EXHIBIT 99.3
RP FINANCIAL, LC.
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Financial Services Industry Consultants
April 2, 1998
Xx. Xxxxxxx Xxxxxx
President
Pulaski Bank, a Federal Savings Bank
00000 Xxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Dear Xx. Xxxxxx:
This letter sets forth the agreement between Pulaski Bank, a Federal
Savings Bank, St. Louis, Missouri ("Pulaski" or the "Bank") and RP Financial,
LC. ("RP Financial") for certain conversion appraisal services pertaining to the
mutual-to-stock conversion of Pulaski Bancshares, MHC (the "MHC"), a federal
mutual holding company and the majority shareholder of Pulaski, and the Plan of
Reorganization between the MHC and Pulaski. The specific services to be
rendered by RP Financial are described below. These services will be rendered
by a team of two senior consultants on staff.
Description of Conversion Appraisal Services
--------------------------------------------
RP Financial will prepare a written detailed valuation report which will be
fully consistent with applicable regulatory guidelines and standard valuation
practices. The valuation report will conclude with an estimate of the pro forma
market value of the shares of stock to be offered and sold in the conversion. RP
Financial understands that as part of the conversion, the shares of Pulaski
which are held by public shareholders (i.e. stockholders other than the MHC)
will be exchanged for newly issued shares of common stock of a newly organized
stock holding company ("SHC") and that shares offered in the conversion will be
SHC shares. The valuation report will incorporate such key transaction
parameters as the financial strength and operations of Pulaski, the proposed
treatment in the conversion of the publicly-traded shares of Pulaski (including
the proposed exchange), and the financial strength and operation of the MHC
unconsolidated. The estimate of pro forma market value will be a preliminary
value, subject to confirmation by RP Financial at the closing of the offering.
Prior to preparing the valuation report, RP Financial will conduct a
financial due diligence, including on-site interviews of senior management and
reviews of financial and other documents and records, to gain insight into the
operations, financial condition, profitability, risks and external factors which
impact the Bank. The valuation will include an in-depth analysis of the Bank's
financial condition and operating results, as well as assess the Bank's interest
rate risk, credit risk and liquidity risk. The valuation report will describe
the Bank's business strategies and market area and prospects for the future. A
peer group analysis relative to publicly-traded savings institutions will be
conducted for the purpose of determining
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WASHINGTON HEADQUARTERS
Rosslyn Center
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Telephone: (000) 000-0000
Arlington, VA 22209 Fax No.: (000) 000-0000
RP Financial, LC.
Xx. Xxxxxxx Xxxxxx
April 2, 1998
Page 2
appropriate valuation adjustments relative to the group. The valuation report
will conclude with a midpoint pro forma valuation for the shares to be offered
in the conversion, as well as a range of value around the midpoint value. The
valuation report may be periodically updated throughout the conversion process
and there will be at least one updated valuation prepared at the time of the
closing of the stock offering.
RP Financial agrees to deliver the valuation appraisal and subsequent
updates, in writing, to Pulaski at the above address in conjunction with the
filing of the regulatory application. Subsequent updates will be filed promptly
as certain events occur which would warrant the preparation and filing of such
valuation updates. Further, RP Financial agrees to perform such other services
as are necessary or required in connection with the regulatory review of the
appraisal and respond to the regulatory comments, if any, regarding the
valuation appraisal and subsequent updates.
Fee Structure and Payment Schedule
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Xxxxxxx agrees to pay RP Financial a fixed fee of $35,000 for these
services, plus reimbursable expenses. Payment of these fees shall be made
according to the following schedule:
o $5,000 upon execution of the letter of agreement engaging RP
Financial's services as outlined herein;
o $25,000 upon delivery of the completed original appraisal report; and
o $5,000 upon completion of the conversion to cover all subsequent
valuation updates that may be required.
The Bank will reimburse RP Financial for out-of-pocket expenses incurred in
the preparation of the appraisal report. Such out-of-pocket expenses will
include travel, telephone, facsimile, copying, shipping, computer and data. RP
Financial will make all attempts to keep out-of-pocket expenses to a minimum.
In the event Pulaski or the MHC shall, for any reason, discontinue the
proposed conversion prior to delivery of the completed documents set forth above
and payment of the respective progress payment fees, Xxxxxxx agrees to
compensate RP Financial according to RP Financial's standard billing rates for
consulting services based on accumulated and verifiable time expenses, not to
exceed the respective fee caps noted above, after giving full credit to the
initial retainer fee. RP Financial's standard billing rates range from $75 per
hour for research and associates to $250 per hour for managing consultants.
