<PAGE> 1
As filed with the Securities and Exchange Commission on January 7, 1999.
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------
SUNCOAST BANCORP, INC.
(Name of Small Business Issuer as specified in its charter)
<TABLE>
<S> <C> <C>
FLORIDA 6712 65-0827141
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification Number)
</TABLE>
5922 CATTLEMEN ROAD, SUITE 202, SARASOTA, FLORIDA 34232 (941) 954-5315
(Address and telephone number of principal place of business)
8522 POTTER PARK DRIVE, SARASOTA, FLORIDA 34238 (941) 954-5315 (Address
of principal place of business or intended principal place of business)
JOHN T. STAFFORD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUNCOAST BANCORP, INC.
5922 CATTLEMEN ROAD, SUITE 202, SARASOTA, FLORIDA 34232
(Name, address and telephone number of agent for service)
---------
Copy to:
JOHN P. GREELEY, ESQUIRE RICHARD A. DENMON, ESQUIRE
SMITH, MACKINNON, GREELEY, CARLTON, FIELDS, WARD, EMMANUEL
BOWDOIN & EDWARDS, P.A. SMITH & CUTLER, P.A.
255 SOUTH ORANGE AVENUE ONE HARBOUR PLACE
SUITE 800 777 SOUTH HARBOUR ISLAND BLVD.
ORLANDO, FLORIDA 32801 TAMPA, FLORIDA 33602-5799
(407) 843-7300 (813) 223-7000
FACSIMILE (407) 843-2448 FACSIMILE (813) 229-4133
---------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. ______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ] _______
---------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to offering price aggregate offering registration
securities to be registered be registered per share (1) price (1) fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, $.01 par value 805,000 shares (2) $10.00 $8,050,000 $2,238
====================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a) under the Securities Act of 1933.
(2) Includes an aggregate of 105,000 shares to cover overallotments, if any,
pursuant to the overallotment option granted to the Underwriters.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE> 2
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS DATED JANUARY 7, 1999; SUBJECT TO COMPLETION.
700,000 COMMON SHARES
$10.00 PER SHARE
SUNCOAST BANCORP, INC.
A PROPOSED HOLDING COMPANY FOR SUNCOAST NATIONAL BANK
This is an initial public offering by Suncoast Bancorp, Inc. of its Common
Shares. Suncoast Bancorp, Inc. has been organized to be, upon receipt of
regulatory approvals, the sole shareholder of Suncoast National Bank (In
Organization). This is a firm commitment underwriting. Prior to this
offering, there has been no public market for the shares. We expect that
quotations for the Common Shares will be reported on the Nasdaq OTC Bulletin
Board under the symbol "SUNB."
AN INVESTMENT IN THE COMMON SHARES IS SPECULATIVE AND INVOLVES RISKS,
INCLUDING THOSE DESCRIBED IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE 4 OF
THIS PROSPECTUS.
The Common Shares offered are not deposits, savings accounts, or other
obligations of a bank or savings association and are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency.
<TABLE>
<CAPTION>
Per Share Total
--------------------
<S> <C> <C>
Public Price ...............................................$10.00 $7,000,000
Underwriting Discounts (1)..................................$ .62 $ 430,000
Proceeds to Suncoast Bancorp, Inc. before expenses .........$ 9.38 $6,570,000
</TABLE>
(1) The Underwriter has agreed with Suncoast Bancorp, Inc. to charge a reduced
underwriter discount of $0.30 per share for sales made to certain investors
identified by Suncoast Bancorp, Inc. to the Underwriter. This reduced rate
is limited to a total of 150,000 shares sold in this offering.
The Underwriter has the right to purchase up to an additional 105,000
shares at the Public Offering Price, less the underwriting discount, within 30
days from the date of this Prospectus to cover over-allotments.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The Underwriter has the right to reject orders in whole or in part and
withdraw, cancel, or modify the offer without notice. We expect that the Common
Shares will be ready for delivery on or about ____________, 1999.
------------------------
ASHTIN KELLY & CO.
, 1999
------------
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.......................................................... 1
Risk Factors................................................................ 4
Recent Developments......................................................... 11
Use of Proceeds............................................................. 11
Dividend Policy............................................................. 13
Capitalization.............................................................. 14
Management's Discussion and Analysis or Plan of Operation................... 14
Business.................................................................... 15
Management.................................................................. 24
Certain Relationships and Related Transactions.............................. 31
Security Ownership of Management and Certain Beneficial Owners.............. 31
Supervision and Regulation.................................................. 32
Description of Capital Stock................................................ 38
Shares Eligible for Future Sale............................................. 41
Underwriting................................................................ 42
Legal Opinions.............................................................. 44
Experts..................................................................... 44
Additional Information...................................................... 44
Index to Financial Statements .............................................. F-1
</TABLE>
[MAP OF THE STATE OF FLORIDA, WITH AN EXCERPT HIGHLIGHTING THE BANK'S LOCATION
IN SARASOTA COUNTY].
<PAGE> 4
SUMMARY
The following is a summary of certain information provided in this
Prospectus. Because this is a summary, it does not contain all of the
information that may be important to you. You should read this entire document
carefully. References in this document to "we," "us," and "our" refer to
Suncoast Bancorp, Inc. In certain instances, where appropriate, such terms refer
collectively to Suncoast Bancorp, Inc. and Suncoast National Bank. References in
this document to the "Company" refer to Suncoast Bancorp, Inc.
THE COMPANY AND THE BANK
We are organizing as a bank holding company to own all of the capital
stock of Suncoast National Bank. The Bank is organizing as a national bank. The
Bank will offer a full range of commercial and consumer banking services in
Sarasota County. We have filed applications with the bank regulatory agencies to
become a bank holding company and to open the Bank. If these applications are
approved, we intend to start business in the second quarter of 1999. We are not
an operating company and we have not engaged in any significant business
operations to date. We expect the Company and the Bank to incur a substantial
loss in the initial years of operation. We currently maintain our office at 5922
Cattlemen Road, Suite 202, Sarasota, Florida 34232. Our phone number is (941)
954-5315.
STRATEGY
We intend to operate a bank providing value to customers by delivering
products and services that meet their needs. We believe that the Bank can
attract customers who prefer to conduct business with a bank that is managed by
local residents and has an active interest in their business. We intend to have
an experienced staff providing personal service and high-quality products. We
intend to have service providers affording customers with convenient electronic
access to their accounts. We also will offer other bank products through debit
cards, voice response and home banking. We believe that this will allow the Bank
to use current technology while minimizing the cost of delivery. We believe this
business will appeal to customers who have been receiving banking services in
the depersonalized environment of our larger banking competitors.
MARKET AREA
Our primary market area will be the southern part of Sarasota, Florida.
Our extended market area will encompass Sarasota County. The economy in this
area is represented by the construction, real estate, retail trade, personal
services, tourism, health care, government and agricultural industries.
BANK PREMISES
We have signed an agreement to lease a building located at 8522 Potter
Park Drive, Sarasota, Florida 34238. This site is located near the intersection
of U.S. 41 and Central Sarasota Parkway, a major intersection in Sarasota.
Commercial and industrial properties and residential communities are located
around the proposed site. The Bank building will consist of approximately 4,000
square feet of office space. It has four inside teller stations, three customer
service platform stations, two drive-through
1
<PAGE> 5
lanes, and a walk-up and night depository ATM lane. We anticipate occupying the
building during the second quarter of 1999.
MANAGEMENT
We have assembled an experienced senior management team and board of
directors. These people have a shared vision and commitment to the success of
the Bank. Certain of our directors and officers have significant banking
experience, including in Sarasota County. John T. Stafford, our President and
Chief Executive Officer, has 27 years of banking experience. Most recently, he
was President and Chief Executive Officer of The Commercial Bank in
Douglasville, Georgia and Chairman, President and Chief Executive Officer of C&S
Bank, Sarasota, Florida. William F. Gnerre, our Executive Vice President and
Senior Loan Officer, has over 30 years of banking experience. He recently served
as Executive Vice President/Senior Credit Officer of The Commercial Bank,
Douglasville, Georgia. He also served in various capacities with National Bank
of Sarasota, including as Senior Vice President and Regional Senior Credit
Officer. We also intend to hire two additional experienced officers to serve as
Vice Presidents of the Bank, supervising the areas of accounting and lending.
All of our directors are business people who have lived in Sarasota
County for many years. They also have significant business interests in the
community. We believe their long-standing ties to the community, combined with
their business and banking experience, will provide the Bank with the unique
ability to understand the needs of the market area.
RISK FACTORS
Before you decide to purchase Common Shares in this offering, you
should read the "Risk Factors" section beginning on page 4 of this Prospectus.
2
<PAGE> 6
QUESTIONS AND ANSWERS ABOUT THE SHARE OFFERING
Q: WHAT IS THE PURPOSE OF THE OFFERING?
A: The purpose of the offering is to raise capital so that we can commence
operation as a bank holding company and the Bank can open for business.
Q: HOW WILL THE OFFERING PROCEEDS BE USED?
A: The net proceeds that we will receive from this offering are estimated
to be $6,400,000. This assumes that 700,000 Common Shares are sold in
the offering and that the underwriter does not exercise its right to
sell an additional 105,000 shares.
We will contribute $6 million of these net proceeds to the Bank. The
Bank will use approximately $430,000 of the proceeds to construct
leasehold improvements and buy furniture, fixtures and equipment and
other necessary assets. The balance of the proceeds will be used by the
Bank to fund investments in loans and securities, and to pay operating
expenses.
Of the $400,000 net proceeds not contributed to the capital of the
Bank, $325,000 of the proceeds will be used to repay a bank line of
credit guaranteed by the directors of the Company and the Bank. The
proceeds of this line of credit were used to pay the expenses of
organizing the Company. As to the remaining $75,000 of proceeds, they
will be invested in an overnight repurchase agreement with the Bank.
They will be used for working capital for general corporate purposes,
to pay operating expenses, and for future capital contributions to the
Bank.
Q: HOW MANY COMMON SHARES MAY I PURCHASE?
A: The minimum purchase is 250 shares ($2,500). The maximum purchase for
any person or persons ordering through a single account, or for any
person, associate or group of persons acting in concert is 35,000
shares or $350,000 of shares sold. We may decrease or increase the
maximum purchase limitation without notifying you.
Q: WHAT PARTICULAR FACTOR SHOULD I CONSIDER WHEN DECIDING WHETHER TO BUY
THE SHARES?
A: Since the Common Shares are expected to be listed initially only on the
OTC Bulletin Board, an active and liquid market for the shares may not
develop and, even if developed, may not be maintained. This may make it
difficult for you to resell the shares you purchase. Also, neither the
Company nor the Bank has opened for business, and we expect the Company
and the Bank to incur a substantial loss in the initial years of
operation. Before you decide to purchase shares, you should read this
prospectus, including the "Risk Factors" section beginning on page 4.
Q: WHO CAN HELP ANSWER ANY OTHER QUESTIONS I MAY HAVE ABOUT THE OFFERING?
A: Ashtin Kelly & Co. is the underwriter for this offering. If you have
any questions you should contact: Ashtin Kelly & Co., 400 Fifth Avenue
South, Naples, Florida 34102, telephone: (941) 435-3888.
3
<PAGE> 7
RISK FACTORS
An investment in the Common Shares is speculative, involves a high
degree of risk and should be considered only by persons who can afford to lose
their entire investment. The following are some of the potential risks of buying
the Common Shares. They should be carefully considered before buying shares. The
order in which the risks are discussed does not indicate their relative
importance. Also, these are not all of the risks of buying the Common Shares.
WE HAVE NO OPERATING HISTORY AND EXPECT TO INCUR SIGNIFICANT INITIAL LOSSES
The proposed operations of the Bank will be subject to all the risks
typically encountered by new businesses and, specifically, to those of operating
a new bank. Neither the Company nor the Bank has yet commenced any business
operations. The Company was only recently formed. The Bank, which will be the
Company's sole subsidiary, is in organization and will not receive final
approval from banking regulators to begin operations until after this offering
is completed. Accordingly, you do not have access to information that would be
available to purchasers of shares in financial institutions that are conducting
business. All of the Bank's initial loans will be unseasoned new loans to new
borrowers. It will take several years to determine the borrowers' payment
histories. As a result, management will not be able to evaluate the quality of
the Bank's loan portfolio until that time. Consequently, in the Bank's early
years, both you and management will have difficulties evaluating the adequacy of
the Bank's underwriting procedures and its loan loss reserve policy. This may
increase the risk of potential loan losses by the Bank and increase the
possibility that the money reserved for such losses may not be adequate. The
Company will not be profitable if the Bank is not profitable. And there is no
assurance that the Bank will be profitable. If the Bank is ultimately
unsuccessful, you may not recover all or any part of your investment in the
Common Shares.
WE MUST OBTAIN REGULATORY APPROVALS BEFORE WE OPEN
The Company and the Bank have applied for all regulatory approvals to
start operations. There is no assurance that required final approvals will be
received, or will be received on a timely basis. On ___________, 1999, the Bank
received preliminary approval from the Office of the Comptroller of the Currency
to commence operations. We believe that all regulatory approvals will be
received after a reasonable period. The regulatory approvals will be subject to
certain conditions, including:
- The Bank must open with capital of at least $6 million. The
Company proposes to satisfy this requirement by using $6.0
million of the proceeds from this offering to invest in the
Bank.
- Its Tier 1 capital - to - total assets ratio must be at least
8% for the first 3 years.
- The Company may not incur debt during its first five years
without prior approval from the bank regulatory agencies.
- The Bank must not deviate materially from its operating plan
submitted to the bank regulatory agencies.
- The bank regulatory agencies must approve the directors and
officers of the Company and the Bank.
4
<PAGE> 8
We anticipate receipt of final regulatory approval to start business in
the second quarter of 1999. If such regulatory approvals are delayed, the
Company's accumulated deficit will continue to increase. If the regulatory
approvals are not obtained at all, the Company would not be able to open the
Bank, and would be liquidated and dissolved. Upon liquidation, you would realize
a substantial loss on your investment.
YOU COULD LOSE A PORTION OF YOUR INVESTMENT IF WE FAIL TO COMMENCE OPERATIONS
The Company anticipates the Bank will commence its operations in the
second quarter of 1999. There is no assurance that the Bank will open during
that time. As of October 31, 1998, the Company's accumulated deficit was $71,006
($_______ as of ________, 1999). The Company will continue to incur pre-opening
expenses until the Bank opens. If the opening of the Bank is delayed, the
pre-opening expenses will increase and the Bank's ability to develop business
and income will be delayed. Until the Bank is profitable, the Company's
accumulated deficit will continue to increase and the book value per share will
decrease. This is because the Bank will be incurring expenses such as rent,
salaries, and operating expenses. After the closing of this offering and before
the Bank starts business, the offering proceeds will be available to pay general
operating expenses and certain organizational and pre-opening expenses of the
Company and the Bank. The offering proceeds may be subject to claims of
creditors of the Company and the Bank. The Company intends to use approximately
$325,000 of the net proceeds to repay the bank line of credit used to pay for
certain organizational and pre-opening expenses of the Company and the Bank. The
Company expects to use an additional $______________ for general operating
expenses through the second quarter of 1999, including payments on the lease for
the Bank's main facility and for furniture, fixtures, and equipment. If the
Company were liquidated, it is unlikely it will recover its full investment in
furniture, fixtures and equipment. Thus, if the Company were to liquidate before
it starts business or becomes profitable, you would likely realize substantially
less than the $10.00 per share price that you paid for the Common Shares.
WE WILL NEED TO DISSOLVE IF WE DO NOT GET REGULATORY APPROVALS
The Company and the Bank have applied for all regulatory
approvals required to commence operations and anticipate receipt of all
necessary regulatory approvals by the second quarter of 1999. On _________,
1999, the Bank received preliminary approval from the Office of the Comptroller
of the Currency to open the Bank. The closing of this offering is not
conditioned on the Company and the Bank receiving final approvals to commence
their businesses. If the Company sells the Common Shares, but does not receive
final approval to open the Bank within 18 months after the date of the
preliminary approval received from the banking agencies, the Company will seek
shareholder approval to dissolve the Company. If the Company is dissolved and
liquidated, we will distribute to shareholders the Company's net assets
remaining after payment or provision for payment of all claims against the
Company. Shareholders will receive only a portion of their original investment
because part of the proceeds of the offering will have been used to pay all
capital costs and incurred by the Company, including the expenses of the
offering, the organizational and pre-opening expenses of the Company and the
Bank, and claims of creditors. These creditor claims include a bank line of
credit for organizational and pre-opening expenses of the Company and the Bank.
If the Company is dissolved after the Common Shares are sold, it is possible
that shareholders will receive only a portion of their investment due to the
foregoing expenses.
5
<PAGE> 9
OUR SUCCESS DEPENDS ON SUCCESSFULLY IMPLEMENTING OUR BUSINESS STRATEGIES
The organizers of the Company and the Bank have developed a business
plan that contains the strategy that we intend to use in order to make the Bank
profitable. This strategy includes hiring and retaining qualified employees who
are familiar with the Sarasota market, community involvement, a community based
marketing program, and providing personalized quality banking services to its
customers. If we cannot hire or retain qualified employees or do not otherwise
successfully execute our business strategy, our ability to develop business and
serve our customers will be hindered. This could have an adverse effect on our
financial performance. Even if we successfully implement our business strategy,
it may not have the favorable impact on operations that we anticipate.
WE FACE SIGNIFICANT COMPETITION IN SARASOTA COUNTY
The Bank will face strong competition for deposits, loans and other
services. These competitors include many Florida and out-of-state banks,
thrifts, credit unions and other businesses that offer financial services. Some
of the businesses that compete with the Bank are not subject to the same amount
of regulation as the Bank. As of October 1998, approximately 132 branch bank
offices, 16 thrift offices and five credit union offices were located in
Sarasota County. Most of these competitors have been in business for many years,
have established customer bases, are larger, and have substantially higher
lending limits than the Bank. Many offer certain services, including trust
services, multiple branches and international banking services, that the Bank
can offer only through correspondents, if at all. In addition, most of these
entities have greater capital resources than the Bank. This may allow them to
price their services at levels more favorable to the customer and to provide
larger loans than the Bank can provide. Our profitability will depend on our
ability to compete successfully.
WE FACE CERTAIN CAPITAL REQUIREMENTS
Although we do not believe we will need additional capital during the
next 12 months to start and maintain our planned business activities, we will
need additional capital above that raised in this offering and generated by the
Bank's income before we can significantly expand operations. There is no
assurance that funds necessary to finance such expansion will be available. The
bank regulatory agencies require the Company and the Bank to maintain certain
minimum capital. This also has the effect of constraining future growth, unless
the Company and the Bank increase their capital. If the Company sells additional
shares in the future to increase its capital, the sale could significantly
dilute your ownership interest in the Company.
The Bank's initial lending limit to any one borrower will be
approximately $767,000. The Board of Directors may establish an "in-house" limit
that will be lower than the Bank's legal lending limit. The Board may
periodically raise or lower the "in-house" limit to comply with sound banking
practices and respond to overall economic conditions. Thus, the size of the
loans which the Bank can offer to customers will be less than the size of loans
that most of the Bank's competitors are able to offer. Initially, this limit may
adversely affect the Bank's ability to seek relationships with the area's larger
businesses. The Bank expects to accommodate loan volumes in excess of its
lending limit through the sale of participations in such loans to other banks.
There can be no assurance that the Bank will be successful in attracting or
maintaining customers seeking larger loans. There also is no assurance that the
Bank will be able to sell portions of these loans on terms favorable to the
Bank.
6
<PAGE> 10
WE ARE SUBJECT TO EXTENSIVE REGULATION
We will be subject to extensive federal and state government
supervision and regulation. Federal and state banking laws limit the Bank's
right to make loans, purchase securities, pay dividends, and many other aspects
of its banking business. These and other restrictions limit the manner in which
we may conduct our business and obtain financing. These laws are intended
primarily to protect the Bank's depositors and are not for the benefit of
shareholders. In addition, the burdens and restrictions imposed by federal and
state banking regulations may place us at a competitive disadvantage compared to
competitors who are less regulated. These laws also affect many other aspects of
the Bank's banking business. Future legislation or government policy could
adversely affect the banking industry or the operations of the Bank. Federal
economic and monetary policy may affect the Bank's ability to attract deposits,
make loans, and achieve satisfactory interest spreads.
OUR SUCCESS DEPENDS ON KEY PERSONNEL
We will depend upon the services of John T. Stafford, the President and
Chief Executive Officer of the Company and the Bank, and William F. Gnerre,
Executive Vice President of the Company and the Bank and Chief Operating Officer
and Senior Loan Officer of the Bank. Mr. Stafford and Mr. Gnerre have been
instrumental in the organization of the Bank and will provide valuable services
to the Company and the Bank. Both of these individuals are important to our
success and the loss of either of these individuals could adversely affect our
operations. When the Bank opens, we intend to enter into employment agreements
with Mr. Stafford and Mr. Gnerre to help secure their continued service to the
Bank and the Company. Additionally, our directors' community involvement,
diverse backgrounds, and extensive local business relationships are important to
our success. If the composition of our Board of Directors changes materially,
our growth could be adversely affected. Ultimately, our success will depend on
our ability to identify, attract, develop, and retain qualified directors,
officers, and other employees. We expect the competition for such individuals to
be intense, and there can be no assurance that we will be successful in
identifying, attracting, developing, or retaining qualified persons.
LENDING RISKS AND LENDING LIMITS
The risk of borrowers not paying their loans is inherent in commercial
banking. Loan defaults may have a material adverse effect on our earnings and
overall financial condition as well as the value of the Common Shares. The risk
of loss is affected by general economic conditions, the type of loan, the
borrower's overall ability to repay the loan, and the quality of the collateral,
if any, provided to the Bank for the loan. Some types of loans carry a greater
risk of default than other loans. For example, historically commercial loans
tend to run a higher risk of default than residential real estate loans.
Although the Bank intends to offer a full range of loans to its customers, the
Bank expects to focus on small-to-medium sized businesses. This may result in a
larger concentration by the Bank of loans to such businesses. As a result, the
Bank may assume greater lending risks than banks which have a lesser
concentration of such loans and tend to make loans to larger businesses.
Commercial loans carry other additional risks. Their repayment is typically
dependent on the success of the borrower's business. Accordingly, commercial
loans are affected more by adverse general economic conditions than real estate
loans. Also, because commercial loans usually involve larger loan balances to
single borrowers than other types of loans, the Bank's loan portfolio is more
likely to have a higher concentration of these loans, the risk of which will be
spread over a smaller number of borrowers. We will attempt to minimize the
Bank's credit risk by carefully monitoring the concentration of its loans within
specific industries.
7
<PAGE> 11
We intend to establish prudent loan application and approval procedures.
However, there is no assurance that such monitoring and procedures will reduce
these lending risks. A significant number of, or dollar amount of, loan defaults
and nonpayments would have an adverse impact on the Bank's profitability and the
value of the Common Shares.
The business economy of the Bank's market area is represented primarily
by the retail trade, construction and real estate, entertainment services,
finance and insurance, health care, and agribusiness industries. The Bank's
loans may be concentrated to one or more of these industry groups. Adverse
conditions in any one or more of the industries operating in our market or a
slowdown in economic conditions could adversely affect the Bank, including its
ability to originate and collect loans.
CHANGES IN INTEREST RATES AND ECONOMIC CONDITIONS MAY AFFECT OUR PROFITABILITY
The profitability of financial institutions, including the Bank, may be
adversely affected by changes in economic conditions, real estate values,
interest rates, and the policies of the federal government. The Bank's
profitability also depends on the difference between the amount of interest the
Bank earns on investments and loans, and the interest it pays on deposits and
other liabilities. This difference is referred to as the Bank's interest rate
spread. Recently, interest rate spreads have narrowed due to changing market
conditions and competitive pricing pressure. Substantially all the Bank's loans
will be to businesses and individuals in the Southwest Florida area. Any decline
in the economy of this area could have an adverse impact on the Bank. Like most
banking institutions, the Bank's net interest spread and margin will be affected
by general economic conditions and other factors which influence interest rates.
The Bank's assets and liabilities will be affected differently by a given change
in interest rates. Thus, an increase or decrease in rates, the length of loan
terms, or the mix of adjustable and fixed rate loans in the Bank's portfolio
could have a positive or negative effect on the Bank's net income, capital and
liquidity. Changes in interest rates are not predictable or controllable.
Negative developments in the economy or the Bank's inability to respond to such
changes, could adversely affect the Bank and the Company.
WE NEED TO STAY CURRENT ON TECHNOLOGICAL CHANGES
The banking industry is undergoing rapid technology changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, effective use of technology increases
efficiency and enables banks to reduce costs. Our future success will depend in
part on our ability to address the needs of our clients by using technology to
provide products and services that will satisfy client demands for convenience
as well as to create additional efficiencies in our operations. Many of our
competitors have substantially greater resources to invest in technology
improvements and highly skilled technical personnel. To be competitive, we may
need to spend significant amounts on computer hardware and software, and for
technical personnel. There can be no assurance that we will be able to
effectively implement new technology-driven products and services or be
successful in marketing these products and services to our clients.
WE FACE YEAR 2000 ISSUES
A great deal of information has been disseminated about the widespread
computer problems that may arise in the year 2000. Computer programs that can
only distinguish the final two digits of the year entered (a common programming
practice in early years) are expected to read entries for the year 2000 as
8
<PAGE> 12
the year 1900 and compute payment, interest and delinquency, based on the wrong
date or are expected to be unable to compute payment, interest or delinquency.
Rapid and accurate data processing is essential in the operation of the Bank.
Data processing is also essential to most other financial institutions and many
other companies.
All our material data processing that could be affected by the year
2000 issue described above will be provided by a third party service bureau. We
intend to select a service bureau that will function properly on and after
January 1, 2000. Prior to selecting a service bureau, we intend to have that
service bureau certify to us that they will be year 2000 compliant. Thus, we do
not believe that the cost of year 2000 compliance will have a material adverse
effect on our financial condition or results of operation. However, any delays,
mistakes, or failures resulting from the failure of our data processing service
provider to be year 2000 compliant could have a significant adverse impact on
our financial condition and results of operations. Although we intend to require
certification of year 2000 readiness before the Company or the Bank engages a
service bureau or purchases any equipment, we cannot verify independently that
such service bureau or equipment will in fact be year 2000 compliant.
Additionally, the Bank could be adversely affected by year 2000 problems
experienced by others over which it has no control -- such as customers,
customers' vendors, correspondent banks, service providers, and government
agencies. If, for example, a significant borrower experiences a year 2000
problem which negatively affects its operations, such borrower may not be able
to maintain its cash flow and could default on its loan. This could lead to loan
losses for the Bank.
ANTI-TAKEOVER LAWS MAY AFFECT SHARE VALUES
Under Federal law, a person, entity or group must notify the Federal
banking agencies before acquiring 10% or more of the outstanding voting stock of
a bank holding company, including the Company. Banking agencies review the
acquisition to determine if it will result in a change of control. The banking
agencies have 60 days to act on the notice, and take into account certain
factors, including the resources of the acquirer, the needs of the community,
and the antitrust effects of the acquisition. Florida law contains similar
provisions which require prior approval before a change of control can be
completed. These laws have the effect of deterring unsolicited attempts to
acquire control of the Company. These provisions also could result in the
Company being less attractive to a potential acquirer. Thus, these laws could
result in shareholders receiving less for their shares than otherwise might be
available in the event of a change in control of the Company.
WE DO NOT PLAN TO PAY CASH DIVIDENDS
We do not anticipate paying any cash dividends on the Common Shares for
the immediately foreseeable future. Our ability to pay dividends also will be
largely dependent upon dividends paid by the Bank to the Company. We do not
intend that the Bank pay dividends during the early years of its operations. No
assurance can be given that future earnings of the Bank, and any resulting
dividends to the Company, will be sufficient to permit the legal payment of
dividends to Company shareholders at any time in the future. Bank holding
companies and national banks are both subject to significant regulatory
restrictions on the payment of cash dividends. Even if we may legally declare
dividends, the amount and timing of such dividends will be at the discretion of
our Board of Directors. The Board may in its sole discretion decide not to
declare dividends. In light of the regulatory restrictions and the need for the
Company and the Bank to retain and build capital for growth and expansion, it
will be the policy of the Board of Directors of the Company and the Bank to
reinvest earnings for the foreseeable future.
9
<PAGE> 13
OUR OBLIGATIONS TO INDEMNIFY DIRECTORS AND OFFICERS COULD REDUCE EARNINGS
Our Bylaws provide for the indemnification of officers, directors,
employees, and agents. It is possible that these indemnification obligations
could result in a charge against our earnings and thereby affect, directly or
indirectly, the availability of funds for payment of dividends to our
shareholders.
THE OFFERING PRICE IS ARBITRARILY DETERMINED
The initial public offering price of $10.00 per share was determined by
negotiations between us and Ashtin Kelly & Co., the underwriter of this
offering. This price is not based upon earnings or any history of operations and
does not bear any relationship to our net worth, book value, or other
established valuation measurements. Accordingly, the initial price should not be
construed as indicative of the present or anticipated future value of the Common
Shares. If a market for the Common Shares should develop, the offering price may
be greater than the market price.
WE ARE CURRENTLY CONTROLLED BY MANAGEMENT
After this offering, we anticipate that our directors and officers
collectively will beneficially own 140,000 Common Shares and options to purchase
an additional 56,000 Common Shares at the initial offering price. Without the
exercise of the options, the directors and officers will have control over 20%
of the outstanding Common Shares (or 17.4% if the over-allotment option is
exercised in full). With the exercise of all of the options, they would control
25.9% of the then-outstanding Common Shares (or 22.8% if the over-allotment
option is exercised in full). As a result, these individuals will be able to
exert a significant measure of control over our affairs and policies. This
control could be used, for example, to help prevent an acquisition of the
Company. This could preclude shareholders from possibly realizing any premium
which may be offered for the Common Shares by a potential acquirer.
OUR COMMON SHARES MAY HAVE NO OR LIMITED MARKET
Prior to this offering, there has been no public trading market for the
Common Shares. We have applied to list the Common Shares for quotation on the
Nasdaq OTC Bulletin Board under the symbol "SUNB." The underwriter has told us
that, after completion of this offering, it presently intends to act as a market
maker in the Common Shares, subject to applicable laws and regulatory
requirements. Making a market in securities involves maintaining bid and ask
quotations. It also involves being able, as principal, to effect transactions in
reasonable quantities at those quoted prices. This activity is subject to
various securities laws and other regulatory requirements. Developing a public
trading market depends upon having willing buyers and sellers. This is not
within the control of the Company, the Bank or any market maker. Even with a
market maker, factors such as the small size of this offering, the lack of
earnings history for the Company and the absence of a reasonable expectation of
dividends in the near future mean that an active and liquid market for the
Common Shares may not develop in the foreseeable future, if at all. Even if a
market develops, there can be no assurance that a market will continue, or that
you will be able to sell your shares at or above the initial public offering
price of $10.00 per share. Also, the underwriter has no obligation to make a
market in the Common Shares. If commenced, the underwriter may cease market
making activities at any time. The potential size of a secondary market for the
Common Shares might, at least initially, be limited by the $2,500 minimum
investment required in this offering. This requirement may restrict the number
of shareholders and make subsequent trading of small numbers of shares less
likely. If no trading market develops or is maintained, you may find it
10
<PAGE> 14
difficult to sell your shares. You should carefully consider the potentially
illiquid and long-term nature of their investment in the shares.
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain "forward-looking statements", such as
statements relating to financial condition and prospects, lending risks, Year
2000 readiness, plans for future business development and marketing activities,
capital spending and financing sources, capital structure, the effects of
regulation and competition, and the prospective business of both the Company and
the Bank. Where used in this Prospectus, the words "anticipate", "believe",
"estimate", "expect", "intend", and similar words and expressions, as they
relate to the Company or the Bank or their respective managements, identify
forward-looking statements. Such forward-looking statements reflect the current
views of the Company and are based on information currently available to the
management of the Company and the Bank and upon current expectations, estimates,
and projections about the Company and its industry, management's beliefs with
respect thereto, and certain assumptions made by management. These
forward-looking statements are not guarantees of future performance and are
subject to risks, uncertainties, and other factors which could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements. Potential risks and uncertainties include, but are
not limited to: (i) significant increases in competitive pressure in the banking
and financial services industries; (ii) changes in the interest rate environment
which could reduce anticipated or actual margins; (iii) changes in political
conditions or the legislative or regulatory environment; (iv) general economic
conditions, either nationally or regionally (especially in southwest Florida),
becoming less favorable than expected resulting in, among other things, a
deterioration in credit quality; (v) changes occurring in business conditions
and inflation; (vi) changes in technology; (vii) changes in monetary and tax
policies; (viii) changes in the securities markets; and (ix) other risks and
uncertainties detailed from time to time in the filings of the Company with the
Commission. The most significant of such risks, uncertainties, and other factors
are discussed under the heading "Risk Factors," beginning on page 4 of this
Prospectus, and prospective investors are urged to carefully consider such
factors.
RECENT DEVELOPMENTS
As of October 31, 1998, the date of the Company's most recent audited
financial statements, the Company's accumulated deficit was $71,006. Since
October 31, 1998, the Company has continued to incur pre-opening expenses and as
of _________, 1999, the Company's accumulated deficit was $________. The
additional expenses incurred related principally to legal and professional fees
incurred in the regulatory application process and in connection with this
offering, salaries, equipment rental and supplies.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 700,000 Common
Shares offered hereby are estimated to be $6,400,000 ($7,376,500 if the
Underwriter's over-allotment option is exercised in full), after deduction of
the underwriting discounts and commissions and estimated offering expenses.
11
<PAGE> 15
The net proceeds have not been reduced by the amount of the Company's
organizational and other operating expenses which were $__________ as of
_________, 1999.
The Company will use $6.0 million of the net proceeds of this offering
to purchase all of the common stock of the Bank, providing the Bank's initial
capitalization. Of the amount contributed to the Bank, approximately $430,000 of
these funds are expected to be used to construct leasehold improvements and buy
necessary furniture, fixtures and equipment expense for the Bank's office. It is
anticipated that the remaining amount will be used by the Bank to fund
investments in loans and U.S. government and agency securities, federal funds
sold, and for payment of the Bank's operating expenses.
After capitalizing the Bank as set forth above, the balance of the net
proceeds of this offering, that will be retained by the Company is estimated to
be approximately $400,000. Of this amount, approximately $325,000 will be used
to repay a bank line of credit, the proceeds of which were used to pay the
expenses of organizing the Company and the Bank. The line of credit is
guaranteed by the directors of the Company and the Bank , provides for interest
only payments (at prime plus 1%, adjustable monthly), and matures on May 1,
1999. The remaining proceeds (plus any net proceeds as a result of the exercise
of the Underwriter's over-allotment option) will initially be invested by the
Company in an overnight repurchase agreement with the Bank secured by U.S.
Treasury and Agency securities and otherwise will be held by the Company as
working capital for general corporate purposes as well as for possible future
capital contributions to the Bank to support asset growth. Such uses by the
Company, however, may be subject to change. The Company believes that the net
proceeds of the offering will satisfy the Company's cash requirements for at
least the first 12 month period following the opening of the Bank.
The following table illustrates the intended use by the Company of the
net proceeds of this offering:
<TABLE>
<CAPTION>
Dollar Amount
-------------
<S> <C>
Repay amounts drawn on Line of Credit $ 325,000
Contribution to the Capital of the Bank 6,000,000
Working Capital 75,000
----------
Total $6,400,000
==========
</TABLE>
12
<PAGE> 16
After the Bank receives the necessary regulatory approvals, the Company
will capitalize the Bank with a minimum of $6 million. The Bank intends to use
these proceeds for the following purposes:
<TABLE>
<CAPTION>
Dollar Amount
-------------
<S> <C>
Construction of leasehold improvements $ 100,000
Furniture, fixtures and equipment for the Bank's main office 330,000
Funds to be used for loans to customers, investments and other general
purposes 5,570,000
----------
Total $6,000,000
==========
</TABLE>
DIVIDEND POLICY
Holders of the Company's Common Shares are entitled to receive cash
dividends when and if declared by its Board of Directors out of funds legally
available therefor.
The Company initially expects that all Company and Bank earnings, if
any, will be retained to finance the growth of the Company and the Bank and that
no cash dividends will be paid for the foreseeable future. The primary source of
dividends to the Company's shareholders, if any, in the future, will depend
primarily on the earnings of the Bank and its ability to pay dividends to the
Company, as to which there can be no assurance. Under Federal law, the Bank will
be restricted as to the maximum amount of dividends it may pay on its common
stock. Also, the approval of the OCC is required for the payment of any dividend
if the aggregate amount of all dividends paid by the Bank during such calendar
year would exceed the sum of: (1) the total net profits of the Bank for that
year; and (2) the retained net profits of the Bank for the previous two years
less any required transfer to surplus. The OCC and the FDIC are also authorized
under certain circumstances to prohibit the payment of dividends by the Bank.
Under federal law and the policy of the Board of Governors of the Federal
Reserve System (the "Federal Reserve"), a bank holding company is required to
serve as a source of financial strength to its subsidiary bank and to commit
resources to support the bank. Consistent with this requirement, the Federal
Reserve has stated that, as a matter of prudent banking, a bank holding company
generally should not pay cash dividends unless the available net income of the
bank holding company is sufficient to fully fund the dividends, and the
prospective rate of earnings retention is to be consistent with the company's
needs, asset quality and overall financial condition. For additional information
regarding restrictions on payment of dividends, see "Supervision and Regulation
- - Dividends."
13
<PAGE> 17
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
October 31, 1998, and as adjusted to reflect the sale of the Common Shares
offered hereby at the public offering price of $10.00 per Share:
<TABLE>
<CAPTION>
October 31, 1998
----------------------------------
Actual As adjusted (1)(2)
------------- ------------------
<S> <C> <C>
Long-term and short-term debt.......................... $ 129,016 $ -0-
========= ==========
Shareholders' equity:
Preferred Shares; $.01 stated par; 3,000,000 shares
authorized; no shares issued or outstanding....... -0- -0-
Common Shares; $.01 par value, 10,000,000 shares
authorized; one share issued and outstanding
700,000 shares as adjusted) (3)................... -0- 7,000
Additional paid-in capital............................. 1 6,393,000
Accumulated deficit (4)................................ (71,006) (71,006)
--------- ----------
Total shareholders' equity............................. $ (71,005) $6,328,994
========= ==========
</TABLE>
(1) As adjusted to give effect to the offering and receipt of the net
proceeds therefrom.
(2) The amount reflected assumes that the over-allotment option granted to
the Underwriter is not exercised.
(3) Does not include (i) 42,000 Common Shares issuable upon exercise of
options to be granted to non-employee directors of the Company upon
opening of the Bank under the Suncoast Bancorp Director Stock Option
Plan, and (ii) 14,000 Common Shares issuable upon exercise of options
to be granted to Messrs. Stafford and Gnerre upon opening of the Bank
under the Suncoast Bancorp, Inc. Employee Stock Option Plan. See
"Management-Stock Option Plans."
(4) The accumulated deficit is comprised primarily of pre-opening expenses
incurred through October 31, 1998, related principally to legal and
professional fees incurred in the regulatory application process,
creation of the holding company, office occupancy costs and supplies.
In addition, William F. Gnerre has been receiving consulting fees since
April 1998 and John T. Stafford an automobile allowance from the
Company since July 1998. The accumulated deficit will continue to
increase prior to the Bank's commencement of operations, and will then
increase further as expected initial operating losses are incurred.
Additional employees will be hired prior to the opening of the Bank and
further salary expenses and training costs will be incurred at such
time. Additional professional fees will also be incurred in connection
with this offering and other corporate matters.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
The Company is still in a development stage and will remain in that
stage until the offering of the Company's Common Shares is completed and the
Bank commences operations. The Company has funded its start-up and organization
costs through a $325,000 bank line of credit, which is guaranteed by the
directors of the Company and the Bank. This line of credit will be repaid from
the net proceeds of the offering. The Company believes that the net proceeds of
the offering will satisfy the Company's cash requirements for at least the first
12 month period following the opening of the Bank. Accordingly, the Company does
not anticipate that it will be necessary to raise additional funds for the
operation of the Company and the Bank during such 12-month period.
14
<PAGE> 18
The operations of the Company from April 1, 1998 ("Inception") through
the close of the offering have been or will continue to be funded through a line
of credit received by the organizers. The total amount available on the line of
credit is $325,000, of which approximately $81,187 was outstanding at October
31, 1998. This loan has been guaranteed by the organizers, bears interest at the
prime rate plus 1%, is adjustable monthly and is due on May 1, 1999. From
Inception to October 31, 1998, the net loss amounted to $71,006. The estimated
net loss from Inception through __________, 1999, the anticipated opening date
of the Bank, is $_________, which is attributable to the following estimated
noninterest expenses:
<TABLE>
<S> <C>
Salaries and benefits: $__________
Lease deposits and payments __________
Purchase of furniture, fixtures and equipment __________
Other pre-opening expenses __________
Total $
==========
</TABLE>
For additional information regarding material expenditures during such
period, see "Use of Proceeds." For information regarding the increase in Company
employees following the opening of the Bank, see "Business - Employees." For
additional information regarding the plan of operations for the Company and the
Bank see "Business" and "Management."
BUSINESS
GENERAL
The Company was incorporated under the laws of the State of Florida on
April 1, 1998 under the name Community Holdings Corporation. The Company changed
its name to Suncoast Bancorp, Inc. on November 20, 1998. The Company was formed
primarily to own all of the common stock of the Bank and to serve as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). The Bank is organizing as a national banking association with depository
accounts to be insured by the FDIC to the extent permitted by law. The Bank
intends to offer a full range of commercial and consumer banking services
primarily within the Bank's designated market area. The market area includes the
southern part of Sarasota County (including the community of Osprey). The Bank's
extended market area encompasses all of Sarasota County. The Company and the
Bank have applied for all necessary regulatory approvals. Assuming such
regulatory approvals are received and the successful completion of this
offering, the Company and the Bank anticipate commencing business in the second
quarter of 1999. On ______________, 1999, the Bank received OCC Preliminary
Approval. The Bank intends to commence business as soon as reasonably possible
upon completion of the offering and satisfaction of conditions to which certain
of its regulatory approvals is subject. See "Risk Factors Governmental
Regulation and Monetary Policy". The Company currently maintains its offices at
5922 Cattlemen Road, Suite 202, Sarasota, Florida 34232. Upon completion of the
Bank's facility, the address will be 8522 Potter Park Drive, Sarasota, Florida
34238. The Company anticipates that the Bank's facility will be completed in the
second quarter of 1999. The Company's telephone number is (941) 954-5315.
15
<PAGE> 19
The Bank is being formed by local business persons who have identified
the need for a consumer-oriented independent community bank in Sarasota County,
Florida to serve its growing population and expanding business base. The
liberalization of Federal and State of Florida interstate banking laws in recent
years has led to substantial consolidation of the banking industry in Florida
and the southwest Florida area. Since the early 1990s, several of the area's
locally owned or locally managed financial institutions have been acquired by
large regional bank holding companies. Members of the Company's Board, all of
whom have been participants or observers of the local banking scene for many
years, have noticed the need for a locally owned, highly service-oriented
banking organization to fill a void created by this consolidation in the banking
industry. Specifically, the Board believes that the area could greatly benefit
from a financial institution whose focus would be to serve the business and
personal banking needs of local entrepreneurs and local business owners. The
Board also believes that this niche is currently being under-served by other
banks.
