Exhibit 99.3
PLAN OF CONVERSION AND REORGANIZATION
OF
PROVIDENT BANCORP, MHC
TABLE OF CONTENTS
1. INTRODUCTION .......................................................................... 1
2. DEFINITIONS ........................................................................... 2
3. PROCEDURES FOR CONVERSION ............................................................. 8
4. HOLDING COMPANY APPLICATIONS AND APPROVALS ............................................ 10
5. SALE OF SUBSCRIPTION SHARES ........................................................... 10
6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES ...................................... 11
7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY ............................... 12
8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY) ...................... 12
9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY) ............................... 13
10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY) ......... 13
11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY) ................................ 14
12. COMMUNITY OFFERING AND MERGER SHARES .................................................. 14
13. SYNDICATED COMMUNITY OFFERING/UNDERWRITTEN PUBLIC OFFERING ............................ 15
14. LIMITATION ON PURCHASES ............................................................... 16
15. PAYMENT FOR SUBSCRIPTION SHARES ....................................................... 17
16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS .......................... 18
17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT ....................... 19
18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES ..................................... 19
19. ESTABLISHMENT OF LIQUIDATION ACCOUNT .................................................. 20
19A. ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION .................................... 21
20. VOTING RIGHTS OF STOCKHOLDERS ......................................................... 22
21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION ...................................... 22
22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION ... 23
23. TRANSFER OF DEPOSIT ACCOUNTS .......................................................... 23
24. REGISTRATION AND MARKETING ............................................................ 23
25. TAX RULINGS OR OPINIONS ............................................................... 23
26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS ......................................... 24
27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY ............................... 24
28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK .......................................... 25
29. CHARTER AND BYLAWS .................................................................... 26
30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE ......................................... 26
31. EXPENSES OF CONVERSION ................................................................ 26
32. AMENDMENT OR TERMINATION OF PLAN ...................................................... 26
33. CONDITIONS TO CONVERSION .............................................................. 26
34. INTERPRETATION ........................................................................ 27
(i)
EXHIBIT A AGREEMENT OF MERGER BETWEEN PROVIDENT BANCORP, INC. AND PROVIDENT
BANK
EXHIBIT B AGREEMENT OF MERGER BETWEEN PROVIDENT BANCORP, MHC AND PROVIDENT
BANK
EXHIBIT C AGREEMENT OF MERGER BETWEEN PROVIDENT BANK AND PROVIDENT INTERIM
BANK III
EXHIBIT D CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY
EXHIBIT E BYLAWS OF THE HOLDING COMPANY
(ii)
PLAN OF CONVERSION AND REORGANIZATION OF
PROVIDENT BANCORP, MHC
1. INTRODUCTION
This Plan of Conversion and Reorganization (the "Plan") provides for the
conversion of Provident Bancorp, MHC, a federal mutual holding company (the
"Mutual Holding Company"), into the capital stock form of organization. The
Mutual Holding Company currently owns a majority of the common stock of
Provident Bancorp, Inc., a federal stock corporation (the "Mid-Tier Holding
Company") that owns 100% of the common stock of Provident Bank (the "Bank"), a
federal stock savings association that is headquartered in Montebello, New York.
A new Delaware stock holding company (the "Holding Company") will be established
as part of the Conversion and will succeed to all the rights and obligations of
the Mutual Holding Company and the Mid-Tier Holding Company and issue Holding
Company Common Stock in the Conversion and Merger. The purpose of the Conversion
is to convert the Mutual Holding Company to the capital stock form of
organization, which will, among other things, permit the Holding Company to
acquire the Acquiree Corporation in the Merger. The Holding Company will offer
its Common Stock in the Offering upon the terms and conditions set forth herein.
The subscription rights granted to Participants in the Subscription Offering are
set forth in Sections 8 through 11 hereof. All sales of Holding Company Common
Stock in the Community Offering, Syndicated Community Offering or Underwritten
Public Offering will be at the sole discretion of the Board of Directors of the
Bank and the Holding Company. As part of the Conversion and the Exchange
Offering, each Minority Stockholder will receive Holding Company Common Stock in
exchange for Minority Shares. The Conversion will have no impact on depositors,
borrowers or customers of the Bank. After the Conversion, the Bank's insured
deposits will continue to be insured by the FDIC to the extent provided by
applicable law.
In furtherance of the Bank's commitment to its community, this Plan
provides for the establishment of a charitable foundation as part of the
Conversion. The Foundation is intended to complement the Bank's existing
community reinvestment activities in a manner that will allow the Bank's local
communities to share in the growth and profitability of the Holding Company and
the Bank over the long term. Consistent with the Bank's goal, the Holding
Company intends to donate to the Foundation cash and shares of Common Stock, in
an aggregate amount equal to 4% of the value of the shares of Conversion Stock
sold in the Conversion.
This Plan has been adopted by the Boards of Directors of the Mutual
Holding Company, the Mid-Tier Holding Company and the Bank. This Plan also must
be approved by (i) a majority of the total number of votes entitled to be cast
by Voting Members of the Mutual Holding Company at a Special Meeting of Members
to be called for that purpose, and (ii) at least two-thirds of the outstanding
common stock of the Mid-Tier Holding Company at a Special Meeting of
Stockholders to be called for that purpose, including at least a majority of the
outstanding shares owned by Minority Stockholders. The OTS must approve this
Plan before it is presented to Voting Members and stockholders of the Mid-Tier
Holding Company for their approval.
2. DEFINITIONS
For the purposes of this Plan, the following terms have the following
meanings:
Account Holder - Any Person holding a Deposit Account in the Bank.
Acquiree Bank - Ellenville National Bank, Ellenville, New York.
Acquiree Corporation - E.N.B. Holding Company, Inc., the bank holding
company, and its subsidiary national bank, that will be merged into the Holding
Company (or a subsidiary thereof) at the closing of, or following, the
Conversion.
Acting in Concert - The term Acting in Concert means (i) knowing
participation in a joint activity or interdependent conscious parallel action
towards a common goal whether or not pursuant to an express agreement; or (ii) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise. A
person or company which acts in concert with another person or company ("other
party") shall also be deemed to be acting in concert with any person or company
who is also acting in concert with that other party, except that any
tax-qualified employee stock benefit plan will not be deemed to be acting in
concert with its trustee or a person who serves in a similar capacity solely for
the purpose of determining whether stock held by the trustee and stock held by
the plan will be aggregated.
Affiliate - Any person that controls, is controlled by, or is under common
control with another person.
Appraised Value Range - The range of the estimated consolidated pro forma
market value of the Holding Company, which shall also be equal to the estimated
pro forma market value of the total number of shares of Conversion Stock to be
issued in the Conversion, as determined by the Independent Appraiser prior to
the Subscription Offering and as it may be amended from time to time thereafter.
The maximum and minimum of the Appraised Value Range may vary as much as 15%
above and 15% below, respectively, the midpoint of the Appraised Value Range.
The appraisal upon which the Appraised Value Range is based may be an appraisal
of the Holding Company, or of the Holding Company and any Acquiree Corporation.
Associate - The term Associate when used to indicate a relationship with
any person, means (i) any corporation or organization (other than the Mid-Tier
Holding Company, the Bank or a majority-owned subsidiary of the Bank) of which
such person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity securities, (ii) any
trust or other estate in which such person has a substantial beneficial interest
or as to which such person serves as trustee or in a similar fiduciary capacity
except that for the purposes of this Plan relating to subscriptions in the
offering, the term "Associate" does not include any Non-Tax-Qualified Employee
Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan in which a
person has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity, and except that, for purposes of aggregating total
shares that may be held by Officers and Directors the term "Associate" does not
include any Tax-Qualified Employee Stock
2
Benefit Plan, and (iii) any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person or who is a Director or
Officer of the Mid-Tier Holding Company, the Bank or the Holding Company, or any
of its parents or subsidiaries.
Bank - Provident Bank, Montebello, New York.
Bank Merger - The merger of Interim with the Bank as set forth in this
Plan.
Code - The Internal Revenue Code of 1986, as amended.
Community - The New York counties of Rockland and Orange.
Community Offering - The offering for sale to certain members of the
general public directly by the Holding Company of shares not subscribed for in
the Subscription Offering.
Control - (including the terms "controlled by," "controlling" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Conversion - The conversion and reorganization of the Mutual Holding
Company to stock form pursuant to this Plan, and all steps incident or necessary
thereto, including the Offering and the Exchange Offering.
Conversion Stock - The Subscription Shares and the Exchange Shares.
Deposit Account - Any withdrawable account, including, without limitation,
savings, time, demand, NOW accounts, money market, certificate and passbook
accounts.
Director - A member of the Board of Directors of the Bank, the Mid-Tier
Holding Company, the Holding Company or the Mutual Holding Company, as
appropriate in the context.
Eligible Account Holder - Any Person holding a Qualifying Deposit on the
Eligibility Record Date for purposes of determining subscription rights and
establishing subaccount balances in the Liquidation Account.
Eligibility Record Date - The date for determining Eligible Account
Holders of the Bank, which is June 30, 2002.
Employees - All Persons who are employed by the Bank, the Mid-Tier Holding
Company or the Mutual Holding Company.
Employee Plans - Any one or more Tax-Qualified Employee Stock Benefit
Plans of the Bank or the Holding Company, including any ESOP and 401(k) Plan.
ESOP - The Bank's Employee Stock Ownership Plan and related trust.
Exchange Offering - The offering and exchange of Holding Company Common
Stock to Minority Stockholders in exchange for Minority Shares.
3
Exchange Ratio - The rate at which shares of Common Stock are exchanged
for Minority Shares upon consummation of the Conversion. The Exchange Ratio
shall be determined as of the closing of the Conversion and shall be the rate
that will result in the Minority Stockholders owning in the aggregate the same
percentage of the outstanding shares of Holding Company Common Stock immediately
upon completion of the Conversion as the percentage of Mid-Tier Holding Company
common stock owned by them in the aggregate immediately prior to the
consummation of the Conversion.
Exchange Shares - The shares of Holding Company Common Stock issued to
Minority Stockholders in the Exchange Offering.
FDIC - The Federal Deposit Insurance Corporation.
Foundation: The charitable foundation that will qualify as an exempt
organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, the establishment and funding of which is contemplated by Section 19A
herein.
Holding Company - The Delaware corporation formed for the purpose of
acquiring all of the shares of capital stock of the Bank in connection with the
Conversion. Shares of Holding Company Common Stock will be issued in the
Conversion to Participants and others in the Conversion.
Holding Company Common Stock - The common stock, par value $0.01 per
share, of the Holding Company.
Independent Appraiser - The appraiser retained by the Mutual Holding
Company and the Bank to prepare an appraisal of the pro forma market value of
the Conversion Stock.
Interim - Provident Interim Bank III, the interim federal savings bank
subsidiary of the Holding Company established to effect the Conversion.
Liquidation Account - The interest in the Bank received by Eligible
Account Holders and Supplemental Account Holders in exchange for their interest
in the Mutual Holding Company in connection with the Conversion.
Majority Ownership Interest - The percentage of common stock of the
Mid-Tier Holding Company owned by the Mutual Holding Company immediately prior
to the completion of the Conversion.
Member - Any Person or entity who qualifies as a member of the Mutual
Holding Company pursuant to is charter and bylaws.
Merger - The merger of the Acquiree Corporation into the Holding Company
(or a subsidiary thereof) with the Holding Company as the resulting corporation,
which shall occur after consummation of the Conversion.
Merger Shares - Any shares of Holding Company Common Stock issued to
stockholders of Acquiree Corporation in consideration of the Merger.
4
MHC Merger - The conversion of the Mutual Holding Company into an interim
stock savings bank and subsequent merger with and into the Bank, which shall
occur immediately prior to completion of the Conversion, as set forth in this
Plan.
Mid-Tier Holding Company - Provident Bancorp, Inc., the federal
corporation that owns 100% of the Bank's Common Stock and any successor thereto.
Mid-Tier Merger - The conversion of the Mid-Tier Holding Company into an
interim stock savings bank and subsequent merger with and into the Bank, which
shall occur immediately prior to completion of the Conversion, as set forth in
this Plan.
Minority Shares - Any outstanding common stock of the Mid-Tier Holding
Company, or shares of common stock of the Mid-Tier Holding Company issuable upon
the exercise of options or grant of stock awards, owned by persons other than
the Mutual Holding Company.
Minority Ownership Interest - The percentage of the Mid-Tier Holding
Company's common stock held by stockholders other than the Mutual Holding
Company immediately prior to the completion of the Conversion.
Minority Stockholder - Any owner of Minority Shares.
Mutual Holding Company - Provident Bancorp, MHC, the mutual holding
company of the Mid-Tier Holding Company.
Offering - The offering and issuance, pursuant to this Plan, of Holding
Company Common Stock in a Subscription Offering, Community Offering, Syndicated
Community Offering or Underwritten Public Offering, as the case may be. The term
"Offering" includes any shares of Holding Company Common Stock that (i) are
offered for sale but not purchased in the Subscription Offering and Community
Offering, and (ii) are issued to stockholders of Acquiree Corporation in
consideration of the Merger. The term "Offering" does not include Holding
Company Common Stock issued in the Exchange Offering.
Offering Range - The range of the number of shares of Holding Company
Stock offered for sale in the Offering multiplied by the Subscription Price. The
Offering Range shall be equal to the Appraised Value Range multiplied by the
Majority Ownership Interest, divided by the Subscription Price.
Officer - An executive officer of the Bank, the Mid-Tier Holding Company,
the Holding Company or the Mutual Holding Company as appropriate in the context,
which includes the Chief Executive Officer, President, Senior Vice Presidents,
Executive Vice President in charge of principal business functions, Secretary
and Controller and any Person performing functions similar to those performed by
the foregoing persons.
Order Form - Any form (together with any cover letter and acknowledgments)
sent to any Participant or Person containing among other things a description of
the alternatives available to such Person under the Plan and by which any such
Person may make elections regarding subscriptions for Subscription Shares.
5
Other Member - Any person holding a Deposit Account on the Voting Record
Date who is not an Eligible Account Holder or Supplemental Eligible Account
Holder.
OTS - The Office of Thrift Supervision, a division of the United States
Department of Treasury.
Participant - Any Eligible Account Holder, Employee Plan, Supplemental
Eligible Account Holder, or Other Member.
Person - An individual, a corporation, a partnership, an association, a
joint-stock company, a trust (including Individual Retirement Accounts and KEOGH
Accounts), any unincorporated organization, a government or political
subdivision thereof or any other entity.
Plan - This Plan of Conversion and Reorganization of the Mutual Holding
Company as it exists on the date hereof and as it may hereafter be amended in
accordance with its terms.
Prospectus - The one or more documents used in offering the Conversion
Stock.
Qualifying Deposit - The aggregate balance of all Deposit Accounts in the
Bank of (i) an Eligible Account Holder at the close of business on the
Eligibility Record Date, provided such aggregate balance is not less than $50,
and (ii) a Supplemental Eligible Account Holder at the close of business on the
Supplemental Eligibility Record Date, provided such aggregate balance is not
less than $50.
Resident - Any Person who occupies a dwelling within the Community, has a
present intent to remain within the Community for a period of time, and
manifests the genuineness of that intent by establishing an ongoing physical
presence within the Community together with an indication that such presence
within the Community is something other than merely transitory in nature. To the
extent the person is a corporation or other business entity, the principal place
of business or headquarters shall be in the Community. To the extent a person is
a personal benefit plan, the circumstances of the beneficiary shall apply with
respect to this definition. In the case of all other benefit plans,
circumstances of the trustee shall be examined for purposes of this definition.
