NORTHFIELD FEDERAL SAVINGS
8005 HARFORD ROAD
BALTIMORE, MARYLAND 21234
(410) 665-7900
NOTICE OF SPECIAL MEETING OF MEMBERS
Notice is hereby given that a Special Meeting of Members (the "Special
Meeting") of Northfield Federal Savings (the "Association") will be held at
__________________________, _______________________, Baltimore, Maryland, on
___________, 1998 at __:__ .m. Eastern Time. The business to be taken up at
the Special Meeting shall be:
(1) To consider and vote upon a Plan of Conversion providing for the
conversion of the Association from a federally chartered mutual
savings association to a federally chartered stock savings bank, to
be known as "Northfield Federal Savings Bank" (the"Bank"), as a
wholly owned subsidiary of Northfield Bancorp, Inc., a newly
organized Maryland corporation formed by the Association for the
purpose of becoming the holding company for the Bank and the related
transactions provided for in such Plan of Conversion, including the
amendment of the Association's existing Federal Mutual Charter and
Bylaws to read in the form of a Federal Stock Charter and Bylaws for
the Bank, pursuant to the laws of the United States and the Rules and
Regulations administered by the Office of Thrift Supervision.
(2) To consider and vote upon any other matters that may lawfully come
before the Special Meeting.
Note: As of the date of mailing of this Notice of Special Meeting of
Members, the Board of Directors is not aware of any other matters
that may come before the Special Meeting.
The members entitled to vote at the Special Meeting shall be those members
of the Association at the close of business on __________ ___, 1998, who
continue as members until the Special Meeting and, should the Special Meeting
be, from time to time, adjourned to a later time, until the final adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
J. Thomas Hoffman
Secretary
______________, 1998
Baltimore, Maryland
_____________
YOUR BOARD OF DIRECTORS URGES YOU TO CONSIDER CAREFULLY THIS PROXY
MATERIAL AND, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE SPECIAL
MEETING, TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) AS SOON AS
POSSIBLE TO ASSURE THAT YOUR VOTES WILL BE COUNTED. THIS WILL NOT PREVENT YOU
FROM VOTING IN PERSON IF YOU ATTEND THE SPECIAL MEETING.
GLOSSARY
Association Northfield Federal Savings converting
from mutual to stock form, in its
mutual form and the federally
chartered stock savings association
resulting from the Association's
conversion from mutual to stock form
Bank Northfield Federal Savings Bank, a
federally chartered stock savings bank
Company The corporation named Northfield
Bancorp, Inc. formed by the
Association to serve as its holding
company after the Conversion
Community Offering The offering of shares of the common
stock to the general public
concurrently with or after
commencement of the Subscription
Offering, giving preference to
natural persons and trusts of natural
persons (including individual
retirement and Keogh retirement
accounts and personal trusts in which
such natural persons have substantial
interests) who are permanent
residents of the Association's Local
Community
Conversion Conversion of the Association from
mutual to stock form, the issuance of
the Bank's outstanding common stock
to the Company and the issuance of
the Company's outstanding common
stock to purchasers in the
Subscription Offering and, if any,
the Community Offering and/or
Syndicated Offering
Eligible Account Holders Holders of savings accounts at the
Association with balances of at least
$50.00 as of December 31, 1995
ESOP Employee Stock Ownership Plan to be
implemented by the Company in the
Conversion
Estimated Valuation Range Range of valuation from 15% below to
15% above the independent appraisal
of our estimated pro forma market
value, which was $4,500,000 as of
February 27, 1997
FDIC Federal Deposit Insurance Corporation
Ferguson Ferguson & Company, the firm we
engaged to prepare the appraisal of
our estimated pro forma market value
in the Conversion
Local Community The county where our offices are
located -- Baltimore County, Maryland
Other Members Depositor and borrower members of the
Association as of ______ __, 1998.
OTS Office of Thrift Supervision of the
United States Department of the
Treasury
SEC Securities and Exchange Commission
Subscription Offering The offering of shares of the common
stock to Eligible Account Holders,
the ESOP, Supplemental Eligible
Account Holders and Other Members
Supplemental Eligible Account Holders of savings accounts at the
Holders Association with balances of at least
$50.00 as of March 31, 1998
Syndicated Offering If any, the offering of shares of the
common stock to the general public
after the Subscription and Community
Offerings in a syndicated offering by
selected dealers
Trident Securities Trident Securities, Inc., the firm we
engaged to advise and assist us in
the marketing of the common stock and
the conduct of the Subscription
Offering and, if any, the Community
Offering and/or Syndicated Offering
QUESTIONS AND ANSWERS
Set forth below are answers to frequently asked questions about the
procedures for voting on the Plan of Conversion and related matters. For
additional information about the Conversion, please refer to the more detailed
information contained in this proxy statement and the accompanying prospectus.
For assistance, please contact the Stock Information Center at (410) 668-2160.
ABOUT VOTING "FOR" THE PLAN OF CONVERSION
1. Am I eligible to vote at the Special Meeting of Members to be held to
consider the Plan of Conversion?
You are eligible to vote at the Special Meeting of Members to be held on
_________, 1998 if you were a depositor or borrower of Northfield Federal
Savings at the close of business on the Voting Record Date (_______, 1998)
and continue as such until the Special Meeting. If you were a member on
the Voting Record Date, you should have received a proxy statement and a
proxy card with which to vote.
2. How many votes do I have?
As an account holder of ours, you have one vote for each $100, or fraction
thereof, on deposit in your account(s) with us. Each borrower member may
cast one vote in addition to the number of votes, if any, he or she is
entitled to cast as an account holder. No member may cast more than 1,000
votes.
3. If I vote "against" the Plan of Conversion and it is approved, will I be
prohibited from buying stock during the Subscription Offering?
No. Voting against the Plan of Conversion in no way restricts you from
purchasing the common stock of our holding company in the Subscription
Offering.
4. Did the Board of Directors of Northfield Federal Savings unanimously adopt
the Plan of Conversion?
Yes. Our Board of Directors unanimously adopted the Plan of Conversion and
urges that all members vote "FOR" approval of the Plan of Conversion.
5. What happens if Northfield Federal Savings does not get enough votes to
approve the Plan of Conversion?
The Conversion would not take place, and we would remain a mutual savings
association.
6. As a qualifying depositor or borrower of Northfield Federal Savings, am I
required to vote?
No. However, failure to return your proxy card or otherwise vote will have
the same effect as a vote AGAINST the Plan of Conversion.
7. What is a Proxy Card?
A proxy card gives you the ability to vote without attending the Special
Meeting in person. If you received more than one informational packet,
then you should vote the proxy cards in all packets. Your proxy card(s) is
(are) located in the window sleeve of your informational packet(s).
You may attend the meeting and vote, even if you have returned your proxy
card, if you choose to do so. However, if you are unable to attend, you
still are represented by proxy. Previously executed proxies, other than
those proxies related to the Conversion which were sent to you, will not be
used to vote for approval of the Plan of Conversion, even if you do not
execute another proxy or attend the Special Meeting and vote in person.
8. How can I get further information concerning the stock offering?
You may call the Stock Information Center at (410) 668-2160 for further
information or to request a copy of the prospectus, a Stock Order Form, a
proxy statement or a proxy card.
THIS INFORMATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY NORTHFIELD BANCORP, INC. COMMON STOCK. SUCH OFFERS AND
SOLICITATIONS MAY BE MADE ONLY BY MEANS OF THE PROSPECTUS. COPIES OF THE
PROSPECTUS MAY BE OBTAINED BY CALLING THE STOCK INFORMATION CENTER AT (410) 668-
2160.
THE SHARES OF NORTHFIELD BANCORP, INC. COMMON STOCK BEING OFFERED ARE NOT
SAVINGS OR DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE SAVINGS ASSOCIATION
INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
NORTHFIELD FEDERAL SAVINGS
8005 HARFORD ROAD
BALTIMORE, MARYLAND 21234
(410) 665-7900
PROXY STATEMENT
YOUR PROXY, IN THE FORM ENCLOSED, IS SOLICITED BY OUR BOARD FOR USE AT A
SPECIAL MEETING OF OUR MEMBERS TO BE HELD ON _________________________ ___, 1998
AND ANY ADJOURNMENT OF THAT MEETING, FOR THE PURPOSES SET FORTH IN THE FOREGOING
NOTICE OF SPECIAL MEETING. OUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE PLAN
OF CONVERSION.
PURPOSE OF MEETING -- SUMMARY
A Special Meeting of Members (the "Special Meeting") of Northfield Federal
Savings (the "Association") will be held at
___________________________________________________, Baltimore, Maryland on
_________________, _____________, 1998, at __:__ .m., Eastern Time, for the
purpose of considering and voting upon a Plan of Conversion, which was
unanimously adopted by our Board of Directors and which, if approved by a
majority of the total votes eligible to be cast by the members, will permit us
to convert from a federal mutual savings association to a federal stock savings
bank, with the name "Northfield Bancorp, Inc. (the "Bank), and the Bank becoming
a wholly owned subsidiary of Northfield Bancorp, Inc. (the "Company"), a
Maryland corporation which we formed for the purpose of becoming our holding
company. Our conversion and the acquisition of us by the Company is referred to
in this Proxy Statement as the "Conversion". The Conversion is contingent upon
our members' approval of the Plan of Conversion at the Special Meeting or any
adjournment of the Special Meeting.
The Plan of Conversion provides in part that after receiving final
authorization from the Office of Thrift Supervision ("OTS"), the Company will
offer for sale shares of its common stock, par value $.01 per share (the "Common
Stock"), through the issuance of nontransferable subscription rights, first to
our depositors as of December 31, 1995 with $50.00 or more on deposit with us on
that date ("Eligible Account Holders"), second to the Company's Employee Stock
Ownership Plan of Conversion (the "ESOP") (a tax-qualified employee stock
benefit plan of the Company, as defined in the Plan of Conversion), third to our
depositors, with $50.00 or more on deposit with us on March 31, 1998, who are
not Eligible Account Holders ("Supplemental Eligible Account Holders"), and
fourth to other members, i.e., our depositors and borrower members, other than
Eligible Account Holders and Supplemental Eligible Account Holders, on
______________ ___, 1998 ("Other Members") (the "Subscription Offering").
Subscription rights received in any of the foregoing categories will be
subordinated to the subscription rights of those in a prior category, with the
exception that any shares of Common Stock sold in excess of the high end of the
estimated value range as established in an independent appraisal, as discussed
below, may be first sold to the ESOP. During or after the Subscription Offering,
the Company may offer shares of the Common Stock not sold in the Subscription
Offering to the general public, in a community offering (the "Community
Offering"). In the Community Offering, preference may be given to natural
persons and trusts of natural persons who are permanent residents of our local
community, Baltimore County, Maryland. Any shares of Common Stock not purchased
in the Subscription and Community Offerings may be sold to a syndicate of
underwriters to be managed by Trident Securities, Inc. ("Trident Securities").
The aggregate price of the Common Stock to be issued by the Company under the
Plan of Conversion is currently estimated to be between $3,825,000 and
$5,175,000, subject to adjustment, as determined by an independent appraisal of
our estimated pro forma market value as converted and as a wholly owned
subsidiary of the Company. For a period of 30 days following the closing of the
Conversion, the Company's Board of Directors may determine to issue up to an
additional 3% of the shares issued in the Conversion. These shares, the
"Contingent Shares," may be issued if necessary in the discretion of the Board,
to fill orders resulting from allocation oversights resulting in an
oversubscription, lost or damaged stock order forms which the Board determines
legitimately should have been filled during the Conversion, or orders initially
rejected but later found to be legitimate. Any Contingent Shares issued will not
be included in the total number of shares
for purposes of determining the level of stock to be purchased by the ESOP or
other stock benefit plans of the Company. Contingent Shares will be allocated to
a subscriber based on the allocation of shares to persons who had the same or
similar deposit account balance as that subscriber. See "The Conversion --
Stock Pricing" and " -- Contingent Shares" in the accompanying prospectus.
Adoption of the proposed Stock Charter and Bylaws of Northfield Federal
Savings Bank is an integral part of the Plan of Conversion. Copies of the Plan
of Conversion and the proposed Stock Charter and Bylaws are attached to this
Proxy Statement. These documents provide, among other things, for the
termination of voting rights of members and their rights to receive any surplus
remaining in the event of our liquidation. These rights, except for the rights
of Eligible Account Holders and Supplemental Eligible Account Holders in the
liquidation account established for their benefit upon completion of the
Conversion, will vest exclusively in the Company as the sole holder of our
outstanding capital stock.
RECOMMENDATION OF THE BOARD OF DIRECTORS
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" APPROVAL
OF THE PLAN OF CONVERSION. VOTING IN FAVOR OF THE PLAN OF CONVERSION WILL NOT
OBLIGATE ANY PERSON TO PURCHASE STOCK.
The Conversion will be accomplished through adoption of a new Charter and
Bylaws to authorize our issuance of capital stock to the Company. Under the Plan
of Conversion, 450,000 shares of the Common Stock, subject to adjustment, are
being offered for sale by the Company. Upon completion of the Conversion, we
will issue all of our newly issued shares of capital stock (100,000 shares) to
the Company in exchange for at least 50% of the net proceeds in the Conversion.
None of our assets will be distributed in order to effect the Conversion other
than to pay expenses incurred as a result of the Conversion.
The net proceeds from the sale of Common Stock in the Conversion will
substantially increase our capital, which will increase the amount of funds
available for lending and investment, and support current operations and the
continued growth of our business. The holding company structure will provide
greater flexibility than we alone would have for diversification of business
activities and geographic operations. We believe that this increased capital and
operating flexibility will enable us to compete more effectively with other
savings institutions and other types of financial service organizations. We also
believe that the Conversion will enhance the future access of both ourselves and
the Company to the capital markets.
NORTHFIELD BANCORP, INC.
The Company was formed as a Maryland corporation in March 1998 at our
direction for the purpose of serving as our holding company after the
Conversion. Prior to the Conversion, the Company has not engaged and is not
expected to engage in any material operations. The Company has received the
approval of the OTS to acquire control of us upon completion of the Conversion.
Upon consummation of the Conversion, the only assets the Company is expected to
own are the Bank's capital stock issued in the Conversion, a note receivable
from our ESOP and any proceeds from the offering the Company retains.
As a holding company, the Company will have greater flexibility than we
would have to diversify its business activities through the formation of
subsidiaries or through acquisition. The Company will be classified as a unitary
savings and loan holding company after the Conversion and will be required to
comply with OTS regulations and be subject to examination.
