EXHIBIT 2.1
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BENJAMIN FRANKLIN BANCORP, M.H.C.
PLAN OF CONVERSION
ADOPTED BY THE BOARD OF TRUSTEES
ON OCTOBER 28, 2004
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TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION - BUSINESS PURPOSE........................................................................1
ARTICLE 2. DEFINITIONS............................................................................................3
2.1. ACTING IN CONCERT.........................................................................................3
2.2. AFFILIATE.................................................................................................3
2.3. APPLICATION...............................................................................................3
2.4. ASSOCIATE.................................................................................................3
2.5. BANK......................................................................................................4
2.6. BHCA......................................................................................................4
2.7. COMMISSIONER..............................................................................................4
2.8. COMMUNITY OFFERING........................................................................................4
2.9. CONVERSION................................................................................................4
2.10. CORPORATOR...............................................................................................4
2.11. DEPOSIT ACCOUNT..........................................................................................4
2.12. DIRECT COMMUNITY OFFERING................................................................................4
2.13. DIVISION.................................................................................................4
2.14. ELIGIBLE ACCOUNT HOLDER..................................................................................5
2.15. ELIGIBILITY RECORD DATE..................................................................................5
2.16. EMPLOYEE.................................................................................................5
2.17. EMPLOYEE PLAN............................................................................................5
2.18. ESOP.....................................................................................................5
2.19. ESTIMATED VALUATION RANGE................................................................................5
2.20. EXCHANGE ACT.............................................................................................5
2.21. FDIC.....................................................................................................5
2.22. FRB......................................................................................................5
2.23. FRB APPLICATION..........................................................................................5
2.24. FOUNDATION...............................................................................................5
2.25. GROUP MAXIMUM PURCHASE LIMIT.............................................................................5
2.26. HOLDING COMPANY COMMON STOCK.............................................................................5
2.27. HOLDING COMPANY CONVERSION STOCK.........................................................................5
2.28. INDEPENDENT APPRAISER....................................................................................5
2.29. INDEPENDENT CORPORATOR...................................................................................5
2.30. INDEPENDENT VALUATION....................................................................................6
2.31. INDIVIDUAL MAXIMUM PURCHASE LIMIT........................................................................6
2.32. INFORMATION STATEMENT....................................................................................6
2.33. LIQUIDATION ACCOUNT......................................................................................6
2.34. LOCAL COMMUNITY..........................................................................................6
2.35. MARKETING AGENT..........................................................................................6
2.36. MARKET MAKER.............................................................................................6
2.37. MERGER SHARES............................................................................................6
2.38. MHC......................................................................................................6
2.39. NON-TAX-QUALIFIED EMPLOYEE BENEFIT PLAN..................................................................6
2.40. OFFERING.................................................................................................6
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2.41. OFFICER..................................................................................................6
2.42. PERSON...................................................................................................6
2.43. PLAN.....................................................................................................7
2.44. QUALIFYING DEPOSIT.......................................................................................7
2.45. RANGE MAXIMUM............................................................................................7
2.46. RANGE MINIMUM............................................................................................7
2.47. REGULATIONS..............................................................................................7
2.48. SEC......................................................................................................7
2.49. SPECIAL MEETING..........................................................................................7
2.50. STOCK HOLDING COMPANY....................................................................................7
2.51. SUBSCRIPTION OFFERING....................................................................................7
2.52. SUBSCRIPTION PRICE.......................................................................................7
2.53. SUBSIDIARY...............................................................................................7
2.54. SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER.....................................................................7
2.55. SUPPLEMENTAL ELIGIBILITY RECORD DATE.....................................................................7
2.56. SYNDICATED COMMUNITY OFFERING............................................................................8
2.57. TAX-QUALIFIED EMPLOYEE PLAN..............................................................................8
ARTICLE 3. GENERAL PROCEDURE FOR CONVERSION.......................................................................8
3.1. PRECONDITIONS TO CONVERSION...............................................................................8
3.2. SUBMISSION OF PLAN TO COMMISSIONER AND FRB................................................................8
3.3. SPECIAL MEETING OF CORPORATORS TO APPROVE THE PLAN........................................................8
3.4. STOCK HOLDING COMPANY CHARTER AND BYLAWS..................................................................9
3.5. BANK CHARTER AND BYLAWS...................................................................................9
