the full text of the
Amended Articles of Incorporation (attached hereto as Appendix III).
Capitalized terms used throughout this discussion of Article XIII shall have
the meaning given to such terms in Article XIII of the Company's Articles of
Incorporation. Article XIII contains both a "Fair Price" and "Supermajority
Vote" provision.
Under the "Fair Price" provision, no Business Combination may be effected
without the approval of the Continuing Directors, unless either:
(i) Approved by holders of not less than 66 2/3 percent of the Voting Stock
held by all Independent Shareholders voting together as a class; or
(ii) The minimum price and other requirements and conditions set forth in
Article VI (D.) are complied with
It is possible that, if the Interested Shareholder has not made a recent
purchase of Corporation stock, the "Fair Price" might be a price paid by the
Interested Shareholder several years ago. That price may have no relation to
the present market value of the stock, particularly if the stock has declined
in value during the interim period.
As the fair price is an aggregate of the cash and Fair Market Value of
property paid plus interest paid on such property from the date the Interested
Shareholder became such to the date of consummation, a determination of whether
the price paid satisfies the Fair Price provision may conceivably not be made
until the date of consummation. Due to this uncertainty of whether the Fair
Price provision has been satisfied, the actual vote required at the meeting of
shareholders may not be determinable until consummation. This uncertainty may
preclude an Interested Shareholder from actually determining the price required
to satisfy the Fair Price provision, even if the Interested Shareholder had
every intention of doing so.
The uncertainty associated with the Fair Price provision may have the
effect of encouraging an Interested Shareholder who is not assured of the
eighty percent (80%) Supermajority Vote to negotiate any proposed Business
Combination with the Board of Directors, and more specifically, negotiate with
the Continuing Directors.
The purpose of the foregoing conditions is to require, in the absence of
the approval of the Continuing Directors or holders of at least 66 2/3 percent
of all Voting Stock held by the Independent Shareholders, that the Independent
Shareholders receive in a Business Combination the "minimum price" specified in
Article XIII (D.), which is the highest price per share paid by the Interested
Shareholder in acquiring shares of such class or series or, if greater, in the
case of preferred stock, the amount of the per share redemption price, plus
interest, less cash dividends received. The form of the consideration would be
the same as previously paid by the Interested Shareholder to acquire the
largest number of shares of such class or series. The conditions in Article
XIII (D)(3) are to deter the Interested Shareholder from self-dealing or taking
advantage of its equity position in the Corporation.
45
<PAGE> 48
Article XIII also contains a "Supermajority Vote" provision. The vote
required by the Supermajority Vote provision is in addition to any vote required
by the Fair Price Provision. Under the Supermajority Vote provision, no
Business Combination with an Interested Shareholder may be effected without the
approval of the Continuing Directors, unless approved by holders of not less
than eighty percent (80%) of the outstanding Voting Stock voting together as a
single class. (This 80 percent Supermajority Vote requirement includes the vote
of the Interested Shareholder.)
Any vote of Shareholders of the Corporation under Article XIII is in
addition to any required vote of the holders of any class of shares of capital
stock of the Corporation and is required notwithstanding that no shareholder
vote or a lesser percentage shareholder vote may be required by law or other
provisions of the Articles of Incorporation.
All actions required to be taken by the Continuing Directors under Article
XIII shall be taken by the vote or written consent of two-thirds (2/3) of the
Continuing Directors. In the event that the number of Continuing Directors is
at any time less than five (5), all power and authority of the Continuing
Directors under Article XIII shall cease, including the authority to approve
Business Combinations and successor Continuing Directors and filling director
vacancies. The Continuing Directors are given authority under Article XIII to
determine, consistent with their fiduciary obligations, such matters as whether
any person is an Interested Shareholder; Fair Market Value of property,
securities and other noncash considerations; and other matters.
Provisions of Article XIII (H) restrict the manner in which the Article
may be repealed, amended, supplemented or otherwise modified.
Comparison with Current Requirements
- ------------------------------------
Under Florida law, the following transactions or actions generally require
shareholder approval:
(i) To effect a consolidation or consolidation;
(ii) To sell or otherwise dispose of all or substantially all the assets of
the Corporation;
(iii) To dissolve the Corporation; and
(iv) To adopt amendments to its Articles of Incorporation.
The Shareholder vote required by Florida law to authorize any of the
foregoing is a majority subject to an increase to two-thirds (2/3) of the
voting power of the Bank on such proposals as noted below. It should be noted,
however, that certain transactions are included within the definition of
Business Combinations which would not, in absence of the proposed Fair Price
and Supermajority Vote provisions, require any shareholder approval. In
addition, under the Fair Price provision, the affirmative vote of the holders
of at least sixty-six and two-thirds percent (66 2/3%) of the Voting Stock held
by the Independent Shareholders voting as a single
46
<PAGE> 49
class is required to approve a Business Combination with an Interested
Shareholder in the absence of the approval of the Continuing Directors or in the
absence of compliance with the minimum price and other conditions and
requirements of the Fair Price provision.
The Board of Directors has determined that encouraging a prospective
purchaser to negotiate directly with the Board and Management will be
beneficial to all shareholders. The Board has determined that it and
Management, in consultation with their professional advisors, are in the best
position to assess the business and prospects of the Company. Accordingly, the
Board is of the opinion that negotiations between the Company and a potential
acquiror will increase the likelihood that shareholders will receive a higher
price for their shares.
The fair price and supermajority vote provisions may have the effect of
protecting the incumbent Board of Directors and management by discouraging
takeover attempts which are not supported by the Board and management. As a
result, shareholders may not have the opportunity to sell some or all of their
shares in such a takeover attempt. Tender offers for control usually involve a
purchase price higher than the prevailing market price and may result in a
bidding contest between competing takeover bidders. In addition, these
"antitakeover" provisions could affect the price of the Company's common shares
by making it less attractive to persons who invest in securities in
anticipation of an increase in price if a takeover attempt occurs. On the
other hand, defeating undesirable tender offers can be expensive and
disruptive. The fair price and supermajority vote provisions may also deter an
Interested Shareholder from proceeding with a second-step business combination
unless approved by the Continuing Directors, especially if the market price of
the Company shares had declined from the highest price paid by the interested
shareholder in acquiring shares of such class. Furthermore, unless the
Continuing Directors approve a business combination, these "antitakeover"
provisions would give the holder of a minority of the total outstanding shares
a veto power over a business combination with an Interested Shareholder
notwithstanding that the other shareholders, including the Interested
Shareholder, may believe the business combination to be desirable or
beneficial.
Classified Board of Directors and Supermajority Vote Required to Remove
Directors
- ------------------------------------------------------------------------
The Company's Board of Directors is divided into three classes and each
class will be elected for a three-year term. The classified election system
for Directors provides continuity of Directors and also serves as a defense
against unwanted takeovers. Shareholders desiring to change a majority of the
Board would have to wait two years, in that one class of the Directors are
elected annually. This may discourage potential acquirors of the Company's
shares from making acquisitions of the Company's shares.
Further the Company Bylaws require a vote of 75% to remove a director from
office which is increased from the majority of shareholders typically required
under Florida law.
Additional Considerations
- -------------------------
The Bank currently has no intended antitakeover provisions in its Articles
of Association. The Company's Articles of Incorporation contain express
antitakeover provisions as set forth above. In addition, because the Company's
Articles of Incorporation do not "opt out" of the
47
<PAGE> 50
provisions, the antitakeover provisions of Sections 607.901 and 607.902 of
the Florida Business Corporation Act will apply to certain attempted acquisition
of the Company by an "interested shareholder" in the future in the event that
the Company has at that time in excess of 300 shareholders. Currently the Bank
has 516 shareholders.
Under Section 607.901, acquisition activities with "interested shareholders"
(i.e. those with greater than 10% ownership interest) are subject to a
supermajority/fair price provision. This provision increases to 66 2/3% of the
disinterested shareholders (from a mere majority of all shareholders) the vote
required to approve certain transactions with interested shareholders. These
provisions, however, do not apply (i) in the event the transaction has been
approved by a majority of Directors who are not affiliated with the interested
shareholder; (ii) if the company has had less than 300 shareholders for each of
the last 3 years; (iii) if the interested shareholder has been the beneficial
owner of 80% of the company's outstanding shares for at least 5 years; (iv) if
the interested shareholder is the beneficial owner of at least 90% of the
outstanding shares of the company, exclusive of shares acquired from the
company, unless such acquisition has been approved by disinterested
directors; or (v) the amount to be paid to the shareholders is a "fair price"
meaning that the highest price paid by the interested shareholder to purchase
shares of the target in the last two years must be maintained for additional
purchases. The intent of the latter provision is to eliminate two-tiered
transactions where an acquiror pays a significant premium for control of the
company then squeezes out the remaining shareholders at a much lower price.
Section 607.902 embodies a "control share acquisition statute" which
places certain procedural restrictions upon the acquisition of ranges of voting
power of the Company (20% to 33 1/3%; 33 1/3% to 50%; and greater than 50%).
The statute provides that the proposed buyer may give a notice to the Company
before or after such an acquisition has occurred and can request that a
shareholders meeting be held to consider the proposed acquisition if the
acquiring person agrees to pay the company expenses in regard to the meeting.
Unless the buyer agrees otherwise, the meeting is to be held within 50 days
after receipt of the notice by the company. A notice to the shareholders of
the company is to be sent and shall include: (i) a copy of the acquiring
persons statement delivered by the proposed buyer; (ii) a statement by the
board of directors of its position or recommendation or that it is making no
recommendation with respect to the proposed acquisition; and (iii) a statement
that the shareholders are or may be entitled to assert dissenters rights in
regard to the proposed transaction. If the company's Articles of Incorporation
or Bylaws contain a provision to the effect that the shares so purchased are
subject to redemption by the company (which the Company's currently do not),
the company may redeem such shares where no acquiring person statement was
filed for a period of up to 60 days after the last such acquisition at their
"fair value." The effect of this section is to make such control share
acquisition more difficult to complete without the prior approval and support
of the Board of Directors and shareholders of the Company.
These sections, if they are applicable to the Company, may have the effect
of further protecting the incumbent Board of Directors and management by
discouraging takeover attempts which are not supported by the Board and
management. As a result, shareholders may not have the opportunity to sell
some or all of their shares in such a takeover attempt. Tender offers for
control usually involve a purchase price higher than the prevailing market
price and may result in a bidding contest between competing takeover bidders.
In addition, these "antitakeover"
48
<PAGE> 51
provisions could affect the price of the Company's common shares by making
it less attractive to persons who invest in securities in anticipation of an
increase in price if a takeover attempt occurs. On the other hand, defeating
undesirable tender offers can be expensive and disruptive. These provisions may
also deter an interested shareholder from proceeding with a second step business
combination unless approved by the Directors, especially if the market price of
the Company shares had declined from the highest price paid by the interested
shareholder in acquiring shares of such class. Furthermore, unless the
Directors approve a business combination, these "antitakeover" provisions would
give the holder of a minority of the total outstanding shares a veto power over
a business combination with an interested shareholder notwithstanding that the
other stockholders, including the interested shareholder, may believe the
business combination to be desirable or beneficial.
Federal law requires prior approval by the Board of Governors of the
Federal Reserve System before any company acquires control of a bank or bank
holding company. In addition, pursuant to national banking law, no person or
entity shall directly or indirectly, acquire a controlling interest in a bank
without the prior written approval of OCC. Independent of any provision of the
Company's Articles of Incorporation or Bylaws, the requirement for such
regulatory approval may delay efforts to obtain control over the Company.
The Company has 2,500,000 shares of authorized common stock of which,
after consummation of the proposed reorganization, there will be 1,429,430
shares issued and outstanding. Therefore the Company will have 1,070,570
shares of its authorized common stock available for future issuance, without
further action by the shareholders of the Company, by the Board of Directors
for any proper corporate purpose. These shares could be issued into "friendly"
hands by the Board of Directors of the Company in the event of an attempt to
gain control of the Company without the approval of the incumbent members of
the Board of Directors. Because the Company's excess authorized shares could
be utilized in this manner they represent a potential "antitakeover" device.
The Company's Articles of Incorporation and Bylaws currently contain no
other provisions that were intended to be or could fairly be considered as
antitakeover in nature or effect. The Board of Directors has no present
intention to amend further the Articles of Incorporation to add any
antitakeover provisions. These antitakeover provisions are not the result of
Management's knowledge of any effort to obtain control of the Company by any
means.
REPORTS
The Bank currently files periodic reports with the OCC pursuant to Section
12g of the Securities Exchange Act of 1934 (the "1934 Act") as a "reporting
company." Subsequent to the consummation of the transaction, the Company as
"successor" to the Bank will file similar annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The Company will deliver to the
shareholders of the Company an annual report containing audited financial
information as required under the 1934 Act. While the Company will file
quarterly reports with the SEC, copies of which may be obtained from the SEC,
the Company is not
49
<PAGE> 52
obligated and does not currently intend to provide copies of such quarterly
reports to shareholders.
LEGAL OPINION
Legal matters in connection with the issuance of common stock of the
Company in the consolidation will be passed upon by special counsel in
connection with the reorganization, Werner & Blank Co., L.P.A., Toledo, Ohio.
OTHER MATTERS
The management of the Bank is not aware of any other matters to be
presented for consideration at the meeting or any adjournments thereof. If any
other matters should properly come before the meeting, it is intended that the
persons' names in the enclosed proxy will vote the shares represented thereby
in accordance with their judgment, pursuant to the discretionary authority
granted therein.
ADDITIONAL INFORMATION
This Prospectus and Proxy Statement constitutes part of the Registration
Statement covering the shares to be offered pursuant to the consolidation
transaction by the Company, as filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended. This Prospectus and Proxy
Statement does not contain all the information set forth in such
Registration Statement and the exhibits thereto, certain portions of which have
been omitted pursuant to the rules and regulations of the Securities and
Exchange Commission.
Such Registration Statement may be inspected, without charge, at the
principal office of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C., and copies of all or part thereof may be obtained from
the Securities and Exchange Commission upon payment of its prescribed fees.
The Securities and Exchange Commission also maintains a 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, including the Company.
THE BANK'S COMMON STOCK IS REGISTERED UNDER SECTION 12G OF THE SECURITIES
AND EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"), PURSUANT TO WHICH IT FILES
ANNUAL AND QUARTERLY FINANCIAL REPORTS WITH THE OFFICE OF THE COMPTROLLER OF
THE CURRENCY. THE BANK'S FORM 10-K ANNUAL REPORT WHICH INCLUDES FINANCIAL
STATEMENTS AND SCHEDULES, BY REFERENCE, IS FILED WITH THE OFFICE OF THE
COMPTROLLER OF THE CURRENCY IN WASHINGTON, DC. A COPY OF THIS REPORT IS
AVAILABLE TO SHAREHOLDERS UPON REQUEST TO THE SECRETARY, FIRST NATIONAL BANK OF
MANATEE, 5817 MANATEE AVENUE WEST, BRADENTON, FLORIDA 34209, (941) 794-6969
THE FIRST COPY WILL BE PROVIDED WITHOUT CHARGE. NEITHER THE ANNUAL REPORT TO
SHAREHOLDERS NOR THE FORM 10-K ARE TO BE TREATED AS PART OF THE PROXY
SOLICITATION MATERIAL, NOR AS HAVING BEEN INCORPORATED HEREIN BY REFERENCE.
ADDITIONALLY SUCH FORM 10-K ANNUAL REPORT MAY
50
<PAGE> 53
BE INSPECTED AND COPIED AT THE OFFICES OF THE OFFICE OF THE COMPTROLLER OF THE
CURRENCY, 490 L'ENFANTE PLAZA, S.W., WASHINGTON D. C., 20219.
By Order of the Board of Directors of
First National Bank of Manatee
Glen W. Fausset, President
51
<PAGE> 54
APPENDIX I
CONSOLIDATION AGREEMENT
<PAGE> 55
CONSOLIDATION AGREEMENT
This CONSOLIDATION AGREEMENT (hereinafter called the "Agreement") dated as
of __________, 1998 between First National Bank of Manatee (hereinafter called
the "Bank") and Manatee Interim Bank, N.A. (hereinafter called the "New Bank")
joined in by First National Bancshares, Inc. (hereinafter called the
"Corporation"), as the parent corporation of New Bank.
WITNESSETH:
WHEREAS, the Bank and the New Bank are each national banking associations
duly organized under the laws of the United States, each with its principal
office in Bradenton, County of Manatee, State of Florida. The Bank is a
banking corporation engaged in the business of banking. The New Bank is a
banking corporation which is not engaged in the business of banking and will
not be engaged in the business of banking prior to the consolidation as
provided herein. New Bank and Bank shall consolidate pursuant to the
provisions of 12 U.S.C. Section 215 of the banking laws of the United States,
under the charter of Bank and with the name "First National Bank of Manatee."
WHEREAS, as of December 31, 1997, the capital funds of the Bank consisted
of capital stock of $3,556,000, divided into 711,200 shares of common stock of
a par value of $5.00 per share, surplus of $4,164,869 and undivided profits,
including capital reserves and unrealized loses on "available for sale
securities" of $3,396,342, for total equity capital of $11,117,211.
WHEREAS, an application to charter New Bank has been submitted to and
approved by the Office of the Comptroller of the Currency and, upon the
effective date of the Consolidation, the New Bank will have capital stock of
$100,000, divided into 1,000 shares of common stock of the par value of $100.00
per share and surplus of $20,000 for total capital funds of $120,000.
WHEREAS, all of the shares of the Bank and the New Bank outstanding
immediately prior to the Consolidation of New Bank and Bank (the
"Consolidation") will be owned by the Corporation immediately following the
Consolidation, and such shares of the New Bank will be retired and canceled by
the Corporation immediately subsequent to the Consolidation.
<PAGE> 56
WHEREAS, Corporation is a for-profit corporation duly organized under the
laws of the State of Florida which has its registered office in Bradenton,
County of Manatee, State of Florida. As of the date hereof, Corporation has
1,000,000 common shares with $0.10 par value authorized, one (1) organizational
share of which is currently issued and outstanding, and which will be canceled
in connection with the Consolidation. Corporation's Articles of Incorporation
will be amended prior to consummation of the transactions specified herein to
increase its total shares of common stock authorized to 2,000,000.
WHEREAS, from and after the time the Consolidation becomes effective, and
as and when required by the provisions of this Agreement, the Corporation will
issue shares of its common stock as hereinafter provided.
WHEREAS, a majority of the Board of Directors of the Bank and a majority
of the Board of Directors of the New Bank, respectively, approved this
Agreement and authorized its execution, and a majority of the Board of
Directors of the Corporation has approved this Agreement, undertaken that the
Corporation shall join in and be bound by it, and authorized the undertaking
hereinafter made by the Corporation.
NOW, THEREFORE, in consideration of the premises, covenants and conditions
contained herein, the Bank and the New Bank hereby enter into this Agreement
and prescribe the terms and conditions set forth herein.
1. Consolidation. The New Bank and the Bank shall be consolidated under the
Charter of the Bank pursuant to the provisions of, and with the effect provided
under 12 U.S.C. Section 215.
2. Name, Articles and Bylaws. Upon the Consolidation becoming effective, the
name of the Bank (hereinafter called the "Consolidated Bank" whenever reference
is made to it as of the time of Consolidation or thereafter) shall be "First
National Bank of Manatee," its Articles of Association shall be the current
Articles of Association of the Bank, and its Bylaws shall be the current Bylaws
of the Bank upon the effective date of the Consolidation. The principal office
of the Consolidated Bank shall be the currently existing principal office of
the Bank and the Consolidated Bank shall continue to operate all legally
established branches of the Bank.
