Attached files
file | filename |
---|---|
S-1/A - FORM S-1/A - Oneida Financial Corp. | g22285a1sv1za.htm |
EX-8 - EX-8 - Oneida Financial Corp. | g22285a1exv8.htm |
EX-3.1 - EX-3.1 - Oneida Financial Corp. | g22285a1exv3w1.htm |
EX-99.4 - EX-99.4 - Oneida Financial Corp. | g22285a1exv99w4.htm |
EX-99.5 - EX-99.5 - Oneida Financial Corp. | g22285a1exv99w5.htm |
EX-23.2 - EX-23.2 - Oneida Financial Corp. | g22285a1exv23w2.htm |
EX-10.12 - EX-10.12 - Oneida Financial Corp. | g22285a1exv10w12.htm |
Exhibit 2
PLAN OF CONVERSION AND REORGANIZATION
OF
ONEIDA FINANCIAL, MHC
TABLE OF CONTENTS
1. INTRODUCTION |
1 | |||
2. DEFINITIONS |
1 | |||
3. PROCEDURES FOR CONVERSION |
8 | |||
4. HOLDING COMPANY APPLICATIONS AND APPROVALS |
10 | |||
5. SALE OF SUBSCRIPTION SHARES |
10 | |||
6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES |
11 | |||
7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY |
12 | |||
8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY) |
12 | |||
9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY) |
13 | |||
10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD
PRIORITY) |
13 | |||
11. SUBSCRIPTION RIGHTS OF OTHER DEPOSITORS (FOURTH PRIORITY) |
14 | |||
12. COMMUNITY OFFERING |
14 | |||
13. SYNDICATED COMMUNITY OFFERING |
15 | |||
14. LIMITATIONS ON PURCHASES |
16 | |||
15. PAYMENT FOR SUBSCRIPTION SHARES |
17 | |||
16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS |
18 | |||
17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT |
19 | |||
18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES |
19 | |||
19. ESTABLISHMENT OF LIQUIDATION ACCOUNT |
20 | |||
20. VOTING RIGHTS OF STOCKHOLDERS |
22 | |||
21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION |
22 | |||
22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE
CONVERSION |
23 | |||
23. TRANSFER OF DEPOSIT ACCOUNTS |
23 | |||
24. REGISTRATION AND MARKETING |
24 | |||
25. TAX RULINGS OR OPINIONS |
24 | |||
26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS |
24 | |||
27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY |
25 | |||
28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK |
26 | |||
29. ARTICLES OF INCORPORATION AND BYLAWS |
26 | |||
30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE |
26 | |||
31. EXPENSES OF CONVERSION |
27 | |||
32. AMENDMENT OR TERMINATION OF PLAN |
27 | |||
33. CONDITIONS TO CONVERSION |
27 | |||
34. INTERPRETATION |
28 |
(i)
EXHIBIT A | FORM OF AGREEMENT OF MERGER BETWEEN ONEIDA FINANCIAL, MHC AND ONEIDA FINANCIAL CORP. |
EXHIBIT B | FORM OF AGREEMENT OF MERGER BETWEEN ONEIDA FINANCIAL CORP. (FEDERAL) AND ONEIDA FINANCIAL CORP. (MARYLAND) |
(ii)
PLAN OF CONVERSION AND REORGANIZATION OF
ONEIDA FINANCIAL, MHC
ONEIDA FINANCIAL, MHC
1. | INTRODUCTION |
This Plan of Conversion and Reorganization (the Plan) provides for the conversion of Oneida
Financial, MHC, a federal mutual holding company (the Mutual Holding Company), into the capital
stock form of organization. The Mutual Holding Company currently owns a majority of the common
stock of Oneida Financial Corp., a federal stock corporation (the Mid-Tier Holding Company) which
owns 100% of the common stock of The Oneida Savings Bank (the Bank), a New York-chartered stock
savings bank. A new stock holding company (the Holding Company) will be established as part of
the Conversion and will succeed to all the rights and obligations of the Mutual Holding Company and
the Mid-Tier Holding Company and will issue Holding Company Common Stock in the Conversion. The
purpose of the Conversion is to convert the Mutual Holding Company to the capital stock form of
organization which will provide the Bank and the Holding Company with additional capital to grow
and to respond to changing regulatory and market conditions. The Conversion will also provide the
Bank and the Holding Company with greater flexibility to effect corporate transactions, including
mergers, acquisitions and branch expansions. The Holding Company Common Stock will be offered in
the Offering upon the terms and conditions set forth herein. The subscription rights granted to
Participants in the Subscription Offering are set forth in Sections 8 through 11 hereof. All sales
of Holding Company Common Stock in the Community Offering, in the Syndicated Community Offering, or
in any other manner permitted by the Bank Regulators, will be at the sole discretion of the Board
of Directors of the Bank and the Holding Company. As part of the Conversion, each Minority
Stockholder will receive Holding Company Common Stock in exchange for Minority Shares. The
Conversion will have no impact on depositors, borrowers or other customers of the Bank. After the
Conversion, the Banks insured deposits will continue to be insured by the FDIC to the extent
provided by applicable law.
This Plan has been adopted by the Boards of Directors of the Mutual Holding Company, the
Mid-Tier Holding Company and the Bank. This Plan also must be approved by at least (i) a majority
of the total votes eligible to be cast by Voting Depositors at the Special Meeting of Depositors,
(ii) two-thirds of the total votes eligible to be cast by Stockholders at the Meeting of
Stockholders, and (iii) a majority of the total votes eligible to be cast by the Minority
Stockholders at the Meeting of Stockholders. Approval of the Plan by the Voting Depositors shall
constitute approval of the MHC Merger and the Mid-Tier Merger by Voting Depositors in their
capacity as members of the Mutual Holding Company. The OTS must approve this Plan before it is
presented to Voting Depositors and Stockholders of the Mid-Tier Holding Company for their approval.
2. | DEFINITIONS |
For the purposes of this Plan, the following terms have the following meanings:
Account Holder Any Person holding a Deposit Account in the Bank.
Acting in Concert The term 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 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.
Affiliate Any Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with another Person.
Appraised Value Range The range of the estimated consolidated pro forma market value of the
Holding Company, which shall also be equal to the estimated pro forma market value of the total
number of shares of Conversion Stock to be issued in the Conversion, as determined by the
Independent Appraiser prior to the Subscription Offering and as it may be amended from time to time
thereafter. The maximum and minimum of the Appraised Value Range may vary as much as 15% above and
15% below, respectively, the midpoint of the Appraised Value Range.
Articles of Combination The Articles of Combination filed with the OTS and any similar
documents filed with the Bank Regulators in connection with the consummation of any merger relating
to the Conversion.
Articles of Merger The Articles of Merger filed with the Maryland State Department of
Assessments and Taxation and any similar documents in connection with the consummation of any
merger relating to the Conversion.
Associate The term Associate when used to indicate a relationship with any Person, means (i)
any corporation or organization (other than the Mutual Holding Company, the Mid-Tier Holding
Company, the Bank or a majority-owned subsidiary of the Mutual Holding Company, the Mid-Tier
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) any 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 except that for the
purposes of this Plan relating to subscriptions in the Offering and the sale of Subscription Shares
following the Conversion, a Person who has a substantial beneficial interest in any
Non-Tax-Qualified Employee Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan, or
who is a trustee or fiduciary of such plan, is not an Associate of such plan, and except that, for
purposes of aggregating total shares that may be held by Officers and Directors the term
Associate does not include any Tax-Qualified Employee Stock Benefit Plan, and (iii) any person
who is related by blood or marriage to such person and (A) who lives in the same home as such
person or (B) who is a Director or Officer of the Mutual Holding Company, the Mid-Tier Holding
Company, the Bank or the Holding Company, or any of their parents or subsidiaries.
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Bank The Oneida Savings Bank, Oneida, New York.
Bank Liquidation Account The account established by the Bank representing the liquidation
interests received by Eligible Account Holders and Supplemental Eligible Account Holders in
connection with the Conversion.
Bank Regulators The OTS and other bank regulatory agencies, if any, responsible for
reviewing and approving the Conversion, including the ownership of the Bank by the Holding Company
and the mergers required to effect the Conversion.
Code The Internal Revenue Code of 1986, as amended.
Community New York counties of Chenango, Cortland, Herkimer, Lewis, Madison, Oneida,
Onondaga, Oswego and Otsego.
Community Offering The offering of Subscription Shares not subscribed for in the
Subscription Offering for sale to certain members of the general public directly by the Holding
Company. The Community Offering may occur concurrently with the Subscription Offering and any
Syndicated Community Offering.
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 or policies of a Person, whether through the ownership of voting securities, by contract
or otherwise as described in 12 C.F.R. Part 574.
Conversion The conversion and reorganization of the Mutual Holding Company to stock form
pursuant to this Plan, and all steps incident or necessary thereto, including the Offering and the
Exchange Offering.
Conversion Stock The Subscription Shares and the Exchange Shares.
Deposit Account Any withdrawable account, including, without limitation, savings, time,
demand, NOW accounts, money market, certificate and passbook accounts.
Director A member of the Board of Directors of the Bank, the Mid-Tier Holding Company or the
Holding Company, or a member of the Board of Directors of the Mutual Holding Company, as
appropriate in the context.
Eligible Account Holder Any Person holding a Qualifying Deposit on the Eligibility Record
Date for purposes of determining subscription rights and establishing subaccount balances in the
Liquidation Account.
Eligibility Record Date The date for determining Eligible Account Holders of the Bank, which
is December 31, 2008.
Employees All Persons who are employed by the Bank, the Mid-Tier Holding Company, the
Holding Company or the Mutual Holding Company.
3
Employee Plans Any one or more Tax-Qualified Employee Stock Benefit Plans of the Bank or the
Holding Company, including any ESOP and 401(k) Plan.
ESOP The Banks Employee Stock Ownership Plan and related trust.
Exchange Offering The offering of Holding Company Common Stock to Minority Stockholders in
exchange for Minority Shares.
Exchange Ratio The rate at which shares of Holding Company Common Stock are exchanged for
Minority Shares upon consummation of the Conversion. The Exchange Ratio shall be determined as of
the closing of the Conversion and shall be the rate that will result in the Minority Stockholders
owning in the aggregate the same percentage of the outstanding shares of Holding Company Common
Stock immediately upon completion of the Conversion as the percentage of Mid-Tier Holding Company
common stock owned by them in the aggregate immediately prior to the consummation of the
Conversion.
Exchange Shares The shares of Holding Company Common Stock issued to Minority Stockholders
in the Exchange Offering.