3.6. OFFER AND SALE OF HOLDING COMPANY CONVERSION STOCK........................................................9
3.7. CONVERSION OF MHC TO STOCK HOLDING COMPANY................................................................9
ARTICLE 4. ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION....................................................10
4.1. ESTABLISHMENT OF THE FOUNDATION..........................................................................10
4.2. PURPOSES OF THE FOUNDATION; CHARITABLE CONTRIBUTIONS.....................................................10
4.3. BOARD OF DIRECTORS OF THE FOUNDATION.....................................................................10
ARTICLE 5. SHARES TO BE OFFERED..................................................................................11
5.1. HOLDING COMPANY COMMON STOCK.............................................................................11
5.2. INDEPENDENT VALUATION, PURCHASE PRICE AND NUMBER OF SHARES...............................................11
ARTICLE 6. SUBSCRIPTION RIGHTS AND ORDERS FOR COMMON STOCK.......................................................12
6.1. DISTRIBUTION OF PROSPECTUS...............................................................................12
6.2. ORDER FORMS..............................................................................................13
6.3. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT..........................................14
6.4. PAYMENT FOR STOCK........................................................................................14
ARTICLE 7. STOCK PURCHASE PRIORITIES.............................................................................15
7.1. PRIORITIES FOR OFFERING..................................................................................15
7.2. CERTAIN DETERMINATIONS...................................................................................15
7.3. MINIMUM PURCHASE; NO FRACTIONAL SHARES...................................................................15
7.4. OVERVIEW OF PRIORITIES...................................................................................15
7.5. PRIORITIES FOR SUBSCRIPTION OFFERING.....................................................................16
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7.6. PRIORITIES FOR DIRECT COMMUNITY OFFERING.................................................................17
7.7. PRIORITIES FOR SYNDICATED COMMUNITY OFFERING.............................................................19
ARTICLE 8. ADDITIONAL LIMITATIONS ON PURCHASES...................................................................19
8.1. GENERAL..................................................................................................19
8.2. INDIVIDUAL MAXIMUM PURCHASE LIMIT........................................................................19
8.3. GROUP ACTING IN CONCERT..................................................................................20
8.4. PURCHASES BY OFFICERS, DIRECTORS, TRUSTEES AND CORPORATORS...............................................20
8.5. SPECIAL RULE FOR TAX-QUALIFIED EMPLOYEE PLANS............................................................20
8.6. INCREASE IN THE TOTAL NUMBER OF SHARES OFFERED...........................................................20
8.7. ILLEGAL PURCHASES........................................................................................21
8.8. REJECTION OF ORDERS......................................................................................21
8.9. SUBSCRIBERS IN NON-QUALIFIED STATES OR IN FOREIGN COUNTRIES..............................................21
8.10. NO OFFER TO TRANSFER SHARES.............................................................................21
8.11. CONFIRMATION BY PURCHASERS..............................................................................21
ARTICLE 9. POST OFFERING MATTERS.................................................................................22
9.1. STOCK PURCHASES AFTER THE CONVERSION.....................................................................22
9.2. RESALES OF STOCK BY MANAGEMENT PERSONS...................................................................22
9.3. STOCK CERTIFICATES.......................................................................................22
9.4. RESTRICTION ON FINANCING STOCK PURCHASES.................................................................22
9.5. STOCK BENEFIT PLANS......................................................................................22
9.6. MARKET FOR HOLDING COMPANY COMMON STOCK..................................................................23
9.7. LIQUIDATION ACCOUNT......................................................................................23
9.8. PAYMENT OF DIVIDENDS.....................................................................................25
9.9. REPURCHASE OF STOCK......................................................................................25
9.10. CONVERSION EXPENSES.....................................................................................25
9.11. PUBLIC INSPECTION OF CONVERSION APPLICATION.............................................................25
9.12. ENFORCEMENT OF TERMS AND CONDITIONS.....................................................................25
9.13. VOTING RIGHTS IN CONVERTED BANK.........................................................................26
ARTICLE 10. MISCELLANEOUS........................................................................................26
10.1. INTERPRETATION OF PLAN..................................................................................26
10.2. AMENDMENT OR TERMINATION OF THE PLAN....................................................................26
Exhibit 3.4 -- Proposed Charter and Bylaws of the Stock Holding Company
Exhibit 3.5 -- Proposed Amended and Restated Charter and Bylaws of the Bank
Exhibit 3.7 -- Initial Members of the Board of Directors of the Stock Holding
Company
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BENJAMIN FRANKLIN BANCORP, M.H.C.
PLAN OF CONVERSION
ARTICLE 1.
INTRODUCTION - BUSINESS PURPOSE
The Board of Trustees of Benjamin Franklin Bancorp, M.H.C., a
Massachusetts-chartered mutual holding company (the "MHC"), has determined that
it is in the best interests of the MHC, of Benjamin Franklin Savings Bank,1 a
Massachusetts-chartered stock savings bank and wholly owned subsidiary of the
MHC (the "BANK"), of the depositors and customers of the Bank, and of the
communities served by the Bank and the MHC for the MHC to convert from a mutual
institution to a stock-form institution (the "CONVERSION"). Capitalized terms
used but not defined in this Article 1 shall have the meaning set forth in
Article 2 hereof.
In order to carry out the Conversion, the Board of Trustees of the MHC
has adopted this Plan of Conversion (the "PLAN") to be carried out under the
laws of The Commonwealth of Massachusetts and the regulations of the
Massachusetts Division of Banks, and other applicable laws and regulations.
Pursuant to the Plan, the MHC will convert to a Massachusetts-chartered stock
form corporation known as Benjamin Franklin Bancorp, Inc. (the "STOCK HOLDING
COMPANY") and offer Holding Company Conversion Stock in the Conversion on a
priority basis to qualifying depositors, any Tax-Qualified Employee Plan, and
Employees, Officers, directors and trustees of the Bank and the MHC, with any
remaining shares to be offered to the public in a Direct Community Offering and
possibly in a Syndicated Community Offering.
