PLAN OF REORGANIZATION AND STOCK ISSUANCE

EXHIBIT 2

PLAN OF REORGANIZATION

AND STOCK ISSUANCE

SUNSHINE SAVINGS BANK

Tallahassee, Florida

as adopted on:

January 29, 2008

and amended on

June 24, 2008

and further amended on

September 16, 2008

 

 

PLAN OF REORGANIZATION

AND STOCK ISSUANCE

SUNSHINE SAVINGS BANK

Tallahassee, Florida

TABLE OF CONTENTS

 

On January 29, 2008, the Board of Directors of Sunshine Savings Bank, Tallahassee, Florida (the "Bank") unanimously adopted this Plan of Reorganization and Stock Issuance  pursuant to which the Bank proposes to reorganize from a federally chartered mutual savings bank into a federally chartered mutual holding company structure (the "Reorganization") under the laws of the United States of America and the rules and regulations of the Office of Thrift Supervision ("OTS").  The Board of Directors amended the Plan of Reorganization and Stock Issuance  ^ on June 24, 2008 and again on September 16, 2008 (the "Plan") .  The Mutual Holding Company ("MHC") will be owned by, and exclusive voting rights will be vested in, the members of the Bank.  As part of the Reorganization, the Bank will convert to a federal stock savings bank (the "Stock Bank") and will establish a federal stock holding company (the "Stock Holding Company") that will be a majority-owned subsidiary of the MHC at all times so long as the MHC structure is maintained.  As part of the Reorganization and concurrently with it, the Stock Holding Company intends to undertake a stock issuance through the offering of up to 49% of its to be outstanding common stock (the “Common Stock”) in the stock offering (the "Stock Offering").  The remaining common stock to be outstanding will be issued to the MHC.  The corporate name of the Stock Bank, Stock Holding Company and MHC will be determined by the Board of Directors of the Bank and the principal office of each will be located in Tallahassee, Florida.

The Stock Offering provides that non-transferable subscription rights to purchase Stock Holding Company Common Stock will be offered first to Eligible Account Holders of record as of the Eligibility Record Date, then to the Bank's Tax-Qualified Employee Plans, then to Supplemental Eligible Account Holders of record as of the Supplemental Eligibility Record Date, and then to Other Members.  Concurrently with, at any time during, or promptly after the Subscription Offering, and on a lowest priority basis, an opportunity to subscribe may also be offered to the general public in a Direct Community Offering or a Public Offering.  The price of the Stock Holding Company Common Stock will be based upon an independent appraisal of the Bank.

The primary purpose of the Reorganization is to establish a holding company and federal stock savings bank charter, which will enable the Bank to expand and compete more effectively in the financial services industry.  The primary purpose of the Stock Offering is to provide for the sale of shares of Common Stock by the Stock Holding Company in order to raise capital for the expansion of the Bank’s business operations, including the acquisition of other financial institutions.  Less than a majority of the Common Stock will be offered for sale in the Stock Offering.

The Reorganization will structure the Bank in the stock form used by commercial banks, most major business corporations and a majority of savings institutions.  In addition, the use of the holding company structure will provide greater organizational and operating flexibility to the Bank.  Moreover, the formation of a mutual holding company will allow the MHC and/or the Stock Holding Company to borrow funds, on a secured or unsecured basis, and to issue debt to the public or in a private placement.  The proceeds of such borrowings or debt offering could be contributed to the Stock Bank to increase its capital or could be used by the MHC and/or the Stock Holding Company for other purposes.  There are currently no plans to issue debt or borrow

 

funds by the MHC or the Stock Holding Company.  No change will be made in the Board of Directors or management as a result of the Reorganization.

The Bank also is expected to benefit from its management and other personnel having a stock ownership in its business, since stock ownership is viewed as an effective performance incentive and a means of attracting, retaining and compensating management and other personnel. No change will be made in the Board of Directors or management as a result of the Reorganization.

The Reorganization is subject to the approval of the OTS and the affirmative vote of a majority of the total votes eligible to be cast by Voting Members of the Bank.

Account(s):   Withdrawable deposit(s) in the Bank, including certificates of deposit.

Acting in Concert:   The term "acting in concert" shall have the same meaning given it in Section 574.2(c) of the Regulations.  The determination under the Plan 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 of Directors and may be based on any evidence upon which such board or delegatee chooses to rely.

Affiliate:   An "affiliate" of, or a Person "affiliated" with, a specified Person, is a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, the Person specified.