<PAGE> 57
3. Effect of Consolidation. Upon the Consolidation becoming effective, the
corporate existence of the Bank and the New Bank shall be consolidated into and
continued in the Consolidated Bank, as provided by the aforementioned federal
banking laws, and the Consolidated Bank shall be deemed to be the same
association as the Bank and the New Bank combined, possessing all the rights,
interests, privileges, powers and franchises and being subject to all
restrictions, liabilities and duties of each. All and each of the rights,
interests, privileges and franchises of the Bank and New Bank and all property,
real, personal and mixed, and all debts due to the Bank and New Bank on
whatever account, shall be transferred to and vested in the Consolidated Bank
without any deed or other transfer and without any order or other action on the
part of any court or otherwise; and, all property, rights, privileges, powers,
franchises and interests and each and every other interest of the Bank or New
Bank shall be thereafter the property of the Consolidated Bank. The
Consolidated Bank, by virtue of the Consolidation, and without any order or
other action on the part of any court or otherwise, shall hold and enjoy the
same and all rights of property, franchises and interests, including
appointments, designations and nominations and all other rights and interests
as trustee, executor, administrator, registrar of stocks and bonds, guardian of
estates, assignee, receiver, guardian of mentally incompetent persons and in
every other fiduciary capacity, in the same manner and to the same extent as
such rights, franchises and interests were held or enjoyed by the Bank and New
Bank immediately prior to the Consolidation of the Bank and the New Bank.
4. Liabilities. Upon the Consolidation becoming effective, the Consolidated
Bank shall be liable for all deposits, debts, liabilities, obligations and
contracts of the Bank and of the New Bank, respectively, matured or unmatured,
whether accrued, absolute, contingent or otherwise; and whether or not
reflected or reserved against on balance sheets, books of account, or records
of the Bank or the New Bank, as the case may be, shall be those of the
Consolidated Bank, and shall not be released or impaired by the Consolidation;
and, all rights of creditors and other
<PAGE> 58
obligees and all liens on property of either the Bank or the New Bank shall be
preserved unimpaired.
5. Conversion, Exchange and Consolidation of Shares. Upon the Consolidation
becoming effective:
(a) The shareholders of the Bank of record at the time the
Consolidation becomes effective shall be allocated and entitled to
receive shares of the common stock of the Corporation, $0.10 par
value, at the rate of two (2) such shares of the Corporation for
each one (1) share of the common stock of the Bank.
(b) Each share of the common stock of the Bank shall, ipso facto
and without any action on the part of the holder thereof, become and
be converted into two (2) shares of the common stock of the
Corporation, and outstanding certificates representing shares of the
common stock of the Bank shall thereafter represent shares of the
common stock of the Corporation, and such certificates may be
exchanged by the holders thereof, after the Consolidation becomes
effective, for the new certificates for the appropriate number of
shares bearing the name of the Corporation.
(c) The amount and number of shares of capital stock of the Bank
outstanding immediately before the Consolidation becomes effective
shall be increased in the amount and the number of shares of the
capital stock of the New Bank outstanding immediately before the
Consolidation becomes effective. Upon the effective date of the
Consolidation, the capital stock of the New Bank will be retired and
canceled.
(d) Upon and by reason of the Consolidation becoming effective,
stock shall be allocated as follows:
(i) To shareholders of the Bank of record at the time
the Consolidation becomes effective there shall be allocated
two (2) shares of common stock
<PAGE> 59
of the Corporation for each one (1) share of common stock of
the Bank held of record at the time of the Consolidation; and
(ii) To the Corporation there shall be allocated the
amount and the number of shares of capital stock of the
Consolidated Bank of the par value of $5.00 each, which shall
be equal to the amount and the number of shares of capital
stock of the Bank outstanding immediately before the
Consolidation.
(e) No dividend, except if and to the extent permitted by the
Board of Directors of the Corporation, payable by the Corporation as
of any date subsequent to the date the Consolidation becomes
effective, shall be payable to any holder of shares of the
Corporation evidenced by any certificate for stock of the Bank
outstanding on the effective date of the Consolidation, unless and
until such outstanding certificate for Bank stock shall have been
surrendered to the Corporation in exchange for a certificate or
certificates evidencing shares of the common stock of the
Corporation. Upon the surrender of any such Bank certificate for a
new certificate or certificates evidencing shares of the common
stock of the Corporation, there shall be paid to the holder of the
certificate the amount of dividends payable by the Corporation as of
a date subsequent to the effective date of the Consolidation and not
theretofore paid on such shares of its common stock.
6. Employee Benefit Plans. Any employee benefit plan of Bank shall not be
terminated upon consummation of the Consolidation, but shall continue
thereafter as the plan of the Consolidated Bank. The parties hereto may enter
into a succession agreement relating to such plans to reflect such
continuation, to adapt such plans to the corporate structure existing from and
after the Consolidation becomes effective, and to make provisions for the
employees of the Corporation to participate therein, all in such manner as the
Boards of Directors of the respective parties may deem necessary or desirable.
<PAGE> 60
7. Directors and Officers. The Board of Directors and Officers of the
Consolidated Bank, upon the Consolidation becoming effective, shall consist of
all persons who are directors or officers, as the case may be, of the Bank
immediately before the Consolidation becomes effective.
8. Shareholder and Regulatory Approvals. This Agreement shall be submitted to
the shareholders of the Bank and the New Bank for ratification and confirmation
at meetings to be called and held in accordance with the applicable provisions
of law and the respective Articles of Association and Bylaws of the Bank and
the New Bank. The Bank and the New Bank shall proceed expeditiously and
cooperate fully in the procurement of any other consents and approvals and in
the taking of any other action, and the satisfaction of all other requirements
prescribed by law or otherwise, necessary for consummation of the Consolidation
on the terms herein provided; including, without being limited to, the
preparation and submission of an application to the Office of the Comptroller
of the Currency to charter New Bank and application for approval under the
provisions of Section 18(c) of the Federal Deposit Insurance Act, as amended,
for prior approval to effect the Consolidation, and, incident thereto, to
establish a branch or branches under Section 9 of the Federal Reserve Act (12
USC 321), and an application by the Corporation to the Federal Reserve System
to acquire the Bank through the Consolidation.
9. Dissenters' Rights. A shareholder of the Bank who votes against the
Consolidation at the meeting of shareholders of the Bank held for the purpose
of considering the Consolidation or who gives notice in writing to the Bank at
or prior to such meeting that he dissents from the Consolidation, shall be
entitled to receive in cash, as provided in 12 U.S.C. Section 215, from the
Consolidated Bank if and when the Consolidation is consummated. A copy of the
relevant portions of Section 215 of the National Banking Laws is attached
hereto as Exhibit A.
10. Conditions. Effectuation of the Consolidation herein provided is
conditioned upon the following:
<PAGE> 61
(a) Ratification and confirmation of this Agreement by vote of
the shareholders of the Bank and the New Bank, as required by law;
and
(b) Procurement of the consent of the Office of the Comptroller
of the Currency, Board of Governors of the Federal Reserve, and all
other necessary consents and approvals, and satisfaction of all
other requirements prescribed by law which are necessary for
consummation of the Consolidation.
11. Termination. If any of the following shall occur, then this Agreement may
be terminated at any time before the Consolidation becomes effective, by the
written notice by either the Bank or the New Bank to the other of them,
authorized or approved by resolution adopted by the Board of Directors of one
of them giving such notice:
(a) The number of shares of capital stock of the Bank voted
against the Consolidation, or in respect of which written notice is
given purporting to dissent from the Consolidation, shall exceed
five percent (5%) of the outstanding shares; or
(b) Any action, suit, proceeding or claim has been instituted,
made or threatened relating to the proposed Consolidation; or
(c) Any action, consent or approval, governmental or otherwise,
which is, or in the opinion of counsel for the Bank, may be
necessary to permit or enable the Consolidated Bank, upon and after
the Consolidation, to conduct all or any part of the business
activities of the Bank up to the time of the Consolidation, in the
manner in which such activities and businesses are then conducted,
shall not have been obtained; or
(d) Rulings from the Internal Revenue Service, or any opinion of
counsel in lieu thereof, satisfactory in form and substance to the
Bank and counsel for the Bank with respect to tax consequences of
the Consolidation and transactions referred to herein shall not have
been obtained and remain in effect; or
<PAGE> 62
(e) In the event of the mutual agreement to terminate the
transactions contemplated by this Agreement, rendered by a
resolution electing to terminate, and adopted by the Boards of
Directors of the Bank and the New Bank.
Upon termination by written notice, as provided in this Section 11, this
Agreement shall be void and of no further effect, and there shall be no
liability by reason of this Agreement or the termination thereof on the part of
any of the Bank, the New Bank, the Corporation or the directors, officers,
employees, agents or shareholders of any of them.
12. Effective Time. Subject to the terms of this Agreement and upon
satisfaction of all requirements of law and the conditions specified in this
Agreement, the Consolidation shall become effective at the time specified in
the certificate of the Comptroller of the Currency approving the Consolidation.
13. Agreement of Directors. Each of the natural persons whose signature is
appended to this Agreement as a Director of the Bank hereby covenants and
agrees with each of the other natural persons whose signature is appended to
this Agreement as a Director of the Bank and New Bank, and with each of the
corporate parties to the Agreement, that he will vote any and all shares of the
capital stock of the Bank now owned, held, or standing in his name in his
individual, fiduciary, or other capacity that he may or shall be or become
entitled to vote, in favor of the adoption of this Agreement in any meeting of
shareholders of the Bank called for the purpose of voting on this Agreement.
14. Agreement of Affiliates. The Bank shall obtain agreements in the form set
forth as Exhibit B attached hereto, executed by each person, who is identified
as an "affiliate" (as such term is defined in Rule 144 under the Securities Act
of 1933) of the Bank.
<PAGE> 63
15. Miscellaneous.
(a) Any of the terms or conditions of this Agreement may be
waived at any time by any party hereto, by action of its Board of
Directors, evidenced by a certificate signed by its President or
other duly authorized person.
(b) To the extent permitted by law, this Agreement may be amended
or supplemented at any time, whether before or after the vote of
shareholders of the Bank or New Bank, by written amendment
authorized by the Boards of Directors of each of the parties and
executed by a majority of members of the Boards of Directors of each
party.
(c) This Agreement and the instruments referred to herein
constitute the entire contract among the parties and supersede all
other understandings with respect to the subject matter hereof.
(d) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together
shall be deemed one and the same Agreement, and shall become binding
on the parties hereto when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
(e) Any notices or other communications required or permitted
hereunder shall be sufficiently given if hand delivered or sent by
registered mail or certified mail, postage prepaid, addressed, if to
Corporation, Bank, or New Bank, 5817 Manatee Avenue West, Bradenton,
Florida 34209, or such other address as shall be furnished in
writing by any party, and any such notice or communication shall be
deemed to have been given as of the date so mailed (except that a
notice of change of address shall not be deemed to have been given
until received by the addressee).
(f) This Agreement shall be governed by and construed in
accordance with the laws of the United States.
<PAGE> 64
(g) The descriptive headings of the several articles, sections
and paragraphs of this Agreement are inserted for convenience only
and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the Bank and the New Bank have caused this
Consolidation Agreement to be executed in counterpart by their duly authorized
officers and their corporate seals to be hereunto affixed as of the date first
above written.
FIRST NATIONAL BANK OF MANATEE
By:__________________________ By:__________________________
Glen W. Fausset, President Robert Matejcek, Cashier
(SEAL OF BANK)
MANATEE INTERIM BANK, N.A.
By:__________________________ By:__________________________
Glen W. Fausset, President Robert Matejcek, Cashier
(SEAL OF INTERIM BANK)
<PAGE> 65
THE UNDERSIGNED AGREES TO THE ABOVE TERMS AND CONDITIONS:
First National Bancshares, Inc.
By:_________________________________
Francis I. duPont, III, President
And:_________________________________
Glen W. Fausset, Secretary
The undersigned execute this Consolidation Agreement pursuant to the provisions
of Section 13.
_______________________ _______________________
Francis I. duPont, III Beverly Beall
_______________________ _______________________
Glen W. Fausset Rosemary Carlson
_______________________ _______________________
Robert G. Blalock Stephen J. Korchek
_______________________ _______________________
Allen J. Butler Ray A. Weigel, III
_______________________ _______________________
William J. Thompson Dan C. Zoller
<PAGE> 66
EXHIBIT A
DISSENTERS' RIGHTS {12 U.S.C. SECTION 215(B), (C), (D)}
(b) The consolidated association shall be liable for all liabilities of the
respective consolidating banks or associations. The capital stock of such
consolidated association shall not be less than that required under existing
law for the organization of a national bank in the place in which it is
located: Provided, That if such consolidation shall be voted for at such
meetings by the necessary majorities of the shareholders of each association
and State bank proposing to consolidate, and thereafter the consolidation shall
be approved by the Comptroller, any shareholder of any of the associations or
State banks so consolidated who has voted against such consolidation at the
meeting of the association or bank of which he is a stockholder, or who has
given notice in writing at or prior to such meeting to the presiding officer
that he dissents from the plan of consolidation, shall be entitled to receive
the value of the shares so held by him when such consolidation is approved by
the Comptroller upon written request made to the consolidated association at
any time before thirty days after the date of consummation of the
consolidation, accompanied by the surrender of his stock certificates.
(c) The value of the shares of any dissenting shareholder shall be
ascertained, as of the effective date of the consolidation, by an appraisal
made by a committee of three persons, composed of (1) one selected by the vote
of the holders of the majority of the stock, the owners of which are entitled to
payment in cash; (2) one selected by the directors of the consolidated banking
association; and (3) one selected by the two so selected. The valuation agreed
upon by any two of the three appraisers shall govern. If the value so fixed
shall not be satisfactory to any dissenting shareholder who has requested
payment, that shareholder may, within five days after being notified of the
appraised value of his shares, appeal to the Comptroller, who shall cause a
reappraisal to be made which shall be final and binding as to the value of the
shares of the appellant.
(d) If, within 90 days from the date of consummation of the consolidation,
for any reason one or more of the appraisers is not selected as herein
provided, or the appraisers fail to determine the value of such shares, the
Comptroller shall upon written request of any interested party cause an
appraisal to be made which shall be final and binding on all parties. The
expenses of the Comptroller in making the reappraisal or the appraisal, as the
case may be, shall be paid by the consolidated banking association. The value
of the shares ascertained shall be promptly paid to the dissenting shareholders
by the consolidated banking association. Within thirty days after payment has
been made to all dissenting shareholders as provided for in this section the
shares of stock of the consolidated banking association which would have been
delivered to such dissenting shareholders had they not requested payment shall
be sold by the consolidated banking association at an advertised public
auction, unless some other method of sale is approved by the Comptroller, and
the consolidated banking association shall have the right to purchase any of
such shares at such public auction, if it is the highest bidder therefor, for
the purpose of reselling such shares within thirty days thereafter to such
person or persons and at such price not less than par as its board of directors
by resolution may determine. If the shares are sold at public auction at a
price greater than the amount paid to the dissenting shareholders the excess in
such sale price shall be paid to such dissenting shareholders. The appraisal
of such shares of stock in any State bank shall be determined in the manner
prescribed by the law of the State in such cases, rather than as provided in
this section, if such provision is made in the State law; and no such
consolidation shall be in contravention of the law of the State under which
such bank is incorporated.
<PAGE> 67
EXHIBIT B
Affiliate Letter
First National Bancshares, Inc.
5817 Manatee Avenue West
Bradenton, Florida 34209
Gentlemen:
I have been advised that I may be deemed an "affiliate," within the meaning of
Paragraph (c) of Rule 145 of the Rules and Regulations of the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933 (the "Act"), of
First National Bank of Manatee, Bradenton, Florida, a national banking
association (the "Bank"), and may be deemed such at the time of the
Consolidation ("Consolidation") of the Bank with Manatee Interim Bank, N.A., a
newly chartered national banking association organized by First National
Bancshares, Inc. (the "Company") for the sole purpose of effecting the
affiliation of the Company and the Bank. Pursuant to the Consolidation, I will
acquire two (2) shares of the Common Stock of the Company ("Company Common
Stock") in exchange for each share of the Bank stock held by me and elected for
such exchange. I agree that I will not make any sale, transfer or other
disposition of the Company Common Stock in violation of the Act or the rules
and regulations promulgated thereunder by the SEC.
I have been advised that the issuance of the Company Common Stock to me
pursuant to the Consolidation has been registered under the Act by the Company
by the filing of a Registration Statement with the SEC or is exempt from such
registration. I have also been advised that such registration does not apply
to any distribution by me of the Company Common Stock received by me in the
Consolidation. I also have been advised that, since at the effective time of
the Consolidation, I may be deemed to have been an "affiliate" of the Bank, any
offering or sale by me of any of the Company Common Stock will, under current
law, require either: (i) the further registration under the Act of the Company
Common Stock to be sold; (ii) compliance with Rule 145 promulgated under the
Act; or (iii) the availability of another exemption from such registration. In
addition, I have been advised that any transferee in a private offering or
other similar disposition will be subject to the same limitations as those
imposed on me.
I represent and warrant to the Company that:
1. I have carefully read this letter and discussed its requirements and
other applicable limitations upon the sale, transfer or other disposition
of the Company Common Stock and to the extent I felt necessary, with my
counsel or counsel for the Bank.
2. I have been informed by the Company that the Company Common Stock must be
held by me indefinitely unless: (i) any of the Company Common Stock
received by me in the Consolidation and to be distributed by me has been
registered under the Act other than by the registration by the Company
referred to above; (ii) a sale of the Company Common Stock is made in
conformity with the volume and other applicable limitations of Rule 144;
or (iii) some other exemption from registration is available with respect
to any such proposed sale, transfer or other disposition of the Company
Common Stock. I will be required to deliver to the Company evidence of
compliance with such requirements in connection with any proposed sale,
transfer or other disposition by me which may
<PAGE> 68
include, in the case of a distribution under some other exemption from
registration, an opinion of counsel satisfactory to counsel for the
Company that such exemption is available.
3. I understand that the Company is under no obligation to register the
Company Common Stock that I may wish to sell, transfer, or otherwise
dispose of or to take any other action necessary in order to make
compliance with an exemption from registration available.
4. If I rely on the exemption from the registration provisions contained in
Section 4 of the Act (other than that contained in Rule 144 and 145), I
will obtain and deliver to the Company a copy of a letter from any
prospective transferee which will contain: (a) representations reasonably
satisfactory to the Company as to the nondistributive intent,
sophistication, ability to bear risk, and access to information of such
transfer of the Company Common Stock; and (b) an assumption of the
obligations of the undersigned under this Paragraph 4.
5. I also understand that to enforce the foregoing commitments, stop
transfer instructions will be given to the Company's transfer agent with
respect to the Company Common Stock and that there will be placed on the
certificates for the Company Common Stock, or any substitutions therefor,
a legend stating in substance:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE
WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION STATEMENT
UNDER SAID ACT OR AN EXEMPTION FROM SUCH REGISTRATION.
Very truly yours,
________________________________
<PAGE> 69
APPENDIX II
DISSENTER'S STATUTE
12 U.S.C. Section 215
AND OCC BANKING CIRCULAR 259 (ISSUED MARCH 5, 1992)
<PAGE> 70
DISSENTERS' RIGHTS {12 U.S.C. SECTION 215(B), (C), (D)}
-------------------------------------------------------
(b) The consolidated association shall be liable for all liabilities of the
respective consolidating banks or associations. The capital stock of such
consolidated association shall not be less than that required under existing
law for the organization of a national bank in the place in which it is
located: Provided, That if such consolidation shall be voted for at such
meetings by the necessary majorities of the shareholders of each association
and State bank proposing to consolidate, and thereafter the consolidation shall
be approved by the Comptroller, any shareholder of any of the associations or
State banks so consolidated who has voted against such consolidation at the
meeting of the association or bank of which he is a stockholder, or who has
given notice in writing at or prior to such meeting to the presiding officer
that he dissents from the plan of consolidation, shall be entitled to receive
the value of the shares so held by him when such consolidation is approved by
the Comptroller upon written request made to the consolidated association at
any time before thirty days after the date of consummation of the
consolidation, accompanied by the surrender of his stock certificates.
