As filed with the Securities and Exchange Commission on
April 12, 1999
Registration No.___
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MegaBank Financial Corporation
(Exact name of registrant as specified in its charter)
Colorado 6719 84-0949755
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
8100 East Arapahoe
Englewood, Colorado 80112
(303) 740-2265
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Thomas R. Kowalski
Chairman and Chief Executive Officer
8100 East Arapahoe Road
Englewood, Colorado 80112
(303) 740-2265
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With Copies to:
Ernest J. Panasci, Esq.
SLIVKA ROBINSON WATERS & O'DORISIO, P.C.
1099 18th Street, Suite 2600
Denver, Colorado 80202
(303) 297-2600
(303) 297-2750 (FAX)
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the Registration Statement
becomes effective.
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [x ]
If this form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of 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 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.[ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount
Title of Each Class to be Price Offering of
of Regis- Per Share Price Registra-
Securities to be tered tion
Registered Fee
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no 243,551 $9.22 $2,245,540 $662.43
par value (1),(2),(3) (1),(2),(3)
- ------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for purposes of
calculating the registration fee based on the average of the
high and low prices of the Registrant's Common Stock as
reported on the Nasdaq National Market as of April 9, 1999.
(2) Represents 162,369 shares of Common Stock issued in
connection with the merger of Empire Title and Escrow
Corporation with and into MB Title Company, a wholly owned
subsidiary of the Company, and shares of Common Stock, the
estimated number of shares of Common Stock of the Company
that may be issued as part of the Post-Effective Time
Consideration to the Selling Stockholders pursuant to the
terms of the Merger Agreement and additional shares of
Common Stock that may be issued to the Selling Stockholders
if on the day preceding the day this registration statement
is declared effective by the Commission the average closing
price of the Registrant's Common Stock over the preceding
ten (10) consecutive trading days is less than $8.78
(3) The shares of Common Stock offered hereby includes the
number of shares of Common Stock issued by the Registrant at
the time of the Merger and an estimate of the number of
shares of Common Stock of the Registrant that may be issued
as part of the Post-Effective Time Consideration and that
may be issued by the Registrant if on the day preceding the
day this registration statement is declared effective by the
Commission the average closing price of the Registrant's
Common Stock over the preceding ten (10) consecutive trading
days is less than $8.78. Such number of shares is subject
to adjustment and could be materially less than the
estimated amount depending upon factors that cannot be
predicted by the Registrant at this time, including, among
other things, the future market price of the Registrant's
Common Stock. This presentation is not intended to
constitute a prediction as to the future market price of the
Registrant's Common Stock or as to the number of shares of
Common Stock issuable as part of the Post-Effective Time
Consideration. See "MegaBank Financial Corporation- Recent
Developments"; "Risk Factors" and "Plan of Distribution."
The Registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION DATED APRIL __, 1999
PROSPECTUS
- ----------
243,551 SHARES
MEGABANK FINANCIAL CORPORATION
Common Stock
(No par value per share)
__________________________
This Prospectus relates to the proposed offer and sale of up
to an aggregate of 243,551 shares of Common Stock of MegaBank
Financial Corporation (the "Common Stock") by the selling
stockholders identified under the caption "Selling Stockholders."
MegaBank Financial Corporation issued the shares to the Selling
Stockholders in connection with MegaBank Financial Corporation's
acquisition of Empire Title and Escrow Corporation which was
owned by the selling stockholders.
MegaBank Financial Corporation will pay the expenses of
registration of the shares but the Selling Stockholders will pay
any broker-dealer commissions, discounts, fees and expenses.
The Selling Stockholders may sell the shares from time to
time on the Nasdaq National Market or in private transactions, at
prevailing market prices or at privately negotiated prices.
The Common Stock is listed on Nasdaq National Market under
the symbol "MBFC." On April 9, 1999 the last reported sale price
was $9.19 per share.
______________________
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.
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such State.
______________________
The date of this Prospectus is April __, 1999
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<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
MegaBank Financial Corporation (the "Company", "we", "us",
and "our") files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange
Commission ("SEC"). You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. For more information about
the SEC's public reference rooms and their copy charges, please
call the SEC at 1-800-SEC-0330. Our filings with the SEC are
also available to the public from the website maintained by the
SEC at http://www.sec.gov. Our securities are listed and traded
on the NASDAQ National Market System. Reports, proxy statements
and other information concerning MegaBank may be inspected at the
offices of the NASDAQ, 86 Trinity Place, New York, New York
10006.
We have filed a registration statement on Form S-3 with the
SEC covering the Common Stock. For further information regarding
the Company and the securities, you should refer to our
registration statement and its exhibits. Since the Prospectus
may not contain all the information that you may find important,
you should review the full text of these documents. We have
included copies of these documents as exhibits to our
Registration Statement.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the
information that we file with them, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information
filed with the SEC will update and supersede this information.
