Registration No. 333-
As filed with the Securities and Exchange Commission on April 26, 2005
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
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CENTRAL FEDERAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 34-1877137
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2923 SMITH ROAD, FAIRLAWN, OHIO 44333
330.666.7979
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Eloise L. Mackus
Senior Vice President, General Counsel and Secretary
Central Federal Corporation
2923 Smith Road, Fairlawn, Ohio 44333
330.666.7979
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Stanley E. Everett
Brouse McDowell
Suite 500, 388 South Main Street
Akron, Ohio 44311
330.535.5711
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this registration statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]________________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for he same offering. [ ]_______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Amount Proposed Maximum Proposed Maximum Amount of
Title of Security To Be Offering Price Aggregate Offering Registration
To Be Registered Registered Per Share (1) Price (1) Fee (1)
----------------------------- -------------- ---------------- ------------------ ------------
Common Stock, par value $0.01
per share 127,077 shares $10.12 $1,286,020 $151.36
(1) The proposed maximum offering price per share has been determined pursuant
to Rule 457(c) as the average of the high and low prices quoted for
Common Stock on the Nasdaq Small Cap Market on April 20, 2005, and the
proposed maximum aggregate offering price and the amount of registration
fee have been calculated using that average price.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Company 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 or until the registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
section 8(a), may determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES, IN ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
127,077 SHARES
CENTRAL FEDERAL CORPORATION
COMMON STOCK
OFFERED BY THE SELLING STOCKHOLDERS
This prospectus covers resales by the Selling Stockholders (the "Selling
Stockholders") of an aggregate of 127,077 shares of the common stock ("Common
Stock") of Central Federal Corporation (the "Company"). The Company will not
receive any proceeds from the sale of Common Stock by the Selling Stockholders.
The Selling Stockholders may sell Common Stock at any time at market prices or
at privately negotiated prices. Such sales may be made directly to purchasers or
through underwriters, broker-dealers or agents, who may receive compensation in
the form of discounts, concessions or commissions.
The Common Stock is quoted on the Nasdaq Small Cap Market under the symbol
"GCFC." The last reported sale price for Common Stock on the Nasdaq Small Cap
Market was $10.87 per share on April 8, 2005.
The mailing address of the Company's principal executive offices is Central
Federal Corporation, 2923 Smith Road, Fairlawn, Ohio 44333; the general
telephone number at that address is 330.666.7979.
AS A PROSPECTIVE PURCHASER OF SHARES OF COMMON STOCK, YOU SHOULD CONSIDER
CAREFULLY THE INFORMATION PROVIDED UNDER THE CAPTION "RISK FACTORS" ON PAGES 2
AND 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SHARES OF COMMON STOCK TO BE
DISTRIBUTED UNDER THIS PROSPECTUS OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is April , 2005
TABLE OF CONTENTS
Summary Information
Risk Factors
Caution Regarding Forward-looking Statements
Use of Proceeds
Price Range of Common Stock
Description of Capital Stock
Limitations on Acquiring the Company
Selling Stockholders
Plan of Distribution
Legal Matters
Experts
Incorporation of Certain Documents by Reference
Where You Can Find Additional Information
Commission Position on Indemnification for Securities Act Liabilities
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS. YOU
SHOULD NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER
TO SELL OR BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO DO
SO. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON ITS COVER
PAGE.
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SUMMARY INFORMATION
THE ISSUER
Central Federal Corporation (the "Company") was organized as a Delaware
corporation in September 1998, under the name Grand Central Financial Corp., as
the holding company for Central Federal Savings and Loan Association (the
"Association") in connection with the Association's conversion from a mutual to
stock form of organization. On March 27, 2003, the Association changed its name
to Central Federal Bank (the "Bank"), and, on April 23, 2003, Grand Central
Financial Corp. changed its name to Central Federal Corporation. On January 15,
2004, the Bank changed its name to CFBank effective April 20, 2004. As a savings
and loan holding company, the Company is subject to regulation by the Office of
Thrift Supervision (the "OTS"). On October 22, 2004, CFBank acquired Reserve
Mortgage Services, Inc., an Ohio corporation formerly know as RJO Financial
Services, Inc. ("Reserve"). Currently, the Company does not transact any
material business other than through the Bank. At March 31, 2005, the Company
had total assets of $$152,511,000 and stockholders' equity of $19,049,000.
The Bank is a community-oriented savings institution which was originally
organized in 1892. Its principal business consists of attracting deposits from
the general public in its primary market area and investing those deposits and
other funds generated from operations and Federal Home Loan Bank of Cincinnati
("FHLB") advances, primarily in commercial real estate and business loans and
conventional mortgage loans secured by single-family residences. The Bank also
invests in consumer loans, primarily indirect automobile loans and loans
originated directly or on the Bank's behalf by automobile dealers at the time of
sale. To a significantly lesser extent, the Bank invests in home equity,
multi-family, commercial real estate and business, construction and land loans.
The Bank also invests in mortgage-backed securities, primarily those guaranteed
or insured by government agencies such as Ginnie Mae, Fannie Mae and Freddie
Mac, and other investment grade securities. The Bank's revenues are derived
principally from the generation of interest and fees on loans originated and, to
a lesser extent, from interest and dividends on investment securities. The
Bank's primary sources of funds are retail savings deposits and, to a lesser
extent, principal and interest payments on loans and investment securities, FHLB
advances and proceeds from the sale of loans. The Bank operates through its home
office located in Fairlawn, Ohio, and full service offices in Calcutta, Ohio,
Columbus, Ohio and Wellsville, Ohio and an additional office in Marietta,
Georgia.
