As filed with the Securities and Exchange Commission on September 23, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
JeffBanks, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation or organization)
23-2189480
(I.R.S. Employer Identification No.)
1609 Walnut Street, Philadelphia, Pennsylvania 19103, (215-564-5040)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Betsy Z. Cohen, Esquire, JeffBanks, Inc.
1609 Walnut Street, Philadelphia, Pennsylvania 19103 (215) 564-5040
(Name, address, including zip code,
and telephone number, including area code, of agent for service)
With a copy to:
J. Baur Whittlesey, Esquire
Ledgewood Law Firm, P.C.
1521 Locust Street, Suite 800
Philadelphia, PA 19102
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plan, 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, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ] .
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ].
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed maximum
Title of each class of maximum aggregate Amount of
securities to be Amount to be offering price offering registration
registered registered per unit(1) price fee
- --------------------------------------------------------------------------------
Common Stock (par 245,956 $34.50 $8,485,482 $2,571.36
value $1.00 per
share). . . . . . . . .
- --------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933 based upon the
average of the high $35.25 and low $33.75 prices reported on the NASDAQ National
Market System on September 19, 1997 (a date within 5 business days prior to the
date of this filing).
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.
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PROSPECTUS
234,248 Shares
[LOGO]
JEFFBANKS, INC.
Common Stock
The shares (the "Shares") of JeffBanks, Inc. (the "Company") Common Stock
(the "Common Stock") offered hereby may be sold by the persons named in "Selling
Shareholders" from time to time on the Nasdaq National Market ("Nasdaq") or
otherwise, in special offerings, secondary distributions pursuant to and in
accordance with applicable rules, in negotiated transactions or otherwise, at
market prices prevailing at the time of the sale, at prices related to such
prevailing market prices or at negotiated prices. Selling Shareholders may
effect such transactions by selling shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from Selling Shareholders and/or
purchasers of shares for whom they may act as agent (which compensation may be
in excess of customary commissions). Selling Shareholders may, as and when Rule
144 under the Securities Act of 1933 is available, sell shares covered by this
Prospectus in one or more transactions under said Rule. See "Plan of
Distribution."
The Common Stock is listed for trading on Nasdaq under the symbol "JEFF."
On September 19, 1997, the last reported sale price for the Common Stock was
$35.25 per share.
The Company will not receive any part of the proceeds from the sale of the
Shares. The Company has agreed to pay certain registration expenses in
connection with the offering (excluding brokerage commissions) estimated at
approximately $30,000.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS
ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, ANY OTHER
GOVERNMENTAL AGENCY OR OTHERWISE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is September 23, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, accordingly, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed with the Commission are available for inspection and copying
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549, and at the
Commission's Regional Offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center, New
York, New York 10048. Copies of such documents may also be obtained from the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, copies of such
documents may be obtained through the Commission's Internet address at
http://www.sec.gov. The Company's Common Stock is authorized for quotation on
Nasdaq and, accordingly, such materials and other information can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (No. 333- ) (together with any amendments thereto, the "Registration
Statement"), under the Securities Act, with respect to the securities offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
omits certain information contained in the Registration Statement as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement and the exhibits and financial statements, notes and
schedules filed as part thereof or incorporated by reference therein, which may
be inspected at the public reference facilities of the Commission, at the
addresses set forth above. Statements made in this Prospectus concerning the
contents of any documents referred to herein are not necessarily complete, and
in each instance are qualified in all respects by reference to the copy of such
document filed as an exhibit to the Registration Statement or incorporated by
reference therein.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed with the Commission (File No. 0-
22850) pursuant to Section 13 of the Exchange Act, are incorporated by reference
herein and made a part hereof: (i) the Company's Annual Report on Form 10-K for
the year ended December 31, 1996; (ii) the Company's Quarterly Report on Form
10-Q for the quarter ended March 30, 1997; (iii) the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which
<PAGE>
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus. All information appearing in this Prospectus should be read in
conjunction with, and is qualified in its entirety by, the information and
financial statements (including notes thereto) appearing in the documents
incorporated herein by reference, except to the extent set forth in the
immediately preceding statement.
The Company will provide without charge, to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference (other than exhibits not
specifically incorporated by reference therein). Written or oral requests for
such copies should be directed to: Secretary, JeffBanks, Inc., 1609 Walnut
Street, Philadelphia, Pennsylvania 19103 (215) 564- 5040.
