EXHIBIT 2
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FSB COMMUNITY BANKSHARES, INC.
STOCK ISSUANCE PLAN
TABLE OF CONTENTS
Page
1. Introduction.............................................................1
2. Definitions..............................................................1
3. Number of Shares to be Offered...........................................6
4. Independent Valuation and Purchase Price of Shares.......................6
5. Method of Offering Shares and Rights to Purchase Stock...................7
6. Additional Limitations on Purchases of Common Stock.....................11
7. Payment for Stock.......................................................15
8. Manner of Exercising Subscription Rights Through Order Forms............16
9. Undelivered, Defective or Late Order Form; Insufficient Payment.........17
10. Completion of the Stock Offering........................................17
11. Market for Common Stock.................................................17
12. Stock Purchases by Management Persons After the Stock Offering..........18
13. Resales of Stock by Directors and Officers..............................18
14. Stock Certificates......................................................18
15. Restriction on Financing Stock Purchases................................18
16. Stock Benefit Plans.....................................................18
17. Post-Stock Issuance Filing and Market Making............................19
18. Payment of Dividends and Repurchase of Stock............................19
19. Stock Offering Expenses.................................................19
20. Employment and Other Severance Agreements...............................19
21. Residents of Foreign Countries and Certain States.......................20
22. Interpretation..........................................................20
23. Amendment or Termination of the Plan....................................20
1. Introduction
This Stock Issuance Plan (the "Plan") provides for the offer and sale of up
to 49.9% of the Common Stock of FSB Community Bankshares, Inc., a federal
corporation (the "Holding Company"), in the Stock Offering. The Common Stock
will be offered on a priority basis to qualifying depositors, borrowers and the
Tax-Qualified Employee Plans of Fairport Savings Bank (the "Bank"), with any
remaining shares offered to the public in a Community Offering or a Syndicated
Community Offering, or a combination thereof. The Stock Offering will be
conducted in accordance with 12 C.F.R. Part 563g, Part 575 and to the extent
applicable, Form OC of the Regulations. Upon completion of the Stock Offering,
FSB Community Bankshares, MHC (the "MHC") will continue to own at least a
majority of the Common Stock of the Holding Company.
2. Definitions
As used in this Plan, the terms set forth below have the following
meanings:
Acting in Concert: The term Acting in Concert means (i) knowing
participation in a joint activity or interdependent conscious parallel action
towards a common goal whether or not pursuant to an express agreement; or (ii) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise. A
Person or company which acts in concert with another Person or company ("other
party") shall also be deemed to be acting in concert with any Person or company
who is also acting in concert with that other party, except that any
Tax-Qualified Employee Plan will not be deemed to be acting in concert with its
trustee or a Person who serves in a similar capacity solely for the purpose of
determining whether stock held by the trustee and stock held by the plan will be
aggregated.
Actual Purchase Price: The price per share, determined as provided in this
Plan, at which the Common Stock will be sold in the Stock Offering.
Affiliate: Any Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with
another Person.
Application: The Application for Approval of a Minority Stock Issuance by a
Subsidiary of a Mutual Holding Company to be submitted by the Holding Company to
the OTS in connection with the Stock Offering.
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, the MHC or a majority-owned subsidiary of any thereof) of which
such Person is a senior officer or partner, or beneficially owns, directly or
indirectly, 10% or more of any class of equity securities of the corporation or
organization; (ii) any trust or other estate, if the Person has a substantial
beneficial interest in the trust or estate or is a trustee or fiduciary of the
trust or estate. (For purposes of ss.ss. 563b.370, 563b.380, 563b.385, 563b.390,
563b.395 and 563b.505 of the Regulations, a Person who has a substantial
beneficial interest in a Tax-Qualified or Non-Tax Qualified Employee Plan, or
who is a trustee or a fiduciary of the plan, is not an Associate of the plan.
For purposes of ss. 563b.370 of the Regulations, a Tax-Qualified Employee Plan
is not an Associate of a Person); (iii) any Person who is related by blood or
marriage to such Person and (a) who lives in the same house as the Person, or
(b) who is a director or senior officer of the Bank, the Holding Company, the
MHC or a subsidiary thereof.
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Bank: Fairport Savings Bank.
Capital Stock: Any and all authorized stock of the Bank or the Holding
Company.
Common Stock: Common stock, par value $0.10 per share, issuable by the
Holding Company in connection with the Stock Offering, including securities
convertible into Common Stock, pursuant to its charter.
Community: The Counties of Livingston, Monroe, Ontario, Orleans and Wayne,
State of New York.
Community Offering: The offering to certain members of the general public
of any unsubscribed shares in the Subscription Offering. The Community Offering
may include a Syndicated Community Offering or public offering.
Control: (including the terms "controlling," "controlled by" and "under
common control with") means the direct or indirect power to direct or exercise a
controlling influence over the management and policies of a person, whether
through the ownership of voting securities, by contract, or otherwise as
described in Part 574 of the Regulations.
Conversion Transaction: A conversion of the MHC from the mutual to the
stock form of organization.
Deposit Account(s): Any withdrawable account as defined in Section 561.42
of the Regulations, and shall include all demand deposit accounts as defined in
Section 561.16 of the Regulations and certificates of deposit.
Effective Date: The date upon which all necessary approvals have been
obtained to complete the Stock Offering, and the Stock Offering has been
completed.
Eligible Account Holder: Any person holding a Qualifying Deposit on the
Eligibility Record Date for purposes of determining subscription rights.
Eligibility Record Date: December 31, 2005, the date for determining who
qualifies as an Eligible Account Holder of the Bank.
Employee Plans: The Tax-Qualified and Non-Tax Qualified Employee Plans of
the Bank and/or the Holding Company.
ESOP: The Bank's employee stock ownership plan and related trust.
Estimated Valuation Range: The range of the estimated pro forma market
value of the total number of shares of Common Stock to be issued by the Holding
Company to the MHC and to Minority Stockholders, as determined by the
Independent Appraiser prior to the Subscription Offering and as it may be
amended from time to time thereafter.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation.
HOLA: The Home Owners' Loan Act, as amended.
Holding Company: FSB Community Bankshares, Inc., the federal corporation
which will be majority-owned by the MHC after the completion of the Stock
Offering and which will own 100% of the common stock of the Bank, and any
successor to such corporation that may be established in connection with the
Stock Offering or a Conversion Transaction.