In the opinion of the Company's management, this situation has created
a favorable opportunity for a new commercial bank with headquarters in the
Sarasota area. Management of the Company believes that such a bank can attract
those clients who prefer to conduct business with a locally-managed institution
that demonstrates an active interest in their businesses and personal financial
affairs. The Company believes that a locally managed institution will be better
able to deliver more timely responses to client requests, provide customized
financial products or services addressing out-of-the-ordinary matters and offer
the personal attention of senior banking officers. The Bank will seek to take
advantage of this opportunity by emphasizing in its marketing plan the Bank's
local management and the Bank's ties and commitment to the local community.
The Bank intends to be a full service commercial bank. The business of
the Bank will consist of attracting deposits from the general public in the
Bank's market area and using those deposits, together with funds derived from
other sources, to originate a variety of commercial, consumer, and residential
real estate loans. While the Bank anticipates that its lending activities will
include residential real estate and consumer loans, it expects to focus its
efforts on lending relationships with small to medium-sized businesses. The
Bank's focus will be on the smaller commercial customer because management
believes that this segment offers the greatest concentration of potential
business. Also, the small to mid-sized commercial market segment has
historically shown a willingness to borrow and carry larger balances. Finally,
the Company believes that this market segment tends to be more loyal in its
banking relationships. The Bank intends to offer a full range of deposit
services that are typically available at most banking institutions, including
personal and business checking accounts, senior checking accounts,
interest-bearing checking accounts, savings accounts, and other time deposits of
various types, ranging from daily money market accounts to longer-term
certificates of deposit. The transaction accounts and time certificates will be
tailored to the market area at rates competitive to those offered in the area.
The Bank's deposits will be insured up to applicable limits by the FDIC. The
Bank also intends to offer commercial loans, consumer installment loans, real
estate loans, construction loans, second mortgage loans (including home equity
loans), and lines of credit. Commercial loans will include both secured and
unsecured loans for working capital (including inventory and receivables),
business expansion (including acquisition of real estate and improvements), and
purchase of machinery and equipment. Consumer loans will include secured and
unsecured loans for financing automobiles, boats, home improvements and personal
investments. Other services the Bank is expected to offer will include official
bank checks and money orders, travelers checks, bank by mail, safe deposit
boxes, wire transfers, direct deposit and payroll and social security checks,
automatic drafts for various accounts, and U.S. Savings Bonds. The
16
<PAGE> 20
Bank does not anticipate initially providing fiduciary services. The need for
such services, however, will be reviewed periodically for possible future
inclusion among the Bank's products and services.
The revenues of the Bank will be primarily derived from interest on and
fees received in connection with, commercial, real estate, and other loans, from
the sales of loans and from interest on and dividends from investment securities
and short-term investments. The principal sources of funds for the Bank's
lending activities will be its deposits, amortization and repayment of loans,
sales of loans, and the sale of investment securities. The principal expenses of
the Bank will be the interest paid on deposits and operating and general
administrative expenses.
As is the case with banking institutions generally, the Bank's
operations will be materially and significantly influenced by general economic
conditions and by related monetary and fiscal policies of financial institution
regulatory agencies, including the Board of the Governors of the Federal Reserve
System and the FDIC. Deposit flows and cost of funds are influenced by interest
rates on competing investments and general market rates of interest. Lending
activities are affected by the demand for financing of real estate and other
types of loans, which in turn is affected by the interest rates at which such
financing may be offered and other factors affecting local demand and
availability of funds.
The Company's primary initial focus will be the development of the
Bank's business from a single office location. As warranted, the Company will
consider diversifying its activities over time to include additional services
and banking locations. The Company has no present plans to acquire or establish
any operating subsidiaries other than the Bank.
BUSINESS STRATEGY
The Bank's strategy will be to operate as a community bank emphasizing
prompt, personalized customer service to the individuals and businesses located
in Sarasota, Florida and surrounding communities. The community banking focus of
the Bank will provide customers with locally-based decision makers who are
familiar with their customers, their business environment and competitive
demands, who are able to quickly evaluate and respond to loan applications, and
have the ability to craft personalized banking solutions to the customers' needs
without extensive bureaucratic delays. Management believes that such a bank will
appeal to customers who prefer to conduct their banking business with a
locally-managed financial institution that demonstrates a genuine interest in
their financial affairs and an ability to cater to their financial needs.
The Bank intends to concentrate on the financial services needs of
individuals and local businesses. A cornerstone of the Bank's business strategy
will be to emphasize the Bank's local management and its commitment to the
Bank's market area. John T. Stafford, the President and Chief Executive Officer
of the Company and the Bank, has 27 years of experience serving the banking
industry, including 17 years in Sarasota County. William F. Gnerre, Executive
Vice President of the Company and the Bank and Chief Operating and Senior Loan
Officer of the Bank also has over 30 years of experience serving the banking
industry, including 17 years in Sarasota County. The directors of the Company
believe that the officers of the Company represent a range of business, banking
and investment knowledge and expertise. The Company directors believe that the
years of experience and existing contacts of the senior officers offer the Bank
a substantial opportunity to attract new relationships for the Bank.
17
<PAGE> 21
In addition, the Company intends to hire two additional experienced
individuals to serve as Vice Presidents of the Bank. One such individual will
serve as the Bank's Chief Financial Officer and will have experience in that
capacity. The second such individual will serve as the Bank's Loan Officer and
will have experience in that capacity with community banks in the Sarasota
Market.
The Bank intends to encourage its employees to be active in the civic,
charitable and social organizations located in the local communities. Most of
the Company's directors currently hold, and have held in the past, leadership
positions in a number of community organizations, and intend to continue this
active involvement in future years. Other members of the management team will
also be encouraged to volunteer for such positions. The employees of the Bank
will be expected to emphasize service in their dealings with clients. Because
the Bank intends to commence operations with a staff of fewer than 15 full time
employees, these employees will need to be flexible in the duties they perform
in an effort to satisfy clients. In addition, management believes that the use
of current technology will permit each employee to devote more time and
attention to personal service, respond more quickly to a client's requests and
deliver services in the most timely manner possible. Management expects this
"high touch-high tech" manner of operations to be appealing to clients.
Upon its opening, the Bank is planning to undertake a marketing
campaign utilizing an officer calling program. The purpose of this call program
will be to describe the products, services, and strategies of the Bank to both
existing and new business prospects. Directors are expected to market the Bank
actively through their business and social contacts. All of the directors are
active members of the Sarasota community and their continued community
involvement will provide an opportunity to promote the Bank, its products, and
services. The Bank also will utilize community-based promotions. The campaign
will emphasize the Bank's independence, local management and special focus on
client service. All employees will be expected to actively market the Bank's
services.
The Bank's initial legal lending limit will be approximately $767,000.
The Board of Directors may establish an "in-house" limit that will be somewhat
lower than the Bank's legal lending limit. The Board may from time to time raise
or lower the "in-house" limit as it deems appropriate to comply with safe and
sound banking practices and respond to overall economic conditions. Initially,
this limit will affect to a degree the ability of the Bank to seek relationships
with the area's larger businesses. However, in light of senior management's
previous experience and the relationships with a number of the region's other
financial institutions, the Bank may originate loan volumes in excess of its
lending limit and sell participations in such loans to other banks. Likewise, it
is quite possible that the Bank will purchase participations from other area
institutions. See "Risk Factors - Lending Risks and Lending Limits".
MARKET AREA
Overview
The Bank anticipates that the market area for its services will be the
southern part of Sarasota, Florida. The community of Sarasota is located in
Sarasota County on the Southwest coast of Florida. The market area encompasses
an area of approximately 25 square miles.
The population of Sarasota County was approximately 295,000 in 1995 and
approximately 305,000 in 1998. The Bank's extended market area encompasses all
of Sarasota County.
18
<PAGE> 22
Sarasota County offers recreational facilities, cultural events,
resorts, commercial office parks, residential developments, major transportation
routes, shopping centers, and entertainment areas. Access to the area is by
Interstate 75 and U.S. 41. Air service is through the Sarasota/Bradenton
International Airport and the Tampa International Airport, both less than an
hour's drive from the area. The area's annual average temperature of 75(0)
provides comfortable year-round living.
According to the Sarasota County Chamber of Commerce, Inc. Statistical
Prospectus, the U.S. Department of Commerce rated the Metropolitan Statistical
Area, of which Sarasota is a part, fourth in the nation for job growth. Seasonal
population, which includes part-time residents who may live for several months
in Sarasota County while maintaining another residence elsewhere, increases from
January through April, thereby increasing the population of the PMA during that
time.
Industry and Employment
Sarasota is part of one of the fastest growing areas of the country.
Business and entertainment service industries, retail trade, government,
construction, real estate, finance/insurance, health care and
transportation/communication/utility form the basis for the area's business
economy. Commercial construction of small shopping centers and small office
parks are in progress throughout the area (and throughout the market area).
Until the late 1950s and early 1960s, agriculture was a major economic basis for
the area. Although not as important as it once was, agriculture remains a part
of the area's industry, with citrus crops, nurseries, and vegetables making up
the bulk of the agriculture business.
The largest employers in Sarasota County are Vinyl Tech/PGT, Sun
Hydraulics, Apac-Florida, the School Board of Sarasota County, Sarasota Memorial
Hospital, Columbia Doctors Hospital, and FCCI Insurance Group. The Sarasota
County Government and the City of Sarasota also employ a significant number of
people.
Management believes that this diverse and growing commercial base
provides potential for business banking services, together with personal banking
services for owners and employees of these enterprises.
COMPETITION
The Bank's intended market area is competitive and market share is
fragmented among a number of financial institutions. As of December 31, 1998,
there were nine banks and thrifts with 10 offices in the Bank's market area. As
of June 30, 1998, there were 32 banks and thrifts operating approximately 148
offices in Sarasota County. The Bank also will face competition from finance
companies, insurance companies, mortgage companies, securities brokerage and
investment firms, money market and mutual funds, loan production offices,
asset-based nonbank lenders, governmental organizations that may offer
subsidized financing at rates lower than those offered by the Bank, and other
providers of financial services. Most of the Bank's competitors have been in
business for many years, have established customer bases, are substantially
larger, have substantially larger lending limits than the Bank, and can offer
certain services, including multiple branches and international banking
services, that the Bank will be able to offer only through correspondent banks,
if at all. In addition, most of these entities have greater capital resources
than the Bank, which among other things, may allow them to price their services
at levels more favorable to clients and to provide larger credit facilities than
could the Bank. The Company anticipates that the Bank's legal lending limit of
approximately $767,000 will be adequate to satisfy the credit needs of most of
its clients and that the needs of its clients in excess of this amount will be
met through loan participation
19
<PAGE> 23
arrangements with correspondent banks and others, however, there can be no
assurance that the Bank will be successful in arranging loan participations that
will be both competitive with products offered by competitors of the Bank and
advantageous to the Bank.
The Company believes that its personal service philosophy will enhance
the Bank's ability to compete favorably in attracting individuals and local
businesses. The Bank will delegate appropriate activity to its personnel to deal
effectively and in a timely fashion with customer service needs. The Bank will
compete for loans principally through the range and quality of the services it
will provide, interest rates and loan fees. The Bank will actively solicit
deposit related clients and will compete for deposits by offering clients
personal attention, professional service and competitive interest rates.
PRODUCTS AND SERVICES
The Bank will offer a range of short to intermediate term personal and
commercial loans.
Commercial Loans. Commercial lending will be directed toward small to
mid-sized businesses whose demands for funds either fall within the legal limits
of the Bank or can be satisfied through loan participations arranged by the
Bank. The Bank intends to offer a full range of commercial loan services
including owner occupied construction and permanent real estate loans, term
loans, single pay loans and lines of credit, most of which will be secured by
the company assets and guaranteed by the principals of the businesses. The
purpose of a particular loan will determine its structure.
The Bank's commercial loans will be underwritten primarily on the basis
of the borrower's ability to service such debt from reliable and stable sources
of income. In all cases the Bank will establish a primary source and secondary
source of repayment. As a general practice, the Bank expects to collateralize
commercial loans with various assets including real estate, equipment,
inventory, accounts receivable and, where applicable, other business and
personal assets as may be deemed appropriate. However, certain commercial loans
may be made on an unsecured basis. Generally, short term working capital loans
are expected to be primarily collateralized by short term assets, whereas term
loans and commercial real estate loans are primarily expected to be
collateralized by long term fixed assets.
Residential Real Estate Loans. The Bank will originate real estate
loans for the purpose of purchasing or refinancing one to four family
residences. The loans, which will generally be long term, will have either fixed
or variable interest rates. The Bank expects that any fixed rate residential
mortgage loans it generates will be sold in the secondary market. The Bank may
retain certain balloon payment and variable rate mortgages in its loan
portfolio. This policy will periodically be subject to review by management and
the Bank's Board of Directors as a result of changing market and economic
conditions and other relevant factors.
Additionally, the Bank will make residential construction loans for one
to four family structures. The Bank will require a first lien on the land
associated with the construction project and will offer these loans to qualified
homeowners and builders. Loan disbursements will require on-site inspections to
assure the project is on budget and that the loan proceeds are being properly
applied to the specific construction project. The loan-to-value ratio for such
loans generally will be 80 percent of cost or appraised value, whichever is
lower. To be eligible for a residential construction loan, the borrower must be
pre-approved for permanent financing.
20
<PAGE> 24
Consumer Loans. The Bank plans to make consumer loans, consisting
primarily of installment loans to individuals for personal, family and household
purposes, including loans for automobiles, home improvements, second mortgages,
home equity lines of credit and investments. Consumer loans typically have
shorter terms and carry higher interest rates than that charged on other types
of loans such as residential mortgage loans. The Bank will be required to rely
on the borrower's ability to repay, since the collateral may be of reduced value
at the time of collection. Accordingly, the initial underwriting must establish
the borrower's credit history and capacity to repay the loan as scheduled.
The Bank's loan approval policies will provide for various levels of
officer lending authority. When the amount of aggregate loans to a single
borrower exceeds that individual officer's lending authority, the loan request
will be considered and approved by an officer with a higher lending limit or the
Bank's Loan Committee. The Bank will not make any loans to any director or
executive officer of the Bank unless the loan is approved by the Board of
Directors of the Bank and is made on terms no more favorable to such person than
would be available to a person unaffiliated with the Bank.
The Bank's lending activities will be subject to a variety of lending
limits imposed by Federal law. Under the regulations of the OCC, a national
bank's total outstanding loans and extensions of credit, both secured and
unsecured, to one borrower may not exceed 15% of the bank's capital and surplus,
plus an additional 10% of the bank's capital and surplus if the amount that
exceeds the 15% general limit is fully secured by readily marketable collateral,
as defined in the regulations. Under these regulations, the Bank's initial
general lending limit to one borrower will be approximately $767,000, plus an
additional $511,000 for loans secured by readily marketable collateral. While
the Bank expects generally to employ more conservative lending limits, the Board
of Directors will have discretion to lend up to these legal lending limits.
Deposit Services. The Bank intends to offer a range of deposit
services, including checking accounts, NOW accounts, savings accounts and time
deposits of various types. The transaction accounts and time certificates will
be tailored to the principal market area at rates competitive with those offered
in the area. All deposit accounts will be insured by the FDIC up to the maximum
amount permitted by law. The Bank intends to solicit these accounts from
individuals, businesses, associations, organizations, financial institutions and
government authorities. It does not intend to accept brokered deposits. The Bank
may also use alternative funding sources as needed, including advances from
Federal Home Loan Banks, conduit financing and the packaging of loans for
securitization and sale.
Other Bank Services. The Bank currently plans to offer other services,
including credit cards, money orders, traveler's checks, automated teller
services with access to one or more regional or national automated teller
networks and safe deposit services. Although the Bank has been involved in
discussions with a number of vendors regarding the provision of such services,
the Bank does not expect to make final decisions with respect to the providers
of such services until approximately 60 days before its commencement of
business. The Bank also intends to establish relationships with correspondent
banks and other financial institutions to provide other services for its
clients, including requesting correspondent banks to participate in loans where
the loan amount exceeds the Bank's policies or legal lending limit. The Bank
does not anticipate initially providing fiduciary services. The need for such
services, however, will be reviewed periodically for possible future inclusion
among the Bank's products and services.
It is anticipated that the Bank's hours of operation will initially be
8:00 a.m. to 6:00 p.m., Monday through Friday and from 8:00 a.m. to 12:00 p.m.
on Saturday. In addition, the Bank's employees will be available to
21
<PAGE> 25
clients wishing to make appointments outside traditional banking hours, either
at the Bank or at the clients' homes or businesses. By providing "appointment
banking," the Bank intends to demonstrate its high level of responsiveness and
service to its clients.
Data Processing. Many of the data processing services, including
on-line teller service, will be purchased on a contract basis, reducing the
number of persons otherwise required to handle the operational functions of the
Bank. The Bank is in the process of discussing arrangements with potential data
processing companies.
ASSET/LIABILITY MANAGEMENT
In addition to loans, the Bank will make other investments primarily in
obligations of the United States or obligations guaranteed as to principal and
interest by the United States and other taxable securities. No investment in any
of those instruments will exceed any applicable limitation imposed by law or
regulation. The investment portfolio will be structured so as to provide for an
ongoing source of funds for meeting loan and deposit demands, and for
reinvestment opportunities to take advantage of changing in interest rate
environment.
It will be the objective of the Company and the Bank to manage assets
and liabilities to provide a satisfactory, consistent level of profitability
within the framework of established cash, loan, investment, borrowing and
capital policies. Certain of the officers of the Bank will be responsible for
monitoring policies and procedures that are designed to insure acceptable
composition of the asset/liability mix, and stability and leverage of all
sources of funds while adhering to prudent banking practices. It also will be
the overall philosophy of management to support asset growth primarily through
growth of deposits, which include deposits of all categories made by
individuals, partnerships and corporations. Management of the Bank will seek to
invest the largest portion of its assets in commercial, consumer and real estate
loans. Bank management also will view the Bank's investment portfolio as a
source of liquidity and as a means to balance its asset/liability mix. The Bank
will invest primarily in obligations of the United States or obligations
guaranteed as to principal and interest by the United States, or other taxable
securities and in certain obligations of states and municipalities. The Bank
also will enter into Federal Funds transactions with its principal correspondent
banks, which represent a short term (generally overnight) loan from one bank to
another, to balance its liquidity needs.
The Bank intends to monitor its asset/liability mix on a daily basis
and a quarterly report reflecting interest-sensitive assets and
interest-sensitive liabilities will be prepared and presented to the Bank's
Asset and Liability Management Committee. The objective of this policy will be
to manage liquidity and control interest-sensitive assets and liabilities so as
to minimize the impact of substantial movements in interest rates on the Bank's
earnings.
BANK PREMISES
The Company has entered into a contract to lease a facility from Palmer
Medical Center, LTD, an unaffiliated third party, which will serve as the Bank's
main office at 8522 Potter Park Drive, Sarasota, Florida. The site is located at
the intersection of U.S. 41 and Central Sarasota Parkway, a major intersection
in Sarasota County. The surrounding area is mixed-use commercial and industrial
properties. The intersection is within two miles of the center of the area's
residential development.
22
<PAGE> 26
The term of the lease will be for a period of five years beginning on
the day the lessor thereunder receives a certificate of occupancy for the
building. Under the lease, the Company has two options to renew the lease term,
each for a five year period. The Company expects that this facility will be
completed and available for the Bank's use in the second quarter of 1999.
The banking facility consists of approximately 4,000 square feet of
office space. The facility will have four inside teller stations, three customer
service platform stations, two drive-through lanes, and a walk-up and depository
ATM lane.
EMPLOYEES
The Bank intends to commence operations with a staff of fewer than 15
full-time equivalent employees. John T. Stafford will serve as the President and
Chief Executive Officer of the Company and the Bank. William F. Gnerre will
serve as Executive Vice President of the Company and the Bank and Chief
Operating Officer and Senior Loan Officer of the Bank. At present, Messrs.
Stafford and Gnerre are the only employees actively involved in the organization
of the Company and the Bank. Since April 1998 Mr. Gnerre has been receiving a
monthly consulting fee of $4,000 as a part of his efforts in connection with the
organization of the Bank. This fee will be continued until such time as the Bank
is authorized to enter into employment agreements. Mr. Stafford receives no
monthly fee but does receive a monthly automobile allowance of $900. See
"Management - Employment Agreements."
The Company will hire additional officers and employees prior to
commencement of the Bank's operations. Company management anticipates that the
Company will increase its staff from 13 to 16 full-time equivalent employees
during the second year of its operations in order to provide for anticipated
growth. The Company plans to employ as officers and employees of the Bank
primarily persons from the Bank's market areas who have experience in banking.
The Company intends to pay competitive salaries to attract and retain such
officers and employees.
LEGAL PROCEEDINGS
Neither the Company nor the Bank is a party to any pending legal
proceeding. Management believes there is no litigation threatened in which the
Company and the Bank faces potential loss or exposure or which will materially
shareholders' equity or the Company's business or financial condition upon
completion of the offering.
23
<PAGE> 27
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company and the Bank and
their ages, and positions with the Company and the Bank are set forth below:
<TABLE>
<CAPTION>
Name Age Positions with the Company and the Bank (1)
- ---- --- ---------------------------------------
<S> <C> <C>
John T. Stafford 51 President and Chief Executive Officer; Director
Larry Berberich 60 Director
Henry E. Black, M.D. 63 Director
H. R. Foxworthy 66 Chairman of the Board
William F. Gnerre 59 Executive Vice President, Secretary and Director
James C. Rutledge 51 Director
Stanley A. Williams 55 Director
Roy A. Yahraus 51 Director
</TABLE>
- ------------------------------------
(1) Each of these individuals serves the Company and the Bank in the same
capacities set forth herein, except that William F. Gnerre also serves
as the Chief Operating Officer and Senior Loan Officer of the Bank.
All of the directors of the Company and the Bank hold office until the
earlier of the next annual meeting of their respective shareholders and until
their successors have been duly elected and qualified, or their death,
resignation, or removal. Officers of the Company and the Bank are elected
annually by the respective Boards of Directors of the Company and the Bank to
hold office until the earlier of their death, resignation, or removal. There are
no family relationships between any of the directors or officers of the Company
or the Bank.
Set forth below is a description of the business experience during the
past five years or more, and other biographical information, for the directors
and executive officers identified above.
John T. Stafford, a director of the Company and the Bank, has been
elected by the Board of Directors to serve as President and Chief Executive
Officer of the Company and the Bank. He started his banking career in 1971 with
First Trust Union Bank in Cuba, N.Y. He moved to Florida in 1979 and joined
Southwest Florida Banks, Ft. Myers, Florida. He has held a number of senior
executive level positions since that time, including, Chairman, President, CEO
and Director of C&S National Bank, Sarasota, Florida, from September 1984 to
February 1992, and President, CEO and Director of The
24
<PAGE> 28
Commercial Bank, Douglasville, Georgia, from March 1994 to April 1996. Since
that time, Mr. Stafford has served as Vice Chairman of FCCI Insurance Group in
Sarasota, Florida.
Mr. Stafford is a founder of the Suncoast Foundation for Handicapped
Children, which has generated over three million in revenues and buildings since
1983. He also been active with the United Way, American Heart Association,
Shrine Crippled Children's hospitals, Chamber of Commerce, Florida Bar
Association Grievance Committee and the Florida Highway Patrol Advisory Board.
Mr. Stafford was born in Cuba, New York and received his high school graduation
certificate from Cuba Central School in 1965. He has attended the University of
Alaska, West Virginia University and Eckerd College, St. Petersburg, Florida and
also received an honorable discharge from the United States Air Force in 1971.
William F. Gnerre, a director of the Company and the Bank, has been
elected by the Board of Directors to serve as Executive Vice President of the
Company and the Bank. He also has been elected to serve as Chief Operating
Officer and Senior Loan Officer of the Bank. He began his banking career in 1960
with the Hackensack Trust Company. In 1965, he joined United Jersey Bank as a
management trainee. He rose to the position of Vice President/Branch
Administration, with responsibility for the 30 branches of United Jersey Bank in
Northern New Jersey. He moved to Sarasota, Florida in February 1978, when he
joined Southeast Bank as Vice President/Cashier. He joined the National Bank of
Sarasota in April 1983 as Vice President/Commercial Lender. He advanced to the
Division Senior Credit Officer in 1985 and Senior Vice President and Regional
Senior Credit Officer in September 1990. From April 1994 to February 1997, he
served as Executive Vice President of The Commercial Bank, Douglasville, Georgia
as EVP/SCO, where he had responsibility for the day to day operations of this
$150 million community bank. He has been involved in the Chamber of Commerce,
the Sarasota Committee of 100, the United Way and the Habitat for Humanity. Mr.
Gnerre was born in Hackensack, New Jersey on August 21, 1939 and graduated from
Hackensack High School in 1957. He attended Rutgers, New Brunswick, New Jersey,
and the University of Oklahoma, Norman, Oklahoma, and received an honorable
discharge from the United States Navy in 1960.
Larry Berberich, a director of the Company and the Bank, graduated from
Mt. Carmel High School, Mt. Carmel, Illinois in 1957. Mr. Berberich's business
background includes ownership of Cirtech Corp., Kansas City, Kansas, a high tech
aerospace company that designed, developed and manufactured military and
aerospace systems. Prior to that he owned Empire Systems Corp. and Berberich
Associates, both of which were located in Dayton, Ohio. Empire Systems was a
distributor of electronic equipment and Berberich Associates functioned as a
manufacturer's representative, handling the same types of military and aerospace
systems as Cirtech Corp. Mr. Berberich served on the board of directors of the
Mid American Bank, Roeland Park, Kansas, from 1980 until his retirement in 1990.
Mr. Berberich's civic and community activities include: Sarasota School
Board Capital Needs Committee, Chairman of the Sarasota County School Board Tax
Oversight Committee, Chairman of the Design Development Board for Prestancia
Community Association, President of the Prestancia Community Association and a
member of the Board of Governors of the Palmer Ranch Master Association. He also
served on the board of the Sarasota YMCA and the Lost Child Network, Kansas
City.
Henry E. Black, M.D, a director of the Company and the Bank, graduated
from Birmingham University Medical School in 1958, with Bachelor of Medicine and
Bachelor of Surgery degrees. From
25
<PAGE> 29
1958 through 1959 he was involved in internships at the United Birmingham
Hospital Group and the Selly Oak Hospital, Birmingham, with emphasis on acute
medical emergencies and obstetrics and gynecology, leading to a post graduate
diploma in OB/GYN. He served in the Royal Navy as a medical officer from 1960 to
1967. In 1967, he joined the medical staff of Jones Memorial Hospital,
Wellsville, New York, where he was appointed Chief of Medicine in June 1968. He
was appointed to the staff of Doctors Hospital and Sarasota Memorial Hospital in
October 1983. In 1984, he opened the Cardiovascular Health Institute in
Sarasota, a medical practice specializing in non-invasive cardiology, where he
continues to practice.
Harvey Ronald Foxworthy, a director of the Company and the Bank, is a
resident of Sarasota, where he graduated from Sarasota High School in 1950 and
Sarasota Vo-Tech in 1957. He founded Rusty Plumbing, Inc., a commercial plumbing
contractor, in 1956 and has operated this company since inception. He has been
involved in a number of other business ventures including the Development of
Laural Oak Country Club. His involvement with community activities in the
Sarasota market includes: directorates with Ellis Bank & Trust Company
(1976-1988), NCNB Sarasota (1988-1989), C & S Bank, Sarasota (1989-1992), and C
& S National Bank of Florida, Ft. Lauderdale (1991-1992).
Mr. Foxworthy is a founder and director of FCCI Group, a large workers
compensation insurance company in Florida, and is the audit committee chairman
for all of its subsidiaries. He is a founder and director of the Florida
Employees Exchange, with its 8,000 members, and is state chairman of its
Political Action Committee. He is the past President of the Plumbing and Heating
Contractors of Florida. His community activities include: founder and director
of the Suncoast Chapter of the Foundation for Handicapped Children and chairman
of its building program. He is also a founder of the Argus Foundation (a local
government oversight organization), serving on its board for 12 years.
James C. Rutledge, a director of the Company and the Bank, received his
high school diploma from the Culver Military Academy, Culver, Indiana, in 1965
and received a Bachelor of Business Science from the University of Mississippi,
Oxford, Mississippi in 1969. He received his Florida Real Estate License in 1972
and began his career in real estate sales and investments in 1973. He has been a
partner in the Real Estate Marketing Group, Sarasota, Florida since October
1995. Mr. Rutledge has served on the Board of Directors of United First Federal
Savings and Loan Association, Sarasota, Florida from 1984 to 1989, and on the
Board of Directors of Barnett Bank of SW Florida from 1989 to 1997. He served as
chairman of the loan and audit committees of both boards during his 13 years of
service.
Mr. Rutledge is a member of the Covenant Life Presbyterian Church and
is involved with a non-profit development program for senior housing. His
community activities also include a directorship on the March of Dimes, and five
years on the Board of Directors of Bethesda Outreach Ministries.
Stanley A. Williams, a director of the Company and the Bank, graduated
from Hayesville High School, Hayesville, Ohio in 1961, he attended Ohio State
University where he earned a degree of Doctor of Dental Surgery in 1968. He
started a solo dental practice in Newton Falls, Ohio in 1968, and built it into
a large dental center, which he sold in 1984. He earned an MBA with a
concentration in finance from Ohio State University in 1979. From 1975 through
1987, he was involved in the development of several townhouse and large single
family homes projects in the Columbia, Maryland area and developed residential
property in Annapolis, Maryland. He has also been involved in the development of
a commercial property complex in Newton Falls, Ohio. Mr. Williams is now
retired.
26
<PAGE> 30
Mr. Williams' community involvement includes serving on the school
board in Newton Falls, Ohio, including a term as its president. He also has
assisted in raising funds for the olympic rowers and served on the finance
committee of the Presbyterian Church. He has been a resident of Sarasota since
1990.
Roy A. Yahraus, a director of the Company and the Bank, was a principal
owner of Gulf Coast Building Materials, Sarasota, from 1972 until 1997, when the
company was sold to a subsidiary of United States Gypsum. He has remained with
the company as its sales manager.
Mr. Yahraus serves on the Board of Directors of Sarasota Manatee
Roofing Association, which seeks out families needing new roofs for their homes,
but who are not financially capable of paying for them. The association donates
the materials and labor to install a new roof. The association also donates
funds to the Sarasota Boys and Girls Club and Hope House. Mr. Yahraus has been a
member of the Shriners for 23 years.
Executive Officers. In addition to Messrs. Stafford and Gnerre, the
Company also anticipates that the Bank will hire two additional experienced
individuals to serve as Vice Presidents of the Bank. One such individual will
serve as the Bank's Loan Officer and have experience in that capacity within the
Sarasota market area. The second such individual will serve as the Bank's Chief
Financial Officer and will have experience in that capacity with community
banks.
COMMITTEES OF THE COMPANY AND THE BANK
Presently the Company's Board of Directors has an Audit Committee and a
Compensation Committee. The Audit Committee will review internal audit
procedures for the Company and the Bank and it will coordinate and review the
Company's annual audit by its independent auditors. The members of this
committee consist of Messrs. Berberich, Black, Foxworthy and Rutledge. The
Compensation Committee will generally oversee the employment practices and
employee benefits of the Company and the Bank. The members of this committee
consist of Messrs. Black, Foxworthy, Stafford, Williams and Yahraus.
The committees of the Bank consist of an Asset - Liability Committee,
Audit and Insurance Committee, Executive Committee, and Loan Committee. The
following sets forth additional information regarding these committees:
Asset - Liability Committee. - Responsible for (i) overall investment
strategy, including liquidity and risk management, (ii) monitoring deposit level
trends and pricing, (iii) monitoring asset level trends and pricing, (iv)
portfolio investment decisions, and (v) establishing appropriate levels of
insurance. The members of this committee consist of Messrs. Gnerre, Stafford,
Williams and Yahraus.
Audit and Insurance Committee. - Responsible for (i) insuring the Bank
Board receives objective information regarding policies, procedures and controls
of the Bank including auditing, accounting, internal accounting controls,
financial reporting, (ii) recommending the appointment of an independent auditor
on an annual basis, (iii) reviewing independent auditor's report and
management's response, (iv) reviewing all reports from regulatory authorities
and management's response, (v) establishing independent reviews and audits (vi)
insuring the Bank is in full compliance with all pertinent regulations and laws;
(vii) establishing an appropriate and independent testing program for
compliance, and (viii)
27
<PAGE> 31
establishing appropriate levels of insurance. The members of this committee
consist of Messrs. Berberich, Black, Foxworthy and Rutledge.
Executive Committee. - Responsible for (i) establishing appropriate
levels of compensation throughout the Bank, (ii) analyzing compensation levels
on an annual basis, (iii) recommending overall compensation increases and
changes in benefits to the Board for approval, (iv) establishing policies with
regard to compensation and benefits at the Bank, (v) recommending all
compensation increases, benefit changes and bonuses for senior officers to the
Board for approval, (vi) developing a proactive CRA program, and (vii)
developing programs to insure compliance with applicable laws. The members of
this committee consist of Messrs. Black, Foxworthy, Stafford, Williams and
Yahraus.
Loan Committee. - Responsible for (i) establishing, in conjunction with
management, and approving all major policies and procedures pertaining to
credit, (ii) establishing a loan approval system, (iii) reviewing all loans in
excess of specific amounts determined in policies and procedures, (iv) reviewing
all past due reports, rated loan reports, real estate owned, non-accrual
reports, and other indicators of overall loan portfolio quality, (v) assuring
adequate funding of the loan loss reserve exists, and (v) handling other matters
pertaining to the credit function, such as yields and loan concentrations. The
members of this committee consist of Messrs. Berberich, Foxworthy, Gnerre,
Rutledge and Stafford.
COMPENSATION OF DIRECTORS
The directors of the Company are not currently compensated for their
attendance at the Company's regularly scheduled or special meetings or for their
services. After the Bank opens, directors will receive a fee of $300 for each
Board meeting attended and non-employee directors also will receive a fee of
$100 for each committee meeting attended. The Company also has approved and
adopted the Company Director Stock Option Plan. No options have been granted
under the Plan. See "Stock Option Plans - Director Stock Option Plan."
EMPLOYMENT AGREEMENTS
The Bank intends to enter into employment agreements with Messrs.
Stafford and Gnerre. The agreements will be for a three-year period and will
automatically renew thereafter for successive one-year periods, unless either
party provides prior notice to the other in accordance with the terms of the
agreements. The employment agreements will provide for Messrs. Stafford and
Gnerre to receive an initial salary of $96,000 and $84,000 respectively, subject
to annual adjustments and such bonuses and other compensation as may be
determined by the Board of Directors. The employment agreements also will
provide for receipt of employee benefits and reimbursement for certain business
related expenses. The employment agreements may be terminated by the Bank for
"cause" (as defined in the employment agreements) or by the Executive for "good
reason" (as defined in the agreements) or as a result of certain actions
following any Change in Control (as defined in the agreements) of the Company or
the Bank. The employment agreement provides that Messrs. Stafford and Gnerre
will not work for any financial institution located within a radius of 50 miles
of any office of the Bank or solicit Bank employees and customers for a one-year
period following termination of their employment (except when the employment is
terminated as a result of "good reason" or following a Change in Control of the
Company).
28
<PAGE> 32
STOCK OPTION PLANS
Suncoast Bancorp, Inc. Employee Stock Option Plan
The Company's Board of Directors and sole shareholder have adopted a
Suncoast Bancorp, Inc. Employee Stock Option Plan (the "Employee Stock Option
Plan") to promote equity ownership of the Company by selected officers and
employees of the Company and the Bank, to increase their proprietary interest in
the success of the Company and to encourage them to remain in the employ of the
Company.
Administration. The Employee Stock Option Plan will be administered by
the Company's Compensation Committee (the "Committee"), comprised of at least
two non-employee directors appointed by the Company's Board of Directors. The
Committee will have the authority to select the officers and employees to whom
awards may be granted, to determine the terms of each award, to interpret the
provisions of the Employee Stock Option Plan and to make all other
determinations that it may deem necessary or advisable for the administration of
the Employee Stock Option Plan.
The Employee Stock Option Plan provides for the grant of "incentive
stock options," as defined under Section 422(b) of the Internal Revenue Code of
1986, as amended. The Board of Directors has reserved 28,000 Common Shares for
issuance under the Employee Stock Option Plan, including issuance of options for
7,000 shares each to Messrs. Stafford and Gnerre. In general, if any award
granted under the Employee Stock Option Plan expires, terminates, is forfeited
or is canceled for any reason, the Common Shares allocable to such award may
again be made subject to an award granted under the Employee Stock Option Plan.
Awards. Officers and policy-making employees of the Company and the
Bank are eligible to receive grants under the Employee Stock Option Plan. Awards
may be granted subject to a vesting requirement and in any event will become
fully vested upon a merger or change of control of the Company. The exercise
price of incentive stock options must at least equal the fair market value of
the Common Shares subject to the option (determined as provided in the plan) on
the date the option is granted.
Each officer and key employee eligible to participate in the Employee
Stock Option Plan will be notified by the Committee. To receive an award under
the Employee Stock Option Plan, an award agreement must be executed which
specifies the type of award to be granted, the number of Common Shares to which
the award relates, the terms and conditions of the award and the date granted.
In the case of an award of options, the award agreement will also specify the
price at which the Common Shares subject to the option may be purchased, and the
dates on which the option becomes exercisable.
The full exercise price for all Common Shares purchased upon the
exercise of options granted under the Employee Stock Option Plan must be paid by
cash, personal check, or Common Shares owned at the time of exercise. Stock
options granted to employees under the Employee Stock Option Plan may remain
outstanding and exercisable for 10 years from the date of grant or until the
expiration of 90 days (or such lesser period as the Committee may determine)
from the date on which the person to whom they were granted ceases to be
employed by the Company. Options granted under the Plan are exercisable in
increments of 20% per year commencing one year after the date of grant.
29
<PAGE> 33
Income Tax. Employee stock options granted under the Employee Stock
Option Plan have certain advantageous tax attributes to the recipient under the
income tax laws. No taxable income is recognized by the option holder for income
tax purposes at the time of the grant or exercise of an Employee stock option,
although neither is there any income tax deduction available to the Company as a
result of such a grant or exercise. Any gain or loss recognized by an option
holder on the later disposition of Common Shares acquired pursuant to the
exercise of an incentive stock option generally will be treated as capital gain
or loss if such disposition does not occur prior to one year after the date of
exercise of the option.
Amendment and Termination. The Employee Stock Option Plan expires
October 15, 2008, unless sooner terminated by the Board of Directors. The Board
of Directors has authority to amend the Plan in such manner as it deems
advisable. The Plan provides for appropriate adjustment, as determined by the
Committee, in the number and kind of shares subject to unexercised options, in
the event of any change in the outstanding Common Shares by reason of a stock
split, stock dividend, combination or reclassification of shares,
recapitalization, merger or similar event.
Director Stock Option Plan
The Company's Board of Directors and sole shareholder also have adopted
Suncoast Bancorp, Inc. Director Stock Option Plan ("Director Stock Option Plan")
to compensate the non-employee directors in recognition of their efforts in
organizing the Company and the Bank, and the risk incurred during the
organizational process. The Director Stock Option Plan does not preclude the
grant of options to non-employee directors. However, the Company does not intend
to issue options from the Director Stock Option Plan to employee directors.
Administration. The Director Stock Option Plan will be administered by
the Board of Directors. The Board of Directors has reserved 42,000 Common Shares
for issuance under the Director Stock Option Plan, all of which will be issued
upon the opening of the Bank to the current non-employee directors based upon
7,000 options for each individual.
Option Terms. The exercise for each of the outstanding options will be
$10.00 per share, which must be paid by cash, personal check, or Common Shares
owned at the time of exercise. The options are exercisable for 10 years from the
date of grant or until the expiration of 90 days from the date on which the
person to whom they were granted ceases to be a director of the Company or the
Bank. Options granted under the Director Stock Option Plan are exercisable in
increments of 20 % per year commencing on the date of grant.
Amendment and Termination. The Director Stock Option Plan expires
October 15, 2008, unless sooner terminated by the Board of Directors. The Board
of Directors has the authority to amend the Plan in such manner as it deems
advisable. The Plan provides for appropriate adjustment, as determined by the
Committee, in the number and kind of shares subject to unexercised options, in
the event of any change in the outstanding Common Shares by reason of a stock
split, stock dividend, combination or reclassification of shares,
recapitalization, merger or similar event.
30
<PAGE> 34
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ORGANIZATIONAL ADVANCES
The directors of the Company and the Bank have obtained and guaranteed
a $325,000 line of credit to pay for expenses in connection with the
organization of the Bank. The line of credit will be repaid from the net
proceeds of this offering.
TRANSACTIONS WITH AFFILIATES
The Company and the Bank expect to have banking and other business
transactions in the ordinary course of business with directors and officers of
the Company and the Bank, including members of their families or corporations,
partnerships, or other organizations in which such directors and officers have a
controlling interest. If such transactions occur, they (i) will be made in the
ordinary course of business, (ii) will be made on substantially the same terms
(including price, or interest rate, and collateral) as those prevailing at the
time for comparable transactions with unrelated parties, and (iii) in the
opinion of management, will not involve more than the normal risk of
collectibility or present other unfavorable features to the Company or the Bank.
Additionally, certain federal banking laws restrict transactions between a
national bank and an "affiliate", as defined in those laws, and the amount and
types of loans that a national bank may make to an executive officer of a
national bank. Certain laws of the State of Florida also restrict "affiliated
transactions" between the Company and an "interested shareholder" or any
"affiliate" or "associate" of an interested shareholder, as those terms are
defined in Florida law. See "Supervision and Regulation."
INDEMNIFICATION
The Bylaws of the Company provide for the indemnification of directors
and officers of the Company and the Bank, including reasonable legal fees,
incurred by such directors and officers while acting for or on behalf of the
Company or the Bank as a director, officer, employee or agent, subject to
certain limitations. See "Description of Capital Stock - Certain Anti-Takeover
and Indemnification Provisions." The Company expects to purchase directors' and
officers' liability insurance for directors and officers of the Company and the
Bank.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Except for one Common Share issued and sold to H. R. Foxworthy
(Chairman of the Board of the Company) for the sole purpose of organizing the
Company, the Company currently has no Common Shares outstanding. This
organizational share will be repurchased at its original issue price of $1.00
concurrently with the closing of the offering.
The following table sets forth certain information regarding the
anticipated beneficial ownership of the Company's Common Shares by: (i) each
director and each executive officer of the Company and (ii) all directors and
executive officers of the Company as a group. No person is expected to be the
beneficial owner of more than 5% of the outstanding Common Shares following the
offering. Except as otherwise indicated, the persons named in the table will
have sole voting and investment power with respect to all of the Common Shares
owned by them.
31
<PAGE> 35
<TABLE>
<CAPTION>
Beneficial Ownership
Number Percent
Name of Beneficial Owner of Shares(1) of Class(2)
- -------------------------------------------------------------------------------------------------
Directors and Certain Executive Officers
<S> <C> <C>
Larry Berberich.................................................... 20,000 (3) 2.86%
Henry E. Black, M.D................................................ 20,000 (3) 2.86%
H. R. Foxworthy.................................................... 20,000 (3) 2.86%
William F. Gnerre.................................................. 10,000 (4) 1.43%
James C. Rutledge.................................................. 20,000 (3) 2.86%
John T. Stafford................................................... 10,000 (4) 1.43%
Stanley A. Williams................................................ 20,000 (3) 2.86%
Roy A. Yahraus..................................................... 20,000 (3) 2.86%
All directors and executive officers as a group (8 persons)........ 140,000 (5) 20.00%
</TABLE>
- --------------
(1) In accordance with Rule 13d-3 promulgated pursuant to the Securities
Exchange Act of 1934, a person is deemed to be the beneficial owner of
a security for purposes of the rule if he or she has or shares voting
power or dispositive power with respect to such security or has the
right to acquire such ownership within sixty days. As used herein,
"voting power" is the power to vote or direct the voting of shares, and
"dispositive power" is the power to dispose or direct the disposition
of shares, irrespective of any economic interest therein.
