Exhibit 99.3
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
1001 North Jesse James Road
Excelsior Springs, Missouri 64024
(816) 630-6711
____________________________________
NOTICE OF SPECIAL MEETING OF MEMBERS
____________________________________
Notice is hereby given that a Special Meeting of Members (the "Special
Meeting") of Community Bank of Excelsior Springs, A Savings Bank (the "Bank"),
will be held at the main office of the Bank located at 1001 North Jesse James
Road, Excelsior Springs, Missouri, on September ___, 1996 at 4:30 p.m.,
Excelsior Springs, Missouri time. The purpose of this Special Meeting is to
consider and vote upon:
A plan to convert the Bank from a federally chartered mutual savings bank
to a federally chartered stock savings bank, including the adoption of a
federal stock savings bank charter and bylaws, with the concurrent sale
of all the Bank's common stock to CBES Bancorp, Inc., a Delaware
corporation (the "Holding Company"), and sale by the Holding Company of
shares of its common stock; and
such other business as may properly come before this Special Meeting or any
adjournment thereof. Management is not aware of any such other business.
The members who shall be entitled to notice of and to vote at the
Special Meeting and any adjournment thereof are depositors and certain borrowers
of the Bank at the close of business on _______, 1996 who continue to be members
as of the date of the Special Meeting. In the event there are not sufficient
votes for approval of the Plan of Conversion at the time of the Special Meeting,
the Special Meeting may be adjourned from time to time in order to permit
further solicitation of proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. McCrorey
Chairman of the Board
Excelsior Springs, Missouri
August ___, 1996
________________________________________________________________________________
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR APPROVAL OF THE PLAN OF CONVERSION BY COMPLETING THE
ENCLOSED PROXY CARD AND RETURNING IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
YOUR VOTE IS VERY IMPORTANT.
________________________________________________________________________________
SUMMARY OF PROPOSED CONVERSION
This summary does not purport to be complete and is qualified in its
entirety by the more detailed information contained in the remainder of this
Proxy Statement and the accompanying Prospectus.
Under its present "mutual" form of organization, the Bank has no
stockholders. Its deposit account holders and certain borrowers are members of
the Bank and have voting rights in that capacity. In the unlikely event of
liquidation, the Bank's deposit account holders would have the sole right to
receive any assets of the Bank remaining after payment of its liabilities
(including the claims of all deposit account holders to the withdrawal value of
their deposits). Under the Plan of Conversion (the "Plan of Conversion") to be
voted on at the Special Meeting, the Bank would be converted into a federally
chartered savings bank organized in stock form, and all of the Bank's common
stock would be sold concurrently to the Holding Company (the "Conversion"). The
Holding Company will offer and sell its common stock (the "Common Stock") in an
offering (1) to depositors with an account balance of $50 or more on March 31,
1995 ("Eligible Account Holders"), (2) tax-qualified employee stock benefit
plans of the Bank ("Tax-Qualified Employee Plans"), (3) depositors of the Bank
with an account balance of $50 or more as of June 30, 1996 ("Supplemental
Eligible Account Holders"), (4) depositors of the Bank as of _______, 1996,
other then Eligible or Supplemental Eligible Account Holders and certain
borrowers as of both ________, 1995 and _______, 1996, who continue to be
borrowers as of the date of this Special Meeting ("Other Members") and (5)
directors, officers and employees of the Bank (the "Subscription Offering").
Notwithstanding the foregoing, to the extent orders for shares exceed the
maximum of the appraisal range, Tax-Qualified Employee Plans shall be afforded a
first priority to purchase shares sold above the maximum of the appraisal range.
It is anticipated that Tax-Qualified Employee Plans will purchase 8% of the
Common Stock sold in the Conversion.
Concurrent with or following completion of the Subscription Offering, to
the extent the Common Stock is not all sold to the persons in the foregoing
categories, the Holding Company may offer Common Stock to members of the general
public to whom a prospectus (the "Prospectus") has been delivered ("Other
Subscribers"), with first preference to natural persons residing in Ray and Clay
Counties, Missouri ("the Community Offering"). The Subscription Offering and
the Community Offering are referred to collectively as the "Subscription and
Community Offering." Voting and liquidation rights with respect to the Bank
would thereafter be held by the Holding Company, except to the limited extent of
the liquidation account (the "Liquidation Account") that will be established for
the benefit of Eligible Account Holders and Supplemental Eligible Account
Holders of the Bank and voting and liquidation rights in the Holding Company
would be held only by those persons who become stockholders of the Holding
Company through purchase of shares of its Common Stock. See "Description of the
Plan of Conversion - Principal Effects of Conversion - Liquidation Rights of
Depositor Members."
