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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: JANUARY 8, 1997 COMMISSION FILE NUMBER 0-19829
ARGO BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-3620612
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
7600 W. 63RD STREET 60501-1830
SUMMIT, ILLINOIS (Zip Code)
(Address of principal executive offices)
(718) 631-8100
(Registrant's Telephone Number, including area code)
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ITEM 5. Other Events
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On December 31, 1996, Argo Bancorp, Inc. ("Company"), the holding company
for Argo Federal Savings Bank, FSB, announced the sale of stock to The Deltec
Banking Corporation Limited ("Deltec") in a negotiated private offering.
Pursuant to the terms of a Stock Purchase Agreement ("Agreement") dated
December 31, 1996, the Company issued and Deltec purchased 25% of the Company's
Common Stock outstanding, or 111,563 2/3 shares, at a purchase price of $38.00
per share for total consideration of $4,239,419.34. Outstanding shares of Common
Stock of the Company now total 446,254 2/3.
Based on September 30, 1996 financial information, the price of $38.00 per
share represents 98.1% of book value outstanding and 115.2% of fully diluted
book value, and as a multiple of earnings is 11.13x primary earnings
(annualized) and 11.27x fully diluted earnings (annualized).
The Company will use the proceeds from the sale of the shares to maintain
a well capitalized position at Argo Federal following its purchase of mortgage
loan pools prior to year-end 1996, while continuing an asset growth rate in
excess of 20% annually. Assets of the Company at November 30, 1996 totaled
$214.5 million and total stockholders' equity, prior to the sale of shares,
totaled $12.5 million.
The Company also entered into a Stockholder Agreement (attached as Exhibit
1, hereto) with Deltec providing for the issuance of additional shares of the
Company of Deltec as may be necessary for Deltec to maintain its 25% interest in
the Company's Common Stock.
The Stockholders Agreement also provides for Deltec to nominate one (1)
director to serve on the Company's board of directors and gives Deltec
registration rights with respect to shares acquired pursuant to the Stock
Purchase Agreement and the Stockholder Agreement. Pursuant to regulations of the
Office of Thrift Supervision ("OTS"), prior to acquiring the Company's Common
Stock Deltec filed a rebuttal of change in control and entered into a Rebuttal
Agreement with the OTS. The Agreements and the stock purchase may be rescinded
if Deltec fails to obtain the approval of the OTS for a revise Rebuttal
Agreement by March 1, 1997.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ARGO BANCORP, INC.
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(Registrant)
By: /s/ John G. Yedinak
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John G. Yedinak, President and
Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this Report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
Date: January 8, 1997 By: /s/ John G. Yedinak
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John G. Yedinak, President and
Chief Executive Officer
Date: January 8, 1997 By: /s/ Frances M. Pitts
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Frances M. Pitts, Secretary
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EXHIBIT 1
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STOCKHOLDER AGREEMENT, dated as of December 31, 1996, among Argo Bancorp,
Inc., a corporation organized under the laws of the State of Delaware (the
"Company"), The Deltec Banking Corporation Limited, a banking corporation
organized under the laws of the Commonwealth of the Bahamas ("Deltec"), and John
G. Yedinak, the controlling stockholder of the Company (the "Controlling
Stockholder"), who is signing this Agreement solely for the purposes of Section
1.1 hereof.
W I T N E S S E T H
WHEREAS, concurrently with the execution and delivery hereof, Deltec has
purchased 111,563 2/3 shares (the "Shares") of original common stock, par value
$0.01 per share (the "Common Stock") of the Company, pursuant to the Stock
Purchase Agreement, dated as of December 31, 1996 (the "Stock Purchase
Agreement"), between the Company and Deltec;
WHEREAS, as of the date hereof, the Company has the authority to issue
5,000,000 shares of the par value $0.01 per share, of which 4,500,000 shares are
common stock and 500,000 shares are serial preferred stock, and the Company's
authorized common stock consists of 3,020,000 shares designated as original
common stock, 340,000 shares designated as Class B common stock, 340,000 shares
designated as Class C common stock and 800,000 shares designated as Class D
common stock, of which 446,254 2/3 shares of Common Stock have been issued
(after giving effect to Deltec's purchase of the Shares) and no shares of Class
B common stock, Class C common stock or Class D common stock have ever been
issued or authorized to be issued, and no shares of serial preferred stock have
ever been issued or authorized to be issued; and
WHEREAS, by entering into this Agreement and the Stock Purchase Agreement,
the Company, Deltec and the Controlling Stockholder understand that Deltec's
acquisition of the Shares is solely for Deltec's own account for the purpose of
investment and for the purpose of owning up to, but not more than, 25% of the
outstanding voting stock of the Company and with no purpose or effect of
controlling or exercising a controlling influence over the management or
policies of the Company;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
in order to induce Deltec to purchase the Shares as contemplated by the Stock
Purchase Agreement, the parties hereto hereby agree as follows:
ARTICLE I
BOARD OF DIRECTORS
1.1 DIRECTORS. So long as this Agreement shall continue in effect and so
long as Deltec shall own at least 15% of the outstanding Common Stock of the
Company, Deltec shall have the right to nominate one director to serve on the
Board of Directors of the Company, and so long as Deltec shall remain in
compliance with Section 1.2 of this Agreement, the Controlling
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Stockholder shall vote (or cause to be voted) all shares of Common Stock owned
by him for the election as a director of the Company of the nominee designated
by Deltec at any annual or special meeting called for such purpose.