The Company's executive offices are located at 8005 Harford Road,
Baltimore, Maryland 21234 and its main telephone number is (410) 665-7900.
2
NORTHFIELD FEDERAL SAVINGS
We are a federal mutual savings association operating through two offices
in Baltimore County, Maryland. We were founded in 1923 as a federally chartered
institution and are a member of the Federal Home Loan Bank System. Our deposits
are insured up to applicable limits by the Federal Deposit Insurance Corporation
("FDIC") under the Savings Association Insurance Fund. At December 31, 1997, we
had total assets of $36.1 million, total deposits of $32.6 million and total
retained earnings of $2.9 million.
Our principal business consists of attracting deposits, primarily
certificates of deposit, from the general public and originating residential
mortgage loans, primarily construction/permanent loans on one- to four-family
properties. We also offer commercial real estate and limited types of consumer
loans. We also have a portfolio of purchased commercial leases.
Our executive offices are located at 8005 Harford Road, Baltimore, Maryland
21234 and our main telephone number is (410) 665-7900.
INFORMATION RELATING TO VOTING AT THE SPECIAL MEETING
Our Board of Directors has fixed the close of business on ________ ___,
1998 as the record date (the "Voting Record Date") for the determination of
members entitled to notice of and to vote at the Special Meeting. Under our
current mutual charter, our members include all holders of deposit or other
authorized accounts and certain of our borrowers. All members of record as of
the close of business on the Voting Record Date who remain members until the
date of the Special Meeting will be entitled to vote at the Special Meeting or
any adjournment thereof.
At the Special Meeting each depositor member may cast one vote for each
$100, or fraction thereof, of the aggregate withdrawal value of all of his or
her savings accounts with us as of the Voting Record Date. Each borrower member
will be entitled to one vote in addition to the number of votes to which he or
she is entitled as a depositor. No member may cast more than 1,000 votes.
Approval of the Plan of Conversion to be presented at the Special Meeting
will require the affirmative vote of at least a majority of the total
outstanding votes of our members eligible to be cast at the Special Meeting. As
of the Voting Record Date for the Special Meeting, there were approximately
_____ votes eligible to be cast, of which _____ votes constitute a majority.
Members may vote at the Special Meeting or any adjournment thereof in
person or by proxy. All properly executed proxies received by us will be voted
in accordance with the instructions indicated on the proxies by the members
giving such proxies. If no contrary instructions are given, proxies will be
voted in favor of the Plan of Conversion. If any other matters are properly
presented before the Special Meeting and may properly be voted upon, the proxies
solicited hereby will be voted on such matters by the proxy holders named
therein as directed by our Board of Directors. Valid, previously executed
general proxies, which typically are obtained from members when they open their
accounts with us, will not be used to vote for approval of the Plan of
Conversion, even if the respective members do not execute another proxy or
attend the Special Meeting and vote in person. You have the right to revoke
your proxy at any time before the voting at the Special Meeting by delivering
either written notice or a duly executed proxy bearing a later date to the
Secretary of Northfield Federal Savings. The Secretary must receive this
written notice or the later-dated proxy prior to the Special Meeting or any
adjournment thereof. You may also revoke your proxy by attending the Special
Meeting and voting in person.
FAILURE TO RETURN AN EXECUTED PROXY FOR THE SPECIAL MEETING OR TO ATTEND
THE SPECIAL MEETING IN ORDER TO VOTE IN PERSON WOULD HAVE THE SAME EFFECT AS
VOTING AGAINST THE CONVERSION.
Proxies may be solicited by our officers, directors or other employees, in
person, by telephone or through other
3
forms of communication. These persons will be reimbursed by us only for their
expenses incurred in connection with such solicitation.
The proxies solicited hereby will be used only at the Special Meeting and
at any adjournment thereof; they will not be used at any other meeting.
DESCRIPTION OF PLAN OF CONVERSION
THE OTS HAS APPROVED OUR PLAN OF CONVERSION (THE "PLAN"), SUBJECT TO THE
APPROVAL OF THE PLAN OF CONVERSION BY OUR MEMBERS AT THE SPECIAL MEETING, AND
SUBJECT TO THE SATISFACTION OF CERTAIN OTHER CONDITIONS IMPOSED BY THE OTS IN
ITS APPROVAL. OTS APPROVAL, HOWEVER, DOES NOT CONSTITUTE A RECOMMENDATION OR
ENDORSEMENT OF THE PLAN OF CONVERSION BY THE OTS.
GENERAL
On December 17, 1997, our board of directors adopted a Plan of Conversion,
which was amended on March 25, 1998, pursuant to which we will convert from a
federally chartered mutual savings association to a federally chartered stock
savings stock, and will adopt the name "Northfield Federal Savings Bank" (the
"Bank") and the Bank will become a wholly owned subsidiary of the Company. The
Conversion will include adoption of the proposed Federal Stock Charter and
Bylaws of the Bank which will authorize the issuance of capital stock. Under
the Plan, the Bank's capital stock is being sold to the Company and the Common
Stock of the Company is being offered to our customers and then to the public.
The OTS has approved the Company's application to become a savings and loan
holding company and to acquire all of our capital stock to be issued in the
Conversion. Pursuant to such OTS approval, the Company plans to retain 50% of
the net proceeds from the sale of shares of Common Stock and to use the
remaining 50% to purchase all of the capital stock we will issue in the
Conversion.
The shares are first being offered in a Subscription Offering to holders of
subscription rights. To the extent shares of Common Stock remain available
after the Subscription Offering, we may offer shares of Common Stock in a
Community Offering. The Community Offering, if any, may begin anytime
subsequent to the beginning of the Subscription Offering. Shares not subscribed
for in the Subscription and Community Offerings may be offered for sale by the
Company in a Syndicated Community Offering. We have the right, in our sole
discretion, to accept or reject, in whole or in part, any orders to purchase
shares of Common Stock received in the Community and Syndicated Community
Offering.
We must sell Common Stock in an amount equal to our pro forma market value
as a stock savings institution in order for the Conversion to become effective.
We must complete the Community Offering within 45 days after the last day of the
Subscription Offering, unless we extend such period and obtain the approval of
the OTS to do so. The Plan provides that the Conversion must be completed
within 24 months after the date of the approval of the Plan by our members.
In the event that we are unable to complete the sale of Common Stock and
effect the Conversion within 45 days after the end of the Subscription Offering,
we may request an extension of the period by the OTS. We cannot assure you that
the extension would be granted if requested, nor can we assure you that our
valuation would not substantially change during any such extension. If the
Estimated Valuation Range of the shares must be amended, we cannot assure that
the OTS would approve such amended Estimated Valuation Range. Therefore, it is
possible that if the Conversion cannot be completed within the requisite period
of time, we may not be permitted to complete the Conversion. A substantial
delay caused by an extension of the period may also significantly increase the
expense of the Conversion. We cannot sell any shares of Common Stock unless the
Plan is approved by our members.
The completion of the offering is subject to market conditions and other
factors beyond our control. We cannot
4
give you any assurances as to the length of time following approval of the Plan
at the meeting of our members that will be required to complete the Community
Offering or other sale of the shares being offered in the Conversion. If we
experience delays, our Estimated Valuation Range upon Conversion could change
significantly, together with corresponding changes in the offering price and the
net proceeds to be realized by us from the sale of the shares. In the event we
terminate the Conversion, we would be required to charge all Conversion expenses
against current income and promptly return any funds collected by us in the
offering to each potential investor, plus interest at the prescribed rate.
EFFECTS OF CONVERSION TO STOCK FORM ON DEPOSITORS AND BORROWERS OF NORTHFIELD
FEDERAL SAVINGS
VOTING RIGHTS. Currently in our mutual form, our depositor and borrower
members have voting rights and may vote for the election of directors.
Following the Conversion, depositors and borrower members will cease to have
voting rights.
SAVINGS ACCOUNTS AND LOANS. The Conversion will not affect the balances,
terms and FDIC insurance coverage of savings accounts, nor will the amounts and
terms of loans and obligations of the borrowers under their individual
contractual arrangements with us be affected.
TAX EFFECTS. We have received an opinion from our counsel, Housley
Kantarian & Bronstein, P.C. on the federal tax consequences of the Conversion.
The opinion is an exhibit to the registration statement of which the
accompanying prospectus is a part. The opinion provides, in part, that,: (i)
the Conversion will qualify as a reorganization under Section 368(a)(1)(F) of
the Internal Revenue Code, and we will not recognize any taxable gain in either
our mutual form or our stock form as a result of the proposed Conversion; (ii)
we will not recognize any taxable gain upon the receipt of money from the
Company for our stock, nor will the Company recognize any gain upon the receipt
of money for the Common Stock; (iii) our assets in either our mutual or our
stock form will have the same basis before and after the Conversion; (iv) the
holding period of our assets will include the period during which the assets
were held by us in our mutual form prior to Conversion; (v) no gain or loss will
be recognized by the Eligible Account Holders, Supplemental Eligible Account
Holders and Other Members upon the issuance to them of withdrawable savings
accounts in us in the stock form in the same dollar amount as their savings
accounts in us in the mutual form plus an interest in the liquidation account of
us in the stock form in exchange for their savings accounts in us in the mutual
form; (vi) depositors will recognize gain or loss upon the receipt of
liquidation rights and the receipt of subscription rights in the Conversion, to
the extent such liquidation rights and subscription rights are deemed to have
value, as discussed below; (vii) the basis of each account holder's savings
accounts in us after the Conversion will be the same as the basis of his savings
accounts in us prior to the Conversion, decreased by the fair market value of
the nontransferable subscription rights received and increased by the amount, if
any, of gain recognized on the exchange; (viii) the basis of each account
holder's interest in the liquidation account will be zero; and (ix) the holding
period of the Common Stock acquired through the exercise of subscription rights
shall begin on the date on which the subscription rights are exercised.
With respect to the subscription rights, we have received an opinion of
Ferguson which, based on certain assumptions, concludes that the subscription
rights to be received by Eligible Account Holders and other eligible subscribers
do not have any economic value at the time of distribution or at the time the
subscription rights are exercised, whether or not a public offering takes place.
Such opinion is based on the fact that such rights are: (i) acquired by the
recipients without payment therefor, (ii) non-transferable, (iii) of short
duration, and (iv) afford the recipients the right only to purchase shares at a
price equal to their estimated fair market value, which will be the same price
at which shares for which no subscription right is received in the Subscription
Offering will be offered in the Community Offering. If the subscription rights
granted to Eligible Account Holders or other eligible subscribers are deemed to
have an ascertainable value, receipt of such rights would be taxable only to
those Eligible Account Holders or other eligible subscribers who exercise the
subscription rights in an amount equal to such value (either as a capital gain
or ordinary income), and we could recognize gain on such distribution.
We are also subject to Maryland income taxes and have received an opinion
from Anderson Associates, llp that the Conversion will be treated for Maryland
state tax purposes similar to the Conversion's treatment for federal tax
5
purposes.
Unlike a private letter ruling, the opinions of Housley Kantarian &
Bronstein, P.C., Ferguson and Anderson Associates, llp have no binding effect or
official status, and we cannot give you any assurance that a court would sustain
the conclusions reached in any of those opinions if contested by the IRS or the
Maryland tax authorities. WE ENCOURAGE ELIGIBLE ACCOUNT HOLDERS, SUPPLEMENTAL
ELIGIBLE ACCOUNT HOLDERS AND OTHER MEMBERS TO CONSULT WITH THEIR OWN TAX
ADVISERS AS TO THE TAX CONSEQUENCES IN THE EVENT THE SUBSCRIPTION RIGHTS ARE
DEEMED TO HAVE AN ASCERTAINABLE VALUE.
LIQUIDATION ACCOUNT. In the unlikely event of our complete liquidation in
our present mutual form, each depositor is entitled to equal distribution of any
of our assets, pro rata to the value of his accounts, remaining after payment of
claims of all creditors (including the claims of all depositors to the
withdrawal value of their accounts). Each depositor's pro rata share of such
remaining assets would be in the same proportion as the value of his deposit
accounts was to the total value of all deposit accounts in us at the time of
liquidation.
Upon a complete liquidation after the Conversion, each depositor would have
a claim, as a creditor, of the same general priority as the claims of all other
general creditors of ours. Therefore, except as described below, a depositor's
claim would be solely in the amount of the balance in his deposit account plus
accrued interest. A depositor would not have an interest in the residual value
of our assets above that amount. if any.
The Plan of Conversion provides for the establishment, upon the completion
of the Conversion, of a special "liquidation account" for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders in an amount
equal to our regulatory capital as reflected in the latest statement of
financial condition set forth in the accompanying prospectus. Each Eligible
Account Holder and Supplemental Eligible Account Holder, if he continues to
maintain his deposit account with us, would be entitled on our complete
liquidation after Conversion, to an interest in the liquidation account prior to
any payment to stockholders. Each Eligible Account Holder would have an initial
interest in such liquidation account for each deposit account held in us on the
qualifying date, December 31, 1995. Each Supplemental Eligible Account Holder
would have a similar interest as of the qualifying date, March 31, 1998. The
interest as to each deposit account would be in the same proportion of the total
liquidation account as the balance of the deposit account on the qualifying
dates was to the aggregate balance in all the deposit accounts of Eligible
Account Holders and Supplemental Eligible Account Holders on such qualifying
dates. However, if the amount in the deposit account on any annual closing date
of ours is less than the amount in such account on the respective qualifying
dates, then the interest in this special liquidation account would be reduced
from time to time by an amount proportionate to any such reduction, and the
interest would cease to exist if such deposit account were closed. The interest
in the special liquidation account will never be increased despite any increase
in the related deposit account after the respective qualifying dates.
No merger, consolidation, purchase of bulk assets with assumptions of
savings accounts and other liabilities, or similar transactions with another
insured institution in which transaction we, in our converted form, are not the
surviving institution shall be considered a complete liquidation. In such
transactions, the liquidation account shall be assumed by the surviving
institution.
RESTRICTIONS ON SALES AND PURCHASES OF SHARES BY DIRECTORS AND OFFICERS
Shares purchased by directors and officers of the Company may not be sold
for one year following completion of the Conversion. An exception to this rule
is a disposition of shares in the event of the death of the director or officer.
Any shares issued to directors and officers as a stock dividend, stock split, or
otherwise with respect to restricted stock shall be subject to the same
restrictions.
For three years following the Conversion, directors and officers may
purchase shares only through a registered broker or dealer. Exceptions are
available only if the OTS has approved the purchase or the purchase is an arm's
length transaction and involves more than one percent of the outstanding shares.
