EXHIBIT 2
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF FLORIDA
LAKELAND, FLORIDA
PLAN OF MUTUAL HOLDING COMPANY REORGANIZATION
AND STOCK ISSUANCE
Adopted by the Board of Directors
on
September 28, 1998
PLAN OF MUTUAL HOLDING COMPANY REORGANIZATION AND STOCK ISSUANCE
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF FLORIDA
TABLE OF CONTENTS
PAGE
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1. Introduction..................................................... A-1
2. Definitions...................................................... A-2
3. Method of Reorganization and Certain Effects of
Reorganization................................................. A-6
4. Special Meeting of Members....................................... A-9
5. Conditions to Implementation of Reorganization................... A-9
6. Stock Offering Documents......................................... A-10
7. Stock Offering................................................... A-10
8. Subscription Rights of Eligible Account Holders
(First Priority)............................................... A-11
9. Subscription Rights of Employee Plans (Second Priority).......... A-12
10. Supplemental Eligible Account Holders (Third Priority)........... A-12
11. Subscription Rights of Other Members (Fourth Priority)........... A-13
12. Community Offering............................................... A-14
13. Syndicated Community Offering.................................... A-14
14. Limitation on Purchases.......................................... A-15
15. Payment for Common Stock......................................... A-17
16. Manner of Exercising Subscription Rights Through Order Forms..... A-18
17. Undelivered, Defective or Late Order Forms:
Insufficient Payment........................................... A-19
18. Restrictions on Resale or Subsequent Disposition................. A-19
19. Charter and Bylaws of the Stock Association...................... A-20
20. Charter and Bylaws of Stock Holding Company...................... A-20
21. Charter and Bylaws of the Mutual Holding Company................. A-20
22. Conversion of Mutual Holding Company to Stock Form............... A-20
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PAGE
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23. Continuity of the Association and Status of Deposit
Accounts and Loans Subsequent to Reorganization................ A-21
24. Rights of Owners of the Mutual Holding Company................... A-22
25. Payment of Dividends and Repurchase of Stock..................... A-22
26. Residents of Foreign Countries and Certain States................ A-22
27. Registration and Market Making................................... A-23
28. Establishment of Liquidation Account............................. A-23
29. Expenses of Reorganization....................................... A-24
30. Amendment or Termination of the Plan............................. A-24
31. Miscellaneous.................................................... A-25
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1. INTRODUCTION
On September 28, 1998, the Board of Directors of First Federal Savings
and Loan Association of Florida (the "Association"), by at least a two-thirds
vote, resolved to adopt this Mutual Holding Company Plan of Reorganization and
Stock Issuance (the "Plan"), pursuant to which the Association proposes to
reorganize from a federally chartered mutual savings association into a
federally chartered mutual holding company under the name "FloridaFirst Bancorp
MHC" (the "Mutual Holding Company") pursuant to the laws of the United States of
America and the Rules and Regulations of the Office of Thrift Supervision
("OTS"). A principal part of the reorganization into the Mutual Holding Company
(the "Reorganization") is the incorporation of a federally chartered stock
holding company (the "Stock Holding Company"), a majority of the voting stock of
which will be owned by the Mutual Holding Company at all times so long as the
Mutual Holding Company remains in the mutual form of organization and the
conversion of the Association to a federal capital stock savings association
(the "Stock Association"), which will be a wholly owned subsidiary of the Stock
Holding Company as long as the Mutual Holding Company is in existence.
One or more stock offerings of up to but less than 50% in the aggregate
of the total voting stock of the Stock Holding Company may be made
simultaneously, or following the Reorganization, subject to the approval of the
OTS, as may be necessary. As long as the Association is chartered under the laws
of the United States of America, any offer and sale of any equity securities,
regardless of when it occurs, will be conducted in accordance with the laws of
the United States and the rules and regulations of the OTS.
In adopting the Plan, the Board of Directors has determined that the
Reorganization is advisable and in the best interest of the Association and its
members. The Reorganization will enable the Association to increase its capital
through the issuance of capital stock without undertaking a full conversion from
the mutual to stock form of organization. The Reorganization will not foreclose
the opportunity to effect a conversion of the Mutual Holding Company from the
mutual-to-stock form of organization following the Reorganization. The
Reorganization may facilitate the possible acquisition of other assets, branch
offices, financial institutions, possible diversification into other related
financial service activities and other purposes and will further enhance the
Association's ability to render services to the public. The Reorganization will
afford the Association as a capital stock savings association subsidiary of the
Stock Holding Company access to capital sources not legally available to a
mutual savings association, while at the same time preserving the mutual form of
ownership in the holding company structure. The mutual holding company structure
also will allow the Association to minimize over-capitalization by providing the
flexibility to raise capital through the issuance of stock in a manner designed
to meet the Association's growth needs, rather than in a single stock offering
as required in a standard mutual-to-stock conversion. This access to the capital
markets will make it possible for the Association to be more responsive to
possible future changes in bank regulatory agencies' regulations mandating
higher capital reserves and/or capital ratios.
This Plan, which has been approved by at least two-thirds of the Board
of Directors present at a duly called meeting of the Board, must also be
approved by the members of the Association by the affirmative vote of a majority
of the total votes eligible to be cast by the members in person or by proxy at a
Special Meeting to be called for that purpose. Prior to submission of this Plan
to the Members for consideration, the Plan must be approved by the OTS.
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Pursuant to Section 10(o) of the Home Owners' Loan Act, as amended 12
U.S.C. 1467(a)(0), ("HOLA"), the Reorganization will be accomplished in
accordance with the procedures contained in this Plan, the Rules and Regulations
of the OTS, and as otherwise may be required by the OTS.
2. DEFINITIONS
As used in this Plan, the terms set forth below have the following
meanings:
Account Holder: The term Account Holder means any Person holding a
Savings Account in the Association.
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; (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; or (iii) a person or company which acts
in concert with another person or company ("other party") shall also
be deemed to be acting in concert with any person or company who is
also acting in concert with that other party, except that any
tax-qualified employee stock benefit plan will not be deemed to be
acting in concert with its trustee or a person who serves in a similar
capacity solely for the purpose of determining whether stock held by
the trustee and stock held by the plan will be aggregated.
Associate: The term Associate when used to indicate a relationship
with any person, means (i) any corporation or organization (other than
the Association or a majority-owned subsidiary of the Association) of
which such person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of
equity securities, (ii) any trust or other estate in which such person
has a substantial beneficial interest or as to which such person
serves as trustee or in a similar fiduciary capacity except that for
the purposes of Sections 9 and 14 hereof, the term "Associate" does
not include any Tax-Qualified Employee Stock Benefit Plan or any
Tax-Qualified Employee Stock Benefit Plan in which a person has a
substantial beneficial interest or serves as a trustee or in a similar
fiduciary capacity, and except that, for purposes of aggregating total
shares that may be held by Officers and Directors the term "Associate"
does not include any Tax-Qualified Employee Stock Benefit Plan, and
(iii) any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person or who is a Director or
Officer of the Association or the Holding Company, or any of its
parents or subsidiaries.
Association: First Federal Savings and Loan Association of Florida, in
its current mutual form or post-Reorganization stock form, as
indicated by the context.
Capital Stock: Any and all authorized stock of the Stock Holding
Company.
Common Stock: Common stock, par value $0.10, issued by the Stock
Holding Company simultaneously with or after the Reorganization,
including securities convertible into common stock, pursuant to its
stock organization certificate.
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Community Offering: The term Community Offering, if applicable, means
the offering for sale to certain members of the general public
directly by the Stock Holding Company, of any shares not subscribed
for in the Subscription Offering.
Director: A member of the Board of Directors of the Holding Company.
Effective Date: The effective date of the Reorganization which shall
be the date of consummation of the Reorganization and Offering in
accordance with this Plan and the Rules and Regulations of the OTS.
Eligible Account Holder: The term Eligible Account Holder means any
Person holding a Qualifying Deposit in a Savings Account at the
Association on the Eligibility Record Date. Only the name(s) of the
Person(s) listed on the account as of the Eligibility Record Date (or
a successor entity or estate) is an Eligible Account Holder. Any
Person(s) added to a Savings Account after the Eligibility Record Date
is not an Eligible Account Holder.