The Mutual Holding Company and the Bank may utilize deposit or loan records or
such other evidence provided to it to make a determination as to whether a
person is a resident. In all cases, however, such a determination shall be in
the sole discretion of the Mutual Holding Company and the Bank. A Participant
must be a "Resident" for purposes of determining whether such person "resides"
in the Community as such term is used in this Plan.
SEC - The Securities and Exchange Commission.
Special Meeting of Members - The special meeting of Voting Members and any
adjournments thereof held to consider and vote upon this Plan.
Special Meeting of Stockholders - The special meeting of stockholders of
the Mid-Tier Holding Company and any adjournments thereof held to consider and
vote upon the Plan.
Subscription Offering - The offering of Subscription Shares to
Participants.
6
Subscription Price - The price per Subscription Share to be paid by
Participants and others in the Offering. The Subscription Price will be
determined by the Board of Directors of the Holding Company and fixed prior to
the commencement of the Subscription Offering.
Subscription Shares - Shares of Holding Company Common Stock offered for
sale in the Offering including Merger Shares issued as described in Section 12.
Subscription Shares do not include shares of Holding Company Common Stock issued
in exchange for Minority Shares in the Exchange Offering.
Supplemental Eligible Account Holder - Any Person, other than Directors
and Officers of the Bank and the Mid-Tier Holding Company and their Associates,
holding a Qualifying Deposit on the Supplemental Eligibility Record Date, who is
not an Eligible Account Holder.
Supplemental Eligibility Record Date - The date for determining
Supplemental Eligible Account Holders, which shall be the last day of the
calendar quarter preceding OTS approval of the application for conversion.
Syndicated Community Offering - The offering of Subscription Shares, at
the sole discretion of the Holding Company, following the Subscription and
Community Offerings through a syndicate of broker-dealers.
Tax-Qualified Employee Stock Benefit Plan - Any defined benefit plan or
defined contribution plan, such as an employee stock ownership plan, stock bonus
plan, profit-sharing plan or other plan, which, with its related trust, meets
the requirements to be "qualified" under Section 401 of the Internal Revenue
Code. The Bank may make scheduled discretionary contributions to a tax-qualified
employee stock benefit plan, provided such contributions do not cause the Bank
to fail to meet its regulatory capital requirements. A "Non-Tax-Qualified
Employee Stock Benefit Plan" is any defined benefit plan or defined contribution
plan which is not so qualified.
Underwritten Public Offering - The offering of Holding Company Common
Stock following or concurrently with the Subscription Offering and any Community
or Syndicated Community Offering by one or more Underwriters on a firm
commitment basis pursuant to Section 13.
Underwriter - Any one or more investment banking firms that agrees in
connection with the Conversion to purchase from the Holding Company and sell to
the public in an Underwritten Public Offering shares of Holding Company Common
Stock not subscribed for in the Subscription Offering, the Community Offering or
any Syndicated Community Offering, or issued to stockholders of Acquiree
Corporation.
Voting Member - Any Person who at the close of business on the Voting
Record Date is entitled to vote as a Member of the Mutual Holding Company
pursuant to its charter and bylaws.
Voting Record Date - The date fixed by the Directors for determining
eligibility to vote at the Special Meeting of Members and/or the Special Meeting
of Stockholders.
7
3. PROCEDURES FOR CONVERSION
A. After approval of the Plan by the Boards of Directors of the Bank, the
Mid-Tier Holding Company and the Mutual Holding Company, the Plan together with
all other requisite material shall be submitted to the OTS for approval. Notice
of the adoption of the Plan by the Board of Directors of the Bank and the Board
of Directors of the Mutual Holding Company and the submission of the Plan to the
OTS for approval will be published in a newspaper having general circulation in
each community in which an office of the Bank is located, and copies of the Plan
will be made available at each office of the Bank for inspection by depositors.
The Mutual Holding Company also will publish a notice of the filing with the OTS
of an application to convert in accordance with the provisions of the Plan.
B. Promptly following approval by the OTS, the Plan will be submitted to a
vote of (i) the Voting Members at the Special Meeting of Members, and (ii) the
Stockholders of the Mid-Tier Holding Company at the Special Meeting of
Stockholders. The Mutual Holding Company will mail to all Voting Members, at
their last known address appearing on the records of the Bank, a proxy statement
in either long or summary form describing the Plan, which will be submitted to a
vote of Voting Members at the Special Meeting of Members. The Holding Company
also will mail to all Participants either a Prospectus and Order Form for the
purchase of Subscription Shares or a letter informing them of their right to
receive a Prospectus and Order Form and a postage prepaid card to request such
materials, subject to other provisions of this Plan. In addition, all
Participants will receive, or be given the opportunity to request by either
returning a postage prepaid card which will be distributed with the proxy
statement or by letter addressed to the Bank's Secretary, a copy of the Plan as
well as the articles of incorporation or bylaws of the Holding Company. Upon
approval of the Plan by at least (i) a majority of the total number of votes
entitled to be cast by Voting Members, (ii) two-thirds of the outstanding common
stock of the Mid-Tier Holding Company, and (iii) a majority vote of Minority
Stockholders present in person or by proxy, the Mutual Holding Company, the
Holding Company and the Bank will take all other necessary steps pursuant to
applicable laws and regulations to consummate the Conversion and Offering. The
Conversion must be completed within 24 months of the approval of the Plan by
Voting Members, unless a longer time period is permitted by governing laws and
regulations.
C. The Conversion will be effected as follows, or in any other manner that
is consistent with the purposes of this Plan and applicable laws and
regulations, including a merger of the Mutual Holding Company into the Mid-Tier
Holding Company followed immediately by the Offering. The choice of which method
to use to effect the Conversion will be made by the Board of Directors of the
Mutual Holding Company immediately prior to the closing of the Conversion. Each
of the steps set forth below shall be deemed to occur in such order as is
necessary to consummate the Conversion pursuant to the Plan, the intent of the
Board of Directors of the Mutual Holding Company and the Board of Directors of
the Bank, and applicable federal and state regulations and policy. Approval of
the Plan by Voting Members and stockholders of the Mid-Tier Holding Company also
shall constitute approval of each of the transactions necessary to implement the
Plan.
(1) The Bank will establish the Holding Company as a first-tier
Delaware-chartered stock holding company subsidiary.
8
(2) Holding Company will charter Interim.
(3) The Mid-Tier Holding Company will convert to an interim stock
savings bank (which shall continue to be referred to as the
"Mid-Tier Holding Company") and merge with and into the Bank
(the "Mid-Tier Merger") with the Bank as the resulting entity
pursuant to the Agreement of Merger attached hereto as Exhibit
A between the Mid-Tier Holding Company and the Bank, whereby
the Mutual Holding Company will receive, and Minority
Stockholders will constructively receive, shares of Bank
common stock in exchange for their Mid-Tier Holding Company
common stock.
(4) Immediately after the Mid-Tier Merger, the Mutual Holding
Company will convert to an interim stock savings bank and will
merge with and into the Bank (the "MHC Merger") pursuant to
the Agreement of Merger attached hereto as Exhibit B between
the Mutual Holding Company and the Bank, whereby the shares of
Bank common stock held by the Mutual Holding Company will be
canceled and each Eligible Account Holder and Supplemental
Eligible Account Holder will receive an interest in a
Liquidation Account of the Bank in exchange for such person's
interest in the Mutual Holding Company.
(5) Immediately after the MHC Merger and the Mid-Tier Merger,
Interim will merge with and into the Bank with the Bank as the
surviving entity (the "Bank Merger") pursuant to the Agreement
of Merger between the Bank and Interim attached hereto as
Exhibit C. Constructive shareholders of the Bank (i.e.,
Minority Stockholders immediately prior to the Conversion)
will exchange the shares of Bank common stock that they
constructively received in the Mid-Tier Merger for Holding
Company Common Stock.
(6) Immediately after the Bank Merger, the Holding Company will
sell the Subscription Shares in the Offering.
D. As part of the Conversion, each of the Minority Shares shall
automatically, without further action of the holder thereof, be converted into
and become the right to receive Holding Company Common Stock based upon the
Exchange Ratio. The basis for exchange of Minority Shares for Holding Company
Common Stock shall be fair and reasonable. Options to purchase shares of
Mid-Tier Holding Company common stock which are outstanding immediately prior to
the consummation of the Conversion shall be converted into options to purchase
shares of Holding Company Common Stock, with the number of shares subject to the
option and the exercise price per share to be adjusted based upon the Exchange
Ratio so that the aggregate exercise price remains unchanged, and with the
duration of the option remaining unchanged.
E. The Holding Company shall register the Conversion Stock with the SEC
and any appropriate state securities authorities. In addition, the Mid-Tier
Holding Company shall prepare
9
preliminary proxy materials as well as other applications and information for
review by the SEC in connection with the solicitation of stockholder approval of
the Plan.
F. All assets, rights, interests, privileges, powers, franchises and
property (real, personal and mixed) of the Mid-Tier Holding Company shall be
automatically transferred to and vested in the Holding Company by virtue of the
Conversion without any deed or other document of transfer. The Holding Company,
without any order or action on the part of any court or otherwise and without
any documents of assumption or assignment, shall hold and enjoy all of the
properties, franchises and interests, including appointments, powers,
designations, nominations and all other rights and interests as the agent or
other fiduciary in the same manner and to the same extent as such rights,
franchises, and interests and powers were held or enjoyed by the Mid-Tier
Holding Company. The Holding Company shall be responsible for all of the
liabilities, restrictions and duties of every kind and description of the
Mid-Tier Holding Company immediately prior to the Conversion, including
liabilities for all debts, obligations and contracts of the Mid-Tier Holding
Company, matured or unmatured, whether accrued, absolute, contingent or
otherwise and whether or not reflected or reserved against on balance sheets,
books or accounts or records of the Mid-Tier Holding Company.
G. The Certificate of Incorporation of the Holding Company (the
"Certificate") shall read in the form of Exhibit D.
H. The home office and branch offices of the Bank shall be unaffected by
the Conversion. The executive offices of the Holding Company shall be located at
the current offices of the Mutual Holding Company and Mid-Tier Holding Company.
I. The Boards of Directors of the Holding Company and the Bank also intend
to take all necessary steps to establish the Foundation and to fund the
Foundation in the manner set forth in Section 19A hereof.
4. HOLDING COMPANY APPLICATIONS AND APPROVALS
The Boards of Directors of the Mutual Holding Company, the Mid-Tier
Holding Company, the Holding Company and the Bank will take all necessary steps
to convert the Mutual Holding Company to stock form, form the Holding Company
and complete the Offering. The Holding Company shall make timely applications to
the OTS and filings with the SEC for any requisite regulatory approvals to
complete the Conversion.
5. SALE OF SUBSCRIPTION SHARES
The Subscription Shares will be offered simultaneously in the Subscription
Offering to the Participants in the respective priorities set forth in this
Plan. The Subscription Offering may begin as early as the mailing of the Proxy
Statement for the Special Meeting of Members. The Holding Company Common Stock
will not be insured by the FDIC. The Bank will not knowingly lend funds or
otherwise extend credit to any Person to purchase shares of Holding Company
Common Stock.
Any shares of Holding Company Common Stock for which subscriptions have
not been received in the Subscription Offering may be issued in the Community
Offering. The
10
Subscription Offering may begin prior to the Special Meeting of Members and, in
that event, the Community Offering also may begin prior to the Special Meeting
of Members. The offer and sale of Holding Company Common Stock prior to the
Special Meeting of Members, however, is subject to the approval of the Plan by
Voting Members and stockholders of the Mid-Tier Holding Company.
If feasible, any shares of Holding Company Common Stock remaining after
the Subscription Offering, and the Community Offering should one be conducted,
will be sold in a Syndicated Community Offering or Underwritten Public Offering,
or in any manner that will achieve the widest distribution of the Holding
Company Common Stock. The Syndicated Community Offering and/or Underwritten
Public Offering may be conducted in addition to, or instead of, a Community
Offering. The issuance of Holding Company Common Stock in any Subscription
Offering and any Community Offering will be consummated simultaneously on the
date the sale of Holding Company Common Stock in the Syndicated Community
Offering or Underwritten Public Offering is consummated and only if the required
minimum number of shares of Holding Company Common Stock has been issued.
6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES
The total number of shares (or a range thereof) of Conversion Stock to be
offered in the Conversion will be determined jointly by the Boards of Directors
of the Mutual Holding Company, the Mid-Tier Holding Company and the Holding
Company immediately prior to the commencement of the Subscription and Community
Offerings, and will be based on the Appraised Value Range and the Subscription
Price. The Offering Range will be equal to the Appraised Value Range multiplied
by the Majority Ownership Percentage. The estimated pro forma consolidated
market value of the Holding Company will be subject to adjustment within the
Appraised Value Range if necessitated by market or financial conditions, with
the receipt of any required approvals of the OTS, and the maximum of the
Appraised Value Range may be increased by up to 15% subsequent to the
commencement of the Subscription Offering to reflect changes in market and
financial conditions or demand for the shares. The number of shares of
Conversion Stock issued in the Conversion will be equal to the estimated pro
forma consolidated market value of the Holding Company, as may be amended,
divided by the Subscription Price, and the number of Subscription Shares issued
in the Offering will be equal to the product of (i) the estimated pro forma
consolidated market value of the Holding Company, as may be amended, divided by
the Subscription Price, and (ii) the Majority Ownership Interest.
In the event that the Subscription Price multiplied by the number of
shares of Conversion Stock to be issued in the Conversion is below the minimum
of the Appraised Value Range, or materially above the maximum of the Appraised
Value Range, a resolicitation of purchasers may be required, provided that up to
a 15% increase above the maximum of the Appraised Value Range will not be deemed
material so as to require a resolicitation. Any such resolicitation shall be
effected in such manner and within such time as the Bank and the Mutual Holding
Company shall establish, if all required regulatory approvals are obtained.
Notwithstanding the foregoing, shares of Conversion Stock will not be
issued unless, prior to the consummation of the Conversion, the Independent
Appraiser confirms to the Bank, the Mutual Holding Company, the Holding Company,
and the OTS, that, to the best knowledge
11
of the Independent Appraiser, nothing of a material nature has occurred which,
taking into account all relevant factors, would cause the Independent Appraiser
to conclude that the number of shares of Conversion Stock issued in the
Conversion multiplied by the Subscription Price is incompatible with its
estimate of the aggregate consolidated pro forma market value of the Holding
Company. If such confirmation is not received, the Holding Company may cancel
the Offering, extend the Conversion and establish a new Subscription Price
and/or Appraised Value Range, extend, reopen or hold a new Offering, or take
such other action as the OTS may permit.
The Holding Company Common Stock to be issued in the Conversion shall be
fully paid and nonassessable.
7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY
The Holding Company may retain up to 50% of the proceeds of the Offering.
The Holding Company believes that the Offering proceeds will provide economic
strength to the Holding Company and the Bank for the future in a highly
competitive and regulated financial services environment and would facilitate
the continued expansion through acquisitions of financial service organizations,
continued diversification into other related businesses and for other business
and investment purposes, including the possible payment of dividends and
possible future repurchases of the Holding Company Common Stock as permitted by
applicable federal and state regulations and policy.
8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)
A. Each Eligible Account Holder shall have nontransferable subscription
rights to subscribe for in the Subscription Offering up to the greater of 50,000
shares of Holding Company Common Stock, 0.10% of the total number of shares of
Holding Company Common Stock issued in the Offering, or fifteen times the
product (rounded down to the next whole number) obtained by multiplying the
number of Subscription Shares offered in the Offering by a fraction of which the
numerator is the amount of the Eligible Account Holder's Qualifying Deposit and
the denominator is the total amount of Qualifying Deposits of all Eligible
Account Holders, in each case on the Eligibility Record Date, subject to the
provisions of Section 14.