THE CONVERSION WILL NOT AFFECT THE BALANCE, INTEREST RATE OR FEDERAL
INSURANCE PROTECTION OF ANY SAVINGS DEPOSIT, AND NO PERSON WILL BE OBLIGATED TO
PURCHASE ANY STOCK IN THE CONVERSION.
Business Purposes Net Conversion proceeds are expected to increase the
for Conversion capital of the Bank, which will support the expansion of
its financial services to the public. The conversion to
stock form and the use of a holding company structure are
also expected to enhance its ability to expand through
possible mergers and acquisitions (although no such
transactions are contemplated at this time) and will
facilitate its future access to the capital markets. The
Bank will continue to be subject to comprehensive
regulation and examination by the Office of Thrift
Supervision, Department of Treasury ("OTS") and the
Federal Deposit Insurance Corporation ("FDIC").
Subscription and As part of the Conversion, Common Stock is being offered
Community Offering for sale in the Subscription Offering, in the priorities
summarized below, to the Bank's (1) Eligible Account
Holders, (2) Tax-Qualified Employee Plans, (3)
Supplemental Eligible Account Holders (4) Other Members,
and (5) employees, officers and directors. In addition, in
the Community Offering, Other Subscribers may purchase
Common Stock to the extent shares are available after
satisfaction of subscriptions in the Subscription
Offering, with a preference first to natural persons
residing in Ray and Clay Counties, Missouri.
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Subscription Rights Each Eligible Account Holder has been
of Eligible Account given non-transferable rights to subscribe for the greater
Holders of $100,000 of Common Stock, one-tenth of one percent of
the total number of shares offered in the Subscription and
Community Offering or 15 times the product (rounded down
to the whole next number) obtained by multiplying the
total number of shares to be issued by a fraction of which
the numerator is the amount of qualifying deposits of such
subscriber and the denominator is the total qualifying
deposits of all account holders in this category on the
qualifying date.
Subscription Rights The Bank's Tax-Qualified Employee Plans have been given
of Tax-Qualified non-transferable rights to subscribe, individually and in
Employee Plans the aggregate, for up to 10% of the total number of
shares sold in the Conversion after satisfaction of
subscriptions of Eligible Account Holders. Notwithstanding
the foregoing, to the extent orders for shares exceed the
maximum of the appraisal range, Tax-Qualified Employee
Plans shall be afforded a first priority to purchase
shares sold above the maximum of the appraisal range. It
is anticipated that Tax-Qualified Employee Plans will
purchase 8% of the Common Stock sold in the Conversion.
Subscription Rights After satisfaction of subscriptions of Eligible Account
of Supplemental Holders and Tax-Qualified Employee Plans, each
Eligible Account Supplemental Eligible Account Holder (other than directors
Holders and officers of the Bank) has been given non-transferable
rights to subscribe for the greater of $100,000 of Common
Stock, one-tenth of one percent of the total number of
shares offered in the Conversion or 15 times the product
(rounded down to the whole next number) obtained by
multiplying the total number of shares to be issued by a
fraction of which the numerator is the amount of
qualifying deposits of such subscriber and the denominator
is the total qualifying deposits of all account holders in
this category on the qualifying date. The subscription
rights of each Supplemental Eligible Account Holder shall
be reduced to the extent of such person's subscription
rights as an Eligible Account Holder.
Subscription Rights Each Other Member has been given non-transferable rights
of Other Members to subscribe for up to $100,000 of Common Stock or
one-tenth of one percent of the total Conversion after
satisfaction of the subscriptions of the Bank's Eligible
Account Holders, Tax-Qualified Employee Plans and
Supplemental Eligible Account Holders.
Subscription Rights Each individual employee, officer and director of the
of Bank Personnel Bank has been given the right to subscribe for up to
$100,000 of Common Stock after satisfaction of the
subscriptions of Eligible Account Holders, Tax-Qualified
Employee Plans, Supplemental Eligible Account Holders and
Other Members. Total shares subscribed for by the
employees, officers and directors in this category may not
exceed 25% of the total shares offered in the Conversion.
