As filed
with the Securities and Exchange Commission on June 26, 2009
Registration
No. 333-157634
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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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WASHINGTON,
D.C. 20549
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AMENDMENT
NO. 1 TO
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FORM
S-3
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REGISTRATION
STATEMENT
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UNDER
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THE
SECURITIES ACT OF 1933
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GUARANTY
FEDERAL BANCSHARES, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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43-1792717
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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1341
West Battlefield
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Springfield,
Missouri 65807
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(417)
520-4333
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(Address,
including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Shaun
A. Burke
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President
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Guaranty
Federal Bancshares, Inc.
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1341
West Battlefield
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Springfield,
Missouri 65807
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(417)
520-4333
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(Name,
address, including zip code, and telephone number, including area code, of
agent for service)
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Copy
of communications to:
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Craig
A. Adoor, Esq.
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Douglas
M. Worley, Esq.
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Husch
Blackwell Sanders LLP
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720
Olive St., Suite 2400
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St.
Louis, MO 63101
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(314)
345-6000
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(314)
345-6060 (fax)
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Approximate date of commencement of
proposed sale to the public: From time to time after this Registration
Statement becomes effective.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
[__]
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended, 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(e) 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 filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act of 1934, as amended. (Check
one):
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Large
Accelerated
filer
o
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Accelerated
filer o
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
reporting company x
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_____________________
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, as amended, 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. The selling
securityholders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state or jurisdiction where the offer or
sale is not permitted.
Subject
to Completion
Preliminary
Prospectus dated June 26, 2009
PROSPECTUS
Guaranty
Federal Bancshares, Inc.
459,459
Shares of Common Stock and a Warrant to Purchase Such Shares
This
prospectus relates to (i) a warrant, or portions thereof, which expires on
January 30, 2019, to purchase 459,459 shares of our common stock at an exercise
price of $5.55 per share, subject to adjustment as described in this prospectus,
and (ii) the shares of our common stock which may be purchased upon exercise of
the warrant. The warrant, along with 17,000 shares of our Fixed Rate
Cumulative Perpetual Preferred Stock, Series A (liquidation preference amount
$1,000 per share), was issued by us on January 30, 2009 to the United States
Department of the Treasury (the “Treasury”) as part of Treasury’s Troubled Asset
Relief Program Capital Purchase Program in a private placement exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”).
The
selling securityholders who may sell or otherwise dispose of the securities
offered by this prospectus include Treasury and any other holders of the
securities covered by this prospectus to whom Treasury has transferred its
registration rights in accordance with the terms of the securities purchase
agreement between us and Treasury. 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, at prevailing market prices, at prices related to prevailing
market prices or at negotiated prices. If these securities are sold
through underwriters, broker-dealers or agents, the selling securityholders will
be responsible for underwriting discounts or commissions or agents’ commissions,
if any. We will not receive any proceeds from the sale of
securities by the selling securityholders.
Our
common stock is listed on the NASDAQ Global Market under the symbol
“GFED.” On June 1, 2009, the closing sale price of our common stock
on the NASDAQ Global Market was $6.90 per share. The warrant is not
currently listed on any established securities exchange or quotation system and
we do not intend to seek such a listing for the warrant unless we are requested
to do so by Treasury.
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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 Federal
Deposit Insurance Corporation or any other government agency.
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Investing
in the securities offered by this prospectus involves risks. See
“Risk Factors” beginning on page 2 of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission nor
any other regulatory body has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
The date
of this prospectus is ___________, 2009.
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission (the “SEC”) using a “shelf” registration, or continuous
offering, process. Under this process, the selling securityholders
may from time to time sell or otherwise dispose of the securities covered by
this prospectus in one or more offerings.
You
should rely only on the information contained or incorporated by reference in
this prospectus and any supplement to this prospectus. We have not, and the
selling securityholders have not, authorized anyone to provide you with
information different from that contained in this prospectus. The selling
securityholders are offering to sell, and seeking offers to buy, our securities
only in jurisdictions where it is lawful to do so. The information in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or any sale of our securities. Neither the
delivery of this prospectus nor any sale made under this prospectus shall, under
any circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information contained or
incorporated by reference in this prospectus is correct as of any time
subsequent to the date of such information.
All
references in this prospectus to “we,” “us,” “our” or similar references mean
Guaranty Federal Bancshares, Inc. and its consolidated subsidiaries and all
references in this prospectus to “Guaranty Federal Bancshares” means Guaranty
Federal Bancshares, Inc. excluding its subsidiaries, in each case unless
otherwise expressly stated or the context otherwise requires. When we
refer to “Guaranty Bank” in this prospectus, we mean our wholly owned
subsidiary, Guaranty Bank, a Missouri-chartered bank. We
sometimes refer to Guaranty Bank as the “Bank.”
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements often include the
words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,”
“plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar
expressions or future or conditional verbs such as “may,” “will,” “should,”
“would” and “could.” These forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that could cause the actual
results to differ materially from the forward-looking statements,
including:
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the
strength of the United States economy in general and the strength of the
local economies in which we conduct
operations;
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fluctuations
in interest rates and in real estate
values;
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monetary
and fiscal policies of the Board of Governors of the Federal Reserve
System (the “Federal Reserve”) and the U.S. Government and other
governmental initiatives affecting financial
services;
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the
risks of lending and investing activities, including changes in the level
and direction of loan delinquencies and write-offs and changes in
estimates of the adequacy of the allowance for loan
losses;
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our
ability to access cost-effective
funding;
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the
timely development of and acceptance of our new products and services and
the perceived overall value of these products and services by users,
including the features, pricing and quality compared to competitors'
products and services;
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demand
for loans and deposits in our market
area;
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legislative
or regulatory changes that adversely affect our
business;
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results
of examinations of us by our regulators, including the possibility that
our regulators may, among other things, require us to increase our reserve
for loan losses or to write-down
assets;
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the
impact of technological changes;
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our
success at managing the risks involved in the
foregoing.
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Some of
these and other factors are discussed in this prospectus under the caption “Risk
Factors” and elsewhere in this prospectus and in the incorporated documents. The
development of any or all of these factors could have an adverse impact on our
financial position and our results of operations.
Any
forward-looking statements are based upon management’s beliefs and assumptions
at the time they are made. We undertake no obligation to publicly update or
revise any forward-looking statements included or incorporated by reference in
this prospectus or to update the reasons why actual results could differ from
those contained in such statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking statements discussed in this prospectus or the
incorporated documents might not occur, and you should not put undue reliance on
any forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION
We are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Accordingly, we file annual, quarterly
and current reports, proxy statements and other information with the
SEC. You may read and copy any reports, statements or other
information that we may file with the SEC at the SEC’s Public Reference Room at
100 F Street, N.E., Room 1580, Washington, D.C., 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements and other information about issuers that file
electronically with the SEC. The address of the SEC’s Internet site is
http://www.sec.gov.
The SEC
allows us to incorporate by reference the information we file with them, which
means that we can disclose important information to you by referring you to
those documents. The information that we incorporate by reference is considered
to be a part of this prospectus, and the information we later file with the SEC
that is incorporated by reference in this prospectus will automatically update
information previously contained in this prospectus and any incorporated
document. Any statement contained in this prospectus or in a document
incorporated by reference in this prospectus will be deemed modified or
superseded to the extent that a later statement contained in this prospectus or
in an incorporated document modifies or supersedes such earlier
statement.
This
prospectus incorporates by reference (i) the description of our common stock,
contained in our Registration Statement on Form 8-A, dated November 5, 1997 and
filed with the SEC on November 6, 1997, including any amendment or report filed
for the purpose of updating such description, and (ii) the documents listed
below that we have filed with the SEC (excluding any portion of these documents
that has been furnished to and deemed not to be filed with the
SEC):
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Report(s)
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Period(s)
of Report(s) or Date(s) Filed
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• Annual
Report on Form 10-K
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For
the fiscal year ended December 31, 2008
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• Quarterly
Report on Form 10-Q
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For
the quarter ended March 31, 2009
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• Current
Reports on Form 8-K
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Filed
on January 26, 2009, February 3, 2009, February 9, 2009, March
17, 2009, and April 22, 2009
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We also
incorporate by reference any future documents we may file with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering, excluding any document or portion thereof that has
been furnished to and deemed not to be filed with the SEC.
These
documents are available without charge to you on the Internet at www.gbankmo.com
or if you call or write to: Investor Relations, Guaranty Federal Bancshares,
Inc., 1341 Battlefield, Springfield, Missouri 65807, telephone: (417)
520-4333. The reference to our website is not intended to be an
active link and the information on our website is not, and you must not consider
the information to be, a part of this prospectus.
We have
also filed a registration statement with the SEC relating to the securities
offered by this prospectus. This prospectus, which constitutes part
of the registration statement, does not contain all of the information presented
or incorporated by reference in the registration statement and its exhibits. You
may obtain from the SEC a copy of the registration statement and exhibits that
we filed with the SEC as described above. The registration statement
may contain additional information that may be important to you.
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This
summary highlights information contained elsewhere in, or incorporated by
reference into, this prospectus. As a result, it does not contain all of
the information that may be important to you or that you should consider
before investing in our securities. You should read this entire
prospectus, including the “Risk Factors” section, and the documents
incorporated by reference, which are described under “Where You Can Find
More Information” in this prospectus.
Guaranty
Federal Bancshares, Inc.
Guaranty
Federal Bancshares, Inc. is a bank holding company incorporated under the
laws of the State of Delaware in September 1997. We conduct our
business primarily through our wholly owned subsidiary, Guaranty Bank, a
Missouri-chartered trust company with banking powers. The Bank
conducts its business from its headquarters in Springfield, Missouri, six
full-service branch offices in Springfield, two full-service branch
offices in Nixa, Missouri, and one full-service branch office in Ozark,
Missouri. The principal business of the Bank consists primarily
of attracting retail deposits from the general public and investing those
deposits, together with funds generated from operations, in one- to
four-family residential mortgage loans, multi-family residential mortgage
loans, construction loans, commercial real estate loans, and consumer and
other loans. The Bank also invests in mortgage-backed
securities, U.S. Government and federal agency securities and other
marketable securities.
