SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for use of the Commission Only
(as permitted by Rule 14a 6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ASB Holding Company
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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ASB HOLDING COMPANY
365 Broad Street
Bloomfield, New Jersey 07003
(973) 748-3600
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
Notice is hereby given that a Special Meeting of Stockholders (the
"Special Meeting") of ASB Holding Company (the "Company") will be held at the
main office of American Bank of New Jersey, located at 365 Broad Street,
Bloomfield, New Jersey on __________ __, 2005 at __:00 _.m., eastern time. As of
the date hereof, the Company owns 100% of the common stock of American Bank of
New Jersey and is majority-owned by American Savings, MHC (the "Mutual Holding
Company").
The Special Meeting is for the purpose of considering and voting upon:
1. A Plan of Conversion and Reorganization (the "Plan"), pursuant to
which the Mutual Holding Company will be merged into American
Bank of New Jersey and the Company will be succeeded by a newly
incorporated New Jersey corporation, American Bancorp of New
Jersey, Inc., (the "New Holding Company"), which has been
established for the purpose of completing the conversion and
reorganization. As part of the conversion and reorganization,
shares of common stock representing the Mutual Holding Company's
ownership interest in the Company will be offered for sale in a
subscription and community offering. Common stock currently held
by the public stockholders of the Company will be converted into
new shares of the New Holding Company pursuant to an exchange
ratio that will ensure that each stockholder at the time of the
conversion and reorganization will own the same percentage of the
New Holding Company's common stock as he or she held in the
Company's common stock immediately prior to the conversion,
exclusive of any shares purchased by the stockholder in the
offering and cash received in lieu of fractional shares.
2. Any other matters that may lawfully come before the Special
Meeting. As of the date of mailing of this Notice, the Board of
Directors is not aware of any other matters that may come before
the Special Meeting.
Stockholders of ASB Holding Company at the close of business on July
31, 2005 are entitled to notice of and to vote at the Special Meeting.
/s/Richard M. Bzdek
Richard M. Bzdek
Secretary
_________ __, 2005
Bloomfield, New Jersey
_________________________________
YOUR VOTE IS VERY IMPORTANT. THE ENCLOSED PROSPECTUS PROVIDES A MORE
DETAILED DESCRIPTION OF THE PROPOSED TRANSACTION AND IS INCORPORATED BY
REFERENCE HERETO. IF YOU HAVE ANY QUESTIONS, PLEASE CALL OUR STOCK
INFORMATION CENTER AT (973) ___-____.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL OF THE PLAN BY COMPLETING THE ENCLOSED PROXY CARD AND PROMPTLY
RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE. YOUR
VOTE IS VERY IMPORTANT. ANY PROXY GIVEN BY A STOCKHOLDER MAY BE REVOKED BY
FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED
PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE
HIS PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING.
QUESTIONS AND ANSWERS
FOR STOCKHOLDERS OF ASB HOLDING COMPANY
You should read this document and the accompanying Prospectus (which
includes a detailed index) for information about the conversion and
reorganization. The Plan of Conversion and Reorganization described herein has
been conditionally approved by our regulators.
Q. What are stockholders being asked to approve?
A. The Company's stockholders as of July 31, 2005 are being asked to vote on
the proposed Plan of Conversion and Reorganization, under which the Mutual
Holding Company will convert into stock form and merge into American Bank
of New Jersey and the New Holding Company will offer for sale to depositors
of American Bank of New Jersey and the public the ownership position in ASB
Holding Company now owned by the Mutual Holding Company.
Q. What are the reasons for the mutual-to-stock conversion and related stock
offering?
A. The primary reason for the conversion and reorganization is to raise
additional equity capital, which will support future deposit growth and
expanded operations. We also intend to list the common stock on the Nasdaq,
which will provide additional liquidity and visibility for the common
stock, additional flexibility in merger and acquisition transactions, and
easier access to the capital markets for possible future equity and debt
offerings.
Q. What will stockholders receive for their existing ASB Holding Company
shares?
A. As more fully described in the sections of the Prospectus entitled "The
Conversion" and "The Stock Offering," depending on the number of shares
sold in the offering, each share of common stock that you own upon
completion of the conversion and reorganization will be exchanged for
between 1.6396 new shares at the minimum and 2.21828 new shares at the
maximum of the offering range (though cash will be paid in lieu of
fractional shares).
Q. Why will the shares that I receive be based on a price of $10.00 per share
rather than the trading price of the ASB Holding Company common stock prior
to the conversion?
A. The Company's Board of Directors selected a price of $10.00 per share for
the stock offered for sale because it is a commonly selected per share
price for mutual-to-stock conversions of savings institutions. The number
of new shares that you will receive for your existing shares will not
depend on the market price of ASB Holding Company common stock. It will
depend on the number of shares sold in the offering, which will in turn
depend on the final independent appraisal of the pro forma market value of
ASB Holding Company assuming completion of the conversion and the stock
offering. The result will be that you will own the same percentage of
common stock of the New Holding Company after the conversion and
reorganization as you held in the common stock of the Company immediately
prior thereto, exclusive of (i) any shares purchased by you in the stock
offering and (ii) cash received in lieu of fractional shares.
Q. Should I submit my stock certificate(s) now?
A. No. If you hold your certificate(s), instructions for exchanging the shares
will be sent to you after completion of the conversion and reorganization.
If your shares are held in "street name" rather than in certificate form,
the share exchange will occur automatically upon completion of the
conversion and reorganization.
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Q. If my shares are held in street name, will my broker automatically vote on
my behalf?
A. No. Your broker will not be able to vote your shares without instructions
from you. You should instruct your broker how to vote your shares, using
the directions that your broker provides to you.
Q. What if I do not give voting instructions to my broker?
A. Your vote is important. The Plan of Conversion and Reorganization requires
the approval of at least two-thirds of the outstanding shares of common
stock of ASB Holding Company, including those shares held by the MHC, and a
majority of the votes eligible to be cast, excluding those shares held by
the MHC. If you do not instruct your broker to vote your shares, the
unvoted proxy will be considered as a vote cast against the Plan of
Conversion and Reorganization.
Q. May I place an order to purchase shares in the offering, in addition to the
shares that I will receive in the exchange?