Independent Appraiser: The appraiser retained by the Holding Company and
the Bank to prepare an appraisal of the pro forma market value of the Bank and
the Holding Company.
Independent Valuation: The aggregate consolidated pro forma market value of
the Holding Company and the Bank, giving effect to the Stock Offering.
Management Person: Any Officer or director of the Bank or any Affiliate of
the Bank, and any person Acting in Concert with any such Officer or director.
Market Maker: A dealer (i.e., any person who engages 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, (1) regularly publishes bona fide competitive
bid and offer quotations on request, and (2) is ready, willing and able to
effect transactions in reasonable quantities at the dealer's quoted prices with
other brokers or dealers.
MHC: FSB Community Bankshares, MHC, the mutual holding company of the
Holding Company.
Minority Ownership Interest: The shares of the Common Stock owned by
persons other than the MHC, expressed as a percentage of the total shares of
Common Stock outstanding.
Minority Stockholder: Any owner of the Common Stock, other than the MHC.
Non-Voting Stock: Any Capital Stock other than Voting Stock.
Offering Range: The aggregate purchase price of the Common Stock to be sold
in the Stock Offering based on the Independent Valuation expressed as a range,
which may vary within 15% above or 15% below the midpoint of such range, with a
possible adjustment by up to 15% above the maximum of such range. The Offering
Range will be based on the Estimated Valuation Range, but will represent a
Minority Ownership Interest equal to up to 49.9% of the Common Stock.
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Officer: An executive officer of the Holding Company or the Bank, including
the Chief Executive Officer, President, Executive or Senior Vice Presidents in
charge of principal business functions, Secretary, Treasurer and any other
person performing similar functions.
Order Form: Any form (together with any attached cover letter and/or
certifications or acknowledgements), sent by the Holding Company to any Person
containing among other things a description of the alternatives available to
such Person under the Plan and by which any such Person may make elections
regarding purchases of Common Stock in the Subscription and Community Offerings.
Other Member: Any Person, other than an Eligible Account Holder or a
Supplemental Eligible Account Holder, holding a Qualifying Deposit on the Other
Member Record Date and any borrower from the Bank as of January 14, 2005 who
continues to maintain such borrowings as of the Other Member Record Date.
Other Member Record Date: The last day of the month immediately preceding
the month in which OTS approval of the Stock Offering is obtained.
OTS: The Office of Thrift Supervision, and any successor thereto.
Person: An individual, corporation, partnership, association, joint-stock
company, limited liability company, trust, unincorporated organization, or a
government or political subdivision of a government.
Plan: This FSB Community Bankshares, Inc. Stock Issuance Plan.
Qualifying Deposit: The aggregate balance of each Deposit Account of an
Eligible Account Holder as of the close of business on the Eligibility Record
Date, or of a Supplemental Eligible Account Holder as of the close of business
on the Supplemental Eligibility Record Date, or of an Other Member as of the
close of business on the Other Member Record Date, as the case may be, provided
such aggregate balance is not less than $50.
Regulations: The rules and regulations of the OTS, including the OTS rules
and regulations regarding mutual holding companies.
Reorganization: The 2005 reorganization of the Bank into the mutual holding
company structure.
Resident: The terms "resident," "residence," "reside," "resided" or
"residing" as used herein with respect to any person shall mean any person who
occupied a dwelling within the Bank's Community, has an intent to remain with
the Community for a period of time, and manifests the genuineness of that intent
by establishing an ongoing physical presence within the Community together with
an indication that such presence within the Community is something other than
merely transitory in nature. To the extent the Person is a corporation or other
business entity, the principal place of business or headquarters shall be in the
Community. To the extent a person is a personal benefit plan, the circumstances
of the beneficiary shall apply with respect to this definition. In the case of
all other benefit plans, the circumstances of the trustee shall be examined for
purposes of this definition. The Bank may utilize deposit or loan records or
such other evidence provided to it to make a determination as to whether a
person is a resident. In all cases, however, such a determination shall be in
the sole discretion of the Holding Company and the Bank.
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SEC: The Securities and Exchange Commission.
Stock Offering: The offering of Common Stock to persons other than the MHC,
in a Subscription Offering and, to the extent shares remain available, in a
Community Offering or a Syndicated Community Offering.
Subscription Offering: The offering of Common Stock for subscription and
purchase pursuant to Section 5.A of this Plan.
Supplemental Eligible Account Holder: Any Person holding a Qualifying
Deposit on the Supplemental Eligibility Record Date, who is not an Eligible
Account Holder, a Tax-Qualified Employee Plan or an Officer or director of the
Bank.
Supplemental Eligibility Record Date: The last day of the calendar quarter
preceding approval of the Plan by the OTS.
Syndicated Community Offering: The offering of Common Stock following or
contemporaneously with the Community Offering through a syndicate of
broker-dealers.
Tax-Qualified Employee Plan: Any defined benefit plan or defined
contribution plan (including any employee stock ownership plan, stock bonus
plan, profit-sharing plan, or other plan) of the Bank, the Holding Company, the
MHC or any of their affiliates, which, with its related trusts, meets the
requirements to be qualified under Section 401 of the Internal Revenue Code. The
term "Non-Tax-Qualified Employee Plan" means any stock benefit plan of the Bank,
the Holding Company, the MHC or any of their affiliates which is not so
qualified under Section 401 of the Internal Revenue Code.
Voting Stock:
(1) Voting Stock means common stock or preferred stock, or similar
interests if the shares by statute, charter or in any manner, entitle the
holder:
(i) To vote for or to select directors of the Bank or the Holding Company;
and
(ii) To vote on or to direct the conduct of the operations or other
significant policies of the Bank or the Holding Company.
(2) Notwithstanding anything in paragraph (1) above, preferred stock is not
"Voting Stock" if:
(i) Voting rights associated with the preferred stock are limited solely
to the type customarily provided by statute with regard to matters
that would significantly and adversely affect the rights or
preferences of the preferred stock, such as the issuance of additional
amounts or classes of senior securities, the modification of the terms
of the preferred stock, the dissolution of the Bank, or the payment of
dividends by the Bank when preferred dividends are in arrears;
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(ii) The preferred stock represents an essentially passive investment or
financing device and does not otherwise provide the holder with
control over the issuer; and
(iii) The preferred stock does not at the time entitle the holder, by
statute, charter, or otherwise, to select or to vote for the selection
of directors of the Bank or the Holding Company.
