EXHIBIT 99.3
LANDMARK COMMUNITY BANK
26 Church Street
Canajoharie, New York 13317
(518) 673-2012
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NOTICE OF SPECIAL MEETING OF MEMBERS
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Notice is hereby given that a Special Meeting of Members (the "Special
Meeting") of Landmark Community Bank (the "Bank"), will be held at the main
office of the Bank, located at 26 Church Street, Canajoharie, New York, on
September 23, 1997 at 3:00 p.m., local time. The purpose of this Special
Meeting is to consider and vote upon:
A Plan of Conversion providing for the conversion of the Bank from a
federally chartered mutual savings bank to a federally chartered stock
savings bank as a wholly owned subsidiary of Landmark Financial Corp. (the
"Company"), a newly organized Delaware corporation formed by the Bank for
the purpose of becoming the holding company for the Bank, the subsequent
conversion of the Bank to either a national bank or a New York-chartered
commercial bank, and the related transactions provided for in such Plan of
Conversion, including the adoption of a Federal Stock Charter and Bylaws
for the Bank and the sale by the Company to the public of its shares of
common stock; and such other business as may properly come before this
Special Meeting or any adjournment thereof. Management is not aware of
any such other business.
The members who shall be entitled to notice of and to vote at the Special
Meeting and any adjournment thereof are depositors and certain borrowers of
the Bank at the close of business on August 1, 1997. In the event there are
not sufficient votes for approval of the Plan of Conversion at the time of
the Special Meeting, the Special Meeting may be adjourned from time to time
in order to permit further solicitation of proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Gordon E. Coleman
Chief Executive Officer
Canajoharie, New York
, 1997
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YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR APPROVAL OF THE PLAN OF CONVERSION BY COMPLETING THE
ENCLOSED PROXY CARD AND RETURNING IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
YOUR VOTE IS VERY IMPORTANT.
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SUMMARY OF PROPOSED CONVERSION
This summary does not purport to be complete and is qualified in its
entirety by the more detailed information contained in the remainder of this
Proxy Statement and the accompanying Prospectus.
Under its present mutual form of organization, the Bank has no
stockholders. Its deposit account holders are members of the Bank and have
voting rights in that capacity. In the unlikely event of liquidation, the
Bank's deposit account holders would have the sole right to receive any
assets of the Bank remaining after payment of its liabilities (including the
claims of all deposit account holders to the withdrawal value of their
deposits). Under the Plan of Conversion (the "Plan of Conversion") to be
voted on at the Special Meeting, the Bank would be converted into a federally
chartered savings bank organized in stock form and all of the Bank's common
stock would be sold concurrently to the Company (the "Stock Conversion").
Subsequently, the Bank expects to convert from a federally chartered stock
savings bank to either a national bank or a New York-chartered commercial
bank (the "Bank Conversion"). References to the Bank include the Bank when
organized in stock form, the national bank, or the New York-chartered
commercial bank, as indicated by the context. The Company will offer and sell
its common stock (the "Common Stock") in a subscription offering (1) to
depositors with an account balance of $50 or more as of December 31, 1995
("Eligible Account Holders"), (2) tax-qualified employee stock benefit plans
of the Bank ("Tax-Qualified Employee Plans"), (3) depositors of the Bank with
an account balance of $50 or more as of June 30, 1997 ("Supplemental Eligible
Account Holders"), (4) depositors of the Bank as of August 1, 1997, other
then Eligible or Supplemental Eligible Account Holders, and borrowers as of
April 1, 1997 ("Other Members") and (5) directors, officers and employees of
the Bank (the "Subscription Offering"). Notwithstanding the foregoing, to the
extent orders for shares exceed the maximum of the appraisal range,
Tax-Qualified Employee Plans shall be afforded a first priority to purchase
shares sold above the maximum of the appraisal range. It is anticipated that
Tax-Qualified Employee Plans will purchase 8% of the Common Stock sold in the
Stock Conversion.
Concurrent with, during or following completion of the Subscription
Offering, to the extent the Common Stock is not all sold to the persons in
the foregoing categories, the Company may offer Common Stock to members of
the general public to whom a prospectus (the "Prospectus") has been delivered
("Other Subscribers"), with first preference to natural persons residing in
the County in which the Bank maintains its office (the "Community Offering").
The Subscription Offering and the Community Offering are referred to
collectively as the "Subscription and Community Offering." Voting and
liquidation rights with respect to the Bank would thereafter be held by the
Company, except to the limited extent of the liquidation account (the
"Liquidation Account") that will be established for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders of the Bank and
voting and liquidation rights in the Company would be held only by those
persons who become stockholders of the Company through purchase of shares of
its Common Stock. See "Description of the Plan of Conversion--Principal
Effects of Conversion--Liquidation Rights of Depositor Members."
THE CONVERSION WILL NOT AFFECT THE BALANCE, INTEREST RATE OR FEDERAL
INSURANCE PROTECTION OF ANY SAVINGS DEPOSIT, AND NO PERSON WILL BE OBLIGATED
TO PURCHASE ANY STOCK IN THE STOCK CONVERSION.
