<PAGE>
EXHIBIT 2.0
PLAN OF CONVERSION AND REORGANIZATION, AS AMENDED AND RESTATED
<PAGE>
LIBERTY SAVINGS MUTUAL HOLDING COMPANY
PLAN OF CONVERSION AND REORGANIZATION
AS ADOPTED ON DECEMBER 21, 2005 AND AMENDED AND RESTATED ON
APRIL 19, 2006
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
1.
Introduction..........................................................
1
2.
Definitions...........................................................
2
3. General Procedure for the Conversion and
Reorganization............... 8
4. Number of Shares and Purchase Price of Common
Stock................... 11
5. Subscription Rights of Eligible Account Holders (First
Priority)...... 12
6. Subscription Rights of Tax Qualified Employee Stock Benefit
Plans
(Second
Priority).....................................................
13
7. Subscription Rights of Supplemental Eligible Account Holders
(Third
Priority)......................................................
14
8. Subscription Rights of Other Members (Fourth
Priority)................ 14
9. Community Offering, Syndicated Community Offering, Public
Offering
and Other
Offerings...................................................
15
10. Limitations on Subscriptions and Purchase of Common
Stock............ 17
11. Timing of Subscription Offering; Manner of Exercising
Subscription
Rights and
Order Forms...............................................
20
12. Payment for Common
Stock............................................. 21
13. Account Holders in Nonqualified States or Foreign
Countries.......... 23
14. Voting Rights of
Stockholders........................................ 23
15. Liquidation
Account..................................................
23
16. Transfer of Deposit
Accounts......................................... 25
17. Requirements Following the Conversion and Reorganization
for
Registration, Market Making and Stock Exchange
Listing............... 26
18. Completion of the Stock
Offering..................................... 26
19. Directors and Officers of the
Bank................................... 26
</TABLE>
i
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<TABLE>
<S>
<C>
20. Requirements for Stock Purchases by Directors and Officers
Following
the
Conversion and Reorganization....................................
26
21. Restrictions on Transfer of
Stock.................................... 26
22. Tax Rulings or
Opinions.............................................. 27
23. Stock Compensation
Plans............................................. 27
24. Dividend and Repurchase Restrictions on
Stock........................ 28
25. Payment of Fees to
Brokers........................................... 28
26. Effective
Date.......................................................
28
27. Amendment or Termination of the
Plan................................. 28
28. Interpretation of the
Plan........................................... 29
</TABLE>
ii
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
-------
<S>
<C>
Agreement and Plan of Merger by and among Liberty Savings
Mutual
Holding Company,
Liberty Savings Bank, F.S.B. and Liberty Interim
Federal Savings
and Loan Association .............................. A
Agreement and Plan of Merger by and among Liberty Savings Bank,
F.S.B., Holding
Company and Liberty Interim Federal Savings and
Loan
Association...................................................
B
Articles of Incorporation of Holding
Company.......................... C
Bylaws of Holding
Company............................................. D
</TABLE>
iii
<PAGE>
LIBERTY SAVINGS MUTUAL HOLDING COMPANY
PLAN OF CONVERSION AND REORGANIZATION
1.
INTRODUCTION.
For
purposes of this section, all capitalized terms have the
meanings
ascribed to them in Section 2.
On
August 23, 1993, Liberty Savings Bank, a Missouri-chartered
mutual
savings bank and the predecessor to Liberty Savings Bank, F.S.B.,
reorganized
into the mutual holding company form of organization. In connection
with the
transaction, Liberty Savings Bank issued 500,000 shares of its
common stock to
its eligible depositors and to the Liberty Savings Bank Employee
Stock Ownership
Plan and issued 800,000 shares to Liberty Savings Mutual Holding
Company, a
federally chartered mutual holding company. Also, in connection
with this
transaction, Liberty Savings Bank converted to a Missouri-chartered
stock
savings bank. On February 8, 1995, Liberty Savings Bank converted
from a
Missouri-chartered stock savings bank to a federally chartered
stock savings
association and simultaneously changed its name from "Liberty
Savings Bank" to
"Liberty Savings Bank, F.S.B." As of the date hereof, the MHC
beneficially and
of record owns 800,000 shares of common stock, par value $1.00 per
share, of
Liberty Savings Bank, F.S.B., representing approximately 58.9% of
the
outstanding voting stock of Liberty Savings Bank, F.S.B., and the
remaining
557,876 shares of Liberty Savings Bank, F.S.B. common stock, or
41.1%, are owned
by persons other than the MHC.
A.
BUSINESS
PURPOSES FOR THE CONVERSION AND REORGANIZATION
The
Boards of Directors of the MHC and the Bank believe that a
conversion
of the MHC to stock form is in the best interests of the MHC, the
members of the
MHC, the Bank and its stockholders. The Board of Directors
determined that this
Plan of Conversion and Reorganization equitably provides for the
interests of
Members through the granting of subscription rights and the
establishment of a
liquidation account. Further, the Board of Directors determined
that the
Conversion and Reorganization would not adversely impact the
stockholders'
equity of the Bank.
The
Conversion and Reorganization will provide the Bank with a
larger
capital base that will enhance its ability to pursue lending and
investment
opportunities, as well as opportunities for growth and expansion.
The Conversion
and Reorganization also will provide a more flexible operating
structure, which
will enable the Bank to compete more effectively with other
financial
institutions. Finally, the Conversion and Reorganization has been
structured to
reunite the accumulated earnings and profits retained by the MHC
with the
retained earnings of the Bank through a tax-free
reorganization.
B.
PROCEDURE FOR
CONVERSION AND REORGANIZATION
As
described in greater detail herein in Section 3, pursuant to the
Plan:
1
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(i) The Bank will form
a new first-tier subsidiary, which will be
incorporated under state law as a stock corporation (the
"Holding
Company"). The Holding Company will in turn form a federally
chartered interim savings association ("Interim A") as a wholly
owned subsidiary.
(ii) The MHC will convert to an interim federal stock savings
association ("Interim B"). Interim B will merge with and into
the
Bank pursuant to the Agreement and Plan of Merger included as
Exhibit A hereto. In connection with that merger, a liquidation
account will be established by the Bank for the benefit of
Members.
(iii) Interim A will merge with and into the Bank, pursuant to
the
Agreement and Plan of Merger included as Exhibit B hereto.
Following this merger, the Bank will become a wholly owned
subsidiary of the Holding Company. In connection therewith,
each
share of Liberty Savings Bank, F.S.B. Common Stock outstanding
immediately before the effective time of the Conversion and
Reorganization shall be automatically converted without further
action by the holder thereof, into and become the right to
receive shares of Holding Company common stock based on the
Exchange Ratio, plus cash in lieu of any fractional share
interest.
(iv) The Holding Company will issue and sell its Conversion Stock
in
the Offerings and provided herein.
C.
APPROVAL OF THE
PLAN
On
December 21, 2005, after careful study and consideration, the
Boards of
Directors of the MHC and the Bank adopted this Plan. The Plan must
be approved
by: (1) the affirmative vote of a majority of the total number of
votes eligible
to be cast by Members of the MHC; (2) by the holders of at least
two-thirds of
the shares of outstanding Bank Common Stock eligible to vote; and
(3) by the
holders of at least a majority of the outstanding shares owned by
Minority
Stockholders. Before submitting the Plan to the Members and the
Bank's
stockholders for consideration, the Plan must be approved by the
Office of
Thrift Supervision.
2.
DEFINITIONS.
As used in this Plan, the terms set forth below have the following
meaning:
ACTING IN CONCERT means (i) knowing participation in a joint
activity or
interdependent conscious parallel action towards a common goal
whether or not
pursuant to an express agreement; or (ii) a combination or pooling
of voting or
other interests in the securities of an issuer for a common purpose
pursuant to
any contract, understanding, relationship, agreement or other
arrangement,
whether written or otherwise. A Person or company which acts in
concert with
another Person or company ("other party") shall also be deemed to
be acting in
concert with any Person or company who is also acting in concert
with that other
party, except that any Tax-Qualified Employee Stock Benefit Plan
will not be
deemed to be acting in concert
2
<PAGE>
with its trustee or a person who serves in a similar capacity
solely for the
purpose of determining whether stock held by the trustee and stock
held by the
plan will be aggregated and participants or beneficiaries of any
such Tax-
Qualified Employee Stock Benefit Plan will not be deemed to be
acting in concert
solely as a result of their common interests as participants or
beneficiaries.