<PAGE>
THE COMPANY
The Company is a Pennsylvania chartered, registered bank holding company
headquartered in Philadelphia with two wholly-owned subsidiaries, Jefferson Bank
("Jefferson PA") and Jefferson Bank of New Jersey ("Jefferson NJ"). The Company
operates principally through its subsidiary banks which are engaged in the
commercial banking business in Philadelphia, Pennsylvania and its immediately
adjacent Pennsylvania and New Jersey suburbs. As of June 30, 1997, the Company
had total assets of $1.17 billion, total deposits and interest-bearing
liabilities of $1.06 billion and shareholders' equity of $96.2 million. The
Company currently operates an executive office, thirty retail branch offices and
a mortgage loan production office.
The Company's executive offices are located at 1609 Walnut Street,
Philadelphia 19103, and its telephone number is (215)564-5040. As used in this
Prospectus, the term "Company" means the Company and its consolidated
subsidiaries.
Additional information concerning the Company is included in the documents
of the Company incorporated herein by reference. See "Incorporation of Certain
Documents by Reference."
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered by the Selling Shareholders.
DETERMINATION OF OFFERING PRICE
The Shares may be sold from time to time on Nasdaq at market prices for the
Common Stock prevailing at the time of the sale.
SELLING SHAREHOLDERS
The Selling Shareholders listed below acquired or will acquire the Shares
under warrants (the "Warrants") issued pursuant to the terms of an Agreement of
Merger (the "Merger Agreement") dated September 5, 1996 and amended on September
30, 1996, by and among United Valley Bancorp., Inc., United Valley Bank,
Jefferson Bank and the Company. Under the Merger Agreement, the Company became
obligated to (i) prepare and file a shelf registration statement under the
Securities Act (the "Shelf Registration Statement") covering the sale of the
Shares, (ii) use its best efforts to cause the Shelf Registration Statement to
be declared effective as soon as practicable after filing and (iii) use its best
efforts to maintain the Shelf Registration Statement in effect for two years
from the effective date thereof.
<PAGE>
The following table sets forth, as of September 1, 1997, the number of
shares that each of the Selling Shareholders is entitled to purchase under the
terms of the Warrants.
Warrants to Shares Available
Selling Shareholder Purchase Shares for Sale
Charlene L. Brennan ................... 711(1)(10) 711
Robert J. Coleman(2) .................. 71,190(3)(10) 71,190
Edward H. Devine ...................... 28,476(4)(10) 28,476
Joseph A. Gennett ..................... 355(5)(10) 355
John G. Hoopes(2) ..................... 17,797(4)(10) 17,797
R. Scott Horner ....................... 2,135(6)(10) 2,135
Ira M. Ingerman ....................... 35,594(7)(10) 35,594
Thomas J. Lynch(2) .................... 24,916(8)(10) 24,916
William S. Stamps ..................... 32,035(4)(10) 32,035
Stanley L. Stein(2) ................... 28,476(8)(10) 28,476
Eugene Zuecca ......................... 4,271(9)(10) 4,271
All Selling Shareholders
as a group ............................ 245,956 245,956
======= =======
(1)Warrant expires on December 31, 1999.
(2)Messrs. Coleman and Hoopes are directors of the Company. Messrs Lynch and
Stein are directors of Jefferson PA.
(3)Warrant expires on February 4, 2003.
(4)Warrants expire seriatim in three equal lots of 5,560 shares each (for Mr.
Devine), 10,050 shares each (for Mr. Stamps) and 9,070 shares each (for Mr.
Stein) on February 4, 1999, February 4, 2000 and February 4, 2001.
(5)Warrant expires on May 1, 2000.
(6)Warrants expire seriatim in two equal lots of 1,017 shares each, on February
4, 1998 and February 4, 1999.
(7)Warrants expire, seriatim, in two equal lots of 11,300 shares each on
February, 1999 and February 4, 2000 and in one lot of 11,299 shares on February
4, 2001.
<PAGE>
(8)Warrants expire, seriatim, in seven equal lots of 3,390 shares each, on
August 17, 200 through August 17, 2006.
(9)Warrants expire, seriatim, in equal lots of 1,356 shares each on September
19, 1997, September 19, 1998 and September 19, 1999.
(10)The number of warrants set forth herein has been adjusted since the original
issuance to reflect a 5% stock dividend to all Shareholders on May 13, 1997.