If during the course of the proposed transaction, unforeseen events occur
so as to materially change the nature or the work content of the services
described in this contract, the terms of said contract shall be subject to
renegotiation by Pulaski and RP Financial. Such unforeseen events shall
include, but not be limited to, major changes in the conversion regulations,
appraisal guidelines or processing procedures as they relate to conversion
appraisals, major changes in management or procedures, operating policies or
philosophies, and excessive delays or suspension of processing of conversion
applications by the regulators such
RP Financial, LC.
Xx. Xxxxxxx Xxxxxx
April 2, 1998
Page 3
that completion of the conversion transaction requires the preparation by
RP Financial of a new appraisal.
Representations and Warranties
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Xxxxxxx and RP Financial agree to the following:
1. The Bank agrees to make available or to supply to RP Financial such
information with respect to its business and financial condition as RP Financial
may reasonably request in order to provide the aforesaid valuation. Such
information heretofore or hereafter supplied or made available to RP Financial
shall include: annual financial statements, periodic regulatory filings and
material agreements, debt instruments, off balance sheet assets or liabilities,
commitments and contingencies, unrealized gains or losses and corporate books
and records. All information provided by the Bank to RP Financial shall remain
strictly confidential (unless such information is otherwise made available to
the public), and if conversion is not consummated or the services of RP
Financial are terminated hereunder, RP Financial shall upon request promptly
return to the Bank the original and any copies of such information.
2. The Bank hereby represents and warrants to RP Financial that any
information provided to RP Financial does not and will not, to be best of the
Bank's knowledge, at the times it is provided to RP Financial, contain any
untrue statement of a material fact or fail to state a material fact necessary
to make the statements therein not false or misleading in light of the
circumstances under which they were made.
3. (a) The Bank agrees that it will indemnify and hold harmless RP
Financial, any affiliates of RP Financial, the respective directors, officers,
agents and employees of RP Financial or their successors and assigns who act for
or on behalf of RP Financial in connection with the services called for under
this agreement (hereinafter referred to as "RP Financial"), from and against any
and all losses, claims, damages and liabilities (including, but not limited to,
all losses and expenses in connection with claims under the federal securities
laws) attributable to (i) any untrue statement or alleged untrue statement of a
material fact contained in the financial statements or other information
furnished or otherwise provided by Pulaski to RP Financial, either orally or in
writing, (ii) the omission or alleged omission of a material fact from the
financial statements or other information furnished or otherwise made available
by Pulaski to RP Financial or (iii) any action or omission to act by Xxxxxxx, or
Xxxxxxx's respective officers, directors, employees or agents which action or
omission is willful or negligent. Xxxxxxx will be under no obligation to
indemnify RP Financial hereunder if a court determines that RP Financial was
negligent or acted in bad faith with respect to any actions or omissions of RP
Financial related to a matter for which indemnification is sought hereunder.
Any time devoted by employees of RP Financial to situations for which
indemnification is provided hereunder, shall be an indemnifiable cost payable by
Pulaski at the normal hourly professional rate chargeable by such employee.
(b) RP Financial shall give written notice to the Bank of such claim or
facts within thirty days of the assertion of any claim or discovery of material
facts upon which the RP Financial intends to base a claim for indemnification
hereunder. In the event the Bank elects, within seven days of the receipt of
the original notice thereof, to contest such claim by written notice to RP
Financial, RP Financial will be entitled to be paid any amounts payable by the
Bank hereunder, together with interest on such costs from the date incurred at
the rate of
RP Financial, LC.
Xx. Xxxxxxx Xxxxxx
April 2, 1998
Page 4
fifteen percent (15%) per annum within five days after the final determination
of such contest either by written acknowledgement of the Bank or a final
judgment of a court of competent jurisdiction. If the Bank does not so elect, RP
Financial shall be paid promptly and in any event within thirty days after
receipt by the Bank of the notice of the claim.
(c) The Bank shall pay for or reimburse the reasonable expenses,
including attorneys' fees, incurred by RP Financial in advance of the final
disposition of any proceeding within thirty days of the receipt of such request
if RP Financial furnishes the Bank: (1) a written statement of RP Financial's
good faith belief that if is entitled to indemnification hereunder; and (2) a
written undertaking to repay the advance if it ultimately is determined in a
final adjudication of such proceeding that it or he is not entitled to such
indemnification.
(d) In the event the Bank does not pay any indemnified loss or make
advance reimbursements of expenses in accordance with the terms of this
agreement, RP Financial shall have all remedies available at law or in equity to
enforce such obligation.
It is understood that, in connection with RP Financial's above-mentioned
engagement, RP Financial may also be engaged to act for the Bank in one or more
additional capacities, and that the terms of the original engagement may be
embodied in one or more separate agreements. The provisions of Paragraph 3
herein shall apply to the original engagement, any such additional engagement,
any modification of the original engagement or such additional engagement and
shall remain in full force and effect following the completion or termination of
RP Financial's engagement(s). This agreement constitutes the entire
understanding of the Bank and RP Financial concerning the subject matter
addressed herein, and such contract shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia. This agreement may not
be modified, supplemented or amended except by written agreement executed by
both parties.