THE OFFERING
Up to 127,077 shares of Common Stock are being offered pursuant to this
prospectus by stockholders who received shares in connection with the
acquisition of Reserve on October 22, 2004. The closing price on the Nasdaq
Stock Market on that day was $12.70 per share. The Company will not receive any
proceeds from the sales of shares pursuant to this offering.
RISK FACTORS
In deciding whether to invest in shares of Common Stock, you should consider
carefully the risk factors discussed in the next section, and you should review
the information incorporated in the discussion of risk factors by reference to
the Company's Form 10-KSB for its fiscal year ended December 31, 2004.
Information on obtaining a copy of the Company's Form 10-KSB is set forth on
page 13 of this prospectus under the caption "Incorporation of Certain Documents
by Reference."
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RISK FACTORS
An investment in shares of Common Stock involves significant risk. You should
carefully consider the following risk factors and the other information set
forth in this prospectus before deciding to purchase any shares of Common Stock.
THE PRICE OF COMMON STOCK MAY BE VOLATILE, WHICH MAY RESULT IN LOSSES FOR
INVESTORS.
The market price for shares of Common Stock has been volatile in the past, and
several factors could cause the price to fluctuate substantially in the future.
These factors include:
- announcements of developments related to the business of the Company or
the Bank;
- fluctuations in the Company's results of operations;
- sales of substantial amounts of the Company's securities into the
marketplace;
- general conditions in the Company's banking niche or the worldwide
economy;
- a shortfall in revenues or earnings compared to securities analysts'
expectations;
- lack of an active trading market for the Common Stock;
- changes in analysts' recommendations or projections; and
- announcements of new acquisitions or other projects by the Company or the
Bank.
The market price of Common Stock may fluctuate significantly in the future, and
these fluctuations may be unrelated to the performance of the Company. General
market price declines or market volatility in the future could adversely affect
the price of Common Stock, and the current market price may not be indicative of
future market prices.
THERE IS NO ACTIVE TRADING MARKET FOR THE COMPANY'S CAPITAL STOCK, AND THUS YOUR
ABILITY TO SELL SHARES OR PURCHASE ADDITIONAL SHARES OF COMMON STOCK WILL BE
LIMITED AND THE MARKET PRICE MAY NOT REFLECT TRUE VALUE.
Your ability to sell shares of Common Stock or purchase additional shares
largely depends upon the existence of an active market for the Common Stock.
Although the Common Stock is quoted on Nasdaq, the volume of trades on any given
day is extremely light. Until an active trading market develops for the Common
Stock, you may be unable to find a buyer for shares you wish to sell or a seller
of additional shares you wish to purchase. In addition, a fair valuation of the
purchase or sales price of a share of Common Stock also depends upon active
trading, and thus the price you receive for a thinly traded stock, such as the
Common Stock, may not reflect its true value.
FUTURE SALES OR ADDITIONAL ISSUANCES OF THE COMPANY'S CAPITAL STOCK MAY DEPRESS
PRICES OF SHARES OF COMMON STOCK.
Sales of a substantial amount of the Company's capital stock in the public
market, or the appearance that a substantial amount is available for sale, or
the issuance of a significant number of shares could adversely affect the market
price for shares of Common Stock. As of March 31, 2005, the Company was
authorized to issue up to 6,000,000 shares of Common Stock, of which 2,225,987
shares were outstanding, 216,398 shares were reserved for issuance pursuant to
options granted under the Company's stock option plans and an additional 14,474
shares were available for granting options or shares of restricted stock under
these plans. The Company also was authorized to issue up to 1,000,000 shares of
Preferred Stock, none of which was outstanding or reserved for issuance.
Accordingly, the Company may issue up to 3,774,013 additional shares of Common
Stock (including those reserved for issuance) and up to 1,000,000 shares of
Preferred Stock without further stockholder approval. Dilution to the value of a
stockholder's investment also would occur if any of the available shares were
issued at a price less than the average price per share paid by such
stockholder.
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THE COMPANY'S CHARTER DOCUMENTS, DELAWARE LAW AND FEDERAL REGULATIONS MAY
INHIBIT A TAKEOVER OR LIMIT THE COMPANY'S GROWTH OPPORTUNITIES, WHICH COULD
CAUSE THE MARKET PRICE OF COMMON STOCK TO DECLINE.
Certain provisions of the Company's charter documents, Delaware law and federal
regulations could have the effect of making it more difficult for a third party
to acquire, or of discouraging a third party from attempting to acquire, control
of the Company. See "Limitations on Acquiring the Company," on pages 5 through
9. In addition, the Company must obtain approval from the OTS before acquiring
control of any other SAIF-insured savings institution. No person may acquire
control of a federally insured savings institution without providing at least 60
days written notice to the OTS and giving the OTS an opportunity to disapprove
the proposed acquisition.
THE COMPANY AND THE BANK OPERATE IN A HIGHLY REGULATED ENVIRONMENT, AND CHANGES
IN LAWS AND REGULATIONS TO WHICH THE COMPANY OR THE BANK IS SUBJECT MAY
ADVERSELY AFFECT THE COMPANY'S RESULTS OF OPERATIONS.
The Company and the Bank operate in a highly regulated environment and are
subject to supervision by various governmental regulatory agencies, including
the OTS and the Federal Deposit Insurance Corporation ("FDIC"). Laws and
regulations currently applicable to the Company and the Bank may change, and
there is no assurance that such changes will not adversely affect the business
of the Company and the Bank. Therefore, the Company is unable to determine the
extent to which legislation, if enacted, would affect its business. For more
detailed information regarding the risks attendant to regulation and
supervision, see the discussion in the Company's Form 10-KSB for the fiscal year
ended December 31, 2002, in Part I, Item 1, Description of Business, under the
captions "Federal Savings Institution Regulation," "Federal Home Loan Bank
System" and "Federal Reserve System." See "Incorporation of Certain Documents by
Reference" at page 13 to learn how to secure a copy of the Form 10-KSB.