Business Purposes Net Stock Conversion proceeds are expected to
for Conversion increase the capital of the Bank, which will
support the expansion of its financial
services to the public. The conversion to
stock form and the use of a holding company
structure are also expected to enhance its
ability to expand through possible mergers
and acquisitions (although no such
transactions are contemplated at this time)
and will facilitate its future access of the
Company and the Converted Bank to the capital
markets. The Bank Conversion shall be deemed
to occur and shall be effective upon
completion of all actions necessary or
appropriate under applicable federal statutes
and regulations and the policies of the
Office of Thrift Supervision ("OTS") and
either the Office of the Comptroller of the
Currency (the "OCC") or the New York State
Banking Department (the "Department") to
complete the conversion of the Converted
Bank, including without limitation the
approval of the Bank Conversion by the
Company as the sole stockholder of the
Converted Bank. The Bank Conversion is
expected to be consummated as soon as
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practicable following the consummation of the
Stock Conversion.
Subscription and As part of the Stock Conversion, Common Stock
Community Offering is being offered for sale in the Subscription
Offering, in the priorities summarized below,
to the Bank's (1) Eligible Account Holders,
(2) Tax-Qualified Employee Plans, (3)
Supplemental Eligible Account Holders (4)
Other Members, and (5) employees, officers
and directors. In addition, in the Community
Offering, Other Subscribers may purchase
Common Stock to the extent shares are
available after satisfaction of subscriptions
in the Subscription Offering, with a
preference first to natural persons residing
in the County in which the Bank maintains its
offices.
Subscription Rights Each Eligible Account Holder has been given
of Eligible Account non-transferable rights to subscribe for an
Holders amount of shares equal to the greater of (i)
$50,000 of the Common Stock sold in the Stock
Conversion; (ii) one-tenth of one percent of
the total offering of shares of Common Stock
in the Stock Conversion, to the extent such
shares are available; or (iii) 15 times the
product (rounded down to the whole next
number) obtained by multiplying the total
number of shares to be issued by a fraction
of which the numerator is the amount of
qualifying deposits of such subscriber and
the denominator is the total qualifying
deposits of all account holders in this
category on the qualifying date.
Subscription Rights The Bank's Tax-Qualified Employee Plans have
of Tax-Qualified been given non-transferable rights to
Employee Plans subscribe, individually and in the aggregate,
for up to 10% of the total number of shares
sold in the Stock Conversion after
satisfaction of subscriptions of Eligible
Account Holders. Notwithstanding the
foregoing, to the extent orders for shares
exceed the maximum of the appraisal range,
Tax-Qualified Employee Plans shall be
afforded a first priority to purchase shares
sold above the maximum of the appraisal
range. It is anticipated that Tax-Qualified
Employee Plans will purchase 8% of the Common
Stock sold in the Stock Conversion.
Subscription Rights After satisfaction of subscriptions of
of Supplemental Eligible Account Holders and Tax-Qualified
Eligible Account Employee Plans, each Supplemental Eligible
Holders Account Holder (other than directors and
officers of the Bank and their associates)
has been given non-transferable rights to
subscribe for an amount of shares equal to
the greater of (i) $50,000 of the Common
Stock sold in the Stock Conversion; (ii)
one-tenth of one percent of the total
offering of shares of Common Stock in the
Stock Conversion, to the extent such shares
are available; or (iii) 15 times the product
(rounded down to the whole next number)
obtained by multiplying the total number of
shares to be issued by a fraction of which
the numerator is the amount of qualifying
deposits of such subscriber and the
denominator is the total qualifying deposits
of all account holders in this category on
the qualifying date. The subscription rights
of each Supplemental Eligible Account Holder
shall be reduced to the extent of such
person's subscription rights as an Eligible
Account Holder.
Subscription Rights Each Other Member has been given non-
of Other Members transferable rights to subscribe for an
amount of shares equal to the greater of (i)
$50,000 of the Common Stock sold in the Stock
Conversion; or (ii) one-tenth of one percent
of the total number of shares offered in the
Stock Conversion after satisfaction of the
subscriptions of the Bank's Eligible Account
Holders, Tax-Qualified Employee Plans and
Supplemental Eligible Account Holders.
Subscription Rights Each individual employee, officer and
of Bank Personnel director of the Bank has been given the right to
subscribe for an amount of shares equal to
$50,000 of the Common Stock sold in the Stock
Conversion after satisfaction of the
subscriptions of Eligible Account Holders,
Tax-Qualified Employee Plans, Supplemental
Eligible Account Holders and Other Members.
Total shares subscribed for by the employees,
officers and directors in this category may
not exceed 25% of the total shares sold in
the Stock Conversion.
