SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SEACOAST FINANCIAL SERVICES CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its charter)
Massachusetts 04-1659040
(State of Incorporation or Organization) (I.R.S. Employer Identification no.)
791 Purchase Street, New Bedford, Massachusetts 02740
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant
to General Instruction A.(c), please check the following box. [ ]
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant
to General Instruction A.(d), please check the following box. [X]
Securities Act registration statement file number to which this form relates:
333-52889
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ------------------------------
Not applicable Not applicable
-------------- --------------
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
The information required by Item 202 of Regulation S-K is provided under
the headings "Description of Capital Stock of Seacoast Financial" and
"Restrictions on Acquisition of Seacoast Financial and Compass" in the
Registrant's Registration Statement on Form S-1, Registration No. 333-52889, as
initially filed with the Securities and Exchange Commission on May 15, 1998, and
subsequently amended (the "Registration Statement on Form S-1"). The
Registration Statement on Form S-1 is incorporated herein by reference.
<TABLE>
<CAPTION>
Item 2. Exhibits.
<S> <C>
2 Plan of Conversion of the Registrant.
3.1 Articles of Organization of the Registrant.
3.2 By-Laws of the Registrant.
4 Specimen certificate for the securities to be registered hereunder.*
</TABLE>
- ------------
* Incorporated herein by reference to the exhibits to the Registration
Statement on Form S-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
SEACOAST FINANCIAL SERVICES CORPORATION
Dated: November 18, 1998 By: /s/ Francis S. Mascianica, Jr.
-------------------------- -----------------------------------
Francis S. Mascianica, Jr.
Vice President and Treasurer
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
2 Plan of Conversion of the Registrant.
3.1 Articles of Organization of the Registrant.
3.2 By-Laws of the Registrant.
4 Specimen certificate for the securities to be registered
hereunder.*
</TABLE>
- ------------
* Incorporated herein by reference to the exhibits to the Registration
Statement on Form S-1.
Exhibit 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE 1855 BANCORP
PLAN OF CONVERSION
Adopted by the Board of Trustees
on April 23, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE 1855 BANCORP
PLAN OF CONVERSION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 1. INTRODUCTION -- BUSINESS PURPOSE ................................. 1
ARTICLE 2. DEFINITIONS ...................................................... 3
ARTICLE 3. GENERAL PROCEDURE FOR CONVERSION ................................. 7
3.1 Preconditions to Conversion ..................................... 7
3.2 Special Meeting of Corporators to Approve the Plan .............. 7
3.3 Stock Holding Company Charter And Bylaws ........................ 7
3.4 Bank Charter And Bylaws ......................................... 7
ARTICLE 4. SHARES TO BE OFFERED ............................................. 8
4.1 Holding Company Common Stock .................................... 9
4.2 Independent Valuation, Purchase Price and Number of Shares ...... 9
ARTICLE 5. SUBSCRIPTION RIGHTS AND ORDERS FOR COMMON STOCK ................. 10
5.1 Distribution of Prospectus ...................................... 10
5.2 Order Forms. .................................................... 10
5.3 Undelivered, Defective or Late Order Form; Insufficient Payment . 11
5.4 Payment for Stock ............................................... 11
5.5 Completion of the Conversion .................................... 12
ARTICLE 6. STOCK PURCHASE PRIORITIES ....................................... 12
6.1 Priorities for Offering ......................................... 12
6.2 Certain Determinations .......................................... 13
6.3 Minimum Purchase; No Fractional Shares .......................... 13
6.5 Priorities For Subscription Offering ............................ 13
6.6 Priorities for Direct Community Offering ........................ 15
6.7 Priorities for Syndicated Community Offering .................... 16
i
<PAGE>
<S> <C>
ARTICLE 7. ADDITIONAL LIMITATIONS ON PURCHASES ............................. 16
7.1 General ......................................................... 16
7.2 Individual Maximum Purchase Limit ............................... 16
7.3 Group Acting in Concert ......................................... 16
7.4 Purchases by Management Persons ................................. 17
7.5 Special Rule for Tax-Qualified Employee Plans ................... 17
7.6 Increase in the Total Number of Shares Offered .................. 17
7.7 Illegal Purchases ............................................... 17
7.8 Rejection of Orders ............................................. 17
7.9 Subscribers in Non-Qualified States or in Foreign Countries ..... 18
7.10 No Offer to Transfer Shares .................................... 18
7.11 Confirmation by Purchasers ..................................... 18
ARTICLE 8. POST OFFERING MATTERS ........................................... 18
8.1 Stock Purchases After the Conversion ............................ 18
8.2 Resales of Stock by Management Persons .......................... 19
8.3 Stock Certificates .............................................. 19
8.4 Restriction on Financing Stock Purchases ........................ 19
8.5 Stock Benefit Plans ............................................. 19
8.6 Market for Holding Company Common Stock ......................... 20
8.7 Liquidation Account ............................................. 20
8.8 Payment of Dividends ............................................ 21
8.9 Repurchase of Stock ............................................. 21
8.10 Conversion Expenses ............................................ 22
8.11 Public Inspection of Conversion Application .................... 22
8.12 Enforcement of Terms and Conditions ............................ 22
ARTICLE 9. MISCELLANEOUS ................................................... 22
9.1 Interpretation of Plan .......................................... 22
9.2 Amendment or Termination of the Plan ............................ 23
</TABLE>
<TABLE>
<S> <C>
EXHIBIT A Charter and Bylaws of the Stock Holding Company
EXHIBIT B Amended and Restated Charter and Bylaws of the Bank
EXHIBIT C Initial Directors of the Stock Holding Company
</TABLE>
ii
<PAGE>
THE 1855 BANCORP
PLAN OF CONVERSION
ARTICLE 1. INTRODUCTION--BUSINESS PURPOSE
The Board of Trustees of The 1855 Bancorp(1), a Massachusetts-chartered
mutual holding company (the "MHC"), has determined that it is in the best
interests of the MHC, of Compass Bank for Savings, a Massachusetts-chartered
stock savings bank and wholly owned subsidiary of the MHC (the "Bank"), of the
depositors and customers of the Bank, and of the communities served by the Bank
and the MHC for the MHC to convert from a mutual institution to a stock-form
institution (the "Conversion"). Capitalized terms used but not defined in this
Article 1 shall have the meaning set forth in Article 2 hereof.
In order to carry out the Conversion, the Board of Trustees of the MHC has
adopted this Plan of Conversion (the "Plan") to be carried out under the laws of
The Commonwealth of Massachusetts and the regulations of the Massachusetts
Division of Banks and the FDIC, and other applicable laws and regulations.
Pursuant to the Plan, the MHC will convert to a stock form corporation (the
"Stock Holding Company") and offer Holding Company Conversion Stock in the
Conversion on a priority basis to qualifying depositors, Tax-Qualified Employee
Plans, and Employees, Officers, directors and trustees of the Bank and the MHC,
with any remaining shares to be offered to the public in a Direct Community
Offering and possibly in a Syndicated Community Offering.
One of the primary purposes of the Conversion is to enable the MHC to
acquire Sandwich Bancorp, Inc., a Massachusetts-chartered holding company
("Sandwich Bancorp") and parent of Sandwich Co-operative Bank, a
Massachusetts-chartered stock co-operative bank ("Sandwich Bank"). Pursuant to
an Amended and Restated Affiliation and Merger Agreement dated March 23, 1998
("Affiliation Agreement") by and among the MHC and the Bank, on the one hand,
and Sandwich Bancorp and Sandwich Bank, on the other hand, all issued and
outstanding shares of Sandwich Bancorp common stock and all issued and
outstanding Sandwich stock options will be exchanged for Holding Company Common
Stock, and, in a multi-step transaction, Sandwich will be merged with 1855
Bancorp and Sandwich Bank will be merged with the Bank (the "Sandwich Bancorp
Acquisition") at a closing to take place shortly after the consummation of the
Conversion. The Conversion will generate capital to support the Sandwich Bancorp
Acquisition and make it possible for the Stock Holding Company to issue the
Holding Company Common Stock to be issued to holders of Sandwich Bancorp common
stock.
The combination of the Conversion and the Sandwich Bancorp Acquisition is
intended to enable the Bank to compete and expand more effectively in the
financial services marketplace. The Conversion is intended to provide an
additional source of capital not now available to the MHC or the Bank. Under the
Plan, the Stock Holding Company will be able to issue capital stock to
- ------------
(1) The Trustees of The 1855 Bancorp have also voted to change the name of the
MHC to "Seacoast Financial Services Corporation." Subject to the approval of the
Corporators of the MHC, the name change is expected to become effective before
the Conversion is completed.
<PAGE>
depositors and other members of the public and to use such capital, directly or
after investing such capital into the Bank, to further the expansion of the
activities of the Stock Holding Company and the Bank. In addition, after the
Conversion, the Stock Holding Company would have the ability to issue additional
shares of Holding Company Common Stock to raise additional capital or in
connection with additional mergers or acquisitions, although no additional
capital issuance and no merger or acquisition (other than the Sandwich Bancorp
Acquisition) are planned or contemplated at the present time. Finally, stock
ownership by Officers and other Employees of the Stock Holding Company and the
Bank has proven to be an effective performance incentive and as a means of
attracting and retaining key personnel.
The MHC will not proceed with the Conversion unless, at the time the
Conversion is scheduled to be consummated, all preconditions to the closing of
the Sandwich Bancorp Acquisition (other than the issuance of Holding Company
Common Stock to the Sandwich shareholders) have been satisfied or waived.
Although the Board of Trustees recognizes and appreciates the benefits of a
conversion of the MHC from mutual to stock form, the Board has concluded that,
without the Sandwich Bancorp Acquisition, it would not complete the Conversion
at this time and would, instead, consider other alternatives, including
retaining its existing mutual holding company structure or establishing a
mid-tier holding company and issuing up to 49% of the capital stock of such
corporation in a so-called "minority issuance" of stock.
The Sandwich Bancorp Acquisition is subject to the approval of various
regulatory agencies, and must also be approved by the affirmative vote of at
least (i) a two-thirds of the MHC's Corporators and (ii) the holders of two
thirds of issued and outstanding capital stock of Sandwich Bancorp. In addition,
individuals purchasing Holding Company Conversion Stock will, by executing their
order to purchase such Holding Company Conversion Stock, consent to and approve
of the Sandwich Bancorp Acquisition, it being understood that there will be no
Conversion, and that no Holding Company Conversion Stock will be issued, unless
the Sandwich Bancorp Acquisition is approved and the Acquisition Precondition
has been satisfied or waived.
The Plan is subject to the approval of various regulatory agencies, and
must also be approved by the affirmative vote of at least two-thirds of the
MHC's Corporators (and, if required by regulatory authorities, a majority of the
MHC's Independent Corporators (who must constitute not less than 60% of all
Corporators)) at an annual meeting or a special meeting called for such purpose.
By approving the Plan, the Corporators will also be approving the charter and
bylaws of each of the Stock Holding Company and the Bank and all other steps
necessary or incidental to the conversion of the MHC to the Stock Holding
Company or to the Conversion.
The Bank became a stock-form subsidiary of the MHC when Compass Bank
reorganized into mutual holding company form in 1994. Accordingly, the
Conversion will not affect the corporate existence of the Bank. Although the
Plan does provide that certain amendments will be made to the Bank's corporate
charter and bylaws, the Bank's business and operations will not be affected or
interrupted by the Conversion, and the Bank will continue as the same legal
entity after the Conversion. The deposit accounts and loan accounts of the
Bank's depositors will not be affected by the Conversion. Upon Conversion, each
deposit account holder of the Bank will continue to hold exactly the same
deposit account as the holder held immediately before the Conversion. All
deposit accounts in the Bank following the Conversion will continue to be
insured up to the legal maximum by the Federal Deposit Insurance Corporation and
the Depositors Insurance Fund of the Mutual Savings Central Fund, Inc. in the
same manner as such deposit
2
<PAGE>
accounts were insured immediately before the Conversion. There will be no change
in the Bank's loans. The Conversion will not result in any reduction of the
Bank's reserves or net worth.
ARTICLE 2. DEFINITIONS
As used in the Plan, the terms set forth below have the following meanings:
2.1 Acquisition Precondition: The precondition to the consummation of the
Conversion that, at the time the Conversion is scheduled to be consummated, all
preconditions to the closing of the Sandwich Bancorp Acquisition (other than the
issuance of Holding Company Common Stock to the Sandwich shareholders) shall
have been satisfied or waived.
2.2 Acting in Concert: The term "Acting in Concert" means (a) knowing
participation in a joint activity or conscious parallel action towards a common
goal, whether or not pursuant to an express agreement; or (b) Persons seeking to
combine or pool their voting or other interests (such as subscription rights) in
the securities of an issuer for a common purpose, pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether written or
otherwise. 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 Trustees of the MHC 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 with
the SEC with respect to other companies. Trustees of the MHC and directors of
the Stock Holding Company and the Bank 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: An "Affiliate" of, or a Person "Affiliated" with, a
specified Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with the
Person specified.
2.4 Application: The application, including a copy of the Plan, submitted
by the MHC to the Commissioner for approval of the Conversion.
2.5 Associate: The term "Associate," when used to indicate a relationship
with any Person, means: (i) any corporation or organization (other than the
Bank, the Stock Holding Company, the MHC or a majority-owned subsidiary of any
thereof) of which such Person is a director, Officer or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
securities; (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity; (iii) any relative or spouse of such Person or
any relative of such spouse, who has the same home as such Person; and (iv) any
Person Acting in Concert with any of the Persons or entities specified in
clauses (i) through (iii) above; provided, however, that any Tax-Qualified or
Non-Tax-Qualified Employee Plan shall not be deemed to be an Associate of any
director, trustee or Officer of the MHC, the Stock Holding Company or the Bank,
to the extent provided in the Plan. When used to refer to a Person other than an
Officer or director of the Bank, the MHC or the Stock Holding Company, the MHC
in its sole discretion may determine the Persons that are Associates of other
Persons. Trustees of the MHC and directors of the Stock Holding Company and the
Bank shall not be deemed to be Associates solely as a result of their membership
on such Board.
2.6 Bank: Compass Bank for Savings.
3
<PAGE>
2.7 BHCA: The Bank Holding Company Act of 1956, as amended.
2.8 Commissioner: The Office of the Commissioner of Banks of The
Commonwealth of Massachusetts.
2.9 Community: The following Massachusetts cities and towns: Acushnet,
Aquinna, Barnstable, Bourne, Brewster, Buzzard's Bay, Carver, Chatham, Chilmark,
Dartmouth, Dennis, Eastham, Edgartown, Fairhaven, Fall River, Falmouth, Freetown
(Assonet), Gosnold, Harwich, Hyannis, Kingston, Lakeville, Marion, Mashpee,
Mattapoisett, New Bedford, Oak Bluffs, Orleans, Plymouth (including Cedarville
and Manomet), Plympton, Pocasset, Rochester, Sandwich, South Sandwich, Somerset,
Swansea, Tisbury, W. Tisbury, Wareham, Westport, Yarmouth and South Yarmouth.
2.10 Community Offering: A Direct Community Offering and/or a Syndicated
Community Offering.
2.11 Conversion: (1) the conversion of the MHC into the Stock Holding
Company by amendment of the MHC's charter and bylaws to authorize the issuance
of capital stock or by such other means as the Commissioner shall approve under
applicable Massachusetts law and regulations, (2) the offering of Holding
Company Conversion Stock in a Subscription Offering and, to the extent shares
remain available, in a Direct Community Offering and possibly in a Syndicated
Community Offering; (3) the issuance of the Holding Company Conversion Stock,
(4) the amendment of the Bank's charter and bylaws as contemplated in the Plan;
and (5) the consummation of the related transactions provided for in the Plan.
2.12 Conversion Committee: The committee of the Board of Trustees that has
been authorized to act on behalf of the MHC for certain matters relating to the
Conversion.
2.13 Corporator: A member of the MHC's Board of Corporators.
2.14 Deposit Account: Any withdrawable deposit account offered by the Bank,
including, without limitation, savings accounts, NOW account deposits,
certificates of deposit, demand deposits, Keogh Plan, SEPs and IRA accounts for
which the Bank acts as custodian or trustee, and such other types of deposit
accounts as may then have been authorized by Massachusetts or federal law and
regulations, but not including repurchase agreements, savings bank life
insurance policies or certain escrow accounts.
2.15 Direct Community Offering: The offering to certain members of the
general public of any unsubscribed shares in the Subscription Offering which may
be effected pursuant to the Plan. The Direct Community Offering may be conducted
simultaneously with the Subscription Offering.
2.16 Division: The Division of Banks of The Commonwealth of Massachusetts.
2.17 Eligible Account Holder: Any Person holding a Qualifying Deposit on
the Eligibility Record Date.
2.18 Eligibility Record Date: December 31, 1996, the date for determining
who qualifies as an Eligible Account Holder.
2.19 Employee: The term "Employee" does not include a trustee, director or
Officer.
4
<PAGE>
2.20 Employee Plan: Any Tax-Qualified Employee Plan or Non-Tax-Qualified
Employee Benefit Plan.
2.21 ESOP: The employee stock ownership plan to be established by the Bank.
2.22 Estimated Valuation Range: The dollar range of the proposed Offering,
as determined by the Independent Appraiser before the Offering and as it may be
amended from time to time thereafter. The Estimated Valuation Range may vary
within 15% above or 15% below the midpoint of such range, with a possible
adjustment by up to 15% above the maximum ("Range Maximum") of such range.
2.23 Exchange Act: The Securities Exchange Act of 1934, as amended.
2.24 FDIC: The Federal Deposit Insurance Corporation.
2.25 FRB: The Board of Governors of the Federal Reserve System.
2.26 Group Maximum Purchase Limit: The limitation on the purchase of shares
of Holding Company Conversion Stock established by Section 7.3, as such limit
may be increased pursuant to said Section 7.3.
2.27 Holding Company Common Stock: The common stock authorized to be issued
from time to time by the Stock Holding Company.
2.28 Holding Company Conversion Stock: The Holding Company Common Stock to
be issued by the Stock Holding Company in the Conversion. Holding Company
Conversion Stock shall not include Holding Company Common Stock issued in
connection with the Sandwich Bancorp Acquisition.
2.29 Independent Appraiser: The appraiser retained by the MHC to prepare an
appraisal of the pro forma market value of the Holding Company Conversion Stock.
2.30 Independent Corporator: A Corporator who is not an Employee, Officer,
or trustee of the MHC or an Employee, Officer, director, or "significant
borrower" of the Bank.
2.31 Independent Valuation: The estimated pro forma market value of the
Holding Company Conversion Stock as determined by the Independent Appraiser.
2.32 Individual Maximum Purchase Limit: The limitation on the purchase of
shares of Holding Company Conversion Stock established by Section 7.2, as such
limit may be increased pursuant to said Section 7.2.
2.33 Information Statement. The information statement required to be sent
to the Corporators in connection with the Special Meeting.
2.34 Liquidation Account: The liquidation account established pursuant to
Section of the Plan.
2.35 Management Person: Any Officer or director of the Bank or the Stock
Holding Company and any Officer, trustee or Corporator of the MHC.
2.36 Marketing Agent: The broker-dealer responsible for organizing and
managing the Conversion and sale of the Holding Company Conversion Stock.
5
<PAGE>
2.37 Market Maker: A dealer (i.e., any Person who engages directly or
indirectly as agent, broker, or principal in the business of offering, buying,
selling or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide
competitive bid and offer quotations on request, and (ii) is ready, willing and
able to effect transactions in reasonable quantities at the dealer's quoted
prices with other brokers or dealers.
2.38 MHC: The 1855 Bancorp, the Massachusetts-chartered holding company for
the Bank as it exists in mutual form prior to the Conversion.
2.39 Non-Tax-Qualified Employee Benefit Plan: Any defined benefit plan or
defined contribution plan which is not qualified under Section 401 of the
Internal Revenue Code.