(3) Notwithstanding anything in paragraphs (1) and (2) above, "Voting
Stock" shall be deemed to include preferred stock and other securities that,
upon transfer or otherwise, are convertible into Voting Stock or exercisable to
acquire Voting Stock where the holder of the stock, convertible security or
right to acquire Voting Stock has the preponderant economic risk in the
underlying Voting Stock. Securities immediately convertible into Voting Stock at
the option of the holder without payment of additional consideration shall be
deemed to constitute the Voting Stock into which they are convertible; other
convertible securities and rights to acquire Voting Stock shall not be deemed to
vest the holder with the preponderant economic risk in the underlying Voting
Stock if the holder has paid less than 50% of the consideration required to
directly acquire the Voting Stock and has no other economic interest in the
underlying Voting Stock.
3. Number of Shares to be Offered
The total number of shares (or range thereof) of Common Stock to be issued
and offered for sale pursuant to the Plan shall be determined initially by the
Board of Directors of the Holding Company in conjunction with the determination
of the Independent Appraiser. The number of shares to be offered may be adjusted
prior to completion of the Stock Offering. The total number of shares of Common
Stock that may be issued to persons other than the MHC at the close of the Stock
Offering must be less than 50% of the issued and outstanding shares of Common
Stock.
4. Independent Valuation and Purchase Price of Shares
All shares of Common Stock sold in the Stock Offering shall be sold at a
uniform price per share. The Actual Purchase Price and number of shares to be
outstanding shall be determined by the Board of Directors of the Holding Company
on the basis of the estimated pro forma market value of the Holding Company and
the Bank. The aggregate purchase price for the Common Stock will not be
inconsistent with such market value of the Holding Company and the Bank. The pro
forma market value of the Holding Company and the Bank will be determined for
such purposes by the Independent Appraiser.
Prior to the commencement of the Stock Offering, an Estimated Valuation
Range will be established, which range may vary within 15% above to 15% below
the midpoint of such range, and up to 15% greater than the maximum of such
range, as determined by the Board of Directors at the time of the Stock Offering
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and consistent with OTS regulations. The Holding Company intends to issue up to
49.9% of its Common Stock in the Stock Offering. The number of shares of Common
Stock to be issued and the ownership interest of the MHC may be increased or
decreased by the Holding Company, taking into consideration any change in the
independent valuation and other factors, at the discretion of the Board of
Directors of the Holding Company.
Based upon the Independent Valuation as updated prior to the commencement
of the Stock Offering, the Board of Directors may establish the minimum and
maximum percentage of shares of Common Stock that will be offered for sale in
the Stock Offering, or it may fix the percentage of shares that will be offered
for sale in the Stock Offering. In the event the percentage of the shares
offered for sale in the Stock Offering is not fixed in the Stock Offering, the
Minority Ownership Interest resulting from the Stock Offering will be determined
as follows: (a) the product of (x) the total number of shares of Common Stock
sold by the Holding Company and (y) the purchase price per share, divided by (b)
the aggregate pro forma market value of the Bank and the Holding Company upon
the closing of the Stock Offering and sale of all the Common Stock.
Notwithstanding the foregoing, no sale of Common Stock may be consummated
unless, prior to such consummation, the Independent Appraiser confirms to the
Holding Company, the Bank 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 Common Stock sold in the Stock Offering
at the Actual Purchase Price is incompatible with the Independent Valuation. If
such confirmation is not received, the Holding Company may cancel the Stock
Offering, extend the Stock Offering and establish a new price range and/or
estimated price range, extend, reopen or hold a new Stock Offering or take such
other action as the OTS may permit.
The estimated market value of the Holding Company and the Bank shall be
determined for such purpose by an Independent Appraiser on the basis of such
appropriate factors as are not inconsistent with OTS regulations. The Common
Stock to be issued in the Stock Offering shall be fully paid and non-assessable.
If there is a Community Offering or Syndicated Community Offering of shares
of Common Stock not subscribed for in the Subscription Offering, the price per
share at which the Common Stock is sold in such Community Offering or Syndicated
Community Offering shall be the Actual Purchase Price, which will be equal to
the purchase price per share at which the Common Stock is sold to persons in the
Subscription Offering. Shares sold in the Community Offering or Syndicated
Community Offering will be subject to the same limitations as shares sold in the
Subscription Offering.
5. Method of Offering Shares and Rights to Purchase Stock
In descending order of priority, the opportunity to purchase Common Stock
shall be given in the Subscription Offering to: (1) Eligible Account Holders;
(2) Tax-Qualified Employee Plans; (3) Supplemental Eligible Account Holders; and
(4) Other Members. Any shares of Common Stock that are not subscribed for in the
Subscription Offering may at the discretion of the Holding Company be offered
for sale in a Community Offering or a Syndicated Community Offering. The minimum
purchase by any Person shall be 25 shares. The Holding Company shall determine
in its sole discretion whether each prospective purchaser is a "Resident,"
"Associate," or "Acting in Concert" as defined in the Plan, and shall interpret
all other provisions of the Plan in its sole discretion. All such determinations
are in the sole discretion of the Holding Company, and may be based on whatever
evidence the Holding Company chooses to use in making any such determination.
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In addition to the priorities set forth below, the Board of Directors may
establish other priorities for the purchase of Common Stock, subject to the
approval of the OTS. The priorities for the purchase of shares in the Stock
Offering are as follows:
A. Subscription Offering
Priority 1: Eligible Account Holders. Each Eligible Account Holder shall
receive non-transferable subscription rights to subscribe for shares of Common
Stock offered in the Stock Offering in an amount equal to the greater of 5% of
the shares of Common Stock sold in the Offering, one-tenth of one percent (0.1%)
of the total shares offered in the Stock Offering, or 15 times the product
(rounded down to the nearest whole number) obtained by multiplying the total
number of shares of Common Stock to be issued in the Stock Offering by a
fraction, of which the numerator is the Qualifying Deposit of the Eligible
Account Holder and the denominator is the total amount of Qualifying Deposits of
all Eligible Account Holders, in each case on the Eligibility Record Date and
subject to the provisions of Section 6; provided that the Holding Company may,
in its sole discretion and without further notice to or solicitation of
subscribers or other prospective purchasers, increase such maximum purchase
limitation to 5% of the maximum number of shares offered in the Stock Offering
or decrease such maximum purchase limitation to 0.1% of the maximum number of
shares offered in the Stock Offering, subject to the overall purchase
limitations set forth in Section 6. If there are insufficient shares available
to satisfy all subscriptions of Eligible Account Holders, shares will be
allocated to Eligible Account Holders so as to permit each such subscribing
Eligible Account Holder to purchase a number of shares sufficient to make his or
her total allocation equal to the lesser of 100 shares or the number of shares
for which such person has subscribed. Thereafter, unallocated shares will be
allocated pro rata to remaining subscribing Eligible Account Holders whose
subscriptions remain unfilled in the same proportion that each such subscriber's
Qualifying Deposit bears to the total amount of Qualifying Deposits of all
subscribing Eligible Account Holders whose subscriptions remain unfilled. To
ensure proper allocation of stock, each Eligible Account Holder must list on his
or her subscription order form all accounts in which he or she had an ownership
interest as of the Eligibility Record Date. Officers, directors and their
Associates may be Eligible Account Holders. However, if an officer, director, or
his or her Associate receives subscription rights based on increased deposits in
the year before the Eligibility Record Date, subscription rights based upon
these deposits are subordinate to the subscription rights of other Eligible
Account Holders.