One of the primary purposes of the Conversion is to enable the MHC to
acquire Chart Bank, a Massachusetts-chartered stock co-operative bank ("CHART
BANK"). Pursuant to an Agreement and Plan of Merger dated September 1, 2004
("AFFILIATION AGREEMENT") by and among the MHC, the Bank and Chart, each issued
and outstanding share of Chart common stock will be exchanged for either cash or
shares of Holding Company Common Stock, and Chart Bank will be merged with the
Bank (the "CHART ACQUISITION") at a closing to take place immediately after the
consummation of the Conversion. The Conversion will generate capital to pay the
cash portion of the consideration to be paid to the holders of Chart Bank common
stock, and will make it possible for the Stock Holding Company to issue shares
of Holding Company Common Stock as the stock portion of the consideration to be
paid to holders of Chart common stock.
The combination of the Conversion and the Chart Acquisition is intended
to enable the Bank to compete and expand more effectively in the financial
services marketplace. The Conversion is intended to provide an additional source
of capital not now available to the MHC or the Bank. Under the Plan, the Stock
Holding Company will issue capital stock to depositors and other members of the
public, and intends to use a portion of the capital raised through such issuance
to pay the cash portion of the consideration to be paid in the Chart
Acquisition. The
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1 Following the adoption of the Plan of Conversion by the Board of Trustees, the
Bank changed its name from "Benjamin Franklin Savings Bank"to "Benjamin Franklin
Bank."
Stock Holding Company will use the remaining capital raised, directly or after
investing such capital into the Bank, to further the expansion of the activities
of the Stock Holding Company and the Bank. In addition, after the Conversion,
the Stock Holding Company would have the ability to issue additional shares of
Holding Company Common Stock to raise additional capital or in connection with
additional mergers or acquisitions, although no additional capital issuance and
no merger or acquisition (other than the Chart Acquisition) are planned or
contemplated at the present time. In addition, stock ownership by Officers and
other Employees of the Stock Holding Company and the Bank has proven to be an
effective performance incentive and as a means of attracting and retaining
qualified personnel. Finally, the Board of Directors, Board of Trustees and
senior management also believe that the Conversion will be beneficial to the
population within the primary market area. The Conversion will provide local
customers and other residents with an opportunity to become equity owners of the
Bank, and thereby participate in the possible stock price appreciation and cash
dividends, which is consistent with the objective of being a locally-owned
financial institution servicing local financial needs. The Board and management
believe that, through expanded local stock ownership, current customers and
non-customers who purchase Holding Company Conversion Stock will seek to enhance
the financial success of the Bank through consolidation of their banking
business and increased referrals to the Bank.
The Conversion and the Chart Acquisition are expected to close on the
same date and at substantially the same time. The Conversion, however, is not
conditioned upon the consummation of Chart Acquisition.
In furtherance of the MHC's commitment to its community, the MHC
intends to form a charitable foundation (the "Foundation") as part of the
Conversion. The Foundation is intended to complement the Bank's community
reinvestment activities in a manner that will allow the Bank's local communities
to share in the growth and profitability of the Stock Holding Company and the
Bank over the long term. Consistent with the Bank's goal, the Stock Holding
Company intends, immediately following the Conversion, to donate to the
Foundation a number of shares of its authorized but unissued Common Stock in an
amount up to 8.0% of the lesser of (i) the number of shares actually sold in the
Conversion or (ii) the number of shares that would have been sold at the
midpoint of the Estimated Valuation Range.
The Chart Acquisition is subject to the approval of various regulatory
agencies, and must also be approved by the affirmative vote of at least (i)
two-thirds of the MHC's Corporators present and eligible to vote at the meeting
called for approval of such Acquisition and (ii) the holders of two thirds of
issued and outstanding capital stock of Chart. In addition, individuals
purchasing Holding Company Conversion Stock will, by executing their order to
purchase such Holding Company Conversion Stock, consent to and approve of the
Chart Acquisition.
The Plan is subject to the approval of various regulatory agencies, and
must also be approved by the affirmative vote of a majority of the total votes
of the MHC's Corporators and a majority of the MHC's Independent Corporators
(who shall constitute not less than 60% of all of the MHC's Corporators) at an
annual meeting or a special meeting called for such purpose. By approving the
Plan, the Corporators will also be approving the charter and bylaws of each of
the Stock Holding Company and the Bank and all other steps necessary or
incidental to the Conversion.
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The Bank became a stock-form subsidiary of the MHC when Benjamin
Franklin Savings Bank reorganized into mutual holding company form in 1995.
Accordingly, the Conversion will not affect the corporate existence of the Bank.