B. In the event that Eligible Account Holders exercise subscription rights
for a number of Subscription Shares in excess of the total number of such shares
eligible for subscription, the Subscription Shares shall be allocated among the
subscribing Eligible Account Holders so as to permit each subscribing Eligible
Account Holder to purchase a number of shares sufficient to make his or her
total allocation of Subscription Shares equal to the lesser of 100 shares or the
number of shares for which such Eligible Account Holder has subscribed. Any
remaining shares will be allocated among the subscribing Eligible Account
Holders whose subscriptions remain unsatisfied in the proportion that the amount
of the Qualifying Deposit of each Eligible Account Holder whose subscription
remains unsatisfied bears to the total amount of the Qualifying Deposits of all
Eligible Account Holders whose subscriptions remain unsatisfied. If the amount
so allocated exceeds the amount subscribed for by any one or more Eligible
Account Holders, the excess shall be reallocated (one or more times as
necessary)
12
among those Eligible Account Holders whose subscriptions are still not fully
satisfied on the same principle until all available shares have been allocated.
C. Subscription rights as Eligible Account Holders received by Directors
and Officers and their Associates that are based on deposits made by such
persons during the 12 months preceding the Eligibility Record Date shall be
subordinated to the subscription rights of all other Eligible Account Holders.
9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)
The Employee Plans of the Holding Company and the Bank shall have
subscription rights to purchase in the aggregate up to 10% of the Subscription
Shares issued in the Offering, including any Subscription Shares to be issued as
a result of an increase in the maximum of the Offering Range after commencement
of the Subscription Offering and prior to completion of the Conversion.
Consistent with applicable laws and regulations and practices and policies, the
Employee Plans may use funds contributed by the Holding Company or the Bank
and/or borrowed from an independent financial institution to exercise such
subscription rights, and the Holding Company and the Bank may make scheduled
discretionary contributions thereto, provided that such contributions do not
cause the Holding Company or the Bank to fail to meet any applicable regulatory
capital requirements. The Employee Plans shall not be deemed to be Associates or
Affiliates of or Persons Acting in Concert with any Director or Officer of the
Holding Company or the Bank. Alternatively, if permitted by the OTS, the
Employee Plans may purchase all or a portion of such shares in the open market.
10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD
PRIORITY)
A. Each Supplemental Eligible Account Holder shall have nontransferable
subscription rights to subscribe for in the Subscription Offering up to the
greater of 50,000 shares of Holding Company Common Stock, 0.10% of the total
number of shares of Holding Company Common Stock issued in the Offering, or
fifteen times the product (rounded down to the next whole number) obtained by
multiplying the number of shares Subscription Shares offered in the Offering by
a fraction of which the numerator is the amount of the Supplemental Eligible
Account Holder's Qualifying Deposit and the denominator is the total amount of
Qualifying Deposits of all Supplemental Eligible Account Holders, in each case
on the Supplemental Eligibility Record Date, subject to the availability of
sufficient shares after filling in full all subscription orders of the Eligible
Account Holders and Employee Plans and to the purchase limitations specified in
Section 14.
B. In the event that Supplemental Eligible Account Holders exercise
subscription rights for a number of Subscription Shares in excess of the total
number of such shares eligible for subscription, the Subscription Shares shall
be allocated among the subscribing Supplemental Eligible Account Holders so as
to permit each such subscribing Supplemental Eligible Account Holder, to the
extent possible, to purchase a number of shares sufficient to make his or her
total allocation of Subscription Shares equal to the lesser of 100 shares or the
number of shares for which each such Supplemental Eligible Account Holder has
subscribed. Any remaining shares will be allocated among the subscribing
Supplemental Eligible Account Holders whose
13
subscriptions remain unsatisfied in the proportion that the amount of the
Qualifying Deposit of each such Supplemental Eligible Account Holder bears to
the total amount of the Qualifying Deposits of all Supplemental Eligible Account
Holders whose subscriptions remain unsatisfied. If the amount so allocated
exceeds the amount subscribed for by any one or more Supplemental Eligible
Account Holders, the excess shall be reallocated (one or more times as
necessary) among those Supplemental Eligible Account Holders whose subscriptions
are still not fully satisfied on the same principle until all available shares
have been allocated.
11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)
A. Each Other Member shall have nontransferable subscription rights to
subscribe for in the Subscription Offering up to the greater of 50,000 shares of
Holding Company Common Stock or 0.10 of the total number of shares of Holding
Company Common Stock issued in the Offering, subject to the availability of
sufficient shares after filling in full all subscription orders of Eligible
Account Holders, Employee Plans and Supplemental Eligible Account Holders and to
the purchase limitations specified in Section 14.
B. In the event that such Other Members subscribe for a number of
Subscription Shares which, when added to the Subscription Shares subscribed for
by the Eligible Account Holders, Employee Plans and Supplemental Eligible
Account Holders, is in excess of the total number of Subscription Shares to be
issued, the available shares will be allocated to Other Members so as to permit
each such subscribing Other Member, to the extent possible, to purchase a number
of shares sufficient to make his or her total allocation of Subscription Shares
equal to the lesser of 100 shares or the number of shares for which each such
Other Member has subscribed. Any remaining shares will be allocated among the
subscribing Other Members whose subscriptions remain unsatisfied in the
proportion that the amount of the Qualifying Deposit of each such Other Member
bears to the total amount of the Qualifying Deposits of all Other Member whose
subscriptions remain unsatisfied.
12. COMMUNITY OFFERING AND MERGER SHARES
A. If subscriptions are not received for all Subscription Shares offered
for sale in the Subscription Offering, shares for which subscriptions have not
been received may be issued for sale in the Community Offering through a direct
community marketing program which may use a broker, dealer, consultant or
investment banking firm experienced and expert in the sale of savings
institutions securities. Such entities may be compensated on a fixed fee basis
or on a commission basis, or a combination thereof. In the event orders for
Holding Company Common Stock in the Community Offering exceed the number of
shares available for sale, shares may be allocated (to the extent shares remain
available) first to cover orders of natural persons residing in the Community,
next to cover orders of Minority Stockholders as of the Voting Record Date, next
to cover orders of any Person who holds a Deposit Account at the Acquiree Bank
on the Voting Record Date and thereafter to cover orders of other members of the
general public. In the event orders for Holding Company Common Stock in any of
these categories exceed the number of shares available for sale, shares any be
allocated on a pro rata basis within a category based on the amount of the
respective orders. The Holding Company shall use its best efforts consistent
with this Plan to distribute Holding Company Common Stock sold in the Community
Offering in such a manner as to promote the widest distribution practicable of
such stock. The Holding
14
Company reserves the right to reject any or all orders in whole or in part,
which are received in the Community Offering. Any Person may purchase up to
50,000 shares of Holding Company Common Stock in the Community Offering, subject
to the purchase limitations specified in Section 14.
B. Notwithstanding A above, if subscriptions totaling at least the minimum
of the Offering Range are not received in the Subscription Offering in the
categories described in Sections 8 through 11 herein, then unsubscribed
Subscription Shares may be issued to stockholders of the Acquiree Corporation in
exchange for their shares of the Acquiree Corporation or in any other manner
that facilitates the completion of the Merger, provided that total Merger
Shares, including Merger Shares issued pursuant to this Section 12B, are less
than 50% of the outstanding Common Stock of the Holding Company immediately
after the closing of the Conversion and Merger.
13. SYNDICATED COMMUNITY OFFERING/UNDERWRITTEN PUBLIC OFFERING
If feasible, the Board of Directors may determine to offer Subscription
Shares not issued in the Subscription Offering, in a Syndicated Community
Offering and/or through an Underwriter in an Underwritten Public Offering, all
subject to such terms, conditions and procedures as may be determined by the
Holding Company, in a manner that will achieve the widest distribution of the
Holding Company Common Stock, subject to the right of the Holding Company to
accept or reject in whole or in part any subscriptions in the Syndicated
Community Offering. In the case of an Underwritten Public Offering, Subscription
Shares will be sold to an Underwriter for resale in an Underwritten Public
Offering. The price to be paid by the Underwriter for Subscription Shares will
be equal to the aggregate price at which such shares were offered in the
Subscription Offering, less the amount of an underwriting discount, which will
be negotiated by the Holding Company and the Underwriter. In the Syndicated
Community Offering and/or Underwritten Public Offering, any Person may purchase
up to 50,000 shares of Holding Company Common Stock, subject to the purchase
limitations specified in Section 14.
Provided that the Subscription Offering has begun, the Holding Company may
begin the Syndicated Community Offering or Underwritten Public Offering at any
time, provided that the completion of the offer and sale of the Holding Company
Common Stock will be conditioned upon the approval of the Plan by Voting
Members. If the Syndicated Community Offering or Underwritten Public Offering
does not begin pursuant to the provisions of the preceding sentence, such
offering will begin as soon as practicable following the date upon which the
Subscription and Community Offerings terminate. The provisions of Section 14
shall not be applicable to sales to Underwriters in an Underwritten Public
Offering for purposes of such an offering, but shall be applicable to the sales
by the Underwriters to the public.
If for any reason a Syndicated Community Offering or an Underwritten
Public Offering of shares of Holding Company Common Stock not sold in the
Subscription and Community Offerings cannot be effected, or in the event that
any insignificant residue of shares of Holding Company Common Stock is not sold
in the Subscription and Community Offerings or in the Syndicated Community or
Underwritten Public Offering, if possible, the Holding Company will make other
arrangements for the disposition of unsubscribed shares aggregating at least the
15
minimum of the Offering Range. Such other purchase arrangements will be subject
to receipt of any required approval of the OTS.
14. LIMITATION ON PURCHASES
The following limitations shall apply to all purchases and issuances of
shares of Conversion Stock:
A. The maximum number of Holding Company Common Stock which may be
subscribed for or purchased in all categories in the Offering by any Person or
Participant together with any Associate or group of Persons Acting in Concert
shall not exceed 100,000 shares of Holding Company Common Stock, except that the
Employee Plans may subscribe for up to 10% of the Holding Company Common Stock
issued in the Offering (including shares issued in the event of an increase in
the maximum of the Offering Range of 15%).
B. The maximum number of shares of Holding Company Common Stock which may
be issued to or purchased in all categories of the Offering by Officers and
Directors and their Associates in the aggregate, when combined with Exchange
Shares received by such persons, shall not exceed 25% of the shares of Holding
Company Common Stock issued in the Conversion.
C. A minimum of 25 shares of Holding Company Common Stock must be
purchased by each Person purchasing shares in the Offering to the extent those
shares are available; provided, however, that in the event the minimum number of
shares of Holding Company Common Stock purchased times the price per share
exceeds $500, then such minimum purchase requirement shall be reduced to such
number of shares which when multiplied by the price per share shall not exceed
$500, as determined by the Board.
D. The maximum number of shares of Holding Company Common Stock that may
be subscribed for or purchased in the Offering by any Person or Participant
together with any Associate or group of Persons Acting in Concert, combined with
Exchange Shares received by any such Person or Participant together with any
Associate or group of Persons Acting in Concert, shall not exceed 5.0% of the
shares of Holding Company Common Stock issued and outstanding at the completion
of the Conversion, except that this limitation shall not apply to the Employee
Plans.
If the number of shares of Holding Company Common Stock otherwise
allocable pursuant to Sections 8 through 13, inclusive, to any Person or that
Person's Associates would be in excess of the maximum number of shares permitted
as set forth above, the number of shares of Holding Company Common Stock
allocated to each such person shall be reduced to the lowest limitation
applicable to that Person, and then the number of shares allocated to each group
consisting of a Person and that Person's Associates shall be reduced so that the
aggregate allocation to that Person and his or her Associates complies with the
above limits.
Depending upon market or financial conditions, the Board of Directors of
the Holding Company, with the receipt of any required approvals of the OTS and
without further approval of Voting Members, may decrease or increase the
purchase limitations in this Plan, provided that the maximum purchase
limitations may not be increased to a percentage in excess of 5% of the
16
shares issued in the Offering except as provided below. If the Holding Company
increases the maximum purchase limitations, the Holding Company is only required
to resolicit Persons who subscribed for the maximum purchase amount in the
Subscription Offering and may, in the sole discretion of the Holding Company,
resolicit certain other large subscribers. In the event that the maximum
purchase limitation is increased to 5% of the shares issued in the Offering,
such limitation may be further increased to 9.99%, provided that orders for
Holding Company Common Stock exceeding 5% of the shares of Holding Company
Common Stock issued in the Offering shall not exceed in the aggregate 10% of the
total shares of Holding Company Common Stock issued in the Offering. Requests to
purchase additional shares of the Conversion Stock in the event that the
purchase limitation is so increased will be determined by the Board of Directors
of the Holding Company in its sole discretion.
In the event of an increase in the total number of shares offered in the
Subscription Offering due to an increase in the maximum of the Offering Range of
up to 15% (the "Adjusted Maximum"), the additional shares will be used to fill
the Employee Plans orders and then will be allocated in accordance with the
priorities set forth in this Plan.
For purposes of this Section 14, the Directors of the Bank, the Mid-Tier
Holding Company and the Holding Company shall not be deemed to be Associates or
a group affiliated with each other or otherwise Acting in Concert solely as a
result of their being Directors of the Bank, the Mid-Tier Holding Company or the
Holding Company.
Each Person purchasing Holding Company Common Stock in the Conversion
shall be deemed to confirm that such purchase does not conflict with the above
purchase limitations contained in this Plan.
15. PAYMENT FOR SUBSCRIPTION SHARES
All payments for Holding Company Common Stock subscribed for in the
Subscription Offering and Community Offering must be delivered in full to the
Bank or Holding Company, together with a properly completed and executed Order
Form, on or prior to the expiration date of the Offering; provided, however,
that if the Employee Plans subscribe for shares in the Subscription Offering,
such plans will not be required to pay for the shares at the time they subscribe
but rather may pay for such shares of Holding Company Common Stock subscribed
for by such plans at the Subscription Price upon consummation of the Conversion.
Payment for Holding Company Common Stock subscribed for shall be made by
check, money order or bank draft. Alternatively, subscribers in the Subscription
and Community Offerings may pay for the shares for which they have subscribed by
authorizing the Bank on the Order Form to make a withdrawal from the designated
types of Deposit Accounts at the Bank in an amount equal to the aggregate
Subscription Price of such shares. Such authorized withdrawal shall be without
penalty as to premature withdrawal. If the authorized withdrawal is from a
certificate account, and the remaining balance does not meet the applicable
minimum balance requirement, the certificate shall be canceled at the time of
withdrawal, without penalty, and the remaining balance will earn interest at the
passbook rate. Funds for which a withdrawal is authorized will remain in the
subscriber's Deposit Account but may not be used by the subscriber during the
Subscription and Community Offerings. Thereafter, the withdrawal will be
17
given effect only to the extent necessary to satisfy the subscription (to the
extent it can be filled) at the Subscription Price per share. Interest will
continue to be earned on any amounts authorized for withdrawal until such
withdrawal is given effect. Interest on funds received will be paid by the Bank
at not less than the passbook rate on payments for Holding Company Common Stock.
Such interest will be paid from the date payment is received by the Bank until
consummation or termination of the Conversion. If for any reason the Conversion
is not consummated, all payments made by subscribers in the Subscription and
Community Offerings will be refunded to them with interest. In case of amounts
authorized for withdrawal from Deposit Accounts, refunds will be made by
canceling the authorization for withdrawal. The Bank is prohibited by regulation
from knowingly making any loans or granting any lines of credit for the purchase
of stock in the Conversion, and therefore, will not do so.