Purchase No person or entity, together with
Limitations associates, and persons acting in concert,
may purchase more than $50,000 of the Common
Stock offered in the Stock Conversion based on the
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Estimated Valuation Range (as
calculated without giving effect to any
increase in such range subsequent to the date
hereof). The Boards of Directors of the
Company and the Bank may, in their sole
discretion, increase the maximum purchase
limitation up to 9.99% of the shares sold,
provided that orders for shares exceeding 5%
shall not exceed in the aggregate, 10% of the
shares offered in the Subscription Offering.
The aggregate purchases of directors and
executive officers and their associates may
not exceed 35% of the total number of shares
offered in the Stock Conversion. These
purchase limitations do not apply to the
Bank's Tax-Qualified Employee Plans.
Expiration Date of All subscriptions for Common Stock must be
Subscription and received by Noon, Eastern Time on September
Community Offerings 16, 1997.
How to Subscribe For information on how to subscribe for
for Shares Common Stock being offered in the Stock
Conversion, please read the Prospectus and
the stock order form and instructions
accompanying this Proxy Statement.
Subscriptions will not become effective until
the Plan of Conversion has been approved by
the Bank's members and all of the Common
Stock offered in the Stock Conversion has
been subscribed for or sold in the
Subscription and Community Offering or
through such other means as may be approved
by the OTS.
Price of Common All sales of Common Stock in the Subscription
Stock and Community Offering will be made at the
same price per share which is currently
expected to be $10.00 per share on the basis
of an independent appraisal of the pro forma
market value of the Bank and the Company upon
Stock Conversion. On the basis of a
preliminary appraisal by FinPro, Inc. which
has been reviewed by the OTS, a minimum of 98,000
and a maximum of 152,000 shares will be offered in the
Stock Conversion. See "The Conversion--Stock
Pricing and Number of Shares to be Issued" in
the Prospectus.
Tax Consequences The Bank has received an opinion from its
special counsel, Luse Lehman Gorman Pomerenk
& Schick, P.C., stating that the Stock
Conversion is a nontaxable reorganization
under Section 368(a)(1)(F) of the Internal
Revenue Code of 1986, as amended (the
"Code"). The Bank also has received an
opinion from Eric W. Montanye, CPA
stating that the Stock Conversion will not be
a taxable transaction for New York income tax
purposes.
Required Vote Approval of the Plan of Conversion will
require the affirmative vote of a majority of
all votes eligible to be cast at the Special
Meeting.
YOUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR
THE PLAN OF CONVERSION
LANDMARK COMMUNITY BANK
PROXY STATEMENT
SPECIAL MEETING OF MEMBERS TO BE HELD ON SEPTEMBER 23, 1997
PURPOSE OF MEETING
This Proxy Statement is being furnished to you in connection with the
solicitation on behalf of the Board of Directors of Landmark Community Bank
(the "Bank") of the proxies to be voted at the Special Meeting of Members
(the "Special Meeting") of the Bank to be held at the main office of the
Bank, located at 26 Church Street, Canajoharie, New York, on September 23,
1997 at 3:00 p.m. Eastern Time, and at any adjournments thereof. The Special
Meeting is being held for the purpose of considering and voting upon a Plan
of Conversion under which the Bank would be converted (the "Stock
Conversion") from its present mutual form of organization into a federally
chartered savings bank organized in stock form, the concurrent sale of all
the common stock of the stock savings bank to Landmark Financial Corp. (the
"Company"), a Delaware corporation, and the sale by the Company of shares of
its common stock (the "Common Stock") and the subsequent conversion of the
Bank to either a national bank or a New York-chartered commercial bank (the
"Bank Conversion"), and such other business as may properly come before the
meeting and any adjournment thereof. References to the Bank include the Bank
when organized in stock form, the national bank, or the New York-chartered
commercial bank, as indicated by the context.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE BANK RECOMMENDS THAT YOU VOTE TO APPROVE THE
PLAN OF CONVERSION.
The Bank is currently organized in mutual rather than stock form, meaning
that it has no stockholders and no authority under its federal mutual charter
to issue capital stock. The Bank's Board of Directors has adopted the Plan of
Conversion providing for the Conversion. The sale of Common Stock of the
Company, which was recently formed to become the holding company of the Bank,
will substantially increase the Bank's net worth. The Company will exchange a
portion of the net proceeds from the sale of the Common Stock for the common
stock of the Bank to be issued upon Stock Conversion. The Company expects to
retain the balance of the net proceeds (up to 50%), as its initial
capitalization of which the Company intends to lend funds to the ESOP to fund
its purchase of Common Stock. This increased capital will support the
expansion of the Bank's financial services to the public. The Board of
Directors of the Bank also believes that the conversion to stock form and the
use of a holding company structure will enhance the Bank's ability to expand
through possible mergers and acquisitions (although no such transactions are
contemplated at this time) and will facilitate its future access to the
capital markets.
The Board of Directors of the Bank believes that the Stock Conversion
will further benefit the Bank by enabling it to attract and retain key
personnel through prudent use of stock-related incentive compensation and
benefit plans. See "Management--Benefit Plans" in the accompanying Prospectus.
Voting in favor of the Plan of Conversion will not obligate any person to
purchase any Common Stock.
