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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1998
REGISTRATION NO. 333-42189
333-42191
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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MEGABANK FINANCIAL CORPORATION MB CAPITAL I
(Name of small business issuer in its charter) (Name of small business co-issuer in its charter)
COLORADO DELAWARE
(State or jurisdiction of incorporation or (State or jurisdiction of incorporation or
organization) organization)
6712 6719
(Primary Standard Industrial Classification Code (Primary Standard Industrial Classification Code
Number) Number)
84-0949755 84-6322538
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
8100 EAST ARAPAHOE ROAD 8100 EAST ARAPAHOE ROAD
ENGLEWOOD, COLORADO 80112 ENGLEWOOD, COLORADO 80112
(303) 740-2265 (303) 740-2265
(Address and telephone number of principal executive (Address and telephone number of principal executive
offices) offices)
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THOMAS R. KOWALSKI, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
8100 EAST ARAPAHOE ROAD
ENGLEWOOD, COLORADO 80112
(303) 740-2265
(Name, address and telephone number of agent for service)
Copies to:
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REID A. GODBOLT, ESQ. MATTHEW C. BOBA, ESQ.
JONES & KELLER, P.C. CHAPMAN AND CUTLER
1625 BROADWAY, SUITE 1600 111 WEST MONROE STREET
DENVER, COLORADO 80202 CHICAGO, ILLINOIS 60603
(303) 573-1600 (312) 845-3000
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APPROXIMATE DATE OF COMMENCEMENT 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. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED(1) REGISTERED PER UNIT(1) PRICE REGISTRATION FEE
- - -----------------------------------------------------------------------------------------------------------------------------------
% Cumulative Preferred Securities of MB
Capital I....................................... 1,200,000 $10.00 $12,000,000 $3,540
- - -----------------------------------------------------------------------------------------------------------------------------------
% Junior Subordinated Debentures of MegaBank
Financial Corporation........................... (2) -- -- --
- - -----------------------------------------------------------------------------------------------------------------------------------
Guarantee of MegaBank Financial Corporation with
respect to the % Cumulative Preferred
Securities(3)................................... (3) -- -- --
- - -----------------------------------------------------------------------------------------------------------------------------------
Total Registration Fee............................ -- -- -- $3,540
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(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(a).
(2) The % Junior Subordinated Debentures (the "Junior Subordinated
Debentures") will be purchased by MB Capital I ("MB Capital") with the
proceeds of the sale of the % Cumulative Preferred Securities (the
"Preferred Securities"). The Junior Subordinated Debentures may later be
distributed for no additional consideration to the holders of the Preferred
Securities upon MB Capital's dissolution and the distribution of its assets.
(3) This Registration Statement is deemed to cover the Junior Subordinated
Debentures of MegaBank Financial Corporation (the "Company"), the rights of
holders of the Junior Subordinated Debentures of the Company under the
Indenture, the rights of holders of the Preferred Securities under the Trust
Agreement, the Guarantee, the Expense Agreement entered into by the Company
and certain backup undertakings as described herein which, taken together,
fully, irrevocably and unconditionally guarantee all of the respective
obligations of MB Capital under the Preferred Securities. No separate
consideration will be received for the Guarantee or such backup
undertakings.
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Directors, officers, employees and agents of the Company and/or the Bank
may be entitled to benefit from the indemnification provisions contained in the
Colorado Business Corporation Act, Title Seven of the Colorado Revised Statutes
(the "CBCA"), the Company's Articles of Incorporation and certain
indemnification agreements. In addition, certain provisions in the CBCA and the
Articles of Incorporation limit the liability of directors of the Company. The
general effect of these provisions is summarized below:
Article 109 of the CBCA permits a Colorado corporation to indemnify any
person who was or is a party or is threatened to be made a party to any suit,
action or other proceeding by reason of the fact that such person 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, or other enterprise. Such indemnification may
be against expenses, including attorneys' fees, judgments, fines and other
amounts in connection with such proceeding. Indemnification is available if such
person acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, or, with respect to any
criminal action or proceeding, such person had no reasonable cause to believe
that the conduct was unlawful. Unless a court of competent jurisdiction
otherwise orders, indemnification is not available in connection with a
proceeding by or in the right of the corporation if the person is adjudged
liable to the corporation or derived an improper personal benefit. A corporation
is required to indemnify a director or officer who is wholly successful in the
defense of any such proceeding. Expenses (including attorneys' fees) incurred by
a director, officer, employee or agent of the corporation in defending any such
proceeding may be advanced by the corporation before the final disposition if
such person furnishes an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to be indemnified. Before a
corporation may indemnify or advance expenses to a person under these
provisions, the board of directors (excluding any directors who are parties to
such a proceeding), independent legal counsel appointed by the board of
directors, or the shareholders must provide authorization. A corporation may
purchase insurance against any liability of individuals for whom the corporation
may provide such indemnification. Any provisions in a corporation's articles of
incorporation, bylaws, resolutions or in a contract (except an insurance policy)
for such indemnification are valid only to the extent not inconsistent with
Article 109 of the CBCA.