At
December 31, 2008, we had consolidated total assets of $675.7 million, net
loans of $556.4 million, deposits of $447.1
million and stockholders’ equity of $37.3 million.
Our
common stock is traded on the NASDAQ Global Market under the ticker symbol
“GFED.” Our principal executive offices are located at 1341
Battlefield, Springfield, Missouri 65807. Our telephone number
is: (417) 520-4333.
Securities
Being Offered
The
securities being offered by this prospectus consist of (i) a warrant, or
portions thereof, which expires on January 30, 2019, to purchase 459,459
shares of our common stock at an exercise price of $5.55 per share,
subject to adjustment as described in this prospectus, and (ii) the shares
of our common stock which may be purchased upon exercise of the
warrant. We issued the warrant on January 30, 2009 to the
United States Department of the Treasury (the “Treasury”) pursuant to
Treasury’s Troubled Asset Relief Program Capital Purchase Program.
Concurrent with the issuance of the warrant, we sold to Treasury 17,000
shares of our Fixed Rate Cumulative Perpetual Preferred Stock, Series A
(the “Series A Preferred Stock”), liquidation preference amount $1,000 per
share, for an aggregate purchase price of $17.0 million. The
issuances of the warrant and the Series A Preferred Stock were completed
in a private placement to Treasury exempt from the registration
requirements of the Securities Act of 1933. We were required
under the terms of the related securities purchase agreement between us
and Treasury to register for resale the warrant and the shares of our
common stock underlying the warrant. The terms of the warrant
and the terms of our common stock and the Series A Preferred Stock are
described under “Description of Warrant” and “Description of Capital
Stock.” The securities purchase agreement between us and
Treasury was attached as Exhibit 10.1 to our Current Report on Form 8-K
filed on February 3, 2009 and incorporated into this prospectus by
reference. See “Where You Can Find More
Information.”
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An
investment in our securities is subject to certain risks. You should carefully
review the following risk factors and other information contained in this
prospectus and the documents incorporated by reference, before deciding whether
an investment in our securities is suited to your particular
circumstances. The risks and uncertainties not presently known to us
or that we currently deem immaterial also may impair our business operations. If
any of the following risks actually occur, our business, results of operations
and financial condition could suffer. In that event, the value of our securities
could decline, and you may lose all or part of your investment. The risks
discussed below also include forward-looking statements, and our actual results
may differ materially from those discussed in these forward-looking
statements.
Risks
Relating to Guaranty Federal Bancshares, Inc.
Difficult
market conditions and economic trends have adversely affected our industry and
our business.
Dramatic
declines in the housing market, with decreasing home prices and increasing
delinquencies and foreclosures, have negatively impacted the credit performance
of mortgage and construction loans and resulted in significant write-downs of
assets by many financial institutions. In addition, the values of
real estate collateral supporting many loans have declined and may continue to
decline. General downward economic trends, reduced availability of commercial
credit and increasing unemployment have negatively impacted the credit
performance of commercial and consumer credit, resulting in additional
write-downs. Concerns over the stability of the financial markets and
the economy have resulted in decreased lending by financial institutions to
their customers and to each other. This market turmoil and tightening
of credit has led to increased commercial and consumer deficiencies, lack of
customer confidence, increased market volatility and widespread reduction in
general business activity. Competition among depository institutions for
deposits has increased significantly. Financial institutions have experienced
decreased access to deposits or borrowings.
The
resulting economic pressure on consumers and businesses and the lack of
confidence in the financial markets may adversely affect our business, financial
condition, results of operations and stock price.
Our
ability to assess the creditworthiness of customers and to estimate the losses
inherent in our credit exposure is made more complex by these difficult market
and economic conditions. As a result of the foregoing factors, there
is a potential for new federal or state laws and regulations regarding lending
and funding practices and liquidity standards, and bank regulatory agencies are
expected to be very aggressive in responding to concerns and trends identified
in examinations. This increased government action may increase
our costs and limit our ability to pursue certain business
opportunities. We also may be required to pay even higher Federal
Deposit Insurance Corporation (“FDIC”) premiums than the recently increased
level, because financial institution failures resulting from the depressed
market conditions have depleted and may continue to deplete the deposit
insurance fund and reduce its ratio of reserves to insured
deposits.
We do not
believe these difficult conditions are likely to improve in the near
future. A worsening of these conditions would likely exacerbate the
adverse effects of these difficult market and economic conditions on us, our
customers and the other financial institutions in our market. As a
result, we may experience increases in foreclosures, delinquencies and customer
bankruptcies, as well as more restricted access to funds.
Recent
legislative and regulatory initiatives to address difficult market and economic
conditions may not stabilize the U.S. banking system.
The
recently enacted Emergency Economic Stabilization Act of 2008 (the “EESA”)
authorizes Treasury to purchase from financial institutions and their holding
companies up to $700 billion in mortgage loans, mortgage-related securities and
certain other financial instruments, including debt and equity securities issued
by financial institutions and their holding companies, under a troubled asset
relief program, or “TARP.” The purpose of TARP is to restore
confidence and stability to the U.S. banking system and to encourage financial
institutions to increase their lending to customers and to each
other. The Treasury has allocated $250 billion towards the TARP
Capital Purchase
Program. Under the TARP Capital Purchase Program, Treasury is
purchasing equity securities from participating institutions. The
warrant offered by this prospectus, together with our Series A Preferred Stock,
was issued by us to Treasury pursuant to the TARP Capital Purchase Program. The
EESA also increased federal deposit insurance on most deposit accounts from
$100,000 to $250,000. This increase is in place until the end of
2013 and is not covered by deposit insurance premiums paid by the banking
industry.
On
February 17, 2009, the American Recovery and Reinvestment Act of 2009 (the
“ARRA”) was signed into law. The ARRA imposes certain additional
executive compensation and corporate expenditure limits on all current and
future TARP Capital Purchase Program recipients. These limits are in
addition to those previously imposed by the Treasury under EESA. As a
result of our participation in the TARP Capital Purchase Program, the
restrictions and standards established under EESA and ARRA are applicable to
us. Neither the ARRA nor the EESA restrictions shall apply to any
TARP recipient, including us, at such time that the federal government no longer
holds any of our preferred stock acquired through the TARP Capital Purchase
Program.
The EESA
and the ARRA followed, and have been followed by, numerous actions by the
Federal Reserve, the U.S. Congress, Treasury, the FDIC, the SEC and others to
address the current liquidity and credit crisis that has followed the sub-prime
meltdown that commenced in 2007. These measures include homeowner
relief that encourage loan restructuring and modification; the establishment of
significant liquidity and credit facilities for financial institutions and
investment banks; the lowering of the federal funds rate; emergency action
against short selling practices; a temporary guaranty program for money market
funds; the establishment of a commercial paper funding facility to provide
back-stop liquidity to commercial paper issuers; and coordinated international
efforts to address illiquidity and other weaknesses in the banking sector. The
purpose of these legislative and regulatory actions is to stabilize the U.S.
banking system. The EESA, the ARRA , and the other regulatory initiatives
described above may not have their desired effects. If the volatility
in the markets continues and economic conditions fail to improve or worsen, our
business, financial condition and results of operations could be materially and
adversely affected.
Current
levels of market volatility are unprecedented.
The
capital and credit markets have been experiencing volatility and disruption for
more than a year. In recent months, the volatility and disruption has reached
unprecedented levels. In some cases, the markets have produced
downward pressure on stock prices and credit availability for certain issuers
without regard to those issuers’ underlying financial strength. If current
levels of market disruption and volatility continue or worsen, there can be no
assurance that we will not experience an adverse effect, which may be material,
on our ability to access capital and on our business, financial condition and
results of operations.
Our
allowance for loan losses may prove to be insufficient to absorb probable losses
in our loan portfolio.
Lending
money is a substantial part of our business. Every loan carries a certain risk
that it will not be repaid in accordance with its terms or that any underlying
collateral will not be sufficient to assure repayment. This risk is affected by,
among other things:
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cash
flow of the borrower and/or the project being
financed;
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in
the case of a collateralized loan, the changes and uncertainties as to the
future value of the collateral;
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the
credit history of a particular
borrower;
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changes
in economic and industry conditions;
and
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the
duration of the loan.
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We
maintain an allowance for loan losses which we believe is appropriate to provide
for potential losses in our loan portfolio. The amount of this allowance is
determined by our management through a periodic review and consideration of
several factors, including, but not limited to:
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an
ongoing review of the quality, size and diversity of the loan
portfolio;
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evaluation
of non-performing loans;
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historical
default and loss experience;
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historical
recovery experience;
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existing
economic conditions;
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risk
characteristics of the various classifications of loans;
and
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the
amount and quality of collateral, including guarantees, securing the
loans.
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If our
loan losses exceed our allowance for probable loan losses, our business,
financial condition and profitability may suffer.
Downturns
in the real estate markets in our primary market area could hurt our
business.
Our
business activities and credit exposure are primarily concentrated in southwest
Missouri. While we did not and do not have a sub-prime lending
program, our residential real estate, construction and land loan portfolios, our
commercial and multifamily loan portfolios and certain of our other loans could
be affected by the downturn in the residential real estate market. We
anticipate that significant declines in the real estate markets in our primary
market area would hurt our business and would mean that collateral for our loans
would hold less value. As a result, our ability to recover on
defaulted loans by selling the underlying real estate would be diminished, and
we would be more likely to suffer losses on defaulted loans. The
events and conditions described in this risk factor could therefore have a
material adverse effect on our business, results of operations and financial
condition.
Liquidity
risk could impair our ability to fund operations and jeopardize our financial
condition.