<PAGE>
PLAN OF DISTRIBUTION
The distribution of the Shares by the Selling Shareholders may be effected
from time to time, in one or more transactions on Nasdaq or otherwise, in
special offerings, secondary distributions pursuant to and in accordance with
applicable rules and regulations of the Commission and Nasdaq, in negotiated
transactions or otherwise, at market prices prevailing at the time of the sale,
at prices related to such prevailing market prices or at negotiated prices.
Selling Shareholders may effect such transactions by selling shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from Selling
Shareholders and/or purchasers of shares for whom they may act as agent (which
compensation may be in excess of customary commissions). Selling Shareholders
may, as and when Rule 144 under the Securities Act of 1933 is available, sell
shares covered by this Prospectus in one or more transactions under said Rule.
Selling Shareholders and broker-dealers that participate with Selling
Shareholders in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and any profit on the resale of the Shares may
be deemed to be underwriting compensation. The Company has no basis for
estimating either the number of shares of Common Stock that will ultimately be
sold by the Selling Shareholders or the prices at which such shares will be
sold.
LEGAL OPINION
The validity of the Shares being offered hereby is being passed on by
Ledgewood Law Firm, P.C., counsel to the Company. A former member of such firm,
who is a director and chairman of the executive committee of the Company's Board
of Directors, receives debt service payments from such firm in connection with
his withdrawal from the firm and the firm's redemption of his interest. The
spouse of a member of the firm is an officer of Jefferson, PA.
EXPERTS
The consolidated financial statements of the Company as of and for the
years ended December 31, 1996 and 1995 incorporated by reference in this
Prospectus have been audited by Grant Thornton LLP, independent certified public
accountants, whose report thereon appears therein, and in reliance upon such
report of Grant Thornton LLP, given upon the authority of such firm as experts
in accounting and auditing.
<PAGE>
No person has been authorized to give any
information or to make any representations
other than those contained or incorporated by
reference in this Prospectus and, if given or
made, such information or representations
must not be relied upon as having been
authorized by the Company. Neither the
delivery of this Prospectus nor any
distribution of the securities to 245,956 Shares
which this Prospectus relates, shall, under
any circumstances, create any implication
that there has been no change in the affairs
of the Company since the date hereof or that
the information contained herein is correct
as of any time subsequent to its date. This [LOGO]
Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any
securities other than the securities to which
it relates or an offer to sell or
solicitation of any offer to buy such
securities in any circumstances in which such
an offer is or solicitation is unlawful. JEFFBANKS, INC.
TABLE OF CONTENTS
Common Stock
Page
Available Information.............................2
Incorporation of Certain Documents by Reference...2
Use of Proceeds...................................4
Determination of Offering Price...................4
Selling Shareholders..............................4 PROSPECTUS
Plan of Distribution..............................6
Legal Opinion.....................................6
Experts...........................................6
September 23, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered are estimated to be:
Registration Fee............................ $ 2,577.36
NASD Listing Fee............................ 00.00
Legal Fees and Expenses..................... 7,500.00
Accountant's Fees and Expenses 7,000.00
Printing Costs.............................. 2,500.00
Blue Sky Fees............................... 500.00
Miscellaneous Expenses...................... $ 1,500.00
---------
TOTAL $ 21,577.36
============
Item 15. Indemnification of Directors and Officers.
Pursuant to the Pennsylvania Business Corporation Law, the Bylaws of
the Company provide that a director of the Company is not personally liable, as
such, for monetary damages for any act taken, or any failure to take action,
unless (a) the director has breached or failed to perform the duties of his
office and (b) the breach or failure constitutes self-dealing, willful
misconduct or recklessness. The Bylaw provision does not eliminate the personal
monetary liability of a director where such director is responsible or liable
pursuant to any criminal statute or for the payment of taxes.
Pursuant to the Bylaws of the Company, the Company is required to
indemnify any director or officer who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the fact
that he is or was a director or officer, as the case may be, of the Company.
Item 16. Exhibits.
Exhibit No.
4 Form of Warrant
5 Opinion of Ledgewood Law
Firm, P.C. regarding legality
of the securities to be
registered.
23 (a) Consent of Ledgewood Law Firm, P.C.
(included in Exhibit 5).
23 (b) Consent of Grant Thornton LLP
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrant undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(I) To include any prospectus required by
section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(I) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(a) of
the Securities Exchange Act of 1934 (and where applicable each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
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<PAGE>
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<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 Philadelphia, Commonwealth of Pennsylvania, on
September 17, 1997.
JEFFBANKS, INC.