When Persons act together for such purpose, their group is deemed
to have
acquired their stock. The determination of whether a group is
Acting in Concert
shall be made solely by the Board of Directors of the Bank or
Officers delegated
by such Board and may be based on any evidence upon which the Board
or such
delegatee chooses to rely, including, without limitation, joint
account
relationships or the fact that such Persons have filed joint
Schedules 13D or
Schedules 13G with the SEC with respect to other companies.
Directors of the
Holding Company, the Bank and the MHC shall not be deemed to be
Acting in
Concert solely as a result of their membership on any such board or
boards.
ACTUAL PURCHASE PRICE means the price per share at which the Common
Stock
is ultimately sold by the Holding Company in the Offerings in
accordance with
the terms hereof.
AFFILIATE means a Person who, directly or indirectly, through one
or more
intermediaries, controls or is controlled by or is under common
control with the
specified Person.
ASSOCIATE of a Person means (i) a corporation or organization
(other than
the MHC, the Holding Company, the Bank or a majority-owned
subsidiary of the
MHC, the Holding Company or the Bank), if the Person is a senior
officer or
partner or beneficially owns, directly or indirectly, 10% or more
of any class
of equity securities of the corporation or organization, (ii) a
trust or other
estate, if the Person has a substantial beneficial interest in the
trust or
estate or is a trustee or fiduciary of the trust or estate,
provided, however,
that such term shall not include any Tax-Qualified Employee Stock
Benefit Plan
of the Holding Company or the Bank in which such Person has a
substantial
beneficial interest or of which such Person serves as a trustee or
in a similar
fiduciary capacity, and (iii) any person who is related by blood or
marriage to
such Person and who lives in the same home as the Person or who is
a director or
senior officer of the MHC, the Holding Company or the Bank or any
of their
subsidiaries.
BANK
means Liberty Savings Bank, F.S.B., a federal stock savings
association.
BANK
BENEFIT PLANS include, but is not limited to, Tax Qualified
Employee
Stock Benefit Plans and Non-Tax Qualified Employee Stock Benefit
Plans.
BANK
COMMON STOCK means the common stock of the Bank, par value $1.00
per
share, which stock is not and will not be insured by the FDIC or
any other
governmental authority, all of which will be held by the Holding
Company
following the Conversion and Reorganization.
BANK
MERGER means the Merger of Interim A with and into the Bank
pursuant
to the Plan of Merger included as Exhibit B hereto.
CODE
means the Internal Revenue Code of 1986, as amended.
3
<PAGE>
COMMON STOCK means the shares of common stock, par value $0.01 per
share,
to be issued and sold by the Holding Company in the Offerings, all
pursuant to
the Plan of Conversion and Reorganization. The Common Stock will
not be insured
by the Federal Deposit Insurance Corporation.
COMMUNITY OFFERING means the offering for sale by the Holding
Company of
any shares of Common Stock not subscribed for in the Subscription
Offering to
such Persons as may be selected by the Holding Company and the Bank
in their
sole discretion and to whom a copy of the Prospectus is delivered
by or on
behalf of the Holding Company.
CONTROL (including the terms "controlling," "controlled by," and
"under
common control with") means the direct or indirect power to direct
or exercise a
controlling influence over the management and policies of a Person,
whether
through the ownership of voting securities, by contract or
otherwise.
CONVERSION AND REORGANIZATION means: (i) the conversion of the MHC
to an
interim federal stock savings association and the subsequent MHC
Merger,
pursuant to which the MHC will cease to exist; (ii) the Bank
Merger, pursuant to
which the Bank will become a wholly owned subsidiary of the Holding
Company and,
in connection therewith, each share of Bank Common Stock
outstanding immediately
before the effective time thereof shall automatically be converted,
without
further action by the holder thereof, into and become the right to
receive
shares of Holding Company Common Stock based on the Exchange Ratio,
plus cash in
lieu of any fractional share interest; and (iii) the issuance of
Common Stock in
the Offerings as provided herein.
DEPOSIT ACCOUNT means any withdrawable account as defined in
Section 561.42
of the Rules and Regulations of the OTS, including a demand account
as defined
in Section 561.16 of the Rules and Regulations of the OTS.
ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying
Deposit on
the Eligibility Record Date for purposes of determining
Subscription Rights.
ELIGIBILITY RECORD DATE means the date for determining Qualifying
Deposits
of Eligible Account Holders and is the close of business on
November 30, 2004.
ESOP means a Tax
Qualified Employee Stock Benefit Plan adopted by the
Holding Company or the Bank in connection with the Conversion
and
Reorganization, the purpose of which shall be to acquire the Common
Stock.
ESTIMATED PRICE RANGE means the range of the estimated aggregate
pro forma
market value of the total number of shares of Common Stock to be
issued in the
Offerings, as determined by the Independent Appraiser in accordance
with Section
4 hereof.
EXCHANGE RATIO means the rate at which shares of the Bank Common
Stock will
be exchanged for shares of Holding Company Common Stock held by
Minority
Stockholders in connection with the Bank Merger. The exact rate
shall be
determined by the MHC and the Bank
4
<PAGE>
to ensure that upon consummation of the Conversion and
Reorganization, the
Minority Stockholders will own in the aggregate the same percentage
of Holding
Company Common Stock to be outstanding upon completion of the
Conversion and
Reorganization as the percentage of Bank Common Stock owned by them
in the
aggregate immediate before the Conversion and Reorganization,
before giving
effect to (a) cash paid in lieu of any fractional shares of Holding
Company
Common Stock and (b) shares of Common Stock purchased by the
Minority
Stockholders in the Offerings.
EXCHANGE SHARES means the shares of Holding Company Common Stock to
be
issued to the Minority Stockholders in connection with the Bank
Merger.
FDIC
means the Federal Deposit Insurance Corporation or any
successor
thereto.
HOLDING COMPANY means the stock corporation to be organized under
the laws
of Missouri that, upon completion of the Conversion and
Reorganization, shall
hold all of the outstanding capital stock of the Bank.
HOLDING COMPANY COMMON
STOCK means the shares of common stock, par value
$0.01 per share of the Holding Company.
INDEPENDENT APPRAISER means the independent investment banking or
financial
consulting firm retained by the Holding Company and the Bank to
prepare an
appraisal of the estimated pro forma market value of the Common
Stock.
INITIAL PURCHASE PRICE means the price per share to be paid
initially by
Participants for shares of Common Stock subscribed for in the
Subscription
Offering and by Persons for shares of Common Stock ordered in the
Community
Offering and/or Syndicated Community Offering.
INTERIM A means Liberty Interim Federal Savings and Loan
Association II,
which will be formed as an interim federal stock savings
association and a
wholly owned subsidiary of the Holding Company to effect the Bank
Merger.
INTERIM B means Liberty Interim Federal Savings and Loan
Association I,
which will be the resultant entity following the conversion of the
MHC. Interim
B will subsequently be merged with and into the Bank.
LOCAL COMMUNITY means Clay, Clinton, Platte and Jackson Counties
in
Missouri.
MANAGEMENT PERSON means any Officer or director of the Bank, the
MHC or the
Holding Company or any Affiliate of the Bank, the MHC or the
Holding Company and
any person Acting in Concert with such Officer or director.
MEMBER means any Person qualifying as a member of the MHC in
accordance
with its mutual holding company charter and bylaws and the laws of
the United
States.
5
<PAGE>
MHC
means Liberty Savings Mutual Holding Company, a federally
chartered
mutual holding company.
MHC
MERGER means the merger of Interim B, the successor of the MHC
following its conversion to an interim federal stock Bank with and
into the Bank
pursuant to the Plan of Merger included as Exhibit A hereto.