THE COMPANY OPERATES IN AN EXTREMELY COMPETITIVE MARKET, AND ITS BUSINESS WILL
SUFFER IF IT IS UNABLE TO COMPETE EFFECTIVELY.
In the conduct of certain aspects of its banking business, the Bank encounters
significant competition form other commercial banks, savings and loan
associations, credit unions, mortgage banking firms, consumer finance companies,
securities brokerage firms, insurance companies, money market mutual funds, and
other financial institutions. Many of the Bank's competitors have substantially
greater resources and lending limits than the Bank.
THE LOSS OF KEY MEMBERS OF THE COMPANY'S SENIOR MANAGEMENT TEAM COULD ADVERSELY
AFFECT ITS BUSINESS.
The Company's success depends largely on the efforts and abilities of current
senior management of the Company and the Bank. Their experience and industry
contacts significantly benefit the Company. If the benefit of their experience
and contacts were to be lost, the business of the Bank and the Company could be
adversely affected.
IF THE COMPANY DOES NOT EXPERIENCE ANTICIPATED GROWTH, THE COSTS ASSOCIATED WITH
RECENT EXPANSION WOULD HAVE A MATERIAL ADVERSE IMPACT ON EARNINGS.
Within the past year, the Company expanded to new locations and restructured its
personnel in anticipation of growth. If the Company does not experience expected
growth, the costs associated with this expansion and restructuring would have a
material adverse impact on the Company's earnings.
CHANGES IN ECONOMIC AND POLITICAL CONDITIONS COULD ADVERSELY AFFECT THE COMPANY.
The success of the Company and the Bank depend, to a certain extent, upon
economic and political conditions, local and national, as well as governmental
monetary policies. Conditions such as inflation, recession, unemployment,
changes in interest rates, short money supply and other factors beyond the
control of the Company and the Bank may adversely affect the Bank's asset
quality, deposit levels and loan demand and, therefore, the earnings of the Bank
and the Company.
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CHANGES IN INTEREST RATES COULD ADVERSELY AFFECT THE COMPANY'S RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The Company's earnings depend substantially on "rate differentials," which are
the differences between the rates it earns on loans, securities and other
earning assets, and the interest rates it pays on deposits and other borrowings.
These rates are highly sensitive to many factors which are beyond the Company's
control, including general economic conditions and the policies of various
governmental and regulatory authorities. Frequently the maturities of assets and
liabilities are not balanced, and an increase or decrease in interest rates
could have a material adverse affect the Company's net interest margin, results
of operations and financial condition.
THE COMPANY MAY NOT BE ABLE TO PAY DIVIDENDS IN THE FUTURE IN ACCORDANCE WITH
PAST PRACTICE.
The Company is dependent primarily upon the Bank for its earnings and funds to
pay dividends on the Company's Common Stock. The payment of dividends by the
Company and the Bank also is subject to legal and regulatory restrictions. Any
payment of dividends by the Company in the future will depend, in large part, on
the Bank's earnings, capital requirements, financial condition and other factors
considered relevant by the Board of Directors (the "Board").
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that reflect the Company's
views regarding future events. These forward-looking statements are subject to
risks and uncertainties and include statements regarding position, business
strategy and other plans and objectives for future operations and statements
that are not historical facts. Although the Company believes such statements are
based on reasonable assumptions, these forward-looking statements are subject to
numerous factors, risks and uncertainties that could cause actual outcomes and
results to be materially different from those projected, including, but not
limited to, those statements found in this prospectus under the caption "Risk
Factors" and in other documents filed by the Company with the Securities and
Exchange Commission and incorporated in this prospectus. Readers are cautioned
not to place undue reliance on forward-looking statements which speak only as of
their dates. Except for its ongoing obligation to disclose material information
as required by the federal securities laws and Nasdaq rules, the Company does
not have any intention to update forward-looking statements after the
distribution of this prospectus. Actual results may differ materially from those
suggested by the forward-looking statements for various reasons, including those
discussed under "Risk Factors" in this prospectus.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by the
Selling Stockholders.
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PRICE RANGE OF COMMON STOCK
Common Stock is quoted on the Nasdaq Small Cap Market under the symbol "GCFC."
Set forth below are the high and low sales prices of Common Stock for the
periods indicated as reported on the Nasdaq Small Cap Market.
HIGH LOW
FISCAL QUARTER ENDED MARCH 31, 2005 $ 13.72 $ 10.15
FISCAL YEAR ENDED DECEMBER 31, 2004
First Quarter $ 16.10 $ 12.99
Second Quarter 18.00 12.35
Third Quarter 15.22 11.25
Fourth Quarter 13.73 10.95
FISCAL YEAR ENDED DECEMBER 31, 2003
First Quarter $ 11.03 $ 9.28
Second Quarter 13.13 10.49
Third Quarter 14.000 10.70
Fourth Quarter 16.18 13.60
FISCAL YEAR ENDED DECEMBER 31, 2002
First Quarter $ 11.00 $ 9.90
Second Quarter 11.36 10.40
Third Quarter 10.79 9.03
Fourth Quarter 10.00 9.10
On April 20, 2005, the last reported sales price of the Company's Common Stock
on the Nasdaq Small Cap Market was $10.49 per share.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company, a Delaware corporation, has authorized capital stock consisting of
6,000,000 shares of Common Stock, par value $0.01 per share, and 1,000,000
shares of preferred stock, par value $0.01 per share (the "Preferred Stock").