2.40 Offering: The Subscription Offering, the Direct Community Offering and
the Syndicated Community Offering.
2.41 Officer: The Chairman of the Board, the President, any Officer of the
level of vice president or above, the Clerk and the Treasurer of the Bank, the
MHC or the Stock Holding Company, as the case may be.
2.42 Person: An individual, corporation, partnership, association,
joint-stock company, trust (including Individual Retirement Accounts, SEP's and
Keogh Accounts), unincorporated organization, government entity or political
subdivision thereof or any other entity.
2.43 Plan: This Plan of Conversion.
2.44 Qualifying Deposit: The aggregate balances of all Deposit Accounts of
an Eligible Account Holder as of the close of business on the Eligibility Record
Date or of a Supplemental Eligible Account Holder as of the close of business on
the Supplemental Eligibility Record Date, as the case may be, provided that such
aggregate balance is not less than $50.
2.45 Range Maximum: The valuation which is 15% above the midpoint of the
Estimated Valuation Range, as defined in Section 2.22.
2.46 Regulations: The regulations of the Division and the FDIC regarding
mutual to stock conversions.
2.47 SEC: The Securities and Exchange Commission.
2.48 Special Meeting: The Special Meeting of Corporators called for the
purpose of voting on the Plan and the Sandwich Bancorp Acquisition.
2.49 Stock Holding Company: The stock-form holding company that will be
formed by conversion of the MHC as provided in the Plan, issue Holding Company
Conversion Stock in the Conversion, and continue to own 100% of the common stock
of the Bank.
2.50 Stock Holding Company Application: The holding company application to
be submitted by the MHC to the FRB to have the MHC convert to stock form and
issue Holding Company Conversion Stock.
2.51 Subscription Offering: The offering of Holding Company Conversion
Stock for subscription by Persons holding subscription rights pursuant to the
Plan.
6
<PAGE>
2.52 Subscription Price: The price per share, determined as provided in
Section 4.2.1 of the Plan, at which the Holding Company Conversion Stock will be
sold in the Offering.
2.53 Subsidiary: A company that is controlled by another company, either
directly or indirectly through one or more subsidiaries.
2.54 Supplemental Eligible Account Holder: Any Person holding a Qualifying
Deposit on the Supplemental Eligibility Record Date.
2.55 Supplemental Eligibility Record Date: The supplemental record date for
determining who qualifies as a Supplemental Eligible Account Holder. The
Supplemental Eligibility Record Date shall be June 30, 1997.
2.56 Syndicated Community Offering: At the discretion of the MHC, the
offering of Holding Company Conversion Stock following or contemporaneously with
the Direct Community Offering through a syndicate of broker-dealers.
2.57 Tax-Qualified Employee Plan: Any defined benefit plan or defined
contribution plan (including the ESOP, any stock bonus plan, profit-sharing
plan, or other plan) of the Bank, the Stock Holding Company, the MHC or any of
their Affiliates, which, with its related trusts, meets the requirements to be
qualified under Section 401 of the Internal Revenue Code.
ARTICLE 3. GENERAL PROCEDURE FOR CONVERSION
3.1 Preconditions to Conversion. The Conversion is expressly conditioned
upon prior occurrence of the following:
3.1.1 Approval of the Plan by the affirmative vote of a majority of the
Corporators at a regular or special meeting of such Corporators (and, if
required by regulatory authorities, by the affirmative vote of a
majority of Independent Corporators (who shall constitute not less than
60% of all Corporators)).
3.1.2 Approval by the Commissioner of the Application, including the Plan
and the Charter and Bylaws of the Stock Holding Company and of the Bank.
3.1.3 Approval by the FRB for the MHC to convert to stock form and issue
Holding Company Conversion Stock.
3.2 Special Meeting of Corporators to Approve the Plan. Upon approval by at
least two-thirds of all Trustees of the MHC, the Plan will be submitted to the
Commissioner as part of the Application, together with a copy of the proposed
Information Statement and all other material required by the Regulations, for
approval by the Commissioner. Upon a determination by the Commissioner that the
Application is complete, the MHC will publish and post public announcements and
notices of the Application as required by the Commissioner and the Regulations.
Following approval of the Plan by the Commissioner, the Special Meeting shall be
scheduled in accordance with the MHC's Bylaws, and the Plan (as revised in
response to comments received from the Commissioner), proposed revisions and
amendments to the charters and bylaws of the Bank and the Stock Holding Company,
and any information required pursuant to the Regulations, will be submitted to
the Corporators for their consideration and approval at the Special Meeting. The
MHC will mail to each Corporator a copy of the Information Statement not less
than seven (7) days before the Special Meeting. Following approval of the Plan
by the Corporators, the MHC intends to take such steps as may be appropriate
pursuant to applicable laws
7
<PAGE>
and regulations to convert the MHC to a Massachusetts-chartered stock form
holding company (subject, however, to the Acquisition Precondition).
3.3 Stock Holding Company Charter And Bylaws. Copies of the proposed
Charter and Bylaws of the Stock Holding Company are attached hereto as Exhibit
A, and are made a part of the Plan. By their approval of the Plan, the
Corporators shall have approved and adopted the Charter and Bylaws of the Stock
Holding Company.
3.4 Bank Charter And Bylaws. Copies of the proposed amended and restated
Charter and Bylaws of the Bank are attached hereto as Exhibit B, and are made a
part of the Plan. By their approval of the Plan, the Trustees, as the governing
body of the sole stockholder of the Bank, have approved and adopted the amended
and restated Charter and Bylaws of the Bank.
3.5 Offer and Sale of Holding Company Conversion Stock.
3.5.1 Upon receipt of all required regulatory approvals, the Holding
Company Conversion Stock will be offered for sale in a Subscription Offering
simultaneously to Eligible Account Holders, Supplemental Eligible Account
Holders, any Tax-Qualified Employee Benefit Plan, and directors, trustees,
Officers and Employees in the manner set forth in Article hereof, and in a
Direct Community Offering to be held either subsequent to or concurrently with
the Subscription Offering. The Subscription Offering period will run for no less
than twenty (20) but no more than forty-five (45) days from the date of
distribution of the Subscription Offering materials, unless extended by the MHC
with the approval of the Commissioner.
3.5.2 If feasible, any shares of Holding Company Conversion Stock
remaining unsold after completion of the Subscription Offering and a Direct
Community Offering will be sold in a Syndicated Community Offering (which may
commence following or contemporaneously with the Direct Community Offering). If
for any reason a Syndicated Community Offering of all unsubscribed Holding
Company Conversion Stock cannot be effected, the MHC will use its best efforts
to obtain other purchasers, subject to the approval of the Commissioner.
Completion of the sale of all Holding Company Conversion Stock not sold in the
Subscription Offering is required within forty-five (45) days after termination
of the Subscription Offering, subject to the extension of such forty-five (45)
day period by the MHC with the approval of the Commissioner. The MHC may seek
one or more extensions of such forty-five (45) day period if necessary to
complete the sale of all shares of Holding Company Conversion Stock. If all
available shares of Holding Company Conversion Stock are sold in the
Subscription Offering and any Direct Community Offering, there will be no
Syndicated Community Offering and the Conversion will be consummated (subject to
the Acquisition Precondition) upon completion of the Subscription Offering or
the Direct Community Offering, as the case may be.
3.6 Conversion of MHC to Stock Holding Company. Upon the consummation
of the Conversion the MHC will be converted into the Stock Holding Company. The
Stock Holding Company will be chartered as a Massachusetts corporation and will
be authorized to exercise any and all powers, rights and privileges, and will be
subject to all limitations applicable to bank holding companies under applicable
laws and regulations. The initial members of the Board of Directors of the Stock
Holding Company will be those Persons whose names are set forth on Exhibit C to
the Plan, each to hold office until the Annual Meeting (or Special Meeting in
lieu thereof) in the year set forth opposite their respective names on such
Exhibit C, and until their successors are elected and have been qualified, and
otherwise in accordance with the Charter and
8
<PAGE>
By-Laws of the Stock Holding Company. The Officers of the MHC immediately prior
to the Conversion shall be the initial Officers of the Stock Holding Company, in
each case until their respective successors are duly elected or appointed and
qualified. The Stock Holding Company, as successor in interest to the MHC, will
continue to own 100% of the common stock of the Bank. The Stock Holding Company
expects to contribute at least half of the net proceeds of the Conversion to the
Bank as additional capital.
ARTICLE 4. SHARES TO BE OFFERED
4.1 Holding Company Common Stock. The Holding Company Common Stock shall be
fully paid and nonassessable. The total number of shares of Holding Company
Common Stock authorized under the Stock Holding Company's Charter will exceed
the number of shares of Holding Company Conversion Stock to be issued to the
Stock Holding Company stockholders in the Conversion. HOLDING COMPANY COMMON
STOCK WILL NOT BE COVERED BY DEPOSIT INSURANCE.
4.2 Independent Valuation, Purchase Price and Number of Shares.
4.2.1 Subscription Price. Before the commencement of the Subscription
Offering, an Estimated Valuation Range will be established by the Independent
Appraiser, which range will vary within 15% above to 15% below the midpoint of
such range. All shares sold in the Conversion will be sold at a uniform price
per share (the "Subscription Price"), which is expected to be determined before
the commencement of the Offering. If there is a Syndicated Community Offering,
the price per share at which the Holding Company Conversion Stock is sold in
such Syndicated Community Offering shall be equal to the per share purchase
price of the shares sold in the Subscription Offering and the Direct Community
Offering. The aggregate purchase price for all shares of Holding Company
Conversion Stock will be equal to the estimated consolidated pro forma market
value of the Holding Company Conversion Stock, as determined for such purpose by
the Independent Appraiser.
4.2.2 Number of Shares. The total number of shares (and a range
thereof) of Holding Company Conversion Stock to be issued and offered for sale
will be determined by the MHC immediately before the commencement of the
Subscription Offering based on the Estimated Valuation Range and the
Subscription Price. Such number of shares shall be subject to adjustment
thereafter if necessitated by market or financial conditions, with the approval
of the FDIC and the Commissioner, if necessary. In particular, the total number
of shares may be increased by up to 15% above the maximum of the number of
shares offered in the Subscription Offering if the Estimated Valuation Range is
increased subsequent to the commencement of the Subscription Offering to reflect
changes in market and financial conditions and the resulting aggregate purchase
price is not more than 15% above the Range Maximum.
4.2.3 Increase or Decrease in Number of Shares. The number of shares of
Holding Company Conversion Stock may be increased or decreased by the MHC. In
the event that the aggregate purchase price of the shares of Holding Company
Conversion Stock ordered is below the minimum of the Estimated Valuation Range,
or materially above the Range Maximum, resolicitation of purchasers may be
required, provided, however, that up to a 15% increase above the Range Maximum
will not be deemed to be material so as to require a resolicitation. Any such
resolicitation shall be effected in such manner and within such time as the MHC
shall establish, with the approval of the FDIC and the Commissioner, if
required.
9
<PAGE>
4.2.4 Confirmation of Valuation. Notwithstanding the foregoing, no sale
of Holding Company Conversion Stock may be consummated unless, before such
consummation, the Independent Appraiser confirms to the MHC and to the FDIC and
the Commissioner that, to the best knowledge of the Independent Appraiser,
nothing of a material nature has occurred which, taking into account all
relevant factors, would cause the Independent Appraiser to conclude that the
aggregate value of the Holding Company Conversion Stock at the aggregate
Subscription Price for all shares of Holding Company Conversion Stock is
incompatible with its estimate of the aggregate consolidated pro forma market
value of the Holding Company Conversion Stock. An increase in the aggregate
value of the Holding Company Conversion Stock by up to 15% above the Range
Maximum would not be deemed to be material. If such confirmation is not
received, the MHC may cancel the Conversion, extend the Conversion and establish
a new Subscription Price and/or Estimated Valuation Range, extend, reopen or
hold a new Conversion or take such other action as the FDIC and the Commissioner
may permit. The estimated pro forma market value of the Holding Company
Conversion Stock shall be determined for such purpose by an Independent
Appraiser on the basis of such appropriate factors as are not inconsistent with
the Regulations and will be confirmed upon completion of the Conversion. In any
case, the total number of shares of Holding Company Conversion Stock to be
issued and sold will be determined by the MHC as follows: (a) the estimated
aggregate pro forma market value of the Holding Company Conversion Stock,
immediately after Conversion as determined by the Independent Appraiser,
expressed in terms of a specific aggregate dollar amount rather than as a range,
shall be divided by (b) the Subscription Price.
ARTICLE 5. SUBSCRIPTION RIGHTS AND ORDERS FOR COMMON STOCK
5.1 Distribution of Prospectus. The Conversion shall be conducted in
compliance with the Regulations and applicable SEC regulations. As soon as
practicable after the prospectus prepared by the MHC has been declared effective
by the Commissioner and the SEC, copies of the prospectus and order forms will
be distributed to all Eligible Account Holders, Supplemental Eligible Account
Holders, any Tax-Qualified Employee Plan and Employees, Officers, directors and
trustees at their last known addresses appearing on the records of the Bank for
the purpose of subscribing for shares of Holding Company Conversion Stock in the
Subscription Offering and will be made available (if and when a Community
Offering is held) for use by those Persons entitled to purchase in the Community
Offering. Instead of distributing the prospectus and order forms, the MHC may
distribute a notice of availability of the prospectus and the order form,
together with a request card and a postage-prepaid return envelope for use in
requesting such prospectus and order form. If the latter method is employed by
the MHC, such notices shall be mailed to those eligible to subscribe in the
Subscription Offering not less than thirty (30) calendar days before the
expiration of the Subscription Offering.
5.2 Order Forms. Each order form will be preceded or accompanied by the
prospectus describing the Stock Holding Company, the Bank, the Sandwich Bancorp
Acquisition, the Holding Company Conversion Stock and the Subscription and
Community Offerings. Each order form will contain, among other things, the
following:
5.2.1 A specified date by which all order forms must be received by the
MHC, which date shall be not less than 20 nor more than 45 days
following the date on which the order forms are mailed by the MHC,
and which date will constitute the termination of the Subscription
Offering, unless extended;
10
<PAGE>
5.2.2 The Subscription Price per share for shares of Holding Company
Conversion Stock to be sold in the Offering;
5.2.3 A description of the minimum and maximum number of shares of
Holding Company Conversion Stock that may be subscribed for pursuant to the
exercise of subscription rights or otherwise purchased in the Offering;
5.2.4 Instructions as to how the recipient of the order form is to
indicate thereon the number of shares of Holding Company Conversion Stock for
which such Person elects to subscribe and the available alternative methods of
payment therefor;
5.2.5 An acknowledgment that the recipient of the order form has
received a copy of the prospectus before execution of the order form;
5.2.6 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 MHC within
the Subscription Offering period such properly completed and executed order
form, together with a check or money order in the full amount of the purchase
price as specified in the order form for the shares of Holding Company
Conversion Stock for which the recipient elects to subscribe in the Subscription
Offering (or by authorizing on the order form that the Bank withdraw said amount
from the Deposit Account at the Bank maintained by such Person, but only if the
MHC elects to permit such withdrawals from the type of such Deposit Account);
5.2.7 A statement to the effect that the executed order form, once
received by the MHC, may not be modified or amended by the subscriber without
the consent of the MHC; and
5.2.8 An acknowledgment by the Person submitting the order form (x)
that the Conversion will not be consummated, and that no Holding Company
Conversion Stock will be issued, unless at the time the Conversion is scheduled
to be consummated, all preconditions to the closing of the Sandwich Bancorp
Acquisition (other than the issuance of Holding Company Common Stock to the
Sandwich shareholders) have been satisfied or waived, and (y) that such Person
accordingly understands and agrees that by submitting such order form such
Person is approving the Sandwich Bancorp Acquisition and is voting by written
consent (pursuant to M.G.L. ch. 156B, ss.43) all Holding Company Conversion
Stock to be purchased by such Person in favor of the Sandwich Bancorp
Acquisition.
Notwithstanding the above, the MHC reserves the right in its sole
discretion to accept or reject orders received on photocopied or facsimilied
order forms.
5.3 Undelivered, Defective or Late Order Form; Insufficient Payment. In the
event order forms (a) are not delivered for any reason or are returned
undelivered to the MHC by the United States Postal Service, (b) are not received
back by the MHC or are received by the MHC after the expiration date specified
thereon, (c) are defectively filled out or executed, (d) are not accompanied by
the full required payment for the shares of Holding Company Conversion Stock
subscribed for (including cases in which Deposit Accounts from which withdrawals
are authorized are insufficient to cover the amount of the required payment), or
(e) are not mailed pursuant to a "no mail" order placed in effect by the account
holder, the subscription rights of the Person to whom such rights have been
granted will lapse as though such Person failed to return the contemplated order
form within the time period specified thereon; provided, however, that the
11
<PAGE>
MHC may, but will not be required to, waive any immaterial irregularity on any
order form or require the submission of corrected order forms or the remittance
of full payment for subscribed shares by such date as the MHC may specify.
5.4 Payment for Stock
5.4.1 All payments for Holding Company Conversion Stock subscribed for
or ordered in the Conversion must be delivered in full to the MHC, together with
a properly completed and executed order form, except in the case of the
Syndicated Community Offering, on or before the expiration date specified on the
order form, unless such date is extended by the MHC; provided, however, that if
any Employee Plan subscribes for shares during the Subscription Offering, such
plans will not be required to pay for the shares at the time they subscribe but
rather may pay for such shares of Holding Company Conversion Stock subscribed
for by such plans at the Subscription Price upon consummation of the Conversion,
provided, however, that, in the case of the ESOP there is in force from the time
of its subscription until the consummation of the Conversion, a loan commitment
to lend to the ESOP, at such time, the aggregated Subscription Price of the
shares for which it subscribed. The Stock Holding Company or the Bank may make
scheduled discretionary contributions to an Employee Plan provided such
contributions from the Bank, if any, do not cause the Bank to fail to meet its
regulatory capital requirement. Payment for Holding Company Conversion Stock may
also be made by a participant in an Employee Plan (including the Bank's deferred
compensation plan for Bank Employees) causing funds held for such participant's
benefit by an Employee Plan to be paid over for such purchase to the extent that
such plan allows participants or any related trust established for the benefit
of such participants to direct that some or all of their individual accounts or
sub-accounts be invested in Holding Company Conversion Stock.
5.4.2 Payment for Holding Company Conversion Stock shall be made either
by check or money order, or if a purchaser has a Deposit Account in the Bank
(and if the MHC has elected to permit such withdrawals from the type of Deposit
Account maintained by such Person), such purchaser may pay for the shares
subscribed for by authorizing the Bank to make a withdrawal from the purchaser's
Deposit Account at the Bank in an amount equal to the aggregate purchase price
of such shares. No wire transfers will be accepted. Any authorized withdrawal,
whether from a savings, passbook or certificate account, shall be without
penalty as to premature withdrawal. If the authorized withdrawal is from a
certificate account, and the remaining balance does not meet the applicable
minimum balance requirements, the certificate shall be canceled at the time of
withdrawal, without penalty, and the remaining balance will earn interest at the
passbook rate. Funds for which a withdrawal is authorized will remain in the
purchaser's Deposit Account but may not be used by the purchaser until the
Conversion is consummated or the 45-day period (or such longer period as may be
approved by the Commissioner) following the Conversion has expired, whichever
occurs first. After consummation of the Conversion, the withdrawal will be given
effect only to the extent necessary to satisfy the subscription (to the extent
it can be filled) at the Subscription Price. Interest submitted will continue to
be earned on any amounts authorized for withdrawal until such withdrawal is
given effect. Interest on checks and money orders will be paid by the Bank at a
rate to be established by the Bank. Such interest will be paid from the date
payment is received by the Bank until consummation or termination of the
Conversion. If for any reason the Conversion is not consummated, all payments
made by subscribers in the Conversion will be refunded to them with interest. In
case of amounts authorized for withdrawal from Deposit Accounts, refunds will be
made by canceling the authorization for withdrawal.