(2) In calculating the percentage ownership for a given individual or
group, the number of Common Shares outstanding includes unissued shares
subject to options, warrants, rights or conversion privileges
exercisable within sixty days held by such individual or group, but are
not deemed outstanding by any other person or group. This information
assumes no exercise of the over-allotment granted to the Underwriter.
(3) Excludes options (which are not currently exercisable) held by such
person to purchase 7,000 Common Shares granted pursuant to the Director
Stock Option Plan. See "Management - Stock Option Plans - Suncoast
Bancorp Director Stock Option Plan."
(4) Excludes options (which are not currently exercisable) held by such
person to purchase 7,000 Common Shares granted pursuant to the Employee
Stock Option Plan. See "Management - Stock Option Plans - Suncoast Bank
Employee Stock Option Plan."
(5) Excludes options (which are not currently exercisable) to purchase
56,000 Common Shares.
SUPERVISION AND REGULATION
Banks and their holding companies, and many of their affiliates, are
extensively regulated under both federal and state law. The following is a brief
summary of certain statutes, rules, and regulations affecting the Company and
the Bank. This summary is qualified in its entirety by reference to the
particular statutory and regulatory provisions referred to below and is not
intended to be an exhaustive description of the statutes or regulations
applicable to the business of the Company and the Bank. Any change in the
applicable law or regulation may have a material effect on the business and
prospects of the Company and the Bank. See "Risk Factors -- Government
Regulation and Monetary Policy." Supervision, regulation, and examination of
banks by regulatory agencies are intended primarily for the protection of
depositors, rather than shareholders.
32
<PAGE> 36
Bank Holding Company Regulation. The Company will be a bank holding
company registered with the Federal Reserve under the BHC Act. As such, the
Company will be subject to the supervision, examination and reporting
requirements of the BHC Act and the regulations of the Federal Reserve. The
Company is required to furnish to the Federal Reserve an annual report of its
operations at the end of each fiscal year, and such additional information as
the Federal Reserve may require pursuant to the BHC Act. The BHC Act requires
that a bank holding company obtain the prior approval of the Federal Reserve
before (1) acquiring direct or indirect ownership or control of more than 5% of
the voting shares of any bank, (2) taking any action that causes a bank to
become a subsidiary of the bank holding company, or (3) merging or consolidating
with any other bank holding company.
The BHC Act further provides that the Federal Reserve may not approve
any transaction that would result in a monopoly of banking in any section of the
United States, or substantially lessen competition, unless the anticompetitive
effects are clearly outweighed by the public interest in meeting the convenience
and needs of the community to be served. The Federal Reserve is also required to
consider the financial and managerial resources and future prospects of the bank
holding companies and banks concerned and the convenience and needs of the
community to be served. Consideration of financial resources generally focuses
on capital adequacy and consideration of convenience and needs issues includes
the parties' performance under the Community Reinvestment Act of 1977 (the
"CRA"), both of which are discussed below.
The BHC Act generally prohibits a bank holding company from engaging in
activities other than banking, or managing or controlling banks or other
permissible subsidiaries, and from acquiring or retaining control of any company
engaged in any activities other than those activities determined by the Federal
Reserve to be closely related to banking or managing or controlling banks. In
determining whether a particular activity is permissible, the Federal Reserve
must consider whether the performance of such an activity can reasonably be
expected to produce benefits to the public, such as greater convenience,
increased competition, or gains in efficiency that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. For example,
factoring accounts receivable, acquiring or servicing loans, leasing personal
property, conducting securities brokerage activities, performing certain data
processing services, acting as agent or broker in selling credit life insurance
and certain other types of insurance in connection with credit transactions, and
certain insurance underwriting activities have all been determined by
regulations of the Federal Reserve to be permissible activities of bank holding
companies. Despite prior approval, the Federal Reserve has the power to order a
holding company or its subsidiaries to terminate any activity or terminate its
ownership or control of any subsidiary, when it has reasonable cause to believe
that continuation of such activity or such ownership or control constitutes a
serious risk to the financial safety, soundness, or stability of any bank
subsidiary of that bank holding company.
Banks are subject to the provisions of the CRA. Under the terms of the
CRA, the appropriate federal bank regulatory agency is required, in connection
with its examination of a bank, to assess such bank's record in meeting the
credit needs of the community served by that bank, including low- and
moderate-income neighborhoods. The CRA does not establish specific lending
requirements or programs for financial institutions, nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with the CRA.
The regulatory agency's assessment of the bank's record is made available to the
public. Further, such assessment is required of any bank which has applied to
(1) charter a national bank, (2) obtain deposit insurance coverage for a newly
chartered institution, (3) establish a new branch office that will accept
33
<PAGE> 37
deposits, (4) relocate an office, or (5) merge or consolidate with, or acquire
the assets or assume the liabilities of, a federally regulated financial
institution. In the case of a bank holding company applying for approval to
acquire a bank or other bank holding company, the Federal Reserve will assess
the record of each subsidiary bank of the applicant bank holding company, and
such records may be the basis for denying the application.
Bank Regulation. The Bank will be chartered by the OCC under the
National Banking Act. The Bank's deposits will be insured by the FDIC to the
extent provided by law. The Bank will be subject to comprehensive regulation,
examination and supervision by the OCC. The Bank also will be subject to other
laws and regulations applicable to banks. Such regulations include limitations
on loans to a single borrower and to its directors, officers and employees;
restrictions on the opening and closing of branch offices; the maintenance of
required capital and liquidity ratios; the granting of credit under equal and
fair conditions; and the disclosure of the costs and terms of such credit. The
Bank will be examined periodically by the OCC, to whom the Bank will submit
periodic reports regarding its financial condition and other matters. The OCC
has a broad range of powers to enforce regulations and to take discretionary
actions determined to be for the protection and safety and soundness of banks,
including the institution of cease and desist orders and the removal of
directors and officers. The OCC also has the authority to approve or disapprove
mergers, consolidations, and similar corporate actions.
Under federal law, federally insured banks are subject to certain
restrictions on any extension of credit to their parent holding companies or
other affiliates, on investment in the stock or other securities of affiliates,
and on the taking of such stock or securities as collateral from any borrower.
In addition, banks are prohibited from engaging in certain tie-in arrangements
in connection with any extension of credit or the providing of any property or
service.
Federal law also contains capital standards and civil and criminal
enforcement provisions. Annual full-scope, on-site examinations are required of
all insured depository institutions. The cost for conducting an examination of
an institution may be assessed to that institution, with special consideration
given to affiliates and any penalties imposed for failure to provide information
requested. Insured state banks also may not engage as principal in any type of
activity that is impermissible for a national bank, including activities
relating to insurance and equity investments.
Transactions with Affiliates. There are various legal restrictions on
the extent to which the Company and any future nonbank subsidiaries can borrow
or otherwise obtain credit from the Bank. There also are legal restrictions on
the Bank's purchase of or investments in the securities of and purchases of
assets from the Company. The Bank also is restricted in loaning to third parties
collateralized by the securities or obligations of the Company, issuing
guarantees, acceptances, and letters of credit on behalf of the Company and
certain bank transactions with the Company. Subject to certain limited
exceptions, the Bank may not extend credit to the Company or to any other
affiliate in an amount which exceeds 10% of the Bank's capital stock and surplus
and may not extend credit in the aggregate to such affiliates in an amount which
exceeds 20% of its capital stock and surplus. Further, there are legal
requirements as to the type, amount and quality of collateral which must secure
such extensions of credit transactions between the Bank and the Company or such
other affiliates. Such transactions also must be on terms and under
circumstances, including credit standards, that are substantially the same or at
least as favorable to the Bank as those prevailing at the time for comparable
transactions with non-affiliated companies. Also, the Company and its
subsidiaries are prohibited from
34
<PAGE> 38
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of services.
Dividends. Dividends from the Bank constitute the primary source of
funds for dividends to be paid by the Company. For additional information, see "
Risk Factors - No Assurance of Dividends" and "Dividend Policy." There also are
various statutory and contractual limitations on the ability of the Bank to pay
dividends, extend credit, or otherwise supply funds to the Company. As a
national bank, the Bank may not pay dividends from its paid-in surplus. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock until
its surplus equals its stated capital, unless there has been transferred to
surplus no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the OCC is required if the total of all dividends declared by a national bank
in any calendar year exceeds the total of its net profits for that year combined
with its retained net profits for the preceding two years, less any required
transfers to surplus. Florida law applicable to companies (including the
Company) provides that dividends may be declared and paid only if, after giving
it effect, (i) the company is able to pay its debts as they become due in the
usual course of business, and (ii) the company's total assets would be greater
than the sum of its total liabilities plus the amount that would be needed if
the company were to be dissolved at the time of the dividend to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the dividend.
Capital Requirements. The federal bank regulatory authorities have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profile among banks and bank holding companies. The
resulting capital ratios represent qualifying capital as a percentage of total
risk-weighted assets and off-balance sheet items. The guidelines are minimums,
and the federal regulators have noted that banks and bank holding companies
contemplating significant expansion programs should not allow expansion to
diminish their capital ratios and should maintain all ratios well in excess of
the minimums. The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common shareholders' equity, qualifying perpetual preferred shares, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
lease losses. Tier 2 capital includes the excess of any preferred shares not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred shares, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
Federal law contains "prompt corrective action" provisions pursuant to
which banks are to be classified into one of five categories based upon capital
adequacy, ranging from "well capitalized" to "critically undercapitalized" and
which require (subject to certain exceptions) the appropriate federal banking
agency to take prompt corrective action with respect to an institution which
becomes "significantly undercapitalized" or "critically undercapitalized".
The OCC has issued final regulations to implement the "prompt
corrective action" provisions. In general, the regulations define the five
capital categories as follows:
35
<PAGE> 39
- an institution is "well capitalized" if it has a total
risk-based capital ratio of 10% or greater, has a Tier 1
risk-based capital ratio of 6% or greater, has a leverage
ratio of 5% or greater and is not subject to any written
capital order or directive to meet and maintain a specific
capital level for any capital measures;
- an institution is "adequately capitalized" if it has a total
risk-based capital ratio of 8% or greater, has a Tier 1
risk-based capital ratio of 4% or greater, and has a leverage
ratio of 4% or greater;
- an institution is "undercapitalized" if it has a total
risk-based capital ratio of less than 8%, has a Tier 1
risk-based capital ratio that is less than 4% or has a
leverage ratio that is less than 4%;
- an institution is "significantly undercapitalized" if it has a
total risk-based capital ratio that is less than 6%, a Tier 1
risk-based capital ratio that is less than 3% or a leverage
ratio that is less than 3%; and
- an institution is "critically undercapitalized" if its
"tangible equity" is equal to or less than 2% of its total
assets.
The OCC also, after an opportunity for a hearing, has authority to downgrade an
institution from "well capitalized" to "adequately capitalized" or to subject an
"adequately capitalized" or "undercapitalized" institution to the supervisory
actions applicable to the next lower category, for supervisory concerns. The
degree of regulatory scrutiny of a financial institution will increase, and the
permissible activities of the institution will decrease, as it moves downward
through the capital categories. Institutions that fall into one of the three
undercapitalized categories may be required to
- submit a capital restoration plan;
- raise additional capital;
- restrict their growth, deposit interest rates, and other
activities;
- improve their management;
- eliminate management fees; or
- divest themselves of all or part of their operations.
Bank holding companies controlling financial institutions can be called upon to
boost the institutions' capital and to partially guarantee the institutions'
performance under their capital restoration plans. These capital guidelines can
affect the Company in several ways. After completion of this offering, the
Company's capital levels will be in excess of those required to be maintained by
a "well capitalized" financial institution. However, rapid growth, poor loan
portfolio performance, or poor earnings performance, or a combination of these
factors, could change the Company's capital position in a relatively short
period of time, making an additional capital infusion necessary.
36
<PAGE> 40
Federal law also requires that (1) only a "well capitalized" depository
institution may accept brokered deposits without prior regulatory approval and
(2) the appropriate federal banking agency annually examine all insured
depository institutions, with some exceptions for small, "well capitalized"
institutions and state-chartered institutions examined by state regulators.
Federal law also contains a number of consumer banking provisions, including
disclosure requirements and substantiative contractual limitations with respect
to deposit accounts.
Enforcement Powers. Congress has provided the federal bank regulatory
agencies with an array of powers to enforce laws, rules, regulations and orders.
Among other things, the agencies may require that institutions cease and desist
from certain activities, may preclude persons from participating in the affairs
of insured depository institutions, may suspend or remove deposit insurance, and
may impose civil money penalties against institution-affiliated parties for
certain violations.
Maximum Legal Interest Rates. Like the laws of many states, Florida law
contains provisions on interest rates that may be charged by banks and other
lenders on certain types of loans. Numerous exceptions exist to the general
interest limitations imposed by Florida law. The relative importance of these
interest limitation laws to the financial operations of the Bank will vary from
time to time, depending on a number of factors, including conditions in the
money markets, the costs and availability of funds, and prevailing interest
rates.
Bank Branching. Banks in Florida are permitted to branch state wide.
Such branch banking by national banks, however, is subject to prior approval by
the OCC. Any such approval would take into consideration several factors,
including the bank's level of capital, the prospects and economics of the
proposed branch office, and other conditions deemed relevant by the OCC for
purposes of determining whether approval should be granted to open a branch
office. For information regarding legislation on interstate branching in
Florida, see "-- Interstate Banking" below.
Change of Control. Federal law restricts the amount of voting stock of
a bank holding company and a bank that a person may acquire without the prior
approval of banking regulators. The overall effect of such laws is to make it
more difficult to acquire a bank holding company and a bank by tender offer or
similar means than it might be to acquire control of another type of
corporation. Consequently, shareholders of the Company may be less likely to
benefit from the rapid increases in stock prices that may result from tender
offers or similar efforts to acquire control of other companies. Federal law
also imposes restrictions on acquisitions of stock in a bank holding company and
a state bank. Under the federal Change in Bank Control Act and the regulations
thereunder, a person or group must give advance notice to the Federal Reserve
before acquiring control of any bank holding company and the OCC before
acquiring control of any national bank (such as the Bank). Upon receipt of such
notice, the Federal Reserve or the OCC, as the case may be, may approve or
disapprove the acquisition. The Change in Bank Control Act creates a rebuttable
presumption of control if a member or group acquires a certain percentage or
more of a bank holding company's or state bank's voting stock, or if one or more
other control factors set forth in the Change in Bank Control Act are present.
Interstate Banking. Federal law provides for nationwide interstate
banking and branching. Under the law, interstate acquisitions of banks or bank
holding companies in any state by bank holding companies in any other state are
permissible subject to certain limitations. Florida also has a law that allows
out-of-state bank holding companies (located in states that allow Florida bank
holding companies to acquire banks and bank holding companies in that state) to
acquire Florida banks and Florida bank
37
<PAGE> 41
holding companies. The law essentially provides for out-of-state entry by
acquisition only (and not by interstate branching) and requires the acquired
Florida bank to have been in existence for at least three years. Interstate
branching and consolidation of existing bank subsidiaries in different states is
permissible. A Florida bank also may establish, maintain, and operate one or
more branches in a state other than Florida pursuant to an interstate merger
transaction in which the Florida bank is the resulting bank. An interstate
merger transaction resulting in the acquisition by an out-of-state bank of a
Florida bank is not permitted unless the Florida bank has been in existence and
continuously operating, on the date of the acquisition, for more than three
years.
Effect of Governmental Policies. The earnings and businesses of the
Company and the Bank are affected by the policies of various regulatory
authorities of the United States, especially the Federal Reserve. The Federal
Reserve, among other things, regulates the supply of credit and deals with
general economic conditions within the United States. The instruments of
monetary policy employed by the Federal Reserve for those purposes influence in
various ways the overall level of investments, loans, other extensions of
credit, and deposits, and the interest rates paid on liabilities and received on
assets.
INDUSTRY RESTRUCTURING
For well over a decade, the banking industry has been undergoing a
restructuring process which is anticipated to continue. The restructuring has
been caused by product and technological innovations in the financial services
industry, deregulation of interest rates, and increased competition from foreign
and nontraditional banking competitors, and has been characterized principally
by the gradual erosion of geographic barriers to intrastate and interstate
banking and the gradual expansion of investment and lending authorities for bank
institutions.
Members of Congress and the administration have indicated their
intention to consider additional legislation designed to institute reforms to
promote the viability of the industry. Certain of the proposals would revise the
federal regulatory structure for insured depository institutions; others would
affect the nature of products, services, and activities that bank holding
companies and their subsidiaries may offer or engage in, and the types of
entities that may control depository institutions. There can be no assurance
as to whether or in what form any such proposed legislation might be enacted, or
what impact such legislation might have upon the Company.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company's Articles of Incorporation authorize the Company to issue:
(i) up to 10,000,000 Common Shares, par value $0.01 per share, of which 700,000
shares will be issued pursuant to this offering (805,000 shares if the
over-allotment option granted to the Underwriter is exercised in full), and (ii)
up to 3,000,000 preferred shares, stated par value of $0.01 per share
("Preferred Shares"), the rights and preferences of which shall be determined by
the Board of Directors at the time it authorizes the issuance thereof. No other
classes of capital stock are authorized.
As of the date of this Prospectus, other than one Common Share issued
to H. R. Foxworthy for the sole purpose of organizing the Company, no shares of
capital stock of this Company are issued and
38
<PAGE> 42
outstanding. This share was issued at $1.00 and will be repurchased at cost and
cancelled concurrently with the closing of the offering. Other than options to
purchase 56,000 Common Shares to be granted under the Director Stock Option Plan
and the Employee Stock Option Plan described elsewhere herein, there are no
outstanding options to purchase, warrants for, or securities convertible into,
Common Shares. See "Management - Stock Option Plans."
COMMON SHARES
All outstanding Common Shares offered hereby will be fully paid and
nonassessable. The holders of Common Shares are entitled to one vote for each
share held of record on all matters voted upon by shareholders. Subject to
preferences that may be applicable to any outstanding Preferred Shares, each
outstanding Common Share is entitled to participate equally in any distribution
of net assets made to the stockholders in liquidation, dissolution, or winding
up the Company and is entitled to participate equally in dividends as and when
declared by the Company's Board of Directors. There are no redemption, sinking
fund, conversion, or preemptive rights with respect to the shares of Common
Shares. All Common Shares have equal rights and preferences.
PREFERRED SHARES
As of the date of this Prospectus, no Preferred Shares were issued or
outstanding. The Board of Directors is authorized to fix or alter the rights,
preferences, privileges and restrictions of any wholly unissued series of
Preferred Shares, including the dividend rights, original issue price,
conversion rights, voting rights, terms of redemption, liquidation preferences
and sinking fund terms thereof, and the number of shares constituting any such
series and the designation thereof and to increase or decrease the number of
shares of such series subsequent to the issuance of shares of such series (but
not below the number of shares then outstanding). The Board of Directors,
without shareholder approval, can issue Preferred Shares with the voting and
conversion rights described above, which could adversely affect the voting power
of the shareholders of Common Shares. The Company has no plans at this time to
issue any Preferred Shares. Any such issuance of Preferrerd Shares could have
the effect of delaying or preventing a change of control.
CERTAIN ANTI-TAKEOVER AND INDEMNIFICATION PROVISIONS
The Company's Board of Directors may authorize the issuance of
additional Common Shares or Preferred Shares without further action by the
Company's shareholders, unless such action is required in a particular case by
applicable laws or regulation. The authority to issue additional Common Shares
or Preferred Shares provides the Company with the flexibility necessary to meet
its future needs without the delay resulting from seeking shareholder approval.
The unissued Common Shares or Preferred Shares may be issued from time to time
for any corporate purposes, including share splits, share dividends, employee
benefit and compensation plans, acquisitions and public and private sales for
cash as a means of raising capital. Such shares could be used to dilute the
share ownership of persons seeking to obtain control of the Company. In
addition, the sale of a substantial number of shares of Common Shares or
Preferred Shares to persons who have an understanding with the Company
concerning the voting of such shares, or the distribution or dividend of Common
Shares or Preferred Shares (or right to receive such shares) to the Company's
shareholders, may have the effect of discouraging or otherwise increasing the
cost of unsolicited attempts to acquire control of the Company. Further, because
the Company's Board of Directors has the power to determine the voting,
conversion or other rights of the Preferred Shares, the
39
<PAGE> 43
issuance of a series of Preferred Shares to persons friendly to management could
effectively discourage or preclude consummation of a change in control
transaction or have the effect of maintaining the position of the Company's
incumbent management. The Company does not currently have any plans or
commitments to use its authority to effect any such issuance, but reserves the
right to take any action that the Board of Directors deems to be in the best
interests of the Company and its shareholders.
The Company is subject to several provisions under Florida law which
may deter or frustrate unsolicited attempts to acquire certain Florida
corporations. These statutes, commonly referred to as the "Control Share Act"
and the "Fair Price Act," apply to most public corporations organized in Florida
unless the corporation has specifically elected to opt out of such provisions.
The Company has not elected to opt out of these provisions. The Fair Price Act
generally requires that certain transactions between a public corporation and an
affiliate must be approved by two-thirds of the disinterested directors or
shareholders (not including those shares beneficially owned by an "interested
shareholder"). The Control Share Act generally provides that shares of a public
corporation acquired in excess of certain specified thresholds will not posses
any voting rights unless such voting rights are approved by a majority vote of
the corporation's disinterested shareholders. These anti-takeover provisions of
Florida law could result in the Company being less attractive to a potential
acquiror and/or result in shareholders receiving less for their shares than
might otherwise might be available in the event of an unsolicited takeover
attempt.
The Florida Business Corporation Act authorizes a company to indemnify
its directors and officers in certain instances against certain liabilities
which they may incur by virtue of their relationship with the company. A company
may indemnify any director, officer, employee or agent against judgments, fines,
penalties, amounts paid in settlement, and expenses incurred in any pending,
threatened or completed civil, criminal, administrative, or investigative
proceeding (except an action by the company) against him in his capacity as a
director, officer, employee, or agent of the company, or another company if
serving in such capacity at the company's request if he (1) acted in good faith;
(2) acted in a manner which he reasonably believed to be in or not opposed to
the best interests of the company; and (3) with respect to a criminal action,
had no reasonable cause to believe his conduct was unlawful. Furthermore, a
company may indemnify any director, officer, agent or employee against expenses
incurred in defense or settlement of any proceeding brought by the company
against him in his capacity as a director, officer, employee or agent of the
company, or another company if serving in such capacity at the company's
request, if he: (1) acted in good faith; (2) acted in a manner which he
reasonably believed to be in or not opposed to the best interests of the
company; and (3) is not adjudged to be liable to the company (unless the court
finds that he is nevertheless reasonably entitled to indemnity for expenses
which the court deems proper). A company must repay the expenses of any
director, officer, employee or agent who is successful on the merits of an
action against him in his capacity as such.
A Florida company is authorized to make any other or further
indemnification or advancement of expenses of any of its directors, officers,
employees, or agents, except for acts or omissions which constitute (1) a
violation of the criminal law (unless the individual had reasonable cause to
believe it was lawful); (2) a transaction in which the individual derived an
improper personal benefit; (3) in the case of a director, a circumstance under
which certain liability provisions of the Florida Business Corporation Act are
applicable (related to payment of dividends or other distributions or
repurchases of shares in violation of such Act); or (4) willful misconduct or a
conscious disregard for the best interest of the
40
<PAGE> 44
company in a proceeding by the company, or a company shareholder. A Florida
company also is authorized to purchase and maintain liability insurance for its
directors, officers, employees and agents.
The Company's Bylaws provide that the Company shall indemnify each of
its directors and officers to the fullest extent permitted by law, and that the
indemnity will include advances for expenses and costs incurred by such director
or officer related to any action in regard to which indemnity is permitted. The
Company maintains directors' and officers' liability insurance covering its
directors and officers against expenses and liabilities arising from certain
actions to which they may become subject by reason of having served in such
role. Such insurance is subject to the coverage amounts, exceptions, deductibles
and other conditions set forth in the policy. There is no assurance that the
Company will maintain liability insurance for its directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended ("Securities Act") 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 and is therefore unenforceable.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Shares will be
Continental Stock Transfer & Trust Co., New York, New York.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company expects to have 700,000
Common Shares outstanding (805,000 if the over-allotment option granted to the
Underwriter is exercised in full). The 700,000 shares of the Company's Common
Shares purchased in this offering (plus any additional shares sold upon the
Underwriter's exercise of its over-allotment option) have been registered with
the Securities and Exchange Commission (the "Commission") under the Securities
Act, and may generally be resold without registration under the Securities Act
unless they were acquired by directors, executive officers, or other affiliates
of the Company or the Bank (collectively, "Affiliates"). Affiliates of the
Company may generally only sell Common Shares pursuant to the Commission's Rule
144 or another exemption under the Securities Act.
In general, under Rule 144 as currently in effect, an affiliate (as
defined in Rule 144) of the Company may sell Common Shares within any
three-month period in an amount limited to the greater of 1% of the outstanding
Company's Common Shares or the average weekly trading volume in the Company's
Common Shares during the four calendar weeks preceding such sale. Sales under
Rule 144 are also subject to certain manner-of-sale provisions, notice
requirements and the availability of current public information about the
Company.
The Company and the directors and officers of the Company and the Bank
(who are expected to hold an aggregate of approximately 140,000 shares after
this offering), have agreed, or will agree, that they will not issue, offer for
sale, sell, grant any options for the sale of or otherwise dispose of any shares
of Common Shares held by them or any rights to purchase Common Shares, without
the prior written
41
<PAGE> 45
consent of the Underwriter for a period of 180 days from the date of this
Prospectus. Prior to this offering, there has been no public trading market for
the Common Shares, and no predictions can be made as to the effect, if any, that
sales of shares or the availability of shares for sale will have on the
prevailing market price of the Common Shares after completion of this offering.
Nevertheless, sales of substantial amounts of Common Shares in the public market
could have an adverse effect on prevailing market prices.
UNDERWRITING
Under the terms and subject to the conditions set forth in the
underwriting agreement by and between the Underwriter and the Company (the
"Underwriting Agreement"), the Underwriter has agreed to purchase from the
Company, and the Company has agreed to sell to the Underwriter 700,000 Common
Shares to be sold in the offering.
The Underwriting Agreement provides that the obligation of the
Underwriter to pay for and accept delivery of the Common Shares is subject to
approval of certain matters by its counsel and to various other conditions
precedent. The Underwriter is obligated to purchase and pay for all Common
Shares offered hereby (other than those covered by the over-allotment option
described below), if any Common Shares are purchased.
The Underwriter has advised the Company that the Underwriter proposes
to offer the Common Shares directly to the public initially at the public
offering price set forth on the cover page of this Prospectus and to certain
selected dealers at such price, less a concession not to exceed $0.70 per share
(this amount will be reduced to $0.30 per share with respect to sales of up to
150,000 Common Shares to certain investors identified by the Company to the
Underwriter, in writing, prior to effectiveness of the Registration Statement
for the offering). The Underwriter may allow, and such selected dealers may
reallow, a concession not in excess of $______ per share to certain other
dealers. After the initial public offering of the Common Shares, the public
offering price, concession, and reallowance to dealers may be changed by the
Underwriter. The Common Shares are offered subject to receipt and acceptance by
the Underwriter and to certain other conditions, including the right to reject
orders in whole or in part.
The Underwriter has advised the Company that it does not intend to
confirm sales of the Common Shares offered hereby to any account over which it
may exercise discretionary authority.
The Company has granted to the Underwriter an option, exercisable
during the 30-day period beginning on the date of this Prospectus, to purchase
up to 105,000 additional Common Shares solely to cover over-allotments, if any,
at the public offering price less the underwriting discounts and commissions set
forth on the cover page of this Prospectus.
Subject to certain limitations, the Company and the Underwriter have
agreed to indemnify each other against certain civil liabilities, including
certain civil liabilities under the Securities Act, or to contribute to payments
that the Company or the Underwriter may be required to make in respect thereof.
At the Company's request, the Underwriter has agreed to reserve up to
150,000 Common Shares for sale at the public offering price to directors,
employees, and other persons having certain business
42
<PAGE> 46
relationships with the Company or the Bank. The number of shares available for
sale to the general public will be reduced to the extent that these persons
purchase such reserved shares. Any reserved shares not purchased will be offered
by the Underwriter to the general public on the same basis as the other shares
offered hereby.
The foregoing is a summary of the principal terms of the Underwriting
Agreements and does not purport to be complete. Reference is made to a copy of
the Underwriting Agreement which is on file as an exhibit to the Registration
Statement.
In connection with the offering of the Common Shares, the Underwriter
and selling group members and their respective affiliates may engage in
over-allotment transactions, stabilizing transactions, syndicate covering
transactions, and penalty bids effected in accordance with Rule 104 of the
Commission's Regulation An over-allotment transaction are those transactions in
which the Underwriter creates a short position for its own account by selling
more Common Shares than it is committed to purchase from the Company. In such
case, to cover all or part of a short position, the Underwriter may exercise the
over-allotment option described above or may purchase Common Shares in the open
market following completion of the offering. In stabilizing transactions, the
Underwriter may bid for, and purchase, Common Shares at a level above that which
might otherwise prevail on the open market for the purpose of preventing or
retarding a decline in the market price of the Common Shares. Syndicate covering
transactions involve purchases of Common Shares in the open market after a
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Underwriter to reclaim selling concessions from
syndicate member when the Common Shares originally sold by such syndicate member
is purchased in a syndicate covering transaction to cover syndicate short
positions Any of the foregoing transactions may cause the price of the Common
Shares to be higher than it would otherwise be in the absence of such
transactions. The Underwriter is not required to engage in any of the foregoing
transactions, and if commenced, such transactions may be discontinued at any
time.
Each of the Company, and the directors, executive officers, and
existing shareholders of the Company and the Bank have agreed that, without the
prior written consent of the Underwriter, they will not, for a period of 180
days from the date of this Prospectus, subject to certain limited exceptions,
directly or indirectly offer, sell, announce an intention to sell, contract to
sell, or otherwise dispose of, any Common Shares held by them or any securities
convertible into or exercisable or exchangeable for the Common Shares.
There has been no public trading market for the Common Shares prior to
this Offering. Consequently, the initial public offering price for the Common
Shares was determined by negotiations between the Company and the Underwriter.
This price is not based upon earnings or any history of operations and should
not be construed as indicative of the present or anticipated future value of the
Common Shares In determining such price, consideration was given to several
factors, including among them the size of the offering, the market conditions
for initial public offerings, the desire that the security being offered be
attractive to individuals, the Underwriter's experience in dealing with initial
public offerings for financial institutions, and other relevant factors. The
Underwriter has advised the Company that it presently intends to make a market
in the Common Shares after the commencement of trading, but no assurances can be
made as to the liquidity of the Common Shares or that an active and liquid
trading market will develop or, if developed, that it will be sustained. The
Underwriter will have no obligation to continue to make a market in the Common
Shares, however, it may cease market making activities, if commenced, at any
time.
43
<PAGE> 47
LEGAL OPINIONS
The legality of the Common Shares being offered hereby will be passed
upon for the Company by Smith, Mackinnon, Greeley, Bowdoin & Edwards, P.A.,
Orlando, Florida. Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa,
Florida is acting as counsel for the Underwriter in connection with certain
legal matters relating to the offering of Common Shares.
EXPERTS
The financial statements of the Company included in this Prospectus
have been audited by Hill, Barth & King, Inc., independent public accountants,
as indicated in their report with respect thereto. Such financial statements
have been included herein and in the Registration Statement in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement
under the Securities Act, with respect to the Common Shares offered by the
Registration Statement. This Prospectus does not contain all of the information
set forth in the Registration Statement and in the exhibits attached. Certain
items were omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Shares, reference is made to the Registration Statement and the exhibits filed
with it. Anyone can inspect the Registration Statement without charge at the
Public Reference Section of the Commission Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Commission's regional offices:
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York,
10048; and Midwest Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies may be obtained upon payment of the
required fees. Information contained in this Prospectus which refer to a
document filed as an exhibit to the Registration Statement are qualified in
their entirety by reference to a copy of that document. In addition, the Company
is required to file electronic versions of these documents with the Commission
through the Commission's EDGAR system. The Commission maintains a World Wide Web
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.
The Company is not currently a reporting company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). However, following this
offering the Company will be required to file certain reports with the
Commission pursuant to the Exchange Act during at least the 1999 fiscal year.
The Company will file the reports required to be filed under the Exchange Act
for the Company's 1999 fiscal year and for any other periods for which the
Exchange Act's requirements apply to the Company. The Company, which will use a
December 31 fiscal year end, intends to furnish its shareholders with annual
reports containing audited financial information and, for the first three
quarters of each fiscal year, quarterly reports containing unaudited financial
information.
44
<PAGE> 48
FINANCIAL STATEMENTS
SUNCOAST BANCORP, INC.
(A Development Stage Company)
October 31, 1998
CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report................................................F-2
Balance Sheet ..............................................................F-3
Statement of Operations ....................................................F-4
Statement of Shareholders' Deficit .........................................F-5
Statement of Cash Flows ....................................................F-6
Notes to Financial Statements ............................................F-7-9
</TABLE>
F-1
<PAGE> 49
Board of Directors
Suncoast Bancorp, Inc.
Sarasota, Florida
Independent Auditors' Report
We have audited the accompanying balance sheet of Suncoast Bancorp,
Inc., formerly known as Community Holdings Corporation (the Company) as of
October 31, 1998 and the related statements of operations, shareholders' deficit
and cash flows for the period from April 1, 1998 (date of inception) to October
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Suncoast Bancorp,
Inc. as of October 31, 1998 and the results of its operations and its cash flows
for the period from April 1, 1998 (date of inception) to October 31, 1998 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
company will continue as a going concern. As discussed in Note H to the
financial statements, the company's ability to continue as a going concern is
dependent on approval from the Office of the Comptroller of the Currency for a
National Banking Charter and a successful public offering of the Company's
common stock. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
November 20, 1998
F-2
<PAGE> 50
SUNCOAST BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
October 31, 1998
ASSETS
- ------
<TABLE>
<S> <C>
Cash $ 1,951
Prepaid expenses 7,118
Deferred offering costs 39,448
Equipment - NOTE B 1,460
Loan Closing Costs - NOTE C 594
Architect's Fees 1,440
Deposits 6,000
---------
$ 58,011
=========
LIABILITIES AND SHAREHOLDERS' DEFICIT
- -------------------------------------
Liabilities:
Accounts Payable $ 46,430
Loans payable - NOTE D 81,187
Accrued interest payable 1,399
---------
TOTAL LIABILITIES 129,016
---------
Shareholders' Deficit:
Preferred stock, par value $.01 per share,
3,000,000 shares authorized; 0 shares issued
and outstanding 0
Common stock, par value $.01 per share,
10,000,000 shares authorized; 1 share issued
and outstanding 0
Additional paid-in capital 1
Deficit accumulated during the development stage (71,006)
---------
TOTAL SHAREHOLDERS' DEFICIT (71,005)
---------
$ 58,011
=========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 51
SUNCOAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period from April 1, 1998 (date of inception) to October 31, 1998
<TABLE>
<S> <C>
INCOME $ 0
- ------
EXPENSES
- --------
Automobile Expense 9,032
Consulting Fees 34,599
Interest expense and loan fees 1,927
License and Permits 17,479
Other expenses 7,969
--------
TOTAL EXPENSES 71,006
--------
NET LOSS $(71,006)
========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 52
SUNCOAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' DEFICIT
Period from April 1, 1998 (date of inception) to October 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Paid-in Development
Stock Capital Stage Total
------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Balance
April 1, 1998 $ 0 $ 0 $ 0 $ 0
Proceeds from
issuance of
common stock 0 1 0 1
Net loss 0 0 (71,006) (71,006)
------- ---------- ----------- ---------
Balance (deficit)
October 31, 1998 $ 0 $ 1 $ (71,006) $ (71,005)
======= ========== =========== =========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 53
SUNCOAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period from April 1, 1998 (date of inception) to October 31, 1998
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------
Net loss $ (71,006)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 618
Increase in prepaid expenses (7,118)
Increase in other assets (46,888)
Increase in intangible assets (1,187)
Increase in accounts payable 46,430
Increase in accrued interest payable 1,399
----------
NET CASH USED IN OPERATING ACTIVITIES (77,752)
----------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Purchase of equipment (1,484)
----------
NET CASH USED IN INVESTING ACTIVITIES (1,484)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Borrowings on short-term notes 81,187
----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 81,187
----------
NET INCREASE IN CASH 1,951
CASH
- ----
Beginning of period 0
----------
End of period $ 1,951
==========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE> 54
SUNCOAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization:
Suncoast Bancorp, Inc. formerly known as Community Holdings Corporation
(the Company) was incorporated under the laws of the State of Florida on April
1, 1998. The Company's activities to date have been limited to the organization
of Suncoast National Bank (the Bank), as well as preparation for a $7,000,000
common stock offering (the Offering). A substantial portion of the proceeds of
the Offering will be used by the Company to provide the initial capitalization
of the Bank. The start-up of the Bank is contingent upon receiving the approval
of various banking regulatory authorities and also a successful completion of
the Offering.
Nature of Business:
The Bank intends to offer a full range of commercial and consumer
banking services primarily within the Sarasota, Florida area.
Use of Estimates:
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Deferred Offering Costs:
Deferred offering costs consist primarily of legal and accounting fees
related to the initial public stock offering and will be offset against the
offering proceeds when received.
NOTE B - EQUIPMENT
Equipment at October 31, 1998 consists of the following:
<TABLE>
<S> <C>
Computer Equipment $ 1,485
Less accumulated depreciation 25
-------
TOTAL $ 1,460
=======
</TABLE>
Depreciation is computed on the straight-line method over the estimated
useful lives of the depreciable assets. Depreciation expense was $25 for the
period ended October 31, 1998.
F-7
<PAGE> 55
SUNCOAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
NOTE C - LOAN CLOSING COSTS
Loan closing costs as of October 31, 1998 consisted of the following:
<TABLE>
<S> <C>
Loan closing costs $1,187
Less accumulated amortization 593
------
TOTAL $ 594
======
</TABLE>
Amortization is computed on the straight-line method over the life of
the loan. Amortization expense for the period ended October 31, 1998 was $594.
NOTE D - LOANS PAYABLE
The Company has obtained a $325,000 line of credit payable to a bank,
guaranteed by the organizers of the Company to pay organizational and
pre-opening expenses of the Bank and the Company. As of October 31, 1998, the
Company had borrowed $81,187 on the demand note under this agreement. The line
of credit bears interest at the prime rate plus 1% (9% as of 10/31/98) and
varies as prime varies and matures on May 1, 1999. The foregoing line of credit
and any unpaid accrued interest will be repaid from the offering proceeds.
NOTE E - INCOME TAXES
Deferred taxes are recognized for temporary differences between the
basis of assets and liabilities for financial statement and income tax purposes.
The tax effect of the differences that gave rise to a deferred tax asset of
$24,852 and corresponding valuation allowance of ($24,852) at October 31, 1998
relate primarily to the capitalization of preoperating start-up costs which are
amortized over a five year term from the date operations commence for tax
purposes.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Company has committed to lease 4,000 square feet for its main
office location. The lease has a term of 5 years with the option for two 5-year
renewals; to begin on the earlier of the date of the certificate of occupancy
for the building or the date the bank opens for business. The base annual lease
payment is $72,000 plus applicable sales tax; increased annually by 4% on the
anniversary date of the lease during the initial term or any option period
agreed to under the lease. The Company has also entered into a 36-month closed
end lease for an automobile. Lease payments under this lease arrangement are
$463 per month.
F-8
<PAGE> 56
SUNCOAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
NOTE G - STOCK OPTIONS
The Board of Directors of the Company has adopted the Suncoast Bancorp,
Inc. Director Stock Option Plan and the Suncoast Bancorp, Inc. Employee Stock
Option Plan and has reserved 42,000 and 28,000 shares, respectively, of its
common stock for issuance under these plans. Under both plans the option price
will be no less than the fair market value of the stock on the date of grant.
The options may be exercised in whole or in part, with respect to whole shares
only, not to exceed 10 years from the date of grant.
NOTE H - GOING CONCERN
As shown in the accompanying financial statements, the Company incurred
a net loss of $71,006 during the development stage, April 1, 1998 (date of
inception) to October 31, 1998, and as of that date, the Company's liabilities
exceeded its assets by $71,005. The ability of the Company to continue as a
going concern is dependent on approval from the Office of the Comptroller of the
Currency for a National Banking Charter and a successful public offering of the
Company's common stock. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
F-9
<PAGE> 57
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE BANK OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE COMMON SHARES OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PAY THE COMMON SHARES BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
--------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary...................................................... 1
Risk Factors............................................................ 4
Recent Developments .................................................... 11
Use of Proceeds......................................................... 11
Dividend Policy......................................................... 13
Capitalization.......................................................... 14
Management's Discussion and Analysis
or Plan of Operation........................................... 14
Business................................................................ 15
Management.............................................................. 24
Certain Relationships and Related Transactions.......................... 31
Security Ownership of Management and Certain Beneficial Owners.......... 31
Supervision and Regulation.............................................. 32
Description of Capital Stock............................................ 38
Shares Eligible for Future Sale......................................... 41
Underwriting............................................................ 42
Legal Opinions.......................................................... 44
Experts................................................................. 44
Additional Information.................................................. 44
Index to Financial Statements...........................................F-1
</TABLE>
--------------------
UNTIL ____________, 1999 (90 DAYS AFTER THE COMMENCEMENT OF THE
OFFERING), ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON SHARES, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
================================================================================
================================================================================
700,000 SHARES
SUNCOAST BANCORP, INC.
COMMON SHARES
--------------
PROSPECTUS
--------------
Ashtin Kelly & Co.
_____________ 1999
================================================================================
<PAGE> 58
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850, Florida Statutes, grants a corporation the power to
indemnify its directors, officers, employees, and agents for various expenses
incurred resulting from various actions taken by its directors, officers,
employees, or agents on behalf of the corporation. In general, if an individual
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the action was
unlawful, then the corporation has the power to indemnify said individual who
was or is a party to any proceeding (including, in the absence of an
adjudication of liability (unless the court otherwise determines), any
proceeding by or in the right of the corporation) against liability expenses,
including counsel fees, incurred in connection with such proceeding, including
any appeal thereof (and, as to actions by or in the right of the corporation,
against expenses and amounts paid in settlement not exceeding, in the judgment
of the board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof). To the extent that
a director, officer, employee, or agent has been successful on the merits or
otherwise in defense of any proceeding, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith. The term
"proceeding" includes any threatened, pending, or completed action, suit, or
other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Any indemnification in connection with the foregoing, unless pursuant to a
determination by a court, shall be made by the corporation upon a determination
that indemnification is proper in the circumstances because the individual has
met the applicable standard of conduct. The determination shall be made (i) by
the board of directors by a majority vote of a quorum consisting of directors
who are not parties to such proceeding; (ii) by majority vote of a committee
duly designated by the board of directors consisting solely of two or more
directors not at the time parties to the proceeding; (iii) by independent legal
counsel selected by the board of directors or such committee; or (iv) by the
shareholders by a majority vote of a quorum consisting of shareholders who are
not parties to such proceeding. Evaluation of the reasonableness of expenses and
authorization of indemnification shall be made in the same manner as the
determination that indemnification is permissible. However, if the determination
of permissibility is made by independent legal counsel, then the directors or
the committee shall evaluate the reasonableness of expenses and may authorize
indemnification. Expenses incurred by an officer or director in defending a
civil or criminal proceeding may be paid by the corporation in advance of the
final disposition of the proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount if he is ultimately found
not to be entitled to indemnification by the corporation. Expenses incurred by
other employees and agents may be paid in advance upon such terms or conditions
that the board of directors deems appropriate.