16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS
As soon as practicable after the Prospectus prepared by the Holding
Company and Bank has been declared effective by the SEC, Order Forms will be
distributed to the Eligible Account Holders, Employee Plans, Supplemental
Eligible Account Holders and Other Members at their last known addresses
appearing on the records of the Bank for the purpose of subscribing for shares
of Holding Company Common Stock in the Subscription Offering and will be made
available for use by those Persons to whom a Prospectus is delivered.
Notwithstanding the foregoing, the Holding Company may elect to send Order Forms
only to those Persons who request them after receipt of such notice in a form
approved by the OTS and which is adequate to apprise the Eligible Account
Holders, Employee Plans, Supplemental Eligible Account Holders and Other Members
of the pendency of the Subscription Offering. Such notice may be included with
the proxy statement for the Special Meeting of Members and also may be included
in the notice of the pendency of the Conversion and the Special Meeting of
Members sent to all Eligible Account Holders in accordance with regulations and
policy of the OTS.
Each Order Form will be preceded or accompanied by a prospectus describing
the Holding Company, the Bank, the Holding Company Common Stock and the
Offering. Each Order Form will contain, among other things, the following:
A. A specified date by which all Order Forms must be received by the Bank
or the Holding Company, which date shall be not less than 20 days, nor more than
45 days, following the date on which the Order Forms are mailed by the Holding
Company, and which date will constitute the termination of the Subscription
Offering unless extended;
B. The Subscription Price per share for shares of Holding Company Common
Stock to be sold in the Offering;
C. A description of the minimum and maximum number of Subscription Shares
which may be subscribed for pursuant to the exercise of subscription rights or
otherwise purchased in the Subscription and Community Offering;
18
D. Instructions as to how the recipient of the Order Form is to indicate
thereon the number of Subscription Shares for which such person elects to
subscribe and the available alternative methods of payment therefor;
E. An acknowledgment that the recipient of the Order Form has received a
final copy of the prospectus prior to execution of the Order Form;
F. A statement to the effect that all subscription rights are
nontransferable, will be void at the end of the Subscription Offering, and can
only be exercised by delivering to the Holding Company within the subscription
period such properly completed and executed Order Form, together with payment in
the full amount of the aggregate purchase price as specified in the Order Form
for the shares of Holding Company Common Stock for which the recipient elects to
subscribe in the Subscription Offering (or by authorizing on the Order Form that
the Bank withdraw said amount from the subscriber's Deposit Account at the
Bank); and
G. A statement to the effect that the executed Order Form, once received
by the Holding Company, may not be modified or amended by the subscriber without
the consent of the Holding Company.
Notwithstanding the above, the Holding Company reserves the right in its
sole discretion to accept or reject orders received on photocopied or
facsimilied order forms.
17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT
In the event Order Forms (a) are not delivered and are returned, or notice
of nondelivery is given, to the Holding Company or the Bank by the United States
Postal Service, (b) are not received back by the Holding Company or are received
by the Holding Company after the expiration date specified thereon, (c) are
defectively filled out or executed, (d) are not accompanied by the full required
payment, unless waived by the Holding Company, for the shares of Holding Company
Common Stock subscribed for (including cases in which deposit accounts from
which withdrawals are authorized are insufficient to cover the amount of the
required payment), or (e) are not mailed pursuant to a "no mail" order placed in
effect by the account holder, the subscription rights of the Person to whom such
rights have been granted will lapse as though such Person failed to return the
completed Order Form within the time period specified thereon; provided,
however, that the Holding Company may, but will not be required to, waive any
immaterial irregularity on any Order Form or require the submission of corrected
Order Forms or the remittance of full payment for subscribed shares by such date
as the Holding Company may specify. The interpretation of the Holding Company of
terms and conditions of this Plan and of the Order Forms will be final, subject
to the authority of the OTS.
18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES
The Holding Company will make reasonable efforts to comply with the
securities laws of all States in the United States in which Persons entitled to
subscribe for shares of Holding Company Common Stock pursuant to this Plan
reside. However, no such Person will be issued subscription rights or be
permitted to purchase shares of Holding Company Common Stock in the Subscription
Offering if such Person resides in a foreign country; or in a State of the
United
19
States with respect to which all of the following apply: (A) a small number of
Persons otherwise eligible to subscribe for shares under the Plan reside in such
state; (B) the issuance of subscription rights or the offer or sale of shares of
Holding Company Common Stock to such Persons would require the Holding Company
under the securities laws of such state, to register as a broker, dealer,
salesman or agent or to register or otherwise qualify its securities for sale in
such state; and (C) such registration or qualification would be impracticable
for reasons of cost or otherwise.
19. ESTABLISHMENT OF LIQUIDATION ACCOUNT
The Bank shall establish at the time of the MHC Merger, a Liquidation
Account in an amount equal to the greater of: (a) the percentage of the
outstanding shares of the common stock of the Mid-Tier Holding Company owned by
the Mutual Holding Company multiplied by the Mid-Tier Holding Company's total
stockholders' equity as reflected in the latest statement of financial condition
contained in the final Prospectus used in the Conversion, or (b) the retained
earnings of the Bank as of the latest financial statements set forth in the
prospectus used in connection with the Bank's initial mutual holding company
reorganization and minority stock offering. Following the Conversion, the
Liquidation Account will be maintained by the Bank for the benefit of the
Eligible Account Holders and Supplemental Eligible Account Holders who continue
to maintain their Deposit Accounts at the Bank. Each Eligible Account Holder and
Supplemental Eligible Account Holder shall, with respect to his Deposit Account,
hold a related inchoate interest in a portion of the Liquidation Account
balance, in relation to his Deposit Account balance at the Eligibility Record
Date or Supplemental Eligibility Record Date, respectively, or to such balance
as it may be subsequently reduced, as hereinafter provided.
In the unlikely event of a complete liquidation of the Bank (and only in
such event), following all liquidation payments to creditors (including those to
Account Holders to the extent of their Deposit Accounts) each Eligible Account
Holder and Supplemental Eligible Account Holder shall be entitled to receive a
liquidating distribution from the Liquidation Account, in the amount of the then
adjusted subaccount balance for his Deposit Account then held, before any
liquidation distribution may be made to any holders of the Bank's capital stock.
No merger, consolidation, purchase of bulk assets with assumption of Deposit
Accounts and other liabilities, or similar transactions with an FDIC-insured
institution, in which the Bank is not the surviving institution, shall be deemed
to be a complete liquidation for this purpose. In such transactions, the
Liquidation Account shall be assumed by the surviving institution.
The initial subaccount balance for a Deposit Account held by an Eligible
Account Holder and Supplemental Eligible Account Holder shall be determined by
multiplying the opening balance in the Liquidation Account by a fraction, the
numerator of which is the amount of the Qualifying Deposits of such account
holder and the denominator of which is the total amount of all Qualifying
Deposits of all Eligible Account Holders and Supplemental Account Holders. For
Deposit Accounts in existence at both the Eligibility Record Date and the
Supplemental Eligibility Record Date, separate initial subaccount balances shall
be determined on the basis of the Qualifying Deposits in such Deposit Account on
each such record date. Such initial subaccount balance shall not be increased,
but shall be subject to downward adjustment as described below.
20
If, at the close of business on any December 31 annual closing date,
commencing on or after the effective date of the Conversion, the deposit balance
in the Deposit Account of an Eligible Account Holder or Supplemental Eligible
Account Holder is less than the lesser of (i) the balance in the Deposit Account
at the close of business on any other annual closing date subsequent to the
Eligibility Record Date or Supplemental Eligibility Record Date, or (ii) the
amount of the Qualifying Deposit in such Deposit Account as of the Eligibility
Record Date or Supplemental Eligibility Record Date, the subaccount balance for
such Deposit Account shall be adjusted by reducing such subaccount balance in an
amount proportionate to the reduction in such deposit balance. In the event of
such downward adjustment, the subaccount balance shall not be subsequently
increased, notwithstanding any subsequent increase in the deposit balance of the
related Deposit Account. If any such Deposit Account is closed, the related
subaccount shall be reduced to zero.
The creation and maintenance of the Liquidation Account shall not operate
to restrict the use or application of any of the equity accounts of the Bank,
except that the Bank shall not declare or pay a cash dividend on, or repurchase
any of, its capital stock if the effect thereof would cause its equity to be
reduced below (i) the amount required for the Liquidation Account; or (ii) the
regulatory capital requirements of the Bank.
19A. ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION
As part of the Conversion, the Holding Company and the Bank intend to
establish the Foundation, which will qualify as an exempt organization under
Section 501(c)(3) of the Internal Revenue Code, and to donate to the Foundation
cash and shares of Common Stock, in an aggregate amount equal to 4% of the value
of the shares of Conversion Stock sold in the Conversion. The Foundation is
being formed in connection with the Conversion in order to complement the Bank's
existing community reinvestment activities and to share with the Bank's local
community a part of the Bank's financial success as a locally headquartered,
community minded, financial services institution. The funding of the Foundation
with Common Stock accomplishes this goal as it enables the community to share in
the growth and profitability of the Holding Company and the Bank over the long-
term.
The Foundation will be dedicated to the promotion of charitable purposes
including community development, grants or donations to support housing
assistance, not-for-profit community groups and other types of organizations or
civic-minded projects. The Foundation will annually distribute total grants to
assist charitable organizations or to fund projects within its local community
of not less than 5% of the average fair market value of Foundation assets each
year, less certain expenses. In order to serve the purposes for which it was
formed and maintain its Section 501(c)(3) qualification, the Foundation may
sell, on an annual basis, a limited portion of the Common Stock contributed to
it by the Holding Company.
The board of directors of the Foundation generally will be comprised of
individuals who are Officers and/or Directors of the Holding Company or the
Bank, except that at least one director of the Foundation will be (i)
independent of the Holding Company and the Bank and (ii) from the Bank's local
community. The board of directors of the Foundation will be responsible for
establishing the policies of the Foundation with respect to grants or donations,
consistent with the stated purposes of the Foundation.
21
Establishment of the Foundation must be approved by a majority of the
total number of votes entitled to be cast by Voting Members, and by a majority
of the total number of votes entitled to be cast by Minority Stockholders.
20. VOTING RIGHTS OF STOCKHOLDERS
Following consummation of the Conversion, the holders of the voting
capital stock of the Holding Company shall have the exclusive voting rights with
respect to the Holding Company.
21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION
A. All Subscription Shares purchased by Directors or Officers of the
Holding Company or the Bank in the Offering shall be subject to the restriction
that, except as provided in this Section or as may be approved by the OTS, no
interest in such shares may be sold or otherwise disposed of for value for a
period of one year following the date of purchase in the Offering.
B. The restriction on disposition of Subscription Shares set forth above
in this Section shall not apply to the following:
(1) Any exchange of such shares in connection with a merger or
acquisition involving the Bank or the Holding Company, as the
case may be, which has been approved by the appropriate
federal regulatory agency; and
(2) Any disposition of such shares following the death of the
person to whom such shares were initially sold under the terms
of the Plan.
C. With respect to all Subscription Shares subject to restrictions on
resale or subsequent disposition, each of the following provisions shall apply:
(1) Each certificate representing shares restricted by this
section shall bear a legend prominently stamped on its face
giving notice of the restriction;
(2) Instructions shall be issued to the stock transfer agent for
the Holding Company not to recognize or effect any transfer of
any certificate or record of ownership of any such shares in
violation of the restriction on transfer; and
(3) Any shares of capital stock of the Holding Company issued with
respect to a stock dividend, stock split, or otherwise with
respect to ownership of outstanding Subscription Shares
subject to the restriction on transfer hereunder shall be
subject to the same restriction as is applicable to such
Conversion Stock.
22
22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE
CONVERSION
For a period of three years following the Conversion, no Officer, Director
or their Associates shall purchase, without the prior written approval of the
OTS, any outstanding shares of Holding Company Common Stock except from a
broker-dealer registered with the SEC. This provision shall not apply to
negotiated transactions involving more than 1% of the outstanding shares of
Holding Company Common Stock, the exercise of any options pursuant to a stock
option plan or purchases of Holding Company Common Stock made by or held by any
Tax-Qualified Employee Stock Benefit Plan or Non-Tax-Qualified Employee Stock
Benefit Plan of the Bank or the Holding Company (including the Employee Plans)
which may be attributable to any Officer or Director. As used herein, the term
"negotiated transaction" means a transaction in which the securities are offered
and the terms and arrangements relating to any sale are arrived at through
direct communications between the seller or any person acting on its behalf and
the purchaser or his investment representative. The term "investment
representative" shall mean a professional investment advisor acting as agent for
the purchaser and independent of the seller and not acting on behalf of the
seller in connection with the transaction.
23. TRANSFER OF DEPOSIT ACCOUNTS
Each person holding a Deposit Account at the Bank at the time of
Conversion shall retain an identical Deposit Account at the Bank following
Conversion in the same amount and subject to the same terms and conditions
(except as to voting and liquidation rights).
24. REGISTRATION AND MARKETING
Within the time period required by applicable laws and regulations, the
Holding Company will register the securities issued in connection with the
Conversion pursuant to the Securities Exchange Act of 1934 and will not
deregister such securities for a period of at least three years thereafter,
except that the maintenance of registration for three years requirement may be
fulfilled by any successor to the Holding Company. In addition, the Holding
Company will use its best efforts to encourage and assist a market-maker to
establish and maintain a market for the Conversion Stock and to list those
securities on a national or regional securities exchange or the Nasdaq Stock
Market.
25. TAX RULINGS OR OPINIONS
Consummation of the Conversion is expressly conditioned upon prior receipt
by the Mutual Holding Company, the Mid-Tier Holding Company and the Bank of
either a ruling or an opinion of counsel with respect to federal tax laws, and
either a ruling, an opinion of counsel, or a letter of advice from their tax
advisor with respect to applicable state tax laws, to the effect that
consummation of the transactions contemplated by the Conversion and this Plan
will not result in a taxable reorganization under the provisions of the
applicable codes or otherwise result in any adverse tax consequences to the
Mutual Holding Company, the Mid-Tier Holding Company, the Holding Company or the
Bank, or the account holders receiving subscription rights before or after the
Conversion, except in each case to the extent, if any, that subscription rights
are deemed to have value on the date such rights are issued.
23
26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS
A. The Holding Company and the Bank are authorized to adopt Tax-Qualified
Employee Stock Benefit Plans in connection with the Conversion, including
without limitation, an ESOP. Existing as well as any newly created Tax-Qualified
Employee Stock Benefit Plans may purchase shares of Holding Company Common Stock
in the Offering, to the extent permitted by the terms of such benefit plans and
this Plan.
B. As a result of the Conversion, the Holding Company shall be deemed to
have ratified and approved all employee stock benefit plans maintained by the
Bank and the Mid-Tier Holding Company and shall have agreed to issue (and
reserve for issuance) Holding Company Common Stock in lieu of common stock of
the Mid-Tier Holding Company pursuant to the terms of such benefit plans. Upon
consummation of the Conversion, the Mid-Tier Holding Company common stock held
by such benefit plans shall be converted into Holding Company Common Stock based
upon the Exchange Ratio. Also upon consummation of the Conversion, (i) all
rights to purchase, sell or receive Mid-Tier Holding Company common stock and
all rights to elect to make payment in Mid-Tier Holding Company common stock
under any agreement between the Bank or the Mid-Tier Holding Company and any
Director, Officer or Employee thereof or under any plan or program of the Bank
or the Mid-Tier Holding Company, shall automatically, by operation of law, be
converted into and shall become an identical right to purchase, sell or receive
Holding Company Common Stock and an identical right to make payment in Holding
Company Common Stock under any such agreement between the Bank or the Mid-Tier
Holding Company and any Director, Officer or Employee thereof or under such plan
or program of the Bank, and (ii) rights outstanding under all stock option plans
shall be assumed by the Holding Company and thereafter shall be rights only for
shares of Holding Company Common Stock, with each such right being for a number
of shares of Holding Company Common Stock based upon the Exchange Ratio and the
number of shares of Mid-Tier Holding Company common stock that were available
thereunder immediately prior to consummation of the Conversion, with the price
adjusted to reflect the Exchange Ratio but with no change in any other term or
condition of such right.
