EXHIBIT 99.2
RP(R) FINANCIAL, LC.
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Financial Services Industry Consultants
March 10, 2006
Board of Directors
First Federal Financial Services, Inc.
000 Xx. Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
This letter sets forth the agreement between First Federal Financial
Services, Inc., Edwardsville, Illinois ("First Federal" or the "Company") and
RP(R) Financial, LC. ("RP Financial"), whereby the Company has engaged RP
Financial to prepare the regulatory business plan and financial projections to
be adopted by the Board of Directors in conjunction with the second step
mutual-to-stock conversion of First Federal and simultaneous acquisition of
Clover Leaf and to prepare certain pro forma financial systems. These services
are described in greater detail below.
DESCRIPTION OF PROPOSED SERVICES
RP Financial's business planning services will include the following
areas: (1) evaluating the Company's current financial and operating condition,
business strategies and anticipated strategies in the future; (2) analyzing and
quantifying the impact of business strategies, incorporating the use of net
conversion proceeds both in the short and long term; (3) analyzing and
quantifying the impact of the acquisition of Clover Leaf by First Federal,
including the related purchase accounting entries; (4) 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 use of
proceeds; (5) preparing the written business plan document which conforms with
applicable regulatory guidelines including a description of the use of proceeds
and how the convenience and needs of the community will be addressed; and (6)
preparing the detailed schedules of the capitalization of the merged bank and
holding company and related cash flows.
Contents of the business plan will include the following and will thus
meet the regulatory criteria and guidelines: Executive Summary; Description of
Business; Marketing Plan; Management Plan; Records, Systems and Controls;
Financial Management Plan; Monitoring and Revising the Plan; and Alternative
Business Strategy.
RP Financial agrees to prepare the business plan and accompanying
financial projections in writing such that the business plan can be filed with
the appropriate regulatory agencies prior to filing the appropriate
applications. RP Financial will incorporate the Company's existing strategic
plan into the business plan reflecting the conversion transaction and
acquisition. In addition, upon request, RP Financial will prepare certain pro
forma schedules for inclusion in the Company's proxy-prospectus reflecting the
pro forma impact of the transactions, including balance sheets, income
statements, capitalization, capital compliance, pro forma per share data and
other schedules as requested.
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WASHINGTON HEADQUARTER
Rosslyn Center Direct: (000) 000-0000
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Telephone: (000) 000-0000
Arlington, VA 22209 Fax No.: (000) 000-0000
xxx.xxxxxxxxxxx.xxx E-Mail: xxxxxxxxxxxx@xxxxxxxxxxx.xxx
BOARD OF DIRECTORS
MARCH 10, 2006
PAGE 2
FEE STRUCTURE AND PAYMENT SCHEDULE
The Company agrees to compensate RP Financial for preparation of the
business plan on a fixed fee basis of $30,000. In addition, the Company agrees
to compensate RP Financial on an hourly time basis at RP Financial's standard
hourly rates for preparation of pro forma financial data for the
proxy-prospectus subject to a maximum of $10,000. Payment of the professional
fees shall be made upon delivery of the completed business plan and pro forma
financial schedules.
The Company also agrees to reimburse RP Financial for those direct
out-of-pocket expenses necessary and incidental to providing the business
planning services. Reimbursable expenses will likely include shipping,
telephone/facsimile printing, computer and data services, and shall be paid to
RP Financial as incurred and billed. RP Financial will agree to limit
reimbursable expenses subject to written authorization from the Company to
exceed such level.
In the event the Company shall, for any reason, discontinue this
planning engagement prior to delivery of the completed business plan and payment
of the progress payment fee, the Company agree 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 fixed fee
described above, plus reimbursable expenses incurred. Standard hourly rates
range from $300 per hour for managing directors to $75 per hour for research
associates.
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 Company and RP Financial. Such unforeseen
events may include changes in regulatory requirements as it specifically relates
to the Company or potential transactions which will dramatically impact the
Company 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
CEO and Managing Director
On behalf of the Board of Directors
Agreed To and Accepted By: Name: Xxxxxx X. Xxxxx
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Title: Chairman
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First Federal Financial Services, Inc.
Date Executed: March 10, 2006
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