(c) The value of the shares of any dissenting shareholder shall be
ascertained, as of the effective date of the consolidation, by an appraisal
made by a committee of three persons, composed of (1) one selected by the vote
of the holders of the majority of the stock, the owners of which are entitled to
payment in cash; (2) one selected by the directors of the consolidated banking
association; and (3) one selected by the two so selected. The valuation agreed
upon by any two of the three appraisers shall govern. If the value so fixed
shall not be satisfactory to any dissenting shareholder who has requested
payment, that shareholder may, within five days after being notified of the
appraised value of his shares, appeal to the Comptroller, who shall cause a
reappraisal to be made which shall be final and binding as to the value of the
shares of the appellant.
(d) If, within 90 days from the date of consummation of the consolidation,
for any reason one or more of the appraisers is not selected as herein
provided, or the appraisers fail to determine the value of such shares, the
Comptroller shall upon written request of any interested party cause an
appraisal to be made which shall be final and binding on all parties. The
expenses of the Comptroller in making the reappraisal or the appraisal, as the
case may be, shall be paid by the consolidated banking association. The value
of the shares ascertained shall be promptly paid to the dissenting shareholders
by the consolidated banking association. Within thirty days after payment has
been made to all dissenting shareholders as provided for in this section the
shares of stock of the consolidated banking association which would have been
delivered to such dissenting shareholders had they not requested payment shall
be sold by the consolidated banking association at an advertised public
auction, unless some other method of sale is approved by the Comptroller, and
the consolidated banking association shall have the right to purchase any of
such shares at such public auction, if it is the highest bidder therefor, for
the purpose of reselling such shares within thirty days thereafter to such
person or persons and at such price not less than par as its board of directors
by resolution may determine. If the shares are sold at public auction at a
price greater than the amount paid to the dissenting shareholders the excess in
such sale price shall be paid to such dissenting shareholders. The appraisal
of such shares of stock in any State bank shall be determined in the manner
prescribed by the law of the State in such cases, rather than as provided in
this section, if such provision is made in the State law; and no such
consolidation shall be in contravention of the law of the State under which
such bank is incorporated.
BC - 259
Date: March 5, 1992
2
<PAGE> 71
BANKING ISSUANCE
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Type: Banking Circular Subject: Stock Appraisals
- --------------------------------------------------------------------------------
To: Chief Executive Officers of National Banks, Deputy Comptrollers
(District), Department and Division Heads, and Examining Personnel
PURPOSE
- -------
This banking circular informs all national banks of the valuation methods used
by the Office of the Comptroller of the Currency (OCC) to estimate the value of
a bank's shares when requested to do so by a shareholder dissenting to the
conversion, merger, or consolidation of its bank. The results of appraisals
performed by the OCC between January 1, 1985 and September 30, 1991 are
summarized.
References: 12 U.S.C. 214a, 215 and 215a; 12 CFR 11.590 (Item 2)
BACKGROUND
- ----------
Under 12 U.S.C. Section 214a, a shareholder dissenting from a conversion,
consolidation, or merger involving a national bank is entitled to receive the
value of his or her shares from the resulting bank. A valuation of the shares
shall be made by a committee of three appraisers (a representative of the
dissenting shareholder, a representative of the resulting bank, and a third
appraiser selected by the other two). If the committee is formed and renders
an appraisal that is acceptable to the dissenting shareholder, the process is
complete and the appraised value of the shares is paid to the dissenting
shareholder by the resulting bank. If, for any reason, the committee is not
formed or if it renders an appraisal that is not acceptable to the dissenting
shareholder, an interested party may request an appraisal by the OCC. 12
U.S.C. Section 215 provides these appraisal rights to any shareholder
dissenting to a consolidation. Any dissenting shareholder of a target bank in
a merger is also entitled to these appraisal rights pursuant to 12 U.S.C.
Section 215a.
The above provides only a general overview of the appraisal process. The
specific requirements of the process are set forth in the statutes themselves.
3
<PAGE> 72
METHODS OF VALUATION USED
- -------------------------
Through its appraisal process, the OCC attempts to arrive at a fair estimate of
the value of a bank's shares. After reviewing the particular facts in each
case and the available information on a bank's shares, the OCC selects an
appropriate valuation method, or combination of methods, to determine a
reasonable estimate of the shares' value.
Market Value
- ------------
The OCC uses various methods to establish the market value of shares being
appraised. If sufficient trading in the shares exists and the prices are
available from direct quotes from the Wall Street Journal or a market-maker,
those quotes are considered in determining the market value. If no market
value is readily available, or if the market value available is not
well-established, the OCC may use other methods of estimating market value,
such as the investment value and adjusted book value methods.
Investment Value
- ----------------
Investment value requires an assessment of the value to investors of a share in
the future earnings of the target bank. Investment value is estimated by
applying an average price/earnings ratio of banks with similar earnings
potential to the earnings capacity of the target bank.
The peer group selection is based on location, size, and earnings patterns. If
the state in which the subject bank is located provides a sufficient number of
comparable banks using location, size and earnings patterns as the criteria for
selection, the price/earnings ratios assigned to the banks are applied to the
earnings per share estimated for the subject bank. In order to select a
reasonable peer group when there are too few comparable independent banks in a
location that is comparable to that of the subject bank, the pool of banks from
which a peer group is selected is broadened by including one-bank holding
company banks in a comparable location, and/or by selecting banks in less
comparable locations, including adjacent states, that have earnings patterns
similar to the subject bank.
Adjusted Book Value
- -------------------
The OCC also uses an "adjusted book value" method for estimating value.
Historically, the OCC has not placed any weight on the bank's "unadjusted book
value," since that value is based on historical acquisition costs of the bank's
assets, and does not reflect investors' perceptions of the value of the bank as
an ongoing concern. Adjusted book value is calculated by multiplying the book
value of the target bank's assets per share times the average market price to
book value ratio of comparable banking organizations. The average market price
to book value ratio measures the premium or discount to book value, which
investors attribute to shares of similarly situated banking organizations.
Both the investment value method and the adjusted book value method present
appraised values which are based on the target bank's value as a going concern.
These techniques provide estimates of the market value of the shares of the
subject bank.
4
<PAGE> 73
OVERALL VALUATION
- -----------------
The OCC may use more than one of the above-described methods in deriving the
value of shares of stock. If more than one method is used, varying weights may
be applied in reaching an overall valuation. The weight given to the value by
a particular valuation method is based on how accurately the given method is
believed to represent market value. For example, the OCC may give more weight
to a market value representing infrequent trading by shareholders than to the
value derived from the investment value method when the subject bank's earnings
trend is so irregular that it is considered to be a poor predictor of future
earnings.
PURCHASE PREMIUMS
- -----------------
For mergers and consolidations, the OCC recognizes that purchase premiums do
exist and may, in some instances, be paid in the purchase of small blocks of
shares. However, the payment of purchase premiums depends entirely on the
acquisition or control plans of the purchasers, and such payments are not
regular or predictable elements of market value. Consequently, the OCC's
valuation methods do not include consideration of purchase premiums in arriving
at the value of shares.
STATISTICAL DATA
- ----------------
The chart below lists the results of appraisals the OCC performed between
January 1, 1985 and September 30, 1991. The OCC provides statistical data on
book value and price/earnings ratios for comparative purposes, but does not
necessarily rely on such data in determining the value of the banks' shares.
Dissenting shareholders should not view these statistics as determinative for
future appraisals.
In connection with disclosures given to shareholders under 12 CFR 11.590 (Item
2), banks may provide shareholders a copy of this banking circular or disclose
the information in the banking circular, including the past results of OCC
appraisals. If the bank discloses the past results of the OCC appraisals. If
the bank discloses the past results of the OCC appraisals, it should advise
shareholders that: (1) the OCC did not rely on all the information set forth
in the chart in performing each appraisal; and (2) the OCC's past appraisals
are not necessarily determinative of its future appraisals of a particular
bank's shares.
5
<PAGE> 74
APPRAISAL RESULTS
- -----------------
<TABLE>
<CAPTION>
OCC Average Price/
Appraisal Appraisal Price Earnings Ratio
Date * Value Offered Book Value of Peer Group
- --------- --------- -------- ---------- --------------
<S> <C> <C> <C> <C>
1/1/85 107.05 110.00 178.29 5.3
1/2/85 73.16 NA 66.35 6.8
1/15/85 53.41 60.00 83.95 4.8
1/31/85 22.72 20.00 38.49 5.4
2/1/85 30.63 24.00 34.08 5.7
2/25/85 27.74 27.55 41.62 5.9
4/30/85 25.98 35.00 42.21 4.5
7/30/85 3,153.10 2,640.00 6,063.66 NC
9/1/85 17.23 21.00 21.84 4.7
11/22/85 316.74 338.75 519.89 5.0
11/22/85 30.28 NA 34.42 5.9
12/16/85 66.29 77.00 89.64 5.6
12/27/85 60.85 57.00 119.36 5.3
12/31/85 61.77 NA 73.56 5.9
12/31/85 75.79 40.00 58.74 12.1
1/12/86 19.93 NA 26.37 7.0
3/14/86 59.02 200.00 132.20 3.1
4/21/86 40.44 35.00 43.54 6.4
5/2/86 15.50 16.50 23.69 5.0
7/3/86 405.74 NA 612.82 3.9
7/31/86 297.34 600.00 650.63 4.4
</TABLE>
- -----------------------------------------------------------
* - The "Appraisal Date" is the consummation date for the conversion,
consolidation, or merger.
NA - Not Available NC - Not Computed
6
<PAGE> 75
APPRAISAL RESULTS
<TABLE>
<CAPTION>
OCC Average Price/
Appraisal Appraisal Price Earnings Ratio
Date * Value Offered Book Value of Peer Group
- --------- --------- ------- ---------- --------------
<S> <C> <C> <C> <C>
8/22/86 103.53 106.67 136.23 NC
12/26/86 16.66 NA 43.57 4.0
12/31/86 53.39 95.58 69.66 7.1
5/1/87 186.42 NA 360.05 5.1
6/11/87 50.46 70.00 92.35 4.5
6/11/87 38.53 55.00 77.75 4.5
7/31/87 13.10 NA 20.04 6.7
8/26/87 55.92 57.52 70.88 NC
8/31/87 19.55 23.75 30.64 5.0
8/31/87 10.98 NA 17.01 4.2
10/6/87 56.48 60.00 73.11 5.6
3/15/88 297.63 NA 414.95 6.1
6/2/88 27.26 NA 28.45 5.4
6/30/88 137.78 NA 215.36 6.0
8/30/88 768.62 677.00 1,090.55 10.7
3/31/89 773.62 NA 557.30 7.9
5/26/89 136.47 180.00 250.42 4.5
5/29/90 9.87 NA 11.04 9.9
</TABLE>
- -----------------------------------------------------------
* - The "Appraisal Date" is the consummation date for the conversion,
consolidation, or merger.
NA - Not Available NC - Not Computed
For more information regarding the OCC's stock appraisal process, contact the
Officer of the Comptroller of the Currency, Bank Organization and Structure.
/S/ Frank Maguire
- ----------------------------
Frank Maguire
Acting Senior Deputy Comptroller
Corporate Policy and Economic Analysis
7
<PAGE> 76
APPENDIX III
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
FIRST NATIONAL BANCSHARES, INC.
<PAGE> 77
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FIRST NATIONAL BANCSHARES, INC
The following Articles of Incorporation of FIRST NATIONAL BANCSHARES, INC,
a Florida corporation (the "Corporation") amend in their entirety and restate
those Articles of Incorporation which were originally filed for the Corporation
on June 15, 1998. These Amended and Restated Articles permit the shareholders
of the Corporation to increase the voting requirement for shareholders over
that required by the Florida Business Corporation Act. The Amended and Restated
Articles also include provisions related to Business Combinations (as defined
therein). These Amended and Restated Articles eliminate information in the
Articles which was of historic value and reform the original Articles to take
into consideration the changes noted above. These Amended and Restated
Articles were adopted by the Board of Directors on July 16, 1998 and by the
Sole Shareholder through an action by written consent on July 16, 1998.
All amendments included herein were adopted pursuant to Section
607.194(4), Florida Statutes, and there is no discrepancy between the
Corporation's Articles of Incorporation as theretofore amended other than the
inclusion of these amendments and the omission of matters of historical
interest.
ARTICLE I
NAME AND PRINCIPAL OFFICE
-------------------------
The name of this Corporation shall be FIRST NATIONAL BANCSHARES, INC,
whose principal office and mailing address shall be located at 5817 Manatee
Avenue West, Bradenton, Florida 34209.
ARTICLE II
COMMENCEMENT OF CORPORATE EXISTENCE
-----------------------------------
This Corporation commenced existence on June 15, 1998, and shall exist
perpetually unless sooner dissolved according to law.
ARTICLE III
PURPOSES AND GENERAL POWERS
---------------------------
The general purpose of this Corporation shall be the transaction of any
and all lawful business. This Corporation shall have all of the powers
enumerated in the Florida General Corporation Act, as the same now exists and
as hereafter amended, and all such other powers as are permitted by applicable
law, including, without limitation to act as a bank holding company and, to the
extent permitted under applicable federal and state laws, now or hereafter
existing, relating to bank holding companies and their activities.
<PAGE> 78
ARTICLE IV
CAPITAL STOCK
-------------
1. Number and Class of Shares Authorized; Par Value.
The capital stock authorized, the par value thereof, and the class of such
stock shall be as follows:
Number of Par Value Class
Shares Authorized Per Share of Stock
----------------- --------- --------
2,500,000 $0.10 Common
The consideration for all of the above stock shall be payable in cash or,
in lieu of cash, property (tangible and intangible), labor or services (past,
present or future), at a just valuation to be fixed by the Board of Directors
of the Corporation.
2. Voting Rights.
-------------
The Common Stock shall possess and exercise exclusive voting rights and at
all meetings of the shareholders, each record holder of such stock shall be
entitled to one vote for each share held. Shareholders holding Common Stock
shall have no cumulative voting rights in any election of directors of the
Corporation.
3. No Preemptive Rights.
--------------------
No shareholder of the Corporation shall have the right, upon the sale for
cash or otherwise, of any new stock of the Corporation or of any stock of the
Corporation held by it in its treasury or otherwise, of the same or any other
kind, class or series as that which he already holds, to purchase his pro rata
or any other share of such stock at the same price at which it is offered to
others or any other price.
4. Relative Rights.
---------------
Each share of Common Stock shall have the same relative rights as and be
identical in all respects with all other shares of common stock.
ARTICLE V
BOARD OF DIRECTORS
------------------
The business of the Corporation shall be conducted by a Board of
Directors. As of the date of adoption of these Amended and Restated Articles,
there are ten (10) members of the Board of Directors. The number of directors
may be either increased or diminished from time to time as provided in the
bylaws. Directors may be removed with or without cause.
<PAGE> 79
ARTICLE VI
DISTRIBUTION OF ASSETS
----------------------
The Board of Directors of the Corporation may, from time to time, and at
its discretion, distribute a portion of the assets of the Corporation to its
shareholders out of the capital surplus of the Corporation.
ARTICLE VII
PURCHASE OF SHARES
------------------
The Board of Directors of the Corporation may, from time to time, and at
its discretion, cause the Corporation to purchase its own shares to the extent
of unreserved and unrestricted capital surplus available for said purchase.
ARTICLE VIII
BYLAWS
------
Except as otherwise provided by law, the power to adopt, alter, amend or
repeal the bylaws shall be vested in the Board of Directors. The shareholders
of the Corporation may adopt or amend a bylaw that fixes a greater quorum or
voting requirement for shareholders (or voting groups of shareholders) than is
required by the Florida Business Corporation Act.
ARTICLE IX
INDEMNIFICATION
---------------
In addition to any and all rights and duties under applicable law, the
Corporation shall indemnify and hold harmless all of its directors, officers,
employees and agents, and former directors, officers, employees and agents from
and against all liabilities and obligations, including attorneys' fees,
incurred in connection with any actions taken or failed to be taken by said
directors, officers, employees and agents in their capacity as such to the
fullest extent possible under law.
ARTICLE X
CONFLICTS OF INTEREST
---------------------
No contract or other transaction between this Corporation and any other
corporation, and no act of this Corporation, shall in any way be affected or
invalidated by the fact that any of the directors of this Corporation are
pecuniarily or otherwise interested in, or are the directors or officers of,
such other corporation. Any director individually, or any firm of which any
director may be a member, may be a party to, or may be pecuniarily or otherwise
interested in any contract or transaction of this Corporation, provided that
the fact that he or such firm is so interested shall be disclosed or shall have
been known to the Board of Directors or a majority thereof, and any director of
this Corporation who is also a director or an officer of such other
corporation, or who is so interested may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of this
Corporation which shall authorize any such contract or transaction with like
force and effect as if he were not such a director or officer of such other
corporation, or not so interested.
<PAGE> 80
ARTICLE XI
LIMITED LIABILITY OF SHAREHOLDERS
---------------------------------
The private property of the shareholders shall not be subject to payment
of the Corporation's debts to any extent.
ARTICLE XII
AMENDMENT
---------
This Corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or any amendment hereto, subject
to the consent thereof by the holders of a majority of the Shares entitled to
vote thereon and any right conferred upon the shareholders is subject to this
reservation.
ARTICLE XIII
FAIR PRICE AND SUPER VOTE REQUIREMENT
-------------------------------------
A. Definitions as Used in This Article XIII.
----------------------------------------
(1) "Affiliate" or "Associate" shall have the respective meanings
given to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934.
(2) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly, any
shares of Voting Stock; or
(ii) which such person or any of its Affiliates or Associates has
by itself or with others: (a) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (b)
the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which is beneficially owned, directly or directly, by any
other person with which such person or any of its Affiliates
or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of
any shares of Voting Stock.
(3) "Business Combination" shall include:
(i) any merger or consolidation of the Corporation or any of its
subsidiaries with or into an Interested Shareholder,
regardless of which person is the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, or other
disposition (in one transaction or a series of transactions)
from the Corporation or any of its subsidiaries to an
Interested Shareholder, or from an Interested Shareholder
to the Corporation or any of its subsidiaries, of assets
having
<PAGE> 81
an aggregate Fair Market Value of five percent (5%) or more
of the Corporation's total stockholders' equity;
(iii) the issuance, sale or other transfer by the Corporation or
any subsidiary thereof of any securities of the Corporation
or any subsidiary thereof to an Interested Shareholder
(other than an issuance or transfer of securities which is
effected on a pro rata basis to all shareholders of the
Corporation);
(iv) the acquisition by the Corporation or any of its
subsidiaries of any securities of an Interested Shareholder;
(v) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Shareholder;
(vi) any reclassification or recapitalization of securities of the
Corporation if the effect, directly or indirectly, of any
transaction is to increase the relative voting power of
an Interested Shareholder; or
(vii) any agreement, contract or other arrangement providing for
or resulting in any of the transactions described in
this definition of Business Combination.
(4) "Disinterested Director" shall mean any member of the Board
of Directors of the Corporation who is unaffiliated with the
Interested Shareholder and was a member of the Board of Directors
prior to the time that the Interested Shareholder became an
Interested Shareholder; any successor of a Disinterested Director
who is unaffiliated with the Interested Shareholder and is approved
to succeed a Disinterested Director by the Disinterested Directors;
any member of the Board of Directors who is unaffiliated with the
Interested Shareholder and is approved by the Disinterested
Directors.