Eligibility Record Date: The term Eligibility Record Date means the
date for determining Eligible Account Holders in the Association and
is the close of business on June 30, 1997.
Employee: A person who is an Employee of the Association at the date
of the Reorganization.
Employee Plans: The term Employee Plans means the Tax-Qualified
Employee Stock Benefit Plans, including the Employee Stock Ownership
Plan, approved by the Board of Directors of the Association.
FDIC: Federal Deposit Insurance Corporation.
Independent Appraiser: The term Independent Appraiser means an
appraiser retained by the Association to prepare an appraisal of the
pro forma market value of the Common Stock.
Independent Valuation: The term Independent Valuation means the
estimated pro forma market value of the Common Stock as determined by
the Independent Appraiser prior to the Subscription Offering and as it
may be amended from time to time thereafter.
Local Community: The term Local Community means the counties in which
the Association has an office.
Majority Interest: Greater than fifty percent (50%) of the combined
voting power or value of all classes of stock of the Stock Holding
Company.
Members: All persons or entities who qualify as members of the
Association pursuant to its Charter and Bylaws.
Minority Stock Offering: Any offering of Capital Stock of the Stock
Holding Company to persons other than the Mutual Holding Company of up
to but less than 50% in the aggregate of the total common stock of the
Stock Holding Company.
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Mutual Association: First Federal Savings and Loan Association of
Florida in the mutual form of organization.
Mutual Holding Company: The mutual holding company established by the
Association incident to the Reorganization.
Notice of Reorganization: The Notice of Mutual Holding Company
Reorganization, to be submitted by the Association to the OTS to
notify the OTS of the Reorganization.
Officer: An executive officer of the Association which includes the
President, Chief Executive Officer, and Vice Presidents in charge of
principal business functions, and any other person participating in
major policy making functions of the Association.
Order Form: The term Order Form means any form together with attached
cover letter, sent by the Association 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 subscriptions for Common Stock in the Subscription and
Community Offerings.
Other Member: The term Other Member means any person, who is a Member
of the Association (other than Eligible Account Holders or
Supplemental Eligible Account Holders) at the close of business on the
voting record date.
OTS: Office of Thrift Supervision or any successor agency.
Participants: The term Participants means the Eligible Account
Holders, Employee Plans, Supplemental Eligible Account Holders and
Other Members.
Person: An individual, a corporation, a partnership, an association, a
joint-stock company, a trust (including Individual Retirement Accounts
and KEOGH Accounts), any unincorporated organization, a government or
political subdivision thereof or any other entity.
Plan: This Plan of Mutual Holding Company Reorganization and Stock
Issuance of the Association as it exists on the date hereof and as it
may hereafter be amended in accordance with its terms.
Preferred Stock: Preferred Stock authorized pursuant to the Stock
Holding Company's stock charter.
Purchase and Assumption Transaction: The method of effecting the
transfer of assets and liabilities of the Association to the Stock
Association as described more particularly in the Plan.
Purchase Price: The term Purchase Price means the per share price at
which the Common Stock will be sold in accordance with the terms
hereof.
Qualifying Deposit: The term Qualifying Deposit means the balance of
each Savings Account of $50 or more in the Association at the close of
business on the Eligibility Record Date or Supplemental Eligibility
Record Date. Savings Accounts with total deposit balances of less than
$50 shall not constitute a Qualifying Deposit.
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Reorganization: Collectively, all steps necessary for the Association
to reorganize into the mutual holding company form of organization and
the creation of the Mutual Holding Company, the Stock Association and
the Stock Holding Company pursuant to this Plan and in accordance with
the laws of the United States of America and the Rules and Regulations
of the OTS.
SAIF: The Savings Association Insurance Fund, which is administered by
the FDIC.
Savings Account: The term Savings Account includes savings accounts as
defined in the Rules and Regulations of the OTS and includes
certificates of deposit and demand accounts.
SEC: The Securities and Exchange Commission.
Special Meeting: The Special Meeting of Members of the Association and
any adjournments thereof held to consider and vote upon this Plan.
Stock Association: The newly organized federally chartered stock
savings association established by the Association as part of the
Reorganization.
Stock Holding Company: The federal capital stock corporation that will
own all of the Stock Association's common stock and will be majority
owned by the Mutual Holding Company so long as the Mutual Holding
Company is in existence.
Subscription Offering: The term Subscription Offering means the
offering of Common Stock of the Stock Holding Company for purchase
through Order Forms to Participants.
Supplemental Eligibility Record Date: The term Supplemental
Eligibility Record Date means the close of business on the last day of
the calendar quarter preceding the approval of the Plan by the OTS.
Supplemental Eligible Account Holder: The term Supplemental Eligible
Account Holder means a holder of a Qualifying Deposit in the
Association (other than an officer or director or their Associates) at
the close of business on the Supplemental Eligibility Record Date.
Tax-Qualified Employee Stock Benefit Plan: The term Tax-Qualified
Employee Stock Benefit Plan means any defined benefit plan or defined
contribution plan, such as an employee stock ownership plan, stock
bonus plan, profit-sharing plan or other plan, which, with its related
trust, meets the requirements to be "qualified" under Section 401 of
the Internal Revenue Code.
Voting Members: Those members of the Association that qualify as
voting members as of the voting record date.
Voting Record Date: The date fixed by the Directors of the Association
for determining eligibility to vote at the Special Meeting.
Voting Stock: Common or preferred stock, or any other type of equity
security, including (without limitation) other securities that are
convertible into common or preferred stock, having voting power for
the election of directors or management of the Stock Holding Company.
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3. METHOD OF REORGANIZATION AND CERTAIN EFFECTS OF REORGANIZATION
A. Organization of a Mutual Holding Company, the Stock Holding
Company and the Stock Association
A principal part of the Reorganization will be the
organization of a federally chartered capital stock savings association
which will be a wholly owned subsidiary of the Stock Holding Company,
and the organization of a federally chartered Stock Holding Company, of
which the Mutual Holding Company will own a Majority Interest as long
as the Mutual Holding Company remains in existence.
The Reorganization will be effected in either of the following
ways, or in any manner approved by the OTS that is consistent with the
purposes of this Plan and applicable laws and regulations. The
Association's intention is to complete the Reorganization using the
Merger Alternative, although it may elect to use any method at the
discretion of the OTS consistent with applicable Regulations and
subject to OTS approval.
"Merger Alternative" Under the Merger Alternative: (i) the
Association will organize an interim federal stock savings association
as a wholly owned subsidiary ("Interim One"); (ii) Interim One will
organize an interim federal stock savings association as a wholly owned
subsidiary ("Interim Two"); (iii) Interim One will organize a federal
stock corporation (Stock Holding Company) as a wholly owned subsidiary
of Interim One; (iv) the Association will exchange its charter for a
federal stock savings association charter (Stock Association); (v)
Interim One will cancel its outstanding stock and exchange its charter
for a federal mutual holding company charter (Mutual Holding Company);
(vi) Interim Two will merge with and into Stock Association, with Stock
Association surviving; (vii) former members of the Association will
become members of the Mutual Holding Company; (viii) Mutual Holding
Company will receive all of the stock of Stock Association in exchange
for its shares of Interim Two stock; (ix) the Mutual Holding Company
will transfer all of the outstanding shares of Stock Association to
Stock Holding Company. Upon consummation of the Reorganization, the
legal existence of the Association will not terminate, but the
converted Stock Holding Company will be a continuation of the
Association and all property of the Association, including its right,
title, and interest in and to all property of whatsoever kind and
nature, interest and asset of every conceivable value or benefit then
existing or pertaining to the Association, or which would inure to the
Association immediately by operation of law and without the necessity
of any conveyance or transfer and without any further act or deed, will
vest in the Stock Association. The Stock Association will have, hold,
and enjoy the same in its right and fully and to the same extent as the
same was possessed, held, and enjoyed by the Association. The Stock
Association will continue to have, succeed to, and be responsible for
all the rights, liabilities, and obligations of the Association and
will maintain its headquarters operations at the Association's present
locations.