Priority 2: Tax-Qualified Employee Plans. The Tax-Qualified Employee Plans
shall be given the opportunity to purchase in the aggregate up to 4.9% of the
shares of Common Stock to be outstanding immediately following the completion of
the Stock Offering. In the event of an oversubscription in the Stock Offering,
subscriptions for shares by the Tax-Qualified Employee Plans may be satisfied,
in whole or in part, out of authorized but unissued shares of the Holding
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Company subject to the maximum purchase limitations applicable to such plans as
set forth in Section 6, or may be satisfied, in whole or in part, through open
market purchases by the Tax-Qualified Employee Plans subsequent to the closing
of the Stock Offering. If the final valuation exceeds the maximum of the
Offering Range, up to 4.9% of the shares of Common Stock to be outstanding
immediately following the completion of the Stock Offering may be sold to the
Tax-Qualified Employee Plans notwithstanding any oversubscription by Eligible
Account Holders.
Priority 3: Supplemental Eligible Account Holders. To the extent there are
sufficient shares remaining after satisfaction of subscriptions by Eligible
Account Holders, and the Tax-Qualified Employee Plans, each Supplemental
Eligible Account Holder shall receive non-transferable subscription rights to
subscribe for shares of Common Stock offered in the Stock Offering in an amount
equal to the greater of 5% of the shares of Common Stock sold in the Offering,
one-tenth of one percent (0.1%) of the total shares offered in the Stock
Offering, or 15 times the product (rounded down to the nearest whole number)
obtained by multiplying the total number of shares of Common Stock to be issued
in the Stock Offering by a fraction, of which the numerator is the Qualifying
Deposit of the Supplemental Eligible Account Holder and the denominator is the
total amount of Qualifying Deposits of all Supplemental Eligible Account
Holders, in each case on the Supplemental Eligibility Record Date and subject to
the provisions of Section 6; provided that the Holding Company may, in its sole
discretion and without further notice to or solicitation of subscribers or other
prospective purchasers, increase such maximum purchase limitation to 5% of the
maximum number of shares offered in the Stock Offering or decrease such maximum
purchase limitation to 0.1% of the maximum number of shares offered in the Stock
Offering, subject to the overall purchase limitations set forth in Section 6. In
the event Supplemental Eligible Account Holders subscribe for a number of shares
which, when added to the shares subscribed for by Eligible Account Holders and
the Tax-Qualified Employee Plans, is in excess of the total shares offered in
the Stock Offering, the subscriptions of Supplemental Eligible Account Holders
will be allocated among subscribing Supplemental Eligible Account Holders so as
to permit each subscribing Supplemental Eligible Account Holder to purchase a
number of shares sufficient to make his or her total allocation equal to the
lesser of 100 shares or the number of shares for which such person has
subscribed. Thereafter, unallocated shares will be allocated to each subscribing
Supplemental Eligible Account Holder whose subscription remains unfilled in the
same proportion that such subscriber's Qualifying Deposits on the Supplemental
Eligibility Record Date bear to the total amount of Qualifying Deposits of all
subscribing Supplemental Eligible Account Holders whose subscriptions remain
unfilled.
Priority 4: Other Members. To the extent there are sufficient shares
remaining after satisfaction of subscriptions by Eligible Account Holders, the
Tax-Qualified Employee Plans, and Supplemental Eligible Account Holders, each
Other Member shall receive non-transferable subscription rights to subscribe for
shares of Common Stock offered in the Stock Offering in an amount equal to the
greater of 5% of the shares of Common Stock sold in the Offering, one-tenth of
one percent (0.1%) of the total shares offered in the Stock Offering, or 15
times the product (rounded down to the nearest whole number) obtained by
multiplying the total number of shares of Common Stock to be issued in the Stock
Offering by a fraction, of which the numerator is the Qualifying Deposit of the
Other Member who is a depositor of the Bank and the denominator is the total
amount of Qualifying Deposits of all Other Members who are depositors of the
Bank, in each case on the Other Member Record Date and subject to the provisions
of Section 6; provided that the Holding Company may, in its sole discretion and
without further notice to or solicitation of subscribers or other prospective
purchasers, increase such maximum purchase limitation to 5% of the maximum
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number of shares offered in the Stock Offering or decrease such maximum purchase
limitation to 0.1% of the maximum number of shares offered in the Stock
Offering, subject to the overall purchase limitations set forth in Section 6. In
the event Other Members subscribe for a number of shares which, when added to
the shares subscribed for by Eligible Account Holders, the Tax-Qualified
Employee Plans, and Supplemental Eligible Account Holders, is in excess of the
total shares offered in the Stock Offering, the subscriptions of Other Members
will be allocated among subscribing Other Members so as to permit each
subscribing Other Member to purchase a number of shares sufficient to make his
or her total allocation equal to the lesser of 100 shares or the number of
shares for which such person has subscribed. Thereafter, unallocated shares will
be allocated to each subscribing Other Member whose subscription remains
unfilled in the proportion that the amounts of their subscription bears to the
total amount of subscriptions of all subscribing Other Members whose
subscriptions remain unfilled.
