MARKET FINANCIAL CORPORATION
REGISTRATION STATEMENT ON FORM S-1
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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1.1 Engagement letter with Charles Webb & Company
1.2 Form of Agency Agreement with Charles Webb & Company
2 Plan of Conversion
3.1 Articles of Incorporation of Market Financial Corporation
3.2 Certificate of Amendment to Articles of Incorporation of Market
Financial Corporation
3.3 Code of Regulations of Market Financial Corporation
5 Opinion of Vorys, Sater, Seymour and Pease regarding legality of
securities being registered
8 Opinion of Vorys, Sater, Seymour and Pease regarding tax matters
10.1 Market Financial Corporation 1997 Stock Option and Incentive Plan
(proposed)
10.2 Market Financial Corporation Recognition and Retention Plan and
Trust Agreement (proposed)
10.3 Employment Agreement between The Market Building and Saving
Company and John T. Larimer (proposed)
23.1 Consent of Grant Thornton LLP
23.2 Consent of Keller & Company, Inc.
23.3 Consent of Vorys, Sater, Seymour and Pease
27 Financial Data Schedule
99.1 Summary Proxy Statement
99.2 Order Form and Form of Certification
99.3 Form of Proxy
99.4 Solicitation and Marketing Material
99.5 Appraisal Agreement between The Market Building and Saving Company
and Keller & Company, Inc.
CHARLES WEBB & COMPANY
INVESTMENT BANKERS AND FINANCIAL ADVISORS
May 27, 1996
Mr. John T. Larimer
President
Market Building and Saving Company
7522 Hamilton
Mt. Healthy, Ohio 45231-4398
Dear Mr. Larimer:
This proposal is in connection with Market Building and Saving Company's (the
"Bank") intention to convert from a mutual to a capital stock form of
organization (the "Conversion"). In order to effect the Conversion, it is
contemplated that all of the Bank's common stock to be outstanding pursuant to
the Conversion will be issued to a holding company (the "Company") to be formed
by the Bank, and that the Company will offer and sell shares of its common stock
first to eligible persons (pursuant to the Bank's Plan of Conversion) in a
Subscription Offering and then in a Community Offering.
Charles Webb & Company ("Webb") will act as the Bank's and the Company's
exclusive financial advisor and marketing agent in connection with the
Conversion. This letter sets forth selected terms and conditions of our
engagement.
1. ADVISORY/CONVERSION SERVICES. As the Bank's and Company's financial
advisor and marketing agent, Webb will provide the Bank and the Company with a
comprehensive program of conversion services designated to promote an orderly,
efficient, cost-effective and long-term stock distribution. Webb will provide
financial and logistical advice to the Bank and the Company concerning the
offering and related issues. Webb will assist in providing of conversion
enhancement services intended to maximize stock sales in the Subscription
Offering and to residents of the Bank's market area, if necessary, in the
Community Offering.
Webb shall provide financial advisory services to the Bank which are typical in
connection with an equity offering and include, but are not limited to, overall
financial analysis of the client with a focus on identifying factors which
impact the valuation of an equity security and provide the appropriate
recommendations for the betterment of the equity valuation.
Mr John T. Larimer
May 29, 1996
Page 2 of 5
Additionally, post conversion financial advisory services will include advice on
shareholder relations, NASDAQ listing, dividend policy, stock repurchase
strategy and communications with market makers. Prior to the closing of the
offering, Webb shall furnish to client a Post-conversion reference manual which
will include specifies relative to these items. (The nature of the services to
be provided by Webb as the Bank's and the Company's financial advisor and
marketing agent are further described in Exhibit A attached hereto.)
2. PREPARATION OF OFFERING DOCUMENTS. The Bank, the Company and their counsel
will draft the Registration Statement, Application for Conversion, Prospectus
and other documents to be used in connection with the Conversion. Webb will
attend meetings to review these documents and advise you on their form and
content. Webb and their counsel will draft appropriate agency agreement and
related documents as well as marketing materials other than the Prospectus.
3. DUE DILIGENCE REVIEW. Prior to filing the Registration Statement,
Application for Conversion or any offering or other documents naming Webb as the
Bank's and the Company's financial advisor and marketing agent, Webb and their
representatives will undertake substantial investigations to learn about the
Bank's business and operations ("due diligence review") in order to confirm
information provided to us and to evaluate information to be contained in the
Bank's and/or the Company's offering documents. The Bank agrees that it will
make available to Webb all relevant information, whether or not publicly
available, which Webb reasonably request, and will permit Webb to discuss
personnel and the operations and prospects of the Bank with management. Webb
will treat all material non-public information as confidential. The Bank
acknowledges that Webb will rely upon the accuracy and completeness of all
information received from the Bank, its officers, directors, employees, agents
and representatives, accountants and counsel including this letter of intent to
serve as the Bank's and the Company's financial advisor and marketing agent.