Liquidity
is essential to our business. An inability to raise funds through deposits,
borrowings, the sale of loans and other sources could have a substantial
negative effect on our liquidity. Our access to funding sources in amounts
adequate to finance our activities on terms which are acceptable to us could be
impaired by factors that affect us specifically or the financial services
industry or economy in general. Factors that could detrimentally impact our
access to liquidity sources include a decrease in the level of our business
activity as a result of a downturn in the markets in which our loans are
concentrated or adverse regulatory action against us. Our ability to borrow
could also be impaired by factors that are not specific to us, such as a
disruption in the financial markets or negative views and expectations about the
prospects for the financial services industry in light of the recent turmoil
faced by banking organizations and the continued deterioration in credit
markets.
We
may elect or be compelled to seek additional capital in the future, but that
capital may not be available when it is needed.
We are
required by federal and state regulatory authorities to maintain adequate levels
of capital to support our operations. In addition, we may elect to
raise additional capital to support our business or to finance acquisitions, if
any, or we may otherwise elect or be required to raise additional
capital. In that regard, a number of financial institutions have
recently raised considerable amounts of capital in response to a deterioration
in their results of operations and financial condition arising from the turmoil
in the mortgage loan market, deteriorating economic conditions, declines in real
estate values and other factors. Should we be required by regulatory
authorities to raise additional capital, we may seek to do so through the
issuance of, among other things, our common stock or preferred
stock.
Our
ability to raise additional capital, if needed, will depend on conditions in the
capital markets, economic conditions and a number of other factors, many of
which are outside our control, and on our financial performance. Accordingly, we
cannot assure you of our ability to raise additional capital if needed or on
terms acceptable to us. If we cannot raise additional capital when needed, it
may have a material adverse effect on our financial condition, results of
operations and prospects.
If
we are unable to redeem our Series A Preferred Stock after five years, the cost
of this capital to us will increase substantially.
If we are
unable to redeem the Series A Preferred Stock prior to May 15, 2014, the cost of
this capital to us will increase substantially on that date, from 5.0% per annum
(approximately $850,000 annually) to 9.0% per
annum (approximately $1,530,000 annually). See “Description of
Capital Stock—Series A Preferred Stock-Redemption and
Repurchases.” Depending on our financial condition at the time, this
increase in the annual dividend rate on the Series A Preferred Stock could have
a material negative effect on our liquidity.
Rising
interest rates may hurt our profits.
To be
profitable we have to earn more interest on our loans and investments than we
pay on our deposits and borrowings. If interest rates rise, our net
interest income and the value of our assets could be reduced if interest paid on
interest-bearing liabilities, such as deposits and borrowings, increases more
quickly than interest received on interest-earning assets, such as loans and
investments. This is most likely to occur if short-term interest rates increase
at a faster rate than long-term interest rates, which would cause income to go
down. In addition, rising interest rates may hurt our income because
they may reduce the demand for loans and the value of our
securities. A flat yield curve may also hurt our income, because it
would reduce our ability to reinvest proceeds from loan and investment
repayments at higher rates.
Non-compliance
with USA Patriot Act, Bank Secrecy Act, or other laws and regulations could
result in fines or sanctions.
The USA
Patriot and Bank Secrecy Acts require financial institutions to develop programs
to prevent financial institutions from being used for money laundering and
terrorist activities. If such activities are detected, financial institutions
are obligated to file suspicious activity reports with the Treasury’s Office of
Financial Crimes Enforcement Network. These rules require financial institutions
to establish procedures for identifying and verifying the identity of customers
seeking to open new financial accounts. Failure to comply with these regulations
could result in fines or sanctions. Several banking institutions have recently
received large fines for non-compliance with these laws and regulations.
Although we have developed policies and procedures designed to assist in
compliance with these laws and regulations, no assurance can be given that these
policies and procedures will be effective in preventing violations of these laws
and regulations.
New
or changes in existing tax, accounting, and regulatory rules and interpretations
could significantly impact strategic initiatives, results of operations, cash
flows, and financial condition.
The
financial services industry is extensively regulated. Federal and state banking
regulations are designed primarily to protect the deposit insurance funds and
consumers, not to benefit a financial company's stockholders. These regulations
may sometimes impose significant limitations on operations. The significant
federal and state banking regulations that affect us are described in our Annual
Report on Form 10-K for the year ended December 31, 2008 under “Item 1.
Business-Regulation of the Company.” See “Where You Can Find More
Information.” These regulations, along with the currently existing
tax, accounting, securities, insurance, and monetary laws, regulations, rules,
standards, policies, and interpretations control the methods by which financial
institutions conduct business, implement strategic initiatives and tax
compliance, and govern financial reporting and disclosures. These laws,
regulations, rules, standards, policies, and interpretations are constantly
evolving and may change significantly over time.
Significant
legal actions could subject us to substantial liabilities.
We are
from time to time subject to claims related to our operations. These claims and
legal actions, including supervisory actions by our regulators, could involve
large monetary claims and significant defense costs. As a result, we may be
exposed to substantial liabilities, which could adversely affect our results of
operations and financial condition.
Our
future success is dependent on our ability to compete effectively in the highly
competitive banking industry.
We face
substantial competition in all phases of our operations from a variety of
different competitors. Our future growth and success will depend on our ability
to compete effectively in this highly competitive environment. To date, we have
grown our business successfully by focusing on our business lines in geographic
markets and emphasizing the high level of service and responsiveness desired by
our customers. We compete for loans, deposits and other financial services with
other commercial banks, thrifts, credit unions, brokerage houses, mutual funds,
insurance companies and specialized finance companies. Many of our competitors
offer products and services which we do not offer, and many have substantially
greater resources and lending limits, name recognition and market presence that
benefit them in attracting business. In addition, larger competitors may be able
to price loans and deposits more aggressively than we do, and smaller newer
competitors may also be more aggressive in terms of pricing loan and deposit
products than we are in order to obtain a share of the market. Some of the
financial institutions and financial services organizations with which we
compete are not subject to the same degree of regulation as is imposed on bank
holding companies, federally insured state-chartered banks and national banks
and federal savings banks. As a result, these nonbank competitors have certain
advantages over us in accessing funding and in providing various
services.
We
are subject to security and operational risks relating to our use of technology
that could damage our reputation and our business.
Security
breaches in our internet banking activities could expose us to possible
liability and damage our reputation. Any compromise of our security also could
deter customers from using our internet banking services that involve the
transmission of confidential information. We rely on standard internet security
systems to provide the security and authentication necessary to effect secure
transmission of data. These precautions may not protect our systems from
compromises or breaches of our security measures that could result in damage to
our reputation and our business.
We
rely on dividends from the Bank for substantially all of our
revenue.
Guaranty
Federal Bancshares receives substantially all of its revenue as dividends from
the Bank. Federal and state regulations limit the amount of dividends
that the Bank may pay to Guaranty Federal Bancshares. See “Regulatory
Considerations.” In the event the Bank becomes unable to pay
dividends to Guaranty Federal Bancshares, Guaranty Federal Bancshares may not be
able to service its debt, pay its other obligations or pay dividends on its
common stock. Accordingly, our inability to receive dividends from
the Bank could also have a material adverse effect on our business, financial
condition and results of operations and the value of your investment in our
common stock.
Risks
Relating to Our Common Stock
The
price of our common stock may fluctuate significantly, and this may make it
difficult for you to resell our common stock when you want or at prices you find
attractive.
We cannot
predict how our common stock will trade in the future. The market value of our
common stock will likely continue to fluctuate in response to a number of
factors including the following, most of which are beyond our control, as well
as the other factors described in this “Risk Factors” section:
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actual
or anticipated quarterly fluctuations in our operating and financial
results;
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developments
related to investigations, proceedings or litigation that involve
us;
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changes
in financial estimates and recommendations by financial
analysts;
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dispositions,
acquisitions and financings;
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actions
of our current stockholders, including sales of common stock by existing
stockholders and our directors and executive
officers;
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fluctuations
in the stock price and operating results of our
competitors;
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regulatory
developments; and
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developments
related to the financial services
industry.
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The
market value of our common stock may also be affected by conditions affecting
the financial markets in general, including price and trading fluctuations.
These conditions may result in (i) volatility in the level of, and fluctuations
in, the market prices of stocks generally and, in turn, our common stock and
(ii) sales of substantial amounts of our common stock in the market, in each
case that could be unrelated or disproportionate to changes in our operating
performance. These broad market fluctuations may adversely affect the market
value of our common stock. Our common stock also has a low average daily trading
volume relative to many other stocks, which may limit an investor’s ability to
quickly accumulate or divest themselves of large blocks of our stock. This can
lead to significant price swings even when a relatively small number of shares
are being traded.
There
may be future sales of additional common stock or preferred stock or other
dilution of our equity, which may adversely affect the market price of our
common stock.
We are
not restricted from issuing additional common stock or preferred stock,
including any securities that are convertible into or exchangeable for, or that
represent the right to receive, common stock or preferred stock or any
substantially similar securities. The market value of our common stock could
decline as a result of sales by us of a large number of shares of common stock
or preferred stock or similar securities in the market or the perception that
such sales could occur.
Anti-takeover
provisions could negatively impact our stockholders.