Article XIII of the Company's Articles of Incorporation states that the
Company shall have all powers to indemnify and make advances in connection with
such indemnification to its directors, officers and others, provided that such
powers and the exercise thereof are consistent with the Colorado Corporation
Code (which preceded the CBCA). This Article also states that the board of
directors is authorized, without shareholder action, to exercise the Company's
powers of indemnification, whether by provision in the bylaws or otherwise.
The Bank has entered into indemnification agreements with certain of its
officers and directors in consideration of their agreement to serve in such
capacities. The terms of each agreement are identical for each such officer or
director. The indemnification agreement provides that the Bank will indemnify
and pay advances to the director or officer to the maximum extent provided in
the Bank's articles of incorporation or bylaws, subject to approval by the board
of directors and certain conditions and limitations. Such indemnification is not
available in connection with expenses, penalties or other amounts in connection
with proceedings brought by a regulatory agency resulting in the assessment of
civil money penalties of requiring the director or officer to make payments to
the Bank, nor will the Bank pay any advances in connection with a proceeding
brought by an regulatory agency. For each annual period following the date of
the indemnification agreement, the total liability of the Bank for
indemnification of all officers and directors of the bank, whether under the
agreement or otherwise, cannot exceed $1,000,000. The indemnification available
under the agreement does not limit any other indemnification which may be
available. However, indemnification under the agreement is available only after
the exhaustion of any available insurance coverage.
Section 7-108-402 of the CBCA permits a corporation, if so provided in the
articles of incorporation, to eliminate or limit the personal liability of a
director to the corporation or its shareholders for monetary
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damages for breach of fiduciary duty. However, such a provision cannot eliminate
or limit such liability arising out of a breach of the director's duty of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or knowing violations of law, unlawful distributions, or any
transaction for which the director derived an improper personal benefit. Article
XV of the Company's Articles of Incorporation provides for such elimination of
director liability.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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Securities and Exchange Commission registration fee......... $ 3,540
NASD fee.................................................... 1,700
American Stock Exchange fees................................ 15,000
Trustees' fees and expenses................................. 25,000
Legal fees and expenses..................................... 100,000
Blue Sky fees and expenses.................................. --
Accounting fees and expenses................................ 30,000
Printing expenses........................................... 65,000
Miscellaneous expenses...................................... 9,760
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Total............................................. $250,000
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All of the above items except the registration fee are estimated.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
None.
ITEM 27. EXHIBITS
(a) Exhibits
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EXHIBIT NO. DESCRIPTION
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1.1 -- Form of Underwriting Agreement(1).
3.1 -- Amended and Restated Articles of Incorporation of
MegaBank Financial Corporation(2).
3.2 -- Amended and Restated Bylaws of MegaBank Financial
Corporation(2).
4.1 -- Form of Subordinated Indenture dated ,
to be entered into between the Registrant and Wilmington
Trust Company, as Indenture Trustee(1).
4.2 -- Form of Junior Subordinated Debenture (included as an
exhibit to Exhibit 4.1).
4.3 -- Certificate of Trust of MB Capital I(1).
4.4 -- Trust Agreement of MB Capital I dated as of December 8,
1997(1).
4.5 -- Form of Amended and Restated Trust Agreement of MB
Capital I, dated , (1).
4.6 -- Form of Preferred Security Certificate of MB Capital I
(included as an exhibit to Exhibit 4.5).
4.7 -- Form of Preferred Securities Guarantee Agreement(1).
4.8 -- Form of Agreement as to Expenses and Liabilities
(included as an exhibit to Exhibit 4.5).
5.1 -- Opinion and Consent of Jones & Keller, P.C.(2).
5.2 -- Opinion and Consent of Richards, Layton & Finger,
P.A.(2).
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EXHIBIT NO. DESCRIPTION
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4.8 -- Form of Agreement as to Expenses and Liabilities
(included as an exhibit to Exhibit 4.5).
