As filed with the Securities and Exchange Commission on July 10, 2009
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
First Litchfield Financial Corporation
(Exact name of registrant as specified in its charter)
Delaware 06-1241321
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
-----------
13 North Street
Litchfield, Connecticut 06759
(860) 567-8752
(Address, including ZIP code, and telephone number, including area code,
of registrant's principal executive offices)
-----------
Joseph J. Greco
President & Chief Executive Officer
First Litchfield Financial Corporation
13 North Street
P.O. Box 578
Litchfield, Connecticut 06759
(860) 567-8752
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
-----------
Copy to:
Thomas A. Klee, Esq.
Cranmore, FitzGerald & Meaney
49 Wethersfield Avenue
Hartford, Connecticut 06114
(860) 522-9100
From time to time after the effective date of this Registration Statement
(Approximate date of commencement of proposed sale to the public)
-----------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| ___________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ___________
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(c) under the Securities Act,
check the following box. |_|
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. |_|
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated file"
and "smaller reporting company' in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
-----------
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Proposed Proposed
Amount Maximum Maximum
Title of Securities to be Offering Price Aggregate Amount of
to be Registered Registered per Unit Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------
Fixed Rate Cumulative Preferred 10,000 $1,000.00(2) $10,000,000.00(2) $558.00
Stock, Series A, par value $0.00001
per share
Warrant to Purchase Common Stock, 199,203(1) $7.53(3) $1,499,998.50(3) $ 83.70
par value $0.01 per share, and
underlying Common Stock issuable
upon exercise of Warrant
---------------
Total $11,499,998.50 $641.70
====================================================================================================================
(1) Pursuant to Rule 416(a), includes such additional shares of Common Stock,
of a currently indeterminable amount, as may be issued from time to time
upon exercise of the warrant to prevent dilution resulting from stock
splits, stock dividends or similar transactions as provided in the warrant
to Purchase Common Stock.
(2) Pursuant to Rule 457 under the Securities Act of 1933, based on the amount
received upon the initial sale of the Fixed Rate Cumulative Preferred
Stock, Series A.
(3) Pursuant to Rule 457(g) under the Securities Act of 1933, based on the
exercise price of the Warrant to Purchase Stock.
- --------------------------------------------------------------------------------
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.
The information in this prospectus is not complete and may be changed or
supplemented. The securities described in this prospectus cannot be sold until
the registration statement that we have filed to cover the securities has become
effective under the rules of the Securities and Exchange Commission. 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 such offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED JULY 10, 2009
PROSPECTUS
FIRST LITCHFIELD FINANCIAL CORPORATION
10,000 Shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A,
par value $.00001 per share
Warrant to Purchase 199,203 Shares of Common Stock, par value $.01 per share
199,203 Shares of Common Stock, par value $.01 per share
This prospectus relates to (1) possible resales from time to time by
selling securityholders of some or all of (a) the 10,000 outstanding Fixed Rate
Cumulative Perpetual Preferred Stock, Series A, par value $.00001 per share (the
"Series A Preferred Stock"), of First Litchfield Financial Corporation (b) a
warrant (the "Warrant") to purchase 199,203 shares of Common Stock, par value
$.01 per share (the "Common Stock"), of First Litchfield Financial Corporation,
for cash at an initial exercise price of $7.53 per share of Common Stock, and
(c) any shares of Common Stock issued upon exercise of the Warrant and (2) any
issuance of shares of Common Stock upon exercise of the Warrant if such issuance
is not exempt from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"). In this prospectus, we refer to the Series A
Preferred Stock, the Warrant and the Common Stock issued upon exercise of the
Warrant, collectively, as the Securities. The Series A Preferred Stock and the
Warrant were originally issued by us pursuant to the Letter Agreement dated
December 12, 2008, and the related Securities Purchase Agreement - Standard
Terms, between us and the United States Department of the Treasury, which we
refer to as the initial selling securityholder, in a transaction exempt from the
registration requirements of the Securities Act.
In this prospectus, we refer to the initial selling securityholder and its
successors, including transferees, as the selling securityholders. The selling
securityholders may offer the Securities from time to time, directly or through
underwriters, broker-dealers or agents and in one or more public or private
transactions and at fixed prices, prevailing market prices, at prices related to
prevailing market prices or at negotiated prices. If the Securities are sold
through underwriters, broker-dealers or agents, the selling securityholders will
be responsible for underwriting discounts or commissions or agents' commissions.
We will not receive any proceeds from the sales of Securities by the
selling securityholders.
The Series A Preferred Stock is not listed on any securities exchange or
included in any automated quotation system, and, unless requested by the initial
selling securityholder, we do not intend to list the Series A Preferred Stock on
any exchange.
Our Common Stock is traded on the over-the-counter market under the symbol
"FLFL.OB." On July 8, 2009, the last sale of our Common Stock as reported on the
over-the-counter market was $6.39 per share.
1
Our principal executive offices are located at 13 North Street, P.O. Box
578, Litchfield, Connecticut 06759, and our telephone number is (860) 567-8752.
-------------
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS REFERRED TO ON PAGE 6 OF THIS
PROSPECTUS AND SET FORTH IN THE DOCUMENTS INCORPORATED BY REFERENCE BEFORE
PURCHASING ANY OF THESE SECURITIES.
-------------
NONE OF THE SECURITIES AND EXCHANGE COMMISSION, THE FEDERAL DEPOSIT INSURNACE
COMMISSION (THE "FDIC"), THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM OR
ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATIONS
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF ANY BANK AND ARE NOT INSURED OR GUARANTEED BY THE FDIC, THE
BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
-------------
Prospectus dated ______ __, 2009
2
TABLE OF CONTENTS
PROSPECTUS
Page
----
About this Prospectus 4
About First Litchfield Financial Corporation 5
Forward-Looking Statements 5
Risk Factors 6
Where You Can Find More Information 6
Incorporation By Reference 6
About This Offering 8
Determination of Offering Price 8
Use of Proceeds 8
Description of Series A Preferred Stock 9
Description of Warrant to Purchase Common Stock 14
Description of Common Stock 16
Selling Securityholders 18
Plan of Distribution 18
Legal Matters 20
Experts 20
3
ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. Under this shelf registration
process, the selling securityholders may, from time to time, sell any
combination of the securities described in this prospectus in one or more
offerings.
The registration statement containing this prospectus, including the
exhibits to the registration statement, provides additional information about us
and the securities offered under this prospectus. The registration statement,
including the exhibits and the documents incorporated herein by reference, can
be read on the SEC website or at the SEC offices mentioned under the heading
"Where You Can Find More Information."