FDIC The Federal Deposit Insurance Corporation.
Holding Company The Maryland corporation formed for the purpose of acquiring all of the
shares of capital stock of the Bank in connection with the Conversion. Shares of Holding Company
Common Stock will be issued in the Conversion to Participants, Minority Stockholders and others in
the Conversion.
Holding Company Common Stock The common stock, par value $0.01 per share, of the Holding
Company.
New York Department The New York State Banking Department.
Independent Appraiser The appraiser retained by the Mutual Holding Company, Mid-Tier Holding
Company and the Bank to prepare an appraisal of the pro forma market value of the Holding Company.
Liquidation Account The account established by the Holding Company representing the
liquidation interests received by Eligible Account Holders and Supplemental Eligible Account
Holders in connection with the Conversion in exchange for their interests in the Mutual Holding
Company immediately prior to the Conversion.
Majority Ownership Interest A fraction, the numerator of which is equal to the number of
shares of MidTier Holding Company common stock owned by the Mutual Holding Company immediately
prior to the completion of the Conversion, and the denominator of which is equal to the total
number of shares of MidTier Holding Company common stock issued and outstanding immediately prior
to the completion of the Conversion.
Meeting of Stockholders The special or annual meeting of stockholders of the Mid-Tier
Holding Company and any adjournments thereof held to consider and vote upon this Plan.
4
Member Any Person who qualifies as a member of the Mutual Holding Company pursuant to its
charter, which shall consist of all holders of savings, demand or other authorized accounts of the
Bank.
MHC Merger The merger of the Mutual Holding Company with and into the Mid-Tier Holding
Company, which shall occur immediately prior to completion of the Conversion as set forth in this
Plan.
Mid-Tier Holding Company Oneida Financial Corp., the federal corporation that owns 100% of
the Banks common stock, and any successor thereto.
Mid-Tier Merger The merger of the Mid-Tier Holding Company with the Holding Company with the
Holding Company as the resulting entity, which merger shall occur immediately following the MHC
Merger and prior to the completion of the Conversion as set forth in this Plan.
Minority Shares Any outstanding common stock of the Mid-Tier Holding Company, or shares of
common stock of the Mid-Tier Holding Company issuable upon the exercise of options or grant of
stock awards, owned by persons other than the Mutual Holding Company.
Minority Stockholder Any owner of Minority Shares.
Mutual Holding Company Oneida Financial, MHC, the mutual holding company of the Mid-Tier
Holding Company.
Offering The offering and issuance, pursuant to this Plan, of Holding Company Common Stock
in a Subscription Offering, Community Offering and/or Syndicated Community Offering, as the case
may be. The term Offering does not include Holding Company Common Stock issued in the Exchange
Offering.
Offering Range The range of the number of shares of Holding Company Common Stock offered for
sale in the Offering multiplied by the Subscription Price. The Offering Range shall be equal to
the Appraised Value Range multiplied by the Majority Ownership Interest. The maximum and minimum
of the Offering Range may vary as much as 15% above and 15% below, respectively, the midpoint of
the Offering Range.
Officer The term Officer means the president, any vice-president (but not an assistant
vice-president, second vice-president, or other vice president having authority similar to an
assistant or second vice-president), the secretary, the treasurer, the comptroller, and any other
person performing similar functions with respect to any organization whether incorporated or
unincorporated. The term Officer also includes the chairman of the Board of Directors if the
chairman is authorized by the charter or bylaws of the organization to participate in its operating
management or if the chairman in fact participates in such management.
Order Form Any form (together with any cover letter and acknowledgments) sent to any
Participant or Person containing among other things a description of the alternatives available to
such Person under the Plan and by which any such Person may make elections regarding subscriptions
for Subscription Shares.
5
Other Depositor A Voting Depositor who is not an Eligible Account Holder or Supplemental
Eligible Account Holder.
OTS The Office of Thrift Supervision, a bureau of the United States Department of Treasury,
or any successor thereto.
Participant Any Eligible Account Holder, Employee Plan, Supplemental Eligible Account Holder
or Other Depositor.
Person An individual, a corporation, a partnership, an association, a joint-stock company, a
limited liability company, a trust, an unincorporated organization, or a government or political
subdivision of a government.
Plan This Plan of Conversion and Reorganization of the Mutual Holding Company as it exists
on the date hereof and as it may hereafter be amended in accordance with its terms.
Prospectus The one or more documents used in offering the Conversion Stock.
Qualifying Deposit 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, or (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. The term Qualifying Deposit shall also include the aggregate balance of all
Deposit Accounts of not less than $50 held by Persons at the close of business on the Eligbility
Record Date or Supplemental Eligibility Record Date in any entity merged with the Bank, the
Mid-Tier Holding Company or the Mutual Holding Company prior to the closing of the Conversion,
which merger would result in such Persons having the subscription rights of an Eligible Account
Holder or Supplemental Eligible Account Holder under applicable rules of the Banking Regulators.
Resident Any Person who occupies a dwelling within the Community, has a present intent to
remain within the Community for a period of time, and manifests the genuineness of that intent by
establishing an ongoing physical presence within the Community together with an indication that
such presence within the Community is something other than merely transitory in nature. To the
extent the Person is a corporation or other business entity, to be a Resident the principal place
of business or headquarters of the corporation or business entity must be in the Community. 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, circumstances of the trustee
shall be examined for purposes of this definition. The Mutual Holding Company and 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 Mutual Holding Company and the Bank. A Participant must be a Resident for
purposes of determining whether such Person resides in the Community as such term is used in this
Plan.
SEC The United States Securities and Exchange Commission.
6
Special Meeting of Depositors The special or annual meeting of Voting Depositors and any
adjournments thereof held to consider and vote upon this Plan.
Stockholder Any owner of outstanding common stock of the Mid-Tier Holding Company, including
the Mutual Holding Company.
Subscription Offering The offering of Subscription Shares to Participants.
Subscription Price The price per Subscription Share to be paid by Participants and others in
the Offering. The Subscription Price will be determined by the Board of Directors of the Holding
Company and fixed prior to the commencement of the Subscription Offering.
Subscription Shares Shares of Holding Company Common Stock offered for sale in the Offering.
Subscription Shares do not include shares of Holding Company Common Stock issued in exchange for
Minority Shares in the Exchange Offering.
Supplemental Eligible Account Holder Any Person, other than Directors and Officers of the
Mutual Holding Company, the Bank and the Mid-Tier Holding Company (unless the OTS grants a waiver
permitting a Director or Officer to be included) and their Associates, holding a Qualifying Deposit
on the Supplemental Eligibility Record Date, who is not an Eligible Account Holder.
Supplemental Eligibility Record Date The date for determining Supplemental Eligible Account
Holders, which shall be the last day of the calendar quarter preceding OTS approval of the
application for conversion. The Supplemental Eligibility Record Date will only occur if the OTS
has not approved the Conversion within 15 months after the Eligibility Record Date.
Syndicated Community Offering The offering, at the sole discretion of the Holding Company,
of Subscription Shares not subscribed for in the Subscription Offering and the Community Offering,
to members of the general public through a syndicate of broker-dealers. The Syndicated Community
Offering may occur concurrently with the Subscription Offering and any Community Offering.
Tax-Qualified Employee Stock Benefit Plan Any defined benefit plan or defined contribution
plan, 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. The Bank may make scheduled discretionary contributions to a
tax-qualified employee stock benefit plan, provided such contributions do not cause the Bank to
fail to meet its regulatory capital requirements. A Non-Tax-Qualified Employee Stock Benefit
Plan is any defined benefit plan or defined contribution plan which is not so qualified.
Voting Depositor Any Person holding a Deposit Account in the Bank as of the Voting Record
Date.
Voting Record Date The date fixed by the Directors for determining eligibility to vote at
the Special Meeting of Depositors and/or the Meeting of Stockholders.
7
3. | PROCEDURES FOR CONVERSION |
A. After approval of the Plan by the Boards of Directors of the Bank, the Mid-Tier Holding
Company and the Mutual Holding Company, the Plan together with all other requisite material shall
be submitted to the Bank Regulators for approval. Notice of the adoption of the Plan by the Boards
of Directors of the Bank, the Mutual Holding Company and the Mid-Tier Holding Company will be
published in a newspaper having general circulation in each community in which an office of the
Bank is located, and copies of the Plan will be made available at each office of the Bank for
inspection by members. The Mutual Holding Company will publish a notice of the filing with the
Bank Regulators of an application to convert in accordance with the provisions of the Plan as well
as notices required in connection with any holding company, merger or other applications required
to complete the Conversion.
B. Promptly following approval by the Bank Regulators, the Plan will be submitted to a vote of
the Voting Depositors at the Special Meeting of Depositors and of the Stockholders of the Mid-Tier
Holding Company at the Meeting of Stockholders. The Mutual Holding Company will mail to all Voting
Depositors, at their last known address appearing on the records of the Bank, a proxy statement in
either long or summary form describing the Plan, which will be submitted to a vote of Voting
Depositors at the Special Meeting of Depositors. The Mid-Tier Holding Company will mail to all
Minority Stockholders a proxy statement describing the Plan, which will be submitted to a vote of
Stockholders at the Meeting of Stockholders. The Holding Company also will mail to all Participants
a Prospectus and Order Form for the purchase of Subscription Shares. In addition, all Participants
will receive, or will be given the opportunity to request by either telephone or by letter
addressed to the Banks Secretary, a copy of the Plan as well as the articles of incorporation or
bylaws of the Holding Company. The Plan must be approved by at least (i) a majority of the total
votes eligible to be cast by Voting Depositors at the Special Meeting of Depositors, (ii)
two-thirds of the total votes eligible to be cast by the Stockholders at the Meeting of
Stockholders, and (iii) a majority of the total votes eligible to be cast by the Minority
Stockholders at the Meeting of Stockholders. Upon such approval of the Plan, the Mutual Holding
Company, the Holding Company and the Mid-Tier Holding Company will take all other necessary steps
pursuant to applicable laws and regulations to consummate the Conversion. The Conversion must be
completed within 24 months of the approval of the Plan by Voting Depositors, unless a longer time
period is permitted by governing laws and regulations.
C. The period for the Subscription Offering will be not less than 20 days nor more than 45
days from the date Participants are first mailed a Prospectus and Order Form, unless extended. Any
shares of Holding Company Common Stock for which subscriptions have not been received in the
Subscription Offering may be issued in a Community Offering, a Syndicated Community Offering, or in
any other manner permitted by the Bank Regulators. All sales of shares of Holding Company Common
Stock must be completed within 45 days after the last day of the Subscription Offering, unless the
offering period is extended by the Mutual Holding Company and the Holding Company with the approval
of the Bank Regulators.
