Exhibit 2.1
PLAN OF CONVERSION
of
OSWEGO COUNTY MHC
and
AGREEMENT AND PLAN OF REORGANIZATION
between
OSWEGO COUNTY MHC,
OSWEGO COUNTY BANCORP, INC.
(A Federal Corporation)
BRIDGE STREET FINANCIAL, INC.
(A Delaware Corporation)
and
OSWEGO COUNTY SAVINGS BANK
TABLE OF CONTENTS
Section
Number Page
------ ----
1. Introduction........................................................................................... 1
2. Definitions............................................................................................ 3
3. General Procedure For Conversion And Reorganization.................................................... 9
4. Total Number Of Shares And Purchase Price Of Conversion Stock.......................................... 13
5. Method Of Offering Shares And Rights To Purchase Stock................................................. 14
6. Additional Limitations On Purchases Of Conversion Stock................................................ 17
7. Timing Of Subscription Offering, Manner Of Exercising Subscription Rights And Order Forms.............. 19
8. Payment For Conversion Stock........................................................................... 22
9. Account Holders In Nonqualified States Or Foreign Countries............................................ 23
10. Voting Rights Of Shareholders.......................................................................... 24
11. Liquidation Account.................................................................................... 24
12. Transfer Of Deposit Accounts........................................................................... 25
13. Requirements Following Conversion For Registration, Market Making And Stock Exchange Listing........... 26
14. Directors And Officers Of The New Bank................................................................. 26
15. Requirements For Stock Purchases By Directors And Officers Following The Conversion And
Reorganization......................................................................................... 26
16. Restrictions On Transfer Of Stock...................................................................... 26
17. Restrictions On Acquisition Of Stock Of The Holding Company............................................ 27
18. Tax Rulings Or Opinions................................................................................ 28
19. Stock Compensation Plans............................................................................... 28
20. Dividend And Repurchase Restrictions On Stock.......................................................... 28
21. Payment Of Fees To Brokers............................................................................. 28
22. Expenses............................................................................................... 28
23. Effective Date......................................................................................... 29
24. Amendment Or Termination Of The Plan................................................................... 29
25. Interpretation Of The Plan............................................................................. 29
26. Severability........................................................................................... 29
27. Miscellaneous.......................................................................................... 30
-i-
1. INTRODUCTION.
For purposes of this section, all capitalized terms have the meanings
ascribed to them in Section 2.
On July 13, 1999, Oswego County Savings Bank ("Bank") reorganized into
the mutual holding company form of organization as a wholly owned subsidiary of
Oswego County Bancorp, Inc. (the "Mid-Tier Holding Company"), a mid-tier stock
holding company that became the majority-owned subsidiary of Oswego County MHC
(the "Mutual Holding Company"). Contemporaneously with the reorganization, the
Mid-Tier Holding Company sold 399,500 shares of its common stock, par value $.01
at $10.00 per share, raising gross proceeds of $4.0 million.
A. Business Purposes for the Conversion and Reorganization
The Boards of Directors of the Mutual Holding Company, the Mid-Tier
Holding Company and the Bank believe that a conversion of the Mutual Holding
Company to stock form and reorganization of the Bank to a national bank pursuant
to this Plan of Conversion are in the best interests of the Mutual Holding
Company, the Mid-Tier Holding Company and the Bank, as well as the best
interests of their respective Members and Shareholders. The Boards of Directors
determined that this Plan of Conversion equitably provides for the interests of
Members through the granting of subscription rights and the establishment of a
liquidation account. The Conversion and Reorganization will result in the
raising of additional capital for the Bank and the Holding Company and is
expected to result in a more active and liquid market for the Holding Company
Common Stock than currently exists for the Mid-Tier Holding Company Common
Stock. In addition, the Conversion and Reorganization have been structured to
re-unite the accumulated earnings and profits retained by the Mutual Holding
Company with the retained earnings of the Bank through a tax-free
reorganization.
The Conversion and Reorganization are intended to provide an additional
source of capital not now available in order to allow the Bank and Holding
Company to better serve the needs of the community through: increased lending to
support continued growth in the Bank's commercial loan portfolio, opening or
acquiring additional branch offices; enhancing the quality of the Bank's
facilities so that it may better serve the needs of its customers; financing
acquisitions of other financial institutions or other businesses related to
banking, although no mergers or acquisitions are planned at the present time;
and expanding the financial products and services currently offered by the Bank.
The Reorganization and Conversion are also intended to provide additional
capital to the Holding Company in order to allow it to: pay dividends to
stockholders; repurchase shares of Conversion Stock; finance acquisitions of
other financial institutions or other businesses related to banking; and use for
other general corporate purposes. In addition, increased stock ownership by
officers and other employees of the Bank and the Holding Company has proven to
be an effective performance incentive and an effective means of attracting and
retaining qualified personnel.
The Board of Directors and senior management also believe that the
Conversion and Reorganization will be beneficial to the population within the
Bank's primary market area. The Board and management believe that, through
expanded local stock ownership, current customers
and non-customers who purchase Conversion Stock will seek to enhance the
financial success of the Bank through consolidation of their banking business
and increased referrals to the Bank.
If a standard conversion had been conducted in 1999, management of the
Bank believed that it may have been difficult to prudently invest the larger
amount of capital that would have been raised, when compared to the net proceeds
raised in connection with the formation of the Mutual Holding Company. A
standard conversion in 1999 also would have immediately eliminated all aspects
of the mutual form of organization.
The Bank and the Mid-Tier Holding Company have also gained experience
as public companies complying with of the Securities Exchange Act of 1934 and in
conducting shareholder meetings and other shareholder matters, such as
communications, press releases and dividend payments. In light of the foregoing,
the Boards of Directors of the Mutual Holding Company, the Mid-Tier Holding
Company and the Bank believe that it is in the best interests of such companies
and their respective Members and Shareholders to raise additional capital at
this time.
Following the Reorganization and Conversion, the Bank will also convert
to a national bank. The Bank believes that significant opportunities for growth
in the commercial lending portfolio are better addressed by a commercial bank
charter. In addition, as a commercial bank, the New Bank would be eligible to
accept municipal deposits. The Bank, as a savings bank, has experienced
difficulties in acquiring commercial banks or branches because of the inability
to accept municipal deposits. Because of continued commercial loan growth, the
Bank is also concerned that it may have difficulty in the future meeting the
"qualified thrift lender test." Because of these factors, senior management and
the Board of Directors of the Mutual Holding Company, the Mid-Tier Holding
Company and the Bank believe that conversion to a national bank charter is
critical to the implementation of the new business plan.
B. Organization of Holding Company and Steps for Reorganization and
Conversion
The Reorganization and Conversion will be effected as follows, or in
any manner approved by the OTS that is consistent with the purposes of this Plan
and applicable laws and regulations.
In connection with the Conversion and Reorganization:
1. The Mid-Tier Holding Company will convert into or exchange
its charter for an interim federal stock savings association and
merge with and into the Bank with the Bank as the surviving
entity. Annex A hereto describes this transaction.
2. As described in more detail in Section 3, the Mutual Holding
Company will convert from the mutual form to a federal interim
stock savings association and simultaneously merge with and into
the Bank pursuant to the Plan of Merger included as Annex B
hereto, pursuant to which the Mutual Holding Company will cease to
exist and a liquidation account will be established by the Bank
for the benefit of depositor Members as of specified dates.
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3. The Bank will form a new first-tier, wholly-owned subsidiary
known as Bridge Street Financial, Inc., a Delaware corporation,
which will become the Holding Company upon consummation of the
Conversion and Reorganization.
4. The Holding Company will in turn form a federally chartered
interim savings association ("Interim") as a wholly-owned
subsidiary.
5. Immediately following the formation of Interim, Interim will
then merge with and into the Bank pursuant to the Plan of Merger
included as Annex C hereto, pursuant to which the Bank will become
a wholly owned subsidiary of the Holding Company. In connection
therewith, each share of Mid-Tier Holding Company Common Stock
outstanding immediately prior to the effective time thereof shall
be automatically converted, without further action by the holder
thereof, into and become the right to receive shares of Holding
Company Common Stock based on the Exchange Ratio, plus cash in
lieu of any fractional share interest.
6. In connection with the Conversion and Reorganization, the
Holding Company will offer shares of Conversion Stock in the
Offerings as provided herein.
7. Following the consummation of the Conversion and
Reorganization, the Bank will convert to a national bank.
C. Certain Effects of Bank Conversion
Following the Conversion and Reorganization, the Bank will convert to a
national bank and will be regulated by the OCC ("New Bank"). The New Bank's
deposits will continue to be insured by the FDIC. In addition, New Bank will
become a member of the Federal Reserve and all insured savings deposits will
continue to be insured by the FDIC up to the maximum provided by law.
Upon consummation of the Bank Conversion, all loans and other
borrowings from the Bank shall retain the same status with the New Bank after
the Conversion and Reorganization as they had with the Bank immediately prior to
the Conversion and Reorganization.
2. DEFINITIONS.
As used in this Plan, the terms set forth below have the following
meaning:
2.1. Actual Purchase Price means the price per share at which the
Conversion Stock is ultimately sold by the Holding Company in the Offerings in
accordance with the terms hereof.
2.2. 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 understanding; 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
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company which acts in concert with another Person or company ("other party")
shall also be deemed to be acting in concert with any Person 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
and participants or beneficiaries of any such Tax- Qualified Employee Stock
Benefit Plan will not be deemed to be acting in concert solely as a result of
their common interests as participants or beneficiaries. When Persons act
together for such purpose, their group is deemed to have acquired their stock.
The determination of whether a group is Acting in Concert shall be made solely
by the Board of Directors of the Bank or Officers delegated by such Board and
may be based on any evidence upon which the Board or such delegatee chooses to
rely, including, without limitation, joint account relationships or the fact
that such Persons have filed joint Schedules 13D or Schedules 13G with the SEC
with respect to other companies. Directors of the Holding Company, the Bank, and
the Mutual Holding Company shall not be deemed to be Acting in Concert solely as
a result of their membership on any such board or boards.
2.3. Affiliate means a Person who, directly or indirectly, through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified.
2.4. Associate, when used to indicate a relationship with any Person,
means (i) a corporation or organization (other than the Mutual Holding Company,
the Mid-Tier Holding Company, the Bank, a majority-owned subsidiary of the Bank
or the Holding Company), 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 estate, provided, however, that such term shall
not include any Tax-Qualified Employee Stock Benefit Plan of the Holding Company
or the Bank in which such Person has a substantial beneficial interest or serves
as a trustee or fiduciary, and (iii) any Person who is related by blood or
marriage to such Person and (A) who lives in the same home as the Person; or (B)
who is a director or senior officer of the Holding Company or the Bank or any of
the subsidiaries of the foregoing.
2.5. Bank means Oswego County Savings Bank, a New York savings bank.
2.6. Bank Conversion means conversion of the Bank to the New Bank.
2.7. Bank Merger means the merger of Interim with and into the Bank
pursuant to the Plan of Merger included as Annex C hereto.
2.8. Bank Common Stock means the common stock of the Bank, par value
$.01 per share.
2.9. Code means the Internal Revenue Code of 1986, as amended.
2.10. Community means the counties in which the Bank has a branch
office.
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2.11. Community Offering means the offering for sale to certain
residents of the Community, and thereafter members of the general public
directly by the Holding Company of any shares of Conversion Stock not subscribed
for in the Subscription Offering.
2.12. Control (including the terms "controlling," "controlled by," and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
2.12. Conversion and Reorganization means (i) the conversion of the
Mid-Tier Holding Company from a federally chartered stock corporation to a
federal interim savings association and the subsequent Mid-Tier Holding Company
Merger pursuant to which the Mid-Tier Holding Company will cease to exist, (ii)
the conversion of the Mutual Holding Company from mutual form to a federal
interim stock savings association and the subsequent Mutual Holding Company
Merger, pursuant to which the Mutual Holding Company will cease to exist, (iii)
the Bank Merger, pursuant to which the Bank will become a wholly owned
subsidiary of the Holding Company and, in connection therewith, each share of
Mid-Tier Holding Company, Common Stock outstanding immediately prior to the
effective time thereof shall automatically be converted, without further action
by the holder thereof, into and become the right to receive shares of Holding
Company Common Stock based on the Exchange Ratio, plus cash in lieu of any
fractional share interest, and (iv) the issuance of Conversion Stock by the
Holding Company in the Offerings as provided herein, which will increase the
number of shares of Holding Company Common Stock outstanding and the
capitalization of the Holding Company and the Bank.
2.13. Conversion Stock means the Holding Company Common Stock to be
issued and sold in the Offerings pursuant to the Plan of Conversion.
2.14. Deposit Account means withdrawable or repurchasable shares,
investment certificates or deposits or other savings accounts, including money
market deposit accounts, negotiable order of withdrawal accounts and demand
accounts, held by an account holder of the Bank.
2.15. Director, Officer and Employee means the terms as applied
respectively to any person who is a director, officer or employee of the Mutual
Holding Company, the Mid-Tier Holding Company, the Bank or any subsidiary
thereof.
2.16. Eligible Account Holder means 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 to be
established.
2.17. Eligibility Record Date means the date for determining Qualifying
Deposits of Eligible Account Holders and is the close of business on (1) March
31, 2001 and (2) May 10, 2001 with respect to Eligible Account Holders with
Qualifying Deposits in the branch acquired from BSB Bank and Trust Co. located
in the P&C Food Market Store on Route 104 East in Oswego, New York.
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2.18. ESOP means the Employee Stock Ownership Plan.
2.19. Estimated Price Range means the range of the estimated aggregate
pro forma market value of the total number of shares of Conversion Stock to be
issued in the Offerings, as determined by the Independent Appraiser in
accordance with Section 4 hereof.