Although the Plan does provide that certain amendments will be made to the
Bank's corporate charter and bylaws, the Bank's business and operations will not
be affected or interrupted by the Conversion, and the Bank will continue as the
same legal entity after the Conversion. The deposit accounts and loan accounts
of the Bank's customers will not be affected by the Conversion. Upon Conversion,
each deposit account holder of the Bank will continue to hold exactly the same
deposit account as the holder held immediately before the Conversion. All
deposit accounts in the Bank following the Conversion will continue to be
insured up to the legal maximum by the Federal Deposit Insurance Corporation and
the Deposit Insurance Fund of the Depositors Insurance Fund in the same manner
as such deposit accounts were insured immediately before the Conversion. There
will be no change in the Bank's loans. The Conversion will not result in any
reduction of the Bank's reserves or net worth.
ARTICLE 2.
DEFINITIONS
As used in the Plan, the terms set forth below have the following
meanings:
2.1. ACTING IN CONCERT. The term "ACTING IN CONCERT" means (a) knowing
participation in a joint activity or conscious parallel action towards a common
goal, whether or not pursuant to an express agreement; or (b) Persons seeking to
combine or pool their voting or other interests (such as subscription rights) in
the securities of an issuer for a common purpose, pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether written or
otherwise. When Persons act together for such purpose, their group is deemed to
have acquired their stock. The determination of whether a group is Acting in
Concert shall be made solely by the Board of Trustees of the MHC or Officers
delegated by such Board and may be based on any evidence upon which the Board or
such delegatee chooses to rely, including, without limitation, joint account
relationships or the fact that such Persons have filed joint Schedules 13D with
the SEC with respect to other companies. Persons living at the same address,
whether or not related, will be deemed to be Acting in Concert unless otherwise
determined by the Board or such delegatee. Trustees of the MHC and directors of
the Stock Holding Company and the Bank shall not be deemed to be Acting in
Concert solely as a result of their membership on any such board or boards.
2.2. AFFILIATE. An "AFFILIATE" of, or a Person "AFFILIATED" with, a
specified Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with the
Person specified.
2.3. APPLICATION. The application, including a copy of the Plan,
submitted by the MHC to the Commissioner for approval of the Conversion.
2.4. ASSOCIATE. The term "ASSOCIATE," when used to indicate a
relationship with any Person, means: (i) any corporation or organization (other
than the Bank, the Stock Holding Company, the MHC or a majority-owned subsidiary
of any thereof) of which such Person is a director, Officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of
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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; (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 trustee or officer of the MHC or the Bank; and (iv) any
Person Acting in Concert with any of the Persons or entities specified in
clauses (i) through (iii) above; provided, however, that any Tax-Qualified or
Non-Tax-Qualified Employee Plan shall not be deemed to be an Associate of any
director, trustee or Officer of the MHC, the Stock Holding Company or the Bank,
to the extent provided in the Plan. When used to refer to a Person other than an
Officer or director of the Bank, the MHC or the Stock Holding Company, the MHC
in its sole discretion may determine the Persons that are Associates of other
Persons. Trustees of the MHC and directors of the Stock Holding Company and the
Bank shall not be deemed to be Associates solely as a result of their membership
on such Board.
2.5. BANK. Benjamin Franklin Savings Bank, which will change its name
to Benjamin Franklin Bank in connection with the Conversion.
2.6. BHCA. The Bank Holding Company Act of 1956, as amended.
2.7. COMMISSIONER. The Commissioner of Banks of The Commonwealth of
Massachusetts.
2.8. COMMUNITY OFFERING. A Direct Community Offering and/or a
Syndicated Community Offering.
2.9. CONVERSION. (1) The conversion of the MHC into the Stock Holding
Company by amendment of the MHC's charter and bylaws to authorize the issuance
of capital stock or by such other means as the Commissioner and the FRB shall
approve under the Regulations, (2) the offering of Holding Company Conversion
Stock in a Subscription Offering and, to the extent shares remain available, in
a Direct Community Offering and possibly in a Syndicated Community Offering; (3)
the issuance of the Holding Company Conversion Stock, (4) the amendment of the
Bank's charter and bylaws as contemplated in the Plan; and (5) the consummation
of the related transactions provided for in the Plan.
2.10. CORPORATOR. A member of the MHC's Board of Corporators.
2.11. DEPOSIT ACCOUNT. Any withdrawable deposit account offered by the
Bank, including, without limitation, savings accounts, NOW account deposits,
certificates of deposit, demand deposits, Keogh Plan, SEPs and IRA accounts for
which the Bank acts as custodian or trustee, and such other types of deposit
accounts as may then have been authorized by Massachusetts or federal law and
regulations, but not including repurchase agreements, savings bank life
insurance policies or certain escrow accounts.
2.12. DIRECT COMMUNITY OFFERING. The offering for sale directly by the
Stock Holding Company of Holding Company Conversion Stock (i) to the Local
Community, as provided in Section 7.6 of the Plan, with preference given to
natural persons residing in the Local Community, and then (ii) to the public at
large. The Direct Community Offering may be conducted simultaneously with the
Subscription Offering.
2.13. DIVISION. The Division of Banks of The Commonwealth of
Massachusetts.
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2.14. ELIGIBLE ACCOUNT HOLDER. Any Person holding a Qualifying Deposit
on the Eligibility Record Date.