(5) "Fair Market Value" shall mean:
(i) in the case of securities listed on a national securities
exchange or quoted in the National Association of Securities
Dealers Automated Quotations System (or any successor
thereof), the highest sales price or bid quotation, as the
case may be, reported for securities of the same class or
series traded on a national securities exchange or in the
over-the-counter market during the 30-day period immediately
prior to the date in question, or if no such report or
quotation is available, the fair market value as determined
by the Disinterested Directors; and
(ii) in the case of other securities and of other property or
consideration (other than cash), the Fair Market Value as
determined by the Disinterested Directors; provided, however,
in the event the prior and authority of the Disinterested
ceases and terminates pursuant to Subdivision F of this
Article XIII as a result of there being less than five (5)
Disinterested Directors at any time, then: (a) for purpose of
clause (ii) of the definition of "Business Combination," any
sale, lease, exchange, mortgage, pledge or
<PAGE> 82
other disposition of assets from the Corporation or
any of its subsidiaries to an Interested Shareholder or from
an Interested Shareholder to the Corporation or any of its
subsidiaries, regardless of the Fair Market Value thereof,
shall constitute a Business Combination; and (b) for purposes
of Paragraph 1 of Subdivision D of this Article XIII, in
determining the amount of consideration received or to be
received per share by the Independent Shareholders in a
Business Combination, there shall be excluded all
consideration other than cash and the Fair Market Value of
securities listed on a national securities exchange or quoted
in the National Association of Securities Dealers Automated
Quotations System (or any successor thereof) for which there
is a reported sales price or bid quotation, as the case may
be, during the 30-day period immediately prior to the date in
question.
(6) "Independent Shareholder" shall mean shareholders of the
Corporation other than the Interested Shareholder engaged in or
proposing the Business Combination.
(7) "Interested Shareholder" shall mean: (a) any person (other
than the Corporation or any of its subsidiaries); and (b) the
Affiliates and Associates of such person, who, or which together,
are:
(i) the beneficial owner, directly or indirectly, of
10 percent or more of the outstanding Voting Stock or were
within the two-year period immediately prior to the date in
question the beneficial owner, directly or indirectly, of 10
percent or more of the then outstanding Voting Stock; or
(ii) an assignee of or other person who has succeeded
to any shares of the Voting Stock which were at any time
within the two-year period immediately prior to the date in
question beneficially owned by an Interested Shareholder, if
such assignment or succession shall have occurred in the
course of a transaction or series of transactions not
involving a public offering within the meaning of the
Securities Act of 1933.
Notwithstanding the foregoing, no Trust Department, or designated
fiduciary or other trustee of such Trust Department of the
Corporation or a subsidiary of the Corporation, or other similar
fiduciary capacity of the Corporation with direct voting control of
the outstanding Voting Stock shall be included or considered as an
Interested Shareholder. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee pension,
or other employee benefit plan of the Corporation or any of its
subsidiaries, and no trustee of any such plan in its capacity as
such trustee, shall be included or considered as an Interested
Shareholder.
(8) A "person" shall mean an individual, partnership, trust,
corporation, or other entity and includes two or more of the
foregoing acting in concert.
(9) "Voting Stock" shall mean all outstanding shares of capital
stock of the Corporation entitled to vote generally in the election
of directors of the Corporation.
<PAGE> 83
B. Supermajority Vote to Effect Business Combination.
-------------------------------------------------
No Business Combination shall be effected or consummated unless:
(1) Authorized and approved by the Disinterested Directors and,
if otherwise required by law to authorize or approve the
transaction, the approval or authorization of shareholders of the
Corporation, by the affirmative vote of the holders of such number
of shares as is mandated the Florida Business Corporation Act; or
(2) Authorized and approved by the affirmative vote of holders of
not less than 80 percent of the outstanding Voting Stock voting
together as a single class.
The authorization and approval required by this Subdivision B is in
addition to any authorization and approval required by Subdivision C of
this Article XIII.
C. Fair Price Required to Effect Business Combination.
No Business Combination shall be effected or consummated unless:
(1) All the conditions and requirements set forth in Subdivision
D of this Article XIII have been satisfied; or
(2) Authorized and approved by the Disinterested Directors; or
(3) Authorized and approved by the affirmative vote of holders of
not less than 66-2/3 percent of the outstanding Voting Stock held by
all Independent Shareholders voting together as a single class.
Any authorization and approval required by this Subdivision C is in
addition to any authorization and approval required by Subdivision B of
this Article XIII.
D. Conditions and Requirements to Fair Price.
-----------------------------------------
All the following conditions and requirements must be satisfied in order
for clause (1) of Subdivision C of this Article XIII to be applicable.
(1) The cash and Fair Market Value of the property, securities or
other consideration to be received by the Independent Shareholders
in the Business Combination per share for each class or series of
capital stock of the Corporation must not be less than the sum of:
(i) the highest per share price (including brokerage
commissions, transfer taxes, soliciting dealer's fees and
similar payments) paid by the Interested Shareholder in
acquiring any shares of such class or series, respectively,
and, in the case of Preferred Stock, if greater, the amount of
the per share redemption price; and
<PAGE> 84
(ii) the amount, if any, by which interest on the per
share price, calculated at the Treasury Bill Rate from time to
time in effect, from the date the Interested Shareholder first
became an Interested Shareholder until the Business
Combination has been consummated, exceeds the per share amount
of cash dividends received by the Independent Shareholders
during such period. The "Treasury Bill Rate" means for each
calendar quarter, or part thereof, the interest rate of the
last auction in the preceding calendar of 91-day United States
Treasury Bills expressed as a bond equivalent yield.
For purposes of this Paragraph (1), per share amounts shall be
appropriately adjusted for any recapitalization, reclassification,
stock dividend, stock split, reverse split, or other similar
transaction. Any Business Combination which does not result in the
Independent Shareholders receiving consideration for or in respect
of their shares of capital stock of the Corporation shall not be
treated as complying with the requirements of this Paragraph (1).
(2) The form of the consideration to be received by the
Independent Shareholders owning the Corporation's shares must be the
same as was previously paid by the Interested Shareholder(s) for
shares of the same class or series; provided, however, if the
Interested Shareholder previously paid for shares of such class or
series with different forms of consideration, the form of the
consideration to be received by the Independent Shareholders owning
shares of such class or series must be in the form as was previously
paid by the Interested Shareholder in acquiring the largest number
of shares of such class or series previously acquired by the
Interested Shareholder, provided, further, in the event no shares of
the same class or series had been previously acquired by the
Interested Shareholder, the form of consideration must be cash. The
provisions of this Paragraph (2) are not intended to diminish the
aggregate amount of cash and Fair Market Value of any other
consideration that any holder of the Corporation's shares is
otherwise entitled to receive upon the liquidation or dissolution of
the Corporation, under the terms of any contract with the
Corporation or an Interested Shareholder, or otherwise.
(3) From the date the Interested Shareholder first became an
Interested Shareholder until the Business Combination has been
consummated, the following requirements must be complied with unless
the Disinterested Directors otherwise approve:
(i) the Interested Shareholder has not received,
directly or indirectly, the benefit (except proportionately as
a shareholder) of any loan, advance, guaranty, pledge, or
other financial assistance, tax credit or deduction, or other
benefit from the Corporation or any of its subsidiaries;
(ii) there shall have been no failure to declare and
pay in full, when and as due or scheduled, any dividends
required to be paid on any class or series of the
Corporation's shares.
<PAGE> 85
(iii) there shall have been: (a) no reduction in the annual rate
of dividends paid on Common Shares of the Corporation (except
as necessary to reflect any split of such shares); and (b) an
increase in the annual rate of dividends as necessary to
reflect reclassification (including a reverse split),
recapitalization or any similar transaction which has the
effect of reducing the number of outstanding Common Shares;
and
(iv) there shall have been no amendment or other modification to
any profit-sharing, employee stock ownership, employee stock
purchase and savings, employee pension or other employee
benefit plan of the Corporation or any of its subsidiaries,
the effect of which is to change in any manner the provisions
governing the voting of any shares of capital stock of the
Corporation in or covered by such plan.
(4) A proxy or information statement describing the Business
Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
under it (or any subsequent provisions replacing that Act and the
rules and regulations under it) has been mailed at least 30 days
prior to the completion of the Business Combination to the holders
of all outstanding Voting Stock. If deemed advisable by the
Disinterested Directors, the proxy or information statement shall
contain a recommendation by the Disinterested Directors as to the
advisability (or inadvisability) of the Business Combination and/or
an opinion by an investment banking firm, selected by the
Disinterested Directors and retained at the expense of the
Corporation, as to the fairness (or unfairness) of the Business
Combination to the Independent Shareholders.
E. Other Applicable Voting Requirement.
-----------------------------------
The affirmative votes or approvals required to be received from
shareholders of the Corporation under Subdivisions B, C and H of this
Article XIII are in addition to the vote of the holders of any class of
shares of capital stock of the Corporation otherwise required by law, or
by other provisions of these Articles of Incorporation, or by the express
terms of the shares of such class. The affirmative votes or approvals
required to be received from shareholders of the Corporation under
Subdivisions B, C and H of this Article XIII shall apply even though no
vote or a lesser percentage vote, may be required by law, or by other
provisions of these Articles of Incorporation, or otherwise. Any
authorization, approval or other action of the Disinterested Directors
under this Article XIII is in addition to any required authorization,
approval or other action of the Board of Directors.
F. Disinterested Directors.
-----------------------
All actions required or permitted to be taken by the Disinterested
Directors shall be taken with or without a meeting by the vote or written
consent of two-thirds of the Disinterested Directors, regardless of
whether the Disinterested Directors constitute a quorum of the members of
the Board of Directors then in office. In the event that the number of
Disinterested Directors is at any time less than five (5), all power and
authority of the Disinterested Directors under this Article XIII shall
thereupon cease and terminate, including, without limitation,
the authority of the Disinterested Directors to authorize and approve a
Business Combination under Subdivisions B and C of this Article XIII and
to
<PAGE> 86
approve a successor Disinterested Director. Two-thirds of the
Disinterested Directors shall have the power and duty, consistent with
their fiduciary obligations, to determine for the purpose of this
Article XIII, on the basis of information known to them:
(1) Whether any person is in Interested Shareholder;
(2) Whether any person is an Affiliate or Associate of another;
(3) Whether any person has an agreement, arrangement, or
understanding with another or is acting in concert with another; and
(4) The Fair Market Value of property, securities or other
consideration (other than cash).
The good faith determination of the Disinterested Directors on such
matters shall be binding and conclusive for purposes of this Article
XIII.
G. Effect on Fiduciary Obligations of Interested Shareholders.
----------------------------------------------------------
Nothing contained in this Article XIII shall be construed to relieve any
Interested Shareholder from any fiduciary obligations imposed by law.
H. Repeal.
------
Notwithstanding any other provisions of these Articles of Incorporation
(and notwithstanding the fact that a lesser percentage vote may be
required by law or other provision of these Articles of Incorporation),
the provisions of this Article XIII may not be repealed, amended,
supplemented or otherwise modified, unless:
(1) The Disinterested Directors (or, if there is no Interested
Shareholder, a majority vote of the whole Board of Directors of the
Corporation) recommend such repeal, amendment, supplement or
modification and such repeal, amendment or modification is approved
by the affirmative vote of the holders of not less than 66-2/3
percent of the outstanding Voting Stock; or
(2) Such repeal, amendment, supplement or modification is
approved by the affirmative vote of holders of: (a) not less than
80 percent of the outstanding Voting Stock voting together as a
single class; and (b) not less than 66-2/3 percent of the
outstanding Voting Stock held by all shareholders other than
Interested Shareholders voting together as a single class.
I. Further Considerations to Effect Business Combination.
-----------------------------------------------------
No Business Combination shall be effected or consummated unless, in
addition to the consideration set forth in Subdivisions B, C, D and E of
this Article XIII, the Board of Directors of the Corporation, including
the Disinterested Directors, shall consider all of the following factors
and any other factors which they deem relevant:
<PAGE> 87
(1) The social and economic effects of the transaction on the
Corporation and its subsidiaries, employees, depositors, loan and
other customers, creditors and other elements of the communities in
which the Corporation and its subsidiaries operate or are located;
(2) The business and financial conditions and earnings prospects
of the Interested Shareholder, including, but not limited to, debt
service and other existing or likely financial obligations of the
Interested Shareholder, and the possible effect on other elements of
the communities in which the Corporation and its subsidiaries
operate or are located; and
(3) The competence, experience and integrity of the Interested
Shareholder and his (its) or their management.
ARTICLE XIV
HEADINGS AND CAPTIONS
---------------------
The headings or captions of these various articles are inserted for
convenience and none of them shall have any force or effect, and the
interpretation of the various articles shall not be influenced by any of said
headings or captions.
IN WITNESS WHEREOF, the undersigned, being the President and Secretary of
the Corporation, for the purpose of amending and restating the Articles of
Incorporation as heretofore filed for the Corporation under the laws of the
State of Florida, hereby make and file these Amended and Restated Articles of
Incorporation declaring and certifying that the facts stated herein are true,
and hereby subscribe thereto and hereunto sets her hand and seal this
_____ day of _________________________, 1998.
(CORPORATE SEAL)
________________, President
________________, Secretary
<PAGE> 88
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 607.850 of the Florida Business Corporation Act provides that
corporations may indemnify an individual made a party to any threatened,
pending, or completed action, suit or proceeding whether civil, criminal,
administrative or investigative, because the individual is or was a director,
officer, employee or agent of the corporation, against liability incurred in
the proceeding if the person: (i) acted in good faith and (ii) the individual
believes his conduct was in the corporation's best interest or was not opposed
to the corporation's best interest.
Section 607.850 further provides that a corporation shall indemnify an
individual who was fully successful on the merits or otherwise in any
proceeding to which the director, officer, employee or agent was a party
because the individual was or is a director, officer, employee or agent of the
corporation, for reasonable expenses incurred by the director in connection
with the proceeding. Section 607.850 also provides that a corporation may
purchase and maintain insurance on behalf of the individual who is or was a
director, officer, employee or agent of the corporation or who, while a
director, officer, employee or agent of the corporation is or was serving at
the request of the corporation as a director, officer, partner, trustee,
employer or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other enterprises, against
liability asserted against or incurred by the individual in that capacity or
arising from the individual status as a director, officer, employee, or agent.
Registrant maintains a directors' and officers' liability insurance
policy, including bank reimbursement, for the purpose of providing
indemnification to its directors and officers in the event of such a
threatened, pending or completed action.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS
The exhibits filed pursuant to this Item 21 immediately follow the Exhibit
Index. The following is a description of the applicable exhibits required for
Form S-4 provided by Item 601 of Regulation S-K.
Exhibit Number Description
(1) Not Applicable
(2) The Consolidation Agreement by and between Manatee Interim Bank,
N.A. and First National Bank of Manatee and joined in by First
National Bancshares, Inc. is attached as Exhibit A to the
Prospectus/Proxy Statement forming a part of this Registration
Statement.
(3) Articles of Incorporation and Bylaws.
II-1
<PAGE> 89
A. A copy of the Amended and Restated Articles of
Incorporation of the Registrant is included as Exhibit
3.A to the Registration Statement.
B. A copy of the Bylaws of the Registrant is included as
Exhibit 3.B to this Registration Statement.
(4) Instruments defining the rights of security holders, including
indentures.
A. Instruments defining the rights of security holders are
included in the Articles of Incorporation and Bylaws
(see Exhibit 3.A. and B).
(5) Opinion of Werner & Blank Co., L.P.A., regarding First National
Bancshares, Inc. Common Stock, and Consent
(6) Not Applicable.
(7) Not Applicable.
(8) Opinion of Werner & Blank Co., L.P.A., regarding certain tax
matters, and Consent.
(9) Not Applicable.
(10) None
(11) Not Applicable.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
(21) None.
(22) None
(23) Consents of Experts and Counsel.
A. Consent of Werner & Blank Co., L.P.A.
(the consent is contained in that firm's opinions filed
as Exhibits (5) and (8)).
II-2
<PAGE> 90
(24) Power of Attorney
(25) Not Applicable.
(26) Not Applicable.
(27) Not Applicable.
(28) Not Applicable.
(29) Not Applicable.
(99) Additional Exhibits.
A. Form of President's Letter to
Shareholders of First National Bank of Manatee.
B. Form of Notice of Special Meeting of
Shareholders of First National Bank of Manatee.
C. Form of Proxy to be delivered to
Shareholders of First National Bank of Manatee.
II-3
<PAGE> 91
ITEM 22. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes as follows:
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any
facts or events arising after the Effective Date of the
Registration Statement (or the most recent
post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to the information set forth in the Registration
Statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to officers, directors, 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
II-4
<PAGE> 92
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 that matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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.
B. The undersigned Registrant hereby undertakes to respond to requests for
information that are incorporated by reference into the Prospectus/Proxy
Statement pursuant to Items 4, 10(b), 11, or 13 of this form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This
includes information contained in the documents filed subsequent to the
Effective Date of this Registration Statement through the date of
responding to the request.
C. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.
II-5
<PAGE> 93
SIGNATURES
Pursuant to 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 S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bradenton, State of Florida, this 30th day of
July, 1998.
First National Bancshares, Inc.
/s/ Francis I. duPont, III
------------------------------------------
Francis I. duPont, III, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 30th day of July, 1998.
Signature Title
- --------- -----
/s/ Francis I. duPont, III
- ----------------------------
Francis I. duPont, III President and Chief Executive Officer
and Director (Principal Executive Officer)
/s/ Glen W. Fausset
- ----------------------------
Glen W. Fausset Secretary/Treasurer and Director
(Principal Accounting Officer)
/s/ Beverly Beall
- ----------------------------
Beverly Beall Director
/s/ Robert G. Blalock
- ----------------------------
Robert G. Blalock Director
/s/ Allen J. Butler
- ----------------------------
Allen J. Butler Director
/s/ Rosemary C. Carlson
- ----------------------------
Rosemary C. Carlson Director
/s/ Stephen J. Korcheck
- ----------------------------
Stephen J. Korcheck, Ph. D. Director
II-6
<PAGE> 94
Signature Title
- ---------- -----
/s/ William J. Thompson
- ----------------------------
William J. Thompson Director
/s/ Raymond A. Weigel, III
- ----------------------------
Raymond A. Weigel, III Director
/s/ Dan C. Zoller
- ----------------------------
Dan C. Zoller Director
II-7
<PAGE> 95
EXHIBIT INDEX
Exhibit No.
3.A A copy of the Registrant's Articles of Incorporation
3.B A copy of the Registrant's Bylaws
5.0 Opinion of Werner & Blank Co., L.P.A. regarding
First National Bancshares, Inc., Common Stock and Consent
8.0 Opinion of Werner & Blank Co., L.P.A., Attorneys,
regarding certain Tax Matters and Consent
23.0 Contained in Opinions at 5.0 and 8.0.
24.0 Power of Attorney
99.A Form of President's Letter to Shareholders
of First National Bank of Manatee
99.B Form of Notice of Special Meeting of Shareholders of
First National Bank of Manatee
99.C Form of Proxy to be delivered to Shareholders of
First National Bank of Manatee
<PAGE> 1
EXHIBIT 3.A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FIRST NATIONAL BANCSHARES, INC
The following Articles of Incorporation of FIRST NATIONAL BANCSHARES, INC,
a Florida corporation (the "Corporation") amend in their entirety and restate
those Articles of Incorporation which were originally filed for the Corporation
on June 15, 1998. These Amended and Restated Articles permit the shareholders
of the Corporation to increase the voting requirement for shareholders over
that required by the Florida Business Corporation Act. The Amended and Restated
Articles also include provisions related to Business Combinations (as defined
therein). These Amended and Restated Articles eliminate information in the
Articles which was of historic value and reform the original Articles to take
into consideration the changes noted above. These Amended and Restated
Articles were adopted by the Board of Directors on July 16, 1998 and by the
Sole Shareholder through an action by written consent on July 16, 1998.
All amendments included herein were adopted pursuant to Section
607.194(4), Florida Statutes, and there is no discrepancy between the
Corporation's Articles of Incorporation as theretofore amended other than the
inclusion of these amendments and the omission of matters of historical
interest.
ARTICLE I
NAME AND PRINCIPAL OFFICE
The name of this Corporation shall be FIRST NATIONAL BANCSHARES, INC,
whose principal office and mailing address shall be located at 5817 Manatee
Avenue West, Bradenton, Florida 34209.
ARTICLE II
COMMENCEMENT OF CORPORATE EXISTENCE
This Corporation commenced existence on June 15, 1998, and shall exist
perpetually unless sooner dissolved according to law.
