EXHIBIT 99
<PAGE>
PLAN OF CONVERSION AND REORGANIZATION
of
FLORIDAFIRST BANCORP, MHC
and
PLANS OF MERGER
between
FLORIDAFIRST BANCORP, MHC, FLORIDAFIRST BANCORP
and
FLORIDAFIRST BANK
ADOPTED ON JULY 21, 2000
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TABLE OF CONTENTS
Section
Number Page
------ ----
1. Introduction..................................................... 1
2. Definitions...................................................... 3
3. General Procedure for Conversion and Reorganization.............. 9
4. Total Number of Shares and Purchase Price of
Conversion Stock............................................... 11
5. Subscription Rights of Eligible Account Holders (First Priority). 13
6. Subscription Rights of the Tax-Qualified Employee Stock
Benefit Plans (Second Priority)................................ 13
7. Subscription Rights of Supplemental Eligible Account Holders
(Third Priority)............................................... 14
8. Subscription Rights of Other Members (Fourth Priority)........... 14
9. Community Offering, Syndicated Community Offering
and Other Offerings............................................ 15
10. Limitations on Subscriptions and Purchases of Conversion Stock... 17
11. Timing of Subscription Offering; Manner of Exercising
Subscription Rights and Order Forms............................ 19
12. Payment for Conversion Stock..................................... 20
13. Account Holders in Nonqualified States or Foreign Countries...... 21
14. Dissenters' Rights............................................... 22
15. Voting Rights of Stockholders.................................... 22
16. Liquidation Account.............................................. 22
17. Transfer of Deposit Accounts..................................... 24
18. Requirements Following Conversion and Reorganization for
Registration, Market Making and Stock Exchange Listing......... 24
19. Directors and Officers of the Bank and Holding Company........... 24
20. Requirements for Stock Purchases by Directors and Officers
Following the Conversion and Merger............................. 24
21. Restrictions on Transfer of Stock................................ 25
22. Restrictions on Acquisition of Stock of the Holding Company...... 25
23. Tax Rulings or Opinions.......................................... 26
24. Stock Compensation Plans......................................... 26
25. Dividend and Repurchase Restrictions on Stock.................... 27
26. Payment of Fees to Brokers....................................... 27
27. Effective Date................................................... 27
28. Amendment or Termination of the Plan............................. 27
29. Interpretation of the Plan....................................... 28
Appendix A - Plan of Merger between Interim Federal Stock Savings Bank No. 1
(formerly the Mutual Holding Company) and the Bank
Appendix B - Plan of Merger between Interim Federal Stock Savings Bank No. 2
(formerly Middle Tier Holding Company) and the Bank
Appendix C - Plan of Merger between Interim Federal Stock Savings Bank No. 3
(subsidiary of Holding Company) and the Bank
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1. INTRODUCTION
------------
For purposes of this section, all capitalized terms have the meaning
ascribed to them in Section 2.
On April 6, 1999, FloridaFirst Bank (the "Bank"), a federally chartered
mutual savings bank (formerly First Federal Bank) reorganized into the mutual
holding company form of organization and converted to a federal stock savings
bank (the "MHC Reorganization"). In connection with the MHC Reorganization,
FloridaFirst Bancorp, a federally chartered corporation ("Middle Tier Holding
Company"), sold 2,703,851 shares (or 47%) of its common stock in a subscription
offering at $10.00 per share and issued the remaining 53% to FloridaFirst
Bancorp MHC. A total of 5,752,875 shares of common stock of FloridaFirst Bancorp
were issued in connection with the MHC Reorganization. Upon completion of these
transactions, the Bank became the wholly owned subsidiary of FloridaFirst
Bancorp. As a result of stock repurchases, as of June 30, 2000, the MHC and the
Public Stockholders own an aggregate of 3,049,024 (57%) and 2,298,273 (43%) of
the outstanding Middle Tier Holding Company Common Stock, respectively. Pursuant
to this Plan, the Bank will form a new state stock holding company, FloridaFirst
Bancorp, Inc. ("Holding Company") and the existing shares of Middle Tier Holding
Company owned by Public Stockholders will be converted pursuant to an Exchange
Ratio into shares of Holding Company.
The Boards of Directors of the Mutual Holding Company, the Middle Tier
Holding Company, the Holding Company and the Bank believe that a conversion of
the Mutual Holding Company to stock form pursuant to this Plan of Conversion is
in the best interests of the Mutual Holding Company and the Bank, as well as the
best interests of their respective Members and Stockholders. The Boards of
Directors have determined that this Plan of Conversion equitably provides for
the interests of Members through the granting of subscription rights and the
establishment of a liquidation account. The Conversion and Merger will result in
the Bank being wholly owned by a state stock holding company which is owned by
public stockholders, which is a more common structure and form of ownership than
a mutual holding company. In addition, the Conversion and Merger will result in
the raising of additional capital for the Bank and the Holding Company and
should result in a more active and liquid market for the Holding Company Common
Stock than currently exists for Middle Tier Holding Company Common Stock.
Finally, the Conversion and Merger is designed to enable the Bank and Holding
Company to compete more effectively in a market which is consolidating.
1
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In the current transaction, (i) the Middle Tier Holding Company will
convert into an interim federal stock savings bank, which will merge with and
into the Bank, and (ii) the Mutual Holding Company will convert into an interim
federal stock savings bank and merge with and into the Bank, pursuant to which
Mutual Holding Company will cease to exist and the shares of Middle Tier Holding
Company Stock held by the Mutual Holding Company will be canceled. The Mutual
Holding Company will cease to exist and a liquidation account will be
established for the benefit of depositor Members as of specified dates. Stock of
the Middle Tier Holding Company held by Public Stockholders shall be
automatically converted into the right to receive shares of Holding Company
Common Stock based on an Exchange Ratio plus cash in lieu of any fractional
share interest.
In connection with the Conversion and Mergers, the Holding Company will
offer shares of Conversion Stock in the Offerings as provided herein. Shares of
Conversion Stock will be offered in a Subscription Offering in descending order
of priority to Eligible Account Holders, Tax-Qualified Employee Stock Benefit
Plans, Supplemental Eligible Account Holders and Other Members. Remaining shares
may be subscribed for by Public Stockholders in the Public Stockholders'
Offering. Any shares of Conversion Stock remaining unsold after the Subscription
Offering and the Public Stockholders' Offering will be offered for sale to the
public through a Community Offering and/or Syndicated Community Offering, as
determined by the Boards of Directors of the Holding Company and the Bank in
their sole discretion.
The Conversion is intended to provide support to the Bank's lending and
investment activities and thereby enhance the Bank's capabilities to serve the
borrowing and other financial needs of the communities it serves. The use of the
Holding Company will provide greater organizational flexibility and facilitate
possible acquisitions and diversification.
This Plan is subject to the approval of the OTS and also must be
approved by (1) at least a majority of the total number of votes eligible to be
cast by Voting Members of the Mutual Holding Company at the Special Meeting and
(2) holders of at least two-thirds of the shares of outstanding Middle Tier
Holding Company Common Stock at the Stockholders' Meeting. In addition, the
Primary Parties have conditioned the consummation of the Conversion and
Reorganization on the approval of the Plan by at least a majority of the votes
cast, in person or by proxy, by the Public Stockholders at the Stockholders'
Meeting.
After the Conversion, the Bank will continue to be regulated by the
OTS, as its chartering authority, and by the FDIC, which insures the Bank's
deposits. In addition, the Bank will continue to be a member of the Federal Home
Loan Bank System, and all insured savings deposits will continue to be insured
by the FDIC up to the maximum amount provided by law.
2
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2. DEFINITIONS
As used in this Plan, the terms set forth below have the following
meanings:
Actual Purchase Price means the price per share at which the Conversion
---------------------
Stock is ultimately sold by the Holding Company in the Offerings in accordance
with the terms hereof.
Affiliate means a Person who, directly or indirectly, through one or
---------
more intermediaries, controls or is controlled by or is under common control
with the Person specified.
Associate, when used to indicate a relationship with any Person, means
---------
(i) a corporation or organization (other than the Mutual Holding Company, the
Middle Tier Holding Company, the Bank, a majority-owned subsidiary of the Bank
or the Middle Tier Holding Company) 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, provided, however, that such term
shall not include any Tax-Qualified Employee Stock Benefit Plan of the Holding
Company or the Bank in which such Person has a substantial beneficial interest
or serves as a trustee or in a similar fiduciary capacity, and (iii) any
relative or spouse of such Person, or any relative of such spouse, who has the
same home as such Person or who is a director or officer of the Holding Company
or the Bank or any of the subsidiaries of the foregoing.
Bank means FloridaFirst Bank in its current stock form as a subsidiary
----
of the Middle Tier Holding Company or FloridaFirst Bank as a subsidiary of the
Holding Company following consummation of the Conversion and Reorganization, as
the context of the reference indicates.