We are incorporating by reference the documents listed below and
any future filings that we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), until this offering is
completed:
(a) Annual Report on Form 10-KSB for our fiscal year ended
December 31, 1998;
(b) Quarterly Reports on Form 10-QSB for the fiscal
quarters ended March 31, 1998, June 30, 1998 and September 30,
1998;
(c) Current Reports on Form 8-K filed on September 24,
1998, October 7, 1998 and April 5,
1999;
(e) Current Reports on Form 8-A filed on October 28, 1998;
and
(d) The description of our Common Stock contained in our
registration statements filed under Section 12 of the Exchange
Act, including any amendment or report filed for the purpose of
updating such description.
You may request a copy of these filings at no cost by
writing or telephoning us at this address and telephone number:
MegaBank Financial Corporation
Investor Relations
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<PAGE>
8100 East Arapahoe Road
Englewood, Colorado 80112
(303) 740-2265
In addition, you can obtain these filings electronically at
the SEC's worldwide website at http://sec.gov/edgarhp/htm.
You should rely only on the information provided in this
Prospectus or in any later Prospectus Supplement or incorporated
by reference in either document. We have not authorized anyone
to provide you with different or additional information. We are
not making an offer to sell securities in any state or country
where the offer is not permitted. You should not assume that the
information in this Prospectus or any later Prospectus Supplement
is accurate as of any date other than the date on the front of
the document.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus, any
applicable supplement to this Prospectus and the documents
incorporated by reference into this Prospectus, may constitute
"forward-looking statements" within the meaning of the federal
securities laws. The following or similar words are intended to
identify forward-looking statements in our documents: "may",
"could", "should", "would", "anticipate", "believe", "estimate",
"expect", "intend", "objective", "plan", "projection",
"forecast", "goal" and similar terms and/or expressions.
Forward-looking statements are based on our management's
expectations regarding our future economic performance and take
into account only the information currently available. These
statements are not statements of historical fact. Various
factors could cause our actual results, performance or financial
condition to differ materially from the expectations expressed or
implied in any forward-looking statements. Some of these factors
are listed below: (i) general volatility of the capital markets
and the market price of our shares, (ii) entering into the title
insurance business, (iii) diversifying into the land development
business, (iv) the success of our growth strategy, (v) the
competitive banking environment, (vi) the sufficiency of our
allowance for loan losses, (vii) risks relating to the our
concentration of land development and construction loans, (viii)
changes in economic conditions, including interest rates,
management's ability to manage interest rates, and credit risks,
(ix) the impact of future regulations, (x) our ability to employ
and retain qualified employees, (xi) our ability, and the ability
of our significant vendors, suppliers and customers, to achieve
Year 2000 compliance and (xii) the dependence upon Thomas R.
Kowalski the Chairman of the Board of the Company.
We qualify all forward-looking statements contained in our
documents by these cautionary factors.
MEGABANK FINANCIAL CORPORATION
General
MegaBank Financial Corporation (the "Company", "we", "us",
and "our") was founded in 1984 by its Chairman and Chief
Executive Officer, Thomas R. Kowalski, with the objective of
building a banking franchise in the Denver, Colorado metropolitan
area that would deliver a broad based package of products and
services to businesses and individuals. The Company's banking
subsidiary, MegaBank (the "Bank") was organized in 1983. Since
the advent of branch banking in Colorado in 1993, the Bank has
opened seven additional banking locations throughout the Denver
area for a total of eight locations, with two more branches in
the planning and construction phases.
Since inception, the Bank has specialized its lending
practice in the residential construction industry. The Bank is
one of the area's leading originators of land development and
residential construction loans to small- and medium-sized
homebuilders.
We have achieved significant growth measured from the end of
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<PAGE>
1995. Total assets have increased to $231 million as of December
31, 1998, from $158 million and $119 million as of December 31,
1997 and December 31 1996, respectively. During the same time
period, net income increased to $3.8 million for the year ended
December 31, 1998 from $2.8 million and $2.4 million for the
years ended December 31, 1997 and 1996, respectively. For the
year ended December 31, 1998 return on average assets equaled
1.89% while return on equity equaled 24.48%.
In September 1998, we changed our status to a unitary thrift
holding company within the meaning of the Home Owners' Loan Act
of 1933, as amended. We are registered with the Office of Thrift
Supervision ("OTS") and are subject to OTS regulations,
examinations, supervision and reporting requirements. Also, in
September 1998, the Bank converted its charter from a Colorado
state-chartered commercial bank to a federal savings bank.
The Company's principal executive office is located at 8100
East Arapahoe Road, Englewood, Colorado 80112, and its telephone
number is (303) 740-2265.