C. The Holding Company and the Bank are authorized to enter into
employment agreements with their executive officers.
D. The Holding Company and the Bank are authorized to adopt stock option
plans, restricted stock grant plans and other Non-Tax-Qualified Employee Stock
Benefit Plans, provided that such plans conform to any applicable requirements
of federal regulations.
27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY
A. (1) The charter of the Bank may contain a provision stipulating
that no person, except the Holding Company, for a period of
five years following the closing date of the Conversion, may
directly or indirectly acquire or offer to acquire the
beneficial ownership of more than 10% of any class of an
equity security of the Bank, without the prior written
approval of the OTS. In addition, such charter may also
provide that for a period of five years following the closing
date of the Conversion, shares beneficially
24
owned in violation of the above-described charter provision
shall not be entitled to vote and shall not be voted by any
person or counted as voting stock in connection with any
matter submitted to stockholders for a vote. In addition,
special meetings of the stockholders relating to changes in
control or amendment of the charter may only be called by the
Board of Directors, and shareholders shall not be permitted to
cumulate their votes for the election of Directors.
(2) For a period of three years from the date of consummation of
the Conversion, no person, other than the Holding Company,
shall directly or indirectly offer to acquire or acquire the
beneficial ownership of more than 10% of any class of an
equity security of the Bank without the prior written consent
of the OTS.
B. The Certificate of Incorporation of the Holding Company may contain a
provision stipulating that in no event shall any record owner of any outstanding
shares of Holding Company Common Stock who beneficially owns in excess of 10% of
such outstanding shares be entitled or permitted to any vote with respect to any
shares held in excess of 10%. In addition, the Certificate of Incorporation and
Bylaws of the Holding Company may contain provisions which provide for staggered
terms of the directors, noncumulative voting for directors, limitations on the
calling of special meetings, a fair price provision for certain business
combinations and certain notice requirements.
C. For the purposes of this section:
(1) The term "person" includes an individual, a firm, a
corporation or other entity;
(2) The term "offer" includes every offer to buy or acquire,
solicitation of an offer to sell, tender offer for, or request
or invitation for tenders of, a security or interest in a
security for value;
(3) The term "acquire" includes every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise;
and
(4) The term "security" includes non-transferable subscription
rights issued pursuant to a plan of conversion as well as a
"security" as defined in 15 U.S.C.ss.8c(a)(10).
28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK
A. The Holding Company shall comply with any applicable regulation in the
repurchase of any shares of its capital stock following consummation of the
Conversion.
B. The Bank shall not declare or pay a cash dividend on, or repurchase any
of, its capital stock if the effect thereof would cause its regulatory capital
to be reduced below (i) the amount required for the liquidation account or (ii)
the federal or state regulatory capital requirements.
25
29. CHARTER AND BYLAWS
By voting to adopt this Plan, Voting Members will be voting to adopt the
Certificate of Incorporation and Bylaws for the Holding Company attached as
Exhibits D and E to this Plan.
30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE
The Effective Date of the Conversion shall be the date upon which the
Articles of Combination (or similar documents) shall be filed with OTS with
respect to the MHC Merger, the Mid-Tier Merger and the Bank Merger. The Articles
of Combination shall be filed after all requisite regulatory, depositor and
stockholder approvals have been obtained, all applicable waiting periods have
expired, and sufficient subscriptions and orders for Subscription Shares have
been received. The Closing of the sale of all shares of Holding Company Common
Stock sold in the Offering shall occur simultaneously on the effective date of
the Closing.
31. EXPENSES OF CONVERSION
The Mutual Holding Company, the Mid-Tier Holding Company, the Bank and the
Holding Company may retain and pay for the services of legal, financial and
other advisors to assist in connection with any or all aspects of the
Conversion, including the Offering, and such parties shall use their best
efforts to assure that such expenses shall be reasonable.
32. AMENDMENT OR TERMINATION OF PLAN
If deemed necessary or desirable, this Plan may be substantively amended
as a result of comments from the OTS or otherwise at any time prior to
solicitation of proxies from Voting Members and Mid-Tier Holding Company
stockholders to vote on this Plan by the Board of Directors of the Mutual
Holding Company, and at any time thereafter by the Board of Directors of the
Mutual Holding Company with the concurrence of the OTS. Any amendment to this
Plan made after approval by Voting Members and Mid-Tier Holding Company
stockholders with the approval of the OTS shall not necessitate further approval
by Voting Members unless otherwise required by the OTS. The Board of Directors
of the Mutual Holding Company may terminate this Plan at any time prior to the
Special Meeting of Members and the Special Meeting of Stockholders to vote on
this Plan, and at any time thereafter with the concurrence of the OTS.
By adoption of the Plan, Voting Members of the Mutual Holding Company
authorize the Board of Directors of the Mutual Holding Company to amend or
terminate the Plan under the circumstances set forth in this Section.
33. CONDITIONS TO CONVERSION
Consummation of the Conversion pursuant to this Plan is expressly
conditioned upon the following:
A. Prior receipt by the Mutual Holding Company, the Mid-Tier Holding
Company, and the Bank of rulings of the United States Internal Revenue Service
and the state taxing authorities, or opinions of counsel or tax advisers as
described in Section 25 hereof;
26
B. The issuance of the Subscription Shares offered in the Conversion; and
C. The completion of the Conversion within the time period specified in
Section 3 of this Plan.
34. INTERPRETATION
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of the Board of Directors of the Mutual
Holding Company shall be final, subject to the authority of the OTS.
Dated: July 1, 2003.
27
EXHIBIT A
AGREEMENT OF MERGER BETWEEN
PROVIDENT BANCORP, INC., PROVIDENT INTERIM BANK I,
AND PROVIDENT BANK
FORM OF
AGREEMENT OF MERGER BETWEEN
PROVIDENT BANCORP, INC., PROVIDENT INTERIM BANK I, AND
PROVIDENT BANK
THIS AGREEMENT OF MERGER (the "Mid-Tier Merger Agreement") dated as of
____ __, 2002, is made by and between Provident Bancorp, Inc., a federal
corporation (the "Mid-Tier Holding Company"), Provident Bank, a federal savings
association (the "Bank"), and Provident Interim Bank I, an interim federal
savings bank ("Interim I").
R E C I T A L S :
1. The Mid-Tier Holding Company is a federal corporation that owns 100% of
the common stock of the Bank.
2. Contemporaneously with the transactions contemplated by this Mid-Tier
Merger Agreement, the Mid-Tier Holding Company will exchange its charter for
that of Interim I and Interim I will merge with and into the Bank with the Bank
as the surviving entity.
3. At least two-thirds of the members of the boards of directors of the
Bank and the Mid-Tier Holding Company have approved this Mid-Tier Merger
Agreement whereby Interim I shall be merged with and into the Bank with the Bank
as the surviving or resulting institution (the "Mid-Tier Merger"), and have
authorized the execution and delivery thereof.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. Merger. At and on the Effective Date of the Mid-Tier Merger, (i) the
Mid-Tier Holding Company will exchange its charter for that of Interim I, and
will merge with and into the Bank with the Bank as the resulting entity (the
"Resulting Institution"), and (ii) the Minority Stockholders of the Mid-Tier
Holding Company shall constructively receive shares of Bank common stock in
exchange for their Mid-Tier Holding Company common stock and the Mutual Holding
Company shall receive shares of Bank common stock in exchange for its Mid-Tier
Holding Company common stock.
2. Effective Date. The Mid-Tier Merger shall not be effective until and
unless it is approved by the Office of Thrift Supervision (the "OTS") after
approval by at least (i) two-thirds of the outstanding common stock of the
Mid-Tier Holding Company, (ii) a majority vote of the shares held by Minority
Stockholders, and (iii) a majority of Voting Members, and the Articles of
Combination shall have been filed with the OTS with respect to the Mid-Tier
Merger. Approval of the Plan by the Voting Members shall constitute approval of
the Mid-Tier Merger Agreement by the Voting Members. Approval of the Plan by
stockholders of the Mid-Tier Holding Company, including the Minority
Stockholders, shall constitute approval of the Mid-Tier Merger Agreement by such
stockholders.
3. Name. The name of the Resulting Institution shall be Provident Bank.
4. Offices. The main banking office of the Resulting Institution shall be
400 Rella Boulevard, Montebello, New York. The branch offices of the Bank that
were in lawful operation prior to the Mid-Tier Merger shall be operated as
branch offices of the Resulting Institution.
5. Directors and Officers. The directors and officers of the Bank
immediately prior to the Effective Date shall be the directors and officers of
the Resulting Institution after the Effective Date.
6. Rights and Duties of the Resulting Institution. At the Effective Date,
the Mid-Tier Holding Company shall convert to Interim I, which shall be merged
with and into the Bank with the Bank as the Resulting Institution. The business
of the Resulting Institution shall be that of a federal savings association as
provided in its Charter. All assets, rights, interests, privileges, powers,
franchises and property (real, personal and mixed) of the Mid-Tier Holding
Company, the Bank and Interim I shall be transferred automatically to and vested
in the Resulting Institution by virtue of the Mid-Tier Merger without any deed
or other document of transfer. The Resulting Institution, without any order or
action on the part of any court or otherwise and without any documents of
assumption or assignment, shall hold and enjoy all of the properties, franchises
and interests, including appointments, powers, designations, nominations and all
other rights and interests as the agent or other fiduciary in the same manner
and to the same extent as such rights, franchises, and interests and powers were
held or enjoyed by the Bank, the Mid-Tier Holding Company and Interim I. The
Resulting Institution shall be responsible for all of the liabilities,
restrictions and duties of every kind and description of the Mid-Tier Holding
Company, the Bank and Interim I immediately prior to the Merger, including
liabilities for all debts, obligations and contracts of the Mid-Tier Holding
Company, the Bank and Interim I, matured or unmatured, whether accrued,
absolute, contingent or otherwise and whether or not reflected or reserved
against on balance sheets, books of accounts or records of the Mid-Tier Holding
Company, the Bank and Interim I. The stockholders of the Bank shall possess all
voting rights with respect to the shares of stock of Interim I and the Mid-Tier
Holding Company. All rights of creditors and other obligees and all liens on
property of the Bank, the Mid-Tier Holding Company and Interim I shall be
preserved and shall not be released or impaired.
7. Other Terms. All terms used in this Mid-Tier Merger Agreement shall,
unless defined herein, have the meanings set forth in the Plan. The Plan is
incorporated herein by this reference and made a part hereof to the extent
necessary or appropriate to effect and consummate the terms of this Mid-Tier
Merger Agreement and the Conversion.
A-2
IN WITNESS WHEREOF, the Mid-Tier Holding Company, Interim I and the Bank
have caused this Mid-Tier Merger Agreement to be executed as of the date first
above written.
Provident Bancorp, Inc.
(a federal corporation)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
Provident Bank
(a federal savings association)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
ATTEST: Provident Interim Bank I
(an interim federal savings bank)
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
A-3
EXHIBIT B
AGREEMENT OF MERGER BETWEEN
PROVIDENT BANCORP, MHC,
PROVIDENT INTERIM BANK II, AND PROVIDENT BANK
EXHIBIT B
FORM OF
AGREEMENT OF MERGER BETWEEN
PROVIDENT BANCORP, MHC,
PROVIDENT INTERIM BANK II, AND PROVIDENT BANK
THIS AGREEMENT OF MERGER (the "MHC Merger Agreement"), dated as of ____
__, 2002, is made by and between Provident Bancorp, MHC, a federal corporation
(the "Mutual Holding Company"), Provident Bank, a federal savings association
(the "Bank"), and Provident Interim Bank II, an interim federal savings bank
("Interim II").
R E C I T A L S:
1. The Mutual Holding Company is a federal corporation that owns a
majority of the common stock of the Bank as a result of the merger of Provident
Bancorp, Inc., a federal corporation, into the Bank (the "Mid-Tier Merger")
immediately prior to the merger provided for in this MHC Merger Agreement.
2. Contemporaneously with the transactions contemplated by this MHC Merger
Agreement, the Mutual Holding Company will exchange its charter for that of
Interim II and Interim II will merge with and into the Bank with the Bank as the
resulting entity.
3. At least two-thirds of the members of the boards of directors of the
Bank and the Mutual Holding Company have approved this MHC Merger Agreement
whereby Interim II will be merged with and into the Bank with the Bank as the
surviving or resulting institution (the "MHC Merger"), and authorized the
execution and delivery thereof.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. Merger. At and on the Effective Date of the MHC Merger, (i) the Mutual
Holding Company shall exchange its charter for that of Interim II, and will
merge with and into the Bank with the Bank as the resulting entity (the
"Resulting Institution"), whereupon shares of Bank common stock owned by the
Mutual Holding Company shall be canceled. As part of the MHC Merger, each
Eligible Account Holder and Supplemental Eligible Account Holder (as defined in
the Plan of Conversion and Reorganization (the "Plan")), shall automatically
receive an interest in the Liquidation Account established in the Bank, in
exchange for such person's interest in the Mutual Holding Company set forth in
the Plan.
2. Effective Date. The MHC Merger shall not be effective until and unless
it is approved by the Office of Thrift Supervision (the "OTS") after approval by
at least (i) two-thirds of the outstanding common stock of the Mid-Tier Holding
Company, (ii) a majority vote of the shares held by Minority Stockholders, and
(iii) a majority of Voting Members, and the Articles of Combination shall have
been filed with the OTS with respect to the MHC Merger. Approval of the Plan by
the Voting Members shall constitute approval of the MHC Merger Agreement by the
Voting Members. Approval of the Plan by the stockholders of the Mid-Tier
Company,
including the Minority Stockholders, shall constitute approval of the MHC Merger
Agreement by such stockholders.
3. Name. The name of the Resulting Institution shall be Provident Bank.
4. Offices. The main banking office of the Resulting Institution shall be
400 Rella Boulevard, Montebello, New York. The branch offices of the Bank that
were in lawful operation prior to the MHC Merger shall be operated as branch
offices of the Resulting Institution.
5. Directors and Officers. The directors and officers of the Bank
immediately prior to the Effective Date shall be the directors and officers of
the Resulting Institution after the Effective Date.