D. The Conversion will be effected as follows, or in any other manner that is consistent with
the purposes of this Plan and applicable laws and regulations. The choice of which method to use
to effect the Conversion will be made by the Board of Directors of the Mutual Holding Company, the
Mid-Tier Holding Company and the Bank immediately prior to
8
the closing of the Conversion. Each of the steps set forth below shall be deemed to occur in
such order as is necessary to consummate the Conversion pursuant to the Plan, the intent of the
Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding Company and the Bank, and
applicable federal and state regulations and policy. Approval of the Plan by Voting Depositors and
Stockholders of the Mid-Tier Holding Company also shall constitute approval of each of the
transactions necessary to implement the Plan.
(1) | The Holding Company will be organized as a first-tier stock subsidiary of the Mid-Tier Holding Company. | ||
(2) | The Mutual Holding Company will merge with and into the Mid-Tier Holding Company with the Mid-Tier Holding Company as the resulting entity (the MHC Merger) pursuant to the Agreement of Merger attached hereto as Exhibit A, whereby the shares of Mid-Tier Holding Company common stock held by the Mutual Holding Company will be canceled and Members of the Mutual Holding Company will constructively receive liquidation interests in the Mid-Tier Holding Company in exchange for their ownership interests in the Mutual Holding Company. | ||
(3) | Immediately after the MHC Merger, the Mid-Tier Holding Company will merge with the Holding Company with the Holding Company as the resulting entity (the Mid-Tier Merger) pursuant to the Agreement of Merger attached hereto as Exhibit B, whereby the Bank will become the wholly-owned subsidiary of the Holding Company. As part of the Mid-Tier Merger, the liquidation interests in Mid-Tier Holding Company constructively received by the Members of the Mutual Holding Company as part of the MHC Merger will automatically, without further action on the part of the holders thereof, be exchanged for an interest in the Liquidation Account, and each of the Minority Shares shall automatically, without further action on the part of the holders thereof, be converted into and become the right to receive Holding Company Common Stock based upon the Exchange Ratio. | ||
(4) | Immediately after the Mid-Tier Merger, the Holding Company will offer for sale the Holding Company Common Stock in the Offering. | ||
(5) | The Holding Company will contribute at least 50% of the net proceeds of the Offering to the Bank in constructive exchange for additional shares of common stock of the Bank and in exchange for the Bank Liquidation Account. |
E. As part of the Conversion, each of the Minority Shares shall automatically, without further
action on the part of the holders thereof, be converted into and become the right to receive
Holding Company Common Stock based upon the Exchange Ratio. The basis for exchange of Minority
Shares for Holding Company Common Stock shall be fair and reasonable. Options to purchase shares
of Mid-Tier Holding Company common stock which are outstanding immediately prior to the
consummation of the Conversion shall be converted into options to purchase shares of Holding
Company Common Stock, with the number of shares subject to the
9
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.
F. The Holding Company shall register the Conversion Stock with the SEC and any appropriate
state securities authorities. In addition, the Mid-Tier Holding Company shall prepare preliminary
proxy materials as well as other applications and information for review by the SEC in connection
with the solicitation of Stockholder approval of the Plan.
G. All assets, rights, interests, privileges, powers, franchises and property (real, personal
and mixed) of the Mid-Tier Holding Company and the Mutual Holding Company shall be automatically
transferred to and vested in the Holding Company by virtue of the Conversion without any deed or
other document of transfer. The Holding Company, without any order or action on the part of any
court or otherwise and without any documents of assumption or assignment, shall hold and enjoy all
of the properties, franchises and interests, including appointments, powers, designations,
nominations and all other rights and interests as the agent or other fiduciary in the same manner
and to the same extent as such rights, franchises, and interests and powers were held or enjoyed by
the Mid-Tier Holding Company and the Mutual Holding Company. The Holding Company shall be
responsible for all of the liabilities, restrictions and duties of every kind and description of
the Mid-Tier Holding Company and the Mutual Holding Company immediately prior to the Conversion,
including liabilities for all debts, obligations and contracts of the Mid-Tier Holding Company and
the Mutual Holding Company, matured or unmatured, whether accrued, absolute, contingent or
otherwise and whether or not reflected or reserved against on balance sheets, books of accounts or
records of the Mid-Tier Holding Company and the Mutual Holding Company.
H. The home office and branch office of the Bank shall be unaffected by the Conversion. The
executive offices of the Holding Company shall be located at the current offices of the Mutual
Holding Company and Mid-Tier Holding Company.
4. | HOLDING COMPANY APPLICATIONS AND APPROVALS |
The Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding Company, the Bank
and the Holding Company will take all necessary steps to convert the Mutual Holding Company to
stock form, form the Holding Company and complete the Offering. The Mutual Holding Company,
Mid-Tier Holding Company, Bank and Holding Company shall make timely applications to the Bank
Regulators and filings with the SEC for any requisite regulatory approvals to complete the
Conversion.
5. | SALE OF SUBSCRIPTION SHARES |
The Subscription Shares will be offered simultaneously in the Subscription Offering to the
Participants in the respective priorities set forth in this Plan. The Subscription Offering may
begin as early as the mailing of the proxy statement for the Special Meeting of Depositors. The
Holding Company Common Stock will not be insured by the FDIC. The Bank will not extend credit to
any Person to purchase shares of Holding Company Common Stock.
10
Any shares of Holding Company Common Stock for which subscriptions have not been received in
the Subscription Offering may be issued in the Community Offering, subject to the terms and
conditions of this Plan. The Community Offering, if any, will involve an offering of unsubscribed
shares directly to the general public with a first preference given to natural persons (including
trusts of natural persons) residing in the Community and the next preference given to Minority
Stockholders as of the Voting Record Date. The Community Offering may begin simultaneously or later
than the Subscription Offering. The offer and sale of Holding Company Common Stock prior to the
Special Meeting of Depositors, however, is subject to the approval of the Plan by the Voting
Depositors and the Stockholders of the Mid-Tier Holding Company, including Minority Stockholders.
If feasible, any shares of Holding Company Common Stock remaining unsold after the
Subscription Offering and Community Offering, may be offered for sale in a Syndicated Community
Offering or in any manner approved by the Bank Regulators that will achieve a widespread
distribution of the Holding Company Common Stock. The issuance of Holding Company Common Stock
in the Subscription Offering and any Community Offering will be consummated simultaneously on the
date the sale of Holding Company Common Stock is consummated in any Syndicated Community Offering,
and only if the required minimum number of shares of Holding Company Common Stock has been issued.
6. | PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES |
The total number of shares of Conversion Stock to be offered in the Conversion will be
determined jointly by the Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding
Company and the Holding Company immediately prior to the commencement of the Subscription Offering,
and will be based on the Appraised Value Range and the Subscription Price. The Offering Range will
be equal to the Appraised Value Range multiplied by the Majority Ownership Interest. The estimated
pro forma consolidated market value of the Holding Company will be subject to adjustment within the
Appraised Value Range if necessitated by market or financial conditions, with the receipt of any
required approvals of the Bank Regulators, and the maximum of the Appraised Value Range may be
increased by up to 15% subsequent to the commencement of the Subscription Offering to reflect
changes in market and financial conditions or demand for the shares. The number of shares of
Conversion Stock issued in the Conversion will be equal to the estimated pro forma consolidated
market value of the Holding Company, as may be amended, divided by the Subscription Price, and the
number of Subscription Shares issued in the Offering will be equal to the product of (i) the
estimated pro forma consolidated market value of the Holding Company, as may be amended, divided by
the Subscription Price, and (ii) the Majority Ownership Interest.
In the event that the Subscription Price multiplied by the number of shares of Conversion
Stock to be issued in the Conversion is below the minimum of the Appraised Value Range, or
materially above the maximum of the Appraised Value Range, a resolicitation of purchasers may be
required, provided that up to a 15% increase above the maximum of the Appraised Value Range will
not be deemed material so as to require a resolicitation. Any such resolicitation shall be
effected in such manner and within such time as the Mutual Holding Company, Mid-Tier Holding
Company, the Holding Company and the Bank shall establish, if all required regulatory approvals are
obtained.
11
Notwithstanding the foregoing, shares of Conversion Stock will not be issued unless, prior to
the consummation of the Conversion, the Independent Appraiser confirms to the Bank, the Mutual
Holding Company, the Holding Company, and the Bank Regulators, that, to the best knowledge of the
Independent Appraiser, nothing of a material nature has occurred which, taking into account all
relevant factors, would cause the Independent Appraiser to conclude that the number of shares of
Conversion Stock issued in the Conversion multiplied by the Subscription Price is incompatible with
its estimate of the aggregate consolidated pro forma market value of the Holding Company. If such
confirmation is not received, the Holding Company may cancel the Offering and the Exchange
Offering, extend the Offering and establish a new Subscription Price and/or Appraised Value Range,
or hold a new Offering and Exchange Offering or take such other action as the Bank Regulators may
permit.
The Holding Company Common Stock to be issued in the Conversion shall be fully paid and
nonassessable.
7. | RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY |
The Holding Company may retain up to 50% of the net proceeds of the Offering. The Holding
Company believes that the Offering proceeds will provide economic strength to the Holding Company
and the Bank for the future in a highly competitive and regulated financial services environment,
and would support the growth in the operations of the Holding Company and the Bank through
increased lending, acquisitions of financial service organizations, continued diversification into
other related businesses and other business and investment purposes, including the possible payment
of dividends and possible future repurchases of the Holding Company Common Stock as permitted by
applicable federal and state regulations and policy.
8. | SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY) |
A. Each Eligible Account Holder shall have nontransferable subscription rights to subscribe
for in the Subscription Offering up to the greater of $300,000 of Holding Company Common Stock,
0.10% of the total number of shares of Holding Company Common Stock issued in the Offering, or
fifteen times the product (rounded down to the next whole number) obtained by multiplying the
number of Subscription Shares offered in the Offering by a fraction of which the numerator is the
amount of the Eligible Account Holders Qualifying Deposit and the denominator is the total amount
of Qualifying Deposits of all Eligible Account Holders, in each case on the Eligibility Record
Date, subject to the purchase limitations specified in Section 14.