By: /S/
Betsy Z. Cohen
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below in so signing also makes,
constitutes and appoints Betsy Z. Cohen, Harmon S. Spolan and Edward E. Cohen,
and each of them acting alone, his true and lawful attorney-in-fact, with full
power of substitution, for him in any and all capacities, to execute and cause
to be filed with the Securities and Exchange Commission any and all amendments
and post effective amendments to this Registration Statement with exhibits
thereto and other documents in connection therewith, and hereby ratifies and
confirms all that said attorney-in-fact or said attorney-in-fact's substitute or
substitutes may do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following person in the capacities
and on the dates indicated.
/S/ Date: September 17, 1997
Betsy Z. Cohen, Chairman of the Board,
Chief Executive Officer and Director
(Chief Executive Officer)
/S/ Date: September 17, 1997
Edward E. Cohen, Chairman of the Executive
Committee and Director
/S/ Date: September 17, 1997
Robert J. Coleman, Director
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<PAGE>
/S/ Date: September 17, 1997
Paul Frenkiel,Senior Vice President - Finance,
Chief Financial Officer and Controller
(Chief Financial and Accounting Officer)
/S/ Date: September 17, 1997
John G. Hoopes,Director
/S/ Date: September 17, 1997
Hersh Kozlov, Director
/S/ Date: September 17, 1997
Arthur Makadon, Director
/S/ Date: September 17, 1997
P. Sherrill Neff, Director
/S/ Date: September 17, 1997
James R. Sibel, Chief Credit Officer
and Director
Date: September 17, 1997
Wiliam H. Lamb, Director
/S/ Date: September 17, 1997
Harmon S. Spolan, President and Director
/S/ Date: September 17, 1997
William D. White, Director
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<PAGE>
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<PAGE>
EXHIBIT 4
No. W ___ No. of Shares _______
Void after 5:00 p.m. (Eastern Time), seriatim on __________, ____, __________,
____ and ___________, ---- .
THIS WARRANT IS NOT TRANSFERABLE OTHER THAN BY WILL OR PURSUANT
TO THE LAWS OF DESCENT AND DISTRIBUTION.
WARRANT TO PURCHASE COMMON STOCK
OF
JEFFBANKS, INC.
DATED AS OF JANUARY 21, 1997
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ______________, or his permitted
assigns (the "Holder") is entitled to purchase from JEFFBANKS, INC., a
Pennsylvania corporation ("JBI"), for a period beginning as hereinafter provided
and terminating seriatim on __________, ____, __________, ____ and __________,
____, common stock of JBI, par value $1.00 per share (the "Common Stock"), at an
initial price of $11.80 per share (which price, as adjusted from time to time as
specified herein, is herein referred to as the "Exercise Price"), upon the terms
and conditions set forth herein. (The shares of Common Stock deliverable upon
the exercise of this Warrant, as adjusted from time to time as specified herein,
are herein referred to as the "Warrant Shares".)
EXERCISE OF WARRANT. The Warrant Shares shall become available
for purchase hereunder in _ equal lots of _______________________________
(_____) shares each. The first such lot became available on __________, ____
("Lot 1") and the remaining lots became available for purchase seriatim on each
of the next 2 succeeding ____________s ("Lots 2" and "Lot 3", respectively).
Subject to Section 2 hereof, the right to purchase Warrant Shares included in a
lot which is eligible for purchase hereunder shall expire on the date that is 10
years after the date such shares first became eligible for purchase. If the
Holder exercises this Warrant to purchase the Warrant Shares, such purchase
shall reduce the number of Warrant Shares as to which this Warrant may
subsequently be exercised in the order that such shares became eligible for
purchase.
This Warrant may be exercised in whole or, subject to Section 2, in part
with respect to the Warrant Shares (but not as to any fractional share) by
surrendering it to JBI at its principal office in Philadelphia, Pennsylvania (or
such other office or agency as it may designate by notice in writing to the
Holder), together with the Purchase Agreement attached hereto as Annex A
properly completed and executed and accompanied by payment in full, in cash or
by certified check or bank draft payable to the order of JBI of the Exercise
Price for the number of shares specified in such agreement. Subject to Section
7, upon receipt by JBI of this Warrant and a duly completed Purchase Agreement
together with payment, all in accordance with the terms and
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<PAGE>
conditions specified herein, Holder shall be deemed for all purposes to be the
record holder of the Warrant Shares issuable upon such exercise as of the close
of business on the date of such receipt. JBI shall deliver to Holder
certificates for Warrant Shares so purchased within a reasonable time after such
exercise. If Holder exercises for less than all of the shares he is entitled to
under this Warrant, than his certificates shall be accompanied by this Warrant,
endorsed by the Secretary or an Assistant Secretary of JBI with the number of
Warrant Shares so purchased and the date of issuance thereof. If the holder
exercises for all of the shares he is entitled to under the Warrant, then JBI
shall deliver only the certificates for Warrant Shares so purchased. Unless
objected to by Holder in writing within ten (10) days after receipt, such
information endorsed on the Warrant shall thereafter be determinative for all
purposes hereunder.