We may provide a prospectus supplement containing specific information
about the terms of a particular offering by the selling securityholders. The
prospectus supplement may add, update or change information in this prospectus.
If the information in the prospectus is inconsistent with a prospectus
supplement, you should rely on the information in that prospectus supplement.
You should read both this prospectus and, if applicable, any prospectus
supplement. See "Where You Can Find More Information" for more information.
We have not authorized any dealer, salesman or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus or any prospectus supplement. You
must not rely upon any information or representation not contained or
incorporated by reference in this prospectus or any prospectus supplement. This
prospectus and any prospectus supplement do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the registered
securities to which they relate, nor do this prospectus and any prospectus
supplement constitute an offer to sell or the solicitation of an offer to buy
securities in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. You should not assume that the
information contained in this prospectus or any prospectus supplement is
accurate on any date subsequent to the date set forth on the front of such
document or that any information we have incorporated by reference is correct on
any date subsequent to the date of the document incorporated by reference, even
though this prospectus and any prospectus supplement is delivered or securities
are sold on a later date.
Unless otherwise stated or the context otherwise requires, all references
to "First Litchfield Financial Corporation," "the Company," "we," "our," "us"
and similar terms refer to First Litchfield Financial Corporation and its
consolidated subsidiary, except that such terms refer to only First Litchfield
Financial Corporation and not its consolidated subsidiary in the sections
entitled "Description of Series A Preferred Stock," "Description of Warrant to
Purchase Common Stock" and "Description of Common Stock."
Unless otherwise indicated, currency amounts in this prospectus and in any
applicable prospectus supplement are stated in U.S. dollars.
4
ABOUT FIRST LITCHFIELD FINANCIAL CORPORATION
First Litchfield Financial Corporation is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended. The Company was
formed in 1988 and has one banking subsidiary, The First National Bank of
Litchfield (the "Bank"), a national banking association organized under the laws
of the United States. The Bank and its predecessors have been in existence since
1814. The Company owns all of the outstanding shares of the Bank. The Bank has
three subsidiaries, Lincoln Corporation, Litchfield Mortgage Service Corporation
and First Litchfield Leasing Corporation. The Bank holds a majority ownership
position in First Litchfield Leasing Corporation. The purpose of Lincoln
Corporation is to hold property such as real estate, personal property,
securities, or other assets, acquired by the Bank through foreclosure or
otherwise to compromise a doubtful claim or collect a debt previously
contracted. The purpose of Litchfield Mortgage Service Corporation is to operate
as a passive investment company in accordance with Connecticut law. The purpose
of First Litchfield Leasing Corporation is to provide equipment financing and
leasing products. In 2003, the Company formed First Litchfield Statutory Trust I
for the purpose of issuing trust preferred securities and investing the proceeds
in subordinated debentures issued by the Company, and on June 26, 2003, the
first series of trust preferred securities were issued. During 2006, the Company
formed a second statutory trust, First Litchfield Statutory Trust II ("Trust
II"). The Company owns 100% of Trust II's common stock. Trust II exists for the
sole purpose of issuing trust securities and investing the proceeds in
subordinated debentures issued by the Company. In June 2006, Trust II issued its
first series of trust preferred securities.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference, as
well as other filings, reports and press releases made or issued by the Company
and the Bank, and oral statements made by executive officers of the Company and
Bank, may include "forward-looking statements" relating to such matters as (a)
assumptions concerning future economic and business conditions and their effect
on the economy in general and on the markets in which the Company and the Bank
do business, and (b) expectations for increased revenues and earnings for the
Company and Bank through growth resulting from acquisitions, attraction of new
deposit and loan and lease customers and the introduction of new products and
services. Such forward-looking statements are based on assumptions rather than
historical or current facts and, therefore, are inherently uncertain and subject
to risk. For those statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
The Company notes that a variety of factors could cause the actual results
or experience to differ materially from the anticipated results or other
expectations described or implied by such forward-looking statements. The risks
and uncertainties that may affect the operations, performance, development and
results of the Company's and Bank's business include the following: (a) the risk
of adverse changes in business conditions in the banking industry generally and
in the specific markets in which the Bank operates; (b) changes in the
legislative and regulatory environment that negatively impact the Company and
Bank through increased operating expenses; (c) increased competition from other
financial and non-financial institutions (d) the impact of technological
advances; and (e) other risks detailed from time to time in the Company's
filings with the SEC.
5
RISK FACTORS
An investment in our securities involves significant risks. You should
carefully consider the risks and uncertainties and the risk factors set forth in
the documents and reports filed with the SEC that are incorporated by reference
into this prospectus, as well as any risks described in any applicable
prospectus supplement, before you make an investment decision regarding the
securities. Additional risks and uncertainties not presently known to us or that
we currently deem immaterial may also affect our business operations.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934. Accordingly, we file annual, quarterly and current reports, proxy
statements and other information with the SEC and filed a registration statement
on Form S-3 under the Securities Act of 1933 relating to the securities offered
by this prospectus. This prospectus, which forms part of the registration
statement, does not contain all of the information included in the registration
statement. For further information, you should refer to the registration
statement and its exhibits.
You may read and copy the registration statement and any document we file
with the SEC at the SEC's Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. You can also review
our filings by accessing the website maintained by the SEC at
http://www.sec.gov. The site contains reports, proxy and information statements
and other information regarding issuers that file electronically with the SEC.
In addition, to the foregoing, we maintain a website at http://www.fnbl.com. Our
website content is made available for informational purposes only. It should
neither be relied upon for investment purposes nor is it incorporated by
reference into this prospectus.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with the SEC into this prospectus, which means we can disclose important
information to you by referring you to another document. The information
incorporated by reference is considered to be part of this prospectus from the
date on which we file that document. Any reports filed by us with the SEC after
the date of this prospectus and before the termination of the offering of the
securities by means of this prospectus will automatically update and, where
applicable, supersede information contained in this prospectus or incorporated
by reference into this prospectus. We incorporate by reference the following
documents:
(a) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 2008, as amended by Form 10-K/A filed on April 23,
2009;
(b) The Corporation's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009 filed on May 15, 2009;
(c) The Corporation's Current Reports on Form 8-K filed on March 10,
2009, March 26, 2009, March 27, 2009, March 31, 2009, April 10,
2009, May 15, 2009, May 20, 2009, May 21, 2009, May 26, 2009 and
July 1, 2009; and
(d) All other reports filed by the Corporation pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act")
since December 31, 2008; and
6
(e) The description of the Corporation's common stock contained in its
Form 10-SB, filed January 7, 2000, and any amendment or report filed
for the purpose of updating such description.