2.20. Exchange Ratio means the rate at which shares of Holding Company
Common Stock will be exchanged for shares of Mid-Tier Holding Common Stock held
by the Public Shareholders in connection with the Bank Merger. The exact rate
shall be determined by the Mutual Holding Company, the Mid-Tier Holding Company
and the Bank in order to ensure that upon consummation of the Conversion and
Reorganization the Public Shareholders will own in the aggregate approximately
the same percentage of the Holding Company Common Stock to be outstanding upon
completion of the Conversion and Reorganization as the percentage of Mid-Tier
Holding Company Common Stock owned by them in the aggregate immediately prior to
consummation of the Conversion and Reorganization, before giving effect to (a)
cash paid in lieu of any fractional interests of Holding Company Common Stock
and (b) any shares of Conversion Stock purchased by the Public Shareholders in
the Offerings.
2.21. Exchange Shares mean the shares of Holding Company Common Stock
to be issued to the Public Shareholders in connection with the Bank Merger.
2.22. FDIC means the Federal Deposit Insurance Corporation or any
successor thereto.
2.23. FRB means the Board of Governors of the Federal Reserve System or
any successor thereto.
2.24. Holding Company means Bridge Street Financial, a stock
corporation to be organized under the laws of the State of Delaware. Such
corporation will be initially formed as a first-tier, wholly owned subsidiary of
the Bank. Upon completion of the Conversion and Reorganization, the Holding
Company shall hold all of the outstanding capital stock of the Bank.
2.25. Holding Company Common Stock means the common stock of the
Holding Company, par value $.01 per share.
2.26. Independent Appraiser means the independent financial consulting
firm retained by the Holding Company, the Mid-Tier Holding Company and the Bank
to prepare an appraisal of the estimated pro forma market value of the
Conversion Stock.
2.27. Initial Purchase Price means the price per share to be paid
initially by Participants for shares of Conversion Stock subscribed for in the
Subscription Offering and by Persons for shares of Conversion Stock ordered in
the Community Offering and/or Syndicated Community Offering.
2.28. Interim means Oswego County Interim Bank, which will be formed as
a first-tier, wholly-owned subsidiary of the Holding Company to facilitate the
Bank Merger.
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2.29. Member means any Person qualifying as a member of the Mutual
Holding Company in accordance with its mutual charter and bylaws and the laws of
the United States.
2.30. Mid-Tier Holding Company means Oswego County Bancorp, Inc., an
existing federally chartered stock corporation.
2.31. Mid-Tier Holding Company Common Stock means the common stock of
the Mid-Tier Holding Company, par value $.01 per share.
2.32. Mid-Tier Holding Company Merger means the Merger of the Mid-Tier
Holding Company (following its conversion to a federal interim stock savings
association) with and into the Bank pursuant to the Plan of Merger included as
Annex A hereto.
2.33. Mutual Holding Company means Oswego County MHC.
2.34. Mutual Holding Company Merger means the merger of the Mutual
Holding Company (following its conversion into a federal interim stock savings
association) with and into the Bank pursuant to the Plan of Merger included as
Annex B hereto.
2.35. New Bank means the Bank following its conversion to a national
bank.
2.36. OCC means Office of the Comptroller of the Currency or any
successor thereto.
2.37. Offerings mean the Subscription Offering, the Community Offering
and the Syndicated Community Offering.
2.38. Officer means the chairman of the board of directors, president,
chief executive officer, vice-president, secretary, treasurer or principal
financial officer, comptroller or principal accounting officer and any other
person performing similar functions with respect to any organization whether
incorporated or unincorporated.
2.39. Order Form means the form or forms to be provided by the Holding
Company, containing all such terms and provisions as set forth in Section 13
hereof, to a Participant or other Person by which Conversion Stock may be
ordered in the Offerings.
2.40. Other Member means a Voting Member who is not an Eligible Account
Holder or a Supplemental Eligible Account Holder.
2.41. OTS means the Office of Thrift Supervision or any successor
thereto.
2.42. Participant means any Eligible Account Holder, Tax-Qualified
Employee Stock Benefit Plan, Supplemental Eligible Account Holder, Other Member,
Director, Officer and Employee and Public Shareholder.
2.43. Person means an individual, a corporation, a limited liability
company, a partnership, a limited liability partnership, an association, a joint
stock company, a trust, an unincorporated organization or a government or any
political subdivision thereof.
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2.44. Plan and Plan of Conversion mean this Plan of Conversion and
Agreement and Plan of Reorganization as adopted by the Boards of Directors of
the Mutual Holding Company, the Mid-Tier Holding Company and the Bank and any
amendment hereto approved as provided herein. The Board of Directors of the
Holding Company shall adopt this Plan as soon as practicable following its
organization, and the Board of Directors of Interim shall adopt the Plan of
Merger included as Annex C hereto as soon as practicable following its
organization.
2.45. Primary Parties mean the Mutual Holding Company, the Mid-Tier
Holding Company, the Bank and the Holding Company.
2.46. Prospectus means the one or more documents to be used in offering
the Conversion Stock in the Offerings.
2.47. Public Shareholders mean those Persons who own shares of Mid-Tier
Holding Company Common Stock, excluding the Mutual Holding Company, as of the
Voting Record Date.
2.48. Qualifying Deposit means the aggregate balance of all Deposit
Accounts in the Bank of (i) an Eligible Account Holder at the close of business
on the Eligibility Record Date, provided such aggregate balance is not less than
$50, and (ii) a Supplemental Eligible Account Holder at the close of business on
the Supplemental Eligibility Record Date, provided such aggregate balance is not
less than $50.
2.49. Resident means 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, the
principal place of business or headquarters shall 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 Primary Parties 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 Primary Parties.
2.50. SEC means the U.S. Securities and Exchange Commission.
2.51. Special Meeting means the Special Meeting of Members of the
Mutual Holding Company called for the purpose of submitting this Plan to the
Members for their approval, including any adjournments of such meeting.
2.52. Shareholders mean those Persons who own shares of Mid-Tier
Holding Company Common Stock.
2.53. Shareholders' Meeting means the annual or special meeting of
Shareholders of the Mid-Tier Holding Company, called for the purpose of
submitting this Plan to the Shareholders for their approval, including any
adjournments of such meeting.
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2.54. Subscription Offering means the offering of the Conversion Stock
to Participants.
2.55. Subscription Rights mean nontransferable rights to subscribe for
Conversion Stock granted to Participants pursuant to the terms of this Plan.
2.56. Supplemental Eligible Account Holder means any Person, except
Directors and Officers of the Bank and their Associates, holding a Qualifying
Deposit at the close of business on the Supplemental Eligibility Record Date.
2.57. Supplemental Eligibility Record Date, if applicable, means the
date for determining Qualifying Deposits of Supplemental Eligible Account
Holders and shall be required if the Eligibility Record Date is more than 15
months prior to the date of the latest amendment to the Application for
Conversion filed by the Mutual Holding Company prior to approval of such
application by the OTS. If applicable, the Supplemental Eligibility Record Date
shall be the last day of the calendar quarter preceding OTS approval of the
Application for Conversion submitted by the Mutual Holding Company pursuant to
this Plan of Conversion.
2.58. Syndicated Community Offering means the offering for sale by a
syndicate of broker-dealers to the general public of shares of Conversion Stock
not purchased in the Subscription Offering and the Community Offering.
2.59. Tax-Qualified Employee Stock Benefit Plan means 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 is established
for the benefit of the employees of the Holding Company and/or the Bank and
which, with its related trust, meets the requirements to be "qualified" under
Section 401 of the Code as from time to time in effect. A "Non-Tax-Qualified
Employee Stock Benefit Plan" is any defined benefit plan or defined contribution
stock benefit plan which is not so qualified.
2.60. Voting Member means a Person who at the close of business on the
Voting Record Date is entitled to vote as a Member of the Mutual Holding Company
in accordance with its mutual charter and bylaws.
2.61. Voting Record Date means the date or dates for determining the
eligibility of Members to vote at the Special Meeting and of Shareholders to
vote at the Shareholders' Meeting, as applicable.
3. GENERAL PROCEDURE FOR CONVERSION AND REORGANIZATION.
A. Steps for Conversion and Reorganization and Bank Conversion;
Regulatory Filings
1. After the Bank's organization of the Holding Company and the
receipt of all requisite regulatory approvals, the Holding
Company will form Interim as a first-tier, wholly owned
subsidiary of the Holding Company, and the Board of Directors of
Interim shall adopt the Plan of Merger included as Annex C hereto
by at least a two-thirds vote. In addition, the Holding Company
shall approve such Plan of Merger in its capacity as the sole
shareholder of Interim. Furthermore, the
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Mid-Tier Holding Company shall approve the Plan and the Plan of
Merger in its capacity as the sole shareholder of the Bank.
2. An application for the Conversion and Reorganization,
including the Plan and all other requisite material (the
"Application for Conversion"), shall be submitted to the OTS for
approval. The Mutual Holding Company, the Mid-Tier Holding
Company and the Bank also will cause notice of the adoption of
the Plan by the Boards of Directors of the Mutual Holding
Company, the Mid-Tier Holding Company and the Bank to be given by
publication in a newspaper having general circulation in each
community in which an office of the Bank is located and will
cause copies of the Plan to be made available at each office of
the Mutual Holding Company, the Mid-Tier Holding Company and the
Bank for inspection by Members and Shareholders. The Mutual
Holding Company, the Mid-Tier Holding Company and the Bank will
again cause to be published, in accordance with the requirements
of applicable regulations of the OTS, a notice of the filing with
the OTS of an application to convert the Mutual Holding Company
from mutual to stock form and will post the notice of the filing
for the Application for Conversion in each of their offices.
3. Promptly following receipt of requisite approval of the OTS,
this Plan will be submitted to the Voting Members for their
consideration and approval at the Special Meeting. The Mutual
Holding Company may, at its option, mail to all Members as of the
Voting Record Date, at their last known address appearing on the
records of the Mutual Holding Company and the Bank, a proxy
statement in either long or, to the extent permitted by
applicable law and regulation, summary form describing the Plan
which will be submitted to a vote of the Members at the Special
Meeting. The Holding Company also shall mail to all such Members
(as well as other Participants) a Prospectus and Order Form for
the purchase of Conversion Stock, subject to the provisions of
Section 7 hereof. In addition, all such Members will receive, or
be given the opportunity to request by returning a
postage-prepaid card which will be distributed with the proxy
statement, letter or other written communication, a copy of the
certificate of incorporation and bylaws of the Holding Company.
4. Subscription Rights to purchase shares of Conversion Stock
will be issued without payment therefor to Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members,
as set forth in Section 5 hereof.
5. The Mid-Tier Holding Company shall file preliminary proxy
materials with the OTS and the SEC in order to seek the approval
of the Plan by its Shareholders. Promptly following clearance of
such proxy materials and the receipt of any other requisite
approval of the OTS, the Mid-Tier Holding Company will mail
definitive proxy materials to all Shareholders as of the Voting
Record Date, at their last known address appearing on the records
of the Mid-Tier Holding Company, for their consideration and
approval of this Plan at the Shareholders' Meeting.
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6. The Holding Company shall submit or cause to be submitted a
holding company application to the OTS for approval of the
acquisition of the Bank for a moment in time. Such application
also shall include an application to form Interim. In addition,
an application to merge the Mutual Holding Company (following its
conversion into a federal interim stock savings association) and
the Bank, an application to merge the Mid-Tier Holding Company
(following its conversion into a federal interim stock savings
association) and the Bank and an application to merge Interim and
the Bank shall be filed with the OTS, either as exhibits to the
holding company application or separately. All notices required
to be published in connection with such applications shall be
published at the times required.
7. The Holding Company shall submit or cause to be submitted a
holding company application to the FRB for approval to become a
bank holding company through the acquisition of New Bank.
8. The Holding Company shall file a Registration Statement with
the SEC to register the Holding Company Common Stock to be issued
in the Conversion and Reorganization under the Securities Act of
1933, as amended, and shall register such Holding Company Common
Stock under any applicable state securities laws. Upon
registration and after the receipt of all required regulatory
approvals, the Conversion Stock shall be first offered for sale
in a Subscription Offering to Eligible Account Holders,
Supplemental Eligible Account Holders, if any, Other Members,
Directors, Officers and Employees and Public Shareholders as of
the Voting Record Date. It is anticipated that any shares of
Conversion Stock remaining unsold after the Subscription Offering
will be sold through a Community Offering and/or a Syndicated
Community Offering. The purchase price per share for the
Conversion Stock shall be a uniform price determined in
accordance with Section 4 hereof. The Holding Company shall
contribute to the Bank an amount of fifty percent (50%) of the
net proceeds received by the Holding Company from the sale of
Conversion Stock.
9. The Bank shall submit Interagency Bank Merger Act
Applications with the New York State Banking Department and the
FDIC for approval of the interim mergers.
10. The Bank shall submit operating subsidiary notices to the New
York State Banking Department for approval to establish the
Holding Company and Interim, and any other applicable notices
and/or applications.
11. The Bank shall submit an application to the OCC for approval
to convert to a national bank.
B. Votes Required for Consummation of Conversion and Reorganization
This Plan was adopted by the Boards of Directors of the Mutual Holding
Company, the Mid-Tier Holding Company and the Bank on June 20, 2002.
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This Plan is subject to the approval of the OTS and must be adopted by
(1) at least a majority of the total number of votes eligible to be cast by
Voting Members of the Mutual Holding Company at the Special Meeting and (2)
holders of at least two-thirds of the outstanding Mid-Tier Holding Company
Common Stock at the Shareholders' Meeting. In addition, the Primary Parties have
conditioned the consummation of the Conversion and Reorganization on the
approval of the Plan by at least a majority of the votes cast, in person or by
proxy, by the Public Shareholders at the Shareholders' Meeting.
Failure to pursue or receive regulatory approval for the Bank
Conversion shall have no effect on the vote with respect to the Offerings.
C. Consummation of Conversion and Reorganization
The effective date of the Conversion and Reorganization shall be the
date set forth in Section 23 hereof.