Associate:   The term "associate," when used to indicate a relationship with any Person, means: (i) any corporation or organization (other than the Bank, the Stock Holding Company, the MHC or a majority-owned subsidiary of any of them) of which such Person is a director, officer or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities; (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a Director or Officer of the Bank, the MHC, the Stock Holding Company or any subsidiary of the MHC or the Stock Holding Company or any affiliate thereof; and (iv) any person acting in concert with any of the persons or entities specified in clauses (i) through (iii) above; provided, however, that any Tax-Qualified or Non-Tax-Qualified Employee Plan shall not be deemed to be an associate of any Director or Officer of the Bank, the MHC or the Stock Holding Company, to the extent provided herein.  When used to refer to a Person other than an Officer or Director of the Bank, the Bank in its sole discretion may determine the Persons that are Associates of other Persons.

Capital Stock :  Any and all authorized stock of the Stock Holding Company or the Stock Bank, as applicable.

 

 

Common Stock :  Common stock, par value $.01 per share, issued by the Stock Holding Company or the Stock Bank, as applicable, simultaneously with the Reorganization, pursuant to its stock charter.

Conversion Transaction:   Any transaction following the Reorganization in which the MHC converts to stock form in accordance with applicable law and the Regulations.

Deposit Account :  Any withdrawable or repurchasable Account or deposit in the Bank or, after the Reorganization, the Stock Bank, including savings accounts, demand accounts and certificates of deposit.

Depositor :  Any Person holding a Deposit Account in the Bank or, after the Reorganization, the Stock Bank.

Director :  A member of the Board of Directors of the Bank and, where applicable, a member of the Board of Directors of the MHC, the Stock Holding Company and the Stock Bank.

Effective Date :  The effective date of the Reorganization and Stock Offering, which shall be the date of consummation of the Reorganization and Stock Offering in accordance with this Plan and all applicable approvals.

Eligible Account Holder:   Any Person (or Persons acting through a single account) holding a Qualifying Deposit in the Bank on the Eligibility Record Date.

Eligibility Record Date:   The close of business on December 31, 2006.

ESOP:   The Bank's employee stock ownership plan.

Exchange Act:   The Securities Exchange Act of 1934, as amended.

FDIC : Federal Deposit Insurance Corporation.

HOLA : The Home Owner's Loan Act, as amended.

Independent Appraiser :  The appraiser retained by the Bank to prepare the appraisal of the pro forma market value of the Bank and the Stock Holding Company.

Market Maker:   A dealer (i.e., any Person who engages directly or indirectly as agent, broker or principal in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another Person) who, with respect to a particular security: (i) regularly publishes bona fide, competitive bid and offer quotations in a recognized inter-dealer quotation system; or (ii) furnishes bona fide competitive bid and offer quotations on request; and (iii) is ready, willing, and able to effect transactions in reasonable quantities at his quoted prices with other brokers or dealers.

 

 

Marketing Agent:   The broker-dealer responsible for organizing and managing the Stock Offering and sale of the Common Stock.

Members :  Any Person that is entitled under the charter of the Bank to vote on matters affecting the Bank, including the Plan and the Reorganization.

MHC :  Sunshine Savings MHC, the mutual holding company established by the Bank incident to the Reorganization.

Minority Ownership Interest:   The shares of the Stock Holding Company's Common Stock owned by persons other than the MHC, expressed as a percentage of the total shares of Stock Holding Company Common Stock outstanding.

Minority Stock Offering :  One or more offerings of less than 50% in the aggregate of the outstanding Common Stock of the Stock Holding Company to Persons other than the MHC.

Minority Stockholder:   Any owner of the Stock Holding Company's Common Stock, other than the MHC.

Mutual Holding Company Application s:  The applications and notices  to be filed with the OTS by the Bank,  Stock Holding Company and MHC requesting approval of the reorganization of the Bank into the mutual holding company form of organization and the MHC's and Stock Holding Company's acquisition of control of the Stock Bank.

Non-Tax-Qualified Employee Plan:   Any defined benefit plan or defined contribution plan of the Bank or the Stock Holding Company, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which with its related trust does not meet the requirements to be "qualified" under Section 401 of the Internal Revenue Code.

Non-Voting Stock:   Any Capital Stock other than Voting Stock.

Notice of Reorganization:   The Notice of MHC Reorganization to be submitted by the Bank to the OTS to notify it of the Reorganization.

