<PAGE>
As filed with the Securities and Exchange Commission on May __,
1999
Registration No. 333-76141
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
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 jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Identification
Classification Number)
Code Number)
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
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]
<PAGE>
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.[ ]
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.
SUBJECT TO COMPLETION DATED MAY __, 1999
<PAGE>
PROSPECTUS
243,551 SHARES
COMMON STOCK
MEGABANK FINANCIAL CORPORATION
8100 East Arapahoe Road
Englewood, Colorado 80112
(303) 740-2265
__________________________
Our Common Stock is listed on Nasdaq National Market under
the symbol "MBFC." On May 5, 1999 the last reported sale price
was $9.1875 per share.
These shares of Common Stock are being sold by certain
current stockholders of the Company. The Company will not
receive any part of the proceeds from the sale.
THE SHARES OF COMMON STOCK OF MEGABANK OFFERED OR SOLD UNDER
THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
______________________
The shares of Common Stock offered hereby are not savings
accounts or deposits and are not insured by the Federal Deposit
Insurance Corporation, the Bank Insurance Fund, the Savings
Association Insurance Fund or any other government agency.
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 Information in this prospectus is not complete and may be
changed. The selling stockholders may not sell these 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.
______________________
The date of this Prospectus is May __, 1999
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy
statements and other information with the 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.
The SEC allows us to "incorporate by reference" the
information 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 we file with the
SEC will automatically update and supersede this information. We
incorporate 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 until
this offering is completed. This Prospectus is part of a
registration statement we filed with the SEC (Registration No.
333-76141).
- Annual Report on Form 10-KSB for the year ended December 31,
1998;
- Quarterly Report on Form 10-QSB for the quarter ended March
31, 1999;
- Current Report on Form 8-K filed on April 5,1999; and
- The description of our Common Stock contained in our
Registration Statement on Form 8-A filed on October 28, 1998.
You may request a copy of these filings at no cost by
writing or telephoning us at the following address and telephone
number:
MegaBank Financial Corporation
Investor Relations
8100 East Arapahoe Road
Englewood, Colorado 80112
(303) 740-2265
You should rely only on the information incorporated by
reference or provided in this Prospectus or any supplement. We
have not authorized anyone to provide you with different or
additional information. The selling stockholders will not make
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 supplement is
accurate as of any date other than the date on the front of those
documents.
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<PAGE>
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. Important factors
that could cause actual results to differ materially from our
expectations are listed under "Risk Factors." All subsequent
written and oral forward-looking statements attributable to us or
persons acting on our behalf all expressly qualified in their
entirety by these statements. We are not required to update any
forward-looking statements and we may not.
MEGABANK FINANCIAL CORPORATION
General
MegaBank Financial Corporation was founded in 1984 by our
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.
Our banking subsidiary, MegaBank (the "Bank") was organized in
1983. Since the advent of branch banking in Colorado in 1993,
the Bank has opened eight additional banking locations throughout
the Denver area for a total of nine locations, with one 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
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%.
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<PAGE>
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.
Our principal executive office is located at 8100 East
Arapahoe Road, Englewood, Colorado 80112, and our telephone
number is (303) 740-2265.
Recent Developments
On April 5, 1999, we acquired Empire Title and Escrow
Corporation ("Empire") pursuant to an Agreement and Plan of
Merger (the "Merger Agreement") whereby Empire was merged into a
newly formed, wholly owned subsidiary of MegaBank (the "Merger").
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 gives us the ability to offer a broader array of
financial products and services to our customers.
The purchase price for Empire includes the potential for
additional consideration based upon the future performance of
Empire during the following three years (the "Post-Effective Time
Consideration"). The entire purchase price for Empire will be
paid in our Common Stock and cash. In connection with the
Merger, as part of the consideration for the acquisition of
Empire, we issued at the closing 162,369 shares of Common Stock
to the stockholders of Empire (the "Selling Stockholders"), all
of which Common Stock is being offered by this Prospectus. In
addition, we are registering an additional 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 (the
"Collar Shares").
RISK FACTORS
An investment in our Common Stock involves substantial risks
and prospective purchasers should carefully consider the
following risk factors, as well as the other information
contained in this prospectus, prior to making an investment in
the Common Stock offered hereby.
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<PAGE>
OUR FUTURE PERFORMANCE IS LARGELY DEPENDENT ON THE CONDITION
OF THE RESIDENTIAL CONSTRUCTION INDUSTRY
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. In addition, we plan to expand into
real estate development through our newly formed real estate
subsidiary, which will further concentrate us in the home
building industry. Accordingly, adverse economic conditions in
the home building industry could have a material adverse affect
on us. Adverse economic 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.