4. REGULATORY FILINGS. The Bank and/or the Company will cause appropriate
offering documents to be filed with all regulatory agencies including, the
Securities and Exchange Commission ("SEC"), the National Association of
Securities Dealers ("NASD"), and such state securities commissioners as may be
determined by the Bank.
5. AGENCY AGREEMENT. The specific terms of the conversion services,
conversion offering enhancement and syndicated offering services contemplated in
this letter shall be set forth in an Agency Agreement between Webb and the Bank
and the Company to be executed prior to commencement of the offering, and dated
the date that the Company's Prospectus is declared effective and/or authorized
to be disseminated by the appropriate regulatory agencies, the SEC,
Mr John T. Larimer
May 29, 1996
Page 3 of 5
the NASD and such state securities commissioners and other regulatory agencies
as required by applicable law.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Agency Agreement will
provide for customary representations, warranties and covenants by the Bank and
Webb, and for the Company to indemnify Webb and their controlling persons (and,
if applicable, the members of the selling group and their controlling persons),
and for Webb to indemnify the Bank and the Company against certain liabilities,
including, without limitation, liabilities under the Securities Act of 1993.
7. FEES. For the services hereunder, the Bank and/or Company shall pay the
following fees to Webb at closing unless stated otherwise:
(a) A Management Fee of $25,000 payable in four consecutive monthly
installments of $6,250 commencing with the signing of this letter.
Such fees shall be deemed to have been earned when due. Should the
Conversion be terminated for any reason not attributable to the
action or inaction of Webb, Webb shall have earned and be entitled to
be paid fees accruing through the stage at which point the
termination occurred.
(b) A Success Fee of 1.5% of the aggregate Purchase Price of Common Stock
sold in the Subscription Offering and Community Offering excluding
shares purchased by the Bank's officers, directors or employees (or
members of their immediate families) plus any ESOP, tax-qualified or
stock based compensation plans (except IRA's) or similar plan created
by the Bank for some or all of its directors or employees. The
Management Fee described in Paragraph 7(a) will be deducted from this
Success Fee.
(c) If any shares of the Company's stock remain available after the
subscription offering, at the request of the Bank, Webb will seek to
form a syndicate of registered broker-dealers to assist in the sale
of such common stock on a best efforts basis, subject to the terms
and conditions set forth in the selected dealers agreement. Webb
will endeavor to distribute the common stock among dealers in a
fashion which best meets the distribution objectives of the Bank and
the Plan of Conversion. Webb will be paid a fee not to exceed 5.5%
of the aggregate Purchase Price of the shares of common stock sold by
them. Webb will pass onto selected broker-dealers, who assist in the
syndicated community, an amount competitive with gross underwriting
discounts charged at such time for comparable amounts of stock sold
at a comparable price per share in a similar market environment.
Fees with respect to purchases affected with the assistance
Mr John T. Larimer
May 29, 1996
Page 4 of 5
of a broker/dealer other than Webb shall be transmitted by Webb to such
broker/dealer. The decision to utilize selected broker-dealers will be
made by the Bank upon consultation with Webb. In the event, with respect
to any stock purchases, fees are paid pursuant to this subparagraph 7(c),
such fees shall be in lieu of, and not in addition to, payment pursuant to
subparagraph 7(a) and 7(b).
8. CONVERSION AGENT. The Bank shall pay Webb a fee of $6,500 for performance
of conversion agent and other data processing duties. Webb shall sub-contract
these duties.
9. EXPENSES. The Bank will bear those expenses of the proposed offering
customarily borne by issuers, including, without limitation, regulatory filing
fees, SEC, "Blue Sky," and NASD filing and registration fees; the fees of the
Bank's accountants, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing and syndicate expenses associated with the
Conversion; the fees set forth in Section 7; and fees for "Blue Sky" legal work.
DUE TO CLIENT'S CLOSE PROXIMITY TO OUR OFFICE, WEBB WILL NOT REQUEST ANY EXPENSE
REIMBURSEMENT FOR TRAVEL AND ACCOMMODATION EXPENSES. Webb shall be reimbursed
for the reasonable fees and expenses of their Counsel, not to exceed $25,000.
The selection of such counsel will be done by Webb, with the approval of the
Bank.