6
INTERPRETATION AND AMENDMENT OF THE PLAN OF CONVERSION
We are authorized to interpret and amend the Plan of Conversion. Our
interpretations are final. Amendments to the Plan of Conversion after the
receipt of member approval will not need further member approval unless required
by the OTS.
CONDITIONS AND TERMINATION
Completion of the Conversion requires (i) the approval of the Plan of
Conversion by the affirmative vote of not less than a majority of the total
number of votes eligible to be cast by our members; and (ii) completion of the
sale of shares within 24 months following approval of the Plan of Conversion by
our members. If these conditions are not satisfied, the Plan of Conversion will
be terminated and we will continue our business in the mutual form of
organization. We may terminate the Plan of Conversion at any time prior to the
meeting of members to vote on the Plan or at any time thereafter with the
approval of the OTS.
OTHER
All statements made in this Proxy Statement are hereby qualified by the
contents of the Plan of Conversion which is attached as Exhibit A to this Proxy
Statement. Please consult the Plan of Conversion for further information. In
addition, please refer to the section entitled "The Conversion" in the
accompanying prospectus for a more detailed discussion of various aspects of the
Plan of Conversion.
CHARTER AND BYLAWS
The following is a summary of certain provisions of the Charter and Bylaws
which will become effective upon our conversion into a federally chartered stock
savings bank. Complete copies of the Stock Charter and Bylaws are attached as
Exhibits B and C to this Proxy Statement.
In stock form, we will be authorized to issue 8,000,000 shares of common
stock, $0.01 par value per share. Our common stock will not be insured by the
FDIC. All of our outstanding common stock will be owned by the Company.
Accordingly, exclusive voting rights with respect to our affairs after the
Conversion will be vested in the Company's Board of Directors.
Our Charter provides that the number of directors shall be not fewer than
five or more than 15, with the exact number to be fixed in the Bylaws. The
proposed Stock Bylaws provide that the number directors shall be six. Directors
will serve for terms of three years and the terms of directors will be staggered
so that approximately one-third of the Board is elected each year.
In addition to the common stock, we will be authorized to issue 2,000,000
shares of serial preferred stock, $0.01 par value per share. The Board of
Directors will be permitted, without further stockholder approval, to authorize
the issuance of preferred stock in series and to fix the voting powers,
designations, preferences and relative, participating, optional, conversion and
other special rights of the shares of each series of the preferred stock and the
qualifications, limitations and restrictions thereof. Preferred stock may rank
prior to common stock in dividend rights, liquidation preferences, or both, and
may have voting rights.
Neither the Stock Charter nor the Bylaws provide for indemnification of
officers and directors. However, we will be required by OTS regulations (as we
currently are) to indemnify its directors, officers and employees against legal
and other expenses incurred in defending lawsuits brought against them by
reasons of the performance of their official duties. Indemnification may be
made to any such person only if final judgment on the merits is in his favor or,
in case of (i) settlement, (ii) final judgment against him or (iii) final
judgment in his favor, other than on the merits, if a majority of our directors
determines that he was acting in good faith within the scope of his employment
or authority as he could reasonably have perceived it under the circumstances
and for a purpose he could have reasonably believed under the circumstances was
in our best interest or the best interest of our stockholders. If a majority of
our directors concludes
7
that in connection with an action any person ultimately may become entitled to
indemnification, the directors may authorize payment of reasonable costs and
expenses arising from defense or settlement of such action.
HOW TO ORDER STOCK
The accompanying prospectus contains information about our business and
financial condition of the and additional information about the Conversion and
the Subscription Offering and the Community Offering. Enclosed is a Stock Order
Form you must use to purchase for stock. You are not obligated to purchase
stock and voting to approve the Conversion will not obligate you to purchase for
stock.
All Subscription Rights are nontransferable and will expire if you do not
exercise them by returning the accompanying Stock Order Form with full payment
(or appropriate instructions authorizing withdrawal from a savings or
certificate account with us) for all shares for which subscription is made to
the Company by __:__ .m., Eastern Time, on ________ ___, 1998, unless extended
by us. A postage-paid reply envelope is provided for this purpose. If not all
of the shares are subscribed for in the Subscription Offering by our members,
the remaining shares may be offered to the general public in the Community
Offering with preference given to natural persons and trusts of natural persons
who reside in Baltimore County, Maryland.
THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS LIMITED IN ITS SCOPE
TO USE IN THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING TO VOTE ON THE
PLAN OF CONVERSION. IT IS NOT INTENDED FOR USE IN THE OFFERING OF THE COMMON
STOCK. SUCH OFFERING IS MADE ONLY BY THE ACCOMPANYING PROSPECTUS.
ADDITIONAL INFORMATION
The information contained in the accompanying prospectus includes a more
detailed description of the Plan of Conversion and is intended to help you
evaluate the Conversion.
All persons eligible to vote at the Special Meeting should review both this
Proxy Statement and the accompanying prospectus carefully.
YOUR BOARD OF DIRECTORS URGES YOU TO CONSIDER CAREFULLY THIS PROXY MATERIAL
AND, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE SPECIAL MEETING, TO
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) AS SOON AS POSSIBLE TO
ASSURE THAT YOUR VOTES WILL BE COUNTED. THIS WILL NOT PREVENT YOU FROM VOTING
IN PERSON IF YOU ATTEND THE SPECIAL MEETING. YOU MAY REVOKE YOUR PROXY BY
WRITTEN INSTRUMENT DELIVERED TO THE SECRETARY OF NORTHFIELD FEDERAL SAVINGS AT
ANY TIME PRIOR TO OR AT THE SPECIAL MEETING OR BY ATTENDING THE SPECIAL MEETING
AND VOTING IN PERSON.
THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY THE COMMON STOCK. THE OFFER IS MADE ONLY BY THE ACCOMPANYING
PROSPECTUS.
BY ORDER OF THE BOARD OF DIRECTORS
J. Thomas Hoffman
Secretary
______________, 1998
Baltimore, Maryland
8
Exhibit A
Northfield Federal Savings
Baltimore, Maryland
PLAN OF CONVERSION
FROM MUTUAL TO STOCK ORGANIZATION
I. General.
On December 17, 1997, the Board of Directors of Northfield Federal Savings,
Baltimore, Maryland (the "Bank"), after careful study and consideration, adopted
this Plan of Conversion from Mutual to Stock Organization (the "Plan"), whereby
the Bank will convert from a federal mutual savings Bank to a federal capital
stock savings Bank (the "Converted Bank") as a wholly owned subsidiary of a
Holding Company to be formed at the direction of the Bank (the "Conversion").
The Conversion is subject to regulations of the Director of the Office of
Thrift Supervision of the United States Department of the Treasury ("OTS")
pursuant to Section 5(i) of the Home Owners' Loan Act and Part 563b of the Rules
and Regulations Applicable to All Savings Associations.
The Plan is subject to the prior written approval of the OTS and must be
adopted by the affirmative vote of at least a majority of the total outstanding
votes of the Members of the Bank. Pursuant to the Plan, shares of Conversion
Stock in the Holding Company will be offered in a Subscription Offering pursuant
to non-transferable Subscription Rights at a predetermined and uniform price
first to the Bank's Eligible Account Holders of record as of December 31, 1995,
second to the Bank's Tax-Qualified Employee Stock Benefit Plans, third to
Supplemental Eligible Account Holders of record as of the last day of the
calendar quarter preceding OTS approval of the Bank's application to convert to
stock form and fourth to Other Members of the Bank. Concurrently with the
Subscription Offering, shares not subscribed for in the Subscription Offering
may be offered by the Bank to the general public in a Community Offering.
Shares remaining, if any, may then be offered to the general public in an
underwritten public offering or otherwise. The aggregate Purchase Price of the
Conversion Stock will be based upon an independent appraisal of the Bank and
will reflect the estimated pro forma market value of the Converted Bank, as a
subsidiary of the Holding Company.
It is the desire of the Board of Directors to attract new capital to the
Converted Bank to increase its net worth, to support future savings growth, to
increase the amount of funds available for other lending and investment, to
provide greater resources for the expansion of customer services and to
facilitate future expansion. In addition, the Board of Directors currently
intends to implement stock option plans and other stock benefit plans subsequent
to the Conversion to better attract and retain qualified directors and officers.
It is the further desire of the Board of Directors to reorganize the Converted
Bank as the wholly owned subsidiary of the Holding Company to enhance
flexibility of operations, diversification of business opportunities and
financial capability for business and regulatory purposes and to enable the
Converted Bank to compete more effectively with other financial service
organizations.
No change will be made in the Board of Directors or management of the Bank
as a result of the Conversion.
II. Definitions.
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 (as defined by 12 C.F.R. (S)563b.2(a)(26)) who acts in concert with
another person ("other party") shall also be deemed to be acting in concert with
any person who is also acting in concert with that other party, except that any
Tax-Qualified
A-1
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 Tax-
Qualified Employee Benefit Plan will be aggregated.
Associate: The term "Associate," when used to indicate a relationship with
---------
any person, means (i) any corporation or organization (other than the Bank, the
Holding Company or a majority-owned subsidiary of the Bank or the Holding
Company) 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 such term shall not include a "Tax-
Qualified Employee Stock Benefit Plan," as defined herein; 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 of the Bank or the Holding
Company, or any of their subsidiaries.
Bank: The term "Bank" means Northfield Federal Savings, either in its
----
present form as a federal mutual savings bank or in its future form as a federal
mutual savings bank in the event of the amendment of its federal mutual charter
and bylaws to substantially conform with the current regulatory model federal
mutual savings bank charter and bylaws.
Capital Stock: The term "Capital Stock" means any and all authorized
-------------
shares of stock of the Converted Bank.
Community Offering: The term "Community Offering" means the offering of
------------------
shares of Conversion Stock to the general public by the Holding Company
concurrently with or after commencement of the Subscription Offering, giving
preference to natural persons and trusts of natural persons (including
individual retirement and Keogh retirement accounts and personal trusts in which
such natural persons have substantial interests) who are permanent Residents of
the Bank's Local Community.
Conversion: The term "Conversion" means (i) the amendment of the Bank's
----------
federal mutual charter and bylaws to authorize issuance of shares of Capital
Stock by the Converted Bank and to conform to the requirements of a federal
capital stock savings bank under the laws of the United States and applicable
regulations; (ii) the issuance and sale of Conversion Stock by the Holding
Company in the Subscription and Community Offerings and/or in an underwritten
public offering or otherwise; and (iii) the purchase by the Holding Company of
all the Capital Stock of the Converted Bank to be issued in the Conversion
immediately following or concurrently with the close of the sale of the
Conversion Stock.
Conversion Stock: The term "Conversion Stock" means the shares of common
----------------
stock to be issued and sold by the Holding Company pursuant to the Plan.
Converted Bank: The term "Converted Bank" means Northfield Federal Savings
--------------
in its form as a federal capital stock savings bank resulting from the
conversion of the Bank to the stock form of organization in accordance with the
terms of the Plan.
Eligibility Record Date: The term "Eligibility Record Date" means the
-----------------------
close of business on December 31, 1995.
Eligible Account Holder: The term "Eligible Account Holder" means each
-----------------------
holder of one or more Qualifying Deposits in the Bank on the Eligibility Record
Date.
Holding Company: The term "Holding Company" means a corporation to be
---------------
incorporated by the Bank under state law for the purpose of becoming a holding
company for the Converted Bank through the issuance and sale of Conversion Stock
under the Plan and the concurrent acquisition of 100% of the Capital Stock to be
issued and sold pursuant to the Plan.
A-2
Holding Company Stock: The term "Holding Company Stock" means any and all
---------------------
authorized shares of stock of the Holding Company.
Independent Appraiser: The term "Independent Appraiser" means a person
---------------------
independent of the Bank, experienced and expert in the area of corporate
appraisal, and acceptable to the OTS, retained by the Bank to prepare an
appraisal of the pro forma market value of the Converted Bank, as a subsidiary
of the Holding Company.
Local Community: The term "Local Community" means the county or counties
---------------
in which the Bank's office or offices are located.
Market Maker: The term "Market Maker" means a dealer (i.e., any person who
------------
engages, either for all or part of such person's time, directly or indirectly,
as agent, broker or principal in the business of offering, buying, selling or
otherwise dealing or trading in securities issued by another person) who, with
respect to a particular security, (i)(a) regularly publishes bona fide,
competitive bid and offer quotations in a recognized interdealer quotation
system or (b) furnishes bona fide competitive bid and offer quotations on
request and (ii) is ready, willing and able to effect transactions in reasonable
quantities at its quoted prices with other brokers or dealers.
Member: The term "Member" means any person or entity who qualifies as a
------
member of the Bank under its federal mutual charter and bylaws prior to the
Conversion.
Officer: The term "Officer" means an executive officer of the Holding
-------
Company or the Bank (as applicable), including the Chairman of the Board,
President, Executive Vice Presidents, Senior Vice Presidents in charge of
principal business functions, Secretary and Treasurer.
Order Form: The term "Order Form" means the order form or forms to be used
----------
by Eligible Account Holders, Supplemental Eligible Account Holders and other
persons eligible to purchase Conversion Stock pursuant to the Plan.
Other Member: The term "Other Member" means any person, other than an
------------
Eligible Account Holder or a Supplemental Eligible Account Holder, who is a
Member as of the Voting Record Date.
OTS: The term "OTS" means the Office of Thrift Supervision of the United
---
States Department of the Treasury or any successor agency having jurisdiction
over the Conversion.
Plan: The term "Plan" means this Plan of Conversion under which the Bank
----
will convert from a federal mutual savings Bank to a federal capital stock
savings Bank as a wholly owned subsidiary of the Holding Company, as originally
adopted by the Board of Directors or amended in accordance with the terms
hereof.
Qualifying Deposit: The term "Qualifying Deposit" means each savings
------------------
balance in any Savings Account in the Bank as of the close of business on the
Eligibility Record Date or the Supplemental Eligibility Record Date, as
applicable, which is equal to or greater than $50.00.
Registration Statement: The term "Registration Statement" means the
----------------------
Registration Statement on Form SB-2, or such other form as may be appropriate,
and any amendments thereto, filed by the Holding Company with the SEC pursuant
to the Securities Act of 1933, as amended, to register shares of Conversion
Stock.