A. Yes. Eligible depositors of American Bank of New Jersey have priority
subscription rights allowing them to purchase common stock in the
subscription offering. Shares not purchased in the subscription offering
may be available for sale to the public in a community offering, as fully
described in the Prospectus. If you are now an ASB Holding Company
stockholder, the shares of American Bancorp of New Jersey, Inc. common
stock that you receive in the exchange for shares of ASB Holding Company
common stock, in accordance with the exchange ratio, will count against the
maximum purchase limitations.
Q. Do I have dissenters' and appraisal rights?
A. Yes. Under federal law, dissenters' rights of appraisal are available to
ASB Holding Company stockholders in connection with the conversion and
reorganization. To exercise your right to dissent, you must file with ASB
Holding Company a written notice of your intention to dissent prior to the
Special Meeting. A failure to vote on the Plan of Conversion and
Reorganization will not constitute a waiver of your appraisal rights,
however, if you vote in favor of the Plan, you will be deemed to have
waived your dissenters' rights. Additionally, if you return a signed proxy
but do not specify on the proxy a vote against the Plan or an abstention
from the vote, then you will be deemed to have waived your dissenters'
rights. Within 60 days of the completion of the conversion and stock
offering, you must file a petition with the Office of Thrift Supervision to
demand a determination of the fair market value of the stock if you have
not reached an agreement with the New Holding Company as to the fair value
of such shares. Please refer to the summary under "Rights of Dissenting
Stockholders" at page __ of this Proxy Statement and Appendix A to this
Proxy Statement which contains the full text of the section of the Office
of Thrift Supervision Regulations that governs dissenters' rights.
Other Questions?
For answers to other questions, please read the Proxy Statement and the
Prospectus. Questions about the offering or voting may be directed to the Stock
Information Center by calling (___) ___-____ or (___) ___-____, Mondays from
__:__ p.m. to _:__ p.m., Tuesdays through Thursdays from _:__ a.m. to _:__ p.m.
and Fridays from _:__ a.m. to __:__ p.m., eastern time.
iii
ASB HOLDING COMPANY
365 Broad Street
Bloomfield, New Jersey 07003
(978) 748-3600
PROXY STATEMENT/PROSPECTUS SUPPLEMENT
_________ __, 2005
YOUR PROXY, IN THE FORM ENCLOSED, IS SOLICITED BY THE BOARD OF
DIRECTORS OF ASB HOLDING COMPANY (THE "COMPANY"), FOR USE AT THE SPECIAL MEETING
OF STOCKHOLDERS TO BE HELD ON _____________ __, 2005, AND AT ANY ADJOURNMENT OF
THAT MEETING, FOR THE PURPOSES SET FORTH IN THE FOREGOING NOTICE OF SPECIAL
MEETING.
VOTING IN FAVOR OF THE PLAN WILL NOT OBLIGATE ANY PERSON TO PURCHASE
CONVERSION STOCK. SHARES OF CONVERSION STOCK ARE BEING OFFERED ONLY BY THE
PROSPECTUS.
THIS PROXY STATEMENT/PROSPECTUS SUPPLEMENT IS A SUMMARY OF INFORMATION
ABOUT THE MUTUAL HOLDING COMPANY, THE COMPANY, THE BANK AND THE NEW HOLDING
COMPANY (COLLECTIVELY, THE "PRIMARY PARTIES") AND THE PROPOSED CONVERSION AND
REORGANIZATION. A MORE DETAILED DESCRIPTION OF THE PRIMARY PARTIES AND THE
CONVERSION AND REORGANIZATION IS INCLUDED IN THE PROSPECTUS, WHICH IS
INCORPORATED BY REFERENCE HEREIN.
VOTING RIGHTS AND VOTE REQUIRED FOR APPROVAL
Only stockholders of record at the close of business on July 31, 2005
(the "Voting Record Date") are entitled to notice of and to vote at the Special
Meeting. Pursuant to Office of Thrift Supervision ("OTS") regulations,
consummation of the proposed conversion and reorganization is conditioned upon
the approval of the Plan by the OTS, as well as (1) the approval of at least
two-thirds of the total number of votes eligible to be cast by the stockholders
of the Company, including those shares held by the Mutual Holding Company, and a
majority of the votes eligible to be cast at the Special Meeting by the
stockholders of the Company, excluding those shares held by the Mutual Holding
Company (the "Public Stockholders"), as of the close of business on the Voting
Record Date, and (2) the approval of at least a majority of the votes eligible
to be cast by the members of the Mutual Holding Company as of the voting record
date for the special meeting of members called for the purpose of considering
the Plan. The Mutual Holding Company intends to vote its shares of ASB Holding
Company Common Stock, which amount to approximately __% of the outstanding
shares, in favor of the Plan at the Special Meeting.
This Proxy Statement/Prospectus Supplement, including the enclosed
Prospectus dated ________ __, 2005, which is incorporated by reference, and
related materials are first being mailed to stockholders of the Company on or
about ________ __, 2005.
THE BOARD OF DIRECTORS OF THE COMPANY URGES YOU TO CAST YOUR VOTE FOR
---
THE PLAN AND TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE, EVEN IF YOU DO NOT INTEND TO PURCHASE
COMMON STOCK. THIS WILL ENSURE THAT YOUR VOTE WILL BE COUNTED.
THE OTS HAS APPROVED THE PLAN, SUBJECT TO THE APPROVAL OF THE
STOCKHOLDERS OF THE COMPANY AND THE SATISFACTION OF CERTAIN OTHER CONDITIONS.
HOWEVER, SUCH APPROVAL DOES NOT CONSTITUTE AN ENDORSEMENT OR RECOMMENDATION OF
THE PLAN BY THE OTS.
PROXIES
The Company's Board of Directors is soliciting the proxy that
accompanies this Proxy Statement for use at the Special Meeting. Stockholders
may vote at the Special Meeting or any adjournment thereof in person or by
proxy. All properly executed proxies received by the Board of Directors of the
Company will be voted in accordance with the instructions indicated thereon by
the stockholders giving such proxies. If no contrary instructions are given,
such proxies will be voted in favor of the proposals as described herein. 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 in
accordance with the best judgment of the proxy holders named therein. Any
stockholder giving a proxy will have the right to revoke his proxy at any time
before it is voted by delivering written notice or a duly executed proxy bearing
a later date to the Secretary of the Company, provided that such notice or proxy
is received by the Secretary prior to the Special Meeting or any adjournment
thereof, or by attending the Special Meeting and voting in person. If there are
not sufficient votes for approval of the proposals at the time of the Special
Meeting, the Special Meeting may be adjourned to permit further solicitation of
proxies.