At March 31, 2005, 2,225,987 shares of Common Stock were issued and outstanding
and held by approximately 599 holders of record and individual participants in
security position listings. No shares of Preferred Stock were outstanding on
that date or are outstanding on the date of this prospectus. The Common Stock is
listed on the Nasdaq Small Cap Market under the ticker symbol "GCFC." Each share
of Common Stock is entitled to one vote on all matters presented to
stockholders. No shares of Preferred Stock are issued and outstanding as of the
date of this prospectus.
The Common Stock represents non-withdrawable capital, is not an account of an
insurable type, and is not insured by the FDIC or any governmental agency.
COMMON STOCK
Dividends. The Company can pay dividends out of statutory surplus or from
certain net profits if, as and when declared by its Board. The payment of
dividends by the Company may be subject to limitations imposed by law and
applicable regulation. The holders of Common Stock are entitled to receive and
share equally in such dividends as may be declared by the Board out of funds
legally available therefore. If the Company issues Preferred Stock, the holders
of shares of Preferred Stock may have a priority over the holders of shares of
Common Stock with respect to the receipt of dividends.
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Voting Rights. The holders of Common Stock possess exclusive voting rights in
the Company. They elect the Board and act on such other maters as are required
to be presented to them under Delaware law or the Company's Certificate of
Incorporation, as well as any other matter that properly comes before the
stockholders. Each share of Common Stock is entitled to one vote; there is no
right to cumulate votes in the election of directors. If the Company hereafter
issues Preferred Stock, holders of shares of Preferred Stock may also possess
voting rights.
Liquidation. In the event of any liquidation, dissolution or winding up of the
Bank, the Company, as holder of the Bank's capital stock, would be entitled to
receive, after payment or provision for payment of all debts and liabilities of
the Bank (including all deposit accounts and accrued interest thereon and any
remaining rights under the liquidation account established in connection with
the Bank's conversion from mutual to stock form in 1998), all assets of the Bank
available for distribution. In the event of any liquidation, dissolution or
winding up of the Company, the holders of its Common Stock would be entitled to
receive, after payment or provision for payment of all its debts and
liabilities, all assets of the Company available for distribution. If Preferred
Stock is issued, the holders of Preferred Stock may have a priority over the
holders of Common Stock in the event of liquidation, dissolution or winding up.
Preemptive Rights. Holders of Common Stock are not entitled to preemptive rights
with respect to any shares that may be issued. Common Stock is not subject to
redemption.
PREFERRED STOCK
None of the shares of the Company's authorized Preferred Stock are issued and
outstanding. However, shares of Preferred Stock may be issued with such
preferences and designations as the Board may from time to time determine. The
Board can, without stockholder approval, issue Preferred Stock with voting,
dividend, liquidation and conversion rights, which could dilute the voting
strength of the holders of Common Stock and may assist management in impeding a
takeover or attempted change in control of the Company.
LIMITATIONS ON ACQUIRING THE COMPANY
Several provisions of the Company's charter documents, the laws of Delaware and
federal regulations limit the ability of any person to acquire a controlling
interest in the Company and thus may be deemed to have an anti-takeover effect.
The following discussion is a general summary of those provisions. Copies of the
Company's Certificate of Incorporation ("Certificate of Incorporation") and
("Bylaws") may be obtained from the Company upon request or at the website of
the Securities and Exchange Commission. See "Incorporation of Certain Documents
by Reference" and "Where You Can Find Additional Information" at page 13 below.
LIMITATION ON VOTING RIGHTS
The Certificate of Incorporation of the Company provides that in no event shall
any record beneficial owner of any outstanding Common Stock in excess of 10% of
the then outstanding shares of the Common Stock (the "Limit") be entitled or
permitted to any vote in respect of the shares held in excess of the Limit.
Beneficial ownership is determined pursuant to Rule 13d-3 of the General Rules
and Regulations promulgated pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act"), and includes (i) shares beneficially owned by such person or
any affiliate (as defined in Exchange Act Rule 12b-2), (ii) shares which such
person or his affiliates have the right to acquire pursuant to any agreement or
understanding, including without limitation upon the exercise of conversion
rights or options and (iii) shares as to which such person or his affiliates are
deemed to have beneficial ownership through any partnership, syndicate or group
acting for the purpose of acquiring, holding, voting or disposing of shares of
Common Stock. Notwithstanding the foregoing, shares with respect to which a
revocable proxy has been granted in connection with a meeting of stockholders
and shares beneficially owned by any Company benefit plan are not subject to the
limitation, and no director or officer of the Company (or any affiliate) will be
deemed to beneficially own shares of Common Stock of any other director or
officer of the Company (or any affiliate) solely by reason of service as a
director or officer of the Company.
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CLASSIFIED BOARD OF DIRECTORS
The Board is divided into three classes, each of which contains one-third of the
whole number of members of the Board. Each class serves a staggered term, with
one-third of the total number of directors being elected each year. The
Certificate of Incorporation provides that the size of the Board is fixed from
time to time by a majority of the directors. The Certificate of Incorporation
provides that any vacancy occurring in the Board, including a vacancy resulting
from death, resignation, retirement, disqualification, removal from office or
other cause, may be filled for the remainder of the unexpired term exclusively
by a majority vote of the directors then in office. The classified Board is
intended to provide for continuity of the Board and to make it more difficult
and time consuming for a stockholder group to fully use its voting power to gain
control of the Board without the consent of the incumbent Board of the Company.
A stockholder may nominate any person to serve as a director, but notice of such
nomination generally must be provided to the Company not later than 90 days
prior to the meeting date. The Certificate of Incorporation of the Company
provides that a director may be removed from the Board prior to the expiration
of his term only for cause, upon the vote of 80% of the outstanding shares of
voting stock. In the absence of these provisions, the vote of the holders of a
majority of the shares could remove the entire Board, with or without cause, and
replace it with persons of the stockholders' choice.