ARTICLE III
PURPOSES AND GENERAL POWERS
The general purpose of this Corporation shall be the transaction of any
and all lawful business. This Corporation shall have all of the powers
enumerated in the Florida General Corporation Act, as the same now exists and
as hereafter amended, and all such other powers as are permitted by applicable
law, including, without limitation to act as a bank holding company and, to the
extent permitted under applicable federal and state laws, now or hereafter
existing, relating to bank holding companies and their activities.
<PAGE> 2
ARTICLE IV
CAPITAL STOCK
1. Number and Class of Shares Authorized; Par Value.
The capital stock authorized, the par value thereof, and the class of such
stock shall be as follows:
<TABLE>
<CAPTION>
Number of Par Value Class
Shares Authorized Per Share of Stock
--------------------------------------
<S> <C> <C>
2,500,000 $0.10 Common
</TABLE>
The consideration for all of the above stock shall be payable in cash or,
in lieu of cash, property (tangible and intangible), labor or services (past,
present or future), at a just valuation to be fixed by the Board of Directors
of the Corporation.
2. Voting Rights.
The Common Stock shall possess and exercise exclusive voting rights and at
all meetings of the shareholders, each record holder of such stock shall be
entitled to one vote for each share held. Shareholders holding Common Stock
shall have no cumulative voting rights in any election of directors of the
Corporation.
3. No Preemptive Rights.
No shareholder of the Corporation shall have the right, upon the sale for
cash or otherwise, of any new stock of the Corporation or of any stock of the
Corporation held by it in its treasury or otherwise, of the same or any other
kind, class or series as that which he already holds, to purchase his pro rata
or any other share of such stock at the same price at which it is offered to
others or any other price.
4. Relative Rights.
Each share of Common Stock shall have the same relative rights as and be
identical in all respects with all other shares of common stock.
ARTICLE V
BOARD OF DIRECTORS
The business of the Corporation shall be conducted by a Board of
Directors. As of the date of adoption of these Amended and Restated Articles,
there are ten (10) members of the Board of Directors. The number of directors
may be either increased or diminished from time to time as provided in the
bylaws. Directors may be removed with or without cause.
<PAGE> 3
ARTICLE VI
DISTRIBUTION OF ASSETS
The Board of Directors of the Corporation may, from time to time, and at
its discretion, distribute a portion of the assets of the Corporation to its
shareholders out of the capital surplus of the Corporation.
ARTICLE VII
PURCHASE OF SHARES
The Board of Directors of the Corporation may, from time to time, and at
its discretion, cause the Corporation to purchase its own shares to the extent
of unreserved and unrestricted capital surplus available for said purchase.
ARTICLE VIII
BYLAWS
Except as otherwise provided by law, the power to adopt, alter, amend or
repeal the bylaws shall be vested in the Board of Directors. The shareholders
of the Corporation may adopt or amend a bylaw that fixes a greater quorum or
voting requirement for shareholders (or voting groups of shareholders) than is
required by the Florida Business Corporation Act.
ARTICLE IX
INDEMNIFICATION
In addition to any and all rights and duties under applicable law, the
Corporation shall indemnify and hold harmless all of its directors, officers,
employees and agents, and former directors, officers, employees and agents from
and against all liabilities and obligations, including attorneys' fees,
incurred in connection with any actions taken or failed to be taken by said
directors, officers, employees and agents in their capacity as such to the
fullest extent possible under law.
ARTICLE X
CONFLICTS OF INTEREST
No contract or other transaction between this Corporation and any other
corporation, and no act of this Corporation, shall in any way be affected or
invalidated by the fact that any of the directors of this Corporation are
pecuniarily or otherwise interested in, or are the directors or officers of,
such other corporation. Any director individually, or any firm of which any
director may be a member, may be a party to, or may be pecuniarily or otherwise
interested in any contract or transaction of this Corporation, provided that
the fact that he or such firm is so interested shall be disclosed or shall have
been known to the Board of Directors or a majority thereof, and any director of
this Corporation who is also a director or an officer of such other
corporation, or who is so interested may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of this
Corporation which shall authorize any such contract or transaction with like
force and effect as if he were not such a director or officer of such other
corporation, or not so interested.
<PAGE> 4
ARTICLE XI
LIMITED LIABILITY OF SHAREHOLDERS
The private property of the shareholders shall not be subject to payment
of the Corporation's debts to any extent.
ARTICLE XII
AMENDMENT
This Corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or any amendment hereto, subject
to the consent thereof by the holders of a majority of the Shares entitled to
vote thereon and any right conferred upon the shareholders is subject to this
reservation.
ARTICLE XIII
FAIR PRICE AND SUPER VOTE REQUIREMENT
A. Definitions as Used in This Article XIII.
(1) "Affiliate" or "Associate" shall have the respective meanings
given to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934.
(2) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly, any
shares of Voting Stock; or
(ii) which such person or any of its Affiliates or
Associates has by itself or with others: (a) the right to
acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or
(b) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which is beneficially owned, directly or directly,
by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
(3) "Business Combination" shall include:
(i) any merger or consolidation of the Corporation or
any of its subsidiaries with or into an Interested Shareholder,
regardless of which person is the surviving entity;
<PAGE> 5
(ii) any sale, lease, exchange, mortgage, pledge, or
other disposition (in one transaction or a series of
transactions) from the Corporation or any of its subsidiaries
to an Interested Shareholder, or from an Interested Shareholder
to the Corporation or any of its subsidiaries, of assets having
an aggregate Fair Market Value of five percent (5%) or more of
the Corporation's total stockholders' equity;
(iii) the issuance, sale or other transfer by the
Corporation or any subsidiary thereof of any securities of the
Corporation or any subsidiary thereof to an Interested
Shareholder (other than an issuance or transfer of securities
which is effected on a pro rata basis to all shareholders of
the Corporation);
(iv) the acquisition by the Corporation or any of its
subsidiaries of any securities of an Interested Shareholder;
(v) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on
behalf of an Interested Shareholder;
(vi) any reclassification or recapitalization of
securities of the Corporation if the effect, directly or
indirectly, of any transaction is to increase the relative
voting power of an Interested Shareholder; or
(vii) any agreement, contract or other arrangement
providing for or resulting in any of the transactions described
in this definition of Business Combination.
(4) "Disinterested Director" shall mean any member of the Board of
Directors of the Corporation who is unaffiliated with the Interested
Shareholder and was a member of the Board of Directors prior to the
time that the Interested Shareholder became an Interested
Shareholder; any successor of a Disinterested Director who is
unaffiliated with the Interested Shareholder and is approved to
succeed a Disinterested Director by the Disinterested Directors; any
member of the Board of Directors who is unaffiliated with the
Interested Shareholder and is approved by the Disinterested
Directors.
(5) "Fair Market Value" shall mean:
(i) in the case of securities listed on a national
securities exchange or quoted in the National Association of
Securities Dealers Automated Quotations System (or any
successor thereof), the highest sales price or bid quotation,
as the case may be, reported for securities of the same class
or series traded on a national securities exchange or in the
over-the-counter market during the 30-day period immediately
prior to the date in question, or if no such report or
quotation is available, the fair market value as determined by
the Disinterested Directors; and
(ii) in the case of other securities and of other property
or consideration (other than cash), the Fair Market Value as
determined by the Disinterested Directors; provided, however,
in the event the prior and authority of the Disinterested
<PAGE> 6
Directors ceases and terminates pursuant to Subdivision F of
this Article XIII as a result of there being less than five (5)
Disinterested Directors at any time, then: (a) for purpose of
clause (ii) of the definition of "Business Combination," any
sale, lease, exchange, mortgage, pledge or other
disposition of assets from the Corporation or any of its
subsidiaries to an Interested Shareholder or from an Interested
Shareholder to the Corporation or any of its subsidiaries,
regardless of the Fair Market Value thereof, shall constitute a
Business Combination; and (b) for purposes of Paragraph 1 of
Subdivision D of this Article XIII, in determining the amount
of consideration received or to be received per share by the
Independent Shareholders in a Business Combination, there shall
be excluded all consideration other than cash and the Fair
Market Value of securities listed on a national securities
exchange or quoted in the National Association of Securities
Dealers Automated Quotations System (or any successor thereof)
for which there is a reported sales price or bid quotation, as
the case may be, during the 30-day period immediately prior to
the date in question.
(6) "Independent Shareholder" shall mean shareholders of the
Corporation other than the Interested Shareholder engaged in or
proposing the Business Combination.
(7) "Interested Shareholder" shall mean: (a) any person (other
than the Corporation or any of its subsidiaries); and (b) the
Affiliates and Associates of such person, who, or which together,
are:
(i) the beneficial owner, directly or indirectly, of 10
percent or more of the outstanding Voting Stock or were within
the two-year period immediately prior to the date in question
the beneficial owner, directly or indirectly, of 10 percent or
more of the then outstanding Voting Stock; or
(ii) an assignee of or other person who has succeeded to
any shares of the Voting Stock which were at any time within
the two-year period immediately prior to the date in question
beneficially owned by an Interested Shareholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
Notwithstanding the foregoing, no Trust Department, or designated
fiduciary or other trustee of such Trust Department of the
Corporation or a subsidiary of the Corporation, or other similar
fiduciary capacity of the Corporation with direct voting control of
the outstanding Voting Stock shall be included or considered as an
Interested Shareholder. Further, no profit-sharing, employee stock
ownership, employee stock purchase and savings, employee pension, or
other employee benefit plan of the Corporation or any of
its subsidiaries, and no trustee of any such plan in its capacity as
such trustee, shall be included or considered as an Interested
Shareholder.
(8) A "person" shall mean an individual, partnership, trust,
corporation, or other entity and includes two or more of the
foregoing acting in concert.
<PAGE> 7
(9) "Voting Stock" shall mean all outstanding shares of capital
stock of the Corporation entitled to vote generally in the election
of directors of the Corporation.
B. Supermajority Vote to Effect Business Combination.
No Business Combination shall be effected or consummated unless:
(1) Authorized and approved by the Disinterested Directors and, if
otherwise required by law to authorize or approve the transaction,
the approval or authorization of shareholders of the Corporation, by
the affirmative vote of the holders of such number of shares as is
mandated the Florida Business Corporation Act; or
(2) Authorized and approved by the affirmative vote of holders of
not less than 80 percent of the outstanding Voting Stock voting
together as a single class.
The authorization and approval required by this Subdivision B is in
addition to any authorization and approval required by Subdivision C of
this Article XIII.
C. Fair Price Required to Effect Business Combination.
No Business Combination shall be effected or consummated unless:
(1) All the conditions and requirements set forth in Subdivision D
of this Article XIII have been satisfied; or
(2) Authorized and approved by the Disinterested Directors; or
(3) Authorized and approved by the affirmative vote of holders of
not less than 66-2/3 percent of the outstanding Voting Stock held by
all Independent Shareholders voting together as a single class.
Any authorization and approval required by this Subdivision C is in
addition to any authorization and approval required by Subdivision B of
this Article XIII.
D. Conditions and Requirements to Fair Price.
All the following conditions and requirements must be satisfied in order
for clause (1) of Subdivision C of this Article XIII to be applicable.
(1) The cash and Fair Market Value of the property, securities or
other consideration to be received by the Independent Shareholders in
the Business Combination per share for each class or series of
capital stock of the Corporation must not be less than the sum of:
(i) the highest per share price (including brokerage
commissions, transfer taxes, soliciting dealer's fees and
similar payments) paid by the Interested Shareholder
<PAGE> 8
in acquiring any shares of such class or series,
respectively, and, in the case of Preferred Stock, if greater,
the amount of the per share redemption price; and
(ii) the amount, if any, by which interest on the per
share price, calculated at the Treasury Bill Rate from time to
time in effect, from the date the Interested Shareholder first
became an Interested Shareholder until the Business Combination
has been consummated, exceeds the per share amount of cash
dividends received by the Independent Shareholders during such
period. The "Treasury Bill Rate" means for each calendar
quarter, or part thereof, the interest rate of the last auction
in the preceding calendar of 91-day United States Treasury
Bills expressed as a bond equivalent yield.
For purposes of this Paragraph (1), per share amounts shall be
appropriately adjusted for any recapitalization, reclassification,
stock dividend, stock split, reverse split, or other similar
transaction. Any Business Combination which does not result in the
Independent Shareholders receiving consideration for or in respect
of their shares of capital stock of the Corporation shall not be
treated as complying with the requirements of this Paragraph (1).
(2) The form of the consideration to be received by the Independent
Shareholders owning the Corporation's shares must be the same as was
previously paid by the Interested Shareholder(s) for shares of the
same class or series; provided, however, if the Interested
Shareholder previously paid for shares of such class or series with
different forms of consideration, the form of the consideration to be
received by the Independent Shareholders owning shares of such class
or series must be in the form as was previously paid by the
Interested Shareholder in acquiring the largest number of shares of
such class or series previously acquired by the Interested
Shareholder, provided, further, in the event no shares of the same
class or series had been previously acquired by the Interested
Shareholder, the form of consideration must be cash. The provisions
of this Paragraph (2) are not intended to diminish the aggregate
amount of cash and Fair Market Value of any other consideration that
any holder of the Corporation's shares is otherwise entitled to
receive upon the liquidation or dissolution of the Corporation, under
the terms of any contract with the Corporation or an Interested
Shareholder, or otherwise.
(3) From the date the Interested Shareholder first became an
Interested Shareholder until the Business Combination has been
consummated, the following requirements must be complied with unless
the Disinterested Directors otherwise approve:
(i) the Interested Shareholder has not received,
directly or indirectly, the benefit (except proportionately as
a shareholder) of any loan, advance, guaranty, pledge, or other
financial assistance, tax credit or deduction, or other benefit
from the Corporation or any of its subsidiaries;
<PAGE> 9
(ii) there shall have been no failure to declare and pay
in full, when and as due or scheduled, any dividends required
to be paid on any class or series of the Corporation's shares.
(iii) there shall have been: (a) no reduction in the
annual rate of dividends paid on Common Shares of the
Corporation (except as necessary to reflect any split of such
shares); and (b) an increase in the annual rate of dividends as
necessary to reflect reclassification (including a reverse
split), recapitalization or any similar transaction which has
the effect of reducing the number of outstanding Common Shares;
and
(iv) there shall have been no amendment or other
modification to any profit-sharing, employee stock ownership,
employee stock purchase and savings, employee pension or other
employee benefit plan of the Corporation or any of its
subsidiaries, the effect of which is to change in any manner
the provisions governing the voting of any shares of capital
stock of the Corporation in or covered by such plan.
(4) A proxy or information statement describing the Business
Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations under
it (or any subsequent provisions replacing that Act and the rules and
regulations under it) has been mailed at least 30 days prior to the
completion of the Business Combination to the holders of all
outstanding Voting Stock. If deemed advisable by the Disinterested
Directors, the proxy or information statement shall contain a
recommendation by the Disinterested Directors as to the advisability
(or inadvisability) of the Business Combination and/or an opinion by
an investment banking firm, selected by the Disinterested Directors
and retained at the expense of the Corporation, as to the fairness
(or unfairness) of the Business Combination to the Independent
Shareholders.
E. Other Applicable Voting Requirement.
The affirmative votes or approvals required to be received from
shareholders of the Corporation under Subdivisions B, C and H of this
Article XIII are in addition to the vote of the holders of any class of
shares of capital stock of the Corporation otherwise required by law, or
by other provisions of these Articles of Incorporation, or by the express
terms of the shares of such class. The affirmative votes or approvals
required to be received from shareholders of the Corporation under
Subdivisions B, C and H of this Article XIII shall apply even though no
vote or a lesser percentage vote, may be required by law, or by other
provisions of these Articles of Incorporation, or otherwise. Any
authorization, approval or other action of the Disinterested
Directors under this Article XIII is in addition to any required
authorization, approval or other action of the Board of Directors.
<PAGE> 10
F. Disinterested Directors.
All actions required or permitted to be taken by the Disinterested
Directors shall be taken with or without a meeting by the vote or written
consent of two-thirds of the Disinterested Directors, regardless of
whether the Disinterested Directors constitute a quorum of the members of
the Board of Directors then in office. In the event that the number of
Disinterested Directors is at any time less than five (5), all power and
authority of the Disinterested Directors under this Article XIII shall
thereupon cease and terminate, including, without limitation, the
authority of the Disinterested Directors to authorize and approve a
Business Combination under Subdivisions B and C of this Article XIII and
to approve a successor Disinterested Director. Two-thirds of the
Disinterested Directors shall have the power and duty, consistent with
their fiduciary obligations, to determine for the purpose of this Article
XIII, on the basis of information known to them:
(1) Whether any person is in Interested Shareholder;
(2) Whether any person is an Affiliate or Associate of another;
(3) Whether any person has an agreement, arrangement, or
understanding with another or is acting in concert with another; and
(4) The Fair Market Value of property, securities or other
consideration (other than cash).
The good faith determination of the Disinterested Directors on such
matters shall be binding and conclusive for purposes of this Article XIII.
G. Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Article XIII shall be construed to relieve any
Interested Shareholder from any fiduciary obligations imposed by law.
H. Repeal.
Notwithstanding any other provisions of these Articles of Incorporation
(and notwithstanding the fact that a lesser percentage vote may be
required by law or other provision of these Articles of Incorporation),
the provisions of this Article XIII may not be repealed, amended,
supplemented or otherwise modified, unless:
(1) The Disinterested Directors (or, if there is no Interested
Shareholder, a majority vote of the whole Board of Directors of the
Corporation) recommend such repeal, amendment, supplement or
modification and such repeal, amendment or modification is approved
by the affirmative vote of the holders of not less than 66-2/3
percent of the outstanding Voting Stock; or
(2) Such repeal, amendment, supplement or modification is approved
by the affirmative vote of holders of: (a) not less than 80 percent
of the outstanding Voting Stock voting
<PAGE> 11
together as a single class; and (b) not less than 66-2/3
percent of the outstanding Voting Stock held by all shareholders
other than Interested Shareholders voting together as a single class.
I. Further Considerations to Effect Business Combination.
No Business Combination shall be effected or consummated unless, in
addition to the consideration set forth in Subdivisions B, C, D and E of
this Article XIII, the Board of Directors of the Corporation, including
the Disinterested Directors, shall consider all of the following factors
and any other factors which they deem relevant:
(1) The social and economic effects of the transaction on the
Corporation and its subsidiaries, employees, depositors, loan and
other customers, creditors and other elements of the communities in
which the Corporation and its subsidiaries operate or are located;
(2) The business and financial conditions and earnings prospects of
the Interested Shareholder, including, but not limited to, debt
service and other existing or likely financial obligations of the
Interested Shareholder, and the possible effect on other elements of
the communities in which the Corporation and its subsidiaries operate
or are located; and
(3) The competence, experience and integrity of the Interested
Shareholder and his (its) or their management.
ARTICLE XIV
HEADINGS AND CAPTIONS
The headings or captions of these various articles are inserted for
convenience and none of them shall have any force or effect, and the
interpretation of the various articles shall not be influenced by any of said
headings or captions.
IN WITNESS WHEREOF, the undersigned, being the President and Secretary of
the Corporation, for the purpose of amending and restating the Articles of
Incorporation as heretofore filed for the Corporation under the laws of the
State of Florida, hereby make and file these Amended and Restated Articles of
Incorporation declaring and certifying that the facts stated herein are true,
and hereby subscribe thereto and hereunto sets her hand and seal this
_____ day of ___________________, 1998.
(CORPORATE SEAL)
-----------------, President
-----------------, Secretary
<PAGE> 1
EXHIBIT 3.B
BYLAWS
OF
FIRST NATIONAL BANCSHARES, INC.