5.1 -- Opinion of Jones & Keller, P.C.(2)
5.2 -- Opinion and Consent of Richards, Layton & Finger, P.A.(2)
8.1 -- Opinion of Jones & Keller, P.C., as to certain federal
income tax matters(3).
10.1 -- Federal Funds Transactions Purchase Agreement dated
November 8, 1993 between MegaBank of Arapahoe and
Bankers' Bank of the West and renewal letter dated
October 20, 1997 from Bankers' Bank of the West(1).
10.2 -- Lease dated December 29, 1994 between Nagrom, L.L.C. and
MegaBank Financial Corporation(1).
10.3 -- Advance, Pledge and Security Agreement dated October 26,
1995 between Federal Home Loan Bank of Topeka and
MegaBank of Arapahoe(1).
10.4 -- Federal Funds line of credit agreement signed September
24, 1997 between Norwest Bank Colorado, N.A. and MegaBnk
of Arapahoe(1).
10.5 -- Consulting Agreement -- First Fidelity Corp.(1).
10.6 -- Branching Rights Purchase Agreement -- First State Bank
of Hotchkiss(1).
10.7 -- Amended and Restated Stock Purchase Agreement by and
among MegaBank Financial Corporation, Thomas R. Kowalski,
the Ryan R. Kowalski Trust, the Realtek Company Profit
Sharing Plan and Trust, Thomas Investments Partnership
and Orchard Valley Financial Corporation dated as of
November 28, 1996(1).
10.8 -- Indemnification Agreement dated July 20, 1995 between
MegaBank Financial Corporation ("MegaBank") and Raymond
L. Anilionis, Warren P. Cohen and Thomas R. Kowalski (the
"Guarantors")(1).
11.1 -- Statement re Computation of per share earnings -- see
Consolidated Financial Statements.
23.1 -- Consent of Fortner, Bayens, Levkulich & Co., P.C.(2).
23.2 -- Consent of Jones & Keller, P.C. (included in Exhibit 5.1
above).
23.3 -- Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 above).
24.1 -- Power of attorney(2).
25.1 -- Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Subordinated
Indenture(1).
25.2 -- Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Amended and Restated
Trust Agreement(1).
25.3 -- Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Preferred Securities
Guarantee Agreement(1).
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(1) Previously filed with this Registration Statement.
(2) Previously filed with Amendment No. 1 to this Registration Statement on
January 22, 1998.
(3) Filed herewith.
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event
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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 hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of the registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Englewood, State of Colorado, on this 29th day
of January, 1998.
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MB CAPITAL I MEGABANK FINANCIAL CORPORATION
By: /s/ THOMAS R. KOWALSKI By: /s/ THOMAS R. KOWALSKI
------------------------------------------------- -------------------------------------------------
Thomas R. Kowalski Thomas R. Kowalski
Administrative Trustee Chairman and Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
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SIGNATURES TITLE DATE
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/s/ THOMAS R. KOWALSKI Director, Chairman and Chief January 29, 1998
- - ----------------------------------------------------- Executive Officer (Principal
Thomas R. Kowalski Executive Officer)
/s/ THOMAS R. KOWALSKI Director, President and Chief January 29, 1998
- - ----------------------------------------------------- Operating Officer
Thomas R. Kowalski,
Attorney for
Larry A. Olsen
/s/ THOMAS R. KOWALSKI Director January 29, 1998
- - -----------------------------------------------------
Thomas R. Kowalski,
Attorney for
Raymond L. Anilionis
/s/ THOMAS R. KOWALSKI Director January 29, 1998
- - -----------------------------------------------------
Thomas R. Kowalski,
Attorney for
Dr. Donald B. Brown
/s/ THOMAS R. KOWALSKI Director January 29, 1998
- - -----------------------------------------------------
Thomas R. Kowalski,
Attorney for
William F. Sievers
/s/ THOMAS R. KOWALSKI Treasurer, Principal January 29, 1998
- - ----------------------------------------------------- Financial and Accounting
Thomas R. Kowalski, Officer
Attorney for
Hiram J. Welton
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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8.1 -- Opinion of Jones & Keller, P.C., as to certain federal
income tax matters
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EXHIBIT 8.1
JONES & KELLER, P.C. LETTERHEAD
January 29, 1998
MegaBank Financial Corporation MB Capital I
8100 East Arapahoe Road c/o MegaBank Financial Corporation
Englewood, Colorado 80112 8100 East Arapahoe Road
Englewood, Colorado 80112
Re: Opinion of Counsel Related to the Material Federal Income Tax
Consequences of the Purchase and Ownership of Preferred Securities
Issued by MB Capital I
Ladies and Gentlemen:
We have acted as special counsel to MegaBank Financial Corporation
(the "Company") in connection with the preparation and filing with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), of a Form SB-2 Registration Statement, dated December 12, 1997,
SEC File No. 333-42189, as amended on January 22 and January 29, 1998 (the
"Registration Statement"). The Registration Statement relates to the offer for
sale of 1,200,000 % Cumulative Preferred Securities (the "Preferred
Securities") of MB Capital I ("MB Capital"), a statutory business trust formed
by the Company under the laws of the State of Delaware, and the Junior
Subordinated Debentures to be issued by the Company to MB Capital in connection
with the sale of the Preferred Securities.