All documents subsequently filed by the Corporation pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be part thereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this registration statement shall be deemed to be modified or superseded for
purposes of this registration statement to the extent that a statement contained
herein or in any other subsequently filed document which 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 registration statement.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address:
First Litchfield Financial Corporation
13 North Street
P.O. Box 578
Litchfield, Connecticut 06759
(860) 567-8752
ATTN: Carroll A. Pereira, Treasurer
7
ABOUT THIS OFFERING
This prospectus relates to possible resales of our Series A Preferred
Stock, a Warrant to purchase 199,203 shares of our Common Stocks and any shares
of Common Stock issued from time to time upon exercise of the Warrant. The
Series A Preferred Stock and the Warrant were issued on December 12, 2008 to the
United States Department of Treasury for an aggregate price of $10 million in a
private placement exempt from the registration requirements of the Securities
Act of 1933. In connection with the private placement and pursuant to a
registration rights agreement, we agreed, subject to certain limitations, to
file this registration statement with the SEC and to use our reasonable best
efforts to cause this registration statement to become effective as promptly as
practicable after filing. This prospectus also relates to any issuance of shares
of Common Stock upon exercise of the Warrant if such issuance is not exempt from
the registration requirements of the Securities Act of 1933.
DETERMINATION OF OFFERING PRICE
This offering is being made solely to allow the selling securityholders to
offer and sell the securities to the public. The selling securityholders may
offer for resale some or all of their securities at the time and price that they
choose. On any given day, the price per share of Common Stock is likely to be
based on the market price for our Common Stock on the over-the-counter market.
USE OF PROCEEDS
This prospectus relates to the securities that may be offered and sold
from time to time by the selling securityholders who will receive all of the
proceeds from the sale of the securities. The Company will not receive any of
the proceeds from the sales of the securities by the selling securityholders.
Most of the costs and expenses incurred in connection with the registration
under the Securities Act of the offered securities will be paid by the Company.
The selling securityholders will pay any brokerage fees and commissions, fees
and disbursements of legal counsel for the selling securityholders, and share
transfer and other taxes attributable to the sale of the offered securities.
This prospectus also relates to any issuance of Common Stock upon exercise
of the Warrant if such issuance is not exempt from the registration requirements
of the Securities Act of 1933. If the Warrant is exercised, the Company will
receive $7.53 for each share of Common Stock issued upon exercise. If the
Warrant were exercised in full, we would receive an aggregate of $1,499,998.50
for the Common Stock issued upon exercise (or $749,999.25 if the number of
shares of Common Stock subject to the Warrant is reduced as described under
"Description of Warrant to Purchase Common Stock - Common Stock Subject to the
Warrant"). Because the Warrant is exercisable at any time on or before December
12, 2018, we cannot predict if and when (if ever) the Warrant may be exercised,
but we currently expect that any proceeds we may receive upon any such exercise
would be used for general corporate purposes.
8
DESCRIPTION OF SERIES A PREFERRED STOCK
The following is a brief description of the terms of the Series A
Preferred Stock that may be resold by the selling securityholders. This summary
does not purport to be complete in all respects. This description is subject to
and qualified in its entirety by reference to our Certificate of Incorporation,
as amended, and Certificates of Designations, including the related Certificate
of Designations with respect to the Series A Preferred Stock (the "Series A
Certificate of Designations"), copies of which have been filed with the SEC and
are also available upon request from us.
General
We have the authority to issue up to 1,000,000 shares of Preferred Stock,
par value $.00001 per share. Of such number of shares of Preferred Stock, 10,000
shares have been designated as Series A Preferred Stock, all of which shares of
Series A Preferred Stock were issued to the initial selling securityholder in a
transaction exempt from the registration requirements of the Securities Act. The
issued and outstanding shares of Series A Preferred Stock are validly issued,
fully paid and nonassessable.
Dividends Payable
Holders of the Series A Preferred Stock are entitled to receive if, as and
when declared by our board of directors or a duly authorized committee of the
board, out of assets legally available for payment, cumulative cash dividends at
a rate per annum of 5% per share on a liquidation preference of $1,000 per share
with respect to each dividend period from December 23, 2008 to, but excluding,
February 15, 2014. From and after February 15, 2014, holders of the Series A
Preferred Stock are entitled to receive cumulative cash dividends at a rate per
annum of 9% per share on a liquidation preference of $1,000 per share with
respect to each dividend period thereafter.
Dividends are payable quarterly in arrears on each February 15, May 15,
August 15 and November 15, each a dividend payment date, starting with February
15, 2009. If any dividend payment date is not a business day, then the next
business day will be the applicable dividend payment date, and no additional
dividends will accrue as a result of the applicable postponement of the dividend
payment date. Dividends payable during any dividend period are computed on the
basis of a 360-day year consisting of twelve 30-day months. Dividends payable
with respect to the Series A Preferred Stock are payable to holders of record of
Series A Preferred Stock on the date that is 15 calendar days immediately
preceding the applicable dividend payment date or such other record date as the
board of directors or any duly authorized committee of the board determines, so
long as such record date is not more than 60 nor less than 10 days prior to the
applicable dividend payment date.
If we determine not to pay any dividend or a full dividend with respect to
the Series A Preferred Stock, we are required to provide written notice to the
holders of Series A Preferred Stock prior to the applicable dividend payment
date.
We are subject to various regulatory policies and requirements relating to
the payment of dividends, including requirements to maintain adequate capital
above regulatory minimums. The Federal Reserve Board is authorized to determine,
under certain circumstances relating to the financial condition of a bank
holding company, such as us, that the payment of dividends would be an unsafe or
unsound practice and to prohibit payment thereof. In addition, we are subject to
Delaware state laws relating to the payment of dividends.
Priority of Dividends
9
With respect to the payment of dividends and the amounts to be paid upon
liquidation, the Series A Preferred Stock will rank:
o senior to our Common Stock and all other equity securities
designated as ranking junior to the Series A Preferred Stock; and
o at least equally with all other equity securities designated as
ranking on a parity with the Series A Preferred Stock, or parity
shares, with respect to the payment of dividends and distribution of
assets upon any liquidation, dissolution or winding-up of the
Company.