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
Conduct of Corporate Business 1
ARTICLE II
Shareholders 1
Section 1. Powers and Duties 1
Section 2. Method of Acting 1
Section 3. Annual Meetings 2
Section 4. Special Meetings 2
Section 5. Adjourned Meetings 2
Section 6. Determination of Shareholders 2
Section 7. Record of Shareholders Having Voting Rights 3
Section 8. Quorum 3
Section 9. Voting 3
Section 10. Proxies 4
Section 11. Order of Business 6
Section 12. Minutes of Meetings 6
Section 13. Nominations for Director 7
ARTICLE III
Board of Directors 7
Section 1. Powers and Duties 7
Section 2. Number and Qualifications 8
Section 3. How Selected 8
Section 4. Term of Office 8
Section 5. Oath of Office 9
Section 6. Method of Acting 9
Section 7. Presumption of Assent 9
Section 8. Annual Meetings 10
Section 9. Regular Meetings 10
Section 10. Special Meetings 10
Section 11. Adjourned Meetings 11
Section 12. Quorum 11
Section 13. Voting 11
Section 14. Vacancies 11
Section 15. Removal of Directors 11
Section 16. Authority to Collect, Account For and Pay Over Taxes 11
Section 17. Director and Officer Conflict of Interest 12
Section 18. Committees 12
Section 19. Chairman 14
<PAGE> 3
ARTICLE IV
Officers 14
Section 1. Number 14
Section 2. Selection 14
Section 3. Term of Office 14
Section 4. Powers and Duties of Officers 15
Section 5. Two or More Positions Held by One Person 17
Section 6. Bond 17
Section 7. Vacancies, How Filled 17
Section 8. Compensation of Officers 17
Section 9. Removal of Officers 17
Section 10. Reimbursement of Disallowed Expenses 17
ARTICLE V
Corporate Seal 18
ARTICLE VI
Shares of Stock 18
Section 1. Description of Share Certificates 18
Section 2. Issuance of Shares 18
Section 3. Restricted Shares 18
Section 4. Transfer of Shares 18
Section 5. Lost Certificates 19
ARTICLE VII
Dividends 19
Section 1. Declaration 19
Section 2. Types 19
ARTICLE VIII
Indemnification of Directors, Officers, Employees and Agents 20
Section 1. Insurance 20
Section 2. Action Against a Party Because of Corporate Position 21
Section 3. Action by or in the Right of Corporation 21
Section 4. Reimbursement if Successful 22
Section 5. Authorization 22
Section 6. Advance Reimbursement 22
Section 7. Further Indemnification 23
Section 8. Continuing Right of Indemnification 23
Section 9. Limitation on Indemnity and Reimbursement 23
<PAGE> 4
ARTICLE IX
Miscellaneous 24
Section 1. Bills, Notes, etc. 24
Section 2. Amendments 24
Section 3. Notice 24
Section 4. Waiver of Notice 25
<PAGE> 5
ARTICLE I
Conduct of Corporate Business
The business of this Corporation shall be conducted in accordance with:
1. Applicable provisions of the law.
2. Its Articles of Incorporation and any and all amendments that may be
made.
3. Rules and regulations, including these Bylaws and any amendments, that
may be adopted by the Board of Directors.
ARTICLE II
Shareholders
Section 1. Powers and Duties. The shareholders of the Corporation shall
have the following powers and duties:
a. To elect and remove directors.
b. All other powers and duties conferred upon the shareholders by the laws
of the State of Florida.
Section 2. Method of Acting.
a. Meetings. Any action of the shareholders may be taken at an annual or
special meeting as provided in these Bylaws.
b. Action by Shareholders Without a Meeting. Any action of the shareholders
of the Corporation may be taken without a meeting provided a resolution or a
consent in writing to the action in question is signed by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, and such resolution or consent
is filed among the records of the Corporation. In the event that the action to
which the shareholders consent is such that would have required the filing of
any certificate or document with the Department of State of the State of
Florida under Chapter 607, Florida Statutes, or any other applicable law, the
document or certificate shall state that written consent, pursuant to Section
607.0704, Florida Statutes, was given in lieu of meeting.
1
<PAGE> 6
c. Action by Participation. Any action of the shareholders may be taken by
which all participants are able to converse with one another, expressly
including discussions by telephone, radio or other communications device.
Physical presence of the participants at the same place is not necessary for
shareholders to take action.
Section 3. Annual Meetings.
a. Date, Place and Time Held. Meetings of the shareholders of the Corporation
shall be held annually within the first six months of each year, or at any
other time permitted by the law, at such time and place as may be fixed by the
Board of Directors.
b. Business to be Conducted. The annual meeting of the shareholders of the
Corporation shall be held for the purpose of electing directors and for the
transaction of such other business as may come before the meeting.
Section 4. Special Meetings. Special meetings of the shareholders may be
called at any time by the Board of Directors or by the holders of not less than
a majority of all the shares entitled to vote at the meeting, upon the giving
of notice as provided in Section 3, Article IX of these Bylaws.
Section 5. Adjourned Meetings. When a meeting is adjourned to another
time and place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting was adjourned are announced
at the meeting at which the ajournment is taken. If, however, after the
adjournment, the Board fixes a new record date for the adjournment meeting, a
notice of the adjourned meeting shall be given as provided in Section 3,
Article IX of these Bylaws to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Determination of Shareholders. For the purpose of determining
the shareholders entitled to notice of, or to vote at, any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
purpose, the following methods may be used:
a. Closing of Transfer Books. The Board of Directors may provide that the
stock transfer books shall be closed for a stated period not to exceed, in any
case, sixty days. If the stock
2
<PAGE> 7
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of, or to vote at, a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting.
b. Fixing Record Date. The Board of Directors may fix in advance a date as
the regular date for any such determination of shareholders, such date in
any case to be not more than sixty (60) days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action requiring such determination of shareholders is to be taken.
c. Mailing of Notice. In the event that the stock transfer books are not
closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, the date on
which the notice of the meeting is mailed shall be the record date for the
determination of shareholders.
d. Resolution Declaring Dividend. In the event that the stock transfer books
are not closed and no record date is fixed for the determination of
shareholders entitled to receive payment of a dividend, the date on which the
resolution by the Board of Directors declaring such dividend is adopted shall
be the record date for the determination of shareholders.
Section 7. Record of Shareholders Having Voting Rights. The Corporation
shall comply with the requirements of Section 607.0720, Florida Statutes, or
any successor statute, regarding the compilation of a list of shareholders
entitled to vote at any meeting.
Section 8. Quorum. A majority of the shareholders entitled to vote,
represented in person, by participation as described in this Article, or by
proxy, shall constitute a quorum at a meeting of shareholders.
Section 9. Voting.
a. Voting of Shares. Each outstanding share shall be entitled to one vote on
each matter submitted to a vote at a meeting of shareholders.
(1) Election of Directors. At each election of directors, every
shareholder entitled to vote in such election shall have the right to vote, in
person or by proxy, the number of shares owned by him for one of the persons
nominated to each position as a director to be elected at that time and for
whose election he has a right to vote. All directors shall be elected to the
Board of
3
<PAGE> 8
Directors by an affirmative vote of the holders of not less than a majority of
all issued and outstanding shares of stock of the Corporation.
b. Voting of Shares by Certain Holders.
(1) Shares Standing in the Name of Another Corporation. Shares standing
in the name of another corporation may be voted by such officer, agent, or
proxy as the Bylaws of such corporation may prescribe, or, in the absence of
such provision, by such person as the Board of Directors of such corporation
may designate. Proof of such designation may be made by presentation of a
certified copy of the pertinent Bylaw provision or other instrument of the
corporate shareholder. In the absence of any such designation or in case of
conflicting designations by the corporate shareholder, the Chairman of the
Board, the President, any Vice President, the Secretary, and the Treasurer of
the corporate shareholder shall be presumed to possess, in that order,
authority to vote such shares.
(2) Shares Held by an Administrator. Shares held by an administrator,
executor, guardian or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name.
(3) Shares Standing in the Name of a Trustee. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name.
(4) Shares Standing in the Name of a Receiver. Shares standing in the
name of a receiver may be voted by such receiver, and shares held by or under
the control of a receiver may be voted by such receiver without the transfer of
such shares into his name, if authority to do so is contained in an appropriate
order of the court by which such receiver was appointed.
(5) Pledged Shares. A shareholder whose shares are pledged shall be
entitled to vote such shares unless and until the shares have been transferred
into the name of the pledgee, and thereafter the pledgee or his nominee shall
be entitled to vote the shares so transferred.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting, or his duly
authorized attorney-in-fact, may authorize another person or persons to act for
him by proxy. Proxies shall be valid for only one
4
<PAGE> 9
meeting, to be specified therein, and any adjournment of such meeting. Proxies
shall be voted whenever a vote is taken. Proxies which have been executed may
be revoked by the attendance of the shareholder at the meeting in person, or by
the execution and filing of a subsequent proxy. Every proxy must be signed by
the shareholder or his attorney-in-fact. No proxy shall be valid after the
expiration date of eleven months from the date thereof unless otherwise
provided in the proxy.
a. Revocable Proxies. Every proxy shall be revocable at the pleasure of the
shareholder executing it, except as otherwise provided in this section. The
authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
b. Irrevocable Proxy. A proxy which states that it is irrevocable is
irrevocable when it is held by any of the following or a nominee of any of the
following.
(1) A pledgee.
(2) A person who has purchased or agreed to purchase the shares.
(3) A creditor or creditors of the Corporation who extend or continue
credit to the Corporation in consideration of the proxy, if the proxy states
that it was given in consideration of such extension or continuation of credit,
the amount thereof, and the name of the person extending or continuing credit.
(4) A person who has contracted to perform services as an officer of the
Corporation, if a proxy is required by the contract of employment and if the
proxy states that it was given in consideration of such contract of employment
and states the name of the employee and the period of employment contracted
for.
(5) The person designated by or under an agreement under Section 607.0731
(1), Florida Statutes, relating to shareholders' agreements, or any successor
statute.
c. Revocability of Irrevocable Proxies. Notwithstanding the provision in the
proxy statement that it is irrevocable, the proxy becomes revocable after the
pledge is redeemed, the
5
<PAGE> 10
debt of the Corporation is paid, the period of employment provided for in the
contract of employment is terminated, or the agreement under Subsection
607.0731 (1), Florida Statutes, has terminated and, in a case provided for in
Section 10b(3) or Section 10b(4) of this Article, becomes revocable three years
after the date of the proxy or at the end of the period if any, specified
therein, whichever period is less, unless the period of irrevocability is
renewed from time to time by the execution of the new irrevocable proxy as
provided in this section. This paragraph does not affect the duration of a
proxy under Section 10a of this Article. A proxy may be revoked,
notwithstanding the provision making it irrevocable, by a purchaser of shares
without knowledge of the existence of such provision, unless the existence of
the proxy and its irrevocability is noted conspicuously on the face or back of
the certificate representing such shares.
d. Multiple Holders of Proxies for Same Shares. If a proxy for the same
confers authority upon two or more persons and does not otherwise provide, a
majority of them present at the meeting, or if only one is present, then that
one may exercise all the powers conferred by the proxy; but if the proxy
holders present at the meeting are equally divided as to the right and manner
of voting in any particular case, the voting of such shares shall be prorated.
e. Substitution. If a proxy expressly provides, any proxy holder may appoint,
in writing, a substitute to act in his place.
Section 11. Order of Business. The order of business at all meetings of
the shareholders shall be as follows:
a. Roll call.
b. Proof of notice of meeting, or a waiver of notice.
c. Transaction of business.
d. Adjournment.
Section 12. Minutes of Meetings. The minutes of all meetings of the
shareholders shall be reduced to writing and signed by the Secretary and
Chairman of the Board. The minutes of a meeting need not state whether all
participants were present in person, and a statement in the
6
<PAGE> 11
minutes that a meeting was held and that a quorum was present shall be
conclusive as against any third party.
Section 13. Nominations for Director. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any shareholder
of any outstanding class of capital stock of the Corporation entitled to vote
for the election of directors. Nominations, other than those made by or on
behalf of the Board of Directors of the Corporation, shall be made in writing
and shall be delivered or mailed to the Chairman of the Board of Directors not
less than 14 days and not more than 50 days prior to any meeting of
shareholders called for the election of directors, provided, however, that if
less than 21 days' notice of the meeting is given to shareholders, such
nomination shall be mailed or delivered to the Chairman of the Board not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name and
address of each proposed nominee; (b) a biographical description of each
nominee, including his or her principal occupation and any previous banking
experience; (c) the total number of shares of capital stock of the Corporation
that is expected to be voted for each proposed nominee; (d) the name and
residence address of the notifying shareholder; and (e) the number of shares of
capital stock of the Corporation owned by the notifying shareholder.
Nominations not made in accordance herewith may, in his discretion, be
disregarded by the Chairman of the meeting, and upon his instructions, the vote
tellers shall disregard all votes cast for any such nominee.
ARTICLE III
Board of Directors
Section 1. Powers and Duties. The Board of Directors of the Corporation
shall have the power and duty to:
a. Direct the management of the business and affairs of the Corporation.
b. Fix the compensation of directors and officers of the Corporation.
7
<PAGE> 12
c. Hold annual meetings and, in addition, such other regular and special
meetings as the Board may deem appropriate or necessary.
d. Elect and remove officers.
e. Adopt such rules and regulations for the conduct of their meetings and the
management of the Corporation as they may deem proper and which are not
inconsistent with these Bylaws, the Articles of Incorporation, and applicable
laws and regulations.
f. Designate committees of the Board.
g. Take any and all actions not prohibited by law.
Section 2. Number and Qualifications. The number of members of the Board
of Directors shall be fixed by the Board of Directors provided, however, that
the Board of Directors shall not consist of less than five members. Not less
than a majority of the directors must, during their whole term of service, be
citizens of the United States, and at least three-fifths of the directors must
have resided in the State of Florida for at least one (1) year preceding their
election and must be residents therein during their continuance in office.
Section 3. How Selected. Unless appointed to fill a vacancy, directors
shall be elected at the annual meeting of shareholders or at a special meeting;
provided that a majority of the full Board of Directors may, at any time during
the year following the annual meeting of shareholders in which such action has
been authorized, increase the number of directors of the Corporation by not
more than two, and appoint persons to fill the resulting vacancies.
Section 4. Term of Office. The Board of Directors shall be divided into
three classes as nearly equal in number as possible with the term of office of
one class expiring each year; and at the annual meeting of shareholders in
1999, directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting; directors of the second class
shall be elected to hold office for a term expiring at the second succeeding
annual meeting; and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting. Thereafter,
at each annual meeting of shareholders, the successors to the class of
directors whose terms shall then expire, shall be elected to hold office until
the third succeeding annual meeting after such election and until their
successors are elected and qualified.
8
<PAGE> 13
When the number of directors is changed, the newly established directorships
shall be apportioned among the classes so as to make all classes as nearly
equal in number as possible.
Section 5. Oath of Office. Each director, upon assuming office, shall
acknowledge that he will diligently and honestly administer the affairs of the
Corporation and will not knowingly violate, or willfully permit to be violated,
any of the provisions of the Florida Business Corporation Act.
Section 6. Method of Acting.
a. Meetings. Any action of the Board of Directors may be taken at an annual,
regular or special meeting as provided in these Bylaws. The Board of Directors
shall act by majority vote of its members unless otherwise provided in these
Bylaws, the Articles of Incorporation, or any applicable law.
b. Action by Directors Without a Meeting. Any action required to be taken at
a meeting of the directors of the Corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing setting forth the action so to be taken and
signed by all of the directors or all of the members of the committee, as the
case may be, is filed in the minutes of the proceedings of the Board or of the
committee. Such consent shall have the same effect as a unanimous vote.
c. Action by Participation. Any action which may be taken by the directors of
the Corporation may be taken by any means by which all participants in the
meeting are able to converse with one another and expressly includes
discussions by conference telephone or similar communications equipment by
means of which all persons participating can hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
Section 7. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the secretary
of the meeting before the adjournment thereof or shall forward such dissent by
9
<PAGE> 14
registered mail to the secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
Section 8. Annual Meetings.
a. Date, Place and Time Held. The annual meeting of the directors of the
Corporation shall be held as soon as practicable after the annual meeting of
the shareholders.
b. Business to be Conducted. The business to be conducted at each annual
meeting of the Board of Directors shall be:
(1) The organization of the new Board of Directors.
(2) The election of officers.
(3) The transaction of any other business which may come before the
meeting.
Section 9. Regular Meetings.
a. Date, Place and Time Held. Regular meetings of the Board of Directors
shall be held at such time and at such place as the Board of Directors may
decide from time to time.
b. Persons Calling the Meeting. Meetings of the Board of Directors may be
called by the Chairman of the Board, by the president of the Corporation, or by
a majority of the directors.
c. Business to be Conducted. The business to be conducted at the regular
meetings of the Board of Directors shall be any business which the Board of
Directors may deem necessary or appropriate in order to direct the management
of the affairs and business of the Corporation.
Section 10. Special Meetings.
a. When Called. If no regular meetings of the Board of Directors are called
as stated in Section 9 of this Article, then all meetings of the Board of
Directors, other than annual meetings, shall be by special meetings. Special
meetings may be called at any time.
b. Persons Calling Meeting. Special meetings of the Board of Directors may be
called by the Chairman of the Board, by the president of the Corporation, or by
a majority of the directors.
c. Business to be Conducted. The business to be conducted at any special
meeting of the Board of Directors shall be any business which the Board of
Directors deems necessary or appropriate in order to direct the management of
the affairs and business of the Corporation. No
10
<PAGE> 15
action taken by the Board of Directors at any special meeting shall be
ineffective or defective solely because it was not mentioned or described in
the notice of the meeting.
Section 11. Adjourned Meetings. A majority of the directors present,
whether or not a quorum exists, may adjourn any meeting of the Board of
Directors to another time and place. Notice of any such adjourned meeting
shall be given to the directors who were not present at the time of adjournment
and, unless the time and place of the adjourned meeting are announced at the
time of the adjournment, to the other directors.
Section 12. Quorum. A majority of the directors shall constitute a
quorum for the transaction of business at any meeting of the Board of
Directors. In the event a quorum is not present, a majority of the directors
present may adjourn any meeting of the Board of Directors to another time and
place as provided in Section 11 of this Article.
Section 13. Voting. At all meetings of the Board of Directors, each
director shall have one (1) vote and the majority vote of the directors present
shall prevail unless a greater number of votes is required by any applicable
law, by the Corporation's Articles of Incorporation, or by these Bylaws.
Section 14. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase of the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors even though the number of the remaining directors may be less than a
quorum of the Board of Directors. A director so elected to fill a vacancy
shall hold office only until the next election of directors by the
shareholders.
Section 15. Removal of Directors. Any one or more of the directors may
be removed either with or without cause at any time by vote of shareholders at
any special meeting called for such purpose. In such voting, a director(s)
shall be removed upon the affirmative vote of the holders of 75 percent of the
outstanding voting stock qualified to vote at a meeting for the election of
Directors. A director may not be removed without such a meeting the notice for
which shall specify the purpose for the meeting.
Section 16. Authority to Collect, Account For and Pay Over Taxes.
Notwithstanding the generality of the powers and duties of the Board of
Directors to direct the management of the
11
<PAGE> 16
business of this Corporation, neither the Board as a Board, nor an individual
director as a director, shall have any authority to collect, account for or pay
over any sums of money as taxes imposed upon the Corporation by any
governmental authority, whether municipal, county, state or federal.
Section 17. Director and Officer Conflict of Interest. Contracts and
transactions between the Corporation and one or more interested directors or
officers shall not be void or voidable solely because of the involvement or
vote of such interested persons as long as: (a) the contract or transaction is
approved in good faith by the Board of Directors or appropriate committee by
the affirmative votes of a majority of disinterested directors, even if the
disinterested directors be less than a quorum, at a meeting of the Board or
committee at which the material facts as to the interested person or persons
and the contract or transaction are disclosed or known to the Board or
committee prior to the vote; or (b) the contract or transaction is approved in
good faith by the shareholders after the material facts as to the interested
person or persons and the contract or transaction had been disclosed to them;
or (c) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved or ratified by the Board, committee, or
shareholders; and (d) the requirements of all applicable laws and regulations
are met. Interested directors may be counted in determining the presence of a
quorum at a meeting of the Board or committee which authorizes the contract or
transaction. For purposes of this section, an interested director or officer
is one who is a party to a contract or transaction with the Corporation or who
is an officer or director of, or has a financial interest in, another
corporation, partnership or association which is a party to a contract or
transaction with the Corporation.