Provisions
in our restated certificate of incorporation and bylaws, the corporate law of
the State of Delaware and federal regulations could delay or prevent a third
party from acquiring us, despite the possible benefit to our stockholders, or
otherwise adversely affect the market price of any class of our equity
securities, including our common stock. These provisions include: a
limitation in the voting power represented by common stock beneficially owned in
excess of 10% of total shares outstanding without prior Board approval;
supermajority voting requirements for certain business combinations with any
person who beneficially owns 10% or more of our outstanding common stock; the
election of directors to staggered terms of three years; advance notice
requirements for nominations for election to our Board of Directors and for
proposing matters that stockholders may act on at stockholder meetings; a
requirement that only directors may fill a vacancy in our Board of Directors;
supermajority voting requirements to remove any of our directors and the other
provisions described under “Description of Capital Stock─Anti-Takeover
Effects.” Our restated certificate of incorporation also authorizes
our Board of Directors to issue preferred stock, and preferred stock could be
issued as a defensive measure in response to a takeover proposal (subject to the
voting rights of Series A Preferred Stock with respect to any such preferred
stock ranking senior to the Series A Preferred Stock; see “Description of
Capital Stock—Series A Preferred Stock—Voting Rights”). In addition,
because we are a bank holding company, purchasers of 10% or more of our common
stock may be required to obtain approvals under the Change in Bank Control Act
of 1978, as amended, or the Bank Holding Company Act of 1956, as amended (and in
certain cases such approvals may be required at a lesser percentage of
ownership). Specifically, under regulations adopted by the Federal
Reserve, (a) any other bank holding company may be required to obtain the
approval of the Federal Reserve to acquire or retain 5% or more of our common
stock and (b) any person other than a bank holding company may be required to
obtain the approval of the Federal Reserve to acquire or retain 10% or more of
our common stock.
These
provisions may discourage potential takeover attempts, discourage bids for our
common stock at a premium over market price or adversely affect the market price
of, and the voting and other rights of the holders of, our common
stock. These provisions could also discourage proxy contests and make
it more difficult for holders of our common stock to elect directors other than
the candidates nominated by our Board of Directors.
The
securities purchase agreement between us and Treasury limits our ability to pay
dividends on and repurchase our common stock.
The
securities purchase agreement between us and Treasury provides that prior to the
earlier of (i) January 30, 2012 and (ii) the date on which all of the shares of
the Series A Preferred Stock have been redeemed by us or transferred by Treasury
to third parties, we may not, without the consent of Treasury, (a) declare or
pay any dividends on our common stock (other than regular quarterly cash
dividends of not more than the amount of the last quarterly cash dividend per
share declared on the common stock prior to October 14, 2008 and dividends
payable in shares of common stock), or (b) subject to limited exceptions,
redeem, repurchase or otherwise acquire shares of our common stock or preferred
stock (other than the Series A Preferred Stock) or trust preferred
securities. In addition, we are unable to pay any dividends on our
common stock unless we are current in our dividend payments on the Series A
Preferred Stock. These restrictions, together with the potentially
dilutive impact of the warrant described in the next risk factor, could have a
negative effect on the value of our common stock. Moreover,
holders of our common stock are entitled to receive dividends only when, as and
if declared by our Board of Directors. Although we have historically
paid cash dividends on our common stock, we are not required to do
so. In the third quarter of 2008, our board of directors decided to
temporarily suspend the payment of quarterly cash dividends on our common
stock.
The
Series A Preferred Stock impacts net income available to our common stockholders
and earnings per common share, and the warrant we issued to Treasury may be
dilutive to holders of our common stock.
The
dividends declared on the Series A Preferred Stock will reduce the net income
available to common stockholders and our earnings per common
share. The Series A Preferred Stock will also receive preferential
treatment in the event of liquidation, dissolution or winding up of Guaranty
Federal Bancshares. Additionally, the ownership interest of the existing holders
of our common stock will be diluted to the extent the warrant we issued to
Treasury in conjunction with the sale to Treasury of the Series A Preferred
Stock is exercised. The shares of common stock underlying the warrant
represent approximately 14.9% of the shares of our common stock outstanding as
of June 1, 2009 (plus the shares issuable upon exercise of the
warrant). Although Treasury has agreed not to vote any of the shares
of common stock it receives upon exercise of the warrant, a transferee of any
portion of the warrant or of any shares of common stock acquired upon exercise
of the warrant is not bound by this restriction.
The
voting limitation provision in our restated certificate of incorporation could
limit your voting rights as a holder of our common stock.
Our
restated certificate of incorporation provides that any person or group who
acquires beneficial ownership of our common stock in excess of 10% of the
outstanding shares may only vote a proportion of the excess shares based on a
formula set forth therein, without prior board approval. Accordingly,
if you acquire beneficial ownership of more than 10% of the outstanding shares
of our common stock, your voting rights with respect to the common stock might
not be commensurate with your economic interest in our company.
All
securities sold pursuant to this prospectus will be sold by the selling
securityholders and we will not receive the proceeds from such
sales.
REGULATORY CONSIDERATIONS
As a
bank holding company, Guaranty Federal Bancshares is subject to regulation,
supervision and examination by the Federal Reserve. For a discussion of elements
of the regulatory framework applicable to bank holding companies and their
subsidiaries, please refer to our Annual Report on Form 10-K for the fiscal year
ended December 31, 2008 and the other documents incorporated herein by reference
as described under “Where You Can Find More Information.” This
regulatory framework is intended primarily for the protection of depositors and
the federal deposit insurance fund and not for the protection of security
holders, including holders of our common stock. As a result of this
regulatory framework, our results of operations and financial condition are
affected by actions of the
Federal Reserve, the Missouri Division of Finance, and the FDIC, which insures
the deposits of our bank subsidiary, Guaranty Bank, within certain
limits.
Our ability to pay dividends on our common stock depends primarily on dividends
we receive from the Bank. Under federal regulations, the dollar
amount of dividends the Bank may pay depends upon its capital position and
recent net income. Generally, if the Bank satisfies its regulatory
capital requirements, it may make dividend payments up to the limits prescribed
under state law and Federal Reserve and FDIC regulations.
The
Federal Reserve has issued a policy statement on the payment of cash dividends
by bank holding companies, which expresses the Federal Reserve’s view that a
bank holding company should pay cash dividends only to the extent that its net
income for the past year is sufficient to cover both the cash dividends and a
rate of earnings retention that is consistent with the holding company’s capital
needs, asset quality and overall financial condition. The Federal Reserve also
indicated that it would be inappropriate for a company experiencing serious
financial problems to borrow funds to pay dividends. Furthermore, a
bank holding company may be prohibited from paying any dividends if the holding
company’s bank subsidiary is not adequately capitalized. On February
24, 2009, the Federal Reserve published a Supervisory Letter regarding the
ability of bank holding companies to declare dividends and to redeem or
repurchase equity securities. The Supervisory Letter is generally
consistent with prior guidance; however, it places greater emphasis on
discussions with the regulators prior to dividend declarations and redemption or
repurchase decisions even when not explicitly required by the
regulations. Under Delaware law, Guaranty Federal Bancshares is
generally permitted to pay a dividend only out of its surplus (defined as the
excess, if any, of its net assets over the amount of its capital) or, if there
is no surplus, out of its net profits for the fiscal year in which such dividend
is declared and/or the preceding fiscal year.
There are
numerous other governmental requirements and regulations that affect our
business activities. A change in applicable statutes, regulations or regulatory
policy may have a material effect on our business and on our ability to pay
dividends on our common stock. Depository institutions, like the Bank, are also
affected by various federal laws, including those relating to consumer
protection and similar matters.
In
addition to the foregoing regulatory restrictions, we are and may in the future
become subject to contractual restrictions that would limit or prohibit us from
paying dividends on our common stock, including those contained in the
securities purchase agreement between us and Treasury, as described under
“Description of Capital Stock—Common Stock-Restrictions on Dividends and
Repurchases Under Agreement with Treasury.”
This
section summarizes specific terms and provisions of the warrant we issued to
Treasury on January 30, 2009 concurrent with our sale to Treasury of 17,000
shares of Series A Preferred Stock pursuant to the TARP Capital Purchase
Program. The description of the warrant contained in this section is qualified
in its entirety by the actual terms of the warrant, a copy of which was attached
as Exhibit 4.2 to our Current Report on Form 8-K filed on February 3, 2009 and
incorporated by reference into this prospectus. See “Where You Can
Find More Information.”
General
The
warrant gives the holder the right to initially purchase up to 459,459 shares of
our common stock at an exercise price of $5.55 per share. Subject to
the limitations on exercise to which Treasury is subject described under
“—Transferability,” the warrant is immediately exercisable and expires on
January 30, 2019. The exercise price may be paid (i) by having us
withhold from the shares of common stock that would otherwise be issued to the
warrant holder upon exercise, a number of shares of common stock having a market
value equal to the aggregate exercise price or (ii) if both we and the warrant
holder consent, in cash.
Possible
Reduction in Number of Shares
If we (or
any successor to us by a business combination) complete one or more Qualified
Equity Offerings prior to December 31, 2009 resulting in aggregate gross
proceeds of at least $17.0 million (plus the aggregate liquidation preference
amount of any preferred stock issued to Treasury by any such successor), the
number of shares of common stock underlying the warrant then held by Treasury
will be reduced by 50%. The number of shares subject to the
warrant are subject to further adjustment as described below under “—Other
Adjustments.”
A
“Qualified Equity Offering” is defined as the sale for cash by Guaranty Federal
Bancshares (or its successor) of perpetual preferred stock or common stock (or
any combination of perpetual preferred stock and common stock) that qualifies as
Tier 1 capital under applicable regulatory capital guidelines.
Transferability
The
holder has certain registration rights to facilitate a sale of the Series A
Preferred Stock upon written request to the Company. Neither the
Series A Preferred Stock, the Warrant nor the Warrant Shares will be subject to
any contractual restrictions on transfer, except that Treasury may not transfer
the Warrant with respect to, and/or exercise the Warrant for, more than one-half
of the 459,459 Warrant Shares prior to the earlier of (i) the date on which the
Company has received aggregate gross proceeds of at least $17.0 million from one
or more "Qualified Equity Offerings," and (ii) December 31, 2009. A
"Qualifed Equity Offering" is defined as the sale for cash by the Company of
preferred stock or common stock that qualifies as Tier 1
capital.