Recent Developments
On April 5, 1999, we acquired Empire Title and Escrow
Corporation ("Empire") from the Selling Stockholders. Empire is
a title insurance company that issues real estate title insurance
policies on residential and commercial real estate. Empire,
formed in 1991, has four offices in the metropolitan Denver area
and one office in Fort Collins, Colorado. Empire represents three
national title insurance underwriters: United General Title
Insurance Company, First American Title Insurance Company and
Lawyers Title Insurance Corporation. The acquisition of Empire
allows us the ability to offer a broader array of financial
products and services to our customers.
The Selling Stockholders have the right to receive
additional consideration based upon the future performance of
Empire during the three years following the acquisition of
Empire. The entire purchase price paid for Empire will be paid
in our Common Stock and cash. In connection with the
transaction, and as part of the consideration for the acquisition
of Empire, the Company issued at the closing to the Selling
Stockholders 162,369 shares of Common Stock, all of which Common
Stock is being offered by this Prospectus. Also, we are
registering up to 81,182 shares of Common Stock that may be
issued to the Selling Stockholders as part of the Post Effective
Time Consideration and that may be issued by us if on the day
preceding the date of this Prospectus the average price of our
Common Stock over the ten day period preceding the date of this
Prospectus was less than $8.78, which Common Stock is also being
offered by this Prospectus.
RISK FACTORS
Investment in our securities involves substantial risks and
prospective purchasers should carefully consider the following
risk factors prior to making an investment.
- Loan and Business Concentration. Since the 1980's the
Bank has been one of the leading originators of land development
and residential construction loans to small- and medium-sized
builders in the Denver, Colorado area. These loans, in the
aggregate, comprise a large percentage of the Bank's total loans.
Also, we plan to expand into real estate development through a
real estate subsidiary which will further concentrate us in the
home building industry. Accordingly, adverse economic conditions
in the home building industry could materially impact our primary
business. These conditions could occur as a result of
significant increases in interest rates, moratoriums on new
building by municipalities, overbuilding of new homes in the
Denver area and a general economic downturn.
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<PAGE>
- Economic Conditions and Impact of Interest Rates.
Results of operations for financial institutions, including us,
may be materially and adversely affected by changes in prevailing
economic conditions, including declines in real estate values,
housing starts, rapid changes in interest rates and the monetary
and fiscal policies of the federal government. A decrease in
interest rate spreads would have a negative effect on our net
interest income and profitability, and there can be no assurance
that this spread will not decrease. Moreover, substantially all
of our loans are to individuals and businesses in the Denver
area, and any decline in the economy of this market area could
have an adverse impact on us.
- Growth and Acquisition Risks. We have pursued and
intend to continue to pursue an internal growth strategy. We
have grown and intend to grow by the establishment of new
branches. Establishing new branches through land purchase and
development takes significant amounts of capital and time to
build. Successful growth through branch expansion will depend on
our ability to maintain sufficient regulatory capital levels and
on continued favorable economic conditions in our market.
- Real Estate Development Risks. We will also face risks
in attempting to achieve growth through the planned establishment
of a real estate subsidiary whose purpose is to purchase and/or
develop land for resale to homebuilders. Among the risks we face
are: having adequate staff to oversee acquisition and development
of land; establishing and maintaining proper internal controls
with respect to land inventory and development; using adequate
procedures to ensure compliance with zoning requirements; and
other risks associated with the establishment of new operations.
- Government Regulation, Recent Legislation and Monetary
Policy. We and the Bank are subject to extensive federal and
state legislation, regulation and supervision which is intended
primarily to protect depositors and the Bank Insurance Fund,
rather than investors. Recently enacted, proposed and future
legislation and regulations designed to strengthen the banking
industry have had and may have a significant impact on the
banking industry. Although some of the legislative and
regulatory changes may benefit us and the Bank, others may
increase our costs of doing business or otherwise adversely
affect us and create competitive advantages for non-bank
competitors. In addition, federal economic and monetary policy
may affect the Bank's ability to attract deposits, make loans and
achieve satisfactory interest spreads.
- Competitive Banking Environment. The banking business
in the Denver metropolitan area is highly competitive. We compete
for loans and deposits with commercial banks, other savings and
loan associations, finance companies, mutual funds, credit unions
and mortgage bankers. In addition to traditional financial
institutions, we also compete for loans with brokerage and
investment banking companies, nonfinancial institutions,
including retail stores that maintain their own credit programs,
and governmental agencies that make available low cost or
guaranteed loans to certain borrowers. Many of our competitors
have substantially greater resources and lending limits than us
and perform other functions that we offer only through
correspondents. Interstate banking is permitted in Colorado,
and, since January 1, 1997, unlimited state-wide branch banking
has been permitted.
- Allowance for Loan Losses. Inability of borrowers to
repay loans can erode earnings and capital. Like all financial
institutions, the Bank maintains an allowance for loan losses to
provide for loan defaults and nonperformance. The allowance is
based on prior experience with loan losses, as well as an
evaluation of the risks in the current portfolio, and is
maintained at a level considered adequate by management to absorb
anticipated losses. The amount of future losses is susceptible
to changes in economic, operating and other conditions, including
changes in interest rates, that may be beyond management's
control, and such losses may exceed current estimates. There can
be no assurance that our allowance for loan losses will be
adequate to cover actual losses. Future provisions for loan
losses could materially and adversely affect results of our
operations.