Proxies may be solicited by officers, directors or other employees of
the Mutual Holding Company in person, by telephone or through other forms of
communication.
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.
The approval of the Plan will require the affirmative vote of at least
two-thirds of the total votes eligible to be cast by all stockholders of the
Company, including the Mutual Holding Company, and the affirmative vote of at
least a majority of the total votes eligible to be cast by the Public
Stockholders.
As of July 31, 2005, the Mutual Holding Company held 3,888,150 shares
or 70.0% of the outstanding shares of the Company's common stock and the Mutual
Holding Company intends to vote all such shares in favor of the Plan.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP THEREOF
On the Voting Record Date, there were 5,554,500 shares of ASB Holding
Company Common Stock outstanding, and the Company had no other class of equity
securities outstanding. Each share of ASB Holding Company Common Stock
outstanding on the Voting Record Date is entitled to one vote at the Special
Meeting on all matters properly presented at the Special Meeting.
As provided in the Company's Charter, for a period of five years from
the effective date of the Charter, no person, except for the Mutual Holding
Company, is permitted to beneficially own in excess of 10% of the outstanding
shares of common stock (the "Limit") of the Company, and any shares of common
stock acquired in violation of this Limit are not entitled to any vote. A person
or entity is deemed
2
to beneficially own shares owned by an affiliate of such person or entity, as
well as persons acting in concert with such person or entity.
A majority of the outstanding shares of ASB Holding Company Common
Stock entitled to vote, represented in person or by proxy, shall constitute a
quorum at the Special Meeting. Shares as to which the "ABSTAIN" box has been
marked on the proxy and any shares held by brokers in street name for customers
which are not voted in the absence of instructions from the customers ("broker
non-votes") will be counted as present for determining if a quorum is present.
Because the Plan must be approved by the vote of at least two-thirds of the
outstanding ASB Holding Company Common Stock (including those shares held by the
Mutual Holding Company) and the affirmative vote of a majority of the votes
eligible to be cast by Public Stockholders, abstentions and broker non-votes
will have the same effect as a vote against such proposal.
Beneficial Ownership of Stock
The following table sets forth, as of the Voting Record Date,
information as to the Company's common stock beneficially owned by persons or
groups who own more than 5%of the Company. Other than the Mutual Holding
Company, management knows of no person or group that owns more than 5% of the
outstanding shares of common stock as of the Voting Record Date.
Percent of Shares
Amount of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- -----------
AMERICAN SAVINGS, MHC
365 Broad Street 3,888,150 70.0%
Bloomfield, New Jersey 07003
INCORPORATION OF INFORMATION BY REFERENCE
The Prospectus that accompanies this Proxy Statement is incorporated by
reference into this Proxy Statement in its entirety. The Company urges you to
carefully read both this Proxy Statement and the Prospectus before voting on
Proposal I presented at the Special Meeting. The Prospectus sets forth
descriptions of the conversion and reorganization and the related offering of
ASB Holding Company Common Stock under the sections entitled "Summary," "The
Conversion" and "The Stock Offering." Such sections also describe the effects of
the conversion and reorganization on the stockholders of the Company, including
the tax consequences thereof.
Information regarding the Primary Parties is set forth in the
Prospectus under the captions "Summary - The Companies," "- American Bancorp of
New Jersey, Inc.," and "- American Bank of New Jersey," as well as under
"Business of American Bancorp of New Jersey, Inc." and "Business of American
Bank of New Jersey." The Prospectus further describes the business and financial
condition of the Bank under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The capital stock of the Company
is described in the Prospectus in "Description of Capital Stock." A discussion
of the restrictions imposed on acquisition of the New Holding Company by its
certificate of incorporation and bylaws and OTS regulations can be found in the
Prospectus at "Restrictions on Acquisition of American Bancorp of New Jersey,
Inc." In addition, the historical, consolidated
3
financial statements of the Bank are included in the Prospectus. Information
regarding the use of proceeds from the sale of American Bancorp of New Jersey,
Inc. Common Stock in connection with the conversion and reorganization, the
historical capitalization and the pro forma capitalization of the Bank, other
pro forma data, as well as information pertaining to regulation, employees and
legal proceedings are set forth in the Prospectus under the captions "Use of
Proceeds," "Capitalization," "Pro Forma Data," "Historical and Pro Forma Capital
Compliance," "Regulation," "Business of American Bank of New Jersey - Personnel"
and "- Legal Proceedings," respectively. The Pro Forma Data show the effects of
the conversion and reorganization on the Bank's total stockholders' equity and
net income, on both an aggregate and per share basis, based upon the assumptions
set forth therein.
The Prospectus also sets forth a description of the current management
of the Company, the Mutual Holding Company and American Bank of New Jersey, as
well as the management of the New Holding Company after the conversion and
reorganization, including current compensation and benefits as well as proposed
future stock benefit plans. See the section entitled "Management" in the
Prospectus.
PROPOSAL I - APPROVAL OF THE PLAN OF CONVERSION AND REORGANIZATION
The Board of Directors of the Company has approved the Plan, as has the
OTS, subject to approval by the members of the Mutual Holding Company and the
stockholders of the Company entitled to vote on the matter, and subject to the
satisfaction of certain other conditions. Such OTS approval, however, does not
constitute a recommendation or endorsement of the Plan by such agency.
In addition to this Proxy Statement, you have received as part of this
mailing a Prospectus that describes the Company, the New Holding Company, the
conversion and reorganization and the related stock offering. The Prospectus is
incorporated by reference into this Proxy Statement in its entirety. The Company
urges you to carefully read both this Proxy Statement and the Prospectus before
voting on Proposal I presented at the Special Meeting.
Comparison of Stockholders' Rights under Federal and New Jersey Law and Certain
Anti-Takeover Provisions
General. As a result of the conversion, the current public stockholders
of the Company will become stockholders of the New Holding Company. There are
certain differences in stockholder rights arising from distinctions between the
Company's federal charter and bylaws and the New Holding Company's New Jersey
certificate of incorporation and bylaws, which are based on New Jersey corporate
law. Additionally, there are distinctions between laws applicable to federally
chartered savings institutions and holding companies and laws applicable to New
Jersey corporations.
