June 19, 2008 Mr. Louis O. Davis, Jr. President Sunshine Savings Bank
EXHIBIT
1.1
June 19,
2008
Xx. Xxxxx X.
Xxxxx, Xx.
President
Sunshine
Savings Bank
0000 X. Xxxx
Xxxxxx
Xxxxxxxxxxx,
Xxxxxxx 00000
Dear Xx.
Xxxxx:
This letter
serves to amend our letter agreement dated January 30, 2008 by adding a new,
third paragraph to Section 9 of the letter agreement, to read as
follows:
"If the
proposed Offering is terminated prior to consummation thereof, the Company shall
reimburse KBW for KBW's reasonable accountable out-of-pocket expenses actually
incurred, not to exceed the amounts set forth in the immediately preceding
paragraph."
Other than as
mod by the above, our letter agreement dated January 30, 2008 is unchanged and
remains in full force and effect.
Sincerely,
XXXXX, XXXXXXXX
& XXXXX, INC.
By: /s/
Xxxxxxx X. Xxxxxx
Xxxxxxx
X. Xxxxxx
Managing
Director
SUNSHINE
SAVINGS BANK
By: /s/
Xxxxx X. Xxxxx, Xx.
Xxxxx
X. Xxxxx, Xx.
President
December 21, 2007
Xx. Xxxxx X. Xxxxx, Xx.
President
Sunshine Savings Bank
0000 X. Xxxx Xxx.
Xxxxxxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxxx:
This proposal is being made in connection with the proposed minority stock
offering (the "Offering") by the to be formed mid-tier holding company (the
"Company") for Sunshine Savings Bank (the "Bank").
Xxxxx, Xxxxxxxx and Xxxxx, Inc. ("KBW") will act as the Company's and the
Bank's exclusive financial advisor and marketing agent in connection with the
Offering. This letter sets forth selected terms and conditions of our
engagement.
1. Advisory/Offering Services. As
the Bank's and Company's financial advisor and marketing agent, KBW will provide
the Bank and the Company with a comprehensive program of services designed to
promote an orderly, efficient, cost-effective and long-term stock
distribution. KBW will provide financial and logistical advice to the Bank
and the Company concerning the Offering and related issues. KBW will
assist in providing Offering enhancement services intended to maximize stock
sales in the Subscription Offering and to residents of the Bank's market area,
if necessary, in the Community Offering.
KBW shall provide financial advisory services to the Bank which are typical
in connection with an equity offering and include, but are not limited to,
overall financial analysis of the Company and the Bank with a focus on
identifying factors which impact the valuation of the common stock and providing
the appropriate recommendations for the equity valuation.
Additionally, post-Offering financial advisory services will include advice
on shareholder relations, after-market trading, dividend policy (for both
regular and special dividends), stock repurchase strategy, communication with
market makers and financial modeling (see Section 8 for details). The
nature of the services to be provided by KBW as the Bank's and the Company's
financial advisor and marketing agent is further described in Exhibit A attached
hereto.
2. Preparation of Offering
Documents. The Bank, the Company and their counsel will draft the
Registration Statement, Form MHC-2, Prospectus and other documents to be used in
connection with the Offering and minority stock issuance. KBW will attend
meetings to review these documents and advise you on their form and
content. KBW and its counsel will draft
Xxxxx, Xxxxxxxx &
Xxxxx 000 Xxxxxxxxx Xxx. Xxxxxx, Xxxx 00000
000.000.0000
Fax 000.000.0000
Xx. Xxxxx X. Xxxxx, Xx.
December 21, 2007
Page 2 of 5
appropriate agency agreement and related documents as well as marketing
materials other than the Prospectus.
3. Due Diligence Review. Prior to
filing the Registration Statement, Application for Offering or any offering or
other documents naming KBW as the Bank's and the Company's financial advisor and
marketing agent, KBW and their representatives will undertake substantial
investigations to learn about the Bank's business and operations ("due diligence
review") in order to confirm information provided to us and to evaluate
information to be contained in the Bank's and/or the Company's offering
documents. The Bank agrees that it will make available to KBW all relevant
information, whether or not publicly available, which KBW reasonably requests,
and will permit KBW to discuss with management the operations and prospects of
the Bank. KBW will treat all material non-public information as
confidential. The Bank acknowledges that KBW will rely upon the accuracy
and completeness of all information received from the Bank, its officers,
directors, employees, agents and representatives, accountants and counsel
including this letter to serve as the Bank's and the Company's financial advisor
and marketing agent.
4. Regulatory Filings. The Bank
and/or the Company will cause appropriate Offering documents to be filed with
all appropriate regulatory agencies including, the Securities and Exchange
Commission ("SEC"), the National Association of Securities Dealers ("NASD"), the
Office of Thrift Supervision ("OTS"), and such state securities commissioners as
may be determined by the Bank.