Section 607.0850 also provides that the indemnification and advancement of
expenses provided pursuant to that Section are not exclusive, and a corporation
may make any other or further indemnification or advancement of expenses of any
of its directors, officers, employees, or agents, under any bylaw, agreement,
vote of shareholders or disinterested directors, or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office. However,
II-1
<PAGE> 59
indemnification or advancement of expenses may not be made if a judgment or
other final adjudication established that the individual's actions, or omissions
to act, were material to the cause of action so adjudicated and constitute (i) a
violation of the criminal law (unless the individual had reasonable cause to
believe his conduct was lawful or had no reasonable cause to believe his conduct
was unlawful); (ii) a transaction from which the individual derived an improper
personal benefit; (iii) in the case of a director, a circumstance under which
the liability provisions of Section 607.0834 are applicable; or (iv) willful
misconduct or a conscious disregard for the best interests of the corporation in
a proceeding by or in the right of the corporation to procure a judgment in its
favor in a proceeding by or in the right of a shareholder. Indemnification and
advancement of expenses shall continue as, unless otherwise provided when
authorized or ratified, to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such person, unless otherwise provided when authorized or
ratified.
Section 607.0850 further provides that unless the corporation's articles
of incorporation provide otherwise, then notwithstanding the failure of a
corporation to provide indemnification, and despite any contrary determination
of the board or of the shareholders in the specific case, a director, officer,
employee, or agent of the corporation who is or was a party to a proceeding may
apply for indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice that it considers necessary, may order indemnification and
advancement of expenses, including expenses incurred in seeking court-ordered
indemnification or advancement of expenses, if it determines that (i) the
individual is entitled to mandatory indemnification under Section 607.0850 (in
which case the court shall also order the corporation to pay the director
reasonable expenses incurred in obtaining court-ordered indemnification or
advancement of expenses); (ii) the individual is entitled to indemnification or
advancement of expenses, or both, by virtue of the exercise by the corporation
of its power under Section 607.0850; or (iii) the individual is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether the person met the
standard of conduct set forth in Section 607.0850. Further, a corporation is
granted the power to purchase and maintain indemnification insurance.
Article VI of the Company's Bylaws provide for indemnification of the
Company's officers and directors and advancement of expenses. The text of the
indemnification provisions contained in the Company's Bylaws is set forth in
Exhibit 3.2, to this Registration Statement. Among other things, indemnification
is granted to each person who is or was a director, officer or employee of the
Company and each person who is or was serving at the request of the Company as a
director, officer or employee of another corporation to the full extent
authorized by law. Article VI of the Company's Bylaws also sets forth certain
conditions in connection with any advancement of expenses and provision by the
Company of any other indemnification rights and remedies. The Company also is
authorized to purchase insurance on behalf of any person against liability
asserted whether or not the Company would have the power to indemnify such
person under the Bylaws. Pursuant to such authority, the Company has purchased
directors and officers liability insurance although there is no assurance that
the Company will maintain such insurance or, if so, the amount of insurance that
it will so maintain.
Pursuant to the Underwriting Agreement, the Company and the Underwriters
have agreed to indemnify each other under certain circumstances and conditions
against and from certain liabilities, including liabilities under the Securities
Act of 1933, as amended. Reference is made to Section 8 of the Underwriting
Agreement filed as Exhibit 1.1 hereto.
II-2
<PAGE> 60
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee.................................... $ 2,238
NASD Filing Fee......................................... 1,305
Transfer Agent and Registration Fees.................... 3,500*
Printing and Engraving Expenses......................... 40,000*
Accounting Fees and Expenses............................ 26,000*
Legal Fees and Expenses................................. 75,000*
Blue Sky Fees and Expenses.............................. 16,815
Miscellaneous........................................... 5,142*
--------
Total............................................... $170,000
========
</TABLE>
- ------------------------
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On April 13, 1998, the Company issued one Common Share to its Chairman of
the Board solely to facilitate the organization of the Company. The foregoing
sale of Common Stock by the Company was exempt from the registration
requirements of the Securities Act by operation of Section 4(2) thereof, the
provision which exempts private offerings. No underwriter or independent selling
agent was used and no compensation or commission were paid in connection with
the sale of the Common Share.
II-3
<PAGE> 61
ITEM 27. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
(a) NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C> <C>
1.1 - Form of Underwriting Agreement
3.1 - Restated Articles of Incorporation
3.2 - Bylaws
4.1 - See Exhibits 3.1 and 3.2 for provisions of
the Restated Articles of Incorporation and
Bylaws of the Company defining rights of
holders of the Company's Common Shares
4.2 - Specimen Common Share Certificate
5 - Form of Legal Opinion of Smith, Mackinnon,
Greeley, Bowdoin & Edwards, P.A. with
respect to the validity of the Common Stock
being offered hereby
10.1 - Form of Employment Agreement to be entered
into between the Company and John T.
Stafford
10.2 - Form of Employment Agreement to be entered
into between the Bank and William F. Gnerre
10.3 - Suncoast Bancorp, Inc. Director Stock Option
Plan
10.4 - Suncoast Bancorp, Inc. Employee Stock Option
Plan
10.5 - Lease Agreement dated August 28, 1998
between the Company and Palmer Medical
Center Ltd.
21 - List of subsidiaries of the Company
23.1 - Consent of Hill, Barth & King, Inc.
23.2 - Consent of Smith, Mackinnon, Greeley,
Bowdoin & Edwards, P.A. (included in Exhibit
5)
27 - Financial Data Schedule (for SEC use only)
</TABLE>
II-4
<PAGE> 62
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Registrant will provide to the Underwriter at the closing specified
in the underwriting agreement certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to each
purchaser.
II-5
<PAGE> 63
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed in its behalf by the undersigned, in the City of
Sarasota, State of Florida, on January 6, 1999.
SUNCOAST BANCORP, INC.
/s/ John T. Stafford
-------------------------------------
John T. Stafford
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints H.R.
Foxworthy and John T. Stafford, for himself and not for one another, and each
and either of them and his substitutes, a true and lawful attorney in his name,
place and stead, in any and all capacities, to sign his name to any and all
amendments to this Registration Statement, including post-effective amendments,
and to cause the same to be filed with the Securities and Exchange Commission,
granting unto said attorneys and each of them full power of substitution and
full power and authority to do and perform any act and thing necessary and
proper to be done in the premises, as fully to all intents and purposes as the
undersigned could do if personally present, and each of the undersigned for
himself hereby ratifies and confirms all that said attorneys or any one of them
shall lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
/s/ H. R. Foxworthy Chairman of the Board January 6, 1999
- ----------------------- and Director
H. R. Foxworthy
/s/ John T. Stafford President and Chief Executive January 6, 1999
- ----------------------- Officer and Director
John T. Stafford
/s/ William F. Gnerre Executive Vice President, January 6, 1999
- ----------------------- Secretary and Director
William F. Gnerre (Principal Financial Officer
and Principal Accounting Officer)
<PAGE> 64
/s/ Larry Berberich Director January 6, 1999
- ------------------------
Larry Berberich
/s/ Henry E. Black Director January 6, 1999
- ------------------------
Henry E. Black, M.D.
/s/ James C. Rutledge Director January 6, 1999
- ------------------------
James C. Rutledge
/s/ Stanley A. Williams Director January 6, 1999
- ------------------------
Stanley A. Williams
/s/ Roy A. Yahraus Director January 6, 1999
- ------------------------
Roy A. Yahraus
<PAGE> 65
<TABLE>
<CAPTION>
EXHIBIT
(a) NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C> <C>
1.1 - Form of Underwriting Agreement
3.1 - Restated Articles of Incorporation
3.2 - Bylaws
4.1 - See Exhibits 3.1 and 3.2 for provisions of
the Restated Articles of Incorporation and
Bylaws of the Company defining rights of
holders of the Company's Common Shares
4.2 - Specimen Common Share Certificate
5 - Form of Legal Opinion of Smith, Mackinnon,
Greeley, Bowdoin & Edwards, P.A. with
respect to the validity of the Common Stock
being offered hereby
10.1 - Form of Employment Agreement to be entered
into between the Company and John T.
Stafford
10.2 - Form of Employment Agreement to be entered
into between the Bank and William F. Gnerre
10.3 - Suncoast Bancorp, Inc. Director Stock Option
Plan
10.4 - Suncoast Bancorp, Inc. Employee Stock Option
Plan
10.5 - Lease Agreement dated August 28, 1998
between the Company and Palmer Medical
Center Ltd.
21 - List of subsidiaries of the Company
23.1 - Consent of Hill, Barth & King, Inc.
23.2 - Consent of Smith, Mackinnon, Greeley,
Bowdoin & Edwards, P.A. (included in Exhibit
5)
27 - Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 1
EXHIBIT 1.1
SUNCOAST BANCORP, INC.
COMMON SHARES
(PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
February ___, 1999
ASHTIN KELLY & CO.
400 Fifth Avenue South
Naples, FL 34102
Gentlemen:
Suncoast Bancorp, Inc., a Florida corporation (the "Company"), hereby
confirms its agreement with Ashtin Kelly & Co., as the underwriter (the
"Underwriter"), as follows:
SECTION 1. Introduction. Subject to the terms and conditions set forth
in this Underwriting Agreement (this "Agreement"), the Company proposes to
issue and sell to the Underwriter an aggregate of 700,000 common shares ("Firm
Shares"), $0.01 par value per share (the "Common Shares"), of the Company. In
addition, the Company proposes to grant to the Underwriter an option to
purchase up to 105,000 additional Common Shares (the "Option Shares") as
provided in Section 4 hereof. The Firm Shares and the Option Shares are
hereinafter referred to collectively as the "Shares."
As part of the offering of the Firm Shares contemplated by this
Agreement, the Underwriter has agreed to reserve out of the Firm Shares up to
150,000 Shares for sale to the Company's employees, officers, and directors,
and other parties associated with the Company (collectively, the
"Participants") as set forth in the Prospectus (as defined below) in the
section entitled "Underwriting" (the "Directed Share Program"). The Shares to
be sold by the Underwriter pursuant to the Directed Share Program (the
"Directed Shares") will be sold by the Underwriter pursuant to this Agreement
at the public offering price as set forth on the cover page of the Prospectus.
Any Directed Shares not orally confirmed for purchase by any Participant prior
to the end of the first business day after the date on which this Agreement is
executed will be offered to the public by the Underwriter as set forth in the
Prospectus.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter as follows:
(a) (i) A registration statement on Form SB-2 (File No._________)
with respect to the Shares, including a related preliminary prospectus, has
been carefully prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations of the Securities and Exchange Commission ("Commission")
promulgated thereunder, and has been filed with the Commission. The Company has
prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date hereof,
and will file such additional amendments thereto and such amended preliminary
prospectuses as may hereafter be required.
(ii) For purposes of this Agreement, the term "Registration
Statement" means the registration statement referred to in Section 2(a)(i) of
this Agreement as amended at the time when it was declared effective by the
Commission (including the related prospectus, Part II, any documents or a
portion thereof incorporated by reference therein, all financial schedules and
exhibits thereto, and all information deemed to be part of the registration
statement at the time it became effective pursuant to Rule 430A(b) under the
Securities Act), except that if the Company files a post-effective amendment to
such registration statement which is declared effective prior to the First
Closing Date (as defined in Section 4 hereof), "Registration Statement" shall
refer to such registration statement as so amended. The date on which the
Registration
1
<PAGE> 2
Statement is declared effective by the Commission shall be referred to as the
"Effective Date." If the Company has filed an abbreviated registration
statement to register additional Shares pursuant to Rule 462(b) under the
Securities Act (including the exhibits thereto, the "Rule 462 Registration
Statement"), then any reference herein to the Registration Statement also shall
be deemed to include the Rule 462 Registration Statement. "Preliminary
Prospectus" shall mean: (A) any prospectus included in the registration
statement, or amendments, before it was declared effective under the Securities
Act, (B) any prospectus filed with the Commission by the Company with the
consent of the Underwriter pursuant to Rule 424(a) under the Securities Act
(including documents incorporated by reference therein), and (C) any prospectus
included in the Registration Statement at the Effective Date that omits the
Rule 430A Information (as defined below). The term "Prospectus" means the final
prospectus documents as first filed with the Commission pursuant to Rule 424(b)
under the Securities Act or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Shares included in the
Registration Statement at the Effective Date, in either case, including all
documents (or portions thereof) incorporated by reference therein. "Rules and
Regulations" means the rules and regulations adopted by the Commission under
either the Securities Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as applicable. "Rule 430A Information" means information
with respect to the Shares and the offering thereof which, pursuant to Rule
430A promulgated under the Securities Act, is permitted to be omitted from the
Registration Statement and the related prospectus at the time the Registration
Statement is declared effective by the Commission.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus complies
with the requirements of, and contains all statements which are required to be
stated therein in accordance with, the Securities Act and the Rules and
Regulations, and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading; provided, however, that no representation or warranty is
made as to information contained in or omitted from the Preliminary Prospectus
in reliance on and in conformity with the written information furnished to the
Company by or on behalf of the Underwriter specifically for use therein.
(c) The Registration Statement has been declared effective and no
stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued or is in effect and no proceedings for that
purpose have been initiated, are pending or, to the knowledge of the Company,
have been threatened by the Commission or the securities authority of any state
or other jurisdiction. The Registration Statement and the Prospectus comply
and, as amended or supplemented, will comply, in all respects with the
requirements of, and contain and, as amended or supplemented, if applicable,
will contain, all statements that are required to be stated therein by, the
Securities Act and the Rules and Regulations. The Registration Statement, at
the Effective Date, did not contain and the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain, and at all times
subsequent thereto up to each of the Closing Dates (as defined in Section 4
hereof) will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which they were
made, not misleading; provided, however, that no representation or warranty is
made as to information contained in or omitted from the Registration Statement,
the Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Underwriter specifically for use therein.
(d) The Company has been duly incorporated and is validly existing as
a corporation with active status under the laws of the State of Florida and,
subject to Section 2(i) of this Agreement and commencement of the business of
the Suncoast National Bank, a national bank (in organization) to be located in
Sarasota, Florida (the "Bank"), is duly registered and in good standing under
the Bank Holding Company Act of 1956, as amended (the "BHCA"), with the full
power and authority (corporate and other) to own, lease, and operate its
properties and conduct its business as described in the Registration Statement
and the Prospectus (and any amendment or supplement thereto); the Company is
duly registered or qualified to do business as a foreign corporation under the
corporation and banking laws of, and is in good standing as such in, each
jurisdiction in which the conduct of its business or where the nature of its
properties requires such registration or
2
<PAGE> 3
qualification, except to the extent that the failure to be so registered or
qualified would not have a material adverse effect on the condition (financial
or other), business, properties, net worth, prospects, or results of operations
of the Company or any of its Subsidiaries (as defined below) ("Material Adverse
Effect"); and no proceeding has been instituted in any jurisdiction revoking,
limiting, or curtailing, or seeking to revoke, limit, or curtail, such power
and authority or qualification.
(e) The Company has the requisite power and authority (corporate and
other) to execute and deliver this Agreement and to perform its obligations
under this Agreement. The execution and delivery of this Agreement, and the
performance by the Company of its obligations hereunder and consummation of the
transactions described herein, have been duly and validly authorized by the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid, and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except in all cases (i) to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium, or similar laws affecting
the enforcement of creditor rights and remedies generally, (ii) that the
availability of the equitable remedy of specific performance and injunctive
relief is subject to the discretion of the court before which the proceeding
may be brought, and (iii) that the enforceability of the indemnification and
contribution provisions hereof may be limited under applicable federal or state
or other securities laws or the public policy underlying such laws).
(f) Neither the execution and delivery by the Company of this
Agreement, nor the performance by the Company of its obligations hereunder or
the consummation of the transactions contemplated hereby (including the offer,
sale, or delivery of the Shares) and compliance by the Company with any of the
provisions hereof will (i) conflict with, violate, or contravene any provision
of the articles of incorporation, bylaws, or other corporate governance
documents of the Company or any Subsidiary, (ii) violate, conflict with, or
result in a breach of any term, condition, or provision of, or constitute a
default (with or without notice or the lapse of time, or both) under, or give
rise to any right of termination, cancellation, or acceleration of any
obligation or loss of benefit under, or result in the creation of any claim,
lien, pledge, security, intent, charge, or other encumbrance of any kind
whatsoever (a "Lien") upon any assets or properties of the Company or any
Subsidiary pursuant to the terms, provisions, or conditions of any loan
agreement, indenture, note, bond, or other evidence of indebtedness, or of any
agreement, lease, deed of trust, mortgage, contract, or other material
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them or any of their assets or properties are bound or affected,
or (iii) conflict with or violate any statute, law, ordinance, rule, or
regulation applicable to the Company, any Subsidiary, or any of their
respective assets or properties, or any order, judgment, writ, injunction, or
decree of any court, or any governmental, regulatory, or administrative agency,
commission, authority, or other body, domestic or foreign, having jurisdiction
over the Company, any Subsidiary, or any of their respective assets or
properties. No consent, approval, filing, authorization, registration,
qualification, or order, including with or by any bank regulatory agency, is
required for the execution, delivery, and performance of this Agreement or the
consummation of the transactions contemplated by this Agreement, other than
such that have been obtained or made, except as such may be required for
compliance with the Securities Act, the Exchange Act, and the Blue Sky Laws
applicable to the public offering of the Shares by the Underwriter, and the
clearance of such offering and the underwriting arrangements evidenced hereby
with the National Association of Securities Dealers, Inc. ("NASD").
(g) The Company had the outstanding capitalization as set forth under
"Capitalization" in the Registration Statement and the Prospectus as of the
date indicated therein and there has been no change therein since such date.
The Common Shares issued and outstanding prior to the issuance of the Shares to
be sold by the Company hereunder have been duly authorized and validly issued,
are fully paid and nonassessable; the Shares to be sold by the Company
hereunder have been duly authorized and, when issued and paid for against
delivery thereof as contemplated by this Agreement, will be validly issued,
fully paid and nonassessable; and, the securities of the Company conform to the
descriptions thereof contained in the Registration Statement and Prospectus,
and the certificates representing the Shares are in due and proper legal form
under, and conform in all respects to the requirements of, the laws of the
State of Florida. There are no preemptive, preferential, or other rights
(including rights of first refusal) to subscribe for or to purchase any of the
Common Shares
3
<PAGE> 4
(including the Shares) and no Common Shares have been issued in violation of
any such rights, nor are there any restrictions upon the voting or transfer of
any Common Shares (including the Shares) pursuant to the Company's articles of
incorporation, bylaws, and other governing documents, or any agreement or other
instrument to which the Company or any Subsidiary is a party or by which any of
them may be bound. All of the securities previously issued by the Company and
each of its Subsidiaries, including the Common Shares and any warrants and
stock options to purchase Common Shares, were duly offered, sold, issued, or
granted in compliance with, and were registered under or exempt from the
registration requirements of, the Securities Act, and were duly registered or
qualified under, or the subject of an available exemption from, the
registration provisions of all applicable state securities laws ("Blue Sky
Laws").
(h) Except as set forth in the Prospectus, the Company does not have
any outstanding options to purchase, or warrants to subscribe for, or any
securities or obligations convertible into or exchangeable for, or any
contracts or commitments to issue or sell, any Common Shares or any such
options, warrants, convertible or exchangeable securities, or obligations, or
other rights of any description, contractual or otherwise, entitling any person
to receive any class of security from the Company. No holder of the Common
Shares or other securities of the Company or any other person has the right,
contractual or otherwise, to cause the Company to register any securities of
the Company under the Securities Act or any Blue Sky Laws.
(i) The Company has prepared and filed with the Board of Governors of
the Federal Reserve System (the "FRB") in accordance with Section 3(a)(1) of
the BHCA and Section 225.15 of Regulation Y promulgated thereunder, an
application to become a bank holding company (together with all exhibits,
schedules, amendments, and supplements thereto, the "BHC Application"). On
_____, 1999, the FRB approved the Company's application to become a bank
holding company through the acquisition of all of the outstanding voting
securities of the Bank, effective upon the Company's compliance with
commitments and representations made in connection with the BHC Application
(the "FRB Approval"). The FRB Approval provides that the acquisition by the
Company of the Bank must be made before three months after ________, 1999,
unless extended by the FRB. The FRB Approval also requires the Company to
provide the FRB with certain further information set forth therein within
thirty days following the Company's acquisition of the Bank's voting stock.
(j) The organizers of the Bank have prepared and filed with the
United States Office of the Comptroller of the Currency ("OCC") in accordance
with the National Bank Act (the "NBA") an Application to Organize a National
Bank (together with all exhibits, schedules, amendments, and supplements
thereto, the "Charter Application"). On ______, 1999, the OCC approved the
Charter Application for authority to organize the Bank, subject to certain
terms and conditions specified in such approval (the "Charter Approval"). The
Charter Approval remains in full force and effect on the date hereof and will
be in full force and effect on each of the Closing Dates. The organizers of the
Bank have prepared and filed with the Federal Deposit Insurance Corporation
("FDIC") in accordance with Section 5(a)(1) of the Federal Deposit Insurance
Act, as amended (the "FDIA"), an Application for Federal Deposit Insurance
(together with all exhibits, schedules, amendments, and supplements thereto,
the "Deposit Insurance Application"). On ______, 1999, the FDIC approved the
Deposit Insurance Application, subject to certain terms and conditions
specified in such approval (the "Deposit Insurance Approval").
(k) The Company has provided the Underwriter with true and complete
copies of the BHC Company Application, the Charter Application, and the Deposit
Insurance Application, as each has been amended or supplemented from time to
time (together, the "Applications"), and the FRB Approval, the Charter
Approval, and the Deposit Insurance Approval (together, the "Regulatory
Approvals"). When the Applications were filed with the respective bank
regulatory authorities, and upon the filing with the Commission or the first
delivery to the Underwriter of the Prospectus, and as of the date of this
Agreement and each of the Closing Dates: (i) each such Application conformed
with and will conform with the respective requirements of the BHCA, the NBA,
and the FDIA and the rules and regulations promulgated thereunder, and (ii)
none of the Applications contained or will contain any untrue statement of a
material fact or omitted or will omit to state any material fact required to be
stated therein or necessary in order to make the statements
4
<PAGE> 5
therein, in light of the circumstances under which they were made, not
misleading. As of each of the Closing Dates, all such Regulatory Approvals are
in full force and effect, and no actions or proceedings to suspend, revoke, or
terminate any of such Regulatory Approvals have been taken or, to the knowledge
of the Company, are pending, threatened, or contemplated, and neither the
Company nor the Bank is in breach of or default under any condition or of any
commitment contained in any Regulatory Approval.
(l) The Company does not have any Subsidiaries and does not, directly
or indirectly, own any equity interest in, or control, any corporation, limited
liability company, association, partnership, joint venture, trust,
proprietorship, or other commercial or business entity or organization, except
that the Company has the sole right to acquire all of the outstanding capital
stock of the Bank, which stock will be acquired upon receipt of all necessary
regulatory approvals, including the Regulatory Approvals, and upon acquisition
of such stock the Bank will be the Company's only subsidiary ("Subsidiary"). On
the First Closing Date, immediately following the sale of the Firm Shares to
the Underwriter pursuant to this Agreement, a minimum of $6,000,000 of the net
proceeds therefrom shall be contributed by the Company to the Bank, and after
receipt thereof the Bank shall issue shares of its common stock to the Company,
and following such issuance, and at all times subsequent thereto up to and as
of the Second Closing Date (as defined in Section 4 hereof), if any, all of the
outstanding shares of capital stock of the Bank (i) will have been issued to
the Company, (ii) when issued to the Company, will have been duly authorized
and validly issued, and will be fully paid and nonassessable, and (iii) will be
owned beneficially and of record by the Company, free and clear of any claim,
lien, encumbrance, or security interest, or restriction on transfer (except for
restrictions under federal or state banking laws). Subject to receipt by the
Bank of such capital contribution from the Company, and satisfaction of the
conditions set forth in the Bank Approvals (as defined in Section 7(g) hereof),
the Bank will be duly organized and validly existing as a nationally chartered
banking association in good standing under the laws of the United States of
America, with full power and authority (corporate and other) to own, lease, and
operate its properties and conduct its business as described in the
Registration Statement, the Prospectus, the Applications, and the Regulatory
Approvals; the Bank is not required to be registered or qualified to do
business as a foreign corporation under the laws of any jurisdiction; and no
proceeding will have been instituted in any jurisdiction revoking, limiting, or
curtailing, or seeking to revoke, limit, or curtail, such power and authority
or qualification. No options to purchase, or warrants to subscribe for, or any
securities or obligations convertible into or exchangeable for, or any
contracts or commitments to issue or sell, any capital stock or ownership
interests in the Bank or any such options, warrants, convertible or
exchangeable securities, or obligations or other rights of any description,
contractual or otherwise, entitling any person to receive any class of security
from the Bank, are outstanding. The Bank is not subject to any current formal
arrangement or memorandum of understanding with, or cease and desist order by,
any bank regulatory agency.
(m) Hill, Barth & King, Inc., the certified public accountants which
have audited, reviewed, and expressed its opinion with respect to certain of
the financial statements and schedules filed with the Commission as a part of
the Registration Statement and included or to be included, as the case may be,
in the Registration Statement and in the Prospectus, and whose report is
included in the Registration Statement and in the Prospectus were and are
independent accountants as required by, and within the meaning of, the
Securities Act and the Rules and Regulations.
(n) The financial statements and schedules and the related notes
thereto included or to be included, as the case may be, in the Registration
Statement, any Preliminary Prospectus, or the Prospectus present fairly the
financial position of the entities purported to be shown thereby as of the
respective dates of such financial statements and schedules, and the results of
operations and changes in equity and in cash flows of the entities purported to
be shown thereby for the respective periods covered thereby, all prepared in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved, except as may be disclosed in the Registration
Statement and the Prospectus. All adjustments necessary for a fair presentation
of the results of such periods have been made. The financial, operating, and
statistical information relating to the Company and any Subsidiary are
accurately and fairly presented and prepared on a basis consistent with the
audited financial statements and the books and records of the Company.
5
<PAGE> 6
(o) The Company and each Subsidiary maintains a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access
to material assets is permitted only in accordance with management's general or
specific authorizations, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(p) Neither the Company nor any Subsidiary is presently, nor with the
giving of notice or the lapse of time, or both, would be (i) in conflict with
or in violation of its articles of incorporation, bylaws, or other corporate
governance documents, (ii) in violation or breach of, or in default in the
performance of any obligation, agreement, or condition contained in any
provision of any loan agreement, indenture, note, bond, or other evidence of
indebtedness, or of any agreement, lease, deed of trust, mortgage, contract, or
other material agreement or instrument to which the Company, or any Subsidiary
is a party or by which any of them or any of their assets or properties are
bound or affected, or (iii) in conflict with or in violation of any law,
ordinance, rule, or regulation applicable to the Company, any Subsidiary, or
any of their respective assets or properties, or any order, judgment, writ,
injunction, or decree of any court, or any governmental, regulatory, or
administrative agency, commission, authority, or other body, domestic or
foreign, having jurisdiction over the Company, any Subsidiary, or any of their
respective assets or properties.
(q) The Company and each Subsidiary have and hold and are operating
in compliance with, and have fulfilled and performed all of their material
obligations with respect to all permits, certificates, franchises, grants,
easements, consents, licenses, approvals, charters, registrations,
authorizations, and orders ("Permits") required under all laws, rules, and
regulations and as are necessary to own their respective properties and to
conduct their respective businesses in the manner described in the Registration
Statement and Prospectus, and all of such Permits are valid and in full force
and effect; and there is no pending proceeding, and neither the Company nor any
Subsidiary has received notice of any threatened proceeding, relating to the
revocation or modification of any such Permit. Neither the Company nor any
Subsidiary is or has been (by virtue of any action, omission to act, contract
to which it is a party or by which it is bound, or any occurrence or state of
facts whatsoever) in violation of any law, rule, regulation, or any order,
writ, injunction, or decree to which the Company or any of its Subsidiaries may
be subject (including those relating to any aspect of banking, bank holding
companies, environmental protection, occupational safety and health, and equal
employment practices) heretofore or currently in effect, except any such
violation that has been fully cured or satisfied without recourse or that is
not reasonably likely to have a Material Adverse Effect on the Company or any
Subsidiary.
(r) Except as described in or contemplated by the Registration
Statement and the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus: (i)
neither the Company nor any of its Subsidiaries has incurred any liability or
obligation, direct or contingent, and neither of them has entered into any
material transaction not in the ordinary course of business; (ii) neither the
Company nor any Subsidiary has purchased any of its outstanding capital stock,
nor declared, paid, or otherwise made any dividend or other distribution of any
kind with respect to its capital stock, and neither the Company nor any
Subsidiary has been delinquent in the payment of principal or interest on any
outstanding debt obligations; and (iii) there has not been any change in the
capital stock, or any material change in the indebtedness of the Company or any
Subsidiary. There has not occurred any material adverse change, or any
development reasonably likely to result in a material adverse change, in the
condition (financial or otherwise), or affecting their respective businesses
(resulting from litigation or otherwise), properties, net worth, prospects, or
results of operations of the Company or any of its Subsidiaries from that set
forth in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(s) There are no contracts or other documents, transactions,
relationships, statutes, regulations, or rules required to be described in the
Registration Statement or the Prospectus, or to be filed as an exhibit to the
6
<PAGE> 7
Registration Statement, by the Securities Act or by the Rules and Regulations
that has not been so described or filed as required.
(t) Either the Company or a Subsidiary, as the case may be, has good
and marketable title in fee simple to all items of real property and good and
marketable title to all the personal property and assets reflected as owned by
the Company or any Subsidiary in the financial statements described above (or
elsewhere in the Registration Statement and the Prospectus), in each case free
and clear of all Liens, defects, or adverse interest of any nature except
those, if any, reflected in such financial statements (or elsewhere in the
Registration Statement and the Prospectus) or such as are not material to the
Company or any Subsidiary and do not interfere with the use of the property or
the conduct of the business of the Company or any Subsidiary; and all real
property and buildings held or used by the Company or any Subsidiary under
leases, licenses, franchises, or other agreements are held by them under valid,
existing, binding, and enforceable leases, licenses, franchises, or other
agreements with respect to which they are not in material default with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings or the conduct of the
business of the Company or any Subsidiary.
(u) There is no litigation or governmental proceeding, action, or
investigation pending or, to the knowledge of the Company, threatened, to which
the Company or any Subsidiary is a party, or to which property owned or leased
by the Company or any Subsidiary is subject, or related to environmental or
discrimination matters, which is required to be disclosed in the Registration
Statement or the Prospectus by the Securities Act or the Rules and Regulations
and is not so disclosed, or which questions the validity of this Agreement or
any action taken or to be taken pursuant hereto nor, to the knowledge of the
Company, is there any basis for any such litigation, proceeding, action, or
investigation.
(v) Neither the Company nor any Subsidiary has distributed any
offering material in connection with the offering of the Shares other than the
Preliminary Prospectus, the Registration Statement, the Prospectus or other
materials permitted by the Securities Act and which distribution was previously
approved in writing by the Underwriter. The Company has not given any
information or made any representation in connection with the offering of the
Shares, written or oral, other than as contained in the Prospectus or the
Preliminary PROSPECTUS. Neither the Company nor any person that controls, is
controlled by (including any Subsidiary), or is under the common control of the
Company has taken or will take, directly or indirectly, any action designed to
cause or result in, or which constitutes or which might reasonably be expected
to constitute, under the Exchange Act or otherwise, stabilization or
manipulation of the price of the Common Shares to facilitate the sale or resale
of the Shares.
(w) Neither the Company nor any person that controls, is controlled
by (including any Subsidiary), or is under the common control of the Company
has, directly or indirectly, at any time: (i) made any unlawful contribution to
any candidate for political office, or failed to disclose fully any
contribution in violation of law; or (ii) made any payment to any federal,
state, local, or foreign government officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof or applicable foreign jurisdictions.
(x) The Company and each Subsidiary has filed all required federal,
state, local, and foreign income and franchise tax returns; all such tax
returns, as filed, are accurate in all material respects and the Company has
paid all taxes shown as due thereon; and no tax deficiency has been asserted or
threatened against the Company or any Subsidiary that would have a Material
Adverse Effect on either of them, except as described in the Registration
Statement and the Prospectus.
(y) The Company or a Subsidiary owns or possesses full right, title
and interest in and to, or has the right to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses, and other rights, know-how,
and technology (including trade secrets and other unpatented and/or proprietary
or confidential information, systems or procedures) (collectively "Intellectual
Property Rights") necessary for the conduct of the business of the
7
<PAGE> 8
Company or any of its Subsidiaries or ownership of their respective properties,
and neither the Company nor any Subsidiary has received notice of conflict with
the asserted rights of others in respect thereof which has not been resolved.
(z) In addition to federal deposit insurance available upon receipt
of and compliance with the Deposit Insurance Approval, the Company and each
Subsidiary has in place and effective such policies of insurance, with limits
of liability in such amounts, as are normal and prudent in the ordinary course
of business similar to that of the Company and each Subsidiary in the
respective jurisdictions in which they conduct business, and the Company has no
reason to believe that the Company and its Subsidiaries will not be able to
renew their existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
their respective businesses at a cost that would not have a Material Adverse
Effect on the Company or any Subsidiary.
(aa) The provisions of any employee pension benefit plan ("Pension
Plan") as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), in which the Company and any Subsidiary is a
participating employer are in substantial compliance with ERISA, and the
Company and each Subsidiary are not in material violation of ERISA. The
Company, each Subsidiary, or the plan sponsor thereof, as the case may be, has
duly and timely filed the reports required to be filed by ERISA in connection
with the maintenance of any Pension Plans in which the Company or any
Subsidiary is a participating employer, and no facts, including any "reportable
event" as defined by ERISA and the regulations thereunder, exist in connection
with any Pension Plan in which the Company or any Subsidiary is a participating
employer which might constitute grounds for the termination of such plan by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
U.S. District Court of a trustee to administer any such plan. The provisions of
any employee benefit welfare plan, as defined in Section 3(1) of ERISA, in
which the Company or any Subsidiary is a participating employer, are in
substantial compliance with ERISA and the Company, any Subsidiary, or the plan
sponsor thereof, as the case may be, has duly and timely filed the reports
required to be filed by ERISA in connection with the maintenance of any such
plans.
(ab) Except as set forth in the Registration Statement and the
Prospectus, to the knowledge of the Company, neither the Company nor any
Subsidiary has violated any environmental, safety, or similar law applicable to
their respective businesses, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, which in each case would be reasonably
expected to have a Material Adverse Effect on the Company or any Subsidiary. No
labor dispute with or disturbance by the employees of the Company or any
Subsidiary exists or is imminent; and neither the Company nor any Subsidiary is
aware of any existing or imminent labor disturbances by its employees that
might reasonably be expected to have a Material Adverse Effect on the Company
or any of its Subsidiaries. No collective bargaining agreement exists with any
of the Company's or any Subsidiary's employees and no such agreement is
imminent. Neither the employment by the Company or any Subsidiary of their key
personnel nor the activities of such individuals at the Company or any
Subsidiary conflicts with, constitutes a breach of, or otherwise violates any
employment, noncompetition, nondisclosure, or similar agreement or covenant by
which such individuals may be bound.
(ac) Neither Company nor any Subsidiary is an "investment company" or
an "affiliated person" of, or a "promoter" or "principal underwriter" for an
investment company within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and none of them is subject to
regulation under the Investment Company Act.
(ad) The Company has complied with all provisions of Section 517.075,
Florida Statutes, relating to disclosures of doing business with the government
of Cuba or with any person or affiliate located in Cuba.
(ae) All Common Shares outstanding prior to the sale of the Shares to
the Underwriter, and all securities convertible into or exercisable or
exchangeable for Common Shares are subject to valid, binding, and enforceable
agreements with the Underwriter (collectively, the "Lock-Up Agreements")
pursuant to which
8
<PAGE> 9
the holders thereof agree not to offer, sell, contract to sell, distribute,
grant any option, right, or warrant for the purchase of, or pledge,
hypothecate, make any short sale, or otherwise transfer or dispose of, directly
or indirectly, any of such Common Shares, or any securities convertible into,
or exercisable or exchangeable for, Common Shares, or any other Common Shares
acquired by them during the term of the Lock-Up Agreements (including Shares
purchased pursuant to the public offering thereof), for a period of 180 days
after the date of the Prospectus without the prior written consent of the
Underwriter.
(af) The Company has not offered, or caused the Underwriter to offer,
Shares to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence: (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the Company,
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its applications or services.
(ag) All documents delivered or to be delivered by the Company or any
of its representatives in connection with the issuance and sale of the Shares
were on the dates on which they were delivered, or will be on the dates on
which they are to be delivered, true, complete, and correct in all material
respects. Neither this Agreement nor any certificate, statement, or other
document delivered or to be delivered by the Company or any Subsidiary contains
or will contain any untrue statement of a material fact or omits or will omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(ah) The Company has prepared and filed with the Commission a
registration statement for the Common Shares pursuant to Section 12(g) of the
Exchange Act, and such registration statement has been declared effective under
the Exchange Act or will be declared effective by the Commission prior to or
concurrently with the commencement of the public offering of the Shares.
(ai) The Company has satisfied the conditions for the use of Form SB-2
with respect to the offering of the Shares for sale to the public.
Any certificate signed by any director or officer of the Company and
delivered to the Underwriter or to counsel for the Underwriter shall be deemed
a representation and warranty of the Company to the Underwriter as to the
matters covered thereby.
Any certificate delivered by the Company to its counsel for purposes
of enabling such counsel to render the opinion referred to in Section 7(d) will
also be furnished to the Underwriter and counsel for the Underwriter and shall
be deemed to be additional representations and warranties to the Underwriter by
the Company as to the matters covered thereby.
SECTION 3. Terms of Public Offering. The Company has been advised by
the Underwriter that the Underwriter proposes to make a public offering of the
Shares, on the terms and conditions set forth in the Registration Statement, as
soon after the Effective Date as the Underwriter deems it advisable to do so.
SECTION 4. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties, and agreements
contained herein, but subject to the terms and conditions set forth herein, the
Company agrees to issue and sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, the Firm Shares at the following purchase prices:
(i) $9.70 per share for each Share purchased and sold pursuant to the Directed
Share Program, and (ii) $9.30 per share for each remaining Share, including any
Shares reserved for issuance pursuant to the Directed Share Program which is
not orally confirmed for purchase pursuant thereto by a Participant prior to
the end of the first business day after the date this Agreement is executed.
The Underwriter agrees to offer the Shares to the public as set forth in the
Prospectus.
9
<PAGE> 10
(b) At 10:00 a.m., Eastern Standard Time, on the fourth full business
day following the commencement of the initial public offering contemplated by
this Agreement, or at such other time not later than ten (10) full business
days following the date of this Agreement, as the Underwriter and the Company
may agree (the "First Closing"), the Company will deliver to the Underwriter at
the offices of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A. ("Carlton
Fields"), 777 South Harbour Island Boulevard, Tampa, Florida 33602, or at such
other location as specified by the Underwriter, certificates representing the
Firm Shares to be purchased by the Underwriter, against payment by the
Underwriter of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company for Firm Shares. Such time of delivery and
payment is referred to in this Agreement as the "First Closing Date."
(c) In addition, on the basis of the representations, warranties, and
agreements contained herein, but subject to the terms and conditions set forth
herein, the Company hereby grants to the Underwriter a one-time option (the
"Option") to purchase from the Company up to 105,000 Option Shares at a
purchase price of $9.30 per share, for use solely in covering any
over-allotments made by the Underwriter in the sale and distribution of the
Firm Shares. The Option granted hereunder may be exercised at any time (but not
more than once) within thirty (30) days after the date of this Agreement, upon
notice by the Underwriter to the Company which sets forth the aggregate number
of Option Shares to be purchased by the Underwriter, the names and
denominations in which the certificates for such shares are to be registered,
and the time and place at which such certificates will be delivered (the
"Second Closing"). Such time of delivery may not be earlier than the First
Closing Date and herein is called the "Second Closing Date." The Second Closing
Date shall be determined by the Underwriter and may be the same as the First
Closing Date, but if at any time other than the First Closing Date, such Second
Closing Date shall not be earlier than three nor later than ten full business
days after delivery of such notice to exercise.
(d) Certificates for the Firm Shares and the Option Shares shall be
in definitive form and shall be registered in such names and in such
denominations as the Underwriter shall request by written notice to the Company
not later than two business days prior to the First Closing Date or the Second
Closing Date, as the case may be. The Company agrees to make such certificates
available for inspection at least twenty-four (24) hours prior to the First
Closing Date or the Second Closing Date, as the case may be, at the offices of
its designated custodian, or at any other location designated by the
Underwriter. The certificates evidencing the Firm Shares and the Option Shares
shall be delivered to the Underwriter on the First Closing Date or the Second
Closing Date, as the case may be, for the account of the Underwriter, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriter duly paid, against payment of the purchase price therefor.
The First Closing Date and the Second Closing Date are sometimes
referred to together in this Agreement as the "Closing Dates".
SECTION 5. Covenants of the Company. In further consideration of the
agreements of the Underwriter herein contained, the Company covenants and
agrees with the Underwriter that:
(a) If any information shall have been omitted from the Registration
Statement in reliance upon Rule 430A under the Securities Act, the Company will
prepare and timely file with the Commission pursuant to Rule 424(b) under the
Securities Act a Prospectus in a form approved by the Underwriter containing
the Rule 430A Information.
(b) The Company will advise the Underwriter and counsel to the
Underwriter promptly, and, if requested by the Underwriter, will confirm such
advice in writing: (i) if information shall have been omitted from the
Registration Statement in reliance on Rule 430A under the Securities Act, (ii)
when the Prospectus or term sheet (as described in Rule 434(b) under the
Securities Act) has been timely filed pursuant to Rule 424(b) under the
Securities Act, (iii) when any post-effective amendment to the Registration
Statement or any Rule 462 Registration Statement is filed or becomes effective
under the Securities Act, (iv) of any request by the Commission for amendments
or supplements to the Registration Statement, any Preliminary Prospectus, or
10
<PAGE> 11
the Prospectus, or for additional information, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any notification of the suspension of qualification or
registration of the Shares for offer or sale in any jurisdiction or the
initiation or threatening of any proceedings for such purposes. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement or the Prospectus, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will not file any amendment to the Registration
Statement (including any post-effective amendment), file any Rule 462(b)
Registration Statement, or make any amendment or supplement to the Prospectus,
or file any amendment or supplement to any of the Applications if: (i) the
Underwriter shall not have been previously advised of such filing, been
furnished with a copy thereof prior thereto, and given reasonable opportunity
to review such amendment or supplement, (ii) the Underwriter shall reasonably
object after having been so advised, or (iii) in the case of a Registration
Statement, Rule 462(b) Registration Statement, or Prospectus, such amendment or
supplement is not in compliance with the Securities Act. The Company will
prepare and file with the Commission any amendments or supplements which, in
the opinion of counsel for the Underwriter, is necessary and advisable in
connection with the distribution of the Shares by the Underwriter.