The discussion herein is not intended to be a complete statement of the
differences affecting the rights of stockholders, but rather as a summary of the
material differences and similarities affecting the rights of stockholders. The
discussion herein is qualified in its entirety by reference to the New Holding
Company's certificate of incorporation and bylaws and the New Jersey Business
Corporation Act. Procedures for obtaining a copy of the New Holding Company's
certificate of incorporation and bylaws can be found under the caption "Where
You Can Find Additional Information" in the Prospectus.
4
Authorized Capital Stock. The New Holding Company's authorized capital
stock consists of 20,000,000 shares of common stock, par value $.10 per share,
and 10,000,000 shares of preferred stock, par value $.10 per share. The
Company's current federal charter authorizes capital stock consisting of
20,000,000 shares of common stock and 5,000,000 shares of preferred stock, par
value $.10 per share. The shares of the New Holding Company's common stock and
preferred stock were authorized in an amount greater than that to be issued in
the conversion to provide the New Holding Company's Board of Directors with
flexibility to effect, among other transactions, financing acquisitions, stock
dividends, stock splits and employee stock options. However, these additional
authorized shares may also be used by the New Holding Company's Board of
Directors, consistent with its fiduciary duty, to deter future attempts to gain
control of the New Holding Company. The New Holding Company's Board of Directors
will also have sole authority to determine the terms of any one or more series
of preferred stock, including voting rights, conversion rates, and liquidation
preferences. As a result of the ability to fix voting rights for a series of
preferred stock, the Board of Directors of the New Holding Company will also
have the power, to the extent consistent with its fiduciary duty, to issue a
series of preferred stock to persons friendly to management in order to attempt
to block a post tender offer merger or other transaction by which a third party
seeks control, and thereby assist management to retain its position. The New
Holding Company's Board of Directors currently has no plans for the issuance of
additional shares, other than the issuance of additional shares pursuant to
stock benefit plans.
Issuance of Capital Stock. Pursuant to applicable federal laws and
regulations, American Savings, MHC is required to own not less than a majority
of the Company's currently outstanding common stock. There will be no such
restriction applicable to the ownership of the New Holding Company's common
stock following consummation of the conversion.
Neither the New Holding Company's certificate of incorporation nor New
Jersey law contains restrictions on the issuance of shares of capital stock to
directors, officers or controlling persons, whereas the Company's current
federal charter restricts such issuance to general public offerings or, if
qualifying shares, to directors, unless the share 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 stockholders' meeting. Thus, stock- related
compensation plans, such as stock option plans, could be adopted by the New
Holding Company without stockholder approval and shares of the New Holding
Company's capital stock could be issued directly to directors or officers
without stockholder approval. The bylaws of the National Association of
Securities Dealers, Inc., however, generally require corporations with
securities quoted on the Nasdaq to obtain stockholder approval of most stock
compensation plans for directors, officers and key employees of the corporation.
Moreover, although generally not required, stockholder approval of stock-related
compensation plans may be sought in certain instances in order to qualify such
plans for favorable federal income tax and securities law treatment under
current laws and regulations.
Voting Rights. Neither the Company's current federal charter or bylaws
nor the New Holding Company's certificate of incorporation or bylaws provide for
cumulative voting in elections of directors. For additional information
regarding voting rights, see "Limitations on Acquisitions of Voting Stock and
Voting Rights" below.
Payment of Dividends. The current ability of the Company to pay
dividends on its capital stock is restricted by regulations and by federal
income tax considerations related to federal savings institutions and federal
holding companies such as American Bank of New Jersey and the Company. Although
the New Holding Company will not be subject to these restrictions on its
dividends, such restrictions will indirectly affect the New Holding Company
because dividends from American Bank of New Jersey will
5
be its primary source of funds for the payment of dividends to its stockholders.
See the section of the Prospectus entitled "Regulation - Regulation of American
Bank of New Jersey - Dividend and Other Capital Distribution Limitations."
Certain restrictions generally imposed on New Jersey corporations may
also have an impact on the New Holding Company's ability to pay dividends. New
Jersey law generally provides that a corporation is prohibited from paying a
dividend if, after such payment, it would not be able to pay its debts as they
became due or if the corporation's total assets would be less than the sum of
its total liabilities.
Board of Directors. The Company's current federal bylaws provide that
the Company's Board of Directors shall be divided into three classes as nearly
equal in number as possible and that the members of each class shall be elected
for a term of three years and until their successors are elected and qualified.
Under the certificate of incorporation and bylaws of the New Holding Company,
the New Holding Company's Board shall be divided into four classes as nearly
equal in number as possible, with the members of each class being elected for
terms of four years and until their successors are elected and qualified.
Under the Company's federal bylaws, any vacancies in the Company's
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, and
persons so elected to fill vacancies may only serve until the next annual
meeting of stockholders. Under the New Holding Company's certificate of
incorporation, any vacancy occurring in its Board of Directors, including any
vacancy created by reason of an increase in the number of directors, may be
filled by the remaining directors, and any director so chosen shall hold office
for a term expiring at the next annual meeting of stockholders.
Limitations on Liability. The New Holding Company's certificate of
incorporation provides that its directors shall not be personally liable for
monetary damages to the New Holding Company for certain actions as directors,
except for liabilities that involve a director's willful misconduct or the
director's conscious disregard for the best interest of the company, the
authorization of unlawful distributions, a director's receipt of an improper
personal benefit from his or her position as a director or a violation of
criminal law, unless the director had reasonable cause to believe that his or
her conduct was lawful. This provision might, in certain instances, discourage
or deter stockholders or management from bringing a lawsuit against the New
Holding Company's directors for a breach of their duties even though such an
action, if successful, might have benefited the New Holding Company.
Currently, the OTS does not permit federally chartered holding
companies like the Company to limit the personal liability of directors in the
manner provided by New Jersey law and the laws of many other states.
Indemnification of Directors, Officers, Employees and Agents. Under
current OTS regulations, however, the Company, as a federal holding company, is
required to indemnify its directors, officers and employees for any costs
incurred in connection with any litigation involving any such person's
activities as a director, officer or employee if such person obtains a final
judgment on the merits in his or her favor. In addition, indemnification is
permitted in the case of a settlement, a final judgment against such person or
final judgment other than on the merits, if a majority of disinterested
directors determine that such person was acting in good faith within the scope
of his or her
6
employment as he or she could reasonably have perceived it under the
circumstances and for a purpose he or she could reasonably have believed under
the circumstances was in the best interest of the Company or its stockholders.