B. In the event that Eligible Account Holders exercise subscription rights for a number of
Subscription Shares in excess of the total number of such shares eligible for subscription, the
Subscription Shares shall be allocated among the subscribing Eligible Account Holders so as to
permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make
his or her total allocation of Subscription Shares equal to the lesser of 100 shares or the number
of shares for which such Eligible Account Holder has subscribed. Any
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remaining shares will be allocated among the subscribing Eligible Account Holders whose
subscriptions remain unsatisfied in the proportion that the amount of the Qualifying Deposit of
each Eligible Account Holder whose subscription remains unsatisfied bears to the total amount of
the Qualifying Deposits of all Eligible Account Holders whose subscriptions remain unsatisfied. If
the amount so allocated exceeds the amount subscribed for by any one or more Eligible Account
Holders, the excess shall be reallocated (one or more times as necessary) among those Eligible
Account Holders whose subscriptions are still not fully satisfied on the same principle until all
available shares have been allocated.
C. Subscription rights as Eligible Account Holders received by Directors and Officers and
their Associates that are based on deposits made by such persons during the 12 months preceding the
Eligibility Record Date shall be subordinated to the subscription rights of all other Eligible
Account Holders, except as permitted by the Bank Regulators.
9. | SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY) |
The Employee Plans of the Holding Company and the Bank shall have subscription rights to
purchase in the aggregate up to 10% of the Subscription Shares issued in the Offering, including
any Subscription Shares to be issued as a result of an increase in the maximum of the Offering
Range after commencement of the Subscription Offering and prior to completion of the Conversion.
Consistent with applicable laws and regulations and practices and policies, the Employee 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, and the Holding Company and the Bank
may make scheduled discretionary contributions thereto, provided that such contributions do not
cause the Holding Company or the Bank to fail to meet any applicable regulatory capital
requirements. The Employee Plans shall not be deemed to be Associates or Affiliates of or Persons
Acting in Concert with any Director or Officer of the Holding Company or the Bank. Alternatively,
if permitted by the Bank Regulators, the Employee Plans may purchase all or a portion of such
shares in the open market.
10. | SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY) |
A. Each Supplemental Eligible Account Holder shall have nontransferable subscription rights to
subscribe for in the Subscription Offering up to the greater of $300,000 of Holding Company Common
Stock, 0.10% of the total number of shares of Holding Company Common Stock issued in the Offering,
or fifteen times the product (rounded down to the next whole number) obtained by multiplying the
number of Subscription Shares offered in the Offering by a fraction of which the numerator is the
amount of the Supplemental Eligible Account Holders Qualifying Deposit and the denominator is the
total amount of Qualifying Deposits of all Supplemental Eligible Account Holders, in each case on
the Supplemental Eligibility Record Date, subject to the availability of sufficient shares after
filling in full all subscription orders of the Eligible Account Holders and Employee Plans and
subject to the purchase limitations specified in Section 14.
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B. In the event that Supplemental Eligible Account Holders exercise subscription rights for a
number of Subscription Shares in excess of the total number of such shares eligible for
subscription, the Subscription Shares shall be allocated among the subscribing Supplemental
Eligible Account Holders so as to permit each such subscribing Supplemental Eligible Account
Holder, to the extent possible, to purchase a number of shares sufficient to make his or her total
allocation of Subscription Shares equal to the lesser of 100 shares or the number of shares for
which each such Supplemental Eligible Account Holder has subscribed. Any remaining shares will be
allocated among the subscribing Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied in the proportion that the amount of the Qualifying Deposit of each such Supplemental
Eligible Account Holder bears to the total amount of the Qualifying Deposits of all Supplemental
Eligible Account Holders whose subscriptions remain unsatisfied. If the amount so allocated
exceeds the amount subscribed for by any one or more Supplemental Eligible Account Holders, the
excess shall be reallocated (one or more times as necessary) among those Supplemental Eligible
Account Holders whose subscriptions are still not fully satisfied on the same principle until all
available shares have been allocated.
11. | SUBSCRIPTION RIGHTS OF OTHER DEPOSITORS (FOURTH PRIORITY) |
A. Each Other Depositor shall have nontransferable subscription rights to subscribe for in the
Subscription Offering up to the greater of $300,000 of Holding Company Common Stock or 0.10% of the
total number of shares of Holding Company Common Stock issued in the Offering, subject to the
availability of sufficient shares after filling in full all subscription orders of Eligible Account
Holders, Employee Plans and Supplemental Eligible Account Holders and subject to the purchase
limitations specified in Section 14.
B. In the event that such Other Depositors subscribe for a number of Subscription Shares
which, when added to the Subscription Shares subscribed for by the Eligible Account Holders,
Employee Plans and Supplemental Eligible Account Holders, is in excess of the total number of
Subscription Shares to be issued, the available shares will be allocated to Other Depositors so as
to permit each such subscribing Other Depositor, to the extent possible, to purchase a number of
shares sufficient to make his or her total allocation of Subscription Shares equal to the lesser of
100 shares or the number of shares for which each such Other Depositor has subscribed. Any
remaining shares will be allocated among the subscribing Other Depositors whose subscriptions
remain unsatisfied in the proportion that the amount of the subscription of each such Other
Depositor bears to the total amount of the subscriptions of all Other Depositors whose
subscriptions remain unsatisfied.
12. | COMMUNITY OFFERING |
If subscriptions are not received for all Subscription Shares offered for sale in the
Subscription Offering, shares for which subscriptions have not been received may be offered for
sale in the Community Offering through a direct community marketing program which may use a broker,
dealer, consultant or investment banking firm experienced and expert in the sale of savings
institutions securities. Such entities may be compensated on a fixed fee basis or on a commission
basis, or a combination thereof. In the event orders for Holding Company Common Stock in the
Community Offering exceed the number of shares available for sale, shares will be
14
allocated (to the extent shares remain available) first to cover orders of natural persons
(including trusts of natural persons) residing in the Community, next to cover orders of Minority
Stockholders as of the Voting Record Date, and thereafter to cover orders of other members of the
general public. In the event orders for Holding Company Common Stock exceed the number of shares
available for sale in a category pursuant to the distribution priorities described above, shares
will be allocated within the category so that each member of that category will receive the lesser
of 100 shares or their ordered amount and thereafter remaining shares will be allocated on an equal
number of shares basis per order. In connection with the allocation, orders received for Holding
Company Common Stock in the Community Offering will first be filled up to a maximum of two percent
of the shares sold in the Offering, and thereafter any remaining shares will be allocated on an
equal number of shares basis per order. The Mutual Holding Company and the Holding Company shall
use their best efforts consistent with this Plan to distribute Holding Company Common Stock sold in
the Community Offering in such a manner as to promote the widest distribution practicable of such
stock. The Holding Company reserves the right to reject any or all orders, in whole or in part,
that are received in the Community Offering. Any Person may purchase up to $300,000 of Holding
Company Common Stock in the Community Offering, subject to the purchase limitations specified in
Section 14.
13. | SYNDICATED COMMUNITY OFFERING |
If feasible, the Board of Directors may determine to offer Subscription Shares not sold in the
Subscription Offering or the Community Offering, if any, for sale in a Syndicated Community
Offering, subject to such terms, conditions and procedures as may be determined by the Mutual
Holding Company and the Holding Company, in a manner that will achieve the widest distribution of
Holding Company Common Stock, subject to the right of the Holding Company to accept or reject in
whole or in part any orders in the Syndicated Community Offering. In the Syndicated Community
Offering, any Person may purchase up to $300,000 of Holding Company Common Stock, subject to the
purchase limitations specified in Section 14. Unless the OTS permits otherwise, orders received
for Holding Company Common Stock in the Syndicated Community Offering will first be filled up to a
maximum of two percent (2%) of the shares sold in the Offering, and thereafter any remaining shares
will be allocated on an equal number of shares basis per order. Provided that the Subscription
Offering has begun, the Holding Company may begin the Syndicated Community Offering at any time.
If for any reason a Syndicated Community Offering of shares of Holding Company Common Stock
not sold in the Subscription Offering or any Community Offering cannot be effected, or in the event
that any insignificant residue of shares of Holding Company Common Stock is not sold in the
Subscription Offering, the Community Offering or any Syndicated Community Offering, the Holding
Company will use its best efforts to make other arrangements for the disposition of unsubscribed
shares aggregating at least the minimum of the Offering Range. Such other purchase arrangements
will be subject to receipt of any required approval of the Bank Regulators.
15
14. | LIMITATIONS ON PURCHASES |
The following limitations shall apply to all purchases and issuances of shares of Conversion
Stock:
A. The maximum number of shares of Holding Company Common Stock that may be subscribed for or
purchased in all categories in the Offering by any Person or Participant, together with any
Associate or group of Persons Acting in Concert, shall not exceed $600,000 of Holding Company
Common Stock, except that the Employee Plans may subscribe for up to 10% of the Holding Company
Common Stock issued in the Offering (including shares issued in the event of an increase in the
maximum of the Offering Range of 15%).
B. The maximum number of shares of Holding Company Common Stock that may be issued to or
purchased in all categories of the Offering by Officers and Directors and their Associates in the
aggregate, when combined with Exchange Shares received by such persons, shall not exceed 25% of the
shares of Conversion Stock issued in the Conversion.
C. The maximum number of shares of Holding Company Common Stock that may be subscribed for or
purchased in all categories of the Offering by any Person or Participant together with purchases by
any Associate or group of Persons Acting in Concert, combined with Exchange Shares received by any
such Person or Participant together with any Associate or group of Persons Acting in Concert, shall
not exceed 5% of the Conversion Stock issued in the Conversion, except that this ownership
limitation shall not apply to the Employee Plans.
D. A minimum of 25 shares of Holding Company Common Stock must be purchased by each Person or
Participant purchasing shares in the Offering to the extent those shares are available; provided,
however, that in the event the minimum number of shares of Holding Company Common Stock purchased
times the Subscription Price exceeds $500, then such minimum purchase requirement shall be reduced
to such number of shares which when multiplied by the price per share shall not exceed $500, as
determined by the Board.
E. If the number of shares of Holding Company Common Stock otherwise allocable pursuant to
Sections 8 through 13, inclusive, to any Person or that Persons Associates would be in excess of
the maximum number of shares permitted as set forth above, the number of shares of Holding Company
Common Stock allocated to each such Person shall be reduced to the lowest limitation applicable to
that Person, and then the number of shares allocated to each group consisting of a Person and that
Persons Associates shall be reduced so that the aggregate allocation to that Person and his or her
Associates complies with the above limits.