(d) The Company will furnish to the Underwriter, without charge,
eight (8) signed copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial statements
and all exhibits thereto, and such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto as the
Underwriter may reasonably request. The Company has delivered to the
Underwriter, without charge, in such quantities as the Underwriter has
requested, copies of each form of the Preliminary Prospectus. The Company
confirms its consent to the use, in accordance with the provisions of the
Securities Act and with the securities or Blue Sky Laws of the jurisdictions in
which the Shares are or have been offered by the Underwriter and by dealers,
prior to the date of the Prospectus, of each Preliminary Prospectus so
furnished by the Company.
(e) The Company will furnish to the Underwriter in Naples, Florida,
without charge, prior to 10:00 a.m., Eastern Standard Time on the business day
next succeeding the date of this Agreement and thereafter from time to time for
such period as in the opinion of counsel for the Underwriter a prospectus is
required by law to be delivered in connection with sales by the Underwriter or
a dealer, as many copies of the Prospectus and the Registration Statement, and
of any amendment or supplement thereto, as the Underwriter may reasonably
request. The Company shall comply with all requirements imposed on it by the
Securities Act, as now and hereafter amended, and by the Rules and Regulations,
as from time to time in force, so far as is necessary to permit the completion
of the distribution of the Shares as contemplated by this Agreement and the
Registration Statement and the Prospectus. If, during the period in which the
Prospectus is required by law to be delivered by the Underwriter or a dealer,
any event shall occur or condition exist as a result of which, in the judgment
of the Company or in the opinion of counsel for the Underwriter, it becomes
necessary to amend or supplement the Registration Statement or the Prospectus
in order to make the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion
of counsel to the Underwriter, it is necessary to amend or supplement the
Prospectus to comply with the Securities Act or applicable law, the Company
promptly will prepare and file with the Commission an appropriate amendment or
supplement thereto, and, will furnish to the Underwriter and to each dealer to
which Shares may have been sold by the Underwriter and to any other dealers
upon request, without charge, as many copies as the Underwriter may from time
to time request.
(f) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, as soon as it is
practicable to do so, but in any event not later than fifteen (15) months after
the effective date of the Registration Statement, covering a period of twelve
(12) consecutive calendar months beginning after the effective date of the
Registration Statement, which consolidated earnings statement will satisfy the
provisions of the last paragraph of Section 11(a) of the Securities Act and
Rule 158
11
<PAGE> 12
of the Rules and Regulations promulgated thereunder and will advise the
Underwriter in writing when such statement has been so made available.
(g) The Company shall take or cause to be taken in cooperation with
the Underwriter and counsel to the Underwriter all actions required to register
or qualify the Shares for offer and sale under the securities or Blue Sky Laws
of such jurisdictions as the Underwriter may reasonably designate and will make
such applications, file such documents, and furnish such information as may be
required for that purpose (provided, that the Company shall not be required to
qualify as a foreign corporation or to file a general consent to the service of
process in any jurisdiction where it is not now so qualified or required to
file a consent, except with respect to the offer and sale of the Shares), and
will continue such registrations or qualifications in effect so long as
reasonably requested by the Underwriter to effect the distribution of the
Shares (including, without limitation, the preparation and filing of such
statements, reports, or documents as may be so required and compliance with all
undertakings given pursuant to such registrations or qualifications). In the
event that the registration or qualification of the Shares in any jurisdiction
is suspended, the Company shall so advise the Underwriter in writing.
(h) During the period ending five years after the date of this
Agreement, the Company will furnish to the Underwriter: (i) as soon as
practicable after the end of each fiscal year, copies of the annual report
containing the consolidated audited financial statements of the Company, (ii)
as soon as available, a copy of each report, document, and definitive proxy or
information statement furnished to or filed with any securities exchange or the
NASD (including the Nasdaq Stock Market, Inc., or any successor thereto)
pursuant to the requirements of such exchange or the NASD, or with the
Commission under the Securities Act or the Exchange Act, and (iii) copies of
all other information or communications (financial or other) furnished to
shareholders of the Company.
(i) The Company shall apply the proceeds from the sale of the Shares
to be sold by it hereunder as set forth in the Prospectus under the heading
"Use of Proceeds" shall file with the Commission, and will furnish or cause to
be furnished to the Underwriter and counsel to the Underwriter, such reports as
may be required in accordance with Rule 463 under the Securities Act.
(j) Except for the sale of Common Shares pursuant to this Agreement
and except as disclosed in the Prospectus, neither the Company nor any
Subsidiary shall, directly or indirectly, offer, sell, pledge, contract to
sell, issue, distribute, grant or sell any option, right, or warrant to
purchase or otherwise dispose of any Common Shares or securities convertible
into, or exercisable, or exchangeable for, Common Shares or a derivative of the
Common Shares (or an agreement for such) in the open market or otherwise, for a
period of one-hundred eighty days (180) days after the later of the Effective
Date or the date of this Agreement, without the express prior written consent
of the Underwriter.
(k) The Company will not, directly or indirectly, take any action
designed, or which might reasonably be expected to cause or result in or
constitute, under the Securities Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(l) The Company has (i) caused each director, officer, and current
shareholder of the Company and each Subsidiary to furnish to the Underwriter,
on or before the date of this Agreement, the Lock-Up Agreements, and (ii)
issued stop-transfer instructions to the transfer agent for the Common Shares
with respect to the Common Shares that are or will be subject to such Lock-Up
Agreements, which stop-transfer instructions shall restrict the transfer of
such shares prior to expiration of the 180-day period specified in the Lock-Up
Agreements.
(m) The Company will file a registration statement under the Exchange
Act to register the Common Shares thereunder as of the Effective Date, and will
comply with all registration, filing, and reporting requirements of the
Exchange Act which may from time to time be applicable to the Company.
12
<PAGE> 13
(n) During the period that a prospectus is required by law to be
delivered in connection with sales of the Shares by the Underwriter or a
dealer, the Company will not, directly or indirectly hold any press conference
with respect to the Company, or its financial condition, results of operations,
business, properties, assets, or prospects, or this offering, without the
express written consent of the Underwriter.
(o) The Company shall not invest or otherwise cause the use of
proceeds received by the Company from its sale of the Shares, or otherwise
conduct its business, in such a manner as would require Company or any
Subsidiary to register as an investment company under the Investment Company
Act of 1940, as amended.
(p) The Company will not prior to the Second Closing Date, if any,
(i) except as specifically described in the Prospectus, acquire any of the
Common Shares, or declare or pay any dividend or make any other distribution
upon its Common Shares payable to shareholders of record on a date prior to the
Second Closing Date, or (ii) incur any material liability or obligation, direct
or contingent, or enter into any material transaction other than in the
ordinary course of business, or any transaction with a related party which is
required to be disclosed in the Prospectus pursuant to Item 404 of Regulation
S-B under the Securities Act.
(q) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Shares.
(r) In connection with the Directed Shares Program, the Company will
ensure that the Directed Shares will be restricted to the extent required by
the NASD or the NASD rules from sale, transfer, assignment, pledge, or
hypothecation for a period of three months following the Effective Date. The
Underwriter will notify the Company as to which Participants are required to be
restricted. The Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
(s) The Company shall comply in all respects with the provisions of
all undertakings contained in the Registration Statement and the undertakings
given by the Company in connection with the registration or qualification of
the Shares for offering and sale under the Blue Sky Laws.
(t) The Company will use its best efforts to satisfy or cause to be
satisfied the conditions to the obligations of the Underwriter in Section 7
hereof.
(u) The Company shall deliver the requisite notice of issuance to the
NASD and shall take all necessary and appropriate action to cause or permit the
quotation and listing of the Common Shares on the OTC Bulletin Board for a
period of at least 36 months, except to the extent during such period that the
Common Shares are listed on a national securities exchange or the Nasdaq Stock
Market.
(v) The Company will advise the Underwriter promptly of and, when
applicable, furnish copies of, any communications with the FRB, OCC, or FDIC
relating to the Applications or the Regulatory Approvals.
(w) The Company shall supply the Underwriter and counsel to the
Underwriter, at the Company's cost, with three bound volumes of the
Underwriting materials within a reasonable time after the last of the Closing
Dates.
SECTION 6. Payment of Expenses and Fees.
(a) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated for any reason, the Company agrees
to pay or cause to be paid all costs, fees, and expenses incurred in connection
with, or incident to the performance of the Company's obligations under this
Agreement, including: (i) the fees, disbursements, and expenses of the
Company's accountants and counsel incurred in connection with the registration
and delivery of the Shares under the Securities Act, (ii) the fees,
13
<PAGE> 14
expenses, and costs associated with the preparation, filing with the
Commission, printing, and distribution (including costs of mailing, packaging,
and shipping copies thereof to the Underwriter and dealers) of the Registration
Statement, each Preliminary Prospectus, and the Prospectus (including all
exhibits and financial statements thereto, and any amendments and supplements
to any of the foregoing); (iii) the cost of preparing, printing, and
authenticating certificates representing the Shares, and all costs and expenses
related to the transfer and delivery of the Shares to the Underwriter,
including any stamp, transfer, or other taxes payable thereon; (iv) all the
costs and expenses in connection with the registration and qualification of the
Shares for the offer and sale under state securities and Blue Sky Laws,
including filing fees and legal fees and disbursements of counsel for the
Underwriter incurred in connection with such registration and qualifications
and in connection with the preparation of the preliminary and supplemental Blue
Sky memoranda, (v) the costs of printing (or reproducing) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda, the Selected
Dealer Agreements, and all other agreements and documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (vi)
all filing fees, and legal fees and disbursements of counsel to the Underwriter
incurred in connection with the review and qualification of the offering of the
Shares by the NASD; (vii) the fees and expenses related to the approval of the
quotation of the Shares on the OTC Bulletin Board; (viii) the costs and charges
of any transfer agent, registrar, or depositary; (ix) transportation,
accommodations, and other expenses incurred by or on behalf of the Underwriter
in connection with the presentations to prospective purchasers of the Shares;
(x) all fees and disbursements of counsel for the Underwriter incurred in
connection with the Directed Shares Program; (xi) preparation, printing, and
distribution of three bound volumes of the closing documents for the
Underwriter and its counsel; and (xii) all other costs incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section 6. It is understood, however, that except as
provided in this Section 6(a), in Section 6(b), and in Section 8 entitled
"Indemnification and Contribution", the Underwriter will pay all of its costs
and expenses, including fees and disbursements of its counsel, stock transfer
taxes payable on resale of any of the Shares by it, and any advertising
expenses connected with any offers the Underwriter may make.
(b) If this Agreement shall be terminated by the Underwriter because
of the conditions in Section 7 of this Agreement are not satisfied, or because
this Agreement is terminated by the Underwriter pursuant to Section 10 of this
Agreement, or by reason of the failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement,
then the Company will reimburse the Underwriter for out-of-pocket expenses
(including fees and disbursements of counsel for the Underwriter) reasonably
incurred by the Underwriter in connection with this Agreement or the offering
contemplated hereunder.
SECTION 7. Conditions to the Obligations of the Underwriter. The
obligations of the Underwriter under this Agreement to purchase the Shares on
each of the Closing Dates shall be subject to (i) the accuracy of the
representations and warranties on the part of the Company set forth herein as
of the date hereof, and at all times subsequent thereto up to and as of the
First Closing Date, and if applicable, as of the Second Closing Date, as the
case may be, (ii) to the accuracy of the statements of the Company's directors
and officers made pursuant to the provisions hereof, (iii) to the performance
and compliance by the Company of its agreements and obligations hereunder, and
(iv) to the following additional conditions, except to the extent expressly
waived in writing by the Underwriter:
(a) The Registration Statement and all post-effective amendments
thereto shall have been declared effective by the Commission not later than
5:30 p.m. Eastern Standard Time on the date of this Agreement, or such later
time as shall have been consented to by the Underwriter, and all filings
required by Rule 424(b) and Rule 430A under the Securities Act shall have been
timely filed with the Commission in compliance with the Rules and Regulations,
and any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
disclosed to the Underwriter and complied with to the Underwriter's
satisfaction. No stop order suspending the effectiveness of the Registration
Statement or any amendment or supplement thereto shall have been issued and no
proceeding for that purpose shall have been initiated or shall be pending or,
to the knowledge of the Company,
14
<PAGE> 15
threatened or contemplated by the Commission, and no restraining order, or
order of any nature by a federal or state court of competent jurisdiction shall
have been issued which would or purports to prevent the issuance of the Shares.
(b) Subsequent to the execution and delivery of this Agreement and
prior to each of the Closing Dates, there shall not have occurred any change,
or any development involving, or which might reasonably be expected to involve,
a prospective change, in the ability of the Company or any Subsidiary to
conduct their respective businesses (whether by reason of any court,
legislative, other governmental action, order, decree, or otherwise), or in the
general affairs, condition (financial and otherwise), business, prospects,
properties, management, financial position or earnings, results of operations,
or net worth of the Company or any Subsidiary, whether or not arising from
transactions in the ordinary course of business that, in the Underwriter's
judgment, is material and adverse and makes it, in the Underwriter's judgment,
impracticable to market the Shares on the terms and in the manner contemplated
by the Prospectus.
(c) The Underwriter shall have received on each of the Closing Dates,
a certificate of the chief executive officer and the principal financial
officer of the Company, dated as of the First Closing Date or the Second
Closing Date, as the case may be, to the effect that:
(i) The Registration Statement has been declared effective by
the Commission under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued, and no proceeding
for such purpose is pending or, to the knowledge of the respective signatories,
threatened or contemplated by the Commission.
(ii) The representations and warranties of the Company set
forth in this Agreement are true and correct as of the date of this Agreement
and as of the First Closing Date or the Second Closing Date, as the case may
be, and the Company has complied with all of the covenants and agreements and
satisfied in all respects all of the conditions to be performed or satisfied by
it on or prior to each such Closing Date.
(iii) Except as set forth in the Registration Statement or the
Prospectus, since the respective dates of the Registration Statement and
Prospectus, neither the Company nor any Subsidiary shall have incurred any
liability or obligation, direct or contingent, neither of them shall have
entered into any material transaction, there shall not have been any change in
the capital stock or other securities of the Company nor any material increase
in the short-term or long-term debt of the Company from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto).
(iv) Each of the respective signatories of the certificate has
carefully examined the Registration Statement, the Prospectus, and any
amendments or supplements thereto, and such documents contain all statements
and information required to be made therein, and neither the Registration
Statement, the Prospectus, nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and, since the date on which the Registration Statement was
initially filed, no event has occurred that was required to be set forth in an
amended or supplemented prospectus or in an amendment to the Registration
Statement that has not been so set forth; provided, however, that no
representation need be made as to information contained in or omitted from the
Registration Statement or any amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Underwriter.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
material adverse change in the conditions (financial or otherwise) of the
Company or any Subsidiary, or any development involving a prospective material
adverse change in the condition (financial or other) of the Company or any
Subsidiary or affecting their businesses (resulting from litigation or
otherwise), properties, net worth, prospects, or results of operations of the
Company or any Subsidiary, whether or not arising from transactions in the
ordinary course of business.
15
<PAGE> 16
(d) The Underwriter shall have received on each of the Closing Dates
an opinion of Smith, Mackinnon, Greeley, Bowdoin & Edwards, P.A., Orlando,
Florida, counsel for the Company, in form reasonably satisfactory to the
Underwriter and counsel for the Underwriter, addressed to the Underwriter and
dated as of the First Closing Date or the Second Closing Date, as the case may
be, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation with active status under the laws of the State of
Florida, and has full power and authority (corporate and other) to own, lease,
and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto); the Company is duly qualified to do business as foreign corporation
under the corporation and banking laws of, and is in good standing as such in,
each jurisdiction in which the conduct of its business or where the nature of
its properties requires such registration or qualification, except where the
failure to so register or qualify would not have a Material Adverse Effect on
the Company or any Subsidiary; and the Company is duly registered and in good
standing under the BHCA and is a member in good standing of the Federal Reserve
System.
(ii) To the knowledge of such counsel after due inquiry, the
Company, prior to the First Closing Date, does not have any Subsidiaries and
does not, directly or indirectly, own any equity interest in, or control, any
corporation, limited liability company, association, partnership, joint
venture, trust, proprietorship, or other commercial or business entity or
organization, except that the Company has the sole right to acquire all of the
outstanding capital stock of the Bank, and upon acquisition of such stock the
Bank will be the Company's only Subsidiary. Upon receipt of all Regulatory
Approvals, satisfaction of the conditions set forth in the Regulatory
Approvals, contribution to the Bank of the net proceeds from the sale of the
Firm Shares, and the issuance by the Bank of its capital stock after receipt
thereof as described in the Prospectus and, in the case of the Second Closing,
and at all times subsequent thereto up to and as of the Second Closing Date, if
any, all of the outstanding capital stock of the Bank (a) will have been issued
to the Company, (b) when issued to the Company, will have been duly authorized,
validly issued, fully paid and nonassessable, and (c) will be owned
beneficially and of record by the Company, free and clear of any claim, lien,
encumbrance, security interest, or restriction on transfer. Subject to the
receipt of such capital contribution by the Company to the Bank, and
satisfaction of the conditions set forth in the Bank Approvals, the Bank will
be or is duly organized and validly existing as a nationally chartered banking
association in good standing under the laws of the United States of America,
with full power and authority (corporate and other) to own, lease, and operate
its properties and conduct its business as described in the Registration
Statement, the Prospectus, the Application, and the Regulatory Approvals. The
Bank is not required to register or qualify to do business as a foreign
corporation under the laws of any jurisdiction, and is not subject to any
current formal arrangements or memorandum of understanding with, or cease and
desist order by, any bank regulatory agency.
(iii) As of the time each Application was filed with the
respective bank regulatory authorities (FRB, OCC, or FDIC) and as of each of
the Closing Dates: (A) each such Application conformed in all material respects
to the applicable respective requirements of the BHCA, the NBA, and the FDIA
and the rules and regulations promulgated thereunder, and (B) to the knowledge
of such counsel after due inquiry, as of such times, none of the Applications
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
(iv) The Company has received the FRB Approval and the Bank has
received the Bank Approvals and, to the knowledge of such counsel after due
inquiry, as of the date hereof and at all times subsequent thereto up to and as
of each of the Closing Dates to which such opinion relates: (A) all such
Regulatory Approvals are in full force and effect, and no actions to suspend,
revoke, or terminate any of such Regulatory Approvals have been taken, have
been initiated or are pending, threatened, or contemplated by any of the FRB,
the OCC, or the FDIC; (B) neither the Company nor the Bank is in breach of or
default under any condition or of any commitment contained in any of such
Regulatory Approvals; and (C) each of the Company
16
<PAGE> 17
and the Bank has satisfied all conditions precedent to such Regulatory
Approvals which can be satisfied thereunder by them as of such date.
(v) The authorized, issued, and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus, and the Common Shares conform as to legal matters to the
descriptions thereof contained in the Registration Statement and Prospectus.
The certificates for the Shares to be delivered hereunder are in due and proper
legal form and, when duly countersigned by the Company's transfer agent and
delivered to the Underwriter or upon the order of the Underwriter in accordance
with this Agreement, will comply in all respects with the requirements of the
Florida Business Corporation Act, and the Company's articles of incorporation
and bylaws.
(vi) The Common Shares issued and outstanding prior to the
issuance of the Firm Shares or the Option Shares, as the case may be, to be
sold by the Company hereunder have been duly authorized and validly issued, are
fully paid and nonassessable. Except as described in the Prospectus, there are
no preemptive, preferential, or, to the knowledge of such counsel after due
inquiry, other rights (including rights of first refusal) to subscribe for or
to purchase any of the Common Shares and no Common Shares have been issued in
violation of such rights, nor are there any restrictions upon the voting or
transfer of any Common Shares pursuant to the Company's articles of
incorporation, bylaws, other governing documents, or, to the knowledge of such
counsel after due inquiry, any agreement or other instrument to which the
Company or any Subsidiary is a party or by which any of them is bound. All of
the securities of the Company and any Subsidiary issued prior to the date
hereof were duly offered, sold, issued, or granted in compliance with, and were
registered or exempt from, the registration requirements of the Securities Act,
and were duly registered or qualified under, or the subject of an available
exemption from, the registration provisions of the Securities Act and all
applicable state securities or Blue Sky Laws.
(vii) The Firm Shares or the Option Shares, as the case may be,
to be sold by the Company hereunder have been duly authorized and, when issued
and paid for against delivery thereof in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable, and the
issuance of the Shares will not be in violation of, or subject to, any
preemptive, preferential, or other rights (including rights of first refusal)
to subscribe for or to purchase such Shares, nor are there any restrictions on
the voting or transfer of such Shares under the Company's articles of
incorporation, bylaws, or other governing documents.
(viii) Except as set forth in the Prospectus, neither the Company
nor any Subsidiary has any outstanding options to purchase, or warrants to
subscribe for, or any securities or obligations convertible or exchangeable
into, or any contracts to commitments to issue or sell, any capital stock or
any such options, warrants, convertible or exchangeable securities, or
obligations, or rights of any description, contractual or otherwise, entitling
any person to receive any class of security of the Company or any Subsidiary.
To the knowledge of such counsel after due inquiry and review of corporate
records, no holder of any securities of the Company or any Subsidiary or any
other person has the right, contractual or otherwise, to cause the Company to
have any such securities included in the Registration Statement or to register
any securities of the Company or any Subsidiary under the Securities Act or
applicable Blue Sky Laws.
(ix) The Registration Statement has been declared effective
under the Securities Act and, to the knowledge of such counsel after due
inquiry, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted, are pending, threatened, or contemplated. All filings required by
Rule 424 and Rule 430A under the Securities Act have been made in the manner
and within the time period required by such rules and, at the Effective Date
and at each of the Closing Dates to which such opinion relates, the
Registration Statement, the Prospectus, and each amendment or supplement
thereto complies as to form in all material respects with the requirements of
the Securities Act and the Rules and Regulations (except that counsel need
express no opinion as to the financial statements and other statistical or
financial data included therein), and no amendments to the Registration
Statement are required to be filed.
17
<PAGE> 18
(x) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review of and discussion
of the contents thereof, and no facts have come to the attention of such
counsel which lead it to believe that either the Registration Statement, the
Prospectus, or any amendment or supplement thereto, as of their respective
effective or issue dates, contained any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as amended
or supplemented, if applicable, as of the First Closing Date or the Second
Closing Date, as the case may be, contains any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which made (except, in each case, for the financial
statements and other statistical or financial data included therein as to which
such counsel need express no opinion).
(xi) The Company has requisite power and authority (corporate
and other) to execute, deliver, and perform this Agreement and to issue, sell,
and deliver the Shares to be sold by it to the Underwriter as provided herein.
The execution and delivery of this Agreement, and the performance by the
Company of its obligations hereunder and consummation of the transactions
described herein, have been duly and validly authorized by the Company, and
this Agreement has been duly executed and delivered by the Company, and
constitutes a legal, valid, and binding obligation of the Company and is
enforceable against the Company in accordance with its terms (except in all
cases (i) to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, moratorium, or similar
laws affecting the enforcement of creditor rights and remedies generally, (ii)
that the availability of the equitable remedy of specific performance and
injunctive relief is subject to the discretion of the court before which the
proceeding may be brought, and (iii) that the enforceability of the
indemnification and contribution provisions hereof may be limited under
applicable federal or state or other securities laws or the public policy
underlying such laws).
(xii) The execution and delivery by the Company of, and the
performance by the Company of its obligations hereunder (including the offer,
sale, or delivery of the Shares) and consummation of the transactions
contemplated by this Agreement will not (A) conflict with, violate, or
contravene any provision of the articles of incorporation, bylaws, or other
governing documents of the Company or any Subsidiary, (B) to the knowledge of
such counsel after due inquiry, violate, conflict with, constitute a breach of,
or a default under any provision of any agreement, contract, mortgage, deed of
trust, lease, loan agreement, indenture, note, bond or other evidence of
indebtedness, or any other material agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them is bound, or to
which any of their properties is subject, or (C) assuming compliance with all
applicable federal and state securities laws, result in a violation of any
statute, law, ordinance, rule, regulation, or any ruling, order, writ,
injunction, judgment, or decree of any court or any governmental, regulatory,
or administrative agency, or commission, authority, or other body, domestic or
foreign, having jurisdiction over the Company, any Subsidiary, or any of their
respective properties, except those, if any, described in the Registration
Statement and the Prospectus.
(xiii) No consent, approval, filing, authorization, registration,
qualification, or order of or with any court or governmental agency or body
(including with or by any bank regulatory agency) is required for the
execution, delivery, and performance by the Company of its obligations under
this Agreement, including the issue and sale of the Shares, or in connection
with the consummation of the transactions contemplated in this Agreement,
except (A) as have been obtained under the Securities Act or the Exchange Act,
or (B) as may be required under state securities or Blue Sky Laws governing the
purchase and distribution of the Shares by the Underwriter (as to which such
counsel need not express an opinion);
(xiv) The statements (A) in the Prospectus under "Risk Factors -
Need to Obtain Regulatory Approvals", "- Government Regulation and Monetary
Policy", "- Anti-Takeover Laws", "Dividend Policy", "Management - Employment
Agreements", "- Stock Option Plans", "Supervision and Regulation", "Description
of Capital Stock", and "Shares Eligible for Future Sale", and (B) in the
Registration Statement in
18
<PAGE> 19
Items 24 and 26, in each case insofar as such statements constitute summaries
of legal matters, documents, or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents, and
proceedings and fairly summarize the matters referred to therein;
(xv) To such counsel's knowledge after due investigation and
inquiry (A) there is no litigation or any legal, regulatory, or governmental
proceedings, actions, or investigations pending or threatened to which the
Company or any Subsidiary is or may be a party or to which any of their
properties is or may be subject, or any statutes, regulations, or rules, that
are required to be described or disclosed in the Registration Statement or the
Prospectus that are not so described or disclosed as required, and (B) there
are no agreements, contracts, indentures, leases or other documents or
instruments required to be described, summarized, or otherwise disclosed in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that has not been so described, summarized, disclosed,
or filed.
(xvi) Neither the Company nor any Subsidiary is, nor with the
giving of notice or the lapse of time, or both, would be (A) in conflict with
or in violation of its articles of incorporation, bylaws, or other corporate
governance documents, or (B) to the knowledge of such counsel after due
inquiry, in violation of breach of, or in default in the performance of any
obligation, agreement, or condition contained in any provision of any loan
agreement, indenture, note, bond, other evidence of indebtedness, or of any
agreement, lease, deed of trust, contract, or other material agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them or any of their assets or properties are bound or affected.
(xvii) The Company and each Subsidiary have and hold, and are in
substantial compliance with, all Permits required under all laws, rules, and
regulations in connection with their respective businesses, and all of such
Permits are valid and in full force and effect, except where the failure to
have and hold or to maintain such Permit in full force and effect would not
have a Material Adverse Effect on the Company or any Subsidiary; and there is
no pending proceeding, and neither the Company nor any Subsidiary has received
notice of any threatened proceeding, relating to the revocation or modification
of any such Permit. Neither the Company nor any Subsidiary is or has been (by
virtue of any action, omission to act, contract to which it is a party or by
which it is bound, or any occurrence or state of facts whatsoever) in violation
of any law, rule, regulation, or any order, writ, injunction, or decree to
which the Company or any of its Subsidiaries may be subject (including those
relating to any aspect of banking, bank holding companies, environmental
protection, occupational safety and health, and equal employment practices)
heretofore or currently in effect, except any such violation that has been
fully cured or satisfied without recourse or that is not reasonably likely to
have a Material Adverse Effect on the Company or any Subsidiary;
(xviii) The Common Shares are registered under Section 12(g) of
the Exchange Act.
(xix) The Company is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act and, upon its receipt of the net proceeds from the sale of the
Shares and the application thereof in accordance with the description set forth
in the Prospectus, will not become or be deemed to be an "investment company"
thereunder; and
(xx) To the knowledge of such counsel, after due inquiry, the
conditions for the use of Form SB-2 have been satisfied with respect to the
Registration Statement.
In rendering such opinion such counsel may rely as to factual matters
on certificates of officers of the Company and of state officials and, as to
legal matters in jurisdictions other than those in which they are domiciled, on
opinions of local counsel, in each case satisfactory to the Underwriter, in
which case their opinion shall state that they are so doing and copies of such
certificates or opinions will be attached to their opinion unless such
certificates or opinions or the information therein has been furnished to
Underwriter in other form.
19
<PAGE> 20
(e) The Underwriter shall have received an opinion of Carlton Fields,
counsel for the Underwriter, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to the issuance and sale of the Shares
by the Company, the Registration Statement, and other related matters as the
Underwriter may reasonably require, and the Company shall have furnished to
such counsel such documents and shall have exhibited to them such papers and
records as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) The Underwriter shall have received, on each of the date of this
Agreement, the First Closing Date, and the Second Closing Date, as the case may
be, a letter addressed to the Underwriter, from Hill Barth & King, Inc., the
Company's independent accountants, the first letter to be dated the date of
this Agreement, the second letter to be dated the First Closing Date, and the
third letter (in the event of a Second Closing) to be dated the Second Closing
Date, which shall be in form and substance reasonably satisfactory to the
Underwriter and shall contain information as of a date within five days of the
date of such letter; provided, however, that the letters delivered on each
Closing Date shall use a "cut-off date" not earlier than the date of this
Agreement. There shall not have been any change or decrease set forth in any
letter referred to in this Section 7(f) that makes it impracticable or
inadvisable in the judgment of the Underwriter to proceed with the public
offering or purchase of the Shares as contemplated hereby.
(g) As of the First Closing Date, the Bank will have received the
Charter Approval and Deposit Insurance Approval (together, the "Bank
Approvals") from the OCC and the FDIC, respectively, and the Company will have
received the FRB Approval from the FRB, and as of each Closing Date (i) the
Regulatory Approvals will be in full force and effect and no action to suspend,
revoke, or terminate any of the Regulatory Approvals will have been taken, or
proceedings for such purposes initiated or threatened, by the FRB, the OCC, or
the FDIC, (ii) neither the Bank nor the Company will be in breach or default
under any condition precedent of or commitment contained in any of the
Regulatory Approvals that can be satisfied as of such date, and (iii) the Bank
and the Company will have satisfied their respective conditions precedent to
the Regulatory Approvals that can be satisfied as of such date.
(h) The Company shall have furnished to the Underwriter such further
certificates and documents as the Underwriter may reasonably request (including
certificates of officers of the Company).
(i) The Shares shall have been qualified or registered for sale, or
subject to an available exemption from such qualification or registration,
under the Blue Sky Laws of such jurisdictions as shall have been reasonably
specified by the Underwriter and the offering shall have been cleared by the
NASD.
(j) The Lock-Up Agreements shall have been delivered to the
Underwriter on or before the date of this Agreement and shall be in full force
and effect on each of the Closing Dates.
All of the agreements, opinions, certificates, letters, and documents
mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions of this Agreement only if they are satisfactory
in form and substance to the Underwriter and to Carlton Fields, counsel for the
Underwriter. The Company shall furnish the Underwriter with such manually
signed or conformed copies of such opinions, certificates, letters, and other
documents as the Underwriter shall reasonably request. If any condition to the
Underwriter's obligations hereunder which are to be satisfied prior to or at
either the First Closing Date or the Second Closing Date, as the case may be,
and is not so satisfied when and as required by this Agreement, this Agreement
at the election of the Underwriter will terminate upon notification to the
Company without liability on the part of the Underwriter, except to the extent
provided in Section 8 of this Agreement, and the Company shall pay those
expenses required under Section 6 hereof in connection with any such
termination.
SECTION 8. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, expenses, liabilities, or actions in respect thereof
("Claims") to which such Underwriter or
20
<PAGE> 21
each such controlling person may become subject under the Securities Act, the
Exchange Act, the Rules and Regulations, Blue Sky Laws, or other federal or
state statutory laws or regulations, at common law or otherwise (including
payments made in settlement of any litigation, if such settlement is effected
with the written consent of the Company, which consent shall not be
unreasonably withheld), insofar as such Claims arise out of or are based upon
the inaccuracy or breach of any representation, warranty, or covenant of the
Company contained in this Agreement, any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any application filed under any Blue Sky Law or other document executed
by the Company for that purpose or based upon written information furnished by
the Company and filed in any state or other jurisdiction to qualify or register
any or all of the Shares under the securities laws thereof (any such document,
application, or information being hereinafter called a "Blue Sky Application"),
or arise out of or are based upon the omission or alleged omission to state in
any of the foregoing a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Company agrees to reimburse
the Underwriter and each such controlling person for any legal fees or other
expenses incurred by the Underwriter or any such controlling person in
connection with investigating or defending any such Claim or appearing as a
third-party witness in connection with any such Claim; provided, however, that
the Company will not be liable in any such case to the extent that:
(i) Any such Claim arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto or in any Blue Sky Application in reliance upon
and in conformity with the written information furnished by or on behalf of the
Underwriter to the Company expressly for use therein pursuant to Section 13 of
this Agreement; or
(ii) Such statement or omission was contained or made in any
Preliminary Prospectus and corrected in the Prospectus and (1) any such Claim
suffered or incurred by the Underwriter (or any person who controls the
Underwriter) resulted from an action, claim, or suit by any person who
purchased Shares that are the subject thereof from such Underwriter in the
offering, and (2) such Underwriter failed to deliver a copy of the Prospectus
(as then amended if the Company shall have amended the Prospectus) to such
person at or prior to the confirmation of the sale of such Shares in any case
where such delivery is required by the Securities Act, unless such failure was
due to failure by the Company to provide copies of the Prospectus (as so
amended) to the Underwriter as required by this Agreement.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, officers who sign the Registration Statement, and each
person who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
Claims to which the Company, or any such director, officer, or controlling
person may become subject under the Securities Act, the Exchange Act, the Rules
and Regulations, Blue Sky Laws, or other federal or state statutory laws or
regulations, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Underwriter and such consent shall not be unreasonably withheld), insofar as
such Claim arises out of or is based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or in any Blue Sky Application, or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky Application, in reliance
upon and in conformity with the written information furnished by the
Underwriter to the Company pursuant to Section 13 of this Agreement. The
Underwriter will reimburse any legal fees or other expenses reasonably incurred
by the Company, or any such director, officer, or controlling person in
connection with investigating or defending any such claim, and from any and all
Claims resulting from failure of the Underwriter to deliver a copy of the
Prospectus, if the person asserting such Claim purchased Shares from the
Underwriter and a copy of the Prospectus (as then amended if the Company shall
have amended the
21
<PAGE> 22
Prospectus) was not sent or given by or on behalf of the Underwriter to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended) would have cured the defect giving rise to such
Claim (unless such failure was due to a failure by the Company to provide
sufficient copies of the Prospectuses (as so amended) to the Underwriter). The
indemnification obligations of the Underwriter as provided above are in
addition to any liabilities any such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under Section 8(a)
or 8(b) of this Agreement of notice of the commencement of any action in
respect of a Claim, such indemnified party will, if a claim for indemnification
under this Section 8 in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof. In case any such action is brought against any
indemnified party, and such indemnified party notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate in and, to the extent that it may wish, jointly with all other
indemnifying parties, similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to the indemnified party and/or
other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties.
(d) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the indemnifying party will not be liable to such
indemnified party under Section 8(a) or 8(b) of this Agreement for any legal
fees or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless:
(i) the indemnified party shall have employed separate counsel
in connection with the assumption of legal defenses in accordance with the
proviso to the last sentence of Section 8(c) of this Agreement (it being
understood, however, that the indemnifying party shall not be liable for the
legal fees and expenses of more than one separate counsel, approved by the
Underwriter, if the Underwriter or its controlling persons are the indemnified
parties);
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the indemnified party's notice to the
indemnifying party of commencement of the action; or
(iii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(e) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient to hold
harmless an indemnified party under Section 8(a) or 8(b) of this Agreement in
respect of any Claim referred to therein, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject, to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other hand from the offering of the Shares; or
(ii) if the allocation provided by Section 8(e)(i) is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in Section 8 (e)(i), but also the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other hand in
22
<PAGE> 23
connection with the statements or omissions that resulted in such Claim, as
well as any other relevant equitable considerations.
The respective relative benefits received by the Company on the one
hand and the Underwriter on the other hand in connection with the offering of
the Shares shall be deemed to be in such proportion so that the Underwriter is
responsible for that portion of a Claim represented by the percentage that the
amount of the underwriting discount per share as set forth in Section 4 hereof
bears to the initial public offering price per share appearing on the cover
page of the Prospectus, and the Company (including the Company's directors,
officers, and controlling persons) shall be responsible for the remaining
portion of such Claim.
The relative fault of the Company on the one hand and the Underwriter
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriter on the other hand
and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such untrue statement or omission. The amount
paid or payable by a party as a result of the Claims referred to above shall be
deemed to include, subject to the limitations set forth in Sections 8(c) and
8(d) of this Agreement, any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or
claim.
(f) The Company and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata or per capita allocation or by any other method or allocation that does
not take into account the equitable considerations referred to in Section 8(e)
of this Agreement. Notwithstanding the other provisions of this Section 8, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(g) The obligations of the Company and the Underwriter under this
Section 8 shall be in addition to any liability that the Company or the
Underwriter may otherwise have.
SECTION 9. Effective Date. This Agreement shall become effective
immediately upon the execution and delivery hereof by the parties hereto. Such
execution and delivery shall include delivery of an executed copy of this
Agreement by telecopier, facsimile transmission, or other means of transmitting
written documents.
SECTION 10. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, the Underwriter, in its
absolute discretion and without any liability on its part, may terminate this
Agreement prior to the First Closing Date, and the Option from the Company
referred to in Section 4 hereof, if exercised, may be cancelled by the
Underwriter, at any time prior to the Second Closing Date, if:
(a) The Company shall have failed, refused, or been unable, at or
prior to such Closing Date, to perform any agreement on its part to be
performed hereunder;
(b) Any condition to the obligations of the Underwriter hereunder is
not fulfilled or satisfied at or prior to the applicable Closing Date;
(c) Any event shall have occurred or shall exist that makes untrue or
incorrect in any material respect any statement or information contained in the
Registration Statement or that is not reflected in the
23
<PAGE> 24
Registration Statement but should be reflected therein to make the statements
or information contained therein not misleading in any material respect; or
(d) There shall have occurred any of the following events: (i) trading
in securities generally on or by, as the case may be, any national stock
exchange, the Nasdaq Stock Market, the OTC Bulletin Board, or the
over-the-counter market, shall have been suspended or materially limited, (ii)
governmental restrictions shall have been imposed on trading in securities
generally or minimum or maximum prices shall have been established, (iii)
trading of any securities of the Company, including the Shares, on any national
stock exchange, the Nasdaq Stock Market, the OTC Bulletin Board, or the
over-the-counter market shall have been suspended or materially limited,
whether by reason of a stop order by the Commission or otherwise, (iv) a
general banking moratorium shall have been established by federal or state
authorities, (v) an outbreak or escalation of hostilities, declaration of war,
national emergency, or other national or international calamity or crisis, or
any change in political, financial, or economic conditions shall have occurred
or shall have accelerated to such extent, in the Underwriter's judgment, as to
make it impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of Shares, or (vi) in the case of any of the events
specified in Section 10(d)(i) through Section 10(d)(v), such event, together
with any other event or events, makes it, in the Underwriter's judgment,
impracticable to market the Shares at the time and in the manner contemplated
by the Prospectus.
SECTION 11. Representations and Indemnities to Survive Delivery. The
expense reimbursement, indemnity, and contribution agreements contained in this
Agreement, and the representations, warranties, covenants, and other statements
of the Company and of its directors and officers set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter, the Company, or any of
its or their partners officers, directors, or any controlling person, as the
case may be, and will survive delivery of and payment for the Shares sold
hereunder or any termination or cancellation of this Agreement.
SECTION 12. Notices. All communications hereunder will be in writing
and, if sent to the Underwriter, will be mailed, delivered, or telecopied (with
receipt confirmed) to Ashtin Kelly & Co., 400 Fifth Avenue South, Naples, FL
34102, Attention: W. Jonathan Wride, President and Chief Executive Officer,
(Fax No. (914) 435-3850) with a copy to Richard A. Denmon, Esq., Carlton,
Fields, Ward, Emmanuel, Smith & Cutler, P.A., 777 South Harbour Island
Boulevard, Tampa, Florida 33602 (Fax No. (813) 229-4133); and if sent to the
Company will be mailed, delivered, or telecopied (with receipt confirmed) to
the Company at 5922 Cattlemen Road, Suite 202, Sarasota, Florida 34232,
Attention: John T. Stafford, President and Chief Executive Officer, (Fax No.
(941) _________) with a copy to John P. Greeley, Esquire, Smith, Mackinnon,
Greeley, Bowdoin & Edwards, P.A., Suite 800, Citrus Center, 255 South Orange
Avenue, Orlando, Florida 32801, (Fax No. (407) 843-2448).
SECTION 13. Representations and Warranties of the Underwriter. The
Underwriter represents and warrants to the Company that the information set
forth (a) in the [FIRST PARAGRAPH ON PAGE 2] of the Prospectus relating to
stabilization, and (b) in the [THIRD AND NINTH PARAGRAPHS] of the section in
the Prospectus entitled "Underwriting," constitutes the only written
information furnished to the Company by and on behalf of the Underwriter
expressly for use in connection with the preparation of the Registration
Statement, and is correct and complete in all material respects and does not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
SECTION 14. Successors. This Agreement has been made and is made
solely for the benefit of the Underwriter, the Company, and their respective
successors and assigns, directors and officers (and their personal
representatives), and controlling persons referred to in Section 8, and no
other person shall have any right or obligation hereunder. The term "successors
or assigns", as used in this Agreement, shall not include any purchaser of the
Shares from the Underwriter merely by reason of such purchase.
24
<PAGE> 25
SECTION 15. Partial Unenforceability. If any section, subsection,
clause, or provision of this Agreement is for any reason determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other section, subsection, clause, or provision hereof.
SECTION 16. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without reference
to conflict of law principles thereunder.
SECTION 17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
25
<PAGE> 26
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed counterparts hereof,
whereupon it will become a binding agreement among the Company, and the
Underwriter in accordance with its terms.
Very truly yours,
SUNCOAST BANCORP, INC.
By:
----------------------------------
Title:
-------------------------------
Accepted as of the date hereof:
ASHTIN KELLY & CO.
By:
----------------------------------
Title:
-------------------------------
26
<PAGE> 1
EXHIBIT 3.1
RESTATED
ARTICLES OF INCORPORATION
OF
SUNCOAST BANCORP, INC.
SUNCOAST BANCORP, INC., whose original Articles of Incorporation were
filed by the Florida Department of State on April 1, 1998 under the name of
Community Holdings Corporation, does hereby amend and restate its Articles of
Incorporation by filing the following Restated Articles of Incorporation,
pursuant to Section 607.1007, of the Florida Business Corporation Act (the
"Act").
ARTICLE I
Name
The name of the Corporation is SUNCOAST BANCORP, INC..
ARTICLE II
Duration
The Corporation shall exist perpetually, commencing April 1, 1998.
ARTICLE III
Purpose
The general purpose of the Corporation shall be the
transaction of any and all lawful business for which corporations may be
incorporated under the Act. The Corporation shall have all of the powers
enumerated in the Act and all such other powers as are not specifically
prohibited to corporations for profit under the laws of the State of Florida.