6. Rights and Duties of the Resulting Institution. At the Effective Date,
the MHC Holding Company shall convert to Interim II, which shall be merged with
and into the Bank with the Bank as the Resulting Institution. The business of
the Resulting Institution shall be that of a federal savings association as
provided in its Charter. All assets, rights, interests, privileges, powers,
franchises and property (real, personal and mixed) of the Mutual Holding
Company, the Bank and Interim II shall be transferred automatically to and
vested in the Resulting Institution by virtue of the MHC Merger without any deed
or other document of transfer. The Resulting Institution, without any order or
action on the part of any court or otherwise and without any documents of
assumption or assignment, shall hold and enjoy all of the properties, franchises
and interests, including appointments, powers, designations, nominations and all
other rights and interests as the agent or other fiduciary in the same manner
and to the same extent as such rights, franchises, and interests and powers were
held or enjoyed by the Bank, the Mutual Holding Company and Interim II. The
Resulting Institution shall be responsible for all of the liabilities,
restrictions and duties of every kind and description of the Mutual Holding
Company, the Bank and Interim II immediately prior to the Merger, including
liabilities for all debts, obligations and contracts of the Mutual Holding
Company, the Bank and Interim II, matured or unmatured, whether accrued,
absolute, contingent or otherwise and whether or not reflected or reserved
against on balance sheets, books of accounts or records of the Mutual Holding
Company, the Bank and Interim II. The stockholders of the Bank shall possess all
voting rights with respect to the shares of stock of the Bank. All rights of
creditors and other obligees and all liens on property of the Mutual Holding
Company, the Bank and Interim II shall be preserved and shall not be released or
impaired.
7. Other Terms. All terms used in this MHC Merger Agreement shall, unless
defined herein, have the meanings set forth in the Plan. The Plan is
incorporated herein by this reference and made a part hereof to the extent
necessary or appropriate to effect and consummate the terms of this MHC Merger
Agreement and the Conversion.
B-2
IN WITNESS WHEREOF, the Mutual Holding Company, Interim II and the Bank have
caused this MHC Merger Agreement to be executed as of the date first above
written.
Provident Bancorp, Inc.
(a federal corporation)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
Provident Bank
(a federal savings association)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
ATTEST: Provident Interim Bank II
(an interim federal savings bank)
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
B-3
EXHIBIT C
FORM OF AGREEMENT OF MERGER BETWEEN
PROVIDENT BANK, PROVIDENT INTERIM BANK III, AND
PROVIDENT BANCORP, INC.
EXHIBIT C
FORM OF AGREEMENT OF MERGER BETWEEN
PROVIDENT BANK, PROVIDENT INTERIM BANK III, AND
PROVIDENT BANCORP, INC.
THIS AGREEMENT OF MERGER (the "Bank Merger Agreement") dated as of
_________, 2002, is made by and between Provident Bank, a federal savings
association (the "Bank"), Provident Bancorp, Inc., a Delaware corporation (the
"Holding Company"), and Provident Interim Bank III, an interim federal savings
bank ("Interim III").
R E C I T A L S :
1. The Bank is a federal savings association that prior to the
transactions contemplated by this Bank Merger Agreement and the Plan of
Conversion and Reorganization of Provident Bancorp, MHC (the "Plan"), was a
wholly-owned subsidiary of Provident Bancorp, Inc. (the "Mid-Tier Holding
Company"), a federal corporation.
2. The Holding Company was formed as a wholly-owned subsidiary of the Bank
to facilitate and effect the Conversion.
3. The Holding Company has organized Interim III as a wholly-owned
subsidiary to effect and facilitate the Conversion.
4. Immediately prior to the transactions contemplated by this Bank Merger
Agreement, (i) the Mid-Tier Holding Company will convert to Provident Interim
Bank I, an interim federal savings bank and merge with and into the Bank (the
"Mid-Tier Merger") with the Bank as the resulting entity, (ii) the Minority
Stockholders will constructively receive, and the Mutual Holding Company will
receive, shares of Bank common stock in exchange for their Mid-Tier Holding
Company common stock, and (iii) Provident Bancorp, MHC will convert to Interim
Savings Bank II, an interim federal savings bank, and merge with and into the
Bank with the Bank as the resulting entity (the "MHC Merger").
5. At least two-thirds of the members of the boards of directors of the
Bank and Interim III have approved this Bank Merger Agreement under which
Interim III will merge with and into the Bank with the Bank as the surviving or
resulting institution (the "Bank Merger"), and have authorized the execution and
delivery thereof.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. Merger. At and on the Effective Date of the Bank Merger and immediately
after the Mid-Tier Merger and the MHC Merger, Interim III will merge with and
into the Bank with the Bank as the surviving entity (the "Resulting
Institution"). Stockholders of the Bank will exchange the shares of Bank common
stock that they either actually or constructively received in the Mid-Tier
Merger for Holding Company Common Stock. As a result of the Bank Merger, the
Holding Company will own 100% of the common stock of the Bank.
2. Stock Offering. Contemporaneously with the Bank Merger, the Holding
Company will sell shares of its common stock in the Offering as described in the
Plan.
3. Effective Date. The Bank Merger shall not be effective until and unless
it is approved by the Office of Thrift Supervision (the "OTS") after approval by
at least (i) two-thirds of the outstanding common stock of the Mid-Tier Holding
Company, (ii) a majority of the shares held by Minority Stockholders, and (iii)
a majority of the Voting Members, and the Articles of Combination shall have
been filed with the OTS with respect to the Bank Merger. Approval of the Plan by
the Voting Members shall constitute approval of this Bank Merger Agreement by
the Voting Members.
4. Name. The name of the Resulting Institution shall be Provident Bank.
5. Offices. The main banking office of the Resulting Institution shall be
400 Rella Boulevard, Montebello, New York. The branch offices of the Bank that
were in lawful operation prior to the Merger shall be operated as branch offices
of the Resulting Institution.
6. Directors and Officers. The directors and officers of the Bank
immediately prior to the Effective Date shall be the directors and officers of
the Resulting Institution after the Effective Date.
7. Rights and Duties of the Resulting Institution. At the Effective Date,
Interim III shall be merged with and into the Bank with the Bank as the
Resulting Institution. The business of the Resulting Institution shall be that
of a federal savings association as provided in its Charter. All assets, rights,
interests, privileges, powers, franchises and property (real, personal and
mixed) of Interim III and the Bank shall be transferred automatically to and
vested in the Resulting Institution by virtue of such Merger without any deed or
other document of transfer. The Resulting Institution, without any order or
action on the part of any court or otherwise and without any documents of
assumption or assignment, shall hold and enjoy all of the properties, franchises
and interests, including appointments, powers, designations, nominations and all
other rights and interests as the agent or other fiduciary in the same manner
and to the same extent as such rights, franchises, and interests and powers were
held or enjoyed by the Bank and Interim III. The Resulting Institution shall be
responsible for all of the liabilities, restrictions and duties of every kind
and description of both Interim III and the Bank immediately prior to the Bank
Merger, including liabilities for all debts, obligations and contracts of
Interim III and the Bank, matured or unmatured, whether accrued, absolute,
contingent or otherwise and whether or not reflected or reserved against on
balance sheets, books of accounts or records of Interim III or the Bank. The
stockholders of the Resulting Institution shall possess all voting rights with
respect to the shares of stock of the Bank and Interim III. All rights of
creditors and other obligees and all liens on property of Interim III and the
Bank shall be preserved and shall not be released or impaired.
8. Other Terms. All terms used in this Bank Merger Agreement shall, unless
defined herein, have the meanings set forth in the Plan. The Plan is
incorporated herein by this reference and made a part hereof to the extent
necessary or appropriate to effect and consummate the terms of the Bank Merger
Agreement and the Conversion.
C-2
IN WITNESS WHEREOF, the Bank, the Holding Company and Interim III have
caused this Bank Merger Agreement to be executed as of the date first above
written.
Provident Bank
(a federal savings association)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
Provident Interim Bank III
(an interim federal savings bank)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
Provident Bancorp, Inc.
(a Delaware corporation)
ATTEST:
___________________________________ By: ____________________________________
Carol Benoist, Corporate Secretary George Strayton, President and Chief
Executive Officer
C-3
EXHIBIT D
CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY
CERTIFICATE OF INCORPORATION
OF
PROVIDENT BANCORP, INC.
FIRST: The name of the Corporation is Provident Bancorp, Inc. (hereinafter
referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 2711 Centerville Road, Suite 400, in the City of
Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH:
A. The total number of shares of all classes of stock that the Corporation
shall have authority to issue is one hundred eighty-five million (85,000,000)
consisting of:
1. Ten million (10,000,000) shares of Preferred Stock, par value one
cent ($0.01) per share (the "Preferred Stock"); and
2. Seventy-five million (75,000,000) shares of Common Stock, par
value one cent ($0.01) per share (the "Common Stock").
B. The Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of the shares of Preferred Stock
in series, and by filing a certificate pursuant to the applicable law of the
State of Delaware (such certificate being hereinafter referred to as a
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences, and rights of the shares of each such series and any
qualifications, limitations or restrictions thereof. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the Common Stock, without a vote of the holders of the
Preferred Stock, or of any series thereof, unless a vote of any such holders is
required pursuant to the terms of any Preferred Stock Designation.
C. 1. Notwithstanding any other provision of this Certificate of
Incorporation or the bylaws of the Corporation, in no event shall any record
owner of any outstanding Common Stock which is beneficially owned, directly or
indirectly, by a person who, as of any record date for the determination of
stockholders entitled to vote on any matter, beneficially owns in excess of 10%
of the then-outstanding shares of Common Stock (the "Limit"), be entitled, or
permitted to any vote in respect of the shares held in excess of the Limit. The
number of votes which may be cast by any record owner by virtue of the
provisions hereof in respect of Common Stock beneficially owned by such
person owning shares in excess of the Limit shall be a number equal to the total
number of votes which a single record owner of all Common Stock owned by such
person would be entitled to cast subject to this Section C of this Article
FOURTH, multiplied by a fraction, the numerator of which is the number of shares
of such class or series which are both beneficially owned by such person and
owned of record by such record owner and the denominator of which is the total
number of shares of Common Stock beneficially owned by such person owning shares
in excess of the Limit.
2. The following definitions shall apply to this Section C of this
Article FOURTH:
(a) "Affiliate" shall have the meaning ascribed to it in
Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on the
date of filing of this Certificate of Incorporation.
(b) "Beneficial ownership" shall be determined pursuant to
Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934 (or any successor
rule or statutory provision), or, if said Rule 13d-3
shall be rescinded and there shall be no successor rule
or statutory provision thereto, pursuant to said Rule
13d-3 as in effect on the date of filing of this
Certificate of Incorporation; provided, however, that a
person shall, in any event, also be deemed the
"beneficial owner" of any Common Stock:
(1) which such person or any of its Affiliates
beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates has (i)
the right to acquire (whether such right is
exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement
or understanding (but shall not be deemed to be
the beneficial owner of any voting shares solely
by reason of an agreement, contract, or other
arrangement with this Corporation to effect any
transaction which is described in any one or more
clauses of Section A of Article EIGHTH) or upon
the exercise of conversion rights, exchange
rights, warrants, or options or otherwise, or (ii)
sole or shared voting or investment power with
respect thereto pursuant to any agreement,
arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the
beneficial owner of any voting shares solely by
reason of a revocable proxy granted for a
particular meeting of stockholders, pursuant to a
public solicitation of proxies for such meeting,
with respect to shares of which neither such
person nor any such Affiliate is otherwise deemed
the beneficial owner); or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such
first mentioned person or any of its Affiliates
acts as a partnership, limited partnership,
syndicate or other group pursuant to any
agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing
of any shares of capital stock of this
Corporation;
D-2
and provided further, however, that (1) no Director or
Officer of this Corporation (or any Affiliate of any
such Director or Officer) shall, solely by reason of any
or all of such Directors or Officers acting in their
capacities as such, be deemed, for any purposes hereof,
to beneficially own any Common Stock beneficially owned
by another such Director or Officer (or any Affiliate
thereof), and (2) neither any employee stock ownership
plan or similar plan of this Corporation or any
subsidiary of this Corporation, nor any trustee with
respect thereto or any Affiliate of such trustee (solely
by reason of such capacity of such trustee), shall be
deemed, for any purposes hereof, to beneficially own any
Common Stock held under any such plan. For purposes of
computing the percentage of beneficial ownership of
Common Stock of a person, the outstanding Common Stock
shall include shares deemed owned by such person through
application of this subsection but shall not include any
other Common Stock which may be issuable by this
Corporation pursuant to any agreement, or upon exercise
of conversion rights, warrants or options, or otherwise.
For all other purposes, the outstanding Common Stock
shall include only Common Stock then outstanding and
shall not include any Common Stock which may be issuable
by this Corporation pursuant to any agreement, or upon
the exercise of conversion rights, warrants or options,
or otherwise.
(c) A "person" shall mean any individual, firm, corporation,
or other entity.
3. The Board of Directors shall have the power to construe and apply
the provisions of this Section C of Article FOURTH and to make all
determinations necessary or desirable to implement such provisions, including
but not limited to matters with respect to (i) the number of shares of Common
Stock beneficially owned by any person, (ii) whether a person is an Affiliate of
another, (iii) whether a person has an agreement, arrangement, or understanding
with another as to the matters referred to in the definition of beneficial
ownership, (iv) the application of any other definition or operative provision
of this section to the given facts, or (v) any other matter relating to the
applicability or effect of this Section C of Article FOURTH.
4. The Board of Directors shall have the right to demand that any
person who is reasonably believed to beneficially own Common Stock in excess of
the Limit (or holds of record Common Stock beneficially owned by any person in
excess of the Limit) supply the Corporation with complete information as to (i)
the record owner(s) of all shares beneficially owned by such person who is
reasonably believed to own shares in excess of the Limit, and (ii) any other
factual matter relating to the applicability or effect of this Section C of
Article FOURTH as may reasonably be requested of such person.
5. Except as otherwise provided by law or expressly provided in this
Section C of Article FOURTH, the presence, in person or by proxy, of holders of
a majority of the shares of capital stock of the Corporation entitled to vote at
the meeting (after giving effect, if required, to the provisions of this Section
C of Article FOURTH) shall constitute a quorum at all meetings of the
stockholders (unless or except to the extent that the presence of a larger
number may be required by law), and every reference in this Certificate of
Incorporation to a majority or other
D-3
proportion of capital stock (or the holders thereof) for purposes of determining
any quorum requirement or any requirement for stockholder consent or approval
shall be deemed to refer to such majority or other proportion of the votes (or
the holders thereof) then entitled to be cast in respect of such capital stock
(after giving effect, if required, to the provisions of this Section C of
Article FOURTH).
6. Any constructions, applications, or determinations made by the
Board of Directors pursuant to this Section C of Article FOURTH in good faith
and on the basis of such information and assistance as was then reasonably
available for such purpose shall be conclusive and binding upon the Corporation
and its stockholders.
7. In the event any provision (or portion thereof) of this Section C
of Article FOURTH shall be found to be invalid, prohibited or unenforceable for
any reason, the remaining provisions (or portions thereof) of this Section C of
Article FOURTH shall remain in full force and effect, and shall be construed as
if such invalid, prohibited or unenforceable provision had been stricken
herefrom or otherwise rendered inapplicable, it being the intent of this
Corporation and its stockholders that such remaining provision (or portion
thereof) of this section remain, to the fullest extent permitted by law,
applicable and enforceable as to all stockholders, including stockholders owning
an amount of stock over the Limit, notwithstanding any such finding.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Directors and stockholders:
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the
powers and authority expressly conferred upon them by statute or by this
Certificate of Incorporation or the Bylaws of the Corporation, the
Directors are hereby empowered to exercise all such powers and do all such
acts and things as may be exercised or done by the Corporation.
B. The Directors of the Corporation need not be elected by written
ballot unless the Bylaws so provide. Stockholders shall not be permitted
to cumulate their votes for the election of Directors.
C. Subject to the rights of any class or series of Preferred Stock
of the Corporation, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual
or special meeting of stockholders of the Corporation and may not be
effected by any consent in writing by such stockholders.
D. Special meetings of stockholders of the Corporation may be called
(i) by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directorships (whether or not
there exist any vacancies in previously authorized directorships at the
time any such resolution is presented to the Board for adoption) (the
"Whole Board") or (ii) as otherwise provided in the Bylaws.