B. Community Offering
Any shares of Common Stock not subscribed for in the Subscription Offering
may be offered for sale in a Community Offering. This will involve an offering
of all unsubscribed shares directly to the general public with a preference to
those natural persons residing in the Community. The Community Offering, if any,
shall be for a period of not more than 45 days unless extended by the Holding
Company and the Bank, and shall commence concurrently with, during or promptly
after the Subscription Offering. The Holding Company and the Bank may use one or
more investment banking firms on a best efforts basis to sell the unsubscribed
shares in the Subscription and Community Offering. The Holding Company and the
Bank may pay a commission or other fee to such investment banking firm(s) as to
the shares sold by such firm(s) in the Subscription and Community Offering and
may also reimburse such firm(s) for expenses incurred in connection with the
sale. The Community Offering may include a Syndicated Community Offering managed
by such investment banking firm(s). The Common Stock will be offered and sold in
the Community Offering, in accordance with OTS regulations, so as to achieve a
widespread distribution of the Common Stock. No Person may purchase more than 5%
of the shares of Common Stock sold in the Offering in the Community Offering,
subject to the overall purchase limitations set forth in Section 6. In the event
orders for Common Stock in the Community Offering exceed the number of shares
available for sale, shares will be allocated (to the extent shares remain
available) first to cover orders of natural persons residing in the Community,
and thereafter to cover orders of other members of the general public, so that
each Person in such category of the Community Offering may receive 1,000 shares
and thereafter, remaining shares will be allocated on an equal number of shares
basis per order in the category until all orders within the category are filled.
The Holding Company, in its sole discretion, may reject subscriptions, in
whole or in part, received from any Person under this Section 5.B.
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C. Syndicated Community Offering
Any shares of Common Stock not sold in the Subscription Offering or in the
Community Offering, if any, may be offered for sale to the general public by a
selling group of broker-dealers in a Syndicated Community Offering, subject to
terms, conditions and procedures, including the timing of the offering, as may
be determined by the Holding Company in a manner that is intended to achieve a
widespread distribution of the Common Stock subject to the rights of the Holding
Company to accept or reject in whole or in part all orders in the Syndicated
Community Offering. It is expected that the Syndicated Community Offering would
commence as soon as practicable after termination of the Subscription Offering
and the Community Offering, if any. The Syndicated Community Offering shall be
completed within 45 days after the termination of the Subscription Offering,
unless such period is extended as provided herein. No Person may purchase more
than 5% of the shares of Common Stock sold in the Offering in the Syndicated
Community Offering, subject to the overall purchase limitations set forth in
Section 6.
If for any reason a Syndicated Community Offering of unsubscribed shares of
Common Stock cannot be effected and any shares remain unsold after the
Subscription Offering and the Community Offering, if any, the Board of Directors
of the Holding Company will seek to make other arrangements for the sale of the
remaining shares. Such other arrangements will be subject to the approval of the
OTS and to compliance with applicable securities laws.
6. Additional Limitations on Purchases of Common Stock
Purchases of Common Stock in the Stock Offering will be subject to the
following purchase limitations:
A. The aggregate amount of outstanding Common Stock owned or controlled
by persons other than the MHC at the close of the Stock Offering shall
be less than 50% of the Holding Company's total outstanding Common
Stock.
B. The maximum purchase of Common Stock in the Subscription Offering by a
Person, or group of Persons through one or more individual and/or
joint Deposit Accounts, is 5% of the shares of Common Stock sold in
the Offering. The maximum purchase of Common Stock in the Subscription
Offering by a group of Persons through a single Deposit Account is 5%
of the shares of Common Stock sold in the Offering. No Person by
himself, or with an Associate or group of Persons Acting in Concert,
may purchase more than 5% of the shares of Common Stock sold in the
Offering, except that: (i) the Holding Company may, in its sole
discretion and without further notice to, or solicitation of,
subscribers or other prospective purchasers, increase such maximum
purchase limitation to 5% of the number of shares offered in the Stock
Offering; (ii) the Tax-Qualified Employee Plans may purchase up to
4.9% of the shares of Common Stock to be outstanding immediately
following the completion of the Stock Offering; and (iii) for purposes
of this subsection 6.B shares to be held by any Tax-Qualified Employee
Plan and attributable to a person shall not be aggregated with other
shares purchased directly by or otherwise attributable to such person.
Notwithstanding the foregoing, subject to the approval of the OTS, the
Holding Company may increase the maximum purchase limitation without
further notice to or solicitation of subscribers or prospective
purchasers to provide that any Person by himself, or with an Associate
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or group of Persons Acting in Concert may subscribe for and purchase
up to 10% of the Common Stock sold in the Offering, provided that
aggregate amounts of orders that exceed 5% of the Common Stock sold in
the Offering shall not exceed 10% of the total shares of Common Stock
sold in the Offering.
C. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by any
Non-Tax-Qualified Employee Plan or any Management Person and his or
her Associates, exclusive of any shares of Common Stock acquired by
such plan or Management Person and his or her Associates in the
secondary market, shall not exceed 4.9% of the outstanding shares of
Common Stock at the conclusion of the Stock Offering. In calculating
the number of shares held by any Management Person and his or her
Associates under this paragraph, shares held by any Tax-Qualified
Employee Plan or Non-Tax-Qualified Employee Plan of the Holding
Company or the Bank that are attributable to such Person shall not be
counted.
D. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by any
Non-Tax-Qualified Employee Plan or any Management Person and his or
her Associates, exclusive of any Common Stock acquired by such plan or
Management Person and his or her Associates in the secondary market,
shall not exceed 4.9% of the stockholders' equity of the Holding
Company at the conclusion of the Stock Offering. In calculating the
number of shares held by any Management Person and his or her
Associates under this paragraph, shares held by any Tax-Qualified
Employee Plan or Non-Tax-Qualified Employee Plan of the Holding
Company or the Bank that are attributable to such Person shall not be
counted.
E. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by any one or more
Tax-Qualified Employee Plans, exclusive of any shares of Common Stock
acquired by such plans in the secondary market, shall not exceed 4.9%
of the outstanding shares of Common Stock at the conclusion of the
Stock Offering.
F. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by any one or more
Tax-Qualified Employee Plans, exclusive of any shares of Common Stock
acquired by such plans in the secondary market, shall not exceed 4.9%
of the stockholders' equity of the Holding Company at the conclusion
of the Stock Offering.
G. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by all stock benefit
plans of the Holding Company or the Bank, other than employee stock
ownership plans, shall not exceed 25% of the outstanding Common Stock
held by persons other than the MHC.