TERMINATION AND ACCELERATION OF WARRANT.
This Warrant is void for all purposes and may not be
exercised after 5:00 p.m. (Eastern Time) on __________, ____, with respect to
Lot 1, on __________, ____, with respect to Lot 2, and on __________, ____, with
respect to Lot 3 (or, if earlier, on the (365th) day after Holder, for any
reason, ceases to be a member of the Board of Directors of JeffBanks
Acquisitioncorp, Inc.); no Warrant Shares shall thereafter be eligible for
purchase hereunder except those shares which were eligible for purchase
immediately preceding such event.
In the event of a proposed (i) consolidation reorganization
or merger of JBI, other than a merger of JBI in which holders of Common Stock
immediately prior to the merger have the same proportionate ownership of common
shares of the surviving corporation immediately after the merger as immediately
before, (ii) sale, lease, exchange or other transfer (in one transaction or
series of related transactions) of all or substantially all of the assets or
earning power of JBI, or (iii) liquidation or dissolution of JBI, in each case
in connection with which holders of Common Stock are to receive cash, securities
or other assets in exchange for all of their shares of Common Stock (a "Covered
Transaction"), the Board of Directors of JBI may, in its discretion, terminate
this Warrant upon at least fifteen (15) days prior notice to Holder, to be
effective upon, and subject to, the occurrence of such Covered Transaction. A
condition to any such termination shall be JBI's agreement to pay Holder in cash
an amount with respect to each share of Common Stock issuable upon the exercise
of this Warrant (assuming solely for such purpose that this Warrant is then
exercisable as to all shares to which it is then or may, by the passage of time,
subsequently become exercisable by the terms hereof) (the "Available Warrant
Shares") equal to the difference between the then applicable Exercise Price and
the value, as determined by the Board of Directors of JBI in its sole
discretion, of the consideration per share of Common Stock to be received by
holders of JBI's Common Stock in connection with such Covered Transaction.
In the event of a Covered Transaction in which holders of Common Stock are to
receive only cash (and no other property) in connection therewith, if the Board
of Directors of JBI does not exercise its right to terminate this Warrant
pursuant to Section 2(b), Holder, upon notice delivered to JBI at any time
before the fifth (5th) business day preceding the effectiveness of such Covered
Transaction shall have the right, at his sole option, to exercise this Warrant
as to all (but, unless the Board of JBI in its sole discretion otherwise
determines, not less than all) Available Warrant Shares; provided, however, that
if the holders of Common Stock are to receive an amount of cash with respect to
each share of Common Stock which is in excess of the Exercise Price, (on a per
share basis, the "Event Amount") Holder may exercise this Warrant without
payment of the Exercise Price, subject to his agreement, in form and substance
reasonably satisfactory to JBI, to offset the Event Amount
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payable to Holder with respect to each of the Available Warrant Shares by the
amount of the Exercise Price. Any exercise of this Warrant pursuant to this
Section 2(c) shall only be permitted subject to the effectiveness of such
Covered Transaction and shall be deemed for all purposes to occur immediately
prior thereto.
EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. The initial
Holder hereof shall have the right to transfer this Warrant (by will, applicable
laws of descent and distribution or otherwise) to Holder's immediate family and
descendants and to any trusts the sole beneficiaries of which are Holder and
Holder's immediate family and descendants; provided that all such transferees
shall be treated as a single Holder for all purposes of this Warrant. Other than
as expressly provided in the preceding sentence, neither this Warrant nor any
interest herein may be assigned, transferred, pledged or otherwise conveyed, and
this Warrant is not exchangeable for another warrant or warrants. Upon receipt
by JBI of satisfactory evidence of the loss, theft or destruction of this
Warrant and of indemnification reasonably satisfactory to JBI (and upon
surrender and cancellation of this Warrant, if mutilated), JBI will issue to
Holder a new Warrant of like tenor and date.