Resident: The term "Resident," as used in this Plan in relation to the
--------
preference afforded natural persons and trusts of natural persons in the Local
Community, includes any natural person who occupies a dwelling within the Local
Community, has an intention to remain within the Local Community for a period of
time (manifested by establishing a physical, ongoing, non-transitory presence
within the Local Community) and continues to reside therein at the time of the
Community Offering. The Bank may utilize deposit or loan records or such other
evidence provided to it to make the determination as to whether a person is
residing in the Local Community. To the extent the "person" is a corporation
A-3
or other business entity, the principal place of business or headquarters should
be within the Local Community. To the extent the "person" is a personal benefit
plan, the circumstances of the beneficiary shall apply with respect to this
definition. In the case of all other benefit plans, circumstances of the trustee
shall be examined for purposes of this definition. In all cases, such
determination shall be in the sole discretion of the Bank.
Sale: The terms "sale" and "sell" mean every contract to sell or otherwise
----
dispose of a security or an interest in a security for value, but such terms do
not include an exchange of securities in connection with a merger or acquisition
approved by the OTS or any other federal agency having jurisdiction.
Savings Account: The term "Savings Account" means a withdrawable deposit
---------------
in the Bank.
SEC: The term "SEC" means the Securities and Exchange Commission or any
---
successor agency.
Special Meeting: The term "Special Meeting" means the Special Meeting of
---------------
Members to be called for the purpose of submitting the Plan to the Members for
their approval.
Subscription Offering: The term "Subscription Offering" means the offering
---------------------
of shares of Conversion Stock to Eligible Account Holders, Tax-Qualified
Employee Stock Benefit Plans, Supplemental Eligible Account Holders and Other
Members under the Plan.
Subscription and Community Prospectus: The term "Subscription and
-------------------------------------
Community Prospectus" means the final prospectus to be used in connection with
the Subscription and Community Offerings.
Subscription Rights: The term "Subscription Rights" means non-
-------------------
transferable, non-negotiable, personal rights of Eligible Account Holders, Tax-
Qualified Employee Stock Benefit Plans, Supplemental Eligible Account Holders
and Other Members to purchase Conversion Stock offered under the Plan.
Supplemental Eligibility Record Date: The term "Supplemental Eligibility
------------------------------------
Record Date" means the last day of the calendar quarter preceding the approval
of the Plan by the OTS.
Supplemental Eligible Account Holder: The term "Supplemental Eligible
------------------------------------
Account Holder" means each holder of one or more Qualifying Deposits in the Bank
(other than Officers and directors of the Bank and their Associates) on the
Supplemental Eligibility Record Date.
Tax-Qualified Employee Stock Benefit Plan: The term "Tax-Qualified
-----------------------------------------
Employee Stock Benefit Plan" means any defined benefit plan or defined
contribution plan of the Bank or the Holding Company, 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 of 1986, as amended. "Non-Tax-Qualified Employee
Stock Benefit Plan" means any defined benefit plan or defined contribution plan
which is not so qualified.
Voting Record Date: The term "Voting Record Date" means the date fixed by
------------------
the Board of Directors of the Bank to determine Members of the Bank entitled to
vote at the Special Meeting.
III. Steps Prior to Submission of the Plan to the Members for Approval.
Prior to submission of the Plan to its Members for approval, the Bank must
receive approval from the OTS of an Application for Approval of Conversion on
Form AC, which includes the Plan to convert to the stock form of organization
(the "Application"). The following steps must be taken prior to such regulatory
approval:
A. The Board of Directors shall adopt the Plan by not less than a
two-thirds vote.
A-4
B. Promptly after adoption of the Plan by the Board of Directors, the
Bank shall notify its Members of the adoption of the Plan by publishing a
statement in a newspaper having a general circulation in each community in
which the Bank maintains an office and/or by mailing a letter to each of
its Members.
C. A press release relating to the proposed Conversion may be
submitted to the local media.
D. Copies of the Plan adopted by the Board of Directors shall be made
available for inspection by Members at each office of the Bank.
E. The Bank shall cause the Holding Company to be incorporated under
state law, and the Board of Directors of the Holding Company shall concur
in the Plan by at least a two-thirds vote.
F. The Bank shall submit or cause to be submitted the Application to
the OTS. The Holding Company shall submit or cause to be submitted an
Application H-(e)1 or Application H-(e)1-S to the OTS and the Registration
Statement to the SEC. Upon receipt of advice from the regulatory
authorities that the Application has been received and is in the prescribed
form, the Bank shall publish a "Notice of Filing of an Application for
Conversion to a Stock Savings Bank" in a newspaper of general circulation,
as referred to in Paragraph III.B. herein. The Bank also shall prominently
display a copy of such notice in each of its offices. The Holding Company
shall publish notice of the filing of the Application H-(e)1 or H-(e)1-S in
accordance with applicable regulations.
G. The Bank shall obtain an opinion of its tax advisors or a
favorable ruling from the United States Internal Revenue Service which
shall state that the Conversion will not result in a taxable reorganization
for federal income tax purposes to the Bank. Receipt of a favorable
opinion or ruling is a condition precedent to completion of the Conversion.
H. The Plan shall be submitted to a vote of the Members at the
Special Meeting after approval by the OTS.
IV. Meeting of Members.
Following receipt of approval of the Plan by the OTS, the Special Meeting
to vote on the Plan shall be scheduled in accordance with the Bank's bylaws and
applicable regulations. Notice of the Special Meeting will be given by means of
a proxy statement authorized for use by the OTS. Promptly after receipt of
approval and at least 20 days but not more than 45 days prior to the Special
Meeting, the Bank will distribute proxy solicitation materials to all voting
Members as of the Voting Record Date established for voting at the Special
Meeting. Proxy materials will also be sent to each beneficial holder of an
Individual Retirement Account where the name of the beneficial holder is
disclosed on the Bank's records. The proxy solicitation materials will include
a copy of the Proxy Statement and other documents authorized for use by the
regulatory authorities and may also include a Subscription and Community
Prospectus as provided in Paragraph VI. below. The Bank will also advise each
Eligible Account Holder and Supplemental Eligible Account Holder not entitled to
vote at the Special Meeting of the proposed Conversion and the scheduled Special
Meeting and provide a postage paid card on which to indicate whether he or she
wishes to receive the Subscription and Community Prospectus, if the Subscription
and Community Offerings are not held concurrently with the proxy solicitation.
Pursuant to applicable regulations, an affirmative vote of at least a
majority of the total outstanding votes of the Members will be required for
approval of the Plan. Voting may be in person or by proxy. The OTS shall be
promptly notified of the actions of the Members at the Special Meeting.
A-5
V. Summary Proxy Statement.
The Proxy Statement to be furnished to Members may be in summary form,
provided that a statement is made in boldface type that a more detailed
description of the proposed transaction may be obtained by returning an enclosed
postage paid card or other written communication requesting a supplemental
information statement. Without prior approval from the OTS, the Special Meeting
shall not be held fewer than 20 days after the last day on which the
supplemental information statement is mailed to Members requesting the same.
The supplemental information statement may be combined with the Subscription and
Community Prospectus if the Subscription and Community Offerings are commenced
concurrently with the proxy solicitation of Members for the Special Meeting.
VI. Offering Documents.
The Holding Company may commence the Subscription Offering and, provided
that the Subscription Offering has commenced, may commence the Community
Offering concurrently with or during the proxy solicitation of Members and may
close the Subscription and Community Offerings before the Special Meeting,
provided that the offer and sale of the Conversion Stock shall be conditioned
upon approval of the Plan by the Members at the Special Meeting.
The Bank's proxy solicitation materials may require Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members to return to
the Bank by a reasonable date certain a postage-paid written communication
requesting receipt of a Subscription and Community Prospectus in order to be
entitled to receive a Subscription and Community Prospectus, provided that the
Subscription Offering shall not be closed until the expiration of 30 days after
mailing proxy solicitation materials to voting Members and a postage-paid
written communication to non-voting Eligible Account Holders and Supplemental
Eligible Account Holders. If the Subscription Offering is commenced within 45
days after the Special Meeting, the Bank shall transmit, no more than 30 days
prior to the commencement of the Subscription Offering, to each voting Member
who had been furnished with proxy solicitation materials and to each non-voting
Eligible Account Holder and Supplemental Eligible Account Holder, written notice
of the commencement of the Subscription Offering which shall state that the Bank
is not required to furnish a Subscription and Community Prospectus to them
unless they return by a reasonable date certain a postage-paid written
communication requesting the receipt of the Subscription and Community
Prospectus.
Prior to commencement of the Subscription and Community Offerings, the
Holding Company shall file the Registration Statement with the SEC pursuant to
the Securities Act of 1933, as amended. The Holding Company shall not
distribute the Subscription and Community Prospectus until the Registration
Statement containing the same has been declared effective by the SEC and the
aforementioned documents have been approved by the OTS. The Subscription and
Community Prospectus may be combined with the Proxy Statement for the Special
Meeting.
VII. Consummation of Conversion.
The date of consummation of the Conversion will be the effective date of
the amendment of the Bank's federal mutual charter to read in the form of a
federal stock charter, which shall be the date of the issuance and sale of the
Conversion Stock. After receipt of all orders for Conversion Stock, and
concurrently with the execution thereof, the amendment of the Bank's federal
mutual charter to authorize the issuance of shares of Capital Stock and to
conform to the requirements of a federal capital stock savings Bank will be
declared effective by the OTS, and the amended bylaws approved by the Members
will become effective. At such time, the Conversion Stock will be issued and
sold by the Holding Company, the Capital Stock to be issued in the Conversion
will be issued and sold to the Holding Company, and the Converted Bank will
become a wholly owned subsidiary of the Holding Company. The Converted Bank
will issue to the Holding Company 100,000 shares of its common stock,
representing all of the shares of Capital Stock to be issued by the Converted
Bank in the Conversion, and the Holding Company will make payment to the
Converted Bank of at least 50 percent of the aggregate net proceeds realized by
the Holding Company from the sale of the Conversion Stock under the Plan, or
such other portion of the aggregate net proceeds as may be authorized or
required by the OTS.
A-6
VIII. Stock Offering.
A. General.
-------
The aggregate purchase price of all shares of Conversion Stock which
will be offered and sold will be equal to the estimated pro forma market
value of the Converted Bank, as a subsidiary of the Holding Company, as
determined by an independent appraisal. The exact number of shares of
Conversion Stock to be offered will be determined by the Board of Directors
of the Bank and the Board of Directors of the Holding Company, or their
respective designees, in conjunction with the determination of the Purchase
Price (as that term is defined in Paragraph VIII.B. below). The number of
shares to be offered may be subsequently adjusted prior to completion of
the Conversion as provided below.
B. Independent Evaluation and Purchase Price of Shares.
---------------------------------------------------
All shares of Conversion Stock sold in the Conversion will be sold at
a uniform price per share referred to in this Plan as the "Purchase Price."
The Purchase Price and the total number of shares of Conversion Stock to be
offered in the Conversion will be determined by the Board of Directors of
the Bank and the Board of Directors of the Holding Company, or their
respective designees, immediately prior to the simultaneous completion of
all such sales contemplated by this Plan on the basis of the estimated pro
forma market value of the Converted Bank, as a subsidiary of the Holding
Company, at such time. The estimated pro forma market value of the
Converted Bank, as a subsidiary of the Holding Company, will be determined
for such purpose by an Independent Appraiser on the basis of such
appropriate factors as are not inconsistent with applicable regulations.
Immediately prior to the Subscription and Community Offerings, a
subscription price range of shares for the offerings will be established
(the "Valuation Range"), which will vary from 15% above to 15% below the
midpoint of such range. The number of shares of Conversion Stock
ultimately issued and sold will be determined at the close of the
Subscription and Community Offerings and any other offering. The
subscription price range and the number of shares to be offered may be
changed subsequent to the Subscription and Community Offerings as the
result of any appraisal updates prior to the completion of the Conversion,
without notifying eligible purchasers in the Subscription and Community
Offerings and without a resolicitation of subscriptions, provided the
aggregate Purchase Price is not below the low end or more than 15 percent
above the high end of the Valuation Range previously approved by the OTS or
if, in the opinion of the Boards of Directors of the Bank and the Holding
Company, the new Valuation Range established by the appraisal update does
not result in a materially different capital position of the Converted
Bank.
Notwithstanding the foregoing, no sale of Conversion Stock may be
consummated unless, prior to such consummation, the Independent Appraiser
confirms to the Bank and the Holding Company and to the OTS that, to the
best knowledge 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 aggregate value of the
Conversion Stock at the Purchase Price is incompatible with its estimate of
the aggregate consolidated pro forma market value of the Converted Bank, as
a subsidiary of the Holding Company. If such confirmation is not received,
the Bank may cancel the Subscription and Community Offerings and/or any
other offering, extend the Conversion, establish a new Valuation Range,
extend, reopen or hold new Subscription and Community Offerings and/or
other offerings or take such other action as the OTS may permit.
C. Subscription Offering.
---------------------
Non-transferable Subscription Rights to purchase shares of Conversion
Stock will be issued at no cost to Eligible Account Holders, Tax-Qualified
Employee Stock Benefits Plans, Supplemental Eligible Account Holders and
Other Members pursuant to priorities established by applicable regulations.
All shares must be sold, and, to the extent that Conversion Stock is
available, no subscriber will be allowed to purchase fewer than
A-7
25 shares of Conversion Stock, provided that this number shall be
decreased if the aggregate purchase price exceeds $500. The priorities
established by applicable regulations for the purchase of shares are as
follows:
1. Category No. 1: Eligible Account Holders.
a. Each Eligible Account Holder shall receive,
without payment, non-transferable Subscription Rights to
purchase Conversion Stock in an amount equal to the greater of
$125,000, one-tenth of one percent of the total offering of
shares of Conversion Stock or 15 times the product (rounded
down to the next whole number) obtained by multiplying the
total number of shares of Conversion Stock to be issued by a
fraction of which the numerator is the amount of the
Qualifying Deposit of the Eligible Account Holder and the
denominator is the total amount of Qualifying Deposits of all
Eligible Account Holders in the Converted Bank in each case on
the Eligibility Record Date.
b. Non-transferable Subscription Rights to purchase
Conversion Stock received by Officers and directors of the
Bank and their Associates based on their increased deposits in
the Bank in the one year period preceding the Eligibility
Record Date shall be subordinated to all other subscriptions
involving the exercise of non-transferable Subscription Rights
to purchase shares pursuant to this Subscription Category.
c. In the event of an oversubscription for shares of
Conversion Stock pursuant to this Category, shares of
Conversion Stock shall be allocated among subscribing Eligible
Account Holders as follows:
(I) Shares of Conversion Stock shall be
allocated among subscribing Eligible Account Holders
so as to permit each such Account Holder, to the
extent possible, to purchase a number of shares of
Conversion Stock sufficient to make its total
allocation equal to 100 shares or the total amount
of its subscription, whichever is less.