Upon the effective date, the following transactions shall occur:
1. The Mutual Holding Company shall convert from a mutual holding
company to a federal interim stock savings association. The Mid-Tier
Holding Company shall convert into a federal interim stock savings
association and simultaneously merge with and into the Bank in the
Mid-Tier Holding Company Merger, with the Bank being the surviving
institution. Immediately thereafter, the Mutual Holding Company, as
converted, shall merge with and into the Bank in the Mutual Holding
Company Merger, with the Bank being the surviving institution. As a
result of the Mutual Holding Company Merger and the Mid-Tier Holding
Company Merger, (x) the shares of Mid-Tier Holding Company Common Stock
held by the Mutual Holding Company (following its conversion to a
federal interim stock savings association) shall be extinguished and
(y) Members of the Mutual Holding Company will be granted interests in
the liquidation account to be established by the Bank pursuant to
Section 11 hereof.
2. Interim shall merge with and into the Bank pursuant to the Bank
Merger, with the Bank being the surviving institution. As a result of
the Bank Merger, (x) the shares of Holding Company Common Stock held by
the Bank shall be extinguished; (y) the shares of Mid-Tier Holding
Company Common Stock held by the Public Shareholders shall be converted
into the right to receive shares of Holding Company Common Stock based
upon the Exchange Ratio, plus cash in lieu of any fractional share
interest based upon the Actual Purchase Price; and (z) the shares of
common stock of Interim held by the Holding Company shall be converted
into shares of Bank Common Stock on a one-for-one basis, with the
result that the Bank shall become a wholly owned subsidiary of the
Holding Company. In addition, as a result of the Bank Merger, options
to purchase shares of Mid-Tier Holding Company Common Stock which are
outstanding immediately prior to consummation of the Conversion and
Reorganization shall be converted into options to purchase shares of
Holding Company Common Stock, with the number of shares subject to the
option and the exercise price per share to be adjusted based upon the
Exchange Ratio so that the aggregate exercise price remains unchanged,
and with the duration of the option remaining unchanged.
12
3. The Holding Company shall sell the Conversion Stock in the
Offerings, as provided herein.
D. Consummation of Bank Conversion
The Bank Conversion shall be deemed to occur and shall be effective
upon completion of all actions necessary or appropriate under applicable federal
statutes and regulations and the policies of the FRB, the OCC and the OTS to
complete the conversion of the Bank to a national bank, including the filing of
the articles of association of the New Bank with the OCC. The Bank Conversion
shall be consummated as soon as reasonably practicable following the effective
date of the Conversion and Reorganization, as set forth in Section 23, hereof.
The Board of Directors of the Bank, by majority vote, may, at any time,
and notwithstanding any language in this Plan of Conversion to the contrary
elect not to proceed with the Bank Conversion, in which event the FRB holding
company application, the OCC conversion application may be withdrawn or
abandoned. In the event the Bank Conversion is not pursued, any references to
the Bank Conversion in this Plan shall be disregarded.
E. Retention of Investment Bankers and Financial Advisors
The Primary Parties may retain and pay for the services of financial
and other advisors and investment bankers to assist in connection with any or
all aspects of the Conversion and Reorganization, including in connection with
the Offerings the payment of fees to brokers and investment bankers for
assisting Persons in completing and/or submitting Order Forms. All fees,
expenses, retainers and similar items shall be reasonable.
4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF CONVERSION STOCK.
The aggregate price at which shares of Conversion Stock shall be sold
in the Offerings shall be based on a pro forma valuation of the aggregate market
value of the Conversion Stock prepared by the Independent Appraiser. The
valuation shall be based on financial information relating to the Primary
Parties, market, financial and economic conditions, a comparison of the Primary
Parties with selected publicly-held financial institutions and holding companies
and with comparable financial institutions and holding companies and such other
factors as the Independent Appraiser may deem to be important. The valuation
shall be stated in terms of an Estimated Price Range, the maximum of which shall
generally be no more than 15% above the average of the minimum and maximum of
such price range and the minimum of which shall generally be no more than 15%
below such average. The valuation shall be updated during the Conversion and
Reorganization as market and financial conditions warrant and as may be required
by the OTS.
Based upon the independent valuation, the Boards of Directors of the
Primary Parties shall fix the Actual Purchase Price and the number (or range) of
shares of Conversion Stock to be offered in the Subscription Offering, Community
Offering and/or Syndicated Community Offering. The Actual Purchase Price and the
total number of shares of Conversion Stock to be issued in the Offerings shall
be determined by the Boards of Directors of the Primary Parties upon conclusion
of the Offerings in consultation with the Independent Appraiser and any
13
financial advisor or investment banker retained by the Primary Parties in
connection therewith, and will be confirmed at the completion of the Offerings.
Subject to the approval of the OTS, the Estimated Price Range may be
increased or decreased to reflect market, financial and economic conditions
prior to completion of the Conversion and Reorganization, and under such
circumstances the Primary Parties may increase or decrease the total number of
shares of Conversion Stock to be issued in the Conversion and Reorganization to
reflect any such change. Notwithstanding anything to the contrary contained in
this Plan, no resolicitation of subscribers shall be required and subscribers
shall not be permitted to modify or cancel their subscriptions unless the gross
proceeds from the sale of the Conversion Stock issued in the Conversion and
Reorganization are less than the minimum or more than 15% above the maximum of
the Estimated Price Range set forth in the Prospectus. In the event of an
increase in the total number of shares offered in the Conversion and
Reorganization due to an increase in the Estimated Price Range, the priority of
share allocation shall be as set forth in this Plan.
5. METHOD OF OFFERING SHARES AND RIGHTS TO PURCHASE STOCK.
A. Subscription Offering
Priority 1: Eligible Account Holders. Each Eligible Account Holder
shall receive, without payment, Subscription Rights to purchase up to the
greater of (i) $250,000 of Conversion Stock (or such maximum purchase limitation
as may be established for the Community Offering and/or Syndicated Community
Offering), (ii) one-tenth of 1% of the total offering of shares in the
Subscription Offering or (iii) 15 times the product (rounded down to the next
whole number) obtained by multiplying the total number of shares of Conversion
Stock offered in the Subscription Offering by a fraction, of which the numerator
is the amount of the Qualifying Deposits of the Eligible Account Holder and the
denominator is the total amount of all Qualifying Deposits of all Eligible
Account Holders, in each case subject to Sections 6 and 9 hereof.
In the event of an oversubscription for shares of Conversion Stock by
Eligible Account Holders, available shares shall be allocated among subscribing
Eligible Account Holders so as to permit each such Eligible Account Holder, to
the extent possible, to purchase a number of shares which will make his or her
total allocation equal to the lesser of the number of shares subscribed for or
100 shares. Any available shares remaining after each subscribing Eligible
Account Holder has been allocated the lesser of the number of shares subscribed
for or 100 shares shall be allocated among the subscribing Eligible Account
Holders in the proportion which the Qualifying Deposit of each such subscribing
Eligible Account Holder bears to the total Qualifying Deposits of all such
subscribing Eligible Account Holders whose orders are unfilled, provided that no
fractional shares shall be issued. Subscription Rights of Eligible Account
Holders who are also Directors or Officers and their Associates shall be
subordinated to those of other Eligible Account Holders to the extent that they
are attributable to increased deposits during the one-year period preceding the
Eligibility Record Date.
Priority 2: Supplemental Eligible Account Holders. In the event that
the Eligibility Record Date is more than 15 months prior to the date of the
latest amendment to the Application
14
for Conversion filed prior to OTS approval, then, and only in that event, a
Supplemental Eligibility Record Date shall be set and each Supplemental Eligible
Account Holder shall receive, without payment, Subscription Rights to purchase
up to the greater of (i) $250,000 of Conversion Stock in the Subscription
Offering (or such maximum purchase limitation as may be established for the
Community Offering and/or Syndicated Community Offering), (ii) one-tenth of 1%
of the total offering of shares in the Subscription Offering and (iii) 15 times
the product (rounded down to the next whole number) obtained by multiplying the
total number of shares of Conversion Stock offered in the Subscription Offering
by a fraction, of which the numerator is the amount of the Qualifying Deposits
of the Supplemental Eligible Account Holder and the denominator is the total
amount of all Qualifying Deposits of all Supplemental Eligible Account Holders,
in each case subject to Sections 6 and 9 hereof and the availability of shares
of Conversion Stock for purchase after taking into account the shares of
Conversion Stock purchased by Eligible Account Holders through the exercise of
Subscription Rights under Sections 5 hereof.
In the event of an oversubscription for shares of Conversion Stock by
Supplemental Eligible Account Holders, available shares shall be allocated among
subscribing Supplemental Eligible Account Holders so as to permit each such
Supplemental Eligible Account Holder, to the extent possible, to purchase a
number of shares sufficient to make his or her total allocation (including the
number of shares, if any, allocated to Eligible Account Holders) equal to the
lesser of the number of shares subscribed for or 100 shares. Any remaining
available shares shall be allocated among subscribing Supplemental Eligible
Account Holders in the proportion that the amount of their respective Qualifying
Deposits bears to the total amount of the Qualifying Deposits of all such
subscribing Supplemental Eligible Account Holders whose orders are unfilled,
provided that no fractional shares shall be issued.
Priority 3: Other Members. Each Other Member shall receive, without
payment, Subscription Rights to purchase up to the greater of (i) $250,000 of
Conversion Stock in the Subscription Offering (or such maximum purchase
limitation as may be established for the Community Offering and/or Syndicated
Community Offering) and (ii) one-tenth of 1% of the total offering of shares in
the Subscription Offering, subject to Sections 6 and 9 hereof and the
availability of shares of Conversion Stock for purchase after taking into
account the shares of Conversion Stock purchased by Eligible Account Holders and
Supplemental Eligible Account Holders, if any, through the exercise of
Subscription Rights under Section 5 hereof.
If Other Members subscribe for a number of shares of Conversion Stock
in excess of the total number of shares of Conversion Stock remaining, available
shares shall be allocated among subscribing Other Members so as to permit each
such Other Member, to the extent possible, to purchase a number of shares which
will make his or her total allocation equal to the lesser of the number of
shares subscribed for or 100 shares. Any remaining shares shall be allocated
among subscribing Other Members on a pro rata basis in the same proportion as
each such Other Member's subscription bears to the total subscriptions of all
such subscribing Other Members, provided that no fractional shares shall be
issued.
15
B. Community Offering
Any shares of Common Stock not subscribed for in the Subscription
Offering may be offered for sale in a Community Offering. This will involve an
offering of all unsubscribed shares directly to the general public with a
preference to those natural persons residing in the Community. Subject to the
requirements set forth herein, the manner in which the Conversion Stock is sold
in the Community Offering shall have as the objective the achievement of the
widest possible distribution of such stock.
In the event of a Community Offering, all shares of Conversion Stock
which are not subscribed for in the Subscription Offering shall be offered for
sale by means of a direct community marketing program, which may provide for the
use of brokers, dealers or investment banking firms experienced in the sale of
financial institution securities.
Each order for Conversion Stock in the Community Offering shall be
subject to the absolute right of the Primary Parties to accept or reject any
such order in whole or in part either at the time of receipt of an order or as
soon as practicable following completion of the Community Offering. Available
shares will be allocated first to each Person whose order is accepted in an
amount equal to the lesser of 100 shares or the number of shares subscribed for
by each such Person, if possible. Thereafter, unallocated shares shall be
allocated among the Persons whose accepted orders remain unsatisfied in the same
proportion that the unfilled order of each bears to the total unfilled orders of
all Persons whose accepted orders remain unsatisfied, provided that no
fractional shares shall be issued.
The amount of Conversion Stock that any Person may purchase in the
Community Offering shall not exceed the greater of (i) $250,000 of Conversion
Stock in the Subscription Offering or (ii) one-tenth of 1% of the total offering
in the Subscription Offering, provided, however, that this amount may be
increased to up to 5% of the total offering of shares of Conversion Stock,
subject to any required regulatory approval but without the further approval of
Members of the Mutual Holding Company or the Shareholders of the Mid-Tier
Holding Company; and provided further that, to the extent applicable, and
subject to the preferences set forth and the limitations on purchases of
Conversion Stock set forth in this section and Section 6 of this Plan, orders
for Conversion Stock in the Community Offering shall first be filled to a
maximum of 2% of the total number of shares of Conversion Stock sold in the
Offerings and thereafter any remaining shares shall be allocated on an equal
number of shares basis per order until all orders have been filled. The Primary
Parties may commence the Community Offering concurrently with, at any time
during, or as soon as practicable after the end of, the Subscription Offering,
and the Community Offering must be completed within 45 days after the completion
of the Subscription Offering, unless extended by the Primary Parties with any
required regulatory approval.
C. Syndicated Community Offering
Subject to such terms, conditions and procedures as may be determined
by the Primary Parties, all shares of Conversion Stock not subscribed for in the
Subscription Offering or ordered in the Community Offering may be sold by a
syndicate of broker-dealers to the general public in a Syndicated Community
Offering. Each order for Conversion Stock in the Syndicated
16
Community Offering shall be subject to the absolute right of the Primary Parties
to accept or reject any such order in whole or in part either at the time of
receipt of an order or as soon as practicable after completion of the Syndicated
Community Offering. The amount of Conversion Stock that any Person may purchase
in the Syndicated Community Offering shall not exceed $250,000 of Conversion
Stock in the Subscription Offering, provided, however, that this amount may be
increased to up to 5% of the total offering of shares of Conversion Stock,
subject to any required regulatory approval but without the further approval of
Members of the Mutual Holding Company or the Shareholders of the Mid-Tier
Holding Company; and provided further that, to the extent applicable, and
subject to the limitations on purchases of Conversion Stock set forth in this
section and Section 6 of this Plan, orders for Conversion Stock in the
Syndicated Community Offering shall first be filled to a maximum of 2% of the
total number of shares of Conversion Stock sold in the Offerings and thereafter
any remaining shares shall be allocated on an equal number of shares basis per
order until all orders have been filled. The Primary Parties may commence the
Syndicated Community Offering concurrently with, at any time during, or as soon
as practicable after the end of, the Subscription Offering and/or Community
Offering, and the Syndicated Community Offering must be completed within 45 days
after the completion of the Subscription Offering, unless extended by the
Primary Parties with any required regulatory approval.