Purchase No person, together with associates, and persons acting
Limitations in concert, may purchase more than $200,000 of Common
Stock offered in the Conversion based on the Estimated
Valuation Range (as calculated without giving effect to
any increase in such range subsequent to the date hereof).
The aggregate purchases of directors and executive
officers and their associates may not exceed 34% of the
total number of shares offered in the Conversion. These
purchase limitations do not apply to the Bank's Tax-
Qualified Employee Plans.
Expiration Date of All subscriptions for Common Stock must be received by
Subscription and 3:00 p.m., Excelsior Springs, Missouri time on
Community Offerings September ___, 1996.
ii
How to Subscribe For information on how to subscribe for Common Stock
for Shares being offered in the Conversion, please read the
Prospectus and the stock order form and instructions
accompanying this Proxy Statement. Subscriptions will not
become effective until the Plan of Conversion has been
approved by the Bank's members and all of the Common Stock
offered in the Conversion has been subscribed for or sold
in the Subscription and Community Offering or through such
other means as may be approved by the OTS.
Price of Common All sales of Common Stock in the Subscription and
Stock Community Offering will be made at the same price per
share which is currently expected to be $10.00 per share
on the basis of an independent appraisal of the pro forma
market value of the Bank and the Holding Company upon
Conversion. On the basis of a preliminary appraisal by RP
Financial, LC. which has been reviewed by the OTS, a
minimum of 892,500 and a maximum of 1,207,500 shares will
be offered in the Conversion. See "The Conversion- Stock
Pricing and Number of Shares to be Issued" in the
Prospectus.
Tax Consequences The Bank has received an opinion from its special counsel,
Luse Lehman Gorman Pomerenk & Schick, P.C., stating that
the Conversion is a nontaxable reorganization under
Section 368(a)(1)(F) of the Internal Revenue Code. The
Bank has also received an opinion from KPMG Peat Marwick
LLP stating that the Conversion will not be a taxable
transaction for Missouri income tax purposes.
Required Vote Approval of the Plan of Conversion will require the
affirmative vote of a majority of all votes eligible to be
cast at the Special Meeting.
YOUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR
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THE PLAN OF CONVERSION
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COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
PROXY STATEMENT
SPECIAL MEETING OF MEMBERS TO BE HELD ON SEPTEMBER ___, 1996
PURPOSE OF MEETING
This Proxy Statement is being furnished to you in connection with the
solicitation on behalf of the Board of Directors of Community Bank of Excelsior
Springs, A Savings Bank (the "Bank") of the proxies to be voted at the Special
Meeting of Members (the "Special Meeting") of the Bank to be held at the Bank's
main office located at 1001 N. Jesse James Road, Excelsior Springs, Missouri, on
September ___, 1996 at 4:30 p.m. Excelsior Springs, Missouri time, and at any
adjournments thereof. The Special Meeting is being held for the purpose of
considering and voting upon a Plan of Conversion under which the Bank would be
converted (the "Conversion") from its present mutual form of organization into a
federally chartered savings bank organized in stock form, the concurrent sale of
all the common stock of the stock savings bank to CBES Bancorp, Inc. (the
"Holding Company"), a Delaware corporation, and the sale by the Holding Company
of shares of its common stock (the "Common Stock") and such other business as
may properly come before the meeting and any adjournment thereof.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE BANK RECOMMENDS THAT YOU VOTE TO APPROVE
THE PLAN OF CONVERSION.
The Bank is currently organized in "mutual" rather than "stock" form,
meaning that it has no stockholders and no authority under its federal mutual
charter to issue capital stock. The Bank's Board of Directors has adopted the
Plan of Conversion providing for the Conversion. The sale of Common Stock of
the Holding Company, which was recently formed to become the holding company of
the Bank, will substantially increase the Bank's net worth. The Holding Company
will exchange 50% of the net proceeds from the sale of the Common Stock for the
common stock of the Bank to be issued upon Conversion. The Holding Company
expects to retain the balance of the net proceeds, as its initial capitalization
of which the Holding Company intends to lend funds to the ESOP to fund its
purchase of Common Stock. This increased capital will support the expansion of
the Bank's financial services to the public. The Board of Directors of the Bank
also believes that the conversion to stock form and the use of a holding company
structure will enhance the Bank's ability to expand through possible mergers and
acquisitions (although no such transactions are contemplated at this time) and
will facilitate its future access to the capital markets.