"Purchase and Assumption Alternative" Under the Purchase and
Assumption Alternative the Association will: (i) incorporate the Stock
Association; (ii) transfer substantially all of its assets (all except
up to $200,000, subject to OTS approval) and all of its liabilities,
including all of its deposit liabilities, to the Stock Association in
exchange for at least a majority of the initially issued and
outstanding shares of Common Stock of the Stock Association; and (iii)
adopt a new charter changing its form to that of a federal mutual
holding company.
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The MHC will not retain any assets of the Association which
are required by the Stock Association in order to satisfy capital and
reserve requirements of federal law. All assets, rights, obligations
and liabilities of whatever nature of the Association that are not
expressly retained by the MHC shall be deemed transferred to the Stock
Association. The Association will apply to the OTS to retain up to
$200,000 at the MHC level in connection with the Reorganization. The
Association may distribute additional capital to the MHC following the
Reorganization, subject to OTS regulations governing capital
distributions.
The Mutual Association shall submit a Notice of Reorganization
to the OTS. Upon filing the Notice, the Mutual Association shall
publish a "Notice of Filing Application for Mutual Holding Company
Reorganization" in a newspaper of general circulation in each community
in which the Association has an office. The Association shall
prominently display a copy of the Notice in each of its offices. Copies
of the Plan as adopted by the Board of Directors shall be made
available for inspection at each office of the Association.
At the conclusion of the Reorganization, the Stock Association will be
the majority owned subsidiary of the Stock Holding Company, and the Stock
Holding Company will be majority owned by the Mutual Holding Company. Based upon
tax, regulatory, economic or other business reasons, the Reorganization can be
revised to eliminate the Stock Holding Company or otherwise without any further
Member ratification.
B. Ownership and Operation of the Mutual Holding Company
The Mutual Holding Company will be a mutual corporation organized under
federal law. As a mutual corporation, the Mutual Holding Company will have no
stockholders. The Mutual Holding Company will own between 50.1% and 100% of the
Voting Stock of the Stock Holding Company, and will be required to own at least
a majority of the Voting Stock of the Stock Holding Company so long as the
Mutual Holding Company remains in existence. The Mutual Holding Company will
have a board of directors which is expected initially to consist of all of the
members of the board of directors of the Association. It is expected that
management of the Mutual Holding Company will consist initially of senior
management persons of the Association.
The rights and powers of the Mutual Holding Company will be defined by
the Mutual Holding Company's Charter and Bylaws and by the statutory and
regulatory provisions applicable to mutual holding companies under federal law.
Depositors who have liquidation rights in the Association immediately prior to
the Reorganization will continue to have such rights in the Mutual Holding
Company after the Reorganization for so long as they maintain deposit accounts
in the Stock Association after the Reorganization. Initially, the sole business
of the Mutual Holding Company will be the ownership of at least a majority of
the voting stock of the Stock Holding Company. The Board of Directors will
continue to have the sole voting rights to govern the Mutual Holding Company,
just as they do now for the Association.
The Association will apply to the OTS to have the Mutual Holding
Company receive or retain (as the case may be) up to $200,000, in connection
with the Reorganization. The Stock Holding Company may distribute additional
capital to the Mutual Holding Company following the Reorganization subject to
applicable state and federal regulations regarding capital distributions.
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C. Ownership and Operation of the Stock Holding Company
The Stock Holding Company will be a capital stock corporation organized
under federal law. The Mutual Holding Company initially will be the sole
stockholder of the Stock Holding Company, and so long as the Mutual Holding
Company is in existence, the Mutual Holding Company will be required to own at
least a majority of the Voting Stock of the Stock Holding Company. However, the
Stock Holding Company may issue any amount of Non-Voting Stock to persons other
than the Mutual Holding Company, and will be authorized to undertake one or more
Minority Stock Offerings provided the aggregate amount of Voting Stock sold in
such Minority Stock Offerings of less than a majority in the aggregate of the
total outstanding Voting Stock of the Stock Holding Company, subject to any
required regulatory approvals. The Stock Holding Company will own 100% of the
Voting Stock of the Stock Association so long as the Mutual Holding Company is
in existence.
The initial members of the board of directors of the Stock Holding
Company will be the existing members of the board of directors of the
Association. Thereafter, the holders of shares of the Stock Holding Company's
Voting Stock will elect the members of the Board of Directors of the Stock
Holding Company for three year terms with approximately one-third of the members
of the Stock Holding Company's board of directors elected annually. The initial
officers of the Stock Holding Company will be senior officers of the
Association.
The Stock Holding Company will be able to exercise all of the powers
authorized to a federal corporation, subject to the restrictions applicable to
mutual holding companies under federal law. Initially, the sole business
activity of the Stock Holding Company will be the ownership of 100% of the
Voting Stock of the Stock Association.
The Association will apply to the OTS to have the Stock Holding Company
receive or retain (as the case may be) up to $200,000 in connection with the
Reorganization. The Stock Association may distribute additional capital to the
Stock Holding Company following the Reorganization, subject to applicable
federal regulations governing capital distributions.
D. Ownership and Operation of the Stock Association
The Stock Association will be a capital stock savings association
organized under federal law. The initial members of the Board of Directors of
the Stock Association will be the existing Board of Directors of the
Association. Thereafter, the Stock Holding Company, as the sole stockholder of
the Stock Association, will elect the members of the Stock Association's Board
of Directors for three year terms with approximately one-third of the directors
up for election each year. The present management of the Association will
continue as the management of the Stock Association following the
Reorganization.
The Stock Association will be authorized to exercise any and all
powers, rights and privileges of, and shall be subject to all limitations
applicable to, capital stock savings banks under federal law. The Reorganization
will not result in any reduction of the amount of retained earnings (other than
the assets of the Association retained by, or distributed to, the Mutual Holding
Company or the Stock Holding Company), undivided profits, and general loss
reserves that the Association had prior to the Reorganization. Such retained
earnings and general loss reserves will be accounted for by the Mutual Holding
Company, the Stock Holding Company and the Stock Association on a consolidated
basis in accordance with generally accepted accounting principles.
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All insured deposit accounts of the Stock Association will continue to
be federally insured up to the legal maximum by the FDIC in the same manner as
deposit accounts existing in the Association immediately prior to the
Reorganization. All loans and other borrowings from the Association shall retain
the same status with the Stock Association after the Reorganization as they had
with the Association immediately prior to the Reorganization.
So long as the Mutual Holding Company is in existence, the Stock
Holding Company will be required to own 100% of the Voting Stock of the Stock
Association. The Stock Association may issue any amount of Non-Voting Stock to
persons other than the Stock Holding Company.
4. SPECIAL MEETING OF MEMBERS
Subsequent to the approval of the Plan by the OTS, the Special Meeting
of Members shall be scheduled in accordance with the Mutual Association's
Bylaws. The Special Meeting shall be held upon written notice given no less than
20 days nor more than 45 days prior to the date of such meeting. Such notice
shall consist of a notice of special meeting and be accompanied by a proxy
statement and proxy card which includes information as is required by applicable
laws and regulations or as the OTS may otherwise require. At the Special
Meeting, each depositor member shall be entitled to cast one vote in person or
by proxy for every one hundred dollars ($100), or fraction thereof, of the
aggregate withdrawal value of all of the their deposit accounts in the
Association as of the Voting Record Date and each borrower member as of the
Voting Record Date shall be entitled to one vote; provided, however, that no
member shall be eligible to cast more than 1,000 votes.
Pursuant to the regulations of the OTS, an affirmative vote of not less
than a majority of the total votes of members eligible to be cast is required
for approval of the Plan, including adoption of the charter and bylaws of the
Mutual Holding Company, the charter and bylaws of the Stock Holding Company and
the charter and bylaws of the Stock Association. Voting may be in person or by
proxy in accordance with the charter and bylaws of the Mutual Association. The
OTS shall be notified promptly of the actions of the Members.
5. CONDITIONS TO IMPLEMENTATION OF REORGANIZATION
Consummation of the Reorganization is expressly conditioned upon the
following:
1. The Plan is approved by at least two-thirds of the Board of
Directors;
2. A Notice of Reorganization is filed with the OTS and either:
(a) The OTS has given written notice of its intent not to
disapprove the proposed Reorganization; or
(b) Sixty days (or such period of time as the OTS may specify if
the review period is extended under ss. 575.3(b)(ii) of the
OTS Regulations) have passed since the OTS received the
Notice of Reorganization and deemed it sufficient under ss.