Depending upon market or financial conditions, the Boards of Directors of the Holding Company
and the Mutual Holding Company, with the receipt of any required approvals of the Bank Regulators
and without further approval of Voting Depositors, may decrease or increase the purchase
limitations in this Plan, provided that the maximum purchase limitations may not be increased to a
percentage in excess of 5% of the shares issued in the Offering except as provided below. If the
Mutual Holding Company and the Holding Company increase the maximum purchase limitations, the
Mutual Holding Company and the Holding Company are only required to resolicit Participants who
subscribed for the maximum purchase amount in the Subscription
16
Offering and may, in the sole discretion of the Mutual Holding Company and the Holding
Company, resolicit certain other large subscribers. In the event that the maximum purchase
limitation is increased to 5% of the shares issued in the Offering, such limitation may be further
increased to 9.99%, provided that orders for Holding Company Common Stock exceeding 5% of the
shares of Holding Company Common Stock issued in the Offering shall not exceed in the aggregate 10%
of the total shares of Holding Company Common Stock issued in the Offering. Requests to purchase
additional shares of the Holding Company Common Stock in the event that the purchase limitation is
so increased will be determined by the Boards of Directors of the Holding Company and the Mutual
Holding Company in their sole discretion.
In the event of an increase in the total number of shares offered in the Offering due to an
increase in the maximum of the Offering Range of up to 15% (the Adjusted Maximum), the additional
shares may be used to fill the Employee Plans orders before all other orders and then will be
allocated in accordance with the priorities set forth in this Plan.
For purposes of this Section 14, (i) Directors, Officers and Employees of the Bank, the
Mid-Tier Holding Company, the Mutual Holding Company and the Holding Company or any of their
subsidiaries shall not be deemed to be Associates or a group affiliated with each other or
otherwise 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 paragraphs A. and B. of this Section 14, and (iii) 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 under Section 401(k) of the Internal Revenue Code of 1986, as amended, shall be
aggregated and included in that individuals purchases and not attributed to the Tax-Qualified
Employee Stock Benefit Plan.
Each Person purchasing Holding Company Common Stock in the Offering shall be deemed to confirm
that such purchase does not conflict with the above purchase limitations contained in this Plan.
15. | PAYMENT FOR SUBSCRIPTION SHARES |
All payments for Holding Company Common Stock subscribed for in the Subscription Offering and
Community Offering must be delivered in full to the Bank or Holding Company, together with a
properly completed and executed Order Form, on or prior to the expiration date of the Offering;
provided, however, that if the Employee Plans subscribe for shares in 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 Holding Company Common Stock subscribed for by such plans at the Subscription
Price upon consummation of the Conversion. Subscription funds will be held in a segregated account
at the Bank or, at the discretion of the Mutual Holding Company, at another insured depository
institution.
Payment for Holding Company Common Stock subscribed for shall be made by personal check, money
order or bank draft. Alternatively, subscribers in the Subscription and Community Offerings may
pay for the shares for which they have subscribed by authorizing the Bank on the
17
Order Form to make a withdrawal from the designated types of Deposit Accounts at the Bank in
an amount equal to the aggregate Subscription Price of such shares. Such authorized withdrawal
shall be without penalty as to premature withdrawal. If the authorized withdrawal is from a
certificate account, and the remaining balance does not meet the applicable minimum balance
requirement, the certificate shall be canceled at the time of withdrawal, without penalty, and the
remaining balance will earn interest at the passbook rate. Funds for which a withdrawal is
authorized will remain in the subscribers Deposit Account but may not be used by the subscriber
during the Subscription and Community Offerings. Thereafter, the withdrawal will be given effect
only to the extent necessary to satisfy the subscription (to the extent it can be filled) at the
Subscription Price per share. Interest will continue to be earned on any amounts authorized for
withdrawal until such withdrawal is given effect. Interest on funds received by check or money
order will be paid by the Bank at not less than the passbook rate. Such interest will be paid from
the date payment is processed by the Bank until consummation or termination of the Offering. If
for any reason the Offering is not consummated, all payments made by subscribers in the
Subscription and Community Offerings will be refunded to them, with interest. In case of amounts
authorized for withdrawal from Deposit Accounts, refunds will be made by canceling the
authorization for withdrawal. The Bank is prohibited by regulation from knowingly making any loans
or granting any lines of credit for the purchase of stock in the Offering, and therefore, will not
do so.
16. | MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS |
As soon as practicable after the registration statements prepared by the Holding Company have
been declared effective by the SEC and the stock offering materials have been approved by the Bank
Regulators, Order Forms will be distributed to the Eligible Account Holders, Employee Plans,
Supplemental Eligible Account Holders and Other Depositors at their last known addresses appearing
on the records of the Bank for the purpose of subscribing for shares of Holding Company Common
Stock in the Subscription Offering and will be made available for use by those Persons to whom a
Prospectus is delivered. Each Order Form will be preceded or accompanied by a Prospectus
describing the Mutual Holding Company, the Mid-Tier Holding Company, the Holding Company, the Bank,
the Holding Company Common Stock and the Offering. Each Order Form will contain, among other
things, the following:
A. A specified date by which all Order Forms must be received by the Mutual Holding Company or
the Holding Company, which date shall be not less than 20 days, nor more than 45 days, following
the date on which the Order Forms are first mailed to Participants by the Mutual Holding Company or
the Holding Company, and which date will constitute the termination of the Subscription Offering
unless extended;
B. The Subscription Price per share for shares of Holding Company Common Stock to be sold in
the Offering;
C. A description of the minimum and maximum number of Subscription Shares which may be
subscribed for pursuant to the exercise of subscription rights or otherwise purchased in the
Subscription and Community Offering;
18
D. Instructions as to how the recipient of the Order Form is to indicate thereon the number of
Subscription Shares for which such Person elects to subscribe and the available alternative methods
of payment therefor;
E. An acknowledgment that the recipient of the Order Form has received a final copy of the
Prospectus prior to execution of the Order Form;
F. A statement to the effect that all subscription rights are nontransferable, will be void at
the end of the Subscription Offering, and can only be exercised by delivering to the Mutual Holding
Company or the Holding Company within the subscription period such properly completed and executed
Order Form, together with payment in the full amount of the aggregate purchase price as specified
in the Order Form for the shares of Holding Company Common Stock for which the recipient elects to
subscribe in the Subscription Offering (or by authorizing on the Order Form that the Bank withdraw
said amount from the subscribers Deposit Account at the Bank); and
G. A statement to the effect that the executed Order Form, once received by the Mutual Holding
Company or the Holding Company, may not be modified or amended by the subscriber without the
consent of the Holding Company.
Notwithstanding the above, the Mutual Holding Company and the Holding Company reserve the
right in their sole discretion to accept or reject orders received on photocopied or facsimiled
order forms.
17. | UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT |
In the event Order Forms (a) are not delivered or are not timely delivered by the United
States Postal Service, (b) are defectively filled out or executed, (c) are not accompanied by the
full required payment for the shares of Holding Company Common Stock subscribed for (including
cases in which Deposit Accounts from which withdrawals are authorized are insufficient to cover the
amount of the required payment), or (d) are not mailed pursuant to a no mail order placed in
effect by the account holder, the subscription rights of the Participant to whom such rights have
been granted will lapse as though such Participant failed to return the completed Order Form within
the time period specified thereon; provided, however, that the Holding Company may, but will not be
required to, waive any immaterial irregularity on any Order Form or require the submission of
corrected Order Forms or the remittance of full payment for subscribed shares by such date as the
Holding Company may specify. The interpretation by the Holding Company of terms and conditions of
this Plan and of the Order Forms will be final, subject to the authority of the Bank Regulators.
18. | RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES |
The Holding Company will make reasonable efforts to comply with the securities laws of all
states in the United States in which Persons entitled to subscribe for shares of Holding Company
Common Stock pursuant to this Plan reside. However, no such Person will be issued subscription
rights or be permitted to purchase shares of Holding Company Common Stock in the Subscription
Offering if such Person resides in a foreign country; or in a state of the United
19
States with respect to which any of the following apply: (a) a small number of Persons
otherwise eligible to subscribe for shares under the Plan reside in such state; (b) the issuance of
subscription rights or the offer or sale of shares of Holding Company Common Stock to such Persons
would require the Holding Company under the securities laws of such state, to register as a broker,
dealer, salesman or agent or to register or otherwise qualify its securities for sale in such
state; or (c) such registration or qualification would be impracticable for reasons of cost or
otherwise.
19. | ESTABLISHMENT OF LIQUIDATION ACCOUNTS |
A Liquidation Account shall be established by the Holding Company at the time of the
Conversion in an amount equal to the product of (i) the Majority Ownership Interest and (ii) the
Mid-Tier Holding Companys total stockholders equity as reflected in the latest statement of
financial condition contained in the final Prospectus used in the Conversion, plus the value of the
net assets of the Mutual Holding Company as reflected in the latest statement of financial
condition of the Mutual Holding Company prior to the effective date of the Conversion (excluding
its ownership of Mid-Tier Holding Company common stock). Following the Conversion, the Liquidation
Account will be maintained for the benefit of the Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain their Deposit Accounts at the Bank. Each
Eligible Account Holder and Supplemental Eligible Account Holder shall, with respect to his Deposit
Account, hold a related inchoate interest in a portion of the Liquidation Account balance, in
relation to his Deposit Account balance at the Eligibility Record Date or Supplemental Eligibility
Record Date, respectively, or to such balance as it may be subsequently reduced, as hereinafter
provided. The Holding Company shall cause the Bank to establish and maintain the Bank Liquidation
Account for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders who
continue to maintain their Deposit Accounts at the Bank.
In the unlikely event of a complete liquidation of (i) the Bank or (ii) the Bank and the
Holding Company (and only in such event) following all liquidation payments to creditors (including
those to Account Holders to the extent of their Deposit Accounts), each Eligible Account Holder and
Supplemental Eligible Account Holder shall be entitled to receive a liquidating distribution from
the Liquidation Account, in the amount of the then adjusted subaccount balance for such Account
Holders Deposit Account, before any liquidation distribution may be made to any holders of the
Banks or the Holding Companys capital stock. A merger, consolidation or similar combination with
another depository institution or holding company thereof, in which the Holding Company and/or the
Bank is not the surviving entity, shall not be deemed to be a complete liquidation for this
purpose. In such transactions, the Liquidation Account shall be assumed by the surviving holding
company or institution.