The Board of Directors of the Bank believes that the Conversion will
further benefit the Bank by enabling it to attract and retain key personnel
through prudent use of stock-related incentive compensation and benefit plans.
The Board of Directors of the Holding Company intends to adopt a stock option
and incentive plan and a recognition and retention plan, subject to approval of
Holding Company stockholders following completion of the Conversion. See
"Management - Benefit Plans" in the accompanying Prospectus.
Voting in favor of the Plan of Conversion will not obligate any person to
purchase any Common Stock.
THE OFFICE OF THRIFT SUPERVISION ("OTS") HAS APPROVED THE PLAN OF
CONVERSION SUBJECT TO THE APPROVAL OF THE BANK'S MEMBERS AND THE SATISFACTION OF
CERTAIN OTHER CONDITIONS. HOWEVER, SUCH APPROVAL DOES NOT CONSTITUTE A
RECOMMENDATION OR ENDORSEMENT OF THE PLAN OF CONVERSION BY THE OTS.
INFORMATION RELATING TO VOTING AT THE SPECIAL MEETING
The Board of Directors of the Bank has fixed _______, 1996 as the voting
record date ("Voting Record Date") for the determination of members entitled to
notice of the Special Meeting. All Bank depositors and certain borrowers are
members of the Bank under its current charter. All Bank members of record as of
the close of business on the Voting Record Date and borrowers as of both
________, 1995 and _______, 1996 who continue to be members as of the date of
the Special Meeting will be entitled to vote at the Special Meeting or any
adjournment thereof.
Each depositor (including IRA and Keogh account beneficiaries) will be
entitled at the Special Meeting to cast one vote for each $100, or fraction
thereof, of the aggregate withdrawal value of all of such depositor's accounts
in the Bank as of the Voting Record Date, up to a maximum of 1,000 votes. In
general, accounts held in different ownership capacities will be treated as
separate memberships for purposes of applying the 1,000 vote limitation. For
example, if two persons hold a $100,000 account in their joint names and each of
the persons also holds a separate account for $100,000 in his own name, each
person would be entitled to 1,000 votes for each separate account and they would
together be entitled to cast 1,000 votes on the basis of the joint account.
Where no proxies are received from IRA and Keogh account beneficiaries, after
due notification, the Bank, as trustee of these accounts, is entitled to vote
these accounts in favor of the Plan of Conversion.
Each borrower member of the Bank as of both ________, 1995 and _______,
1996 who continues to be a borrower as of the date of the Special Meeting will
be entitled to cast one vote as a borrower member, in addition to any votes he
or she may be entitled to cast as a depositor.
Approval of the Plan of Conversion requires the affirmative vote of a
majority of the total outstanding votes of the Bank's members eligible to be
cast at the Special Meeting. As of _______, 1996, the Bank had approximately
_____ members who were entitled to cast a total of approximately _______ votes
at the Special Meeting.
Bank members may vote at the Special Meeting or any adjournment thereof
in person or by proxy. Any member giving a proxy will have the right to revoke
the proxy at any time before it is voted by giving written notice to the
Secretary of the Bank, provided that such written notice is received by the
Secretary prior to the Special Meeting or any adjournment thereof, or upon
request if the member is present and chooses to vote in person.
All properly executed proxies received by the Board of Directors of the
Bank will be voted in accordance with the instructions indicated thereon by the
members giving such proxies. If no instructions are given, such proxies will be
voted in favor of the Plan of Conversion. If any other matters are properly
presented at the Special Meeting and may properly be voted on, the proxies
solicited hereby will be voted on such matters in accordance with the best
judgment of the proxy holders named thereon. Management is not aware of any
other business to be presented at the Special Meeting.
If a proxy is not executed and is returned or the member does not vote in
person, the Bank is prohibited by OTS regulations from using a previously
executed proxy to vote for the Conversion. As a result, failure to vote may have
the same effect as a vote against the Plan of Conversion.
To the extent necessary to permit approval of the Plan of Conversion,
proxies may be solicited by officers, directors or regular employees of the
Bank, in person, by telephone or through other forms of communication and, if
necessary, the Special Meeting may be adjourned to a later date. Such persons
will be reimbursed by the Bank for their expenses incurred in connection with
such solicitation. The Bank will bear all costs of this solicitation. The
proxies solicited hereby will be used only at the Special Meeting and at any
adjournment thereof.