6. ADDITIONAL LIMITATIONS ON PURCHASES OF CONVERSION STOCK.
The following limitations apply to the offerings, in addition to those
set forth in Section 5:
1. In addition to the other restrictions and limitations set forth
herein, the maximum amount of Holding Company Common Stock which
any Person together with any Associate or group of Persons Acting
in Concert may, directly or indirectly, subscribe for or purchase
in the Conversion and Reorganization shall not exceed $400,000.
2. The number of shares of Conversion Stock which Directors and
Officers and their Associates may purchase in the aggregate in the
Offerings shall not exceed 32% of the total number of shares of
Conversion Stock sold in the Offerings, including any shares which
may be issued in the event of an increase in the maximum of the
Estimated Price Range to reflect changes in market, financial and
economic conditions after commencement of the Subscription Offering
and prior to completion of the Offerings.
3. No Person may purchase fewer than 25 shares of Conversion Stock
in the Offerings, to the extent such shares are available;
provided, however, that if the Actual Purchase Price is greater
than $20.00 per share, such minimum number of shares shall be
adjusted so that the aggregate Actual Purchase Price for such
minimum shares will not exceed $500.00.
4. For purposes of the foregoing limitations and the determination
of Subscription Rights, (i) Directors, Officers and Employees shall
not be deemed to
17
be Associates or a group Acting in Concert solely as a result of
their capacities as such and (ii) Exchange Shares shall be valued
at the Actual Purchase Price.
5. Subject to any required regulatory approval and the
requirements of applicable laws and regulations, but without
further approval of the Members of the Mutual Holding Company or
the Shareholders of the Mid-Tier Holding Company, the Primary
Parties may increase or decrease any of the individual or aggregate
purchase limitations set forth herein to a percentage which does
not exceed 5% of the total offering of shares of Holding Company
Common Stock in the Conversion and Reorganization whether prior to,
during or after the Subscription Offering, Community Offering
and/or Syndicated Community Offering. In the event that an
individual purchase limitation is increased after commencement of
the Subscription Offering or any other offering, the Primary
Parties shall permit any Person who subscribed for the maximum
number of shares of Conversion Stock to purchase an additional
number of shares, so that such Person shall be permitted to
subscribe for the then maximum number of shares permitted to be
subscribed for by such Person, subject to the rights and
preferences of any Person who has priority Subscription Rights. In
the event that any of the individual or aggregate purchase
limitations are decreased after commencement of the Subscription
Offering or any other offering, the orders of any Person who
subscribed for more than the new purchase limitation shall be
decreased by the minimum amount necessary so that such Person shall
be in compliance with the then maximum number of shares permitted
to be subscribed for by such Person.
6. The Primary Parties shall have the right to take all such
action as they may, in their sole discretion, deem necessary,
appropriate or advisable in order to monitor and enforce the terms,
conditions, limitations and restrictions contained in this section
and elsewhere in this Plan and the terms, conditions and
representations contained in the Order Form, including, but not
limited to, the absolute right (subject only to any necessary
regulatory approvals or concurrences) to reject, limit or revoke
acceptance of any subscription or order and to delay, terminate or
refuse to consummate any sale of Conversion Stock which they
believe might violate, or is designed to, or is any part of a plan
to, evade or circumvent such terms, conditions, limitations,
restrictions and representations. Any such action shall be final,
conclusive and binding on all persons, and the Primary Parties and
their respective Boards shall be free from any liability to any
Person on account of any such action.
7. Notwithstanding anything to the contrary contained in this Plan
and except as may otherwise be required by the OTS, the Public
Shareholders will not have to sell any Mid-Tier Holding Company
Common Stock or be limited in receiving Exchange Shares even if
their ownership of Mid-Tier Holding Company Common Stock when
converted into Exchange Shares would exceed an applicable purchase
limitation; provided, however, that a Public Shareholder who would
exceed an applicable purchase limitation may be precluded from
purchasing Conversion Stock in the Offerings.
18
8. Notwithstanding any other provisions of this Plan, no person
shall be entitled to purchase any Conversion to the extent such
purchase would be illegal under any federal law or state law or
regulation or would violate regulations or policies of the National
Association of Securities Dealers, Inc., particularly those
regarding free riding and withholding. The Holding Company and/or
its agents may ask for an acceptable legal opinion from any
purchaser as to the legality of such purchase and may refuse to
honor any purchase order if such opinion is not timely furnished.
Prior to the consummation of the Offerings, no Person shall offer to transfer,
or enter into any agreement or understanding to transfer the legal or beneficial
ownership of any subscription rights or shares of Conversion Stock, except
pursuant to this Plan. Each person purchasing Conversion Stock shall be deemed
to confirm that such purchase does not conflict with the above purchase
limitations contained in this Plan.
EACH PERSON PURCHASING CONVERSION STOCK IN THE OFFERINGS WILL BE DEEMED TO
CONFIRM THAT PURCHASE DOES NOT CONFLICT WITH THE PURCHASE LIMITATIONS IN THIS
PLAN. ALL QUESTIONS CONCERNING WHETHER ANY PERSONS ARE ASSOCIATES OR A GROUP
ACTING IN CONCERT OR WHETHER ANY PURCHASE CONFLICTS WITH THE PURCHASE
LIMITATIONS IN THIS PLAN OR OTHERWISE VIOLATES ANY PROVISION OF THIS PLAN SHALL
BE DETERMINED BY THE PRIMARY PARTIES IN THEIR SOLE DISCRETION. SUCH
DETERMINATION SHALL BE CONCLUSIVE, FINAL AND BINDING ON ALL PERSONS AND THE
PRIMARY PARTIES MAY TAKE ANY REMEDIAL ACTION, INCLUDING WITHOUT LIMITATION
REJECTING THE PURCHASE OR REFERRING THE MATTER TO THE OTS FOR ACTION, AS IN
THEIR SOLE DISCRETION THE PRIMARY PARTIES MAY DEEM APPROPRIATE.
7. TIMING OF SUBSCRIPTION OFFERING, MANNER OF EXERCISING SUBSCRIPTION
RIGHTS AND ORDER FORMS.
A. Timing of Subscription Offering.
The Subscription Offering may be commenced concurrently with or at any
time after the mailing to Voting Members of the Mutual Holding Company and
Shareholders of the Mid-Tier Holding Company of the proxy statement(s) to be
used in connection with the Special Meeting and the Shareholders' Meeting. The
Subscription Offering may be closed before the Special Meeting and the
Shareholders' Meeting, provided that the offer and sale of the Conversion Stock
shall be conditioned upon the approval of the Plan by the Voting Members of the
Mutual Holding Company and the Shareholders of the Mid-Tier Holding Company at
the Special Meeting and the Shareholders' Meeting, respectively.
The exact timing of the commencement of the Subscription Offering shall
be determined by the Primary Parties in consultation with the Independent
Appraiser and any financial or advisory or investment banking firm retained by
them in connection with the Conversion. The Primary Parties may consider a
number of factors, including, but not limited to, their current and projected
future earnings, local and national economic conditions, and the prevailing
market for
19
stocks in general and stocks of financial institutions in particular. The
Primary Parties shall have the right to withdraw, terminate, suspend, delay,
revoke or modify any such Subscription Offering, at any time and from time to
time, as they in their sole discretion may determine, without liability to any
Person, subject to compliance with applicable securities laws and any necessary
regulatory approval or concurrence.
The Primary Parties shall, promptly after the SEC has declared the
Registration Statement, which includes the Prospectus, effective and all
required regulatory approvals have been obtained, distribute or make available
the Prospectus, together with Order Forms for the purchase of Conversion Stock,
to all Participants at their last known addresses appearing on the records of
the Bank for the purpose of enabling them to exercise their respective
Subscription Rights, subject to this section, and at the discretion of the Board
of the Holding Company will be made available for use by those persons entitled
to purchase in the Community Offering.
B. Order Forms; Return of Order Forms
A single Order Form for all Deposit Accounts maintained with the Bank by
an Eligible Account Holder and any Supplemental Eligible Account Holder may be
furnished, irrespective of the number of Deposit Accounts maintained with the
Bank on the Eligibility Record Date and Supplemental Eligibility Record Date,
respectively. No person holding a subscription right may exceed any otherwise
applicable purchase limitation by submitting multiple orders for Conversion
Stock. Multiple orders are subject to adjustment, as appropriate, on a pro rata
basis and deposit balances will be divided equally among such orders in
allocating shares in the event of an oversubscription.
The recipient of an Order Form shall have no less than 20 days and no
more than 45 days from the date of mailing of the Order Form (with the exact
termination date to be set forth on the Order Form) to properly complete and
execute the Order Form and deliver it to the Primary Parties. The Primary
Parties may extend such period by such amount of time as they determine is
appropriate. Failure of any Participant to deliver a properly executed Order
Form to the Primary Parties, along with payment (or authorization for payment by
withdrawal) for the shares of Conversion Stock subscribed for, within the time
limits prescribed, shall be deemed a waiver and release by such person of any
rights to subscribe for shares of Conversion Stock. Each Participant shall be
required to confirm to the Primary Parties by executing an Order Form that such
Person has fully complied with all of the terms, conditions, limitations and
restrictions in the Plan.
C. Requirements for Order Form
Each Order Form shall contain:
1. A specified date by which all order forms must be received by
the Bank, which date shall be not less than 20, nor more than 45
days, as stated in subsection (e) above, following the date on
which the order forms are mailed by the Bank, and which date will
constitute the termination of the Subscription Offering;
20
2. The Initial Purchase Price per share for shares of Conversion
Stock to be sold in the Subscription Offering and Community
Offering;
3. An explanation of the rights and privileges granted under this
Plan to each class of persons granted subscription rights pursuant
to this Plan with respect to the purchase of Conversion Stock;
4. Specifically designated blank spaces for dating and signing the
order form;
5. A description of the minimum and maximum number of shares of
Conversion Stock that may be subscribed for pursuant to the
exercise of subscription rights or otherwise purchased in the
Community Offering;
6. The amount which must be returned with the order form to
subscribe for Conversion Stock. Such amount will be equal to the
purchase price multiplied by the number of shares of Conversion
Stock subscribed for in accordance with the terms of this Plan;
7. Instructions concerning how to indicate on such order form the
extent to which the recipient elects to exercise subscription
rights under this Plan, the name or names in which the shares of
Conversion Stock subscribed for are to be registered, the address
to which certificates representing such shares of Conversion Stock
are to be sent and the alternative methods of payment for
Conversion Stock which will be permitted;
8. An acknowledgment that the recipient of the order form has
received a final copy of the Prospectus prior to execution of the
order form;
9. A statement indicating the consequences of failing to properly
complete and return the order form, including 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 Bank within the subscription period
such properly completed and executed order form, together with the
full required payment as specified in the order form for the shares
of Conversion Stock for which the recipient elects to subscribe in
the Subscription Offering (or by authoring on the order form that
the Bank withdraw said amount from the subscriber's Deposit Account
at the Bank); the subscription rights of Eligible Account Holders,
Supplemental Eligible Account Holders, and Other Members are
nontransferable. Certificates representing shares of Conversion
Stock purchased in the Subscription Offering must be registered in
the name of the Eligible Account Holder, Supplemental Eligible
Account Holder or Other Member, as the case may be. Joint stock
registration will be allowed only in the qualifying deposit account
is so registered;
10. Provision for certification to be executed by the recipient of
the order form to the effect that, as to any shares of Conversion
Stock which the recipient elects to purchase, such recipient is
purchasing such shares of Conversion Stock for his
21
own account only and has no present agreement or understanding
regarding any subsequent sale or transfer of such shares of
Conversion Stock; and
11. A statement to the effect that the executed order form, once
received by the Bank, may not be modified or amended by the
subscriber without the consent of the Bank; notwithstanding the
above, the Bank and the Holding Company reserve the right in their
sole discretion to accept or reject orders received on photocopied
or facsimilied order forms.
D. Rejection of Order Forms; Interpretation of Order Forms
The Primary Parties shall have the absolute right, in their sole
discretion and without liability to any Participant or other Person, to reject
any Order Form, including, but not limited to, any Order Form that is (i)
improperly completed or executed; (ii) not timely received; (iii) not
accompanied by the proper payment (or authorization of withdrawal for payment)
or, in the case of institutional investors in the Community Offering, not
accompanied by an irrevocable order together with a legally binding commitment
to pay the full amount of the purchase price prior to 48 hours before the
completion of the Offerings; or (iv) submitted by a Person whose representations
the Primary Parties believe to be false or who they otherwise believe, either
alone, or Acting in Concert with others, is violating, evading or circumventing,
or intends to violate, evade or circumvent, the terms and conditions of the
Plan. Furthermore, in the event Order Forms (i) are not delivered and are
returned to the Bank, the Mid-Tier Holding Company or the Mutual Holding Company
by the Untied States Postal Service or the Bank, the Mid-Tier Holding Company or
the Mutual Holding Company is unable to locate the addressee, or (ii) are not
mailed pursuant to a "no mail" order placed in effect by the account holder, the
subscription rights of the person to which such rights have been granted will
lapse as though such person failed to return the contemplated Order Form within
the time period specified thereon. The Primary Parties may, but will not be
required to, waive any irregularity on any Order Form or may require the
submission of corrected Order Forms or the remittance of full payment for shares
of Conversion Stock by such date as they may specify. The interpretation of the
Primary Parties of the terms and conditions of the Order Forms shall be final
and conclusive.