ANTI-DILUTION PROVISIONS. The Exercise Price and the number
and kind of securities purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time as hereinafter provided:
(d) If JBI shall at any time issue Common Stock as a dividend
upon Common Stock or in payment of a dividend thereon, the Exercise Price then
in effect shall be proportionately decreased, effective immediately upon the
record date for the determination of shareholders entitled to receive the same.
If JBI shall at any time subdivide or combine its
outstanding shares of Common Stock (by any stock split, recapitalization,
reclassification or otherwise), the Exercise Price then in effect shall be
proportionately decreased or increased, as the case may be, effective
immediately upon the effective date of such subdivision or combination, or if
earlier, any record date established by JBI in connection therewith.
Subject to JBI's rights to terminate this Warrant pursuant
to Section 2(b), if any capital reorganization or reclassification of the
capital stock of JBI, or consolidation or merger of JBI with another entity
(other than a change in par value of stock or a merger in which JBI is the
surviving corporation and which does not result in any reclassification or
change in its capital stock, other than a change in par value), or the sale or
transfer of all or substantially all of its assets to another entity shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provision shall be made
whereby Holder shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions specified in this Warrant and in lieu of
the Available Warrant Shares, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of Available Warrant Shares had
such reorganization, reclassification, consolidation, merger or sale not taken
place, and in any such case appropriate provision shall be made with respect to
the rights and interest of Holder so that the provisions of this Warrant
(including, without limitation, exercise periods and provisions for adjustment
of the Exercise Price and of the number of shares issuable upon the exercise of
this Warrant) shall thereafter be applicable as nearly as may be in relation to
any shares of stock, securities or assets thereafter deliverable upon exercise
of this warrant. Subject to JBI's right to terminate this Warrant pursuant to
Section 2(b), JBI shall not effect any such consolidation, merger or sale unless
prior to or simultaneously with the consummation thereof the successor entity
(if other than JBI)
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resulting from such consolidation or merger or the entity purchasing such assets
shall assume, by written instrument, the obligation to deliver to Holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, Holder may be entitled to purchase. The provisions hereof shall not
affect in any way the right or power of JBI to effect a reorganization,
reclassification, consolidation, merger or sale of all or substantially all of
its assets.
If JBI shall at any time make any non-cash distribution or
dividend on its Common Stock in connection with a transaction that does not
result in a change in the Exercise Price or the number or kind of securities
issuable upon exercise of this Warrant pursuant to paragraphs (a), (b) or (c) of
this Section 4, the Board of Directors may, at its sole option, make an
appropriate provision, including but not limited to a decrease in the Exercise
Price, so as to provide for the interest of Holder.
Upon each adjustment of the Exercise Price pursuant to
paragraph (a), (b) or (d) of this Section 4, the number of shares of Common
Stock specified in this Warrant shall thereupon evidence the right to purchase
that number of shares of Common Stock (calculated to the nearest hundredth of a
share of Common Stock) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
purchasable immediately prior to such adjustment upon exercise of such Warrant
and dividing the product obtained by the Exercise Price in effect after such
adjustment.
Any adjustment of the Exercise Price or of the number or
kind of securities issuable upon exercise of this Warrant shall be effective
notwithstanding that this Warrant may continue to express the number of shares
of Common Stock and Exercise Price in effect prior to such adjustments.
A certificate of any firm of independent public accountants
of recognized standing selected by JBI's Board of Directors shall be conclusive
evidence of any computation made under this Section 4 or under Section 2(b).
Whenever there is an adjustment in the Exercise Price or in
the number or kind of securities issuable upon exercise of this Warrant, or
both, as provided in this Section 4, JBI shall (i) promptly file in the custody
of its Secretary or Assistant Secretary a certificate signed by the Chairman of
the Board or the President or a Vice President of JBI and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of JBI, showing
in detail the facts requiring such adjustment and the number and kind of
securities issuable upon exercise of this Warrant after such adjustment; and
(ii) send to Holder a notice stating that such adjustment has been effected and
stating the Exercise Price then in effect and the number and kind of securities
issuable upon exercise of this Warrant.
The Exercise Price and the number of shares issuable upon
exercise of this Warrant shall not be adjusted except in the manner and only
upon the occurrence of the events heretofore specifically referred to in this
Section 4.