MINORITY STOCKHOLDER means any owner of the Bank Common Stock other
than
the MHC.
OFFERINGS means the offering of Common Stock to Persons other than
the MHC
in the Subscription Offering, the Community Offering and the
Syndicated
Community or Public Offering.
OFFICER means the president, chief executive officer,
vice-president,
secretary, treasurer or principal financial officer, comptroller or
principal
accounting officer and any other person performing similar
functions with
respect to any organization whether incorporated or
unincorporated.
ORDER FORM means the form or forms to be provided by the Holding
Company,
containing all such terms and provisions as set forth in Section 11
hereof, to a
Participant or other Person by which Common Stock may be ordered in
the
Offering.
OTHER MEMBER means a Voting Member who is not an Eligible Account
Holder or
a Supplemental Eligible Account Holder
OTS
means the Office of Thrift Supervision or any successor
thereto.
PARTICPANT means any Eligible Account Holder, Tax-Qualified
Employee Stock
Benefit Plan, Supplemental Eligible Account Holder or Other Member,
but does not
include the MHC.
PERSON means an individual, a corporation, a partnership, a Bank,
joint
stock company, a limited liability company, a trust an
unincorporated
organization or a government or any political subdivision of a
government.
PLAN
OR PLAN OF CONVERSION AND REORGANIZATION means this Plan of
Conversion
and Reorganization as adopted by the Board of Directors of the MHC
and the Bank
and any amendment hereto approved as provided herein.
PRIMARY PARTIES means the MHC, the Bank and the Holding
Company.
PROSPECTUS means the one or more documents to be used in offering
the
Common Stock in the Offering.
6
<PAGE>
PROXY STATEMENT means the document used to solicit approval of the
Plan by
Voting Members.
PUBLIC OFFERING means underwritten firm commitment offering to the
public
through one or more underwriters.
QUALIFYING DEPOSIT means the aggregate balance of all Deposit
Accounts in
the Bank of (i) an Eligible Account Holder at the close of Business
on the
Eligibility Record Date, provided such aggregate balance is not
less than
$50.00, and (ii) a Supplemental Eligible Account Holder at the
close of business
on the Supplemental Eligibility Record Date, provided such
aggregate balance is
not less than $50.00.
SEC
means the Securities and Exchange Commission.
SPECIAL MEETING OF MEMBERS means the Special Meeting of Voting
Members
called for the purpose of submitting this Plan to the Members for
their
approval, including any adjournments of such meeting.
SPECIAL MEETING OF STOCKHOLDERS means the Special Meeting of
Stockholders
of the Bank called for the purpose of submitting this Plan to the
Bank Common
Stock for their approval, including any adjournments of such
meeting.
SUBSCRIPTION OFFERING
means the offering of the Common Stock to
Participants.
SUBSCRIPTION RIGHTS means nontransferable rights to subscribe for
Common
Stock granted to Participants pursuant to the terms of this
Plan.
SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER means any Person, except
directors and
Officers of the MHC or the Bank and their Associates, holding a
Qualified
Deposit at the close of business on the Supplemental Eligibility
Record Date.
SUPPLEMENTAL ELIGIBILITY RECORD DATE, if applicable, means the date
for
determining Supplemental Eligibility Account Holders and shall be
required if
the Eligibility Record Date is more than 15 months prior to the
date of the
approval of the Conversion and Reorganization by the OTS. If
applicable, the
Supplemental Eligibility Record Date shall be the last day of the
calendar
quarter preceding OTS approval of the Conversion and
Reorganization.
SYNDICATED COMMUNITY OFFERING means the offering for sale by a
syndicate of
broker-dealer to the general public of shares of Common Stock not
purchased in
the Subscription Offering and the Community Offering.
7
<PAGE>
TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means any defined benefit
plan or
defined contribution plan, such as an employee sock ownership plan,
stock bonus
plan, profit-sharing plan or other plan, which is established for
the benefit of
the employees of the Holding Company and/or the bank and any
Affiliate thereof
and which, with its related trust, meets the requirements to be
"qualified"
under Section 401 of the Code as from time to time in effect. A
"Non-Tax
Qualified Employee Stock Benefit Plan" is any defined benefit plan
or defined
contribution stock benefit plan that is not so qualified.
VOTING MEMBER means a person who, at the close of business on the
Voting
Record Date, is entitled to vote as a Member of the MHC in
accordance with its
mutual charter and bylaws.
VOTING RECORD DATE means the date or dates for determining the
eligibility
of Member to vote at the Special Meeting.
3. GENERAL
PROCEDURE FOR THE CONVERSION AND REORGANIZATION.
A.
STEPS FOR
CONVERSION AND REORGANIZATION; REGULATORY FILINGS
i. After the
Bank's organization of the Holding Company and the
receipt of all requisite regulatory approvals, the Holding
Company will form Interim A as its wholly owned subsidiary
and the Board of Directors of Interim A shall adopt the Plan
of Merger included as Exhibit B hereto by at least a
two-thirds vote. The Holding Company shall approve such Plan
of Merger in its capacity as the sole stockholder of Interim
A.
ii. An application for
the Conversion and Reorganization,
including the Plan and all other requisite material (the
"Application for Conversion"), shall be submitted to the OTS
for approval. The MHC and the Bank also will cause notice of
the adoption of the Plan by the Boards of Directors of the
MHC and the Bank to be given by publication in a newspaper
having general circulation in each community in which an
office of Bank is located and will cause copies of the Plan
to be made available at each office of the MHC and the Bank
for inspection by Members and the Bank's stockholders. The
MHC and the Bank will again cause to be published, in
accordance with the requirements of applicable regulations
of the OTS, a notice of the filing with the OTS of an
application to
convert the MHC from mutual to stock form and
will post the notice of the filing for the Application for
Conversion in each of their offices.
iii. Promptly following receipt of requisite approval of the
OTS,
the Plan will be submitted to the Voting Members for their
consideration and
8
<PAGE>
approval at the Special Meeting of Members. The MHC may, at
its option, mail to all Voting Members, at their last known
address appearing on the records of the MHC and the Bank,
the Proxy Statement. The Holding Company also shall mail to
all such Members (as well as other Participants) a
Prospectus and Order Form for the purchase of Common Stock,
subject to the provisions of Section 11 and Section 13
hereof. In addition, all such Members will receive, or be
given the opportunity to request by returning a
postage-prepaid card that will be distributed with the Proxy
Statement, letter or other written communication, a copy of
the articles of incorporation and bylaws of the Holding
Company.
iv. Subscription
Rights to purchase shares of Common Stock will
be issued without payment therefor to Eligible Account
Holders, the Tax-Qualified Employee Stock Benefit Plan,
Supplemental Eligible Account Holders and Other Members, as
set forth in Sections 5 through 8 hereof.
v.
The Bank shall
file preliminary proxy materials with the OTS
to seek the approval of the Plan by its stockholders.