516.2(c) of the OTS Regulations, and the OTS has not given
written notice that the proposed Reorganization is
disapproved;
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3. The Plan is approved by a majority of the total votes of the
Voting Members of the Mutual Association eligible to be cast
at the Special Meeting;
4. All necessary approvals have been obtained from the OTS in
connection with the charter and bylaws of the Mutual Holding
Company, the Stock Holding Company and the Stock Association
and the transfer of assets and liabilities of the Association
to the Stock Association; and all conditions specified or
otherwise imposed by the OTS in connection with approval of
the Notice of Reorganization and all transactions related
thereto, have been satisfied; and, if applicable, the FDIC has
approved the insurance of accounts of the Stock Association;
5. Receipt by the Mutual Association of a favorable ruling of the
Internal Revenue Service ("IRS") or an opinion of the Mutual
Association's tax advisor with respect to federal taxation to
the effect that consummation of the Reorganization will not be
a taxable event to the Mutual Holding Company, the Stock
Holding Company, the Stock Association or the Mutual
Association's depositors; and
6. Receipt by the Mutual Association of either a private letter
ruling of the Florida Department of Revenue or an opinion of
the Mutual Association's tax advisor with respect to state
taxation to the effect that consummation of the Reorganization
will not be a taxable event to the Mutual Holding Company, the
Stock Holding Company, the Stock Association or to the Mutual
Association's depositors.
6. STOCK OFFERING DOCUMENTS
The Stock Holding Company and the Association intend to commence a
Minority Stock Offering concurrent with the formation of the Mutual Holding
Company. The Association may close the Minority Stock Offering before the
Effective Date, provided that the offer and sale of the Common Stock shall be
conditioned upon the receipt of all required regulatory and Member approvals.
The Association may send Participants a Summary of the Reorganization and
require Participants, to return to the Association by a reasonable date certain
a postage prepaid card or other written communication requesting receipt of the
prospectus. The Stock Holding Company and the Association shall not distribute
the final prospectus until such prospectus has been approved for use by the OTS
and declared effective by the SEC.
7. STOCK OFFERING
A. Number of Shares. The number of shares and price per share of Common
Stock to be offered pursuant to the Plan shall be initially determined by the
Board of Directors of the Association in conjunction with the determination of
the Independent Appraiser. The number of shares to be issued will be on a
minimum-maximum basis within a range determined by the Board of Directors (the
"Offering Range") and may be adjusted at or immediately subsequent to the
completion of the Minority Stock Offering without notifying Participants and
without a resolicitation of subscriptions. The number of shares to be offered or
Offering Range may be subsequently adjusted at or immediately subsequent to the
completion of the Minority Stock Offering for any reason, including a change in
the appraisal. The total number of shares of Common Stock that may be issued to
persons other than the Mutual Holding
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Company at the close of the Minority Stock Offering must be less than 50% of the
issued and outstanding shares of the Stock Holding Company.
B. Independent Evaluation and Purchase Price of Shares. All shares of
Common Stock sold in the Minority Stock Offering shall be sold at a uniform
price per share, referred to in this Plan as the "Purchase Price". The Purchase
Price and number of shares shall be determined by the Board of Directors of the
Association immediately prior to the simultaneous completion of all such sales
contemplated by this Plan on the basis of the estimated pro forma market value
of the Association and the fact that the shares offered represent a minority
interest in the Stock Holding Company (the "Independent Evaluation"). Therefore,
the Independent Evaluation and the resulting Purchase Price may reflect a
discount to the valuation applied to a standard mutual-to-stock conversion. The
aggregate Purchase Price for the Common Stock will not be inconsistent with such
market value of the Association. The Independent Evaluation of the Association
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 total
amount of Common Stock that may be issued to persons other than the Mutual
Holding Company must be less than 50% of the outstanding stock of the Stock
Holding Company. The Common Stock to be issued in the Minority Stock Offering
shall be fully paid and nonassessable.
C. Minority Ownership Percentage. Based upon the Independent
Appraiser's valuation of the Association as updated prior to the commencement of
the Minority Stock Offering, the Board of Directors will establish the minimum
and maximum ownership percentage applicable to the Minority Stock Offering
("Minority Ownership Range"). The final minority ownership percentages or
interest will be determined by the Association as follows: (a) the product of
(x) the total number of shares of Common Stock to be issued and sold and (y) the
Purchase Price shall be by divided by (b) the estimated aggregate pro forma
market value of the Association immediately after the Minority Stock Offering as
determined by the Independent Appraiser, expressed in terms of a specific
aggregate dollar amount upon the closing of the Minority Stock Offering or sale
of all the Common Stock.
D. Method of Offering Shares. Subject to the discretion of the
Association and the limitations set forth in Section 14, the opportunity to
purchase Common Stock will be given, at no cost, in accordance with Sections 8,
9, 10, 11, 12 and 13 of the Plan and pursuant to priorities established by the
Board of Directors in accordance with the Plan. The Minority Stock Offering
shall be conducted on a minimum-maximum basis, setting forth the minimum and
maximum amount of stock that must be offered and sold before closing. The Stock
Holding Company and the Association may elect to pay fees on either a fixed fee
or commission basis or combination thereof to an investment bank firm which
assists it in the sale of the Common Stock in the Minority Stock Offering.
The Stock Holding Company and the Association may also elect to offer
to pay fees on a per share basis to brokers who assist Persons in determining to
purchase shares in the Syndicated Public Offering and whose broker's name
appears on the purchaser's Order Form.
8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)
A. Each Eligible Account Holder shall receive, without payment,
nontransferable subscription rights to subscribe for shares of Common Stock
equal to the greater of: (i) the maximum established for the Community Offering;
(ii) one-tenth of one percent of the Conversion Stock offered; or (iii) 15 times
the product (rounded down to the next whole number) obtained by multiplying the
total number of shares
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of Common Stock offered by a fraction of which the numerator is the amount of
the Qualifying Deposit of such Eligible Account Holder and the denominator is
the total amount of Qualifying Deposits of all Eligible Account Holders but in
no event greater than the maximum purchase limitation specified in Section 14
hereof. All such purchases are subject to the maximum and minimum purchase
limitations specified in Section 14 and are exclusive of an increase in the
total number of shares issued due to an increase in the maximum of the Offering
Range of up to 15%. Only a Person(s) with a Qualifying Deposit as of the
Eligibility Record Date (or a successor entity or estate) shall receive
subscription rights. Any Person(s) added to a Savings Account after the
Eligibility Record Date is not an Eligible Account Holder.
B. In the event that Eligible Account Holders exercise Subscription
Rights for a number of shares of Common Stock in excess of the total number of
such shares eligible for subscription, the shares of Common Stock shall be
allocated among the subscribing Eligible Account Holders so as to permit each
subscribing Eligible Account Holder, to the extent possible, to purchase a
number of shares sufficient to make his or her total allocation of Common Stock
equal to the lesser of 100 shares or the number of shares subscribed for by the
Eligible Account Holder. Any shares remaining after that allocation will be
allocated among the subscribing Eligible Account Holders whose subscriptions
remain unsatisfied in the proportion that the amount of the Qualifying Deposit
of each Eligible Account Holder whose subscription remains unsatisfied bears to
the total amount of the Qualifying Deposits of all Eligible Account Holders
whose subscriptions remain unsatisfied. If the amount so allocated exceeds the
amount subscribed for by any one or more Eligible Account Holders, the excess
shall be reallocated (one or more times as necessary) among those Eligible
Account Holders whose subscriptions are still not fully satisfied on the same
principle until all available shares have been allocated or all subscriptions
satisfied.
C. Subscription rights as Eligible Account Holders received by
Directors and Officers and their Associates which are based on deposits made by
such persons during the twelve (12) months preceding the Eligibility Record Date
shall be subordinated to the Subscription Rights of all other Eligible Account
Holders.
9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)
Subject to the availability of sufficient shares after filling
subscription orders of Eligible Account Holders under Section 8, the Employee
Plans shall receive without payment nontransferable subscription rights to
purchase in the Subscription Offering the number of shares of Common Stock
requested by such Plans, subject to the purchase limitations set forth in
Section 14.
The Employee Plans shall not be deemed to be associates or affiliates
of or Persons Acting in Concert with any Director or Officer of the Stock
Holding Company or the Association.
10. SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)
A. In the event that the Eligibility Record Date is more than 15 months
prior to the date of the latest amendment to the application filed prior to OTS
approval, then, and only in that event, each Supplemental Eligible Account
Holder shall receive, without payment, nontransferable subscription rights
entitling such Supplemental Eligible Account Holder to purchase that number of
shares of Common Stock which is equal to the greater of: (i) the maximum
purchase limitation established for the Community
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Offering; (ii) one-tenth of 1% of the Common Stock Offered; and (iii) or 15
times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be issued by a
fraction of which the numerator is the amount of the Qualifying Deposit of the
Supplemental Eligible Account Holder and the denominator is the total amount of
the Qualifying Deposits of all Supplemental Eligible Account Holders. All such
purchases are subject to the maximum and minimum purchase limitations in Section
14 and are exclusive of an increase in the total number of shares issued due to
an increase in the maximum of the Offering Range of up to 15%.
B. Subscription rights received pursuant to this Category shall be
subordinated to the subscription rights received by Eligible Account Holders and
by the Employee Plans.
C. Any subscription rights to purchase shares of Common Stock received
by an Eligible Account Holder in accordance with Section 8 shall reduce to the
extent thereof the subscription rights to be distributed pursuant to this
Section.
D. In the event of an oversubscription for shares of Common Stock
pursuant to this Section, shares of Common Stock shall be allocated among the
subscribing Supplemental Eligible Account Holders as follows:
(1) Shares of Common Stock shall be allocated so as to permit
each such Supplemental Eligible Account Holder, to the extent possible,
to purchase a number of shares of Common Stock sufficient to make his
total allocation (including the number of shares of Common Stock, if
any, allocated in accordance with Section 8) equal to 100 shares of
Common Stock or the total amount of his subscription, whichever is
less.
(2) Any shares of Common Stock not allocated in accordance
with subparagraph (1) above shall be allocated among the subscribing
Supplemental Eligible Account Holders on an equitable basis, related to
the amounts of their respective Qualifying Deposits as compared to the
total Qualifying Deposits of all subscribing Supplemental Eligible
Account Holders.
11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)
A. Each Other Member shall receive, without payment, nontransferable
subscription rights to subscribe for shares of Common Stock in an amount equal
to the greater of the maximum purchase limitation established for the Community
Offering or one-tenth of one percent of the Common Stock offered, subject to the
maximum and minimum purchase limitations specified in Section 14 and exclusive
of an increase in the total number of shares issued due to an increase in the
maximum of the Offering Range of up to 15%, which will be allocated only after
first allocating to Eligible Account Holders, the Employee Plans and
Supplemental Eligible Account Holders all shares of Common Stock subscribed for
pursuant to Sections 8, 9 and 10 above.
B. In the event that such Other Members subscribe for a number of
shares of Common Stock which, when added to the shares of Common Stock
subscribed for by the Eligible Account Holders, the Employee Plans and the
Supplemental Eligible Account Holders is in excess of the total number of shares
of Common Stock being issued, the subscriptions of such Other Members will be
allocated among the subscribing Other Members so as to permit each subscribing
Other Member, to the extent possible, to purchase a number of shares sufficient
to make his total allocation of Common Stock equal to the lesser
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of 100 shares or the number of shares subscribed for by the Other Member. Any
shares remaining will be allocated among the subscribing Other Members whose
subscriptions remain unsatisfied on a 100 shares (or whatever lesser amount is
available) per order basis until all orders have been filled or the remaining
shares have been allocated.
12. COMMUNITY OFFERING
If less than the total number of shares of Common Stock to be
subscribed for in the Minority Offering are sold in the Subscription Offering,
shares remaining may be made available for purchase in the Community Offering to
certain members of the general public. The Subscription Offering may be
commenced prior to the Special Meeting of Members and, in that event, the
Community Offering may also be commenced prior to the Special Meeting of
Members. The offer and sale of Common Stock, prior to the Special Meeting of
Members shall, however, be conditioned upon approval of the Plan by the Voting
Members.
The maximum amount of Common Stock that any Person may purchase in the
Community Offering, subject to the further limitations of Section 14 hereof (and
exclusive of an increase in the total number of shares issued due to an increase
in the Maximum of the Offering Range of up to 15%), shall not exceed $200,000.
The maximum amount may be decreased or increased to up to 5% of the total
offering of shares in the Minority Offering, subject to any required regulatory
approval but without the further approval of Members, subject to the preferences
set forth in Section 14 of this Plan. In the Community Offering, if any, shares
will be available for purchase by the general public with preference given first
to natural persons residing in the Local Community and second, to natural
persons residing in the State of Florida ("Community Purchasers"). The
Association shall make distribution of the Common Stock to be sold in the
Community Offering in such a manner as to promote a wide distribution of Common
Stock.
If the Persons whose orders would otherwise be accepted, subscribe for
more shares than are available for purchase, the shares available to them will
be allocated among those persons submitting orders in the Community Offering in
an equitable manner as determined by the Board of Directors. The Association may
establish all terms and conditions of such offer.
The Community Offering, if any, may commence simultaneously with,
during or subsequent to the completion of the Subscription Offering and if
commenced simultaneously with or during the Subscription Offering the Community
Offering may be limited to Community Purchasers. The Community Offering must be
completed within 45 days after the completion of the Subscription Offering
unless otherwise extended by the OTS.
The Association and the Stock Holding Company, in their absolute
discretion, reserve the right to reject any or all orders in whole or in part
which are received in the Community Offering, at the time of receipt or as soon
as practicable following the completion of the Community Offering.
13. SYNDICATED COMMUNITY OFFERING
Any shares of Common Stock not sold in the Subscription Offering or in
the Community Offering, if any, may then be sold through the Underwriter to the
general public at the Purchase Price
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in a Syndicated Community Offering, subject to such terms, conditions and
procedures as may be determined by the Board of Directors of the Association, in
a manner that will achieve a wide distribution of the Common Stock and subject
to the right of the Association and the Stock Holding Company, in their absolute
discretion, to accept or reject in whole or in part all subscriptions in the
Syndicated Community Offering. In the Syndicated Community Offering, if any, any
person together with any Associate or group of persons Acting in Concert may
purchase up to the maximum purchase limitation established for the Community
Offering, subject to the maximum and minimum purchase limitations specified in
Section 14 and exclusive of an increase in the total number of shares issued due
to an increase in the maximum of the Offering Range of up to 15%. Shares
purchased by any Person together with any Associate or group of persons Acting
in Concert pursuant to Section 12 shall be counted toward meeting the maximum
purchase limitation specified for this Section. Provided that the Subscription
Offering has commenced, the Association may commence the Syndicated Community
Offering at any time after the mailing to the Members of the proxy statement to
be used in connection with the special meeting of Members, provided that the
completion of the offer and sale of the Common Stock shall be conditioned upon
the ratification of this Plan by the Voting Members. It is expected that the
Syndicated Community Offering, if any, will commence just prior to, or as soon
as practicable after, the termination of the Subscription Offering. The
Syndicated Community Offering shall be completed within 45 days after the
termination of the Subscription Offering, unless such period is extended as
provided above.
14. LIMITATION ON PURCHASES
The following limitations shall apply to all purchases of shares of
Common Stock in the Minority Stock Offering:
A. The maximum number of shares of Common Stock which may be purchased
in the Subscription Offering by any Person (or persons through a single account)
in the First Priority, Third Priority and Fourth Priority shall not exceed
$200,000 divided by the Purchase Price.
B. The number of shares of Common Stock which may be purchased by any
Person in the Community and/or Syndicated Community Offering shall not exceed
$200,000 divided by the Purchase Price.
C. The maximum number of shares of Common Stock which may be subscribed
for or purchased in all categories in the Minority Stock Offering by any Person
(or persons through a single account) together with any Associate or group of
persons Acting in Concert shall not exceed $200,000 divided by the Purchase
Price per share, except for Employee Plans, which in the aggregate may subscribe
for up to 10% of the Common Stock issued in the Minority Stock Offering.
D. The maximum number of shares of Common Stock which may be purchased
in all categories in the Minority Stock Offering by Officers and Directors of
the Association and their Associates in the aggregate shall not exceed 27% of
the total number of shares of Common Stock issued in the Minority Stock
Offering.