So long as any shares of Series A Preferred Stock remain outstanding,
unless all accrued and unpaid dividends for all prior dividend periods have been
paid or are contemporaneously declared and paid in full, no dividend whatsoever
shall be paid or declared on the Common Stock or other junior shares, other than
a dividend payable solely in shares of Common Stock. Similarly, so long as any
shares of Series A Preferred Stock remain outstanding, we and our subsidiaries
may not purchase, redeem or otherwise acquire for consideration any of our
shares of Common Stock or other junior shares unless all accrued and unpaid
dividends for all prior dividend periods have been paid or are contemporaneously
declared and paid in full, other than:
o purchases, redemptions or other acquisitions of our Common Stock or
other junior shares in connection with the administration of our
employee benefit plans in the ordinary course of business and
consistent with past practice, including purchases pursuant to a
publicly announced repurchase plan up to the increase in diluted
shares outstanding resulting from the grant, vesting or exercise of
equity-based compensation;
o purchases or other acquisitions by a broker-dealer subsidiary of the
Company solely for the purpose of market-making, stabilization or
customer facilitation transactions in junior shares or parity shares
in the ordinary course of its business;
o purchases by a broker-dealer subsidiary of the Company of our
capital shares for resale pursuant to an offering by the Company of
such shares that is underwritten by such broker-dealer subsidiary;
o any dividends or distributions of rights or junior shares in
connection with any shareholders' rights plan or any redemption or
repurchases of rights pursuant to any shareholders' rights plan;
o acquisition by the Company or any of its subsidiaries of record
ownership of junior shares or parity shares for the beneficial
ownership of any other person who is not the Company or a subsidiary
of the Company, including as trustee or custodian; and
o the exchange or conversion of junior shares for or into other junior
shares or of parity shares for or into other parity shares or junior
shares but only to the extent that such acquisition is required
pursuant to binding contractual agreements entered into before
December 12, 2008 or any subsequent agreement for the accelerated
exercise, settlement or exchange thereof for Common Stock.
Until such time as the initial selling securityholder ceases to own any
shares of Series A Preferred Stock, if we repurchase shares of Series A
Preferred Stock from a holder who is not the initial selling
10
securityholder, other than permitted repurchases, we must offer to repurchase a
ratable portion of the Series A Preferred Stock then held by the initial selling
securityholder.
On any dividend payment date for which full dividends are not paid, or
declared and funds set aside therefor, on the Series A Preferred Stock and any
other parity shares, all dividends paid or declared for payment on that dividend
payment date (or, with respect to parity shares with a different dividend
payment date, on the applicable dividend date therefor falling within the
dividend period and related to the dividend payment date for the Series A
Preferred Stock), with respect to the Series A Preferred Stock and any other
parity shares shall be declared ratably among the holders of any such shares who
have the right to receive dividends, in proportion to the respective amounts of
the undeclared and unpaid dividends relating to the dividend period.
Subject to the immediately preceding paragraph, such dividends (payable in
cash, securities or otherwise) as may be determined by our board of directors
(or a duly authorized committee of the board) may be declared and paid on our
Common Stock and any other shares ranking junior to the Series A Preferred Stock
from time to time out of any funds legally available for such payment, and the
Series A Preferred Stock shall not be entitled to participate in any such
dividend.
Redemption
The Series A Certificate of Designations provides that shares of the
Series A Preferred Stock may not be redeemed prior to February 15, 2012 unless
we have received aggregate gross proceeds from one or more qualified equity
offerings (as described below) equal to $2,500,000, which equals 25% of the
aggregate liquidation amount of the Series A Preferred Stock on the date of
issuance. In such a case, we may redeem the Series A Preferred Stock, subject to
the approval of Federal Reserve Board, in whole or in part, upon notice as
described below, up to a maximum amount equal to the aggregate net cash proceeds
received by us from such qualified equity offerings. A "qualified equity
offering" is a sale and issuance for cash by us, to persons other than the
Company or its subsidiaries after December 12, 2008, of perpetual preferred
shares, Common Stock or a combination thereof, that in each case qualify as Tier
1 capital of the Company at the time of issuance under the applicable risk-based
capital guidelines of the Federal Reserve Board (other than any such sales or
issuances made pursuant to agreements or arrangements entered into, or pursuant
to financing plans that were publicly announced, on or prior to October 13,
2008).
The American Recovery and Reinvestment Act of 2009 provides that the
Company, subject to consultation with the appropriate Federal banking agency,
may redeem the Series A Preferred Stock at any time without regard to whether
the Company has replaced the funds received upon the sales of the Series A
Preferred Stock from any other source. It further provides that if such
redemption occurs, the Treasury shall liquidate the Warrant at the current
market price.
After February 15, 2012, the Series A Preferred Stock may be redeemed at
any time, subject to the approval of the Federal Reserve Board, in whole or in
part, subject to notice as described below.
In any redemption, the redemption price is an amount equal to the per
share liquidation amount plus accrued and unpaid dividends up to but excluding
the date of redemption.
The Series A Preferred Stock will not be subject to any mandatory
redemption, sinking fund or similar provisions. Holders of shares of Series A
Preferred Stock have no right to require the redemption or repurchase of the
Series A Preferred Stock.
11
If fewer than all of the outstanding shares of Series A Preferred Stock
are to be redeemed, the shares to be redeemed will be selected either pro rata
from the holders of record of shares of Series A Preferred Stock in proportion
to the number of shares held by those holders or in such other manner as our
board of directors or a committee thereof may determine to be fair and
equitable.
We will mail notice of any redemption of shares of Series A Preferred
Stock by first class mail, postage prepaid, addressed to the holders of record
of the Series A Preferred Stock to be redeemed at their respective last
addresses appearing on our books. This mailing will be at least 30 days and not
more than 60 days before the date fixed for redemption. Any notice mailed or
otherwise given as described in this paragraph will be conclusively presumed to
have been duly given, whether or not the holder receives the notice, and failure
duly to give the notice by mail or otherwise, or any defect in the notice or in
the mailing or provision of the notice, to any holder of shares of Series A
Preferred Stock designated for redemption will not affect the validity of the
redemption of any other shares of Series A Preferred Stock. Each notice of
redemption will set forth the applicable redemption date, the redemption price,
the place where the Series A Preferred Stock is to be redeemed, and the number
of shares of Series A Preferred Stock to be redeemed (and, if less than all
shares of Series A Preferred Stock held by the applicable holder, the number of
shares to be redeemed from the holder).
Series A Preferred Stock that is redeemed, repurchased or otherwise
acquired by us will revert to authorized but unissued preferred shares.