10. CONDITIONS. Webb's willingness and obligation to proceed hereunder shall
be subject to, among other things, satisfaction of the following conditions in
Webb's opinion, which opinion shall have been formed in good faith by Webb after
reasonable determination and consideration of all relevant factors: (a) full
and satisfactory disclosure of all relevant material, financial and other
information in the disclosure documents and a determination by Webb, in their
sole discretion, that the sale of stock on the terms proposed is reasonable
given such disclosures; (b) no material adverse change in the condition or
operations of the Bank subsequent to the execution of the agreement; and (c) no
market conditions at the time of offering which in Webb's opinion make the sale
of the shares by the Company inadvisable.
11. BENEFIT. This Agreement shall inure to the benefit of the parties hereto
and their respective successors and to the parties indemnified hereunder and
their successors, and the obligations and liabilities assumed hereunder by the
parties hereto shall be binding upon their respective successors provided,
however, that this Agreement shall not be assignable by Webb.
12. DEFINITIVE AGREEMENT. This letter reflects Webb's present intention of
proceeding to work with the Bank on its proposed conversion. It does not create
a binding obligation on the part of the Bank, the Company or Webb except as to
the agreement to maintain the confidentiality of non-public information set
forth in Section 3, the payment of certain fees as set forth in Section 7(a) and
7(b) and the assumption of expenses as set forth in Section 9, all of which
shall constitute
Mr John T. Larimer
May 29, 1996
Page 5 of 5
the binding obligations of the parties hereto and which shall survive the
termination of this Agreement or the completion of the services furnished
hereunder and shall remain operative and in full force and effect. You further
acknowledge that any report or analysis rendered by Webb pursuant to this
engagement is rendered for use solely by the management of the Bank and its
agents in connection with the Conversion. Accordingly, you agree that you will
not provide any such information to any other person without prior written
consent.
Webb acknowledges that in offering the Company's stock no person will be
authorized to give any information or to make any representation not contained
in the offering prospectus and related offering materials filed as part of a
registration statement to be declared effective in connection with the offering.
Accordingly, Webb agrees that in connection with the offering it will not give
any unauthorized information or make any unauthorized representation. We will
be pleased to elaborate on any of the matters discussed in this letter at your
convenience.
If the foregoing correctly sets forth our mutual understanding, please so
indicated by signing and returning the original copy of this letter to the
undersigned.
Very truly yours,
CHARLES WEBB & COMPANY
/s/ Patricia A. McJoynt
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Patricia A. McJoynt
Executive Vice President
MARKET BUILDING & SAVINGS COMPANY
By:/s/ John T. Larimer May 27, 1996
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John T. Larimer, President Date
EXHIBIT A
CONVERSION SERVICES PROPOSAL
TO MARKET BUILDING AND SAVING COMPANY
Charles Webb & Company provides thrift institutions converting from mutual to
stock form of ownership with a comprehensive program of conversion services
designed to promote an orderly, efficient, cost-effective and long-term stock
distribution. The following list is representative of the conversion services,
if appropriate, we propose to perform on behalf of the Bank.
GENERAL SERVICES
Assist management and legal counsel with the design of the transaction
structure.
Analyze and make recommendations on bids from printing, transfer agent, and
appraisal firms.
Assist officers and directors in obtaining bank loans to purchase stock, if
requested.
Assist in drafting and distribution of press releases as required or
appropriate.
CONVERSION OFFERING ENHANCEMENT SERVICES
Establish and manage Conversion Center at the Bank. Conversion Center personnel
will track prospective investors; record stock orders; mail order confirmations;
provide the Bank's senior management with daily reports; answer customer
inquires; and handle special situations as they arise.
Assign Webb's personnel to be at the Bank through completion of the Subscription
and Community Offerings to manage the Conversion Center, meet with prospective
shareholders at individual and community information meetings, solicit local
investor interest through a telemarketing campaign, answer inquires, and
otherwise assist in the sale of stock in the Subscription and Community
Offerings. This effort will be led by a Principal of Webb.
Create target investor list based upon review of the Bank's depositor base.
Provide intensive financial and marketing input for drafting of the prospectus.
Prepare other marketing materials, including prospecting letters and brochures,
and media advertisements.
Arrange logistics of community information meeting(s) as required.
Prepare audio-visual presentation by senior management for community information
meeting(s).
Prepare management for question-and-answer period at community information
meeting(s).
Attend and address community information meeting(s) and be available to answer
questions.
BROKER-ASSISTED SALES SERVICES
Arrange for broker information meeting(s) as required.
Prepare audio-visual presentation for broker information meeting(s).
Prepare script for presentation by senior management at broker information
meeting(s).
Prepare management for question-and answer period at broker information
meeting(s).
Attend and address broker information meeting(s) and be available to answer
questions.
Produce confidential broker memorandum to assist participating brokers in
selling the Bank's common stock.
AFTERMARKET SUPPORT SERVICES
Webb will use their best efforts to secure market making and on-going research
commitment from at least two NASD firms.