2
DESCRIPTION OF THE PLAN OF CONVERSION
The Plan of Conversion to be presented for approval at the Special
Meeting provides for the Conversion to be accomplished through adoption of
amended charter and bylaws for the Bank to authorize the issuance of capital
stock along with the concurrent formation of a holding company. As part of the
Conversion, the Plan of Conversion provides for the subscription offering (the
"Subscription Offering") of the Common Stock to the Bank's (i) Eligible Account
Holders (deposit account holders with an account balance of $50 or more as of
March 31, 1995); (ii) Tax-Qualified Employee Plans, (iii) Supplemental Eligible
Account Holders (deposit account holders with an account balance of $50 or more
as of June 30, 1996); (iv) Other Members (deposit account holders and borrowers
eligible to vote at the Special Meeting who are not Eligible Account Holders or
Supplemental Eligible Account Holders); and (v) the Bank's employees, officers
and directors. Notwithstanding the foregoing, to the extent orders for shares
exceed the maximum of the appraisal range, Tax-Qualified Employee Plans shall be
afforded a first priority to purchase shares sold above the maximum of the
appraisal range. It is anticipated that Tax-Qualified Employee Plans will
purchase 8% of the Common Stock sold in the Conversion. Concurrently with or
following completion of the Subscription Offering, members of the general
public, with a preference first to natural persons residing in Ray and Clay
Counties, Missouri, will be afforded the opportunity to purchase the Common
Stock not subscribed for in the Subscription Offering (the "Community Offering"
and when referred to with the Subscription Offering, the "Subscription and
Community Offering").
THE SUBSCRIPTION OFFERING HAS COMMENCED AS OF THE DATE OF MAILING OF THIS
PROXY STATEMENT. A PROSPECTUS EXPLAINING THE TERMS OF THE SUBSCRIPTION AND
COMMUNITY OFFERING, INCLUDING HOW TO ORDER AND PAY FOR SHARES AND DESCRIBING THE
BUSINESS OF THE BANK AND THE HOLDING COMPANY, ACCOMPANIES THIS PROXY STATEMENT
AND SHOULD BE READ BY ALL PERSONS WHO WISH TO CONSIDER SUBSCRIBING FOR COMMON
STOCK. THE SUBSCRIPTION AND COMMUNITY OFFERING EXPIRES AT 3:00 P.M. EXCELSIOR
SPRINGS, MISSOURI TIME ON SEPTEMBER ___, 1996 UNLESS EXTENDED BY THE BANK AND
THE HOLDING COMPANY.
The federal conversion regulations require that all stock offered in a
conversion must be sold in order for the conversion to become effective. The
conversion regulations require that the offering be completed within 45 days
after completion of the Subscription Offering period unless extended by the Bank
and the Holding Company with the approval of the OTS. This 45-day period
expires October ___, 1996 unless the Subscription Offering is extended. If this
is not possible, an occurrence that is currently not anticipated, the Board of
Directors of the Bank and the Holding Company will consult with the OTS to
determine an appropriate alternative method of selling all unsubscribed shares
offered in the Conversion. The Plan of Conversion provides that the Conversion
must be completed within 24 months after the date of the Special Meeting.
The Subscription and Community Offering or any other sale of the
unsubscribed shares will be made as soon as practicable after the date of the
Special Meeting. No sales of shares may be completed, either in the
Subscription and Community Offering or otherwise, unless the Plan of Conversion
is approved by the members of the Bank.
The commencement and completion of the Subscription and Community
Offering, however, is subject to market conditions and other factors beyond the
Bank's control. Due to adverse conditions in the stock market in the past, a
number of converting thrift institutions encountered significant delays in
completing their stock offerings or were not able to complete them at all. No
assurance can be given as to the length of time after approval of the Plan of
Conversion at the Special Meeting that will be required to complete the
Subscription and Community Offering or other sale of the Common Stock to be
offered in the Conversion. If delays are experienced, significant changes may
occur in the estimated pro forma market value of the Holding Company's Common
Stock, together with corresponding changes in the offering price and the net
proceeds realized by the Bank and the Holding Company from the sale of the
Common Stock. The Bank and the Holding Company may also incur substantial
additional printing, legal, accounting and other expenses in completing the
Conversion.