The Company is also currently permitted under federal regulations to pay ongoing
expenses incurred by a director, officer or employee if a majority of
disinterested directors concludes that such person may ultimately be entitled to
indemnification. Before making any indemnification payment, the Company is
required to notify the OTS of its intention and such payment cannot be made if
the OTS objects thereto.
The New Holding Company's officers, directors, agents and employees
will be indemnified with respect to certain actions pursuant to its certificate
of incorporation, which complies with New Jersey law regarding indemnification.
New Jersey law allows the New Holding Company to indemnify the aforementioned
persons for expenses, settlements, judgments and fines in suits in which such
person has been made a party by reason of the fact that he or she is or was an
agent of the New Holding Company. Generally, indemnification would be permitted
if such person acted in good faith or in a manner he or she reasonably believed
to be in or not opposed to the New Holding Company's best interests and, with
respect to any criminal proceeding, such person had no reasonable cause to
believe his or her conduct was unlawful.
Special Meetings of Stockholders. The New Holding Company's certificate
of incorporation provides that special meetings of its stockholders may be
called by the chairman, the president, a majority of the Board of Directors or a
duly designated committee of the Board of Directors. The Company's current
federal bylaws provide that special meetings of stockholders may be called by
the chairman, the vice chairman, the president, a majority of the Board of
Directors or the holders of not less than one-tenth of the outstanding capital
stock of the Company entitled to vote.
Stockholder Nominations and Proposals. The current federal bylaws of
the Company generally provide that stockholders may submit nominations for
election of director at an annual meeting of stockholders at least five days
before the date of any such meeting and may submit any new business to be taken
up at such a meeting by filing such in writing with the Company at least five
days before the date of any such meeting.
The New Holding Company's bylaws generally provide that any stockholder
desiring to make a nomination for the election of directors or a proposal for
new business at a meeting of stockholders must submit written notice to the New
Holding Company not less than 60 days prior to the anniversary date of its
immediately preceding annual meeting of stockholders. Failure to comply with
these advance notice requirements will preclude such nominations or new business
from being considered at the meeting. Management believes that it is in the best
interests of the New Holding Company and its stockholders to provide sufficient
time to enable management to disclose to stockholders information about a
dissident slate of nominations for directors. This advance notice requirement
may also give management time to solicit its own proxies in an attempt to defeat
any dissident slate of nominations, should management determine that doing so is
in the best interest of stockholders, generally. Similarly, adequate advance
notice of stockholder proposals will give management time to study such
proposals and to determine whether to recommend to the stockholders that such
proposals be adopted. In certain instances, such provisions could make it more
difficult to oppose management's nominees or proposals, even if stockholders
believe such nominees or proposals are in their best interests.
Stockholders' Right to Examine Books and Records. A federal regulation
applicable to the Company provides that stockholders may inspect and copy
specified books and records of a federally
7
chartered holding company after proper written notice for a proper purpose. New
Jersey law similarly provides that a stockholder may inspect certain books and
records if the stockholder makes a written demand for a proper purpose.
Limitations on Acquisitions of Voting Stock and Voting Rights. The New
Holding Company's certificate of incorporation provides that in no event shall
any record owner of any outstanding common stock which is beneficially owned,
directly or indirectly, by a person who beneficially owns in excess of 10% of
the then outstanding shares of common stock be entitled or permitted to any vote
in respect of the shares held in excess of such limit. The Company's current
federal charter does not provide for a similar voting restriction .
Mergers, Consolidations and Sales of Assets. A federal regulation
currently requires the approval of two-thirds of the Board of Directors of the
Company and the holders of two-thirds of the outstanding stock of the Company
entitled to vote thereon for mergers, consolidations and sales of all or
substantially all of the assets of the Company. Such regulation permits the
Company to merge with another corporation without obtaining the approval of its
stockholders if:
(1) the merger does not involve an interim savings institution;
(2) the Company's federal stock charter is not changed;
(3) each share of the Company's stock outstanding immediately prior to
the effective date of the transaction is to be an identical outstanding share or
a treasury share of the Company after such effective date; and
(4) either:
(a) no shares of voting stock of the Company and no securities
convertible into such stock are to be issued or delivered under the
plan of combination; or
(b) the authorized unissued shares or the treasury shares of
voting stock of the Company to be issued or delivered under the plan of
combination, plus those initially issuable upon conversion of any
securities to be issued or delivered under such plan, do not exceed 15%
of the total shares of voting stock of the Company outstanding
immediately prior to the effective date of the transaction.
Under New Jersey law, mergers, consolidations and other forms of
business combination must generally be approved by a majority of the votes cast
by stockholders entitled to vote, unless a corporation's certificate of
incorporation imposes a higher vote requirement. Approval by the stockholders of
a New Jersey corporation that survives a merger is not required under New Jersey
law if:
(1) the certificate of incorporation of the corporation is not amended
thereby;
(2) each stockholder of the surviving corporation will hold the same
number of shares, with the same designations, preferences and rights, after the
merger as such stockholder had before; and
8
(3) the number of voting shares outstanding after the merger, plus the
number of voting shares issuable on conversion of other securities or on
exercise of rights and warrants issued pursuant to the merger, will not exceed
by more than 40% the total number of voting shares of the surviving corporation
that were outstanding before the merger.
The New Holding Company's certificate of incorporation provides that,
if a merger, consolidation or sale of all or substantially all the assets of the
New Holding Company is approved by two-thirds of its Board of Directors, the
stockholder vote required to approve such transaction will be that specified by
New Jersey law. However, if a merger, consolidation or sale of all or
substantially all the assets of the New Holding Company is not approved by a
two-thirds vote of the Board of Directors, the certificate of incorporation
provides that any such transaction must be approved by the vote of at least 80%
of the New Holding Company's outstanding shares of capital stock eligible to
vote.