Notice of Stock Issuance:   The Notice of Stock Issuance to be submitted by the Bank to the OTS to notify it of the Stock Offering.

Officer :  An executive officer of the Bank which includes the Chief Executive Officer, President, Executive Vice Presidents and Senior Vice Presidents in charge of principal business functions, and any other person participating in major policy making functions of the Bank.

Order Form:   Form to be used in the Subscription Offering to exercise subscription rights.

Other Members:   Members of the Bank, other than Eligible Account Holders, Tax-Qualified Employee Plans or Supplemental Eligible Account Holders, as of the Voting Record Date.

 

 

OTS :  Office of Thrift Supervision, Department of the Treasury, and its successors.

Parent:   A company that controls another company, either directly or indirectly through one or more subsidiaries.

Person :  Any individual, a corporation, a partnership, an association, a joint-stock company, a trust (including Individual Retirement Accounts and KEOGH Accounts), any unincorporated organization, a government or political subdivision thereof or any other entity.

Plan :  This Plan of Reorganization and Stock Issuance of the Bank as it exists on the date hereof and as it may hereafter be amended in accordance with its terms.

Public Offering:   The offering for sale through the Underwriters to selected members of the general public of any shares of Stock Holding Company Common Stock not subscribed for in the Subscription Offering or the Direct Community Offering, if any.

Public Offering Price:   The price per share at which any unsubscribed shares of Stock Holding Company Common Stock are initially offered for sale in the Public Offering.

Qualifying Deposit:   The aggregate balance of $50 or more of each Deposit Account of an Eligible Account Holder or of a Supplemental Eligible Account Holder.

Registration Statement:   Form SB-2 Registration Statement to be filed with the SEC for registration of the shares offered in the Stock Issuance.

Regulations :   The rules and regulations of the OTS.

Reorganization :  Collectively, all steps necessary for the Bank to reorganize into the mutual holding company form of organization in accordance with the Plan, the HOLA and Part 575 of the Regulations.

Residence:   The terms "residence," "reside," "resided" or "residing" as used herein with respect to any person shall mean any person who occupied a dwelling in the communities in which the Bank does business, has an intent to remain with such communities for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence within such communities together with an indication that such presence within such communities is something other than merely transitory in nature.  To the extent the Person is a corporation or other business entity, the principal place of business or headquarters shall be in these communities.  To the extent a person is a personal benefit plan, the circumstances of the beneficiary shall apply with respect to this definition.  In the case of all other benefit plans, the circumstances of the trustee shall be examined for purposes of this definition.  The Bank may utilize deposit or loan records or such other evidence provided to it to make a determination as to whether a person is a resident.  In all cases, however, such a determination shall be in the sole discretion of the Bank.

SEC:   U.S. Securities and Exchange Commission.

 

 

Special Meeting of Members :  The special meeting and any adjournments thereof held to consider and vote upon this Plan, including the Reorganization and the Stock Offering.

Stock Bank :  The newly organized federally chartered stock savings bank subsidiary of the Stock Holding Company resulting from the Reorganization.

Stock Holding Company :  Sunshine Financial, Inc., the federal stock corporation, initially wholly-owned by the MHC, which is being formed for the purpose of initially owning 100% of the Common Stock of the Stock Bank.

Stock Offering :  The offering of Common Stock of the Stock Holding Company to Persons other than the MHC, in a Subscription Offering and, to the extent shares remain available, in a Direct Community Offering or otherwise.

Subscription Offering :  The offering of Common Stock of the Stock Holding Company for subscription and purchase pursuant to this Plan.

Subsidiary :  Any company, a majority of whose voting stock is indirectly or directly owned, controlled or held with power to vote by another company.

Supplemental Eligible Account Holder:   Any Person (or Persons acting through a single account) holding a Qualifying Deposit on the Supplemental Eligibility Record Date, who is not an Officer or Director of the Bank, or an Associate of an Officer or Director of the Bank.

Supplemental Eligible Record Date:   The last day of the calendar quarter before approval of the Plan by the OTS.

Tax-Qualified Employee Plans :  Any defined benefit plan or defined contribution plan of the Bank or the Stock Holding Company, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which with its related trust meets the requirements to be "qualified" under Section 401 of the Internal Revenue Code, as amended.

Underwriters :  The investment banking firm or firms agreeing to offer and sell Stock Holding Company Common Stock in the Public Offering.

Voting Members :  Those Persons eligible to vote at meetings of Members of the Bank pursuant to the Bank's charter and bylaws.