In the unlikely event of a complete liquidation of either (i) the Bank or (ii) the Bank and
the Holding Company (and only in such event) following all liquidation payments to creditors
of the
Bank (including those to Account Holders to the extent of their Deposit Accounts), at a time when
the Bank has a positive net worth and the Holding Company does not have sufficient assets (other
than the stock of the Bank) at the time of liquidation to fund its obligations under the
Liquidation Account, the Bank with respect to the Bank Liquidation Account shall
immediately pay
directly to each Eligible Account Holder and Supplemental Eligible
20
Account Holder an amount necessary to fund the Holding Companys remaining obligations under the Liquidation
Account before any liquidating distribution may be made to any holders of the Banks capital stock and without making such amount subject to the Holding Companys creditors. Each Eligible Account
Holder and Supplemental Eligible Account Holder shall be entitled to receive a distribution from
the Liquidation Account with respect to the Holding Company, in the amount of the then adjusted
subaccount balance for his or her Deposit Account then held, before any distribution may be made to
any holders of the Holding Companys capital stock.
In the event of a complete liquidation of the Holding Company where the Bank is not also
completely liquidating, or in the event of a sale or other disposition of the Holding Company apart
from the Bank, each Eligible Account Holder and Supplemental Eligible Account Holder shall be
treated as surrendering such Persons rights to the Liquidation Account and receiving from the
Holding Company an equivalent interest in the Bank Liquidation Account. Each such holders
interest in the Bank Liquidation Account shall be subject to the same rights and terms as if the
Bank Liquidation Account were the Liquidation Account (except that the Holding Company shall cease
to exist).
The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and
Supplemental Eligible Account Holder shall be determined by multiplying the opening balance in the
Liquidation Account by a fraction, the numerator of which is the amount of the Qualifying Deposits
of such Account Holder and the denominator of which is the total amount of all Qualifying Deposits
of all Eligible Account Holders and Supplemental Eligible Account Holders. For Deposit Accounts in
existence at both the Eligibility Record Date and the Supplemental Eligibility Record Date,
separate initial subaccount balances shall be determined on the basis of the Qualifying Deposits in
such Deposit Account on each such record date. Such initial subaccount balance shall not be
increased, but shall be subject to downward adjustment as described below.
If, at the close of business on any annual closing date, commencing on or after the effective
date of the Conversion, the deposit balance in the Deposit Account of an Eligible Account Holder or
Supplemental Eligible Account Holder is less than the lesser of (i) the balance in the Deposit
Account at the close of business on any other annual closing date subsequent to the Eligibility
Record Date or Supplemental Eligibility Record Date, or (ii) the amount of the Qualifying Deposit
in such Deposit Account as of the Eligibility Record Date or Supplemental Eligibility Record Date,
the subaccount balance for such Deposit Account shall be adjusted by reducing such subaccount
balance in an amount proportionate to the reduction in such deposit balance. In the event of such
downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding
any subsequent increase in the deposit balance of the related Deposit Account. If any such Deposit
Account is closed, the related subaccount shall be reduced to zero.
The creation and maintenance of the Liquidation Account and Bank Liquidation Account shall not
operate to restrict the use or application of any capital of the Holding Company or the Bank except
that neither the Holding Company nor the Bank shall declare or pay a cash dividend on, or
repurchase any of, its capital stock if the effect thereof would cause its equity to be reduced
below: (i) the amount required for the Liquidation Account
21
or the Bank Liquidation Account, as
applicable; or (ii) the regulatory capital requirements of the Holding Company (to
the extent applicable) or the Bank.
Eligible Account Holders and Supplemental Eligible
Account Holders do not retain any voting rights in either the Holding Company or the Bank based on
their liquidation subaccounts.
The amount of the Bank Liquidation Account shall equal at all times the amount of the
Liquidation Account, and the Bank Liquidation Account shall be reduced by the same amount and upon
the same terms as any reduction in the Liquidation Account. In no event will any Eligible Account
Holder or Supplemental Eligible Account Holder be entitled to a distribution that exceeds such
holders subaccount balance in the Liquidation Account. Notwithstanding any of the provisions of
this Section 19, the Liquidation Account and the Bank Liquidation Account shall be subject to the
rights of depositors under the liquidation account set forth in Section 7 of the Banks Restated
Organization Certificate dated December 30, 1998.
For the three-year period following the completion of the Conversion, the Holding Company will
not without prior OTS approval (i) sell or liquidate the Holding Company, or (ii) cause the Bank to
be sold or liquidated. Upon the written request of the OTS at any time after two years from the
completion of the Conversion, the Holding Company shall eliminate or transfer the Liquidation
Account to the Bank and the Liquidation Account shall be assumed by the Bank, at which time the
interests of Eligible Account Holders and Supplemental Eligible Account Holders will be solely and
exclusively established in the Bank Liquidation Account. In the event such transfer occurs, the
Holding Company shall be deemed to have transferred the Liquidation Account to the Bank and such
Liquidation Account shall become the liquidation account of the Bank and shall not be subject in
any manner or amount to the claims of the Holding Companys creditors.
Approval of the Plan by
the Members shall constitute approval of the transactions described herein.
20. | VOTING RIGHTS OF STOCKHOLDERS |
Following consummation of the Conversion, the holders of the voting capital stock of the
Holding Company shall have the exclusive voting rights with respect to the Holding Company.
21. | RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION |
A. All Subscription Shares purchased by Directors or Officers of the Mutual Holding Company,
the Mid-Tier Holding Company, the Holding Company or the Bank in the Offering shall be subject to
the restriction that, except as provided in this Section or as may be approved by the Bank
Regulators, no interest in such shares may be sold or otherwise disposed of for value for a period
of one year following the date of purchase in the Offering.
B. The restriction on disposition of Subscription Shares set forth above in this Section shall
not apply to the following:
22
(1) | Any exchange of such shares in connection with a merger or acquisition involving the Bank or the Holding Company, as the case may be, which has been approved by the appropriate federal regulatory agency; and | ||
(2) | Any disposition of such shares following the death of the person to whom such shares were initially sold under the terms of the Plan. |
C. With respect to all Subscription Shares subject to restrictions on resale or subsequent
disposition, each of the following provisions shall apply:
(1) | Each certificate representing shares restricted by this section shall bear a legend prominently stamped on its face giving notice of the restriction; |
(2) | Instructions shall be issued to the stock transfer agent for the Holding Company not to recognize or effect any transfer of any certificate or record of ownership of any such shares in violation of the restriction on transfer; and |
(3) | Any shares of capital stock of the Holding Company issued with respect to a stock dividend, stock split, or otherwise with respect to ownership of outstanding Subscription Shares subject to the restriction on transfer hereunder shall be subject to the same restriction as is applicable to such Subscription Shares. |
22. | REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION |
For a period of three years following the Conversion, no Officer, Director or their Associates
shall purchase, without the prior written approval of the Bank Regulators, any outstanding shares
of Holding Company Common Stock except from a broker-dealer registered with the SEC. This
provision shall not apply to negotiated transactions involving more than 1% of the outstanding
shares of Holding Company Common Stock, the exercise of any options pursuant to a stock option plan
or purchases of Holding Company Common Stock made by or held by any Tax-Qualified Employee Stock
Benefit Plan or Non-Tax-Qualified Employee Stock Benefit Plan of the Bank or the Holding Company
(including the Employee Plans) which may be attributable to any Officer or Director. As used
herein, the term negotiated transaction means a transaction in which the securities are offered
and the terms and arrangements relating to any sale are arrived at through direct communications
between the seller or any person acting on its behalf and the purchaser or his investment
representative. The term investment representative shall mean a professional investment advisor
acting as agent for the purchaser and independent of the seller and not acting on behalf of the
seller in connection with the transaction.
23. | TRANSFER OF DEPOSIT ACCOUNTS |
Each Person holding a Deposit Account at the Bank at the time of Conversion shall retain an
identical Deposit Account at the Bank following Conversion in the same amount and subject to the
same terms and conditions (except as to voting and liquidation rights) applicable to such Deposit
Account in the Bank immediately prior to completion of the Conversion.
23
24. | REGISTRATION AND MARKETING |
Within the time period required by applicable laws and regulations, the Holding Company will
register the securities issued in connection with the Conversion pursuant to the Securities
Exchange Act of 1934 and will not deregister such securities for a period of at least three years
thereafter, except that the requirement to maintain the registration of such securities for three
years may be fulfilled by any successor to the Holding Company. In addition, the
Holding Company will use its best efforts to encourage and assist a market-maker to establish
and maintain a market for the Conversion Stock and to list those securities on a national or
regional securities exchange or the Nasdaq Stock Market.
25. | TAX RULINGS OR OPINIONS |
Consummation of the Conversion is expressly conditioned upon prior receipt by the Mutual
Holding Company, the Mid-Tier Holding Company, the Holding Company and the Bank of either a ruling,
an opinion of counsel or a letter of advice from their tax advisor, regarding the federal and state
income tax consequences of the Conversion to the Mutual Holding Company, the Mid-Tier Holding
Company, the Holding Company, the Bank and the Account Holders receiving subscription rights in the
Conversion.
26. | STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS |
A. The Holding Company and the Bank are authorized to adopt Tax-Qualified Employee Stock
Benefit Plans in connection with the Conversion, including without limitation, an ESOP. Existing
as well as any newly created Tax-Qualified Employee Stock Benefit Plans may purchase shares of
Holding Company Common Stock in the Offering, to the extent permitted by the terms of such benefit
plans and this Plan.
B. As a result of the Conversion, the Holding Company shall be deemed to have ratified and
approved all employee stock benefit plans maintained by the Bank and the Mid-Tier Holding Company
and shall have agreed to issue (and reserve for issuance) Holding Company Common Stock in lieu of
common stock of the Mid-Tier Holding Company pursuant to the terms of such benefit plans. Upon
consummation of the Conversion, the Mid-Tier Holding Company common stock held by such benefit
plans shall be converted into Holding Company Common Stock based upon the Exchange Ratio. Also
upon consummation of the Conversion, (i) all rights to purchase, sell or receive Mid-Tier Holding
Company common stock and all rights to elect to make payment in Mid-Tier Holding Company common
stock under any agreement between the Bank or the Mid-Tier Holding Company and any Director,
Officer or Employee thereof or under any plan or program of the Bank or the Mid-Tier Holding
Company, shall automatically, by operation of law, be converted into and shall become an identical
right to purchase, sell or receive Holding Company Common Stock and an identical right to make
payment in Holding Company Common Stock under any such agreement between the Bank or the Mid-Tier
Holding Company and any Director, Officer or Employee thereof or under such plan or program of the
Bank, and (ii) rights outstanding under all stock option plans shall be assumed by the Holding
Company and thereafter shall be rights only for shares of Holding Company Common Stock, with each
such right being for a number of shares of Holding Company Common Stock based upon the Exchange
Ratio and the number of shares of Mid-Tier
24
Holding Company common stock that were available
thereunder immediately prior to consummation of the Conversion, with the price adjusted to reflect
the Exchange Ratio but with no change in any other term or condition of such right.