8. PAYMENT FOR CONVERSION STOCK.
All payments for Conversion subscribed for or ordered in the Offerings
must be delivered in full to the Bank along with a properly completed and
executed Order Form, or purchase order in the case of the Syndicated Community
Offering, on or prior to the expiration date specified on the Order Form or
purchase order, as the case may be, unless such date is extended by the Bank. A
properly completed original stock Order Form must be used to subscribe for
Conversion Stock. Copies of an order form are not required to be accepted. The
Bank shall not knowingly loan funds or otherwise extend credit to any
Participant or other Person to purchase Conversion Stock. Each share of
Conversion Stock shall be non-assessable upon payment in full of the Actual
Purchase Price.
Payment for Conversion Stock will be permitted to be made in any of the
following manners:
22
1. By check, bank draft or money order, provided that checks will
only be accepted subject to collection. Interest will be paid by
the Bank at not less than the rate per annum being paid by the Bank
on its passbook accounts at the time the Offerings commence, on
payments for Conversion Stock received in the Offerings by check,
bank draft or money order from the date payment is received until
consummation or termination of the Reorganization and Conversion.
The Bank shall be entitled to invest all amounts paid for
subscriptions in the Offerings for its own account until completion
or termination of the Reorganization.
2. By appropriate authorization of withdrawal from designated types
of deposit accounts in the Bank. The order forms will contain
appropriate means by which authorization of such withdrawals may be
made. For purposes of determining the withdrawable balance of such
accounts, such withdrawals will be deemed to have been made upon
receipt of appropriate authorization therefor, but interest at the
rates applicable to the accounts from which the withdrawals have
been deemed to have been made will be paid by the Bank on the
amounts deemed to have been withdrawn until the date on which the
Conversion and Reorganization is consummated, at which date the
authorized withdrawal will actually be made. Such withdrawals may
be made upon receipt of order forms authorizing such withdrawals,
but interest will be paid by the Bank on the amounts withdrawn as
if such amounts had remained in the accounts from which they were
withdrawn until the date upon which the sales of Conversion Stock
pursuant to exercise of subscription rights are actually
consummated.
3. Wire transfers as payment for shares ordered for purchase may be
permitted or accepted as proper payment.
4. Payments for the purchase of Conversion in the Offerings will be
permitted through authorization of withdrawals from certificate
accounts at the Bank without early withdrawal penalties. If the
remaining balances of the certificate accounts after such
withdrawals are less than the minimum qualifying balances under
applicable regulations, the certificates evidencing the accounts
will be canceled upon consummation of the Conversion and
Reorganization, and the remaining balances will thereafter earn
interest at the passbook rate.
9. ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES.
The Primary Parties shall make reasonable efforts to comply with the
securities laws of all jurisdictions in the United States in which Participants
reside. However, no Participant will be offered or receive any Conversion Stock
under the Plan if such Participant resides in a foreign country or resides in a
jurisdiction of the United States with respect to which all of the following
apply: (a) there are few Participants otherwise eligible to subscribe for shares
under this Plan who reside in such jurisdiction; (b) the granting of
Subscription Rights or the offer or sale of shares of Conversion Stock to such
Participants would require any of the Primary Parties or their respective
Directors and Officers, under the laws of such jurisdiction, to register as a
broker-dealer, salesman or selling agent or to register or otherwise qualify the
Conversion Stock for sale
23
in such jurisdiction, or any of the Primary Parties would be required to qualify
as a foreign corporation or file a consent to service of process in such
jurisdiction; and (c) such registration, qualification or filing in the judgment
of the Primary Parties would be impracticable or unduly burdensome for reasons
of cost or otherwise.
10. VOTING RIGHTS OF SHAREHOLDERS.
Following consummation of the Conversion and Reorganization, voting
rights with respect to the New Bank shall be held and exercised exclusively by
the Holding Company as holder of all of the New Bank's outstanding voting
capital stock, and voting rights with respect to the Holding Company shall be
held and exercised exclusively by the holders of the Holding Company's voting
capital stock.
11. LIQUIDATION ACCOUNT.
At the time of the Mutual Holding Company Merger, the Bank shall
establish a liquidation account in an amount equal to the greater of (i) the
Bank's net worth as of the date of the latest statement of financial condition
contained in the final offering circular utilized in the formation of the Mutual
Holding Company, or (ii) the percentage of the outstanding shares of the common
stock of the Mid-Tier Holding Company owned by the Mutual Holding Company prior
to the Mid-Tier Holding Company Merger, multiplied by the Mid-Tier Holding
Company's total shareholders' equity as reflected in its latest statement of
financial condition contained in the final Prospectus utilized in the Conversion
and Reorganization. The function of the liquidation account will be to preserve
the rights of certain holders of Deposit Accounts in the Bank who maintain such
accounts in the Bank following the Conversion and Reorganization to a priority
to distributions in the unlikely event of a liquidation of the Bank subsequent
to the Conversion and Reorganization.
The liquidation account shall be maintained for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders, if any, who maintain
their Deposit Accounts in the Bank after the Conversion and Reorganization. Each
such account holder will, with respect to each Deposit Account held, have a
related inchoate interest in a portion of the liquidation account balance, which
interest will be referred to in this Section 11 as the "subaccount balance." All
Deposit Accounts having the same social security number will be aggregated for
purposes of determining the initial subaccount balance with respect to such
Deposit Accounts, except as set forth below.
In the event of a complete liquidation of the Bank subsequent to the
Conversion and Reorganization (and only in such event), each Eligible Account
Holder and Supplemental Eligible Account Holder, if any, shall be entitled to
receive a liquidation distribution from the liquidation account in the amount of
the then current subaccount balances for Deposit Accounts then held (adjusted as
described below) before any liquidation distribution may be made with respect to
the capital stock of the Bank. No merger, consolidation, sale of bulk assets or
similar combination transaction with another FDIC-insured institution in which
the Bank is not the surviving entity shall be considered a complete liquidation
for this purpose. In any such transaction, the liquidation account shall be
assumed by the surviving entity.
24
The initial subaccount balance for a Deposit Account held by an Eligible
Account Holder and Supplemental Eligible Account Holder, if any, shall be
determined by multiplying the opening balance in the liquidation account by a
fraction, of which the numerator is the amount of the Qualifying Deposits of
such account holder and the denominator is the total amount of Qualifying
Deposits of all Eligible Account Holders and Supplemental Eligible Account
Holders, if any. For Deposit Accounts in existence at both the Eligibility
Record Date and the Supplemental Eligibility Record Date, if any, separate
initial subaccount balances shall be determined on the basis of the Qualifying
Deposits in such Deposit Accounts on each such record date. Initial subaccount
balances shall not be increased, and shall be subject to downward adjustment as
provided below.
If the aggregate deposit balance in the Deposit Account(s) of any
Eligible Account Holder or Supplemental Eligible Account Holder, if any, at the
close of business on any December 31 annual closing date, commencing on or after
the effective date of the Conversion and Reorganization, is less than the lesser
of (a) the aggregate deposit balance in such Deposit Account(s) at the close of
business on any other annual closing date subsequent to such record dates or (b)
the aggregate deposit balance in such Deposit Account(s) as of the Eligibility
Record Date or the Supplemental Eligibility Record Date, if any, the subaccount
balance for such Deposit Account(s) shall be adjusted by reducing such
subaccount balance in an amount proportionate to the reduction in such deposit
balance. In the event of such a downward adjustment, the subaccount balance
shall not be subsequently increased, notwithstanding any subsequent increase in
the deposit balance of the related Deposit Account(s). The subaccount balance of
an Eligible Account Holder or Supplemental Eligible Account Holder, if any, will
be reduced to zero if the Account Holder ceases to maintain a Deposit Account at
the Bank that has the same social security number as appeared on his Deposit
Account(s) at the Eligibility Record Date or, if applicable, the Supplemental
Eligibility Record Date.
Subsequent to the Conversion and Reorganization, the Bank may not pay
cash dividends generally on deposit accounts and/or capital stock of the Bank,
or repurchase any of the capital stock of the Bank, if such dividend or
repurchase would reduce the Bank's regulatory capital below the aggregate amount
of the then current subaccount balances for Deposit Accounts then held;
otherwise, the existence of the liquidation account shall not operate to
restrict the use or application of any of the net worth accounts of the Bank.
For purposes of this Section 11, a Deposit Account includes a
predecessor or successor account which is held by an Account Holder with the
same social security number.
12. TRANSFER OF DEPOSIT ACCOUNTS.
Each Deposit Account in the New Bank at the time of the consummation of
the Conversion and Reorganization shall become, without further action by the
holder, a Deposit Account in the New Bank equivalent in withdrawable amount to
the withdrawal value (as adjusted to give effect to any withdrawal made for the
purchase of Conversion Stock), and subject to the same terms and conditions
(except as to voting and liquidation rights) as such Deposit Account in the New
Bank immediately preceding consummation of the Conversion and Reorganization.
Holders of Deposit Accounts in the New Bank shall not, as such holders, have any
voting rights.
25
13. REQUIREMENTS FOLLOWING CONVERSION FOR REGISTRATION, MARKET MAKING AND
STOCK EXCHANGE LISTING.
In connection with the Conversion and Reorganization, the Holding
Company shall register the Holding Company Common Stock pursuant to Section 12
of the Securities Exchange Act of 1934, as amended, and shall undertake not to
deregister such stock for a period of three years thereafter. The Holding
Company also shall use its best efforts to (i) encourage and assist a market
maker to establish and maintain a market for the Holding Company Common Stock
and (ii) list the Holding Company Common Stock on a national or regional
securities exchange or to have quotations for such stock disseminated on the
Nasdaq Stock Market.
14. DIRECTORS AND OFFICERS OF THE NEW BANK.
Each person serving as a Director or Officer of the Bank at the time of
the Conversion and Reorganization shall continue to serve as a Director or
Officer of New Bank for the balance of the term for which the person was elected
prior to the Conversion and Reorganization, and until a successor is elected and
qualified. The number, names, business addresses and terms of the Directors of
the Bank are set forth in the Plans of Merger included as Annexes A, B and C
hereto.
15. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING
THE CONVERSION AND REORGANIZATION.
For a period of three years following the Conversion and Reorganization,
the Directors and Officers of the Holding Company and the Bank and their
Associates may not purchase, without the prior written approval of the OTS,
Holding Company Common Stock except from a broker-dealer registered with the
SEC. This prohibition shall not apply, however, to (i) a negotiated transaction
arrived at by direct negotiation between buyer and seller and involving more
than 1% of the outstanding Holding Company Common Stock and (ii) purchases of
stock made by and held by any Tax-Qualified Employee Stock Benefit Plan (and
purchases of stock made by and held by any Non-Tax-Qualified Employee Stock
Benefit Plan following the receipt of shareholder approval of such plan) which
may be attributable to individual officers or directors.
The foregoing restriction on purchases of Holding Company Common Stock
shall be in addition to any restrictions that may be imposed by federal and
state securities laws.
16. RESTRICTIONS ON TRANSFER OF STOCK.
All shares of Conversion Stock which are purchased by Persons other than
Directors and Officers shall be transferable without restriction, except in
connection with a transaction proscribed by Section 17 of this Plan. Shares of
Conversion Stock purchased by Directors and Officers of the Holding Company and
the Bank on original issue from the Holding Company (by subscription or
otherwise) shall be subject to the restriction that such shares shall not be
sold or otherwise disposed of for value for a period of one year following the
date of purchase, except for any disposition of such shares following the death
of the original purchaser or pursuant to any merger or similar transaction
approved by the OTS. The shares of Conversion Stock issued by
26
the Holding Company to Directors and Officers shall bear the following legend
giving appropriate notice of such one-year restriction:
"The shares of stock evidenced by this Certificate are
restricted as to transfer for a period of one year from the date of this
Certificate pursuant to Part 563b of the Rules and Regulations of the
Office of Thrift Supervision. These shares may not be transferred during
such one-year period without a legal opinion of counsel for the Company
that said transfer is permissible under the provisions of applicable law
and regulation. This restrictive legend shall be deemed null and void
after one year from the date of this Certificate."
In addition, the Holding Company shall give appropriate instructions to
the transfer agent for the Holding Company Common Stock with respect to the
applicable restrictions relating to the transfer of restricted stock. Any shares
issued at a later date as a stock dividend, stock split or otherwise with
respect to any such restricted stock shall be subject to the same holding period
restrictions as may then be applicable to such restricted stock.
The foregoing restriction on transfer shall be in addition to any
restrictions on transfer that may be imposed by federal and state securities
laws.
17. RESTRICTIONS ON ACQUISITION OF STOCK OF THE HOLDING COMPANY.
The certificate of incorporation of the Holding Company shall prohibit
any Person together with Associates or group of Persons Acting in Concert from
offering to acquire or acquiring, directly or indirectly, beneficial ownership
of more than 10% of any class of equity securities of the Holding Company, or of
securities convertible into more than 10% of any such class, for such period of
time following completion of the Conversion and Reorganization as may be
determined by the Board of Directors of the Holding Company. The certificate of
incorporation of the Holding Company also shall provide that all equity
securities beneficially owned by any Person in excess of 10% of any class of
equity securities shall be considered "excess shares," and that excess shares
shall not be counted as shares entitled to vote and shall not be voted by any
Person or counted as voting shares in connection with any matters submitted to
the shareholders for a vote. The foregoing restrictions shall not apply to (i)
any offer with a view toward public resale made exclusively to the Holding
Company by underwriters or a selling group acting on its behalf, (ii) the
purchase of shares by a Tax-Qualified Employee Stock Benefit Plan established
for the benefit of the employees of the Holding Company and its subsidiaries
which is exempt from approval requirements under 12 C.F.R. ss.574.3(c)(1)(vi) or
any successor thereto, and (iii) any offer or acquisition approved in advance by
the affirmative vote of two-thirds of the entire Board of Directors of the
Holding Company. Directors, Officers or Employees of the Holding Company or the
Bank or any subsidiary thereof shall not be deemed to be Associates or a group
Acting in Concert with respect to their individual acquisitions of any class of
equity securities of the Holding Company solely as a result of their capacities
as such.