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H. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by all
Non-Tax-Qualified Employee Plans, Management Persons and their
Associates, exclusive of any Common Stock acquired by such plans,
Management Persons and their Associates in the secondary market, shall
not exceed 32% of the outstanding shares of Common Stock held by
persons other than the MHC at the conclusion of the Stock Offering. In
calculating the number of shares held by Management Persons and their
Associates under this paragraph or paragraph I. below, shares held by
any Tax-Qualified Employee Plan or Non-Tax-Qualified Employee Plan
that are attributable to such persons shall not be counted.
I. The aggregate amount of Common Stock acquired in the Stock Offering,
plus all prior issuances by the Holding Company, by all
Non-Tax-Qualified Employee Plans, Management Persons and their
Associates, exclusive of any Common Stock acquired by such plans,
Management Persons and their Associates in the secondary market, shall
not exceed 32% of the stockholders' equity of the Holding Company held
by persons other than the MHC at the conclusion of the Stock Offering.
J. Notwithstanding any other provision of this Plan, no Person shall be
entitled to purchase any Common Stock to the extent such purchase
would be illegal under any federal law or state law or regulation or
would violate regulations or policies of the National Association of
Securities Dealers, Inc., particularly those regarding free riding and
withholding. The Holding Company and/or its agents may ask for an
acceptable legal opinion from any purchaser as to the legality of such
purchase and may refuse to honor any purchase order if such opinion is
not timely furnished.
K. The Board of Directors of the Holding Company has the right in its
sole discretion to reject any order submitted by a person whose
representations the Board of Directors believes to be false or who it
otherwise believes, either alone or acting in concert with others, is
violating, circumventing, or intends to violate, evade or circumvent
the terms and conditions of this Plan.
L. A minimum of 25 shares of Common Stock must be purchased by each
Person purchasing shares in the Stock Offering to the extent those
shares are available; provided, however, that in the event the minimum
number of shares of Common Stock purchased times the price per share
exceeds $500, then such minimum purchase requirement shall be reduced
to such number of shares which when multiplied by the price per share
shall not exceed $500, as determined by the Board.
Non-exclusive examples of the applicability of the purchase limitations set
forth in this Section 6 include, but are not limited to, the following
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(i) Depositor A has multiple Deposit Accounts, each of which is registered
in his own name. No Associate of or individual otherwise Acting in
Concert with Depositor A is purchasing Common Stock in the
Subscription Offering. Depositor A can purchase a maximum of 5% of the
shares of Common Stock sold in the Offering.
(ii) Depositor B has one Deposit Account registered in her own name.
Depositor B has another Deposit Account that is held jointly with
Depositor C (either as an "and" account, an "or" account, or in any
other form of joint account). No other Associate of or individual
otherwise Acting in Concert with either of Depositor B or Depositor C
is purchasing Common Stock in the Subscription Offering. Generally, no
more than a total of 5% of the shares of Common Stock sold in the
Offering may be ordered in the Subscription Offering through the
ownership of these two Deposit Accounts. However, if Depositor C
purchased 5% of the shares of Common Stock sold in the Offering
through an IRA or other type of account as permitted by Section 8,
then Depositor B could also purchase a maximum of 5% of the shares of
Common Stock sold in the Offering in the Subscription Offering.
(iii) Depositor D and Depositor E have multiple joint accounts with each
other that are all titled in the same manner. No other Associate or
individual otherwise Acting in Concert with either of Depositor D or
Depositor E is purchasing Common Stock in the Subscription Offering.
No more than a total of 5% of the shares of Common Stock sold in the
Offering may be ordered in the Subscription Offering through the
ownership of these Deposit Accounts, regardless of whether Depositor D
or Depositor E purchases Common Stock through an IRA or other type of
account as permitted by Section 8.
(iv) Depositor F has one deposit account registered in his own name.
Depositor G, who is Depositor F's spouse, has one deposit account
registered in her own name. No other Associate of or individual
otherwise Acting in Concert with either of Depositor F or Depositor G
is purchasing Common Stock in the Subscription Offering. The maximum
combined amount of Common Stock that may be purchased by Depositor F
and Depositor G through the ownership of these two deposit accounts is
a total of 5% of the shares of Common Stock sold in the Offering.
Subscription rights afforded under this Plan and by OTS regulations are
non-transferable. No person may transfer, offer to transfer, or enter into any
agreement or understanding to transfer, the legal or beneficial ownership of any
subscription rights under this Plan. No person may transfer, offer to transfer
or enter into an agreement or understanding to transfer legal or beneficial
ownership of any shares of Common Stock except pursuant to this Plan.
EACH PERSON PURCHASING COMMON STOCK IN THE STOCK OFFERING WILL BE DEEMED TO
CONFIRM THAT SUCH PURCHASE DOES NOT CONFLICT WITH THE PURCHASE LIMITATIONS IN
THIS PLAN. ALL QUESTIONS CONCERNING WHETHER ANY PERSONS ARE ASSOCIATES OR A
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GROUP ACTING IN CONCERT OR WHETHER ANY PURCHASE CONFLICTS WITH THE PURCHASE
LIMITATIONS IN THIS PLAN OR OTHERWISE VIOLATES ANY PROVISION OF THIS PLAN SHALL
BE DETERMINED BY THE HOLDING COMPANY IN ITS SOLE DISCRETION. SUCH DETERMINATION
SHALL BE CONCLUSIVE, FINAL AND BINDING ON ALL PERSONS, AND THE HOLDING COMPANY
AND THE BANK MAY TAKE ANY REMEDIAL ACTION INCLUDING, WITHOUT LIMITATION,
REJECTING THE PURCHASE OR REFERRING THE MATTER TO THE OTS FOR ACTION, AS THE
HOLDING COMPANY MAY IN ITS SOLE DISCRETION DEEM APPROPRIATE.
7. Payment for Stock
All payments for Common Stock subscribed for or ordered in the Stock
Offering must be delivered in full to the Holding Company, together with a
properly completed and executed order form, or purchase order in the case of the
Syndicated Community Offering, on or prior to the expiration date specified on
the order form or purchase order, as the case may be, unless such date is
extended by the Holding Company; provided, that if the Employee Plans subscribe
for shares of Common Stock during the Subscription Offering, such plans may pay
for such shares at the Actual Purchase Price upon consummation of the Stock
Offering. The Holding Company or the Bank may make scheduled discretionary
contributions to the ESOP provided such contributions from the Bank, if any, do
not cause the Bank to fail to meet its regulatory capital requirement.