12
<PAGE>
5.5 Completion of the Conversion. The Conversion will be terminated if not
completed within 180 days from the date of approval by the Commissioner.
ARTICLE 6. STOCK PURCHASE PRIORITIES.
6.1 Priorities for Offering. All purchase priorities established by
this Article 6 shall be subject to the purchase limitations set forth in, and
shall be subject to adjustment as provided in, Article 7 of this Plan. In
addition to the priorities set forth in this Article 6, the MHC may establish
other priorities for the purchase of Holding Company Conversion Stock, subject
to the approval of the Commissioner and the FDIC. The priorities for the
purchase of shares in the Conversion are set forth in the following Sections.
6.2 Certain Determinations. All interpretations or determinations of
whether prospective purchasers are "residents," "Associates," or "Acting in
Concert", and any other interpretations of any and all other provisions of the
Plan shall be made by and at the sole discretion of the MHC, and may be based on
whatever evidence the MHC may choose to use in making any such determination.
6.3 Minimum Purchase; No Fractional Shares. The minimum purchase by any
Person shall be 25 shares (to the extent that shares of Holding Company
Conversion Stock are available for purchase), provided, however, that the
aggregate purchase price for any minimum share purchase shall not exceed $500.
No fractional shares will be allocated or issued.
6.4 Overview of Priorities. In descending order of priority, the
opportunity to purchase Holding Company Conversion Stock shall be given in the
Subscription Offering to: (1) Eligible Account Holders; (2) Supplemental
Eligible Account Holders; (3) Tax-Qualified Employee Plans; and (4) Employees,
Officers, directors and trustees of the MHC and the Bank. Any shares of Holding
Company Conversion Stock that are not subscribed for in the Subscription
Offering at the discretion of the MHC may be offered for sale in a Direct
Community Offering and/or a Syndicated Community Offering on terms and
conditions and procedures satisfactory to the MHC.
6.5 Priorities For Susbscription Offering.
6.5.1 First Priority: Eligible Account Holders. Upon approval of the
Plan by the Corporators and the receipt of permission from the Commissioner to
offer the Holding Company Conversion Stock for sale, each Eligible Account
Holder shall receive, without payment therefor, nontransferable subscription
rights on a first priority basis to subscribe for a number of shares of Holding
Company Conversion Stock equal to the greatest of (x) a number determined by
dividing the Individual Maximum Purchase Limit (as such term is defined in
Section ) by the per share Subscription Price, (y) one-tenth of one percent
(.10%) of the shares offered in the Conversion, or (z) 15 times the product
(rounded down to the nearest whole number) obtained by multiplying (1) the total
number of shares of Holding Company Conversion Stock to be issued in the
Conversion by (2) a fraction, of which the numerator is the Qualifying Deposit
of the Eligible Account Holder and the denominator is the total amount of
Qualifying Deposits of all Eligible Account Holders. If there are insufficient
shares available to satisfy all subscriptions of Eligible Account Holders,
shares will be allocated to Eligible Account Holders so as to permit each such
subscribing Eligible Account Holder to purchase a number of shares of Holding
Company Conversion Stock sufficient to make his or her total allocation equal to
the lesser of 100 shares or the number of shares subscribed for. Thereafter,
unallocated shares of Holding Company Conversion Stock will be allocated pro
rata to remaining subscribing Eligible Account Holders whose subscriptions
remain unfilled in the same proportion that each such subscriber's Qualifying
Deposit bears to the total amount of Qualifying Deposits of all subscribing
Eligible Account Holders whose subscriptions remain
13
<PAGE>
unfilled. Subscription rights to purchase Holding Company Conversion Stock
received by corporators, Trustees, Officers, and directors of the MHC and the
Bank (and their Associates) based on their increased deposits in the Bank in the
one year preceding the Eligibility Record Date shall be subordinated to the
subscription rights of other Eligible Account Holders. To ensure proper
allocation of stock, each Eligible Account Holder must list on his or her
subscription order form all Deposit Accounts in which he had an ownership
interest as of the Eligibility Record Date.
6.5.2 Second Priority: Supplemental Eligible Account Holders. To the
extent there are shares remaining after satisfaction of subscriptions by
Eligible Account Holders, each Supplemental Eligible Account Holder shall
receive non-transferable subscription rights to subscribe for a number of shares
of Holding Company Conversion Stock equal to the greatest of (x) a number
determined by dividing the Individual Maximum Purchase Limit by the per share
Subscription Price, (y) one-tenth of one percent (.10%) of the shares offered in
the Conversion, or (z) 15 times the product (rounded down to the nearest whole
number) obtained by multiplying (1) the total number of shares of Holding
Company Conversion Stock to be issued in the Conversion by (2) a fraction, of
which the numerator is the Qualifying Deposit of the Supplemental Eligible
Account Holder and the denominator is the total amount of Qualifying Deposits of
all Supplemental Eligible Account Holders. In the event Supplemental Eligible
Account Holders subscribe for a number of shares of Holding Company Conversion
Stock which, when added to the shares subscribed for by Eligible Account
Holders, exceed available shares, the available shares of Holding Company
Conversion Stock will be allocated among subscribing Supplemental Eligible
Account Holders so as to permit each subscribing Supplemental Eligible Account
Holder to purchase a number of shares of Holding Company Conversion Stock
sufficient to make his or her total allocation equal to the lesser of 100 shares
or the number of shares subscribed for. Thereafter, unallocated shares will be
allocated to each subscribing Supplemental Eligible Account Holder whose
subscription remains unfilled in the same proportion that such subscriber's
Qualifying Deposit on the Supplemental Eligibility Record Date bears to the
total amount of Qualifying Deposits of all subscribing Supplemental Eligible
Account Holders whose subscriptions remain unfilled. Any Subscription Rights to
purchase shares of Holding Company Conversion Stock received by an Eligible
Account Holder pursuant to Section above shall be applied in partial
satisfaction of the Subscription Rights of Supplemental Eligible Account Holders
described in this Section 6.5.2.
6.5.3 Third Priority: Tax-Qualified Employee Plans. To the extent there
are shares remaining after satisfaction of subscriptions by Eligible Account
Holders and Supplemental Eligible Account Holders, the Tax-Qualified Employee
Plans shall be given the opportunity to purchase in the aggregate up to 8% of
the Holding Company Conversion Stock issued in the Conversion. In the event that
the total number of shares of Holding Company Conversion Stock offered in the
Conversion is increased to an amount greater than the Range Maximum, the ESOP
shall have a priority right to purchase any such shares exceeding the Range
Maximum (up to the aggregate of 8% of Holding Company Conversion Stock allocated
to it pursuant to this Section 6.5.3).
6.5.4 Fourth Priority: Employees, Officers, Directors and Trustees. To
the extent there are shares remaining after satisfaction of subscriptions by
Eligible Account Holders, Supplemental Eligible Account Holders, and any
Tax-Qualified Employee Plan, each Employee, Officer, director and trustee of the
MHC or the Bank shall receive non-transferable subscription
14
<PAGE>
rights to subscribe for shares of Holding Company Conversion Stock offered in
the Conversion in an amount equal to the Individual Maximum Purchase Limit;
provided, however, that the aggregate number of shares of Holding Company
Conversion Stock that may be purchased by Employees, Officers, directors and
trustees pursuant to this Section 6.5.4 shall be limited to 30% of the total
number of shares of Holding Company Conversion Stock sold in the Conversion.
Shares purchased under this Section 6.5.4 shall be aggregated with shares
purchased under the preceding priority categories when calculating the 30%
purchase limitation applicable to purchases by such Persons. In the event that
Employees, Officers, directors, and trustees subscribe under this Section 6.5.4
for more shares of Holding Company Conversion Stock than are available for
purchase by them, the shares of Holding Company Conversion Stock available for
purchase will be allocated by the MHC among such subscribing Persons on an
equitable basis, such as by giving weight to the period of service, compensation
and position of the individual subscriber.
6.6 Priorities for Direct Community Offering
6.6.1 Any shares of Holding Company Conversion Stock not subscribed for
in the Subscription Offering may be offered for sale in a Direct Community
Offering. This will involve an offering of all unsubscribed shares of Holding
Company Conversion Stock directly to the general public. The Direct Community
Offering, if any, shall be for a period of not more than 45 days unless extended
by the MHC, and shall commence concurrently with, during or promptly after the
Subscription Offering. The MHC may use an investment banking firm or firms on a
best efforts basis to sell the unsubscribed shares in the Subscription and
Direct Community Offering. The MHC may pay a commission or other fee to such
investment banking firm or firms as to the shares sold by such firm or firms in
the Subscription and Direct Community Offering and may also reimburse such firm
or firms for expenses incurred in connection with the sale. The Direct Community
Offering may be supplemented by a Syndicated Community Offering managed by such
investment banking firm or firms, for which a fee will also apply, as well as
expense reimbursement. The Holding Company Conversion Stock will be offered and
sold in the Direct Community Offering, in accordance with the Regulations, so as
to achieve the widest distribution of the Holding Company Conversion Stock. No
Person may subscribe for or purchase more than the Individual Maximum Purchase
Limit of Holding Company Conversion Stock in the Direct Community Offering.
6.6.2 In the event of an oversubscription for shares in the Direct
Community Offering, available shares will be allocated (to the extent shares
remain available) first to cover orders of natural Persons residing in the
Bank's Community, so that each such Person may receive 100 shares, and
thereafter, on a pro rata basis to such Persons based on the amount of their
respective subscriptions or on such other reasonable basis as may be determined
by the MHC. After such allocation has been completed, available shares will be
allocated (to the extent shares remain available) to cover orders of any other
Person subscribing for shares in the Direct Community Offering, so that each
such other Person may receive 100 shares, and thereafter, on a pro rata basis to
such other Persons based on the amount of their respective subscriptions or on
such other reasonable basis as may be determined by the MHC.
6.6.3 The terms "residence," "reside," or "residing" as used herein
with respect to any Person shall mean any Person who occupies a dwelling within
the Bank's Community, has an intent to remain with 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
15
<PAGE>
such presence within the Community is not merely transitory in nature. To the
extent the Person is a corporation or other business entity, the principal place
of business or headquarters must be in the Community. The Bank may use deposit
or loan records or such other evidence provided to it to determine whether a
Person is a resident. In all cases, however, such a determination shall be in
the sole discretion of the MHC.
6.6.4 The MHC, in its sole discretion, may reject subscriptions, in
whole or in part, received from any Person under this Section 6.6.
6.7 Priorities for Syndicated Community Offering
6.7.1 Any shares of Holding Company Conversion Stock not sold in the
Subscription Offering or in the Direct Community Offering, if any, may be
offered for sale to the general public by a selling group of broker-dealers in a
Syndicated Community Offering, subject to terms, conditions and procedures as
may be determined by the MHC in a manner that is intended to achieve the widest
distribution of the Holding Company Conversion Stock subject to the rights of
the MHC to accept or reject in whole or in part all orders in the Syndicated
Community Offering. No Person may purchase in the Syndicated Community Offering
more than the Individual Maximum Purchase Limit of Holding Company Conversion
Stock. Orders for Holding Company Conversion Stock in the Syndicated Community
Offering may be filled up to a maximum percentage (to be determined by the MHC
and not to exceed two percent (2%) or the purchase limitations contained in the
Plan) of the total number of shares of Holding Company Conversion Stock. It is
expected that the Syndicated Community Offering will commence as soon as
practicable after termination of the Direct Community Offering, if any. The
Syndicated Community Offering shall be completed within 45 days after the
termination of the Subscription Offering, unless such period is extended as
provided herein. The commission in the Syndicated Community Offering shall be
determined by a marketing agreement between the MHC and the Marketing Agent.
Such agreement shall be filed with the FDIC, the Division and the SEC.
6.7.2 If for any reason a Syndicated Community Offering of unsubscribed
shares of Holding Company Conversion Stock cannot be effected or is not deemed
to be advisable, and any shares remain unsold after the Subscription Offering
and the Community Offering, if any, the MHC will seek to make other arrangements
for the sale of the remaining shares, including an underwritten public offering.
Such other arrangements will be subject to the approval of the Commissioner and
the FDIC and to compliance with applicable state and federal securities laws.
ARTICLE 7. ADDITIONAL LIMITATIONS ON PURCHASES
7.1 General. Purchases of Holding Company Conversion Stock in the
Conversion will be subject to the purchase limitations set forth in this
Article 7:
7.2 Individual Maximum Purchase Limit. This Section 7.2 sets forth the
"Individual Maximum Purchase Limit." No Person may purchase in the Offering
(including the Subscription Offering, the Direct Community Offering and the
Syndicated Community Offering) more than $750,000 of Holding Company Conversion
Stock, except that: (i) the MHC may, in its sole discretion and without further
notice to or solicitation of subscribers or other prospective purchasers, (x)
increase such Individual Maximum Purchase Limit to up to 5% of the number of
shares of Holding Company Conversion Stock offered in the Conversion or (y)
decrease such Individual Maximum Purchase Limit to no less than one-tenth of one
percent (.10%) of the number of shares of Holding Company Conversion Stock
offered in the Conversion; and (ii) Tax-Qualified
16
<PAGE>
Employee Plans may purchase up to 8% of the shares issued in the Conversion. If
the MHC increases the Individual Maximum Purchase Limit (as permitted by this
Section 7.2), subscribers for the previously-effective maximum amount will be,
and certain other large subscribers in the sole discretion of the MHC may be,
given the opportunity to increase their subscriptions up to the then applicable
limit. Requests to purchase additional shares of Holding Company Conversion
Stock under this provision will be determined by the MHC, in its sole
discretion.
7.3 Group Acting in Concert. This Section 7.3 sets forth the "Group Maximum
Purchase Limit." No Person and his or her Associates or group of Persons Acting
in Concert, may purchase in the Offering (including the Subscription Offering,
the Direct Community Offering and the Syndicated Community Offering) more than
$1,500,000 of Holding Company Conversion Stock, except that: (i) the MHC may, in
its sole discretion and without further notice to or solicitation of subscribers
or other prospective purchasers, (x) increase such Group Maximum Purchase Limit
to up to 5% of the number of shares of Holding Company Conversion Stock offered
in the Conversion or (y) decrease such Group Maximum Purchase Limit to no less
than one-tenth of one percent (.10%) of the number of shares of Holding Company
Conversion Stock offered in the Conversion; and (ii) Tax-Qualified Employee
Plans may purchase up to 8% of the shares issued in the Conversion.
Notwithstanding the foregoing, in the event that the MHC increases the
Individual Maximum Purchase Limit (as permitted by Section 7.2) to a number that
is in excess of the Group Maximum Purchase Limit established by this Section
7.3, the Group Maximum Purchase Limit shall automatically be increased so as to
be equal to the Individual Maximum Purchase Limit, as adjusted.
7.4 Purchases by Management Persons. The aggregate number of shares of
Holding Company Conversion Stock to be purchased in the Offering by Management
Persons and their Associates shall not exceed 30% of the total number of shares
of Holding Company Conversion Stock sold in the Conversion.
7.5 Special Rule for Tax-Qualified Employee Plans. Shares of Holding
Company Conversion Stock purchased by any individual participant ("Plan
Participant") in a Tax-Qualified Employee Plan using funds therein pursuant to
the exercise of subscription rights granted to such Participant in his
individual capacity as an Eligible Account Holder or Supplemental Eligible
Account Holder and purchases by such Plan Participant in a Community Offering
shall not be deemed to be purchases by a Tax-Qualified Employee Plan for
purposes of calculating the maximum amount of Holding Company Conversion Stock
that Tax-Qualified Employee Plans may purchase pursuant to this Plan if the
individual Plan Participant controls or directs the investment authority with
respect to such account or subaccount.
7.6 Increase in the Total Number of Shares Offered. In the event that (i)
the total number of shares of Holding Company Conversion Stock offered in the
Conversion is increased to an amount greater than the Range Maximum, and (ii)
there shall be additional shares of Holding Company Conversion Stock available
after the ESOP shall have exercised its priority right (established pursuant to
Section 6.5.3) to purchase shares exceeding the Range Maximum, any additional
shares not purchased by the ESOP will be issued to fill unfulfilled
subscriptions of other subscribers according to their respective priorities set
forth in the Plan.
7.7 Illegal Purchases. Notwithstanding any other provision of the Plan, no
Person shall be entitled to purchase any Holding Company Conversion Stock to the
extent such purchase would be illegal under any federal law or state law or
regulation or would violate regulations or policies
17
<PAGE>
of the National Association of Securities Dealers, Inc., particularly those
regarding free riding and withholding. The MHC 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.
7.8 Rejection of Orders. The MHC has the right in its sole discretion to
reject any order submitted by a Person whose representations the MHC believes to
be false or who it otherwise believes, either alone or Acting in Concert with
others, is violating, circumventing, or intends to violate, evade or circumvent
the terms and conditions of the Plan.
7.9 Subscribers in Non-Qualified States or in Foreign Countries. The MHC,
in its sole discretion, may make reasonable efforts to comply with the
securities laws of any state in the United States in which its depositors
reside, and will only offer and sell the Holding Company Conversion Stock in
states in which the offers and sales comply with such states' securities laws.
However, no Person will be offered or allowed to purchase any Holding Company
Conversion Stock under the Plan if he or she resides in a foreign country or in
a state of the United States with respect to which any of the following apply:
(i) a small number of Persons otherwise eligible to purchase shares under the
Plan reside in such state or foreign county; (ii) the offer or sale of shares of
Holding Company Conversion Stock to such Persons would require the Stock Holding
Company or its Employees to register, under the securities laws of such state or
foreign country, as a broker or dealer or to register or otherwise qualify its
securities for sale in such state or foreign country; or (iii) such registration
or qualification would be impracticable for reasons of cost or otherwise.
7.10 No Offer to Transfer Shares. Before the consummation of the
Conversion, 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 Holding Company Conversion Stock, except pursuant to the
Plan. The following shall not constitute impermissible transfers under this
Plan. Any Person having subscription rights in his individual capacity as an
Eligible Account Holder or Supplemental Eligible Account Holder may exercise
such subscription rights by causing a tax-qualified plan to make such purchase
using funds allocated to such Person in such tax-qualified plan if such
individual plan participant controls or directs the investment authority with
respect to such account or subaccount. A tax-qualified plan that maintains an
Eligible Deposit Account in the Bank as trustee for or for the benefit of a
Person who controls or directs the investment authority with respect to such
account or subaccount ("Beneficiary") may, in exercising its subscription
rights, direct that the Holding Company Conversion Stock be issued in the name
of such individual Beneficiary in his individual capacity.
7.11 Confirmation by Purchasers. EACH PERSON ORDERING HOLDING COMPANY
CONVERSION STOCK IN THE CONVERSION WILL BE DEEMED TO CONFIRM THAT SUCH PURCHASE
DOES NOT CONFLICT WITH THE PURCHASE LIMITATIONS IN THE 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 THE PLAN OR
OTHERWISE VIOLATES ANY PROVISION OF THE PLAN SHALL BE DETERMINED BY THE MHC IN
ITS SOLE DISCRETION. SUCH DETERMINATION SHALL BE CONCLUSIVE, FINAL AND BINDING
ON ALL PERSONS AND THE MHC MAY TAKE ANY REMEDIAL ACTION, INCLUDING WITHOUT
LIMITATION REJECTING THE PURCHASE OR REFERRING THE MATTER TO THE COMMISSIONER
FOR ACTION, AS IN ITS SOLE DISCRETION THE MHC MAY DEEM APPROPRIATE.
18
<PAGE>
ARTICLE 8 POST OFFERING MATTERS
8.1 Stock Purchases After the Conversion. For a period of three years after
the proposed Conversion, no Officer or director of the Stock Holding Company or
the Bank, or his or her Associates, may purchase, without the prior written
approval of the Commissioner, any Holding Company Common Stock:
(i) from the Stock Holding Company, or
(ii) except from a broker-dealer registered with the SEC, provided that
the foregoing shall not apply to (x) negotiated transactions involving more than
1% of the outstanding Holding Company Common Stock, or (y) purchases of stock
made by and held by any Tax-Qualified or Non-Tax-Qualified Employee Plan of the
Bank or the Stock Holding Company even if such stock is attributable to
Officers, directors or their Associates.