THE OTS HAS APPROVED THE PLAN OF CONVERSION SUBJECT TO THE APPROVAL OF
THE BANK'S MEMBERS AND THE SATISFACTION OF CERTAIN OTHER CONDITIONS. HOWEVER,
SUCH APPROVAL DOES NOT CONSTITUTE A RECOMMENDATION OR ENDORSEMENT OF THE PLAN
OF CONVERSION BY THE OTS.
INFORMATION RELATING TO VOTING AT THE SPECIAL MEETING
The Board of Directors of the Bank has fixed August 1, 1997 as the
voting record date ("Voting Record Date") for the determination of members
entitled to notice of the Special Meeting. All Bank depositors are members of
the Bank under its current charter. All Bank members of record as of the
close of business on the Voting Record Date will be entitled to vote at the
Special Meeting or any adjournment thereof.
Each depositor (including IRA and Keogh account beneficiaries) will be
entitled at the Special Meeting to cast one vote for each $100, or fraction
thereof, of the aggregate withdrawal value of all of such depositor's
accounts in the Bank as of the Voting Record Date, up to a maximum of 500
votes. Each borrower of the savings bank as of April 1, 1997 shall be able
to cast one vote as a borrower member as long as such borrower's borrowings
as of April 1, 1997 remain outstanding as of the Voting Record Date. Joint
accounts shall be entitled to no more than 500 votes, and any owner may cast
all the votes unless notified in writing. In general, accounts held in
different ownership capacities will be treated as separate memberships for
purposes of applying the 500 vote limitation. For example, if two persons
hold a $50,000 account in their joint names and each of the persons also
holds a separate account for $50,000 in his own name, each person would be
entitled to 500 votes for each separate account and they would together be
entitled to cast 500 votes on the basis of the joint account. Where no
proxies are received from IRA and Keogh account beneficiaries, after due
notification, the Bank, as trustee of these accounts, is entitled to vote
these accounts in favor of the Plan of Conversion.
Approval of the Plan of Conversion requires the affirmative vote of a
majority of the total outstanding votes of the Bank's members eligible to be
cast at the Special Meeting. As of August 1, 1997, the Bank had
members who were entitled to cast a total of votes at the Special
Meeting.
Bank members may vote at the Special Meeting or any adjournment thereof
in person or by proxy. Any member giving a proxy will have the right to
revoke the proxy at any time before it is voted by giving written notice to
the Secretary of the Bank, provided that such written notice is received by
the Secretary prior to the Special Meeting or any adjournment thereof, or
upon request if the member is present and chooses to vote in person.
All properly executed proxies received by the Board of Directors of the
Bank will be voted in accordance with the instructions indicated thereon by
the members giving such proxies. If no instructions are given, such proxies
will be voted in favor of the Plan of Conversion. If any other matters are
properly presented at the Special Meeting and may properly be voted on, the
proxies solicited hereby will be voted on such matters in accordance with the
best judgment of the proxy holders named thereon. Management is not aware of
any other business to be presented at the Special Meeting.
If a proxy is not executed and is returned or the member does not vote in
person, the Bank is prohibited by OTS regulations from using a previously
executed proxy to vote for the Conversion. As a result, failure to vote may
have the same effect as a vote against the Plan of Conversion.
To the extent necessary to permit approval of the Plan of Conversion,
proxies may be solicited by officers, directors or regular employees of the
Bank, in person, by telephone or through other forms of communication and, if
necessary, the Special Meeting may be adjourned to a later date. Such persons
will be reimbursed by the Bank for their expenses incurred in connection with
such solicitation. The Bank will bear all costs of this solicitation. The
proxies solicited hereby will be used only at the Special Meeting and at any
adjournment thereof.
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DESCRIPTION OF THE PLAN OF CONVERSION
The Plan of Conversion to be presented for approval at the Special
Meeting provides for the Conversion to be accomplished through adoption of an
amended charter and bylaws for the Bank to authorize the issuance of capital
stock along with the concurrent formation of a holding company, the
subsequent conversion of the Bank to either a national bank or a New
York-chartered commercial bank, and the related transactions provided for in
the Plan of Conversion, including the adoption of an amended Federal Stock
Charter and Bylaws for the Bank. As part of the Conversion, the Plan of
Conversion provides for the Subscription Offering of the Common Stock to the
Bank's (i) Eligible Account Holders (deposit account holders with an account
balance of $50 or more as of December 31, 1995); (ii) Tax-Qualified Employee
Plans, (iii) Supplemental Eligible Account Holders (deposit account holders
with an account balance of $50 or more as of June 30, 1997); (iv) Other
Members (certain deposit account holders who are not Eligible Account Holders
or Supplemental Eligible Account Holders and borrowers as of April 1, 1997);
and (v) the Bank's employees, officers and directors. Notwithstanding the
foregoing, to the extent orders for shares exceed the maximum of the
appraisal range, Tax-Qualified Employee Plans shall be afforded a first
priority to purchase shares sold above the maximum of the appraisal range. It
is anticipated that Tax-Qualified Employee Plans will purchase 8% of the
Common Stock sold in the Stock Conversion. Concurrently with, during or
following completion of the Subscription Offering, members of the general
public, with a preference first to natural persons residing in the County in
which the Bank maintains its office, will be afforded the opportunity to
purchase the Common Stock not subscribed for in the Subscription Offering.