Pulaski and RP Financial are not affiliated, and neither Pulaski nor RP
Financial has an economic interest in, or is held in common with, the other and
has not derived a significant portion of its gross revenues, receipts or net
income for any period from transactions with the other.
The MHC and RP Financial are not affiliated, and neither the MHC nor RP
Financial has an economic interest in, or is held in common with, with other and
has not derived a significant portion of its gross revenues, receipts or net
income for any period from transactions with the other.
* * * * * * * * * * *
RP Financial, LC.
Xx. Xxxxxxx Xxxxxx
April 2, 1998
Page 5
Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to RP Financial a signed copy of this letter, together with
the initial retainer fee of $5,000.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Chief Executive Officer
and Managing Director
Agreed To and Accepted By: /s/ Xx. Xxxxxxx X. Xxxxxx
-------------------------
Xx. Xxxxxxx X. Xxxxxx
President
For: Pulaski Bank, a Federal Savings Bank
St. Louis, Missouri
Date Executed: 4-15-98
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RP FINANCIAL, LC.
------------------------------------------
Financial Services Industry Consultants
April 2, 1998
Xx. Xxxxxxx Xxxxxx
President
Pulaski Bank, a Federal Savings Bank
00000 Xxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Dear Xx. Xxxxxx:
This letter sets forth the agreement between Pulaski Bank, a Federal
Savings Bank, St. Louis, Missouri ("Pulaski" or the "Bank") and RP Financial,
LC. ("RP Financial"), whereby the Bank has engaged RP Financial to assist in
the preparation of the regulatory business plan and financial projections to be
adopted by the Bank pursuant to the formation of a holding company. These
services are described in greater detail below.
Description of Proposed Services
--------------------------------
RP Financial's business planning services will include, but are not limited
to, the following areas: (1) gaining an understanding of Pulaski's current
financial and operating condition, business strategies and anticipated
strategies in the future; (2) analyzing and quantifying the impact of business
strategies to enhance profitability, capitalization, competitiveness and
compliance with applicable regulations; (3) preparing detailed financial
projections on a quarterly basis for a period of at least three fiscal years to
reflect the impact of Board approved business strategies; and (4) preparing the
written business plan document which conform with any applicable regulatory
guidelines.
The business plan will clearly describe and demonstrate the business and
operating strategies and objectives of Pulaski and the holding company for three
fiscal years, with the objective of demonstrating the financial viability and
operating strength of the Bank and holding company cash flows. Contents of the
business plan will include:
Philosophy/Goals
Economic Environment and Background
Lending, Leasing and Investment Activities
Deposit, Savings and Borrowing Activity
Asset and Liability Management
Operations
Records, Systems and Controls
Growth, Profitability and Capital
Responsibility for Monitoring this Plan
The business plan will include detailed financial projections prepared on a
quarterly basis covering three fiscal years. The financial projections will
reflect the anticipated timing and financial impact of the Board-approved
strategies.
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WASHINGTON HEADQUARTERS
Rosslyn Center
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Telephone: (000) 000-0000
Arlington, VA 22209 Fax No.: (000) 000-0000
RP Financial, LC.
Xx. Xxxxxxx Xxxxxx
April 2, 1998
Page 2
Fee Structure and Payment Schedule
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The Bank agrees to compensate RP Financial for preparation of the business
plan with a fixed fee of $7,500. The Bank will reimburse RP Financial for out-
of-pocket expenses incurred in the preparation of the business plan. Such out-
of-pocket expenses will include, but not be limited to, travel, telephone,
facsimile, copying, shipping, computer and data. RP Financial will make all
attempts to keep out-of-pocket expenses to a minimum.
In the event the Bank shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
business planning fee, the Bank agrees to compensate RP Financial according to
RP Financial's standard billing rates for consulting services based on
accumulated and verifiable time expenses, not to exceed the fee cap described
above.
If during the course of the planning engagement, unforeseen events occur so
as to materially change the nature or the work content of the business planning
services described in this contract, the terms of said contract shall be subject
to renegotiation by the Bank and RP Financial. Such unforeseen events may
include changes in regulatory requirements as it specifically relates to Pulaski
or potential transactions which will dramatically impact the Bank such as a
pending acquisition or branch transaction.
* * * * * * * * * * *
Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to RP Financial a signed copy of this letter.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Chief Executive Officer
and Managing Director
Agreed To and Accepted By: /s/ Xx. Xxxxxxx X. Xxxxxx
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Xx. Xxxxxxx X. Xxxxxx
President
For: Pulaski Bank, a Federal Savings Bank
St. Louis, Missouri
Date Executed: 4-15-98
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