8.2 Resales of Stock by Management Persons. Holding Company Conversion
Stock purchased by Management Persons in the Conversion may not be resold for a
period of at least one year following the date of purchase, except in the case
of death or substantial disability, as determined by the Commissioner, of the
Management Person, or upon the written approval of the Commissioner.
8.3 Stock Certificates. Each stock certificate shall bear a legend giving
appropriate notice of the restrictions set forth in Section 8.2. Appropriate
instructions shall be issued to the Stock Holding Company's transfer agent with
respect to applicable restrictions on transfers of such stock. Any shares of
stock issued as a stock dividend, stock split or otherwise with respect to such
restricted stock, shall be subject to the same restrictions as apply to the
restricted stock.
8.4 Restriction on Financing Stock Purchases. The Stock Holding Company
will not offer or sell any of the Holding Company Common Stock proposed to be
issued to any Person whose purchase would be financed by funds loaned to the
Person by the Stock Holding Company, Bank or any of their Affiliates.
8.5 Stock Benefit Plans. The Board of Directors of the Bank and/or the
Stock Holding Company are permitted under the Regulations, and may decide, to
adopt one or more stock benefit plans for the benefit of the Employees, Officers
and directors of the Bank and Stock Holding Company, including an ESOP, stock
award plans and stock option plans, which will be authorized to purchase Holding
Company Common Stock and grant options for Holding Company Common Stock.
However, only the Tax-Qualified Employee Plans will be permitted to purchase
Holding Company Conversion Stock in the Conversion subject to the purchase
priorities set forth in the Plan. Pursuant to the Regulations, the Stock Holding
Company may authorize the ESOP and any other Tax-Qualified Employee Plans to
purchase in the aggregate up to 8% of the Holding Company Conversion Stock to be
issued. The Bank or the Stock Holding Company may make scheduled discretionary
contributions to one or more Tax-Qualified Employee Plans to purchase Holding
Company Common Stock or to purchase issued and outstanding shares of Holding
Company Common Stock or authorized but unissued shares of Holding Company Common
Stock subsequent to the completion of the Conversion, provided, however, that
such contributions do not cause the Bank to fail to meet any of its regulatory
capital requirements. The Plan specifically authorizes the grant and issuance by
the Stock Holding Company of (i) awards of Holding Company Common Stock after
the Conversion pursuant to one or more stock recognition and award plans (the
"Recognition Plans") in an amount equal to up to 4% of the number of shares of
Holding Company Conversion Stock issued in the Conversion, (ii) options to
purchase a number of
19
<PAGE>
shares of the Stock Holding Company's Holding Company Conversion Stock in an
amount equal to up to 10% of the number of shares of Holding Company Conversion
Stock issued in the Conversion and shares of Holding Company Conversion Stock
issuable upon exercise of such options, and (iii) Holding Company Common Stock
to one or more Tax Qualified Employee Plans, including the ESOP, at the closing
of the Conversion or at any time thereafter, in an amount equal to up to 8% of
the number of shares of Holding Company Conversion Stock issued in the
Conversion (including shares of Holding Company Conversion Stock to be issued to
the ESOP). Shares awarded to the Tax Qualified Employee Plans or pursuant to the
Recognition Plans, and shares issued upon exercise of options may be authorized
but unissued shares of the Stock Holding Company's Holding Company Common Stock,
or shares of Holding Company Common Stock purchased by the Stock Holding Company
or such plans in the open market. The Recognition Plans and the stock option
plans will be subject to stockholder approval.
8.6 Market for Holding Company Common Stock. If at the close of the
Conversion the Stock Holding Company has more than 300 shareholders of any class
of stock, the Stock Holding Company shall use its best efforts to:
8.6.1 Encourage and assist a Market Maker to establish and maintain a
market for that class of stock; and
8.6.2 List that class of stock on a national or regional securities
exchange, or on the NASDAQ system.
8.6.3 Register the Holding Company Common Stock with the SEC pursuant
to the Exchange Act, and undertake not to deregister such Holding Company Common
Stock for a period of three years thereafter.
8.7 Liquidation Account.
8.7.1 The MHC shall, at the time of the Conversion, establish a
Liquidation Account in an amount equal to the net worth of the MHC as set forth
in the latest consolidated statement of financial condition contained in the
final Prospectus distributed in connection with the Conversion. The function of
the Liquidation Account is to establish a priority on liquidation and, except as
otherwise provided in this Section, the existence of the Liquidation Account
shall not operate to restrict the use or application of any of the net worth
accounts of the Stock Holding Company. The Liquidation Account will be
maintained by the MHC for the benefit of the Eligible Account Holders and
Supplemental Eligible Account Holders who continue to maintain Deposit Accounts
with the Bank following the Conversion. Each Eligible Account Holder and
Supplemental Eligible Account Holder shall, with respect to each Deposit
Account, hold a related inchoate interest in a portion of the Liquidation
Account balance, in relation to each Deposit Account balance at the Eligibility
Record Date or Supplemental Eligibility Record Date, as the case may be, or to
such balance as it may be subsequently reduced, as hereinafter provided. The
initial Liquidation Account balance shall not be increased, and shall be subject
to downward adjustment to the extent of any downward adjustment of any
subaccount balance of any Eligible Account Holder or Supplemental Eligible
Account Holder in accordance with 209 CMR 33.05(12).
8.7.2 In the unlikely event of a complete liquidation of the Stock
Holding Company (and only in such event), following all liquidation payments to
creditors (including those to depositors to the extent of their Deposit
Accounts) each Eligible Account Holder and Supplemental Eligible Account Holder
shall be entitled to receive a liquidating distribution from the Liquidation
20
<PAGE>
Account, in the amount of the then-adjusted subaccount balances for his or her
deposit accounts then held, before any liquidating distribution may be made to
any holders of the Stock Holding Company's capital stock. No merger,
consolidation, reorganization, or purchase of bulk assets with assumption of
deposit accounts and other liabilities, or similar transactions with an
FDIC-insured institution, in which the Stock Holding Company is not the
surviving institution, shall be deemed to be a complete liquidation for this
purpose. In such transactions, the Liquidation Account shall be assumed by the
surviving institution.
8.7.3 The initial subaccount balance for a Deposit Account held by an
Eligible Account Holder and/or Supplemental Eligible Account Holder shall be
determined by multiplying the opening balance in the Liquidation Account by a
fraction, the numerator of which is the amount of such Eligible Account Holder's
or Supplemental Eligible Account Holder's Qualifying Deposit and the denominator
of which is the total amount of all Qualifying Deposits of all Eligible Account
Holders and Supplemental Eligible Account Holders in the Bank. For Deposit
Accounts in existence on both dates, separate subaccounts shall be determined on
the basis of the Qualifying Deposits in such Deposit Accounts on such record
dates. Such initial subaccount balance shall not be increased by additional
Deposits, but shall be subject to downward adjustment as described below.
8.7.4 If, at the close of business on the last day of any period for
which the Stock Holding Company has prepared audited financial statements
subsequent to the effective date of the Conversion, the deposit balance in the
Deposit Account of an Eligible Account Holder or Supplemental Eligible Account
Holder is less than the lesser of: (i) the balance in the Deposit Account at the
close of business on the last day of any period for which the Stock Holding
Company has prepared audited financial statements subsequent to the Eligibility
Record Date or Supplemental Eligibility Record Date, or (ii) the amount in such
Deposit Account as of the Eligibility Record Date or Supplemental Eligibility
Record Date, then the subaccount balance for such Deposit Account shall be
adjusted by reducing such subaccount balance in an amount proportionate to the
reduction in the balance of such Deposit Account. In the event of such downward
adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any subsequent increase in the deposit balance of the related
Deposit Account. If any such Deposit Account is closed, the related subaccount
shall be reduced to zero. For purposes of this Section, a time account shall be
deemed to be closed upon its maturity date regardless of any renewal thereof. A
distribution of each subaccount balance may be made only in the event of a
complete liquidation of the Stock Holding Company subsequent to the Conversion
and only out of funds available for such purpose after payment of all creditors.
8.7.5 The Stock Holding Company shall not be required to set aside
funds for the purpose of establishing the Liquidation Account, and the creation
and maintenance of the Liquidation Account shall not operate to restrict the use
or application of any of the net worth accounts of the Stock Holding Company,
except that the Stock Holding Company shall not declare or pay a cash dividend
on, or repurchase any of, its capital stock if the effect thereof would cause
its net worth to be reduced below the amount required for the Liquidation
Account.
8.8 Payment of Dividends. The Stock Holding Company may not declare or pay
a cash dividend on the Holding Company Common Stock if the effect thereof would
cause its regulatory capital to be reduced below the amount required to maintain
the Liquidation Account and under
21
<PAGE>
FDIC rules and regulations. Otherwise, the Stock Holding Company may declare
dividends in accordance with applicable laws and regulations.
8.9 Repurchase of Stock. The Stock Holding Company has no present intention
of repurchasing any of the Holding Company Common Stock. However, based upon
facts and circumstances following the Conversion and subject to applicable
regulatory and accounting requirements, the Board of Directors of the Stock
Holding Company may determine to repurchase stock in the future. Such facts and
circumstances may include but not be limited to: (i) market and economic factors
such as the price at which the Holding Company Common Stock is trading in the
market, the volume of trading, the attractiveness of other investment
alternatives in terms of the rate of return and risk involved in the investment,
the ability to increase the book value and/or earnings per share of the
remaining outstanding shares, and the opportunity to improve the Stock Holding
Company's return on equity; (ii) the avoidance of dilution to stockholders by
not having to issue additional shares to cover the exercise of stock options or
the purchase of shares by the ESOP in the event the ESOP is unable to acquire
shares in the Subscription Offering, or to fund the Stock Plans; (iii) the
preservation of pooling-of-interests treatment of the Sandwich Bancorp
Acquisition under GAAP and (iv) any other circumstances in which repurchases
would be in the best interests of the Stock Holding Company and its
shareholders. In order to preserve pooling-of-interests accounting treatment of
the Sandwich Bancorp Acquisition under GAAP, the Stock Holding Company's ability
to repurchase shares of Holding Company Common Stock will be limited during the
two-year period following consummation of the Sandwich Bancorp Acquisition.
8.10 Conversion Expenses. The Regulations require that the expenses of the
Conversion must be reasonable. The MHC will use its best efforts to assure that
the expenses incurred by the MHC in effecting the Conversion will be reasonable.
8.11 Public Inspection of Conversion Application. The MHC will maintain a
copy of the Application in the main banking office of the Bank and such copy
will be available for public inspection.
8.12 Enforcement of Terms and Conditions. The MHC shall have the right to
take all such action as it, in its sole discretion, may deem necessary,
appropriate or advisable in order to monitor and enforce the terms, conditions,
limitations and restrictions contained in the Plan and the terms, conditions and
representations contained in the Order Forms, including, but not limited to, the
right to require any subscriber or purchaser to provide evidence, in a form
satisfactory to the MHC, of such Person's eligibility to subscribe for or
purchase shares of the Holding Company Conversion Stock under the terms of the
Plan and the absolute right (subject only to any necessary regulatory approvals
or concurrence) to reject, limit or revoke acceptance of any subscription or
order and to delay, terminate or refuse to consummate any sale of Holding
Company Conversion Stock that it believes 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 MHC, the Bank and their Board of
Trustees, Board of Directors, Officers, Employees and agents shall be free from
any liability to any Person on account of any such action.
8.13 Voting Rights in Converted Bank. Following the Conversion, the holders
of the capital stock of the Stock Holding Company shall have exclusive voting
rights in the Stock Holding Company.
22
<PAGE>
ARTICLE 9. MISCELLANEOUS
9.1 Interpretation of Plan. All interpretations of the Plan and application
of its provisions to particular circumstances by the MHC shall be final, subject
to the authority of the Commissioner. When a reference is made in this Agreement
to Sections or Exhibits, such reference shall be to a Section of or Exhibit to
the Plan unless otherwise indicated. The recitals hereto constitute an integral
part of the Plan. References to Sections include subsections, which are part of
the related Section (e.g., a section numbered "Section 5.5.1" would be part of
"Section 5.5" and references to "Section 5.5" would also refer to material
contained in the subsection described as "Section 5.5.1"). The table of contents
and headings contained in the Plan are for reference purposes only and shall not
affect in any way the meaning or interpretation of the Plan. Whenever the words
"include", "includes" or "including" are used in the Plan, they shall be deemed
to be followed by the words "without limitation".
9.2 Amendment or Termination of the Plan. If deemed necessary or
desirable, the terms of the Plan may be substantively amended by a majority vote
of the members of the Board of Trustees as a result of comments from regulatory
authorities at any time prior to approval of the Plan by the Commissioner and at
any time thereafter with the concurrence of the Commissioner. Other amendments
which do not result from the comments from regulatory authorities may be
approved by a vote of a majority of the Conversion Committee. If amendments to
the Plan are made after the Special Meeting, no further approval of the
Corporators will be necessary unless otherwise required by the Commissioner. The
Plan may be terminated by the Board of Trustees in its sole discretion, by
reason of the termination of the Acquisition Agreement or otherwise, at any time
prior to the Special Meeting and at any time thereafter with the concurrence of
the Commissioner. The Plan will terminate if the sale of all shares of Holding
Company Conversion Stock is not completed within twenty four months from the
date of approval of the Plan by the Board of Trustees.
Dated: April 23, 1998.
23
FEDERAL IDENTIFICATION
NO. 04-1659040
----------
- -------------- The Commonwealth of Massachusetts
Examiner William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
RESTATED ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B, Section 74)
- --------------
Name Approved
We, Kevin G. Champagne , President,
and J. Louis LeBlanc , Clerk,
of Seacoast Financial Services Corporation
------------------------------------------
(Exact name of corporation)
located at 791 Purchase Street, New Bedford, MA 02740
------------------------------------------------------
(Street address of corporation Massachusetts)
do hereby certify that the following Restatement of the
Articles of Organization was duly adopted at a meeting at
which a quorum was present held on August 24, 1998 by a vote
of: 113 corporators of 142 corporators entitled to vote
thereon, being all of the corporators present and entitled to
vote at such meeting:
C [ ] ARTICLE I
P [ ] The name of the corporation is:
M [ ]
R.A. [ ] Seacoast Financial Services Corporation
ARTICLE II
The purpose of the corporation is to engage in the following business
activities:
To buy, sell, deal in, or hold securities of every kind and description; and in
general to carry on any business permitted to corporations organized under
Chapter 156B of the Massachusetts General Laws as now in force or hereafter
amended.
P.C.
<PAGE>
ARTICLE III
State the total number of shares and par value, if any, of each class of stock
which the corporation is authorized to issue:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
- ---------------------------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common: 0 Common: 100,000,000 $.01
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Preferred: 0 Preferred: 10,000,000 $.01
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.
See Continuation Sheet IVA attached hereto and made a part hereof.
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
None.
ARTICLE VI
Other lawful provisions, if any, for the conduct and regulation of the business
and affairs of the corporation, for its voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholders:
See Continuation Sheet VIA attached hereto and made a part hereof.
Note: The preceding six (6) articles are considered to be permanent and may ONLY
be changed by filing appropriate Articles of Amendment.
<PAGE>
CONTINUATION SHEET IVA
ARTICLE IV. CAPITAL STOCK.
Section 4.1 Capital Stock. A description of the different classes and
series of the Corporation's capital stock and a statement of the designations,
and the relative rights, preferences and limitations of the shares of each class
and series of capital stock are as follows:
4.1.1 Common Stock. Each holder of Common Stock shall at every
meeting of stockholders be entitled to one vote in person or by proxy for each
share of Common Stock held by him or her. The holders of the Common Stock shall
be entitled to such dividends as may from time to time be declared by the Board
of Directors out of any funds legally available for the declaration of
dividends, subject to any provisions of these Articles of Organization, as
amended from time to time (these "Articles"), and subject to the relative rights
and preferences of any shares of Preferred Stock authorized and issued
hereunder. Subject to the relative rights and preferences of any shares of
Preferred Stock authorized and issued hereunder, upon the dissolution or
liquidation of the Corporation, whether voluntary or involuntary, the holders of
shares of Common Stock shall be entitled to receive pro rata all assets of the
Corporation available for distribution to its stockholders.
<PAGE>
There shall be no cumulative voting rights in the election of
Directors. Each share of Common Stock shall have the same relative rights as,
and be identical in all respects with, all the other shares of Common Stock.
4.1.2 Preferred Stock. The Board of Directors is authorized,
subject to limitations prescribed by law and the provisions of this Article IV,
to provide for the issuance of shares of Preferred Stock with or without series,
and, by filing a certificate pursuant to the applicable law of The Commonwealth
of Massachusetts (the "Certificate of Designation"), to establish from time to
time the number of shares to be included in each such series and to fix the
designation, preferences, voting powers, qualifications and special or relative
rights or privileges of the shares of each such series. In the event that at any
time the Board of Directors shall have established and designated one or more
series of Preferred Stock consisting of a number of shares less than the total
number of authorized shares of Preferred Stock, the remaining authorized shares
of Preferred Stock shall be deemed to be shares of an undesignated series of
Preferred Stock until designated by the Board of Directors as being a part of a
series previously established or a new series then being established by the
Board of Directors. Notwithstanding the fixing of the number of shares
constituting a particular series, the Board of Directors may at any time
thereafter authorize the issuance of additional shares of the same series except
as set forth in the Certificate of Designation. The authority of the Board of
Directors with respect to each series shall include, but not be limited to,
determination of one or more of the following:
(a) The number of shares constituting that
series, which number may be increased or decreased (but not below the number of
shares of such series then outstanding) from time to time by the Board of
Directors, and the distinctive designation of that series;
(b) Whether any dividend shall be paid on shares
of that series, and, if so, the dividend rate on the shares of that series;
whether dividends shall be cumulative and, if so, from which date or dates, and
the relative rights of priority, if any, of payment of dividends on shares of
that series;
(c) Whether shares of that series shall have
voting rights in addition to the voting rights provided by law and, if so, the
terms of such voting rights;
(d) Whether shares of that series shall be
convertible into shares of Common Stock or another security and, if so, the
terms and conditions of such conversion, including provisions for adjustment of
the conversion rate in such events as the Board of Directors shall determine;
(e) Whether shares of that series shall be
redeemable and, if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates; and whether that series shall have
a sinking fund for the redemption or purchase of shares of that series and, if
so, the terms and amount of such sinking fund;
<PAGE>
(f) Whether, in the event of purchase or
redemption of the shares of that series, any shares of that series shall be
restored to the status of authorized but unissued shares or shall have such
other status as shall be set forth in the Certificate of Designation;
(g) The rights of the shares of that series in
the event of the sale, conveyance, exchange or transfer of all or substantially
all of the property and assets of the Corporation, or the merger or
consolidation of the Corporation into or with any other corporation or entity,
or the merger of any other corporation or entity into it, or the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of shares of that series to payment in any
such event;
(h) The price or other consideration for which
the shares of such series shall be issued;
(i) Whether shares of that series shall carry
any preemptive right in or preemptive right to subscribe to any additional
shares of Preferred Stock or any shares of any other class of stock which may at
any time be authorized or issued, or any bonds, debentures or other securities
convertible into shares of stock of any class of the Corporation, or options or
warrants carrying rights to purchase such shares or securities; and
(j) Any other designations, preferences, voting
powers, qualifications, and special or relative rights or privileges of the
shares of that series.