(II) Any shares not so allocated shall be
allocated among the subscribing Eligible Account
Holders on an equitable basis, related to the amounts
of their respective aggregate Qualifying Deposits, as
compared to the total aggregate Qualifying Deposits
of all subscribing Eligible Account Holders.
2. Category No. 2: Tax-Qualified Employee Stock Benefit Plans.
a. Tax-Qualified Employee Stock Benefit Plans of the
Converted Bank shall receive, without payment,
non-transferable Subscription Rights to purchase up to 10% of
the shares of Conversion Stock issued in the Conversion.
b. Subscription rights received in this Category
shall be subordinated to the Subscription Rights received by
Eligible Account Holders pursuant to Category No. 1, provided
that any shares of Conversion Stock sold in excess of the high
end of the Valuation Range may be first sold to Tax-Qualified
Employee Stock Benefit Plans.
3. Category No. 3: Supplemental Eligible Account Holders.
a. In the event that the Eligibility Record Date is
more than 15 months prior to the date of the latest amendment
of the Application filed prior to OTS approval, then each
Supplemental Eligible Account Holder shall receive, without
payment, non-transferable Subscription Rights to purchase
Conversion Stock in an amount equal to the greater of
$125,000, one-tenth of one percent of the total
A-8
offering of shares of Conversion Stock or 15 times the product
(rounded down to the next whole number) obtained by multiplying the
total number of the shares of Conversion Stock to be issued by a
fraction of which the numerator is the amount of the Qualifying
Deposit of the Supplemental Eligible Account Holder and the
denominator is the total amount of the Qualifying Deposits of all
Supplemental Eligible Account Holders on the Supplemental Eligibility
Record Date.
b. Subscription Rights received pursuant to this Category shall
be subordinated to the Subscription Rights received by the Eligible
Account Holders and by Tax-Qualified Employee Stock Benefit Plans
pursuant to Category Nos. 1 and 2.
c. Any non-transferable Subscription Rights to purchase shares
received by an Eligible Account Holder in accordance with Category No.
1 shall reduce to the extent thereof the Subscription Rights to be
distributed to such Eligible Account Holder pursuant to this Category.
d. In the event of an oversubscription for shares of Conversion
Stock pursuant to this Category, shares of Conversion Stock shall be
allocated among the subscribing Supplemental Eligible Account Holders
as follows:
(I) Shares of Conversion Stock shall be allocated among
subscribing Supplemental Eligible Account Holders so as to permit
each such Supplemental Eligible Account Holder, to the extent
possible, to purchase a number of shares of Conversion Stock
sufficient to make its total allocation (including the number of
shares of Conversion Stock, if any, allocated in accordance with
Category No. 1) equal to 100 shares of Conversion Stock or the
total amount of its subscription, whichever is less.
(II) Any shares of Conversion Stock not allocated in
accordance with subparagraph (I) above shall be allocated among
the subscribing Supplemental Eligible Account Holders on an
equitable basis, related to the amounts of their respective
aggregate Qualifying Deposits on the Supplemental Eligibility
Record Date as compared to the total aggregate Qualifying
Deposits of all subscribing Supplemental Eligible Account Holders
in each case on the Supplemental Eligibility Record Date.
4. Category No. 4: Other Members.
a. Each Other Member, other than those Members who are Eligible
Account Holders or Supplemental Eligible Account Holders, shall
receive, without payment, non-transferable Subscription Rights to
purchase Conversion Stock in an amount equal to the greater of
$125,000 or one-tenth of one percent of the total offering of shares
of Conversion Stock.
b. Subscription Rights received pursuant to this Category shall
be subordinated to the Subscription Rights received by Eligible
Account Holders, Tax-Qualified Employee Stock Benefit Plans and
Supplemental Eligible Account Holders pursuant to Category Nos. 1, 2
and 3.
c. In the event of an oversubscription for shares of Conversion
Stock pursuant to this Category, the shares of Conversion Stock
available shall be allocated among subscribing Other Members so as to
permit each subscribing Other Member, to the extent possible, to
purchase a number of shares sufficient to make his or her total
allocation of Conversion Stock equal to the lesser of 100 shares or
the number of shares subscribed for by the Other Member. The shares
remaining thereafter will be allocated among subscribing Other Members
whose subscriptions remain unsatisfied on a reasonable basis as
determined by the Board of Directors.
A-9
Order Forms may provide that the maximum purchase limitation
shall be based on the midpoint of the Valuation Range. In the event
the aggregate Purchase Price of the Conversion Stock issued and sold
is below the midpoint of the Valuation Range, that portion of
subscriptions in excess of the maximum purchase limitation will be
refunded. In the event the aggregate Purchase Price of Conversion
Stock issued and sold is above the midpoint of the Valuation Range,
persons who have subscribed for the maximum purchase limitation may be
given the opportunity to increase their subscriptions so as to
purchase the maximum number of shares subject to the availability of
shares. The Bank will not otherwise notify subscribers of any change
in the number of shares of Conversion Stock offered.
D. Community Offering.
------------------
1. Any shares of Conversion Stock not purchased through the
exercise of Subscription Rights in the Subscription Offering may be
sold in a Community Offering, which may commence concurrently with the
Subscription Offering. Shares of Conversion Stock will be offered in
the Community Offering to the general public, giving preference to
natural persons and the trusts of natural persons (including
individual retirement and Keogh retirement accounts and personal
trusts in which such natural persons have substantial interests) who
are permanent Residents of the Local Community. The Community
Offering may commence concurrently with or as soon as practicable
after the completion of the Subscription Offering and must be
completed within 45 days after the last day of the Subscription
Offering, unless extended by the Holding Company with the approval of
the OTS. The offering price of the Conversion Stock to the general
public in the Community Offering will be the same price paid for such
stock by Eligible Account Holders and other persons in the
Subscription Offering. If sufficient shares are not available to
satisfy all orders in the Community Offering, the shares available
will be allocated by the Holding Company in its discretion. The
Holding Company shall have the right to accept or reject orders in the
Community Offering in whole or in part.
2. Orders accepted in the Community Offering shall be filled up
to a maximum of 2% of the Conversion Stock, and thereafter remaining
shares shall be allocated on an equal number of shares basis per order
until all orders have been filled.
3. The Conversion Stock to be offered in the Community Offering
will be offered and sold in a manner that will achieve the widest
distribution of the Conversion Stock.
E. Other Offering.
--------------
In the event a Community Offering does not appear feasible, the
Bank will immediately consult with the OTS to determine the most
viable alternative available to effect the completion of the
Conversion. Should no viable alternative exist, the Bank may
terminate the Conversion with the concurrence of the OTS.
F. Limitations Upon Purchases of Shares of Conversion Stock.
--------------------------------------------------------
The following additional limitations and exceptions shall apply to all
purchases of Conversion Stock:
1. No Person may purchase fewer than 25 shares of Conversion
Stock in the Conversion, to the extent such shares are available.
A-10
2. Purchases of Conversion Stock in the Community Offering by
any person, when aggregated with purchases by an Associate of that
person, or a group of persons Acting in Concert, shall not exceed
$125,000 of Conversion Stock, except that Tax-Qualified Employee
Stock Benefit Plans may purchase up to 10% of the total shares of
Conversion Stock to be issued in the Conversion, and shares to be held
by the Tax-Qualified Employee Stock Benefit Plans and attributable to
a participant thereunder shall not be aggregated with shares of
Conversion Stock purchased by such participant or any other purchaser
of Conversion Stock in the Conversion.
3. Officers and directors of the Bank and the Holding Company,
and Associates thereof, may not purchase in the aggregate more than
35% of the shares of Conversion Stock issued in the Conversion, or
such greater amount as may be permitted under applicable legal limits.
4. Directors of the Holding Company and the Bank shall not be
deemed to be Associates or a group Acting in Concert with other
directors solely as a result of membership on the Board of Directors
of the Holding Company or the Bank or any of their subsidiaries.
5. Purchases of shares of Conversion Stock in the Conversion by
any person, when aggregated with purchases by an Associate of that
person, or a group of persons Acting in Concert, shall not exceed the
lesser of (a) $225,000 of Conversion Stock or (b) 5% of the shares
of Conversion Stock issued in the Conversion, except that Tax-
Qualified Employee Stock Benefit Plans may purchase up to 10% of the
total shares of Conversion Stock to be issued in the Conversion, and
shares purchased by the Tax-Qualified Employee Stock Benefit Plans and
attributable to a participant thereunder shall not be aggregated with
shares purchased by such participant or any other purchaser of
Conversion Stock in the Conversion.
Subject to any required regulatory approval and the requirements of
applicable laws and regulations, the Holding Company and the Bank may
increase or decrease any of the purchase limitations set forth herein at
any time. Under current regulatory authority, the Boards of Directors of
the Holding Company and the Bank may, in their discretion, increase the
maximum purchase limitations in the Subscription Offering and/or, if
applicable, the Community Offering or other offering up to 9.99%, provided
that orders for shares exceeding 5% of the shares to be issued in the
Conversion shall not exceed, in the aggregate, 10% of the shares to be
issued in the Conversion. In the event that the individual purchase
limitation is increased after commencement of the Subscription and
Community Offerings, the Holding Company and the Bank shall permit any
person who subscribed for the maximum number of shares of Conversion Stock
to purchase an additional number of shares, such that such person shall be
permitted to subscribe for the then maximum number of shares permitted to
be subscribed for by such person, subject to the rights and preferences of
any person who has priority Subscription Rights. In the event that either
the individual purchase limitation or the number of shares of Conversion
Stock to be sold in the Conversion is decreased after commencement of the
Subscription and Community Offerings, the orders of any person who
subscribed for the maximum number of shares of Conversion Stock shall be
decreased by the minimum amount necessary so that such person shall be in
compliance with the then maximum number of shares permitted to be
subscribed for by such person.
Each person purchasing Conversion Stock in the Conversion shall be
deemed to confirm that such purchase does not conflict with the purchase
limitations under the Plan or otherwise imposed by law, rule or regulation.
In the event that such purchase limitations are violated by any person
(including any Associate or group of persons affiliated or otherwise Acting
in Concert with such person), the Holding Company shall have the right to
purchase from such person at the actual Purchase Price per share all shares
acquired by such person in excess of such purchase limitations or, if such
excess shares have been sold by such person, to receive the difference
between the actual Purchase Price per share paid for such excess shares and
the price at which such excess shares were sold by such person. This right
of the Holding Company to purchase such excess shares shall be assignable
by the Holding Company.
A-11
G. Restrictions on and Other Characteristics of Stock Being Sold.
-------------------------------------------------------------
1. Transferability.
---------------
Except as provided in Paragraph XIII. below, Conversion Stock
purchased by persons other than directors and Officers of the Bank and
directors and Officers of the Holding Company will be transferable
without restriction. Conversion Stock purchased by such directors or
Officers shall not be sold for a period of one year from the date of
Conversion except for any sale of such shares (i) following the death
of the original purchaser or (ii) resulting from an exchange of
securities in a merger or acquisition approved by the applicable
regulatory authorities.
The Conversion Stock issued by the Holding Company to such
directors and Officers shall bear the following legend giving
appropriate notice of the one-year holding period restriction:
"The shares of stock evidenced by this Certificate are restricted
as to transfer for a period of one year from the date of this
Certificate pursuant to applicable regulations of the Office of
Thrift Supervision of the United States Department of the
Treasury. Except in the event of the death of the registered
holder, the shares represented by this Certificate may not be
sold prior thereto without a legal opinion of counsel for the
Holding Company that said sale is permissible under the
provisions of applicable laws and regulations."
In addition, the Holding Company shall give appropriate
instructions to the transfer agent for the Holding Company Stock with
respect to the applicable restrictions relating to the transfer of
restricted stock. Any shares of Holding Company Stock subsequently
issued as a stock dividend, stock split or otherwise, with respect to
any such restricted stock, shall be subject to the same holding period
restrictions for such directors and Officers as may be then applicable
to such restricted stock.
2. Repurchase and Dividend Rights.
------------------------------
Pursuant to present regulations, except as otherwise permitted by
the OTS, the Holding Company may not, for a period of three years from
the date of Conversion, repurchase Holding Company Stock from any
person, with the exception of (i) repurchases on a pro rata basis
pursuant to offers approved by the OTS and made to all stockholders,
(ii) repurchases of qualifying shares of directors or, (iii) unless
prohibited by the OTS, repurchases of shares to fund employee stock
benefit plans of the Holding Company or the Bank. Upon 10 days'
written notification to the OTS Regional Director for the Converted
Bank and the Chief Counsel of the Corporate and Securities Division of
the OTS, however, the Holding Company may make open market repurchases
of outstanding Holding Company Stock, provided that (i) such Regional
Director and Chief Counsel do not object based on a determination that
(a) the repurchases would materially adversely affect the financial
condition of the Converted Bank, (b) the information submitted by the
Converted Bank is insufficient upon which to base a conclusion as to
whether the Converted Bank's financial condition would be materially
adversely affected, or (c) the Converted Bank does not demonstrate a
valid purpose for the repurchases. Except as otherwise permitted by
the OTS, (i) no repurchases may occur in the first year following the
Conversion; (ii) any repurchases in the second and third years
following the Conversion must be part of an open-market stock
repurchase program that allows no more than five percent (5%) of the
outstanding Holding Company Stock to be purchased during any 12 month
period; and (iii) any repurchases within the first three years
following the Conversion must not cause the Converted Bank to become
"undercapitalized," as defined pursuant to 12 C.F.R. (S)565.4 or a
successor regulation.
A-12
Present regulations also provide that the Converted Bank may not
declare or pay a cash dividend on or repurchase any of its Capital
Stock if the result thereof would be to reduce the regulatory capital
of the Converted Bank below the amount required for the Liquidation
Account. Further, any dividend declared or paid on, or repurchase of,
the Capital Stock shall be in compliance with the Rules and
Regulations of the OTS, or other applicable regulations.
The above limitations shall not preclude payment of dividends on,
or repurchases of, Holding Company Stock in the event applicable
federal regulatory limitations are liberalized subsequent to the
Conversion.