Bank Common Stock means the common stock of the Bank, par value $0.10
-----------------
per share, which stock is not and will not be insured by the FDIC or any other
governmental authority.
Code means the Internal Revenue Code of 1986, as amended.
----
Community Offering means the offering for sale by the Holding Company
-------------------
of any shares of Conversion Stock not subscribed for in the Subscription
Offering to (i) Public Stockholders, (ii) natural persons residing in the Local
Community, and (iii) such other Persons within or without the State of Florida
as may be selected by the Holding Company and the Bank within their sole
discretion.
Control (including the terms "controlling," "controlled by," and "under
-------
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
3
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Conversion and Reorganization means (i) the conversion of the Mutual
-------------------------------
Holding Company to an interim federal stock savings bank and the subsequent
merger, pursuant to which the Mutual Holding Company will cease to exist, (ii)
the conversion of Middle Tier Holding Company to an interim federal stock
savings bank and merger into Bank, and (iii) the issuance of Conversion Stock by
the Holding Company in the Offerings as provided herein.
Conversion Stock means the Holding Company Common Stock to be issued
-----------------
and sold in the Offerings pursuant to the Plan of Conversion.
Deposit Account means savings and demand accounts, including passbook
---------------
accounts, money market deposit accounts and negotiable order of withdrawal
accounts, and certificates of deposit and other authorized accounts of the Bank
held by a Member.
Director, Officer and Employee means the terms as applied respectively
-------------------------------
to any person who is a director, officer or employee of the Mutual Holding
Company, the Bank, the Middle Tier Holding Company, the Holding Company or any
subsidiary thereof.
Eligible Account Holder means any Person holding a Qualifying Deposit
------------------------
on the Eligibility Record Date for purposes of determining subscription rights
and establishing subaccount balances in the liquidation account to be
established pursuant to the provision herein.
Eligibility Record Date means the date for determining Qualifying
-------------------------
Deposits of Eligible Account Holders and is the close of business on June 30,
1999.
Estimated Price Range means the range of the estimated aggregate pro
----------------------
forma market value of the Conversion Stock to be issued in the Offerings, as
determined by the Independent Appraiser in accordance with Section 4 hereof.
Exchange Ratio means the rate at which shares of Holding Company Common
--------------
Stock will be received by the Public Stockholders in exchange for their Middle
Tier Holding Company Common Stock. The exact rate shall be determined by the
Mutual Holding Company and the Holding Company in order to ensure that upon
consummation of the Conversion and Reorganization, the Public Stockholders will
own in the aggregate approximately the same percentage of the Holding Company
Common Stock to be outstanding upon completion of the Conversion and
Reorganization as the percentage of Middle Tier Holding Company Common Stock
owned by them in the aggregate on the Effective Date, but before giving effect
to (a) cash paid in lieu of any fractional interests of Middle Tier Holding
Company Common Stock and (b) any shares of Conversion Stock purchased by the
Public Stockholders in the Offerings or tax- qualified employee stock benefit
plans thereafter.
Exchange Shares means the shares of Holding Company Common Stock to be
----------------
issued to the Public Stockholders in connection with the Middle Tier Holding
Company Merger ("Merger No. 2") with and into the Bank.
4
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FDIC means the Federal Deposit Insurance Corporation or any successor
----
thereto.
Holding Company means Florida Bancorp, Inc., a corporation newly
----------------
organized under the laws of the State of Florida. At the completion of the
Reorganization, the Bank will become a wholly owned subsidiary of the Holding
Company.
Holding Company Common Stock means the Common Stock of the Holding
-------------------------------
Company, par value $.10 per share, which stock cannot and will not be insured by
the FDIC or any other governmental authority.
Middle Tier Holding Company means FloridaFirst Bancorp, a corporation
---------------------------
organized under the laws of the United States. Since the completion of the April
6, 1999 MHC Reorganization, the Middle Tier Holding Company has held all of the
outstanding capital stock of the Bank.
Middle Tier Holding Company Common Stock means the Common Stock of the
-----------------------------------------
Middle Tier Holding Company, par value $.10 per share, which stock cannot and
will not be insured by the FDIC or any other governmental authority.
Independent Appraiser means the independent investment banking or
----------------------
financial consulting firm retained by the Holding Company and the Bank to
prepare an appraisal of the estimated pro forma market value of the Conversion
Stock.
Initial Purchase Price means the price per share to be paid initially
------------------------
by Participants for shares of Conversion Stock subscribed for in the
Subscription Offering, Public Stockholders for shares of Conversion Stock
ordered in the Public Stockholders' Offering and by Persons for shares of
Conversion Stock ordered in the Community Offering and/or Syndicated Community
Offering.
Interim Bank No. 1 means an interim federal stock savings bank, which
------------------
will be formed as a result of the conversion of FloridaFirst Bancorp MHC into
the stock form of organization.
Interim Bank No. 2 means an interim federal stock savings bank, which
------------------
will be formed as a result of the conversion of Middle Tier Holding Company into
an interim federal stock savings bank.
Interim Bank No. 3 mean an interim federal stock savings bank wholly
------------------
owned by Holding Company, which will be merged with and into the Bank.
Local Community means all counties in which the Bank has its home
----------------
office or a branch office.
Member means any Person qualifying as a member of the Mutual Holding
------
Company in accordance with its mutual charter and bylaws and the laws of the
United States.
5
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Merger No. 1 means the merger of Interim No. 2 (formerly Middle Tier
------------
Holding Company) with and into the Bank.
Merger No. 2 means the merger of Interim No. 1 (formerly Mutual Holding
------------
Company) with and into the Bank.
Merger No. 3 means the merger of Interim No. 3, a subsidiary of Holding
------------
Company, with and into the Bank.
Mergers means the completion of Merger No. 1, Merger No. 2, and Merger
-------
No. 3.
Middle Tier Holding Company means FloridaFirst Bancorp, a Federal
-----------------------------
Chartered corporation which currently owns 100% of the Bank.
Mutual Holding Company means FloridaFirst Bancorp, MHC prior to its
-----------------------
conversion into an interim federal stock savings bank.
Offerings means the Subscription Offering, the Public Stockholders
---------
Offering, the Community Offering and the Syndicated Community Offering, if
applicable.
Officer means the president, senior vice president, vice-president,
-------
secretary, treasurer or principal financial officer, comptroller or principal
accounting officer and any other person performing similar functions with
respect to any organization whether incorporated or unincorporated.
Order Form means the form or forms provided by the Holding Company,
----------
containing all such terms and provisions as set forth herein, to a Participant
or other Person by which Conversion Stock may be ordered in the Offerings.
Other Member means a Voting Member who is not an Eligible Account
-------------
Holder or a Supplemental Eligible Account Holder.
OTS means the Office of Thrift Supervision or any successor thereto.
---
Participant means any Eligible Account Holder, Tax-Qualified Employee
-----------
Stock Benefit Plan, Supplemental Eligible Account Holder and Other Member.
Person means an individual, a corporation, a partnership, an
------
association, a joint stock company, a trust, an unincorporated organization or a
government or any political subdivision thereof.
Plan and Plan of Conversion means this Plan of Conversion and
-------------------------------
Reorganization and Plan of Merger as adopted by the Boards of Directors of the
Mutual Holding Company, the Middle Tier
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Holding Company and the Bank and any amendments hereto approved as provided
herein. The Board of Directors of Interim No. 1, Interim No. 2 and Interim No. 3
shall adopt the Plans of Merger included as Appendices hereto as soon as
practicable following their organization.
Primary Parties means the Middle Tier Holding Company, Mutual Holding
---------------
Company, the Bank and the Holding Company.
Prospectus means the one or more documents to be used in offering the
----------
Conversion Stock in the Offerings.
Public Stockholders means those Persons who own shares of Middle Tier
--------------------
Holding Company Common Stock, excluding the Mutual Holding Company, as of the
Stockholder Voting Record Date.
Qualifying Deposit means the aggregate balance of all Deposit Accounts
-------------------
in the Bank of (i) an Eligible Account Holder at the close of business on the
Eligibility Record Date, provided such aggregate balance is not less than $50,
and (ii) a Supplemental Eligible Account Holder at the close of business on the
Supplemental Eligibility Record Date, provided such aggregate balance is not
less than $50.
Resident means any person who, on the date designated for that category
--------
of subscriber in the Plan, maintained a bona fide residence within the Local
Community and has manifested an intent to remain within the Local Community for
a period of time. The designated dates for Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members are the Eligibility
Record Date, the Supplemental Eligibility Record Date and the Voting Record
Date, respectively. To the extent the person is a corporation or other business
entity, the principal place of business or headquarters must be within the Local
Community in order to qualify as a Resident. To the extent the person is a
personal benefit plan, the circumstances of the beneficiary shall apply with
respect to this definition. In the case of all other benefit plans,
circumstances of the trustee shall be examined for purposes of this definition.