5. Agency Agreement. The specific
terms of KBW's services, including stock offering enhancement and syndicated
offering services contemplated in this letter shall be set forth in a mutually
agreed upon Agency Agreement between KBW and the Bank and the Company to be
executed prior to commencement of the Offering, and dated the date that the
Company's Prospectus is declared effective and/or authorized to be disseminated
by the appropriate regulatory agencies, the SEC, the NASD, the OTS and such
state securities commissioners and other regulatory agencies as required by
applicable law.
6. Representations, Warranties and
Covenants. The Agency Agreement will provide for to be agreed upon
representations, warranties and covenants by the Bank and KBW, and for the
Company to indemnify KBW and their controlling persons (and, if applicable, the
members of the selling group and their controlling persons), and for KBW to
indemnify the Bank and the Company against certain liabilities, including,
without limitation, liabilities under the Securities Act of 1933, to the extent
applicable.
7. Fees. For the services
hereunder, the Bank and/or Company shall pay the following
fees to KBW at closing unless stated otherwise:
(a) | Management Fee. A Management Fee of $25,000 payable in four consecutive monthly installments of $6,250 commencing with the adoption of the Plan of Stock |
Xx. Xxxxx X. Xxxxx, Xx.
December 21, 2007
Page 3 of 5
Issuance. Such fees shall be deemed to have been earned when due. Should the Offering be terminated for any reason not attributable to the action or inaction of KBW, KBW shall have earned and be entitled to be paid fees accruing through the stage at which point the termination occurred. |
(b) | Success Fee: A Success Fee equal to 1.25% shall be paid to KBW upon consummation of the transaction; provided however, in no event shall the Success Fee be less than $125,000. The Success Fee shall be charged based on the aggregate Purchase Price of Common Stock sold in the Subscription Offering and Community Offering excluding shares purchased by the Bank's officers, directors, or employees (or members of their immediate family) or their IRAs and any ESOP, tax-qualified or stock based compensation plans or similar plan created by the Bank for some or all of its directors or employees as well as Company's Charitable Foundation. The Management Fee described in 7(a) will be applied against the Success Fee. |
(c) | Broker-Dealer Pass-Through. If any shares of the Company's stock remain available after the subscription offering, at the request of the Bank, KBW will seek to form a syndicate of registered broker-dealers to assist in the sale of such common stock on a best efforts basis, subject to the terms and conditions set forth in the selected dealers agreement. KBW will endeavor to distribute the common stock among dealers in a fashion which best meets the distribution objectives of the Bank and the Plan of Offering. KBW will be paid a fee not to exceed 5.5% of the aggregate Purchase Price of the shares of common stock sold by them. From this fee, KBW will pass onto selected broker-dealers, who assist in the syndicated community offering, an amount competitive with gross underwriting discounts charged at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases affected with the assistance of a broker/dealer other than KBW shall be transmitted by KBW to such broker/dealer. The decision to utilize selected broker-dealers will be made by the Bank upon consultation with KBW. In the event, with respect to any stock purchases, fees are paid pursuant to this subparagraph 7(c), such fees shall be in lieu of, and not in addition to, payment pursuant to subparagraph 7(b). |
8. Additional Services. KBW further
agrees to provide general financial advisory assistance to the Company and the
Bank for a period of three years following completion of the Offering, including
assistance with financial modeling, formation of a dividend policy and share
repurchase program, assistance with shareholder reporting and shareholder
relations matters, general advice on mergers and acquisitions and other related
financial matters, without the payment by the Company and the Bank of any fees
in addition to those set forth in Section 7 hereof. If, however, a
specific buy side assignment were to develop, KBW would look to develop a
separate and specific engagement letter tailored to such a transaction, while
simultaneously maintaining the elements of this agreement in good
standing.
Xx. Xxxxx X. Xxxxx, Xx.
December 21, 2007
Page 4 of 5
9. Expenses. The Bank will bear
those expenses of the proposed offering customarily borne by issuers, including,
without limitation, regulatory filing fees, SEC, DTC, "Blue Sky," and NASD
filing and registration fees; the fees of the Bank's accountants, attorneys,
appraiser, transfer agent and registrar, printing, mailing and marketing and
syndicate expenses associated with the Offering; the fees set forth in Section
7; and fees for "Blue Sky" legal work. If KBW incurs expenses on behalf of
Client, Client will reimburse KBW for such expenses.
KBW shall be reimbursed for reasonable out-of-pocket expenses, including
costs of travel, meals and lodging, photocopying, telephone, facsimile and
couriers not to exceed $25,000 without the approval of the Bank. The Bank
also will reimburse KBW for the fees, not to exceed $40,000, and expenses, not
to exceed $5,000, of its counsel.
10. Information Agent and Fees. As
the Bank's information agent, KBW will provide the Company the following
services:
a. Consolidation of
accounts and development of a master file;
b. Preparation of stock
order forms;
c. Subscription
services.
d. Preparation of proxy
cards.
e. Tabulation of
proxies.
For
its services as Information Agent, KBW will not charge any additional fee beyond
the fees described in Section 7 above.