Voting Record Date:   The date established by the Board of Directors of the Bank in accordance with the Regulations for determining eligibility to vote at the Special Meeting of Members.

Voting Stock:   Common or preferred stock, or similar interests if the shares by statute, charter or in any manner, entitle the holder to: (i) vote for or to select directors of the Stock Bank or the Stock Holding Company; and (ii) vote on or direct the conduct of the operations or other significant policies of the Stock Bank or the Stock Holding Company.  Notwithstanding anything in paragraph (1) above, preferred stock is not "Voting Stock" if: (i) voting rights associated with

 

 

the preferred stock are limited solely to the type customarily provided by statute with regard to matters that would significantly and adversely affect the rights or preferences of the preferred stock, such as the issuance of additional amounts or classes of senior securities, the modification of the terms of the preferred stock, the dissolution of the Stock Bank, or the payment of dividends by the Stock Bank when preferred dividends are in arrears; (ii) the preferred stock represents an essentially passive investment or financing device and does not otherwise provide the holder with control over the issuer; and (iii) the preferred stock does not at the time entitle the holder, by statute, charter, or otherwise, to select or to vote for the selection of directors of the Stock Bank or the Stock Holding Company.  Notwithstanding anything in paragraphs (1) and (2) above, "Voting Stock" shall be deemed to include preferred stock and other securities that, upon transfer or otherwise, are convertible into Voting Stock or exercisable to acquire Voting Stock where the holder of the stock, convertible security or right to acquire Voting Stock has the preponderant economic risk in the underlying Voting Stock.  Securities immediately convertible into Voting Stock at the option of the holder without payment of additional consideration shall be deemed to constitute the Voting Stock into which they are convertible; other convertible securities and rights to acquire Voting Stock shall not be deemed to vest the holder with the preponderant economic risk in the underlying Voting Stock if the holder has paid less than 50% of the consideration required to directly acquire the Voting Stock and has no other economic interest in the underlying Voting Stock.

III.           Plan of Reorganization

Pursuant to Section 10(o) of the HOLA and 12 C.F.R. Part 575 of the Regulations, the Reorganization will be accomplished in accordance with the procedures set forth in this Plan, the Regulations  and as otherwise may be required by the OTS.

A principal part of the Reorganization will be the formation of the Stock Bank.  As a result of the Reorganization, the Stock Holding Company will own 100% of the Stock Bank's Voting Stock.  At the completion of the Reorganization, the MHC will own a majority interest in the Stock Holding Company's Voting Stock. Thereafter, the MHC will own a majority interest in the Stock Holding Company and the Stock Bank at all times, for as long as the MHC remains in the mutual form of organization.

The Reorganization will be effected as follows, or in any manner approved by the Board of Directors of the Bank and the OTS that is consistent with the purposes of this Plan and applicable laws and regulations:

 

 

Contemporaneously with the Reorganization, the Stock Holding Company will offer for sale in the Stock Offering shares of Common Stock based on the pro forma market value of the Stock Holding Company and the Bank.

Upon consummation of the Reorganization, the legal existence of the Bank will not terminate, but the converted Stock Bank will be a continuation of the Bank, and all property of the Bank, including its right, title and interest in and to all property of whatsoever kind and nature, interest and asset of every conceivable value or benefit then existing or pertaining to the Bank, or which would inure to the Bank immediately by operation of law and without the necessity of any conveyance or transfer and without any further act or deed, will vest in the Stock Bank.  The Stock Bank will have, hold and enjoy the same in its right and fully to the same extent as the same was possessed, held and enjoyed by the Bank.  The Stock Bank will continue to have, succeed to, and be responsible for all rights, liabilities and obligations of the Bank and will maintain its headquarters operations at the Bank's present location.

In connection with the Reorganization, the Bank will apply to the OTS to have the Stock Holding Company retain up to 50% of the net proceeds of the Stock Offering, or such other amount as may be determined by the board of the Bank.  The Stock Bank may distribute additional capital to the Stock Holding Company following the Reorganization, subject to the Regulations governing capital distributions.  The Stock Holding Company will have the power to issue shares of Capital Stock to Persons other than the MHC.  However, so long as the MHC is in existence, the MHC will be required to own at least a majority of the Voting Stock of the Stock Holding Company.  The Stock Holding Company may issue any amount of non-Voting Stock to Persons other than the MHC.  The Stock Holding Company will be authorized to

 

undertake one or more Minority Stock Offerings of less than 50% in the aggregate of the total outstanding Common Stock of the Stock Holding Company, and the Stock Holding Company intends to offer for sale up to 49% of its Common Stock in the Stock Offering.  The Bank believes that capitalization of the MHC and the Stock Holding Company will provide the MHC and the Stock Holding Company with economic strength separate and apart from the Stock Bank and could facilitate future activities by the MHC and the Stock Holding Company.