Payment for Common Stock shall be made either by check or money order, or
if a purchaser has a Deposit Account in the Bank, such purchaser may pay for the
shares subscribed for by authorizing the Bank to make a withdrawal from the
purchaser's Deposit Account at the Bank in an amount equal to the purchase price
of such shares. Such authorized withdrawal, whether from a savings passbook or
certificate account, shall be without penalty as to premature withdrawal. If the
authorized withdrawal is from a certificate account, and the remaining balance
does not meet the applicable minimum balance requirements, the certificate shall
be canceled at the time of withdrawal, without penalty, and the remaining
balance will earn interest at the Bank's passbook rate. Funds for which a
withdrawal is authorized will remain in the purchaser's Deposit Account but may
not be used by the purchaser until the Common Stock has been sold or a 90-day
period (or such longer period as may be approved by the OTS) following the
effective date of the Prospectus has expired, whichever occurs first.
Thereafter, the withdrawal will be given effect only to the extent necessary to
satisfy the subscription (to the extent it can be filled) at the Actual Purchase
Price per share. Interest will continue to be earned on any amounts authorized
for withdrawal until such withdrawal is given effect. The Bank or the Holding
Company will pay interest, at a rate no less than the Bank's passbook rate, for
all amounts paid by check or money order to purchase Common Stock. Such interest
will be earned from the date payment is received by the Bank or the Holding
Company until consummation or termination of the Stock Offering. If for any
reason the Stock Offering is not consummated, all payments made by subscribers
in the Stock Offering will be refunded to them with interest. In case of amounts
authorized for withdrawal from Deposit Accounts, refunds will be made by
canceling the authorization for withdrawal.
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8. Manner of Exercising Subscription Rights Through Order Forms
As soon as practicable after the prospectus prepared by the Holding Company
has been declared effective by the SEC and authorized for use by the OTS, copies
of the prospectus and order forms will be distributed to all Eligible Account
Holders, the Tax-Qualified Employee Plans, Supplemental Eligible Account Holders
and Other Members at their last known addresses appearing on the records of the
Bank for the purpose of subscribing for shares of Common Stock in the
Subscription Offering.
Each order form will be preceded or accompanied by the prospectus
describing the Holding Company, the Bank, the Common Stock and the Subscription
and Community Offerings. Each order form will contain, among other things, the
following:
A. A specified date by which all order forms must be received by the
Holding Company or the Bank, which date shall be not less than 20
days, nor more than 45 days, following the date on which the order
forms are mailed by the Holding Company or the Bank, and which date
will constitute the termination of the Subscription Offering;
B. The Actual Purchase Price;
C. A description of the minimum and maximum number of shares of Common
Stock that may be subscribed for pursuant to the exercise of
Subscription Rights or otherwise purchased in the Community Offering;
D. Instructions as to how the recipient of the order form must indicate
thereon the number of shares of Common Stock for which such Person
elects to subscribe and the available alternative methods of payment
therefor; E. An acknowledgment that the recipient of the order form
has received a final copy of the prospectus prior to execution of the
order form;
F. A statement indicating the consequences of failing to properly
complete and return the order form, including a statement to the
effect that all subscription rights are nontransferable, will be void
at the end of the Subscription Offering, and can only be exercised by
delivering to the Holding Company or the Bank within the subscription
period such properly completed and executed order form, together with
a check or money order in the full amount of the purchase price as
specified in the order form for the shares of Common Stock for which
the recipient elects to subscribe in the Subscription Offering (or by
authorizing on the order form that the Bank withdraw said amount from
the subscriber's Deposit Account at the Bank); and
G. A statement to the effect that the executed order form, once received
by the Holding Company or the Bank, may not be modified or amended by
the subscriber without the consent of the Holding Company or the Bank.
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With the exception of purchases through individual retirement accounts,
Keogh accounts and 401(k) plan accounts, shares of Common Stock purchased in the
Subscription Offering must be registered in the names of all depositors on the
qualifying Deposit Account(s). The ability to register Common Stock in a
different name than the names of all of the depositors on the qualifying Deposit
Account does not affect whether the depositors on the qualifying Deposit Account
are Associates or are otherwise Acting in Concert with each other or with other
individuals with other qualifying Deposit Accounts.
Notwithstanding the above, the Bank and the Holding Company reserve the
right in their sole discretion to accept or reject orders received on order
forms via facsimile or that have been photocopied.
9. Undelivered, Defective or Late Order Form; Insufficient Payment
In the event order forms (a) are not delivered and are returned to the
Holding Company or the Bank by the United States Postal Service or the Holding
Company is unable to locate the addressee, (b) are not received back by the
Holding Company or the Bank or are received by the Holding Company or the Bank
after the expiration date specified thereon, (c) are defectively filled out or
executed, (d) are not accompanied by the full required payment for the shares of
Common Stock subscribed for (including cases in which Deposit Accounts from
which withdrawals are authorized are insufficient to cover the amount of the
required payment), or (e) are not mailed pursuant to a "no mail" order placed in
effect by the account holder, the subscription rights of the Person to whom such
rights have been granted will lapse as though such Person failed to return the
completed order form within the time period specified thereon; provided, that
the Holding Company may, but will not be required to, waive any immaterial
irregularity on any order form or require the submission of corrected order
forms or the remittance of full payment for subscribed shares by such date as
the Holding Company may specify. The interpretation by the Holding Company of
terms and conditions of this Plan and of the order forms will be final, subject
to the authority of the OTS.
10. Completion of the Stock Offering
The Stock Offering will be terminated if not completed within 90 days from
the date on which the prospectus is declared effective by the OTS unless an
extension is approved by the OTS.
11. Market for Common Stock
If at the close of the Stock Offering the Holding Company has more than 100
shareholders of any class of stock, the Holding Company shall use its best
efforts to:
(i) encourage and assist a market maker to establish and maintain a market
for that class of stock; and
(ii) list that class of stock on a national or regional securities
exchange, or on the Nasdaq quotation system.
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12. Stock Purchases by Management Persons After the Stock Offering
For a period of three years after the Stock Offering, no Management Person
or his or her Associates may purchase, without the prior written approval of the
OTS, any Common Stock, except from a broker-dealer registered with the SEC,
except that the foregoing shall not apply to:
A. Negotiated transactions involving more than 1% of the outstanding
stock in the class of stock; or
B. Purchases of stock made by and held by any Tax-Qualified or Non-Tax
Qualified Employee Plan even if such stock is attributable to
Management Persons or their Associates.