Liquidation Rights
In the event that we voluntarily or involuntarily liquidate, dissolve or
wind up our affairs, holders of Series A Preferred Stock will be entitled to
receive an amount per share, referred to as the total liquidation amount, equal
to the fixed liquidation preference of $1,000 per share, plus any accrued and
unpaid dividends, whether or not declared, to the date of payment. Holders of
the Series A Preferred Stock will be entitled to receive the total liquidation
amount out of our assets that are available for distribution to shareholders,
after payment or provision for payment of our debts and other liabilities but
before any distribution of assets is made to holders of our Common Stock or any
other shares ranking, as to that distribution, junior to the Series A Preferred
Stock.
If our assets are not sufficient to pay the total liquidation amount in
full to all holders of Series A Preferred Stock and all holders of any
outstanding parity shares, the amounts paid to the holders of the Series A
Preferred Stock and other parity shares will be paid pro rata in accordance with
the respective total liquidation amount for those holders. If the total
liquidation amount per share of Series A Preferred Stock has been paid in full
to all holders of Series A Preferred Stock and other parity shares, the holders
of our Common Stock or any other shares ranking, as to such distribution, junior
to the Series A Preferred Stock will be entitled to receive all of our remaining
assets according to their respective rights and preferences.
For purposes of the liquidation rights, neither the sale, lease or
exchange (for cash, securities or other property) of all or substantially all of
our assets, nor the consolidation or merger by us with or into any other
corporation or any other entity or by another corporation or any other entity
with or into us, will constitute a liquidation, dissolution or winding up of our
affairs.
Voting Rights
Except as indicated below or otherwise required by law, the holders of the
Series A Preferred Stock will not have any voting rights.
12
Election of Two Directors upon Non-Payment of Dividends. If the dividends
on the Series A Preferred Stock have not been paid for an aggregate of six
quarterly dividend periods or more (whether or not consecutive), the authorized
number of directors then constituting our board of directors will be increased
by two. Holders of Series A Preferred Stock, together with the holders of any
outstanding parity shares with like voting rights, referred to as voting parity
shares, voting as a single class, will be entitled to elect the two additional
members of our board of directors, referred to as the preferred share directors,
at the next annual meeting (or at a special meeting called for the purpose of
electing the preferred share directors prior to the next annual meeting) and at
each subsequent annual meeting until all accrued and unpaid dividends for all
past dividend periods have been paid in full. The election of any preferred
share director is subject to the qualification that the election would not cause
us to violate the corporate governance requirement of any other exchange on
which our securities may be listed that listed companies must have a majority of
independent directors.
Upon the termination of the right of the holders of the Series A Preferred
Stock and voting parity shares to vote for preferred share directors, as
described above, the preferred share directors will immediately cease to be
qualified as directors, their term of office shall terminate immediately and the
number of authorized directors of the Company will be reduced by the number of
preferred share directors that the holders of the Series A Preferred Stock and
voting parity shares had been entitled to elect. The holders of a majority of
the shares of Series A Preferred Stock and voting parity shares, voting as a
class, may remove any preferred share director, with or without cause, and the
holders of a majority of the shares of the Series A Preferred Stock and voting
parity shares, voting as a class, may fill any vacancy created by the removal of
a preferred share director. If the office of a preferred share director becomes
vacant for any other reason, the remaining preferred share director may choose a
successor to fill such vacancy for the remainder of the unexpired term.
Other Voting Rights. So long as any shares of Series A Preferred Stock are
outstanding, in addition to any other vote or consent of shareholders required
by law or by our Certificate of Incorporation, the vote or consent of the
holders of at least 66 2/3% of the Series A Preferred Stock at the time
outstanding, voting separately as a single class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:
o any amendment or alteration of the Series A Certificate of
Designations or our Certificate of Incorporation to authorize or
create or increase the authorized amount of, or any issuance of, any
shares of, or any securities convertible into or exchangeable or
exercisable for shares of, any class or series of our capital stock
ranking senior to the Series A Preferred Stock with respect to
payment of dividends and/or distribution of assets on any
liquidation, dissolution or winding up of the Company;
o any amendment, alteration or repeal of any provision of the Series A
Certificate of Designations or our Certificate of Incorporation so
as to adversely affect the rights, preferences, privileges or voting
powers of the Series A Preferred Stock; or
o any consummation of a binding share exchange or reclassification
involving the Series A Preferred Stock or of a merger or
consolidation of the Company with another entity, unless (i) the
shares of Series A Preferred Stock remains outstanding following any
such transaction or, if the Company is not the surviving entity, are
converted into or exchanged for preference securities of the
surviving entity or its ultimate parent, and (ii) such remaining
outstanding shares of Series A Preferred Stock or preference
securities have rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, that are not materially
less favorable than the rights, preferences, privileges or voting
powers of the Series A Preferred Stock, taken as a whole.
13
Holders of the Series A Preferred Stock will be entitled to one vote for
each such share on any matter on which holders of the Series A Preferred Stock
are entitled to vote, including any action by written consent.
The foregoing voting provisions will not apply if, at or prior to the time
when the vote or consent would otherwise be required, all outstanding shares of
Series A Preferred Stock have been redeemed or called for redemption upon proper
notice and sufficient funds have been set aside by us for the benefit of the
holders of the Series A Preferred Stock to effect the redemption.
DESCRIPTION OF WARRANT TO PURCHASE COMMON STOCK
The following is a brief description of the terms of the Warrant that may
be resold by the selling securityholders. This summary does not purport to be
complete in all respects. This description is subject to and qualified in its
entirety by reference to the Warrant, a copy of which has been filed with the
SEC and is also available upon request from us.
Common Stock Subject to the Warrant
The Warrant is initially exercisable for 199,203 shares of our Common
Stock. If we complete one or more qualified equity offerings on or prior to
December 31, 2009 that result in our receipt of aggregate gross proceeds of not
less than $10,000,000, which is equal to 100% of the aggregate liquidation
preference of the Series A Preferred Stock, the number of shares of Common Stock
underlying the Warrant then held by the selling securityholders will be reduced
by 50%. The number of shares subject to the Warrant are subject to the further
adjustments described below under the heading "Adjustments to the Warrant."