In addition, the New Holding Company's certificate of incorporation
requires the approval of the holders of at least 80% of its outstanding shares
of voting stock to approve certain "Business Combinations" involving an
"Interested Shareholder" except in cases where the proposed transaction has been
approved in advance by two-thirds of those members of the New Holding Company's
Board of Directors who are unaffiliated with the Interested Shareholder and were
directors prior to the time when the Interested Shareholder became an Interested
Shareholder. The term "Interested Shareholder" is defined to include any
individual, corporation, partnership or other entity, other than the New Holding
Company or its subsidiaries, which owns beneficially or controls, directly or
indirectly, 10% or more of the outstanding shares of voting stock of the New
Holding Company or an affiliate of such person or entity. This provision of the
certificate of incorporation applies to any "Business Combination," which is
defined to include, among other things, any merger, consolidation, sale of 10%
or more of the New Holding Company's assets, reclassification of the common
stock or recapitalization of the New Holding Company with or involving an
Interested Shareholder. If, however, the proposed transaction is approved in
advance by two-thirds of the members of the New Holding Company's Board of
Directors who were directors before the Interested Shareholder became an
Interested Shareholder, such transaction would require only the majority vote of
stockholders otherwise required by New Jersey law.
The New Holding Company's certificate of incorporation requires its
Board of Directors to consider certain factors in addition to the amount of
consideration to be paid when evaluating certain business combinations or a
tender or exchange offer. These additional factors include the social and
economic effects of the transaction on its customers and employees and the
communities served by the New Holding Company.
Dissenters' Rights of Appraisal. OTS regulations generally provide that
a stockholder of a federally chartered holding company that engages in a merger,
consolidation or sale of all or substantially all of its assets shall have the
right to demand from such company payment of the fair or appraised value of his
or her stock in the company, subject to specified procedural requirements. This
regulation also provides, however, that the stockholders of a federally
chartered holding company with stock listed on a national securities exchange or
quoted on the Nasdaq Stock Market are not entitled to dissenters' rights in
connection with a merger involving such savings institution if the stockholder
is required to accept only "qualified consideration" for his or her stock, which
is defined to include cash, shares of stock of any institution or corporation
which at the effective date of the merger will be listed on a national
securities exchange or quoted on the Nasdaq Stock Market or any combination of
such shares of stock and cash.
9
Pursuant to general New Jersey corporate law, a stockholder of a New
Jersey corporation generally has the right to dissent from any merger or
consolidation involving the corporation or sale of all or substantially all of
the corporation's assets. However, dissenters' rights are not available for the
shares of any class or series of a New Jersey corporation's capital stock if (i)
such shares are either listed on a national securities exchange or held of
record by more than 1,000 stockholders or (ii) the consideration to be received
in the merger consists of cash and/or shares of stock that are either listed on
a national securities exchange or held of record by more than 1,000
stockholders.
Amendment of Governing Instruments. No amendment of the Company's
current federal charter may be made unless it is first proposed by the Board of
Directors, then preliminarily approved by the OTS, and thereafter approved by
the holders of a majority of the total votes eligible to be cast at a legal
meeting. The New Holding Company's certificate of incorporation may be amended
by the vote of the holders of a majority of the outstanding shares of its common
stock, except that the provisions of the certificate of incorporation governing
the calling of meetings of stockholders, stockholders' nominations and
proposals, authorized capital stock, denial of preemptive rights, the number and
staggered terms of directors, removal of directors, approval of certain business
combinations, the evaluation of certain business combinations, elimination of
directors' liability, indemnification of officers and directors, and the manner
of amending the certificate of incorporation and bylaws, each may not be
repealed, altered, amended or rescinded except by the vote of the holders of at
least 80% of the New Holding Company's outstanding shares. This provision is
intended to prevent the holders of a lesser percentage of the New Holding
Company's outstanding stock from circumventing any of the foregoing provisions
by amending the certificate of incorporation to delete or modify one of such
provisions.
The Company's current federal bylaws may be amended by a majority vote
of the full Board of Directors or by a majority vote of the votes cast by the
stockholders of the Company at any legal meeting. The New Holding Company's
bylaws may only be amended by a two-thirds vote of its Board of Directors or by
the holders of at least 80% of its outstanding stock.
Purpose and Takeover Defensive Effects of the New Holding Company's
Certificate of Incorporation and Bylaws. The Board of Directors of the Company
believes that the provisions described above are prudent and will reduce the New
Holding Company's vulnerability to takeover attempts and certain other
transactions that have not been negotiated with and approved by the New Holding
Company's Board of Directors. These provisions will also assist the Company in
the orderly deployment of the conversion proceeds into productive assets during
the initial period after the conversion. The Board of Directors believes these
provisions are in the best interest of American Bank of New Jersey, the New
Holding Company and the New Holding Company's stockholders. In the judgment of
the Board of Directors, the New Holding Company's Board will be in the best
position to determine the true value of the New Holding Company and to negotiate
more effectively for what may be in the best interests of its stockholders.
Accordingly, the Board of Directors believes that it is in the best interest of
the New Holding Company and its stockholders to encourage potential acquirers to
negotiate directly with the New Holding Company's Board of Directors and that
these provisions will encourage such negotiations and discourage hostile
takeover attempts. It is also the view of the Board of Directors that these
provisions should not discourage persons from proposing a merger or other
transaction that is at a price reflective of the true value of New Holding
Company and that is in the best interest of all of the New Holding Company's
stockholders.
Attempts to acquire control of financial institutions and their holding
companies have recently become increasingly common. Takeover attempts that have
not been negotiated with and approved by the
10
Board of Directors present to stockholders the risk of a takeover on terms that
may be less favorable than might otherwise be available. A transaction that is
negotiated and approved by the Board of Directors, on the other hand, can be
carefully planned and undertaken at an opportune time in order to obtain maximum
value for the stockholders of the New Holding Company, with due consideration
given to matters such as the management and business of the acquiring
corporation and maximum strategic development of its assets.
An unsolicited takeover proposal can seriously disrupt the business and
management of a corporation and cause it great expense. Although a tender offer
or other takeover attempt may be made at a price substantially above the current
market prices, such offers are sometimes made for less than all of the
outstanding shares of a target company. As a result, stockholders may be
presented with the alternative of partially liquidating their investment at a
time that may be disadvantageous, or retaining their investment in an enterprise
that is under different management and whose objectives may not be similar to
those of the remaining stockholders. The concentration of control, which could
result from a tender offer or other takeover attempt, could also deprive the New
Holding Company's remaining stockholders of benefits of certain protective
provisions of the Securities Exchange Act of 1934, if the number of beneficial
owners were to become fewer than 300, thereby allowing for deregistration under
the act.