ARTICLE IV
Capital Stock
A. Number and Class of Shares Authorized; Par Value.
The Corporation is authorized to issue the following shares of
capital stock:
<PAGE> 2
(1) Common Stock. The aggregate number of shares of
common stock (referred to in these Restated Articles of Incorporation as "Common
Stock") which the Corporation shall have authority to issue is 10,000,000 with a
par value of $0.01 per share.
(2) Preferred Stock. The aggregate number of shares of
preferred stock (referred to in these Restated Articles of Incorporation as
"Preferred Stock") which the Corporation shall have authority to issue is
3,000,000 with a par value of $.01 per share.
B. Description of Preferred Stock.
The terms, preferences, limitations and relative rights of the
Preferred Stock are as follows:
(1) Dividends on the outstanding shares of Preferred
Stock shall be declared and paid or set apart for payment before any dividends
shall be declared and paid or set apart for payment on the outstanding shares of
Common Stock with respect to the same quarterly period. Dividends on any shares
of Preferred Stock shall be cumulative only if and to the extent determined by
resolution of the Board of Directors, as provided below. In the event of any
liquidation, dissolution, or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the outstanding shares of Preferred Stock
shall have preference and priority over the outstanding shares of Common Stock
for payment of the amount, if any, to which shares of each outstanding series of
Preferred Stock may be entitled in accordance with the terms and rights thereof
and each holder of Preferred Stock shall be entitled to be paid in full such
amount, or have a sum sufficient for the payment in full set aside, before any
such payments shall be made to the holders of Common stock.
(2) The Board of Directors is expressly authorized at any
time and from time to time to provide for the issuance of shares of Preferred
Stock in one or more series, with such voting powers, full or limited
(including, by way of illustration and not limitation, in excess of one vote per
share), or without voting powers, and with such designations, preferences and
relative participating, option or other rights, qualifications, limitations or
restrictions, as shall be fixed and determined in the resolution or resolutions
providing for the issuance thereof adopted by the Board of Directors, and as are
not stated and expressed in these Restated Articles of Incorporation or any
amendment hereto, including (but without limiting the generality of the
foregoing) the following:
(a) The distinctive designation of such series and
the number of shares which shall constitute such series, which number
may be increased (except where otherwise provided by the Board of
Directors in creating such series) or decreased (but not below the
number of shares thereof then outstanding) from time to time by
resolution of the Board of Directors; and
(b) The rate and manner of payment of dividends
payable on shares of such series, including the dividend rate, date of
declaration and payment, whether dividends shall be cumulative, and the
conditions upon which and the date from which such dividends shall be
cumulative; and
2
<PAGE> 3
(c) Whether shares of such series shall be redeemed,
the time or times when, and the price or prices at which, shares of
such series shall be redeemable, the redemption price, the terms and
conditions of redemption, and the sinking fund provisions, if any, for
the purchase or redemption of such shares; and
(d) The amount payable on shares of such series and
the rights of holders of such shares in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of
the Corporation; and
(e) The rights, if any, of the holders of shares of
such series to convert such shares into, or exchange such shares for,
shares of Common Stock, other securities, or shares of any other class
or series of Preferred Stock and the terms and conditions of such
conversion or exchange; and
(f) The voting rights, if any, and whether full or
limited, of the shares of such series, which may include no voting
rights, one vote per share, or such higher number of votes per share as
may be designated by the Board of Directors; and
(g) The preemptive or preferential rights, if any, of
the holders of shares of such series to subscribe for, purchase,
receive, or otherwise acquire any part of any new or additional issue
of stock of any class, whether now or hereafter authorized, or of any
bonds, debentures, notes, or other securities of the Corporation,
whether or not convertible into shares of stock with the Corporation.
(3) Except in respect of the relative rights and
preferences that may be provided by the Board of Directors as
hereinbefore provided, all shares of Preferred Stock shall be
identical, and each share of a series shall be identical in all
respects with the other shares of the same series. When payment of the
consideration for which shares of Preferred Stock are to be issued
shall have been received by the Corporation, such shares shall be
deemed to be fully paid and nonassessable.
C. Common Stock Voting Rights.
Each record holder of Common Stock shall be entitled to one
vote for each share held. Holders of Common Stock shall have no cumulative
voting rights in any election of directors of the Corporation.
D. Preemptive Rights.
Holders of Common Stock shall not have as a matter of right
any preemptive or preferential right to subscribe for, purchase, receive, or
otherwise acquire any part of any new or additional issue of stock of any class,
whether now or hereafter authorized, or of any bonds, debentures, notes, or
other securities of the Corporation, whether or not convertible into shares of
stock of the Corporation.
3
<PAGE> 4
ARTICLE V
Registered Office and Agent; Principal Place of Business
The street address of the registered office of the Corporation shall be
5922 Cattlemen Road, Suite 202, Sarasota, Florida 34232, and the registered
agent of the Corporation at such address shall be John T. Stafford. The
principal place of business and the mailing address of the Corporation shall be
5922 Cattlemen Road, Suite 202, Sarasota, Florida 34232. The Corporation may
change its registered agent, the location of its registered office, its
principal place of business, or its mailing address, or any of the foregoing,
from time to time without amendment of these Restated Articles of Incorporation.
ARTICLE VI
Directors
The number of Directors of this Corporation shall be the number from
time to time fixed by the shareholders or by the Directors, in accordance with
the provisions of the bylaws of the Corporation, but at no time shall the number
of Directors be less than one.
ARTICLE VII
Bylaws
The power to adopt, alter, amend or repeal bylaws shall be vested in
the Board of Directors.
ARTICLE VIII
Amendment of Restated Articles of Incorporation
These Restated Articles of Incorporation may be amended in the manner
from time to time provided by law and any right conferred upon the shareholders
by any provision of these Restated Articles of Incorporation is hereby made
subject to this reservation.
CERTIFICATE
The foregoing Restated Articles of Incorporation were duly adopted by
the Board of Directors of the Corporation in accordance with the Act on October
15, 1998 and by the holders of the shares of Common Stock, being the sole shares
entitled to vote thereon, in accordance with the Act, on October 15, 1998, and
the number of votes cast for the foregoing Restated Articles of Incorporation
was sufficient for approval by such holders of Common Stock.
4
<PAGE> 5
IN WITNESS WHEREOF, the undersigned President and Chief Executive
Officer of this Corporation has executed these Restated Articles of
Incorporation on the 15th day of October, 1998.
SUNCOAST BANCORP, INC.
By: /s/ John T. Stafford
--------------------------------------------
John T. Stafford
President and Chief Executive Officer
STATE OF FLORIDA )
COUNTY OF SARASOTA )
The foregoing instrument was acknowledged before me this 15th day of
October, 1998, by John T. Stafford, President and Chief Executive Officer of
Suncoast Bancorp, Inc., a Florida corporation, on behalf of the corporation. He
is personally known to me and did not take an oath.
/s/ Linda A. Gay
---------------------------------------------
( Linda A. Gay )
-------------------------------------------
Print Name Below Signature
Notary Public, State of Florida
5
<PAGE> 1
EXHIBIT 3.2
================================================================================
BYLAWS
OF
SUNCOAST BANCORP, INC.
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Caption Page
- ------- ------- ----
<S> <C> <C>
ARTICLE I - Meeting of Shareholders............................................ 1
Section 1 Annual Meeting................................................................. 1
Section 2 Special Meetings............................................................... 1
Section 3 Place.......................................................................... 1
Section 4 Notice of Meeting.............................................................. 1
Section 5 Notice of Adjourned Meetings................................................... 2
Section 6 Waiver of Notice............................................................... 2
Section 7 Record Date.................................................................... 2
Section 8 Shareholders' List for Meeting................................................. 2
Section 9 Voting Entitlement of Shares................................................... 3
Section 10 Proxies........................................................................ 3
Section 11 Shareholder Quorum and Voting.................................................. 4
Section 12 Voting Trusts.................................................................. 4
Section 13 Shareholders' Agreements....................................................... 4
ARTICLE II - Directors......................................................... 5
Section 1 General Powers................................................................. 5
Section 2 Qualifications of Directors.................................................... 5
Section 3 Number......................................................................... 5
Section 4 Election and Term.............................................................. 5
Section 5 Vacancy on Board............................................................... 5
Section 6 Removal of Directors by Shareholders........................................... 5
Section 7 Compensation................................................................... 5
Section 8 Presumption of Assent.......................................................... 5
Section 9 Directors' Meetings............................................................ 6
Section 10 Notice of Meetings............................................................. 6
Section 11 Waiver of Notice............................................................... 6
Section 12 Quorum and Voting.............................................................. 6
Section 13 Action by Directors Without a Meeting.......................................... 6
Section 14 Adjournments................................................................... 6
Section 15 Participation by Conference Telephone.......................................... 6
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Section Caption Page
- ------- ------- ----
<S> <C> <C>
ARTICLE III - Committees....................................................... 7
Section 1 Standing Committees............................................................ 7
Section 2 Audit Committee................................................................ 7
Section 3 Compensation Committee......................................................... 7
Section 4 Other Committees............................................................... 7
Section 5 Alternate Member Vacancies..................................................... 7
Section 6 Prohibited Committee Actions................................................... 7
Section 7 Tenure........................................................................ 8
Section 8 Meetings...................................................................... 8
Section 9 Quorum........................................................................ 9
Section 10 Action Without a Meeting...................................................... 9
Section 11 Procedures.................................................................... 9
Section 12 Limitation.................................................................... 9
ARTICLE IV - Officers.......................................................... 9
Section 1 Officers, Election and Terms of Office......................................... 9
Section 2 Resignation and Removal of Officers............................................ 10
Section 3 Vacancies...................................................................... 10
Section 4 Chief Executive Officer........................................................ 10
Section 5 Chairman of the Board.......................................................... 10
Section 6 Vice Chairman.................................................................. 10
Section 7 President...................................................................... 11
Section 8 Vice President................................................................. 11
Section 9 Secretary...................................................................... 11
Section 10 Treasurer...................................................................... 12
Section 11 Delegation of Duties........................................................... 12
ARTICLE V - Stock Certificates................................................. 12
Section 1 Issuance....................................................................... 12
Section 2 Signatures; Form............................................................... 13
Section 3 Transfer of Stock.............................................................. 13
Section 4 Lost Certificates.............................................................. 14
ARTICLE VI - Indemnification................................................... 14
Section 1 Definitions.................................................................... 14
Section 2 Indemnification of Officers, Directors, Employees
and Agents................................................................. 15
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Section Caption Page
- ------- ------- ----
<S> <C> <C>
ARTICLE VII - General Provisions............................................... 18
Section 1 Fiscal Year.................................................................... 18
Section 2 Seal........................................................................... 18
Section 3 Amendment of Bylaws............................................................ 18
CERTIFICATE OF ADOPTION...................................................... 18
</TABLE>
iii
<PAGE> 5
BYLAWS
OF
SUNCOAST BANCORP, INC.
ARTICLE I
Meeting of Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders of the Corporation shall be held following the end of the
Corporation's fiscal year at such time as shall be determined by the Board of
Directors. The annual meeting shall be held for the election of directors of the
Corporation and the transaction of any business which may be brought before the
meeting. The annual meeting of the shareholders for any year shall be held no
later than thirteen months after the last preceding annual meeting of
shareholders. The failure to hold the annual meeting at the time stated shall
not affect the validity of any corporate action and shall not work a forfeiture
of or dissolution of the Corporation. Annual meetings shall be held at the
Corporation's principal office unless stated otherwise in the notice of the
annual meeting.
Section 2. Special Meetings. Special meetings of the
shareholders shall be held when directed by the Chairman of the Board, the
President, or the Board of Directors, or when requested in writing by the
holders of not less than one-third of all the votes entitled to be cast on any
issue proposed to be considered at the proposed special meeting. Shareholders
should sign, date, and deliver to the Corporation's Secretary one or more
written demands for the meeting describing the purpose or purposes for which it
is to be held. A meeting requested by shareholders shall be called for a date
not less than ten nor more than sixty days after the request is made. The call
for the meeting shall be issued by the Secretary, unless the Chairman of the
Board, the President, the Board of Directors, or shareholders requesting the
calling of the meeting shall designate another person to do so.
Section 3. Place. Meetings of shareholders may be held either
within or without the State of Florida. Unless otherwise directed by the Board
of Directors, meetings of the shareholders shall be held at the principal
offices of the Corporation in the State of Florida.
Section 4. Notice of Meeting. The Corporation shall notify
shareholders in writing of the date, time, and place of each annual and special
shareholders' meeting no fewer than ten or more than sixty days before the
meeting date. Notice of a shareholders' meeting may be communicated or delivered
to any shareholder in person, or by teletype, telegraph or other form of
electronic communication, or by mail, by or at the direction of the Chairman of
the Board, the President, the Secretary, or the officer or persons calling the
meeting. If notice is mailed, it shall be deemed to be delivered when deposited
in the United States mail, addressed to the shareholder at his address as it
appears on the stock transfer books of the Corporation, with postage thereon
prepaid.
<PAGE> 6
Section 5. Notice of Adjourned Meetings. When an annual or
special shareholders' meeting is adjourned to a different date, time or place,
notice need not be given of the new date, time or place if the new date, time or
place is announced at the meeting before an adjournment is taken, and any
business may be transacted at the adjourned meeting that might have been
transacted on the original date of the meeting. If, however, after the
adjournment the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting must be given to persons who are
shareholders as of the new record date who are entitled to notice of the
meeting.
Section 6. Waiver of Notice. A shareholder may waive any
notice required by the Articles of Incorporation or Bylaws before or after the
date and time stated in the notice. The waiver must be in writing, be signed by
the shareholder entitled to the notice, and be delivered to the Corporation for
inclusion in the minutes or filing with the corporate records. Attendance by a
shareholder at a meeting waives objection to lack of notice or defective notice
of the meeting, unless the shareholder at the beginning of the meeting objects
to holding the meeting or transacting business at the meeting.
Section 7. Record Date. For the purpose of determining the
shareholders entitled to notice of a shareholders' meeting, to demand a special
meeting, to vote, or to take any other action, the Board of Directors may fix
the record date for any such determination of shareholders.
The record date for determining shareholders entitled to
demand a special meeting is the date the first shareholder delivers his demand
to the Corporation. The record date for determining shareholders entitled to
take action without a meeting is the date the first signed written consent is
delivered to the Corporation under Section 4 of this Article. A record date for
purposes of this Section may not be more than seventy days before the meeting or
action requiring a determination of shareholders.
If the stock transfer books are not closed and no record date
is fixed for the determination of shareholders entitled to notice or to vote at
a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section, such
determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date for the adjourned meeting.
Section 8. Shareholders' List for Meeting. After fixing a
record date for a meeting, the Corporation shall prepare an alphabetical list of
the names of all its shareholders who are entitled to notice of a shareholders'
meeting, arranged by voting group with the address of, and the number and class
and series, if any, of shares held by each. The shareholders' list shall be
available for inspection by any shareholder for a period of ten days prior to
the meeting or such shorter time as exists between the record date and the
meeting and continuing through the meeting at the
2
<PAGE> 7
Corporation's principal office, at a place identified in the meeting notice in
the city where the meeting will be held, or at the office of the Corporation's
transfer agent or registrar. A shareholder or his agent or attorney is entitled
on written demand to inspect the list, during regular business hours and at the
shareholder's expense, during the period it is available for inspection.
The Corporation shall make the shareholders' list available at
the meeting, and any shareholder or his agent or attorney is entitled to inspect
the list at any time during the meeting or any adjournment.
Section 9. Voting Entitlement of Shares. Except as provided
otherwise in the Articles of Incorporation or herein, each outstanding share,
regardless of class, is entitled to one vote on each matter submitted to vote at
a meeting of the shareholders. Shares standing in the name of another
corporation, domestic or foreign, may be voted by such officer, agent, or proxy
as the bylaws of the corporate shareholder may prescribe or, in the absence of
any applicable provision, by such person as the board of directors of the
corporate shareholder may designate. In the absence of any such designation or
in case of conflicting designation by the corporate shareholder, the Chairman of
the Board, the President, any Vice President, the Secretary, and the Treasurer
of the corporate shareholder, in that order, shall be presumed to be fully
authorized to vote such shares.
Shares entitled to vote which are held by an administrator,
executor, guardian, personal representative, or conservator may be voted by him,
either in person or by proxy, without a transfer of such shares into his name.
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 or the name of his nominee.
Shares held by or under the control of a receiver, a trustee
in bankruptcy proceedings, or an assignee for the benefit of creditors may be
voted by him without the transfer thereof into his name.
Nothing herein contained shall prevent trustees or other
fiduciaries holding shares registered in the name of a nominee from causing such
shares to be voted by such nominee as the trustee or other fiduciary may direct.
Such nominee may vote shares as directed by a trustee or other fiduciary without
the necessity of transferring the shares to the name of the trustee or other
fiduciary.
Section 10. Proxies. A shareholder, other person entitled to
vote on behalf of a shareholder pursuant to law, or attorney in fact, may vote
the shareholder's shares in person or by proxy.
A shareholder may appoint a proxy to vote or otherwise act for
him by signing an appointment form, either personally or by his attorney in
fact. An executed telegram or cablegram appearing to have been transmitted by
such person, or a photographic, photostatic, telecopy or equivalent reproduction
of an appointment form is a sufficient appointment form. An appointment of a
proxy is effective when received by the Secretary or other officer authorized to
tabulate votes
3
<PAGE> 8
and is valid for up to eleven months unless a longer period is expressly
provided in the appointment form.
The death or incapacity of a shareholder appointing a proxy
does not affect the right of the Corporation to accept the proxy's authority
unless notice of the death or incapacity is received by the Secretary or other
officer or agent authorized to tabulate votes before the proxy exercises his
authority under the appointment.
Section 11. Shareholder Quorum and Voting. A majority of the
votes entitled to be cast on the matter by the voting group, constitutes a
quorum of that voting group at a meeting of shareholders. If a quorum exists,
action on a matter (other than the election of directors) by a voting group is
approved if the votes cast within the voting group favoring the action exceed
the votes cast opposing the action, unless the Articles of Incorporation or
applicable law requires a greater number of affirmative votes. After a quorum
has been established at a shareholders' meeting, a subsequent withdrawal of
shareholders, so as to reduce the number of shares entitled to vote at the
meeting below the number required for a quorum, shall not affect the validity of
any action taken at the meeting or any adjournment thereof.
Section 12. Voting Trusts. One or more shareholders may create
a voting trust, conferring on a trustee the right to vote or otherwise act for
them, by signing an agreement setting out the provisions of the trust (which may
include anything consistent with its purpose) and transferring their shares to
the trustee. When a voting trust agreement is signed, the trustee shall prepare
a list of the names and addresses of all owners of beneficial interests in the
trust, together with the number and class of shares each transferred to the
trust, and deliver copies of the list and agreement to the Corporation's
principal office. After filing a copy of the list and agreement in the
Corporation's principal office, such copy shall be open to inspection by any
shareholder of the Corporation or any beneficiary of the trust under the
agreement during business hours.
A voting trust is valid for not more than ten years after its
effective date, provided that all or some of the parties to a voting trust may
extend it for additional terms of not more than ten years each by signing an
extension agreement and obtaining the voting trustee's written consent to the
extension. An extension is valid for the period set forth therein, up to ten
years, from the date the first shareholder signs the extension agreement. The
voting trustee must deliver copies of the extension agreement and list of
beneficial owners to the Corporation's principal office. An extension agreement
binds only those parties signing it.
Section 13. Shareholders' Agreements. Two or more shareholders
may provide for the manner in which they will vote their shares by signing an
agreement for that purpose. When a shareholders' agreement is signed, the
shareholders parties thereto shall deliver copies of the agreement to the
Corporation's principal office. After filing a copy of the agreement in the
Corporation's principal office, such copy shall be open to inspection by any
shareholder of the Corporation, or any party to the agreement during business
hours.
4
<PAGE> 9
ARTICLE II
Directors
Section 1. General Powers. All corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of its Board of Directors.
Section 2. Qualifications of Directors. Directors must be
natural persons who are eighteen years of age or older but need not be residents
of this state or shareholders of the Corporation.
Section 3. Number. The Board of Directors of the Corporation
as of the date of adoption of these Bylaws shall consist of eight members. The
number of directors may be increased or decreased from time to time by action of
the Board of Directors, but no decrease shall have the effect of shortening the
terms of any incumbent director. Directors are elected at each annual meeting of
shareholders.
Section 4. Election and Term. At the first annual meeting of
shareholders and at each annual meeting thereafter, the shareholders shall elect
directors to hold office until the next succeeding annual meeting. Each director
shall hold office for the term for which such director is elect and until such
director's successor shall have been elected and qualified or until such
director's earlier resignation, removal from office, or death.
Section 5. Vacancy on Board. Any vacancy occurring on the
Board of Directors, including a vacancy from an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 6. Removal of Directors by Shareholders. The
shareholders may remove one or more directors with or without cause. A director
may be so removed by the shareholders at a meeting of shareholders, provided the
notice of the meeting states that the purpose, or one of the purposes, of the
meeting is removal of the director with cause.
Section 7. Compensation. The Board of Directors shall have
authority to fix the compensation of directors.
Section 8. 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 such director votes against such action or abstains from
voting in respect thereto because of an asserted conflict of interest.
5
<PAGE> 10
Section 9. Directors' Meetings. The Board of Directors may
hold regular or special meetings in or out of the state. Meetings of the Board
of Directors may be called at any time by the Chairman of the Board, by the
President, or by directors constituting at least one-fourth of the full Board of
Directors.
Section 10. Notice of Meetings. Regular meetings of the Board
of Directors may be held without notice of the date, time, place or purpose of
the meetings. Special meetings of the Board of Directors must be preceded by at
least two days' notice of the date, time and place of the meeting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
Section 11. Waiver of Notice. Notice of a meeting of the Board
of Directors need not be given to any director who signs a waiver of notice
either before or after the meeting. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting and waiver of any and all
objections to the place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any objection
to the transaction of business because the meeting is not lawfully called or
convened.
Section 12. Quorum and Voting. A majority of the number of
directors fixed by these Bylaws shall constitute a quorum for the transaction of
business. If a quorum is present when a vote is taken, the affirmative vote of a
majority of directors present is the act of the Board of Directors.
Section 13. Action by Directors Without a Meeting. Any action
required or permitted by law to be taken at a Board of Directors' meeting or
committee meeting may be taken without a meeting if action is taken by all
members of the Board or the committee. The action must be evidenced by one or
more written consents describing the action taken and signed by each director or
committee member. Action taken shall be effective when the last director signs
the consent, unless the consent specifies a different effective date. The
consent signed shall have the effect of a meeting vote and may be described as
such in any document.
Section 14. Adjournments. A majority of the directors present,
whether or not a quorum exists, may adjourn any meeting of the Board of
Directors to another time and place. Notice of any such adjourned meeting shall
be given to the directors who were not present at the time of the adjournment
and, unless the time and place of the adjourned meeting are announced at the
time of the adjournment, to the other directors.
Section 15. Participation by Conference Telephone. Members of
the Board of Directors may participate in a meeting of such Board by means of a
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
6
<PAGE> 11
ARTICLE III
Board Committees
Section 1. Standing Committees. The Board of Directors shall
have and maintain as standing committees of the Board an Audit Committee and a
Compensation Committee. The Board of Directors shall at the annual meeting
following the Corporation's annual meeting of shareholders and may at such other
times as the Board may determine, elect the members of each such committee, all
of whom shall be directors of the Corporation, designate one of the members of
each such committee as chairman of the committee, and prescribe the duties of
each committee, which duties shall be consistent with these Bylaws.
Section 2. Audit Committee. The Audit Committee shall consist
of not less than four directors, none of whom shall be officers or employees of
the Corporation or any direct or indirect subsidiary or affiliate of the
Corporation. The Audit Committee shall select and approve the terms and scope of
engagement of the independent certified accountants of the Corporation and shall
have such other duties as may from time to time be prescribed by the Board of
Directors. The independent auditor of the Corporation, if any, shall report
directly to the Audit Committee.
Section 3. Compensation Committee. The Compensation Committee
shall consist of not less than four directors, none of whom shall be officers or
employees of the Corporation or any direct or indirect subsidiary or affiliate
of the Corporation. The Compensation Committee shall serve as the Board
committee responsible for administering any compensation and benefit plans of
the Corporation and shall have such other duties as may from time to time be
prescribed by the Board of Directors.
Section 4. Other Committees. The Board of Directors may by
resolution establish such other committees composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
Corporation and may prescribe the composition, duties, and procedures thereof.
Section 5. Alternate Member Vacancies. The Board of Directors
may designate one or more directors as alternate members of any committee, and
such alternate members may act in the place and stead of any absent member or
members at any meeting of such committee. The Board of Directors may fill any
vacancy or vacancies occurring in any committee.
Section 6. Prohibited Committee Actions. Notwithstanding any
other provision of these Bylaws, no committee of the Board of Directors shall
have the authority to:
(a) Approve or recommend to shareholders actions or proposals
required by law, the Articles of Incorporation, or these Bylaws to be approved
by the shareholders.
(b) Fill vacancies on the Board of Directors or any
committee thereof.
7
<PAGE> 12
(c) Adopt, amend, or repeal the Bylaws.
(d) Authorize or approve the reacquisition of any
shares of capital stock of the Corporation unless pursuant to a general formula
or method specified by the Board of Directors.
(e) Authorize or approve the issuance or sale or
contract for the sale of shares of capital stock, or determine the designation
and relative rights, preferences, and limitations of a voting group except that
the Board of Directors may authorize a committee (or a senior executive officer
of the Corporation) to do so within limits specifically prescribed by the Board
of Directors.
(f) Declare any dividend or distribution on the capital stock
of the Corporation, whether in cash or in kind.
(g) Authorize or approve any stock split, reverse
stock split, or other recapitalization of any class of capital stock of the
Corporation.
(h) Authorize or approve any agreement or plan
providing for a merger, acquisition, consolidation, or other business
combination involving the Corporation.
(i) Authorize or approve the sale of all or substantially all
of the assets of the Corporation.
(j) Authorize or approve any transaction in which any
member of such committee has any material beneficial interest.
(k) Authorize or approve any action described in
Article II, Section 16, of these Bylaws.
(l) Repeal or revoke any of the foregoing.
Section 7. Tenure. Each committee member shall hold office
until the next annual meeting of the Board of Directors following his
appointment and until a successor is designated, provided that any member of a
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full Board of Directors. Any member of a committee may
resign from the committee at any time by giving written notice to the Chairman
of the Board or Secretary of the Corporation. Unless otherwise specified
therein, such resignation shall take effect upon receipt and acceptance of such
resignation shall not be necessary to make it effective.
Section 8. Meetings. Regular meetings of a committee may be
held without notice at such times and places as the committee or the Board of
Directors may fix from time to time by resolution. Special meetings of a
committee may be called by the Chairman of the Board, by the President, by the
Chairman of the Committee, or by a majority of the members of the committee.
8
<PAGE> 13
Special meetings of a committee must be preceded by at least 24 hours notice of
the date, time and place of the meeting. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the committee need be
specified in the notice or waiver of notice of such meeting. Notice of a meeting
of a committee need not be given to any member who signs a waiver of notice
either before or after the meeting. Attendance of a member at a committee
meeting shall constitute a waiver of notice of such meeting and waiver of any
and all objections to the place of the meeting, the time of the meeting, or the
manner in which it has been called or convened, except when a director states,
at the beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Section 9. Quorum. A majority of the members of a committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action by the committee must be authorized by the affirmative vote
of a majority of the members at the meeting at which such action is taken.
Section 10. Action Without a Meeting. Any action required or
permitted to be taken by a committee at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the members of the committee.
Section 11. Procedures. Each committee may fix its own rules
of procedure which shall not be inconsistent with law or the Articles of
Incorporation or Bylaws of the Corporation, and shall keep regular minutes of
its proceedings and report the same to the Board of Directors at the Board
meeting next following the date the proceedings shall have occurred.
Section 12. Limitation. Neither the designation of any
committee of the Board of Directors, the delegation thereto of authority, nor
any action by such committee pursuant to such authority shall alone constitute
compliance by any member of the Board of Directors not a member of the committee
in question with his responsibility to act in good faith, in a manner he or she
reasonably believes to be in the best interest of the Corporation, and with such
care as an ordinarily prudent person in a like position would use under similar
circumstances.
ARTICLE IV
Officers
Section 1. Officers, Election and Terms of Office. The
principal officers of the Corporation shall consist of a Chief Executive Officer
(who shall also be the President of the Corporation), a Chairman of the Board,
one or more Vice Chairmen of the Board, a President, one or more Vice
Presidents, a Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors at the first meeting of directors immediately following the
annual meeting of shareholders of the Corporation, and shall hold his or her
respective office from the date of the meeting at which elected until the time
of the next succeeding meeting of the Board following the
9
<PAGE> 14
annual meeting of the shareholders. The Board of Directors shall have the power
to elect or appoint, for such term as it may see fit, such other officers and
assistant officers and agents as it may deem necessary, and to prescribe such
duties for them to perform as it may deem advisable. Any two or more offices may
be held by the same person. Failure to elect a Chairman of the Board, Vice
Chairman of the Board, President, Vice President, Secretary or Treasurer shall
not affect the existence of the Corporation.
Section 2. Resignation and Removal of Officers. An officer
may resign at any time by delivering notice to the Corporation. A resignation is
effective when the notice is delivered unless the notice specifies a later
effective date. If a resignation is made effective at a later date and the
Corporation accepts the future effective date, the Board of Directors may fill
the pending vacancy before the effective date if the Board of Directors provides
that the successor does not take office until the effective date.
The Board of Directors may remove any officer at any time with
or without cause. Any officer or assistant officer, if appointed by another
officer, may likewise be removed by such officer. Removal of any officer shall
be without prejudice to the contract rights, if any, of the person so removed;
however, election or appointment of an officer or agent shall not of itself
create contract rights.
Section 3. Vacancies. Any vacancy, however occurring, in any
office may be filled by the Board of Directors.
Section 4. Chief Executive Officer. The Board of Directors
shall designate a Chief Executive Officer, who shall also serve as President of
the Corporation. The Chief Executive Officer shall preside at all meetings of
the shareholders of the Corporation. Such person shall serve as the Chief
Executive Officer of the Corporation and, subject to the provisions of these
Bylaws and any limitations imposed by the Board of Directors, shall have general
charge of the business, affairs, and property of the Corporation and general
supervision over its other officers, agents, and employees. The Chief Executive
Officer shall have the power and authority to execute contracts, deeds, notes,
mortgages, bonds, and other instruments and documents in the name of the
Corporation and on its behalf, subject, however, to any limitations imposed by
the Board of Directors. The Chief Executive Officer shall report to the Board of
Directors. Unless otherwise expressly provided by the Board of Directors, the
Chief Executive Officer shall perform the duties and exercise the powers of the
Chairman of the Board during any absence or disability of such officer.
Section 5. Chairman of the Board. The Board of Directors shall
appoint one of its members to be Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the Board of Directors and shall
generally have and perform such other duties as may from time to time be
conferred or assigned by the Board of Directors.
Section 6. Vice Chairman. The Board of Directors may appoint
one or more of its members to be Vice Chairmen of the Board. In the absence of
the Chairman, the Vice
10
<PAGE> 15
Chairman (in such order of seniority as may be determined by the Board of
Directors, if any) shall preside at any meeting of the shareholders and the
Board of Directors, unless the Board of Directors shall designate a Chairman Pro
Tem for such purposes. The Vice Chairman shall have the power and authority to
execute contracts, deeds, notes, mortgages, bonds, and other instruments and
documents in the name of the Corporation and on its behalf, subject, however, to
any limitations imposed by the Board of Directors. The Vice Chairman of the
Board shall also have and may exercise such further executive powers and duties
as from time to time may be conferred upon or assigned by the Board of Directors
or, in the absence of such action by the Board, by the Chief Executive Officer.
The Vice Chairman shall report to the Chief Executive Officer.
Section 7. President. Subject to the provisions of these
Bylaws and any limitations imposed by the Board of Directors, the President
shall have such general executive powers as usually pertain to such office or as
may be properly required by the Board of Directors. The President shall have the
power and authority to sign certificates evidencing the capital stock of the
Corporation and execute contracts, deeds, notes, mortgages, bonds, and other
instruments and documents in the name of the Corporation and on its behalf,
subject, however, to any limitations imposed by the Board of Directors. If the
offices of Chief Executive Officer and President are ever separated, then the
President shall report to the Chief Executive Officer. The President shall,
unless otherwise expressly provided by the Board of Directors, perform the
duties and exercise the powers of the Chief Executive Officer during any
disability of the Chief Executive Officer.
Section 8. Vice President. One or more Vice Presidents may be
designated by that title or such additional title or titles as the Board of
Directors may determine. A Vice President shall have the powers and perform such
duties as may be delegated to such Vice President by the Board of Directors, or,
in the absence of such action by the Board, then by the Chief Executive Officer,
the Chairman of the Board or the President. Each Executive Vice President will
report to the President and Chief Executive Officer. A Vice President (in such
order of seniority as may be determined by the Board of Directors, if any)
shall, except as may be expressly limited by action of the Board of Directors,
perform the duties and exercise the powers of the President during the absence
or disability of the President. Each Vice President shall at all times have the
power to sign all certificates of stock, execute all contracts, deeds, notes,
mortgages, bonds and other instruments and documents in the name of the
Corporation and on its behalf, subject to any limitations imposed by the Board
of Directors. A Vice President also shall have such powers and perform such
duties as usually pertain to such office or as may be properly required by the
Board of Directors.
Section 9. Secretary. The Secretary shall keep the minutes of
all meetings of the shareholders and the Board of Directors in a book or books
to be kept for such purposes, and also, when so requested, the minutes of all
meetings of committees in a book or books to be kept for such purposes. The
Secretary shall attend to giving and serving of all notices, and such Secretary
shall have charge of all books and papers of the Corporation, except those
hereinafter directed to be in charge of the Treasurer, or except as otherwise
expressly directed by the Board of Directors. The Secretary shall keep the stock
certificate book or books. The Secretary shall be the custodian of the seal of
the Corporation. The Secretary shall sign with the Chief Executive Officer all
certificates of
11
<PAGE> 16
stock as the Secretary of the Corporation and as Secretary affix or cause to be
affixed thereto the seal of the Corporation. The Secretary may sign as Secretary
of the Corporation, with the President in the name of the Corporation and on its
behalf, all contracts, deeds, mortgages, bonds, notes and other papers,
instruments and documents, except as otherwise expressly provided by the Board
of Directors, and as such, the Secretary shall affix the seal of the Corporation
thereto when required thereby. Under the direction of the Board of Directors,
the Chairman of the Board, any Vice Chairman of the Board, or the President, the
Secretary shall perform all the duties usually pertaining to the office of
Secretary or the Chief Executive Officer, and such Secretary shall perform such
other duties as may be prescribed by the Board of Directors. If at any time any
person or persons shall be designated as an Assistant Secretary of the
Corporation, the Secretary may delegate to such Assistant Secretary such duties
and powers as the Secretary may deem proper.
Section 10. Treasurer. The Treasurer shall have the custody of
all the funds and securities of the Corporation except as may be otherwise
provided by the Board of Directors, and the Treasurer shall make such
disposition of the funds and other assets of the Corporation as such Treasurer
may be directed by the Board of Directors. The Treasurer shall keep or cause to
be kept a record of all money received and paid out, and all vouchers and
receipts given therefor, and all other financial transactions of the
Corporation. The Treasurer shall have general charge of all financial books,
vouchers and papers belonging to the Corporation or pertaining to its business.
The Treasurer shall perform such other duties as are usually incident by law or
otherwise to the office of the Treasurer, and as such Treasurer may be directed
or required by the Board of Directors or the Chief Executive Officer. If at any
time any person shall be designated as Comptroller of the Corporation, the
Treasurer may delegate to such Comptroller such duties and powers as the
Treasurer may deem proper.
Section 10. Delegation of Duties. In the case of the absence
or disability of any officer of the Corporation, or in case of a vacancy in any
office or for any other reason that the Board of Directors may deem sufficient,
the Board of Directors, except as otherwise provided by law, may delegate the
powers or duties of any officer during the period of such officer's absence or
disability to any other officer or to any director.
ARTICLE V
Stock Certificates
Section 1. Issuance. Every holder of shares in the Corporation
shall be entitled to have a certificate, representing all shares to which such
holder is entitled. No certificate shall be issued for any share until such
share is fully paid.
Section 2. Signatures; Form. Certificates representing shares
in the Corporation shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary and may be sealed with the seal of the
Corporation or a facsimile thereof. The signatures of the President and the
Secretary may be facsimiles if the certificate is manually signed on behalf
12
<PAGE> 17
of a transfer agent or a registrar, other than the Corporation itself or an
employee of the Corporation. In case any officer who signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Corporation
with the same effect as if such person were such officer at the date of its
issuance.
Every certificate representing shares which are restricted as
to the sale, disposition or other transfer of such shares shall state that such
shares are restricted as to transfer and shall set forth or fairly summarize
such restrictions upon the certificate. Alternatively, each certificate may
state conspicuously that the Corporation will furnish to any shareholder upon
request and without charge a full statement of such restrictions.
Section 3. Transfer of Stock. Shares of stock of the
Corporation shall be transferred on the books of the Corporation only upon
surrender to the Corporation of the certificate or certificates representing the
shares to be transferred accompanied by an assignment in writing of such shares
properly executed by the shareholder of record or his duly authorized attorney
in fact and with all taxes on the transfer having been paid. The Corporation may
refuse any requested transfer until furnished evidence satisfactory to it that
such transfer is proper. Upon the surrender of a certificate for transfer of
stock, such certificate shall be marked on its face "Canceled." The Board of
Directors may make such additional rules concerning the issuance, transfer and
registration of stock as it deems appropriate.
If any holder of any stock of the Corporation shall have
entered into an agreement with any other holder of any stock of the Corporation
or with the Corporation, or both, relating to a sale or sales or transfer of any
shares of stock of the Corporation, or wherein or whereby any restriction or
condition is imposed or placed upon or in connection with the sale or transfer
of any share of stock of the Corporation, and if a duly executed or certified
copy thereof shall have been filed with the Secretary of the Corporation, none
of the shares of stock covered by such agreement or to which it relates, of any
such contracting shareholder, shall be transferred upon the books of the
Corporation until there has been filed with the Secretary of the Corporation
evidence satisfactory to the Secretary of the Corporation of compliance with
such agreement, and any evidence of any kind or quality, of compliance with the
terms of such agreement which the Secretary deems satisfactory or sufficient
shall be conclusive upon all parties interested; provided, however, that neither
the Corporation nor any director, officer, employee or transfer agent thereof
shall be liable for trans ferring or effecting or permitting the transfer of any
such shares of stock contrary to or inconsistent with the terms of any such
agreement, in the absence of proof of willful disregard thereof or fraud, bad
faith or gross negligence on the part of the party to be charged; provided,
further, that the certificate of the Secretary, under the seal of the
Corporation, bearing the date of its issuance by the Secretary, certifying that
such an agreement is or is not on file with the Secretary, shall be conclusive
as to such fact so certified for a period of five days from the date of such
certificate, with respect to the rights of any innocent purchaser or transferee
for value of any such shares without actual notice of the existence of any
restrictive agreement.
13
<PAGE> 18
Section 4. Lost Certificates. Any shareholder claiming a
certificate of stock to be lost or destroyed shall make affidavit or affirmation
of the fact and the fact that such shareholder is the owner and holder thereof,
and give notice of the loss or destruction of same in such manner as the Board
of Directors may require, and shall give the Corporation a bond of indemnity in
form, and with one or more sureties satisfactory to the Board of Directors,
payable as may be required by the Board of Directors to protect the Corporation
and any person injured by the issuance of the new certificate from any liability
or expense which it or they may incur by reason of the original certificate
remaining outstanding, whereupon the President or a Vice President and the
Secretary or an Assistant Secretary may cause to be issued a new certificate in
the same tenor as the one alleged to be lost or destroyed, but always subject to
approval of the Board of Directors.
ARTICLE VI
Indemnification
Section 1. Definitions. For purposes of this Article VI, the
following terms shall have the meanings hereafter ascribed to them:
(a) "agent" includes a volunteer.
(b) "Corporation" includes, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person who is or
was a director, officer, employee, or agent of a constituent corporation, or is
or was serving at the request of a constituent corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust or other enterprise, is in the same position with respect to the resulting
or surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
(c) "expenses" includes counsel fees, including those for
appeal.
(d) "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and reasonably
incurred with respect to a proceeding.
(e) "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal.
(f) "serving at the request of the Corporation" includes any
service as a director, officer, employee, or agent of the Corporation that
imposes duties on such persons, including duties relating to an employee benefit
plan and its participants or beneficiaries.
14
<PAGE> 19
(f) "not opposed to the best interest of the Corporation"
describes the actions of a person who acts in good faith and in a manner he
reasonably believes to be in the best interests of the participants and
beneficiaries of an employee benefit plan.
(g) "other enterprises" includes employee benefit
plans.
Section 2. Indemnification of Officers, Directors, Employees
and Agents.
(a) The Corporation shall have power to indemnify any person
who was or is a party to any proceeding (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, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
liability incurred in connection with such 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 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.
(b) The Corporation shall have power to indemnify any
person, who was or is a party to any proceeding 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, officer, employee or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses and amounts paid in settlement not exceeding, in
the judgment of the Board of Directors, the estimated expense of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if 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, 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 unless, and only to the extent that, the court in which such proceeding
was brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
(c) To the extent that a director, officer, employee,
or agent of the Corporation has been successful on the merits or otherwise in
the defense of any proceeding referred to in subsection (a) or subsection (b),
or in the defense of any claim, issue, or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith.
15
<PAGE> 20
(d) Any indemnification under subsection (a) or
subsection (b), unless pursuant to a determination 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 has met the applicable standard of conduct set
forth herein. Such determination shall be made:
1. By the Board of Directors by a majority
vote of a quorum consisting of directors who are not parties to such proceeding;
2. If such a quorum is not obtainable or,
even if obtainable, by majority vote of a committee duly designated by the Board
of Directors (in which directors who are parties may participate) consisting
solely of two or more directors not at the time parties to the proceeding;
3. By independent legal counsel:
a. Selected by the Board of Directors
prescribed in subsection (d)(1) or the committee prescribed in subsection
(d)(2);
b. If a quorum of the directors cannot
be obtained for subsection (d)(1) and a committee cannot be designated for
subsection (d)(2), selected by majority vote of the full Board of Directors (in
which directors who are parties may participate); or
4. By the shareholders by a majority vote of
a quorum consisting of shareholders who were not parties to such proceeding or,
if no such quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
(e) Evaluation of the reasonableness of expenses and
authorization of indemnification shall be made in the same manner as the
determination that indemnification is permissible. However, if the determination
of permissibility is made by independent legal counsel, persons designated by
independent legal counsel shall evaluate the reasonableness of expenses and may
authorize indemnification.
(f) Expenses incurred by an officer or director in defending a
civil or criminal proceeding may be paid by the Corporation in advance of the
final disposition of such proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if he is ultimately
found not to be entitled to indemnification by the Corporation pursuant to this
section. Expenses incurred by other employees and agents may be paid in advance
upon such terms or conditions that the Board of Directors deems appropriate.