THE SUBSCRIPTION OFFERING HAS COMMENCED AS OF THE DATE OF MAILING OF THIS
PROXY STATEMENT. A PROSPECTUS EXPLAINING THE TERMS OF THE SUBSCRIPTION AND
COMMUNITY OFFERING, INCLUDING HOW TO ORDER AND PAY FOR SHARES AND DESCRIBING
THE BUSINESS OF THE BANK AND THE HOLDING COMPANY, ACCOMPANIES THIS PROXY
STATEMENT AND SHOULD BE READ BY ALL PERSONS WHO WISH TO CONSIDER SUBSCRIBING
FOR COMMON STOCK. THE SUBSCRIPTION AND COMMUNITY OFFERING EXPIRES AT NOON,
EASTERN TIME ON SEPTEMBER 16, 1997 UNLESS EXTENDED BY THE BANK AND THE
HOLDING COMPANY.
The federal conversion regulations require that all stock offered in a
conversion must be sold in order for the conversion to become effective. The
conversion regulations require that the offering be completed within 45 days
after completion of the Subscription Offering period unless extended by the
Bank and the Company with the approval of the OTS. This 45-day period expires
October 31, 1997 unless the Subscription Offering is extended. If this is
not possible, an occurrence that is currently not anticipated, the Board of
Directors of the Bank and the Company will consult with the OTS to determine
an appropriate alternative method of selling all unsubscribed shares offered
in the Stock Conversion. The Plan of Conversion provides that the Stock
Conversion must be completed within 24 months after the date of the Special
Meeting.
The Subscription and Community Offering or any other sale of the
unsubscribed shares will be made as soon as practicable after the date of the
Special Meeting. No sales of shares may be completed, either in the
Subscription and Community Offering or otherwise, unless the Plan of
Conversion is approved by the members of the Bank.
The commencement and completion of the Subscription and Community
Offering, however, is subject to market conditions and other factors beyond
the Bank's control. Due to adverse conditions in the stock market in the
past, a number of converting thrift institutions encountered significant
delays in completing their stock offerings or were not able to complete them
at all. No assurance can be given as to the length of time after approval of
the Plan of Conversion at the Special Meeting that will be required to
complete the Subscription and Community Offering or other sale of the Common
Stock to be offered in the Stock Conversion. If delays are experienced,
significant changes may occur in the estimated pro forma market value of the
Common Stock, together with corresponding changes in the offering price and
the net proceeds realized by the Bank and the Company from the sale of the
Common Stock. The Bank and the Company may also incur substantial additional
printing, legal, accounting and other expenses in completing the Conversion.
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The following is a brief summary of the Conversion and is qualified in
its entirety by reference to the Plan of Conversion. The Bank will provide to
you a copy of the Plan of Conversion if you return the enclosed, postage-paid
postcard by , 1997. A copy of the Company's Certificate of
Incorporation and Bylaws are also available from the Bank upon written
request.
PRINCIPAL EFFECTS OF CONVERSION
DEPOSITORS. The Conversion will not change the amount, interest rate,
withdrawal rights or federal insurance protection of deposit accounts, or
affect deposit accounts in any way other than with respect to voting and
liquidation rights as discussed below.
BORROWERS. The rights and obligations of borrowers under their loan
agreements with the Bank will remain unchanged by the Conversion. The
principal amount, interest rate and maturity date of loans will remain as
they were contractually fixed prior to the Conversion.
VOTING RIGHTS OF DEPOSITORS. Under the Bank's current federal mutual
charter, depositors have voting rights as members of the Bank with respect to
the election of directors and certain other affairs of the Bank. After the
Conversion, exclusive voting rights with respect to all such matters will be
vested in the Company as the sole stockholder of the Bank. Depositors will no
longer have any voting rights, except to the extent that they become
stockholders of the Company through the purchase of its Common Stock. Voting
rights in the Company will be held exclusively by its stockholders.