13. Resales of Stock by Directors and Officers
Common Stock purchased by Officers, directors and their Associates in the
Stock Offering may not be resold for a period of at least one year following the
date of purchase, except in the case of death of an Officer, director or their
Associate.
14. Stock Certificates
Each stock certificate shall bear a legend giving appropriate notice of the
restrictions set forth in Section 13 above. Appropriate instructions shall be
issued to the Holding Company's transfer agent with respect to applicable
restrictions on transfers of such stock. Any shares of stock issued as a stock
dividend, stock split or otherwise with respect to such restricted stock, shall
be subject to the same restrictions as apply to the restricted stock.
15. Restriction on Financing Stock Purchases
The Holding Company and the Bank will not loan funds to any Person to
purchase Common Stock in the Stock Offering, and will not knowingly offer or
sell any of the Common Stock to any Person whose purchase would be financed by
funds loaned to the Person by the Holding Company, the Bank or any Affiliate.
16. Stock Benefit Plans
The Board of Directors of the Bank and/or the Holding Company intend to
adopt one or more stock benefit plans for employees, officers and directors,
including an ESOP, stock award plans and stock option plans, which will be
authorized to purchase Common Stock and grant options for Common Stock. However,
only the Tax-Qualified Employee Plans will be permitted to purchase Common Stock
in the Stock Offering, subject to the purchase priorities set forth in this
Plan. The Board of Directors of the Bank intends to establish the ESOP and
authorize the ESOP and any other Tax-Qualified Employee Plans to purchase in the
aggregate up to 4.9% of the shares of Common Stock to be outstanding immediately
following the completion of the Stock Offering. The Bank or the Holding Company
may make scheduled discretionary contributions to one or more Tax-Qualified
Employee Plans to purchase Common Stock issued in the Stock Offering, or to
purchase issued and outstanding shares of Common Stock in the open market or
from authorized but unissued shares of Common Stock or treasury shares from the
Holding Company subsequent to the completion of the Stock Offering; provided
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such contributions do not cause the Bank to fail to meet any of its regulatory
capital requirements. In addition to shares purchased by one or more
Tax-Qualified Employee Plans in this Stock Offering, any subsequent stock
offering, and/or from authorized but unissued shares or treasury shares of the
Holding Company, this Plan also specifically authorizes the Holding Company to
grant awards under one or more stock benefit plans, including stock recognition
and award plans and stock option plans, in an amount up to 25% of the shares of
Common Stock held by persons other than the MHC.
17. Post-Stock Issuance Filing and Market Making
If the Holding Company has more than 35 stockholders of any class of stock,
the Holding Company shall register its Common Stock with the SEC pursuant to the
Exchange Act, and shall undertake not to deregister such Common Stock for a
period of three years thereafter.
18. Payment of Dividends and Repurchase of Stock
The Holding Company may not declare or pay a cash dividend on its Common
Stock if the effect thereof would cause the regulatory capital of the Bank to be
reduced below the amount required under Section 567.2 of the Regulations.
Otherwise, the Holding Company may declare dividends or make other capital
distributions in accordance with Section 563b.520 of the Regulations. Following
completion of the Stock Offering, the Holding Company may repurchase its Common
Stock consistent with Section 563b.510 and Section 563b.515 of the Regulations
relating to stock repurchases, as long as such repurchases do not cause the
regulatory capital of the Bank to be reduced below the amount required under
Section 563b.450 of the Regulations. The MHC may from time to time purchase
Common Stock. Subject to any notice or approval requirements of the OTS under
the Regulations, the MHC may waive its right to receive dividends declared by
the Holding Company.
19. Stock Offering Expenses
The Regulations require that the expenses of any Stock Offering must be
reasonable. The Holding Company will use its best efforts to assure that the
expenses incurred by the Bank and the Holding Company in effecting the Stock
Offering will be reasonable.
20. Employment and Other Severance Agreements
Following or contemporaneously with the Stock Offering, the Bank and/or the
Holding Company may enter into employment and/or severance arrangements with one
or more executive officers of the Bank and/or the Holding Company. It is
anticipated that any employment contracts entered into by the Bank and/or the
Holding Company will be for terms not exceeding three years and that such
contracts will provide for annual renewals of the term of the contracts, subject
to approval by the Board of Directors. The Bank and/or the Holding Company also
may enter into severance arrangements with one or more executive officers that
provide for the payment of severance compensation in the event of a change in
control of the Bank and/or the Holding Company. The significant terms of such
employment and severance arrangements have not been determined as of this time,
but will be described in any prospectus circulated in connection with the Stock
Offering and will be subject to and comply with all regulations of the OTS.
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21. Residents of Foreign Countries and Certain States
The Holding Company will make reasonable efforts to comply with the
securities laws of all states in the United States in which Persons entitled to
subscribe for shares of Common Stock pursuant to this Plan reside. However, no
such Person will be issued subscription rights in the Subscription Offering or
be permitted to purchase shares of Common Stock if such Person resides in a
foreign country or in a state of the United States with respect to which any of
the following apply: (A) a small number of Persons otherwise eligible to
subscribe for shares under this Plan reside in such state; (B) the issuance of
subscription rights or the offer or sale of shares of Common Stock to such
Persons would require the Holding Company, under the securities laws of such
state, to register as a broker, dealer, salesman in such state; or (C) such
registration or qualification would be impracticable for reasons of cost or
otherwise.
22. Interpretation
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of the Board of Directors of the Bank
shall be final, subject to the authority of the OTS.
23. Amendment or Termination of the Plan
If necessary or desirable, the terms of the Plan may be substantially
amended by a majority vote of the Holding Company's Board of Directors as a
result of comments from regulatory authorities or otherwise at any time prior to
the approval of the Plan by the OTS and at any time thereafter with the
concurrence of the OTS. The Plan may be terminated by a majority vote of the
Board of Directors at any time prior to the earlier of approval of the Plan by
the OTS and may be terminated by a majority vote of the Board of Directors at
any time thereafter with the concurrence of the OTS.
Dated: January 24, 2007, as amended on April 25, 2007, May 7, 2007, June 14,
2007 and on July 11, 2007
F:\clients\1017\stock offering\Plan Stock Issuance v5 (07 11 07).doc