Except as specifically provided in these Articles, the holders
of Preferred Stock or Common Stock shall not be entitled to any vote and shall
not have any voting rights concerning the designation or issuance of any shares
of Preferred Stock authorized by and complying with the conditions of these
Articles, and subject to the authority of the Board of Directors or any
authorized committee thereof as set forth above, the right to any such vote is
expressly waived by all present and future holders of the capital stock of the
Corporation.
<PAGE>
CONTINUATION SHEET VIA
ARTICLE VI. OTHER LAWFUL PROVISIONS.
Section 6.1 Certain Business Combinations
6.1.1 Vote Required for Certain Business Combinations. In
addition to any affirmative vote required by the Massachusetts General Laws or
by these Articles, and except as otherwise expressly provided in Section 6.1.3,
any Business Combination (as hereinafter defined) shall require the affirmative
vote of the holders of at least eighty percent (80%) of the voting power of all
of the then-outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (the "Voting Stock"), voting
together as a single class (it being understood that for purposes of this
Section 6.1, each share of the Voting Stock shall have the number of votes
granted to it pursuant to Article IV of these Articles). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or that
a lesser percentage may be specified, by law or by any other provisions of these
Articles or any Certificate of Designation (as defined in Section 4.1.2) or in
any agreement with any national securities exchange or otherwise.
6.1.2 Business Combination Defined. The term "Business
Combination" as used in this Article VI shall mean:
(a) any merger or consolidation of the Corporation
or any Subsidiary (as defined in Section 6.1.4(e)) with (a) any Interested
Stockholder (as defined in Section 6.1.4(b)) or (b) any other corporation
(whether or not itself an Interested Stockholder) which is, or after such merger
or consolidation would be, an Affiliate (as defined in Section 6.1.4(d)) of an
Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of transactions)
to or with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as defined in Section 6.1.4(g)) equal to or greater
than ten percent (10%) of the combined assets of the Corporation and its
Subsidiaries; or
(c) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market Value
equal to or greater than ten percent (10%) of the combined assets of the
Corporation and its Subsidiaries, except for any issuance or transfer pursuant
to an employee benefit plan of the Corporation or any Subsidiary thereof
(established with the approval of a majority of the Disinterested Directors (as
defined in Section 6.1.4(f))); or
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on behalf of any
Interested Stockholder or any Affiliate of any Interested Stockholder; or
(e) any reclassification of securities (including any
reverse stock split) or recapitalization of the Corporation or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving any Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder.
6.1.3. When Higher Vote is Not Required. The provisions of
Section 6.1.1 shall not be applicable to any particular Business Combination,
and such Business Combination shall require only such affirmative vote, if any,
as may be required by law or by any other provision of
<PAGE>
these Articles, if either (x) the condition specified in Section 6.1.3(a) is met
or (y) all of the conditions specified in Section 6.1.3(b) are met:
(a) Approval by Disinterested Directors. The
Business Combination shall have been approved by two-thirds (2/3) of the
Disinterested Directors, it being understood that this condition shall not be
capable of satisfaction unless there is at least one Disinterested Director.
(b) Price and Procedure Requirements. All of the
following conditions shall have been met:
(1) The aggregate amount of the cash and the
Fair Market Value of consideration other than cash, determined as of the date of
the consummation of the Business Combination, to be received per share by
holders of Common Stock in such Business Combination shall be at least equal to
the higher of the following:
(A) (if applicable) the highest per share
price (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder or any of its Affiliates for
any shares of Common Stock acquired by it (1) within the two-year period
immediately prior to the first public announcement of the proposal of the
Business Combination (the "Announcement Date") or (2) in the transaction in
which it became an Interested Stockholder, whichever is higher;
(B) the Fair Market Value per share of
Common Stock of the Corporation on the Announcement Date or on the date on which
the Interested Stockholder became an Interested Stockholder (the "Determination
Date"), whichever is higher.
(2) The aggregate amount of the cash and the
Fair Market Value of consideration other than cash, determined as of the date of
the consummation of the Business Combination, to be received per share by
holders of shares of any class of outstanding Voting Stock other than the Common
Stock shall be at least equal to the highest of the following (it being intended
that the requirements of this Section 6.1.3(b)(2) shall be required to be met
with respect to each such other class of outstanding Voting Stock, whether or
not the Interested Stockholder has previously acquired any shares of a
particular class of Voting Stock):
(A) (if applicable) the highest per share
price (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder or any of its Affiliates for
any shares of such class of Voting Stock acquired by it (1) within the two-year
period immediately prior to the Announcement Date or (2) in the transaction in
which it became an Interested Stockholder, whichever is higher; or
(B) (if applicable) the highest
preferential amount per share to which the holders of shares of such class of
Voting Stock are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; or
<PAGE>
(C) the Fair Market Value per share
of such class of Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(3) The holders of all outstanding shares of
Voting Stock not beneficially owned by the Interested Stockholder immediately
prior to the consummation of any Business Combination shall be entitled to
receive in such Business Combination cash or other consideration for their
shares meeting all of the terms and conditions of this Section 6.1.3(b);
provided, however, that the failure of any stockholders who are exercising their
statutory rights to dissent from such Business Combination and receive payment
of the fair value of their shares to exchange their shares in such Business
Combination shall not be deemed to have prevented the condition set forth in
this Section 6.1.3(b)(3) from being satisfied.
(4) The consideration to be received by
holders of any particular class or, if outstanding, any particular series of
outstanding Voting Stock (including Common Stock) shall be in cash or in the
same form as the Interested Stockholder or any of its Affiliates has previously
paid for shares of such class or such series of Voting Stock. If the Interested
Stockholder or any of its Affiliates has paid for shares of any class or any
series of Voting Stock with varying forms of consideration, the form of
consideration to be received per share by holders of such class or such series
of Voting Stock shall be either cash or the form used to acquire the largest
number of shares of such class or such series of Voting Stock previously
acquired by the Interested Stockholder or any of its Affiliates.
(5) The prices determined in accordance with
Section 6.1.3(b) shall be subject to appropriate adjustment in the event of any
stock dividend, stock split, combination of shares or similar event.
(6) After such Interested Stockholder has
become an Interested Stockholder and prior to the consummation of any such
Business Combination: (a) except as shall have been approved by two-thirds (2/3)
of the Disinterested Directors, there shall have been no failure to declare and
pay at the regular date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding stock having preference over the Common Stock as
to dividends or liquidation; (b) there shall have been (1) no reduction in the
annual rate of dividends paid on the Common Stock (except as necessary to
reflect any subdivision of the Common Stock), except as approved by two-thirds
(2/3) of the Disinterested Directors, and (2) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by two-thirds
(2/3) of the Disinterested Directors; and (c) neither such Interested
Stockholder nor any of its Affiliates shall have become the beneficial owner (as
such term is defined in Section 6.1.4(c)) of any additional shares of Voting
Stock except as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder.
(7) After such Interested Stockholder has
become an Interested Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
<PAGE>
financial assistance or any tax credits or other tax advantages provided,
directly or indirectly, by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.
(8) A proxy or information statement
describing the proposed Business Combination and complying with the requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations thereunder (or any subsequent provisions replacing such
Act, rules or regulations) shall be mailed to stockholders of the Corporation at
least 30 days prior to the consummation of such Business Combination (whether or
not such proxy or information statement is required to be mailed pursuant to
such Act or subsequent provisions). Such proxy or information statement shall
contain, if a majority of the Disinterested Directors so requests, an opinion of
a reputable investment banking firm which shall be selected by a majority of the
Disinterested Directors, furnished with all information such investment banking
firm reasonably requests and paid a reasonable fee for its services by the
Corporation upon the Corporation's receipt of such opinion, as to the fairness
(or lack of fairness) of the terms of the proposed Business Combination from the
point of view of the holders of shares of Voting Stock (other than the
Interested Stockholder).
6.1.4 Certain Definitions. For the purpose of these
Articles:
(a) A "person" shall include any individual, group
acting in concert, corporation, partnership, limited liability company,
association, joint venture, pool, joint stock company, trust, unincorporated
organization or similar company, syndicate, or any group formed for the purpose
of acquiring, holding or disposing of securities.
(b) "Interested Stockholder" shall mean any person
(other than the Corporation, any Subsidiary or any employee stock ownership plan
formed by the Corporation) who or which:
(1) is the beneficial owner, directly or
indirectly, of ten percent (10%) or more of the voting power of the outstanding
Voting Stock; or
(2) is an Affiliate of the Corporation and at
any time within the two-year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of ten percent (10%) or more
of the voting power of the then outstanding Voting Stock; or
(3) is an assignee of or has otherwise
succeeded to any shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question beneficially owned by
any Interested Stockholder, if such assignment or succession shall have occurred
in the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended, and such
assignment or succession was not approved by two-thirds (2/3) of the
Disinterested Directors.
(c) "Beneficial ownership" shall be determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act (or any successor rule or statutory
<PAGE>
provision), or, if said Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto, pursuant to said Rule 13d-3 as in
effect on the date of filing of these Articles; provided, however, that a person
shall, in any event, also be deemed to be a "beneficial owner" of any shares of
Voting Stock:
(1) which such person or any of its Affiliates
or Associates (as hereinafter defined) beneficially owns, directly or
indirectly, within the meaning of Rule 13d-3 of the Exchange Act, as in effect
on the date of filing of these Articles; or
(2) which such person or any of its
Affiliates or Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding (but shall not be deemed to be the
beneficial owner of any voting shares solely by reason of an agreement,
contract, or other arrangement with this Corporation to effect any transaction
which is described in Section 6.1.2) or upon the exercise of conversion rights,
exchange rights, warrants, or options, or otherwise, (b) sole or shared voting
or investment power with respect thereto pursuant to any agreement, arrangement,
understanding, relationship or otherwise (but shall not be deemed to be the
beneficial owner of any voting shares solely by reason of a revocable proxy
granted for a particular meeting of stockholders, pursuant to a public
solicitation of proxies for such meeting, with respect to shares of which
neither such person nor any such Affiliate is otherwise deemed the beneficial
owner), or (c) the right to dispose of or transfer; or
(3) which are beneficially owned, directly
or indirectly, by any other person with which such first-mentioned person or any
of its Affiliates or Associates has any agreements, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares of
capital stock of the Corporation;
and provided further, however, that (1) no Director or Officer of this
Corporation (and no Affiliate of any such Director or Officer) shall, solely by
reason of any or all of such Directors' or Officers' acting in their capacities
as such, be deemed, for any purposes hereof, to beneficially own any Voting
Stock beneficially owned by another such Director or Officer (or any Affiliate
thereof), and (2) neither any employee stock ownership plan or similar plan of
the Corporation or any Subsidiary, nor any trustee with respect thereto or any
Affiliate of such trustee (solely by reason of its capacity as such trustee),
shall be deemed, for any purposes hereof, to beneficially own any Voting Stock
held under any such plan.
For purposes of computing the percentage beneficial ownership
of Voting Stock of a person, the outstanding Voting Stock shall include shares
deemed owned by such person through application of Section 6.1.4(c), but shall
not include any other shares of Voting Stock which may be issuable by this
Corporation pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
(d) "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act as in effect on the date of filing of
these Articles.
<PAGE>
(e) "Subsidiary" means any corporation of which a
majority of any class of equity security is owned, directly or indirectly, by
the Corporation; provided, however, that for the purposes of the exclusion from
the definition of Interested Stockholder set forth in Section 6.1.4(b), the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
(f) "Disinterested Director" means
(1) at any time when there is no Interested
Stockholder, any member of the Board of Directors, and
(2) at any time when there is an Interested
Stockholder, any Director of the Corporation who (i) is not, and was not at any
time during the two-year period immediately prior to the date in question, an
Affiliate or Associate of the Interested Stockholder, and (ii) either (A) was a
member of the Board prior to the time that the Interested Stockholder became an
Interested Stockholder or (B) thereafter received favorable votes for his or her
nomination or election as a Director by a majority of the Disinterested
Directors then serving on the Board.
(g) "Fair Market Value" means:
(1) in the case of stock, the highest closing
sale price during the 30-day period immediately preceding and including the date
in question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid quotation with respect to a share
of such stock during the 30-day period preceding and including the date in
question on any automated quotation system maintained by the Nasdaq Stock
Market, Inc. or any similar system then in use, or, if no such quotations are
available, the fair market value on the date in question of a share of such
stock as determined in good faith by a majority of the Disinterested Directors;
and
(2) in the case of property other than cash
or stock, the fair market value of such property on the date in question as
determined in good faith by a majority of the Disinterested Directors.
(h) All references to prices and values, including
references to "Fair Market Value" and "highest per share price" shall in each
case be adjusted to the extent necessary to reflect an appropriate adjustment
for any dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock.
<PAGE>
(i) "Group acting in concert" shall mean persons
seeking to combine or pool their voting or other interests in the securities of
the Corporation for a common purpose, pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written, oral or
otherwise, or persons acting with conscious parallel behavior, or any "group of
persons" as defined under Section 13(d) of the Exchange Act. When persons act
together for such purpose, their group is deemed to have acquired their stock.
(j) In the event of any Business Combination in which
the Corporation survives, the phrase "consideration other than cash" as used in
Section 6.1.3(b)(1) and Section 6.1.3(b)(2) hereof shall include the shares of
Common Stock and/or the shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
(k) For the purposes of determining the "Announcement
Date," in the event that the first public announcement of the proposal of the
Business Combination is made after the close on such date of any securities
exchange registered under the Exchange Act on which any shares of the Voting
Stock of the Corporation are traded, or of any automated quotation system
maintained by the Nasdaq Stock Market, Inc. or any other system on which any
shares of the Voting Stock of the Corporation are listed, then the Announcement
Date shall be deemed to be the next day on which such exchange or quotation
system is open.
6.1.5. Powers of the Board of Directors. A majority of the
Disinterested Directors of the Corporation then in office shall have the power
and duty to determine for the purposes of this Section 6.1, on the basis of
information known to them after reasonable inquiry, (A) whether a person is an
Interested Stockholder, (B) the number or percentage of shares of Voting Stock
beneficially owned by any person, (C) whether a person is an Affiliate or
Associate of another, (D) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value equal to or greater than ten
percent (10%) of the combined assets of the Corporation and its Subsidiaries,
(E) whether the requirements of Section 6.1.3 have been met with respect to any
Business Combination, and (F) any other matters of interpretation arising under
this Section 6.1. The good faith determination of a majority of the
Disinterested Directors on such matters shall be conclusive and binding for all
purposes of this Section 6.1.
6.1.6 No Effect on Fiduciary Obligations of Interested
Stockholders. Nothing contained in this Section 6.1 shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
6.1.7 Amendment, Repeal, etc. Notwithstanding any other
provisions of these Articles or the By-Laws of the Corporation (and
notwithstanding the fact that a lesser percentage or no vote may be specified by
law, these Articles or the By-Laws of the Corporation), and in addition to any
affirmative vote of the holders of Preferred Stock or any other class of capital
stock of the Corporation or any series of the foregoing then outstanding which
is required by law or by or pursuant to these Articles, the affirmative vote of
the holders of eighty percent (80%) or
<PAGE>
more of the outstanding Voting Stock, voting together as a single class, shall
be required to amend or repeal, or adopt any provisions inconsistent with, this
Section 6.1.
Section 6.2. Standards for Board of Directors' Evaluation of
Offers. The Board of Directors of the Corporation, in determining whether the
interests of the Corporation and its stockholders will be served by any offer of
another person to (i) make a tender or exchange offer for any equity security of
the Corporation, (ii) merge or consolidate the Corporation with or into another
institution, or (iii) purchase or otherwise acquire all or substantially all of
the properties and assets of the Corporation, may consider the interests of the
Corporation's employees, suppliers, creditors and customers, the economy of the
state, region and nation, community and societal considerations, and the
long-term and short-term interests of the Corporation and its stockholders,
including the possibility that these interests may be best served by the
continued independence of the Corporation.
Section 6.3 Stockholder Vote Required for Certain
Transactions. Any (i) sale, lease or exchange of all or substantially all of the
property or assets, including goodwill, of the Corporation, or (ii) merger,
share exchange or consolidation of the Corporation with or into any other
entity, shall require the affirmative vote of at least seventy-five percent
(75%) of the total number of votes eligible to be cast by stockholders on such
sale, lease or exchange, or merger, share exchange or consolidation, voting
together as a single class, at a duly constituted meeting of stockholders called
expressly for such purpose. The seventy-five percent (75%) vote requirement set
forth in the previous sentence shall not apply, and only the affirmative vote of
a majority of the total number of votes eligible to be cast by stockholders on
such matter, voting together as a single class, shall be required for approval
of a merger, share exchange, or consolidation which would result in the Voting
Stock (as such term is defined in Section 6.1.1) of the Corporation outstanding
immediately prior to the transaction continuing to represent (either by
remaining outstanding or by being converted into or exchanged for voting
securities of the surviving entity) more than seventy percent (70%) of the
Voting Stock of the Corporation or such surviving entity outstanding immediately
after such merger, share exchange, or consolidation. The term "surviving entity"
shall mean (i) the entity that continues to exist following a merger or a
consolidation or (ii), with respect to a share exchange, the entity that issues
its securities in exchange for the outstanding securities of another entity. The
provisions of this Section 6.3 shall not apply to the extent that a higher
percentage vote shall be required by law or the provisions of Section 6.1 of
these Articles.
Section 6.4 Preemptive Rights. Holders of the capital stock of
the Corporation shall not be entitled to preemptive rights with respect to any
shares of the capital stock of the Corporation which may be issued.
Section 6.5 Directors
6.5.1. Classification of Directors. The Directors, other than
those who may be elected by the holders of any series of Preferred Stock of the
Corporation, shall be classified, with respect to the term for which they
severally hold office, into three classes, as nearly equal in number as
possible, with one class to be elected annually. The initial Directors of the
Corporation shall hold office as follows: the first class of Directors shall
hold office initially for a term expiring
<PAGE>
at the annual meeting of stockholders to be held in 1999, the second class of
Directors shall hold office initially for a term expiring at the annual meeting
of stockholders to be held in 2000, and the third class of Directors shall hold
office initially for a term expiring at the annual meeting of stockholders to be
held in 2001. At each succeeding annual meeting of stockholders, the successors
of the class of Directors whose term expires at that meeting shall be elected by
a plurality vote of all votes cast at such meeting to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election. Members of each class shall hold office until their
successors are duly elected and qualified or until their earlier resignation or
removal.
6.5.2. Removal of Directors. Subject to the rights of the
holders of any Preferred Stock then outstanding, any Director (including persons
elected by Directors to fill vacancies in the Board of Directors) may be removed
from office, only for cause and only by an affirmative vote of not less than
two-thirds (2/3) of the total votes eligible to be cast by stockholders, voting
together as a single class, at a duly constituted meeting of stockholders called
expressly for such purpose. At least 30 days prior to such meeting of
stockholders, written notice shall be sent to the Director whose removal will be
considered at the meeting and the Director will be provided an opportunity to be
heard before the stockholders.
6.5.3. Limitation of Liability of Directors. No Director of
the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a Director
notwithstanding any provision of law imposing such liability; provided, however,
that this Section 6.5.3 shall not eliminate or limit any liability of a Director
(i) for any breach of the Director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Sections 61 or
62 of Chapter 156B of the General Laws of The Commonwealth of Massachusetts, or
(iv) with respect to any transaction from which the Director derived an improper
personal benefit. No amendment or repeal of this Section 6.5.3 shall adversely
affect the rights and protection afforded to a Director of this Corporation
under this Section 6.5.3 for acts or omissions occurring prior to such amendment
or repeal. If the Massachusetts Business Corporation Law is hereafter amended to
further eliminate or limit the personal liability of Directors or to authorize
corporate action to further eliminate or limit such liability, then the
liability of the Directors of this Corporation shall be eliminated or limited to
the fullest extent permitted by the Massachusetts Business Corporation Law as so
amended.