2.15. ELIGIBILITY RECORD DATE. May 31, 2003, the date for determining
who qualifies as an Eligible Account Holder.
2.16. EMPLOYEE. The term "EMPLOYEE" does not include a trustee,
director or Officer.
2.17. EMPLOYEE PLAN. Any Tax-Qualified Employee Plan or
Non-Tax-Qualified Employee Benefit Plan.
2.18. ESOP. The employee stock ownership plan to be established by the
Bank.
2.19. ESTIMATED VALUATION RANGE. The dollar range of the proposed
Offering, as determined by the Independent Appraiser before the Offering and as
it may be amended from time to time thereafter. The Estimated Valuation Range
may vary within 15% above or 15% below the midpoint of such range, with a
possible adjustment by up to 15% above the Range Maximum.
2.20. EXCHANGE ACT. The Securities Exchange Act of 1934, as amended.
2.21. FDIC. The Federal Deposit Insurance Corporation.
2.22. FRB. The Board of Governors of the Federal Reserve System.
2.23. FRB APPLICATION. The application submitted by the MHC to the FRB
seeking the FRB's prior approval of the MHC's conversion from mutual to stock
form.
2.24. FOUNDATION. A charitable foundation established and funded by the
Stock Holding Company immediately following the Conversion as contemplated by
Article 4 hereof. The Foundation will qualify as an exempt organization under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
2.25. GROUP MAXIMUM PURCHASE LIMIT. The limitation on the purchase of
shares of Holding Company Conversion Stock established by Section 8.3, as such
limit may be increased pursuant to said Section 8.3.
2.26. HOLDING COMPANY COMMON STOCK. The common stock authorized to be
issued from time to time by the Stock Holding Company.
2.27. HOLDING COMPANY CONVERSION STOCK. The Holding Company Common
Stock to be issued by the Stock Holding Company in the Conversion, including the
Merger Shares, if any, issued as described in Section 7.6.4.
2.28. INDEPENDENT APPRAISER. The appraiser retained by the MHC to
prepare an appraisal of the pro forma market value of the Holding Company
Conversion Stock.
2.29. INDEPENDENT CORPORATOR. A Corporator who is not an Employee,
Officer, or trustee of the MHC or an Employee, Officer, director, or
"significant borrower" of the Bank as determined by the Commissioner.
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2.30. INDEPENDENT VALUATION. The estimated pro forma market value of
the Holding Company Conversion Stock as determined by the Independent Appraiser.
2.31. INDIVIDUAL MAXIMUM PURCHASE LIMIT. The limitation on the purchase
of shares of Holding Company Conversion Stock established by Section 8.2, as
such limit may be increased pursuant to said Section 8.2.
2.32. INFORMATION STATEMENT. The information statement required to be
sent to the Corporators in connection with the Special Meeting.
2.33. LIQUIDATION ACCOUNT. The liquidation account established pursuant
to Section 9.7 of the Plan.
2.34. LOCAL COMMUNITY. The following Massachusetts cities and towns:
Attleboro, Ashland, Bellingham, Belmont, Blackstone, Brookline, Dover, Franklin,
Foxboro, Holliston, Hopedale, Hopkinton, Lexington, Lincoln, Mansfield,
Medfield, Medway, Mendon, Milford, Millis, Millville, Needham, Newton, Norfolk,
North Attleboro, Northbridge, Norton, Plainville, Sharon, Sherborn, Upton,
Uxbridge, Walpole, Waltham, Watertown, Wellesley, Weston and Wrentham.
2.35. MARKETING AGENT. The broker-dealer responsible for organizing and
managing the Conversion and sale of the Holding Company Conversion Stock.
2.36. MARKET MAKER. A dealer (i.e., any Person who engages directly or
indirectly as agent, broker, or principal in the business of offering, buying,
selling or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide
competitive bid and offer quotations on request, and (ii) is ready, willing and
able to effect transactions in reasonable quantities at the dealer's quoted
prices with other brokers or dealers.
2.37. MERGER SHARES. Shares of Holding Company Common Stock issued to
stockholders of Chart Bank in consideration of the Chart Acquisition, whether
pursuant to Section 7.6.4 or otherwise.
2.38. MHC. Benjamin Franklin Bancorp, M.H.C., the
Massachusetts-chartered holding company for the Bank as it exists in mutual form
prior to the Conversion.
2.39. NON-TAX-QUALIFIED EMPLOYEE BENEFIT PLAN. Any defined benefit plan
or defined contribution plan which is not qualified under Section 401 of the
Internal Revenue Code.
2.40. OFFERING. The Subscription Offering, the Direct Community
Offering and the Syndicated Community Offering.
2.41. OFFICER. The Chairman of the Board, the President, any officer of
the level of vice president or above, the Clerk and the Treasurer of the Bank,
the MHC or the Stock Holding Company, as the case may be.
2.42. PERSON. An individual, corporation, partnership, association,
joint-stock company,
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trust (including Individual Retirement Accounts, SEPs and Keogh Accounts),
unincorporated organization, government entity or political subdivision thereof
or any other entity.