Exercise of the Warrant
The initial exercise price applicable to the Warrant is $7.53 per share of
Common Stock for which the Warrant may be exercised. The Warrant may be
exercised at any time on or before December 12, 2018 by surrender of the Warrant
and a completed notice of exercise attached as an annex to the Warrant and the
payment of the exercise price per share for the Common Stock for which the
Warrant is being exercised. The exercise price may be paid either by the
withholding by the Company of such number of shares Common Stock issuable upon
exercise of the Warrant equal to the value of the aggregate exercise price of
the Warrant determined by reference to the market price of our Common Stock on
the trading day on which the Warrant is exercised or, if agreed to by us and the
warrantholder, by the payment of cash equal to the aggregate exercise price. The
exercise price applicable to the Warrant is subject to the further adjustments
described below under the heading "Adjustments to the Warrant."
Upon exercise of the Warrant, certificates for the shares of Common Stock
issuable upon exercise will be issued to the warrantholder. We will not issue
fractional shares upon any exercise of the Warrant. Instead, the warrantholder
will be entitled to a cash payment equal to the market price of our Common Stock
on the last trading day preceding the date of exercise of the Warrant (less the
pro-rated exercise price of the Warrant) for any fractional shares that would
have otherwise been issuable upon exercise of the Warrant. We will at all times
reserve the aggregate number of shares of our Common Stock for which the Warrant
may be exercised.
Rights as a Shareholder
14
The warrantholder shall have no rights or privileges of the holders of our
Common Stock, including any voting rights, until (and then only to the extent)
the Warrant has been exercised.
Transferability
The initial selling securityholder may not transfer a portion of the
Warrant with respect to more than 50% of the Common Stock subject to the Warrant
until the earlier of the date on which the Company has received aggregate gross
proceeds from a qualified equity offering of at least $10,000,000 and December
31, 2009. The Warrant, and all rights under the Warrant, are otherwise
transferable.
Adjustments to the Warrant
Adjustments in Connection with Stock Splits, Subdivisions,
Reclassifications and Combinations. The number of shares for which the Warrant
may be exercised and the exercise price applicable to the Warrant will be
proportionately adjusted in the event we pay dividends or make distributions of
our Common Stock, subdivide, combine or reclassify outstanding Common Stock.
Anti-dilution Adjustment. Until the earlier of December 12, 2011 and the
date on which the initial selling securityholder no longer holds the Warrant or
any portion of the Warrant (and other than in certain permitted transactions
described below), if we issue any Common Stock (or securities convertible or
exercisable into Common Stock) without consideration or for less than 90% of the
market price of the Common Stock on the last trading day prior to the date of
the agreement on pricing such shares, then the number of Common Stock into which
the Warrant is exercisable and the exercise price will be adjusted. Permitted
transactions include issuances:
o as consideration for or to fund the acquisition of businesses and/or
related assets;
o in connection with employee benefit plans and compensation related
arrangements in the ordinary course and consistent with past
practice approved by our board of directors; and
o in connection with public or broadly marketed offerings and sales of
Common Stock or convertible securities for cash conducted by us or
our affiliates pursuant to registration under the Securities Act of
1933, or Rule 144A thereunder on a basis consistent with
capital-raising transactions by comparable financial institutions.
Other Distributions. If we declare any dividends or distributions other
than our historical, ordinary cash dividends, the exercise price of the Warrant
will be adjusted to reflect such distribution.
Certain Repurchases. If we effect a pro rata repurchase of shares of
Common Stock, both the number of shares issuable upon exercise of the Warrant
and the exercise price will be adjusted.
Business Combinations. In the event of a merger, consolidation or similar
transaction involving the Company and requiring shareholder approval, the
warrantholder's right to receive our Common Stock upon exercise of the Warrant
shall be converted into the right to exercise the Warrant for the consideration
that would have been payable to the warrantholder with respect to the shares
Common Stock for which the Warrant may be exercised, as if the Warrant had been
exercised prior to such merger, consolidation or similar transaction.
15
DESCRIPTION OF COMMON STOCK
The following is a description of our Common Stock and certain provisions
of our Certificate of Incorporation and Bylaws and certain provisions of
applicable law. The following is only a summary and is qualified by applicable
law and by the provisions of our Certificate of Incorporation and Bylaws, copies
of which have been filed with the SEC and are also available upon request from
us.
General
Under our Certificate of Incorporation, as amended, we have authority to
issue up to 5,000,000 shares of our Common Stock, par value $.01 per share. As
of June 30, 2009, 2,356,875 shares of our Common Stock were issued and
outstanding.
Our Common Stock is traded on the over-the-counter market. Outstanding
shares of Common Stock are validly issued, fully paid and non-assessable.
Voting Rights
Holders of shares of our Common Stock are entitled to one vote per share
on all matters submitted to a vote of shareholders. Holders of shares of our
Common Stock do not have cumulative voting rights.
Dividend Rights
Holders of shares of our Common Stock are entitled to dividends when and
as declared by our board of directors out of any funds legally available for the
payment of dividends. Holders of Series A Preferred Stock have (and other series
of preferred shares may in the future have) a priority over holders of shares of
our Common Stock with respect to dividends.
Until the earlier of December 12, 2011 and the date on which the initial
selling securityholder no longer holds any Series A Preferred Stock, we may not
declare or pay any dividend or make any distribution on the Common Stock, other
than regular quarterly cash dividends of not more than $0.15 per share, as
adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction; dividends payable solely in shares of
Common Stock; and dividends or distributions of rights or junior shares in
connection with a shareholders' rights plan.
16
Liquidation and Dissolution
In the event of the liquidation, dissolution and winding up of the
Company, the holders of our Common Stock are entitled to receive ratably all of
the assets of the Company available for distribution after satisfaction of all
liabilities of the Company, subject to the rights of the holders of any of the
Company's preferred shares that may be issued from time to time.
Other Rights
Holders of our Common Stock have no preferential or preemptive rights with
respect to any securities of the Company and there are no conversion rights or
redemption or sinking fund provisions applicable to our Common Stock.
Restrictions on Ownership
The Bank Holding Company Act requires any "bank holding company," as
defined in the Bank Holding Company Act, to obtain the approval of the Federal
Reserve Board prior to the acquisition of 5% or more of our Common Stock. Any
person, other than a bank holding company, is required to obtain prior approval
of the Federal Reserve Board to acquire 10% or more of our Common Stock under
the Change in Bank Control Act. Any holder of 25% or more of our Common Stock,
or a holder of 5% or more if such holder otherwise exercises a "controlling
influence" over us, is subject to regulation as a bank holding company under the
Bank Holding Company Act.