The Bank may utilize deposit or loan records or such other evidence provided to
it to make a determination as to whether a person is a bona fide resident of the
Local Community. Subscribers in the Community Offering who are natural persons
also will have a purchase preference if they were residents of the Local
Community on the date of the Prospectus. In all cases, however, such
determination shall be in the sole discretion of the Bank and Holding Company.
SEC means the Securities and Exchange Commission.
---
Special Meeting means the Special Meeting of Members of the Mutual
----------------
Holding Company called for the purpose of submitting this Plan to the Members
for their approval, including any adjournments of such meeting.
Stockholders means those Persons who own shares of Holding Company
------------
Common Stock.
7
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Stockholders' Meeting means the annual or special meeting of
-----------------------
Stockholders of Middle Tier Holding Company called for the purpose of submitting
this Plan to the Stockholders for their approval, including any adjournments of
such meeting.
Stockholder Voting Record Date means the date for determining the
---------------------------------
Public Stockholders of the Middle Tier Holding Company eligible to vote at the
Stockholders' Meeting.
Subscription Offering means the offering of the Conversion Stock to
----------------------
Participants.
Subscription Rights means nontransferable rights to subscribe for
--------------------
Conversion Stock granted to Participants pursuant to the terms of this Plan.
Supplemental Eligible Account Holder means any Person holding a
---------------------------------------
Qualifying Deposit at the close of business on the Supplemental Eligibility
Record Date.
Supplemental Eligibility Record Date, if applicable, means the date for
------------------------------------
determining Qualifying Deposits of Supplemental Eligible Account Holders and
shall be required if the Eligibility Record Date is more than 15 months prior to
the date of the latest amendment to the Application for Conversion filed by the
Mutual Holding Company prior to approval of such application by the OTS. If
applicable, the Supplemental Eligibility Record Date shall be the last day of
the calendar quarter preceding OTS approval of the Application for Conversion
submitted by the Mutual Holding Company pursuant to this Plan of Conversion.
Syndicated Community Offering means the offering for sale by a
-------------------------------
syndicate of broker- dealers to the general public of shares of Conversion Stock
not purchased in the Subscription Offering and the Community Offering.
Tax-Qualified Employee Stock Benefit Plan means any defined benefit
--------------------------------------------
plan or defined contribution plan, such as an employee stock ownership plan,
stock bonus plan, profit-sharing plan or other plan, which is established for
the benefit of the employees of the Holding Company and the Bank and which, with
its related trust, meets the requirements to be "qualified" under Section 401 of
the Code as from time to time in effect. A "Non-Tax-Qualified Employee Stock
Benefit Plan" is any defined benefit plan or defined contribution stock benefit
plan which is not so qualified.
Voting Member means a Person who at the close of business on the Voting
-------------
Record Date is entitled to vote as a Member of the Mutual Holding Company in
accordance with its mutual charter and bylaws.
Voting Record Date means the date or dates for determining the
--------------------
eligibility of Members to vote at the Special Meeting.
8
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3. GENERAL PROCEDURE FOR CONVERSION AND REORGANIZATION
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A. An application for the Conversion and Reorganization, including the
Plan and all other requisite material (the "Application for Conversion"), shall
be submitted to the OTS for approval. The Mutual Holding Company, the Holding
Company, the Middle Tier Holding Company and the Bank also will cause notice of
the adoption of the Plan by the Boards of Directors of the Mutual Holding
Company, the Middle Tier Holding Company and the Bank to be given by publication
in a newspaper having general circulation in each community in which an office
of the Bank is located; and will cause copies of the Plan to be made available
at each office of the Mutual Holding Company, the Middle Tier Holding Company,
and the Bank for inspection by Members and Stockholders. The Mutual Holding
Company, the Middle Tier Holding Company, and the Bank will cause to be
published, in accordance with the requirements of applicable regulations of the
OTS, a notice of the filing with the OTS of an application to convert the Mutual
Holding Company from mutual to stock form.
B. Promptly following receipt of requisite approval of the OTS, this
Plan will be submitted to the Members for their consideration and approval at
the Special Meeting. The Mutual Holding Company may, at its option, mail to all
Members as of the Voting Record Date, at their last known address appearing on
the records of the Mutual Holding Company and the Bank, a proxy statement in
either long or summary form describing the Plan which will be submitted to a
vote of the Members at the Special Meeting. The Holding Company also shall mail
to all such Members (as well as other Participants) either a Prospectus and
Order Form for the purchase of Conversion Stock or a letter informing them of
their right to receive a Prospectus and Order Form and a postage prepaid card to
request such materials, subject to the provisions herein. The Plan must be
approved by the affirmative vote of at least a majority of the total number of
votes eligible to be cast by Voting Members at the Special Meeting.
C. Subscription Rights to purchase shares of Conversion Stock will be
issued without payment therefor to Eligible Account Holders, Tax-Qualified
Employee Plans, Supplemental Eligible Account Holders and Other Members.
D. The Middle Tier Holding Company shall file preliminary proxy
materials with the OTS in order to seek the approval of the Plan by its
Stockholders. Promptly following clearance of such proxy materials and the
receipt of any other requisite approval of the OTS, the Middle Tier Holding
Company will mail definitive proxy materials to all Stockholders as of the
Stockholder Voting Record Date, at their last known address appearing on the
records of the Middle Tier Holding Company, for their consideration and approval
of this Plan at the Stockholders' Meeting. The Plan must be approved by the
holders of at least two-thirds of the outstanding shares of Middle Tier Holding
Company Common Stock as of the Stockholder Voting
9
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Record Date. In addition, the Primary Parties have conditioned the consummation
of the Conversion and Reorganization on the approval of the Plan by at least a
majority of the votes cast, in person or by proxy, by the Public Stockholders as
of the Stockholder Voting Record Date at the Stockholders' Meeting.
E. The Mutual Holding Company shall apply to convert to a federal
interim stock savings bank.
F. The Middle Tier Holding Company shall apply to convert to a federal
interim stock savings bank.
G. The Holding Company shall file a Registration Statement with the SEC
to register the Holding Company Common Stock to be issued in the Conversion and
Merger under the Securities Act of 1933, as amended, and shall register such
Holding Company Common Stock under any applicable state securities laws. Upon
registration and after the receipt of all required regulatory approvals, the
Conversion Stock shall be first offered for sale in a Subscription Offering to
Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans,
Supplemental Eligible Account Holders and Other Members. It is anticipated that
any shares of Conversion Stock remaining unsold after the Subscription Offering
will be sold first through the Public Stockholders' Offering and then through a
Community Offering and/or a Syndicated Community Offering. The purchase price
per share for the Conversion Stock shall be a uniform price determined in
accordance with the provisions herein. The Holding Company shall contribute to
the Bank an amount of the net proceeds received by the Holding Company from the
sale of Conversion Stock as shall be determined by the Boards of Directors of
the Holding Company and the Bank and as shall be approved by the OTS.
H. The Effective Date of the Conversion and Reorganization shall be the
date set forth in Section 27 hereof. Upon the effective date, the following
transactions shall occur:
(i) The Mutual Holding Company will convert into an interim
federal stock savings bank to be known as Interim Bank No. 1.
(ii) Middle Tier Holding Company will adopt an interim
federal stock savings bank charter to be known as Interim Bank No. 2;
Interim Bank No. 2 will then merge with and into the Bank ("Merger No.
1"), with the Bank as the surviving entity.
(iii) Immediately following Merger No. 1, Interim Bank No. 1,
formerly the Mutual Holding Company, will merge with and into the Bank
with the Bank as the surviving entity ("Merger No. 2"). The shares of
Middle Tier Holding Company Common Stock previously held by the Mutual
Holding Company (now Interim Bank No. 1) will be canceled. Eligible
members of the Mutual Holding Company as of certain specified dates
will be granted interests in a liquidation account to be established
by the Bank. The amount in the liquidation account is the amount of
dividends waived by the Mutual Holding
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Company plus the greater or (a) 100% of retained earnings as of
September 30, 1998 (the date of the latest statement of financial
condition contained in the final offering circular utilized in the
Bank's initial stock offering), or (b) 57% of Middle Tier Holding
Company's total shareholders' equity as reflected in its latest
statement of financial condition.
(iv) Holding Company will form an interim corporation
("Interim Bank No. 3"), a new, wholly owned first-tier subsidiary with
an interim federal stock savings bank charter.
(v) Immediately following Merger No. 2, Interim Bank No. 3
will merge with an into the Bank, with the Bank as the surviving
entity ("Merger No. 3"). As a result of Merger No. 3, Bank stock
deemed held by Public Stockholders will be converted into Holding
Company Common Stock based upon the Exchange Ratio which is designed
to ensure that the same Public Stockholders will own, approximately
the same percentage of Holding Company Common Stock as the percentage
of Middle Tier Holding Company Common Stock owned by them immediately
prior to the Conversion and Reorganization before giving effect to (a)
cash paid in lieu of fractional shares and (b) any shares of Holding
Company stock purchased by Public Stockholders in the Offering.
(vi) The Holding Company shall sell the Conversion Stock in
the Offerings, as provided herein.
I. The Primary parties may retain and pay for the services of financial
and other advisors and investment bankers to assist in connection with any or
all aspects of the Conversion and Reorganization, including in connection with
the Offerings, the payment of fees to brokers and investment bankers for
assisting Persons in completing and/or submitting Order Forms. All fees,
expenses, retainers and similar items shall be reasonable.
4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF CONVERSION
-------------------------------------------------------
STOCK
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A. The aggregate price at which shares of Conversion Stock shall be
sold in the Offerings shall be based on a pro forma valuation of the aggregate
market value of the Conversion Stock prepared by the Independent Appraiser. The
valuation shall be based on financial information relating to the Primary
Parties, market, financial and economic conditions, a comparison of the Primary
Parties with selected publicly held financial institutions and holding companies
such other factors as the Independent Appraiser may deem to be important. The
valuation shall be stated in terms of an Estimated Price Range, the maximum of
which shall generally be no more than 15% above the average of the minimum and
maximum of such price range and the minimum of which shall generally be no more
than 15% below such average. The valuation shall be updated during the
Conversion as market and financial conditions warrant and as may be required by
the OTS.
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B. Based upon the independent valuation, the Boards of Directors of the
Primary Parties shall fix the Initial Purchase Price and the number (or range)
of shares of Conversion Stock ("Offering Range") to be offered in the Offerings.
The Actual Purchase Price and the total number of shares of Conversion Stock to
be issued in the Offerings shall be determined by the Boards of Directors of the
Primary Parties upon conclusion of the Offerings in consultation with the
Independent Appraiser and any financial advisor or investment banker retained by
the Primary Parties in connection therewith.
C. Subject to the approval of the OTS, the Estimated Price Range may be
increased or decreased prior to completion of the Conversion to reflect changes
in market, financial and economic conditions since the commencement of the
Offerings, and under such circumstances the Primary Parties may correspondingly
increase or decrease the total number of shares of Conversion Stock to be issued
in the Conversion to reflect any such change. Notwithstanding anything to the
contrary contained in this Plan, no resolicitation of subscribers shall be
required and subscribers shall not be permitted to modify or cancel their
subscriptions unless the aggregate funds received from the offer of the
Conversion Stock in the Conversion are less than the minimum or (excluding
purchases, if any, by the Holding Company's and the Bank's Tax- Qualified
Employee Stock Benefit Plans) more than 15% above the maximum of the Estimated
Price Range set forth in the Prospectus. In the event of an increase in the
total number of shares offered in the Conversion due to an increase in the
Estimated Price Range, the priority of share allocation shall be as set forth in
this Plan, provided, however, that such priority will have no effect whatsoever
on the ability of the Tax-Qualified Employee Stock Benefit Plans to purchase
additional shares pursuant to Section 4.D.
D. (i) In the event that Tax-Qualified Employee Stock Benefit Plans are
unable to purchase the number of shares subscribed for by such Tax-Qualified
Employee Stock Benefit Plans due to an oversubscription for shares of Conversion
Stock pursuant to Section 5 hereof, Tax- Qualified Employee Stock Benefit Plans
may purchase from the Holding Company, and the Holding Company may sell to the
Tax-Qualified Employee Stock Benefit Plans, such additional shares ("Additional
Shares") of Holding Company Common Stock necessary to fill the subscriptions of
the Tax-Qualified Employee Stock Benefit Plans, provided that such Additional
Shares may not exceed 8% of the total number of shares of Conversion Stock sold
in the Conversion. The sale of Additional Shares, if necessary, will occur
contemporaneously with the sale of the Conversion Stock. The sale of Additional
Shares to Tax-Qualified Employee Stock Benefit Plans by the Holding Company is
conditioned upon receipt by the Holding Company of a letter from the Independent
Appraiser to the effect that such sale would not have a material effect on the
Conversion and Reorganization or the Actual Purchase Price and the approval of
the OTS. The ability of the Tax-Qualified Employee Stock Benefit Plans to
purchase up to an additional 8% of the total number of shares of Conversion
Stock sold in the Conversion shall not be affected or limited in any manner by
the priorities or purchase limitations otherwise set forth in this Plan of
Conversion.
12
<PAGE>
(ii) Notwithstanding anything to the contrary contained in this Plan,
if the final valuation of the Conversion Stock exceeds the maximum of the
Estimated Price Range, up to 8% of the total number of shares of Conversion
Stock sold in the Conversion may be sold to Tax- Qualified Stock Benefit Plans
prior to filling any other orders for Conversion Stock from such shares in
excess of the maximum of the Estimated Price Range.
5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS
-----------------------------------------------
(FIRST PRIORITY)
----------------
A. Each Eligible Account Holder shall receive, without payment,
nontransferable Subscription Rights to purchase, subject to the further
limitations of Section 10 hereof, up to the greater of (i) the maximum purchase
limitation set forth in Section 10 hereof, (ii) one-tenth of 1% of the total
offering of shares of Conversion Stock in the Subscription Offering, and (iii)
15 times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Conversion Stock offered in the
Subscription Offering by a fraction, of which the numerator is the amount of the
Qualifying Deposit of the Eligible Account Holder and the denominator is the
total amount of all Qualifying Deposits of all Eligible Account Holders, subject
to Section 14 hereof.
B. In the event of an oversubscription for shares of Conversion Stock
pursuant to the provisions herein, available shares shall be allocated among
subscribing Eligible Account Holders so as to permit each such Eligible Account
Holder, to the extent possible, to purchase a number of shares which will make
his or her total allocation equal to the lesser of the number of shares
subscribed for or 100 shares. Any available shares remaining after each such
subscribing Eligible Account Holder has been allocated the lesser of the number
of shares subscribed for or 100 shares shall be allocated among the subscribing
Eligible Account Holders in the proportion which the Qualifying Deposit of each
such subscribing Eligible Account Holder bears to the total Qualifying Deposits
of all such subscribing Eligible Account Holders whose orders are unfilled,
provided that no fractional shares shall be issued. Subscription Rights of
Eligible Account Holders who are also Directors or Officers and their Associates
shall be subordinated to those of other Eligible Account Holders to the extent
that they are attributable to increased deposits during the one-year period
preceding the Eligibility Record Date.
6. SUBSCRIPTION RIGHTS OF THE TAX-QUALIFIED EMPLOYEE STOCK
-------------------------------------------------------
BENEFIT PLANS (SECOND PRIORITY)
-------------------------------
Notwithstanding the purchase limitations discussed below, Tax-Qualified
Employee Stock Benefit Plans of the Holding Company and the Bank shall receive,
without payment, Subscription Rights to purchase in the aggregate up to 10% of
the Conversion Stock, including first priority to purchase any shares of
Conversion Stock to be issued in the Conversion and Reorganization as a result
of an increase in the Estimated Price Range after commencement of the
Subscription Offering and prior to completion of the Conversion and
Reorganization. Consistent with applicable laws, regulations, policies and
practices of the OTS, Tax-Qualified Employee Stock
13
<PAGE>
Benefit Plans may use funds contributed by the Holding Company or the Bank
and/or borrowed from an independent third party to exercise such Subscription
Rights, and the Holding Company and the Bank may make scheduled discretionary
contributions thereto, provided that such contributions do not cause the Holding
Company or the Bank to fail to meet any applicable regulatory capital
requirement.
7. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT
----------------------------------------------------
HOLDERS (THIRD PRIORITY)
------------------------
A. In the event that the Eligibility Record Date is more than 15 months
prior to the date of the latest amendment to the Application for Conversion
filed prior to OTS approval, then, and only in that event, a Supplemental
Eligibility Record Date shall be set and each Supplemental Eligible Account
Holder shall, subject to the further limitations of Section 10 hereof, receive,
without payment, Subscription Rights to purchase up to the greater of (i) the
maximum purchase limitation set forth in Section 10 hereof, (ii) one-tenth of 1%
of the total offering of shares of Conversion Stock in the Subscription
Offering, and (iii) 15 times the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of Conversion Stock offered
in the Subscription Offering by a fraction, of which the numerator is the amount
of the Qualifying Deposits of the Supplemental Eligible Account Holder and the
denominator is the total amount of all Qualifying Deposits of all Supplemental
Eligible Account Holders, subject to Section 14 hereof and the availability of
shares of Conversion Stock for purchase after taking into account the shares of
Conversion Stock purchased by Eligible Account Holders and Tax-Qualified
Employee Stock Benefit Plans though the exercise of Subscription Rights under
Sections 5 and 6 hereof.
B. In the event of an oversubscription for shares of Conversion Stock,
available shares shall be allocated among subscribing Supplemental Eligible
Account Holders so as to permit each such Supplemental Eligible Account Holder,
to the extent possible, to purchase a number of shares sufficient to make his
total allocation (including the number of shares, if any, allocated in
accordance with Section 5.A) equal to the lesser of the number of shares
subscribed for or 100 shares. Any remaining available shares shall be allocated
among subscribing Supplemental Eligible Account Holders in the proportion that
the Qualifying Deposits of each bears to the total amount of the Qualifying
Deposits of all such subscribing Supplemental Eligible Account Holders whose
orders are unfilled, provided that no fractional shares shall be issued.
8. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)
------------------------------------------------------
A. Each Other Member shall, subject to the further limitations of
Section 10 hereof, receive, without payment, Subscription Rights to purchase up
to the greater of (i) the maximum purchase limitation set forth in Section 10
hereof and (ii) one-tenth of 1% of the total offering of shares of Conversion
Stock in the Subscription Offering, in each case subject to Section 13 hereof
and the availability of shares of Conversion Stock for purchase after taking
into account the shares of Conversion Stock purchased by Eligible Account
Holders, Tax-Qualified Employee Stock
14
<PAGE>
Benefit Plans, and Supplemental Eligible Account Holders, if any, through the
exercise of Subscription Rights under Sections 5, 6 and 7 hereof.
B. If, pursuant to this Section, Other Members subscribe for a number
of shares of Conversion Stock in excess of the total number of shares of
Conversion Stock remaining, available shares shall be allocated among
subscribing Other Members so as to permit each such Other Members, to the extent
possible, to purchase a number of shares sufficient to make his total allocation
equal to the lesser of the number of shares subscribed or 100 shares. Any
remaining available shares shall be allocated among subscribing Other Members on
a pro rata basis in the same proportion as each such Other Member's subscription
bears to the total subscriptions of all such subscribing Other Members whose
orders are unfilled, provided that no fractional shares shall be issued.
9. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING AND
-----------------------------------------------------
OTHER OFFERINGS
---------------
A. If less than the total number of shares of Conversion Stock are sold
in the Subscription Offering, it is anticipated that all remaining shares of
Conversion Stock shall, if practicable, be sold in a Community Offering and/or a
Syndicated Community Offering. Subject to the requirements set forth herein, the
manner in which the Conversion Stock is sold in the Community Offering and/or
the Syndicated Community Offering shall have as the objective the achievement of
a wide distribution of such stock, subject to the right of the Primary Parties,
in their absolute discretion, to accept or reject in whole or in part all orders
in the Community Offering and/or Syndicated Community Offering.
B. In the event of a Community Offering, all shares of Conversion Stock
which are not subscribed for in the Subscription Offering shall be offered for
sale by means of a direct community marketing program, which may provide for the
use of brokers, dealers or investment banking firms experienced in the sale of
financial institution securities. Any available shares in excess of those not
subscribed for in the Subscription Offering will be available for purchase by
members of the general public to whom a Prospectus is delivered by the Holding
Company or on its behalf, with preference first given to Public Stockholders as
of the Stockholder Voting Record Date and then to natural persons who are
Residents of the Local Community ("Preferred Subscribers").
C. A Prospectus and Order Form shall be furnished to such Persons as
the Primary Parties may select in connection with the Community Offering, and
each order for Conversion Stock in the Community Offering shall be subject to
the absolute right of the Primary Parties to accept or reject any such order in
whole or in part either at the time of receipt of an order or as soon as
practicable following completion of the Community Offering. Available shares
will be allocated first to each Preferred Subscriber whose order is accepted in
an amount equal to the lesser of 100 shares or the number of shares subscribed
for by each such Preferred Subscriber, if possible. Thereafter, unallocated
shares shall be allocated among the Preferred Subscribers whose
15
<PAGE>
accepted orders remain unsatisfied in an equitable manner as determined by the
Board of Directors. If there are any shares remaining after all accepted orders
by Preferred Subscribers have been satisfied, any remaining shares shall be
allocated to other members of the general public who place orders in the
Community Offering, applying the same allocation described above for Preferred
Subscribers.
D. The maximum amount of Conversion Stock that any Person may purchase
in the Community Offering shall, subject to the further limitations of Section
10 hereof, not exceed $300,000 provided, however, that this amount may be
decreased or increased to up to 5% of the total offering of shares in the
Conversion and Reorganization, subject to any required regulatory approval but
without the further approval of Members of the Mutual Holding Company or the
Stockholders of the Bank, subject to the preferences set forth in Section 9.B
and 9.C of this Plan. The Primary Parties may commence the Community Offering
concurrently with, at any time during, or as soon as practicable after the end
of, the Subscription Offering and Public Stockholders' Offering, and the
Community Offering must be completed within 45 days after the completion of the
Subscription Offering and Public Stockholders' Offering, unless extended by the
Primary Parties with any required regulatory approval.
E. Subject to such terms, conditions and procedures as may be
determined by the Primary Parties, all shares of Conversion Stock not subscribed
for in the Subscription Offering and Public Stockholders Offering or ordered in
the Community Offering may be sold by a syndicate of broker-dealers to the
general pubic in a Syndicated Community Offering. Each order for Conversion
Stock in the Syndicated Community Offering shall be subject to the absolute
right of the Primary Parties to accept or reject any such order in whole or in
part either at the time of receipt of an order or as soon as practicable after
completion of the Syndicated Community Offering. The amount of Conversion Stock
that any Person may purchase in the Syndicated Community Offering shall, subject
to the further limitations of Section 10 hereof, not exceed $300,000 provided,
however, that this amount may be decreased or increased to up to 5% of the total
offering of shares in the Conversion and Reorganization, subject to any required
regulatory approval but without the further approval of Members of the Mutual
Holding Company or the Stockholders of the Bank. The Primary Parties may
commence the Syndicated Community Offering concurrently with, at any time
during, or as soon as practicable after the end of, the Subscription Offering,
the Public Stockholders' Offering and/or Community Offering. The Syndicated
Community Offering must be completed within 45 days after the completion of the
Subscription Offering, unless extended by the Primary Parties with any required
regulatory approval.
F. If for any reason a Syndicated Community Offering of shares of
Conversion Stock not sold in the Subscription Offering and the Community
Offering cannot be effected, or in the event that any insignificant residue of
shares of Conversion Stock is not sold in the Subscription Offering, Public
Stockholders' Offering, Community Offering or Syndicated Community Offering, the
Primary Parties shall use their best efforts to obtain other purchasers for such
shares in such manner and upon such conditions as may be satisfactory to the
OTS.
16
<PAGE>
10. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF CONVERSION
--------------------------------------------------------
STOCK
-----
The following limitations shall apply to all purchases of Conversion
Stock:
A. The number of shares of Conversion Stock which may be purchased by
any Person (or persons through a single account), in the First Priority, Third
Priority and Fourth Priority in the Subscription Offering shall not exceed such
number of shares of Conversion Stock that when combined with Exchange Shares
received shall equal $300,000 of Holding Company Common Stock, except for
Tax-Qualified Employee Stock Benefit Plans, which in the aggregate may subscribe
for up to 8% of the Conversion Stock.
B. The number of shares of Conversion Stock which may be purchased by
any Person in the Public Stockholders, the Community and/or the Syndicated
Community Offerings shall not exceed such number of shares of Conversion Stock
that when combined with Exchange Shares received shall equal $300,000 of Holding
Company Common Stock.
C. Except for the Tax-Qualified Employee Stock Benefit Plans, the
maximum number of shares of Conversion Stock which may be purchased in all of
the combined categories of the Conversion and Reorganization by any Person (or
persons through a single account) together with any Associate or group of
persons Acting in Concert shall not exceed such number of shares of Conversion
Stock that when combined with Exchange Shares shall equal $500,000 of Holding
Company Common Stock.
D. The number of shares of Conversion Stock which Directors and
Officers and their Associates may purchase in the aggregate in the Offering
shall not exceed 25% of the total number of shares of Conversion Stock sold in
the Offerings, including any shares which may be issued in the event of an
increase in the maximum of the Estimated Price Range to reflect changes in
market, financial and economic conditions after commencement of the Subscription
Offering and prior to completion of the Offerings.
E. No Person may purchase fewer than 25 shares of Conversion Stock in
the Offerings, to the extent such shares are available; provided, however, that
if the Actual Purchase Price is greater than $20.00 per share, such minimum
number of shares shall be adjusted so that the aggregate Actual Purchase Price
for such minimum shares will not exceed $500.00.
F. For purposes of the foregoing limitations and the determination of
Subscription Rights, (i) Directors, Officers and Employees shall not be deemed
to be Associates or a group acting in concert solely as a result of their
capacities as such, (ii) shares purchased by Tax- Qualified Employee Stock
Benefit Plans shall not be attributable to the individual trustees or
beneficiaries of any such plan for purposes of determining compliance with the
limitations set forth in this Section, (iii) shares purchased by Tax-Qualified
Employee Stock Benefit Plans shall not be attributable to the individual
trustees or beneficiaries of any such plan for purposes of determining
compliance with the limitation set forth in this Section, and (iv) Exchange
Shares shall be valued at the Actual Purchase Price.