E. A minimum of 25 shares of Common Stock must be purchased by each
Person purchasing shares in the Minority Stock Offering to the extent those
shares are available; provided, however, that
A - 15
the minimum number of shares requirement will not apply if the number of shares
of Common Stock purchased times the price per share exceeds $500.
F. If the number of shares of Common Stock otherwise allocable pursuant
to Sections 8 through 13, inclusive, to any Person or that Person's Associates
would be in excess of the maximum number of shares permitted as set forth above,
the number of shares of Common Stock allocated to each such Person shall be
reduced to the lowest limitation applicable to that Person, and then the number
of shares allocated to each group consisting of a Person and that Person's
Associates shall be reduced so that the aggregate allocation to that Person and
his Associates complies with the above maximums, and such maximum number of
shares shall be reallocated among that Person and his Associates as they may
agree, or in the absence of an agreement, in proportion to the shares subscribed
by each (after first applying the maximums applicable to each Person,
separately).
G. Depending upon market or financial conditions, the Board of
Directors of the Association, without further approval of the Members, may
decrease or increase the purchase limitations in this Plan, provided that the
maximum purchase limitations may not be increased to a percentage in excess of
5% of the Minority Stock Offering. If the Association increases the maximum
purchase limitations, the Association is only required to resolicit Persons who
subscribed for the maximum purchase amount and may, in the sole discretion of
the Association, resolicit certain other large subscribers with respect to
increasing their orders. For purposes of this Section 14, the Directors of the
Association shall not be deemed to be Associates or a group affiliated with each
other or otherwise Acting in Concert solely as a result of their being Directors
of the Association.
H. In the event of an increase in the total number of shares offered in
the Minority Stock Offering due to an increase in the maximum of the Offering
Range of up to 15% (the "Adjusted Maximum") the additional shares will be used
in the following order of priority: (i) to fill the Employees Plan's
subscription to up to 10% of the Adjusted Maximum; (ii) in the event that there
is an oversubscription at the Eligible Account Holder level, to fill unfilled
subscriptions of Eligible Account Holders exclusive of the Adjusted Maximum
according to Section 8; (iii) in the event that there is an oversubscription at
the Supplemental Eligible Account Holder level, to fill unfilled subscriptions
of Supplemental Eligible Account Holders exclusive of the Adjusted Maximum
according to Section 10; (iv) in the event that there is an oversubscription at
the Other Member level, to fill unfilled subscriptions of Other Members
exclusive of the Adjusted Maximum in accordance with Section 11; and (v) to fill
unfilled Subscriptions in the Community Offering exclusive of the Adjusted
Maximum, with preference given to Persons residing in the Local Community.
I. Each Person purchasing Common Stock in the Minority Stock Offering
shall be deemed to confirm that such purchase does not conflict with the above
purchase limitations contained in this Plan.
J. For a period of three years following the Reorganization, no
Officer, Director or their Associates shall purchase, without the prior written
approval of the OTS, any outstanding shares of common stock of the Stock Holding
Company, except from a registered broker-dealer. This provision shall not apply
to negotiated transactions involving more than one percent of the outstanding
shares of common stock of the Stock Holding Company, the exercise of any options
pursuant to a stock option plan or purchases of common stock of the Stock
Holding Company, made by or held by any Tax-Qualified Employee Stock Benefit
Plan or Non-Tax Qualified Employee Stock Benefit Plan of the Stock Association
or Stock Holding Company (including the Employee Plans) which may be
attributable to any Officer or Director. As used herein, the term "negotiated
transaction" means a transaction in which the securities
A - 16
are offered and the terms and arrangements relating to any sale are arrived at
through direct communications between the seller or any person acting on its
behalf and the purchaser or his investment representative. The term "investment
representative" shall mean a professional investment advisor acting as agent for
the purchaser and independent of the seller and not acting on behalf of the
seller in connection with the transaction.
15. PAYMENT FOR COMMON STOCK
All payments for Common Stock subscribed for in the Subscription and
Community Offering (if any), must be delivered in full to the Association,
together with a properly completed and executed Order Form, 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 Stock Association; provided, however,
that if the Employee Plans subscribe for shares during the Subscription
Offering, the Employee Plans will not be required to pay for the shares at the
time they subscribe but rather may pay for such shares of Common Stock upon
consummation of the Reorganization. The Association may make scheduled
discretionary contributions to Employee Plans provided such contributions do not
cause the Association to fail to meet its regulatory capital requirement.
Notwithstanding the foregoing, the Association and the Stock Holding
Company shall have the right, in their sole discretion, to permit institutional
investors to submit contractually irrevocable orders in the Community Offering
(if any), and to thereafter submit payment for the Common Stock for which they
are subscribing in the Community Offering (if any), at any time prior to the
completion of the Reorganization.
Payment for Common Stock subscribed for shall be made either in cash
(if delivered in person), check or money order. Alternatively, subscribers in
the Subscription and Community Offering (if any) may pay for the shares
subscribed for by authorizing the Association on the Order Form to make a
withdrawal from the subscriber's Savings Account at the Association 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
requirement, the certificate shall be canceled at the time of withdrawal,
without penalty, and the remaining balance will earn interest at the passbook
rate. Funds for which a withdrawal is authorized will remain in the subscriber's
Savings Account but may not be used by the subscriber until the Common Stock has
been sold or the 45-day period (or such longer period as may be approved by the
OTS) following the Subscription Offering 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 Purchase Price
per share. Interest will continue to be earned on any amounts authorized for
withdrawal until such withdrawal is given effect. Interest will be paid by the
Association at not less than the annual passbook rate on payments for Common
Stock received in cash or by money order or check. Such interest will be paid
from the date payment is received by the Association until consummation or
termination of the Minority Offering. If for any reason the Minority Offering is
not consummated, all payments made by subscribers in the Minority Offering will
be refunded to them with interest. In case of amounts authorized for withdrawal
from Savings Accounts, refunds will be made by canceling the authorization for
withdrawal.
A - 17
The Association is prohibited by regulation from knowingly making any
loans or granting any lines of credit for the purchase of stock in the
Reorganization.
16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS
As soon as practicable after the prospectus prepared by the Association
has been approved by the OTS and declared effective by the SEC, Order Forms will
be distributed to the Participants at their last known addresses appearing on
the records of the Association for the purpose of subscribing to shares of
Common Stock in the Subscription Offering and may be made available for use in
the Community Offering. Notwithstanding the foregoing, the Association may elect
to send Order Forms only to those Persons who request them after such notice as
is approved by the OTS and is adequate to apprise the Participants of the
pendency of the Subscription Offering has been given. Such notice may be
included with the proxy statement for the Special Meeting of Members and may
also be included in a notice of the pendency of the Reorganization and the
Special Meeting of Members in accordance with regulations of the OTS.
Each Order Form will be preceded or accompanied by the Offering Circular
describing the Association, the Common Stock and the Subscription and Community
Offering (if any). Each Order Form will contain, among other things, the
following:
A. A specified date by which all Order Forms must be received by the
Association, which date shall be not less than twenty (20), nor more than
forty-five (45) days, following the date on which the Order Forms are mailed by
the Association, and which date will constitute the termination of the
Subscription Offering;
B. The purchase price per share for shares of Common Stock to be sold in
the Subscription and Community Offering (if any);
C. A description of the minimum and maximum number of shares of Common
Stock which 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 is to 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, as the case may be, prior to execution of the
Order Form.
F. A statement to the effect that all subscription rights are
nontransferable, will be void at the end of the Subscription Offering, and can
only be exercised by delivering within the subscription period such properly
completed and executed Order Form, together with cash (if delivered in person),
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 Association withdraw said amount from the subscriber's Savings Account at
the Association) to the Association; and
A - 18
G. A statement to the effect that the executed Order Form, once
received by the Association, may not be modified or amended by the subscriber
without the consent of the Association.
Notwithstanding the above, the Association reserves the right in its
sole discretion to accept or reject orders received on photocopied or
facsimilied order forms or whose payment is to be made by wire transfer.