2.43. PLAN. This Plan of Conversion.
2.44. QUALIFYING DEPOSIT. The aggregate balances of all Deposit
Accounts of an Eligible Account Holder as of the close of business on the
Eligibility Record Date or of a Supplemental Eligible Account Holder as of the
close of business on the Supplemental Eligibility Record Date, as the case may
be, provided that such aggregate balance is not less than $50.
2.45. RANGE MAXIMUM. The valuation which is 15% above the midpoint of
the Estimated Valuation Range, as defined in Section 2.19.
2.46. RANGE MINIMUM. The valuation which is 15% below the midpoint of
the Estimated Valuation Range, as defined in Section 2.19.
2.47. REGULATIONS. The regulations of the Division regarding mutual to
stock conversions mutual holding companies and the applicable regulations of the
Office of Thrift Supervision (as administered by the FRB), to the extent that
such Office of Thrift Supervision regulations do not conflict with the
regulations of the Division.
2.48. SEC. The Securities and Exchange Commission.
2.49. SPECIAL MEETING. The Special Meeting of Corporators called for
the purpose of voting on the Plan and the Chart Acquisition.
2.50. STOCK HOLDING COMPANY. The stock-form holding company that (x)
will result from the conversion of the MHC as provided in the Plan, (y) issue
Holding Company Conversion Stock in the Conversion, and (z) continue to own 100%
of the common stock of the Bank. The Stock Holding Company will be a
Massachusetts-chartered corporation known as Benjamin Franklin Bancorp, Inc.
2.51. SUBSCRIPTION OFFERING. The offering of Holding Company Conversion
Stock for subscription by Persons holding subscription rights pursuant to the
Plan.
2.52. SUBSCRIPTION PRICE. The price per share, determined as provided
in Section 5.2 of the Plan, at which the Holding Company Conversion Stock will
be sold in the Offering.
2.53. SUBSIDIARY. A company that is controlled by another company,
either directly or indirectly through one or more subsidiaries.
2.54. SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER. Any Person (other than
Officers, Directors, Trustees, or Corporators of the MHC and the Bank and their
Associates) holding a Qualifying Deposit on the Supplemental Eligibility Record
Date.
2.55. SUPPLEMENTAL ELIGIBILITY RECORD DATE. The supplemental record
date for determining who qualifies as a Supplemental Eligible Account Holder.
The Supplemental Eligibility Record Date shall be the last day of the calendar
quarter preceding the Commissioner's approval of the Application.
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2.56. SYNDICATED COMMUNITY OFFERING. At the discretion of the MHC, the
offering of Holding Company Conversion Stock following or contemporaneously with
the Direct Community Offering through a syndicate of broker-dealers.
2.57. TAX-QUALIFIED EMPLOYEE PLAN. Any defined benefit plan or defined
contribution plan (including the ESOP, any stock bonus plan, profit-sharing
plan, 401(k) plan or other plan) of the Bank, the Stock Holding Company, the MHC
or any of their Affiliates, which, with its related trusts, meets the
requirements to be qualified under Section 401 of the Internal Revenue Code.
ARTICLE 3.
GENERAL PROCEDURE FOR CONVERSION
3.1. PRECONDITIONS TO CONVERSION. The Conversion is expressly
conditioned upon prior occurrence of the following:
3.1.1 Approval of the Plan by the affirmative vote of a majority of
the Corporators at a regular or special meeting of such Corporators (and, if
required by regulatory authorities, by the affirmative vote of a majority of
Independent Corporators (who shall constitute not less than 60% of all
Corporators)).
3.1.2 Approval by the Commissioner of the Application, including the
Plan and the Charter and Bylaws of the Stock Holding Company and of the Bank.
3.1.3 Approval by the FRB of the FRB Application.
3.2. SUBMISSION OF PLAN TO COMMISSIONER AND FRB. Upon approval by at
least two-thirds of all Trustees of the MHC, the Plan will be submitted to the
Commissioner as part of the Application, and to the FRB as part of the FRB
Application, together with a copy of the proposed Information Statement and all
other material required by the Regulations, for approval by the Commissioner and
the FRB. The MHC must also receive either a private letter ruling from the
Internal Revenue Service or an opinion of its counsel as to the federal income
tax consequences of the Conversion, substantially to the effect that the
Conversion will not result in any adverse federal income tax consequence to the
MHC, the Bank, the Stock Holding Company, Eligible Account Holders or
Supplemental Eligible Account Holders. Upon a determination by the Commissioner
that the Application is complete, the MHC will publish and post public
announcements and notices of the Application as required by the Commissioner and
the Regulations.
3.3. SPECIAL MEETING OF CORPORATORS TO APPROVE THE PLAN. Following
approval of the Plan by the Commissioner, the Special Meeting shall be scheduled
in accordance with the MHC's Bylaws, and the Plan (as revised in response to
comments received from the Commissioner and the FRB), proposed revisions and
amendments to the charters and bylaws of the Bank and the Stock Holding Company,
and any information required pursuant to the Regulations, will be submitted to
the Corporators for their consideration and approval at the Special Meeting. The
MHC will mail to each Corporator a copy of the Information Statement not less
than seven (7) days before the Special Meeting. Following approval of the Plan
by the Corporators, the MHC intends to take such steps as may be appropriate
pursuant to applicable
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laws and regulations to convert the MHC to a Massachusetts-chartered stock form
holding company.