Voting
of Warrant Shares
Treasury
has agreed that it will not vote any of the shares of common stock that it
acquires upon exercise of the warrant. This does not apply to any
other person who acquires all or any portion of the warrant, or the shares of
common stock underlying the warrant, from Treasury. Our restated
certificate of incorporation provides, however, that any person who beneficially
owns shares of our common stock in excess of 10% of the outstanding shares may
only vote a portion of the excess shares based on a formula set forth therein
without the prior approval of our Board of Directors. See “Description of
Capital Stock—Anti-Takeover Effects-Voting Limitation.”
Other
Adjustments
The
exercise price of the warrant and the number of shares underlying the warrant
automatically adjust upon the following events:
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any
stock split, stock dividend, subdivision, reclassification or combination
of our common stock;
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until
the earlier of (i) the date on which Treasury no longer holds any portion
of the warrant and (ii) January 30, 2012, issuance of our common stock (or
securities convertible into our common stock) for consideration (or having
a conversion price per share) less than 90% of then current market value,
except for issuances in connection with benefit plans, business
acquisitions and public or other broadly marketed
offerings;
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a
pro rata repurchase by us of our common stock;
or
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a
determination by our Board of Directors to make an adjustment to the
anti-dilution provisions as are reasonably necessary, in the good faith
opinion of the Board, to protect the purchase rights of the warrant
holders.
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In
addition, if we declare any dividends or distributions on our common stock other
than our historical, ordinary cash dividends, dividends paid in our common stock
and other dividends or distributions covered by the first bullet point above,
the exercise price of the warrant will be adjusted to reflect such
distribution.
In the
event of any merger, consolidation, or other business combination to which we
are a party, the warrantholder’s right to receive shares of our common stock
upon exercise of the warrant will be converted into the right to exercise the
warrant to acquire the number of shares of stock or other securities or property
(including cash) which the common stock issuable upon exercise of the warrant
immediately prior to such business combination would have been entitled to
receive upon consummation of the business combination. For purposes
of the provision described in the preceding sentence, if the holders of our
common stock have the right to elect the amount or type of consideration to be
received by them in the business combination, then the consideration that the
warrantholder will be entitled to receive upon exercise will be the amount and
type of consideration received by a majority of the holders of the common stock
who affirmatively make an election.
No
Rights as Stockholders
The
warrant does not entitle its holder to any of the rights of a stockholder of
Guaranty Federal Bancshares prior to exercise.
DESCRIPTION OF CAPITAL STOCK
Our
authorized capital stock consists of:
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10,000,000
shares of common stock, par value $.10 per share;
and
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2,000,000
shares of preferred stock, par value $.01 per
share.
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As of
June 1, 2009, there were 2,621,340 shares of our common stock issued and
outstanding and 17,000 shares of our preferred stock issued and outstanding, all
of which consisted of our Series A Preferred Stock.
In this
section we describe certain features and rights of our capital stock. The
summary does not purport to be exhaustive and is qualified in its entirety by
reference to our restated certificate of incorporation and bylaws and to
applicable Delaware law.
Common
Stock
General. Except as
described below under “—Anti-takeover Effects –Voting Limitation,” each holder
of common stock is entitled to one vote for each share on all matters to be
voted upon by the common stockholders. There are no cumulative voting rights.
Subject to preferences to which holders of any shares of preferred stock may be
entitled, holders of common stock will be entitled to receive ratably any
dividends that may be declared from time to time by the Board of Directors out
of funds legally available for that purpose. In the event of our
liquidation, dissolution or winding up, holders of common stock will be entitled
to share in our assets remaining after the payment or provision for payment of
our debts and other liabilities, and the satisfaction of the liquidation
preferences of the holders of the Series A Preferred Stock and any other series
of our preferred stock then outstanding. Holders of common stock have
no preemptive or conversion rights or other subscription
rights. There are no redemption or sinking fund provisions that apply
to the common stock. All shares of common stock currently outstanding are fully
paid and nonassessable. The rights, preferences and privileges of the holders of
common stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock that we may designate in the
future.
Restrictions on Dividends and
Repurchases Under Agreement with Treasury. The securities
purchase agreement between us and Treasury provides that prior to the earlier of
(i) January 30, 2012 and (ii) the date on which all of the shares of the Series
A Preferred Stock have been redeemed by us or transferred by Treasury to third
parties, we may not, without the consent of Treasury, (a) declare or pay any
dividends on our common stock (other than regular quarterly cash dividends of
not more than the amount of the last quarterly cash dividend per share declared
on the common stock prior to October 14, 2008 and dividends payable in shares of
common stock) or (b) subject to limited exceptions, redeem, repurchase or
otherwise acquire shares of our common stock or preferred stock (other than the
Series A Preferred Stock) or trust preferred securities. In addition,
we are unable to pay any dividends on our common stock unless we are current in
our dividend payments on the Series A Preferred Stock.
Preferred
Stock-General
Our
restated certificate of incorporation permits our Board of Directors to
authorize the issuance of up to 2,000,000 shares of preferred stock, par value
$0.01, in one or more series, without stockholder action. The Board of Directors
can fix the designation, powers, preferences and rights of each
series. Therefore, without approval of the holders
of our common stock or the Series A Preferred Stock (except as may be required
under the terms of the Series A Preferred Stock (see “—Series A Preferred
Stock—Voting Rights”) or by the rules of the NASDAQ Stock Market or any other
exchange or market on which our securities may then be listed or quoted), our
Board of Directors may authorize the issuance of preferred stock with voting,
dividend, liquidation and conversion and other rights that could dilute the
voting power or other rights or adversely affect the market value of our common
stock and the Series A Preferred Stock and may assist management in impeding any
unfriendly takeover or attempted change in control. See
“—Anti-Takeover Effects – Authorized Shares.”
Series
A Preferred Stock
This
section summarizes specific terms and provisions of the Series A Preferred
Stock. The description of the Series A Preferred Stock set forth
below is qualified in its entirety by the actual terms of the Series A Preferred
Stock, as are stated in the certificate of designation for the Series A
Preferred Stock, a copy of which was attached as Exhibit 10.1 to our Current
Report on Form 8-K filed on February 3, 2009 and incorporated by reference into
this prospectus. See “Where You Can Find More
Information.”
General. The
Series A Preferred Stock constitutes a single series of our preferred stock,
consisting of 17,000 shares, par value $0.01 per share, having a liquidation
preference amount of $1,000 per share. The Series A Preferred Stock
has no maturity date. We issued the shares of Series A Preferred
Stock to Treasury on January 30, 2009 in connection with the TARP Capital
Purchase Program for a purchase price of $17.0 million.
Dividend
Rate. Dividends on the Series A Preferred Stock are payable
quarterly in arrears, when, as and if authorized and declared by our Board of
Directors out of legally available funds, on a cumulative basis on the $1,000
per share liquidation preference amount plus the amount of accrued and unpaid
dividends for any prior dividend periods, at a rate of (i) 5% per annum, from
the original issuance date to but excluding the first day of the first dividend
period commencing after the fifth anniversary of the original issuance date
(i.e., 5% per annum from January 30, 2009 to but excluding May 15, 2014), and
(ii) 9% per annum, from and after the first day of the first dividend period
commencing after the fifth anniversary of the original issuance date (i.e., 9%
per annum on and after May 15, 2014). Dividends are payable quarterly
in arrears on February 15, May 15, August 15 and November 15 of each year,
commencing on May 15, 2009.
Dividends
on the Series A Preferred Stock will be cumulative. If for any reason
our Board of Directors does not declare a dividend on the Series A Preferred
Stock for a particular dividend period, or if our Board of Directors declares
less than a full dividend, we will remain obligated to pay the unpaid portion of
the dividend for that period and the unpaid dividend will compound on each
subsequent dividend date (meaning that dividends for future dividend periods
will accrue on any unpaid dividend amounts for prior dividend
periods).
We are
not obligated to pay holders of the Series A Preferred Stock any dividend in
excess of the dividends on the Series A Preferred Stock that are payable as
described above. There is no sinking fund with respect to dividends on the
Series A Preferred Stock.
Priority of Dividends and
Redemptions. So long as the Series A Preferred Stock remains
outstanding, we may not declare or pay a dividend or other distribution on our
common stock or any other shares of Junior Stock (other than dividends payable
solely in common stock) or Parity Stock (other than dividends paid on a pro rata
basis with the Series A Preferred Stock), and we generally may not directly or
indirectly purchase, redeem or otherwise acquire any shares of common stock,
Junior Stock or Parity Stock unless all accrued and unpaid dividends on the
Series A Preferred Stock for all past dividend periods are paid in
full.
“Junior
Stock” means our common stock and any other class or series of our stock the
terms of which expressly provide that it ranks junior to the Series A Preferred
Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of Guaranty Federal Bancshares. We currently have no
outstanding class or series of stock constituting Junior Stock other than our
common stock.
“Parity
Stock” means any class or series of our stock, other than the Series A Preferred
Stock, the terms of which do not expressly provide that such class or series
will rank senior or junior to the Series A Preferred Stock as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of Guaranty
Federal Bancshares, in each case without regard to whether dividends accrue
cumulatively or non-cumulatively. We currently have no outstanding
class or series of stock constituting Parity Stock.
Liquidation
Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of Guaranty Federal
Bancshares, holders of the Series A Preferred Stock will be entitled to receive
for each share of Series A Preferred Stock, out of the assets of Guaranty
Federal Bancshares or proceeds available for distribution to our stockholders,
subject to any rights of our creditors, before any distribution of assets or
proceeds is made to or set aside for the holders of our common stock and any
other class or series of our stock ranking junior to the Series A Preferred
Stock, payment of an amount equal to the sum of (i) the $1,000 liquidation
preference amount per share and (ii) the amount of any accrued and unpaid
dividends on the Series A Preferred Stock (including dividends accrued on any
unpaid dividends). To the extent the assets or proceeds available for
distribution to stockholders are not sufficient to fully pay the liquidation
payments owing to the holders of the Series A Preferred Stock and the holders of
any other class or series of our stock ranking equally with the Series A
Preferred Stock, the holders of the Series A Preferred Stock and such other
stock will share ratably in the distribution.