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<PAGE>
- Dependence on Key Person. We are highly dependent on
the continued services of Thomas R. Kowalski, our Chairman and
Chief Executive Officer. We do not have an employment agreement
with Mr. Kowalski. Although we have a $3.0 million key man life
insurance policy on Mr. Kowalski, proceeds under the policy paid
to us will, at the option of certain affiliated stockholders of
Mr. Kowalski, be utilized by the Company for the repurchase of
all or a portion of Mr. Kowalski's Common Stock. The loss of the
services of Mr. Kowalski could adversely affect us.
- Year 2000 Compliance. As the year 2000 approaches, a
significant business issue has emerged regarding existing
application software programs and operating systems and their
ability to accommodate the date value for the year 2000. Many
existing software application products, including products used
by the Bank, its suppliers and customers, were designed to
accommodate only a two-digit date value, which represents the
year. For example, information relating to the year 1996 is
stored in the system as "96." As a result, the year 1999 (i.e.,
"99") could be the maximum date value that these systems will be
able to process accurately. In response to concerns about this
issue, regulatory agencies have begun to monitor holding
companies' and banks' readiness for the year 2000 as part of the
regular examination process.
We presently believe that with modifications to existing
software and conversion to new software, the year 2000 issue will
not pose significant operational problems for our computer
systems or business operations. Implementation of our plan to
test in-house and out-sourced software has been underway since
the first quarter of 1998. Testing of applications considered to
be "mission critical" was completed in the first quarter of 1999
and modifications and changes necessary have been completed and
tested. Compliance for all systems is expected by management to
be completed by the third quarter of 1999; management currently
estimates that such total compliance will cost approximately
$150,000. Costs incurred through 1998 were approximately
$24,000. Compliance audits performed to date have been positive
and no specific items of improvement were noted. The team for
the plan is responsible for the implementation of the plan and
reports to the our Board of Directors on a monthly basis until
the plan is completed.
However, if the modifications that have been made are not
effective, the year 2000 issue could have a material adverse
impact on our operations. Because of the factors discussed
below, management cannot estimate with any reasonable degree of
certainty the magnitude of lost revenues should management's
reasonable worst case scenario develop in which we would need to
use an outside vendor to become year 2000 compliant and
noncompliant customers were unable to repay their loans.
Even though our "mission critical" systems have tested year
2000 compliant, we have in place a business resumption
contingency plan in the event of an unforeseen problem in its
computer systems. This plan details actions to be taken in the
unlikely event of problems in the change over to the millennium.
This process of validation is in accordance with Federal
Financial Institutions Examination Council guidelines.
The Bank has sent direct mail to its customers regarding the
year 2000 issue and the need for readiness, pursuant to
guidelines of the banking industry regulators. Management
intends to continue to solicit customer response on this matter.
The Bank has also instituted a policy requiring a loan applicant
to sign a year 2000 acknowledgment certificate at closing as part
of a loan package. Failure of our customers to prepare for year
2000 compatibility could have a significant adverse effect of
customers' operations and profitability, thus inhibiting their
ability to repay loans and adversely affecting our operations.
We do not have sufficient information accumulated from customers
to enable us to assess the degree to which customers' operations
are susceptible to potential problems relating to the year 2000
issue or, further, to quantify the potential lost revenue to us
in this case.
- Potential Liability for Undercapitalized Subsidiary.
Under federal law, a thrift holding company may be required to
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<PAGE>
guarantee a capital plan filed by an undercapitalized bank
subsidiary with its primary regulator. As such, it is possible
that we will be required to contribute capital to the Bank or any
other bank that we may acquire in the event that such bank
becomes undercapitalized. Moreover, we may be required to make
such capital contribution at a time when we have other
significant capital needs, and, therefore, such requirement may
adversely affect our business, financial condition, results of
operations and cash flows.
- No Dividends, Restrictions on Payments of Dividends.
Our policy is to retain earnings to support the growth of our
business, and it is unlikely that dividends will be paid in the
foreseeable future. The Board of Directors has never declared
cash dividends on the Company's common stock. Pursuant to the
terms of our outstanding 8.75% Junior Subordinated Debentures
(the "Debentures"), we generally cannot pay dividends if interest
payments on the Debentures have been deferred or we are in
default on the Debentures. Moreover, our ability to pay a cash
dividend on our Common Stock, if we determine to do so, is
largely dependent upon the payment of dividends by the Bank to
the Company. The Bank's ability to pay dividends to us is
restricted by federal regulations. Future cash dividends will be
determined by the Board of Directors based on our earnings,
financial condition, capital requirements and other relevant
factors.