(g) The indemnification and advancement of expenses provided
pursuant to this Article are not exclusive, and the Corporation may make any
other or further indemnification or advancement of expenses of any of its
directors, officers, employees, or agents, under any bylaw,
16
<PAGE> 21
agreement, vote of shareholders, or disinterested directors, or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office. However, indemnification or advancement of expenses shall
not be made to or on behalf of any director, officer, employee, or agent if a
judgment or other final adjudication establishes that his actions, or omissions
to act, were material to the cause of action so adjudicated and constitute:
1. A violation of the criminal law, unless
the director, officer, employee, or agent had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful;
2. A transaction from which the
director, officer, employee, or agent derived an improper personal benefit;
3. In the case of a director, a circumstance
under which the liability provisions of Section 607.0834, Florida Statutes, are
applicable; or
4. Willful misconduct or a conscious
disregard for the best interests of the Corporation in a proceeding by or in the
right of the Corporation to procure a judgment in its favor or in a proceeding
by or in the right of a shareholder.
(h) Indemnification and advancement of expenses as
provided in this Article shall continue as, unless otherwise provided when
authorized or ratified, to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized or
ratified.
(i) Notwithstanding the failure of the Corporation to provide
indemnification, and despite any contrary determination of the Board of
Directors or of the shareholders in the specific case, a director, officer,
employee or agent of the Corporation who is or was a party to a proceeding may
apply for indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the Circuit Court, or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice that it considers necessary, may order indemnification and
advancement of expenses, including expenses incurred in seeking court-ordered
indemnification or advancement of expenses, if it determines that:
1. The director, officer, employee or agent
is entitled to mandatory indemnification, in which case the court shall also
order the Corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
2. The director, officer, employee or agent
is entitled to indemnification or advancement of expenses, or both, by virtue of
the exercise by the Corporation of its power; or
17
<PAGE> 22
3. The director, officer, employee or agent
is fairly and reasonably entitled to indemnification or advancement of expenses,
or both, in view of all the relevant circumstances, regardless of whether such
person met the standard of conduct set forth herein.
ARTICLE VII
General Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation
shall begin on the first day of January and end on the last day of December in
each year.
Section 2. Seal. The Board of Directors in its discretion
may adopt a seal for the Corporation in such form as may be determined from time
to time by the Board of Directors.
Section 3. Amendment of Bylaws. The Board of Directors shall
have the power to appeal, alter, amend, and rescind these Bylaws.
CERTIFICATE OF ADOPTION
I hereby certify that the foregoing Bylaws were duly adopted at a
meeting of the Board of Directors held on April 13, 1998.
/s/ John T. Stafford
----------------------------------------
John T. Stafford
President and Chief Executive Officer
18
<PAGE> 1
EXHIBIT 4.2
(FORM OF STOCK CERTIFICATE - FRONT SIDE)
NUMBER SHARES
SUNCOAST BANCORP, INC.
INCORPORATED UNDER THE [CUSIP]
LAWS OF THE STATE OF FLORIDA SEE REVERSE
FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY That __________________________________ is the owner of
_______ FULLY PAID SHARES OF COMMON STOCK, $.01 PAR VALUE PER SHARE, OF
SUNCOAST BANCORP, INC.
transferable only on the books of the Corporation by the holders hereof in
person or by attorney duly authorized upon surrender of this certificate duly
endorsed or assigned. This certificate and the shares represented hereby are
subject to the laws of the United States of America and to the Articles of
Incorporation and Bylaws of the Corporation as now or hereafter amended. This
certificate is not paid until countersigned by the Transfer Agent and the
Registrar.
WITNESS, the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
SECRETARY PRESIDENT
(SEAL)
COUNTERSIGNED AND REGISTERED:
-------------------------------------------------
TRANSFER AGENT AND REGISTRAR
By:
---------------------------
AUTHORIZED OFFICER
<PAGE> 2
(FORM OF STOCK CERTIFICATE - BACK SIDE)
The Corporation is authorized to issue more than one class of stock,
including a class of preferred stock which may be issued in one or more series.
The Corporation will furnish to any stockholder, upon written request and
without charge, a full statement of the designations, rights, preferences, and
limitations of the shares of each class authorized to be issued and, with
respect to the issuance of any preferred stock to be issued in series, the
relative rights and preferences between the shares of each series as far as the
rights and preferences have been fixed and determined and the authority of the
Board of Directors to fix and determine the relative rights and preferences of
subsequent series.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian __________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act __________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, ________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
[ ]
[ ]
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP
CODE, OF ASSIGNEE)
_________ shares of the capital stock represented by the within Certificate, and
do hereby irrevocably constitute and appoint _________________________________
Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.
Dated
--------------------------
-------------------------------------------------
NOTICE: THE SIGNATURE(S) OF THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE> 1
EXHIBIT 5
January 6, 1999
Suncoast Bancorp, Inc.
5922 Cattlemen Lane, Suite 202
Sarasota, Florida 34232
Gentlemen:
This opinion is issued in connection with the filing by Suncoast
Bancorp, Inc. (the "Company") with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), of a Registration Statement
on Form SB-2, as amended (the "Registration Statement"), with respect to the
offer and sale of shares of common stock, par value $.01 per share, of the
Company (the "Shares").
We have examined the originals, or certified, conformed or reproduction
copies, of such records, agreements, instruments and documents as we have deemed
relevant or necessary as the basis for the opinion hereinafter expressed. In all
such examinations, we have assumed the genuineness of all signatures on original
or certified copies and the conformity to original or certified copies of all
copies submitted to us as conformed or reproduction copies. As to various
questions of fact relevant to such opinion, we have relied upon, and assumed the
accuracy of, certificates and oral or written statements and other information
of or from public officials, officers or representatives of the Company, and
others.
Based upon the foregoing and subject to the limitations set forth
herein, we are of the opinion that the Shares, when issued, delivered and paid
for in accordance with the Registration Statement, and the Restated Articles of
Incorporation of the Company, will be legally issued, fully paid and
nonassessable Shares of common stock of the Company.
The opinion expressed herein is limited to the laws of the State of
Florida.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus forming a part
<PAGE> 2
Suncoast Bancorp, Inc.
January 6, 1999
Page 2
- ------------------
of the Registration Statement. In giving this consent, we do not hereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
SMITH, MACKINNON, GREELEY,
BOWDOIN & EDWARDS, P.A.
/s/ John P. Greeley
--------------------------
By: John P. Greeley
JPG:erw
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of this _____
day of ___________, 1999, by and between Suncoast Bancorp, Inc. (the "Company"),
Suncoast National Bank (the "Bank"), and John T. Stafford (the "Executive").
WITNESSETH:
WHEREAS, the Bank desires to retain the services of and employ the
Executive, and the Executive desires to provide services to the Bank, pursuant
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements herein contained, the Bank and the Executive covenant and agree
as follows:
1. Employment. Pursuant to the terms and conditions of this Agreement,
the Bank agrees to employ the Executive and the Executive agrees to render
services to the Bank as set forth herein.
2. Position and Duties. During the term of this Agreement, the
Executive shall serve as President and Chief Executive Officer of the Bank and
the Company, and shall undertake such duties, consistent with such titles, as
may be assigned to him from time to time by the Boards of Directors of the
Company and the Bank (collectively referred to as the "Board"), including
management of all Company and Bank personnel, serving on Board committees as
appointed from time to time by the Board, keeping the Board informed of industry
and regulatory developments regarding the Company and Bank, coordinating with
Company and Bank personnel and third parties to the extent necessary to further
the profitability and business of the Company and Bank, and assisting in keeping
the Company and Bank in compliance with applicable laws and regulations. In
performing his duties pursuant to this Agreement, the Executive shall devote his
full business time, energy, skill and best efforts to promote the Company and
Bank and their business and affairs; provided that, subject to Sections 10, 12
and 13 of this Agreement, the Executive shall have the right to manage and
pursue personal and family interests, and make passive investments in
securities, real estate, and other assets, and also to participate in charitable
and community activities and organizations, so long as such activities do not
adversely affect the performance by Executive of his duties and obligations to
the Company and Bank.
3. Term. The initial term of employment pursuant to this Agreement
shall be for a period of three years, commencing with the date hereof and
expiring (unless sooner terminated as otherwise provided in this Agreement or
unless otherwise renewed or extended as set forth herein) on the third
anniversary of this Agreement, which date, including any earlier date of
termination or any extended expiration date, shall be referred to as the
"Expiration Date". Subject to the provisions
<PAGE> 2
of Section 8 of this Agreement, the term of this Agreement and the employment of
the Executive by the Company and Bank hereunder shall be deemed automatically
renewed for successive periods of one year commencing on the third anniversary
date of this Agreement, unless either party gives the other written notice, at
least 180 days prior to the end of the then term of the Agreement. After
termination of the employment of the Executive for any reason whatsoever, the
Executive shall continue to be subject to the provisions of Sections 10 through
17, inclusive, of this Agreement; provided, however, that the Executive shall
not be subject to the provisions of Sections 12 or 13 where the employment of
the Executive is terminated by the Executive for Good Reason (as defined in
Section 8) or pursuant to Sections 8(e) or 8(f), or where the term of employment
is not renewed pursuant to this Section 3.
4. Compensation. During the term of this Agreement, the Bank shall pay
or provide to the Executive as compensation for the services of the Executive
set forth in Section 2 hereof:
(a) A base annual salary of at least $96,000 payable in such
periodic installments consistent with other employees of the Bank (such base
salary to be subject to increase by the Board in its discretion); and
(b) Such individual bonuses and other compensation to the
Executive as may be authorized by the Board from time to time.
5. Benefits and Insurance. The Bank shall provide to the Executive such
medical, health, and life insurance as well as any other benefits as the Board
shall determine from time to time. At a minimum, the Executive shall be entitled
to (i) participate in all employee benefit plans offered to the Bank's employees
generally, and (ii) life insurance coverage (payable to such beneficiary as the
Executive may designate from time to time). The Executive also shall be entitled
to participate in any group disability plan maintained by the Bank, with the
Bank paying to the Executive his base annual salary during any waiting period
imposed by such plan for the receipt of disability benefits thereunder. The Bank
shall undertake to provide for its employees generally (including the Executive)
a retirement plan and a plan qualified under Section 401(k) of the Internal
Revenue Code of 1986, as amended. All benefits referred to herein shall be
provided at reasonable levels and within reasonable time after the commencement
of the Executive's employment pursuant to the terms of this Agreement.
6. Vacation. The Executive may take up to four weeks of vacation time
at such periods during each year as the Board and the Executive shall determine
from time to time. The Executive shall be entitled to full compensation during
such vacation periods.
7. Reimbursement of Expenses; Automobile Allowance. The Bank shall
reimburse the Executive for reasonable expenses incurred in connection with his
employment hereunder subject to guidelines issued from time to time by the Board
and upon submission of documentation in conformity with applicable requirements
of federal income tax laws and regulations supporting
2
<PAGE> 3
reimbursement of such expenses. The Bank also shall provide to the Executive an
automobile allowance in an amount as shall be mutually agreed upon by the
Executive and the Bank.
8. Termination. The employment of the Executive may be terminated as
follows:
(a) By the Company and Bank, by action taken by the Board, at
any time and immediately upon written notice to the Executive if said discharge
is for cause. In the notice of termination furnished to the Executive under this
Section 8(a), the reason or reasons for said termination shall be given and, if
no reason or reasons are given for said termination, said termination shall be
deemed to be without cause and therefore termination pursuant to Section 8(f).
Any one or more of the following conditions shall be deemed to be grounds for
termination of the employment of the Executive for cause under this Section
8(a):
(i) If the Executive shall fail or refuse to comply
with the obligations required of him as set forth in this Agreement or comply
with the policies of the Bank established by the Board from time to time;
provided, however, that for the first two such failures or refusals, the
Executive shall be given written warnings (each providing at least a 10 day
period for an opportunity to cure), and the third failure or refusal shall be
grounds for termination for cause;
(ii) If the Executive shall have engaged in conduct
involving fraud, deceit, personal dishonesty, or breach of fiduciary duty, which
in any such case has adversely affected, or may adversely affect, the business
or reputation of the Bank;
(iii) If the Executive shall have wilfully violated
any banking law or regulation, memorandum of understanding, cease and desist
order, or other agreement with any banking agency having jurisdiction over the
Bank;
(iv) If the Executive shall have become subject to
continuing intemperance in the use of alcohol or drugs which has adversely
affected, or may adversely affect, the business or reputation of the Bank; or
(v) If the Executive shall have filed, or had filed
against him, any petition under the federal bankruptcy laws or any state
insolvency laws.
In the event of termination for cause, the Bank shall
pay the Executive only salary, vacation, and bonus amounts accrued and unpaid as
of the effective date of termination.
(b) By the Executive upon the lapse of 10 days following
written notice by the Executive to the Company and Bank of termination of his
employment hereunder for Good Reason (as defined below), which notice shall
reasonably describe the Good Reason for which the Executive's employment is
being terminated; provided, however, that if the Good Reason specified in such
notice is such that there is a reasonable prospect that it can be cured with
diligent effort within 10 days, the Company and Bank shall have a reasonable
time (having regard for the nature
3
<PAGE> 4
of the Good Reason) to cure such Good Reason, which time shall not in any event
exceed 10 days from the date of such notice, and the Executive's employment
shall continue in effect during such reasonable time so long as the Company and
Bank makes diligent efforts during such time to cure such Good Reason. If such
Good Reason shall be cured by the Company and Bank during such reasonable time,
the Executive's employment and the obligations of the Company and Bank hereunder
shall not terminate as a result of the notice which has been given with respect
to such Good Reason. Cure of any Good Reason with or without notice from the
Executive shall not relieve the Company and Bank from any obligations to the
Executive under this Agreement or otherwise and shall not affect the Executive's
rights upon the reoccurrence of the same, or the occurrence of any other, Good
Reason. For purposes of this Agreement, the term "Good Reason" shall mean any
material breach by the Company and Bank of any provision of this Agreement, any
significant reduction, without the Executive's prior written consent, in the
duties, responsibilities, authority or title of the Executive as an officer of
the Company and Bank, or if the Executive's employment is terminated by the
Company and Bank for any reason other than cause.
If the Executive's employment is terminated by the Executive
for Good Reason, the Bank shall, for a period of the greater of one year after
said termination or until the expiration of this Agreement:
(i) continue to pay to the Executive the base annual
salary in effect under Section 4(a) on the date of said termination (or, if
greater, the highest annual salary in effect for the Executive within the 36
month period prior to said termination) plus an annual amount equal to any bonus
paid by the Bank to the Executive during the 12 month period prior to said
termination;
(ii) continue to provide for the benefit of the
Executive the life insurance benefits provided to the Executive prior to
termination; and
(iii) reimburse the Executive for continued coverage
in accordance with the Consolidated Omnibus Budget Reconciliation Act under the
Bank's medical insurance plan.
(c) By the Executive upon the lapse of 30 days following
written notice by the Executive to the Company and Bank of his resignation from
the Company and Bank for other than Good Reason; provided, however, that the
Company and Bank, in their discretion, may cause such termination to be
effective at any time during such 30-day period. If the Executive's employment
is terminated because of the Executive's resignation, the Bank shall be
obligated to pay to the Executive any salary, vacation, and bonus amounts
accrued and unpaid as of the effective date of such resignation.
(d) If the Executive's employment is terminated by the death
of the Executive, this Agreement shall automatically terminate, and the Bank
shall be obligated to pay to the Executive's estate any salary, vacation, and
bonus amounts accrued and unpaid at the date of death.
4
<PAGE> 5
(e) If after a Change of Control and before the end of the
initial term (or, if applicable, the renewal term), the Executive's employment
is terminated, his duties are materially reduced, his base salary is reduced,
his employment is relocated more than 50 miles from the Bank's main office or
his participation in any employee benefit plan is materially reduced or
adversely affected, and the Executive does not consent to such change, then the
Executive shall be entitled to receive promptly thereafter an amount equal to
one times the average base annual salary plus annual bonus received by the
Executive during the three year period prior to such termination. For purposes
of this Agreement, a Change of Control shall mean a merger or acquisition in
which the Company is not the surviving entity, or the acquisition by any
individual or group of beneficial ownership of more than 50% of the outstanding
shares of Company common stock. The term "group" and the concept of beneficial
ownership shall have such meanings ascribed thereto as set forth in the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
regulations and rules thereunder.
(f) By the Company and Bank, by action taken by the Board, at
any time if said discharge is without cause. If the Executive's employment is
terminated by the Company and Bank without cause, the Bank shall, for a period
of the greater of one year after said termination or until the expiration of
this Agreement:
(i) continue to pay to the Executive the base annual
salary in effect under Section 4(a) on the date of said termination (or, if
greater, the highest annual salary in effect for the Executive within the 36
month period prior to said termination) plus an annual amount equal to any bonus
paid by the Bank to the Executive during the 12 month period prior to said
termination;
(ii) continue to provide for the benefit of the
Executive the life insurance benefits provided to the Executive prior to
termination; and
(iii) reimburse the Executive for continued coverage
in accordance with the Consolidated Omnibus Budget Reconciliation Act under the
Bank's medical insurance plan.
9. Notice. All notices permitted or required to be given to either
party under this Agreement shall be in writing and shall be deemed to have been
given (a) in the case of delivery, when addressed to the other party as set
forth at the end of this Agreement and delivered to said address, (b) in the
case of mailing, three days after the same has been mailed by certified mail,
return receipt requested, and deposited postage prepaid in the U.S. Mails,
addressed to the other party at the address as set forth at the end of this
Agreement, and (c) in any other case, when actually received by the other party.
Either party may change the address at which said notice is to be given by
delivering notice of such to the other party to this Agreement in the manner set
forth herein.
10. Confidential Matters. The Executive is aware and acknowledges that
the Executive shall have access to confidential information by virtue of his
employment. The Executive agrees that, during the period of time the Executive
is retained to provide services to the Bank, and thereafter subsequent to the
termination of Executive's services to the Bank for any reason
5
<PAGE> 6
whatsoever, the Executive will not release or divulge any confidential
information whatsoever relating to the Bank or its business, to any other person
or entity without the prior written consent of the Bank. Confidential
information does not include information that is available to the public or
which becomes available to the public other than through a breach of this
Agreement on the part of the Executive. Also, the Executive shall not be
precluded from disclosing confidential information in furtherance of the
performance of his services to the Bank or to the extent required by any legal
proceeding.
11. Injunction Without Bond. In the event there is a breach or
threatened breach by the Executive of the provisions of Sections 10, 12, or 13,
the Bank shall be entitled to an injunction without bond to restrain such breach
or threatened breach, and the prevailing party in any such proceeding will be
entitled to reimbursement for all costs and expenses, including reasonable
attorneys' fees in connection therewith. Nothing herein shall be construed as
prohibiting the Bank from pursuing such other remedies available to it for any
such breach or threatened breach including recovery of damages from the
Executive.
12. Noncompetition. The Executive agrees that during the period of time
the Executive is retained to provide services to the Bank, and thereafter for a
period of one year subsequent to the termination of Executive's services to the
Bank for any reason whatsoever (except where the employment of the Executive is
terminated by the Executive for Good Reason or pursuant to Sections 8(e) or
8(f), or where the term of employment is not renewed pursuant to Section 3),
Executive will not enter the employ of, or have any interest in, directly or
indirectly (either as executive, partner, director, officer, consultant,
principal, agent or employee), any other bank or financial institution or any
entity which either accepts deposits or makes loans (whether presently existing
or subsequently established) and which has an office located within a radius of
50 miles of any office of the Bank; provided, however, that the foregoing shall
not preclude any ownership by the Executive of an amount not to exceed 5% of the
equity securities of any entity which is subject to the periodic reporting
requirements of the 1934 Act and the shares of Bank common stock owned by the
Executive at the time of termination of employment.
13. Nonsolicitation; Noninterference. The Executive agrees that during
the period of time the Executive is retained to provide services to the Bank,
and thereafter for a period of one year subsequent to the termination of
Executive's services to the Bank for any reason whatsoever (except where such
termination is by the Executive for Good Reason or pursuant to Sections 8(e) or
8(f), or where the term of employment is not renewed pursuant to Section 3), the
Executive will not (a) solicit for employment by Executive, or anyone else, or
employ any employee of the Bank or any person who was an employee of the Bank
within 12 months prior to such solicitation of employment; (b) induce, or
attempt to induce, any employee of the Bank to terminate such employee's
employment; (c) induce, or attempt to induce, anyone having a business
relationship with the Bank to terminate or curtail such relationship or, on
behalf of himself or anyone else, compete with the Bank; (d) knowingly make any
untrue statement concerning the Bank or its directors or officers to anyone; or
(e) permit anyone controlled by the Executive, or any person acting on behalf of
the Executive or anyone controlled by an employee of the Executive to do any of
the foregoing.
6
<PAGE> 7
14. Remedies. The Executive agrees that the restrictions set forth in
this Agreement are fair and reasonable. The covenants set forth in this
Agreement are not dependent covenants and any claim against the Bank, whether
arising out of this Agreement or any other agreement or contract between the
Bank and Executive, shall not be a defense to a claim against Executive for a
breach or alleged breach of any of the covenants of Executive contained in this
Agreement. It is expressly understood by and between the parties hereto that the
covenants contained in this Agreement shall be deemed to be a series of separate
covenants. The Executive understands and agrees that if any of the separate
covenants are judicially held invalid or unenforceable, such holding shall not
release him from his obligations under the remaining covenants of this
Agreement. If in any judicial proceedings, a court shall refuse to enforce any
or all of the separate covenants because taken together they are more extensive
(whether as to geographic area, duration, scope of business or otherwise) than
necessary to protect the business and goodwill of the Bank, it is expressly
understood and agreed between the parties hereto that those separate covenants
which, if eliminated or restricted, would permit the remaining separate
covenants or the restricted separate covenant to be enforced in such proceeding
shall, for the purposes of such proceeding, be eliminated from the provisions of
this Agreement or restriction, as the case may be.
15. Invalid Provision. In the event any provision should be or become
invalid or unenforceable, such facts shall not affect the validity and
enforceability of any other provision of this Agreement. Similarly, if the scope
of any restriction or covenant contained herein should be or become too broad or
extensive to permit enforcement thereof to its full extent, then any such
restriction or covenant shall be enforced to the maximum extent permitted by
law, and Executive hereby consents and agrees that the scope of any such
restriction or covenant may be modified accordingly in any judicial proceeding
brought to enforce such restriction or covenant.
16. Governing Law; Venue. This Agreement shall be construed in
accordance with and shall be governed by the laws of the State of Florida. The
sole and exclusive venue for any action arising out of this Agreement shall be a
federal or state court situated in Sarasota County, Florida, and the parties to
this Agreement agree to be subject to the personal jurisdiction of such Court
and that service on each party shall be valid if served by certified mail,
return receipt requested or hand delivery.
17. Attorneys' Fees and Costs. In the event a dispute arises between
the parties under this Agreement and suit is instituted, the prevailing party
shall be entitled to recover his or its costs and attorneys' fees from the
nonprevailing party. As used herein, costs and attorneys' fees include any costs
and attorneys' fees in any appellate proceeding.
18. No Third Party Beneficiary. This Agreement is solely between the
parties hereto, and no person not a party to this Agreement shall have any
rights hereunder, either as a third party beneficiary or otherwise. The rights
and obligations of the parties under this Agreement shall inure to the benefit
of and shall be binding upon their respective successors and legal
representatives.
7
<PAGE> 8
19. Effect on Other Agreements. This Agreement and the termination
thereof shall not affect any other agreement between the Executive and the Bank,
and the receipt by the Executive of benefits thereunder.
20. Miscellaneous. The rights and duties of the parties hereunder are
personal and may not be assigned or delegated without the prior written consent
of the other party to this Agreement. The captions used herein are solely for
the convenience of the parties and are not used in construing this Agreement.
Time is of the essence of this Agreement and the performance by each party of
its or his duties and obligations hereunder.
21. Complete Agreement. This Agreement constitutes the complete
agreement between the parties hereto and incorporates all prior discussions,
agreements and representations made in regard to the matters set forth herein.
This Agreement may not be amended, modified or changed except by a writing
signed by the party to be charged by said amendment, change or modification.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SUNCOAST BANCORP, INC.
SUNCOAST NATIONAL BANK
By:
---------------------------
"EXECUTIVE"
------------------------------
John T. Stafford, individually
Address: 6217 Weymouth Drive
Sarasota, FL 34238
8
<PAGE> 1
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of this _____
day of ___________, 1999, by and between Suncoast National Bank (the "Bank"),
and William F. Gnerre (the "Executive").
WITNESSETH:
WHEREAS, the Bank desires to retain the services of and employ the
Executive, and the Executive desires to provide services to the Bank, pursuant
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements herein contained, the Bank and the Executive covenant and agree
as follows:
1. Employment. Pursuant to the terms and conditions of this Agreement,
the Bank agrees to employ the Executive and the Executive agrees to render
services to the Bank as set forth herein.
2. Position and Duties. During the term of this Agreement, the
Executive shall serve as Executive Vice President and Senior Loan Officer of the
Bank, and shall undertake such duties, consistent with such titles, as may be
assigned to him from time to time by the President and Chief Executive Officer,
including management of assigned Bank personnel, serving on Board committees as
appointed from time to time by the Board, and keeping the President and Chief
Executive Officer informed of industry and regulatory developments regarding the
Bank, and assisting in keeping the Bank in compliance with applicable laws and
regulations. In performing his duties pursuant to this Agreement, the Executive
shall devote his full business time, energy, skill and best efforts to promote
the Bank and its business and affairs; provided that, subject to Sections 10, 12
and 13 of this Agreement, the Executive shall have the right to manage and
pursue personal and family interests, and make passive investments in
securities, real estate, and other assets, and, with the prior permission of the
President and Chief Executive Officer, to participate in charitable and
community activities and organizations, so long as such activities do not
adversely affect the performance by Executive of his duties and obligations to
the Bank.
3. Term. The initial term of employment pursuant to this Agreement
shall be for a period of three years, commencing with the date hereof and
expiring (unless sooner terminated as otherwise provided in this Agreement or
unless otherwise renewed or extended as set forth herein) on the third
anniversary of this Agreement, which date, including any earlier date of
termination or any extended expiration date, shall be referred to as the
"Expiration Date". Subject to the provisions of Section 8 of this Agreement, the
term of this Agreement and the employment of the Executive by the Bank hereunder
shall be deemed automatically renewed for successive periods of one year
1
<PAGE> 2
commencing on the third anniversary date of this Agreement, unless either party
gives the other written notice, at least 180 days prior to the end of the then
term of the Agreement. After termination of the employment of the Executive for
any reason whatsoever, the Executive shall continue to be subject to the
provisions of Sections 10 through 17, inclusive, of this Agreement; provided,
however, that the Executive shall not be subject to the provisions of Sections
12 or 13 where the employment of the Executive is terminated by the Executive
for Good Reason (as defined in Section 8) or pursuant to Sections 8(e) or 8(f),
or where the term of employment is not renewed pursuant to this Section 3.
4. Compensation. During the term of this Agreement, the Bank shall pay
or provide to the Executive as compensation for the services of the Executive
set forth in Section 2 hereof:
(a) A base annual salary of at least $84,000 payable in such
periodic installments consistent with other employees of the Bank (such base
salary to be subject to increase by the Board in its discretion); and
(b) Such individual bonuses and other compensation to the
Executive as may be authorized by the Board from time to time.
5. Benefits and Insurance. The Bank shall provide to the Executive such
medical, health, and life insurance as well as any other benefits as the Board
shall determine from time to time. At a minimum, the Executive shall be entitled
to (i) participate in all employee benefit plans offered to the Bank's employees
generally, and (ii) life insurance coverage (payable to such beneficiary as the
Executive may designate from time to time). The Executive also shall be entitled
to participate in any group disability plan maintained by the Bank, with the
Bank paying to the Executive his base annual salary during any waiting period
imposed by such plan for the receipt of disability benefits thereunder. The Bank
shall undertake to provide for its employees generally (including the Executive)
a retirement plan and a plan qualified under Section 401(k) of the Internal
Revenue Code of 1986, as amended. All benefits referred to herein shall be
provided at reasonable levels and within reasonable time after the commencement
of the Executive's employment pursuant to the terms of this Agreement.
6. Vacation. The Executive may take up to three weeks of vacation time
at such periods during each year as the Board and the Executive shall determine
from time to time. The Executive shall be entitled to full compensation during
such vacation periods.
7. Reimbursement of Expenses; Automobile Allowance. The Bank shall
reimburse the Executive for reasonable expenses incurred in connection with his
employment hereunder subject to guidelines issued from time to time by the Board
and upon submission of documentation in conformity with applicable requirements
of federal income tax laws and regulations supporting reimbursement of such
expenses. The Bank also shall provide to the Executive an automobile allowance
in an amount as shall be mutually agreed upon by the Executive and the Bank.
2
<PAGE> 3
8. Termination. The employment of the Executive may be terminated as
follows:
(a) By the Bank, by action taken by its President and Chief
Executive Officer, at any time and immediately upon written notice to the
Executive if said discharge is for cause. In the notice of termination furnished
to the Executive under this Section 8(a), the reason or reasons for said
termination shall be given and, if no reason or reasons are given for said
termination, said termination shall be deemed to be without cause and therefore
termination pursuant to Section 8(f). Any one or more of the following
conditions shall be deemed to be grounds for termination of the employment of
the Executive for cause under this Section 8(a):
(i) If the Executive shall fail or refuse to comply
with the obligations required of him as set forth in this Agreement or comply
with the policies of the Bank established by the Board of Directors of the Bank
(the "Board") from time to time; provided, however, that for the first two such
failures or refusals, the Executive shall be given written warnings (each
providing at least a 10 day period for an opportunity to cure), and the third
failure or refusal shall be grounds for termination for cause;
(ii) If the Executive shall have engaged in conduct
involving fraud, deceit, personal dishonesty, or breach of fiduciary duty, which
in any such case has adversely affected, or may adversely affect, the business
or reputation of the Bank;
(iii) If the Executive shall have wilfully violated
any banking law or regulation, memorandum of understanding, cease and desist
order, or other agreement with any banking agency having jurisdiction over the
Bank;
(iv) If the Executive shall have become subject to
continuing intemperance in the use of alcohol or drugs which has adversely
affected, or may adversely affect, the business or reputation of the Bank; or
(v) If the Executive shall have filed, or had filed
against him, any petition under the federal bankruptcy laws or any state
insolvency laws.
In the event of termination for cause, the Bank shall
pay the Executive only salary, vacation, and bonus amounts accrued and unpaid as
of the effective date of termination.
(b) By the Executive upon the lapse of 10 days following
written notice by the Executive to the President and Chief Executive Officer of
termination of his employment hereunder for Good Reason (as defined below),
which notice shall reasonably describe the Good Reason for which the Executive's
employment is being terminated; provided, however, that if the Good Reason
specified in such notice is such that there is a reasonable prospect that it can
be cured with diligent effort within 10 days, the Bank shall have a reasonable
time (having regard for the nature of the Good Reason) to cure such Good Reason,
which time shall not in any event exceed 10 days from the date of such notice,
and the Executive's employment shall continue in effect during such reasonable
3
<PAGE> 4
time so long as the Bank makes diligent efforts during such time to cure such
Good Reason. If such Good Reason shall be cured by the Bank during such
reasonable time, the Executive's employment and the obligations of the Bank
hereunder shall not terminate as a result of the notice which has been given
with respect to such Good Reason. Cure of any Good Reason with or without notice
from the Executive shall not relieve the Bank from any obligations to the
Executive under this Agreement or otherwise and shall not affect the Executive's
rights upon the reoccurrence of the same, or the occurrence of any other, Good
Reason. For purposes of this Agreement, the term "Good Reason" shall mean any
material breach by the Bank of any provision of this Agreement, any significant
reduction, without the Executive's prior written consent, in the duties,
responsibilities, authority or title of the Executive as an officer of the Bank,
or if the Executive's employment is terminated by the Bank for any reason other
than cause.
If the Executive's employment is terminated by the Executive
for Good Reason, the Bank shall, for a period of the greater of one year after
said termination or until the expiration of this Agreement:
(i) continue to pay to the Executive the base annual
salary in effect under Section 4(a) on the date of said termination (or, if
greater, the highest annual salary in effect for the Executive within the 36
month period prior to said termination) plus an annual amount equal to any bonus
paid by the Bank to the Executive during the 12 month period prior to said
termination;
(ii) continue to provide for the benefit of the
Executive the life insurance benefits provided to the Executive prior to
termination; and
(iii) reimburse the Executive for continued coverage
in accordance with the Consolidated Omnibus Budget Reconciliation Act under the
Bank's medical insurance plan.
(c) By the Executive upon the lapse of 30 days following
written notice by the Executive to the Bank of his resignation from the Bank for
other than Good Reason; provided, however, that the Bank, in its discretion, may
cause such termination to be effective at any time during such 30-day period. If
the Executive's employment is terminated because of the Executive's resignation,
the Bank shall be obligated to pay to the Executive any salary, vacation, and
bonus amounts accrued and unpaid as of the effective date of such resignation.
(d) If the Executive's employment is terminated by the death
of the Executive, this Agreement shall automatically terminate, and the Bank
shall be obligated to pay to the Executive's estate any salary, vacation, and
bonus amounts accrued and unpaid at the date of death.
(e) If after a Change of Control and before the end of the
initial term (or, if applicable, the renewal term), the Executive's employment
is terminated, his duties are materially reduced, his base salary is reduced,
his employment is relocated more than 50 miles from the Bank's main office or
his participation in any employee benefit plan is materially reduced or
adversely affected, and the Executive does not consent to such change, then the
Executive shall be entitled to
4
<PAGE> 5
receive promptly thereafter an amount equal to one times the average base annual
salary plus annual bonus received by the Executive during the three year period
prior to such termination. For purposes of this Agreement, a Change of Control
shall mean a merger or acquisition in which Suncoast Bancorp, Inc., is not the
surviving entity, or the acquisition by any individual or group of beneficial
ownership of more than 50% of the outstanding shares of Suncoast Bancorp, Inc.
common stock. The term "group" and the concept of beneficial ownership shall
have such meanings ascribed thereto as set forth in the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and the regulations and rules thereunder.
(f) By the Bank, by action taken by its President and Chief
Executive Officer, at any time if said discharge is without cause. If the
Executive's employment is terminated by the Bank without cause, the Bank shall,
for a period of the greater of one year after said termination or until the
expiration of this Agreement:
(i) continue to pay to the Executive the base annual
salary in effect under Section 4(a) on the date of said termination (or, if
greater, the highest annual salary in effect for the Executive within the 36
month period prior to said termination) plus an annual amount equal to any bonus
paid by the Bank to the Executive during the 12 month period prior to said
termination;
(ii) continue to provide for the benefit of the
Executive the life insurance benefits provided to the Executive prior to
termination; and
(iii) reimburse the Executive for continued coverage
in accordance with the Consolidated Omnibus Budget Reconciliation Act under the
Bank's medical insurance plan.
9. Notice. All notices permitted or required to be given to either
party under this Agreement shall be in writing and shall be deemed to have been
given (a) in the case of delivery, when addressed to the other party as set
forth at the end of this Agreement and delivered to said address, (b) in the
case of mailing, three days after the same has been mailed by certified mail,
return receipt requested, and deposited postage prepaid in the U.S. Mails,
addressed to the other party at the address as set forth at the end of this
Agreement, and (c) in any other case, when actually received by the other party.
Either party may change the address at which said notice is to be given by
delivering notice of such to the other party to this Agreement in the manner set
forth herein.
10. Confidential Matters. The Executive is aware and acknowledges that
the Executive shall have access to confidential information by virtue of his
employment. The Executive agrees that, during the period of time the Executive
is retained to provide services to the Bank, and thereafter subsequent to the
termination of Executive's services to the Bank for any reason whatsoever, the
Executive will not release or divulge any confidential information whatsoever
relating to the Bank or its business, to any other person or entity without the
prior written consent of the Bank. Confidential information does not include
information that is available to the public or which becomes available to the
public other than through a breach of this Agreement on the part of the
Executive. Also, the Executive shall not be precluded from disclosing
confidential
5
<PAGE> 6
information in furtherance of the performance of his services to the Bank or to
the extent required by any legal proceeding.
11. Injunction Without Bond. In the event there is a breach or
threatened breach by the Executive of the provisions of Sections 10, 12, or 13,
the Bank shall be entitled to an injunction without bond to restrain such breach
or threatened breach, and the prevailing party in any such proceeding will be
entitled to reimbursement for all costs and expenses, including reasonable
attorneys' fees in connection therewith. Nothing herein shall be construed as
prohibiting the Bank from pursuing such other remedies available to it for any
such breach or threatened breach including recovery of damages from the
Executive.
12. Noncompetition. The Executive agrees that during the period of time
the Executive is retained to provide services to the Bank, and thereafter for a
period of one year subsequent to the termination of Executive's services to the
Bank for any reason whatsoever (except where the employment of the Executive is
terminated by the Executive for Good Reason or pursuant to Sections 8(e) or
8(f), or where the term of employment is not renewed pursuant to Section 3),
Executive will not enter the employ of, or have any interest in, directly or
indirectly (either as executive, partner, director, officer, consultant,
principal, agent or employee), any other bank or financial institution or any
entity which either accepts deposits or makes loans (whether presently existing
or subsequently established) and which has an office located within a radius of
50 miles of any office of the Bank; provided, however, that the foregoing shall
not preclude any ownership by the Executive of an amount not to exceed 5% of the
equity securities of any entity which is subject to the periodic reporting
requirements of the 1934 Act and the shares of Bank common stock owned by the
Executive at the time of termination of employment.
13. Nonsolicitation; Noninterference. The Executive agrees that during
the period of time the Executive is retained to provide services to the Bank,
and thereafter for a period of one year subsequent to the termination of
Executive's services to the Bank for any reason whatsoever (except where such
termination is by the Executive for Good Reason or pursuant to Sections 8(e) or
8(f), or where the term of employment is not renewed pursuant to Section 3), the
Executive will not (a) solicit for employment by Executive, or anyone else, or
employ any employee of the Bank or any person who was an employee of the Bank
within 12 months prior to such solicitation of employment; (b) induce, or
attempt to induce, any employee of the Bank to terminate such employee's
employment; (c) induce, or attempt to induce, anyone having a business
relationship with the Bank to terminate or curtail such relationship or, on
behalf of himself or anyone else, compete with the Bank; (d) knowingly make any
untrue statement concerning the Bank or its directors or officers to anyone; or
(e) permit anyone controlled by the Executive, or any person acting on behalf of
the Executive or anyone controlled by an employee of the Executive to do any of
the foregoing.
14. Remedies. The Executive agrees that the restrictions set forth in
this Agreement are fair and reasonable. The covenants set forth in this
Agreement are not dependent covenants and any claim against the Bank, whether
arising out of this Agreement or any other agreement or contract between the
Bank and Executive, shall not be a defense to a claim against Executive for a
breach or
6
<PAGE> 7
alleged breach of any of the covenants of Executive contained in this Agreement.
It is expressly understood by and between the parties hereto that the covenants
contained in this Agreement shall be deemed to be a series of separate
covenants. The Executive understands and agrees that if any of the separate
covenants are judicially held invalid or unenforceable, such holding shall not
release him from his obligations under the remaining covenants of this
Agreement. If in any judicial proceedings, a court shall refuse to enforce any
or all of the separate covenants because taken together they are more extensive
(whether as to geographic area, duration, scope of business or otherwise) than
necessary to protect the business and goodwill of the Bank, it is expressly
understood and agreed between the parties hereto that those separate covenants
which, if eliminated or restricted, would permit the remaining separate
covenants or the restricted separate covenant to be enforced in such proceeding
shall, for the purposes of such proceeding, be eliminated from the provisions of
this Agreement or restriction, as the case may be.
15. Invalid Provision. In the event any provision should be or become
invalid or unenforceable, such facts shall not affect the validity and
enforceability of any other provision of this Agreement. Similarly, if the scope
of any restriction or covenant contained herein should be or become too broad or
extensive to permit enforcement thereof to its full extent, then any such
restriction or covenant shall be enforced to the maximum extent permitted by
law, and Executive hereby consents and agrees that the scope of any such
restriction or covenant may be modified accordingly in any judicial proceeding
brought to enforce such restriction or covenant.
16. Governing Law; Venue. This Agreement shall be construed in
accordance with and shall be governed by the laws of the State of Florida. The
sole and exclusive venue for any action arising out of this Agreement shall be a
federal or state court situated in Sarasota County, Florida, and the parties to
this Agreement agree to be subject to the personal jurisdiction of such Court
and that service on each party shall be valid if served by certified mail,
return receipt requested or hand delivery.
17. Attorneys' Fees and Costs. In the event a dispute arises between
the parties under this Agreement and suit is instituted, the prevailing party
shall be entitled to recover his or its costs and attorneys' fees from the
nonprevailing party. As used herein, costs and attorneys' fees include any costs
and attorneys' fees in any appellate proceeding.
18. No Third Party Beneficiary. This Agreement is solely between the
parties hereto, and no person not a party to this Agreement shall have any
rights hereunder, either as a third party beneficiary or otherwise. The rights
and obligations of the parties under this Agreement shall inure to the benefit
of and shall be binding upon their respective successors and legal
representatives.
19. Effect on Other Agreements. This Agreement and the termination
thereof shall not affect any other agreement between the Executive and the Bank,
and the receipt by the Executive of benefits thereunder.
7
<PAGE> 8
20. Miscellaneous. The rights and duties of the parties hereunder are
personal and may not be assigned or delegated without the prior written consent
of the other party to this Agreement. The captions used herein are solely for
the convenience of the parties and are not used in construing this Agreement.
Time is of the essence of this Agreement and the performance by each party of
its or his duties and obligations hereunder.
21. Complete Agreement. This Agreement constitutes the complete
agreement between the parties hereto and incorporates all prior discussions,
agreements and representations made in regard to the matters set forth herein.
This Agreement may not be amended, modified or changed except by a writing
signed by the party to be charged by said amendment, change or modification.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SUNCOAST NATIONAL BANK
By:
----------------------------------
John T. Stafford
President and Chief Executive Officer
"EXECUTIVE"
-------------------------------------
William F. Gnerre, individually
Address: 511 West Lake Drive
Sarasota, FL 34232
8
<PAGE> 1
EXHIBIT 10.3
SUNCOAST BANCORP, INC.
DIRECTOR STOCK OPTION PLAN
ARTICLE I
Definitions
As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
(a) "Board" or "Board of Directors" shall mean the board of
directors of the Company.
(b) "Change of Control" shall mean (i) the acquisition, other
than from the Company, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Company Voting Securities"),
provided, however, that any acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of the Company or
its subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by the
individuals and entities who were the beneficial owners of the Company Voting
Securities immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of the
Company Voting Securities shall not constitute a Change of Control; or (ii)
individuals who, as of the date hereof, constitute the Board (as of the date
hereof the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purposes, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the Directors of the Company (as such terms are used in Rule 14a- 11
of Regulation 14A promulgated under the Exchange Act); or (iii) approval by the
shareholders of the Company of a reorganization, merger or consolidation, in
each case, with respect to which the individuals and entities who were the
beneficial owners of the Company Voting Securities immediately prior to such
reorganization, merger or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or a complete
<PAGE> 2
liquidation or dissolution of the Company or of the sale or other disposition of
all or substantially all of the assets of the Company.
(c) "Company" shall mean Suncoast Bancorp, Inc., a Florida
corporation, and its successors.
(d) "Director" shall mean any individual who is serving as a
director of the Company or any of its subsidiaries.
(e) "Option" shall mean an option to purchase Stock granted by
the Company pursuant to the provisions of this Plan.
(f) "Option Price" shall mean the purchase price of each share
of Stock subject to Option, as defined in Section 5.2 hereof.
(g) "Optionee" shall mean a Director who has received an
Option granted by the Company hereunder.
(h) "Plan" shall mean this Suncoast Bancorp, Inc. Director
Stock Option Plan.