Section 6.6. Transactions with Interested Persons. For the
purposes of this Section 6.6, "Interested Person" means any person or
organization in any way interested in the Corporation, whether as a director,
officer, stockholder, employee or otherwise, and any other entity in which any
director, officer, stockholder or employee of the Corporation is a director,
officer, stockholder or employee or is otherwise interested in any way. The
Corporation may enter into contracts or transact business with one or more
Interested Persons and may enter into other contracts or transactions in which
one or more Interested Persons are in any way interested. In the absence of
fraud, no such contract or transaction shall be invalidated or in any way
affected by the fact that any such Interested Person has or may have any
interest which is or might be adverse to the interest of the Corporation even
though the vote or action of an Interested Person having
<PAGE>
such an adverse interest may have been necessary to obligate the Corporation
upon such contract or transaction.
At any meeting of the Board of Directors (or of any duly
authorized committee thereof) at which any such contract or transaction shall be
authorized or ratified, any Director having such adverse interest may vote or
act thereat with like force and effect as if he or she had no such interest,
provided in such case that the nature of such interest (though not necessarily
the extent or details thereof) shall be disclosed or shall have been known to
the Directors. A general notice that a Director or officer is interested in any
corporation, organization or other concern of any kind referred to above shall
be a sufficient disclosure as to the interest of such Director or officer with
respect to all contracts and transactions with such corporation, organization or
other concern. No Director shall be disqualified from holding office as a
Director or an officer of the Corporation by reason of any such adverse
interest, unless the Board of Directors shall determine that such adverse
interest is detrimental to the Corporation. In the absence of fraud, no
Director, officer or stockholder having such adverse interest shall be liable on
account of such adverse interest to the Corporation or to any stockholder or
creditor thereof or to any other person for any loss incurred by it under or by
reason of such contract or transaction, nor shall any such Director, officer or
stockholder be accountable on such ground for any gains or profits realized
thereon.
Section 6.7 Indemnification
6.7.1 Officers. To the extent permitted by law and except as
provided in Sections 6.7.3 and 6.7.4, each Officer of the Corporation (and his
or her heirs and personal representatives) shall be indemnified by the
Corporation against all Expenses incurred by him or her in connection with any
Proceeding in which he or she is involved as a result of (a) his or her serving
or having served as an Officer or employee of the Corporation, (b) his or her
serving or having served as a Director, officer or employee of any of its
wholly-owned Subsidiaries, or (c) his or her serving or having served in any
capacity with respect to any other corporation, organization, partnership, joint
venture, trust, employee benefit plan or other entity at the request or
direction of the Corporation. Capitalized terms used but not defined in this
Section 6.7 shall have the meanings defined in Section 6.7.9.
6.7.2 Non-Officer Employees. To the extent permitted by law
and except as provided in Sections 6.7.3 and 6.7.4, each non-Officer Employee of
the Corporation (and his or her heirs and personal representatives) may, in the
discretion of the Board of Directors, be indemnified against any or all Expenses
incurred by him or her in connection with any Proceeding in which he or she is
involved as a result of (a) his or her serving or having served as a non-Officer
Employee of the Corporation, (b) his or her serving or having served as a
Director, officer, or employee of any of its wholly-owned subsidiaries, or (c)
his or her serving or having served in any capacity with respect to any other
corporation, organization, partnership, joint venture, trust employee benefit
plan or other entity at the request or direction of the Corporation.
6.7.3 Service at Direction of Board of Directors. No
indemnification shall be provided to an Officer or non-Officer Employee with
respect to his or her serving or having
<PAGE>
served in any capacity "at the request or direction of the Corporation" unless
such service was required or directed by vote of the Board of Directors prior to
the occurrence of the event to which the indemnification relates; provided that
the Board of Directors may provide an Officer or non-Officer Employee with
indemnification, as to a specific Proceeding, even though such Board of
Directors vote was not obtained, if in its discretion, the Board of Directors
determines it to be appropriate for the Corporation to do so.
6.7.4 Certain Limitations. No indemnification shall be
provided to an Officer or to a non-Officer Employee with respect to a matter as
to which he or she shall have been determined by final judicial decision from
which there is no further right to appeal (hereinafter a "Final Adjudication")
that such Indemnitee is not entitled to be indemnified for such expenses under
this Section 6.7 or otherwise. If in a Proceeding brought by or in the right of
the Corporation, a Director of the Corporation is held not liable for monetary
damages, whether because that Director is relieved of personal liability under
the provisions of Section 6.5.3 of these Articles or otherwise, that Director
shall be deemed to have met the standard of conduct set forth above and to be
entitled to indemnification for Expenses reasonably incurred in the defense of
such Proceeding.
6.7.5 Advancement of Expenses. In the event that the
Corporation does not assume the defense, or unless and until the Corporation
assumes the defense pursuant to Section 6.7.7 of any Proceeding of which the
Corporation receives notice under this Section 6.7, the Corporation shall pay,
in the case of a Director or officer at the level of Vice President or above,
and may pay, in the case of any other Indemnitee, any Expenses incurred by such
Indemnitee in defending a Proceeding or any appeal therefrom in advance of the
final disposition of such Proceeding ("Advancement of Expenses"); provided,
however, that if the Proceeding is initiated by the Indemnitee or the
Disinterested Directors, then the Corporation may, but need not, pay such
Expenses in advance of the final disposition of such Proceeding. The Board of
Directors shall have the authority, in its discretion, to pay Expenses incurred
by any other Officer or any Non-Officer Employee in defending a Proceeding or
any appeal therefrom in advance of the final disposition of such Proceeding.
Notwithstanding the foregoing, to the extent required by the
Massachusetts Business Corporation Law Expenses incurred by an Indemnitee in
advance of the final disposition of a Proceeding may be paid only upon the
Corporation's receipt of an undertaking ("Undertaking") by the Indemnitee to
repay such payment if there shall have been a Final Adjudication that such
Indemnitee is not entitled to be indemnified for such expenses under this
Section 6.7 or otherwise. The Corporation may accept such Undertaking without
reference to the financial ability of the Indemnitee to make such repayment.
6.7.6 Right of Indemnitee to Bring Suit. If a claim under this
Section 6.7 is not paid in full by the Corporation within sixty (60) days after
a written claim has been received by the Corporation, except in the case of a
claim for an Advancement of Expenses, in which case the applicable period shall
be twenty (20) days, the Indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If the
Indemnitee is successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an
<PAGE>
Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee
shall also be entitled to be paid the expense of prosecuting or defending such
suit. In any suit brought by the Indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the Indemnitee to
enforce a right to an Advancement of Expenses) it shall be a defense that the
Indemnitee has not met the applicable standard of conduct set forth in the
Massachusetts Business Corporation Law. In addition, in any suit by the
Corporation to recover an Advancement of Expenses pursuant to the terms of an
Undertaking, the Corporation shall be entitled to recover such expenses upon a
Final Adjudication that the Indemnitee has not met the applicable standard of
conduct set forth in the Massachusetts Business Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or stockholders) to have made a determination prior to the commencement
of such suit that indemnification of the Indemnitee is proper in the
circumstances because the Indemnitee has met the applicable standard of conduct
set forth in the Massachusetts Business Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel or stockholders) that the Indemnitee has not met such applicable
standard of conduct, shall create a presumption that the Indemnitee has not met
the applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an Advancement of Expenses hereunder,
or by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under this
Section 6.7 or otherwise shall be on the Corporation.
6.7.7 Notification and Defense of Claim. Each Indemnitee must
notify the Corporation in writing as soon as practicable of any Proceeding
involving him or her or with respect to which indemnity will or could be sought.
With respect to any Proceeding of which the Corporation is so notified, the
Corporation will be entitled to participate therein at its own expense and/or to
assume the defense thereof at its own expense, with legal counsel reasonably
acceptable to the Indemnitee. After the Corporation notifies the Indemnitee of
its election so to assume such defense, the Corporation shall not be liable to
the Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with such claim, other than as provided below in this
Section 6.7.7. The Indemnitee shall have the right to employ his or her own
counsel in connection with such claim, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense
thereof shall be at the expense of the Indemnitee unless (i) the employment of
counsel by the Indemnitee has been authorized by the Corporation, (ii) counsel
to the Indemnitee shall have reasonably concluded that there may be a conflict
of interest or position on any significant issue between the Corporation and the
Indemnitee in the conduct of the defense of such action, or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of
such action. In each such case, the fees and expenses of Indemnitee's counsel
reasonably acceptable to the Corporation shall be at the expense of the
Corporation, except as otherwise expressly provided by this Section 6.7. The
Corporation shall not be entitled, without the consent of the Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation or
as to which counsel for the Indemnitee shall have reasonably made the conclusion
provided for in clause (ii) above.
<PAGE>
6.7.8 Insurance. The Corporation may purchase and maintain
insurance to protect itself and any Indemnitee against any liability of any
character asserted against and incurred by the Corporation or any such
Indemnitee, or arising out of any such status, whether or not the Corporation
would have the power to indemnify such person against such liability by law or
under the provisions of this Section 6.7 or under the Massachusetts Business
Corporation Law. The Corporation's obligation to provide indemnification under
this Section 6.7 shall be offset to the extent indemnification is available from
any other source, including any otherwise applicable insurance coverage under a
policy maintained by the Corporation or any other person.
6.7.9 Definitions. For the purposes of this Section 6.7:
(a) "Officer" means (i) any person who serves or has served as
a Director of the Corporation (ii) any person who serves or has served in any
other office filled by election or appointment by the Board of Directors,
whether or not such person is an officer of the Corporation within the
definition of that term as contained in the By-Laws of the Corporation, and
(iii) any other person who serves or has served, at the request or direction of
the Corporation, as a Director or officer of any of the Corporation's
wholly-owned subsidiaries;
(b) "non-Officer Employee" means any person who serves or has
served as an employee or agent of the Corporation but who is not an Officer;
(c) "Indemnitee" means each Officer, and each non-Officer
Employee whom the Board of Directors has determined to indemnify pursuant to
Section 6.7.2;
(d) "Proceeding" means any action, suit, proceeding or
investigation, civil or criminal, brought or threatened in or before any court,
tribunal, administrative or legislative body or agency; and
(e) "Expenses" means any liability fixed by a judgment, order,
decree or award (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties) in a Proceeding, any amount actually and reasonably paid in
settlement of a Proceeding and any professional fees and other disbursements
reasonably incurred in a Proceeding.
6.7.10 Other Indemnification Rights. The provisions of this
Section 6.7 shall not be construed to be exclusive. The Corporation shall have
the power to indemnify (and to provide for the Advancement of Expenses to) its
Officers and any of its agents or employees who are not Officers and to enter
into specific agreements, commitments or arrangements for indemnification on any
terms not prohibited by law which it deems to be appropriate. Nothing in this
Section 6.7 shall limit any lawful rights to indemnification existing
independently of this Section 6.7.
6.7.11 Survival of Benefits. The provisions of this Section
6.7 shall be applicable to persons who shall have ceased to be Directors or
officers of the Corporation, and shall inure to the benefit of the heirs,
executors and administrators of persons entitled to be indemnified hereunder.
Nothing hereunder shall be deemed to limit the Corporation's authority to
indemnify any person pursuant to any contract or otherwise.
<PAGE>
6.7.12 Subsequent Amendment. The right to indemnification
conferred in this Section 6.7 shall be a contract right and no amendment,
termination or repeal of this Section 6.7 or of the relevant provisions of the
Massachusetts Business Corporation Law or any other applicable laws shall affect
or diminish in any way the rights of any Indemnitee to indemnification under the
provisions hereof with respect to any Proceeding arising out of or relating to
any actions, transactions or facts occurring prior to the final adoption of such
amendment, termination or repeal.
6.7.13 Merger or Consolidation. If the Corporation is merged
into or consolidated with another corporation and the Corporation is not the
surviving corporation, the surviving corporation shall assume the obligations of
the Corporation under this Section 6.7 with respect to any action, suit,
proceeding or investigation arising out of or relating to any actions,
transactions or facts occurring at or prior to the date of such merger or
consolidation.
6.7.14 Subsequent Legislation. If the Massachusetts General
Laws are amended after adoption of this Section 6.7 to expand further the
indemnification permitted to Indemnitees, then the Corporation shall indemnify
such persons to the fullest extent permitted by the Massachusetts General Laws,
as so amended.
6.7.15 Savings Clause. If this Section 6.7 or any portion
hereof shall be found invalid on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee
as to any Expenses with respect to any Proceeding to the fullest extent
permitted by any applicable portion of this Section 6.7 that shall not have been
found invalid and to the fullest extent permitted by applicable law.
Section 6.8. Acting as a Partner. The Corporation may be a
partner in any business enterprise which it would have power to conduct by
itself.
Section 6.9. Stockholders' Meetings. Meetings of stockholders
may be held anywhere in the United States.
Section 6.10. Call of Special Meetings. Special meetings of
stockholders may be called by a majority of the Directors then in office
(provided, however, that if there is an Interested Stockholder, any such call by
the Board of Directors shall also require the affirmative vote of a majority of
the Disinterested Directors then in office). Special meetings shall be called by
the Clerk or in the case of the death, absence, incapacity or refusal of the
Clerk, by any other officer, upon written application of one or more
stockholders who hold at least two-thirds (2/3) in interest of the capital stock
entitled to vote at such meeting. Application to a court pursuant to Section
34(b) of Chapter 156B of the General Laws of The Commonwealth of Massachusetts
requesting the call of a special meeting of stockholders because none of the
officers is able and willing to call such a meeting may be made only by
stockholders who hold at least two-thirds (2/3) in interest of the capital stock
entitled to vote at such meeting. The hour, date and place of any special
meeting and the record date for determining the stockholders having the right to
notice of and to vote at such meeting shall be determined by the Board of
Directors or the President. At a special meeting of stockholders, only such
business shall be conducted, and only such proposals shall be acted
<PAGE>
upon, as shall have been properly brought before the meeting in accordance with
the procedures set forth in the By-Laws of the Corporation.
Section 6.11. Amendment of By-Laws.
6.11.1 Amendment by Directors. Except as otherwise required by
law, the By-laws of the Corporation may be amended by the affirmative vote of a
majority of the Directors then in office at a duly constituted meeting of the
Board of Directors (unless at the time of such action there shall be an
Interested Stockholder, in which case such action shall also require the
affirmative vote of two-thirds (2/3) of the Disinterested Directors then in
office at such meeting). Not later than the time of giving notice of the annual
meeting of stockholders next following the amending by the Directors of any
By-law, notice thereof stating the substance of such change shall be given to
all stockholders entitled to vote on amending the By-laws.
6.11.2 Amendment by Stockholders. The By-laws of the
Corporation may be amended at a duly constituted meeting of stockholders called
expressly for such purpose, by the affirmative vote of at least seventy-five
percent (75%) of the total voted eligible to be cast by stockholders on such
amendment, voting together as a single class; provided, however, that if the
Board of Directors recommends, by the affirmative vote of two-thirds (2/3) of
the Directors then in office at a duly constituted meeting of the Board of
Directors (unless at the time of such action there shall be an Interested
Stockholder, in which case such action shall also require the affirmative vote
of two-thirds (2/3) of the Disinterested Directors then in office at such
meeting), that stockholders approve such amendment at such meeting of
stockholders, such amendment shall only require the affirmative vote of a
majority of the total votes eligible to be cast by stockholders on such
amendment, voting together as a single class.
Section 6.12. Amendment of Articles of Organization. These
Articles may be amended at a duly constituted meeting of stockholders called
expressly for such purpose, by the affirmative vote of at least seventy-five
percent (75%) of the total votes eligible to be cast by stockholders on such
amendment, voting together as a single class; provided, however, that if the
Board of Directors recommends, by the affirmative vote of at least two-thirds
(2/3) of the Disinterested Directors then in office at a duly constituted
meeting of the Board of Directors, that stockholders approve such amendment at
such meeting of stockholders, such amendment shall only require the affirmative
vote of a majority of the total votes eligible to be cast by stockholders on
such amendment, voting together as a single class. Notwithstanding the
foregoing, to the extent that any provision of these Articles provides for
stockholder approval by a vote of more than a majority of the total votes
eligible to be cast, such provision may only be amended, altered, changed or
repealed after approval by the same percentage vote as is provided for in such
provision.
Section 6.13. Beneficial Ownership Limitation.
6.13.1 For a period of five (5) years from the date of
consummation of the initial issuance by the Corporation of Common Stock to the
public (the "Stock Issuance Date"), no person shall directly or indirectly offer
to acquire or acquire the beneficial ownership of more than
<PAGE>
ten percent (10%) of the outstanding shares of Voting Stock of the Corporation.
This limitation shall not apply (i) to any acquisition of shares of capital
stock of the Corporation which has been expressly approved in advance by an
affirmative vote of not less than two-thirds (2/3) of the Directors then in
office (unless at the time of such action there shall be an Interested
Stockholder, in which case such action shall also require the affirmative vote
of two-thirds (2/3) of the Disinterested Directors then in office at such
meeting), or (ii) to any offer with a view toward public resale made exclusively
to the Corporation or to any underwriters acting on behalf of the Corporation or
to the selling group acting on the underwriter's behalf in connection with a
public offering of the Corporation's capital stock, or (iii) to a corporate
reorganization which does not result in any change in the respective beneficial
ownership interests of the Corporation's stockholders other than pursuant to the
exercise of any dissenters' appraisal rights.
6.13.2 In the event Voting Stock is acquired in violation of
this Section 6.13, the excess shares shall no longer be entitled to vote on any
matter or take other stockholder action or be counted in determining the total
number of outstanding shares for purposes of any matter involving stockholder
action, and the Board of Directors may cause such excess shares to be
transferred to an independent trustee for sale on the open market or otherwise,
with the expenses of such trustee to be paid out of the proceeds from such sale.
The term "offer" as used in this Section 6.13 includes every offer to buy or
acquire, solicitation of an offer to sell, tender offer for, or request or
invitation for tender of, a security or interest in a security for value.
Section 6.14 Interpretation. When a reference is made in these
Articles to a Section, such reference shall include subsections, which are part
of the related Section (e.g., a section numbered "Section 5.5.1" would be part
of "Section 5.5" and references to "Section 5.5" would also refer to material
contained in the subsection described as "Section 5.5.1"). The headings
contained in these Articles are for reference purposes only and shall not affect
in any way the meaning or interpretation of these Articles.
Section 6.15 Certain Statutes. The provisions of Chapters 110D
and 110F of the Massachusetts General Laws shall not apply to the Corporation.
<PAGE>
ARTICLE VII
The effective date of the restated Articles of Organization of the corporation
shall be the date approved and filed by the Secretary of the Commonwealth. If a
later effective date is desired, specify such date which shall not be more than
thirty days after the date of filing.
ARTICLE VIII
The information contained in Article VIII is not a permanent part of the
Articles of Organization.
a. The street address (post office boxes are not acceptable) of the principal
office of the corporation in Massachusetts is:
791 Purchase Street, New Bedford, MA 02740
b. The name, residential address and post office address of each director and
officer of the corporation is as follows:
<TABLE>
<CAPTION>
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
<S> <C> <C> <C>
President: Kevin G. Champagne 269 Wilbur St., New Bedford, MA 02740 Same
Treasurer: Francis S. Mascianica, Jr. 49 William Bradford Rd.
North Dartmouth, MA 02747 Same
Clerk: J. Louis LeBlanc 4090 Acushnet Ave., New Bedford, MA 02745 Same
Directors: See Continuation Sheet VIII(b) attached hereto and made a part hereof.
</TABLE>
c. The fiscal year (i.e., tax year) of the corporation shall end on the last day
of the month of: October
d. The name and business address of the resident agent, if any, of the
corporation is: None
We further certify that the foregoing Restated Articles of Organization affect
no amendments to the Articles of Organization of the corporation as heretofore
amended, except amendments to the following articles. Briefly describe
amendments below:
See Articles II through VI hereof.