For
purposes of the liquidation rights of the Series A Preferred Stock, neither a
merger or consolidation of Guaranty Federal Bancshares with another entity nor a
sale, lease or exchange of all or substantially all of Guaranty Federal
Bancshares’s assets will constitute a liquidation, dissolution or winding up of
the affairs of Guaranty Federal Bancshares.
Redemption and
Repurchases. Subject to the prior approval of the Federal
Reserve, the Series A Preferred Stock is redeemable at our option in whole or in
part at a redemption price equal to 100% of the liquidation preference amount of
$1,000 per share plus any accrued and unpaid dividends to but excluding the date
of redemption (including dividends accrued on any unpaid dividends), provided
that any declared but unpaid dividend payable on a redemption date that occurs
subsequent to the record date for the dividend will be payable to the holder of
record of the redeemed shares on the dividend record date, and provided further
that the Series A Preferred Stock may be redeemed prior to the first dividend
payment date falling after the third anniversary of the original issuance date
(i.e., prior to May 15, 2012) only if (i) we have, or our successor following a
business combination with another entity which also participated in the TARP
Capital Purchase Program has, raised aggregate gross proceeds in one or more
Qualified Equity Offerings (as defined above under “Description of
Warrant—Possible Reduction in Number of Shares”) of at least the Minimum Amount
and (ii) the aggregate redemption price of the Series A Preferred Stock does not
exceed the aggregate net proceeds from such Qualified Equity Offerings by us and
any successor. The “Minimum Amount” means $4,250,000 plus, in the
event we are succeeded in a business combination by another entity which also
participated in the TARP Capital Purchase Program, 25% of the aggregate
liquidation preference amount of the preferred stock issued by that entity to
Treasury.
Shares of
Series A Preferred Stock that we redeem, repurchase or otherwise acquire will
revert to authorized but unissued shares of preferred stock, which may then be
reissued by us as any series of preferred stock other than the Series A
Preferred Stock.
No Conversion
Rights. Holders of the Series A Preferred Stock have no right
to exchange or convert their shares into common stock or any other
securities.
Voting Rights. The
holders of the Series A Preferred Stock do not have voting rights other than
those described below, except to the extent specifically required by Delaware
law.
Whenever
dividends have not been paid on the Series A Preferred Stock for six or more
quarterly dividend periods, whether or not consecutive, the authorized number of
directors of Guaranty Federal Bancshares will automatically increase by two and
the holders of the Series A Preferred Stock will have the right, with the
holders of shares of any other classes or series of Voting Parity Stock
outstanding at the time, voting together as a class, to elect two directors (the
“Preferred Directors”) to fill such newly created directorships at our next
annual meeting of stockholders (or at a special meeting called for that purpose
prior to the next annual meeting) and at each subsequent annual meeting of
stockholders until all accrued and unpaid dividends for all past dividend
periods on all outstanding shares of Series A Preferred Stock have been paid in
full at which time this right will terminate with respect
to the Series A Preferred Stock, subject to revesting in the event of each and
every subsequent default by us in the payment of dividends on the Series A
Preferred Stock.
Upon any termination of the right of the holders of the Series A Preferred Stock
and Voting Parity Stock as a class to vote for directors as described above, the
Preferred Directors will cease to be qualified as directors, the terms of office
of all Preferred Directors then in office will terminate immediately and the
authorized number of directors will be reduced by the number of Preferred
Directors which had been elected by the holders of the Series A Preferred Stock
and the Voting Parity Stock. Any Preferred Director may be removed at any time,
with or without cause, and any vacancy created by such a removal may be filled,
only by the affirmative vote of the holders a majority of the outstanding shares
of Series A Preferred Stock voting separately as a class together with the
holders of shares of Voting Parity Stock, to the extent the voting rights of
such holders described above are then exercisable. If the office of any
Preferred Director becomes vacant for any reason other than removal from office,
the remaining Preferred Director may choose a successor who will hold office for
the unexpired term of the office in which the vacancy occurred.
The term
“Voting Parity Stock” means with regard to any matter as to which the holders of
the Series A Preferred Stock are entitled to vote, any series of Parity Stock
(as defined under “—Dividends-Priority of Dividends”) upon which voting rights
similar to those of the Series A Preferred Stock have been conferred and are
exercisable with respect to such matter. We currently have no
outstanding shares of Voting Parity Stock.
In
addition to any other vote or consent required by Delaware law or by our
restated certificate of incorporation, the vote or consent of the holders of at
least 66 2/3% of the outstanding shares of Series A Preferred Stock, voting as a
separate class, is required in order to do the following:
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·
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amend
our restated certificate of incorporation or the certificate of
designation for the Series A Preferred Stock 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 stock ranking senior to the Series A Preferred
Stock with respect to the payment of dividends and/or the distribution of
assets on any liquidation, dissolution or winding up of Guaranty Federal
Bancshares; or
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·
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amend
our restated certificate of incorporation or the certificate of
designation for the Series A Preferred Stock in a way that materially and
adversely affect the rights, preferences, privileges or voting powers of
the Series A Preferred Stock; or
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·
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consummate
a binding share exchange or reclassification involving the Series A
Preferred Stock or a merger or consolidation of Guaranty Federal
Bancshares with another entity, unless (i) the shares of Series A
Preferred Stock remain outstanding or, in the case of a merger or
consolidation in which Guaranty Federal Bancshares is not the surviving or
resulting entity, are converted into or exchanged for preference
securities of the surviving or resulting entity or its ultimate parent,
and (ii) the shares of Series A Preferred Stock remaining outstanding or
such preference securities, have such rights, preferences, privileges,
voting powers, limitations and restrictions, taken as a whole, as are not
materially less favorable than the rights, preferences, privileges, voting
powers, limitations and restrictions of the Series A Preferred Stock prior
to consummation of the transaction, taken as a
whole;
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provided, however, that (1)
any increase in the amount of our authorized but unissued shares of preferred
stock, or (2) the creation and issuance, or an increase in the authorized or
issued amount, of any other series of preferred stock, or any securities
convertible into or exchangeable or exercisable for any other series of
preferred stock, ranking equally with and/or junior to the Series A Preferred
Stock with respect to the payment of dividends, whether such dividends are
cumulative or non-cumulative and the distribution of assets upon our
liquidation, dissolution or winding up, will not be deemed to materially and
adversely affect the rights, preferences, privileges or voting powers of the
Series A Preferred Stock and will not require the vote or consent of the holders
of the Series A Preferred Stock.
To the
extent holders of the Series A Preferred Stock are entitled to vote, holders of
shares of the Series A Preferred Stock will be entitled to one vote for each
share then held.
Anti-takeover
Effects
The
provisions of our restated certificate of incorporation and bylaws and Delaware
law summarized in the following paragraphs may have anti-takeover effects and
could delay, defer, or prevent a tender offer or takeover attempt that a
stockholder might consider to be in such stockholder’s best interest, including
those attempts that might result in a premium over the market price for the
shares held by stockholders, and may make removal of the incumbent management
and directors more difficult.
Authorized
Shares. Our restated certificate of incorporation authorizes
the issuance of 10,000,000 shares of common stock and 2,000,000 shares of
preferred stock. These shares of common stock and preferred stock
provide our Board of Directors with as much flexibility as possible to effect,
among other transactions, financings, acquisitions, stock dividends and the
exercise of employee stock options. However, these additional
authorized shares may also be used by the Board of Directors consistent with its
fiduciary duty to deter future attempts to gain control of us. The
Board of Directors also has sole authority to determine the terms of any one or
more series of preferred stock, including voting rights, conversion rates, and
liquidation preferences (subject to the voting rights of Series A Preferred
Stock with respect to any such preferred stock ranking senior to the Series A
Preferred Stock; see “—Series A Preferred Stock—Voting Rights”). As a
result of the ability to fix voting rights for a series of preferred stock, the
Board has the power to the extent consistent with its fiduciary duty to issue a
series of preferred stock to persons friendly to management in order to attempt
to block a tender offer, merger or other transaction by which a third party
seeks control of us, and thereby assist members of management to retain their
positions.
Voting
Limitation. Our restated certificate of incorporation provides
that any person who beneficially owns in excess of 10% of the outstanding shares
of our common stock may only vote a portion of the excess shares based on a
formula set forth therein unless the acquisition of such shares has been
approved by a majority of the Board as such Board is constituted immediately
prior to such acquisition. This provision could limit the voting
power of a beneficial owner of more than 10% of our outstanding shares of common
stock in a proxy contest or on other matters on which such person is entitled to
vote.
Board of
Directors. Except with respect to any directors who may be
elected by any class or series of preferred stock, our Board of Directors is
divided into three classes, each of which contains one-third of the members of
the Board. The members of each class are elected for a term of three
years, with the terms of office of all members of one class expiring each year
so that approximately one-third of the total number of directors is elected each
year. The classification of directors, together with the provisions
in our restated certificate of incorporation described below that limit the
ability of stockholders to remove directors and that permit only the remaining
directors to fill any vacancies on the Board of Directors, have the effect of
making it more difficult for stockholders to change the composition of the Board
of Directors. As a result, at least two annual meetings of stockholders will be
required for the stockholders to change a majority of the directors, whether or
not a change in the Board of Directors would be beneficial and whether or not a
majority of stockholders believe that such a change would be desirable. Our restated certificate
of incorporation provides that stockholders may not cumulate their votes in the
election of directors.