CUMULATIVE VOTING, SPECIAL MEETINGS AND ACTION BY WRITTEN CONSENT
The Certificate of Incorporation does not provide for cumulative voting for any
purpose. Moreover, special meetings of stockholders of the Company may be called
only by the Board. The Certificate of Incorporation also provides that any
action required or permitted to be taken by the stockholders of the Company may
be taken only at an annual or special meeting and prohibits stockholder action
by written consent in lieu of a meeting.
AUTHORIZED SHARES
The Certificate of Incorporation authorizes the issuance of 6,000,000 shares of
Common Stock and 1,000,000 shares of Preferred Stock. The authorization of these
shares gives the Board flexibility to effect, among other transactions,
financings, acquisitions, stock dividends, stock splits and employee stock
options. However, these additional authorized shares may also be used by the
Board consistent with its fiduciary duty to deter future attempts to gain
control of the Company. The Board 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. 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 post-tender
offer merger or other transaction by which a third party seeks control, and
thereby assist management to retain its position.
STOCKHOLDER VOTE REQUIRED TO APPROVE BUSINESS COMBINATIONS WITH PRINCIPAL
STOCKHOLDERS
The Certificate of Incorporation requires the approval of the holders of at
least 80% of the Company's outstanding shares of voting stock to approve certain
"Business Combinations," as defined therein, and related transactions. Under
Delaware law, absent this provision, Business Combinations, including mergers,
consolidations and sales of all or substantially all of the assets of a
corporation must, subject to certain exceptions, be approved by the vote of the
holders of only a majority of the outstanding shares of Common Stock of the
Company and any other affected class of stock. Under the Certificate of
Incorporation, at least 80% approval of stockholders is required in connection
with any transaction involving an Interested Stockholder (as defined below)
except (i) in cases where the proposed transaction has been approved in advance
by a majority of those members of the Board who are unaffiliated with the
Interested Stockholder and were directors prior to the time when the Interested
Stockholder became an Interested Stockholder or (ii) if the proposed transaction
meets certain conditions set forth therein which are designed to afford the
stockholders a fair price in consideration for their shares in which case, if a
stockholder vote is required, approval of only a majority of the outstanding
shares of voting stock would be sufficient. The term "Interested Stockholder" is
defined in the Certificate of Incorporation to include any individual,
corporation, partnership or other entity (other than the Company or its
subsidiary) which owns beneficially or controls, directly or indirectly, 10% or
more of the outstanding shares of voting stock of the Company. This provision of
the Certificate of Incorporation applies to any "Business Combination," which is
defined to include (i) any merger or consolidation of the Company or any of its
subsidiaries with or into any Interested Stockholder or Affiliate (as defined in
the Certificate of Incorporation) of an Interested Stockholder; (ii) any sale,
lease, exchange, mortgage, pledge, transfer, or
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other disposition to or with any Interested Stockholder or Affiliate of 10% or
more of the assets of the Company or combined assets of the Company and its
subsidiary; (iii) the issuance or transfer to any Interested Stockholder or its
Affiliate by the Company (or any subsidiary) of any securities of the Company in
exchange for any assets, cash or securities the value of which equals or exceeds
10% of the fair market value of the Common Stock of the Company; (iv) the
adoption of any plan for the liquidation or dissolution of the Company proposed
by or on behalf of any Interested Stockholder or Affiliate thereof and (v) any
reclassification of securities, recapitalization, merger or consolidation of the
Company which has the effect of increasing the proportionate share of Common
Stock or any class of equity or convertible securities of the Company owned
directly or indirectly by an Interested Stockholder or Affiliate thereof.
AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS
Amendment of the Company's Certificate of Incorporation must be approved by a
majority vote of its Board or by the affirmative vote of at least 80% of the
outstanding shares of the Company's voting stock entitled to vote (after giving
effect to the provision limiting voting rights) in order to amend or repeal
certain provisions of the Certificate of Incorporation, including the provisions
relating to voting rights (Article Fourth, Part C), management of the business
and conduct of the affairs of the Company and calling special meetings (Article
Fifth), the number and classification of directors and nominations (Article
Sixth), amendment of the Bylaws (Article Seventh), approval of certain business
combinations (Article Eighth), director and officer indemnification by the
Company (Article Tenth) and amendment of the Company's Certificate of
Incorporation (Article Twelfth).
The Bylaws may be amended by the Board, or by the vote of at least 80% of the
total votes eligible to be voted in the election of directors.
CERTAIN PROVISIONS OF THE BYLAWS
Article Sixth of the Certificate of Incorporation incorporates by reference
Article I, Section 6 of the Bylaws, as it pertains to stockholder nominations
for director. As noted above, a stockholder who intends to nominate a candidate
for election to the Board must give at least 90 days advance notice to the
Secretary of the Company. Article I, Section 6 of the Bylaws also requires a
stockholder to give 90 days prior notice with respect to any new business; the
stockholder also must provide certain information to the Company concerning the
nature of the new business, the stockholder and the stockholder's interest in
the business matter. Similarly, a stockholder wishing to nominate any person for
election as a director must provide the Company with certain information
concerning the nominee and the proposing stockholder.
Article I, Section 9 of the Bylaws provides that any action to be taken by the
stockholders must be taken at a special or annual meeting and may not be taken
by written consent of the stockholders.
Article VIII of the Bylaws specifies that the Bylaws may be amended by a
majority of the members of the Board or by the affirmative vote of stockholders
holding at least 80% of the outstanding shares of Common Stock.