Each Deposit Account in the Bank on the Effective Date will remain a Deposit Account in the Stock Bank in the same amount and upon the same terms and conditions, and will continue to be federally insured up to the legal maximum by the FDIC in the same manner as the Deposit Account existed in the Bank immediately prior to the Reorganization.  Upon consummation of the Reorganization, all loans and other borrowings from the Bank shall retain the same status with the Stock Bank after the Reorganization as they had with the Bank immediately prior to the Reorganization.

Upon completion of the Reorganization the Stock Bank will be authorized to exercise any and all powers, rights and privileges of, and will be subject to all limitations applicable to, capital stock savings banks under federal law.  The proposed charter and bylaws of the Stock Bank, which are attached hereto as Exhibits A -1 and A-2, respectively, are made a part of this Plan.  The Reorganization will not result in any reduction of the amount of retained earnings (other than the assets of the Bank retained by or distributed to the Stock Holding Company or the MHC), undivided profits, and general loss reserves that the Bank had prior to the Reorganization.  Such retained earnings and general loss reserves will be accounted for by the MHC, the Stock Holding Company and the Stock Bank on a consolidated basis in accordance with generally accepted accounting principles.

The initial members of the Board of Directors of the Stock Bank will be the members of the existing Board of Directors of the Bank.  The Stock Bank will be wholly owned by the Stock Holding Company.  The Stock Holding Company will be wholly owned by its stockholders, who will consist of the MHC and the Persons who purchase Common Stock in the Stock Offering and any subsequent Minority Stock Offering.  Upon the Effective Date of the Reorganization, the voting and membership rights of Members will be transferred to the MHC, subject to the conditions specified below.

The Stock Holding Company will be authorized to exercise any and all powers, rights and privileges, and will be subject to all limitations applicable to savings and loan holding companies and mutual holding companies under federal law and regulations. The initial members of the Board of Directors of the Stock Holding Company will be the members of the existing Board of Directors of the Bank.  Thereafter, the voting stockholders of the Stock Holding Company will elect approximately one-third of the Stock Holding Company's directors annually.  The proposed charter and bylaws of the Stock Holding Company, which are attached as Exhibits B -1 and B-2, respectively, are made part of this Plan.

 

 

 

The Stock Holding Company will have the power to issue shares of Capital Stock to Persons other than the MHC.  However, so long as the MHC is in existence, the MHC will be required to own at least a majority of the Voting Stock of the Stock Holding Company.  The Stock Holding Company may issue any amount of non-Voting Stock to Persons other than the MHC.  The Stock Holding Company will be authorized to undertake one or more Minority Stock Offerings of less than 50% in the aggregate of the total outstanding Common Stock of the Stock Holding Company, and the Stock Holding Company intends to offer for sale up to 49% of its Common Stock in the Stock Offering.

As a mutual corporation, the MHC will have no stockholders.  The members of the MHC will have exclusive voting authority as to all matters requiring a vote of members under the charter of the MHC.  Persons who have membership rights with respect to the Bank under its existing charter immediately prior to the Reorganization shall continue to have such rights solely with respect to the MHC after the Reorganization, so long as such Persons remain depositors of the Stock Bank after the Reorganization.  In addition, all Persons who become Depositors of the Stock Bank following the Reorganization will have membership rights with respect to the MHC.  The rights and powers of the members of the MHC will be defined by the MHC's charter and bylaws, applicable law and the Regulations.  The MHC's charter and bylaws, which are attached as Exhibits C-1 and C-2, respectively, are made a part hereof.  In particular, the MHC shall be subject to the limitations and restrictions imposed on savings and loan holding companies by Section 10(o)(5) of the HOLA.

The initial members of the Board of Directors of the MHC will be the members of the existing Board of Directors of the Bank.  Thereafter, approximately one-third of the directors of the MHC will be elected annually by the members of the MHC who will consist of certain of the former Members of the Bank and all Persons who become Depositors of the Stock Bank after the Reorganization.

 

 

Consummation of the Reorganization is expressly conditioned upon the following: