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EXHIBIT 2.1
PLAN OF RESTRUCTURING
FROM MUTUAL SAVINGS BANK TO MUTUAL HOLDING COMPANY
OF
MUTUAL SAVINGS BANK
MILWAUKEE, WISCONSIN
AS ADOPTED ON FEBRUARY 21, 2000,
AS AMENDED AND RESTATED MAY 15, 2000
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TABLE OF CONTENTS
RECITALS.............................................................1
ARTICLE I
DEFINITIONS..........................................................2
Associate............................................................2
Capital Stock........................................................2
Code.................................................................2
Common Stock.........................................................3
Community Offering...................................................3
Conversion Transaction...............................................3
Deposit Account......................................................3
Director.............................................................3
Effective Date of the Restructuring..................................3
Eligible Account Holder..............................................3
Eligibility Record Date..............................................3
Employee Plans.......................................................3
Employee Stock Benefit Plan..........................................3
FDIC.................................................................3
First Northern.......................................................4
First Northern Merger................................................4
First Northern Savings...............................................4
HOLA.................................................................4
Interim..............................................................4
Members..............................................................4
Merger...............................................................4
MHC..................................................................4
Minority Stock Issuance Application..................................4
Minority Stock Offerings.............................................4
MRPs.................................................................4
Mutual...............................................................5
Notice...............................................................5
Officer..............................................................5
OTS..................................................................5
OTS's Mutual Holding Company Regulations.............................5
Other Members........................................................5
Person...............................................................5
Plan of Merger.......................................................5
Plan of Restructuring................................................5
Prospectus...........................................................5
Proxy Statement......................................................5
Qualifying Deposit...................................................5
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Registration Statement................................................6
Restructuring.........................................................6
SEC...................................................................6
Special Meeting.......................................................6
Stock Bank............................................................6
SHC...................................................................6
Stock Issuance Plan...................................................6
Stock Offering........................................................6
Stock Option Plan.....................................................6
Subscription Offering.................................................7
Supplemental Eligibility Record Date..................................7
Supplemental Eligible Account Holder..................................7
Syndicated Community Offering.........................................7
Voting Record Date....................................................7
WDFI..................................................................7
ARTICLE II
BUSINESS PURPOSES FOR THE RESTRUCTURING...............................7
ARTICLE III
CERTAIN EFFECTS OF THE RESTRUCTURING;
OWNERSHIP AND OPERATION OF SHC AND STOCK BANK.........................9
3.1 Structure...........................................9
3.2 Merger..............................................9
3.3 Notices............................................10
3.4 Operations; Directors..............................10
3.5 Retained Earnings..................................11
3.6 Stock Issuances....................................11
ARTICLE IV
OPERATION AND OWNERSHIP OF THE STOCK BANK AND
EFFECT ON RIGHTS OF MEMBERS..........................................11
4.1 Membership Rights..................................11
4.2 Depository Accounts................................11
4.3 Loans..............................................12
ARTICLE V
OPERATION AND OWNERSHIP OF THE MHC AND
EFFECT ON RIGHTS OF MEMBERS..........................................12
5.1 Ownership..........................................12
5.2 Management.........................................12
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ARTICLE VI
CONDITIONS TO IMPLEMENTATION OF THE RESTRUCTURING....................12
ARTICLE VII
SPECIAL MEETING OF MEMBERS...........................................14
7.1 Special Meeting....................................14
7.2 Proxy Statement....................................14
7.3 Vote Required......................................14
7.4 Effect of Approval.................................15
ARTICLE VIII
CHARTER AND BYLAWS OF THE MHC........................................15
ARTICLE IX
CHARTER AND BYLAWS OF
THE SHC AND THE STOCK BANK...........................................15
9.1 Stock Bank.........................................15
9.2 SHC................................................15
ARTICLE X
ACCOUNTS AND LOANS SUBSEQUENT TO THE RESTRUCTURING...................15
10.1 Deposit Accounts...................................15
10.2 Loans..............................................16
ARTICLE XI
RIGHTS OF MEMBERS OF THE MHC.........................................16
ARTICLE XII
CONVERSION OF MHC TO STOCK FORM......................................16
12.1 Conversion Transaction.............................16
12.2 Continuing Rights of Eligible Account Holders......17
ARTICLE XIII
TIMING OF THE RESTRUCTURING..........................................17
ARTICLE XIV
MISCELLANEOUS........................................................18
14.1 No Financing by Mutual.............................18
14.2 Interpretations Final..............................18
14.3 Expenses...........................................18
14.4 Amendments; Termination............................18
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APPENDICES
A. PLAN OF STOCK ISSUANCE
B. PLAN OF MERGER
C. CHARTER OF MHC
D. BYLAWS OF MHC
E. CHARTER OF STOCK BANK
F. BYLAWS OF STOCK BANK
G. CHARTER OF SHC
H. BYLAWS OF SHC
I. MUTUAL BRANCH OFFICES
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THIS PLAN OF RESTRUCTURING is adopted by the Board of Directors of
Mutual Savings Bank on February 21, 2000, and amended and restated on May 15,
2000, whereby Mutual proposes simultaneously to: (i) convert from a
state-chartered mutual savings bank to a federally-chartered stock savings bank;
(ii) reorganize into a multi-state mutual holding company under the laws of the
United States of America and the regulations of the OTS; and (iii) merge the
mid-tier stock holding company with First Northern Capital Corporation.
RECITALS
WHEREAS, as a result of the Restructuring, Mutual will establish a
federal mutual holding company, and all of the current ownership and voting
rights of the Members of Mutual will become the rights of Members of the MHC.
The Restructuring of Mutual into the mutual holding company structure includes
the incorporation of a federal stock savings bank ("Stock Bank") and a middle
tier stock holding company ("SHC"). SHC will be a majority-owned subsidiary of
the MHC, and Stock Bank will be a wholly-owned subsidiary of SHC.
WHEREAS, in adopting this Plan, the Board of Directors has determined
that the Restructuring is in the best interests of Mutual and its Members.
Conversion to a federal charter and the formation of the MHC under OTS
regulations present Mutual with a method of preserving the mutual form of
organization, while positioning Mutual to be an active and effective participant
in the rapidly changing financial services industry. Formation of SHC as a
mid-tier holding company will permit the SHC to issue Capital Stock, which is a
source of capital that is not available to mutual savings associations.
WHEREAS, Mutual has the opportunity to acquire First Northern and First
Northern Savings Bank, S.A., which the Board of Directors believes to be an
attractive opportunity for Mutual and its Members, which required prompt
attention. That transaction would require creation of a stock issuing entity.
WHEREAS, the mutual holding company provides flexibility in structuring
mergers and acquisitions, including that of First Northern, and will give the
opportunity to retain acquired institutions as separate subsidiaries. Mutual
would not be effecting the Restructuring at this time if it were not for the
opportunity to acquire First Northern. The MHC also will be able to acquire
other types of financial institutions and make investments not now available to
Mutual.
WHEREAS, subject to the approval of the Board of Directors of the SHC
and the OTS, and registration with the SEC, the SHC will be authorized to issue
Common Stock in one or more Minority Stock Offerings to persons other than the
MHC in an aggregate amount less than 50 percent of the total outstanding SHC
Common Stock.
WHEREAS, contemporaneously with or immediately following the
Restructuring and subject to the approval of the OTS, the SHC intends to issue
up to 49.9 percent of its Common Stock in a combination of the First Northern
Merger and a Stock Offering pursuant to a Stock
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Issuance Plan adopted by the Board of Directors of Mutual on February 21, 2000,
and amended on the date hereof. The Stock Issuance Plan is attached hereto as
Appendix A and is incorporated herein by reference. The closing of the Stock
Offering is expected to occur contemporaneously with or as soon as possible
following the closing of the Restructuring.
WHEREAS, implementation of this Plan of Restructuring is subject to,
among other conditions, the prior written approval of the OTS and the
contemporaneous consummation of the First Northern Merger and must be approved
by the affirmative vote of a majority of the total number of votes entitled to
be cast by Members of Mutual at the Special Meeting.
NOW, THEREFORE, in consideration of the recitals and of the mutual
covenants, conditions and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used in this Plan of Restructuring, the following terms shall have
the meanings specified:
Associate. "Associate," when used to indicate a relationship with any
Person, shall mean:
(a) any corporation or organization (other than Mutual or a
majority-owned subsidiary of Mutual, SHC or the MHC) of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities; and
(b) 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, except that the term "Associate" does not include any
Employee Plan in which a Person has a substantial beneficial interest or serves
as a trustee or in a similar fiduciary capacity; and
(c) 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
Mutual, any of its subsidiaries or the MHC.
Capital Stock. "Capital Stock" shall mean any and all authorized shares
of common stock, par value $.01 per share, of the SHC.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
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Common Stock. "Common Stock" shall mean all of the shares of Capital
Stock offered and sold by the SHC in the Stock Offering, or issued in the First
Northern Merger or to the MHC contemporaneously with or immediately following
the Restructuring pursuant to the First Northern Merger or the Stock Issuance
Plan, which Common Stock will not be insured by the FDIC or any other government
agency.
Community Offering. "Community Offering" shall mean the offering for
sale of shares of Common Stock to certain members of the general public under
the terms of the Stock Issuance Plan concurrently with or after completion of
the Subscription Offering, to the extent shares of Common Stock remain available
after satisfying all subscriptions received in the Subscription Offering and
after the shares set aside for issuance in the First Northern Merger.
Conversion Transaction. Defined in Section 12.1 hereof.
Deposit Account. "Deposit Account" shall mean any withdrawable or
repurchasable shares, demand deposits, certificates of deposit, or other
deposits or savings accounts, including money market deposit accounts and
negotiable order of withdrawal accounts, offered by Mutual and owned by a
Member.
Director. "Director" shall mean a member of the Board of Directors of
Mutual, but does not include an advisory director, honorary director, director
emeritus or person holding a similar position unless such person is otherwise
performing functions similar to those of a member of the Board of Directors of
Mutual.
Effective Date of the Restructuring. "Effective Date of the
Restructuring" shall mean the date and time at which all of the conditions to
the Restructuring are satisfied.
Eligible Account Holder. "Eligible Account Holder" shall mean the
holder of a Qualifying Deposit of Mutual on the Eligibility Record Date.
Eligibility Record Date. "Eligibility Record Date" shall mean January
31, 1999.
Employee Plans. "Employee Plans" shall mean any employee stock benefit
plans, MRPs and Stock Option Plans approved by the Board of Directors of Mutual
or the SHC.
Employee Stock Benefit Plan. "Employee Stock Benefit Plan" shall mean
any defined benefit plan or defined contribution plan of Mutual, the SHC or the
MHC, other than an MRP, such as an employee stock ownership plan, employee stock
bonus plan, profit sharing plan or other plan, which, with its related trust,
meets the requirements to be "qualified" under Section 401 of the Code.
FDIC. "FDIC" shall mean the Federal Deposit Insurance Corporation.
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First Northern. "First Northern" shall mean First Northern Capital
Corp., a Wisconsin corporation.
First Northern Merger. "First Northern Merger" shall mean the merger of
First Northern into SHC in which, among other things, the SHC will issue stock
and pay cash to former First Northern shareholders, and through which First
Northern Savings will become a wholly-owned subsidiary of the SHC.
First Northern Savings. "First Northern Savings" shall mean First
Northern Savings Bank, S.A., a Wisconsin savings and loan association, and any
successor thereto.
HOLA. "HOLA" shall mean the Home Owners' Loan Act, as amended.
Interim. "Interim" shall mean Mutual Stock Savings Bank, a transitory
federal stock savings bank being formed to effect the Merger.
Members. "Members" shall mean all persons or entities who qualify as
members of Mutual as of the close of business on the Voting Record Date pursuant
to Mutual's articles of incorporation or bylaws as in effect prior to the
Restructuring. When referring to Members of the MHC, the term Members means (i)
members of Mutual who become members of the MHC as a result of the
Restructuring; and (ii) persons who become depositors of the Stock Bank after
the Restructuring.
Merger. "Merger" shall mean the merger of Interim with and into the
Stock Bank, with the Stock Bank being the surviving organization, pursuant to
the terms of the Plan of Merger.
MHC. "MHC" shall mean the federally-chartered mutual holding company
resulting from the Restructuring, which shall be known as Mutual Savings
Bancorp, MHC.
Minority Stock Issuance Application. "Minority Stock Issuance
Application" shall mean the Application for Approval of a Minority Stock
Issuance by a Savings Association Subsidiary of a Mutual Holding Company to be
submitted by Mutual to the OTS for approval.
Minority Stock Offerings. "Minority Stock Offerings" shall mean one or
more offerings of less than 50 percent in the aggregate of the outstanding
Common Stock of the SHC to persons other than the MHC.
MRPs. "MRPs" shall mean any management recognition plan(s) established
by Mutual or the SHC to induce certain Directors, Officers and employees of
Mutual and First Northern Savings Bank, S.A. to continue their service with the
company following the Restructuring through awards of Capital Stock in
accordance with the terms and conditions of the Stock Issuance Plan and the
documents establishing the MRPs.
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Mutual. "Mutual" shall mean Mutual Savings Bank, a Wisconsin mutual
savings bank, including where appropriate any successor savings bank resulting
from a conversion to a federal savings bank charter and from a conversion from a
mutual savings bank to a stock savings bank.
Notice. "Notice" shall mean the Notice of Mutual Holding Company
Reorganization to be submitted by Mutual to the OTS to notify the OTS of the
Restructuring, which will include the Proxy Statement.
Officer. "Officer" shall mean an executive officer of Mutual, which
includes the Chairman of the Board, President, Vice Presidents, Secretary,
Treasurer or principal financial officer, Comptroller or principal accounting
officer, and any other person performing similar functions.
OTS. "OTS" shall mean the Office of Thrift Supervision or any successor
thereto.
OTS's Mutual Holding Company Regulations. "OTS's Mutual Holding Company
Regulations" means the regulations of the OTS governing mutual holding company
formations, as set forth at 12 C.F.R. ss. 575 et seq.
Other Members. "Other Members" shall mean Members of Mutual (other than
Eligible Account Holders and Supplemental Eligible Account Holders) as of the
close of business on the Voting Record Date.
Person. "Person" shall mean 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 of Merger. "Plan of Merger" shall mean the Plan of Merger between
Stock Bank and Mutual, which is attached hereto as Appendix B.
Plan of Restructuring. "Plan of Restructuring" shall mean this Plan of
Restructuring, as adopted by the Board of Directors of Mutual, and as may be
subsequently amended from time to time, under the terms of which the
Restructuring will occur.
Prospectus. "Prospectus" shall mean the prospectus forming part of the
Registration Statement.
Proxy Statement. "Proxy Statement" shall mean the materials utilized by
Mutual to solicit proxies in connection with the vote by Members on the Plan of
Restructuring at the Special Meeting.
Qualifying Deposit. "Qualifying Deposit" shall mean the total of the
deposit balances of the Deposit Accounts of an Eligible Account Holder or
Supplemental Eligible Account Holder in
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Mutual as of the close of business on the Eligibility Record Date or, in the
case of a Supplemental Eligible Account Holder, the Supplemental Eligibility
Record Date, provided that Deposit Accounts of an Eligible Account Holder or
Supplemental Eligible Account Holder with total deposit balances of less than
$50 shall not constitute a Qualifying Deposit.
Registration Statement. "Registration Statement" shall mean the
Registration Statement of SHC filed with the SEC under the Securities Act of
1933 for purposes of registering Capital Stock of SHC to be issued pursuant to
the Stock Issuance Plan.
Restructuring. "Restructuring" shall mean the Restructuring of Mutual
into the MHC form of ownership, which includes, among other things, conversion
of Mutual's state charter to a federal charter, the organization of the SHC as a
subsidiary of the MHC, and Stock Bank as a subsidiary of SHC, pursuant to the
Plan of Restructuring.
SEC. "SEC" shall mean the Securities and Exchange Commission.
Special Meeting. "Special Meeting" shall mean the special meeting of
Members of Mutual called for the purpose of submitting this Plan of
Restructuring for approval.
Stock Bank. "Stock Bank" shall mean the federally chartered stock
savings bank resulting from the Restructuring as a continuation of Mutual, which
savings bank will be a wholly-owned subsidiary of the SHC following the
Restructuring.
SHC. "SHC" shall mean Bank Mutual Corporation, a federally chartered
MHC subsidiary holding company, or any permitted assignee thereof or successor
thereto, which will own 100% of the shares of the Stock Bank, and in turn be not
less than 50.1 percent owned by MHC.
Stock Issuance Plan. "Stock Issuance Plan" shall mean the Stock
Issuance Plan attached hereto as Appendix A, under which the SHC shall offer for
sale (or issue in the First Northern Merger) up to 49.9 percent of its Common
Stock.
Stock Offering. "Stock Offering" shall mean the offering of the Common
Stock to Persons other than the MHC, on a priority basis as set forth in the
Stock Issuance Plan, which offering is expected to occur concurrently with or as
soon as possible following the Restructuring. Certain shares of such Common
Stock offered may, however, be set aside for issuance in the First Northern
Merger. Shares sold, plus shares issued in the First Northern Merger, may not
exceed 49.9% of the Common Stock outstanding. The remaining outstanding shares
must be held by the MHC.
Stock Option Plan. "Stock Option Plan" shall mean any stock option plan
adopted by Mutual or SHC providing for grants of options to purchase Capital
Stock to Directors, Officers and employees of Mutual, the SHC and the MHC and
their other subsidiaries in accordance with
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the terms and conditions of the Stock Issuance Plan and the documents
establishing the Stock Option Plan.
Subscription Offering. "Subscription Offering" shall mean the offering
of shares of Common Stock to the Eligible Account Holders, Employee Stock
Benefit Plans, Supplemental Eligible Account Holders, Other Members of Mutual,
and Directors, Officers and employees of Mutual pursuant to the terms of the
Stock Issuance Plan.
Supplemental Eligibility Record Date. "Supplemental Eligibility Record
Date" shall mean the last day of the calendar quarter preceding the approval of
the Stock Issuance Plan by the OTS.
Supplemental Eligible Account Holder. "Supplemental Eligible Account
Holder" shall mean the holder of a Qualifying Deposit in Mutual (other than an
Officer or Director or their Associates) on the Supplemental Eligibility Record
Date.
Syndicated Community Offering. "Syndicated Community Offering" shall
mean the best-efforts offering by broker-dealers who will offer shares of Common
Stock to members of the general public, to the extent shares of Common Stock
remain available after satisfying all subscriptions received in the Subscription
Offering, shares set aside for issuance in the First Northern Merger and all
orders received in the Community Offering and accepted by the SHC.
Voting Record Date. "Voting Record Date" shall mean the date fixed by
the Board of Directors of Mutual for determining the Members of Mutual eligible
to vote on the Plan of Restructuring at the Special Meeting, which date shall
not be less than 10 nor more than 60 days prior to the date of the Special
Meeting without the prior approval of the OTS.
WDFI. "WDFI" shall mean the Wisconsin Department of Financial
Institutions, Division of Savings Institutions or any successor thereto.
ARTICLE II
BUSINESS PURPOSES FOR THE RESTRUCTURING
Mutual has several business purposes for undertaking the Restructuring.
(a) The Restructuring will structure Mutual in the stock form, which is
used by commercial banks, most major commercial enterprises and many savings
banks and savings associations. Formation of the SHC as a subsidiary of the MHC
will permit the SHC to issue Capital Stock, which is a source of capital not
available to mutual savings banks. This new capital will support Mutual's future
growth and expanded operations as business needs dictate. The ability to attract
new capital will enhance Mutual's ability to effect future acquisitions and
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investments, as well as increase the capabilities of Mutual to address the needs
of the communities it serves.
(b) Mutual's mutual form of ownership will be preserved in the MHC
structure. As a mutual organization, the MHC will at all times indirectly
control at least a majority of the Common Stock of the Stock Bank so long as the
MHC remains in existence. The Restructuring will enable Mutual to achieve the
benefits of a stock company without a loss of control that often follows
standard conversions from mutual to stock form.
(c) Mutual is committed to being a community-oriented institution, and
the Board of Directors believes that the MHC structure is best suited for this
purpose. The Restructuring will not foreclose the opportunity of the MHC to
convert from the mutual-to-stock form of organization in the future.
(d) Formation of a mutual holding company also is expected to
facilitate diversification of Mutual's activities. The opportunities presented
to Mutual by the possibility of the First Northern Merger led the Directors to a
determination that the restructuring would be appropriate at this time, so as to
facilitate the First Northern Merger. Mutual would not be effecting the mutual
holding company formation part of the Restructuring at this time if the First
Northern Merger were not approved and effected as part of the Restructuring.
(e) Contemporaneously with or immediately following the Restructuring,
the SHC expects to issue up to 49.9 percent of its Common Stock in connection
with the First Northern Merger and in the Stock Offering at an aggregate price
determined by an independent appraisal. The sale of Common Stock will provide
the SHC with new equity capital, which will facilitate the First Northern Merger
and support future deposit growth and expanded operations of Mutual, First
Northern and any other subsidiaries. The ability to sell Capital Stock also will
enable the SHC to increase its capital in response to changes in the regulatory
capital requirements of the banking agencies. The sale of Capital Stock,
together with the accumulation of earnings, after payment of any dividends, from
year to year, will provide a means for the orderly preservation and expansion of
the SHC's capital base, and allows flexibility to respond to sudden and
unanticipated capital needs.
(f) The ability of the SHC to issue Capital Stock also will enable the
SHC to establish stock-based benefit plans for management and employees,
including incentive stock option plans, stock award plans, and employee stock
ownership plans, and will benefit the Members and the shareholders of SHC by
creating employee incentives based on corporate and stock performance.
(g) The formation of the MHC also will allow the MHC to borrow funds,
on a secured and unsecured basis, and to issue debt to the public or in a
private placement. The proceeds of certain borrowings or debt issuance may be
contributed to the Stock Bank or other subsidiaries as core capital for
regulatory capital purposes. (Mutual has not made a
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determination to borrow funds or issue debt at the present time, and there can
be no assurance when, if ever, any such borrowing or debt issuance would occur,
or whether it would be consummated on terms satisfactory to the MHC.)
ARTICLE III
CERTAIN EFFECTS OF THE RESTRUCTURING;
OWNERSHIP AND OPERATION OF SHC AND STOCK BANK
3.1 Structure. The Restructuring will include the incorporation of
Stock Bank, a federal savings bank. They will be 100% owned by the SHC. SHC in
turn will be a majority-owned subsidiary of the MHC at all times so long as the
MHC remains in existence.
3.2 Merger. (a) The Restructuring will be effected in the following
manner, or in any other manner approved by the OTS that is consistent with the
purposes of this Plan of Restructuring and applicable law.
As part of the Restructuring:
(i) Mutual would form MHC. MHC would, in turn, form
SHC. MHC would also form an interim federal stock savings bank ("Interim"). MHC
would initially own all of the stock of both SHC and Interim.
(ii) Mutual would convert to a stock savings bank
("Stock Bank"). Mutual's depositors would receive accounts in Stock Bank with
the same terms as their accounts in Mutual.
(iii) Interim would merge into Stock Bank in a
transaction in which MHC would receive all of the stock of Stock Bank.
(iv) MHC would transfer the stock of Stock Bank to
SHC so that SHC would hold all of the stock of Stock Bank. The former depositors
of Mutual would hold all of the liquidation and voting interests in MHC.
(v) SHC would issue shares of its Common Stock in the
Stock Offering.
(vi) First Northern would merge into SHC with SHC
surviving. In connection with the First Northern Merger, shareholders of First
Northern would receive cash and shares of SHC.
(vii) As a result of the First Northern Merger, First
Northern Savings would become a sister corporation of Stock Bank. After the
Restructuring MHC would own
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greater than 50 percent of the stock of SHC. The public and the former
shareholders of First Northern would own less than 50 percent of the stock of
SHC.
(b) Upon completion of the Restructuring, the legal existence
of Mutual will not terminate, but the Stock Bank will be a continuation of
Mutual, and all property of Mutual including its right, title, and interest in
and to all property of any kind and nature, interest and asset of every
conceivable value or benefit then existing or pertaining to Mutual (other than
any assets of Mutual transferred to the MHC or the SHC in connection with
Section 3.2(a)(1) above), or which would inure to Mutual immediately by
operation of law and without the necessity of any conveyance or transfer and
without any further act or deed, will vest in the Stock Bank. The Stock Bank
will have, hold, and enjoy the same in its right and fully and to the same
extent as the same was possessed, held, and enjoyed by Mutual. The Stock Bank
will continue to have, succeed to, assume and be responsible for all the rights,
liabilities and obligations of Mutual, will maintain its headquarters operations
at Mutual's location at 4949 West Brown Deer Road, Brown Deer, Wisconsin, and
will maintain its branch offices at their current locations, as listed on
Appendix I.
(c) As a result of the transactions set forth above, (i) the
Stock Bank will be a wholly-owned subsidiary of SHC, which will in turn be a
wholly-owned subsidiary of the MHC until shares of Common Stock are issued
pursuant to the First Northern Merger and under the Stock Issuance Plan, at
which time the SHC will be a majority-owned subsidiary of the MHC, and (ii) the
former members of Mutual will become members of the MHC.
3.3 Notices. Mutual shall submit to the OTS the following notices, and
any others as required by the OTS: (i) the Notice; (ii) Application for Approval
of Minority Stock Issuance; (iii) Application for establishment of SHC (OTS Form
H-(e)(1)); and (iv) Application for SHC to acquire by merger, First Northern
(OTS Form H-(e)(3). Upon filing the Notice, Mutual shall publish a "Notice of
Filing of Application for Mutual Holding Company Reorganization" in a newspaper
of general circulation in each community in which Mutual has an office. Mutual
shall prominently display a copy of the Notice in each of its offices. Copies of
the Plan of Restructuring shall be made available for inspection at each office
of Mutual. Mutual likewise shall comply with the publication and routing
requirements for the other application and notices.
3.4 Operations; Directors. Upon completion of the Restructuring, the
Stock Bank will be authorized to exercise any and all powers, rights and
privileges of, and shall be subject to all limitations applicable to, a capital
stock savings bank chartered under federal law. The initial Board of Directors
of the Stock Bank will be the existing Board of Directors of Mutual. Thereafter,
the holders of shares of the Stock Bank's voting stock will elect the Stock
Bank's Board of Directors as provided in its Charter and Bylaws. It is expected
that present management of Mutual will continue as the management of the Stock
Bank following the Restructuring.
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3.5 Retained Earnings. The Restructuring will not result in any
reduction in the amount of retained earnings (other than the assets of Mutual
contributed to the MHC and the SHC pursuant to Section 3.2), undivided profits,
and general loss reserves that Mutual had prior to the Restructuring. Such
retained earnings and general loss reserves will be accounted for by the MHC,
SHC and the Stock Bank on a consolidated basis in accordance with generally
accepted accounting principles.
3.6 Stock Issuances.
(a) Following the Restructuring, the SHC will have the power to issue
shares of its capital stock to persons other than the MHC. So long as the MHC is
in existence, however, the MHC will be required to own at least a majority of
the Common Stock of the SHC. The SHC will in turn wholly own the Stock Bank.
(b) The SHC will be authorized to undertake the First Northern Merger
and one or more Minority Stock Offerings together aggregating less than 50
percent of the total outstanding Common Stock. The SHC expects to offer for sale
in the Stock Offering and issue in the First Northern Merger up to 49.9 percent
of its Common Stock contemporaneously with or immediately upon completion of the
Restructuring, subject to approval of the OTS, and effectiveness with the SEC of
the Registration Statement.
ARTICLE IV
OPERATION AND OWNERSHIP OF THE STOCK BANK AND
EFFECT ON RIGHTS OF MEMBERS
4.1 Membership Rights. Upon the Effective Date of the Restructuring,
the voting, ownership and liquidation rights of the Members of Mutual will
become the rights of Members of the MHC, subject to the conditions specified
below.
4.2 Depository Accounts. Each deposit account in Mutual at the
Effective Date of the Restructuring will become, without payment, a deposit
account in the Stock Bank in the same amount and upon the same terms and
conditions, except that the holder of each such deposit account will have
ownership and membership rights with respect to the MHC rather than the Stock
Bank for so long as such holder maintains a deposit account with the Stock Bank
as specified in Article V below. All insured deposit accounts of Mutual that are
transferred to the Stock Bank will continue to be federally insured up to the
legal maximum by the FDIC in the same manner as deposit accounts existing in
Mutual immediately prior to the Restructuring. Any new deposit accounts
established with the Stock Bank after the Restructuring will create member and
liquidation rights in the MHC and will be federally insured up to the legal
maximum by the FDIC.
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4.3 Loans. All loans and other borrowings from Mutual shall retain the
same status with the Stock Bank after the Restructuring as they had with Mutual
immediately prior to the Restructuring. Borrowers of Mutual are not members of
Mutual solely by virtue of any borrowing relationship with Mutual. Accordingly,
borrowers of the Stock Bank shall not be members of the MHC after the
Restructuring solely by means of any borrowing relationship after the
Restructuring.
ARTICLE V
OPERATION AND OWNERSHIP OF THE MHC AND
EFFECT ON RIGHTS OF MEMBERS
5.1 Ownership. Depositors who have membership or liquidation rights
with respect to Mutual under its existing articles of incorporation immediately
prior to the Restructuring shall continue to have such rights solely with
respect to the MHC after the Restructuring so long as such persons remain
depositors of the Stock Bank following the Restructuring. In addition, all
persons who become depositors of the Stock Bank following the Restructuring will
have membership and liquidation rights with respect to the MHC. Depositors of
First Northern Savings will not have membership rights in the MHC after the
Restructuring. The rights and powers of the MHC will be defined by the MHC's
charter and bylaws and by the statutory and regulatory provisions applicable to
federal mutual holding companies.
5.2 Management. Following the Restructuring, the members of the Board
of Directors of Mutual will become the members of the Board of Directors of the
MHC. Thereafter, the directors of the MHC will be elected by the Members of the
MHC, who will consist of the former Members of Mutual and all persons who become
depositors of the Stock Bank after the Restructuring. It is expected initially
that management of the MHC will consist of certain senior management persons of
Mutual and First Northern.
ARTICLE VI
CONDITIONS TO IMPLEMENTATION OF THE RESTRUCTURING
Consummation of the Restructuring is expressly conditioned upon the
prior occurrence of the following.
(a) The Plan of Restructuring is approved by at least 80% of the Board
of Directors of Mutual.
(b) The Notice is filed with the OTS and either:
(i) The OTS has given written notice of its intent not to
disapprove the Restructuring; or
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(ii) Sixty days have passed since the OTS received the Notice and
deemed it sufficient under 516.2(c) of the OTS regulations, and the OTS has not
given written notice that the Restructuring is disapproved or extended for an
additional 30 days the period during which disapproval may be issued.
(c) Mutual has received the approval of the OTS for:
(i) the Stock Offering;
(ii) the conversion of Mutual from a Wisconsin charter to a federal
charter;
(iii) the establishment of the SHC; and
(iv) the First Northern Merger.
(d) The Plan of Restructuring is submitted to Members pursuant to a
Proxy Statement and form of proxy approved in advance by the OTS and the Plan of
Restructuring is approved by a majority of the total number of votes entitled to
be cast by Members of Mutual at the Special Meeting.
(e) All necessary approvals have been obtained from the OTS in
connection with the adoption of the charter and bylaws of the MHC, the SHC and
the Stock Bank and the Merger, and all conditions specified or otherwise imposed
by the OTS in connection with such matters have been satisfied.
(f) Mutual has received either a private letter ruling of the Internal
Revenue Service or an opinion of Mutual's counsel or public accounting firm as
to the federal income tax consequences of the Restructuring to the MHC, the
Stock Bank, Mutual and the Members.
(g) Mutual has received either a private letter ruling from the
Wisconsin Department of Revenue or an opinion of Mutual's counsel or public
accounting firm as to the Wisconsin tax consequences of the Restructuring to the
MHC, the Stock Bank, Mutual and the Members.
(h) The First Northern Merger has received the First Northern
shareholders' approval, and there shall be no reason known to Mutual which would
otherwise prevent the First Northern Merger.
(i) The Registration Statement has been declared effective by the SEC.
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ARTICLE VII
SPECIAL MEETING OF MEMBERS
7.1 Special Meeting. Upon receipt of OTS approval of the Notice,
Minority Stock Issuance Application, conversion from a Wisconsin charter to a
federal charter, establishment of the SHC, the First Northern Merger, Mutual
shall convene a Special Meeting to approve the Plan of Restructuring in
accordance with Mutual's mutual articles of incorporation and bylaws and the
requirements of the OTS's Mutual Holding Company Regulations.
7.2 Proxy Statement. Promptly after receipt of the approvals referenced
in Section 7.1 above and at least 20 but not more than 45 days prior to the
Special Meeting, Mutual shall distribute proxy solicitation materials to all
Members and beneficial owners of Deposit Accounts held in fiduciary capacities
where the beneficial owners possess voting rights, as of the Voting Record Date,
pursuant to the terms of Mutual's mutual articles of incorporation and bylaws.
(a) The proxy solicitation materials shall include the Proxy
Statement to be used in connection with such solicitation and other documents
authorized for use by the regulatory authorities and may also include a copy of
this Plan of Restructuring, the Stock Issuance Plan and/or the Prospectus.
(b) The Proxy Statement furnished to Members may be in summary
form, provided that a statement is made in bold-face type that a more detailed
description of the proposed transaction may be obtained by returning an enclosed
postage prepaid card or other written communication requesting supplemental
information. Without prior approval of the OTS, the Special Meeting shall not be
held less than 20 days after the last day on which the supplemental information
statement is mailed to requesting Members. The supplemental information
statement may be combined with the Prospectus if the Subscription Offering and
Community Offering are commenced concurrently with or during the proxy
solicitation of Members for the Special Meeting.
(c) Mutual also shall advise each Eligible Account Holder and
Supplemental Eligible Account Holder not entitled to vote at the Special Meeting
of the proposed Restructuring and the scheduled Special Meeting, and provide a
postage prepaid card on which to indicate whether he or she wishes to receive
the Prospectus, if the Subscription Offering is not held concurrently with the
proxy solicitation.
7.3 Vote Required. Pursuant to the OTS's Mutual Holding Company
Regulations, an affirmative vote of a majority of the total number of votes
eligible to be cast by the Members at the Special Meeting is required for
approval of the Plan of Restructuring. Voting may be in person or by proxy.
Mutual may not utilize a proxy that has been previously obtained from a Member
to vote on matters to be presented at the Special Meeting. The OTS and the WDFI
shall be promptly notified of the actions of the Members.
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7.4 Effect of Approval. By voting in favor of the adoption of the Plan
of Restructuring, the Members will be voting in favor of (a) the adoption by the
Stock Bank of its federal capital stock savings bank charter and bylaws, which
are attached hereto as Appendix E and F, respectively, (b) the adoption by the
SHC of its charter and bylaws, which are attached hereto as Appendix G and H,
respectively, (c) the adoption by the MHC of its charter and bylaws which are
attached hereto as Appendix C and D, respectively; and (d) and the Plan of
Merger, which is attached hereto as Appendix B.
ARTICLE VIII
CHARTER AND BYLAWS OF THE MHC
As part of the Restructuring, the MHC will be chartered under the name
"Mutual Bancorp, MHC." Copies of the proposed charter and bylaws of the MHC are
attached hereto as Appendix C and D, respectively, and are made a part of the
Plan of Restructuring. By their approval of the Plan of Restructuring, the Board
of Directors of Mutual has approved and adopted the charter and bylaws of the
MHC.
ARTICLE IX
CHARTER AND BYLAWS OF
THE SHC AND THE STOCK BANK
9.1 Stock Bank. As part of the Restructuring, charter and bylaws of the
Stock Bank shall be adopted to authorize the Stock Bank to operate as a federal
capital stock savings bank. Copies of the proposed charter and bylaws of the
Stock Bank are attached hereto as Appendix E and F, respectively, and are made
part of this Plan of Restructuring.
9.2 SHC. As part of the Restructuring, charter and bylaws of SHC shall
be adopted to authorize SHC to operate as an MHC subsidiary holding company.
Copies of the proposed charter and bylaws of SHC are attached hereto as Appendix
G and H, respectively, and are made part of this Plan of Restructuring.
ARTICLE X
ACCOUNTS AND LOANS SUBSEQUENT TO THE RESTRUCTURING
10.1 Deposit Accounts. Upon completion of the Restructuring, each
Person having a Deposit Account at Mutual prior to Restructuring will continue
to have a Deposit Account at the Stock Bank in the same amount and subject to
the same terms and conditions (except for voting and liquidation rights) as in
effect prior to the Restructuring. Mutual intends at this time to continue to be
a member of the Federal Home Loan Bank System and all of its insured savings
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deposits will continue to be insured by the FDIC through the Savings Association
Insurance Fund to the extent provided by applicable law.
10.2 Loans. All loans shall retain the same status with the Stock Bank
after the Restructuring as they had with Mutual prior to the Restructuring.
ARTICLE XI
RIGHTS OF MEMBERS OF THE MHC
Following the Restructuring, all persons who had membership or
liquidation rights with respect to Mutual as of the Effective Date of the
Restructuring will continue to have such rights solely with respect to the MHC.