11. Conditions. KBW's willingness
and obligation to proceed hereunder shall be subject to, among other things,
satisfaction of the following conditions in KBW's opinion, which opinion shall
have been formed in good faith by KBW after reasonable determination and
consideration of all relevant factors: (a) full and satisfactory
disclosure of all relevant material, financial and other information in the
disclosure documents and a determination by KBW, in its sole discretion, that
the sale of stock on the terms proposed is reasonable given such disclosures;
(b) no material adverse change in the condition or operations of the Bank
subsequent to the execution of the agreement; and (c) no adverse market
conditions at the time of offering which in KBW's opinion make the sale of the
shares by the Company inadvisable.
12. Benefit. This Agreement shall
inure to the benefit of the parties hereto and their respective successors and
to the parties indemnified pursuant to the terms and conditions of the Agency
Agreement and their successors, and the obligations and liabilities assumed
hereunder by the parties hereto shall be binding upon their respective
successors provided, however, that this Agreement shall not be assignable by
KBW.
13. Definitive Agreement. This
letter reflects KBW's present intention of proceeding to work with the Bank on
its proposed Offering. It does not create a binding obligation on the part
of the Bank, the Company or KBW except as to the agreement to maintain the
confidentiality of non-public information set forth in Section 3, the payment of
certain fees as set forth in Section 7(a) and
Xx. Xxxxx X. Xxxxx, Xx.
December 21, 2007
Page 5 of 5
7(b) and the assumption of expenses as set forth in Section 9, all of which
shall constitute the binding obligations of the parties hereto and which shall
survive the termination of this Agreement or the completion of the services
furnished hereunder and shall remain operative and in full force and
effect. You further acknowledge that any report or analysis rendered by
KBW pursuant to this engagement is rendered for use solely by the management of
the Bank and its agents in connection with the Offering. Accordingly, you
agree that you will not provide any such information to any other person without
our prior written consent.
KBW acknowledges that in offering the Company's stock no person will be
authorized to give any information or to make any representation not contained
in the offering prospectus and related offering materials filed as part of a
registration statement to be declared effective in connection with the
offering. Accordingly, KBW agrees that in connection with the offering it
will not give any unauthorized information or make any unauthorized
representation. We will be pleased to elaborate on any of the matters
discussed in this letter at your convenience.
If the foregoing correctly sets forth our mutual understanding, please so
indicate by signing and returning the original copy of this letter to the
undersigned.
Very truly yours,
XXXXX, XXXXXXXX & XXXXX, INC.
By: /s/ Xxxxxxx X.
Xxxxxx
Xxxxxxx X.
Xxxxxx
Managing
Director
SUNSHINE SAVINGS BANK
By: /s/ Xxxxx X. Xxxxx,
Xx. Date: Jan. 30, 2008
Xxxxx X. Xxxxx,
Xx.
President
EXHIBIT A
OFFERING SERVICES PROPOSAL
TO SUNSHINE SAVINGS BANK
KBW provides thrift institutions converting from the mutual to stock form
of ownership with a comprehensive program of stock issuance services designed to
promote an orderly, efficient, cost-effective and long-term stock
distribution. The following list is representative of the stock issuance
services, if appropriate, we propose to perform on behalf of the Bank and the
Company.
General Services
Assist management and legal counsel with the design of the transaction
structure.
Analyze and make recommendations on bids from printing, transfer agent, and
appraisal firms.
Assist officers and directors in obtaining bank loans to purchase stock, if
requested.
Assist in drafting and distribution of press releases as required or
appropriate.
Stock Offering Enhancement
Services
Establish and manage Stock Information Center at the Bank. Stock
Information Center personnel will track prospective investors; record stock
orders; mail order confirmations; provide the Bank's senior management with
daily reports; answer customer inquiries; and handle special situations as they
arise.
Assign KBW's personnel to be at the Bank through completion of the
Subscription and Community Offerings to manage the Stock Information Center,
meet with prospective shareholders at individual and community information
meetings (if applicable), solicit local investor interest through a
tele-marketing campaign, answer inquiries, and otherwise assist in the sale of
stock in the Subscription and Community Offerings. This effort will be
lead by a Principal of KBW.
Create target investor list based upon review of the Bank's depositor
base.
Provide intensive financial and marketing input for drafting of the
prospectus.
Stock Offering Enhancement
Services- Continued
Prepare other marketing materials, including prospecting letters and
brochures, and media advertisements.
Arrange logistics of community information meeting(s) as required.
Prepare audio-visual presentation by senior management for community
information meeting(s).
Prepare management for question-and-answer period at community information
meeting(s).
Attend and address community information meeting(s) and be available to
answer questions.
Broker-Assisted Sales
Services.
Arrange for broker information meeting(s) as required.
Prepare audio-visual presentation for broker information meeting(s).
Prepare script for presentation by senior management at broker information
meeting(s).
Prepare management for question-and-answer period at broker information
meeting(s).
Produce confidential broker memorandum to assist participating brokers in
selling the Bank's common stock.
After-market Support
Services.
KBW will use their best efforts to secure a trading commitment from at
least two NASD firms, one of which will be Xxxxx, Xxxxxxxx & Xxxxx,
Inc.