This opinion letter relates to the material federal income tax
consequences of the purchase and ownership of the Preferred Securities by
investors. All capitalized terms used in this opinion letter and not otherwise
defined herein are used as described in the Registration Statement. The
consequences described herein are not applicable to investors who may be
subject to special tax treatment, such as banks, real estate investment trusts,
regulated investment companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, non-United States Persons or persons that
will hold the Preferred Securities as part of a position in a "straddle" or as
part of a "hedging" or other integrated transaction. In addition, this opinion
does not include any description of any alternative minimum tax consequences or
the tax laws of any state, local or foreign government that may be applicable
to an investor.
We have examined the Registration Statement and such other documents
as we have deemed necessary to render our opinion expressed below. In our
examination of such material, we have relied upon the current and continued
accuracy of the factual matters we have considered, and we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals and the conformity to original documents of all copies of
documents submitted to us. In addition, we also have assumed that the
transactions related to the issuance of the Junior Subordinated Debentures and
the Preferred Securities will be consummated in accordance with the terms and
forms of the documents. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied
upon oral or written statements and representations of officers, trustees, and
other representatives of the Company, MB Capital and others. Should any of the
above facts, circumstances, or assumptions be subsequently determined incorrect
or inaccurate, our conclusions may vary from those set forth below and such
variance could be material.
Based on the foregoing, and assuming that MB Capital was formed and
will be maintained in compliance with the terms of the Trust Agreement it is
our opinion that:
(1) MB Capital will be classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes, and as a
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result, each beneficial owner of Preferred Securities will be treated as owning
an undivided beneficial interest in the Junior Subordinated Debentures.
(2) Stated interest on the Junior Subordinated Debentures
generally will be included in income by a Securityholder at the time such
interest income is paid or accrued in accordance with the Securityholder's
regular method of tax accounting.
(3) Gain or loss will be recognized by a Securityholder on a sale
of Preferred Securities (including a redemption for cash) in an amount equal to
the difference between the amount realized (which for this purpose, will
exclude amounts attributable to accrued interest or original issue discount not
previously included in income) and the Securityholder's adjusted tax basis in
the Preferred Securities sold or so redeemed. Gain or loss recognized by the
Securityholder on Preferred Securities will generally be taxable as capital
gain or loss.
This opinion is based upon the Internal Revenue Code of 1986, as
amended, the Treasury regulations promulgated thereunder and other relevant
authorities and law, all as in effect on the date hereof. All of the above are
subject to change or modification by subsequent legislative, regulatory,
administrative or judicial decisions which could adversely affect our opinions.
Consequently, future changes in the law, or administrative or judicial
interpretations thereof, may cause the tax treatment of the transactions
referred to herein to be materially different from that described above.
Other than the specific tax opinions set forth in this letter, no
other opinion has been rendered with respect to the tax treatment of the
proposed issuance and sale of the Junior Subordinated Debentures or the
Preferred Securities, including, but not limited to, the tax treatment of the
proposed transactions under other provisions of the Code and the regulations,
the tax treatment of any conditions existing at the time of, or effects
resulting from, the proposed transactions that are not specifically covered by
the above opinions, or the tax treatment of the proposed transactions under
state, local, foreign or any other tax laws.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and the use of our name in the Registration Statement
under the captions "Certain Federal Income Tax Consequences." In giving such
consent, we do not concede that this consent is required under Section 7 of the
Securities Act of 1933.
Very truly yours,
/s/ JONES & KELLER, P.C.
------------------------
JONES & KELLER, P.C.
8.1-2