3. Voting Rights.
-------------
After Conversion, holders of Savings Accounts and obligors on
loans will not have voting rights in the Converted Bank. Exclusive
voting rights with respect to the Holding Company shall be vested in
the holders of Holding Company Stock, and the Holding Company will
have exclusive voting rights with respect to the Capital Stock. Each
stockholder of the Holding Company will be entitled to vote on any
matters coming before the stockholders of the Holding Company for
consideration and will be entitled to one vote for each share of stock
owned by said stockholder.
4. Purchases by Officers, Directors and Associates Following
---------------------------------------------------------
Conversion.
----------
Without the prior approval of the OTS, Officers and directors of
the Converted Bank and Officers and directors of the Holding Company,
and their Associates, shall be prohibited for a period of three years
following completion of the Conversion from purchasing outstanding
shares of Holding Company Stock, except from a broker or dealer
registered with the SEC. Notwithstanding this restriction, negotiated
transactions involving more than 1% of the total outstanding shares of
Holding Company Stock and purchases made and shares held by a Tax-
Qualified Employee Stock Benefit Plan or Non-Tax-Qualified Employee
Stock Benefit Plan which may be attributable to Officers or directors
may be made without OTS permission or the use of a broker or dealer.
H. Mailing of Offering Materials and Collation of Subscriptions.
------------------------------------------------------------
The sale of all shares of Conversion Stock offered pursuant to the
Plan must be completed within 24 months after approval of the Plan at the
Special Meeting. After approval of the Plan by the OTS and the declaration
of the effectiveness of the Subscription and Community Prospectus by the
SEC, the Holding Company shall distribute such Subscription and Community
Prospectus and Order Forms for the purchase of shares in accordance with
the terms of the Plan.
The recipient of an Order Form will be provided neither fewer than 20
days nor more than 45 days from the date of mailing, unless extended, to
complete, execute and return properly the Order Form to the Holding Company
or the Bank. Self-addressed, postage paid return envelopes will accompany
these forms when mailed. The Bank or Holding Company will collate the
returned executed Order Forms upon completion of the Subscription Offering.
Failure of any eligible subscriber to return a properly completed and
executed Order Form within the prescribed time limits shall be deemed a
waiver and a release by such person of any rights to purchase shares of
Conversion Stock hereunder.
The sale of all shares of Conversion Stock shall be completed within
45 days after the last day of the Subscription Offering unless extended by
the Holding Company and the Bank with the approval of the OTS.
A-13
I. Method of Payment.
-----------------
Payment for all shares of Conversion Stock subscribed for in the
Subscription and Community Offerings must be received in full by the Bank
or the Holding Company, together with properly completed and executed Order
Forms, indicating thereon the number of shares being subscribed for and
such other information as may be required thereon, on or prior to the
expiration date specified on the Order Form, unless such date is extended
by the Holding Company and the Bank; provided, however, that payments by
Tax-Qualified Employee Stock Benefit Plans for Conversion Stock may be made
to the Bank concurrently with the completion of the Conversion.
Payment for all shares of Conversion Stock may be made in cash (if
delivered in person) or by check or money order, or, if the subscriber has
a Savings Account in the Bank (including a certificate of deposit), the
subscriber may authorize the Bank to charge the subscriber's Savings
Account for the purchase amount. The Bank shall pay interest at not less
than the passbook rate on all amounts paid in cash or by check or money
order to purchase shares of Conversion Stock in the Subscription and
Community Offerings from the date payment is received until the Conversion
is completed or terminated. The Bank shall not knowingly loan funds or
otherwise extend credit to any person for the purpose of purchasing
Conversion Stock.
If a subscriber authorizes the Bank to charge its Savings Account, the
funds will remain in the subscriber's Savings Account and will continue to
earn interest, but may not be used by the subscriber until all Conversion
Stock has been sold or the Conversion is terminated, whichever is earlier.
The withdrawal will be given effect only concurrently with the sale of all
shares of Conversion Stock in the Conversion and only to the extent
necessary to satisfy the subscription at a price equal to the Purchase
Price. The Bank will allow subscribers to purchase shares of Conversion
Stock by withdrawing funds from certificate accounts without the assessment
of early withdrawal penalties. In the case of early withdrawal of only a
portion of such account, the certificate evidencing such account shall be
cancelled if the remaining balance of the account is less than the
applicable minimum balance requirement. In that event, the remaining
balance will earn interest at the passbook rate. This waiver of the early
withdrawal penalty is applicable only to withdrawals made in connection
with the purchase of Conversion Stock under the Plan.
Tax-Qualified Employee Stock Benefit Plans may subscribe for shares by
submitting an Order From, and in the case of an employee stock ownership
plan, together with evidence of a loan commitment from the Holding Company
or an unrelated financial institution for the purchase of the shares of
Conversion Stock, during the Subscription Offering and by making payment
for the shares of Conversion Stock on the date of the closing of the
Conversion.
J. Undelivered, Defective or Late Order Forms; Insufficient Payment.
----------------------------------------------------------------
In the event an Order Form (i) is not delivered and is returned to the
Holding Company or the Bank by the United States Postal Service (or the
Holding Company or the Bank is unable to locate the addressee); (ii) is not
received by the Holding Company or the Bank, or is received by the Holding
Company or the Bank after termination of the date specified thereon; (iii)
is defectively completed or executed; or (iv) is not accompanied by the
total required payment for the shares of Conversion Stock subscribed for
(including cases in which the subscribers' Savings Accounts are
insufficient to cover the authorized withdrawal for the required payment),
the Subscription Rights of the person to whom such rights have been granted
will not be honored and will be treated as though such person failed to
return the completed Order Form within the time period specified therein.
Alternatively, the Holding Company or the Bank may, but will not be
required to, waive any irregularity relating to any Order Form or require
the submission of a corrected Order Form or the remittance of full payment
for subscribed shares of Conversion Stock by such date as the Holding
Company or the Bank may specify. Subscription orders, once tendered,
cannot be revoked. The Holding Company's and the Bank's
A-14
interpretation of the terms and conditions of this Plan and acceptability
of the Order Forms will be final and conclusive.
K. Members in Non-Qualified States or in Foreign Countries.
-------------------------------------------------------
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 Conversion Stock pursuant to the Plan reside.
However, no such person will be offered or receive any Conversion Stock
under this Plan who resides in a foreign country or who resides in a state
of the United States with respect to which any or all of the following
apply: (i) a small number of persons otherwise eligible to subscribe for
shares of Conversion Stock under this Plan reside in such state or foreign
country; (ii) the granting of Subscription Rights or the offer or sale of
shares of Conversion Stock to such person would require the Holding
Company or the Bank or their employees to register, under the securities
laws of such state, as a broker, dealer, salesman or agent or to register
or otherwise qualify its securities for sale in such state or foreign
country; and (iii) such registration qualification would be impracticable
for reasons of cost or otherwise. No payments will be made in lieu of the
granting of Subscription Rights to any such person.
L. Sales Commissions.
-----------------
Sales commissions may be paid as determined by the Boards of
Directors of the Bank and the Holding Company or their designees to
securities dealers assisting subscribers in making purchases of
Conversion Stock in the Subscription Offering or in the Community
Offering, if the securities dealer is named by the subscriber on the
Order Form. In addition, a sales commission may be paid to a securities
dealer for advising and consulting with respect to, or for managing the
sale of Conversion Stock in, the Subscription Offering, the Community
Offering or any other offering.
IX. Charter and Bylaws.
As part of the Conversion, a federal stock charter and bylaws will be
adopted to authorize the Converted Bank to operate as a federal capital stock
savings Bank. By approving the Plan, the Members of the Bank will thereby
approve amending the Bank's existing federal mutual charter and bylaws to read
in the form of a federal stock charter and bylaws. Prior to completion of the
Conversion, the proposed federal stock charter and bylaws may be amended in
accordance with the provisions and limitations for amending the Plan under
Paragraph XIV. below. The effective date of the amendment of the Bank's federal
mutual charter and bylaws to read in the form of a federal stock charter and
bylaws shall be the date of the issuance of the Conversion Stock, which shall be
the date of consummation of the Conversion.
X. Registration and Market Making.
In connection and concurrently with the Conversion, the Holding Company
shall register the Holding Company Stock with the SEC pursuant to the Securities
Exchange Act of 1934, as amended, and shall undertake not to deregister the
Holding Company Stock for a period of three years thereafter.
The Holding Company shall use its best efforts to encourage and assist
various Market Makers to establish and maintain a market for the Holding Company
Stock. The Holding Company shall also use its best efforts to have the Holding
Company Stock quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System or listed on a national or regional securities
exchange.
A-15
XI. Status of Savings Accounts and Loans Subsequent to Conversion.
All Savings Accounts in the Bank will retain the same status after
Conversion as these accounts had prior to Conversion. Subject to Paragraph
VIII.I. hereof, each holder of a Savings Account in the Bank shall retain,
without payment, a withdrawable Savings Account or Savings Accounts in the
Converted Bank, equal in dollar amount and on the same terms and conditions as
in effect prior to Conversion. All Savings Accounts will continue to be insured
by the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation up to the applicable limits of insurance coverage. All loans shall
retain the same status after Conversion as these loans had prior to Conversion.
After Conversion, holders of Savings Accounts and obligors on loans of the Bank
will not have voting rights in the Converted Bank. Exclusive voting rights with
respect to the Holding Company shall be vested in the holders of the Conversion
Stock issued by the Holding Company, and the Holding Company will have exclusive
voting rights with respect to the Converted Bank's Capital Stock.
XII. Liquidation Account.
After the Conversion, holders of Savings Accounts will not be entitled to
share in the residual assets after liquidation of the Converted Bank. However,
pursuant to applicable regulations, the Bank shall, at the time of the
Conversion, establish a Liquidation Account in an amount equal to its regulatory
capital as of the date of the latest statement of financial condition contained
in the final prospectus to be used in connection with the Conversion. The
function of the Liquidation Account is to establish a priority on liquidation,
and, except as provided in Paragraph VIII.G.2. above, the existence of the
Liquidation Account shall not operate to restrict the use or application of any
of the net worth accounts of the Converted Bank.
The Liquidation Account shall be maintained by the Converted Bank
subsequent to Conversion for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders who retain their Savings Accounts in the
Converted Bank. Each Eligible Account Holder and Supplemental Eligible Account
Holder shall, with respect to each Savings Account held, have a related inchoate
interest in a portion of the Liquidation Account ("subaccount balance").
The initial subaccount balance for a Savings Account held by an Eligible
Account Holder and/or a Supplemental Eligible Account Holder shall be determined
by multiplying the opening balance in the Liquidation Account by a fraction of
which the numerator is the amount of the qualifying deposit in the related
Savings Account and the denominator is the total amount of the qualifying
deposits of all Eligible Account Holders and Supplemental Eligible Account
Holders in the Bank. Such initial subaccount balance shall not be increased but
shall be subject to downward adjustment as provided below.
If the deposit balance in any Savings Account of an Eligible Account
Holder or Supplemental Eligible Account Holder to which the subaccount relates
at the close of business on any annual closing date subsequent to the
Eligibility Record Date or Supplemental Eligibility Record Date is less than the
lesser of (i) the deposit balance in such Savings Account at the close of
business on any annual closing date subsequent to the Eligibility Record Date or
the Supplemental Eligibility Record Date, or (ii) the amount of the Qualifying
Deposit in such Savings Account on the Eligibility Record Date or the
Supplemental Eligibility Record Date, then the subaccount balance for such
Savings Account shall be adjusted by reducing such subaccount balance in an
amount proportionate to the reduction in such deposit balance. In the event of a
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any increase in the deposit balance of the related Savings
Account. If any such Savings Account is closed, the related subaccount balance
shall be reduced to zero.
In the event of a complete liquidation of the Converted Bank (and only in
such event), each Eligible Account Holder and Supplemental Eligible Account
Holder shall be entitled to receive a liquidation distribution from the
Liquidation Account in the amount of the then-current adjusted subaccount
balances for Savings Accounts then held before any liquidation distribution may
be made to stockholders. No merger, consolidation, sale of bulk assets or
similar combination or transaction with another institution insured by the
Federal Deposit Insurance Corporation shall be
A-16
considered to be a complete liquidation for these purposes. In such
transactions, the Liquidation Account shall be assumed by the surviving
institution.
XIII. Restrictions on Acquisition of Holding Company.
A. Present regulations provide that for a period of three years
following completion of the Conversion, no person (i.e., an individual, a
group acting in concert, a corporation, a partnership, an association, a
joint stock company, a trust or any unincorporated organization or
similar company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities of an insured institution
or its holding company) shall directly, or indirectly, offer to purchase
or actually acquire the beneficial ownership of more than 10% of any
class of Holding Company Stock without the prior approval of the OTS.
However, approval is not required for purchases directly from the Holding
Company or underwriters or a selling group acting on its behalf with a
view towards public resale, or for purchases not exceeding 1% per annum
of the shares outstanding, or for the acquisition of securities by one or
more Tax-Qualified Employee Stock Benefit Plans of the Holding Company or
the Converted Bank, provided that the plan or plans do not have
beneficial ownership in the aggregate of more than 25% of any class of
Holding Company Stock. Civil penalties may be imposed by the OTS for
willful violation or assistance of any violation. Where any person,
directly or indirectly, acquires beneficial ownership of more than 10% of
any class of Holding Company Stock within such three-year period, without
the prior approval of the OTS, Holding Company Stock beneficially owned
by such person in excess of 10% shall not be counted as shares entitled
to vote and shall not be voted by any person or counted as voting shares
in connection with any matter submitted to the stockholders for a vote.
B. The Holding Company may provide in its Articles of Incorporation
a provision that, for a period of five years following the date of the
completion of the Conversion, no person shall directly or indirectly
offer to acquire or actually acquire the beneficial ownership of more
than 10% of any class of Holding Company Stock except with respect to
purchases by one or more Tax-Qualified Employee Stock Benefit Plans of
the Holding Company or Converted Bank. The Holding Company may provide in
its Articles of Incorporation for such other provisions affecting the
acquisition of Holding Company Stock as shall be determined by its Board
of Directors.
XIV. Interpretation and Amendment or Termination of the Plan.
The Bank's Board of Directors shall have the sole discretion to interpret
and apply the provisions of the Plan to particular facts and circumstances and
to make all determinations necessary or desirable to implement such provisions,
including but not limited to matters with respect to giving preference to
natural persons and trusts of natural persons who are permanent Residents of the
Bank's Local Community, and any and all interpretations, applications and
determinations made by the Board of Directors 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 Bank and its members and
subscribers in the Subscription and Community Offerings, subject to the
authority of the OTS.