These provisions of the New Holding Company's certificate of
incorporation and bylaws may also have the effect of discouraging a future
takeover attempt that would not be approved by the New Holding Company's Board,
but pursuant to which stockholders may receive a substantial premium for their
shares over then current market prices. As a result, stockholders who might
desire to participate in such a transaction may not have any opportunity to do
so. Such provisions will also render the removal of the New Holding Company's
Board of Directors and management more difficult. The Boards of Directors of
American Bank of New Jersey and the New Holding Company, however, have concluded
that the potential benefits outweigh the possible disadvantages.
Following the conversion, pursuant to applicable law and, if required,
following the approval by stockholders, the New Holding Company may adopt
additional anti-takeover provisions or other devices regarding the acquisition
of its equity securities that would be permitted for a New Jersey business
corporation.
The cumulative effect of the restrictions on acquisitions of the New
Holding Company's shares contained in the New Holding Company's certificate of
incorporation and bylaws and in federal and New Jersey law may be to discourage
potential takeover attempts and perpetuate incumbent management, even though
certain of the New Holding Company's stockholders may deem a potential
acquisition to be in their best interests, or deem existing management not to be
acting in their best interests.
Rights of Dissenting Stockholders
Under federal law, dissenters' rights of appraisal are available to
holders of common stock in connection with the conversion and reorganization.
The following discussion is not a complete statement of the law pertaining to
dissenters' rights under the OTS Rules and Regulations, and is qualified in its
entirety by the full text of Section 552.14 of the OTS Rules and Regulations,
which is referred to as Section 552.14 and is reprinted in its entirety as
Appendix A to this proxy statement. Any ASB Holding Company stockholder who
desires to exercise his or her dissenters' rights should review carefully
Section 552.14 and is urged to consult a legal advisor before electing or
attempting to exercise his or her rights. All references in Section 552.14 to a
"stockholder" and in this summary are to the record holder of shares
11
of ASB Holding Company Common Stock as to which dissenters' rights are asserted.
Subject to the exceptions stated below, holders of ASB Holding Company Common
Stock who comply with the applicable procedures summarized below will be
entitled to exercise dissenters' rights under Section 552.14.
A stockholder electing to exercise his or her rights to dissent from
the Plan is required to file with ASB Holding Company (addressed to Richard M.
Bzdek, Secretary, ASB Holding Company, 365 Broad Street, Bloomfield, New Jersey
07003), prior to voting on the Plan, a written statement identifying himself or
herself and stating his or her intention to demand appraisal of, and payment
for, his or her shares. This demand must be made in addition to, and separate
from, any proxy or vote. A failure to vote on the proposal to approve the Plan
will not constitute a waiver of appraisal rights, but a vote for the Plan will
be deemed a waiver of such rights. A vote against the proposal will not be
deemed to satisfy the requirement to file the written statement. However, if a
stockholder returns a signed proxy but does not specify a vote against the Plan,
or a direction to abstain, the proxy, if not revoked prior to the Meeting, will
be voted for approval of the Plan, which will have the effect of waiving that
stockholder's dissenters' rights.
Within ten days after the Effective Date of the Plan, the Company shall
(i) give written notice of the Effective Date by mail to any dissenting
stockholder who has not voted in favor of the Plan, (ii) make a written offer to
each dissenting stockholder to pay for his or her shares at a specified price
deemed by the Company to be fair value of such shares, and (iii) inform any
dissenting stockholder that, within 60 days of the Effective Date, the
dissenting stockholder must file a petition with the Office of Thrift
Supervision, 1700 G Street, N.W., Washington, D.C. 20552, if the stockholder and
the Company do not agree as to the fair market value .
If within 60 days of the Effective Date the fair value is agreed upon
between the Company and any dissenting stockholder, payment will be made within
90 days of the Effective Date. If within such period, however, the Company and
any dissenting stockholder do not agree as to the fair value of such shares,
such stockholder may file a petition with the OTS demanding a determination of
the fair market value of the stock. A copy of such petition must be sent by
registered or certified mail to the Company. Any such stockholder who fails to
file the petition within 60 days of the Effective Date is deemed to have
accepted the terms of the Plan.
Each dissenting stockholder, within 60 days of the Effective Date, must
submit his or her certificates to the transfer agent for notation thereon that
an appraisal and payment have been demanded. Any stockholder who fails to submit
his or her certificates will not be entitled to appraisal rights and will be
deemed to have accepted the terms of the Plan.
Any stockholder who is demanding payment for his shares in accordance
with Section 552.14 shall not thereafter be entitled to vote or exercise any
rights of a stockholder except the right to receive payment for his shares
pursuant to the provisions of Section 552.14 and the right to maintain certain
legal actions. The respective shares for which payment has been demanded shall
not thereafter be considered outstanding for the purposes of any subsequent vote
of stockholders.
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Additional Information
The Plan is attached hereto as Appendix B. The Certificate of
Incorporation and Bylaws of the New Holding Company are available at no cost by
contacting the Company at (973) ___-____ or by writing to the Corporate
Secretary of ASB Holding Company at 365 Broad Street, Bloomfield, New Jersey
07003. Adoption of the Plan by the stockholders authorizes the Boards of
Directors of the Primary Parties to amend or terminate the Plan, including the
Charter of American Bank of New Jersey and the Certificate of Incorporation of
the New Holding Company, prior to the closing of the conversion and
reorganization. All statements made in this document are hereby qualified by the
contents of such documents as set forth above.
The information contained in the accompanying Prospectus, including a
more detailed description of the Plan, certain financial statements of the
Company and the New Holding Company, a description of the capitalization,
business, the directors and officers of the Company and the New Holding Company,
and the compensation and other benefits of directors and officers, a description
of the ASB Holding Company Common Stock and anticipated use of the net proceeds
from the offering of such stock, is intended to help you evaluate the conversion
and reorganization and is incorporated herein by reference.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR THE PLAN. NOT VOTING WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE
---
PLAN. VOTING FOR THE PLAN WILL NOT OBLIGATE YOU TO PURCHASE ANY SHARES OF ASB
---
HOLDING COMPANY COMMON STOCK. SHARES OF ASB HOLDING COMPANY COMMON STOCK ARE
BEING OFFERED ONLY BY THE PROSPECTUS, WHICH IS INCORPORATED BY REFERENCE HERETO.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Special Meeting other than the matters described above in this Proxy Statement.