C. The Holding Company and the Bank are authorized to adopt stock option plans, restricted
stock award plans and other Non-Tax-Qualified Employee Stock Benefit Plans, provided that such
plans conform to any applicable regulations. The Holding Company and the
Bank intend to implement a stock option plan and a restricted stock award plan no earlier than
six months after completion of the Conversion. Stockholder approval of these plans will be
required. If adopted within 12 months following the completion of the Conversion, the stock option
plan will reserve a number of shares equal to up to 10% of the shares sold in the Offering and the
stock award plan will reserve a number of shares equal to up to 4% of the shares sold in the
Offering (unless the Banks tangible capital is less than 10% upon completion of the Offering in
which case the stock award plan will reserve a number of shares equal to up to 3% of the shares
sold in the Offering), subject to adjustment, if any, as may be required by OTS regulations or
policy to reflect stock options or restricted stock granted by the Mid-Tier Holding Company prior
to the completion of the Conversion, for awards to employees and directors at no cost to the
recipients. (Non-Tax-Qualified Employee Stock Benefit Plans implemented more than one year
following the completion of the Conversion are not subject to the restrictions set forth in the
preceding sentence.) Shares for such plans may be issued from authorized but unissued shares,
treasury shares or repurchased shares.
D. The Holding Company and the Bank are authorized to enter into employment agreements and/or
change in control agreements with their executive officers.
27. | RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY |
A. | (1) | The charter of the Bank may contain a provision stipulating that no person, except the Holding Company, for a period of five years following the closing date of the Conversion, may directly or indirectly acquire or offer to acquire the beneficial ownership of more than 10% of any class of equity security of the Bank, without the prior written approval of the New York Department. In addition, such charter may also provide that for a period of five years following the closing date of the Conversion, shares beneficially owned in violation of the above-described charter provision shall not be entitled to vote and shall not be voted by any person or counted as voting stock in connection with any matter submitted to stockholders for a vote. In addition, special meetings of the stockholders relating to changes in control or amendment of the charter may only be called by the Board of Directors, and shareholders shall not be permitted to cumulate their votes for the election of Directors. | |
(2) | For a period of three years from the date of consummation of the Conversion, no person, other than the Holding Company, shall directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10% of any class of equity security of the Bank without the prior written consent of the OTS and the New York Department. |
25
B. The Articles of Incorporation of the Holding Company may contain a provision stipulating
that in no event shall any record owner of any outstanding shares of Holding Company Common Stock
who beneficially owns in excess of 10% of such outstanding shares be entitled or permitted to any
vote with respect to any shares held in excess of 10%. In addition, the Articles of Incorporation
and Bylaws of the Holding Company may contain provisions which provide for staggered terms of the
directors, noncumulative voting for directors, limitations on
the calling of special meetings, a fair price provision for certain business combinations and
certain notice requirements.
C. For the purposes of this section:
(1) | The term person includes an individual, a firm, a corporation or other entity; | ||
(2) | The term offer includes every offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value; | ||
(3) | The term acquire includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise; and | ||
(4) | The term security includes non-transferable subscription rights issued pursuant to a plan of conversion as well as a security as defined in 15 U.S.C. § 77b(a)(1). |
28. | PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK |
A. The Holding Company shall comply with applicable regulations in the repurchase of any
shares of its capital stock following consummation of the Conversion. The Holding Company shall
not declare or pay a cash dividend on, or repurchase any of, its capital stock, if such dividend or
repurchase would reduce its capital below the amount then required for the Liquidation Account.
B. The Bank shall not declare or pay a cash dividend on, or repurchase any of, its capital
stock, if the effect thereof would cause its regulatory capital to be reduced below its applicable
regulatory capital requirements.
29. | ARTICLES OF INCORPORATION AND BYLAWS |
By voting to approve this Plan, Voting Depositors will be voting to adopt the Articles of
Incorporation and Bylaws for the Holding Company attached as Exhibits C and D to this Plan.
30. | CONSUMMATION OF CONVERSION AND EFFECTIVE DATE |
The Effective Date of the Conversion shall be the date upon which the Articles of Combination
shall be filed with the OTS and the Articles of Merger shall be filed with Maryland State
Department of Assessments and Taxation. The Articles of Combination and the Articles of Merger
shall be filed after all requisite regulatory, depositor and stockholder approvals have been
obtained, all applicable waiting periods have expired, and sufficient subscriptions and orders for
26
Subscription Shares have been received. The closing of the sale of all shares of Holding Company
Common Stock sold in the Offering and the Exchange Offering shall occur simultaneously on the
effective date of the closing.
31. | EXPENSES OF CONVERSION |
The Mutual Holding Company, the Mid-Tier Holding Company, the Bank and the Holding Company may
retain and pay for the services of legal, financial and other advisors to assist in connection with
any or all aspects of the Conversion, including the Offering, and such parties shall use their best
efforts to assure that such expenses shall be reasonable.
32. | AMENDMENT OR TERMINATION OF PLAN |
If deemed necessary or desirable, this Plan may be substantively amended as a result of
comments from the Bank Regulators or otherwise at any time prior to solicitation of proxies from
Voting Depositors and Mid-Tier Holding Company stockholders to vote on this Plan by the Board of
Directors of the Mutual Holding Company, and at any time thereafter by the Board of Directors of
the Mutual Holding Company with the concurrence of the Bank Regulators. Any amendment to this Plan
made after approval by Voting Depositors and Mid-Tier Holding Company stockholders with the
approval of the Bank Regulators shall not necessitate further approval by Voting Depositors unless
otherwise required by the Bank Regulators. The Board of Directors of the Mutual Holding Company
may terminate this Plan at any time prior to the Special Meeting of Depositors and the Meeting of
Stockholders to vote on this Plan, and at any time thereafter with the concurrence of the Bank
Regulators.
By adoption of the Plan, Voting Depositors of the Mutual Holding Company authorize the Board
of Directors of the Mutual Holding Company to amend or terminate the Plan under the circumstances
set forth in this Section.
33. | CONDITIONS TO CONVERSION |
Consummation of the Conversion pursuant to this Plan is expressly conditioned upon the
following:
A. Prior receipt by the Mutual Holding Company, the Mid-Tier Holding Company, the Stock
Holding Company and the Bank of rulings of the United States Internal Revenue Service and state
taxing authorities, or opinions of counsel or tax advisers as described in Section 25 hereof;
B. The issuance of the Subscription Shares offered in the Conversion;
C. The issuance of Exchange Shares; and
D. The completion of the Conversion within the time period specified in Section 3 of this
Plan.
27
34. | INTERPRETATION |
All interpretations of this Plan and application of its provisions to particular circumstances
by a majority of the Board of Directors of the Mutual Holding Company shall be final, subject to
the authority of the Bank Regulators.
Dated:
February 9, 2010, as amended.
28
EXHIBIT A
FORM OF AGREEMENT OF MERGER BETWEEN
ONEIDA FINANCIAL, MHC
AND ONEIDA FINANCIAL CORP.
ONEIDA FINANCIAL, MHC
AND ONEIDA FINANCIAL CORP.
EXHIBIT A
FORM OF AGREEMENT OF MERGER BETWEEN
ONEIDA FINANCIAL, MHC
AND ONEIDA FINANCIAL CORP.
ONEIDA FINANCIAL, MHC
AND ONEIDA FINANCIAL CORP.
THIS AGREEMENT OF MERGER (the MHC Merger Agreement) dated as of , is made by
and between Oneida Financial, MHC, a federal mutual holding company (the Mutual Holding Company)
and Oneida Financial Corp., a federal corporation (the Mid-Tier Holding Company). Capitalized
terms have the respective meanings given them in the Plan of Conversion and Reorganization (the
Plan) of the Mutual Holding Company, unless otherwise defined herein.
R E C I T A L S:
1. The Mutual Holding Company is a federal mutual holding company that owns approximately 55%
of the common stock of the Mid-Tier Holding Company
2. The Mid-Tier Holding Company is a federal corporation that owns 100% of the common stock of
the Bank. .
3. At least two-thirds of the members of the boards of directors of the Mutual Holding Company
and the Mid-Tier Holding Company have approved this MHC Merger Agreement whereby the Mutual Holding
Company shall merge with and into the Mid-Tier Holding Company with the Mid-Tier Holding Company as
the resulting corporation (the MHC Merger), and have authorized the execution and delivery
thereof.
NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the
parties hereto have agreed as follows:
1. Merger. At and on the Effective Date of the MHC Merger, the Mutual Holding Company will
merge with and into the Mid-Tier Holding Company with the Mid-Tier Holding Company as the resulting
entity (Resulting Corporation) whereby the shares of Mid-Tier Holding Company common stock held
by the Mutual Holding Company will be canceled and Members of the Mutual Holding Company will
constructively receive liquidation interests in the Mid-Tier Holding Company in exchange for their
ownership interests in the Mutual Holding Company.
2. Effective Date. The MHC Merger shall not be effective until and unless the Plan is
approved by the Office of Thrift Supervision (the OTS) after approval by at least (i) two-thirds
of the total votes eligible to be cast by the Stockholders of the Mid-Tier Holding Company, (ii) a
majority of the total votes eligible to be cast by the Minority Stockholders of the Mid-Tier
Holding Company, and (iii) a majority of the total votes eligible to be cast by Voting Depositors,
and the Articles of Combination shall have been filed with the OTS with respect to the MHC Merger.
Approval of the Plan by the Voting Depositors shall constitute approval of the MHC Merger Agreement
by the Voting Depositors. Approval of the Plan by the Stockholders of the Mid-Tier Holding
Company, including the Minority Stockholders, shall constitute approval of the MHC Merger Agreement
by such Stockholders.
3. Name. The name of the Resulting Corporation shall be Oneida Financial Corp.
A-1
EXHIBIT A
4. Offices. The main office of the Resulting Corporation shall be 182 Main Street, Oneida,
New York.
5. Directors and Officers. The directors and officers of the Mid-Tier Holding Company
immediately prior to the Effective Date shall be the directors and officers of the Resulting
Corporation after the Effective Date.