3
The following is a brief summary of the Conversion and is qualified in
its entirety by reference to the Plan of Conversion, a complete copy of which is
attached hereto. The Bank's federal stock charter and bylaws that will become
effective upon completion of the Conversion are available from the Bank upon
request. A copy of the Holding Company's certificate of incorporation and
bylaws are also available from the Bank upon request.
PRINCIPAL EFFECTS OF CONVERSION
Depositors. The Conversion will not change the amount, interest rate,
withdrawal rights or federal insurance protection of deposit accounts, or affect
deposit accounts in any way other than with respect to voting and liquidation
rights as discussed below.
Borrowers. The rights and obligations of borrowers under their loan
agreements with the Bank will remain unchanged by the Conversion. The principal
amount, interest rate and maturity date of loans will remain as they were
contractually fixed prior to the Conversion.
Voting Rights of Members. Under the Bank's current federal mutual
charter, depositors and certain borrowers have voting rights as members of the
Bank with respect to the election of directors and certain other affairs of the
Bank. After the Conversion, exclusive voting rights with respect to all such
matters will be vested in the Holding Company as the sole stockholder of the
Bank. Depositors and borrowers will no longer have any voting rights, except to
the extent that they become stockholders of the Holding Company through the
purchase of its Common Stock. Voting rights in the Holding Company will be held
exclusively by its stockholders.
Liquidation Rights of Depositor Members. Currently, in the unlikely
event of liquidation of the Bank, any assets remaining after satisfaction of all
creditors' claims in full (including the claims of all depositors to the
withdrawal value of their accounts) would be distributed pro rata among the
depositors of the Bank, with the pro rata share of each being the same
proportion of all such remaining assets as the withdrawal value of each
depositor's account is of the total withdrawal value of all accounts in the Bank
at the time of liquidation. After the Conversion, the assets of the Bank would
first be applied, in the event of liquidation, against the claims of all
creditors (including the claims of all depositors to the withdrawal value of
their accounts). Any remaining assets would then be distributed to the persons
who qualified as Eligible Account Holders or Supplemental Eligible Account
Holders under the Plan of Conversion to the extent of their interests in a
"Liquidation Account" that will be established at the time of the completion of
the Conversion and then to the Holding Company as the sole stockholder of the
Bank's outstanding common stock. The Bank's depositors who did not qualify as
Eligible Account Holders or Supplemental Eligible Account Holders would have no
right to share in any residual net worth of the Bank in the event of liquidation
after the Conversion, but would continue to have the right as creditors of the
Bank to receive the full withdrawal value of their deposits prior to any
distribution to the Holding Company as the Bank's sole stockholder. In addition,
the Bank's deposit accounts will continue to be insured by the Federal Deposit
Insurance Corporation ("FDIC") to the maximum extent permitted by law, currently
up to $100,000 per insured account. The Liquidation Account will initially be
established in an amount equal to the net worth of the Bank as of the date of
the Bank's latest statement of financial condition contained in the final
prospectus used in connection with the Conversion. Each Eligible Account Holder
and/or Supplemental Eligible Account Holder will receive an initial interest in
the Liquidation Account in the same proportion as the balance in all of his
qualifying deposit accounts was of the aggregate balance in all qualifying
deposit accounts of all Eligible Account Holders and Supplemental Eligible
Account Holders on March 31, 1995 or June 30, 1996, respectively. For accounts
in existence on both dates, separate subaccounts shall be determined on the
basis of the qualifying deposits in such accounts on the record dates. However,
if the amount in the qualifying deposit account on any annual closing date of
the Bank is less than the lowest amount in such deposit account on the
Eligibility Record Date and/or Supplemental Eligibility Record Date, and any
subsequent annual closing date, this interest in the Liquidation Account will be
reduced by an amount proportionate to such reduction in the related deposit
account and will not thereafter be increased despite any subsequent increase in
the related deposit account.
The Bank. Under federal law, the stock savings bank resulting from
the Conversion will be deemed to be a continuation of the mutual bank rather
than a new entity and will continue to have all of the rights, privileges,
properties, assets and liabilities of the Bank prior to the Conversion. The
Conversion will enable the Bank to issue capital stock, but will not change the
general objectives, purposes or types of business currently conducted by the
Bank, and no assets of the Bank will be distributed in order to effect the
Conversion, other than to pay the expenses incident thereto. After the
Conversion, the Bank will remain subject to examination and regulation by the
OTS and
4
will continue to be a member of the Federal Home Loan Bank System. The
Conversion will not cause any change in the executive officers or directors of
the Bank.