However, if any matters should properly come before the Special Meeting, it is
intended that holders of the proxies will act as directed by a majority of the
Board of Directors.
13
Appendix A
DISSENTER AND APPRAISAL RIGHTS
552.14 Dissenter and appraisal rights.
(a) Right to demand payment of fair or appraised value. Except as
provided in paragraph (b) of this section, any stockholder of a Federal stock
association combining in accordance with 552.13 of this part shall have the
right to demand payment of the fair or appraised value of his stock: Provided,
That such stockholder has not voted in favor of the combination and complies
with the provisions of paragraph (c) of this section.
(b) Exceptions. No stockholder required to accept only qualified
consideration for his or her stock shall have the right under this section to
demand payment of the stock's fair or appraised value, if such stock was listed
on a national securities exchange or quoted on the National Association of
Securities Dealers' Automated Quotation System ("NASDAQ") on the date of the
meeting at which the combination was acted upon or stockholder action is not
required for a combination made pursuant to 552.13(h)(2) of this part.
"Qualified consideration" means cash, shares of stock of any association or
corporation which at the effective date of the combination will be listed on a
national securities exchanged or quoted on NASDAQ or any combination of such
shares of stock and cash.
(c) Procedure.
(1) Notice. Each constituent Federal stock association shall
notify all stockholders entitled to rights under this section, not less than
twenty days prior to the meeting at which the combination agreement is to be
submitted for stockholder approval, of the right to demand payment of appraised
value of shares, and shall include in such notice a copy of this section. Such
written notice shall be mailed to stockholders of record and may be part of the
management's proxy solicitation for such meeting.
(2) Demand for Appraisal and Payment. Each stockholder
electing to make a demand under this section shall deliver to the Federal stock
association, before voting on the combination, a writing identifying himself or
herself and stating his or her intention thereby to demand appraisal of and
payment for his or her shares. Such demand must be in addition to and separate
from any proxy or vote against the combination by the stockholder.
(3) Notification of Effective Date and Written Offer. Within
ten days after the effective date of the combination, the resulting association
shall;
(i) Give written notice by mail to stockholders of
constituent Federal Stock associations who have complied with the provisions of
paragraph (c)(2) of this section and have not voted in favor of the combination,
of the effective date of the combination;
(ii) Make a written offer to each stockholder to pay
for dissenting shares at a specified price deemed by the resulting association
to be the fair value thereof; and
(iii) Inform them that, within sixty days of such
date, the respective requirements of paragraphs (c)(5) and (6) of this section
(set out in the notice) must be satisfied.
The notice and offer shall be accompanied by a balance sheet and
statement of income of the association the shares of which the dissenting
stockholder holds, for a fiscal year ending not more than sixteen months before
the date of notice and offer, together with the latest available interim
financial statements.
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(4) Acceptance of Offer. If within sixty days of the effective
date of the combination the fair value is agreed upon between the resulting
association and any stockholder who has complied with the provisions of
paragraph (c)(2) of this section, payment therefor shall be made within ninety
days of the effective date of the combination.
(5) Petition to be Filed if Offer Not Accepted. If within
sixty days of the effective date of the combination the resulting association
and any stockholder who has complied with the provisions of paragraph (c)(2) of
this section do not agree as to the fair value, then any such stockholder may
file a petition with the Office, with a copy by registered or certified mail to
the resulting association, demanding a determination of the fair market value of
the stock of all such stockholders. A stockholder entitled to file a petition
under this section who fails to file such petition within sixty days of the
effective date of the combination shall be deemed to have accepted the terms
offered under the combination.
(6) Stock Certificates to be Noted. Within sixty days of the
effective date of the combination, each stockholder demanding appraisal and
payment under this section shall submit to the transfer agent his certificates
of stock for notation thereon that an appraisal and payment have been demanded
with respect to such stock and that appraisal proceedings are pending. Any
stockholder who fails to submit his stock certificates for such notation shall
no longer be entitled to appraisal rights under this section and shall be deemed
to have accepted the terms offered under the combination.
(7) Withdrawal of Demand. Notwithstanding the foregoing, at
any time within sixty days after the effective date of the combination, any
stockholder shall have the right to withdraw his or her demand for appraisal and
to accept the terms offered upon the combination.
(8) Valuation and Payment. The Director shall, as he or she
may elect, either appoint one or more independent persons or direct appropriate
Staff of the Office to appraise the shares to determine their fair market value,
as of the effective date of the combination, exclusive of any element of value
arising from the accomplishment or expectation of the combination. Appropriate
staff of the Office shall review and provide an opinion on appraisals prepared
by independent persons as to the suitability of the appraisal methodology and
the adequacy of the analysis and supportive data. The Director after
consideration of the appraisal report and the advice of the appropriate staff
shall, if he or she concurs in the valuation of the shares, direct payment by
the resulting association of the appraised fair market value of the shares, upon
surrender of the certificates representing such stock. Payment shall be made,
together with interest from the effective date of the combination, at a rate
deemed equitable by the Director.
(9) Costs and Expenses. The costs and expenses of any
proceeding under this section may be apportioned and assessed by the Director as
he or she may deem equitable against all or some of the parties. In making this
determination the Director shall consider whether any party has acted
arbitrarily, vexatiously, or not in good faith in respect to the rights provided
by this section.
(10) Voting and Distribution. Any stockholder who has demanded
appraisal rights as provided in paragraph (c)(2) of this section shall
thereafter neither be entitled to vote such stock for any purpose nor be
entitled to the payment of dividends or other distributions on the stock (except
dividends or other distribution payable to, or a vote to be taken by
stockholders of record at a date which is on or prior to, the effective date of
the combination): Provided, That if any stockholder becomes unentitled to
appraisal and payment of appraised value with respect to such stock and accepts
or is deemed to have accepted the terms offered upon the combination, such
stockholder shall thereupon be entitled to vote and receive the distributions
described above.
(11) Status. Shares of the resulting association into which
shares of the stockholders demanding appraisal rights would have been converted
or exchanged, had they assented to the combination, shall have the status of
authorized and unissued shares of the resulting association.
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