REGULATORY RESTRICTIONS
A federal regulation prohibits any person prior to the completion of a
conversion from transferring, or entering into any agreement or understanding to
transfer, the legal or beneficial ownership of the subscription rights issued
under a plan of conversion or the stock to be issued upon their exercise. This
regulation also prohibits any person prior to the completion of a conversion
from offering, or making an announcement of an offer or intent to make an offer,
to purchase such subscription rights or stock. For three years following
conversion, OTS regulations prohibit any person, without the prior approval of
the OTS, from acquiring or making an offer to acquire more than 10% of the stock
of any converted savings institution if such person is, or after consummation of
such acquisition would be, the beneficial owner of more than 10% of such stock.
In the event that any person, directly or indirectly, violates this regulation,
the securities beneficially owned by such person in excess of 10% shall not be
counted as shares entitled to vote and shall not be voted by any person or
counted as voting shares in connection with any matter submitted to a vote of
stockholders.
10
Federal law provides that no company, "directly or indirectly or acting in
concert with one or more persons, or through one or more subsidiaries, or
through one or more transactions," may acquire "control" of a savings
association at any time without the prior approval of the OTS. In addition, any
company that acquires such control becomes a "savings and loan holding company"
subject to registration, examination and regulation as a savings and loan
holding company. Control in this context means ownership of, control of, or
holding proxies representing ore than 25% of the voting shares of a savings
association or the power to control in any manner the election of a majority of
the directors of such institution.
Federal law also provides that no "person," acting directly or indirectly or
through or in concert with one or more other persons, may acquire control of a
savings association unless at least 60 days prior written notice has been given
to the OTS and the OTS has not objected to the proposed acquisition. Control is
defined for this purpose as the power, directly or indirectly, to direct the
management or policies of a savings association or to vote more than 25% of any
class of voting securities of a savings association. Under federal law (as well
as the regulations referred to below) the term "savings association" includes
state-chartered and federally chartered SAIF-insured institutions, federally
chartered savings and loans and savings banks whose accounts are insured by the
FDIC and holding companies thereof.
Federal regulations require that, prior to obtaining control of an insured
institution, a person, other than a company, must give 60 days notice to the OTS
and have received no OTS objection to such acquisition of control, and a company
must apply for and receive OTS approval of the acquisition. Control, involves a
25% voting stock test, control in any manner of the election of a majority of
the institution's directors, or a determination by the OTS that the acquiror has
the power to direct, or directly or indirectly to exercise a controlling
influence over, the management or policies of the institution. Acquisition of
more than 10% of an institution's voting stock, if the acquiror also is subject
to any one of either "control factors," constitutes a rebuttable determination
of control under the regulations. The determination of control may be rebutted
by submission to the OTS, prior to the acquisition of stock or the occurrence of
any other circumstances giving rise to such determination, of a statement
setting forth facts and circumstances which would support a finding that no
control relationship will exist and containing certain undertakings. The
regulations provide that persons or companies which acquire beneficial ownership
exceeding 10% or more of any class of a savings association's stock after the
effective date of the regulations must file with the OTS a certification that
the holder is not in control of such institution, is not subject to a rebuttable
determination of control and will take no action which would result in a
determination or rebuttable determination of control without prior notice to or
approval of the OTS, as applicable.
DELAWARE CORPORATE LAW
Delaware law provides additional protection against hostile takeovers. The
Delaware takeover statute, which is codified in Section 203 of the Delaware
General Corporation law ("Section 203"), is intended to discourage certain
takeover practices by impeding the ability of a hostile acquiror to engage in
certain transactions with the target company.
In general, Section 203 provides that a "Person" (as defined therein) who owns
15% or more of the outstanding voting stock of a Delaware corporation (an
"Interested Stockholder") may not consummate a merger or other business
combination transaction with such corporation at any time during the three-year
period following the date such "Person" became an Interested Stockholder. The
term "business combination" is defined broadly to cover a wide range of
corporate transactions including mergers, sales of assets, issuances of stock,
transactions with subsidiaries and the receipt of disproportionate financial
benefits.
The statute exempts the following transactions from the requirements of Section
203: (i) any business combination if, prior to the date a person became an
Interested Stockholder, the Board approved either the business combination or
the transaction which resulted in the stockholder becoming an Interested
Stockholder; (ii) any business combination involving a person who acquired at
least 85% of the outstanding voting stock in the transaction in which he became
an Interested Stockholder, with the number of shares outstanding calculated
without regard to those shares owned by the corporation's directors who are also
officers and by certain employee stock plans; (iii) any business combination
with an Interested Stockholder that is approved by the Board and by a two-thirds
vote of the outstanding voting stock not owned by the Interested Stockholder;
and (iv) certain business combinations that are proposed after the corporation
had received other acquisition proposals and which are approved or not opposed
by a majority of certain continuing members of the
11
Board. A corporation may exempt itself from the requirements of the statute by
adopting an amendment to its Certificate of Incorporation or Bylaws electing not
to be governed by Section 203.
SELLING STOCKHOLDERS
The following table sets forth the name of each beneficial owner of Common Stock
who is participating in this Offering as a Selling Stockholder, as well as (i)
any position such person now holds with the Company or the Bank, (ii) the number
of shares and percentage of the outstanding shares of Common Stock the person
held immediately prior to this Offering, (iii) the number of shares offered by
such Selling Stockholder in this Offering and (iv) the number of shares and
percentage of the outstanding shares of Common Stock such Selling Stockholder
will hold immediately after this offering, if all the shares offered are sold.