27
18. TAX RULINGS OR OPINIONS.
Consummation of the Conversion and Reorganization is conditioned upon
prior receipt by the Primary Parties of either a ruling or an opinion of counsel
with respect to federal tax laws, and either a ruling or an opinion with respect
to Delaware tax laws, to the effect that consummation of the transactions
contemplated hereby qualify as a tax-free transaction for federal income tax
purposes and will not result in any adverse tax consequences to the Primary
Parties or to account holders receiving Subscription Rights before or after the
Conversion and Reorganization, except in each case to the extent, if any, that
Subscription Rights are deemed to have fair market value on the date such rights
are issued.
19. STOCK COMPENSATION PLANS.
The Holding Company and the Bank are authorized to adopt stock option
plans, restricted stock grant plans and other Non-Tax-Qualified Employee Stock
Benefit Plans, provided that no stock options shall be granted, and no shares of
Conversion Stock shall be purchased, pursuant to any of such plans prior to the
earlier of (i) the one-year anniversary of the consummation of the Conversion
and Reorganization or (ii) the receipt of shareholder approval of such plans at
either an annual or special meeting of shareholders of the Holding Company held
no earlier than six months following the Conversion and Reorganization.
The Holding Company and the Bank are authorized to enter into
employment or severance agreements with their executive officers.
20. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK.
Following consummation of the Conversion and Reorganization, any
repurchases of shares of capital stock by the Holding Company will be made in
accordance with then applicable laws and regulations.
The Bank may not declare or pay a cash dividend on, or repurchase any
of, its capital stock if the effect thereof would cause the regulatory capital
of the Bank to be reduced below the amount required for the liquidation account.
Any dividend declared or paid on, or repurchase of, the Bank's capital stock
also shall be in compliance with applicable law and regulations.
21. PAYMENT OF FEES TO BROKERS.
The Primary Parties may elect to offer to pay fees on a per share basis
to securities brokers who assist purchasers of Conversion Stock in the
Offerings.
22. EXPENSES.
OTS regulations require that the expenses of the Offerings must be
reasonable. The Bank will use its best efforts to assure that the expenses
incurred by the Bank and the Holding Company in effecting the Reorganization and
the Stock Offering will be reasonable.
28
23. EFFECTIVE DATE OF CONVERSION AND REORGANIZATION.
The effective date of the Conversion and Reorganization shall be the
date upon which the last of the following actions occurs: (i) the filing of
Articles of Combination with the OTS with respect to the Mid-Tier Holding
Company Merger, (ii) the filing of Articles of Combination with the OTS with
respect to the Mutual Holding Company Merger, (iii) the filing of Articles of
Combination with the OTS with respect to the Bank Merger, (iv) the closing of
the issuance of the shares of Conversion Stock in the Offerings. The filing of
Articles of Combination relating to the Mutual Holding Company Merger, the
Mid-Tier Holding Company Merger and the Bank Merger and the closing of the
issuance of shares of Conversion Stock in the Offerings shall not occur until
all requisite regulatory, Member and Shareholder approvals have been obtained,
all applicable waiting periods have expired and sufficient subscriptions and
orders for the Conversion Stock have been received. It is intended that the
closing of the Mutual Holding Company Merger, the Mid-Tier Holding Company
Merger, the Bank Merger, the sale of shares of Conversion Stock in the Offerings
and shall occur consecutively and substantially simultaneously.
24. AMENDMENT OR TERMINATION OF THE PLAN.
If deemed necessary or desirable by the Boards of Directors of the
Primary Parties, this Plan may be substantively amended, as a result of comments
from regulatory authorities or otherwise, at any time prior to the solicitation
of proxies from Members and Shareholders to vote on the Plan and at any time
thereafter with the concurrence of the OTS. Any amendment to this Plan made
after approval by the Members and Shareholders with the concurrence of the OTS
shall not necessitate further approval by the Members or Shareholders unless
otherwise required by the OTS. This Plan shall terminate if the sale of all
shares of Conversion Stock is not completed within 24 months from the date of
the Special Meeting. Prior to the earlier of the Special Meeting and the
Shareholders' Meeting, this Plan may be terminated by the Boards of Directors of
the Primary Parties without approval of the OTS; after the Special Meeting or
the Shareholders' Meeting, the Boards of Directors may terminate this Plan only
with the approval of the OTS.
25. INTERPRETATION OF THE PLAN.
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of each of the Boards of Directors of the
Primary Parties shall be final, subject to the authority of the OTS.
26. SEVERABILITY.
If any term, provision, covenant or restriction contained in this Plan
is held by a court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions contained in this Plan shall remain in
full force and effect, and shall in no way be affected, impaired or invalidated.
29
27. MISCELLANEOUS.
This Plan is to be governed by and construed in accordance with the
laws of the United States. None of the cover page, the table of contents, or the
section headings are to be considered a part of this Plan, but are included
solely for convenience of reference and shall in no way define, limit, extend,
or describe the scope or intent of any of the provisions hereof. Words in the
singular include the plural, and words in the plural include the singular.
Except for such rights as are set forth herein for Members, this Plan shall
create no rights in any Person.
30
ANNEX A
PLAN OF MERGER
This Plan of Merger, dated as of ____________, 2002, is among Oswego
County Bancorp, Inc. (the "Mid-Tier Holding Company"), a federally chartered
stock corporation, Oswego County Savings Bank (the "Bank" or the "Surviving
Bank"), a New York savings bank and Oswego County Interim Savings Bank I, an
interim federal savings bank ("Interim I").
WITNESSETH:
WHEREAS, the Mid-Tier Holding Company, Oswego County MHC (the "Mutual
Holding Company") and the Bank have adopted a Plan of Conversion of the Mutual
Holding Company and Agreement and Plan of Reorganization between Oswego County
Bancorp, Inc., a Delaware corporation, (the "Holding Company"), the Mid-Tier
Holding Company, the Mutual Holding Company, Bridge Street Financial, Inc. and
the Bank (the "Plan of Conversion"), pursuant to which (i) the Mid-Tier Holding
Company will convert to a federally chartered interim stock savings association
and simultaneously merge with and into the Bank; (ii) the Mutual Holding Company
will convert to a federally chartered interim stock savings association and
simultaneously merge with and into the Bank (the "Mutual Holding Company
Merger"), (iii) the Bank and a newly-formed interim savings association will
merge, pursuant to which the Bank will become a wholly owned subsidiary of the
Holding Company (the "Bank Merger"), and (iv) the Holding Company will offer
shares of its common stock in the manner set forth in the Plan of Conversion;
WHEREAS, the Mid-Tier Holding Company owns 100% of the outstanding
common stock of the Bank, par value $.01 per share ("Bank Common Stock");
WHEREAS, the Mid-Tier Holding Company will convert to a federally
chartered interim stock savings association pursuant to the Plan of Conversion
and merge with and into the Bank pursuant to this Plan of Merger (the "Mid-Tier
Holding Company Merger"), pursuant to which, among other things, all shares of
Bank Common Stock held by the Mid-Tier Holding Company will be cancelled; and
WHEREAS, Interim I and the Bank ("Constituent Banks") desire to provide
for the terms and conditions of the Mid-Tier Holding Company Merger.
NOW, THEREFORE, the Mid-Tier Holding Company, Interim I and the Bank
hereby agree as follows:
1. EFFECTIVE DATE. The Mid-Tier Mutual Holding Company Merger shall be
effective upon the filing of the Plan of Merger with the Office of
Superintendent of Banks of the State of New York.
2. THE MID-TIER HOLDING COMPANY MERGER AND EFFECT THEREOF. Subject to
the terms and conditions set forth herein and the prior approval of the Office
of Thrift
1
Supervision of the Conversion and Reorganization, as defined in the Plan of
Conversion, and the expiration of all applicable waiting periods, the Mid-Tier
Holding Company shall convert to Interim I and simultaneously merge with and
into the Bank, which shall be the Surviving Bank. Upon consummation of the
Mid-Tier Holding Company Merger, the Surviving Bank shall be considered the same
business and corporate entity as each of the Constituent Banks and thereupon and
thereafter all the property, rights, powers and franchises of each of the
Constituent Banks shall vest in the Surviving Bank and the Surviving Bank shall
be subject to and be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Constituent Banks and shall have succeeded
to all of each of their relationships, fiduciary or otherwise, as fully and to
the same extent as if such property, rights, privileges, powers, franchises,
debts, obligations, duties and relationships had been originally acquired,
incurred or entered into by the Surviving Bank. Deposit accounts shall be deemed
issued in the name of the Surviving Bank in accordance with applicable New York
and FDIC regulations. In addition, any reference to either of the Constituent
Banks in any contract, will or document, whether executed or taking effect
before or after the Effective Date, shall be considered a reference to the
Surviving Bank if not inconsistent with the other provisions of the contract,
will or document; and any pending action or other judicial proceeding to which
either of the Constituent Banks is a party shall not be deemed to have abated or
to have been discontinued by reason of the Mid-Tier Holding Company Merger, but
may be prosecuted to final judgment, order or decree in the same manner as if
the Mid-Tier Holding Company Merger had not occurred or the Surviving Bank may
be substituted as a party to such action or proceeding, and any judgment, order
or decree may be rendered for or against it that might have been rendered for or
against either of the Constituent Banks if the Mid-Tier Holding Company Merger
had not occurred.
3. CANCELLATION OF BANK COMMON STOCK HELD BY THE MID-TIER HOLDING
COMPANY AND MEMBER INTERESTS; LIQUIDATION ACCOUNT.
(a) On the Effective Date, (i) each share of Bank Common Stock issued
and outstanding immediately prior to the Effective Date and held by the Mid-Tier
Holding Company shall, by virtue of the Mid-Tier Holding Company Merger and
without any action on the part of the holder thereof, be canceled, (ii) the
interests in the Mutual Holding Company of any person, firm or entity who or
which qualified as a member of the Mutual Holding Company in accordance with its
mutual charter and bylaws and the laws of the United States prior to the Mutual
Holding Company's conversion from mutual to stock form (the "Members") shall, by
virtue of the Mutual Holding Company Merger which shall occur substantially
simultaneously with the Mid-Tier Mutual Holding Company Merger and without any
action on the part of the holder thereof, be canceled, and (iii) the Bank shall
establish a liquidation account on behalf of each depositor member of the Mutual
Holding Company, as defined in the Plan of Conversion, in accordance with
Section 11 of the Plan of Conversion.
(b) At or after the Effective Date and prior to the Bank Merger, each
certificate or certificates theretofore evidencing issued and outstanding shares
of Mid-Tier Holding Company Common Stock, other than any such certificate or
certificates held by the Mutual Holding Company, which shall be canceled, shall
be deemed to represent issued and outstanding shares of Bank Common Stock which
shall be exchanged as provided by the Bank Merger.
2
4. DISSENTING SHARES. No shareholder of the Mid-Tier Holding Company
shall have any dissenter or appraisal rights in connection with the Mid-Tier
Holding Company Merger.
5. NAME OF SURVIVING CORPORATION. The name of the Surviving Bank shall
be "Oswego County Savings Bank."
6. DIRECTORS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Charter and Bylaws of the Surviving Bank
and applicable law, the number of directors of the Surviving Bank shall be
seven. The names of those persons who, upon and after the Effective Date, shall
be directors of the Surviving Bank are set forth below. Each such director shall
serve for the term which expires at the annual meeting of shareholders of the
Surviving Bank in the year set forth after his respective name, and until a
successor is elected and qualified.
Name Term Expires
---------------------------------- ------------
Xxxx X. Xxxxxxx 2002
Xxxxxxx X. Xxxxx 2003
Xxxx X. Xxxxxxxxx 2003
Xxxxx X. Xxxxxxxxxxx 2004
Xxxx X. Xxxxx 2004
Xxxxxxx X. Xxxxxxx 2004
Xxxx X. Xxxxxxx 2005
Xxxxxx Xxxxxxx 2005
The address of each such director is c/o Oswego County Savings Bank, 00
Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000.
7. OFFICERS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Charter and Bylaws of the Surviving Bank
and applicable law, the officers of the Bank immediately prior to the Effective
Date shall be the officers of the Surviving Bank.
8. OFFICES. Upon the Effective Date, all offices of the Bank shall be
offices of the Surviving Bank. As of the Effective Date, the home office of the
Surviving Bank shall remain at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000 and the
locations of the other offices of the Surviving Bank shall be as set forth
below, except for the addition of deposit-taking offices authorized or the
deletion of deposit-taking offices closed subsequent to the date hereof and the
Effective Date.
3
Executive Office:
00 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Branch Offices:
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
0000 Xxxxx Xxxxx 0
Xxxxxx, Xxx Xxxx 00000
Xxxxx Xxxxx 000 Xxxx
Xxxxxx, Xxx Xxxx 00000
00 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
X. Xxxxxxxx, Xxx Xxxx 00000
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
9. ORGANIZATION CERTIFICATE AND BYLAWS. On and after the Effective
Date, the Organization Certificate of the Bank as in effect immediately prior to
the Effective Date shall be the Organization Certificate of the Surviving Bank
until amended in accordance with the terms thereof and applicable law, except
that the Organization Certificate shall be amended to provide for the
establishment of a liquidation account in accordance with applicable law and
regulation.
On and after the Effective Date, the Bylaws of the Bank as in effect
immediately prior to the Effective Date shall be the Bylaws of the Surviving
Bank until amended in accordance with the terms thereof and applicable law.
10. SHAREHOLDER AND MEMBER APPROVALS. The affirmative votes of the
holders of Mid-Tier Holding Company Common Stock, set forth in Section 3(e) of
the Plan of Conversion and the Members set forth in Section 3(c) of the Plan of
Conversion shall be required to approve the Plan of Conversion, of which this
Plan of Merger is a part, on behalf of the Mid-Tier Holding Company and the
Mutual Holding Company, respectively. The approval of the Mid-Tier Holding
Company, as the sole holder of the Bank Common Stock, shall be required to
approve the Plan of Conversion, of which this Plan of Merger, is a part, on
behalf of the Bank.