Section 18. Committees.
a. Standing Committees. The following standing committees may be formed:
(1) Executive Committee.
b. Executive Committee.
(1) The Board of Directors may designate from among its members an
executive committee of not less than three (3) nor more than seven (7) members,
which shall have and may
12
<PAGE> 17
exercise all the authority of the Board of Directors, except that no such
committee shall have the authority to:
(a) Approve or recommend to shareholders actions or proposals
required by law to be approved by shareholders;
(b) Designate candidates for the office of director, for purposes
of proxy solicitation or otherwise;
(c) Fill vacancies on the Board of Directors or any committee
thereof;
(d) Amend the Bylaws;
(e) Authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the Board of Directors;
(f) Authorize or approve the issuance or sale of, or any contract
to issue or sell, shares or designate the terms of the series of a class of
shares.
(2) The Board, by resolution adopted in accordance with subsection (1),
may designate one or more directors as alternate members of any such committee
who may act in the place and stead of any absent member or members at any
meeting of such committee.
c. Other Committees. The Board of Directors or the Chairman of the Board may
appoint other committees from time to time for such purposes and with such
powers as the Board or Chairman may determine.
d. Term. The term of each standing committee and each additional committee
appointed shall continue until the next annual meeting of shareholders
following its appointment, at which time the existence of the committee shall
automatically terminate unless the committee is reappointed at the annual
meeting of directors held immediately thereafter; provided, however, that the
existence of any committee may be terminated at any time by affirmative action
of the Board.
e. Meetings. Each committee shall hold as many meetings as are necessary to
continue or complete the performance of its duties.
f. Record of Meetings. Each committee shall keep or cause to be kept minutes
of each meeting held, and each set of minutes shall include a description of
all matters considered and all
13
<PAGE> 18
decisions, if any, made. The minutes of all meetings held since the time of
the last preceding regular Board of Directors meeting shall be filed with the
Chairman of the Board at or prior to the next regular board meeting and copies
of the minutes shall be presented to the Board as part of the committee's
report.
Section 19. Chairman. The Board of Directors shall elect a Chairman of
the Board and a Vice Chairman of the Board at each annual meeting of directors
and whenever vacancies in such offices occur. The powers and duties of the
Chairman shall be as follows:
a. To preside at all meetings of shareholders and directors;
b. To exercise all powers and perform all duties assigned to him under these
Bylaws or by the Board of Directors.
During the absence or inability of the Chairman to perform his duties or
exercise his powers, the same shall be performed and exercised by the Vice
Chairman; and when so acting, he shall have the powers and be subject to all
responsibilities hereby given to or imposed upon the Chairman.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation shall be:
a. President.
b. One or more Vice Presidents.
c. Secretary.
d. Treasurer.
e. Such other officers as the Board of Directors may from time to time deem
necessary for the proper conduct of the corporate business.
Section 2. Selection. All officers of the Corporation shall be elected
by the Board of Directors at such time and in such manner as may be prescribed
in these Bylaws.
Section 3. Term of Office. Each officer shall hold office until his
successor is duly appointed or elected by the Board of Directors.
14
<PAGE> 19
Section 4. Powers and Duties. The powers and duties of the officers of
the Corporation shall be as follows:
a. President. Unless otherwise designated by the Board of Directors, the
President shall be the Chief Executive Officer (i.e., the full-time managing
officer of the Corporation) and, as such, shall have the following powers and
duties:
(1) During any period of time that he is serving as Chief Executive
Officer, he shall be a member of the Board of Directors.
(2) He may cause to be called special meetings of the shareholders and
directors in accordance with these Bylaws.
(3) He shall appoint and remove, employ and discharge, and fix the
compensation of all servants, agents, employees and clerks of the Corporation,
other than the duly elected officers, subject to policies adopted by the Board
of Directors.
(4) He shall sign and make all contracts and agreements in the name of
the Corporation, and see that they are properly carried out.
(5) He shall see that the books, reports, statements, and certificates of
the Corporation are properly kept, made, and filed according to law.
(6) He shall sign all certificates of stock, notes, drafts, or bills of
exchange, warrants or other orders for the payment of money duly drawn by the
treasurer.
(7) He shall enforce these Bylaws and perform all of the duties incident
to the position and office, and which are required by law.
b. Vice Presidents. One or more Vice Presidents may be designated by that
title or such additional title or titles as the Board of Directors may
determine. The duties of the Vice Presidents shall be as follows:
During the absence and inability of the President to perform his duties or
exercise his powers, as set forth in these Bylaws or in the acts under which
this Corporation is organized, the same shall be performed and exercised by a
Vice President (in such order of seniority as may be determined by the Board of
Directors or, failing such determination, as may be designated by the Chairman
of the Board); and when so acting, he shall have the powers and be subject to
all
15
<PAGE> 20
responsibilities hereby given to or imposed upon the President. However, the
Vice President shall not become a member of the Board of Directors unless
elected by the Board of Directors. The Vice Presidents shall have such powers
and perform such duties as usually pertain to their office or as are assigned
to them by the President or the Board of Directors.
c. Secretary. The Secretary shall have such powers and perform such duties as
are incident to the Office of Secretary of a Corporation or as are assigned to
him by the President or the Board of Directors, including the following:
(1) He shall keep the resolutions, forms of written consent, minutes of
the meetings of the Board of Directors and of the shareholders, and other
official records of the Corporation in appropriate books.
(2) He shall give and serve all notices of the Corporation.
(3) He shall be custodian of the records and of the corporate seal, and
affix the latter when required.
(4) He shall keep the stock and transfer books in the manner prescribed
by law, so as to show at all times the amount of capital stock, the manner and
the time the same was paid in, the names of the owners thereof,
alphabetically arranged, their respective places of residences, their post
offices addresses, the number of shares owned by each, the time at which each
person became such owner, and the amount paid thereon; and keep such stock and
transfer books open daily during the business hours and at the main office of
the Corporation, subject to the inspection of such shareholders as are
authorized to inspect the same, as provided in Article II, Section 1 of these
Bylaws.
(5) He shall sign all certificates of stock.
(6) He shall present to the Board of Directors all communications
addressed to him officially by the President or any officer or shareholder of
the Corporation.
(7) He shall attend to all correspondence and perform all the duties
incident to the Office of Secretary.
16
<PAGE> 21
d. Treasurer. The Treasurer of the Corporation shall be responsible for the
maintenance of accurate financial records and shall have such other powers and
duties as are assigned to him by the President or the Board of Directors.
e. Other Officers. Other officers, if any, elected by the Board of Directors
shall have such powers and duties as are assigned to them by the President or
the Board of Directors.
Section 5. Two or More Positions Held by One Person. In the event that
one person shall hold two or more offices of the Corporation, such person
shall, when acting on behalf of the Corporation in his capacity as an officer
of the Corporation, designate which capacity or capacities in which he is
acting and upon doing so shall be deemed to act only in the capacity or
capacities so designated.
Section 6. Bond. The Cashier and Treasurer shall, if required by the
Board of Directors, give to the Corporation such security for the faithful
discharge of the duties of such offices as the Board may direct.
Section 7. Vacancies, How Filled. All vacancies in any office shall be
filled by the Board of Directors without undue delay in the manner set forth in
these Bylaws for the election of officers.
Section 8. Compensation of Officers. The officers of the Corporation
shall receive such salary or other compensation as may be determined by the
Board of Directors.
Section 9. Removal of Officers. Any officer elected or appointed by the
Board of Directors may be removed by majority vote of the Board whenever, in
its judgement, the best interest of the Corporation will be served thereby.
Section 10. Reimbursement of Disallowed Expenses. Any payments made to
an officer of the Corporation, such as salary, commission, bonus, interest,
rent, or entertainment expense incurred by him, which are later determined for
federal income tax purposes to be excessive in whole or in part and are
disallowed as deductions from income, shall, at the option of the Board of
Directors, be reimbursed by such officer to the Corporation to the full extent
of such excess.
17
<PAGE> 22
ARTICLE V
Corporate Seal
Section 1. Seal. The seal of the Corporation shall be as follows:
ARTICLE VI
Shares of Stock
Section 1. Description of Share Certificates. The certificates
representing shares shall state upon their face:
a. The name of the Corporation;
b. That the Corporation is organized under the laws of the State of Florida;
c. The name of the person or persons to whom they are issued;
d. The number and class of shares and designation of series, if any;
e. The par value, if any.
Section 2. Issuance of Shares. All certificates issued shall be
registered and numbered in the order in which they are issued. They shall be
issued in consecutive order, and on the face of each share shall be entered the
name of the person owning the shares represented by the certificate, the number
of shares represented by the certificate, and the date of issuance of the
certificate. Upon issuance, the certificate shall be signed by the President
or a Vice President, and countersigned by the Secretary or an assistant
secretary, and sealed with the seal of the Corporation. No certificate shall
be issued for any share until such share is fully paid.
Section 3. Restricted Shares. Every certificate representing shares
which are restricted as to the sale, disposition, or other transfer of shares
shall state that such shares are restricted as to their transfer and shall set
forth or fairly summarize upon the certificate, or shall state that the
Corporation will furnish to any shareholder upon request and without charge a
full statement of such restrictions.
Section 4. Transfer of Shares. The shares of the Corporation shall be
assigned and transferable on the books of the Corporation only by the person in
whose name it appears on said books, or his duly authorized legal
representative. In case of transfer by an attorney, the power
18
<PAGE> 23
of attorney, duly executed and acknowledged, shall be deposited with the
Secretary of the Corporation. In all cases of transfer, the former
certificate must be surrendered and cancelled before a new certificate will be
issued. No transfer shall be made upon the books of the Corporation while the
transfer books of the Corporation are closed.
Section 5. Lost Certificates. In the event that a replacement of a lost
certificate is requested, the Board of Directors shall have power to
authorize the issuance of a duplicate certificate upon affidavit and
satisfactory proof that the original has been lost, misplaced or destroyed, and
upon the Corporation being satisfactorily indemnified against such loss.
ARTICLE VII
Dividends
Section 1. Declaration. The Board of Directors may by resolution or vote
declare such dividends as are permitted pursuant to Florida law, and which are
not otherwise prohibited by any other applicable law or regulation, whenever in
their opinion the condition of the Corporation's affairs will render it
expedient for such dividends to be declared; provided, however, that no such
dividends shall be declared when the Corporation is insolvent, when such
payment would render the Corporation insolvent, or when the declaration or
payment thereof would be contrary to applicable laws or regulations or to any
restrictions contained in the Articles of Incorporation.
Section 2. Types. The following types of dividends may be declared from
time to time by the Board of Directors;
a. Dividends in cash or property; provided, however, that such dividends may be
paid only out of the unreserved and unrestricted earned surplus of the
Corporation.
b. Dividends in cash paid for out of current net profits or retained earnings
in accordance with the provisions of Florida Statutes, or any successor
statute.
c. Dividends paid in the Corporation's own authorized but unissued shares out
of any unreserved and unrestricted surplus of the Corporation upon the
following conditions:
19
<PAGE> 24
(1) If the dividend is payable in its own shares having a par value, such
shares shall be issued at not less than the par value, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend;
(2) If a dividend is payable in its own shares without par value, such
shares shall be issued at such stated value as shall be fixed by the Board of
Directors by a resolution adopted at the time such dividend is declared, and
there shall be transferred to stated capital at the time such dividend is paid
an amount of surplus equal to the aggregate stated value so fixed in respect to
such shares, and the amount per share so transferred to stated capital shall be
disclosed to the shareholders receiving such dividend concurrently with the
payment thereof.
d. No dividend payable in shares of any class shall be paid to the holders of
the shares of any other class unless the Articles of Incorporation so provide
or such payment is authorized by the affirmative vote or the written consent of
the holders of at least a majority of the outstanding shares of the class in
which the payment is to be made.
ARTICLE VIII
Indemnification of Directors, Officers, Employees, and Agents
Section 1. Insurance. The Board of Directors of the Corporation, in its
discretion, shall have authority on behalf of the Corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, partner, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article. The provisions of the following sections of this Article for
Indemnification of Directors, Officers, Employees, and Agents shall apply only
in the event that no such insurance is in effect or, if such insurance is in
effect, only to the extent that
20
<PAGE> 25
matters for which indemnification by the Corporation is permitted by such
sections are not within the coverage of such insurance.
Section 2. Action Against a Party Because of Corporate Position. The
Corporation shall indemnify each person who was or is a party, or is threatened
to be made a party, to any threatened, pending, or completed claim, action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by, or in the right of, the Corporation) by reason of the
fact that he is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, partner, officer, employee, or agent of another corporation, a
partnership, joint venture, trust, or other enterprise against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding, including any appeal thereof, if he 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 his conduct was unlawful. The termination of
any claim, action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the Corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 3. Action by or in the Right of Corporation. The Corporation
shall indemnify any person who was or is a party, or is threatened to be made a
party, to any threatened, pending, or completed claim, action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, partner, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such claim, action, or suit,
including any appeal thereof, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed
21
<PAGE> 26
to the best interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue, or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the Corporation unless, and only to the extent that, the court
in which such claim, action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Section 4. Reimbursement if Successful. To the extent that the director,
officer, employee, or agent of the Corporation has been successful on the
merits or otherwise in defense of any claim, action, suit, or proceeding
referred to in Section 1 or Section 2 of this Article, or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith, notwithstanding that he had not been successful (on the
merits or otherwise) on any other claim, issue, or matter in any such claim,
action, suit or proceeding.
Section 5. Authorization. Any indemnification under Section 1 or Section
2 of this Article (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he met the applicable standard of conduct set forth in
Section 1 or Section 2 hereof. Such determination shall be made:
a. By the Board of Directors by a majority vote of a quorum consisting of
directors who are or were not parties to such action, suit or proceeding; or
b. If such a quorum is not obtainable, or even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion; or
c. By the shareholders by a majority vote of a quorum consisting of
shareholders who are or were not parties to such action, suit or proceeding.
Section 6. Advance Reimbursement. Expenses, including attorneys' fees,
incurred in defending a civil or criminal action, suit, or proceeding may be
paid by the Corporation in advance of the final disposition of such action,
suit or proceeding, upon a preliminary
22
<PAGE> 27
determination, following one of the procedures set forth in Section 5 of this
Article, that the director, officer, employee or agent met the applicable
standard of conduct set forth in Section 1 or Section 2 hereof, or as
authorized by the Board of Directors in the specific case and, in either event,
upon receipt of an undertaking by or on behalf of the director, officer,
employee or agent to repay such amount unless it shall ultimately be determined
that he is entitled to be indemnified by the Corporation as authorized in this
Article.
Section 7. Further Indemnification. Indemnification as provided in this
Article shall not be deemed exclusive. The Corporation shall make any other
further indemnification of any of its directors, officers, employees or agents
that may be authorized under any statute, rule or law, provision of Articles of
Incorporation, 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, except an indemnification against
gross negligence or willful misconduct. Where such other provision provides
broader rights of indemnification than these Bylaws, such other provision shall
control.
Section 8. Continuing Right of Indemnification. Indemnification as
provided in this Article shall continue as 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 a person.
Section 9. Limitation on Indemnity and Reimbursement. Notwithstanding
any other provisions of this Article, in the event that the Board of Directors
determines that the action giving rise to a claim for indemnity or expense
reimbursement is the result of gross negligence or willful misconduct upon the
part of the claimant, no such indemnity or expense reimbursement shall be
provided by the Corporation.
23
<PAGE> 28
ARTICLE IX
Miscellaneous
Section 1. Bills, Notes, etc. All bills payable, notes, checks or other
negotiable instruments of the Corporation shall be made in the name of the
Corporation, and shall be signed by such officer or officers as the Board of
Directors shall direct. No officer or agent of the Corporation, either singly
or jointly with others, shall have the power to make any bill payable, note,
check, draft or warrant or other negotiable instrument, or endorse the same in
the name of the Corporation, or contract or cause to be contracted any debt or
liability in the name or on behalf of the Corporation, except as herein
expressly provided.
Section 2. Amendments. These Bylaws may be altered, amended, or repealed
by: (a) the action by unanimous written consent of the shareholders in lieu of
a meeting; or (b) the action by unanimous written consent of the Board of
Directors in lieu of a meeting; or (c) by an affirmative vote of a majority of
the shareholders or directors at a regular meeting or at a special meeting
called for that purpose.
Section 3. Notice.
a. Shareholders Meetings. Notice in writing of any annual or special meetings
of shareholders shall be given to each shareholder of record, and shall contain
the place, date and hour of the meeting, and in the case of a special meeting,
a statement of the purpose or purposes for which the meeting is being called.
Such notice shall be given at least ten (10) days but not more than sixty (60)
days prior to any annual or special meeting to each shareholder of record at
his address as it appears on the books of the Corporation. Notice of an action
taken by written consent of shareholders shall be given to all shareholders who
have not consented in writing, when an action by written consent has been taken
as provided in Section 2 of Article II of these Bylaws.
b. Directors Meetings. Notice in writing of any meeting of the Board of
Directors shall be given to each director, and shall contain the place, date,
and hour of the meeting, and may state the purpose or purposes for which the
meeting is being called. Such notice shall be given at least
24
<PAGE> 29
five (5) days before any meeting to each director at his address as it appears
on the books of the Corporation.
c. Effective Time. All notices of meetings of shareholders and meetings of
directors shall be given either by personal delivery or by mail or other
written communication. Notice shall be considered to be delivered and becomes
effective on the date the notice is personally delivered, or, if mailed, the
date on which the notice was sent by prepaid United States mail, properly
addressed to the party to receive it at the current address of such party as
shown on the books of the Corporation.
Section 4. Waiver of Notice. Notice of any meeting of shareholders or
any meeting of directors need not be given to any person entitled to notice who
signs a waiver of notice either before or after the meeting. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting has not been lawfully called or convened.
25
<PAGE> 1
EXHIBIT 5
[Werner & Blank Co., L.P.A. Stationery]
July 30, 1998
Board of Directors
First National Bancshares, Inc.
5817 Manatee Avenue West
Bradenton, FL 34209
Re: S-4 Registration Statement for the Securities of First National Bancshares,
Inc.
Gentlemen:
In connection with the proposed public offering of 1,429,430 shares of common
stock of First National Bancshares, Inc. by First National Bancshares, Inc.
(the "Company") covered by the above Registration Statement, we have examined
the Company's Articles of Incorporation, Bylaws, Corporate Minute book, and
Registration Statement on Form S-4 to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
Based upon examination of such other instruments and records as we deem
necessary, we are of the opinion that:
1. The Company has been duly incorporated under the laws of the State of
Florida and is validly existing and in good standing under these laws.
2. The 1,429,430 shares of common stock covered by said Registration
Statement have been legally authorized, and when issued in exchange for
the common stock of First National Bank of Manatee, will be legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the said
Registration Statement under the caption "legal opinions" in the Proxy
Statement, constituting a part of the Registration Statement.
Very truly yours,
/s/ Werner & Blank Co., LPA
Werner & Blank Co., L.P.A.
<PAGE> 1
EXHIBIT 8
[Werner & Blank Co., L.P.A. Stationery]
July 30, 1998
The Board of Directors
First National Bank of Manatee
5817 Manatee Avenue West
Bradenton, FL 34209
Attention: Mr. Glen Fausset
Re: Plan of Corporate Reorganization under which First National Bank of
Manatee, Bradenton, Florida, will become a wholly owned subsidiary of
First National Bancshares, Inc.