LIQUIDATION RIGHTS OF DEPOSITOR MEMBERS. Currently, in the unlikely
event of liquidation of the Bank, any assets remaining after satisfaction of
all creditors' claims in full (including the claims of all depositors to the
withdrawal value of their accounts) would be distributed pro rata among the
depositors of the Bank, with the pro rata share of each being the same
proportion of all such remaining assets as the withdrawal value of each
depositor's account is of the total withdrawal value of all accounts in the
Bank at the time of liquidation. After the Conversion, the assets of the Bank
would first be applied, in the event of liquidation, against the claims of
all creditors (including the claims of all depositors to the withdrawal value
of their accounts). Any remaining assets would then be distributed to the
persons who qualified as Eligible Account Holders or Supplemental Eligible
Account Holders under the Plan of Conversion to the extent of their interests
in a "Liquidation Account" that will be established at the time of the
completion of the Stock Conversion and then to the Company as the sole
stockholder of the Bank's outstanding common stock. The Bank's depositors who
did not qualify as Eligible Account Holders or Supplemental Eligible Account
Holders would have no right to share in any residual net worth of the Bank in
the event of liquidation after the Stock Conversion, but would continue to
have the right as creditors of the Bank to receive the full withdrawal value
of their deposits prior to any distribution to the Company as the Bank's sole
stockholder. In addition, the Bank's deposit accounts will continue to be
insured by the Federal Deposit Insurance Corporation ("FDIC") to the maximum
extent permitted by law, currently up to $100,000 per insured account. The
Liquidation Account will initially be established in an amount equal to the
net worth of the Bank as of the date of the Bank's latest statement of
financial condition contained in the final prospectus used in connection with
the Stock Conversion. Each Eligible Account Holder and/or Supplemental
Eligible Account Holder will receive an initial interest in the Liquidation
Account in the same proportion as the balance in all of his qualifying
deposit accounts was of the aggregate balance in all qualifying deposit
accounts of all Eligible Account Holders and Supplemental Eligible Account
Holders on December 31, 1995 or June 30, 1997, respectively. For accounts in
existence on both dates, separate subaccounts shall be determined on the
basis of the qualifying deposits in such accounts on the record dates.
However, if the amount in the qualifying deposit account on any annual
closing date of the Bank is less than the lowest amount in such deposit
account on the Eligibility Record Date and/or Supplemental Eligibility Record
Date, and any subsequent annual closing date, this interest in the
Liquidation Account will be reduced by an amount proportionate to such
reduction in the related deposit account and will not thereafter be increased
despite any subsequent increase in the related deposit account. The Bank
Conversion shall not be deemed to be a complete liquidation of the Converted
Bank for purposes of the distribution of the liquidation account. Upon
consummation of the Bank Conversion, the liquidation account and all rights
and obligations of the federally-chartered stock bank in connection
therewith, shall be assumed by the commercial bank.
THE BANK. Under federal law, the stock savings bank resulting from the
Stock Conversion will be deemed to be a continuation of the mutual association
rather than a new entity and will continue to have all of the rights,
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privileges, properties, assets and liabilities of the Bank prior to the Stock
Conversion. The Stock Conversion will enable the Bank to issue capital stock,
but will not change the general objectives, purposes or types of business
currently conducted by the Bank, and no assets of the Bank will be
distributed in order to effect the Stock Conversion, other than to pay the
expenses incident thereto. After the Stock Conversion, the Bank will remain
subject to examination and regulation by the OTS and will continue to be a
member of the Federal Home Loan Bank System. The Stock Conversion will not
cause any change in the executive officers or directors of the Bank.
THE BANK CONVERSION. Following the Conversion the Bank intends to
convert to either a national bank or commercial bank charter. Following the
Bank Conversion, the commercial bank will be deemed to be a continuation of
the federally-chartered stock bank and will have all the rights, privileges,
properties, assets and liabilities of the federally-chartered stock bank. The
Bank Conversion shall be deemed to occur and shall be effective upon
completion of all actions necessary or appropriate to complete the Bank
Conversion. After the Bank Conversion, the Bank will be subject to
examination and regulation by either the OCC or the Department. The Bank
intends to remain a member of the Federal Home Loan Bank System following the
Bank Conversion. The Bank Conversion will not cause any change in the
executive officers or directors of the Bank.
TAX CONSEQUENCES. Consummation of the Stock Conversion is expressly
conditioned upon prior receipt by the Bank of either a ruling from the
Internal Revenue Service or an opinion of Luse Lehman Gorman Pomerenk &
Schick, P.C. with respect to federal taxation, and a ruling of the New York
taxation authorities or an opinion of Eric W. Montanye, CPA with respect
to New York taxation, to the effect that consummation of the Stock Conversion
will not be taxable to the Converted Bank or the Company.