Promptly following clearance of such proxy materials and the
receipt of any other requisite approval of the OTS, the Bank
will mail definitive proxy materials to all stockholders as
of the Voting Record Date, at their last known address
appearing on the records of the Bank, for their
consideration and approval of this Plan at the Special
Meeting of Stockholders.
vi. The Holding
Company shall submit or cause to be submitted a
holding company application to the OTS for approval of the
acquisition of the Bank. Such application also shall include
an application to form Interim A. In addition, an
application to merge the MHC (following its conversion into
an interim federal stock savings association) and the Bank
and an application to merge Interim A and the Bank shall be
filed with the OTS, either as exhibits to the holding
company application or separately. All notices required to
be published in connection with such applications shall be
published at the times required.
vii. The Holding Company shall file a Registration Statement
with
the SEC to register the Holding Company Common Stock to be
issued in the Conversion and Reorganization under the
Securities Act of 1933, as amended, and shall register such
Holding Company Common Stock under any applicable state
securities laws. Upon registration and after the receipt of
all required regulatory approvals, the Common Stock shall be
first offered for sale in a Subscription Offering to
Eligible
9
<PAGE>
Account Holders, the Tax-Qualified Employee Stock Benefit
Plan, Supplemental Eligible Account Holders, if any, and
Other Members. It is anticipated that any shares of Common
Stock remaining unsold after the Subscription Offering will
be sold through a Community Offering, a Syndicated Community
Offering and/or a Public Offering. The purchase price per
share for the Common Stock shall be a uniform price
determined in accordance with Section 4 hereof and shall be
set forth in the Prospectus. The Holding Company shall
contribute to the Bank an amount of fifty percent (50%) of
the net proceeds received by the Holding Company from the
sale of Common Stock.
viii. The Articles of Incorporation of the Holding Company
shall
read in the form of Exhibit C.
ix. The home office
and branch offices of the Bank shall be
unaffected by the Conversion and Reorganization. The
executive offices of the Holding Company shall be located at
the current offices of the MHC.
x. Each Deposit
Account of the Bank at the effective date shall
remain a Deposit Account in the Bank for the same amount and
subject to the same terms and conditions applicable to such
Deposit Account before the Conversion and Reorganization.
B.
VOTES REQUIRED
FOR CONSUMMATION OF CONVERSION AND REORGANIZATION
This
Plan was adopted by the Boards of Directors of the MHC and the Bank
on
December 21, 2005.
This
Plan is subject to the approval of the OTS and must be adopted by
(1)
at least a majority of the total number of votes eligible to be
cast by Voting
Members at the Special Meeting of Members, (2) holders of at least
two-thirds of
the shares of outstanding Bank Common Stock, at the Special Meeting
of
Stockholders, and (3) by the holders of at least a majority of the
outstanding
shares of Bank Common Stock owned by Minority Stockholders.
C.
CONSUMMATION OF
CONVERSION AND REORGANIZATION
The
effective date of the Conversion and Reorganization shall be the
date
set forth in Section 27 hereof.
Upon
the effective date, the following transactions shall occur:
i. The MHC shall
convert from a mutual holding company to an
interim federal stock savings association and simultaneously
merge with and into the Bank in the MHC Merger, with the
Bank being the surviving
10
<PAGE>
institution. As a result of the MHC Merger, (x) the shares
of Bank Common Stock held by the MHC (following its
conversion to an interim federal stock savings association)
shall be extinguished, and (y) Members of the MHC will be
granted interests in the liquidation account to be
established by the Bank pursuant to Section 15 hereof.
ii. Interim A shall
merge with and into the Bank pursuant to the
Bank Merger, with the Bank being the surviving institution.
As a result of the Bank Merger, (x) the shares of Bank
Common Stock held by the Bank shall be extinguished; (y) the
shares of Bank Common Stock held by the Minority
Stockholders
shall be converted into the right to receive
shares of Holding Company Common Stock based upon the
Exchange Ratio, plus cash in lieu of any fractional share
interest based upon the Actual Purchase Price; and (z) the
shares of common stock of Interim A held by the Holding
Company shall be converted into shares of Bank Common Stock
on a one-for-one basis, with the result that the Bank shall
become a wholly owned subsidiary of the Holding Company. In
addition, as a result of the Bank Merger, options to
purchase shares of Bank Common Stock that are outstanding
immediately before consummation of the Conversion and
Reorganization shall be converted into options to purchase
shares of Holding Company Common Stock, with the number of
shares subject to the option and the exercise price per
share to be adjusted based upon the Exchange Ratio so that
the aggregate exercise price remains unchanged, and with the
duration of the option remaining unchanged.
iii. The Holding Company shall sell the Common Stock in the
Offerings, as provided herein.
D.
RETENTION OF
INVESTMENT BANKERS AND FINANCIAL ADVISORS
The
Primary Parties may retain and pay for the services of financial
and
other advisors and investment bankers to assist in connection with
any or all
aspects of the Conversion and Reorganization, including in
connection with the
Offerings the payment of fees to brokers and investment bankers for
assisting
Persons in completing and/or submitting Order Forms. All fees,
expenses,
retainers and similar items shall be reasonable.
4. TOTAL NUMBER
OF SHARES AND PURCHASE PRICE OF COMMON STOCK.
a.
The aggregate
price at which shares of Common Stock shall be sold in
the Offerings shall be based on a pro forma valuation of the
aggregate
market value of the Common Stock prepared by the Independent
Appraiser. The valuation shall be based on financial
information
relating to the Primary Parties, market, financial and economic
conditions, a comparison of the Primary Parties with selected
publicly
held financial
11
<PAGE>
institutions and holding companies and with comparable
financial
institutions and holding companies and such other factors as
the
Independent Appraiser may deem to be important, including, but
not
limited to, the projected operating results and financial condition
of
the Holding Company and the Bank. The valuation shall be stated
in
terms of an Estimated Price Range, the maximum of which shall be
no
more than 15% above the average of the minimum and maximum of
such
price range and
the minimum of which shall be no more than 15% below
such average. The valuation shall be updated during the Conversion
and
Reorganization as market and financial conditions warrant and as
may
be required by the OTS.
b.
Based upon the
independent valuation, the Boards of Directors of the
Primary Parties shall fix the Initial Purchase Price and the number
of
shares of Common Stock to be offered in the Offerings. The
purchase
price per share
for the Common Stock shall be a uniform price
determined in accordance with applicable OTS rules and
regulations.
The Actual Purchase Price and the total number of shares of
Common
Stock to be issued in the Offerings shall be determined by the
Boards
of Directors of the Primary Parties upon conclusion of the
Offerings
in consultation with the Independent Appraiser and any
financial
advisor or investment banker retained by the Primary Parties in
connection with such Offerings.
c.
Subject to the
approval of the OTS, the Estimated Price Range may be
increased or decreased to reflect market, financial and
economic
conditions before completion of the Conversion and Reorganization,
and
under such circumstances the Primary Parties may increase or
decrease
the total number of shares of Common Stock to be issued in the
Offerings to reflect any such change. Notwithstanding anything to
the
contrary contained in this Plan, no resolicitation of
subscribers
shall be required and subscribers shall not be permitted to modify
or
cancel their subscriptions unless the gross proceeds from the sale
of
the
Common Stock in the Offerings are less than the minimum or more
than 15% above the maximum of the Estimated Price Range set forth
in
the Prospectus. In the event of an increase in the total number
of
shares offered in the Offerings due to an increase in the
Estimated
Price Range, the priority of share allocation shall be as set forth
in
this Plan.
5. SUBSCRIPTION
RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY).
a.
Each Eligible
Account Holder shall receive, as first priority and
without payment, Subscription Rights to purchase up to the greater
of
(i) $75,000 of Common Stock (or such maximum purchase limitation
as
may be established for the Community Offering and/or Syndicated
Community Offering), (ii) one-tenth of 1% of the total offering
of
shares in the Subscription Offering, or (iii) 15 times the
product
(rounded down to the next whole number) obtained by multiplying
the
total number of shares of Common Stock offered in the
Subscription
Offering by a fraction, of which the numerator is the amount of
the
Qualifying Deposits of the Eligible Account Holder
12
<PAGE>
and the denominator is the total amount of all Qualifying Deposits
of
all Eligible Account Holders, in each case subject to Sections 10
and
13 hereof.
b.
In the event of
an oversubscription for shares of Common Stock
pursuant to Section 5(a), available shares shall be allocated
among
subscribing Eligible Account Holders so as to permit each such
Eligible Account Holder, to the extent possible, to purchase a
number
of shares that will make his or her total allocation equal to
the
lesser of the number of shares subscribed for or 100 shares.
Any
available shares remaining after each subscribing Eligible
Account
Holder has been allocated the lesser of the number of shares
subscribed for or 100 shares shall be allocated among the
subscribing
Eligible Account Holders whose subscriptions remain unsatisfied in
the
proportion that the Qualifying Deposit of each such subscribing
Eligible Account Holder bears to the total Qualifying Deposits of
all
such subscribing Eligible Account Holders whose orders are
unfilled,
provided that no fractional shares shall be issued.
c.