All existing proxies granted by Members of Mutual to the Board of Directors of
Mutual shall automatically become proxies granted to the Board of Directors of
the MHC. In addition, all persons who become depositors of the Stock Bank
subsequent to the Restructuring also will have membership and liquidation rights
with respect to the MHC. In each case, no person who ceases to be the holder of
a Deposit Account with the Stock Bank shall have any membership or liquidation
rights with respect to the MHC.
ARTICLE XII
CONVERSION OF MHC TO STOCK FORM
12.1 Conversion Transaction.
(a) Following the Restructuring, the MHC may, but shall not be
required to, elect to convert to stock form in accordance with applicable law.
The terms of such a conversion cannot be determined at this time and there is no
assurance when, if ever, such a conversion will occur. If the conversion does
not occur, the MHC will always own a majority of the Common Stock of SHC, which
in turn will own all of the stock of the Stock Bank.
(b) If the MHC converts to stock form, either directly or in
connection with a merger (a "Conversion Transaction"), the stockholders of the
SHC will be entitled to exchange their shares of stock in the SHC for shares of
the converted MHC or of a stock company formed in connection with such
Conversion Transaction in a manner which does not dilute their ownership rights
and interests in the SHC so that each stockholder of the SHC immediately prior
to the Conversion Transaction receives the same percentage ownership interest in
the SHC or any stock holding company formed in the Conversion Transaction as a
successor to the SHC that such stockholder had in the SHC immediately prior to
the Conversion Transaction, before giving effect to any additional stock
purchases by such person in the Conversion Transaction. It is the intention of
this Plan of Restructuring that, to the extent possible, the holders of SHC
Common Stock be permitted to participate in any conversion of MHC to the fullest
extent possible, in a
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tax-free manner, on a pro-rata basis and in a manner which does not prejudice or
dilute their investment.
12.2 Continuing Rights of Eligible Account Holders. Subject to the
rights of SHC stockholders as provided in law, regulation and this Plan of
Restructuring, in the event of a Conversion Transaction, Eligible Account
Holders shall be afforded the first priority to purchase shares of Capital Stock
of the SHC or any successor corporation in the subscription offering of the
Conversion Transaction if, and to the extent, such Eligible Account Holders hold
Qualifying Deposits in the Stock Bank in the same account number and title at
the eligibility date which is established for the future Conversion Transaction,
as such priority may be modified at the direction of the OTS or by the SHC with
the approval of the OTS. However, no reduction of the subscription rights of
officers and directors based upon increased deposits in the one year prior to
the Eligibility Record Date shall apply in computing this priority in a
Conversion Transaction.
ARTICLE XIII
TIMING OF THE RESTRUCTURING
Mutual intends to consummate the Restructuring as soon as feasible
following the receipt of all required regulatory approvals. As a stock
subsidiary of the MHC, following the Restructuring the SHC will be authorized to
undertake one or more Minority Stock Offerings. Subject to the approval of the
OTS, and the status of the Registration Statement, the SHC intends to commence
the Stock Offering concurrently with the proxy solicitation of Members.
Mutual may close the Stock Offering before the Special Meeting,
provided that the offer and sale of the Common Stock shall be conditioned upon
approval of the Plan of Restructuring by the Members at the Special Meeting.
Mutual's proxy solicitation materials may permit certain Members to return to
Mutual by a reasonable date certain a postage paid card or other written
communication requesting receipt of the Prospectus if the Prospectus is not
mailed concurrently with the proxy solicitation materials. Mutual shall not
distribute the final Prospectus until the Registration Statement has been
declared effective by the SEC and becomes effective under OTS regulations, as
required by applicable law.
The Stock Offering shall be conducted pursuant to the Stock Issuance
Plan in compliance with the OTS securities offering regulations contained in 12
C.F.R. ss. 563g and otherwise in accordance with law.
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ARTICLE XIV
MISCELLANEOUS
14.1 No Financing by Mutual. Mutual will not knowingly offer or sell
Common Stock to any person whose purchase would be financed by funds loaned,
directly or indirectly, to the person by Mutual.
14.2 Interpretations Final. All interpretations of this Plan of
Restructuring and application of its provisions to particular circumstances by a
majority of the Board of Directors of Mutual shall be final, subject to the
authority of the OTS.
14.3 Expenses. Mutual shall use its best efforts to ensure that
expenses incurred in connection with the Restructuring are reasonable.
14.4 Amendments; Termination.
(a) This Plan of Restructuring may be substantively amended by the
Board of Directors of Mutual as a result of comments from regulatory authorities
or otherwise prior to the solicitation of proxies from the Members to vote on
the Plan of Restructuring and at any time thereafter with the concurrence of the
OTS.
(b) This Plan of Restructuring may be terminated by the Board of
Directors of Mutual at any time prior to the Special Meeting and at any time
thereafter with the concurrence of the OTS.
(c) In its discretion, the Board of Directors may modify or terminate
the Plan of Restructuring upon the order of the regulatory authorities or to
conform to new mandatory regulations of the OTS, without a resolicitation of
proxies or another meeting of the Members only if the OTS concurs that such
resolicitation is not required. However, any material amendment of the terms of
the Plan of Restructuring that relate to the Restructuring that occurs after the
Special Meeting shall require a resolicitation of Members.
(d) The Plan of Restructuring shall be terminated if the Restructuring
is not completed within 24 months from the date upon which the Members approve
the Plan of Restructuring, and such period may not be extended by Mutual.
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