An opinion has been received from Luse Lehman Gorman Pomerenk & Schick,
P.C. with respect to the proposed Stock Conversion of the Bank, to the effect
that (i) the Stock Conversion will qualify as a reorganization under Section
368(a)(1)(F) of the Code, and no gain or loss will be recognized to the Bank
in either its mutual form or its stock form by reason of the proposed Stock
Conversion, (ii) no gain or loss will be recognized to the Bank upon the
receipt of money from the Company for stock of the Bank; and no gain or loss
will be recognized to the Company upon the receipt of money for Common Stock
of the Company; (iii) the assets of the Bank in either its mutual or its
stock form will have the same basis before and after the Stock Conversion;
(iv) the holding period of the assets of the Bank will include the period
during which the assets were held by the Bank in its mutual form prior to
conversion; (v) no gain or loss will be recognized by the depositors of the
Bank upon the issuance to them of withdrawable deposit accounts in the Bank
after the Stock Conversion in the same dollar amount as their deposit
accounts in the Bank plus an interest in the Liquidation Account of the Bank,
as described above, in exchange for their deposit account in the Bank; (vi)
the basis of the account holder's deposit accounts in the Bank after the
Stock Conversion will be the same as the basis of his deposit accounts in the
Bank prior to the Stock Conversion; (vii) the basis of each account holder's
interest in the Liquidation Account will be zero; (viii) the basis of the
Common Stock to its shareholders will be the Purchase Price thereof plus, in
the case of stock acquired by account holders, the basis, if any, in the
Subscription Rights; (ix) a shareholder's holding period for Common Stock
acquired through the exercise of Subscription Rights shall begin on the date
on which the Subscription Rights are exercised and the holding period for
Common Stock purchased in the Community Offering or otherwise will commence
on the date following the date on which such stock is purchased; (x) for
purposes of Section 381 of the Code, the Bank will be treated as if there had
been no reorganization, accordingly, the taxable year of the Bank will not
end on the effective date of the Stock Conversion and the tax attributes of
the Bank will be taken into account by the Bank in stock form as if there had
been no reorganization; (xi) the part of the taxable year of the Bank before
the reorganization and the part of the taxable year of the Bank after the
reorganization will constitute a single taxable year of the Bank; (xii) the
Bank, immediately after Stock Conversion, will succeed to and take into
account the earnings and profits of the Bank in mutual form; and (xiii) the
tax attributes of the Bank in mutual form enumerated in Section 381(c) of the
Code will be taken into account by the Bank in stock form.
The opinion from Luse Lehman Gorman Pomerenk & Schick, P.C. is based, among
other things, on certain assumptions, including the assumptions that the
exercise price of the Subscription Rights to purchase Company Common Stock will
be approximately equal to the fair market value of that stock at the time of the
completion of the proposed Stock Conversion. The Company and the Bank have
received a letter issued by FinPro, Inc. ("FinPro") stating that pursuant to
FinPro's valuation, FinPro is of the belief that Subscription Rights issued in
connection with the Stock Conversion will have no value.
5
The Bank has also received an opinion of Luse Lehman Gorman Pomerenk &
Schick, P.C. to the effect that, based in part on the FinPro Letter: (i) no
taxable income will be realized by depositors as a result of the receipt or
exercise of non-transferable Subscription Rights to purchase shares of
Company Common Stock at fair market value; and (ii) no taxable income will be
realized by the Bank or Company on the issuance of Subscription Rights to
eligible subscribers to purchase shares of Company Common Stock at fair
market value.
If it is subsequently established that the Subscription Rights received
by such persons have an ascertainable fair market value, then, in such event,
the Subscription Rights will be taxable to the recipient in the amount of
their fair market value. In this regard, the Subscription Rights may be taxed
partially or entirely at ordinary income tax rates.
With respect to New York taxation, the Bank has received an opinion from
Eric W. Montanye, CPA to the effect that, assuming the Stock Conversion
does not result in any federal taxable income, gain or loss to the Bank in
its mutual or stock form, the Company, the account holders, borrowers,
officers, directors and employees and Tax-Qualified Employee Plans of the
Bank, the Stock Conversion should not result in any New York income tax
liability to such entities or persons.
APPROVAL, INTERPRETATION, AMENDMENT AND TERMINATION
Under the Plan of Conversion, the letter from the OTS giving approval
thereto, and applicable regulations, consummation of the Conversion is
subject to the satisfaction of the following conditions: (a) approval of the
Plan of Conversion by members of the Bank casting at least a majority of the
votes eligible to be cast at the Special Meeting; (b) sale of all of the
Common Stock to be offered in the Stock Conversion; and (c) receipt of
favorable rulings or opinions of counsel as to the federal and New York tax
consequences of the Stock Conversion. The Bank Conversion is subject to OCC
or Department approval of the conversion of the Bank to a national bank or a
New York-chartered commercial bank and Federal Reserve Board ("FRB") approval
of the Company's application to become a bank holding company, which
approvals have not been received as of the date hereof. If the FRB, the OCC
or the Department deny such applications, significantly delay the approval of
such applications, or impose burdensome conditions on the approval of such
applications, the Board of Directors may elect not to proceed with the Bank
Conversion. Unless and until the Bank becomes a national bank or a New
York-chartered commercial bank, the Company will operate as a savings and
loan holding company and the Bank as a federal stock savings bank. If the
Board of Directors elects not to proceed with the Bank Conversion or to
proceed with the Bank Conversion notwithstanding the imposition of conditions
imposed by the OCC, the Department, or the FRB, subscribers for Common Stock
in the Offerings will not be resolicited unless required by regulatory
authority.
The Plan of Conversion may be substantively amended by the Boards of
Directors of the Bank and the Company with the concurrence of the OTS. If the
Plan of Conversion is amended, proxies which have been received prior to such
amendment will not be resolicited unless otherwise required by the OTS. Also,
as required by the federal regulations, the Plan of Conversion provides that
the transactions contemplated thereby may be terminated by the Board of
Directors of the Bank alone at any time prior to the Special Meeting and may
be terminated by the Board of Directors of the Bank at any time thereafter
with the concurrence of the OTS, notwithstanding approval of the Plan of
Conversion by the members of the Bank at the Special Meeting. All
interpretations by the Bank and the Company of the Plan of Conversion and of
the Stock Order Forms and related materials for the Subscription and
Community Offering will be final, except as regards or affects the OTS.