Subscription
Rights of Eligible Account Holders who are also directors
or Officers of the Holding Company or the Bank and their
Associates
shall be subordinated to those of other Eligible Account Holders
to
the extent that they are attributable to increased deposits during
the
one-year period preceding the Eligibility Record Date.
6. SUBSCRIPTION
RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS (SECOND
PRIORITY).
Tax-Qualified Employee Stock Benefit Plans shall receive, without
payment,
Subscription Rights to purchase in the aggregate up to 10% of the
Common Stock
sold in the Offerings, including any shares of Common Stock to be
issued as a
result of an increase in the Estimated Price Range after
commencement of the
Subscription Offering and before completion of the Conversion
and
Reorganization. The Subscription Rights granted to Tax-Qualified
Employee Stock
Benefit Plans shall be subject to the availability of shares of
Common Stock
after taking into account the shares of Common Stock purchased by
Eligible
Account Holders; provided, however, that if the total number of
shares of Common
Stock is increased to any amount greater than the number of shares
representing
the maximum of the Estimated Price Range as set forth in the
Prospectus (the
"Maximum Shares"), the ESOP shall have a priority right to purchase
any such
shares exceeding the Maximum Shares up to an aggregate of 10% of
Common Stock
sold in the Offerings. Shares of Common Stock purchased by any
individual
participant ("Plan Participant") in a Tax-Qualified Employee Stock
Benefit Plan
using funds therein pursuant to the exercise of Subscription Rights
granted to
such Participant in his individual capacity as an Eligible Account
Holder and/or
Supplemental Eligible Account Holder and/or purchases by such Plan
Participant
in the Community Offering shall not be deemed to be purchases by a
Tax-Qualified
Employee Stock Benefit Plan for purposes of calculating the maximum
amount of
Common Stock that Tax-Qualified Employee Stock Benefit Plans may
purchase
pursuant to the first sentence of this Section 6 if the individual
Plan
Participant controls or directs the investment authority with
respect to such
account or subaccount. Consistent with applicable laws and
regulations and
policies and practices of the OTS, the Tax-Qualified Employee Stock
Benefit
Plans may use funds contributed by the Holding Company or the Bank
and/or
borrowed from an independent financial institution to exercise such
Subscription
Rights,
13
<PAGE>
and the Holding Company and the Bank may make scheduled
discretionary
contributions thereto, provided that such contributions do not
cause the Bank to
fail to meet any applicable regulatory capital requirement.
The
Tax-Qualified Employee Stock Benefit Plans shall not be deemed to
be an
Associate or Affiliate of, or Person Acting in Concert with, any
Management
Person.
7. SUBSCRIPTION
RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD
PRIORITY).
a.
In the event
that the Eligibility Record Date is more than 15 months
before the date of OTS approval of the Plan, then, and only in
that
event, a Supplemental Eligibility Record Date shall be set and
each
Supplemental Eligible Account Holder shall receive, without
payment,
Subscription Rights to purchase up to the greater of (i) $75,000
of
Common Stock (or such maximum purchase limitation as may be
established for the Community Offering and/or Syndicated
Community
Offering), (ii) one-tenth of 1% of the total offering of shares in
the
Subscription Offering or (iii) 15 times the product (rounded down
to
the next whole number) obtained by multiplying the total number
of
shares of Common Stock offered in the Subscription Offering by
a
fraction, of which the numerator is the amount of the
Qualifying
Deposits of the Supplemental Eligible Account Holder and the
denominator is the total amount of all Qualifying Deposits of
all
Supplemental Eligible Account Holders, in each case subject to
Sections 10 and 13 hereof and the availability of shares of
Common
Stock for purchase after taking into account the shares of
Common
Stock purchased by Eligible Account Holders and Tax-Qualified
Employee
Stock Benefit Plans through the exercise of Subscription Rights
under
Sections 5 and 6 hereof.
b.
In the event of
an oversubscription for shares of Common Stock
pursuant to Section 7(a) above, available shares shall be
allocated
among subscribing Supplemental Eligible Account Holders so as
to
permit each such Supplemental Eligible Account Holder, to the
extent
possible, to purchase a number of shares sufficient to make his or
her
total allocation (including the number of shares, if any, allocated
in
accordance with Section 5(a)) equal to the lesser of the number
of
shares subscribed for or 100 shares. Any remaining available
shares
shall be allocated among subscribing Supplemental Eligible
Account
Holders whose subscriptions remain unsatisfied in the proportion
that
the amount of their respective Qualifying Deposits bears to the
total
amount of the Qualifying Deposits of all such subscribing
Supplemental
Eligible Account Holders whose orders are unfilled, provided that
no
fractional shares shall be issued.
8. SUBSCRIPTION RIGHTS OF OTHER
MEMBERS (FOURTH PRIORITY).
a.
Each Other
Member shall receive, without payment, Subscription Rights
to purchase up to the greater of (i) $75,000 of Common Stock (or
such
maximum purchase limitation as may be established for the
Community
Offering and/or Syndicated Community Offering) or (ii) one-tenth of
1%
of the total offering of shares in the
14
<PAGE>
Subscription Offering, subject to Sections 10 and 13 hereof and
the
availability of shares of Common Stock for purchase after taking
into
account the shares of Common Stock purchased by Eligible
Account
Holders, Tax-Qualified Employee Stock Benefit Plans and
Supplemental
Eligible Account Holders, if any, through the exercise of
Subscription
Rights under Sections 5, 6 and 7 hereof.
b.
If, pursuant to
this Section 8, Other Members subscribe for a number
of shares of Common Stock in excess of the total number of shares
of
Common Stock remaining, available shares shall be allocated
among
subscribing Other Members so as to permit each such Other Member,
to
the extent possible, to purchase a number of shares which will
make
his or her total allocation equal to the lesser of the number
of
shares subscribed for or 100 shares. Any remaining available
shares
shall be allocated among subscribing Other Members whose
subscriptions
remain unsatisfied on a pro rata basis in the same proportion as
each
such Other Member's subscription bears to the total subscriptions
of
all such subscribing Other Members, provided that no fractional
shares
shall be issued.
9. COMMUNITY
OFFERING, SYNDICATED COMMUNITY OFFERING, PUBLIC OFFERING AND
OTHER OFFERINGS.
a.
If less than the
total number of shares of Common Stock offered by the
Holding Company are sold in the Subscription Offering, it is
anticipated that all remaining shares of Common Stock shall, if
practicable, be sold in a Community Offering. Subject to the
requirements set forth herein, the manner in which the Common Stock
is
sold in the Community Offering shall have as its objective the
achievement of the widest possible distribution of such stock.
b.
In the event of
a Community Offering, all shares of Common Stock that
are not subscribed for in the Subscription Offering shall be
offered
for sale by means of a direct community marketing program, which
may
provide for the use of brokers, dealers or investment banking
firms
experienced in the sale of financial institution securities.
Any
available shares in excess of those not subscribed for in the
Subscription Offering will be available for purchase by members of
the
general public to whom a Prospectus is delivered by the Holding
Company or on its behalf, with preference given first to
Minority
Stockholders and second to natural persons and trusts of
natural
persons residing in the Local Community ("Preferred
Subscribers").
c.
A Prospectus and
Order Form shall be furnished to such Persons as the
Primary Parties may select in connection with the Community
Offering,
and each order for Common Stock in the Community Offering shall
be
subject to the absolute right of the Primary Parties to accept
or
reject any such order in whole or in part either at the time of
receipt of an order or as soon as practicable following completion
of
the Community Offering. Available shares will be allocated first
to
each
Preferred Subscriber whose order is accepted in an amount equal
to the lesser of 100 shares or the number of shares subscribed for
by
each such Preferred Subscriber, if possible. Thereafter,
unallocated
shares shall be allocated among the Preferred Subscribers
15
<PAGE>
whose accepted orders remain unsatisfied in the same proportion
that
the unfilled order bears to the total unfilled orders of all
Preferred
Subscribers whose accepted orders remain unsatisfied, provided that
no
fractional shares shall be issued. If there are any shares
remaining
after all accepted orders by Preferred Subscribers have been
satisfied, such remaining shares shall be allocated to other
members
of the general public who purchase in the Community Offering,
applying
the same allocation described above for Preferred Subscribers.
d.