- Concentration of Ownership. As of December 31, 1998,
directors, executive officers and key employees of ours
beneficially owned 50.2% of the Common Stock. Accordingly, such
persons will be in a position to exercise substantial influence
over our affairs and may impede the acquisition of control of the
Company by a third party.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares
offered in this Prospectus. All proceeds will be received and
retained solely by the Selling Stockholders.
SELLING STOCKHOLDERS
The 243,551 shares being offered are beneficially owned by
and offered for the accounts of the Selling Stockholders set
forth in the following table. We issued the shares to the
Selling Stockholders in connection with our acquisition of Empire
Title and Escrow Corporation on April 5, 1999 and any subsequent
issuance of shares to the Selling Stockholders pursuant to the
Merger Agreement. The shares beneficially owned and that may be
issued to the Selling Stockholders may represent up to 3.13% of
the outstanding Common Stock as of April 12, 1999.
Prior to the transaction, the Selling Stockholders had no
relationship or affiliation with us or our affiliates. Following
the acquisition, each of the following Selling Stockholders
entered into a two-year employment agreement with Empire now a
wholly owned subsidiary of ours ("New Empire"), and each will
serve as an officer and director of New Empire as set forth
below.
<TABLE>
<CAPTION>
Name of Selling Stockholder Office
<S> <C>
John P. Dwyer, Jr. Director
James A. Cimino President, Director
Linda J. Kelsey Vice President/Secretary/Treasurer,
Director
Roger W. Smith Sr. Vice President, Director
Brian R. Gray Vice President, Director
Gregory C. Erpelding Vice President
Lynn A. Cisneros Assistant Treasurer
</TABLE>
The following table sets forth, as of April 12, 1999, the
name of each of the Selling Stockholders, certain beneficial
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<PAGE>
ownership information with respect to each of the Selling
Stockholders, and the number and percentage of securities offered
by this Prospectus that may be sold from time to time by the
Selling Stockolders pursuant to this Prospectus. The number of
shares of Common Stock set forth in the following table that are
being offered by the Selling Stockholders assumes that the
maximum amount of post-closing consideration is earned in
connection with the acquisition of Empire. The actual number of
shares of our Common Stock that we may issue to the Selling
Stockholders in connection with the acquisition of Empire is
indeterminate and could be materially less (but not more) than
the number assumed depending upon the financial performance of
Empire in the next three years. There is no assurance the
Selling Stockholders will sell the shares offered by this
Prospectus.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to Owned After
Offering Shares Being Offering (1)(2)
Name Number Percent(1)Offered Number Percent
<S> <C> <C> <C> <C> <C>
James A. Cimino 63,946 0.82% 63,946 0 0
Brian R. Gray 55,419 0.71% 55,419 0 0
Linda J. Kelsey 44,287 0.57% 44,287 0 0
Roger W. Smith 33,823 0.44% 33,823 0 0
John P. Dwyer, Jr. 26,352 0.34% 26,352 0 0
Gregory C. Erpelding9,862 0.13% 9,862 0 0
Lynn Cisneros 9,862 0.13% 9,862 0 0
Totals 243,551 3.13% 243,551 0 0
</TABLE>
(1) Applicable percentage of ownership is based on shares of
Common Stock outstanding on April 12, 1999.
(2) Assumes the sale of all shares offered hereby.
PLAN OF DISTRIBUTION
We are registering the shares of Common Stock on behalf of
the Selling Stockholders. As used herein, "Selling Stockholders"
includes donees and pledgees selling shares received from the
Selling Stockholders after the date of this Prospectus. We will
pay all costs, expenses and fees related to the registration of
the shares. The Selling Stockholders will pay all brokerage
commissions and similar, selling expenses, if any, incurred in
connection with the sale of the shares. The Selling Stockholders
may sell the shares from time to time in one or more types of
transactions (which may include block transactions) on the Nasdaq
National Market, in negotiated transactions, or a combination of
such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not
involve brokers or dealers. The Selling Stockholders have
advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is
there any underwriter or coordinating broker acting in connection
with the proposed sale of shares by the Selling Stockholders.
The Selling Stockholders may effect transactions by selling
shares directly to purchasers or through broker-dealers. In the
event that the Selling Stockholders do not intend to effect the
sale of the shares through a broker-dealer, the Selling
Stockholders must notify us in advance of any intended
transaction so we can determine compliance with applicable
federal and state securities laws. After we notify the Selling
Stockholders that the transaction may proceed, the Selling
Stockholders may sell the shares. If necessary, we may file with
the SEC a supplemental prospectus which describes the method of
sale in greater detail pursuant to Rule 424(c) under the
Securities Act of 1933. In effecting sales, broker-dealers
engaged by the Selling Stockholders and/or purchasers of the
shares may arrange for other broker-dealers to participate.