Certain provisions included in our Certificate of Incorporation, our
Bylaws, as well as certain provisions of the Delaware General Corporation Law
and federal law, may discourage, delay or prevent potential acquisitions of
control of us, particularly when attempted in a transaction that is not
negotiated directly with, and approved by, our board of directors, despite
possible benefits to our shareholders. These provisions are more fully set forth
in the documents and reports filed with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference into this prospectus.
Transfer Agent
The transfer agent and registrar for our Common Stock is Registrar and
Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016.
17
SELLING SECURITYHOLDERS
On December 12, 2008, we issued the Securities covered by this prospectus
to the United States Department of Treasury, which is the initial selling
securityholder under this prospectus, in a transaction exempt from the
registration requirements of the Securities Act of 1933. The initial selling
securityholder, or its successors, including transferees, may from time to time
offer and sell, pursuant to this prospectus or a supplement to this prospectus,
any or all of the securities they own. The Securities to be offered under this
prospectus for the account of the selling securityholders are:
o 10,000 shares of Series A Preferred Stock, representing beneficial
ownership of 100% of the Series A Preferred Stock outstanding on the
date of this prospectus;
o A Warrant to purchase 199,203 shares of our Common Stock; and
o 199,203 shares of Common Stock issuable upon exercise of the
Warrant, which shares, if issued, would represent approximately 7.8%
of our outstanding Common Stock on a pro forma basis as of June 30,
2009.
For purposes of this prospectus, we have assumed that, after completion of
the offering, none of the Securities covered by this prospectus will be held by
the selling securityholders.
Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting or investment power with respect to the Securities. To our
knowledge, the initial selling securityholder has sole voting and investment
power with respect to the Securities.
We do not know when or in what amounts the selling securityholders may
offer the Securities for sale. The selling securityholders might not sell any or
all of the Securities offered by this prospectus. Because the selling
securityholders may offer all or some of the Securities pursuant to this
offering, and because currently no sale of any of the Securities is subject to
any agreements, arrangements or understandings, we cannot estimate the number of
the Securities that will be held by the selling securityholders after completion
of the offering.
Other than with respect to the acquisition of the Securities, the initial
selling securityholder has not had a material relationship with us.
Information about the selling securityholders may change over time and
changed information will be set forth in supplements to this prospectus if and
when necessary.
PLAN OF DISTRIBUTION
The selling securityholders and their successors, including their
transferees, may sell the Securities directly to purchasers or through
underwriters, broker-dealers or agents, who may receive compensation in the form
of discounts, concessions or commissions from the selling securityholders or the
purchasers of the Securities. These discounts, concessions or commissions as to
any particular underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
The Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions:
o On any national securities exchange or quotation service on which
the Series A Preferred Stock or the Common Stock may be listed or
quoted at the time of sale;
o In the over-the-counter market;
18
o In transactions otherwise than on these exchanges or services or in
the over-the-counter market; or
o Through the writing of options, whether the options are listed on an
options exchange or otherwise.
In addition, any Securities that 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.
In connection with the sale of the Securities or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Common Stock issuable upon exercise of
the Warrant in the course of hedging the positions they assume. The selling
securityholders may also sell short the Common Stock issuable upon exercise of
the Warrant and deliver shares of Common Stock to close out short positions, or
loan or pledge the Series A Preferred Stock or the Common Stock issuable upon
exercise of the Warrant to broker-dealers that in turn may sell these
securities.
The aggregate proceeds to the selling securityholders from the sale of the
Securities will be the purchase price of the securities less discounts and
commissions, if any.
In effecting sales, broker-dealers or agents engaged by the selling
securityholders may arrange for other broker-dealers to participate.
Broker-dealers or agents may receive commissions, discounts or concessions from
the selling securityholders in amounts to be negotiated immediately prior to the
sale.
In offering the Securities covered by this prospectus, the selling
securityholders and any broker-dealers who execute sales for the selling
securityholders may be deemed to be "underwriters" within the meaning of Section
2(a)(11) of the Securities Act of 1933 in connection with such sales. Any
profits realized by the selling securityholders and the compensation of any
broker-dealer may be deemed to be underwriting discounts and commissions.
Selling securityholders who are "underwriters" within the meaning of Section
2(a)(11) of the Securities Act of 1933 will be subject to the prospectus
delivery requirements of the Securities Act and may be subject to certain
statutory and regulatory liabilities, including liabilities imposed pursuant to
Sections 11, 12 and 17 of the Securities Act of 1933 and Rule 10b-5 under the
Securities Exchange Act of 1934.
In order to comply with the securities laws of certain states, if
applicable, the Securities must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Securities 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.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934 may apply to sales of the Securities pursuant to this prospectus and
to the activities of the selling securityholders. In addition, we will make
copies of this prospectus available to the selling securityholders for the
purpose of satisfying the prospectus delivery requirements of the Securities Act
of 1933.
At the time a particular offer of the Securities is made, if required, a
prospectus supplement will set forth the number and type of securities being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
We do not intend to apply for listing of the Series A Preferred Stock on
any securities exchange or for inclusion of the Series A Preferred Stock in any
automated quotation system unless requested by the
19
initial selling securityholder. No assurance can be given as to the liquidity of
the trading market, if any, for the Series A Preferred Stock.
We have agreed to indemnify the selling securityholders against certain
liabilities, including certain liabilities under the Securities Act of 1933. We
have also agreed, among other things, to bear substantially all expenses (other
than underwriting discounts and selling commissions) in connection with the
registration and sale of the Securities covered by this prospectus.
This prospectus may also be used in connection with any issuance of shares
of Common Stock upon exercise of the Warrant if such issuance is not exempt from
the registration requirements of the Securities Act of 1933.
LEGAL MATTERS
The validity of the Securities offered pursuant to this prospectus has
been passed upon for us by Cranmore, FitzGerald & Meaney.
EXPERTS
The consolidated financial statements of First Litchfield Financial
Corporation and Subsidiary as of December 31, 2008 and 2007, and for the years
then ended appearing in First Litchfield Financial Corporation's 2008 Annual
Report on Form 10-K/A Amendment No. 1 have been audited by McGladrey & Pullen,
LLP, an independent registered public accounting firm, as stated in their
reports that are incorporated by reference in this Prospectus and Registration
Statement in reliance upon such report and upon the authority of such firm as
experts in accounting and auditing.