D-4
SIXTH:
A. The number of Directors shall be fixed from time to time exclusively by
the Board of Directors pursuant to a resolution adopted by a majority of the
Whole Board. The Directors shall be divided into three classes, with the term of
office of the first class to expire at the first annual meeting of stockholders,
the term of office of the second class to expire at the annual meeting of
stockholders one year thereafter and the term of office of the third class to
expire at the annual meeting of stockholders two years thereafter. At each
annual meeting of stockholders following such initial classification and
election, Directors elected to succeed those Directors whose terms expire shall
be elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election.
B. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of Directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the Directors
then in office, though less than a quorum, and Directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been chosen expires. No decrease
in the number of Directors constituting the Board of Directors shall shorten the
term of any incumbent Director.
C. Advance notice of stockholder nominations for the election of Directors
and of business to be brought by stockholders before any meeting of the
stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
D. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, any Director, or the entire Board of Directors, may be removed
from office at any time, but only for cause and only by the affirmative vote of
the holders of at least 80 percent of the voting power of all of the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors (after giving effect to the provisions of
Article FOURTH of this Certificate of Incorporation ("Article FOURTH")), voting
together as a single class.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend or
repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the Corporation by the Board of Directors shall require the approval
of the majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors (after giving effect to
the provisions of Article FOURTH), voting together as a single class, shall be
required to adopt, amend or repeal any provisions of the Bylaws of the
Corporation.
D-5
EIGHTH:
A. In addition to any affirmative vote required by law or this Certificate
of Incorporation, and except as otherwise expressly provided in this section:
1. any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself
an Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder, or any Affiliate of any Interested
Stockholder, of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereinafter defined) equaling or exceeding
25% or more of the combined assets of the Corporation and its
Subsidiaries; or
3. the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an aggregate Fair
Market Value (as hereinafter defined) equaling or exceeding 25% of the
combined Fair Market Value of the then-outstanding common stock of the
Corporation and its Subsidiaries, except pursuant to an employee benefit
plan of the Corporation or any Subsidiary thereof; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of an Interested Stockholder; or
5. any reclassification or combination of securities, or
recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other transaction (whether
or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the
proportional share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is
directly or indirectly owned by an Interested Stockholder or any Affiliate
of an Interested Stockholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of Directors (the "Voting Stock") (after giving effect to
the provision of Article FOURTH), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or by any other
provisions of this Certificate of Incorporation or any Preferred Stock
Designation or in any agreement with any national securities exchange or
otherwise.
D-6
The term "Business Combination" as used in this Article EIGHTH shall mean
any transaction which is referred to in any one or more of paragraphs 1 through
5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only the affirmative vote of the majority of the outstanding
shares of capital stock entitled to vote (after giving effect, if required, to
the provisions of Section C of Article FOURTH), or such vote as is required by
law or by this Certificate of Incorporation, if, in the case of any Business
Combination that does not involve any cash or other consideration being received
by the stockholders of the Corporation solely in their capacity as stockholders
of the Corporation, the condition specified in the following paragraph 1 is met
or, in the case of any other Business Combination, all of the conditions
specified in either of the following paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by two-thirds
of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be
received per share by the holders of Common Stock in
such Business Combination shall at least be equal to the
higher of the following:
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Stockholder
or any of its Affiliates for any shares of Common
Stock acquired by it (i) within the two-year
period immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date"), or (ii) in
the transaction in which it became an Interested
Stockholder, whichever is higher.
(2) the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the
Interested Stockholder became an Interested
Stockholder (such latter date is referred to in
this Article EIGHTH as the "Determination Date"),
whichever is higher.
(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be
received per share by holders of shares of any class of
outstanding Voting Stock other than Common Stock shall
be at least equal to the highest of the following (it
being intended that the requirements of this
subparagraph (b) shall be required to be met with
respect to every such class of outstanding Voting Stock,
whether or not the Interested
D-7
Stockholder has previously acquired any shares of a
particular class of Voting Stock):
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Stockholder
for any shares of such class of Voting Stock
acquired by it (i) within the two-year period
immediately prior to the Announcement Date, or
(ii) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(2) (if applicable) the highest preferential amount
per share to which the holders of shares of such
class of Voting Stock are entitled in the event of
any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; and
(3) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(c) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including
Common Stock) shall be in cash or in the same form as
the Interested Stockholder has paid for shares of such
class of Voting Stock. If the Interested Stockholder has
previously paid for shares of any class of Voting Stock
with varying forms of consideration, the form of
consideration to be received per share by holders of
shares of such class of Voting Stock shall be either
cash or the form used to acquire the largest number of
shares of such class of Voting Stock previously acquired
by the Interested Stockholder. The price determined in
accordance with subparagraph B.2 of this Article EIGHTH
shall be subject to appropriate adjustment in the event
of any stock dividend, stock split, combination of
shares or similar event.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of
such Business Combination: (1) except as approved by a
majority of the Disinterested Directors, there shall
have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or
not cumulative) on any outstanding stock having
preference over the Common Stock as to dividends or
liquidation; (2) there shall have been (i) no reduction
in the annual rate of dividends paid on the Common Stock
(except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the
Disinterested Directors, and (ii) an increase in such
annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar
transaction which has the effect of reducing the number
of outstanding shares of the Common Stock, unless the
failure to so increase such annual rate is approved by a
majority of the Disinterested Directors; and (3)
D-8
neither such Interested Stockholder or any of its
Affiliates shall have become the beneficial owner of any
additional shares of Voting Stock except as part of the
transaction which results in such Interested Stockholder
becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder
shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder), of
any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements
of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be
mailed to stockholders of the Corporation at least 30
days prior to the consummation of such Business
Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act
or subsequent provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, a group acting in
concert, a corporation, a partnership, an association, a joint venture, a
pool, a joint stock company, a trust, an unincorporated organization or
similar company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities.
2. "Interested Stockholder" shall mean any person (other than the
Corporation or any holding company or Subsidiary thereof) who or which:
(a) is the beneficial owner, directly or indirectly, of more
than 10% of the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more of the
voting power of the then-outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by an
Interested Stockholder, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions
not involving a public offering within the meaning of the Securities
Act of 1933.
D-9
3. For purposes of this Article EIGHTH, "beneficial ownership" shall
be determined in the manner provided in Section C of Article FOURTH
hereof.
4. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on the date of
filing of this Certificate of Incorporation.
5. "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in paragraph 2 of this section, the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
6. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors prior to the time that the Interested
Stockholder became an Interested Stockholder, and any Director who is
thereafter chosen to fill any vacancy of the Board of Directors or who is
elected and who, in either event, is unaffiliated with the Interested
Stockholder and in connection with his or her initial assumption of office
is recommended for appointment or election by a majority of Disinterested
Directors then on the Board of Directors.
7. "Fair Market Value" means: (a) in the case of stock, the highest
closing sales price of the stock during the 30-day period immediately
preceding the date in question of a share of such stock on the National
Association of Securities Dealers Automated Quotation System or any system
then in use, or, if such stock is admitted to trading on a principal
United States securities exchange registered under the Securities Exchange
Act of 1934, Fair Market Value shall be the highest sales price reported
during the 30-day period preceding the date in question, or, if no such
quotations are available, the Fair Market Value on the date in question of
a share of such stock as determined by the Board of Directors in good
faith, in each case with respect to any class of stock, appropriately
adjusted for any dividend or distribution in shares of such stock or any
stock split or reclassification of outstanding shares of such stock into a
greater number of shares of such stock or any combination or
reclassification of outstanding shares of such stock into a smaller number
of shares of such stock, and (b) in the case of property other than cash
or stock, the Fair Market Value of such property on the date in question
as determined by the Board of Directors in good faith.
8. Reference to "Highest Per Share Price" shall in each case with
respect to any class of stock reflect an appropriate adjustment for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number
of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such
stock.
9. In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as
used in
D-10
subparagraphs (a) and (b) of paragraph 2 of Section B of this Article
EIGHTH shall include the shares of Common Stock and/or the shares of any
other class of outstanding Voting Stock retained by the holders of such
shares.
D. A majority of the Directors of the Corporation shall have the power and
duty to determine for the purposes of this Article EIGHTH, on the basis of
information known to them after reasonable inquiry: (a) whether a person is an
Interested Stockholder; (b) the number of shares of Voting Stock beneficially
owned by any person; (c) whether a person is an Affiliate or Associate of
another; and (d) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value equaling or exceeding 25% of the
combined Fair Market Value of the common stock of the Corporation and its
Subsidiaries. A majority of the Directors shall have the further power to
interpret all of the terms and provisions of this Article EIGHTH.
E. Nothing contained in this Article EIGHTH shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least 80 percent of the voting power of all of the
then-outstanding shares of the Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal this Article EIGHTH.
NINTH: The Board of Directors of the Corporation, when evaluating any
offer of another Person (as defined in Article EIGHTH hereof) to (A) make a
tender or exchange offer for any equity security of the Corporation, (B) merge
or consolidate the Corporation with another corporation or entity or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, the social and economic effect of acceptance of such offer on: the
Corporation's present and future customers and employees and those of its
Subsidiaries (as defined in Article EIGHTH hereof); the communities in which the
Corporation and its Subsidiaries operate or are located; the ability of the
Corporation to fulfill its corporate objectives as a savings or bank holding
company; and the ability of its subsidiary bank to fulfill its corporate
objectives under applicable statutes and regulations.
TENTH:
A. Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a Director or an Officer of the
Corporation or is or was serving at the request of the Corporation as a
Director, Officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter
D-11
an "indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a Director, Officer, employee or agent or in any other
capacity while serving as a Director, Officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith; provided, however, that, except as provided in Section C hereof with
respect to proceedings to enforce rights to indemnification, the Corporation
shall indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this Article
TENTH shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a Director of Officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections A and B of this Article TENTH shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a Director, Officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not paid in
full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law,
D-12
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article TENTH or otherwise shall be on the
Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article TENTH shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any Director, Officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article TENTH with respect to the indemnification and
advancement of expenses of Directors and Officers of the Corporation.
ELEVENTH: A Director of this Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the Director derived an improper
personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of Directors, then the liability of a Director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
Director of the Corporation existing at the time of such repeal or modification.
TWELFTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to
D-13
any vote of the holders of any class or series of the stock of the Corporation
required by law or by this Certificate of Incorporation, the affirmative vote of
the holders of at least 80 percent of the voting power of all of the
then-outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of Directors (after giving effect to the provisions of
Article FOURTH), voting together as a single class, shall be required to amend
or repeal this Article TWELFTH, Section C of Article FOURTH, Sections C or D of
Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH or Article TENTH.
THIRTEENTH: The name and mailing address of the sole incorporator are as
follows:
Name Mailing Address
---- ---------------
Edward A. Quint 5335 Wisconsin Avenue, N.W.
Suite 400
Washington, D.C. 20015
D-14
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a
corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, do certify that the facts herein stated are
true, and accordingly, have hereto set my hand this 30th day of June, 2003.
________________________________________
Edward A. Quint
Incorporator
D-15
EXHIBIT E
BYLAWS OF THE HOLDING COMPANY
BYLAWS
OF
PROVIDENT BANCORP, INC.
ARTICLE I - STOCKHOLDERS
Section 1. Annual Meeting.
A. An annual meeting of the stockholders, for the election of Directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months subsequent to the later of the date of
incorporation or the last annual meeting of stockholders.
B. Nominations of persons for election to the Board of Directors and the
proposal of business to be transacted by the stockholders may be made at an
annual meeting of stockholders (a) pursuant to the Corporation's notice with
respect to such meeting, (b) by or at the direction of the Board of Directors or
(c) by any stockholder of record of the Corporation who was a stockholder of
record at the time of the giving of the notice provided for in the following
paragraph, who is entitled to vote at the meeting and who has complied with the
notice procedures set forth in this section.
C. For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of the foregoing
paragraph, (1) the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation, (2) such business must be a proper matter
for stockholder action under the General Corporation Law of the State of
Delaware, (3) if the stockholder, or the beneficial owner on whose behalf any
such proposal or nomination is made, has provided the Corporation with a
Solicitation Notice, as that term is defined in subclause (c)(iii) of this
paragraph, such stockholder or beneficial owner must, in the case of a proposal,
have delivered a proxy statement and form of proxy to holders of at least the
percentage of the Corporation's voting shares required under applicable law to
carry any such proposal, or, in the case of a nomination or nominations, have
delivered a proxy statement and form of proxy to holders of a percentage of the
Corporation's voting shares reasonably believed by such stockholder or
beneficial holder to be sufficient to elect the nominee or nominees proposed to
be nominated by such stockholder, and must, in either case, have included in
such materials the Solicitation Notice and (4) if no Solicitation Notice
relating thereto has been timely provided pursuant to this section, the
stockholder or beneficial owner proposing such business or nomination must not
have solicited a number of proxies sufficient to have required the delivery of
such a Solicitation Notice under this section. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal executive offices of
the Corporation not less than 90 days prior to the date of the Corporation's
proxy materials for the preceding year's annual meeting of stockholders ("Proxy
Statement Date"); provided, however, that if the date of the annual meeting is
advanced more than 30 days prior to or delayed by more than 30 days after the
anniversary of the preceding year's annual meeting, notice by the stockholder to
be timely must be so delivered not later than the close of business on the 10th
day following the day on
which public announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all information
relating to such person as would be required to be disclosed in solicitations of
proxies for the elections of such nominees as directors pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and such person's written consent to serve as a director if elected; (b) as to
any other business that the stockholder proposes to bring before the meeting, a
brief description of such business, the reasons for conducting such business at
the meeting and any material interest in such business of such stockholder and
the beneficial owner, if any, on whose behalf the proposal is made; (c) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner, (ii) the class and number of shares of the Corporation that are owned
beneficially and of record by such stockholder and such beneficial owner and
(iii) whether either such stockholder or beneficial owner intends to deliver a
proxy statement and form of proxy to holders of, in the case of a proposal, at
least the percentage of the Corporation's voting shares required under
applicable law to carry the proposal or, in the case of a nomination or
nominations, a sufficient number of holders of the Corporation's voting shares
to elect such nominee or nominees (an affirmative statement of such intent, a
"Solicitation Notice").
D. Notwithstanding anything in the second sentence of the third paragraph
of this Section 1 to the contrary, in the event that the number of directors to
be elected to the Board of Directors is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board of Directors made by the Corporation at least 85 days prior
to the Proxy Statement Date, a stockholder's notice required by this Bylaw shall
also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary at
the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
E. Only persons nominated in accordance with the procedures set forth in
this Section 1 shall be eligible to serve as directors and only such business
shall be conducted at an annual meeting of stockholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
section. The chairman of the meeting shall have the power and the duty to
determine whether a nomination or any business proposed to be brought before the
meeting has been made in accordance with the procedures set forth in these
Bylaws and, if any proposed nomination or business is not in compliance with
these Bylaws, to declare that such defectively proposed business or nomination
shall not be presented for stockholder action at the meeting and shall be
disregarded.
F. For purposes of these Bylaws, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones New Service, Associated
Press or a comparable national news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
G. Notwithstanding the foregoing provisions of this Section 1, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations
E-2
thereunder with respect to matters set forth in this Section 1. Nothing in this
Section 1 shall be deemed to affect any rights of stockholders to request
inclusion of proposals in the Corporation's proxy statement pursuant to Rule
14a-8 under the Exchange Act.
Section 2. Special Meetings.