17
<PAGE>
G. Subject to any required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of the Members of
the Mutual Holding Company or the Stockholders of the Bank, the Primary Parties
may increase or decrease the individual or overall purchase limitations set
forth herein to a percentage which does not exceed 5% of the total shares of
Holding Company Common Stock issued in the Conversion and Reorganization whether
prior to, during or after the Subscription Offering, Community Offering and/or
Syndicated Community Offering. Notwithstanding the foregoing, the maximum
purchase limitation may be increased up to 9.99% provided that orders for
exceeding 5% of the shares being offered shall not exceed, in the aggregate, 10%
of the total offering. In the event that the individual or overall purchase
limitations are increased after commencement of the Subscription Offering or any
other offering, the Primary Parties shall permit any Person who subscribed for
the maximum number of shares of Conversion Stock (plus certain large subscribers
as determined in the sole discretion of the Primary Parties) to purchase an
additional number of shares, so that such Person shall be permitted to subscribe
for the then maximum number of shares permitted to be subscribed for by such
Person, subject to the rights and preferences of any Person who has priority
Subscription Rights. In the event that the individual or overall purchase
limitations are decreased after commencement of the Subscription Offering or any
other offering, the orders of any Person who subscribed for more than the new
purchase limitation shall be decreased by the minimum amount necessary so that
such Person shall be in compliance with the then maximum number of shares
permitted to be subscribed for by such Person.
H. The Primary Parties shall have the right to take all such action as
they may, in their sole discretion, deem necessary, appropriate or advisable in
order to monitor and enforce the terms, conditions, limitations and restrictions
contained in this Section and elsewhere in this Plan and the terms, conditions
and representations contained in the Order Form, including, but not limited to,
the absolute right (subject only to any necessary regulatory approvals or
concurrences) to reject, limit or revoke acceptance of any subscription or order
and to delay, terminate or refuse to consummate any sale of Conversion Stock
which they believe might violate, or is designed to, or is any part of a plan
to, evade or circumvent such terms, conditions, limitations, restrictions and
representations. Any such action shall be final, conclusive and binding on all
persons, and the Primary Parties and their respective Boards shall be free from
any liability to any Person on account of any such action.
I. Notwithstanding anything to the contrary contained in this Plan,
except as may otherwise be required by the OTS, the Public Stockholders will not
have to sell any Mid-Tier Common Stock or be limited in receiving Exchange
Shares even if their ownership of Mid-Tier Common Stock when converted into
Exchange Shares pursuant to the MHC Merger would exceed an applicable purchase
limitation; however, they might be precluded from purchasing any Conversion
Stock in the Offerings.
18
<PAGE>
11. TIMING OF SUBSCRIPTION OFFERING; MANNER OF EXERCISING
-----------------------------------------------------
SUBSCRIPTION RIGHTS AND ORDER FORMS
-----------------------------------
A. The Subscription Offering may be commenced concurrently with or at
any time after the mailing to Voting Members of the Mutual Holding Company and
Stockholders of the Bank of the proxy statement(s) to be used in connection with
the Special Meeting and the Stockholders' Meeting. The Subscription Offering may
be closed before the Special Meeting and the Stockholders' Meeting, provided
that the offer and sale of the Conversion Stock shall be conditioned upon the
approval of the Plan by the Voting Members of the Mutual Holding Company and the
Stockholders of the Bank at the Special Meeting and the Stockholders' Meeting,
respectively.
B. The exact timing of the commencement of the Subscription Offering
shall be determined by the Primary Parties in consultation with the Independent
Appraiser and any financial or advisory or investment banking firm retained by
them in connection with the Conversion. The Primary Parties may consider a
number of factors, including, but not limited to, their current and projected
future earnings, local and national economic conditions, and the prevailing
market for stocks in general and stocks of financial institutions in particular.
The Primary Parties shall have the right to withdraw, terminate, suspend, delay,
revoke or modify any such Subscription Offering, at any time and from time to
time, as they in their sole discretion may determine, without liability to any
Person, subject to compliance with applicable securities laws and any necessary
regulatory approval or concurrence.
C. The Primary Parties shall, promptly after the SEC has declared the
Registration Statement, which includes the Prospectus, effective and all
required regulatory approvals have been obtained, distribute or make available
the Prospectus, together with Order Forms for the purchase of Conversion Stock,
to all Participants for the purpose of enabling them to exercise their
respective Subscription Rights, subject to Section 14 hereof. The Primary
Parties may elect to mail a Prospectus and Order Form only to those Participants
who request such materials by returning a postage-paid card to the Primary
Parties by a date specified in the letter informing them of their Subscription
Rights. Under such circumstances, the Subscription Offering shall not be closed
until the expiration of 30 days after the mailing by the Primary Parties of the
postage- paid card to Participants.
D. A single Order Form for all Deposit Accounts maintained with the
Bank by an Eligible Account Holder, Supplemental Eligible Account Holder and any
Other Member may be furnished, irrespective of the number of Deposit Accounts
maintained with the Bank on the Eligibility Record Date and Supplemental
Eligibility Record Date and the Voting Record Date, respectively.
E. The recipient of an Order Form shall have no less than 20 days and
no more than 45 days from the date of mailing of the Order Form (with the exact
termination date to be set forth on the Order Form) to properly complete and
execute the Order Form and deliver it to the Primary
19
<PAGE>
Parties. The Primary Parties may extend such period by such amount of time as
they determine is appropriate. Failure of any Participant to deliver a properly
executed Order Form to the Primary Parties, along with payment (or authorization
for payment by withdrawal) for the shares of Conversion Stock subscribed for,
within time limits prescribed, shall be deemed a waiver and release by such
person of any rights to subscribe for shares of Conversion Stock. Each
Participant shall be required to confirm to the Primary Parties by executing an
Order Form that such Person has fully complied with all of the terms,
conditions, limitations and restrictions in the Plan.
F. The Primary Parties shall have the absolute right, in their sole
discretion and without liability to any Participant or other Person, to reject
any Order Form, including, but not limited to, any Order Form that is (i)
improperly completed or executed; (ii) not timely received; (iii) not
accompanied by the proper payment (or authorization of withdrawal for payment)
or, in the case of institutional investors in the Community Offering, not
accompanied by an irrevocable order together with a legally binding commitment
to pay the full amount of the purchase price prior to 48 hours before the
completion of the Offerings; or (iv) submitted by a Person whose representations
the Primary Parties believe to be false or who they otherwise believe, either
alone, or acting in concert with others, is violating, evading or circumventing,
or intends to violate, evade or circumvent, the terms and conditions of the
Plan. The Primary Parties may, but will not be required to, waive any
irregularity on any Order Form or may require the submission of corrected Order
Forms or the remittance of full payment for shares of Conversion Stock by such
date as they may specify. The interpretation of the Primary Parties of the terms
and conditions of the Order Forms shall be final and conclusive.
12. PAYMENT FOR CONVERSION STOCK
----------------------------
A. Payment for shares of Conversion Stock subscribed for by
Participants in the Subscription Offering and payment for shares of Conversion
Stock ordered by Persons in the Stockholders' Offering, Community Offering and
Syndicated Community Offering (if applicable) shall be equal to the Initial
Purchase Price multiplied by the number of shares which are being subscribed for
or ordered, respectively. Such payment may be made in cash, if delivered in
person, or by check or money order at the time the Order Form is delivered to
the Primary Parties. In addition, the Primary Parties may elect to provide
Participants and/or other Persons who have a Deposit Account with the Bank the
opportunity to pay for shares of Conversion Stock by authorizing the Bank to
withdraw from such Deposit Account an amount equal to the aggregate Purchase
Price of such shares. If the Actual Purchase Price is less than the Initial
Purchase Price, the Primary Parties shall refund the difference to all
Participants and other Persons, unless the Primary Parties choose to provide
Participants and other Persons the opportunity on the Order Form to elect to
have such difference applied to the purchase of additional whole shares of
Conversion Stock. If the Actual Purchase Price is more than the Initial Purchase
Price, the Primary Parties shall reduce the number of shares of Conversion Stock
ordered by Participants and other Persons and refund any remaining amount which
is attributable to a fractional share interest, unless the Primary Parties
choose to provide Participants and other Persons the opportunity to increase the
amount of funds submitted to pay for their shares of Conversion Stock.
20
<PAGE>
B. Consistent with applicable laws and regulations and policies and
practices of the OTS, payment for shares of Conversion Stock subscribed for by
Tax-Qualified Employee Stock Benefit Plans may be made with funds contributed by
the Holding Company and/or funds obtained pursuant to a loan from an independent
third party pursuant to a loan commitment which is in force from the time that
any such plan submits an Order Form until the closing of the transactions
contemplated hereby.