SIGNED UNDER THE PENALTIES OF PERJURY, this ____ day of ___________, 1998,
<TABLE>
<S> <C>
/s/ Kevin G. Champagne, President,
- ----------------------------------
/s/ J. Louis LeBlanc, Clerk
- ----------------------------------
</TABLE>
<PAGE>
Continuation Sheet VIII(b)
Directors List
--------------
<TABLE>
<CAPTION>
Name Residence Post Office Address
- ---- --------- -------------------
<S> <C> <C>
Manuel G. Camacho, DDS 189 Adelaide Street Same
New Bedford, MA 02745
David P. Cameron 8 Mattakiset Road, Box 287 Same
Mattapoisett, MA 02739
Kevin G. Champagne 269 Wilbur Street Same
New Bedford, MA 02740
Howard C. Dyer, Jr. 6 Lucy Street Same
South Dartmouth, MA 02748
Glen F. Johnson 180 Bedford Street Same
New Bedford, MA 02740
Thornton P. Klaren, Jr. 486 Elm Street Same
South Dartmouth, MA 02748
J. Louis LeBlanc, Esq. 4090 Acushnet Avenue Same
New Bedford, MA 02745
A. William Munro 6 Stone Gate Road Same
Warren, RI 02885
Carl Ribeiro 80 Olde Knoll Road Same
Marion, MA 02738
Joseph H. Silverstein 130 Clarendon Street Same
Dartmouth, MA 02747
Gerald H. Silvia 496 Riverside Drive Same
Tiverton, RI 02878
</TABLE>
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B, Section 74)
=================================================
I hereby approve the within Restated Articles of
Organization and, the filing fee in the amount of
$________________ having been paid, said articles
are deemed to have been filed with me this ____
day of _________________, 19__.
Effective Date: _________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
I hereby approve the within restated articles of
organization.
--------------------- ------------------------
Date Commissioner of Banks
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
Peter W. Coogan, Esq.
-------------------------------------------------
Foley, Hoag & Eliot LLP
-------------------------------------------------
One Post Office Square
-------------------------------------------------
Boston, MA 02109
-------------------------------------------------
Telephone: (617) 832-1000
--------------------------------------
Exhibit 3.2
BY-LAWS
OF
SEACOAST FINANCIAL SERVICES CORPORATION
________ , 1998
<PAGE>
BY-LAWS
OF
SEACOAST FINANCIAL SERVICES CORPORATION
<TABLE>
<S> <C> <C>
ARTICLE I -- ORGANIZATION
1.1 Name and Powers ........................................................ 1
1.2 Interested Stockholder and Disinterested Directors ..................... 1
ARTICLE II -- STOCKHOLDERS
2.1 Annual Meeting ......................................................... 1
2.2 Special Meetings ....................................................... 1
2.3 Matters to be Considered at Annual Meetings ............................ 2
2.4 Notice of Meetings ..................................................... 3
2.5 Quorum ................................................................. 3
2.6 Voting and Proxies ..................................................... 3
2.7 Action at Meeting ...................................................... 4
2.8 Action without Meeting ................................................. 4
2.9 Presiding Officer ...................................................... 4
2.10 Voting Procedures and Inspectors of Elections ......................... 4
2.11 Rescheduling of Meetings; Adjournments ................................ 5
ARTICLE III -- DIRECTORS
3.1 Powers ................................................................. 5
3.2 Composition and Term ................................................... 5
3.3 Director Nominations ................................................... 6
3.4 Qualifications ......................................................... 7
3.5 Resignation ............................................................ 7
3.6 Removal ................................................................ 7
3.7 Vacancies .............................................................. 7
3.8 Compensation ........................................................... 8
3.9 Regular Meetings ....................................................... 8
3.10 Special Meetings ...................................................... 8
3.11 Notice of Special Meetings ............................................ 8
3.12 Quorum ................................................................ 8
3.13 Action at Meeting ..................................................... 9
3.14 Action by Consent ..................................................... 9
3.15 Presumption of Assent ................................................. 9
3.16 Committees ............................................................ 9
3.17 Powers of Executive Committee ......................................... 9
3.18 Manner of Participation ............................................... 10
i
<PAGE>
<S> <C> <C>
ARTICLE IV -- OFFICERS
4.1 Enumeration ............................................................ 10
4.2 Election ............................................................... 10
4.3 Qualification .......................................................... 10
4.4 Tenure ................................................................. 10
4.5 Removal ................................................................ 10
4.6 Vacancies .............................................................. 11
4.7 Chairman of the Board .................................................. 11
4.8 Chief Executive Officer ................................................ 11
4.9 President and Vice Presidents .......................................... 11
4.10 Treasurer and Assistant Treasurers .................................... 11
4.11 Clerk and Assistant Clerks ............................................ 11
4.12 Secretary and Assistant Secretaries ................................... 11
4.13 Other Powers and Duties ............................................... 12
ARTICLE V -- CAPITAL STOCK
5.1 Certificates of Stock .................................................. 12
5.2 Transfers .............................................................. 12
5.3 Record Holders ......................................................... 12
5.4 Record Date ............................................................ 12
5.5 Replacement of Certificates ............................................ 13
5.6 Issuance of Capital Stock .............................................. 13
5.7 Dividends............................................................... 13
ARTICLE VI -- MISCELLANEOUS PROVISIONS
6.1 Fiscal Year ............................................................ 13
6.2 Seal ................................................................... 13
6.3 Execution of Instruments ............................................... 13
6.4 Voting of Securities ................................................... 13
6.5 Resident Agent ......................................................... 14
6.6 Corporation Records .................................................... 14
6.7 Articles of Organization ............................................... 14
6.8 By-Law Amendments ...................................................... 14
</TABLE>
ii
<PAGE>
BY-LAWS
OF
SEACOAST FINANCIAL SERVICES CORPORATION
ARTICLE I -- ORGANIZATION
1.1 Name and Powers. The name of this Corporation shall be "Seacoast
Financial Services Corporation". The Corporation shall have and may exercise all
the powers, privileges and authority, express, implied and incidental, now or
hereafter conferred by applicable law and the Corporation's Articles of
Organization.
1.2 Interested Stockholder and Disinterested Directors. As used in these
By-Laws, the terms "Interested Stockholder" and "Disinterested Director" shall
have the same respective meanings assigned to them in the Corporation's Articles
of Organization. Any determination of beneficial ownership of securities under
these By-Laws shall be made in the manner specified in the Articles of
Organization.
ARTICLE II -- STOCKHOLDERS
2.1 Annual Meeting. The annual meeting of the stockholders for elections
and other purposes shall be held on the third Thursday in March at 10 a.m. (or
if that be a legal holiday in the place where the meeting is to be held, on the
next succeeding full business day), at the main office of the Corporation in
Massachusetts, unless a different hour, date or place within or without the
United States is fixed by the Board of Directors, the Chairman of the Board or
the President. If no annual meeting has been held on the date fixed above, a
special meeting in lieu thereof may be held, and such special meeting shall have
for the purposes of these By-Laws or otherwise all the force and effect of an
annual meeting.
2.2 Special Meetings. Special meetings of stockholders may be called by a
majority of the Directors then in office (provided, however, that if there is an
Interested Stockholder, any such call by the Board of Directors shall also
require the affirmative vote of a majority of the Disinterested Directors then
in office). Special meetings shall be called by the Clerk or in the case of the
death, absence, incapacity or refusal of the Clerk, by any other officer, upon
written application of one or more stockholders who hold at least 66-2/3% in
interest of the capital stock entitled to vote at such meeting. Application to a
court pursuant to Section 34(b) of Chapter 156B of the General Laws of The
Commonwealth of Massachusetts requesting the call of a special meeting of
stockholders because none of the officers is able and willing to call such a
meeting may be made only by stockholders who hold at least 66-2/3% in interest
of the capital stock entitled to vote at such meeting.
Any written application for a special meeting by one or more stockholders
shall set forth as to each matter proposed to be brought before the special
meeting (a) a brief description of the
1
<PAGE>
proposal desired to be brought before the special meeting and the reasons for
conducting such business at the special meeting, (b) the name and address, as
they appear on the Corporation's books, of the stockholder(s) proposing such
business and any other stockholders known by such stockholder(s) to be
supporting such proposal, (c) the class and number of shares of the
Corporation's capital stock which are beneficially owned by the stockholder(s)
on the date of such stockholder application and by any other stockholders known
by such stockholder(s) to be supporting such proposal on the date of such
stockholder application, and (d) any financial interest of the supporting
stockholder(s) in such proposal. The Board of Directors or a designated
committee thereof may reject any stockholder proposal not made in accordance
with the terms of this Section 2.2.
The hour, date and place of any special meeting and the record date for
determining the stockholders having the right to notice of and to vote at such
meeting shall be determined by the Board of Directors or the President. At a
special meeting of stockholders, only such business shall be conducted, and only
such proposals shall be acted upon, as shall have been stated in the written
notice of the special meeting, unless otherwise provided by law.
2.3 Matters to be Considered at Annual Meetings. At an annual meeting of
stockholders, only such new business shall be conducted, and only such proposals
shall be acted upon as shall be proper subjects for stockholder action pursuant
to the Articles of Organization, these By-Laws, or applicable law and shall have
been brought before the annual meeting (a) by, or at the direction of, the Board
of Directors, the Chairman of the Board, or the President or (b) by any holder
of record (both as of the time notice of such proposal is given by the
stockholder as set forth below and as of the record date for the Annual Meeting
in question) of any shares of capital stock of the Corporation entitled to vote
at such Annual Meeting who complies with the requirements set forth in this
Section 2.3.
For a proposal to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Clerk of the Corporation. To be timely, a stockholder's notice must be
received at the principal executive offices of the Corporation not less than 60
days nor more than 150 days prior to the scheduled annual meeting, regardless of
any postponements, deferrals or adjournments of that meeting to a later date;
provided, however, that if less than 70 days' notice or prior public disclosure
of the date of the scheduled annual meeting is given or made, notice by the
stockholder to be timely must be so delivered or received not later than the
close of business on the tenth day following the earlier of the day on which
such notice of the date of the scheduled annual meeting was mailed or the day on
which public disclosure was made. A stockholder's notice to the Clerk shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the proposal desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the Corporation's books, of
the stockholder proposing such business and any other stockholders known by such
stockholder to be supporting such proposal, (c) the class and number of shares
of the Corporation's capital stock which are beneficially owned by the
stockholder on the date of such stockholder notice and by any other stockholders
known by such stockholder to be supporting such proposal on the date of such
stockholder notice, and (d) any financial interest of the stockholder in such
proposal.
2
<PAGE>
The Board of Directors, a designated committee thereof or the presiding
officer at the Annual Meeting may reject any stockholder proposal not made in
accordance with the terms of this Section 2.3. If there is an Interested
Stockholder, any determinations to be made by the Board of Directors or a
designated committee thereof pursuant to the provisions of this Section 2.3
shall also require the concurrence of a majority of the Disinterested Directors
then in office.
This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, Directors, and
committees, but in connection with such reports, no matter shall be acted upon
at such annual meeting unless stated and filed as herein provided.
Notwithstanding the provisions of this Section 2.3, a stockholder shall
also comply with all applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations thereunder
with respect to the matters set forth in this Section 2.3.
Nothing contained in this Section 2.3 shall require proxy materials
distributed by the management of the Corporation to include any information with
respect to stockholder proposals.
2.4 Notice of Meetings. A written notice of all annual and special meetings
of stockholders shall state the place, date, hour, and purposes of such
meetings, and shall be given by the Clerk or an Assistant Clerk (or other person
authorized by these By-Laws or by law) at least seven (7) days (or such longer
period as may be required by law) before the meeting to each stockholder
entitled to vote at such meeting or to each stockholder who, under the Articles
of Organization, or under these By-laws, is entitled to such notice, by leaving
such notice with him or her or at his or her residence or usual place of
business, or by mailing it, postage prepaid, and addressed to such stockholder
at his or her address as it appears on the stock transfer books of the
Corporation. When any stockholders' meeting, either annual or special, is
adjourned for thirty (30) days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting. It shall not be necessary to give
any notice of the time and place of any meeting adjourned for less than thirty
(30) days or of the business to be transacted thereat, other than an
announcement at the meeting at which such adjournment is taken. A written waiver
of notice, executed before or after a meeting by such stockholder or his or her
attorney thereunto authorized and filed with the records of the meeting, shall
be deemed equivalent to notice of the meeting.
2.5 Quorum. The holders of a majority in interest of all stock issued,
outstanding, and entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, but if less than a quorum is
present at a meeting, a majority in interest of the stockholders present or the
presiding officer may adjourn the meeting from time to time and the meeting may
be held as adjourned without further notice, except as provided in Section . At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The stockholders present at a duly constituted meeting may
continue to transact business until adjournment notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.6 Voting and Proxies. Stockholders shall have one vote for each share of
stock entitled to vote owned by them of record according to the books of the
Corporation, unless otherwise provided by law or by the Articles of
Organization. Stockholders of record may vote
3
<PAGE>
either in person or by written proxy dated not more than six (6) months before
the meeting named therein, unless the proxy is coupled with an interest and
provides otherwise. Proxies shall be filed with the Clerk at the meeting, or any
adjournment thereof, before being voted. Proxies solicited on behalf of the
management shall be voted as directed by the stockholder or, in the absence of
such direction, as determined by a majority of the Board of Directors. Except as
otherwise limited therein, proxies shall entitle the persons authorized thereby
to vote at any adjournment of such meeting, but they shall not be valid after
final adjournment of such meeting. A proxy with respect to stock held in the
name of two or more persons shall be valid if executed by one of them unless at
or prior to exercise of the proxy the Clerk of the Corporation receives a
specific written notice to the contrary from any one of them. Whenever stock is
held in the name of two or more persons, in the absence of specific written
notice to the Corporation to the contrary, at any meeting of the stockholders of
the Corporation any one or more of such stockholders may cast, in person or by
proxy, all votes to which such ownership is entitled. In the event an attempt is
made to cast conflicting votes, in person or by proxy, by the several persons in
whose names shares of stock stand, the vote or votes to which those persons are
entitled shall be cast as directed by a majority of those holding such stock and
present in person or by proxy at such meeting, but no votes shall be cast for
such stock if a majority does not agree. A proxy purporting to be executed by or
on behalf of a stockholder shall be deemed valid unless successfully challenged
at or prior to its exercise, and the burden of proving invalidity shall rest on
the challenger.
2.7 Action at Meeting. When a quorum is present, any matter before the
meeting shall be decided by vote of the holders of a majority of the shares of
stock voting on such matter, except where a larger vote is required by law, by
the Articles of Organization, or by these By-Laws. Any election by stockholders
shall be determined by a plurality of the votes cast, except where a larger vote
is required by law, by the Articles of Organization, or by these By-Laws. No
ballot shall be required for any election unless requested by a stockholder
entitled to vote in the election. The Corporation shall not directly or
indirectly vote any share of its own stock; provided however, that no provision
of these By-Laws shall be construed to limit the voting rights and powers
relating to shares of stock held pursuant to a plan which is intended to be an
"employee stock ownership plan" as defined in the Internal Revenue Code, as now
or hereafter in effect.
2.8 Action without Meeting. Any action to be taken at any annual or special
meeting of stockholders may be taken without a meeting if all stockholders
entitled to vote on the matter consent to the action in writing and the written
consents are filed with the records of the meetings of stockholders. Such
consents shall be treated for all purposes as a vote at a meeting.
2.9 Presiding Officer. The Chairman of the Board, if one is elected, or if
not elected or in his or her absence, the President, shall preside at all annual
or special meetings of stockholders and shall have the power, among other
things, to adjourn such meeting at any time and from time to time, subject to
Sections 2.4 and 2.5. The order of business and all other matters of procedure
at every meeting of the stockholders shall be determined by the presiding
officer.
2.10 Voting Procedures and Inspectors of Elections. In advance of any
meeting of stockholders, the presiding officer may appoint one or more
inspectors to act at an annual or special meeting of stockholders and make a
written report thereon. Any inspector may, but need not, be an officer, employee
or agent of the Corporation. The inspector(s) shall (i) ascertain the
4
<PAGE>
number of shares outstanding and the voting power of each, (ii) determine the
shares represented at a meeting and the validity of proxies and ballots, (iii)
count all votes and ballots, (iv) determine and retain for a reasonable period a
record of the disposition of any challenges made to any determination by the
inspectors, and (v) certify their determination of the number of shares
represented at the meeting, and their count of all votes and ballots. The
inspector(s) may appoint or retain other persons or entities to assist the
inspector(s) in the performance of the duties of the inspector(s). The presiding
officer may review all determinations made by the inspector(s), and in so doing
the presiding officer shall be entitled to exercise his or her sole judgment and
discretion and such officer shall not be bound by any determinations made by the
inspector(s). All determinations by the inspector(s) and, if applicable,
presiding officer shall be subject to further review by any court of competent
jurisdiction.
2.11 Rescheduling of Meetings; Adjournments. The Board of Directors or a
designated committee thereof may postpone and reschedule any previously
scheduled annual or special meeting of stockholders, and a record date with
respect thereto, regardless of whether any notice or public disclosure with
respect to any such meeting or record date has been sent or made (unless there
is an Interested Stockholder, in which case the affirmative vote of a majority
of the Disinterested Directors shall also be required). In no event shall the
public announcement of an adjournment, postponement or rescheduling of any
previously scheduled Annual Meeting of stockholders commence a new time period
for the giving of a stockholder's notice under Section 2.3 and Section 3.3 of
these By-Laws.
ARTICLE III -- DIRECTORS
3.1 Powers. The business and affairs of the Corporation shall be managed
by a Board of Directors who may exercise all the powers of the Corporation
except as otherwise provided by law, by the Articles of Organization or by these
By-Laws. In the event of a vacancy in the Board of Directors, the remaining
Directors, except as otherwise provided by law, may exercise the powers of the
full Board until the vacancy is filled.
3.2 Composition and Term. The initial members of the Board of Directors
shall be those persons who were serving as Directors of Compass Bank for Savings
on the effective date of this Corporation's conversion from mutual to stock form
in accordance with the provisions of Chapter 167H. Subject to the rights of the
holders of any series of Preferred Stock, the number of Directors and their
respective classifications shall be fixed from time to time exclusively by the
Board of Directors; provided, however, that if at the time of such action there
is an Interested Stockholder, such action shall in addition require a majority
vote of the Disinterested Directors then in office.
The Directors, other than those who may be elected by the holders of any
series of Preferred Stock of the Corporation, shall be classified, with respect
to the term for which they severally hold office, into three classes, as nearly
equal in number as possible, with one class to be elected annually. The initial
Directors of the Corporation shall hold office as follows: the first class of
Directors shall hold office initially for a term expiring at the annual meeting
of stockholders to be held in 1999, the second class of Directors shall hold
office initially for a term expiring at the annual meeting of stockholders to be
held in 2000, and the third class of Directors
5
<PAGE>
shall hold office initially for a term expiring at the annual meeting of
stockholders to be held in 2001. At each succeeding annual meeting of
stockholders, the successors of the class of Directors whose term expires at
that meeting shall be elected by a plurality vote of all votes cast at such
meeting to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election. Members of each
class shall hold office until their successors are duly elected and qualified or
until their earlier resignation or removal.
3.3 Director Nominations. Nominations of candidates for election as
Directors at any annual meeting of stockholders may be made (a) by, or at the
direction of, a majority of the Board of Directors or a designated committee
thereof (unless there is an Interested Stockholder, in which case the
affirmative vote of a majority of the Disinterested Directors shall also be
required) or (b) by any holder of record (both as of the time notice of such
nomination is given by the stockholder as set forth below and as of the record
date for the Annual Meeting in question) of any shares of capital stock of the
Corporation entitled to vote at such Annual Meeting who complies with the
requirements set forth in this Section 3.3. Only persons nominated in accordance
with the procedures set forth in this Section 3.3 shall be eligible for election
as Directors at an annual meeting.