Tax Consequences. Consummation of the Conversion is expressly
conditioned upon prior receipt of either a ruling of the United States Internal
Revenue Service ("IRS") or an opinion letter of the Bank's counsel with respect
to federal taxation, and either a ruling of the Missouri taxation authorities or
an opinion letter with respect to Missouri taxation, to the effect that the
Conversion will not be a taxable transaction to the Holding Company, the Bank or
the Bank's deposit account holders receiving subscription rights.
The Bank has received an opinion of its special counsel, Luse Lehman
Gorman Pomerenk & Schick, P.C., to the effect that (i) the Conversion will
qualify as a reorganization under Section 368(a)(1)(F) of the Internal Revenue
Code of 1986, as amended, and no gain or loss will be recognized to the Bank in
either its mutual form or its stock form by reason of the proposed Conversion,
(ii) no gain or loss will be recognized to the Bank upon the receipt of money
from the Holding Company for stock of the Bank; and no gain or loss will be
recognized to the Holding Company upon the receipt of money for Common Stock of
the Holding Company; (iii) the assets of the Bank in either its mutual or its
stock form will have the same basis before and after the Conversion; (iv) the
holding period of the assets of the Bank will include the period during which
the assets were held by the Bank in its mutual form prior to conversion; (v)
gain, if any, will be realized by the Eligible Account Holders and Supplemental
Eligible Account Holders of the Bank, upon the constructive issuance to them of
withdrawable deposit accounts of the Bank immediately after the proposed
Conversion, interests in the Liquidation Account, and on the receipt or
distribution to them of the nontransferable Subscription Rights to purchase
Holding Company Common Stock (any such gain will be recognized by such account
holder, but only to the extent, if any, of an amount not in excess of the fair
market value of the Subscription Rights and Liquidation Account interests
received); (vi) the basis of the account holder's savings accounts in the Bank
after the Conversion will be the same as the basis of his or her savings
accounts in the Bank prior to the Conversion; (vii) the basis of each account
holder's interest in the Liquidation Account will be zero; (viii) the basis of
the Holding Company Common Stock to its shareholders will be the Purchase Price
thereof and a shareholder's holding period for Holding Company Common Stock
acquired through the exercise of Subscription Rights shall begin on the date on
which the Subscription Rights are exercised; (ix) the Bank, immediately after
Conversion, will succeed to the bad debt reserve accounts of the Bank, in mutual
form, and the bad debt reserves will have the same character in the hands of the
Bank after Conversion as if no distribution or transfer had occurred; and (x)
the creation of the liquidation account will have no effect on the Bank's
taxable income, deductions or addition to reserve for bad debts either in its
mutual or stock form.
The opinion from Luse Lehman Gorman Pomerenk & Schick, P.C., is based,
among other things, on certain assumptions, including the assumptions that the
exercise price of the Subscription Rights to purchase Holding Company Common
Stock will be approximately equal to the fair market value of that stock at the
time of the completion of the proposed Conversion. With respect to the
Subscription Rights, the Bank has received an opinion of RP Financial, LC. (the
"Appraiser Opinion") which, based on certain assumptions, concludes that the
Subscription Rights to be received by Eligible Account Holders, Supplemental
Eligible Account Holders and other eligible subscribers do not have any economic
value at the time of distribution or at the time the Subscription Rights are
exercised, whether or not a public offering takes place.
The Bank has also received an opinion of Luse Lehman Gorman Pomerenk &
Schick, P.C., to the effect that, based in part on the Appraiser Opinion, no
taxable income will be realized by a stock subscriber as a result of the
exercise of non-transferable Subscription Rights to purchase shares of Holding
Company Common Stock or upon the lapse of such rights.
If it is subsequently established that the subscription rights received
by such persons have an ascertainable fair market value, or in the case of
employees, directors and officers are compensatory in nature, then, in such
event, the subscription rights will be taxable to the recipient in the amount of
their fair market value. In this regard, the subscription rights may be taxed
partially or entirely at ordinary income tax rates.