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<PAGE>
Broker-dealers may receive commissions, concessions or discounts
from the Selling Stockholders and/or the purchasers of the shares
in amounts to be negotiated prior to the sale (and which might be
in excess of customary commissions). In addition, any shares
covered by this Prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act of 1933 may be sold under Rule
144 rather than pursuant to this Prospectus.
The Selling Stockholders and any broker-dealer who act in
connection with the sale of the shares may be deemed to be
"underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, and any commissions or other compensation
received by them and any profit on any resale of the shares sold
by them while acting as principals might be deemed to be
underwriting discounts and commissions under the Securities Act
of 1933.
Because the Selling Stockholders may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the
Securities Act of 1933, the Selling Stockholders will be subject
to the prospectus delivery requirements of the Securities Act of
1933. We have informed the Selling Stockholders that the
anti-manipulative provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in
the market.
At the time a particular offer of shares is made, to the
extent required, a supplemental prospectus will be distributed
which will set forth the number of Shares being offered and the
terms of the offering including the name or names of any
underwriters, dealers or agents, the purchase price paid by any
underwriter for the shares purchased from the Selling
Stockholders, any discounts, commissions and other items
constituting compensation from the Selling Stockholders and any
discounts, commissions or discounts allowed or paid to dealers.
In order to comply with the securities laws of certain
states, if applicable, the shares will be sold in such
jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the shares may not be
sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
We have agreed to keep the registration statement of which
this Prospectus constitutes a part effective in respect of shares
issued pursuant thereto until the first to occur of the following
dates.
- The date one year from the final payment of the Post-
Effective Time Consideration.
- Such date as all of the shares offered by the selling
stockholders listed above have been sold.
We intend to de-register any of the shares not sold by the
Selling Stockholders after such time.
LEGAL MATTERS
The legality and certain matters with respect to the
securities offered hereby will be passed upon for us by Slivka
Robinson Waters & O'Dorisio, P.C., Denver, Colorado.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-KSB for the year ended
December 31, 1998, have been so included in reliance upon the
report of Fortner, Bayens, Levkulich & Co., P.C., independent
certified public accountants, given on the authority of said firm
as experts in auditing and accounting.
-9-
<PAGE>
- - We have not authorized
anyone to give you any
information that differs
from the information in
this Prospectus. If you
receive any different
information, you should not
rely on it.
- - The delivery of this
Prospectus shall not, under
any circumstances, create
an implication that
MegaBank Financial
Corporation is operating
under the same conditions
that it was operating under
when this Prospectus was
written. Do not assume
that the information
contained in this
prospectus is correct at
any time past the date
indicated.
- - This Prospectus does not
constitute an offer _________ Shares
to sell, or the
solicitation of an offer to
buy, any securities other
than the securities to
which it relates.
MEGABANK FINANCIAL
- - This Prospectus does not CORPORATION
constitute an offer
to sell, or the
solicitation of an offer to
buy, the securities to
which it relates in any
circumstances in which such
offer or solicitation is
unlawful.
_______________ Common Stock
Table Of Contents
Page
Where You Can Find More Information 2
Incorporation of Information We File with
the SEC 2
MegaBank Financial Corporation 3
Risk Factors 3
Use of Proceeds 7
Selling Stockholders 7 Prospectus
Plan of Distribution 8
Legal Matters 9
Experts 9
April ___, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all
estimated expenses in connection with the issuance and
distribution of the securities being registered:
<TABLE>
<S> <C>
SEC registration fee $ 662.43
Legal expenses* 5,000.00
Accounting fees and expenses* 5,000.00
Miscellaneous* 2,000.00
--------
Total $12,662.43
</TABLE>
______________________________
* Estimated
The Company will pay all expenses incident to the offering
and sale to the public of the shares being registered other than
any commissions and discounts of underwriters, dealers or agents,
and any transfer taxes. The Selling Stockholders will pay their
own expenses, including expenses of its own counsel, broker or
dealer fees, discounts and expenses and all transfer and other
taxes on the sale of shares.
Item 15. Indemnification of Directors and Officers
The Company's Articles of Incorporation provide that the
board of directors is authorized, without the need for
stockholder approval, to indemnify directors, officers and other
persons without regard to whether or not such powers are
expressly provided for by Colorado law; provided, however, that
the exercise of such indemnification powers by the board of
directors are consistent with Colorado law. Generally under
Colorado law, any director or officer who is made or threatened
to be made a party to any suit or proceeding may be indemnified
if such director or officer acted in good faith and had no
reasonable basis to believe that (i) in the case of conduct in an
official capacity with the Company, his or her conduct was in the
Company's best interests; and (ii) in all other cases, his or her
conduct was at least not opposed to the best interests of the
Company; and, with respect to any criminal proceeding, he or she
had no reasonable cause to believe his or her conduct was
unlawful. Colorado law further provides that such
indemnification is not exclusive of any other rights to which
such individuals may be entitled under a company's Articles of
Incorporation or Bylaws, or pursuant to any agreement, insurance
policies, vote of stockholders or disinterested directors or
otherwise.