NOTICE TO WARRANT HOLDER. So long as this Warrant is
outstanding, (a) if JBI offers to the holders of Common Stock any share of any
class or any other rights for subscription or purchase by them or (b) if any
capital reorganization of JBI, reclassification of the capital stock of JBI,
consolidation or
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merger of JBI with or into another entity (other than a change in par value of
stock or a merger in which JBI is the surviving corporation and which does not
result in any reclassification or change in the Common Stock, other than a
change in par value), or sale, or transfer of all or substantially all of the
property and assets of JBI to another entity, or voluntary or involuntary
dissolution, liquidation or winding up of JBI shall be effected, then in any
such case, JBI shall cause to be mailed by certified mail to Holder, at his last
address filed with JBI, at least fifteen (15) days prior to the date specified
in (x) or (y), below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be fixed for the purpose of such rights, or (y) such classification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place and the date, if any is to be fixed, as of which the
holders of Common Stock or other securities shall receive cash or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up.
CERTAIN COVENANTS OF JBI. JBI shall comply with all laws and
regulations applicable to the issuance of shares or other securities pursuant to
the terms hereof. Notwithstanding any provision to the contrary, if at the time
of any exercise of this Warrant, JBI, upon the advice of its counsel, shall have
determined that any legal requirement required to be satisfied by JBI prior to
the issuance of Warrant Shares or other securities pursuant hereto has not been
satisfied, then the issuance of such shares or securities shall not occur until
such requirement has been satisfied and, in such event, (a) the period specified
in this Warrant for purchase of such Warrant Shares or other securities shall be
extended by the number of days equivalent to the period beginning on the date of
the aforementioned exercise and ending on the second business day following the
date the requirement in question is complied with, and (b) the shares or other
securities purchased shall be deemed to be issued for all intents and purposes
as of the first business day following the date of such compliance. All shares
which may be issued upon the exercise of this Warrant will, upon issuance, be
duly and validly issued, fully paid and non-assessable and free from all taxes,
liens and charges with respect to the issue thereof. JBI further agrees to
submit for the approval of JBI's Board of Directors, its Articles of
Incorporation to increase the authorized shares of Common Stock. If such
amendment is approved by the shareholders, and so long as the rights represented
by this Warrant may be exercised, JBI will have authorized and reserved for the
purpose of issue upon exercise of the purchase rights evidenced by this and all
other warrants and options of JBI, a sufficient number of shares of its Common
Stock to provide for the exercise of the rights represented thereby.
TRANSFER TO COMPLY WITH APPLICABLE LAWS. The transfer of this
Warrant is subject to the provisions of Section 3. Any shares or other
securities issued or issuable upon exercise of this Warrant may not be sold or
otherwise disposed of except (a) in accordance with applicable securities laws
and (b) to a person to whom such shares or other securities may legally be
transferred without expense to JBI under federal and state laws and regulations
applicable to such sale or disposition.
FRACTIONAL SHARES. The exercise of this Warrant shall be only
to the nearest whole share as to which it is exercisable, and no cash will be
paid and no fraction of a share or scrip shall be issued in lieu of any fraction
of a share.
RIGHTS OF HOLDER. This Warrant does not entitle Holder to any
rights whatsoever of a shareholder. The rights of Holder are limited to those
expressed in this Warrant and are not enforceable against JBI except to the
extent expressly set forth herein.
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JEFFBANKS, INC.
By:
Betsy Z. Cohen, Chairman
and Chief Executive Officer
[SEAL]
ATTEST:
Dated as of: January 21, 1997
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WARRANT - SCHEDULE 1
Pursuant to Section 14(a) of the Warrant ("Anti-Dilution Provisions"), the
exercise price of the Warrant has been adjusted to $11.24 to reflect a 5% stock
dividend to all Shareholders on May 13, 1997.
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EXHIBIT 5
September 15, 1997
Grant Thornton LLP
Two Commerce Square
Suite 3100
2001 Market Street
Philadelphia, PA 19103-9970
RE: JeffBanks, Inc.
Gentlemen:
We have been requested (the "Request") by JeffBanks, Inc. (the
"Corporation") to furnish you with certain information in connection with your
examination of its financial statements as of December 31, 1996 and as of
September 15, 1997, the effective date of this reply.