17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORMS: INSUFFICIENT PAYMENT
In the event Order Forms (a) are not delivered and are returned to the
Association by the United States Postal Service or the Association is unable to
locate the addressee, (b) are not received back by the Association or are
received by the Association after the expiration date specified thereon, (c) are
defectively filled out or executed, (d) are not accompanied by the full required
payment, or, in the case of institutional investors in the Community Offering,
by delivering irrevocable orders together with a legally binding commitment to
pay in cash, check, money order or wire transfer the full amount of the purchase
price prior to 48 hours before the completion of the conversion for the shares
of Common Stock subscribed for (including cases in which Savings Accounts from
which withdrawals are authorized are insufficient to cover the amount of the
required payment), or (e) are not mailed pursuant to a "no mail" order placed in
effect by the account holder, the subscription rights of the person to whom such
rights have been granted will lapse as though such person failed to return the
completed Order Form within the time period specified thereon; provided,
however, that the Association 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 Association may specify. The interpretation of the Association of terms
and conditions of the Plan and of the Order Forms will be final, subject to the
authority of the OTS.
18. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION
A. All shares of Common Stock purchased by Directors or Officers of the
Association in the Minority Stock Offering shall be subject to the restriction
that, except as provided in Section 18B below, or as may be approved by the OTS,
no interest in such shares may be sold or otherwise disposed of for value for a
period of one (1) year following the date of purchase.
B. The restriction on disposition of shares of Common Stock set forth
in Section 18A above shall not apply to any disposition of such shares following
the death of the person to whom such shares were initially sold under the terms
of the Plan.
C. With respect to all shares of Common Stock subject to restrictions
on resale or subsequent disposition, each of the following provisions shall
apply;
(i) Each certificate representing shares restricted within the
meaning of Section 18A, above, shall bear a legend prominently stamped on its
face giving notice of the restriction;
(ii) Instructions shall be issued to the stock transfer agent
to recognize or effect any transfer of any certificate or record of ownership of
any such shares in violation of the restriction on transfer; and
A - 19
(iii) Any shares of capital stock of the Stock Holding Company
issued with respect to a stock dividend, stock split, or otherwise with respect
to ownership of outstanding shares of Common Stock subject to the restriction on
transfer hereunder shall be subject to the same restriction as is applicable to
such Common Stock.
19. CHARTER AND BYLAWS OF THE STOCK ASSOCIATION
As part of the Reorganization, a charter and bylaws of the Stock
Association shall be adopted to authorize the Stock Association to operate as a
federally chartered stock savings association.
20. CHARTER AND BYLAWS OF THE STOCK HOLDING COMPANY
As part of the Reorganization, a Charter and Bylaws of the Stock
Holding Company shall be adopted pursuant to federal law. The Stock Holding
Company's charter may authorize a number of shares of Common Stock greater than
the number of shares that shall be issued to the Stock Holding Company in the
Reorganization. The charter may contain provisions that for a period of five
years from the effective date of the charter, (i) prohibit any person other than
the Mutual Holding Company from acquiring beneficial ownership of greater than
10% of the Common Stock of the Stock Holding Company, unless approved by a
majority of the Directors of the Association; (ii) prohibit persons beneficially
owning shares in excess of 10% from voting such excess shares in connection with
any matter submitted to stockholders for a vote; (iii) prohibit persons other
than the Board of Directors of the Stock Holding Company from calling special
meetings of the stockholders of the Stock Holding Company; and (iv) prohibit
cumulative voting by stockholders for directors. The charter for the Stock
Holding Company may also contain provisions which allow for the issuance of
Preferred Stock in accordance with applicable federal law. Additional
anti-takeover provisions may be adopted subsequent to the Reorganization
provided they are permitted under the laws of Florida. By their approval of the
Plan, Voting Members shall have approved and adopted the Charter and Bylaws of
the Stock Holding Company. The number of shares of Common Stock authorized under
the Stock Holding Company Charter will exceed the shares of Common Stock to be
issued to the Mutual Holding Company in the Reorganization. The Charter may
include any provision authorized under federal law.
21. CHARTER AND BYLAWS OF THE MUTUAL HOLDING COMPANY
As part of the Reorganization, the Association will reorganize into a
mutual holding company under federal law and will adopt a charter and bylaws for
the Mutual Holding Company. By their approval of the Plan, the Board of
Directors of the Mutual Association and its Voting Members have approved and
adopted the charter and bylaws of the Mutual Holding Company. A copy of the
proposed Charter and Bylaws of the Mutual Holding Company, the Stock Holding
Company and the Stock Association are required to be mailed only to those
members requesting them.
22. CONVERSION OF MUTUAL HOLDING COMPANY TO STOCK FORM
Once the Reorganization is completed, the Mutual Holding Company may,
if approved by the OTS, elect to convert to the stock form of ownership pursuant
to federal law. As long as required by
A - 20
federal law or regulation, any such conversion is also subject to the approval
of the Members of the Stock Association. The terms and conditions of such a
conversion cannot be determined at this time and there is no assurance when, if
ever, such a conversion will occur. If the conversion does not occur, the Mutual
Holding Company will always own a majority of the Common Stock of the Stock
Holding Company.
If the Mutual Holding Company converts to stock form, either on a
stand-alone basis or in the context of a conversion-merger ("Conversion
Transaction"), under federal law, shares of stock issued in connection with the
Conversion Transaction shall be subject to subscription rights granted in
accordance with OTS regulations. In addition, pursuant to federal law and OTS
Regulations, in the Conversion Transaction, the shares of stock held by the
stockholders of the Stock Association or Stock Holding Company shall be
exchanged for shares of the converted Mutual Holding Company in a proportion
established by independent appraisals of the Mutual Holding Company, the Stock
Holding Company and the Stock Association. If, in a Conversion Transaction, the
stockholders of the Stock Association or Stock Holding Company do not receive,
for any reason, shares of the converted Mutual Holding Company (or its
successor) on such proportionate basis, the Mutual Holding Company (or its
successor) shall be obligated to purchase all shares not owned by it
simultaneously with the closing of such Conversion Transaction at the fair
market value of such shares, determined as if such shares had such exchange
rights, as determined by the independent appraisals. Moreover, in the event that
the Mutual Holding Company converts to stock form in a Conversion Transaction,
any options or other convertible securities held by any Officer, Director, or
Employee of the Stock Holding Company, convertible into shares of the Stock
Holding Company shall be convertible into shares of the converted Mutual Holding
Company (or its successor), provided, that any exchange ratio shall provide the
holder of such options or convertible securities with shares at least equal in
value to those exchanged; provided, further however, that if such shares cannot
be so converted, the holders of such options or other convertible securities
shall be entitled to receive cash payment for such options and other convertible
securities in an amount equal to the appraised value of the underlying
securities represented by such options or other convertible securities.
In any Conversion Transaction, stockholders of the Stock Holding
Company other than the Mutual Holding Company ("Minority Stockholders"), if any,
will be entitled to maintain the same percentage ownership interest in the Stock
Holding Company after the Conversion Transaction as their ownership interest in
the Stock Holding Company immediately prior to the Conversion Transaction,
subject only to certain adjustments (i.e., waiver of dividends and the transfer
of assets held solely by the Mutual Holding Company to the resulting stock
company) that may be required by the OTS. These adjustments may result in a
decrease of ownership interest of the Minority Stockholders.
Each certificate representing shares of Common Stock shall bear a
legend giving appropriate notice of the provisions applicable to a Conversion
Transaction.
23. CONTINUITY OF THE ASSOCIATION AND STATUS OF DEPOSIT ACCOUNTS AND
LOANS SUBSEQUENT TO REORGANIZATION
Upon the Effective Date of the Reorganization, except for those assets
expressly retained by the Mutual Holding Company or the Stock Holding Company,
the Stock Association will succeed to all of the assets, rights, powers,
franchises, debts, liabilities, interests, duties and obligations of the Mutual
Association before the Reorganization, including but not limited to, all rights
and interests of the Mutual Association in and to its assets and properties,
whether real, personal or mixed.
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All deposit accounts in the Mutual Association shall retain the same
status after the Reorganization as these accounts had prior to Reorganization,
except that each deposit account holder shall retain, without payment therefor,
a withdrawable deposit account or accounts in the Stock Association after the
Reorganization, equal in amount to the withdrawable value of such holders'
deposit account or accounts prior to the Reorganization. All deposit accounts
which are transferred to the Stock Association will continue to be insured by
the FDIC up to the applicable limits of insurance coverage.