In addition, the Company's Articles of Incorporation provide
that to the fullest extent permitted by Colorado law, the
Company's directors will not be liable for monetary damages for
breach of the directors' fiduciary duty of care to the Company
and its stockholders. Notwithstanding such limitations on
liability, each director will continue to be subject to liability
for breach of the director's duty of loyalty to the Company or
its stockholders, for acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law,
for certain activities prohibited by Colorado law (relating
primarily to the unlawful payment of dividends, repurchase of
stock or improper loans or guarantees to directors), and for any
transaction from which the director derived an improper personal
benefit. This provision also does not affect a director's
responsibilities under any other laws, such as the federal
securities laws or state or federal environmental laws.
II-11
<PAGE>
There is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Company as to
which indemnification is being sought. The Company is not aware
of any other threatened litigation that may result in claims for
indemnification by any director, officer, employee or other
agent.
Item 16. Exhibits
(a) Exhibits. The following exhibits are filed as part of
this registration statement.
<TABLE>
<S> <C>
Exhibit Number Description
4.1 Description of
the Registrant's capital stock in Article
IV of the Amended and Restated Articles of
Incorporation of MegaBank Financial
Corporation incorporated by reference to
Exhibit 3.1 of the Registrant's
Registration Statement on Form SB-2
(Registration No. 333-42189 and 333-42191)
dated December 12, 1997 and as amended on
January 22, 1998 and January 29, 1998.
5 Opinion of Slivka
Robinson Waters & O'Dorisio, P.C.
23.1 Consent of Slivka
Robinson Waters & O'Dorisio, P.C.
(included in the Opinion filed as Exhibit
5)
23.2 Consent of Fortner, Bayens,
Levkulich & Co., P.C.
24 Power of Attorney
(included in signature page to
Registration Statement)
</TABLE>
Item 17. Undertakings
(a) Rule 415.
The undersigned small business issuer hereby
undertakes that it will:
(1) File, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement to:
(iii) Include any material
additional or changed information on the plan of
distribution.
(2) For determining liability under the Securities Act
of 1933 (the "Securities Act"), treat each post-effective
amendment as a new registration statement of securities offered,
and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end
of the offering.
(e) Indemnification.
II-12
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer 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 small business issuer of expenses
incurred or paid by a director, officer or controlling person of
the small business issuer 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 small business issuer 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.
(i) Rule 430A.
The undersigned small business issuer hereby undertakes that
it will:
(1) For determining any liability under the Securities
Act, treat the information omitted from the form of Prospectus
filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of Prospectus filed by the
small business issuer under Rule 424(b)(1) or (4) or 497(h) under
the Securities Act as part of this Registration Statement as of
the time the Commission declared it effective.
(2) For determining any liability under the Securities
Act, treat each post-effective amendment that contains a form of
Prospectus as a new registration statement for the securities
offered in the registration statement, and that offering of the
securities at that time as the initial bona fide offering of
those securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Englewood, State of Colorado, on April 12, 1999.
MEGABANK FINANCIAL CORPORATION
By: /s/ Thomas R. Kowalski
Thomas R. Kowalski
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on April 12, 1999.
Dated: April 12, 1999
Each person whose signature appears below constitutes and
appoints Thomas R. Kowalski and Larry A. Olsen his trust and
lawful attorneys-in-fact and agents, each acting alone, with full
power of stead, in any and all capacities, to sign any or all
amendments to this S-3 Registration Statement and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he
might or could in each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
thereof.
Signature Title
/s/ Thomas R. Kowalski Chairman, Chief Executive Officer
Thomas R. Kowalski and Director
/s/ Larry A. Olsen President, Chief Operating Officer
Larry A. Olsen and Director
/s/ Hiram J. Welton Treasurer and Chief Accounting Officer
Hiram J. Welton
/s/ Larry A. Olsen Director
Attorney-in-fact for
Raymond A. Anilionis
/s/ Larry A. Olsen Director
Attorney-in-fact for
Donald B. Brown
II-14
<PAGE>
/s/ Larry A. Olsen Director
Attorney-in-fact for
William F. Sievers
/s/ Larry A. Olsen Director
Attorney-in-fact for
Roger L. Morgan
II-15
<PAGE>
Index to Exhibits
<TABLE>
<S> <C>
Exhibit Number Description
4.1 Description of the
Registrant's capital stock in Article IV
of the Amended and Restated Articles of
Incorporation of MegaBank Financial
Corporation incorporated by reference to
Exhibit 3.1 of the Registrant's
Registration Statement on Form SB-2
(Registration No. 333-42189 and 333-
42191) dated December 12, 1997 and as
amended on January 22, 1998 and January
29, 1998.
5 Opinion of Slivka
Robinson Waters & O'Dorisio, P.C.