If deemed necessary or desirable, the Plan may be substantively amended
at any time prior to submission of the Plan and proxy materials to the Members
by a two-thirds vote of the Bank's Board of Directors. After submission of the
Plan and proxy materials to the Members, the Plan may be amended by a two-thirds
vote of the Bank's Board of Directors at any time prior to the Special Meeting
and at any time following such Special Meeting with the concurrence of the OTS.
In its discretion, the Board of Directors may modify or terminate the Plan upon
the order of the regulatory authorities without a resolicitation of proxies or
another Special Meeting.
In the event that mandatory new regulations pertaining to conversions are
adopted by the OTS or any successor agency prior to the completion of the
Conversion, the Plan will be amended to conform to the new mandatory regulations
without a resolicitation of proxies or another Special Meeting. In the event
that new conversion regulations
A-17
adopted by the OTS or any successor agency prior to completion of the Conversion
contain optional provisions, the Plan may be amended to utilize such optional
provisions at the discretion of the Board of Directors without a resolicitation
of proxies or another Special Meeting.
By adoption of the Plan, the Bank's Members authorize the Board of
Directors to amend and/or terminate the Plan under the circumstances set forth
above.
XV. Expenses of the Conversion.
The Holding Company and the Bank will use their best efforts to assure
that expenses incurred in connection with the Conversion shall be reasonable.
XVI. Contributions to Tax-Qualified Employee Stock Benefit Plans.
The Holding Company and the Converted Bank may make scheduled
discretionary contributions to their Tax-Qualified Employee Stock Benefit Plans,
provided such contributions do not cause the Converted Bank to fail to meet its
then-applicable regulatory capital requirements.
A-18
EXHIBIT B
NORTHFIELD FEDERAL SAVINGS BANK
FEDERAL STOCK CHARTER
Section 1. Corporate Title. The full corporate title of the savings
bank is Northfield Federal Savings Bank (the "savings bank").
Section 2. Office. The home office shall be located in the County of
Baltimore, State of Maryland.
Section 3. Duration. The duration of the savings bank is perpetual.
Section 4. Purpose and Powers. The purpose of the savings bank is to
pursue any or all of the lawful objectives of a Federal savings bank chartered
under section 5 of the Home Owners' Loan Act and to exercise all of the express,
implied, and incidental powers conferred thereby and by all acts amendatory
thereof and supplemental thereto, subject to the Constitution and laws of the
United States as they are now in effect, or as they may hereafter be amended,
and subject to all lawful and applicable rules, regulations, and orders of the
Office of Thrift Supervision ("Office").
Section 5. Capital Stock. The total number of shares of all classes of
capital stock that the savings bank has the authority to issue is 10,000,000, of
which 8,000,000 shares shall be common stock of par value of $0.01 per share and
of which 2,000,000 shares shall be serial preferred stock of par value of $0.01
per share. The shares may be issued from time to time as authorized by the
board of directors without further approval of shareholders, except as otherwise
provided in this Section 5 or to the extent that such approval is required by
governing law, rule, or regulation. The consideration for the issuance of the
shares shall be paid in full before their issuance and shall not be less than
the par value. Neither promissory notes nor future services shall constitute
payment or part payment for the issuance of shares of the savings bank. The
consideration for the shares shall be cash, tangible or intangible property (to
the extent direct investment in such property would be permitted), labor, or
services actually performed for the savings bank, or any combination of the
foregoing. In the absence of actual fraud in the transaction, the value of such
property, labor, or services, as determined by the board of directors of the
savings bank, shall be conclusive. In the case of a stock dividend, that part
of the retained earnings of the savings bank that is transferred to common stock
or paid-in capital accounts upon the issuance of shares as a stock dividend
shall be deemed to be the consideration for their issuance.
Except for shares issued in the initial organization of the savings bank
or in connection with the conversion of the savings bank from the mutual to the
stock form of capitalization, no shares of capital stock (including shares
issuable upon conversion, exchange, or exercise of other securities) shall be
issued, directly or indirectly, to officers, directors, or controlling persons
of the savings bank other than as part of a general public offering or as
qualifying shares to a director, unless their issuance or the plan under which
they would be issued has been approved by a majority of the total votes eligible
to be cast at a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or series of capital stock to
vote as a separate class or series or to more than one vote per share, except as
to the cumulation of votes for the election of directors, unless the charter
otherwise provides that there shall be no such cumulative voting: Provided,
That this restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of preferred
stock, voting as a class or series, to elect some members of the board of
directors, less than a majority thereof, in the event of default in the payment
of dividends on any class or series of preferred stock;
B-1
(ii) To any provision that would require the holders of preferred stock,
voting as a class or series, to approve the merger or consolidation of the
savings bank with another corporation or the sale, lease, or conveyance (other
than by mortgage or pledge) of properties or business in exchange for securities
of a corporation other than the savings bank if the preferred stock is exchanged
for securities of such other corporation: Provided, That no provision may
require such approval for transactions undertaken with the assistance or
pursuant to the direction of the Office or the Federal Deposit Insurance
Corporation;
(iii) To any amendment which would adversely change the specific terms of
any class or series of capital stock as set forth in this Section 5 (or in any
supplementary sections hereto), including any amendment which would create or
enlarge any class or series prior ranking thereto in rights and preferences. An
amendment which increases the number of authorized shares of any class or series
of capital stock, or substitutes the surviving savings bank in a merger or
consolidation for the savings bank, shall not be considered to be such an
adverse change.
A description of the different classes and series (if any) of the savings
bank's capital stock and a statement of the designations, and the relative
rights, preferences, and limitations of the shares of each class of and series
(if any) of capital stock are as follows:
A. Common Stock. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of common stock shall exclusively
possess all voting power. Each holder of shares of the common stock shall be
entitled to one vote for each share held by each holder, except as to the
cumulation of votes for the election of directors, unless the charter otherwise
provides that there shall be no such cumulative voting.
Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the common stock as to the payment of dividends, the full amount
of dividends and of sinking fund, retirement fund, or other retirement payments,
if any, to which such holders are respectively entitled in preference to the
common stock, then dividends may be paid on the common stock and on any class or
series of stock entitled to participate therewith as to dividends out of any
assets legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the
savings bank, the holders of the common stock (and the holders of any class or
series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the savings bank available for distribution remaining after: (i)
Payment or provision for payment of the savings bank's debts and liabilities;
(ii) distributions or provision for distributions in settlement of its
liquidation account; and (iii) distributions or provisions for distributions to
holders of any class or series of stock having preference over the common stock
in the liquidation, dissolution, or winding up of the savings bank. Each share
of common stock shall have the same relative rights as and be identical in all
respects with all the other shares of common stock.
B. Preferred Stock. The savings bank may provide in supplementary
sections to its charter for one or more classes of preferred stock, which shall
be separately identified. The shares of any class may be divided into and
issued in series, with each series separately designated so as to distinguish
the shares thereof from the shares of all other series and classes. The terms
of each series shall be set forth in a supplementary section to the charter.
All shares of the same class shall be identical except as to the following
relative rights and preferences, as to which there may be variations between
different series:
(a) The distinctive serial designation and the number of shares
constituting such series;
B-2
(b) The dividend rate or the amount of dividends to be paid on the shares
of such series, whether dividends shall be cumulative and, if so, from which
date(s) the payment date(s) for dividends, and the participating or other
special rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such series;
(d) Whether the shares of such series shall be redeemable and, if so, the
price(s) at which, and the terms and conditions on which such shares may be
redeemed;
(e) The amount(s) payable upon the shares of such series in the event of
voluntary or involuntary liquidation, dissolution, or winding up of the savings
bank;
(f) Whether the shares of such series shall be entitled to the benefit of
a sinking or retirement fund to be applied to the purchase or redemption of such
shares, and if so entitled, the amount of such fund and the manner of its
application, including the price(s) at which such shares may be redeemed or
purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes of stock of the savings
bank and, if so, the conversion price(s) or the rate(s) of exchange, and the
adjustments thereof, if any, at which such conversion or exchange may be made,
and any other terms and conditions of such conversion or exchange;
(h) The price or other consideration for which the shares of such series
shall be issued; and
(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial preferred
stock and whether such shares may be reissued as shares of the same or any other
series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption of
supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established by
a supplementary charter section adopted by the board of directors, the savings
bank shall file with the Secretary to the Office a dated copy of that
supplementary section of this charter established and designating the series and
fixing and determining the relative rights and preferences thereof.
Section 6. Preemptive Rights. Holders of the capital stock of the
savings bank shall not be entitled to preemptive rights with respect to any
shares of the savings bank which may be issued.
Section 7. Directors. The savings bank shall be under the direction of
a board of directors. The authorized number of directors, as stated in the
savings bank's bylaws, shall not be fewer than five nor more than fifteen except
when a greater or lesser number is approved by the Director of the Office, or
his or her delegate.
B-3
Section 8. Amendment of Charter. Except as provided in Section 5, no
amendment, addition, alteration, change, or repeal of this charter shall be
made, unless such is proposed by the board of directors of the savings bank,
approved by the shareholders by a majority of the votes eligible to be cast at a
legal meeting, unless a higher vote is otherwise required, and approved or
preapproved by the Office.
NORTHFIELD FEDERAL SAVINGS
Attest: By:
--------------------------- ---------------------------------
J. Thomas Hoffman G. Ronald Jobson
Secretary President
Declared effective as of
---------
DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION
Attest: By:
--------------------------- ---------------------------------
B-4
EXHIBIT C
BYLAWS
NORTHFIELD FEDERAL SAVINGS BANK
ARTICLE I - HOME OFFICE
The home office of Northfield Federal Savings Bank (the "savings bank")
shall be 1844 E. Joppa Road, in the County of Baltimore, in the State of
Maryland.
ARTICLE II - SHAREHOLDERS
Section 1. Place of Meetings. All annual and special meetings of
shareholders shall be held at the home office of the savings bank or at such
other convenient place as the board of directors may determine.
Section 2. Annual Meeting. A meeting of the shareholders of the savings
bank for the election of directors and for the transaction of any other business
of the savings bank shall be held annually within 150 days after the end of the
savings bank's fiscal year on the second Tuesday of May, if not a legal holiday,
and if a legal holiday, then on the next day following which is not a legal
holiday, at 7:00 p.m., or at such other date and time within such 150-day period
as the board of directors may determine.
Section 3. Special Meetings. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision ("Office"), may be called at any time by the
chairman of the board, the president, or a majority of the board of directors,
and shall be called by the chairman of the board, the president, or the
secretary upon the written request of the holders of not less than one-tenth of
all of the outstanding capital stock of the savings bank entitled to vote at the
meeting. Such written request shall state the purpose or purposes of the
meeting and shall be delivered to the home office of the savings bank addressed
to the chairman of the board, the president, or the secretary.
Section 4. Conduct of Meetings. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
board of directors adopts another written procedure for the conduct of meetings.
The board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
Section 5. Notice of Meetings. Written notice stating the place, day, and
hour of the meeting and the purpose(s) for which the meeting is called shall be
delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the shareholder at the address as it appears on the stock transfer
books or records of the savings bank as of the record date prescribed in Section
6 of this Article II with postage prepaid. When any shareholders' meeting,
either annual or special, is adjourned for 30 days or more, notice of the
adjourned meeting shall be given as in the case of an original meeting. It
shall not be necessary to give any notice of the time and place of any meeting
adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken.
Section 6. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the board of directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more
than 60 days and, in case of a meeting of shareholders, not fewer than 10 days
prior to the date on which the particular action, requiring such determination
of shareholders, is to be taken. When a determination of shareholders entitled
to vote at
C-1
any meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment.
Section 7. Voting Lists. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the savings bank shall make a complete list of the shareholders of
record entitled to vote at such meeting, or any adjournment thereof, arranged in
alphabetical order, with the address and the number of shares held by each.
This list of shareholders shall be kept on file at the home office of the
savings bank and shall be subject to inspection by any shareholder of record or
the shareholder's agent at any time during usual business hours for a period of
20 days prior to such meeting. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to inspection by any
shareholder of record or any shareholder's agent during the entire time of the
meeting. The original stock transfer book shall constitute prima facie evidence
of the shareholders entitled to examine such list or transfer books or to vote
at any meeting of shareholders. In lieu of making the shareholder list
available for inspection by shareholders as provided in the preceding paragraph,
the board of directors may elect to follow the procedures prescribed in
'552.6(d) of the Office's regulations as now or hereafter in effect.
Section 8. Quorum. A majority of the outstanding shares of the savings
bank entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If less than a majority of the outstanding
shares is represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to constitute less than a quorum. If a quorum is present, the
affirmative vote of the majority of the shares represented at the meeting and
entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter. Directors, however, are elected by a
plurality of the votes cast at an election of directors.
Section 9. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his or her duly
authorized attorney in fact. Proxies may be given telephonically or
electronically as long as the holder uses a procedure for verifying the identity
of the shareholder. Proxies solicited on behalf of the management shall be
voted as directed by the shareholder or, in the absence of such direction, as
determined by a majority of the board of directors. No proxy shall be valid
more than eleven months from the date of its execution except for a proxy
coupled with an interest.
Section 10. Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, in the absence of written
directions to the savings bank to the contrary, at any meeting of the
shareholders of the savings bank, any one or more of such shareholders may cast,
in person or by proxy, all votes to which such ownership is entitled. In the
event an attempt is made to cast conflicting votes, in person or by proxy, by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such and present in person or by proxy at such meeting, but no
votes shall be cast for such stock if a majority cannot agree.
Section 11. Voting of Shares of Certain Holders. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares held in trust in an IRA or Keogh Account, however, may be voted by the
savings bank if no other instructions are received. Shares standing in the name
of a receiver may be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer into
his or her name if authority to do so is contained in an appropriate order of
the court or other public authority by which such receiver was appointed.
C-2
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the savings bank nor
shares held by another corporation, if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the savings
bank, shall be voted at any meeting or counted in determining the total number
of outstanding shares at any given time for purposes of any meeting.
Section 12. Inspectors of Election. In advance of any meeting of
shareholders, the board of directors may appoint any person other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails
or refuses to act, the vacancy may be filled by appointment by the board of
directors in advance of the meeting or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares and the voting
power of each share, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; receiving votes,
ballots, or consents; hearing and determining all challenges and questions in
any way arising in connection with the rights to vote; counting and tabulating
all votes or consents; determining the result; and such acts as may be proper to
conduct the election or vote with fairness to all shareholders.