JUDICIAL REVIEW
Section 5(i)(2)(B) of the Home Owners' Loan Act, as amended, 12 U.S.C.
Section1464(i)(2)(B) and Section 563b.8(u) of the Rules and Regulations
promulgated thereunder (12 C.F.R. Section 563b.8(u)) provide: (i) that
persons aggrieved by a final action of the OTS which approves, with or
without conditions, or disapproves a plan of conversion, may obtain review of
such final action only by filing a written petition in the United States
Court of Appeals for the circuit in which the principal office or residence
of such person is located, or in the United States Court of Appeals for the
District of Columbia, requesting that the final action of the OTS be
modified, terminated or set aside, and (ii) that such petition must be filed
within 30 days after publication of notice of such final action in the
Federal Register, or 30 days after the date of mailing of the notice and proxy
statement for the meeting of the
6
converting institution's members at which the conversion is to be voted on,
whichever is later. The notice of the Special Meeting of the Bank's members
to vote on the Plan of Conversion described herein is included at the
beginning of this Proxy Statement. The statute and regulation referred to
above should be consulted for further information.
ADDITIONAL INFORMATION
The information contained in the accompanying Porspectus, including a
more detailed description of the Plan of Conversion, financial statements of
the Bank and a description of the capitalization and business of the Bank and
the Company, including the Bank's directors and executive officers and their
compensation, the conversion of the Bank to a national bank, the anticipated
use of the net proceeds from the sale of the Common Stock and a description
of the Common Stock, is intended to help you evaluate the Conversion and is
incorporated herein by this reference.
YOUR VOTE IS VERY IMPORTANT TO US. PLEASE TAKE A MOMENT NOW TO COMPLETE
AND RETURN YOUR PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY
STILL ATTEND THE SPECIAL MEETING AND VOTE IN PERSON EVEN THOUGH YOU HAVE
VOTED YOUR PROXY. FAILURE TO SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS
VOTING AGAINST THE CONVERSION.
If you have any questions, please call our Stock Information Center at
(518) .
IMPORTANT: YOU MAY BE ENTITLED TO VOTE IN MORE THAN ONE CAPACITY. PLEASE
SIGN, DATE AND PROMPTLY RETURN EACH PROXY CARD YOU RECEIVE.
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THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER WILL BE MADE ONLY BY THE PROSPECTUS.
THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR
GUARANTEED.
REVOCABLE PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
LANDMARK COMMUNITY BANK
FOR A SPECIAL MEETING OF MEMBERS
TO BE HELD ON SEPTEMBER 23, 1997
The undersigned member of Landmark Community Bank (the "Bank"), hereby
appoints the full Board of Directors, with full powers of substitution, as
attorneys-in-fact and agents for and in the name of the undersigned, to vote
such votes as the undersigned may be entitled to vote at the Special Meeting
of Members of the Bank, to be held at the main office of the Bank,
located at 26 Church Street, Canajoharie, New York on September 23, 1997, at
3:00 p.m., Eastern time, and at any and all adjournments thereof. They are
authorized to cast all votes to which the undersigned is entitled as follows:
FOR AGAINST
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1. The adoption of the Plan of Conversion providing for the / / / /
conversion of the bank from a federally chartered mutual
savings association to a federally chartered stock savings
bank as a wholly owned subsidiary of Landmark Financial
Corp. (the "Company"), a newly organized Delaware
Corporation formed by the Bank for the purpose of becoming
the holding company for the Bank, the subsequent
conversion of the Bank to either a national bank or a New
York-chartered commercial bank and the related transactions
provided for in such Plan of Conversion, including the
adoption of an amended Federal Stock Charter and Bylaws
for the Bank and the sale by the Company to the public of its
shares of Common Stock.
FOR AGAINST
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2. The grant of authority to the Board of Directors to adjourn / / / /
the Special Meeting if necessary for the purpose of
soliciting additional votes to approve the Plan.
NOTE: The Board of Directors is not aware of any other matter that may come
before the Special Meeting of Members.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THE BOARD OF DIRECTORS IN
THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
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Votes will be cast in accordance with the Proxy. Should the undersigned
be present and elect to vote at the Special Meeting or at any adjournment
thereof and after notification to the Secretary of the Bank at said Meeting
of the member's decision to terminate this Proxy, then the power of said
attorney-in-fact or agents shall be deemed terminated and of no further force
and effect.
The undersigned acknowledges receipt of a Notice of Special Meeting of
Members and a Proxy Statement dated , 1997, prior to the
execution of this Proxy.
--------------------------
DATE
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SIGNATURE
NOTE: Only one signature is required
in the case of a joint account.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE.
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