1.2 REBUTTAL AGREEMENT. While this Agreement continues in effect, Deltec
shall remain in compliance with the Rebuttal Agreement between Deltec and the
Office of Thrift Supervision.
ARTICLE II
SALE OR PURCHASE OF CAPITAL STOCK
2.1 ISSUANCE OF CAPITAL STOCK. If the Company shall at any time propose to
issue or sell any additional shares of its Common Stock (the "Additional
Shares"), whether such shares are authorized but previously unissued shares or
are treasury shares, then the Company shall notify Deltec thereof as promptly as
practicable and shall offer to sell to Deltec, concurrently with the issuance
and sale of the Additional Shares, such number of additional shares of Common
Stock (including fractional shares) so that Deltec shall continue, after giving
effect to such sales, to own exactly 25% of the outstanding shares of Common
Stock. In case such sale of Additional Shares if for cash, the Company's offer
to Deltec shall be at a purchase price equal to the price per share paid for the
Additional Shares and shall be upon substantially the same other terms and
conditions, except that in the case of the exercise of employee stock options,
the Company's offer to Deltec shall be at a price equal to the Market Price (as
hereinafter defined) on the date of sale. In case such sale of Additional Shares
if for consideration other than cash, the Company's offer to Deltec shall be at
a price equal to the fair market value per share of such other consideration, as
determined by the Board of Directors of the Company for purposes of the
Company's financial statements. "Market Price" as of any date shall mean the
average of the high and low sale prices of the Company's Common Stock as
reported on the NASDAQ Stock Market (the "Average") for the 30 business days
immediately preceding the date in question, provided that (i) prior to the
issuance of stock pursuant to a public offering (the "Public Offering") expected
to occur prior to June 30, 1997, or such later date as the Company and its
underwriters may determine, the Market Price shall equal 94.7% of the book value
of the Company as set forth on the Company's most recent balance sheet prior to
the date in question, (ii) the Market Price of stock purchased in connection
with the Public Offering shall equal the public offering price, (iii) during the
30-day period following the Public Offering the Market Price will equal the
greater of the public offering price or the Average for the period from the date
of the Public Offering to the date in question, and (iv) the Market Price of
stock purchased in connection with any subsequent public offering shall equal
the public offering price in such subsequent public offering.
2.2 PURCHASE OR ACQUISITION OF COMMON STOCK. If at any time the Company
shall propose to purchase or otherwise acquire any outstanding shares of its
Common Stock, then the Company shall notify Deltec thereof as promptly as
practicable and shall offer to purchase from Deltec, concurrently with such
purchase or other acquisition, such number of shares (including fractional
shares) that, after giving effect thereto, Deltec will own exactly 25% of the
outstanding shares of Common Stock.
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2.3 OTHER CLASS OF STOCK. If at any time the Company shall propose to
issue or sell any shares of Class B common stock, Class C common stock, Class D
common stock or serial preferred stock authorized by its certificate of
incorporation or any other class of common stock hereafter authorized by the
Company, then the Company shall notify Deltec thereof as promptly as practicable
and shall offer to sell to Deltec, concurrently with the issuance of such shares
such number of such shares as will enable Deltec to maintain ownership of 25% of
such other class of stock.
2.4 REGISTRATION RIGHTS. The Company agrees to grant Deltec registration
rights in respect of any shares of Common Stock that Deltec decides to sell. The
terms and conditions of such registration rights will be agreed to as promptly
as practicable after the execution and delivery of this Agreement.
ARTICLE III
MISCELLANEOUS
3.1 AMENDMENTS, TERMINATION, TRANSFER, ETC. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by each of the Company, Deltec, and the
Controlling Stockholder.
3.2 NOTICES. All notices, requests, permissions, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when received if delivered by hand, facsimile transmission or by
United States mail (registered, return request required), properly addressed and
postage prepaid:
If to the Company or the Controlling Stockholder, to:
Argo Bancorp, Inc.
7600 West 63rd Street
Summit, Illinois 60501
Attn: Frances Pitts, Esq.
General Counsel
Tel.: 708-496-7178
Fax: 708-496-2946
with a copy to:
Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attn: Mary M. Sjoquist, Esq.
Tel.: 202-362-0840
Fax: 202-966-9409
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If to Deltec, to:
The Deltec Banking Corporation Limited
Deltec House, P.O. Box N-3229
Lyford Cay, Nassau, Bahamas
Attn: Matthew F. Gibbons, President
Tel.: 242-362-4549
Fax: 242-362-4623
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attn: Richard R. Howe, Esq.
Tel.: 212-558-3612
Fax: 212-558-3111
Such names and addresses may be changed by such notice.
3.3 BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors, legal
representatives and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person other than the parties hereto and
their respective successors, legal representatives and permitted assigns, any
rights, obligations or liabilities under or by reason of this Agreement.
3.4 ASSIGNABILITY. The agreement shall not be assignable by any party
without the prior written consent of each party hereto.
3.5 HEADINGS. The headings contained in this Agreement are for convenience
only and shall not affect the meaning or interpretation of this Agreement.
3.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
3.7 APPLICABLE LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAW OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW.
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IN WITNESS WHEREOF, the undersigned have hereto set their hands as of the
day and year first above written,
ARGO BANCORP, INC.
By:
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Name:
Title:
THE DELTEC BANKING CORPORATION
By:
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Name:
Title:
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John G. Yedinak
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