Name Current Position with the Company, the Bank Pre-Offering Shares Post-Offering
Of Beneficial Owner or an Affiliate of the Company or Bank Holdings Offered Holdings
-------------------- ------------------------------------------- ----------------- ------- -------------
Shares % Shares %
---------- --- ------ ---
Richard J. O'Donnell President and Chief Executive Officer,
Reserve Mortgage Services, Inc., a
subsidiary of the Bank 123,077 5.33 123,077 0 0
Kathy K. Vidakovics Vice President and Chief Operating Officer,
Reserve Mortgage Services, Inc., a
subsidiary of the Bank 4,000 <0.01 4,000 0 0
TOTAL 127,077 127,077 0 0
Neither Mr. O'Donnell nor Ms. Vidakovics held any position with the Company, the
Bank or any affiliate of either prior to October 22, 2004. Prior to October 22,
2004, Mr O'Donnell was President and Treasurer, and Ms. Vidakovics was Vice
President and Secretary, of Reserve. During the last three years, neither has
served in any position with the Company, the Bank or any affiliate of either,
except for the positions each currently holds with Reserve Mortgage Services,
Inc.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell Common Stock 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 Stockholders or the
purchasers. 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. Common Stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at prices related to the prevailing market prices, at varying prices determined
at the time of sale or at negotiated prices. These sales may be effected in
transactions that involve crosses or block transactions:
- on any national securities exchange or U.S. inter-dealer system of a
registered national securities association on which Common Stock may be
listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
- through the writing of options, whether the options are listed on an
options exchange or otherwise; or
- through the settlement of short sales.
In connection with the sale of Common Stock, the Selling Stockholders may enter
into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of Common Stock in the course of hedging
the positions assumed. The Selling Stockholders may also sell Common Stock short
and deliver these securities to close out short positions, or loan or pledge
Common Stock to broker-dealers that in turn may sell the securities. The
aggregate proceeds to the Selling Stockholders from the sale of Common Stock
will be the purchase price of the shares of Common Stock less discounts and
commissions, if any. Each Selling Stockholder reserves the right to accept and,
together with his
12
or her agents from time to time, to reject, in whole or in part, any proposed
purchase of Common Stock to be made directly or through agents. The Company will
not receive any of the proceeds of this offering.
Common Stock is quoted on the Nasdaq Small Cap Market under the trading symbol
"GCFC." In order to comply with the securities laws of some states, if
applicable, Common Stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states shares of
Common Stock may not be sold unless they have been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with by the Selling Stockholder and any underwriter,
broker-dealer or agent that participates in the sale of Common Stock. Any of the
foregoing may be an "underwriter" within the meaning of Section 2(11) of the
Securities Act. Any discounts, commissions, concessions or profit earned on any
resale of the shares may be underwriting discounts and commissions under the
Securities Act. Selling Stockholders who are "underwriters" within the meaning
of Section 2(11) of the Securities Act will be subject to the prospectus
delivery requirements of the Securities Act. The Selling Stockholders have
acknowledged that they understand their obligations to comply with the
provisions of the Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation M.
LEGAL MATTERS
The legality of the Common Stock has been passed on for the Company by Brouse
McDowell, A Legal Professional Association, Akron, Ohio.
EXPERTS
The consolidated financial statements appearing in the Company's Annual Report
(Form 10-KSB) for the fiscal year ended December 31, 2004 have been audited by
Crowe Chizek and Company LLC, independent auditors, as set forth in their report
thereon, included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission (the "Commission") allows the Company to
incorporate into this prospectus information that it files with the Commission
in other documents. This means that the Company can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and information
that the Company files with the Commission in the future and incorporates by
reference in this prospectus automatically updates and supersedes previously
filed information. The Company incorporates by reference the documents listed
below: (a) its Annual Report on Form 10-KSB for the fiscal year ended December
31, 2004; (b) the description of its capital stock contained in its
registration statement on Form 8-A filed with the Commission on November 6,
1998, including any amendments or reports filed for the purpose of updating that
description; and (c) all its other filings with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this prospectus and prior to the termination of the
offering.
Upon written or oral request, you may obtain without charge copies of any or all
of these documents, including exhibits, as well as copies of the Company's
Certificate of Incorporation and Bylaws, by request to Eloise L. Mackus, Senior
Vice President, General Counsel and Secretary, Central Federal Corporation, 2923
Smith Road, Fairlawn, Ohio 44333; telephone 330.666.7979.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Exchange Act,
and, accordingly, files reports, proxy statements and other information with the
Commission. You may read and copy any document the Company has filed at the
Commission's Public Reference Room, Judiciary Plaza Building, 450 Fifth Street,
N.W., Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the Public Reference Room. The Commission maintains an Internet
site that contains reports, proxy and information statements and other
information about issuers that file electronically with the Commission. The
address of the Commission's Internet site is http://www.sec.gov. This prospectus
is part of a registration statement that the Company filed with the Commission.
The registration statement
13
contains more information than this prospectus regarding the Company and the
Company's capital stock, including certain exhibits and schedules. You can
obtain a copy of the registration statement from the Commission at the address
listed above or from the Commission's Internet site.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Sections 102(b)(7) and 145 of the Delaware General Corporation Law authorize the
indemnification of officers and directors in defense of any civil, criminal,
administrative or investigative proceeding. Articles Tenth and Eleventh of the
Company's Certificate of Incorporation provide for indemnification in terms
consistent with the statutory authority, and the Company maintains insurance
covering certain liabilities of the directors and elected and appointed officers
of the Company and its subsidiaries, including liabilities under the Securities
Act of 1933 (the "Securities Act").
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions of the Company's Certificate of Incorporation, or
otherwise, the Company 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.
14
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses payable by the registrant
in connection with the issuance and distribution of Common Stock. All the
amounts shown are estimates.
Securities and Exchange Commission registration fee................ $ 152
Accounting fees and expenses....................................... 3,500
Printing fees and expenses......................................... 1,000
Legal fees and expenses ........................................... 3,750
Miscellaneous...................................................... 1,000
Total......................................................... $ 9,402
Item 15. Indemnification of Directors And Officers.