OUR FUTURE PERFORMANCE MAY BE ADVERSELY IMPACTED BY A DECLINE
IN GENERAL ECONOMIC CONDITIONS
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 or
housing starts, rapid changes in interest rates and the monetary
and fiscal policies of the federal government. Our profitability
is in part a function of the spread between interest rates earned
on assets and the interest rates paid on deposits and other
interest bearing liabilities. 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.
WE MAY NOT BE ABLE TO CONTINUE TO GROW THROUGH EXPANSION
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.
WE MAY NOT BE SUCCESSFUL IN ESTABLISHING NEW OPERATIONS
We face risks in attempting to achieve growth through the planned
establishment of a real estate subsidiary whose purpose will be
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.
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<PAGE>
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATIONS WHICH COULD
NEGATIVELY IMPACT OUR BUSINESS
Our business and the Bank's 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 in our Common Stock. 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.
WE HAVE MANY COMPETITORS AND MAY NOT BE ABLE TO COMPETE
EFFECTIVELY AGAINST THEM
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.
OUR ALLOWANCE FOR LOAN LOSSES MAY BE INADEQUATE TO COVER
ACTUAL LOSSES
The 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>
WE MAY NOT BE ABLE TO RETAIN OUR KEY PERSONNEL
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.
PROBLEMS RELATED TO THE "YEAR 2000 ISSUE" COULD ADVERSELY
AFFECT OUR BUSINESS
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 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.
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<PAGE>
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.
WE MAY BE REQUIRED TO MAKE CAPITAL CONTRIBUTIONS TO
UNDERCAPITALIZED SUBSIDIARIES
Under federal law, a thrift holding company may be required to
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.
WE DO NOT INTEND TO PAY CASH DIVIDENDS AND AS A RESULT
STOCKHOLDERS WILL NEED TO SELL SHARES TO REALIZE PROFIT ON THEIR
INVESTMENT
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
us. 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.
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<PAGE>
HIGH CONCENTRATION OF OWNERSHIP BY DIRECTORS, EXECUTIVE
OFFICERS AND KEY EMPLOYEES MAY IMPEDE THE ACQUISITION OF CONTROL
OF THE COMPANY
As of March 31, 1999, our directors, executive officers and key
employees 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 MegaBank 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. The 243,551 shares of our Common
Stock offered by the Selling Stockholders hereby includes the
162,369 shares issued pursuant to the Merger Agreement and an
additional 81,182 shares that may be issued as Collar Shares or
as part of the Post-Effective Time Consideration.
Prior to the Merger, the Selling Stockholders had no
relationship or affiliation with us or our affiliates. In
connection with the Merger, 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/or director of New Empire as
set forth below.
Name of Selling Stockholder Office
John P. Dwyer, Jr. Director, Chairman
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
The following table sets forth, as of May 10, 1999, the name
of each of the Selling Stockholders, certain beneficial 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
Stockholders pursuant to this Prospectus. The number of shares
of Common Stock set forth in the following
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table that are being offered by the Selling Stockholders assumes
that the maximum amount of Post-Effective Time Consideration is
earned in connection with the Merger. The actual number of
shares of our Common Stock that we may issue to the Selling
Stockholders in connection with the Merger 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 BeingOffering (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 May 10, 1999.
(2) Assumes the sale of all shares offered hereby.
PLAN OF DISTRIBUTION
We are registering the shares of Common Stock offered hereby
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.
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<PAGE>
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.
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.
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<PAGE>
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 deregister 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.
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<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. 243, 551 Shares
- - This Prospectus does not
constitute an offer to
sell, or the solicitation
of an offer to buy, any MEGABANK FINANCIAL
securities other than the CORPORATION
securities to which it
relates.
- - This Prospectus does not Common Stock
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.
Prospectus
Table Of Contents
Page
Where You Can Find More
Information 2 May __, 1999.
MegaBank Financial Corporation
3
Risk Factors 3
Use of Proceeds 8
Selling Stockholders 8
Plan of Distribution 9
Legal Matters 11
Experts 11
<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:
SEC registration fee $624.26
Legal expenses* 5,000
Accounting fees and expenses* 5,000
Miscellaneous* 2,000
Total $13,435
______________________________
* Estimated
MegaBank Financial Corporation (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
<PAGE>
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.
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.
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 *
* Previously Filed
<PAGE>
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.
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.
<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 May 10, 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 May 10, 1999.
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
* Treasurer and Chief Accounting
Hiram J. Welton Officer
* Director
Raymond A. Anilionis
* Director
Donald B. Brown
* Director
William F. Sievers
* Director
Roger L. Morgan
/s/Larry A. Olsen
Larry A. Olsen
as Attorney-in-Fact
<PAGE>
Index to Exhibits
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*
* Previously Filed
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. 333-76141) 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
May 10, 1999