11. DIRECTOR APPROVAL. At least two thirds of the members of the boards
of directors of each of the parties hereto have approved this Plan of Merger.
12. ABANDONMENT OF AGREEMENT. This Plan of Merger may be abandoned by
either the Mid-Tier Holding Company or the Bank at any time before the Effective
Date in the manner set forth in Section 24 of the Plan of Conversion.
4
13. AMENDMENTS. This Plan of Merger may be amended in the manner set
forth in Section 24 of the Plan of Conversion by a subsequent writing signed by
the parties hereto upon the approval of the Board of Directors of each of the
parties hereto.
14. SUCCESSORS. This Agreement shall be binding on the successors of
the Mid-Tier Holding Company and the Bank.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the laws of the United
States of America.
5
IN WITNESS WHEREOF, the Mid-Tier Holding Company and the Bank have
caused this Plan of Merger to be executed by their duly authorized officers as
of the day and year first above written.
OSWEGO COUNTY BANCORP, INC.
(A FEDERAL CORPORATION)
Attest:
/s/ [ ]
By:
_____________________________ __________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive
Officer
Attest:
OSWEGO COUNTY SAVINGS BANK
/s/ [ ]
By:
_____________________________ __________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive
Officer
Attest:
OSWEGO COUNTY INTERIM SAVINGS BANK I
/s/ [ ]
By:
_____________________________ __________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive
Officer
6
ANNEX B
PLAN OF MERGER
This Plan of Merger, dated as of ____________, 2002, is among Oswego
County MHC (the "Mutual Holding Company"), a federally chartered mutual holding
company, Oswego County Savings Bank (the "Bank" or the "Surviving Bank"), a New
York savings bank and Oswego County Interim Savings Bank II, an interim federal
savings bank ("Interim II").
WITNESSETH:
WHEREAS, the Mutual Holding Company, Oswego County Bancorp, Inc., a
federal stock corporation (the "Mid-Tier Holding Company"), and the Bank have
adopted a Plan of Conversion of the Mutual Holding Company and Agreement and
Plan of Reorganization between Oswego County Bancorp, Inc. a newly formed
Delaware corporation (the "Holding Company"), the Mid-Tier Holding Company,
Bridge Street Financial, Inc., the Mutual Holding Company and the Bank (the
"Plan of Conversion"), pursuant to which (i) the Mid-Tier Holding Company will
convert to a federally chartered interim stock savings association and
simultaneously merge with and into the Bank (the "Mid-Tier Holding Company
Merger"); (ii) the Mutual Holding Company will convert to a federally chartered
interim stock savings association and simultaneously merge with and into the
Bank; (iii) the Bank and a newly-formed interim savings association will merge,
pursuant to which the Bank will become a wholly owned subsidiary of the Holding
Company (the "Bank Merger"), and (iv) the Holding Company will offer shares of
its common stock in the manner set forth in the Plan of Conversion;
WHEREAS, the Mutual Holding Company, which owns more than 50% of the
outstanding common stock of the Mid-Tier Holding Company, par value $.01 per
share ("Mid-Tier Holding Company Common Stock"), will convert to a federally
chartered interim stock savings association pursuant to the Plan of Conversion
and substantially simultaneously with the completion of the Mid-Tier Holding
Company Merger merge with and into the Bank pursuant to this Plan of Merger (the
"Mutual Holding Company Merger"), pursuant to which, among other things, all
interests of members in the Mutual Holding Company and all shares of Mid-Tier
Common Stock held by the Mutual Holding Company will be canceled; and
WHEREAS, the Mutual Holding Company, Interim II and the Bank desire to
provide for the terms and conditions of the Mutual Holding Company Merger.
NOW, THEREFORE, Interim II and the Bank ("Constituent Banks") hereby
agree as follows:
1. EFFECTIVE DATE. The Mutual Holding Company Merger shall be effective
upon the filing of the Plan of Merger with the Office of Superintendent of Banks
of the State of New York.
2. THE MUTUAL HOLDING COMPANY MERGER AND EFFECT THEREOF. Subject to the
terms and conditions set forth herein and the prior approval of the Office of
Thrift Supervision of the Conversion and Reorganization, as defined in the Plan
of Conversion, and the expiration of all applicable waiting periods, the Mutual
Holding Company shall convert from the
1
mutual form to Interim II and simultaneously merge with and into the Bank, which
shall be the Surviving Bank. Upon consummation of the Mutual Holding Company
Merger, the Surviving Bank shall be considered the same business and corporate
entity as each of the Constituent Banks and thereupon and thereafter all the
property, rights, powers and franchises of each of the Constituent Banks shall
vest in the Surviving Bank and the Surviving Bank shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations and duties of
each of the Constituent Banks and shall have succeeded to all of each of their
relationships, fiduciary or otherwise, as fully and to the same extent as if
such property, rights, privileges, powers, franchises, debts, obligations,
duties and relationships had been originally acquired, incurred or entered into
by the Surviving Bank. Deposit accounts shall be deemed issued in the name of
the Surviving Bank in accordance with applicable New York and FDIC regulations.
In addition, any reference to either of the Constituent Banks in any contract,
will or document, whether executed or taking effect before or after the
Effective Date, shall be considered a reference to the Surviving Bank if not
inconsistent with the other provisions of the contract, will or document; and
any pending action or other judicial proceeding to which either of the
Constituent Banks is a party shall not be deemed to have abated or to have been
discontinued by reason of the Mutual Holding Company Merger, but may be
prosecuted to final judgment, order or decree in the same manner as if the
Mutual Holding Company Merger had not occurred or the Surviving Bank may be
substituted as a party to such action or proceeding, and any judgment, order or
decree may be rendered for or against it that might have been rendered for or
against either of the Constituent Banks if the Mutual Holding Company Merger had
not occurred.
3. CANCELLATION OF MID-TIER HOLDING COMPANY COMMON STOCK HELD BY THE
MUTUAL HOLDING COMPANY AND MEMBER INTERESTS; LIQUIDATION ACCOUNT.
(a) On the Effective Date, (i) each share of Mid-Tier Holding Company
Common Stock issued and outstanding immediately prior to the Effective Date
(which shall be deemed to be Bank Common Stock pursuant to the Mid-Tier Holding
Company Merger) and held by the Mutual Holding Company shall, by virtue of the
Mutual Holding Company Merger and without any action on the part of the holder
thereof, be canceled, (ii) the interests in the Mutual Holding Company of any
person, firm or entity who or which qualified as a member of the Mutual Holding
Company in accordance with its mutual charter and bylaws and the laws of the
United States prior to the Mutual Holding Company's conversion from mutual to
stock form (the "Members") shall, by virtue of the Mutual Holding Company Merger
which shall occur substantially simultaneously with the Mid-Tier Mutual Holding
Company Merger, and without any action on the part of the holder thereof, be
canceled, and (iii) the Bank shall establish a liquidation account on behalf of
each depositor member of the Mutual Holding Company, as defined in the Plan of
Conversion, in accordance with Section 11 of the Plan of Conversion.
(b) At or after the Effective Date and prior to the Bank Merger, each
certificate or certificates theretofore evidencing issued and outstanding shares
of Mid-Tier Common Stock, other than any such certificate or certificates held
by the Mutual Holding Company, which shall be canceled, shall be deemed to
represent issued and outstanding shares of Bank Common Stock which shall be
exchanged as provided by the Bank Merger.
2
4. DISSENTING SHARES. No member of the Mutual Holding Company shall
have any dissenter or appraisal rights in connection with the Mutual Holding
Company Merger. Holders of Mid-Tier Holding Company Common Stock shall not have
any dissenter or appraisal rights.
5. NAME OF SURVIVING CORPORATION. The name of the Surviving Bank shall
be "Oswego County Savings Bank."
6. DIRECTORS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Charter and Bylaws of the Surviving Bank
and applicable law, the number of directors of the Surviving Bank shall be
seven. The names of those persons who, upon and after the Effective Date, shall
be directors of the Surviving Bank are set forth below. Each such director shall
serve for the term which expires at the annual meeting of shareholders of the
Surviving Bank in the year set forth after his respective name, and until a
successor is elected and qualified.
Name Term Expires
---------------------------------- ------------
Xxxx X. Xxxxxxx 2002
Xxxxxxx X. Xxxxx 2003
Xxxx X. Xxxxxxxxx 2003
Xxxxx X. Xxxxxxxxxxx 2004
Xxxx X. Xxxxx 2004
Xxxxxxx X. Xxxxxxx 2004
Xxxx X. Xxxxxxx 2005
Xxxxxx Xxxxxxx 2005
The address of each such director is c/o Oswego County Savings Bank, 00
Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000.
7. OFFICERS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Charter and Bylaws of the Surviving Bank
and applicable law, the officers of the Bank immediately prior to the Effective
Date shall be the officers of the Surviving Bank.
8. OFFICES. Upon the Effective Date, all offices of the Bank shall be
offices of the Surviving Bank. As of the Effective Date, the home office of the
Surviving Bank shall remain at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000 and the
locations of the other offices of the Surviving Bank shall be as set forth
below, except for the addition of deposit-taking offices authorized or the
deletion of deposit-taking offices closed subsequent to the date hereof and the
Effective Date.
3
Executive Office:
00 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Branch Offices:
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
0000 Xxxxx Xxxxx 0
Xxxxxx, Xxx Xxxx 00000
Xxxxx Xxxxx 000 Xxxx
Xxxxxx, Xxx Xxxx 00000
00 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
X. Xxxxxxxx, Xxx Xxxx 00000
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
9. ORGANIZATION CERTIFICATE AND BYLAWS. On and after the Effective
Date, the Organization Certificate of the Bank as in effect immediately prior to
the Effective Date shall be the Organization Certificate of the Surviving Bank
until amended in accordance with the terms thereof and applicable law, except
that the Organization Certificate shall be amended to provide for the
establishment of a liquidation account in accordance with applicable law and
regulation.
On and after the Effective Date, the Bylaws of the Bank as in effect
immediately prior to the Effective Date shall be the Bylaws of the Surviving
Bank until amended in accordance with the terms thereof and applicable law.
10. SHAREHOLDER AND MEMBER APPROVALS. The affirmative votes of the
holders of Mid-Tier Holding Company Common Stock, set forth in Section 3(e) of
the Plan of Conversion and the Members set forth in Section 3(c) of the Plan of
Conversion shall be required to approve the Plan of Conversion, of which this
Plan of Merger is a part, on behalf of the Mid-Tier Holding Company and the
Mutual Holding Company, respectively. The approval of the Mid-Tier Holding
Company, as the sole holder of the Bank Common Stock, shall be required to
approve the Plan of Conversion, of which this Plan of Merger, is a part, on
behalf of the Bank.
11. DIRECTOR APPROVAL. At least two thirds of the members of the boards
of directors of each of the parties hereto have approved this Plan of Merger.
12. ABANDONMENT OF AGREEMENT. This Plan of Merger may be abandoned by
either the Mutual Holding Company or the Bank at any time before the Effective
Date in the manner set forth in Section 24 of the Plan of Conversion.
4
13. AMENDMENTS. This Plan of Merger may be amended in the manner set
forth in Section 24 of the Plan of Conversion by a subsequent writing signed by
the parties hereto upon the approval of the Board of Directors of each of the
parties hereto.
14. SUCCESSORS. This Agreement shall be binding on the successors of
the Mutual Holding Company and the Bank.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the laws of the United
States of America.
5
IN WITNESS WHEREOF, the Mutual Holding Company and the Bank have caused
this Plan of Merger to be executed by their duly authorized officers as of the
day and year first above written.
OSWEGO COUNTY MHC
Attest:
/s/ [ ] By:
________________________________ _____________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive Officer
OSWEGO COUNTY SAVINGS BANK
Attest:
/s/ [ ] By:
_____________________________________
Xxxxxxx X. Xxxxx
________________________________ President and Chief Executive Officer
Xxxx X. Xxxxx
Corporate Secretary
OSWEGO COUNTY INTERIM SAVINGS BANK II
Attest:
/s/ [ ]
By:
________________________________
Xxxx X. Xxxxx _____________________________________
Corporate Secretary Xxxxxxx X. Xxxxx
President and Chief Executive Officer
6
ANNEX C
PLAN OF MERGER
This Plan of Merger, dated as of __________, 2002, is among Oswego County
Savings Bank (the "Bank" or the "Surviving Bank"), a New York savings bank,
Oswego County Bancorp, Inc. (the "Holding Company"), a Delaware corporation, and
Oswego County Interim Savings Bank III, an interim federal savings bank
("Interim III").