With respect to Missouri taxation, the Bank has received an opinion from
KPMG Peat Marwick LLP to the effect that, assuming the Conversion does not
result in any federal taxable income, gain or loss to the Bank in its mutual or
stock form, the Holding Company, the account holders, borrowers, officers,
directors and employees and Tax-Qualified Employee Plans of the Bank, the
Conversion should not result in any Missouri income tax liability to such
entities or persons.
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Unlike a private letter ruling, the opinions of Luse Lehman Gorman
Pomerenk & Schick, P.C., and KPMG Peat Marwick LLP as well as the Appraiser
Opinion, have no binding effect or official status, and no assurance can be
given that the conclusions reached in any of those opinions would be sustained
by a court if contested by the IRS or the Missouri tax authorities.
APPROVAL, INTERPRETATION, AMENDMENT AND TERMINATION
Under the Plan of Conversion, the letter from the OTS giving approval
thereto, and applicable regulations, consummation of the Conversion is subject
to the satisfaction of the following conditions: (a) approval of the Plan of
Conversion by members of the Bank casting at least a majority of the votes
eligible to be cast at the Special Meeting; (b) sale of all of the Common Stock
to be offered in the Conversion; and (c) receipt of favorable rulings or
opinions of counsel as to the federal and Missouri tax consequences of the
Conversion.
The Plan of Conversion may be substantively amended by the Boards of
Directors of the Bank and the Holding Company with the concurrence of the OTS.
If the Plan of Conversion is amended, proxies which have been received prior to
such amendment will not be resolicited unless otherwise required by the OTS.
Also, as required by the federal regulations, the Plan of Conversion provides
that the transactions contemplated thereby may be terminated by the Board of
Directors of the Bank alone at any time prior to the Special Meeting and may be
terminated by the Board of Directors of the Bank at any time thereafter with the
concurrence of the OTS, notwithstanding approval of the Plan of Conversion by
the members of the Bank at the Special Meeting. All interpretations by the Bank
and the Holding Company of the Plan of Conversion and of the Order Forms and
related materials for the Subscription and Community Offering will be final,
except as regards or affects the OTS.
JUDICIAL REVIEW
Section 5(i)(2)(B) of the Home Owners' Loan Act, as amended, 12 U.S.C.
(S)1464(i)(2)(B) and Section 563b.8(u) of the Rules and Regulations promulgated
thereunder (12 C.F.R. Section 563b.8(u)) provide: (i) that persons aggrieved by
a final action of the OTS which approves, with or without conditions, or
disapproves a plan of conversion, may obtain review of such final action only by
filing a written petition in the United States Court of Appeals for the circuit
in which the principal office or residence of such person is located, or in the
United States Court of Appeals for the District of Columbia, requesting that the
final action of the OTS be modified, terminated or set aside, and (ii) that such
petition must be filed within 30 days after publication of notice of such final
action in the Federal Register, or 30 days after the date of mailing of the
notice and proxy statement for the meeting of the converting institution's
members at which the conversion is to be voted on, whichever is later. The
notice of the Special Meeting of the Bank's members to vote on the Plan of
Conversion described herein is included at the beginning of this Proxy
Statement. The statute and regulation referred to above should be consulted for
further information.
ADDITIONAL INFORMATION
The information contained in the accompanying Prospectus, including a
more detailed description of the Plan of Conversion, consolidated financial
statements of the Bank and a description of the capitalization and business of
the Bank and the Holding Company, including the Bank's directors and executive
officers and their compensation, the anticipated use of the net proceeds from
the sale of the Common Stock and a description of the Common Stock, is intended
to help you evaluate the Conversion and is incorporated by this reference.
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YOUR VOTE IS VERY IMPORTANT TO US. PLEASE TAKE A MOMENT NOW TO COMPLETE
AND RETURN YOUR PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY STILL
ATTEND THE SPECIAL MEETING AND VOTE IN PERSON EVEN THOUGH YOU HAVE VOTED YOUR
PROXY. FAILURE TO SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE
CONVERSION.
If you have any questions, please call our Stock Information Center at
(816) ________.
IMPORTANT: YOU MAY BE ENTITLED TO VOTE IN MORE THAN ONE CAPACITY. PLEASE
SIGN, DATE AND PROMPTLY RETURN EACH PROXY CARD YOU RECEIVE.
________________
THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER WILL BE MADE ONLY BY THE PROSPECTUS.
THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR
GUARANTEED.
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