Referring to the Corporation's request that we furnish you information
with respect to pending or threatened litigation or claims, and unasserted
claims and assessments, please be advised that our response is limited as
follows:
(1) We are using the following definition of "litigation or
lawsuit in which the company [sic] is involved directly or indirectly, and of
any claims asserted against this company [sic] even though legal proceedings
have not started" as referred to in the Request: matters which in each case are
understood by us to involve claims that are not admitted liabilities and are
being or would be contested, and which are either the subject of pending
litigation involving the Corporation or involve instances where a potential
claimant has manifested to us, the Corporation or the management of the
Corporation (which has notified us thereof) an awareness of and present
intention to assert an alleged claim or assessment.
(2) With respect to unasserted claims and assessments, we
advise and consult with the Corporation from time to time concerning the
question of financial statement or other public disclosure of unasserted claims
or assessments which have been identified by us or the Corporation only if and
when the Corporation requests such advice and consultation (in writing or by a
specific oral request) with respect to a particular unasserted claim or
assessment and we and the Corporation agree on the nature, extent and cost of
the engagement.
(3) We are not undertaking to comment upon pending or
threatened litigation, claims and assessments, other than as defined in
paragraph (1) above, and we are not undertaking to comment upon (i) any
unasserted claims and assessments which are not specifically identified in the
Request and our comment thereon specifically requested by the Corporation, or
(ii) any advice rendered by us to the Corporation concerning or relating to
unasserted claims or assessments.
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(4) Our response is directed only to matters which have been
given substantive attention by us in the form of legal consultation and, where
appropriate, legal representation and which we have recognized as falling within
the matters referred to in paragraph (1) hereof or which have been specifically
identified in the Request and our comment thereon specifically requested by the
Corporation. In the preparation of this response, our procedures have been
limited to an endeavor to determine from lawyers presently in our firm who have
performed services for the Corporation whether such services involved
substantive attention in the form of legal consultation concerning any such
matters. Accordingly, it is to be noted that we have made no independent review
of any of the transactions or contractual arrangements of the Corporation for
purposes of this response.
Subject to the foregoing, we advise that we have been engaged to give
substantive attention to, or to represent the Corporation in connection with the
litigation previously described in our letter to you dated January 13, 1997 as
well as the following matter:
Effect Leather Shoes Factory, Ltd. v. Jefferson Bank, Court of Common
Pleas, Montgomery County, PA, No. 97-11821
On June 23, 1997, Effect Leather Shoes Factory, Ltd. ("Effect
Leather") commenced this action against Jefferson Bank, alleging counts of
breach of consignee's duty, breach of contract, conversion and fraud.
According to Effect Leather, Jefferson Bank received bills of lading as a
consignee and forwarded them to its customer J.A.E. Holdings, Inc. ("J.A.E.")
without ensuring that J.A.E. made payment to Effect Leather. Jefferson Bank
denies any liability to Effect Leather. During the period in question, Jefferson
Bank was not acting as consignee. Moreover, Jefferson Bank never received the
bills of lading at issue. Effect Leather seeks damages in the amount of
$35,654.10. At the present time, we are unable to express an opinion as to the
likelihood of an unfavorable outcome or an estimate of the potential loss to the
Jefferson Bank with respect to this matter.
With respect to the "other matters" referred to in the Request, please
be advised that (i) we have not performed any lien searches and so are unable to
comment regarding the filing of financing statements with respect to the assets
of the Corporation, and (ii) as of September 15, 1997, the effective date of
this letter, a total of $6,932.00 is due to us from the Corporation and its
subsidiaries for services rendered.
We confirm as correct the understanding of the Corporation that
whenever, in the course of performing legal services for the Corporation with
respect to a matter recognized to involve an unasserted possible claim or
assessment that may call for financial statement disclosure, we have formed a
professional conclusion that the Corporation must disclose or consider
disclosure concerning such possible claim or assessment, we, as a matter of
professional responsibility to the Corporation, will so advise the Corporation
and will consult with the Corporation concerning the question of such disclosure
and the applicable requirements of Statement of Financial Accounting Standards
No. 5.
Very truly yours,
/s/
LEDGEWOOD LAW FIRM, P.C.
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EXHIBIT 23(b)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 15, 1997 (except for notes 2 and 7, as
to which the dates are January 21, 1997 and February 5, 1997, respectively)
accompanying the consolidated financial statements of JeffBanks, Inc. and
Subsidiaries appearing in the Annual Report on Form 10-K for the year ended
December 31, 1996 which is included in this Registration Statement. We consent
to the incorporation by reference in the Registration Statement of the
aforementioned report and to the use of our name as it appears under the caption
"Experts."
Grant Thornton LLP
/s/
Philadelphia, Pennsylvania
September 23, 1997
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