WITNESSETH:
WHEREAS, the Bank has organized the Holding Company as a first-tier,
wholly-owned subsidiary for the purpose of becoming the stock holding company of
the Bank upon completion of the Conversion and Reorganization, as defined in the
Plan of Conversion of Oswego County MHC (the "Mutual Holding Company") and
Agreement and Plan of Reorganization between the Holding Company, Oswego County
Bancorp, Inc., a Delaware corporation (the "Mid-Tier Holding Company"), the
Mutual Holding Company and the Bank (the "Plan of Conversion");
WHEREAS, the Mutual Holding Company, a federally chartered mutual holding
company which owns more than 50% of the common stock of the Mid-Tier Holding
Company, par value $.01 per share ("Mid-Tier Holding Company Common Stock"),
will convert to a federally chartered interim stock savings association and
simultaneously merge with and into the Bank pursuant to the Plan of Conversion
and the Plan of Merger included as Annex B thereto (the "Mutual Holding Company
Merger"), pursuant to which all shares of Mid-Tier Common Stock held by the
Mutual Holding Company will be cancelled;
WHEREAS, substantially simultaneously with the Mutual Holding Company
Merger, the Mid-Tier Holding Company will convert into a federal interim stock
savings association and merge with and into the Bank (the "Mid-Tier Holding
Company Merger") and the shares of Mid-Tier Holding Company Common Stock held by
other than the Mutual Holding Company will be deemed to represent shares of Bank
common stock, $.01 par value per share ("Bank Common Stock");
WHEREAS, the formation of a stock holding company by the Bank will be
facilitated by causing the Holding Company to become the sole shareholder of a
newly-formed interim federally chartered stock savings association and then
merging the interim savings association with and into the Bank (the "Bank
Merger"), pursuant to which the Bank will become a wholly owned subsidiary of
the Holding Company and, in connection therewith, all outstanding shares of
Mid-Tier Common Stock will be converted automatically into and become shares of
common stock of the Holding Company, par value $.01 per share ("Holding Company
Common Stock");
WHEREAS, Interim III is being organized by the officers of the Bank as an
interim federally chartered stock savings association with the Holding Company
as its sole shareholder in order to effect the Bank Merger; and
WHEREAS, the Bank and Interim III desire to provide for the terms and
conditions of the Bank Merger.
1
NOW, THEREFORE, the Bank, the Holding Company and Interim III hereby agree
as follows:
1. EFFECTIVE DATE. The Bank Merger shall be effective upon the filing of
the Plan of Merger with the office of Superintendent of Banks of the State of
New York.
2. THE BANK MERGER AND EFFECT THEREOF. Subject to the terms and
conditions set forth herein and the prior approval of the Office of Thrift
Supervision of the Conversion and the Reorganization, as defined in the Plan of
Conversion, and the expiration of all applicable waiting periods, Interim III
shall merge with and into the Bank, which shall be the Surviving Bank. Upon
consummation of the Bank Merger, the Surviving Bank shall be considered the same
business and corporate entity as each of the Constituent Banks and thereupon and
thereafter all the property, rights, powers and franchises of each of the
Constituent Banks shall vest in the Surviving Bank and the Surviving Bank shall
be subject to and be deemed to have assumed all of the debts, liabilities,
obligations and duties of each of the Constituent Banks and shall have succeeded
to all of each of their relationships, fiduciary or otherwise, as fully and to
the same extent as if such property, rights, privileges, powers, franchises,
debts, obligations, duties and relationships had been originally acquired,
incurred or entered into by the Surviving Bank. Deposit accounts shall be deemed
issued in the name of the Surviving Bank in accordance with applicable New York
and FDIC regulations. In addition, any reference to either of the Constituent
Banks in any contract, will or document, whether executed or taking effect
before or after the Effective Date, shall be considered a reference to the
Surviving Bank if not inconsistent with the other provisions of the contract,
will or document; and any pending action or other judicial proceeding to which
either of the Constituent Banks is a party shall not be deemed to have abated or
to have been discontinued by reason of the Bank Merger, but may be prosecuted to
final judgment, order or decree in the same manner as if the Bank Merger had not
occurred or the Surviving Bank may be substituted as a party to such action or
proceeding, and any judgment, order or decree may be rendered for or against it
that might have been rendered for or against either of the Constituent Banks if
the Bank Merger had not occurred.
3. CONVERSION OF STOCK.
(a) On the Effective Date, (i) each share of Mid-Tier Common Stock issued
and outstanding immediately prior to the Effective Date shall, by virtue of the
Bank Merger and without any action on the part of the holder thereof, be
converted into the right to receive Holding Company Common Stock based on the
Exchange Ratio, as defined in the Plan of Conversion, plus the right to receive
cash in lieu of any fractional share interest, as determined in accordance with
Section 3(c) thereof, (ii) each share of common stock, par value $.01 per share,
of Interim III ("Interim Common Stock") issued and outstanding immediately prior
to the Effective Date shall, by virtue of the Bank Merger and without any action
on the part of the holder thereof, be converted into one share of Bank Common
Stock, and (iii) each share of Holding Company Common Stock issued and
outstanding immediately prior to the Effective Date shall, by virtue of the Bank
Merger and without any action on the part of the holder thereof, be cancelled.
By voting in favor of this Plan of Merger, the Holding Company, as the sole
shareholder of Interim III, shall have agreed (i) to issue shares of Holding
Company Common Stock in accordance with the terms hereof and (ii) to cancel all
previously issued and outstanding shares of Holding Company Common Stock upon
the effectiveness of the Bank Merger.
2
(b) On and after the Effective Date, there shall be no registrations of
transfers on the stock transfer books of Interim III, the Mid-Tier Holding
Company or the Bank of shares of Interim Common Stock, Mid-Tier Holding Company
Common Stock or Bank Common Stock which were outstanding immediately prior to
the Effective Date.
(c) Notwithstanding any other provision hereof, no fractional shares of
Holding Company Common Stock shall be issued to holders of Mid-Tier Holding
Company Common Stock. In lieu thereof, each holder of shares of Mid-Tier Holding
Company Common Stock entitled to a fraction of a share of Holding Company Common
Stock shall, at the time of surrender of the certificate or certificates
representing such holder's shares, receive an amount of cash equal to the
product arrived at by multiplying such fraction of a share of Holding Company
Common Stock by the Actual Purchase Price, as defined in the Plan of Conversion.
No such holder shall be entitled to dividends, voting rights or any other rights
in respect of any fractional share.
4. EXCHANGE OF SHARES.
(a) At or after the Effective Date, each holder of a certificate or
certificates theretofore evidencing issued and outstanding shares of Mid-Tier
Common Stock, upon surrender of the same to an agent, duly appointed by the
Holding Company ("Exchange Agent"), shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of full shares of
Holding Company Common Stock for which the shares of Mid-Tier Holding Company
Common Stock theretofore represented by the certificate or certificates so
surrendered shall have been converted as provided in Section 3(a) hereof. The
Exchange Agent shall mail to each holder of record of an outstanding certificate
which immediately prior to the Effective Date evidenced shares of Mid-Tier
Holding Company Common Stock, and which is to be exchanged for Holding Company
Common Stock as provided in Section 3(a) hereof, a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to such certificate shall pass, only upon delivery of such certificate to the
Exchange Agent) advising such holder of the terms of the exchange effected by
the Bank Merger and of the procedure for surrendering to the Exchange Agent such
certificate in exchange for a certificate or certificates evidencing Holding
Company Common Stock.
(b) No holder of a certificate theretofore representing shares of Mid-Tier
Holding Company Common Stock shall be entitled to receive any dividends in
respect of the Holding Company Common Stock into which such shares shall have
been converted by virtue of the Bank Merger until the certificate representing
such shares of Mid-Tier Holding Company Common Stock is surrendered in exchange
for certificates representing shares of Holding Company Common Stock. In the
event that dividends are declared and paid by the Holding Company in respect of
Holding Company Common Stock after the Effective Date but prior to surrender of
certificates representing shares of Mid-Tier Holding Company Common Stock,
dividends payable in respect of shares of Holding Company Common Stock not then
issued shall accrue (without interest). Any such dividends shall be paid
(without interest) upon surrender of the certificates representing such shares
of Mid-Tier Holding Company Common Stock. The Holding Company shall be entitled,
after the Effective Date, to treat certificates representing shares of Mid-Tier
Holding Company Common Stock as evidencing ownership of the number of full
shares of Holding Company Common Stock into which the shares of Mid-Tier Holding
3
Company Common Stock represented by such certificates shall have been converted,
notwithstanding the failure on the part of the holder thereof to surrender such
certificates.
(c) The Holding Company shall not be obligated to deliver a certificate or
certificates representing shares of Holding Company Common Stock to which a
holder of Mid-Tier Holding Company Common Stock would otherwise be entitled as a
result of the Bank Merger until such holder surrenders the certificate or
certificates representing the shares of Mid-Tier Holding Company Common Stock
for exchange as provided in this Section 4, or, in default thereof, an
appropriate Affidavit of Loss and Indemnity Agreement and/or a bond as may be
required in each case by the Holding Company. If any certificate evidencing
shares of Holding Company Common Stock is to be issued in a name other than that
in which the certificate evidencing Mid-Tier Holding Company Common Stock
surrendered in exchange therefor is registered, it shall be a condition of the
issuance thereof that the certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the person requesting such
exchange pay to the Exchange Agent any transfer or other tax required by reason
of the issuance of a certificate for shares of Holding Company Common Stock in
any name other than that of the registered holder of the certificate surrendered
or otherwise establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable.
(d) If, between the date hereof and the Effective Date, the shares of
Mid-Tier Holding Company Common Stock shall be changed into a different number
or class of shares by reason of any reclassification, recapitalization,
split-up, combination, exchange of shares or readjustment, or a stock dividend
thereon shall be declared with a record date within said period, the Exchange
Ratio specified in Section 3(a) hereof shall be adjusted accordingly.
5. DISSENTING SHARES. No holders of shares of Mid-Tier Holding Company
Common Stock shall have dissenter and appraisal rights in connection with the
Bank Merger.
6. NAME OF SURVIVING BANK. The name of the Surviving Mid-Tier Holding
Company shall be "Oswego County Savings Bank."
4
7. DIRECTORS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Charter and Bylaws of the Surviving Bank
and applicable law, the number of directors of the Surviving Bank shall be
seven. The names of those persons who, upon and after the Effective Date, shall
be directors of the Surviving Bank are set forth below. Each such director shall
serve for the term which expires at the annual meeting of shareholders of the
Surviving Bank in the year set forth after his respective name, and until a
successor is elected and qualified.
Name Term Expires
-------------------- ------------
Xxxx X. Xxxxxxx 2002
Xxxxxxx X. Xxxxx 2003
Xxxx X. Xxxxxxxxx 2003
Xxxxx X. Xxxxxxxxxxx 2004
Xxxx X. Xxxxx 2004
Xxxxxxx X. Xxxxxxx 2004
Xxxx X. Xxxxxxx 2005
Xxxxxx Xxxxxxx 2005
The address of each such director is c/o Oswego County Savings Bank, 00
Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000.
8. OFFICERS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Charter and Bylaws of the Surviving Bank
and applicable law, the officers of the Bank immediately prior to the Effective
Date shall be the officers of the Surviving Bank.
9. OFFICES. Upon the Effective Date, all offices of the Bank shall be
offices of the Surviving Bank. As of the Effective Date, the home office of the
Surviving Bank shall remain at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000 and the
locations of the other offices of the Surviving Bank shall be as set forth
below, except for the addition of deposit-taking offices authorized or the
deletion of deposit-taking offices closed subsequent to the date hereof and the
Effective Date.
5
Executive Office:
00 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Branch Offices:
0000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
0000 Xxxxx Xxxxx 0
Xxxxxx, Xxx Xxxx 00000
Xxxxx Xxxxx 000 Xxxx
Xxxxxx, Xxx Xxxx 00000
00 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
X. Xxxxxxxx, Xxx Xxxx 00000
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
10. ORGANIZATION CERTIFICATE AND BYLAWS. On and after the Effective Date,
the Organization Certificate and Bylaws of the Bank as in effect immediately
prior to the Effective Date shall be the Organization Certificate and Bylaws of
the Surviving Bank until amended in accordance with the terms thereof and
applicable law.
11. SAVINGS ACCOUNTS. Upon the Effective Date, any savings accounts of
Interim III, without reissue, shall be and become savings accounts of the
Surviving Bank without change in their respective terms, including, without
limitation, maturity, minimum required balances or withdrawal value.
12. SHAREHOLDER APPROVAL. The affirmative votes of the holders of Mid-Tier
Holding Company Common Stock set forth in Section 3 of the Plan of Conversion
shall be required to approve the Plan of Conversion, of which this Plan of
Merger is a part, on behalf of the Mid-Tier Holding Company. The approval of the
Holding Company, as the sole holder of the Interim Common Stock, shall be
required to approve the Plan of Conversion, of which this Plan of Merger is a
part, on behalf of Interim III. The approval of the Mid-Tier Holding Company, as
the sole holder of the Bank Common Stock, shall be required to approve the Plan
of Conversion, of which this Plan of Merger is a part, on behalf of the Bank.
13. DIRECTOR APPROVAL. At least two thirds of the members of the boards of
directors of each of the parties hereto have approved this Plan of Merger.
14. REGISTRATION; OTHER APPROVALS. In addition to the approvals set forth
in Sections 1 and 13 hereof and the Plan of Conversion, the parties' obligations
to consummate the Bank Merger shall be subject to the Holding Company Common
Stock to be issued hereunder in exchange for Mid-Tier Holding Company Common
Stock being registered under the Securities Act of 1933, as amended, and
registered or qualified under applicable state
6
securities laws, as well as the receipt of all other approvals, consents or
waivers as the parties may deem necessary or advisable.
15. ABANDONMENT OF AGREEMENT. This Plan of Merger may be abandoned by
either the Bank or Interim III at any time before the Effective Date in the
manner set forth in Section 24 of the Plan of Conversion.
16. AMENDMENTS. This Plan of Merger may be amended in the manner set forth
in Section 24 of the Plan of Conversion by a subsequent writing signed by the
parties hereto upon the approval of the Board of Directors of each of the
parties hereto.
17. SUCCESSORS. This Agreement shall be binding on the successors of the
Bank and Interim III.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the laws of the United
States of America.
7
IN WITNESS WHEREOF, the Bank, the Holding Company and Interim III have
caused this Plan of Merger to be executed by their duly authorized officers as
of the day and year first above written.
OSWEGO COUNTY SAVINGS BANK
Attest:
By:
_________________________________ _________________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive Officer
OSWEGO COUNTY BANCORP, INC.
(a Delaware corporation)
Attest:
By:
_________________________________ _________________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive Officer
OSWEGO COUNTY INTERIM SAVINGS
BANK III
Attest:
By:
_________________________________ _________________________________________
Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
Corporate Secretary President and Chief Executive Officer
8
