FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ALLEN PARISH
222 South 10th Street
Oakdale, Louisiana
(318) 335-2031
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NOTICE OF SPECIAL MEETING OF MEMBERS
________________________________
Notice is hereby given that a Special Meeting of Members (the "Special
Meeting") of First Federal Savings and Loan Association of Allen Parish, (the
"Association"), will be held at the main office of the Association located at
222 South 10th Street, Oakdale, Louisiana, on _______, 1996 at local time. The
purpose of this Special Meeting is to consider and vote upon:
A plan to convert the Association from a federally chartered
mutual savings and loan association to a federally chartered
stock savings and loan association, including the adoption of a
federal stock savings bank charter and bylaws, with the
concurrent sale of all the Association's common stock to First
Allen Parish 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 the 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
Association 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
Charles L. Galligan
President and Chief Executive Officer
_________, 1996
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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.
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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 Association has no
stockholders. Its deposit account holders and certain borrowers are members of
the Association and have voting rights in that capacity. In the unlikely event
of liquidation, the Association's deposit account holders would have the sole
right to receive any assets of the Association 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 Association would be
converted into a federally chartered savings and loan association organized in
stock form, and all of the Association'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 May 31, 1995 ("Eligible Account Holders"),
(2) tax-qualified employee plans of the Association and the Holding Company
("Tax-Qualified Employee Plans"), (3) other members of the Association as of
__________ , other then Eligible Account Holders and certain borrowers as of
both _________, and ___________, 1996 ("Other Members") and (4) employees,
officers and directors of the Association on a priority basis (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.
To the extent that shares remain available for purchase after the
Subscription Offering, the Holding Company will 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
Allen Parish, Louisiana ("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
Association 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 of the Association
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 Association, 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 Association 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 Association's (1) Eligible
Account Holders, (2) Tax-Qualified Employee Plans, (3)
Other Members, and (4) employees, officers and directors.
In addition, in the Community Offering, Other Subscribers
may purchase Common Stock to the extent shares are
available for purchase after the Subscription Offering,
with a preference first to natural persons residing in
Allen Parish, Louisiana.
i
Subscription Rights Each Eligible Account Holder has been given non-
of Eligible Account transferable rights to subscribe for the greater of
Holders $50,000 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 Association's Tax-Qualified Employee Plans have been
of Tax-Qualified given non-transferable rights to subscribe, individually
Employee Plans and in 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 Each Other Member has been given non-transferable rights
of Other Members to subscribe for up to $50,000 of Common Stock or one-
tenth of one percent of the total number of shares offered
in the Conversion after satisfaction of the subscriptions
of the Association's Eligible Account Holders and Tax-
Qualified Employee Plans.
Subscription Rights Each individual employee, officer and director of the
of Association Association has been given the right to subscribe for up
Personnel to $50,000 of Common Stock after satisfaction of the
subscriptions of Eligible Account Holders, Tax-Qualified
Employee Plans, and Other Members.
Purchase No person, together with associates, and persons acting
Limitations in concert, may purchase more than $100,000 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).
These purchase limitations do not apply to the
Association's Tax-Qualified Employee Plans.
Expiration Date of All subscriptions for Common Stock must be received by
Subscription and 12:00 noon, local time on ____________, 1996.
Community Offerings
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 Association'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 Association and the Holding Company
upon Conversion. On the basis of a preliminary appraisal
by Ferguson & Co., L.L.P. which has been reviewed by the
OTS, a minimum of 212,500 and a maximum of 287,500 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 Association 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 Association has also received an opinion from Darnall,
Sikes, Kolder, Frederick & Rainey stating that the
Conversion will not be a taxable transaction for Missouri
income tax purposes.
ii
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
iii
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ALLEN PARISH
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 First Federal Savings and
Loan Association of Allen Parish (the "Association") of the proxies to be voted
at the Special Meeting of Members (the "Special Meeting") of the Association to
be held at the Association's main office located at 222 South 10th Street,
Oakdale, Louisiana, on September ___, 1996 at ____ p.m. local 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 Association
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 First
Allen Parish 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 ASSOCIATION UNANIMOUSLY RECOMMENDS THAT YOU
VOTE TO APPROVE THE PLAN OF CONVERSION.
The Association 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 Association'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 Association, will substantially increase the Association'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 Association 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 Association's financial services to
the public. The Board of Directors of the Association also believes that the
conversion to stock form and the use of a holding company structure will enhance
the Association'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 Association believes that the Conversion will
further benefit the Association 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 ASSOCIATION'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 Association has fixed July ___, 1996 as the
voting record date ("Voting Record Date") for the determination of members
entitled to notice of the Special Meeting. All Association depositors and
certain borrowers are members of the Association under its current charter. All
Association members of record as of the close of business on the Voting Record
Date and borrowers as of both ________, 1996 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 Association 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 Association, as trustee of these accounts, is entitled to
vote these accounts in favor of the Plan of Conversion.