Gentlemen:
We have been requested as special counsel to First National Bank of Manatee
(the "Bank") to render our opinion expressed below in connection with the
proposed consolidation (the "Consolidation") of the Bank and Manatee Interim
Bank, N.A. (the "New Bank"), a wholly owned subsidiary of First National
Bancshares, Inc. (the "Corporation"), a Florida corporation organized at the
direction of the Bank pursuant to the terms and conditions of a Consolidation
Agreement (the "Agreement"), by and among the Bank, the Corporation, and the
New Bank described in the Form S-4 Registration Statement (the "Registration
Statement") filed by the Corporation.
In rendering our opinion, we have conducted an examination of applicable law,
regulations, rulings, decisions, documents, and records, and have made such
investigation of fact as we have deemed necessary, and we have relied upon the
representations in the Agreement and upon the following "Assumptions of Facts"
and certain "Representations" which have heretofore been made to us by
directors and officers.
ASSUMPTIONS OF FACTS
First National Bank of Manatee
First National Bank of Manatee ("Bank") is a National Bank organized under the
laws of the United States, with its principal office and place of business at
5817 Manatee Avenue West, Bradenton, Florida 34209.
The Bank has an authorized capital structure of 1,000,000 shares of common
stock, par value $5.00 per share, 714,715 of which authorized shares are
presently issued and outstanding.
The Bank is engaged in the general banking business in the City of Bradenton,
which is located in Manatee County. The Bank provides customary retail and
commercial banking services to its customers, including checking and savings
accounts, time deposits, safe deposit facilities,
personal loans, and installment loans. It also makes secured and unsecured
commercial loans. The Bank does not operate any foreign offices.
<PAGE> 2
First National Bancshares, Inc.
First National Bancshares, Inc. ("Corporation") is a domestic corporation which
was incorporated under the laws of the State of Florida on June 15, 1998, at
the direction of the management of the Bank for the purpose of becoming a bank
holding company by acquiring all of the outstanding shares of common stock of
the Bank. Corporation also has its principal place of business at 5817 Manatee
Avenue West, Bradenton, Florida 34209.
Corporation has an authorized capital structure of 2,500,000 shares, $0.10 par
value. After the consolidation becomes effective, and as and when required by
the Agreement, Corporation will issue up to 1,429,430 shares of its common
stock in exchange for Bank common stock, as provided in the Agreement.
Corporation maintains its books of account on a calendar year basis, and
computes its income for financial purposes under the accrual method of
accounting.
Manatee Interim Bank, National Association (In Organization)
Manatee Interim Bank, National Association (In Organization) (the "New Bank")
is a banking corporation which will be organized under the laws of the United
States and will be wholly owned by Corporation. It is intended that the New
Bank will never open for business as a separate operating entity, but will only
be an "interim" bank to be consolidated with the Bank as part of the proposed
reorganization. New Bank will also have its principal place of business at
5817 Manatee Avenue West, Bradenton, Florida 34209.
The New Bank will have an authorized capital structure of 1,000 shares of
common stock, par value of $100.00 per share, all of which shares will be
issued and outstanding at the time of the Consolidation.
PROPOSED TRANSACTION
In the proposed transaction, the Bank will become a wholly owned subsidiary of
the Corporation. Each of the following steps has been or will be undertaken at
the direction of the Bank to carry out the plan of reorganization.
The Corporation will acquire 100% of the stock of the New Bank, as soon as the
New Bank receives a charter and issues shares of its common stock. The New
Bank will be consolidated with the Bank under the charter of the Bank, pursuant
to the laws of the United States and pursuant to a Consolidation Agreement (the
"Agreement"), which has been entered into between the Bank, the New Bank, and
joined by the Corporation.
Pursuant to the Agreement, the resulting bank (hereinafter called the
"Resulting Bank") will continue the name and banking business of the Bank
without change. The Resulting Bank will continue to hold all of the Bank's
assets and will assume all of the Bank's liabilities subsequent to the
transaction. The name of the Resulting Bank will be "First National Bank of
Manatee" and the Resulting Bank's Articles of Incorporation and Bylaws will be
the Articles of Incorporation and Bylaws of the Bank upon the effective date of
the Consolidation. The Resulting Bank will operate under the charter of
the Bank. The principal office of the Bank will continue to be the principal
office of the Resulting Bank.
<PAGE> 3
Each share of the common stock of the Bank then issued and outstanding will, by
operation of law, be transferred into the Corporation, and the holders thereof
will receive two (2) shares of common stock of Corporation in exchange
therefor, unless such holder properly exercises his dissenter's right of
appraisal under federal banking law. The shareholders of the Bank have the
right to dissent from the transaction under applicable law.
The amount and number of shares of capital stock of the New Bank outstanding
immediately before the consolidation becomes effective (specifically, $100,000
divided into 1,000 shares, $100.00 par value) will be increased in the amount
and number of shares of the capital stock of the Bank outstanding immediately
before the consolidation becomes effective. At the effective date of the
consolidation, the Resulting Bank will redeem and simultaneously cancel the
1,000 shares of $100.00 par value stock formerly representing the capital stock
of the New Bank from the Corporation.
BUSINESS PURPOSES
The Boards of Directors of the Bank and the Corporation believe that the
proposed merger will provide a means whereby the Resulting Bank can provide
improved commercial banking services to the Bradenton area.
The bank holding company structure will give the Resulting Bank greater
flexibility in carrying on its present activities and responding effectively in
the future to meet the changing needs of its customers. Enterprises with
facilities or customers outside of the Resulting Bank's local area can be
served more effectively by the broader geographic coverage of the Corporation.
Total earnings of the group, including the Corporation and the Resulting Bank,
should be increased through the use of the combined skills of the Bank and the
Corporation.
The new structure will also provide an opportunity for diversification, either
through the formation of new subsidiaries or by acquisition of established
companies. The extent of such diversification is governed by the provisions of
the Bank Holding Company Act of 1956, as amended, and is limited essentially to
ownership of banks and of companies whose activities are closely related to
banking. The activities in which a bank holding company may engage include
mortgage banking, financial companies, credit card activities, servicing of
loans for others, electronic data processing, equipment leasing, insurance
agencies or insurance brokerage operations and certain equity and debt
investments.
In summary, the consolidation of the New Bank with and into the Bank, and the
Resulting Bank's affiliation with the Corporation is expected to enable the
Resulting Bank to operate more efficiently and profitably for the benefit of
its customers, employees and the shareholders of the Corporation.
<PAGE> 4
REPRESENTATIONS
The following representations are made in connection with the proposed
transaction:
1. The fair market value of the Corporation's stock and other consideration
received by each Bank shareholder will be approximately equal to the fair
market value of the Bank stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of Bank who own one
percent (1%) or more of the Bank stock, and to the best of the knowledge
of the management of Bank, there is no plan or intention on the part of
the remaining shareholders of Bank to sell, exchange or otherwise dispose
of a number of shares of the Corporation stock received in the transaction
that would reduce the Bank shareholders' ownership of the Corporation
stock to a number of shares having a value, as of the date of the
transaction, of less than eighty percent (80%) of the value of all of the
formerly outstanding stock of the Bank as of the same date. For purposes
of this representation, shares of Bank stock exchanged for cash or other
property, surrendered by dissenters or exchanged for cash in lieu of
fractional shares of parent stock will be treated as outstanding Bank
stock and shares of Corporation stock held by Bank shareholders and
otherwise sold, redeemed, or disposed of prior or subsequent to the
transaction will be considered in making this representation.
3. The Resulting Bank will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market value
of the gross assets held by the Bank immediately prior to the transaction.
For purposes of this representation, amounts paid by the Bank to
dissenters, amounts paid by the Bank to shareholders who receive cash or
other property, the Bank assets used to pay its reorganization expenses,
and all redemptions and distributions (except for regular, normal
dividends) made by the Bank immediately preceding the transfer, will be
included as assets of the Bank held immediately prior to the transaction.
4. Prior to the transaction, the Corporation will be in control of the New
Bank within the meaning of Section 368(c) of the Internal Revenue Code.
5. Following the transaction, Resulting Bank will not issue additional
shares of its stock that would result in Corporation losing control of
Resulting Bank within the meaning of Section 368(c) of the Internal
Revenue Code.
6. The Corporation has no plan or intention to reacquire any of its stock
issued in the transaction.
7. The Corporation has no plan or intention to liquidate the Resulting Bank;
to merge the Resulting Bank with and into another corporation; to sell or
otherwise dispose of the stock of the Resulting Bank; or to cause the
Resulting Bank to sell or otherwise dispose of any of the assets of the
Bank acquired in the transaction, except for dispositions made in the
ordinary course of business or transfers described in Section 368(a)(2)(C)
of the Internal Revenue Code.
8. The liabilities of the New Bank assumed by the Bank and the liabilities
to which the transferred assets of the New Bank are subject were incurred
by the New Bank in the ordinary course of its business.
<PAGE> 5
9. Following the transaction, the Resulting Bank will continue the historic
business of the Bank or use a significant portion of the Bank's business
assets in a business.
10. The Corporation, the New Bank, and the Bank, and the shareholders of the
Bank will pay their respective expenses, if any, incurred in connection
with the transaction.
11. There is no intercorporate indebtedness existing between the Corporation
and the Bank or between the New Bank and the Bank that was issued,
acquired, or will settle at a discount.
12. No two parties to the transaction are investment companies as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
13. The Bank is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Internal
Revenue Code.
14. The fair market value of the assets of the New Bank transferred to the
Bank will equal or exceed the sum of the liabilities assumed by the Bank,
plus the amount of liabilities, if any, to which the transferred assets
are subject.
15. No stock of the New Bank will be issued in the transaction.
16. No dividends will be paid by the Bank prior to the consummation of the
transaction other than regular periodic dividends, consistent in amount
and in effect with prior dividend distributions.
17. The Bank presently has, and on the date of the proposed transaction will
have, no outstanding warrants, options or convertible securities or any
other type or right pursuant to which any person could acquire shares of
Bank except pursuant to a stock option plan to be adopted by the Company
for Company shares after the transaction.
OPINION
Based on the foregoing "Assumptions of Facts" and "Representations," it is our
opinion that:
1. The consolidation of the New Bank with the Bank qualifies as a statutory
merger/consolidation under the federal banking laws, and provided that
after the transaction the Resulting Bank will hold substantially all of
the assets and substantially all of the liabilities of the Bank and the
New Bank, and in the transaction shareholders of the Bank will exchange,
an amount of stock of Bank representing "control," within the meaning of
Section 368(c), for Corporation voting common stock, the transaction will
constitute a reorganization, within the meaning of Section 368(a)(1)(A)
and (a)(2)(E) of the Internal Revenue Code of 1986, as amended. For
purposes of this opinion, "substantially all" means at least 90 percent of
the fair market value of the gross assets of the Bank and the New Bank.
2. No gain or loss will be recognized by the Corporation, the Bank or the
New Bank upon the acquisition by the Corporation of the stock of the Bank,
as described in number 1, above.
<PAGE> 6
3. The basis of the assets received by the Resulting Bank will be the same
as the basis of such assets in the hands of the Bank immediately prior to
the merger (Section 362(b)).
4. No gain or loss will be recognized by the Corporation upon receipt of
stock of the Bank solely in exchange for stock in the Corporation (Section
354(a)(1)).
5. With respect to Bank shareholders who receive only Corporation voting
stock in the transaction, no gain or loss will be recognized by them on
the receipt of shares of Corporation voting common stock solely in
exchange for shares of their stock in the Bank (Section 354(a)(1)).
6. With respect to those Bank shareholders who receive only Corporation
voting stock in the transaction, the basis of the Corporation stock
received by them will be the same as the basis of their shares of the Bank
stock surrendered in exchange therefor (Section 358(a)(1)).
7. The holding period for the Corporation's stock to be received by the
shareholders of the Bank will include the period during which their shares
of stock in the Bank surrendered in exchange therefor were held, provided
that the shares of the Bank stock surrendered in the exchange were held as
capital assets on the date of the exchange (Section 1223(1)).
This letter is solely for your information and use and, except to the extent
that such may be referred to in the Registration Statement on Form S-4 as filed
with the Securities and Exchange Commission as an exhibit to same, it is not to
be used, circulated, quoted or otherwise referred to for any other purpose, or
relied upon by any other person, for whatever reason without our prior written
consent.
Sincerely,
/s/ Werner & Blank Co., LPA
Werner & Blank Co., L.P.A.
<PAGE> 1
EXHIBIT 24
POWERS OF ATTORNEY
DIRECTORS OF FIRST NATIONAL BANCSHARES, INC.
Know all men by these presents that each person whose name is signed below
has made, constituted and appointed, and by this instrument does make,
constitute and appoint Francis I. duPont, III and Glen W. Fausset, or either
one of them, his true and lawful attorney with full power of substitution and
resubstitution to affix for him and in his name, place and stead, as
attorney-in-fact, his signature as director or officer, or both, of First
National Bancshares, Inc., a Florida corporation (the "Company"), to a
Registration Statement on Form S-4 registering under the Securities Act of
1933, common stock to be issued in connection with the acquisition of First
National Bank of Manatee, and to any and all amendments, post effective
amendments and exhibits to that Registration Statement, and to any and all
applications and other documents pertaining thereto, giving and granting to
such attorney-in-fact full power and authority to do and perform every act and
thing whatsoever necessary to be done in the premises, as fully as he might or
could do if personally present, and hereby ratifying and confirming all that
said attorney-in-fact or any such substitute shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed at Bradenton,
Florida, this 30th day of July, 1998.
/s/ Francis I. duPont, III /s/ Glen W. Fausset
- ------------------------------------- ---------------------------------
Francis I. duPont, III, Director Glen W. Fausset, Director
/s/ Beverly Beall /s/ Robert G. Blalock
- ------------------------------------- ---------------------------------
Beverly Beall, Director Robert G. Blalock, Director
/s/ Allen J. Butler /s/ Rosemary C. Carlson
- ------------------------------------- ---------------------------------
Allen J. Butler, Director Rosemary C. Carlson, Director
/s/ Stephen J. Korcheck /s/ William J. Thompson
- ------------------------------------- ---------------------------------
Stephen J. Korcheck, Ph. D., Director William J. Thompson, Director
/s/ Raymond A. Weigel, III /s/ Dan C. Zoller
- ------------------------------------- ---------------------------------
Raymond A. Weigel, III, Director Dan C. Zoller, Director
<PAGE> 1
EXHIBIT 99.A
{TO BE RETYPED ON THE FIRST NATIONAL BANK OF MANATEE STATIONERY}
__, 1998
Dear Fellow Shareholder:
Enclosed you will find a Notice of Special Meeting of Shareholders and
Proxy Statement. The Special Meeting will be held on _________, ___________,
1998 at ________________________, Bradenton, Florida 34209, at _____ p.m.
(local time). At this meeting your Directors are asking that you approve the
reorganization of the Bank into a One-Bank Holding Company to be known as First
National Bancshares, Inc. The enclosed materials describe in detail the
proposed holding company formation. We urge you to read it carefully.
As we previously have reported to you, your Board of Directors has studied
the formation of a holding company for some time and believes that this is the
appropriate time to proceed with this matter. The formation of a holding
company will give the Bank additional corporate and financial flexibility as a
subsidiary of a registered bank holding company. Your Board of Directors has
unanimously approved the formation of the holding company and recommends that
shareholders vote in favor of the transaction to form First National
Bancshares, Inc. Each of the Directors has agreed to vote their shares in
favor of the transaction. Management will, if necessary, vote its proxies to
adjourn the meeting to insure that the Merger Agreement is approved.
We look forward to seeing you at the Special Meeting. Whether or not you
plan to attend the Meeting, please sign, date and return the enclosed Proxy in
the enclosed envelope at your earliest convenience. The vote of 66 2/3% of all
shareholders is required to approve of the Merger transaction. Thank you for
your continued loyalty and support. If you have questions about this
transaction, please feel free to contact me.
Sincerely,
Glen W. Fausset, President
<PAGE> 1
EXHIBIT 99.B
FIRST NATIONAL BANK OF MANATEE
5817 Manatee Avenue West
Bradenton, Florida 34209
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD
_________, 1998
TO THE SHAREHOLDERS OF FIRST NATIONAL BANK OF MANATEE:
You are hereby notified that a special meeting of the shareholders of
First National Bank of Manatee (the "Bank") will be held on _________, 1998 at
___ p.m. (local time), at _______________________ Bradenton, Florida 34209, for
the purpose of considering and acting upon the following:
1. To consider and vote upon the formation of a holding company by the
adoption of a Consolidation Agreement (the "Agreement") which provides for
the consolidation of Manatee Interim Bank, N.A., a subsidiary of First
National Bancshares, Inc., a Florida corporation (the "Company") with and
into the Bank under the name and charter of First National Bank of Manatee
with shareholders of the Bank receiving two (2) shares of Company stock
for each share of Bank stock held by them.
2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
The Board of Directors has fixed ___________, 1998 as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting.
By order of the Board of Directors
Glen W. Fausset, President
The affirmative vote of the holders of two-thirds (2/3) of the outstanding
common stock of First National Bank of Manatee is required for approval of the
Agreement. Directors of the Bank beneficially owned _____ shares, or ___
percent of the outstanding common stock of the Bank as of __________, 1998.
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. YOU MAY REVOKE YOUR EXECUTED PROXY AT ANY TIME BEFORE IT IS
EXERCISED AT THE SPECIAL MEETING OF SHAREHOLDERS BY NOTIFYING THE CHAIRMAN OF
THE MEETING OR THE SECRETARY OF THE BANK AT, OR PRIOR TO THE MEETING, OF YOUR
INTENTION. IF YOUR STOCK IS HELD IN MORE THAN ONE (1) NAME, ALL PARTIES MUST
SIGN THE PROXY FORM.
<PAGE> 1
EXHIBIT 99.C
PROXY FOR SPECIAL MEETING OF
FIRST NATIONAL BANK OF MANATEE
BRADENTON, FLORIDA
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned shareholder of
First National Bank of Manatee, Bradenton, Florida, do hereby nominate,
constitute, and appoint Francis I. duPont, III and/or Glen W. Fausset, or
either of them (with full power of substitution for me and in my name, place
and stead) to vote all the common stock of said Corporation, standing in my
name on its books on __________, 1998, at the Special Meeting of its
shareholders to be held at ____________________________________, Bradenton,
Florida 34209, on _____________, 1998 at ____ p.m. (local time), or any
adjournments thereof with all the powers the undersigned would possess if
personally present as follows:
1. To approve and vote upon the formation of a holding company by the
adoption of a Consolidation Agreement (the "Agreement"), which provides
for: (i) the consolidation of Manatee Interim Bank, N.A., a wholly owned
subsidiary of First National Bancshares, Inc., a Florida corporation (the
"Company"), with the Bank under the name and charter of First National
Bank of Manatee with shareholders of the Bank receiving two (2) shares of
Company stock for each share of Bank stock held by them.
[ ] For [ ] Against [ ] Abstain
2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF INCLUDING ADJOURNMENT OF THE MEETING.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" THE PROPOSITIONS LISTED ABOVE UNLESS
"AGAINST" OR "ABSTAIN" IS INDICATED. IF ANY OTHER BUSINESS IS PRESENTED AT
SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS
OF MANAGEMENT. ALL SHARES REPRESENTED BY PROPERLY EXECUTED PROXIES WILL BE
VOTED AS DIRECTED.
The Board of Directors recommends a vote "FOR" the propositions. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and may be revoked prior to its
exercise by either written notice or personally at the meeting or by a
subsequently dated proxy.
PLEASE SIGN ON REVERSE SIDE
<PAGE> 2
INSERT LABEL
Date:___________________________________________
________________________________________________
(STOCKHOLDER SIGNATURE)
_________________________________________________
(STOCKHOLDER SIGNATURE)
Please Print Name______________________________________________________________
Please Print Number of Shares__________________________________________________
(WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, PLEASE
GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. ALL JOINT OWNERS
MUST SIGN.)
PLEASE SIGN AND RETURN IMMEDIATELY