6. Rights and Duties of the Resulting Corporation. At the Effective Date, the Mutual Holding
Company shall be merged with and into the Mid-Tier Holding Company with the Mid-Tier Holding
Company as the Resulting Corporation. The business of the Resulting Corporation shall be that of a
Federally-chartered corporation as provided in its Charter. All assets, rights, interests,
privileges, powers, franchises and property (real, personal and mixed) of the Mid-Tier Holding
Company and the Mutual Holding Company shall be transferred automatically to and vested in the
Resulting Corporation by virtue of the MHC Merger without any deed or other document of transfer.
The Resulting Corporation, without any order or action on the part of any court or otherwise and
without any documents of assumption or assignment, shall hold and enjoy all of the properties,
franchises and interests, including appointments, powers, designations, nominations and all other
rights and interests as the agent or other fiduciary in the same manner and to the same extent as
such rights, franchises, and interests and powers were held or enjoyed by the Mid-Tier Holding
Company and the Mutual Holding Company. The Resulting Corporation shall be responsible for all of
the liabilities, restrictions and duties of every kind and description of the Mid-Tier Holding
Company and the Mutual Holding Company immediately prior to the MHC Merger, including liabilities
for all debts, obligations and contracts of the Mid-Tier Holding Company and the Mutual Holding
Company, matured or unmatured, whether accrued, absolute, contingent or otherwise and whether or
not reflected or reserved against on balance sheets, books of accounts or records of the Mid-Tier
Holding Company or the Mutual Holding Company. The stockholders of the Mid-Tier Holding Company
shall possess all voting rights with respect to the shares of stock of the Resulting Corporation.
All rights of creditors and other obligees and all liens on property of the Mid-Tier Holding
Company and the Mutual Holding Company shall be preserved and shall not be released or impaired.
7. Rights of Stockholders. At the Effective Date, the shares of Mid-Tier Holding Company
common stock held by the Mutual Holding Company will be canceled and members of the Mutual Holding
Company will constructively receive liquidation interests in the Mid-Tier Holding Company in
exchange for their ownership interests in the Mutual Holding Company. Minority Stockholders rights
will remain unchanged.
8. Other Terms. All terms used in this MHC Merger Agreement shall, unless defined herein,
have the meanings set forth in the Plan. The Plan is incorporated herein by this reference and
made a part hereof to the extent necessary or appropriate to effect and consummate the terms of
this MHC Merger Agreement and the Conversion.
A-2
EXHIBIT A
IN WITNESS WHEREOF, the Mid-Tier Holding Company and the Mutual Holding Company have caused
this MHC Merger Agreement to be executed as of the date first above written.
Oneida Financial Corp. | ||||||||
(a federal corporation) | ||||||||
ATTEST: |
||||||||
By: | |
|||||||
President and Chief Executive Officer | ||||||||
Oneida Financial, MHC | ||||||||
(a federal mutual holding company) | ||||||||
ATTEST: |
||||||||
By: | ||||||||
President and Chief Executive Officer |
A-3
EXHIBIT B
FORM OF AGREEMENT OF MERGER BETWEEN
ONEIDA FINANCIAL CORP. (FEDERAL) AND
ONEIDA FINANCIAL CORP. (MARYLAND)
ONEIDA FINANCIAL CORP. (FEDERAL) AND
ONEIDA FINANCIAL CORP. (MARYLAND)
EXHIBIT B
EXHIBIT B
FORM OF
AGREEMENT OF MERGER BETWEEN
ONEIDA FINANCIAL CORP. (FEDERAL) AND
ONEIDA FINANCIAL CORP. (MARYLAND)
AGREEMENT OF MERGER BETWEEN
ONEIDA FINANCIAL CORP. (FEDERAL) AND
ONEIDA FINANCIAL CORP. (MARYLAND)
THIS AGREEMENT OF MERGER (the Mid-Tier Merger Agreement), dated as of , is
made by and between Oneida Financial Corp., a federal corporation (the Mid-Tier Holding Company)
and Oneida Financial Corp., a Maryland corporation (the Holding Company). Capitalized terms have
the respective meanings given them in the Plan of Conversion and Reorganization of Oneida
Financial, MHC (the Plan) unless otherwise defined herein.
R E C I T A L S:
1. The Mid-Tier Holding Company is a federal corporation that owns 100% of the common stock of
The Oneida Savings Bank, a New York chartered savings bank (the Bank).
2. The Holding Company has been organized as a first-tier stock subsidiary of the Mid-Tier
Holding Company.
3. At least two-thirds of the members of the boards of directors of the Mid-Tier Holding
Company and the Holding Company have approved this Mid-Tier Merger Agreement whereby the Mid-Tier
Holding Company will be merged with the Holding Company with the Holding Company as the resulting
corporation (the Mid-Tier Merger), and authorized the execution and delivery thereof.
4. Immediately prior to the Mid-Tier Merger, Oneida Financial, MHC, a federal mutual holding
company (the Mutual Holding Company) and the majority stockholder of the Mid-Tier Holding
Company, merged with and into the Mid-Tier Holding Company with the Mid-Tier Holding Company as the
resulting entity (the MHC Merger), whereby the shares of Mid-Tier Holding Company held by the
Mutual Holding Company were cancelled and Members of the Mutual Holding Company constructively
received liquidation interests in the Mid-Tier Holding Company in exchange for their ownership
interests in the Mutual Holding Company.
5. As a result of the Mid-Tier Merger, the Bank will become a wholly-owned subsidiary of the
Holding Company.
NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein, the
parties hereto have agreed as follows:
1. Merger. At and on the Effective Date of the Mid-Tier Merger, the Mid-Tier Holding Company
will merge with the Holding Company with the Holding Company as the resulting corporation (the
Resulting Corporation), whereby the Bank will become the wholly-owned subsidiary of the Holding
Company. As part of the Mid-Tier Merger, the members of the Mutual Holding Company who
constructively received liquidation interests in Mid-Tier Holding Company as part of the MHC Merger
will exchange the liquidation interests in the Mid-Tier Holding Company that they constructively
received for interests in the Liquidation Account, and
B-1
EXHIBIT B
the stockholders of the Mid-Tier Holding Company (Minority Stockholders immediately prior to
the Mid-Tier Merger) will exchange their shares of Mid-Tier Holding Company common stock for
Holding Company Common Stock in the Exchange Offering pursuant to the Exchange Ratio.
2. Effective Date. The Mid-Tier Merger shall not be effective until and unless the Plan is
approved by the Office of Thrift Supervision (the OTS) after approval by at least (i) two-thirds
of the total votes eligible to be cast by the Stockholders of the Mid-Tier Holding Company, (ii) a
majority of the total votes eligible to be cast by the Minority Stockholders of the Mid-Tier
Holding Company, and (iii) a majority of the total votes eligible to be cast by the Voting
Depositors, and the Articles of Combination shall have been filed with the OTS and Articles of
Merger have been filed with the Maryland State Department of Assessments and Taxation with respect
to the Mid-Tier Merger. Approval of the Plan by the Voting Depositors shall constitute approval of
the Mid-Tier Merger Agreement by the Voting Depositors in their capacity as members of Oneida
Financial, MHC. Approval of the Plan by the Stockholders of the Mid-Tier Holding Company,
including the Minority Stockholders, shall constitute approval of the Mid-Tier Merger Agreement by
such Stockholders.
3. Name. The name of the Resulting Corporation shall be Oneida Financial Corp.
4. Offices. The main office of the Resulting Corporation shall be 182 Main Street, Oneida,
New York.
5. Directors and Officers. The directors and officers of the Mid-Tier Holding Company
immediately prior to the Effective Date shall be the directors and officers of the Resulting
Corporation after the Effective Date.
6. Rights and Duties of the Resulting Corporation. At the Effective Date, the Mid-Tier
Holding Company shall merge with the Holding Company, with the Holding Company as the Resulting
Corporation. The business of the Resulting Corporation shall be that of a Maryland corporation as
provided in its Articles of Incorporation. All assets, rights, interests, privileges, powers,
franchises and property (real, personal and mixed) of the Mid-Tier Holding Company and the Holding
Company shall be transferred automatically to and vested in the Resulting Corporation by virtue of
the Mid-Tier Merger without any deed or other document of transfer. The Resulting Corporation,
without any order or action on the part of any court or otherwise and without any documents of
assumption or assignment, shall hold and enjoy all of the properties, franchises and interests,
including appointments, powers, designations, nominations and all other rights and interests as the
agent or other fiduciary in the same manner and to the same extent as such rights, franchises, and
interests and powers were held or enjoyed by the Mid-Tier Holding Company and the Holding Company.
The Resulting Corporation shall be responsible for all of the liabilities, restrictions and duties
of every kind and description of the Mid-Tier Holding Company and the Holding Company immediately
prior to the Mid-Tier Merger, including liabilities for all debts, obligations and contracts of the
Mid-Tier Holding Company and the Holding Company, matured or unmatured, whether accrued, absolute,
contingent or otherwise and whether or not reflected or reserved against on balance sheets, books
of accounts or records of the Mid-Tier Holding Company or the Holding Company. The stockholders of
the Holding Company shall possess all voting rights with respect to the shares of stock of the
Resulting Corporation. All rights of creditors and other obligees and all liens on
B-2
EXHIBIT B
property of the Mid-Tier Holding Company and the Holding Company shall be preserved and shall
not be released or impaired.
7. Rights of Stockholders. At the Effective Date, the Members of the Mutual Holding Company
who constructively received liquidation interests in the Mid-Tier Holding Company in exchange for
their ownership interests in the Mutual Holding Company as part of the MHC Merger, will exchange
their liquidation interests in Mid-Tier Holding Company for interests in the Liquidation Account,
and the stockholders of the Mid-Tier Holding Company (Minority Stockholders immediately prior to
the Mid-Tier Merger) will exchange their shares of Mid-Tier Holding Company common stock for
Holding Company Common Stock in the Exchange Offering pursuant to the Exchange Ratio.
8. Other Terms. All terms used in this Mid-Tier Merger Agreement shall, unless defined
herein, have the meanings set forth in the Plan. The Plan is incorporated herein by this reference
and made a part hereof to the extent necessary or appropriate to effect and consummate the terms of
this Mid-Tier Merger Agreement and the Conversion.
B-3
EXHIBIT B
IN WITNESS WHEREOF, the Mid-Tier Holding Company and the Holding Company have caused this
Mid-Tier Merger Agreement to be executed as of the date first above written.
Oneida Financial Corp. | ||||||||
(a federal corporation) | ||||||||
ATTEST: |
||||||||
By: | ||||||||
President and Chief Executive Officer | ||||||||
Oneida Financial Corp. | ||||||||
(a Maryland corporation) | ||||||||
ATTEST: |
||||||||
By: | ||||||||
President and Chief Executive Officer |
B-4