All loans shall retain the same status after the Reorganization as they
had prior to the Reorganization. The amount, interest rate, maturity, and
security for each loan will remain contractually fixed as they existed prior to
the Reorganization. Following the Reorganization, all of such loans will be held
by the Stock Association.
All other assets of the Mutual Association at the time of
Reorganization will retain the same status as prior to the Reorganization,
except that substantially all of such other assets will become assets of the
Stock Association.
24. RIGHTS OF OWNERS OF THE MUTUAL HOLDING COMPANY
Following the Reorganization, all persons who had membership or
liquidation rights with respect to the Association as of the Date of the
Reorganization will continue to have such rights solely with respect to the
Mutual Holding Company. All existing proxies granted by members of the
Association to the Board of Directors of the Association shall automatically
become proxies granted to the Board of Directors of the Mutual Holding Company,
provided, however, such proxies may not be voted by the Board of Directors at
the Special Meeting to approve the Plan. In addition, all persons who become
depositors of the Stock Association subsequent to the Reorganization also will
have membership and liquidation rights with respect to the Mutual Holding
Company. In each case, no person who ceases to be the holder of a deposit
account with the Stock Association shall have any membership or liquidation
rights with respect to the Mutual Holding Company. Borrowers of the Stock
Association who were borrower members of the Association at the time of
Reorganization will have the same membership rights in the Mutual Holding
Company as they had in the Association immediately prior to the Reorganization
for so long as their pre-Reorganization borrowings remain outstanding. Borrowers
will not receive membership rights in connection with any new borrowings made
after the Reorganization.
25. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK
The Stock Association and the Stock Holding Company may declare
dividends or make other capital distributions or repurchase stock in accordance
with applicable laws and regulations. In accordance with applicable law, and the
regulations and policies of the OTS, the Mutual Holding Company may waive its
right to receive dividends declared to it by the Stock Holding Company.
26. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES
The Association 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 the Plan reside. However, no
such Person will be issued subscription rights or be permitted to purchase
shares
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of Conversion Stock in the Subscription Offering if such Person resides in a
foreign country or in a state of the United States with respect to which all of
the following apply: (i) a small number of Persons otherwise eligible to
subscribe for shares under the Plan reside in such state; (ii) the issuance of
subscription rights or the offer or sale of shares of Common Stock to such
Persons would require the Association, under the securities laws of such state,
to register as a broker, dealer, salesman or agent or to register or otherwise
qualify its securities for sale in such state; and (iii) such registration or
qualification would be impracticable for reasons of cost or otherwise.
27. REGISTRATION AND MARKET MAKING
Within the time period required by applicable laws and regulations, the
Stock Association will register the securities issued in connection with the
Reorganization pursuant to the Securities Exchange Act of 1934 and will not
deregister such securities for a period of at least three years thereafter,
except that the maintenance of registration for three years requirement may be
fulfilled by any successor to the Stock Association. In addition, the Stock
Association will use its best efforts to encourage and assist a market-maker to
establish and maintain a market for the common stock issued in the
Reorganization and to list those securities on a national or regional securities
exchange or the Nasdaq System.
28. ESTABLISHMENT OF LIQUIDATION ACCOUNT
The Association shall establish at the time of Reorganization a
liquidation account in an amount equal to its net worth as of the latest
practicable date prior to the Reorganization. The liquidation account will be
maintained by the Stock Association for the benefit of the Eligible Account
Holders and Supplemental Eligible Account Holders who continue to maintain their
Savings Accounts at the Stock Association. Each Eligible Account Holder and
Supplemental Eligible Account Holder shall, with respect to his Savings Account,
hold a related inchoate interest in a portion of the liquidation account
balance, in relation to his Savings Account balance at the Eligibility Record
Date and Supplemental Eligibility Record Date, respectively, or to such balance
as it may be subsequently reduced, as hereinafter provided.
In the unlikely event of a complete liquidation of the Stock
Association (and only in such event), following all liquidation payments to
creditors (including those to Account Holders to the extent of their Savings
Accounts) each Eligible Account Holder and Supplemental Eligible Account Holder
shall be entitled to receive a liquidating distribution from the liquidation
account, in the amount of the then adjusted subaccount balance for his Savings
Account then held, before any liquidation distribution may be made to any
holders of the Stock Association's capital stock. No merger, consolidation,
purchase of bulk assets with assumption of Savings Accounts and other
liabilities, or similar transactions with an FDIC-insured institution, in which
the Stock Association is not the surviving institution, shall be deemed to be a
complete liquidation for this purpose. In such transactions, the liquidation
account shall be assumed by the surviving institution.
The initial subaccount balance for a Savings Account held by an
Eligible Account Holder or Supplemental Eligible Account Holder shall be
determined by multiplying the opening balance in the liquidation account by a
fraction, the numerator of which is the amount of such Eligible Account Holder's
and Supplemental Eligible Account Holder's Qualifying Deposit and the
denominator of which is the total amount of all Qualifying Deposits of all
Eligible Account Holders and Supplemental Eligible Account
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Holders in the Association. Such initial subaccount balance shall not be
increased, but shall be subject to downward adjustment as described below.
If, at the close of business on any annual closing date, commencing on
or after the effective date of Reorganization, the deposit balance in the
Savings Account of an Eligible Account Holder or Supplemental Eligible Account
Holder is less than the lesser of (i) the balance in the Savings Account at the
close of business on any other annual closing date subsequent to the Eligibility
Record Date or Supplemental Eligibility Record Date, as applicable, or (ii) the
amount of the Qualifying Deposit in such Savings Account, the subaccount balance
of such Savings Account shall be adjusted by reducing such subaccount balance in
an amount proportionate to the reduction in such deposit balance. In the event
of such downward adjustment, the subaccount balance shall not be subsequently
increased, notwithstanding any subsequent increase in the deposit balance of the
related Savings Account. If any such Savings Account is closed, the related
subaccount shall be reduced to zero.
The creation and maintenance of the liquidation account shall not
operate to restrict the use or application of any of the net worth accounts of
the Stock Association.
29. EXPENSES OF REORGANIZATION
The Association shall use its best efforts to assure that expenses
incurred by it in connection with the Reorganization shall be reasonable.
30. AMENDMENT OR TERMINATION OF THE PLAN
This Plan may be substantively amended by the Board of Directors of the
Association as a result of comments from the regulatory authorities or otherwise
prior to submission of the Plan and proxy materials to Members, and at any time
thereafter with the concurrence of the OTS. This Plan may be terminated by the
Board of Directors of the Association at any time prior to the Special Meeting
of members, and at any time thereafter with the concurrence of the OTS. This
Plan shall be terminated if not completed within 24 months from the date upon
which members approve this Plan.
An increase or decrease in the maximum purchase limitation or number of
shares sold in the Minority Stock Offering by the Board of Directors pursuant to
Section 14 subsequent to the Special Meeting of Members is specifically
authorized by this Plan, and is not an amendment to the Plan which would require
Member approval. In the event that mandatory new regulations pertaining to
mutual holding companies are adopted by the OTS prior to the completion of the
Reorganization, the Plan may be amended to conform to the new mandatory
regulations. In the event that new mutual holding company regulations adopted by
the OTS prior to completion of the Reorganization contain optional provisions,
the Plan may be amended to utilize such optional provisions at the discretion of
the Board of Directors.
By adoption of the Plan, the Members of the Association authorize the
Board of Directors to amend or terminate the Plan under the circumstances set
forth in this Section.
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31. MISCELLANEOUS
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of the Board of Directors of the
Association shall be final, subject to the authority of the OTS.
If any term, provision, covenant or restriction contained in this Plan
is held by a court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions contained in this Plan shall remain in
full force and effect, and shall in no way be affected, impaired or invalidated.
This Plan is to be governed by and construed in accordance with the
laws of the United States. None of the cover page, the table of contents, or the
section headings are to be considered a part of this Plan, but are included
solely for convenience of reference and shall in no way define, limit, extend,
or describe the scope or intent of any of the provisions hereof. Words in the
singular include the plural, and words in the plural include the singular.
Except for such rights as are set forth herein for Members, this Plan shall
create no rights in any Person.
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