3.4. STOCK HOLDING COMPANY CHARTER AND BYLAWS. Copies of the proposed
Charter and Bylaws of the Stock Holding Company are attached hereto as Exhibit
3.4, and are made a part of the Plan. By their approval of the Plan, the
Corporators shall have approved and adopted the Charter and Bylaws of the Stock
Holding Company.
3.5. BANK CHARTER AND BYLAWS. Copies of the proposed amended and
restated Charter and Bylaws of the Bank are attached hereto as Exhibit 3.5, and
are made a part of the Plan. By their approval of the Plan, the Trustees, as the
governing body of the sole stockholder of the Bank, have approved and adopted
the amended and restated Charter and Bylaws of the Bank.
3.6. OFFER AND SALE OF HOLDING COMPANY CONVERSION STOCK.
3.6.1 If the Corporators approve the Plan, and upon receipt of all
required regulatory approvals, the Holding Company Conversion Stock will be
offered for sale in a Subscription Offering simultaneously to Eligible Account
Holders, Supplemental Eligible Account Holders, any Tax-Qualified Employee Plan,
and directors, trustees, Officers and Employees in the manner set forth in
Article 7 hereof. The Subscription Offering period will run for no less than
twenty (20) but no more than forty-five (45) days from the date of distribution
of the Subscription Offering materials, unless extended by the MHC with the
approval of the Commissioner and the FRB, if required. If feasible, any Holding
Company Conversion Stock remaining will then be sold to the general public
through a Direct Community Offering as provided in Article 7 hereof, which may
be held either subsequent to or concurrently with the Subscription Offering.
3.6.2 If feasible, any shares of Holding Company Conversion Stock
remaining unsold after completion of the Subscription Offering and a Direct
Community Offering may, in the sole discretion of the MHC, either be applied
toward the Merger Shares as described in Section 7.6.4 or sold in a Syndicated
Community Offering (which may commence following or contemporaneously with the
Direct Community Offering). If for any reason a Syndicated Community Offering
cannot be effected, the MHC will either apply such unsubscribed Holding Company
Conversion Stock toward the Merger Shares as described in Section 7.6.4 or use
its best efforts to obtain other purchasers, or both, in order to meet the Range
Minimum, subject to the approval of the Commissioner and the FRB, if required.
The sale of all shares of Holding Company Conversion Stock to be sold pursuant
to this Plan must be completed within forty-five (45) days after termination of
the Subscription Offering, subject to the extension of such forty-five (45) day
period by the MHC with the approval of the Commissioner and the FRB, if
required. The MHC may seek one or more extensions of such forty-five (45) day
period if necessary to complete the sale of all shares of Holding Company
Conversion Stock. If all available shares of Holding Company Conversion Stock
are sold in the Subscription Offering and any Direct Community Offering, there
will be no Syndicated Community Offering and the Conversion will be consummated
upon completion of the Subscription Offering or the Direct Community Offering,
as the case may be.
3.7. CONVERSION OF MHC TO STOCK HOLDING COMPANY. Upon the consummation
of the
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Conversion the MHC will be converted into the Stock Holding Company. The Stock
Holding Company will be chartered as a Massachusetts corporation and will be
authorized to exercise any and all powers, rights and privileges, and will be
subject to all limitations applicable to bank holding companies under applicable
laws and regulations. The initial members of the Board of Directors of the Stock
Holding Company will be those Persons whose names are set forth on Exhibit 3.7
to the Plan, each to hold office until the Annual Meeting (or Special Meeting in
lieu thereof) in the year set forth opposite their respective names on such
Exhibit 3.7, and until their successors are elected and have been qualified, and
otherwise in accordance with the Charter and By-Laws of the Stock Holding
Company. The Officers of the MHC immediately prior to the Conversion shall be
the initial Officers of the Stock Holding Company, in each case to serve at the
pleasure of the Board of Directors of the Stock Holding Company. The Stock
Holding Company, as successor in interest to the MHC, will continue to own 100%
of the common stock of the Bank. The Stock Holding Company expects to contribute
to the Bank as additional capital at least half of the net proceeds remaining
after the payment of expenses of the Conversion; provided that the capital
contributed to the Bank will include the amount of Conversion proceeds applied
toward the cash portion of the purchase price in the Chart Acquisition.
ARTICLE 4.
ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION.
4.1. ESTABLISHMENT OF THE FOUNDATION. As part of the Conversion, the
Stock Holding Company intends to establish the Foundation which will qualify as
an exempt organization under Section 501(c)(3) of the Internal Revenue Code and
to donate to the Foundation a number of shares of its authorized but unissued
Common Stock in an amount up to 8.0% of the lesser of (i) the number of shares
actually sold in the Conversion or (ii) the number of shares that would have
been sold at the midpoint of the Estimated Valuation Range.