20
FIRST LITCHFIELD FINANCIAL CORPORATION
Fixed Rate Cumulative Perpetual Preferred Stock, Series A
Warrant to Purchase 199,203 Shares of Common Stock
199,203 Shares of Common Stock
PROSPECTUS
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
registration of the Securities offered hereby. First Litchfield Financial
Corporation will bear all of these expenses, including those of the selling
securityholders (other than any underwriting discounts or commissions or any
agent commissions). All amounts are estimated except for the SEC registration
fee:
Item Amount
- -----------------------------------------------------------------
SEC registration fee $ 641.70
Legal fees and expenses 7,500.00
Accounting fees and expenses 15,000.00
Printing expenses 2,500.00
Miscellaneous fees and expenses 2,358.30
----------
Total Expenses $28,000.00
==========
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law authorizes the Corporation to
indemnify Officers, Directors and certain individuals associated with the
Corporation.
In general, Article IX of the Corporation's Bylaws provides that the
Corporation shall indemnify any person who was or is a party to any threatened,
pending or completed action, suit or proceeding, and any appeal therein, whether
civil, criminal, administrative, arbitrative or investigative (other than an
action by or in the right of the Corporation) by reason of the fact that he or
she is or was a director, officer, trustee, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation,
association, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines, penalties and amounts
paid in settlement actually and reasonably incurred by him or her in connection
with such action, suit or proceeding, and any appeal therein, if he or she acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to
II-1
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, that he or she had reasonable cause to believe that his or her
conduct was unlawful.
Article IX of the Corporation's Bylaws also provides that the Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he or she is or was a director, officer, trustee, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation,
association, partnership, joint venture, trust or other enterprise, against
amounts paid in settlement and expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the defense or settlement
of such action or suit, if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Corporation; provided, however, that no indemnification shall be made against
expenses in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his or her duty to the Corporation or against amounts paid in settlement
unless and only to the extent that there is a determination (as set forth in
Article IX) that despite the adjudication of liability,or the settlement, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses or amounts paid in settlement.
Article IX of the Corporation's Bylaws further provides that expenses
incurred in connection with a threatened or pending action, suit or proceeding
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director, officer, trustee, employee or agent to repay such amount if it shall
be determined that he or she is not entitled to be indemnified by the
Corporation.
Item 16. EXHIBITS.
Exhibit No. Description
- ----------- -----------
4.1.1 Certificate of Incorporation of First Litchfield Financial
Corporation, as amended. (Incorporated by reference to Exhibit
3.1 in the Corporation's Registration Statement on Form 10-SB
filed January 7, 2000 (File No. 0-28815)).
4.1.2 Certificate of Designations for Fixed Rate Cumulative
Perpetual Preferred Stock, Series A, par value $.0001 per
share of First Litchfield Financial Corporation. (Incorporated
by reference to Exhibit 3.1 in the Corporation's Current
Report on Form 8-K filed December 18, 2008 (File No.
0-28815)).
4.2 By-Laws of First Litchfield Financial Corporation, as amended.
(Incorporated by reference to Exhibit 3.2 in the Corporation's
Registration Statement on Form 10-SB filed January 7, 2000
(File No. 0-28815)).
4.3 Warrant to purchase Common Stock dated December 12, 2008.
(Incorporated by reference to Exhibit 4.1 in the Corporation's
Current Report on Form 8-K filed December 18, 2008 (File No.
0-28815)).
5.1 Opinion of Cranmore, FitzGerald & Meaney as to the legality of
the securities being registered.
II-2
10.1. Letter Agreement between the Company and the United States
Department of the Treasury dated December 12, 2008, including
the Securities Purchase Agreement-Standard Terms attached
thereto. (Incorporated by reference to Exhibit 10.1 in the
Corporation's Current Report on Form 8-K filed December 18,
2008 (File No. 0-28815)).
23.1 Consent of Cranmore, FitzGerald & Meaney (included in Exhibit
5.1).
23.2 Consent of McGladrey & Pullen, LLP.
24.1 Powers of Attorney (included in the signature page of this
registration statement).
Item 17. UNDERTAKINGS.
The undersigned registrant hereby 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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 per cent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 (1)(i), (1)(ii) and (1)(iii) do not apply if
the registration statement is on Form S-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 SEC 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, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of 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 will 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.
(4) That, for purposes of determining liability under the Securities Act
of 1933 to any purchaser:
II-3
(i) Each prospectus filed by the registrant pursuant to Rule
424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration
statement; and
(ii) Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or
(x) for the purpose of providing the information required by section 10(a) of
the Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date
(5) That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of an undersigned
registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made
by an undersigned registrant to the purchaser.
(6) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of First
Litchfield Financial Corporation's annual report pursuant to section 13(a) or
section 15(d) 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 will be deemed to be a new registration statement
relating to the securities offered therein, and the offering of the securities
at that time will be deemed to be the initial bona fide offering thereof.
II-4
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 that a claim for
indemnification against liabilities (other than the payment by each 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 the 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.
II-5
SIGNATURES
Pursuant to 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 Town of Litchfield, State of Connecticut, on July 6, 2009.
First Litchfield Financial Corporation
[REGISTRANT]
By: /s/ Joseph J. Greco
-------------------
Joseph J. Greco
President and Chief Executive Officer
POWER OF ATTORNEY
Know All Persons by These Presents, that each person whose signature
appears below constitutes and appoints Joseph J. Greco and Carroll A. Pereira
and each of them, his or her true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution for him or her and in his or her
name, place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file same, with all exhibits thereto, and other documents in connection
therewith, with full power and authority to do and perform each and every act
and thing requisite or necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Joseph J. Greco President, Chief Executive
- ------------------- Officer and Director June 30, 2009
Joseph J. Greco
/s/ Patrick J Boland
- --------------------
Patrick J. Boland Director July 1, 2009
/s/ John A. Brighenti
- ---------------------
John A. Brighenti Director June 30, 2009
/s/ Perley H. Grimes, Jr.
- -------------------------
Perley H. Grimes, Jr. Director July 2, 2009
/s/George M. Madsen
- -------------------
George M. Madsen Director July 1, 2009
II-6
/s/ Alan B. Magary
- ------------------
Alan B. Magary Director June 30, 2009
/s/ Gregory S. Oneglia
- ----------------------
Gregory S. Oneglia Director June 30, 2009
/s/ Richard E. Pugh
Richard E. Pugh Director June 30, 2009
/s/ William J. Sweetman
- -----------------------
William J. Sweetman Director July 1, 2009
/s/ H. Ray Underwood
- --------------------
H. Ray Underwood Director June 30, 2009
- -------------------
Patricia D. Werner Director
/s/ Carroll A. Pereira (Principal Financial and
- ---------------------- Accounting Officer) June 30, 2009
Carroll A. Pereira
II-7