Our
restated certificate of incorporation provides that we will have the number of
directors as may be fixed from time to time by our Board of Directors, provided
that the number fixed by the Board may not be less than three nor more than
15. Guaranty Federal Bancshares currently has nine
directors. Our restated certificate of incorporation also provides
that vacancies in the Board of Directors, however created, will be filled by a
vote of two-thirds of the directors then in office, whether or not a quorum, and
any director so chosen shall hold office for a term expiring at the annual
meeting of stockholders at which the term of the class to which the director has
been chosen expires and the director’s successor is elected and
qualified. Our restated certificate of incorporation further provides
that any director or the entire Board of Directors may be removed from office
only for cause and only upon the affirmative vote of the holders of least 80% of
the total votes to which all of the shares then entitled to vote at a meeting of
stockholders called for an election of directors are entitled.
The
foregoing description of our Board of Directors does not apply with respect to
directors that may be elected by the holders of the Series A Preferred Stock in
the event we do not pay dividends on the Series A Preferred Stock for six or
more dividend periods. See “—Series A Preferred Stock—Voting
Rights.”
Special Meetings of
Stockholders. Our bylaws provide that special meetings of
stockholders may only be called by our Board of Directors (or a duly designated
committee of our Board of Directors).
Action by Stockholders Without A
Meeting. The Delaware General Corporation Law (the “DGCL”)
provides that, unless otherwise provided in the certificate of incorporation,
any action required or permitted to be taken at a meeting of stockholders may be
taken without a meeting only if consents in writing setting forth the action are
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and
voted. Our restated certificate of incorporation expressly denies
such power of stockholders to consent in writing, without a meeting, to the
taking of any such action.
Business Combinations With Certain
Persons. Our restated certificate of incorporation provides
that certain business combinations (for example, mergers, share exchanges,
significant asset sales and significant stock issuances) involving “principal
shareholders” of Guaranty Federal Bancshares require, in addition to any vote
required by law or otherwise, the approval of the holders of at least 80% of the outstanding
shares of stock entitled to vote generally in the election of
directors. This provision in our restated certificate of
incorporation shall not apply to a business combination which is approved by
two-thirds of those members of the board of directors who were directors prior
to the time when the principal shareholder became a principal
shareholder. A "principal shareholder" for purposes of this provision
generally means (i) any person or entity which, together with its affiliates and
associates, beneficially owns 10% or more of the outstanding shares of
stock entitled to vote generally in the election of our directors, and (ii) any
affiliate or associate of any such person or entity.
In
addition to the conditions discussed above, those imposed by law or otherwise,
no business combination shall be effected unless: (i) the ratio of (a) the
aggregate amount of the cash and the fair market value of the other
consideration to be received per share by the stockholders in the business
combination to (b) the “Market Price” (as defined in Article XV of our restated
certificate of incorporation) of the common stock of the Company immediately
prior to the announcement of the business combination or the solicitation of the
stockholders prior to the business combination, whichever is first, shall be at
least as great as the ratio of (x) the highest price per share previously paid
by the principal shareholder to (y) the Market Price of the common stock on the
trading date immediately prior to the earliest date on which the principal
shareholder purchased any shares of the common stock during the two year period
prior to the date on which the principal shareholder acquired the shares of
common stock owned for which it paid the highest price per share or if the
principal shareholder did not purchase any common stock during this two year
period, the Market Price of the common stock on the date of two years prior to
the date on which the principal shareholder acquired the common stock for which
it paid the highest price per share; (ii) the aggregate amount of the cash and
the fair market value of the other consideration to be received per share by the
stockholders in the business combination shall be no less than the highest price
per share previously paid by the principal shareholder for any of the shares of
common stock owned by the principal shareholder; and (iii) the consideration to
be received by the stockholders in the business combination shall be in the same
form and of the same kind as the consideration paid to the principal shareholder
in acquiring the majority of the shares of common stock already owned by the
principal shareholder.
The DGCL
also contains a business combination statute that prohibits a business
combination between a corporation and an interested stockholder (subject to
certain exceptions, one who beneficially owns 15% or more of the voting stock of
the corporation or is an affiliate or associate of the corporation and
beneficially owns 15% or more of the voting stock of the corporation at any time
within the three-year period immediately prior to the date of such determination
of being an interested stockholder) for a period of three years after the
interested stockholder first becomes an interested stockholder, unless, among
other exceptions, (i) the transaction has been approved by the board of
directors before the interested stockholder became an interested stockholder,
(ii) once the stockholder became an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation (excluding
shares owned by directors or officers or shares owned in employee stock plans),
(iii) the corporation has exempted itself from the statute pursuant to a
provision in its certificate of incorporation or bylaws, or (iv) at or
subsequent to such time the business combination is approved by the board of
directors and authorized at an
annual meeting of stockholders (not by written consent) by the affirmative vote
of at least 66 2/3% of the outstanding voting stock other than shares owned by
the interested stockholder and its affiliates and associates. We are
subject to the Delaware business combination statute.
Amendment of Certificate of
Incorporation and Bylaws. Our restated certificate of
incorporation generally may be amended upon approval by our Board of Directors
and the holders of a majority of the outstanding shares of our common stock
(except as otherwise described below). The amendment of the
provisions of our restated certificate of incorporation pertaining to certain
business combinations, as described above under “—Business Combinations with
Certain Persons,” also requires the approval of the holders of at least 80% of
the outstanding shares of stock entitled to vote generally in the election of
directors. In addition, an amendment of certain other provisions of
our restated certificate of incorporation, including the number, classification,
election and removal of directors, also requires the affirmative vote of the
holders of at least 80% of the total votes to
which all of the shares then entitled to vote at a meeting of stockholders
called for an election of directors are entitled. See Article XX of
our restated certificate of incorporation for a listing of such
provisions.
Our
bylaws may be amended either by our Board of Directors or by our stockholders by
the vote of the holders of at least 80% of the voting power of the outstanding
shares of capital stock entitled to vote generally in the election of directors,
voting together as a single class.
Advance Notice
Provisions. Our restated certificate of incorporation provides
that we must receive written notice of any stockholder proposal for business at
an annual meeting of stockholders not less than 30 days or more than 60 days
before any such annual meeting.
Our
restated certificate of incorporation also provides that we must receive written
notice of any stockholder director nomination for a meeting of stockholders not
less than 30 days or more than 60 days before the date of the
meeting.
Transfer
Agent
The
transfer agent and registrar for our common stock is Registrar and Transfer
Company.
The
selling securityholders may include (i) Treasury, which acquired the warrant and
all of the shares of Series A Preferred Stock from us on January 30, 2009 in a
private placement exempt from the registration requirements of the Securities
Act, and (ii) any other person or persons holding any portion of the warrant and
any shares of our common stock issued upon exercise of the warrant to whom
Treasury has transferred its registration rights under the terms of the
securities purchase agreement between us and Treasury. Treasury is
required to notify us in writing of any such transfer of its registration rights
within ten days after the transfer, including the name and address of the
transferee and the number and type of securities with respect to which the
registration rights have been assigned. As of the date of this
prospectus, Treasury has not notified us of any such
transfer. Accordingly, we believe that Treasury currently holds
record and beneficial ownership of the entire amount of the warrant (none of
which has been exercised) covered by this prospectus.
The
securities to be offered under this prospectus for the account of the selling
securityholders are:
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·
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a
ten-year warrant to purchase 459,459 shares of our common stock at an
exercise price of $5.55 per share, subject to adjustment as described
under “Description of Warrant”; and
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·
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the
459,459 shares of our common stock issuable upon exercise of the warrant
(subject to adjustment as described under “Description of Warrant”), which
shares, if issued, would represent ownership of approximately 14.9% of the
shares of our common stock outstanding as of June 1, 2009 (including the
shares issuable upon exercise of the warrant in total shares
outstanding).
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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.
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,
to our knowledge, no sale of any of the securities is currently 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.
The only
potential selling securityholder whose identity we are currently aware of is
Treasury. Other than with respect to Treasury’s acquisition of the
Series A Preferred Stock and warrant from us, Treasury 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.
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:
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•
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on
any national securities exchange or quotation service on which the
preferred stock or the common stock may be listed or quoted at the time of
sale, including, as of the date of this prospectus, the Nasdaq Global
Market in the case of the common
stock;
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•
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in
the over-the-counter market;
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•
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in
transactions otherwise than on these exchanges or services or in the
over-the-counter market; or
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•
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through
the writing of options, whether the options are listed on an options
exchange or otherwise.
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In
addition, any securities that qualify for sale pursuant to Rule 144 under
the Securities Act 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 common stock to close out short positions, or loan or
pledge 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 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
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 and Rule 10b-5 under the Exchange Act.
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 Exchange Act may apply to
sales of 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, which may include
delivery through the facilities of the Nasdaq Global Market pursuant to
Rule 153 under the Securities Act.
At the
time a particular offer of 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.
The
warrant is not listed on an exchange and, unless requested by the initial
selling securityholder, we do not intend to list the warrant on any
exchange.
Pursuant
to the securities purchase agreement between us and Treasury, we have agreed to
indemnify the selling securityholders against certain liabilities, including
certain liabilities under the Securities Act. 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.
The
validity of the securities offered by this prospectus has been passed upon for
us by Husch Blackwell Sanders LLP.
The
consolidated financial statements of Guaranty Federal Bancshares, Inc. as of
December 31, 2008 and 2007, and for each of the years in the three year period
ended December 31, 2008, have been incorporated by reference herein in reliance
upon the report of BKD, LLP, independent registered public accounting firm,
incorporated by reference herein, and given as experts in accounting and
auditing.
459,459
Shares of Common Stock and a Warrant to Purchase Such Shares
Guaranty
Federal Bancshares, Inc.
_________________________________________
PROSPECTUS
_________________________________________
___________________,
2009
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
|
Item
14.
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Other
Expenses of Issuance and
Distribution
|
The
following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities covered by the registration
statement of which this prospectus is a part. Guaranty Federal
Bancshares, Inc. (the “Registrant”) will bear all of these
expenses.
|
Registration
fee under the Securities Act
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|
$ |
100.21 |
|
|
Legal
fees and expenses*
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|
$ |
15,000.00 |
|
|
Accounting
fees and expenses*
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|
$ |
5,000.00 |
|
|
Printing
and other miscellaneous fees and expenses*
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|
$ |
1,000.00 |
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Total
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|
$ |
21,100.21 |
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|
*Estimated
solely for the purpose of this Item. Actual expenses may be more or
less.