23.1 Consent of Slivka
Robinson Waters & O'Dorisio. P.C.
(included in the Opinion filed as
Exhibit 5)
23.2 Consent of Fortner, Bayens, Levkulich &
Co., P.C.
24 Power of Attorney
(included in signature page to
Registration Statement)
</TABLE>
II-16
<PAGE>
EXHIBIT 5
[Slivka Robinson Waters & O'Dorisio Letterhead]
April 12, 1999
MegaBank Financial Corporation
8100 East Arapahoe
Englewood, Colorado 80112
Re: MegaBank Financial Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to MegaBank Financial Corporation,
a Colorado corporation (the "Company"), in connection with the
filing with the Securities and Exchange Commission (the
"Commission") of a Registration Statement on Form S-3 (the
"Registration Statement") covering 243,551 shares (the "Shares")
of common stock of the Company, no par value per share (the
"Common Stock"). The Shares being registered are being sold by
the Selling Stockholders.
The opinion hereinafter set forth is given to the Company
pursuant to Item 16 of Form S-3 and Item 601(b)(5) of Regulation
S-B. The only opinion rendered by this firm consists of the
matters set forth in numbered paragraph 1 below (our "Opinion"),
and no other opinion is implied or to be inferred beyond such
matter. This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord,
and this Opinion Letter is subject to and should be read in
conjunction therewith. Additionally, our Opinion is based upon
and subject to the qualifications, limitations and exceptions set
forth in this letter.
Our Opinion is furnished for the benefit of the Company
solely with regard to the Registration Statement, may be relied
upon by the Company only in connection with the Registration
Statement and may not otherwise be relied upon, used, quoted or
referred to by or filed with any other person or entity without
our prior written permission.
In rendering our Opinion, we have examined such agreements,
documents, instruments and records as we deemed necessary or
appropriate under the circumstances for us to express our
Opinion, including, without limitation, the Articles of
Incorporation and Bylaws, as restated or amended, of the Company;
the Agreement and Plan of Merger dated April 5, 1999, by and
between the Company, MB Title Company, Empire Title and Escrow
Corporation, and the stockholder of Empire Title and Escrow
Corporation; and the resolutions adopted by the Board of
Directors of the Company authorizing, approving and ratifying the
Merger Agreement and the preparation and filing of the
Registration Statement. In making all of our examinations, we
have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to
the original documents of all documents submitted to us as
copies, and the due execution and delivery of all documents by
any persons or entities other than the Company and the Selling
Stockholders where due execution and delivery by such persons or
entities is a prerequisite to the effectiveness of such
documents.
II-17
<PAGE>
As to various factual matters that are material to our
Opinion, we have relied upon the factual statements set forth in
an officer's certificate of the Company and certificates of, and
other information obtained from, public officials. We have not
independently verified or investigated, nor do we assume any
responsibility for, the factual accuracy or completeness of such
factual statements.
Members of this firm are admitted to the Bar of the State of
Colorado and are duly qualified to practice law in that state.
Because the Company is organized under, and the subject of our
Opinion therefore is governed by, the Business Corporation Code
of the State of Colorado (the "Colorado Code"), we do not herein
express any opinion concerning any matter respecting or affected
by any laws other than laws set forth in the Colorado Code that
are now in effect and that, in the exercise of reasonable
professional judgment, are normally considered in transactions
such as the offering and sale of the Shares. The Opinion
hereinafter set forth is based upon pertinent laws and facts in
existence as of the date hereof, and we expressly disclaim any
obligation to advise you of changes to such pertinent laws or
facts that hereafter may come to our attention.
Based upon and subject to the foregoing, we are of the
Opinion that:
(1) the Corporation (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Colorado and (b) has requisite corporate power and authority
to carry on its business as described in the Registration
Statement.
(2) the ________ Shares to be registered are validly
issued, fully paid and nonassessable.
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 heading "Legal Matters" in the Prospectus
forming a part of the Registration Statement.
The opinions set forth above are subject to the General
Qualifications and are provided to you and may be relied upon by
you only in connection with the Registration Statement and as
legal opinions only and not as a guarantee or warranty of the
matters discussed herein.
This opinion is furnished to you in connection with the
filing of the Registration Statement and is not to be used,
circulated, quoted or otherwise relied upon for any other
purpose.
Very truly yours,
/s/ Slivka Robinson Waters & O'Dorisio,
P.C.
SLIVKA ROBINSON WATERS & O'DORISIO, P.C.
II-18
<PAGE>
CONSENT OF FORTNER BAYENS LEVKULICH & CO., P.C.
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
registration statement of MegaBank Financial Corporation and
Subsidiaries (the "Company") on Form S-3 (File No. 33- ) of
our report, dated February 19, 1999, on our audits of the
consolidated financial statements of the Company appearing on
page thirty (30) of the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1998. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
Fortner Bayens Levkulich & Co., P.C.
Denver, Colorado
April 12, 1999
II-19