C. If a Participant or other Person authorizes the Bank to withdraw the
amount of the Initial Purchase Price from his or her Deposit Account, the Bank
shall have the right to make such withdrawal or to freeze funds equal to the
aggregate Initial Purchase Price upon receipt of the Order Form. Notwithstanding
any regulatory provisions regarding penalties for early withdrawals from
certificate accounts, the Bank may allow payment by means of withdrawal from
certificate accounts without the assessment of such penalties. In the case of an
early withdrawal of only a portion of such account, the certificate evidencing
such account shall be canceled if any applicable minimum balance requirement
ceases to be met. In such case, the remaining balance will be returned to the
depositor. However, where any applicable minimum balance is maintained in such
certificate account, the rate of return on the balance of the certificate
account shall remain the same as prior to such early withdrawal. This waiver of
the early withdrawal penalty applies only to withdrawals made in connection with
the purchase of Conversion Stock and is entirely within the discretion of the
Primary Parties.
D. The Bank shall pay interest, at not less than the passbook rate, for
all amounts paid in cash, by check or money order to purchase shares of
Conversion Stock in the Subscription Offering, Public Stockholders' Offering and
the Community Offering from the date payment is received until the date the
Conversion and Reorganization is completed or terminated.
E. The Bank shall not knowingly loan funds or otherwise extend credit
to any Participant or other Person to purchase Conversion Stock.
F. Each share of Conversion Stock shall be non-assessable upon payment
in full of the Actual Purchase Price.
13. ACCOUNTHOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES
----------------------------------------------------------
The Primary Parties shall make reasonable efforts to comply with the
securities laws of all jurisdictions in the United States in which Participants
reside. However, no Participant will be offered or receive any Conversion Stock
under the Plan if such Participant resides in a foreign country or resides in a
jurisdiction of the United States with respect to which any of the following
apply; (a) there are few Participants otherwise eligible to subscribe for shares
under this Plan who reside in such jurisdiction; (b) the granting of
Subscription Rights or the offer or sale of shares of Conversion Stock to such
Participants would require any of the Primary Parties or their respective
Directors and Officers, under the laws of such jurisdiction, to register as a
broker-dealer, salesman or selling agent or to register or otherwise qualify the
Conversion Stock for sale in such
21
<PAGE>
jurisdiction, or any of the Primary Parties would be required to qualify as a
foreign corporation or file a consent to service of process in such
jurisdiction; or (c) such registration, qualification or filing in the judgment
of the Primary Parties would be impracticable or unduly burdensome for reasons
of cost or otherwise.
14. DISSENTERS' RIGHTS
------------------
The stockholders of the Middle Tier Holding Company do not have
dissenters' rights of appraisal in connection with their vote on the Conversion
and Reorganization.
15. VOTING RIGHTS OF STOCKHOLDERS
-----------------------------
Following consummation of the Conversion and Reorganization, voting
rights with respect to the Bank shall be held and exercised exclusively by the
Holding Company as holder of all of the Bank's outstanding voting capital stock,
and voting rights with respect to the Holding Company shall be held and
exercised exclusively by the holders of the Holding Company's voting capital
stock.
16. LIQUIDATION ACCOUNT
-------------------
A. At the time of the Merger No. 2, the Bank shall establish a
liquidation account in an amount equal to the amount of the dividends from Bank
Common Stock and Middle Tier Holding Company Common Stock waived by the Mutual
Holding Company plus the greater of (i) the retained earnings of the Bank as of
the date of the latest statement of financial condition contained in the final
offering circular utilized in the Bank's initial public offering, or (ii) 57% of
the Middle Tier Holding Company's total stockholders' equity as reflected in its
latest statement of financial condition contained in the final Prospectus
utilized in the Conversion and Reorganization. The function of the liquidation
account will be to preserve the rights of certain holders of Deposit Accounts in
the Bank who maintain such accounts in the Bank following the Conversion and
Reorganization to priority to distributions in the unlikely event of a
liquidation of the Bank subsequent to the Conversion and Reorganization.
B. The liquidation account shall be maintained for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders, if any, who
maintain their Deposit Accounts in the Bank after the Conversion and
Reorganization. Each such account holder will, with respect to each Deposit
Account held, have a related inchoate interest in a portion of the liquidation
account balance, which interest will be referred to in this Section as the
"subaccount balance." All Deposit Accounts having the same social security
number will be aggregated for purposes of determining the initial subaccount
balance with respect to such Deposit Accounts, except as provided in this
Section.
C. In the event of a complete liquidation of the Bank subsequent to the
Conversion and Reorganization (and only in such event), each Eligible Account
Holder and Supplemental Eligible
22
<PAGE>
Account Holder, if any, shall be entitled to receive a liquidation distribution
from the liquidation account in the amount of the then current subaccount
balances for Deposit Accounts then held (adjusted as described below) before any
liquidation distribution may be made with respect to the capital stock of the
Bank. No merger, consolidation, sale of bulk assets or similar combination
transaction with another FDIC-insured institution in which the Bank is not the
surviving entity shall be considered a complete liquidation for this purpose. In
any merger or consolidation transaction, the liquidation account shall be
assumed by the surviving entity.
D. The initial subaccount balance for a Deposit Account held by an
Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall
be determined by multiplying the opening balance in the liquidation account by a
fraction, of which the numerator is the amount of the Qualifying Deposits of
such account holder and the denominator is the total amount of Qualifying
Deposits of all Eligible Account Holders and Supplemental Eligible Account
Holders, if any. For Deposit Accounts in existence at both the Eligibility
Record Date and the Supplemental Eligibility Record Date, if any, separate
initial subaccount balances shall be determined on the basis of the Qualifying
Deposits in such Deposit Accounts on each such record date. Initial subaccount
balances shall not be increased, and shall be subject to downward adjustment as
provided below.
E. If the aggregate deposit balance in the Deposit Account(s) of any
Eligible Account Holder or Supplemental Eligible Account Holder, if any, at the
close of business on any June 30 annual closing date is less than the lesser of
(a) the aggregate deposit balance in such Deposit Account(s) at the close of
business on any other annual closing date subsequent to such record dates or (b)
the aggregate deposit balance in such Deposit Account(s) as of the Eligibility
Record Date or the Supplemental Eligibility Record Date, the subaccount balance
for such Deposit Accounts(s) shall be adjusted by reducing such subaccount
balance in an amount proportionate to the reduction in such deposit balance. In
the event of such a downward adjustment, the subaccount balance shall not be
subsequently increased, notwithstanding any subsequent increase in the deposit
balance of the related Deposit Account(s). The subaccount balance of an Eligible
Account Holder or Supplemental Eligible Account Holder, if any, will be reduced
to zero if the Account Holder ceases to maintain a Deposit Account at the Bank
that has the same social security number as appeared on his Deposit Account(s)
at the Eligibility Record Date or, if applicable, the Supplemental Eligibility
Record Date.
F. Subsequent to the Conversion and Reorganization, the Bank may not
pay cash dividends generally on deposit accounts and/or capital stock of the
Bank, if such dividend or repurchase would reduce the Bank's regulatory capital
below the aggregate amount of the then current subaccount balances for Deposit
Accounts then held; otherwise, the existence of the liquidation account shall
not operate to restrict the use or application of any of the net worth accounts
of the Bank.
G. For purposes of this Section, a Deposit Account includes a
predecessor or successor account which is held by an Account Holder with the
same social security number.
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17. TRANSFER OF DEPOSIT ACCOUNTS
----------------------------
Each Deposit Account in the Bank at the time of the consummation of the
Conversion and Reorganization shall become, without further action by the
holder, a Deposit Account in the Bank equivalent in withdrawable amount to the
withdrawal value (as adjusted to give effect to any withdrawal made for the
purchase of Conversion Stock), and subject to the same terms and conditions
(except as to voting and liquidation rights) as such Deposit Account in the Bank
immediately preceding consummation of the Conversion and Reorganization. Holders
of Deposit Accounts in the Bank shall not, as such holders, have any voting
rights.
18. REQUIREMENTS FOLLOWING CONVERSION AND REORGANIZATION FOR
--------------------------------------------------------
REGISTRATION, MARKET MAKING AND STOCK EXCHANGE LISTING
------------------------------------------------------
In connection with the Conversion and Reorganization, the Holding
Company shall register the Holding Company Common Stock pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended, and shall undertake
not to deregister such stock for a period of three years thereafter. The Holding
Company also shall use its best efforts to (i) encourage and assist a market
maker to establish and maintain a market for the Holding Company Common Stock
and (ii) list the Holding Company Common Stock on a national or regional
securities exchange or to have quotations for such stock disseminated on the
National Association of Securities Dealers Automated Quotation System.