A. Special meetings of the stockholders, other than those required by
statute, may be called at any time by the Board of Directors acting pursuant to
a resolution adopted by a majority of the Whole Board. For purposes of these
Bylaws, the term "Whole Board" shall mean the total number of authorized
directors whether or not there exist any vacancies in previously authorized
directorships. The Board of Directors may postpone or reschedule any previously
scheduled special meeting.
B. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Corporation's notice of meeting. Nominations of persons for election to the
Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (a)
by or at the direction of the Board of Directors or (b) by any stockholder of
record of the Corporation who is a stockholder of record at the time of giving
of notice provided for in this paragraph, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in Section 1 of
this Article I. Nominations by stockholders of persons for election to the Board
of Directors may be made at such a special meeting of stockholders if the
stockholder's notice required by the third paragraph of Section 1 of this
Article I shall be delivered to the Secretary at the principal executive offices
of the Corporation not later than the close of business on the later of the 90th
day prior to such special meeting or the 10th day following the day on which
public announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected as such meeting.
C. Notwithstanding the foregoing provisions of this Section 2, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to matters set forth
in this Section 2. Nothing in this Section 2 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 3. Notice of Meetings.
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of
E-3
the adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting.
Section 4. Quorum.
At any meeting of the stockholders, the holders of a majority of all of
the shares of the stock entitled to vote at the meeting, present in person or by
proxy (after giving effect to the provisions of Article FOURTH of the
Corporation's Certificate of Incorporation), shall constitute a quorum for all
purposes, unless or except to the extent that the presence of a larger number
may be required by law. Where a separate vote by a class or classes is required,
a majority of those represented in person or by proxy (after giving effect to
the provisions of Article FOURTH of the Corporation's Certificate of
Incorporation) shall constitute a quorum entitled to take action with respect to
that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date,
or time.
If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held with
those present in person or by proxy constituting a quorum, then except as
otherwise required by law, those present in person or by proxy at such adjourned
meeting shall constitute a quorum, and all matters shall be determined by a
majority of the votes cast at such meeting.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in the
absence of such a person, the Chairman of the Board of the Corporation or, in
his or her absence, such person as may be chosen by the holders of a majority of
the shares entitled to vote who are present, in person or by proxy, shall call
to order any meeting of the stockholders and act as chairman of the meeting. In
the absence of the Secretary of the Corporation, the secretary of the meeting
shall be such person as the chairman appoints.
Section 6. Conduct of Business.
The chairman of any meeting of stockholders shall determine the order of
business and the procedures at the meeting, including such regulation of the
manner of voting and the conduct of discussion as seem to him or her in order.
The date and time of the opening and closing of the polls for each matter upon
which the stockholders, will vote at the meeting shall be announced at the
meeting.
Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing filed in
accordance with the procedure established for the meeting. Any facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this paragraph, may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or
E-4
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission.
All voting, including on the election of Directors but excepting where
otherwise required by law or by the governing documents of the Corporation, may
be made by a voice vote; provided, however, that upon demand therefor by a
stockholder entitled to vote or his or her proxy, a stock vote shall be taken.
Every stock vote shall be taken by ballot, each of which shall state the name of
the stockholder or proxy voting and such other information as may be required
under the procedures established for the meeting. The Corporation shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act at
the meeting and make a written report thereof. The Corporation may designate one
or more persons as alternate inspectors to replace any inspector who fails to
act. If no inspector or alternate is able to act at a meeting of stockholders,
the person presiding at the meeting shall appoint one or more inspectors to act
at the meeting. Each inspector, before entering upon the discharge of his
duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his ability.
All elections of Directors shall be determined by a plurality of the votes
cast, and except as otherwise required by law, all other matters shall be
determined by a majority of the votes cast affirmatively or negatively.
Section 8. Stock List.
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting in the manner provided by law.
The stock list shall also be open to the examination of any such
stockholder during the whole time of the meeting as provided by law. This list
shall presumptively determine the identity of the stockholders entitled to vote
at the meeting and the number of shares held by each of them.
Section 9. Consent of Stockholders in Lieu of Meeting.
Subject to the rights of the holders of any class of series of preferred
stock of the Corporation, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.
ARTICLE II - BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
The business and affairs of the Corporation shall be under the direction
of its Board of Directors. The number of Directors who shall constitute the
Whole Board shall be such number as the Board of Directors shall from time to
time have designated, except in the absence of such
E-5
designation such number shall be ten (10). The Board of Directors shall annually
elect a Chairman of the Board from among its members who shall, when present,
preside at its meetings.
The Directors, other than those who may be elected by the holders of any
class or series of Preferred Stock, shall be divided, with respect to the time
for which they severally hold office, into three classes, with the term of
office of the first class to expire at the first annual meeting of stockholders,
the term of office of the second class to expire at the annual meeting of
stockholders one year thereafter and the term of office of the third class to
expire at the annual meeting of stockholders two years, thereafter, with each
Director to hold office until his or her successor shall have been duly elected
and qualified. At each annual meeting of stockholders, Directors elected to
succeed those Directors whose terms then expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders after
their election, with each Director to hold office until his or her successor
shall have been duly elected and qualified.
Section 2. Vacancies and Newly Created Directorships.
Subject to the rights of the holders of any class or series of Preferred
Stock, and unless the Board of Directors otherwise determines, newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
only by a majority vote of the Directors then in office (and not by
stockholders), though less than a quorum, and Directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been elected expires and until
such Director's successor shall have been duly elected and qualified. No
decrease in the number of authorized directors constituting the Board shall
shorten the term of any incumbent Director.
Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all Directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by one-third
(1/3) of the Directors then in office (rounded up to the nearest whole number),
by the Chairman of the Board or the Chief Executive Officer and shall be held at
such place, on such date, and at such time as they, or he or she, shall fix.
Notice of the place, date, and time of each such special meeting shall be given
each Director by whom it is not waived by mailing written notice not less than
five (5) days before the meeting or by telegraphing or telexing or by facsimile
transmission or electronic transmission of the same not less than twenty-four
(24) hours before the meeting. Unless otherwise indicated in the notice thereof,
any and all business may be transacted at a special meeting.
E-6
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the Whole Board
shall constitute a quorum for all purposes. If a quorum shall fail to attend any
meeting, a majority of those present may adjourn the meeting to another place,
date, or time, without further notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the Directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing or by electronic transmission, and the writing or writings or
electronic transmission or transmissions are filed with the minutes of
proceedings of the Board of Directors. Such filing shall be in paper form if the
minutes are maintained in paper form and shall be in electronic from if the
minutes are maintained in electronic form.
Section 8. Powers.
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(1) To declare dividends, from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(4) To remove any Officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any Officer upon any
other person for the time being;
(5) To confer upon any Officer of the Corporation the power to
appoint, remove and suspend subordinate Officers, employees and agents;
E-7
(6) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for Directors, Officers, employees and agents
of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for Directors, Officers, employees and agents of the Corporation
and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent with
these Bylaws, for the management of the Corporation's business and affairs.
Section 9. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as Directors,
including, without limitation, their services as members of committees of the
Board of Directors.
Section 10. Qualification.
A. No person seventy-five (75) years of age or above shall be eligible for
election, reelection, appointment or reappointment to the board of directors of
the Corporation. No director shall serve as a director of the Company beyond the
annual meeting of the Corporation that immediately follows the director becoming
age seventy-five (75).
B. Any person nominated, appointed or elected to the Board of Directors,
in order to qualify as such, shall own at least 100 shares of the Corporation's
common stock, and shall reside or work in a county in which Provident Bank (the
banking subsidiary of the Corporation) maintains an office (at the time of
appointment or election) or in a county contiguous to a county in which
Provident Bank maintains an office.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors.
The Board of Directors, by a vote of a majority of the Board of Directors,
may from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for these committees and any others provided for herein,
elect a Director or Directors to serve as the member or members, designating, if
it desires, other Directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of any committee and any alternate member in his
or her place, the member or members of the committee present at the meeting and
not disqualified from voting, whether or not he or she or they constitute a
quorum, may by unanimous vote appoint another member of the Board of Directors
to act at the meeting in the place of the absent or disqualified member.
E-8
Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing or by electronic transmission, and the writing or writings or
electronic transmission or transmissions are filed with the minutes of the
proceedings of such committee. Such filing shall be in paper form if the minutes
are maintained in paper form and shall be in electronic from if the minutes are
maintained in electronic form.
Section 3. Nominating Committee
The Board of Directors may appoint a Nominating Committee of the Board,
consisting of not less than three (3) members. The Nominating Committee shall
have authority (a) to review any nominations for election to the Board of
Directors made by a stockholder of the Corporation pursuant to Section 6(c)(ii)
of Article I of these Bylaws in order to determine compliance with such Bylaw
and (b) to recommend to the Whole Board nominees for election to the Board of
Directors to replace those Directors whose terms expire at the annual meeting of
stockholders next ensuing.
ARTICLE IV - OFFICERS
Section 1. Generally.
(a) The Board of Directors as soon as may be practicable after the
annual meeting of stockholders shall choose a Chairman of the Board, a Chief
Executive Officer and President, one or more Vice Presidents, a Secretary and a
Treasurer and from time to time may choose such other officers as it may deem
proper. The Chairman of the Board shall be chosen from among the Directors. Any
number of offices may be held by the same person.
(b) The term of office of all Officers shall be until the next
annual election of Officers and until their respective successors are chosen but
any Officer may be removed from office at any time by the affirmative vote of a
majority of the authorized number of Directors then constituting the Board of
Directors (without prejudice to contract rights under any employment agreement
that may have been entered into).
(c) All Officers chosen by the Board of Directors shall have such
powers and duties as generally pertain to their respective Offices, subject to
the specific provisions of this ARTICLE IV. Such officers shall also have such
powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof.
E-9
Section 2. Chairman of the Board of Directors.
The Chairman of the Board shall, subject to the provisions of these Bylaws
and to the direction of the Board of Directors, serve in general executive
capacity and unless the Board has designated another person, when present, shall
preside at all meetings of the stockholders of the Corporation. The Chairman of
the Board shall perform all duties and have all powers which are commonly
incident to the office of Chairman of the Board or which are delegated to him or
her by the Board of Directors. He or she shall have power to sign all stock
certificates, contracts and other instruments of the Corporation which are
authorized.
Section 3. Chief Executive Officer and President.
The Chief Executive Officer and President (the "Chief Executive Officer")
shall have general responsibility for the management and control of the business
and affairs of the Corporation and shall perform all duties and have all powers
which are commonly incident to the offices of Chief Executive Officer and
President or which are delegated to him or her by the Board of Directors.
Subject to the direction of the Board of Directors, the Chief Executive Officer
shall have power to sign all stock certificates, contracts and other instruments
of the Corporation which are authorized and shall have general supervision of
all of the other Officers (other than the Chairman of the Board), employees and
agents of the Corporation.
Section 4. Vice President.
The Vice President or Vice Presidents shall perform the duties of the
Chief Executive Officer in his absence or during his inability to act. In
addition, the Vice Presidents shall perform the duties and exercise the powers
usually incident to their respective offices and/or such other duties and powers
as may be properly assigned to them by the Board of Directors, the Chairman of
the Board or the Chief Executive Officer. A Vice President or Vice Presidents
may be designated as Executive Vice President or Senior Vice President.
Section 5. Secretary.
The Secretary or Assistant Secretary shall issue notices of meetings,
shall keep their minutes, shall have charge of the seal and the corporate books,
shall perform such other duties and exercise such other powers as are usually
incident to such office and/or such other duties and powers as are properly
assigned thereto by the Board of Directors, the Chairman of the Board or the
Chief Executive Officer. Subject to the direction of the Board of Directors, the
Secretary shall have the power to sign all stock certificates.
Section 6. Treasurer.
The Treasurer shall be the Comptroller of the Corporation and shall have
the responsibility for maintaining the financial records of the Corporation. The
Treasurer may be designated the Chief Financial Officer. He or she shall make
such disbursements of the funds of the Corporation as are authorized and shall
render from time to time an account of all such transactions and of the
financial condition of the Corporation. The Treasurer shall also perform such
other duties as the Board of Directors may from time to time prescribe. Subject
to the
E-10
direction of the Board of Directors, the Treasurer shall have the power to sign
all stock certificates.
Section 7. Assistant Secretaries and Other Officers.
The Board of Directors may appoint one or more Assistant Secretaries and
such other Officers who shall have such powers and shall perform such duties as
are provided in these Bylaws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the Chief Executive Officer.
Section 8. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the Chief Executive
Officer or any Officer of the Corporation authorized by the Chief Executive
Officer shall have power to vote and otherwise act on behalf of the Corporation,
in person or by proxy, at any meeting of stockholders of or with respect to, any
action of stockholders of any other corporation in which this Corporation may
hold securities and otherwise to exercise any and all rights and powers which
this Corporation may possess by reason of its ownership of securities in such
other corporation.
ARTICLE V - STOCK
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the Chairman of the Board or the Chief Executive
Officer, and by the Secretary or an Assistant Secretary, or any Treasurer or
Assistant Treasurer, certifying the number of shares owned by him or her. Any or
all of the signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these Bylaws,
an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to
E-11
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the next day preceding the day on
which the meeting is held, and, for determining stockholders entitled to receive
payment of any dividend or other distribution or allotment or rights or to
exercise any rights of change, conversion or exchange of stock or for any other
purpose, the record date shall be at the close of business on the day on which
the Board of Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate of
stock, another may be issued in its place pursuant to such regulations as the
Board of Directors may establish concerning proof of such loss, theft or
destruction and concerning the giving of a satisfactory bond or bonds of
indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI - NOTICES
Section 1. Notices.
If mailed, notice to stockholders shall be deemed given when deposited in
the mail, postage prepaid, directed to the stockholder at such stockholder's
address as it appears on the records of the Corporation. Without limiting the
manner by which notice otherwise may be given effectively to stockholders, any
notice to stockholders may be given by electronic transmission in the manner
provided in Section 232 of the Delaware General Corporation Law.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder, Director,
Officer, employee or agent, or waiver by electronic transmission by such person,
whether before or after the time of the event for which notice is to be given,
shall be deemed equivalent to the notice required to be given to such
stockholder, Director, Officer, employee or agent. Neither the business nor the
purpose of any meeting need be specified in such a waiver.
E-12
ARTICLE VII - MISCELLANEOUS
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these Bylaws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and when
so directed by the Board of Directors or a committee thereof, duplicates of the
seal may be kept and used by the Treasurer or by an Assistant Secretary or an
assistant to the Treasurer.
Section 3. Reliance Upon Books, Reports and Records.
Each Director, each member of any committee designated by the Board of
Directors, and each Officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its Officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such Director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
The fiscal year of the Corporation shall end on September 30 of every
year.
Section 5. Time Periods.
In applying any provision of these Bylaws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
ARTICLE VIII - AMENDMENTS
The Board of Directors may amend, alter or repeal these Bylaws at any
meeting of the Board. The stockholders shall also have power to amend, alter or
repeal these Bylaws at any meeting of stockholders provided notice of the
proposed change was given in the notice of the meeting; provided, however, that,
notwithstanding any other provisions of the Bylaws or any provision of law which
might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the voting
stock required by law, the Certificate of Incorporation, any Preferred Stock
Designation or these Bylaws, the affirmative votes of the holders of at least
80% of the voting power of all the then-outstanding shares of the capital stock
of the Corporation entitled to vote generally in the election of
E-13
Directors (after giving effect to the provisions of Article FOURTH), voting
together as a single class, shall be required to alter, amend or repeal any
provisions of these Bylaws.
E-14