The amount of
Common Stock that any Person may purchase in the
Community Offering shall not exceed $75,000 of Common Stock;
provided,
however, that this amount may be increased to up to 5% of the
total
offering of shares of Common Stock or decreased to less than
$75,000,
subject to any required regulatory approval but without the
further
approval of Members or the Bank's stockholders or the
resolicitation
of subscribers; and provided further that, to the extent
applicable,
and subject to the preferences set forth in Section 9(b) and (c)
of
this Plan and the limitations on purchases of Common Stock set
forth
in this Section 9(d) and Section 10 of this Plan, orders for
Common
Stock in the Community Offering shall first be filled to a maximum
of
2% of the total number of shares of Common Stock sold in the
Offerings
and thereafter any remaining shares shall be allocated on an
equal
number of shares basis per order until all orders have been
filled,
provided no fractional shares shall be issued. The Primary Parties
may
commence the Community Offering concurrently with, at any time
during,
or as soon as practicable after the end of, the Subscription
Offering,
and the Community Offering must be completed within 45 days after
the
completion of the Subscription Offering, unless extended by the
Primary Parties with any required regulatory approval.
e.
Subject to such
terms, conditions and procedures as may be determined
by the Primary Parties, all shares of Common Stock not subscribed
for
in the Subscription Offering or ordered in the Community Offering
may
be sold by a syndicate of broker-dealers to the general public in
a
Syndicated Community Offering. Each order for Common Stock in
the
Syndicated Community Offering shall be subject to the absolute
right
of the Primary Parties to accept or reject any such order in whole
or
in part either at the time of receipt of an order or as soon as
practicable after completion of the Syndicated Community Offering.
The
amount of Common Stock that any Person may purchase in the
Syndicated
Community Offering shall not exceed $75,000 of Common Stock,
provided,
however, that this amount may be increased to up to 5% of the
total
offering of shares of Common Stock or decreased to less than
$75,000,
subject to any required regulatory approval but without the
further
approval of Members or the Bank's stockholders or the
resolicitation
of subscribers; and provided further that, to the extent
applicable,
and subject to the limitations on purchases of Common Stock set
forth
in this Section 9(e) and Section 10 of this Plan, orders for
Common
Stock in the Syndicated Community Offering shall first be filled to
a
maximum of 2% of the total number of shares of Common Stock sold
in
the Offerings and thereafter any remaining shares shall be
allocated
on an equal number of shares basis per order until all orders
have
been filled, provided no fractional shares shall be issued. The
Primary Parties may commence the Syndicated
16
<PAGE>
Community Offering concurrently with, at any time during, or as
soon
as practicable after the end of, the Subscription Offering
and/or
Community Offering, and the Syndicated Community Offering must
be
completed within 45 days after the completion of the
Subscription
Offering, unless extended by the Primary Parties with any
required
regulatory approval.
f.
The Primary
Parties may sell any shares of Common Stock remaining
following the Subscription Offering, Community Offering and/or
the
Syndicated Community Offering in a Public Offering. The provisions
of
Section 10 hereof shall not be applicable to the sales to
underwriters
for purposes of the Public Offering but shall be applicable to
sales
by the underwriters to the public. The price to be paid by the
underwriters in such an offering shall be equal to the Actual
Purchase
Price less an underwriting discount to be negotiated among such
underwriters and the Primary Parties, subject to any required
regulatory approval or consent.
g.
If, for any
reason, a Syndicated Community Offering or Public Offering
of shares of Common Stock not sold in the Subscription Offering
and
the Community Offering cannot be effected, or if any
insignificant
residue of shares of Common Stock is not sold in the
Subscription
Offering, Community Offering or Syndicated Community Offering,
the
Primary Parties shall use their best efforts to obtain other
purchasers for such shares in such manner and upon such conditions
as
may be satisfactory to the OTS.
10. LIMITATIONS ON
SUBSCRIPTIONS AND PURCHASE OF COMMON STOCK.
The
following limitations shall apply to all purchases of Common Stock
in
the Offerings:
a.
The maximum
amount of Common Stock that may be subscribed for or
purchased in all categories in the Offerings by any Person,
together
with any Associate or group of Persons Acting in Concert, shall
not
exceed $300,000 except for Tax-Qualified Employee Stock Benefit
Plans.
b.
The maximum
number of shares of Common Stock that may be purchased in
the Conversion and Reorganization by the ESOP shall not exceed 8%
and
all Tax-Qualified Employee Stock Benefit Plans shall not exceed 10%
of
the total
number of shares of Holding Company Common Stock issued in
the Conversion and Reorganization, in each instance, including
any
shares which may be issued in the event of an increase in the
maximum
of the Estimated Price Range to reflect changes in market,
financial
and economic conditions after commencement of the Subscription
Offering and before completion of the Offerings; provided,
however,
that purchases of Common Stock that are made by Plan
Participants
pursuant to the exercise of Subscription Rights granted to such
Plan
Participant in his or her individual capacity as a Participant
or
purchases by a Plan Participant in the Community Offering using
the
funds thereof held in Tax-Qualified Employee Stock Benefit
Plans
17
<PAGE>
shall not be deemed to be purchases by a Tax-Qualified Employee
Stock
Benefit Plan for purposes of this Section 10(b).
c.
Except in the
case of Tax-Qualified Employee Stock Benefit Plans, as
set forth in Section 10(b) hereof, and certain Eligible Account
Holders and Supplemental Eligible Account Holders, as set forth
in
Sections 5(a)(ii) and (iii) and 7(a)(ii) and (iii) hereof, and
in
addition to the other restrictions and limitations set forth
herein,
the maximum amount of Holding Company Common Stock that any
Person
together with any Associate or group of Persons Acting in Concert
may,
directly or indirectly, subscribe for or purchase in the
Conversion
and Reorganization, when combined with Exchange Shares received
(which, for this purpose, shall not include any shares held in any
of
the Tax Qualified Employee Stock Benefit Plans or Non-Tax
Qualified
Stock Benefit Plans of the Holding Company or the Association),
shall
not exceed 4.0% of the total number of shares of Holding
Company
Common Stock issued in the Conversion and Reorganization.
d.
The number of
shares of Common Stock that directors and Officers of
the Primary Parties and their Associates may purchase in the
aggregate
in the Offerings shall not exceed 31% of the total number of shares
of
Common Stock sold in the Offerings, including any shares that may
be
issued in the event of an increase in the maximum of the
Estimated
Price Range to reflect changes in market, financial and
economic
conditions after commencement of the Subscription Offering and
before
completion of the Offerings.
e.
No Person may
purchase fewer than 25 shares of Common Stock in the
Offerings, to the extent such shares are available; provided,
however,
that if the Actual Purchase Price is greater than $20.00 per
share,
such minimum number of shares shall be adjusted so that the
aggregate
Actual Purchase Price for such minimum shares will not exceed
$500.00.
f.
For purposes of
the foregoing limitations and the determination of
Subscription Rights, (i) directors, Officers and employees of
the
Primary Parties or their subsidiaries shall not be deemed to be
Associates or a group Acting in Concert solely as a result of
their
capacities as such, (ii) shares purchased by Tax-Qualified
Employee
Stock Benefit Plans shall not be attributable to the individual
trustees or beneficiaries of any such plan for purposes of
determining
compliance with the limitations set forth in Section 10(c) or
Section
10(d) hereof, (iii) Exchange Shares shall be valued at the
Actual
Purchase Price, and (iv) shares purchased by a Tax-Qualified
Employee
Stock Benefit Plan pursuant to instructions of an individual in
an
account in such plan in which the individual has the right to
direct
the investment, including any plan of the Bank qualified plan
under
Section 401(k) of the Code, shall be aggregated and included in
that
individual's purchases and not attributed to the Tax-Qualified
Employee Stock Benefit Plan.