19. DIRECTORS AND OFFICERS OF THE BANK AND HOLDING COMPANY
------------------------------------------------------
Each person serving as a Director or Officer of the Bank or the Holding
Company at the time of the Conversion and Reorganization shall continue to serve
as a Director or Officer of the Bank or the Holding Company for the balance of
the term for which the person was elected prior to the Conversion and
Reorganization, and until a successor is elected and qualified.
20. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS
----------------------------------------------------------
FOLLOWING THE CONVERSION AND REORGANIZATION
-------------------------------------------
For a period of three years following the Conversion and
Reorganization, the Directors and Officers of the Holding Company and the Bank
and their Associates may not purchase, without the prior written approval of the
OTS, Holding Company Common Stock except from a broker- dealer registered with
the SEC. This prohibition shall not apply, however, to (i) a negotiated
transaction arrived at by direct negotiation between buyer and seller and
involving more than 1% of the outstanding Holding Company Common Stock and (ii)
purchases of stock made by and held by any Tax-Qualified Employee Stock Benefit
Plan (and purchases of stock made by and held by any Non-Tax-Qualified Employee
Stock Benefit Plan following the receipt of stockholder approval of such plan)
which may be attributable to individual officers or directors.
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The foregoing restriction on purchases of Holding Company Common Stock
shall be in addition to any restrictions that may be imposed by federal and
state securities laws.
21. RESTRICTIONS ON TRANSFER OF STOCK
---------------------------------
All shares of the Conversion Stock which are purchased by Persons other
than Directors and Officers shall be transferable without restriction, except in
connection with a transaction proscribed by Section 22 of this Plan. Shares of
Conversion Stock purchased by Directors and Officers of the Holding Company and
the Bank on original issue from the Holding Company (by subscription or
otherwise) shall be subject to the restriction that such shares shall not be
sold or otherwise disposed of for value for a period of one year following the
date of purchase, except for any disposition of such shares following the death
of the original purchaser or pursuant to any merger or similar transaction
approved by the OTS. The shares of Conversion Stock issued by the Holding
Company to Directors and Officers shall bear the following legend giving
appropriate notice of such one-year restriction.
The shares of stock evidenced by this Certificate are restricted as to
transfer for a period of one year from the date of this Certificate
pursuant to Part 563b of the Rules and Regulations of the Office of Thrift
Supervision. These shares may not be transferred during such one-year
period without a legal opinion of counsel for the Company that said
transfer is permissible under the provisions of applicable law and
regulation. This restrictive legend shall be deemed null and void after one
year from the date of this Certificate.
In addition, the Holding Company shall give appropriate instructions to
the transfer agent for the Holding Company Common Stock with respect to the
applicable restrictions relating to the transfer of restricted stock. Any shares
issued at a later date as a stock dividend, stock split or otherwise with
respect to any such restricted stock shall be subject to the same holding period
restrictions as may then be applicable to such restricted stock.
The foregoing restriction on transfer shall be in addition to any
restrictions on transfer that may be imposed by federal and state securities
laws.
22. RESTRICTIONS ON ACQUISITION OF STOCK OF THE HOLDING COMPANY
-----------------------------------------------------------
The articles of incorporation of the Holding Company shall prohibit any
Person together with Associates or groups of Persons acting in concert from
offering to acquire or acquiring, directly or indirectly, beneficial ownership
of more than 10% of any class of equity securities of the Holding Company, or of
securities convertible into more than 10% of any such class, for five years
following completion of the Conversion and Reorganization. The articles of
incorporation of the Holding Company also shall provide that all equity
securities beneficially owned by any Person in excess of 10% of any class of
equity securities during such five-year period shall be considered "excess
shares," and that excess shares shall not be counted as shares entitled to vote
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and shall not be voted by any Person or counted as voting shares in connection
with any matters submitted to the stockholders for a vote. The foregoing
restrictions shall not apply to (i) any offer with a view toward public resale
made exclusively to the Holding Company by underwriters or a selling group
acting on this behalf, (ii) the purchase of shares by a Tax-Qualified Employee
Stock Benefit Plan established for the benefit of the employees of the Holding
Company and its subsidiaries which is exempt from approval requirements under 12
C.F.R. ss.574.3(c)(1)(vi) or any successor thereto, and (iii) any offer or
acquisition approved in advance by the affirmative vote of two-thirds of the
entire Board of Directors of the Holding Company. Directors, Officers or
Employees of the Holding Company or the Bank or any subsidiary thereof shall not
be deemed to be Associates or a group acting in concert with respect to their
individual acquisition of any class of equity securities of the Holding Company
solely as a result of their capacities as such.
23. TAX RULINGS OR OPINIONS
-----------------------
Consummation of the Conversion and Reorganization is conditioned upon
prior receipt by the Primary Parties of either a ruling or an opinion of counsel
with respect to federal tax laws, and either a ruling or an opinion of counsel
with respect to Florida tax laws, to the effect that consummation of the
transactions contemplated hereby will not result in a taxable reorganization
under the provisions of the applicable codes or otherwise result in any material
adverse tax consequences to the Primary Parties or to account holders receiving
Subscription Rights before or after the Conversion and Reorganization, except in
each case to the extent, if any, that Subscription Rights are deemed to have
fair market value on the date such rights are issued.
24. STOCK COMPENSATION PLANS
------------------------
A. The Holding Company and the Bank are authorized to adopt
Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion and
Reorganization, including without limitation an employee stock ownership plan.
B. The Holding Company and the Bank also are authorized to adopt stock
option plans, restricted stock grant plans and other Non-Tax-Qualified Employee
Stock Benefit Plans, provided that no stock options shall be granted, and no
shares of Conversion Stock shall be purchased, pursuant to any of such plans
prior to the earlier of (i) the one-year anniversary of the consummation of the
Conversion and Reorganization or (ii) the receipt of stockholder approval of
such plans at either the annual or special meeting of stockholders of the
Holding Company to be held not earlier than six months after the completion of
the Conversion and Reorganization.
C. Existing as well as any newly created Tax-Qualified Employee Stock
Benefit Plans may purchase shares of Conversion Stock in the Offerings, to the
extent permitted by the terms of such benefit plans and this Plan.
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25. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK
---------------------------------------------
A. Except as may otherwise may be permitted by the OTS, the Holding
Company may not repurchase any shares of its capital stock during the first year
following consummation of the Conversion and Reorganization.
B. The Bank may not declare or pay a cash dividend on, or repurchase
any of, its capital stock if the effect thereof would cause the regulatory
capital of the Bank to be reduced below the amount required for the liquidation
account. Any dividend declared or paid on, or repurchase of, the Bank's capital
stock also shall be in compliance with Section 563.134 of the Regulations
Applicable to All Savings Associations, or any successor thereto.
C. Notwithstanding anything to the contrary set forth herein, the
Holding Company may repurchase its capital stock to the extent and subject to
the requirements set forth in Section 563b.3(g)(3) of the Regulations Applicable
to All Savings Associations, or any successor thereto, or as otherwise may be
approved by the OTS.
26. PAYMENT OF FEES TO BROKERS
--------------------------
The Primary Parties may elect to offer to pay fees on a per share basis
to securities brokers who assist purchasers of Conversion Stock in the
Offerings.
27. EFFECTIVE DATE
--------------
The Effective Date of the Conversion and Reorganization shall be the
date upon which the last of the following actions occurs: (i) the filing of
Articles of Combination with the OTS with respect to the Mergers, (ii) the
closing of the issuance of the shares of Conversion Stock in the Offerings. The
filing of Articles of Combination relating to the Mergers and the closing of the
issuance of shares of Conversion Stock in the Offerings shall not occur until
all requisite regulatory, Member and Stockholder approvals have been obtained,
all applicable waiting periods have expired and sufficient subscriptions and
orders for the Conversion Stock have been received. It is intended that the
closing of the Mergers and the sale of shares of Conversion Stock in the
Offerings shall occur consecutively and substantially simultaneously.
28. AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
If deemed necessary or desirable by the Boards of Directors of the
Primary Parties, this Plan may be substantively amended, as a result of comments
from regulatory authorities or otherwise, at any time prior to the solicitation
of proxies from members and Stockholders to vote on the Plan and at any time
thereafter with the concurrence of the OTS. Any amendment to this Plan made
after approval by the Members and Stockholders with the concurrence of the OTS
shall not necessitate further approval by the Members or Stockholders unless
otherwise required by the OTS. This Plan shall terminate if the sale of all
shares of Conversion Stock is not completed
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within 24 months from the date of the Special Meeting. Prior to the earlier of
the Special Meeting and the Stockholders' Meeting, this Plan may be terminated
by the Boards of Directors of the Primary Parties without approval of the OTS;
after the Special Meeting or the Stockholder's Meeting, the Boards of Directors
may terminate this Plan only with the approval of the OTS.
29. INTERPRETATION OF THE PLAN
--------------------------
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of each of the Boards of Directors of the
Primary Parties shall be final, subject to the authority of the OTS.
28