General Corporation Law
The Company is incorporated under the laws of the State of Delaware. Section 145
("Section 145") of the General Corporation Law of the State of Delaware
("Delaware Law"), inter alia, provides that a Delaware corporation:
(i) may indemnify any person who was, is or is threatened to be made, a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by
reason of the fact that such person is or was an officer, director,
employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or
agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, provided
such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding, if he had no
reasonable cause to believe that his conduct was illegal; and
(ii) may indemnify any person who is, was or is threatened to be made, a
party to any threatened, pending or completed action or suit by or
in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation
as a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys'
fees) actually and reasonably incurred by any such person in
connection with the defense or settlement of such action or suit,
provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's
best interests and that no indemnification is permitted without
judicial approval if the officer, director, employee or agent is
adjudged to be liable to the corporation.
Where an officer, director, employee or agent is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against expenses (including attorneys' fees) actually and
reasonably incurred in connection therewith.
The determination that indemnity is proper in the circumstances, because the
director or officer has met the applicable standard of conduct, shall be made in
each specific case by a majority of the directors who are not parties to the
action, by a committee of directors designated by a majority of such non-party
directors, by independent legal counsel in a written opinion (if there are no
non-party directors or at the request of a majority of the non-party directors)
or by a majority vote of the outstanding shares of Common Stock.
The indemnification and advancement of expenses authorized by Section 145 is not
exclusive of other such rights under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, and a corporation is expressly
authorized to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise, against any liability asserted
against him and incurred by him in any such capacity,
arising out of his status as such, whether or not the corporation would
otherwise have the power to indemnify him under Section 145.
Section 102(b)(7) of Delaware Law enables a corporation, by provision in its
Certificate of Incorporation, to limit or eliminate the personal liability of a
director to the corporation and its stockholders for breach of fiduciary duty,
except with respect to (i) any breach of the duty of loyalty to the Company or
its stockholders, (ii) any act or omission not in good faith or which involved
intentional misconduct or a knowing violation of law, (iii) certain transactions
under Section 174 of Delaware Law, which concerns unlawful payments of
dividends, stock purchases or redemptions or (iv) any transaction from which the
director a personal benefit in money, property or services to which the director
is not legally entitled.
Certificate of Incorporation
As permitted by Section 145, Article Tenth of the Company's Certificate of
Incorporation, as amended (the "Charter"), provides that any director or officer
of the Company or any person who is or was serving, at the request of the
Company, as a director, officer, employee or agent of another corporation or
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan, shall be indemnified and held harmless by
the Company to the fullest extent permitted by Delaware Law, as the same exists
or may hereafter be amended (but in the case of any such amendment only to the
extent that such amendment permits the Company to provide broader
indemnification rights that Delaware Law permitted the Company to provide prior
to amendment).
Such indemnification extends to any expense, liability or loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by the indemnified person.
Article Tenth also provides for the advancement of expenses to be incurred in
connection with the defense of any claim; provided, however, that if Delaware
Law so requires, an advancement of expenses in connection with a claim made with
respect to service as a director or officer will be provided only if the
indemnified director or officer undertakes in writing to repay all amounts
advanced if it is ultimately determined by final judicial decision that he is
not entitled to be indemnified for such expenses.
The right to indemnification under Article Tenth is not exclusive of any other
right the indemnified person may have or acquire under any statute, agreement,
vote of stockholders or otherwise, to the extent permitted by Delaware Law.
Finally, Article Tenth provides that the Company may grant to any employee or
agent to the fullest extent permitted by Delaware Law the rights of
indemnification and advancement of expenses available to directors and officers
under Article Tenth.
As permitted by Section 102(b)(7), Article Eleventh of the Charter provides that
no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty except with
respect to (i) any breach of the duty of loyalty to the Company or its
stockholders, (ii) any act or omission not in good faith or which involved
intentional misconduct or a knowing violation of law, (iii) certain transactions
under Section 174 of Delaware Law, which concerns unlawful payments of
dividends, stock purchases or redemptions or (iv) any transaction from which the
director derived an improper personal benefit.
Insurance
The Company also maintains insurance covering certain liabilities of the
directors and the elected and appointed officers of the Company and its
subsidiaries, including liabilities under the Securities Act.
Item 16. Exhibits.
See the Exhibit Index at page E-1 of this Registration Statement.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to 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.
(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) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Security Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
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 of the registrant in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Fairlawn, Ohio, as of the 25th day of April, 2005.
CENTRAL FEDERAL CORPORATION
By: /s/ Eloise L. Mackus
---------------------------
Eloise L. Mackus, Secretary
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on April 25, 2005.
SIGNATURE TITLE
/s/ David C. Vernon Chairman of the Board
----------------------
David C. Vernon
/s/ Mark S. Allio Vice Chairman of the Board; President and Chief
---------------------- Executive Officer (principal executive officer)
Mark S. Allio
/s/ Therese Ann Liutkus Treasurer and Chief Financial Officer (principal
----------------------- financial officer and principal accounting officer)
Therese Ann Liutkus
/s/ Jeffrey W. Aldrich Director
----------------------
Jeffrey W. Aldrich
/s/ Thomas P. Ash Director
----------------------
Thomas P. Ash
/s/ W. R. Downing Director
-----------------------
W. R. Downing
/s/ Gerry W. Grace Director
----------------------
Gerry W. Grace
/s/ Jerry F. Whitmer Director
----------------------
Jerry F. Whitmer
CENTRAL FEDERAL CORPORATION
EXHIBIT INDEX
EXHIBIT NUMBER DOCUMENT NAME
5 Opinion of Brouse McDowell, A Legal Professional Association,
as to the validity of Common Stock
23.1 Consent of Independent Registered Public Accounting Firm
23.2 Consent of Brouse McDowell (included in Exhibit 5.1)
24 Power of Attorney
E-1