Each borrower member of the Association as of both ________, 1996 and July
__, 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 Association's members eligible to
be cast at the Special Meeting. As of July __, 1996, the Association had
approximately _____ members who were entitled to cast a total of approximately
_______ votes at the Special Meeting.
Association 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 Association, 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
Association 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 Association 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
Association, 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 Association for their expenses incurred in
connection with such solicitation. The Association 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 Association 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 Association'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) Other Members
(deposit account holders who are eligible to vote at the Special Meeting, and
certain borrowers of the Association, who are not Eligible Account Holders) and
(iv) the Association'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. To the extent shares remain available for purchase after the
Subscription Offering, members of the general public, with a preference first to
natural persons residing in Allen Parish, Louisiana, will be afforded the
opportunity to purchase the Common Stock not subscribed for in the Subscription
Offering (the "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 OFFERING,
INCLUDING HOW TO ORDER AND PAY FOR SHARES AND DESCRIBING THE BUSINESS OF THE
ASSOCIATION 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 OFFERING EXPIRES AT 12:00 NOON LOCAL TIME ON SEPTEMBER __, 1996
UNLESS EXTENDED BY THE ASSOCIATION 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
Association 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 Association 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 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 Offering, Community
Offering or otherwise, unless the Plan of Conversion is approved by the members
of the Association.
The commencement and completion of the Subscription Offering, however, is
subject to market conditions and other factors beyond the Association'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 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 Association and the
Holding Company from the sale of the Common Stock. The Association and the
Holding Company may also incur substantial additional printing, legal,
accounting and other expenses in completing the Conversion.
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 Association's federal stock charter and bylaws that will
become effective upon completion of the Conversion are available from the
Association upon request. A copy of the Holding Company's certificate of
incorporation and bylaws are also available from the Association upon request.
3
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 Association 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 Association's current federal mutual
charter, depositors and certain borrowers have voting rights as members of the
Association with respect to the election of directors and certain other affairs
of the Association. 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 Association. 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 Association, 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 Association, 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
Association at the time of liquidation. After the Conversion, the assets of the
Association 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 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 Association's
outstanding common stock. The Association's depositors who did not qualify as
Eligible Account Holders would have no right to share in any residual net worth
of the Association in the event of liquidation after the Conversion, but would
continue to have the right as creditors of the Association to receive the full
withdrawal value of their deposits prior to any distribution to the Holding
Company as the Association's sole stockholder. In addition, the Association'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 Association as of the
date of the Association's latest statement of financial condition contained in
the final prospectus used in connection with the Conversion. Each 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 on May 31, 1995. However, if the amount in the qualifying
deposit account on any annual closing date of the Association is less than the
lowest amount in such deposit account on the 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.
4
The Association. 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 Association prior to the Conversion.
The Conversion will enable the Association to issue capital stock, but will not
change the general objectives, purposes or types of business currently conducted
by the Association, and no assets of the Association will be distributed in
order to effect the Conversion, other than to pay the expenses incident thereto.
After the Conversion, the Association will remain subject to examination and
regulation by the OTS and 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 Association.
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 Association's counsel with respect
to federal taxation, and either a ruling of the Louisiana taxation authorities
or an opinion letter with respect to Louisiana taxation, to the effect that the
Conversion will not be a taxable transaction to the Holding Company, the
Association or the Association's deposit account holders receiving subscription
rights.
The Association 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
Association 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 Association
upon the receipt of money from the Holding Company for stock of the Association;
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
Association 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
Association will include the period during which the assets were held by the
Association in its mutual form prior to conversion; (v) gain, if any, will be
realized by the Eligible Account Holders of the Association, upon the
constructive issuance to them of withdrawable deposit accounts of the
Association 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 Association after the Conversion
will be the same as the basis of his or her savings accounts in the Association
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 Association, immediately after
Conversion, will succeed to the bad debt reserve accounts of the Association, in
mutual form, and the bad debt reserves will have the same character in the hands
of the Association after Conversion as if no distribution or transfer had
occurred; and (x) the creation of the liquidation account will have no effect on
the Association'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 Association has received an opinion of Ferguson & Co.,
L.L.P. (the "Appraiser Opinion") which, based on certain assumptions, concludes
that the Subscription Rights to be received by Eligible Account Holders, and
other eligible subscribers do not have any economic value at the time of
distribution or at the time the Subscription Rights are exercised, whether or
not a public offering takes place.
The Association 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.
5
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 Louisiana taxation, the Association has received an opinion
from Darnall, Sikes, Kolder, Frederick & Rainey to the effect that, assuming the
Conversion does not result in any federal taxable income, gain or loss to the
Association in its mutual or stock form, the Holding Company, the account
holders, borrowers, officers, directors and employees and Tax-Qualified Employee
Plans of the Association, the Conversion should not result in any Louisiana
income tax liability to such entities or persons.
Unlike a private letter ruling, the opinions of Luse Lehman Gorman Pomerenk
& Schick, P.C., and Darnall, Sikes, Kolder, Frederick & Rainey 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 Louisiana 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 Association 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 Louisiana tax consequences of the
Conversion.
The Plan of Conversion may be substantively amended by the Boards of
Directors of the Association 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 Association alone at any time prior to the Special
Meeting and may be terminated by the Board of Directors of the Association at
any time thereafter with the concurrence of the OTS, notwithstanding approval of
the Plan of Conversion by the members of the Association at the Special Meeting.
All interpretations by the Association 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 Association'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 Association and a description of the capitalization and
business of the Association and the Holding Company, including the Association'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 Sales Center at (318) 335-
4487.
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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