18
<PAGE>
g.
Subject to any
required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of
the
Members or the Bank's stockholders, the Primary Parties may
increase
or decrease any of the individual or aggregate purchase
limitations
set forth herein to a percentage which does not exceed 5% of the
total
offering of shares of Holding Company Common Stock in the
Conversion
and Reorganization whether before, during or after the
Subscription
Offering, Community Offering and/or Syndicated Community Offering.
If
an individual purchase limitation is increased after commencement
of
the Subscription Offering or any other offering, the Primary
Parties
shall permit any Person who subscribed for the maximum number
of
shares of Common Stock to purchase an additional number of shares,
so
that such Person shall be permitted to subscribe for the then
maximum
number of shares permitted to be subscribed for by such Person,
subject to the rights and preferences of any Person who has
priority
Subscription Rights. If any of the individual or aggregate
purchase
limitations are decreased after commencement of the
Subscription
Offering or any other offering, the orders of any Person who
subscribed for more than the new purchase limitation shall be
decreased by the minimum amount necessary so that such Person shall
be
in compliance with the then maximum number of shares permitted to
be
subscribed for by such Person.
h.
The Primary
Parties shall have the right to take all such action as
they may, in their sole discretion, deem necessary, appropriate
or
advisable to monitor and enforce the terms, conditions,
limitations
and restrictions contained in this Section 10 and elsewhere in
this
Plan and the terms, conditions and representations contained in
the
Order Form, including, but not limited to, the absolute right
(subject
only to any necessary regulatory approvals or concurrences) to
reject,
limit or revoke acceptance of any subscription or order and to
delay,
terminate or refuse to consummate any sale of Common Stock that
they
believe might violate, or is designed to, or is any part of a plan
to,
evade or circumvent such terms, conditions, limitations,
restrictions
and representations. Any such action shall be final, conclusive
and
binding on all persons, and the Primary Parties and their
respective
Boards shall be free from any liability to any Person on account
of
any such action.
i. Notwithstanding anything to
the contrary contained in this Plan and
except as may otherwise be required by the OTS, the Minority
Stockholders will not have to sell any Bank Common Stock or be
limited
in receiving Exchange Shares even if their ownership of Bank
Common
Stock when converted into Exchange Shares would exceed an
applicable
purchase limitation; provided, however, that a Minority
Stockholder
who would exceed an applicable purchase limitation may be
precluded
from purchasing Common Stock in the Offerings.
19
<PAGE>
11. TIMING OF
SUBSCRIPTION OFFERING; MANNER OF EXERCISING SUBSCRIPTION RIGHTS
AND
ORDER FORMS.
a.
The Offerings
shall be conducted in compliance with 12 C.F.R. part
563g and, to the extent applicable, Form OC. The Subscription
Offering
may be commenced concurrently with or at any time after the mailing
of
the Proxy Statement to Voting Members and the proxy materials to
the
Bank's stockholders. The Subscription Offering may be closed
before
the Special Meeting of Members and the Special Meeting of
Stockholders, provided that the offer and sale of the Common
Stock
shall be conditioned upon the approval of the Plan by the
Voting
Members at the Special Meeting of Members and by the Bank's
stockholders at the Special Meeting of Stockholders.
b.
The exact timing
of the commencement of the Subscription Offering
shall be determined by the Primary Parties in consultation with
the
Independent Appraiser and any financial or advisory or
investment
banking firm retained by them in connection with the Conversion
and
Reorganization. The Primary Parties may consider a number of
factors,
including, but not limited to, their current and projected
future
earnings, local and national economic conditions, and the
prevailing
market for stocks in general and stocks of financial institutions
in
particular. The Primary Parties shall have the right to
withdraw,
terminate, suspend, delay, revoke or modify any such
Subscription
Offering, at any time and from time to time, as they in their
sole
discretion may determine, without liability to any Person, subject
to
compliance with applicable securities laws and any necessary
regulatory approval or concurrence.
c.
Promptly after
the SEC has declared the Registration Statement, which
includes the Prospectus, effective and all required regulatory
approvals have been obtained, the Primary Parties shall, distribute
or
make available the Prospectus, together with Order Forms for
the
purchase of Common Stock, to all Participants for the purpose
of
enabling them to exercise their respective Subscription Rights,
subject to Section 13 hereof.
d.
Account Holder
and any Supplemental Eligible Account Holder may be
furnished, irrespective of the number of Deposit Accounts
maintained
with the Bank on the Eligibility Record Date and Supplemental
Eligibility Record Date, respectively. No person holding a
Subscription Right may exceed any otherwise applicable purchase
limitation by submitting multiple orders for Common Stock.
Multiple
orders are subject to adjustment, as appropriate, on a pro rata
basis
and
deposit balances will be divided equally among such orders in
allocating shares in the event of an oversubscription.
e.
The recipient of
an Order Form shall have no less than 20 days and no
more than 45 days from the date of mailing of the Order Form (with
the
exact termination date to be set forth on the Order Form) to
properly
complete and execute the Order Form and deliver it to the
Primary
Parties. The Primary Parties may extend such period by such amount
of
time as they determine is appropriate. Failure of any Participant
to
deliver
20
<PAGE>
a properly executed Order Form to the Primary Parties, along with
full
payment (or authorization for full payment by withdrawal) for
the
shares of Common Stock subscribed for, within the time limits
prescribed, shall be deemed a waiver and release by such person of
any
rights to subscribe for shares of Common Stock. Each Participant
shall
be required to confirm to the Primary Parties by executing an
Order
Form that such Person has fully complied with all of the terms,
conditions, limitations and restrictions in the Plan.
f.
The Primary
Parties shall have the absolute right, in their sole
discretion and without liability to any Participant or other
Person,
to reject any Order Form, including, but not limited to, any
Order
Form that is (i) improperly completed or executed; (ii) not
timely
received; (iii) not accompanied by the proper and full payment
(or
authorization of withdrawal for full payment) or, in the case
of
institutional investors in the Community Offering, not accompanied
by
an irrevocable order together with a legally binding commitment to
pay
the full amount of the purchase price at any time prior to 48
hours
before the completion of the Offerings; or (iv) submitted by a
Person
whose representations the Primary Parties believe to be false or
who
they otherwise believe, either alone, or Acting in Concert with
others, is violating, evading or circumventing, or intends to
violate,
evade or circumvent, the terms and conditions of the Plan.
Furthermore, if Order Forms (i) are not delivered and are returned
to
the Primary Parties by the United States Postal Service or the
Primary
Parties are unable to locate the addressee, or (ii) are not
mailed
pursuant to a "no mail" order placed in effect by the account
holder,
the Subscription Rights of the Person to which such rights have
been
granted will lapse as though such Person failed to return the
contemplated Order Form within the time period specified thereon.
The
Primary Parties may, but will not be required to, waive any
irregularity on any Order Form or may require the submission of
corrected Order Forms or the remittance of full payment for shares
of
Common Stock by such date as they may specify. The interpretation
by
the Primary Parties of the terms and conditions of the Order
Forms
shall be final and conclusive.
12. PAYMENT FOR COMMON
STOCK.
a.
Payment for
shares of Common Stock subscribed for by Participants in
the subscription Offering and payment for shares of Common
Stock
ordered by Persons in the Community Offering shall be equal to
the
Initial Purchase Price multiplied by the number of shares that
are
being subscribed for or ordered, respectively. Such payment may
be
made in cash, if delivered in person, or by check, bank draft or
money
order at the time the Order Form is delivered, provided that
checks
will only be accepted subject to collection. The Primary Parties
may,
in their sole discretion, permit institutional investors to
submit
irrevocable orders together with the legally binding commitment
for
payment and to thereafter pay for such shares of Common Stock
for
which they subscribe in the Community Offering at any time prior
to
the 48 hours before the completion of the Conversion and
Reorganization. The Primary Parties, in their sole and absolute
discretion, may also elect to receive payment for shares of
Common
Stock by wire transfer. In addition, the Primary Parties may
elect
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to provide Participants and/or other Persons who have a Deposit
Account with the Bank the opportunity to pay for shares of
Common
Stock by authorizing the Bank to withdraw from such Deposit Account
an
amount equal to the aggregate Initial Purchase Price of such
shares.