Nominations, other than those made by, or at the direction of, the Board of
Directors (or by the Disinterested Directors, if required), shall be made
pursuant to timely notice in writing to the Clerk of the Corporation as set
forth in this Section 3.3. To be timely, a stockholder's notice shall be
delivered to, or mailed and received, at the principal executive offices of the
Corporation not less than 60 days nor more than 150 days prior to the date of
the scheduled annual meeting, regardless of postponements, deferrals, or
adjournments of that meeting to a later date; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the scheduled
annual meeting is given or made, notice by the stockholder to be timely must be
so delivered or received not later than the close of business on the tenth day
following the earlier of the day on which such notice of the date of the
scheduled annual meeting was mailed or the day on which such public disclosure
was made. Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or re-election as a Director
and as to the stockholder giving the notice (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
Corporation's capital stock which are beneficially owned by such person on the
date of such stockholder notice and (iv) any other information relating to such
person that is required to be disclosed in solicitations of proxies with respect
to nominees for election as Directors, pursuant to the Exchange Act and the
Rules and regulations thereunder, including, but not limited to, the written
consent of such person to serve as a Director if elected; and (b) as to the
stockholder giving the notice (x) the name and address as they appear on the
Corporation's books, of such stockholder and any other stockholders known by
such stockholder to be supporting such nominees and (y) the class and number of
shares of the Corporation's capital stock which are beneficially owned by such
stockholder on the date of such stockholder notice and by any other stockholders
known by such stockholder to be supporting such nominees on the date of such
stockholder notice. At the request of the Board of Directors, any person
nominated by, or at the direction of, the Board for election as a Director at an
annual or special meeting shall furnish to the Clerk of the Corporation that
information required to be set forth in the stockholder's notice of nomination
which pertains to the nominee.
6
<PAGE>
Nothing contained in this Section 3.3 shall require proxy materials
distributed by the management of the Corporation to include any information with
respect to nominations by stockholders.
No person shall be elected as a Director of the Corporation unless
nominated in accordance with the procedures set forth in this Section 3.3.
Ballots bearing the names of all the persons who have been nominated for
election as Directors at an annual or special meeting in accordance with the
procedures set forth in this Section 3.3 shall be provided for use at such
annual or special meeting.
The Board of Directors, a designated committee thereof, or the presiding
officer may reject any nomination by a stockholder that is not timely made in
accordance with this Section 3.3 or does not satisfy the requirements of this
Section 3.3 in any material respect. If there is an Interested Stockholder, any
determinations to be made by the Board of Directors or a designated committee
thereof pursuant to the provisions of this paragraph shall also require the
concurrence of a majority of the Disinterested Directors then in office.
3.4 Qualifications. Each Director shall have such qualifications as are
required by applicable law. No Director shall serve as a corporator, trustee,
director or officer of any holding company or bank or thrift institution which
is not a direct or indirect subsidiary of the Corporation. No person shall be
qualified to be elected to serve as a Director if he or she has reached the age
of seventy-two years, provided, however, no person who served prior to May 1,
1988 as a Trustee of Compass Bank for Savings shall be disqualified by reason of
age to be elected to serve as a Director until such person has reached the age
of eighty years.
3.5 Resignation. Any Director may resign at any time by delivering his or
her written resignation to the main office of the Corporation addressed to the
Chairman of the Board or the President. Such resignation shall be effective upon
receipt thereof by the Chairman of the Board or the President, unless it is
specified to be effective at some other time or upon the happening of some other
event.
3.6 Removal. Subject to the rights of the holders of any Preferred Stock
then outstanding, any Director (including persons elected by Directors to fill
vacancies in the Board of Directors) may be removed from office, only for cause
and only by an affirmative vote of not less than two-thirds (2/3) of the total
votes eligible to be cast by stockholders, voting together as a single class, at
a duly constituted meeting of stockholders called expressly for such purpose. At
least 30 days prior to such meeting of stockholders, written notice shall be
sent to the Director whose removal will be considered at the meeting and the
Director will be provided an opportunity to be heard before the stockholders.
3.7 Vacancies. Subject to the rights of the holders of any series of
Preferred Stock or any other series or class of stock as set forth in the
Articles of Organization, any vacancy occurring on the Board of Directors as a
result of resignation, removal, death or other cause, and newly created
directorships resulting from any increase in the authorized number of Directors,
may be filled only by the affirmative vote of the majority of the remaining
Directors then in office, though less than a quorum of the number constituting
the full board as fixed by the Board of Directors;
7
<PAGE>
provided, however, that if at the time of such vacancy there is an Interested
Stockholder, such vacancy may only be filled by vote of a majority of the
Disinterested Directors then in office. A Director elected to fill such a
vacancy shall be elected to serve for the full term of the Class of Directors in
which the vacancy occurred or the new directorship was created and until such
Director's successor has been elected and qualified, or until such Director's
earlier resignation or removal.
3.8 Compensation. The members of the Board of Directors and the members of
either standing or special committees may be allowed such compensation for
attendance at meetings as the Board of Directors or the Executive Committee may
determine.
3.9 Regular Meetings. A regular meeting of the Board of Directors shall be
held without other notice than this By-Law on the same date and at the same
place as the annual meeting of stockholders, or the special meeting held in lieu
thereof, following such meeting of stockholders. The Board of Directors may
provide by resolution, the time, date and place for the holding of regular
meetings without other notice than such resolution.
3.10 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board, the President, or a
majority of the Directors. The persons authorized to call special meetings of
the Board of Directors may fix the time, date and place for holding any special
meeting of the Board of Directors called by such persons.
3.11 Notice of Special Meetings. Notice of the time, date and place of all
special meetings of the Board of Directors shall be given to each Director by
the Secretary, or if there be no Secretary, by the Clerk or Assistant Clerk or
in the case of the death, absence, incapacity or refusal of such persons, by the
officer or one of the Directors calling the meeting. Notice of any special
meeting of the Board of Directors shall be given to each Director in person or
by telephone or sent to his or her business or home address by telecommunication
at least twenty-four (24) hours in advance of the meeting, or by written notice
mailed to his or her business or home address at least forty-eight (48) hours in
advance of such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the mail so addressed, with postage thereon prepaid. When any
Board of Directors' meeting, either regular or special, is adjourned for thirty
(30) days or more, notice of the adjourned meeting shall be given as in the case
of an original meeting. It shall not be necessary to give any notice of the time
and place of any meeting adjourned for less than thirty (30) days or of the
business to be transacted thereat, other than an announcement at the meeting at
which such adjournment is taken. Any Director may waive notice of any meeting by
a writing executed by him or her either before or after the meeting and filed
with the records of the meeting. The attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting, except where the Director
protests the lack of notice to him or her prior to the meeting or at its
commencement. Neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.
3.12 Quorum. A majority of the number of Directors then in office shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but if less than a quorum is present at a meeting, a majority of
the Directors present may adjourn the meeting from time to time and the meeting
may be held as adjourned without further notice, except as provided in
8
<PAGE>
Section 3.11. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed.
3.13 Action at Meeting. The act of the majority of the Directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors, unless a greater number is prescribed by governing law, by the
Articles of Organization or by these By-Laws.
3.14 Action by Consent. Any action required or permitted to be taken by the
Board of Directors at any meeting may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
Directors then in office. Such written consents shall be filed with the records
of the meetings of the Board of Directors and shall be treated for all purposes
as a vote at a meeting of the Board of Directors.
3.15 Presumption of Assent. A Director of the Corporation who is present
at a meeting of the Board of Directors at which action on any Corporation matter
is taken shall be presumed to have assented to the action taken unless his or
her dissent or abstention has been entered in the minutes of the meeting or
unless he or she has filed a written dissent to such action with the person
acting as the Clerk of the meeting before the adjournment thereof or has
forwarded such dissent by registered mail to the Clerk of the Corporation within
five (5) days after the date such dissenting Director receives a copy of the
minutes of the meeting. Such right to dissent shall not apply to a Director who
voted in favor of such action.
3.16 Committees. The Board of Directors, by vote of a majority of all of
the Directors then in office, shall elect from its number an Audit Committee and
an Executive Committee, and may elect such other committees as it deems
appropriate, and may delegate to such committees some or all of its powers
except those which by law, by the Articles of Organization or by these By-Laws
may not be delegated. The Chief Executive Officer may appoint such other
committees as such officer deems appropriate. Any committees shall consist of
not less than three (3) members of the Board of Directors. Except as the Board
of Directors may otherwise determine, any committee may make rules for the
conduct of its business, but unless otherwise provided by the Board of Directors
or in such rules, its business shall be conducted so far as possible in the same
manner as is provided by these By-Laws for the Board of Directors. All members
of committees shall hold such offices at the pleasure of the Board of Directors.
The Board of Directors may abolish any committee (other than the Executive
Committee) at any time, subject to applicable law. Any committee to which the
Board of Directors delegates any of its powers or duties shall keep records of
its meetings and shall report its action to the Board of Directors. The Board of
Directors shall have power to rescind any action of any committee, but no such
rescission shall have retroactive effect.
3.17 Powers of Executive Committee. In addition to the powers and duties
provided by law, the Executive Committee, when the Board of Directors is not in
session, shall exercise general supervision and control in all matters
pertaining to the interests of the Corporation not otherwise provided by law or
in these By-Laws, subject at all times to the direction and control of the Board
of Directors.
9
<PAGE>
3.18 Manner of Participation. Members of the Board of Directors may
participate in meetings of the Board by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear each other. Such participation shall constitute presence in person.
ARTICLE IV -- OFFICERS
4.1 Enumeration. The officers of the Corporation shall consist of a
President, a Treasurer, a Clerk, and such other officers, including without
limitation a Chairman of the Board, a Secretary, and one or more Vice
Presidents, Assistant Vice Presidents, Assistant Treasurers, Assistant Clerks or
Assistant Secretaries, as the Board of Directors may determine.
4.2 Election. The Chairman of the Board, the Chief Executive Officer, the
President, the Treasurer, the Clerk, and all officers at the level of Vice
President or above shall be elected by the Board of Directors annually at their
first meeting following the annual meeting of stockholders. All other officers
may be elected by the Board of Directors or appointed by the Chief Executive
Officer.
4.3 Qualification. Any two or more offices may be held by any person. The
President shall be a Director. The Clerk shall be a resident of Massachusetts
unless the Corporation has a resident agent appointed for the purpose of service
of process. Any officer may be required by the Board of Directors to give bond
for the faithful performance of his or her duties in such amount and with such
sureties as the Board of Directors may determine. Other than as required by
applicable law or regulation, no officer or Director need be a stockholder. No
officer shall serve as a corporator, trustee, director or officer of any holding
company or bank or thrift institution which is not a direct or indirect
subsidiary of the Corporation.
4.4 Tenure. Except as otherwise provided by law, by the Articles of
Organization or by these By-Laws, the President, Treasurer and Clerk shall hold
office until the first meeting of the Board of Directors following the next
annual meeting of stockholders and until their respective successors are chosen
and qualified. All other officers shall hold office until the first meeting of
the Board of Directors following the next annual meeting of stockholders and
until their successors are chosen and qualified, or for such shorter term as may
have been fixed at the time such officers are chosen. Any officer may resign by
delivering his or her written resignation to the Corporation at its main office
addressed to the President, Clerk or Secretary. Such resignation shall be
effective upon receipt thereof by the President, Clerk or Secretary, unless it
is specified to be effective at some other time or upon the happening of some
other event. Election or appointment of an officer, employee or agent shall not
of itself create contract rights to continued employment or otherwise. The Board
of Directors may authorize the Corporation to enter into an employment contract
with any officer in accordance with governing law or regulation, but no such
contract right shall preclude the Board of Directors from exercising right to
remove any officer at any time in accordance with Section 4.5.
4.5 Removal. Any officer elected by the Board of Directors may be removed
at any time with or without cause by vote of a majority of the full Board of
Directors; provided, however, that if at the time of such removal there is an
Interested Stockholder, the affirmative vote of a majority
10
<PAGE>
of the Disinterested Directors then in office shall instead be required. Any
officer appointed by the Chief Executive Officer, and any employee or agent of
the Corporation, may be removed at any time with or without cause by the Chief
Executive Officer, or by the Board of Directors.
4.6 Vacancies. Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors.
4.7 Chairman of the Board. The Board of Directors may annually elect a
Chairman of the Board. If the Board of Directors so provides, the Chairman of
the Board shall be the Chief Executive Officer of the Corporation and shall
preside, when present, at all meetings of the Board of Directors.
4.8 Chief Executive Officer. The Chief Executive Officer shall, subject to
the direction of the Board of Directors, have general supervision and control of
the Corporation's business.
4.9 President and Vice Presidents. The President shall have such powers
and shall perform such duties as the Board of Directors may from time to time
designate and shall serve as the Chief Executive Officer of the Corporation
unless the Board of Directors otherwise provides. Unless otherwise provided by
the Board of Directors, the President shall preside, when present, at all
meetings of stockholders and of the Board of Directors if there is no Chairman
of the Board or if the Chairman of the Board does not attend such meetings.
Any Vice President or Assistant Vice President shall have such powers and
shall perform such duties as the Board of Directors or the Chief Executive
Officer may from time to time designate.
4.10 Treasurer and Assistant Treasurers. The Treasurer shall, subject to
the direction of the Board of Directors, have general charge of the financial
affairs of the Corporation and shall cause to be kept accurate books of account.
The Treasurer shall have custody of all funds, securities, and valuable
documents of the Corporation, except as the Board of Directors may otherwise
provide. The Treasurer shall also perform such other duties as the Board of
Directors may from time to time designate.
Any Assistant Treasurer shall have such powers and perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.
4.11 Clerk and Assistant Clerks. The Clerk shall keep a record of the
meetings of stockholders. In case a Secretary is not elected or is absent, the
Clerk or an Assistant Clerk shall keep a record of the meetings of the Board of
Directors. In the absence of the Clerk from any meeting of the stockholders, an
Assistant Clerk if one be elected, otherwise a Temporary Clerk designated by the
person presiding at the meeting, shall perform the duties of the Clerk.
4.12 Secretary and Assistant Secretaries. The Secretary, if one be elected,
shall keep a record of the meetings of the Board of Directors. In the absence of
the Secretary, any Assistant Secretary, the Clerk and any Assistant Clerk, a
Temporary Secretary shall be designated by the person presiding at such meeting
to perform the duties of the Secretary.
11
<PAGE>
4.13 Other Powers and Duties. Subject to these By-Laws, each officer of
the Corporation shall have in addition to the duties and powers specifically set
forth in these By-Laws, such duties and powers as are customarily incident to
his or her office, and such duties and powers as may be designated from time to
time by the Board of Directors.
ARTICLE V -- CAPITAL STOCK
5.1 Certificates of Stock. Each stockholder shall be entitled to a
certificate of the capital stock of the Corporation in such form as may from
time to time be prescribed by the Board of Directors. Such certificate shall be
signed by the President or a Vice President and by the Treasurer or an Assistant
Treasurer, and sealed with the corporate seal or a facsimile thereof. Such
signatures may be facsimile if the certificate is signed by a transfer agent, or
by a registrar, other than a Director, officer or employee of the Corporation.
In case any officer who has signed or whose signature has been placed on such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if the
person so signing were such officer at the time of its issue. Each certificate
for shares of capital stock shall be consecutively numbered or otherwise
identified. Every certificate for shares of stock which are subject to any
restriction on transfer and every certificate issued when the Corporation is
authorized to issue more than one class or series of stock shall contain such
legend with respect thereto as is required by law.
5.2 Transfers. Subject to any restrictions on transfer, shares of stock
may be transferred on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate therefor properly endorsed
or accompanied by a written assignment and power of attorney properly executed,
with transfer stamps (if necessary) affixed, and with such proof of the
authenticity of signature as the Corporation or its transfer agent may
reasonably require.
5.3 Record Holders. Except as may be otherwise required by law, by the
Articles of Organization or by these By-Laws, the Corporation shall be entitled
to treat the record holder of stock as shown on its books as the owner of such
stock for all purposes, including the payment of dividends and the right to vote
with respect thereto, regardless of any transfer, pledge or other disposition of
such stock, until the shares have been transferred on the books of the
Corporation in accordance with the requirements of these By-Laws.
It shall be the duty of each stockholder to notify the Corporation of his
or her current post office address.
5.4 Record Date. The Board of Directors may fix in advance a time of not
more than sixty (60) days preceding the date of any meeting of stockholders, or
the date for the payment of any dividend or the making of any distribution to
stockholders, or the last day on which the consent or dissent of stockholders
may be effectively expressed for any purpose, as the record date for determining
the stockholders having the right to notice of and to vote at such meeting, and
any adjournment thereof, or the right to receive such dividend or distribution
or the right to give such consent or dissent. In such case only stockholders of
record on such record date shall have such right, notwithstanding any transfer
of stock on the books of the Corporation after the record date.
12
<PAGE>
Without fixing such record date the Board of Directors may for any of such
purposes close the transfer books for all or any part of such period.
If no record date is fixed and the transfer books are not closed, (a) the
record date for determining stockholders having the right to notice of or to
vote at a meeting of stockholders shall be at the close of business on the day
next preceding the day on which notice is given, and (b) the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors acts with respect thereto.
5.5 Replacement of Certificates. In case of the alleged loss, destruction
or mutilation of a certificate of stock, a duplicate certificate may be issued
in place thereof, upon such terms as the Board of Directors may prescribe.
5.6 Issuance of Capital Stock. The Board of Directors shall have the
authority to issue or reserve for issue from time to time the whole or any part
of the capital stock of the Corporation which may be authorized from time to
time, to such persons or organizations, for such consideration, whether cash,
property, services or expenses, and on such terms as the Board of Directors or a
designated committee thereof may determine, including without limitation the
granting of options, warrants, or conversion or other rights to subscribe to
said capital stock.
5.7 Dividends. Subject to applicable law, the Articles of Organization and
these By-Laws, the Board of Directors may from time to time declare, and the
Corporation may pay, dividends on outstanding shares of its capital stock.
ARTICLE VI -- MISCELLANEOUS PROVISIONS
6.1 Fiscal Year. Except as otherwise determined by the Board of Directors,
the fiscal year of the Corporation shall be the twelve months ending October
31st.
6.2 Seal. The Board of Directors shall have power to adopt and alter the
seal of the Corporation.
6.3 Execution of Instruments. All deeds, leases, transfers, contracts,
bonds, notes and other instruments and obligations to be entered into by the
Corporation in the ordinary course of its business without Board of Directors
action may be executed on behalf of the Corporation by the Chairman of the
Board, President, any Vice President, Treasurer or any other officer, employee
or agent of the Corporation as the Board of Directors may authorize.
6.4 Voting of Securities. Unless otherwise provided by the Board of
Directors, the Chairman of the Board, the President or Treasurer may waive
notice of and act on behalf of the Corporation, or appoint another person or
persons to act as proxy or attorney in fact for the Corporation with or without
discretionary power and/or power of substitution, at any meeting of stockholders
or shareholders of any other organization, any of whose securities are held by
the Corporation.
13
<PAGE>
6.5 Resident Agent. The Board of Directors may appoint a resident agent
upon whom legal process may be served in any action or proceeding against the
Corporation. Said resident agent shall be either an individual who is a resident
of and has a business address in Massachusetts, a corporation organized under
the laws of The Commonwealth of Massachusetts, or a corporation organized under
the laws of any other state of the United States, which has qualified to do
business in, and has an office in, Massachusetts.
6.6 Corporation Records. The original, or attested copies, of the Articles
of Organization, By-Laws and record of all meetings of the Directors or
stockholders, and the stock and transfer records, which shall contain the names
of all stockholders and the record address and the amount of stock held by each,
shall be kept in Massachusetts at the main office of the Corporation, or at an
office of its transfer agent, Clerk or resident agent.
6.7 Articles of Organization. All references in these By-Laws to the
Articles of Organization shall be deemed to refer to the Articles of
Organization of the Corporation, as amended and in effect from time to time.
6.8 By-Law Amendments. These By-Laws may be amended in the manner provided
in the Articles of Organization.
14