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Item
15.
|
Indemnification
of Officers and Directors
|
As
permitted by Section 102(b)(7) of the Delaware General Corporation Law (the
“DGCL”), our restated certificate of incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability of a director (i) for any breach of the director’s duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not
made in good faith or that involve intentional misconduct or a knowing violation
of law, (iii) under section 174 of the DGCL, or (iv) for any transaction from
which the director derived an improper personal benefit. If the DGCL is amended
to further eliminate or limit the personal liability of directors, then the
liability of a director of the Registrant shall be eliminated or limited to the
fullest extent permitted by the DGCL, as so amended.
Section
174 of the DGCL provides, among other things, that a director, who willfully or
negligently approves an unlawful payment of dividends or an unlawful purchase or
redemption of stock, may be held liable for such actions. A director who was
either absent when the unlawful actions were approved or dissented at the time,
may avoid liability by causing his or her dissent to such actions to be entered
in the books containing minutes of the meetings of the board of directors at the
time such action occurred or immediately after such absent director receives
notice of the unlawful acts.
The
indemnification provisions in our restated certificate of incorporation may be
sufficiently broad to indemnify the officers and directors of the Registrant
under certain circumstances from liabilities arising under the Securities Act of
1933 (the “Securities Act”). As permitted by Section 145 of the DGCL, our
restated certificate of incorporation provides that in the case of a threatened,
pending or completed action or suit by or in the right of the Registrant against
any person who is or was a director or officer of the Registrant by reason of
such person holding such position, the Registrant shall indemnify such person
for expenses (including attorneys’ fees) actually and reasonably incurred by
such person in connection with the defense or settlement of the action or suit;
provided that such person is successful on the merits or otherwise or such
person acted in good faith in the transaction which is the subject of such
action or suit, and in the manner such person reasonably believed to be in or
not opposed to, the best interest of the Registrant, including, but not limited
to, the taking of any and all actions in connection with the Registrant’s
response to any tender offer or any offer or proposal of another party to engage
in a Business Combination (as such term is defined in Article XIV of the
restated certificate of incorporation) not approved by the board of directors.
However, such director or officer shall not be indemnified in respect of any
claim, issue or matter as to which such person has been adjudged liable to the
Registrant unless (and only to the extent that) the Court of Chancery or the
court in which the suit was brought shall determine, upon application, that
despite the adjudication, but in view of all the circumstances, such person is
fairly and reasonably entitled to indemnity for such expenses as the court shall
deem proper.
In
addition, as permitted by Section 145 of the DGCL, our restated certificate of
incorporation provides that in the case of a threatened, pending or completed
action, suit or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the Registrant, against
any person who is or was a director or officer of the Registrant by reason of
such person holding such position, the Registrant shall indemnify such person
for amounts actually and reasonably incurred by such person in connection with
the defense or settlement of such action or suit, including, but not limited to,
expenses (including attorneys’ fees), amounts paid in settlement, judgments and
fines; provided that such person is successful on the merits or otherwise or
such person acted in good faith in the transaction which is the subject of such
suit, and in the manner such person reasonably believed to be in or not opposed
to, the best interest of the Registrant, including, but not limited to, the
taking of any and all actions in connection with the Registrant’s response to
any tender offer or any offer or proposal of another party to engage in a
Business Combination (as such term is defined in Article XIV of the restated
certificate of incorporation) not approved by the board of directors, and, with
respect to any criminal action or proceeding, such person had no reasonable
cause to believe his or her conduct was unlawful. The termination of such suit
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that such officer or
director failed to satisfy the standard described above.
Unless
ordered by a court, indemnification may be made only following a determination
that such indemnification is permissible because the person being indemnified
has met the requisite standard of conduct. Such determination may be made
(i) by a majority vote of a quorum of the corporation’s directors who are
not parties to such proceeding; or (ii) by independent legal counsel
(appointed by a majority of the disinterested directors of the Registrant,
whether or not a quorum) in a written opinion; or (iii) by the
stockholders.
Our
restated certificate of incorporation also provides that (i) the Registrant may
pay in advance any expenses (including attorneys’ fees) which may become subject
to indemnification, but only if the officer or director receiving such payment
undertakes in writing to repay the same if it is ultimately determined that such
person is not entitled to indemnification by the Registrant, (ii) if Delaware
law is amended to permit further indemnification of directors and officers of
the Registrant, then the Registrant shall indemnify such persons to the fullest
extent permitted by Delaware law, as so amended, (iii) the indemnification and
advancement of expenses provided for in our restated certificate of
incorporation or otherwise granted pursuant to Delaware law shall not be
exclusive of any other rights to which a director or officer may be entitled,
(iv) any repeal or modification of the applicable provisions of our restated
certificate of incorporation by the stockholders of the Registrant shall not
adversely affect any right or protection of a director or officer existing at
the time or such repeal or modification, and (v) the Registrant may purchase and
maintain insurance on behalf of any person who holds or who has held a director
or officer position against any liability asserted against and incurred by such
person in any such position, or arising out of his or her status as such,
whether or not the Registrant would have power to indemnify such director or
officer against such liability under the restated certificate of
incorporation.
In
addition to the above and as approved by the Registrant’s board of directors,
the Registrant maintains director and officer liability insurance indemnifying
the directors and officers of the Registrant for certain liability incurred by
them.
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See
the Exhibit Index on page II-6
hereof.
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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;
(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 the 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 20 percent change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(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) of this section do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by
the Registrant pursuant to section 13 or section 15(d) of the Exchange Act 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, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act to any
purchaser:
(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 to any purchaser in the initial distribution of the securities: The
undersigned Registrant undertakes that in a primary offering of securities of an
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 the undersigned
Registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar
as indemnification for liabilities arising under the Securities Act 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 Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, 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 Amendment to its
Registration Statement (Reg. No. 333-157634) to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Springfield, State of
Missouri, on the 26th day of June, 2009.
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GUARANTY FEDERAL BANCSHARES,
INC. |
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By:
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/s/ Shaun
A. Burke |
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Shaun
A. Burke |
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President
and Chief Executive Officer
(Duly
Authorized Representative)
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Pursuant
to the requirements of the Securities Act of 1933, as amended, this Amendment to
the Registration Statement (Reg. No. 333-157634) has been signed by the
following persons in the capacities and on the dates indicated.
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/s/
Shaun A. Burke
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/s/
Tim Rosenbury*
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|
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Shaun
A. Burke
|
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Tim
Rosenbury
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|
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President
and Chief Executive Officer and Director
(Principal Executive
Officer)
Date: June 26,
2009
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Director
Date: June 26,
2009
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/s/
Carter M. Peters
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/s/
James Batten*
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|
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Carter
M. Peters
|
|
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James
Batten
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EVP
and Chief Financial Officer
(Principal
Accounting and Financial Officer)
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Director
Date: June 26,
2009
|
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/s/
John F. Griesemer*
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|
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/s/ Don
M. Gibson*
|
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John
F. Griesemer
|
|
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Don
M. Gibson
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Director
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Chairman
of the Board and Director
Date: June 26,
2009
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/s/
Gregory V. Ostergren*
|
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/s/ James
L. Sivils, III*
|
|
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Gregory
V. Ostergren
|
|
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James
L. Sivils, III
|
|
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Director
|
|
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Director
Date: June 26,
2009
|
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|
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/s/
Kurt D. Hellweg*
|
|
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/s/ Jack
L. Barham*
|
|
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Kurt
D. Hellweg
|
|
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Jack
L. Barham
|
|
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Director
|
|
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Director
Date: June 26,
2009
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*By:
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/s/ Shaun
A. Burke |
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Shaun
A. Burke, Attorney-in-Fact |
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EXHIBIT
INDEX
These
exhibits are numbered in accordance with the Exhibit Table of Item 601 of
Regulation S-K.
|
Number
|
Description
of Document
|
|
|
4.1
|
Restated
Certificate of Incorporation of the Registrant(1)
|
|
|
4.2
|
Certificate
of Designations containing the terms of the Registrant’s Fixed Rate
Cumulative Perpetual Preferred Stock, Series A(2)
|
|
|
4.3
|
Bylaws,
as amended, of the Registrant(3)
|
|
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4.4
|
Warrant
to purchase shares of the Registrant’s common stock dated January 30,
2009(4)
|
|
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4.5
|
Letter
Agreement (including Securities Purchase Agreement Standard Terms attached
as Exhibit A) dated January 30, 2009 between the Registrant and the United
States Department of the Treasury(5)
|
|
|
4.6
|
Form
of Certificate of Series A Preferred Stock(6)
|
|
|
5.1
|
Opinion
of Husch Blackwell Sanders LLP*
|
|
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23.2
|
Consent
of Husch Blackwell Sanders LLP (contained in its opinion filed as Exhibit
5.1)*
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________________
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(1)
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Filed
as Exhibit 3(i) to the Registrant’s Annual Report on Form 10-K for the
fiscal year ended June 30, 1998 (SEC File No. 0-23325) and incorporated
herein by reference.
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(2)
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Filed
as Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant
on February 3, 2009 and incorporated herein by
reference.
|
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(3)
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Filed
as Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant
on December 3, 2007 and incorporated herein by
reference.
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(4)
|
Filed
as Exhibit 4.2 to the Current Report on Form 8-K filed by the Registrant
on February 3, 2009 and incorporated herein by
reference.
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(5)
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Filed
as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant
on February 3, 2009 and incorporated herein by
reference.
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(6)
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Filed
as Exhibit 4.1 to the Current Report on Form 8-K filed by the Registrant
on February 3, 2009 and incorporated herein by
reference.
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