Payment may also be made by a Participant using funds held for
such
Participant's benefit by a Bank Benefit Plan to the extent that
such
plan allows participants or any related trust established for
the
benefit of such participants to direct that some or all of
their
individual accounts or sub-accounts be invested in Common Stock.
If
the Actual Purchase Price is less than the Initial Purchase Price,
the
Primary Parties shall refund the difference to all Participants
and
other Persons, unless the Primary Parties choose to provide
Participants and other Persons the opportunity on the Order Form
to
elect to have such difference applied to the purchase of
additional
whole shares of Common Stock. If the Actual Purchase Price is
more
than the Initial Purchase Price, the Primary Parties shall reduce
the
number of shares of Common Stock ordered by Participants and
other
Persons and refund any remaining amount that is attributable to
a
fractional share interest, unless the Primary Parties chooses
to
provide Participants and other Persons the opportunity to increase
the
Actual Purchase Price submitted by them.
b.
Notwithstanding
the above, if the Tax-Qualified Employee Stock Benefit
Plans subscribe for shares during the Subscription Offering,
such
plans will not be required to pay for the shares at the time
they
subscribe but rather may pay for such shares of Common Stock
subscribed for by such plans at the Actual Purchase Price upon
consummation of the Offerings, provided that, in the case of
the
employee stock ownership plan, there is in force from the time of
its
subscription until the consummation of the Offerings, a loan
commitment to lend to the employee stock ownership plan, at such
time,
the aggregate price of the shares for which it subscribed.
c.
If a Participant
or other Person authorizes the Bank to withdraw the
amount of the Initial Purchase Price from his or her Deposit
Account,
the Bank shall have the right to make such withdrawal or to
freeze
funds equal to the aggregate Initial Purchase Price upon receipt
of
the Order Form. Notwithstanding any regulatory provisions
regarding
penalties for early withdrawals from certificate accounts, the
Bank
may allow payment by means of withdrawal from certificate
accounts
without the assessment of such penalties. In the case of an
early
withdrawal of only a portion of such account, the certificate
evidencing such account shall be canceled if any applicable
minimum
balance requirement ceases to be met. In such case, the
remaining
balance will earn interest at the regular passbook rate.
However,
where any applicable minimum balance is maintained in such
certificate
account, the rate of return on the balance of the certificate
account
shall remain the same as before such early withdrawal. This waiver
of
the early withdrawal penalty applies only to withdrawals made
in
connection with the purchase of Common Stock and is entirely
within
the discretion of the Primary Parties.
d.
The subscription
funds will be held by the Bank or, in the Bank's
discretion, in an escrow account at an unaffiliated institution.
The
Bank shall pay interest, at not less
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<PAGE>
than the Bank's passbook rate, for all amounts paid in cash, by
check,
bank draft or money order to purchase shares of Common Stock in
the
Subscription Offering and the Community Offering from the date
payment
is received until the date the Conversion and Reorganization is
completed or terminated.
e.
The Holding
Company will not offer or sell any of the Common Stock
proposed to be issued to any Person whose purchase would be
financed
by funds loaned, directly or indirectly, to the Person by the
Bank.
f.
Each share of
Common Stock shall be non-assessable upon payment in
full of the Actual Purchase Price.
13. ACCOUNT HOLDERS IN
NONQUALIFIED STATES OR FOREIGN COUNTRIES.
The Primary Parties shall make reasonable efforts to comply with
the
securities laws of all jurisdictions in the United States in
which
Participants reside. However, no Participant will be offered or
receive any
Common Stock under the Plan if such Participant resides in a
foreign
country or resides in a jurisdiction of the United States with
respect to
which any of the following apply: (a) there are few Participants
otherwise
eligible to subscribe for shares under this Plan who reside in
such
jurisdiction; (b) the granting of Subscription Rights or the offer
or sale
of
shares of Common Stock to such Participants would require any of
the
Primary Parties or their respective directors and Officers, under
the laws
of
such jurisdiction, to register as a broker-dealer, salesman or
selling
agent or to register or otherwise qualify the Common Stock for sale
in such
jurisdiction, or any of the Primary Parties would be required to
qualify as
a
foreign corporation or file a consent to service of process in
such
jurisdiction; or (c) such registration, qualification or filing in
the
judgment of the Primary Parties would be impracticable or unduly
burdensome
for
reasons of cost or otherwise.
14. VOTING RIGHTS OF
STOCKHOLDERS.
Following consummation of the Conversion and Reorganization,
voting
rights with respect to the Bank shall be held and exercised
exclusively by
the
Holding Company as holder of all of the Bank's outstanding
voting
capital stock, voting rights with respect to the Holding Company
shall be
held
and exercised exclusively by the holders of the Holding
Company's
voting capital stock.
15. LIQUIDATION
ACCOUNT.
a.
At the time of
the MHC Merger, the Bank shall establish a liquidation
account in
an amount equal to the percentage of the outstanding shares
of the common stock of the Bank owned by the MHC before the
Bank
Merger, multiplied by the Bank's total stockholders' equity as
reflected in its latest statement of financial condition contained
in
the final Prospectus utilized in the Conversion and
Reorganization.
The function of the liquidation account will be to preserve the
rights
of certain holders of
23
<PAGE>
Deposit Accounts in the Bank who maintain such accounts in the
Bank
following the Conversion and Reorganization to a priority to
distributions in the unlikely event of a liquidation of the
Bank
subsequent to the Conversion and Reorganization.
b.
The liquidation
account shall be maintained for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders,
if
any, who maintain their Deposit Accounts in the Bank after the
Conversion and Reorganization. Each such account holder will,
with
respect to each Deposit Account held, have a related inchoate
interest
in a portion of the liquidation account balance, which interest
will
be referred to in this Section 15 as the "subaccount balance."
All
Deposit Accounts having the same social security number will be
aggregated for purposes of determining the initial subaccount
balance
with respect to such Deposit Accounts, except as provided in
Section
15(d) hereof.
c.
In the event of
a complete liquidation of the Bank subsequent to the
Conversion and Reorganization (and only in such event), each
Eligible
Account Holder and Supplemental Eligible Account Holder, if any,
shall
be entitled to receive a liquidation distribution from the
liquidation
account in the amount of the then current subaccount balances
for
Deposit Accounts then held (adjusted as described below) before
any
liquidation distribution may be made with respect to the capital
stock
of the Bank. No merger, consolidation, sale of bulk assets or
similar
combination transaction with another FDIC-insured institution in
which
the Bank is not the surviving entity shall be considered a
complete
liquidation for this purpose. In any such transaction, the
liquidation
account shall be assumed by the surviving entity.
d.
The initial
subaccount balance for a Deposit Account held by an
Eligible Account Holder and Supplemental Eligible Account Holder,
if
any, shall be determined by multiplying the opening balance in
the
liquidation account by a fraction, of which the numerator is
the
amount of the Qualifying Deposits of such account holder and
the
denominator is the total amount of Qualifying Deposits of all
Eligible
Account Holders and Supplemental Eligible Account Holders, if any.
For
Deposit Accounts in existence at both the Eligibility Record Date
and
the Supplemental Eligibility Record Date, if any, separate
initial
subaccount balances shall be determined on the basis of the
Qualifying
Deposits in such Deposit Accounts on each such record date.
Initial
subaccount balances shall not be increased, and shall be subject
to
downward adjustment as provided below.
e.
The initial
subaccount balance for a Deposit Account held by an
Eligible Account Holder and Supplemental Eligible Account Holder,
if
any, shall be determined by multiplying the opening balance in
the
liquidation account by a fraction, of which the numerator is
the
amount of the Qualifying Deposits of such account holder and
the
denominator is the total amount of Qualifying Deposits of all
Eligible
Accoun