Section 13. Nominating Committee. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at least 20 days prior to the date
of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the savings bank. No nominations for
directors except those made by the nominating committee shall be voted upon at
the annual meeting unless other nominations by shareholders are made in writing
and delivered to the secretary of the savings bank at least five days prior to
the date of the annual meeting. Upon delivery, such nominations shall be posted
in a conspicuous place in each office of the savings bank. Ballots bearing the
names of all persons nominated by the nominating committee and by shareholders
shall be provided for use at the annual meeting. However, if the nominating
committee shall fail or refuse to act at least 20 days prior to the annual
meeting, nominations for directors may be made at the annual meeting by any
shareholder entitled to vote and shall be voted upon.
Section 14. New Business. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the secretary of the savings
bank at least five days before the date of the annual meeting, and all business
so stated, proposed, and filed shall be considered at the annual meeting; but no
other proposal shall be acted upon at the annual meeting. Any shareholder may
make any other proposal at the annual meeting and the same may be discussed and
considered, but unless stated in writing and filed with the secretary at least
five days before the meeting, such proposal shall be laid over for action at an
adjourned, special, or annual meeting of the shareholders taking place 30 days
or more thereafter. This provision shall not prevent the consideration and
approval or disapproval at the annual meeting of reports of officers, directors,
and committees; but in connection with such reports, no new business shall be
acted upon at such annual meeting unless stated and filed as herein provided.
Section 15. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of shareholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
shareholders entitled to vote with respect to the subject matter.
C-3
ARTICLE III - BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the savings bank
shall be under the direction of its board of directors. The board of directors
shall annually elect a chairman of the board and a president from among its
members and shall designate, when present, either the chairman of the board or
the president to preside at its meetings.
Section 2. Number and Term. The board of directors shall consist of six
(6) members and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be
elected by ballot annually.
Section 3. Regular Meetings. A regular meeting of the board of directors
shall be held without other notice than this bylaw following the annual meeting
of shareholders. The board of directors may provide, by resolution, the time
and place for the holding of additional regular meetings without other notice
than such resolution. Directors may participate in a meeting by means of a
conference telephone or similar communications device through which all persons
participating can hear each other at the same time. Participation by such means
shall constitute presence in person for all purposes.
Section 4. Qualification. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the savings
bank unless the savings bank is a wholly owned subsidiary of a holding company.
Section 5. Special Meetings. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the president,
or one-third of the directors. The persons authorized to call special meetings
of the board of directors may fix any place, within the savings bank's normal
lending territory, as the place for holding any special meeting of the board of
directors called by such persons.
Members of the board of directors may participate in special meetings by
means of conference telephone or similar communications equipment by which all
persons participating in the meeting can hear each other. Such participation
shall constitute presence in person for all purposes.
Section 6. Notice. Written notice of any special meeting shall be given
to each director at least 24 hours prior thereto when delivered personally or by
telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall
be deemed to be delivered when deposited in the mail so addressed, with postage
prepaid if mailed, when delivered to the telegraph company if sent by telegram
or, when the savings bank receives notice of delivery if electronically
transmitted. Any director may waive notice of any meeting by a writing filed
with the secretary. The attendance of a director at a meeting shall constitute
a waiver of notice of such meeting, except where a director attends a meeting
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the board of directors need be
specified in the notice of waiver of notice of such meeting.
Section 7. Quorum. A majority of the number of directors fixed by Section
2 of this Article III shall constitute a quorum for the transaction of business
at any meeting of the board of directors; but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time. Notice of any adjourned meeting shall be given in
the same manner as prescribed by Section 6 of this Article III.
Section 8. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.
Section 9. Action Without a Meeting. Any action required or permitted to
be taken by the board of directors at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the directors.
C-4
Section 10. Resignation. Any director may resign at any time by sending
a written notice of such resignation to the home office of the savings bank
addressed to the chairman of the board or the president. Unless otherwise
specified, such resignation shall take effect upon receipt by the chairman of
the board or the president. More than three consecutive absences from regular
meetings of the board of directors, unless excused by resolution of the board of
directors, shall automatically constitute a resignation, effective when such
resignation is accepted by the board of directors.
Section 11. Vacancies. Any vacancy occurring on the board of directors
may be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected to serve until the next election of directors by
the shareholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the board of directors for a
term of office continuing only until the next election of directors by the
shareholders.
Section 12. Compensation. Directors, as such, may receive a stated salary
for their services. By resolution of the board of directors, a reasonable fixed
sum, and reasonable expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the board of directors.
Members of either standing or special committees may be allowed such
compensation for attendance at committee meetings as the board of directors may
determine.
Section 13. Presumption of Assent. A director of the savings bank who is
present at a meeting of the board of directors at which action on any savings
bank matter is taken shall be presumed to have assented to the action taken
unless his or her dissent or abstention shall be entered in the minutes of the
meeting or unless he or she shall file a written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the secretary of the savings
bank within five days after the date a copy of the minutes of the meeting is
received. Such right to dissent shall not apply to a director who voted in
favor of such action.
Section 14. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director may be removed for cause by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of the shares of any class are entitled to
elect one or more directors by the provisions of the charter or supplemental
sections thereto, the provisions of this section shall apply, in respect to the
removal of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.
Section 15. Age Limitation. No person seventy (70) years of age shall be
eligible for election, reelection, appointment, or reappointment to the board of
directors of the savings bank. No person shall serve as a director beyond the
annual meeting of the savings bank immediately following the director becoming
age 70, except that a director serving on the date of the adoption of the mutual
bylaws of Northfield Federal Savings may complete the term as director. This
age limitation does not apply to an advisory director.
The age limitation contained in these bylaws shall not be applicable to any
director holding office on the date of the adoption of the mutual bylaws of
Northfield Federal Savings.
ARTICLE IV - EXECUTIVE AND OTHER COMMITTEES
Section 1. Appointment. The board of directors, by resolution adopted by
a majority of the full board, may designate the chief executive officer and two
or more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
C-5
Section 2. Authority. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the savings bank, or recommending to the shareholders a
plan of merger, consolidation, or conversion; the sale, lease, or other
disposition of all or substantially all of the property and assets of the
savings bank otherwise than in the usual and regular course of its business; a
voluntary dissolution of the savings bank; a revocation of any of the foregoing;
or the approval of a transaction in which any member of the executive committee,
directly or indirectly, has any material beneficial interest.
Section 3. Tenure. Subject to the provisions of Section 8 of this Article
IV, each member of the executive committee shall hold office until the next
regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.
Section 4. Meetings. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee
may be called by any member thereof upon not less than one day's notice stating
the place, date, and hour of the meeting, which notice may be written or oral.
Any member of the executive committee may waive notice of any meeting and no
notice of any meeting need be given to any member thereof who attends in person.
The notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
Section 5. Quorum. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 6. Action Without a Meeting. Any action required or permitted to
be taken by the executive committee at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the members of the executive committee.
Section 7. Vacancies. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.
Section 8. Resignations and Removal. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the savings bank. Unless otherwise
specified, such resignation shall take effect upon its receipt; the acceptance
of such resignation shall not be necessary to make it effective.
Section 9. Procedure. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
Section 10. Other Committees. The board of directors may by resolution
establish an audit, loan, or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
savings bank and may prescribe the duties, constitution, and procedures thereof.
C-6
ARTICLE V - OFFICERS
Section 1. Positions. The officers of the savings bank shall be a
president, one or more vice presidents, a secretary, and a treasurer or
comptroller, each of whom shall be elected by the board of directors. The board
of directors may also designate the chairman of the board as an officer. The
offices of the secretary and treasurer or comptroller may be held by the same
person and a vice president may also be either the secretary or the treasurer or
comptroller. The board of directors may designate one or more vice presidents
as executive vice president or senior vice president. The board of directors
may also elect or authorize the appointment of such other officers as the
business of the savings bank may require. The officers shall have such
authority and perform such duties as the board of directors may from time to
time authorize or determine. In the absence of action by the board of
directors, the officers shall have such powers and duties as generally pertain
to their respective offices.
Section 2. Election and Term of Office. The officers of the savings bank
shall be elected annually at the first meeting of the board of directors held
after each annual meeting of the shareholders. If the election of officers is
not held at such meeting, such election shall be held as soon thereafter as
possible. Each officer shall hold office until a successor has been duly
elected and qualified or until the officer's death, resignation, or removal in
the manner hereinafter provided. Election or appointment of an officer,
employee, or agent shall not of itself create contractual rights. The board of
directors may authorize the savings bank to enter into an employment contract
with any officer in accordance with regulations of the Office, but no such
contract shall impair the right of the board of directors to remove any officer
at any time in accordance with Section 3 of this Article V.
Section 3. Removal. Any officer may be removed by the board of directors
whenever in its judgment the best interests of the savings bank will be served
thereby, but such removal, other than for cause, shall be without prejudice to
any contractual rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the board
of directors for the unexpired portion of the term.
Section 5. Remuneration. The remuneration of the officers shall be fixed
from time to time by the board of directors.
Section 6. Age Limitation. No person seventy (70) years of age shall be
eligible for election, reelection, appointment or reappointment as an officer of
the savings bank. No officer shall serve beyond the annual meeting of the
savings bank immediately following the officer becoming age seventy (70), except
that an officer serving on the date of the adoption of the mutual bylaws of
Northfield Federal Savings may complete the term.
ARTICLE VI - CONTRACTS, LOANS, CHECKS, AND DEPOSITS
Section 1. Contracts. To the extent permitted by regulations of the
Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the board of directors may authorize any officer,
employee, or agent of the savings bank to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the savings bank. Such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the savings
bank and no evidence of indebtedness shall be issued in its name unless
authorized by the board of directors. Such authority may be general or confined
to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts, or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the savings bank shall be signed by one or more officers, employees or
agents of the savings bank in such manner as shall from time to time be
determined by the board of directors.
C-7
Section 4. Deposits. All funds of the savings bank not otherwise employed
shall be deposited from time to time to the credit of the savings bank in any
duly authorized depositories as the board of directors may select.
ARTICLE VII - CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
capital stock of the savings bank shall be in such form as shall be determined
by the board of directors and approved by the Office. Such certificates shall
be signed by the chief executive officer or by any other officer of the savings
bank authorized by the board of directors, attested by the secretary or an
assistant secretary, and sealed with the corporate seal or a facsimile thereof.
The signatures of such officers upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent or a registrar
other than the savings bank itself or one of its employees. Each certificate
for shares of capital stock shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares are issued,
with the number of shares and date of issue, shall be entered on the stock
transfer books of the savings bank. All certificates surrendered to the savings
bank for transfer shall be canceled and no new certificate shall be issued until
the former certificate for a like number of shares has been surrendered and
canceled, except that in the case of a lost or destroyed certificate, a new
certificate may be issued upon such terms and indemnity to the savings bank as
the board of directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of capital stock of the
savings bank shall be made only on its stock transfer books. Authority for such
transfer shall be given only by the holder of record or by his or her legal
representative, who shall furnish proper evidence of such authority, or by his
or her attorney authorized by a duly executed power of attorney and filed with
the savings bank. Such transfer shall be made only on surrender for
cancellation of the certificate for such shares. The person in whose name
shares of capital stock stand on the books of the savings bank shall be deemed
by the savings bank to be the owner for all purposes.
ARTICLE VIII - FISCAL YEAR; ANNUAL AUDIT
The fiscal year of the savings bank shall end on the 31st day of December
of each year. The appointment of such independent accountants shall be subject
to annual ratification by the shareholders.
ARTICLE IX - DIVIDENDS
Subject to the terms of the savings bank's charter and the regulations and
orders of the Office, the board of directors may, from time to time, declare,
and the savings bank may pay, dividends on its outstanding shares of capital
stock.
ARTICLE X - CORPORATE SEAL
The board of directors shall provide a savings bank seal which shall be two
concentric circles between which shall be the name of the savings bank. The
year of incorporation or an emblem may appear in the center.
ARTICLE XI - AMENDMENTS
These bylaws may be amended in a manner consistent with regulations of the
Office and shall be effective after (i) the approval of the amendment by a
majority vote of the authorized board of directors, or by a majority of the
votes cast by the shareholders of the savings bank at any legal meeting, and
(ii) receipt of any applicable regulatory approval. When the savings bank fails
to meet its quorum requirements, solely due to vacancies on the board, then the
affirmative vote of a majority of the sitting board will be required to amend
the bylaws.
C-8
REVOCABLE PROXY
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NORTHFIELD FEDERAL SAVINGS
FOR A SPECIAL MEETING OF MEMBERS
TO BE HELD ON ____________, 1998)
The undersigned member of Northfield Federal Savings (the "Association")
hereby appoints _______________, ____________ and _________________, or any one
of them, with full powers of substitution, as attorneys-in-fact and agents for
and in the name of the undersigned, to vote such votes as the undersigned may be
entitled to cast at the Special Meeting of Members of the Association (the
"Meeting") to be held at __________________, ____________________, Baltimore,
Maryland, on ________________, _____________, 1998, at __:__ .m., Eastern Time,
and at any adjournments thereof. They are authorized to cast all votes to which
the undersigned is entitled, as follows:
FOR AGAINST
--- -------
Approval of the Plan of Conversion providing for
the conversion of the Association from a
federally chartered mutual savings association to
a federally chartered stock savings bank, to be
known as "Northfield Federal Savings Bank" (the
"Bank"), as a wholly owned subsidiary of
Northfield Bancorp, Inc., including the amendment
of the Association's Federal Mutual Charter and
Bylaws to read in the form of a Federal Stock
Charter and Bylaws for the Bank.
[_] [_]
In their discretion, on any other matters that
may lawfully come before the Meeting.
NOTE: The Board of Directors is not aware of any other matters that may come
before the Meeting.
THIS PROXY WILL BE VOTED FOR THE PLAN OF CONVERSION IF
NO CHOICE IS MADE HEREON
Should the undersigned be present and elect to vote at said Meeting or at
any adjournment thereof and, after notification to the Secretary of Northfield
Federal Savings at said Meeting of the member's decision to terminate this
Proxy, then the power of said attorneys-in-fact or agents shall be deemed
terminated and of no further force and effect. The undersigned hereby revokes
any and all proxies heretofore given.
The undersigned acknowledges receipt of a Notice of Special Meeting of the
Members of Northfield Federal Savings to be held on ___________, 1998 and a
Proxy Statement dated ______________, 1998 and a Prospectus dated
______________, 1998 prior to the execution of this Proxy.
---------------------------
Date
---------------------------
Signature
Note: Only one signature is required in
the case of a joint account.