(i) "Service" shall mean the tenure of an individual as a
Director of the Company or any of its Subsidiaries or any predecessor (including
tenure with a corporation or other entity prior to the date that it became a
Subsidiary).
(j) "Stock" shall mean the common stock of the Company, par
value $.01 per share, or, in the event that the outstanding shares of Stock are
hereafter changed into or exchanged for shares of a different class of stock or
securities of the Company or some other corporation, such other stock or
securities.
(k) "Stock Option Agreement" shall mean the agreement between
the Company and the Optionee under which the Optionee may purchase Stock
pursuant to the Plan.
(l) "Stock Option Committee" shall mean the committee
administering the Plan, pursuant to Article III hereof.
(m) "Subsidiary" shall mean any corporation or other entity
which qualifies as a subsidiary of a corporation under the definition of
"subsidiary corporation" contained in Section 424(f) of the Code.
2
<PAGE> 3
ARTICLE II
The Plan
2.1 Name. This plan shall be known as the "Suncoast Bancorp, Inc.
Director Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to compensate the Directors in
recognition of their efforts in organizing the Company and its Subsidiary, and
the risk incurred during the organizational process.
2.3 Effective Date. The Plan shall become effective on October 15, 1998
(which is the same date the Plan was adopted by the Company's Board of
Directors).
2.4 Participants. Only Directors of the Company and its Subsidiaries
shall be eligible to receive Options under the Plan.
ARTICLE III
Plan Administration
3.1 Stock Option Committee. This Plan shall be administered by the
Board of Directors of the Company (the "Stock Option Committee").
3.2 Power of the Stock Option Committee. The Stock Option Committee
shall have full authority and discretion: (a) to determine, consistent with the
provisions of this Plan, which of the Directors will be granted Options to
purchase any shares of Stock which may be issued and sold hereunder as provided
in Section 4.1 hereof, the times at which Options shall be granted, and the
number of shares of Stock covered by each Option; (b) to determine the Option
Price (subject to Section 5.2 hereof) and other terms and provisions of each
respective Stock Option Agreement, which need not be identical; (c) to determine
whether the Options granted pursuant to this Plan shall be Incentive Stock
Options or Nonstatutory Stock Options; (d) to construe and interpret the Plan;
and (e) to make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan. All such
actions and determinations shall be conclusively binding upon all persons for
all purposes. Unless otherwise indicated by the Stock Option Committee, Options
granted pursuant to this Plan shall be Incentive Stock Options.
3
<PAGE> 4
ARTICLE IV
Shares of Stock Subject to Plan
4.1 Limitations. Subject to adjustment pursuant to the provisions of
Section 4.3 hereof, the number of shares of Stock which may be issued and sold
hereunder pursuant to Stock Option Agreements shall not exceed forty-two
thousand (42,000) shares. Shares subject to Options which terminate or expire
prior to exercise shall be available for future Options.
4.2 Options Granted Under Plan. Shares of Stock with respect to which
an Option granted hereunder shall have been exercised shall not again be
available for Option hereunder. If Options granted hereunder shall terminate for
any reason without being wholly exercised, then the Stock Option Committee shall
have the discretion to grant new Options to Optionees hereunder covering the
number of shares to which such terminated Options related.
4.3 Stock Adjustments; Mergers. Notwithstanding Section 4.1, in the
event the outstanding shares of Stock are increased or decreased or changed into
or exchanged for a different number or kind of shares or other securities of the
Company or of any other corporation by reason of any merger, sale of stock,
consolidation, liquidation, recapitalization, reclassification, stock split up,
combination of shares, or stock dividend, the total number of shares set forth
in Section 4.1 shall be proportionately and appropriately adjusted by the Board.
If the Company continues in existence, the number and kind of shares that are
subject to any Option and the Option Price per share shall be proportionately
and appropriately adjusted without any change in the aggregate price to be paid
therefor upon exercise of the Option. If the Company will not remain in
existence or a majority of its Stock will be purchased or acquired by a single
purchaser or group of purchasers acting together, then the Board may (i) declare
that all Options shall terminate 30 days after the Board gives written notice to
all Optionees of their immediate right to exercise all Options then outstanding
(without regard to limitations on exercise otherwise contained in the Options),
or (ii) notify all Optionees that all Options granted under the Plan shall apply
with appropriate adjustments as determined by the Board to the securities of the
successor corporation to which holders of the numbers of shares subject to such
Options would have been entitled, or (iii) some combination of aspects of (i)
and (ii). The determination by the Board as to the terms of any of the foregoing
adjustments shall be conclusive and binding. Any fractional shares resulting
from any of the foregoing adjustments under this section shall be disregarded
and eliminated.
4.4 Change of Control. Upon a Change of Control, all Options granted
under the Plan shall become exercisable immediately notwithstanding the
provisions of the respective Option agreements regarding exercisability.
4
<PAGE> 5
ARTICLE V
Options
5.1 Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting of the Stock Option Committee authorizing the
same and by a written Stock Option Agreement dated as of the date of grant and
executed by the Company and the Optionee, which Stock Option Agreement shall set
forth such terms and conditions as may be determined by the Stock Option
Committee to be consistent with the Plan.
5.2 Option Price. The Option Price of each share of Stock subject to
Option shall not be less than the fair market value of the Stock on the date of
grant. If the Stock is traded on a national securities exchange or on the NASDAQ
National Market System ("NMS") at the date of grant, then the fair market value
of the Stock on the date of grant shall be equal to the closing price of such
Stock as quoted on such exchange or market as of the trading day immediately
preceding the effective date of such grant. If the Stock is not traded on a
national securities exchange or the NMS at the date of grant, then the fair
market value of the Stock on the date of grant shall be determined in good faith
by the Board of Directors using any reasonable method, which shall include
consideration of market quotations to the extent available.
5.3 Option Exercise. Options may be exercised in whole or in part from
time to time with respect to whole shares only, within the period permitted for
the exercise thereof. Notwithstanding any other provision in this Plan, no
option granted under the Plan may be exercised more than ten (10) years after
the date on which it is granted. Options shall be exercised by: (i) written
notice of intent to exercise the Option with respect to a specific number of
shares of Stock which is delivered by hand delivery or registered or certified
mail, return receipt requested, to the Company at its principal office; and (ii)
payment in full to the Company at such office of the amount of the Option Price
for the number of shares of Stock with respect to which the Option is then being
exercised. Payment of the Option Price shall be made in cash, certified check,
cashier's check, or personal check (and if made by personal check the shares of
Stock issued upon exercise of the Option shall be held by the Company until the
check has cleared); provided, however, that if at the time of exercise of the
Option the Stock is traded on a national securities exchange or on the NMS, all
or part of the Option Price may also be paid by delivery to the Company of
shares of Stock previously acquired by the Optionee, which shall be valued for
such purpose at the closing price of such Stock as quoted on such exchange or
market as of the trading day immediately preceding the date of exercise. In
addition to and at the time of payment of the Option Price, the Optionee shall,
if and to the extent requested by the Company, pay to the Company in cash the
full amount of all federal, state, and local withholding or other employment
taxes, if any, applicable to the taxable income of the Optionee resulting from
such exercise, and any sales, transfer, or similar taxes imposed with respect to
the issuance or transfer of shares of Stock in connection with such exercise.
5.4 Nontransferability of Option. No Option shall be transferred by an
Optionee otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic
5
<PAGE> 6
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder (a "Qualified Domestic Order").
During the lifetime of an Optionee, the Option shall be exercisable only by the
Optionee or the Optionee's legal guardian or personal representative.
5.5 Effect of Termination of Service.
(a) If an Optionee's Service with the Company and its Subsidiaries
shall be terminated for any reason, then the Optionee shall
have the right to exercise the Optionee's Options for ninety
(90) days after the date of such termination, but only to the
extent that such Options were exercisable at the date of such
termination; provided, however, that the Stock Option
Committee may, but shall not be obligated to, allow such
Optionee to exercise within such time any or all of the
Options, if any, held by the Optionee which would not yet
otherwise be exercisable.
(b) No transfer of an Option by the Optionee by will, the laws of
descent and distribution, or a Qualified Domestic Order shall
be effective to bind the Company unless the Company shall have
been furnished with written notice thereof and an
authenticated copy of the will or the Qualified Domestic Order
and/or such other evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions
of such Option.
5.6 Rights as Shareholder. An Optionee or a transferee of an Option
shall have no rights as a shareholder with respect to any shares of Stock
subject to such Option prior to the purchase of such shares by exercise of such
Option as provided herein.
5.7 Investment Intent. Upon or prior to the exercise of all or any
portion of an Option, the Optionee shall furnish to the Company in writing such
information or assurances as, in the Company's opinion, may be necessary to
enable it to comply fully with the Securities Act of 1933, as amended, and the
rules and regulations thereunder and any other applicable statutes, rules, and
regulations. Without limiting the foregoing, if a registration statement is not
in effect under the Securities Act of 1933, as amended, with respect to the
shares of Stock to be issued upon exercise of an Option, the Company shall have
the right to require, as a condition to the exercise of such Option, that the
Optionee represent to the Company in writing that the shares to be received upon
exercise of such Option will be acquired by the Optionee for investment and not
with a view to distribution and that the Optionee agree, in writing, that such
shares will not be disposed of except pursuant to an effective registration
statement, unless the Company shall have received an opinion of counsel
reasonably acceptable to it to the effect that such disposition is exempt from
the registration requirements of the Securities Act of 1933, as amended. The
Company shall have the right to endorse on certificates representing shares of
Stock issued upon exercise of an Option such
6
<PAGE> 7
legends referring to the foregoing representations and restrictions or any other
applicable restrictions on resale or disposition as the Company, in its
discretion, shall deem appropriate.
ARTICLE VI
Stock Certificates
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted hereunder
or of any portion thereof, prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed, if any;
(b) The completion of any registration or other qualification
of such shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory agency, which the Company shall in its sole discretion determine to
be necessary or advisable;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency which the Company shall in its sole
discretion determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Company from time to time may establish for
reasons of administrative convenience.
ARTICLE VII
Termination, Amendment, and Modification of Plan
The Board may at any time terminate, and may at any time and from time
to time and in any respect amend or modify, the Plan; provided, however, that no
such action of the Board without approval of the shareholders of the Company may
increase the total number of shares of Stock subject to the Plan except as
contemplated in Section 4.3 hereof or alter the class of persons eligible to
receive Options under the Plan, and provided further that no termination,
amendment, or modification of the Plan shall without the written consent of the
Optionee of such Option adversely affect the rights of the Optionee with respect
to an outstanding Option or the unexercised portion thereof.
Notwithstanding any other provision in this Plan, the Company's primary
federal bank regulator shall at any time have the right to direct the Company to
require Optionees to exercise their
7
<PAGE> 8
Options or forfeit their Options if the Company's capital falls below the
minimum requirements, as determined by such federal bank regulator.
ARTICLE VIII
Miscellaneous
8.1 Other Compensation Plans. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or its Subsidiaries, nor shall the Plan preclude the Company or its
Subsidiaries from establishing any other forms of incentive or other
compensation for directors or officers of the Company or its Subsidiaries.
8.2 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
8.3 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
8.4 Applicable Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Florida.
8.5 Headings, etc., No Part of Plan. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.
8.6 Severability. If any provision or provisions of this Plan shall be
held to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
IN WITNESS WHEREOF, the undersigned Chairman of the Board of the
Company has signed this Plan for and on behalf of the Company.
------------------------------
H. R. Foxworthy
Chairman of the Board
8
<PAGE> 1
EXHIBIT 10.4
SUNCOAST BANCORP, INC.
EMPLOYEE STOCK OPTION PLAN
ARTICLE I
Definitions
As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
(a) "Board" or "Board of Directors" shall mean the board of
directors of the Company.
(b) "Change of Control" shall mean (i) the acquisition, other
than from the Company, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Company Voting Securities"),
provided, however, that any acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of the Company or
its subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by the
individuals and entities who were the beneficial owners of the Company Voting
Securities immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of the
Company Voting Securities shall not constitute a Change of Control; or (ii)
individuals who, as of the date hereof, constitute the Board (as of the date
hereof the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purposes, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the Directors of the Company (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act); or (iii) approval by the
shareholders of the Company of a reorganization, merger or consolidation, in
each case, with respect to which the individuals and entities who were the
beneficial owners of the Company Voting Securities immediately prior to such
reorganization, merger or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or a complete
<PAGE> 2
liquidation or dissolution of the Company or of the sale or other disposition of
all or substantially all of the assets of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended, unless otherwise specifically provided herein.
(d) "Company" shall mean Suncoast Bancorp, Inc., a Florida
corporation, and its successors.
(e) "Disinterested Person" shall have the meaning attributable
to such term in Rule 16b-3 under the Securities Exchange Act of 1934, or any
successor provision thereto.
(f) "Employee" shall mean any individual who is employed with
the Company or any of its Subsidiaries as an officer or employee.
(g) "Incentive Stock Option" shall have the meaning given to it
by Section 422 of the Code.
(h) "Nonstatutory Stock Option" shall mean any Option granted by
the Company pursuant to this Plan which is not an Incentive Stock Option.
(i) "Option" shall mean an option to purchase Stock granted by
the Company pursuant to the provisions of this Plan.
(j) "Option Price" shall mean the purchase price of each share
of Stock subject to Option, as defined in Section 5.2 hereof.
(k) "Optionee" shall mean an Employee who has received an Option
granted by the Company hereunder.
(l) "Plan" shall mean this Suncoast Bancorp, Inc. Employee Stock
Option Plan.
(m) "Service" shall mean the tenure of an individual as an
Employee of the Company or any of its Subsidiaries or any predecessor (including
tenure with a corporation or other entity prior to the date that it became a
Subsidiary).
(n) "Stock" shall mean the common stock of the Company, par
value $.01 per share, or, in the event that the outstanding shares of Stock are
hereafter changed into or exchanged for shares of a different class of stock or
securities of the Company or some other corporation, such other stock or
securities.
(o) "Stock Option Agreement" shall mean the agreement between
the Company and the Optionee under which the Optionee may purchase Stock
pursuant to the Plan.
2
<PAGE> 3
(p) "Stock Option Committee" shall mean the committee
administering the Plan, pursuant to Article III hereof.
(q) "Subsidiary" shall mean any corporation or other entity
which qualifies as a subsidiary of a corporation under the definition of
"subsidiary corporation" contained in Section 424(f) of the Code.
ARTICLE II
The Plan
2.1 Name. This plan shall be known as the "Suncoast Bancorp, Inc.
Employee Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to advance the interests of the
Company and its shareholders by affording to Employees an opportunity to acquire
or increase their proprietary interest in the Company by the grant of Options to
such Employees under the terms set forth herein. By encouraging such Employees
to become owners of Stock of the Company, the Company seeks to motivate, retain,
and attract those highly competent individuals upon whose judgment, initiative,
leadership, and continued efforts the success of the Company and its
Subsidiaries in large measure depends.
2.3 Effective Date. The Plan shall become effective on October 15, 1998
(which is the same date the Plan was adopted by the Company's shareholders and
Board of Directors).
2.4 Participants. Only Employees of the Company and its Subsidiaries
shall be eligible to receive Options under the Plan.
ARTICLE III
Plan Administration
3.1 Stock Option Committee. This Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the "Stock
Option Committee"), which shall consist of at least two members of the Board who
are Disinterested Persons and who are each an "outside director" (as such term
is used in Treasury Regulation Section 1.162-27(e)(3)) during the time that they
serve on such Stock Option Committee.
3.2 Power of the Stock Option Committee. The Stock Option Committee
shall have full authority and discretion: (a) to determine, consistent with the
provisions of this Plan, which of the
3
<PAGE> 4
Employees will be granted Options to purchase any shares of Stock which may be
issued and sold hereunder as provided in Section 4.1 hereof, the times at which
Options shall be granted, and the number of shares of Stock covered by each
Option; (b) to determine the Option Price (subject to Section 5.2 hereof) and
other terms and provisions of each respective Stock Option Agreement, which need
not be identical; (c) to determine whether the Options granted pursuant to this
Plan shall be Incentive Stock Options or Nonstatutory Stock Options; (d) to
construe and interpret the Plan; and (e) to make all other determinations and
take all other actions deemed necessary or advisable for the proper
administration of the Plan. All such actions and determinations shall be
conclusively binding upon all persons for all purposes. Unless otherwise
indicated by the Stock Option Committee, Options granted pursuant to this Plan
shall be Incentive Stock Options.
ARTICLE IV
Shares of Stock Subject to Plan
4.1 Limitations. Subject to adjustment pursuant to the provisions of
Section 4.3 hereof, the number of shares of Stock which may be issued and sold
hereunder pursuant to Stock Option Agreements shall not exceed twenty eight
thousand (28,000) shares. Shares subject to Options which terminate or expire
prior to exercise shall be available for future Options.
4.2 Options Granted Under Plan. Shares of Stock with respect to which an
Option granted hereunder shall have been exercised shall not again be available
for Option hereunder. If Options granted hereunder shall terminate for any
reason without being wholly exercised, then the Stock Option Committee shall
have the discretion to grant new Options to Optionees hereunder covering the
number of shares to which such terminated Options related.
4.3 Stock Adjustments; Mergers. Notwithstanding Section 4.1, in the
event the outstanding shares of Stock are increased or decreased or changed into
or exchanged for a different number or kind of shares or other securities of the
Company or of any other corporation by reason of any merger, sale of stock,
consolidation, liquidation, recapitalization, reclassification, stock split up,
combination of shares, or stock dividend, the total number of shares set forth
in Section 4.1 shall be proportionately and appropriately adjusted by the Board.
If the Company continues in existence, the number and kind of shares that are
subject to any Option and the Option Price per share shall be proportionately
and appropriately adjusted without any change in the aggregate price to be paid
therefor upon exercise of the Option. If the Company will not remain in
existence or a majority of its Stock will be purchased or acquired by a single
purchaser or group of purchasers acting together, then the Board may (i) declare
that all Options shall terminate 30 days after the Board gives written notice to
all Optionees of their immediate right to exercise all Options then outstanding
(without regard to limitations on exercise otherwise contained in the Options),
or (ii) notify all Optionees that all Options granted under the Plan shall apply
with appropriate adjustments as determined by the Board to the securities of the
successor corporation to which holders of the numbers of shares subject to such
Options would have been entitled, or (iii) some combination of aspects of (i)
and (ii). The
4
<PAGE> 5
determination by the Board as to the terms of any of the foregoing adjustments
shall be conclusive and binding. Any fractional shares resulting from any of the
foregoing adjustments under this section shall be disregarded and eliminated.
4.4 Change of Control. Upon a Change of Control, all Options granted
under the Plan shall become exercisable immediately notwithstanding the
provisions of the respective Option agreements regarding exercisability.
ARTICLE V
Options
5.1 Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting of the Stock Option Committee authorizing the
same and by a written Stock Option Agreement dated as of the date of grant and
executed by the Company and the Optionee, which Stock Option Agreement shall set
forth such terms and conditions as may be determined by the Stock Option
Committee to be consistent with the Plan and shall indicate whether the Option
that it evidences is intended to be an Incentive Stock Option or a Nonstatutory
Stock Option.
5.2 Option Price. The Option Price of each share of Stock subject to
Option shall not be less than the fair market value of the Stock on the date of
grant. If the Stock is traded on a national securities exchange or on the NASDAQ
National Market System ("NMS") at the date of grant, then the fair market value
of the Stock on the date of grant shall be equal to the closing price of such
Stock as quoted on such exchange or market as of the trading day immediately
preceding the effective date of such grant. If the Stock is not traded on a
national securities exchange or the NMS at the date of grant, then the fair
market value of the Stock on the date of grant shall be determined in good faith
by the Board of Directors using any reasonable method, which shall include
consideration of market quotations to the extent available.
5.3 Option Exercise. Options may be exercised in whole or in part from
time to time with respect to whole shares only, within the period permitted for
the exercise thereof. Notwithstanding any other provision in this Plan, no
option granted under the Plan may be exercised more than ten (10) years after
the date on which it is granted. Options shall be exercised by: (i) written
notice of intent to exercise the Option with respect to a specific number of
shares of Stock which is delivered by hand delivery or registered or certified
mail, return receipt requested, to the Company at its principal office; and (ii)
payment in full to the Company at such office of the amount of the Option Price
for the number of shares of Stock with respect to which the Option is then being
exercised. Payment of the Option Price shall be made in cash, certified check,
cashier's check, or personal check (and if made by personal check the shares of
Stock issued upon exercise of the Option shall be held by the Company until the
check has cleared); provided, however, that if at the time of exercise of the
Option the Stock is traded on a national securities exchange or on the NMS, all
or part of the Option Price may also be paid by delivery to the Company of
shares of Stock previously acquired by the
5
<PAGE> 6
Optionee, which shall be valued for such purpose at the closing price of such
Stock as quoted on such exchange or market as of the trading day immediately
preceding the date of exercise. In addition to and at the time of payment of the
Option Price, the Optionee shall, if and to the extent requested by the Company,
pay to the Company in cash the full amount of all federal, state, and local
withholding or other employment taxes, if any, applicable to the taxable income
of the Optionee resulting from such exercise, and any sales, transfer, or
similar taxes imposed with respect to the issuance or transfer of shares of
Stock in connection with such exercise.
5.4 Nontransferability of Option. No Option shall be transferred by an
Optionee otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder (a
"Qualified Domestic Order"). During the lifetime of an Optionee, the Option
shall be exercisable only by the Optionee or the Optionee's legal guardian or
personal representative.
5.5 Effect of Death, Disability, Retirement, or Other Termination of
Service.
(a) If an Optionee's Service with the Company and its
Subsidiaries shall be terminated for "cause," as defined
in Section 5.5(b) hereof, then no Options held by such
Optionee, which are unexercised in whole or in part, may
be exercised on or after the date on which such Optionee
is first notified in writing by the Company of such
termination for cause.
(b) For purposes of this Section 5.5, termination for
"cause" shall mean termination for the Optionee's
personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, violation of
any law, rule, or regulation (other than traffic
violations or similar offenses) affecting the Company or
its Subsidiaries, violation of any agreement or order
with any bank regulatory agency, or failure by the
Optionee after receipt of written notice from the
Company to perform Optionee's stated duties with the
Company or its Subsidiaries.
(c) If an Optionee's Service with the Company and its
Subsidiaries shall be terminated for any reason other
than for cause (as defined in Section 5.5(b) hereof) and
other than normal or early retirement at or after age
fifty-five (55) or the disability (as defined in Section
5.5(f) hereof) or death of the Optionee, then: (i) no
Options held by such Optionee which are unexercised in
whole or in part may be exercised on or after the
effective date of such termination or, if later, ten
(10) days after the date that the Optionee, if
terminated by the Company and its Subsidiaries, receives
written notice of termination; and (ii) the Stock Option
Committee may, but shall not be obligated to, allow the
Optionee to exercise within such time any or all of the
Options, if any, held by the Optionee which would not
yet otherwise be exercisable.
6
<PAGE> 7
(d) If an Optionee's Service with the Company and its
Subsidiaries shall be terminated by reason of normal or
early retirement at or after age fifty-five (55), then
the Optionee shall have the right to exercise the
Optionee's Options for ninety (90) days after the date
of such termination, but only to the extent that such
Options were exercisable at the date of such
termination; provided, however, that the Stock Option
Committee may, but shall not be obligated to, allow such
Optionee to exercise within such time any or all of the
Options, if any, held by the Optionee which would not
yet otherwise be exercisable.
(e) If an Optionee's Service with the Company and its
Subsidiaries shall be terminated by reason of the death
or disability (as defined in Section 5.5(f) hereof) of
the Optionee, then the personal representative or
administrator of the estate of the Optionee or the
person or persons to whom an Option granted hereunder
shall have been validly transferred by the personal
representative or administrator pursuant to the
Optionee's will or the laws of descent and distribution,
as the case may be, shall have the right to exercise all
of the Optionee's Options for ninety (90) days after the
date of such termination, including any Options not yet
otherwise exercisable as of the date of such
termination.
(f) For purposes of this Section 5.5, the terms "disability"
and "disabled" shall have the meaning set forth in the
principal disability insurance policy or similar program
then maintained by the Company on behalf of Employees
or, if no such policy or program is then in existence,
the meaning then used by the United States Government in
determining persons eligible to receive disability
payments under the social security system of the United
States.
(g) No transfer of an Option by the Optionee by will, the
laws of descent and distribution, or a Qualified
Domestic Order shall be effective to bind the Company
unless the Company shall have been furnished with
written notice thereof and an authenticated copy of the
will or the Qualified Domestic Order and/or such other
evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions of
such Option.
5.6 Rights as Shareholder. An Optionee or a transferee of an Option
shall have no rights as a shareholder with respect to any shares of Stock
subject to such Option prior to the purchase of such shares by exercise of such
Option as provided herein.
5.7 Investment Intent. Upon or prior to the exercise of all or any
portion of an Option, the Optionee shall furnish to the Company in writing such
information or assurances as, in the Company's opinion, may be necessary to
enable it to comply fully with the Securities Act of 1933, as amended, and the
rules and regulations thereunder and any other applicable statutes, rules, and
7
<PAGE> 8
regulations. Without limiting the foregoing, if a registration statement is not
in effect under the Securities Act of 1933, as amended, with respect to the
shares of Stock to be issued upon exercise of an Option, the Company shall have
the right to require, as a condition to the exercise of such Option, that the
Optionee represent to the Company in writing that the shares to be received upon
exercise of such Option will be acquired by the Optionee for investment and not
with a view to distribution and that the Optionee agree, in writing, that such
shares will not be disposed of except pursuant to an effective registration
statement, unless the Company shall have received an opinion of counsel
reasonably acceptable to it to the effect that such disposition is exempt from
the registration requirements of the Securities Act of 1933, as amended. The
Company shall have the right to endorse on certificates representing shares of
Stock issued upon exercise of an Option such legends referring to the foregoing
representations and restrictions or any other applicable restrictions on resale
or disposition as the Company, in its discretion, shall deem appropriate.
ARTICLE VI
Incentive Stock Options
6.1 Requirements. All Incentive Stock Options granted pursuant to the
terms of this Plan shall be subject to the additional limitations and
restrictions as set forth in the Code and in this Article VI. Any Option granted
pursuant to this Plan which does not fulfill all of the provisions of this
Article VI shall not be an Incentive Stock Option and thus shall be a
Nonstatutory Stock Option.
6.2 Grant Period. All Incentive Stock Options granted hereunder must be
granted within ten (10) years from the Effective Date set forth in Section 2.3
which represents the earlier of: (a) the date the Plan was adopted by the Board;
or (b) the date the Plan is approved by the shareholders of the Company.
6.3 Eligibility. The Stock Option Committee shall determine which
Employees shall receive Incentive Stock Options. No member of the Stock Option
Committee shall be eligible to receive Incentive Stock Options. Incentive Stock
Options may not be granted to any Employee who, at the time the Incentive Stock
Option is granted, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company unless: (a)
such Incentive Stock Option by its terms is not exercisable after the expiration
of five (5) years from the date of its grant; and (b) the Option Price of the
shares covered by such Incentive Stock Option is not less than one hundred and
ten percent (110%) of the fair market value of such shares on the date that such
Incentive Stock Option is granted.
6.4 Special Rule Regarding Exercisability. If, for any reason, any
Option granted hereunder which is intended to be an Incentive Stock Option shall
exceed the limitation on exercisability contained in the Code at any time, such
Options shall nevertheless be exercisable, but: (a) any exercise of such Option
shall be deemed to be an exercise of an Incentive Stock Option first until the
portion of such Option qualifying as an Incentive Stock Option shall have been
exercised
8
<PAGE> 9
in full; and (b) the portion of such Option in excess of the foregoing
limitation on exercisability shall be deemed to be a Nonstatutory Stock Option.
ARTICLE VII
Nonstatutory Stock Options
The Stock Option Committee may grant Nonstatutory Stock Options under
this Plan. Such Nonstatutory Stock Options must fulfill all of the requirements
of all provisions of this Plan except for those contained in Article VI hereof.
Subject to the approval and acceptance of the Stock Option Committee in its
discretion, any Employee who is granted a Nonstatutory Stock Option pursuant to
this Plan shall be entitled to elect to surrender all or any part of such
Nonstatutory Stock Option to the Company and receive, in exchange, an Incentive
Stock Option covering the same number of shares as those with respect to which
the Nonstatutory Stock Option was surrendered. Any such election shall be valid
and effective only upon its approval and acceptance by the Stock Option
Committee, which may impose additional terms as a condition to its approval.
ARTICLE VIII
Stock Certificates
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted hereunder
or of any portion thereof, prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed, if any;
(b) The completion of any registration or other qualification
of such shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory agency, which the Company shall in its sole discretion determine to
be necessary or advisable;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency which the Company shall in its sole
discretion determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Company from time to time may establish for
reasons of administrative convenience.
9
<PAGE> 10
ARTICLE IX
Termination, Amendment, and Modification of Plan
The Board may at any time terminate, and may at any time and from time
to time and in any respect amend or modify, the Plan; provided, however, that no
such action of the Board without approval of the shareholders of the Company may
increase the total number of shares of Stock subject to the Plan except as
contemplated in Section 4.3 hereof or alter the class of persons eligible to
receive Options under the Plan, and provided further that no termination,
amendment, or modification of the Plan shall without the written consent of the
Optionee of such Option adversely affect the rights of the Optionee with respect
to an outstanding Option or the unexercised portion thereof.
Notwithstanding any other provision in this Plan, the Company's primary
federal bank regulator shall at any time have the right to direct the Company to
require Optionees to exercise their Options or forfeit their Options if the
Company's capital falls below the minimum requirements, as determined by such
federal bank regulator.
ARTICLE X
Miscellaneous
10.1 Continued Employment Not Presumed. This Plan and any document
describing this Plan and the grant of any Option hereunder shall not give any
Optionee or other employee a right to continued employment by the Company or its
Subsidiaries or affect the right of the Company or its Subsidiaries to terminate
the employment of any such person with or without cause.
10.2 Other Compensation Plans. The adoption of the Plan shall not
affect any other stock option or incentive or other compensation plans in effect
for the Company or its Subsidiaries, nor shall the Plan preclude the Company or
its Subsidiaries from establishing any other forms of incentive or other
compensation for directors, officers, or employees of the Company or its
Subsidiaries.
10.3 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
10.4 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
10.5 Applicable Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Florida.
10.6 Headings, etc., No Part of Plan. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.
10.7 Severability. If any provision or provisions of this Plan shall be
held to be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
10
<PAGE> 1
EXHIBIT 10.5
LEASE AGREEMENT
LESSOR: PALMER MEDICAL CENTER, LTD.
921 South Beneva Road
Sarasota, FL 34232
LESSEE: ____________ BANK (TO BE FORMED).
W I T N E S S E T H:
In consideration of the mutual promises, covenants and conditions
herein contained, and rents to be paid by Lessee, and Lessee hereby leases from
Lessor, certain Premises in the office and complex located on Potter Park Drive,
Sarasota, Florida, commonly known as Palmer Medical Center, for the term, at the
rentals and upon the terms and conditions hereinafter set forth:
1. PREMISES. The Premises leased hereunder are located at 8522 Potter
Park Drive, Sarasota, Florida 34238, and consist of approximately 4,000 square
feet (hereinafter referred to as the "Premises"). Lessor hereby leases, lets and
demises the Premises unto Lessee, and Lessee hereby leases the Premises from
Lessor. The Premises will be within the highlighted area on the site plan
attached hereto as Exhibit A. Exact location of the 4,000 S.F. will be
determined within 60 days of lease execution.
2. COMMENCEMENT DATE. The parties acknowledge that this Lease shall be
legally binding as of the day on which it is fully executed by Lessor and
Lessee. The commencement date of the lease shall be the date of the Certificate
of Occupancy as issued by Sarasota County.
3. TERM. The term of this Lease shall be for a period of Five (5) Years
beginning as of the Commencement Date set forth above.
4. BASE RENT. During the initial term of this Lease, Lessee shall pay
to Lessor as annual base rent for the Premises the amount of Seventy-Two
Thousand and 00/100 dollars ($72,000.00) per year. The rent shall be payable in
equal monthly installments of Six Thousand and 00/100 dollars ($6,000.00). The
rent shall be gross to Lessor. Lessor shall pay all additional rent charges.
Lessee shall pay all costs of electricity, telephone and interior janitorial.
The rent shall be paid in advance on the first day of each month, without
demand. The rent for the first month shall be prorated as of the date the rent
commences.
In addition to base rent, Lessee shall pay to Lessor, monthly, a sum
equal to any sales tax, tax on rental, and any other charges or impositions now
in existence or imposed hereafter based upon the privilege of renting the
Premises.
5. ESCALATION. The base rent shall be increased four percent (4%) per
year, beginning with the first anniversary date of the initial term of the
Lease, and any Option period agreed to.
6. ADVANCE RENT AND SECURITY DEPOSIT. Upon full execution of this
Lease, and notwithstanding other provisions in this Lease to the contrary,
Lessee shall tender to Lessor the amount of Six Thousand Four Hundred Twenty and
00/100 dollars ($6,420.00), representing payment in advance including tax, for
the first month of the initial term of this Lease and a security deposit, in the
amount of Six Thousand and 00/100 dollars ($6,000.00), representing one month's
rent. All other rental payments shall be made in accordance with paragraph 4
above.
1
<PAGE> 2
7. USE. Lessee, its successors and assigns, shall use the Premises
exclusively for Business Offices, Banking, and for other uses approved by
Lessor, which approval shall not be withheld unreasonably. Lessee shall comply
with all laws, ordinances, rules and regulations of applicable governmental
authorities respecting the use, operation and activities of the Premises, or
permit any nuisance thereon. Lessee shall not make any use of the Premises which
would make void or voidable any policy of fire or extended coverage insurance
pertaining to the Premises. Lessee shall not abandon the Premises or leave said
Premises vacant, or abandon or cease business operations at the Premises during
the term of this Lease. Lessee shall not store or place any materials whatsoever
outside the Premises.
8. SIGNS AND DISPLAYS. Lessee shall not place or suffer to be placed or
maintained upon any door, roof, wall or window of the Premises, any sign,
awning, canopy or advertising material or other thing, and shall not place or
maintain any decoration, lettering or advertising material on the glass of any
window or door of the Premises, without Lessor's prior written consent, which
consent shall not be withheld unreasonably provided Lessee's proposed sign or
display meets the uniform design standards established by the Lessor.
9. MERCHANDISE DISPLAY. Lessee shall not have the right to display any
merchandise on the exterior of the Premises nor shall Lessee maintain any
loudspeaker, voicemaking or other sound projection device in such a manner as to
be audible to anyone outside the Premises, nor shall Lessee use or display any
flashing lights visible to anyone outside of the Premises.
10. REPAIRS, MAINTENANCE AND SURRENDER. Lessor shall maintain exterior
walls, roof and parking area. Lessee shall repair, service, keep and maintain
the Premises, including all fixtures, doors, walls, ceilings, floors, equipment,
appurtenances, plumbing fixtures and restrooms, in good and substantial repair
during the entire term of this Lease, and shall replace all glass and windows
and doors broken during the Lease term, but such agreement of Lessee shall not
apply to any damage caused by fire or other casualty covered by standard fire
and extended coverage insurance maintained by Lessor. Lessee shall promptly make
repairs at its own expense to the exterior or interior of the Premises if
damaged by Lessee, its agents, employees or business invitees. Lessee shall be
responsible to pay for and obtain a service contract which will cause quarterly
preventative maintenance of the air conditioning, heating, condenser and air
handling equipment servicing the Premises.
At the end of the term or upon termination of this Lease, Lessee
shall deliver of the Premises and all erections, alterations and additions made
to or upon the same, in good condition and repair, and in a broom-clean
condition, with all glass and windows and doors intact, and with all signs,
lettering, personal property, goods and effects belonging to Lessee or anyone
claiming through or under Lessee removed.
11. ALTERATION TO THE PREMISES AND REMOVAL OF INSTALLATIONS.
Lessee shall not make any substantial alteration or addition to the Premises,
including heating, air conditioning, electrical and plumbing systems, without
first obtaining the express prior written consent of Lessor, which consent shall
not be withheld unreasonably.
12. INSPECTION. Lessor or Lessor's representatives shall have the right
at any reasonable time to enter upon the Premises for the purposes of inspection
or otherwise to protect Lessor's interest, but the right of Lessor to enter or
do anything else to protect his interest, or the exercise or failure to exercise
said right, shall in no way diminish Lessee's obligations or enlarge Lessor's
obligations under this Lease or affect any right of Lessor, or create any duty
or liability by Lessor to Lessee or any third party.
13. CASUALTY DAMAGE. Lessee shall maintain at all times during the term
of this Lease any renewals thereof, fire, flood, casualty coverage in an
adequate amount insuring the Lessee's property located on or about the Premises
against loss by fire, flood or other casualty, and additionally, shall carry
plate-glass insurance on all glass in the Premises which shall be payable to
Lessor as its interest may appear. Certified copies of such insurance policies
shall be delivered by Lessee to Lessor prior to occupancy of the Premises.
2
<PAGE> 3
14. PUBLIC LIABILITY INSURANCE. Lessor shall carry adequate public
liability insurance covering the parking areas and walkways of the business
center. Lessee shall carry public liability insurance with respect to the
interior of the Premises in an amount equal to at least three hundred thousand
dollars ($300,000.00) per person and one million dollars ($1,000,000.00) per
occurrence. Additionally, Lessee shall maintain at all times during the term of
this Lease any renewals thereof, workmens' compensation insurance for the
benefit of all employees entering upon the Premises as the result of or in
connection with their employment of Lessee.
15. DEFAULT. In the event Lessee shall (a) fail to make any rental or
other payment due hereunder within ten (10) days following the day on which such
rental or other payment was due, or (b) if Lessee shall neglect or fail to
perform or observe any of the other covenants or undertakings herein on its part
to be performed or observed and such neglect or failure shall continue for
thirty (30) days after notice to it from Lessor; or (c) if the default is other
than a default under clause (a) above, or clauses (d) through (i) below, and is
such that it cannot be cured within thirty (30) days, but is capable of being
cured, and Lessee does not within said thirty (30) day period commence to cure
such default, continue to do so diligently, and thereafter complete such cure
within not more than ninety (90) days following notice of default; or (d) if
proceedings for corporate or other reorganization or arrangement under the
bankruptcy laws of the United States, or any laws amendatory thereof or
supplemental thereto, shall be filed by Lessee, or any guarantor of Lessee's
obligations ("Guarantor"); or (e) if any other proceedings are instituted by the
Lessee or any Guarantor under the bankruptcy laws, or any laws amendatory
thereof or supplemental thereto; or (f) if any other proceedings shall be
instituted against the Lessee or any Guarantor under bankruptcy laws or any
insolvency law and not be dismissed within thirty (30) days; or (g) if the
Lessee or any Guarantor shall execute an assignment of its property for the
benefit of its creditors; or (h) if a receiver or other similar officer for
Lessee or any Guarantor shall be appointed and not be discharged within thirty
(30) days; or (i) if the estate hereby created shall be taken by execution or by
other process of law and is then, except in the case of a default under clauses
(d) or (e) above, in which event this Lease shall terminate automatically,
Lessor may, immediately or at any time thereafter (notwithstanding any license
or waiver of any former breach or waiver of the benefit hereof, or consent in a
former instance) terminate this Lease by written notice to Lessee.
16. QUIET ENJOYMENT. Lessor covenants that so long as Lessee pays the
rent reserved in this Lease and performs it agreements hereunder, Lessee shall
have the right to quietly enjoy and use the Premises for the term hereof,
subject only to the provisions of this Lease.
17. BROKER. Lessee represents that it has not dealt with any person in
connection with the Premises or the negotiation or execution of this Lease other
than officers or employees of Lessor, Starling Realty, Inc., or except as set
forth on any separate brokerage agreement executed by the parties and attached
hereto. Lessee shall indemnify and save harmless Lessor from and against all
claims, liabilities, costs and expenses incurred as a result of any breach of
the foregoing representation by Lessee.
18. NOTICES. All notices required or contemplated by this Lease shall
be in writing and shall be delivered in person or by United States Certified
Mail, Return Receipt Requested, addressed to the party to whom such notice is
directed, at the addresses given above. By giving at least two (2) days prior
written notice to the other party, either party may change its address for
notices hereunder.
19. OPTION TO RENEW. Provided Lessee is not then in default, Lessee
shall have the right to renew this Lease by giving Lessor written notice, not
less than one hundred eighty (180) days prior to the expiration of the initial
Term of this Lease, of Lessee's exercise of its right to renew this Lease for an
additional term of five (5) years. Provided Lessee is not then in default,
Lessee shall have the right to renew this Lease again by giving Lessor written
notice, not less than one hundred eighty (180) days prior to the expiration of
the first renewal Term of this Lease, of Lessee's exercise of its right to renew
this Lease for one more additional term of five (5) years. Any renewal of this
lease shall be subject to all conditions, provisions, and covenants of the
Lease.
20. CONSTRUCTION OF INTERIOR IMPROVEMENTS. Lessor agrees to give to
Lessee an allowance of $100,000.00 toward Lessee's Interior Improvements. Lessor
shall install concrete floor slab and drywall on bottom of trusses. Lessee shall
be responsible for any and all cost associated with
3
<PAGE> 4
completing the Premises including, but not limited to, architectural fees,
construction cost, MSTU fees, and the like. Lessor shall complete the
improvements under a separate contract with Fred M. Starling, Inc. Lessee shall
review and approve, in writing, all plans and cost associated with improvements.
An estimate shall be provided by Lessor of cost. Contractor shall be entitled to
a fee of 10% of all cost associated with improvements.
21. RADON GAS. Florida law requires that the following notice be
provided on at least one document form or application executed at the time of or
prior to execution of a rental agreement for any building: "Radon is a naturally
occurring radioactive gas that, when it has accumulated in a building in
sufficient quantities may present health risks to persons who are exposed to it
over time. Levels of radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional information regarding radon and radon
testing may be obtained from your County Public Health Unit."
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be executed as
required by law on the day and year first above written.
LESSOR:
PALMER MEDICAL CENTER, LTD
WITNESS:
- ---------------------------------- ---------------------------
- ----------------------------------
Executed by Lessor on
, 19
----------------- ---
LESSEE:
BANK
-----------------
WITNESS:
- ---------------------------------- ---------------------------
- ----------------------------------
Executed by Lessor on
, 19
----------------- ---
4
<PAGE> 5
EXHIBIT A
5
<PAGE> 1
EXHIBIT 21
LIST OF SUBSIDIARIES OF SUNCOAST BANCORP, INC.
Suncoast National Bank
<PAGE> 1
EXHIBIT 23.1
CONSENT OF HILL, BARTH & KING, INC., INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form SB-2 and related Prospectus of Suncoast Bancorp,
Inc. for the registration of 805,000 shares of its common stock and to the
incorporation therein of our report dated November 20, 1998 relating to the
financial statements of Suncoast Bancorp, Inc. as of October 31, 1998 and for
the period from April 1, 1998 (date of inception) to October 31, 1998.
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
January 6, 1999
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE AUDITED FINANCIAL
STATEMENTS DATED OCTOBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 1,951
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 58,011
<DEPOSITS> 0
<SHORT-TERM> 81,197
<LIABILITIES-OTHER> 47,829
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> (71,005)
<TOTAL-LIABILITIES-AND-EQUITY> 58,011
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 1,927
<INTEREST-INCOME-NET> (1,927)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 69,079
<INCOME-PRETAX> (71,006)
<INCOME-PRE-EXTRAORDINARY> (71,006)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (71,006)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