4.2. PURPOSES OF THE FOUNDATION; CHARITABLE CONTRIBUTIONS. The
Foundation is being formed in connection with the Conversion in order to
complement the Bank's existing community reinvestment activities and to share
with the Bank's community a part of the Bank's financial success as a locally
headquartered, community minded, financial services institution. The funding of
the Foundation with Holding Company Common Stock accomplishes this goal as it
enables the community to share in the growth and profitability of the Stock
Holding Company and the Bank over the long term. The Foundation will be
dedicated to the promotion of charitable purposes including community
development, grants or donations to support housing assistance, not-for-profit
community groups and other types of organizations or civic minded projects. The
Foundation will annually distribute total grants to assist charitable
organizations or to fund projects within the Bank's community of not less than
five percent (5.0%) of the average fair value of Foundation assets each year,
less certain expenses. In order to serve the purposes for which it was formed
and maintain its Section 501(c)(3) qualification, the Foundation may sell, on an
annual basis, a portion of the Holding Company Common Stock contributed to it by
the Holding Company.
4.3. BOARD OF DIRECTORS OF THE FOUNDATION. The board of directors of
the Foundation will consist of a majority of individuals who are directors of
the Bank. The board of directors of the Foundation will be responsible for
establishing the policies of the Foundation with respect to grants or donations,
consistent with the stated purposes of the Foundation.
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ARTICLE 5.
SHARES TO BE OFFERED
5.1. HOLDING COMPANY COMMON STOCK. The Holding Company Common Stock
shall be fully paid and nonassessable. The total number of shares of Holding
Company Common Stock authorized under the Stock Holding Company's Charter will
exceed the number of shares of Holding Company Conversion Stock to be issued to
the Stock Holding Company stockholders in the Conversion and shares of Holding
Company Common Stock to be issued to holders of Chart common stock in the
Acquisition. HOLDING COMPANY COMMON STOCK WILL NOT BE COVERED BY DEPOSIT
INSURANCE.
5.2. INDEPENDENT VALUATION, PURCHASE PRICE AND NUMBER OF SHARES.
5.2.1 INDEPENDENT VALUATION. An Independent Appraiser shall be
employed by the MHC to provide it with an Independent Valuation as required by
the Regulations, which value shall be included in the prospectus (as described
in Section 6.1 of this Plan) filed with the Commissioner and the SEC. The
Trustees of the MHC shall thoroughly review and analyze the methodology and
fairness of the Independent Valuation. The Independent Valuation will be made by
a written report to the MHC, contain the factors upon which the Independent
Valuation was made and conform to procedures adopted by the Commissioner and the
FRB. The Independent Valuation provided by the Independent Appraiser to the MHC
before the commencement of the Subscription Offering will contain an Estimated
Valuation Range of aggregate prices for the Holding Company Conversion Stock,
which range shall reflect the anticipated pro forma market value of the Holding
Company Conversion Stock. Such Estimated Valuation Range will establish a
midpoint and will vary within 15% above (the "RANGE MAXIMUM") to 15% below (the
"RANGE MINIMUM") such midpoint. The Independent Appraiser shall also present to
the MHC at the close of the Subscription Offering a valuation of the pro forma
market value of the Holding Company Conversion Stock.
5.2.2 SUBSCRIPTION PRICE. All shares sold in the Conversion will be
sold at a uniform price per share (the "SUBSCRIPTION PRICE"), which is expected
to be determined before the commencement of the Offering. If there is a
Syndicated Community Offering, the price per share at which the Holding Company
Conversion Stock is sold in such Syndicated Community Offering shall be equal to
the per share purchase price of the shares sold in the Subscription Offering and
the Direct Community Offering. The aggregate purchase price for all shares of
Holding Company Conversion Stock will be equal to the estimated consolidated pro
forma market value of the Holding Company Conversion Stock, as determined for
such purpose by the Independent Appraiser.
5.2.3 NUMBER OF SHARES. The total number of shares (and a range
thereof) of Holding Company Conversion Stock to be issued and offered for sale
will be determined by the MHC immediately before the commencement of the
Subscription Offering based on the Independent Valuation, the Estimated
Valuation Range and the Subscription Price. The Independent Valuation, and such
number of shares, shall be subject to adjustment thereafter if necessitated by
market or financial conditions, with the approval of the Commissioner and the
FRB, if necessary. In particular, the total number of shares may be increased by
up to 15% above the Range Maximum if the Independent Valuation is increased
subsequent to the
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commencement of the Subscription Offering to reflect changes in market and
financial conditions and the resulting aggregate purchase price is not more than
15% above the Range Maximum.
5.2.4 INCREASE OR DECREASE IN NUMBER OF SHARES. The number of shares
of Holding Company Conversion Stock may be increased or decreased by the MHC,
subject to the following provisions. In the event that the aggregate purchase
price of the number of shares of Holding Company Conversion Stock ordered is
below the minimum of the Estimated Valuation Range, or materially above the
Range Maximum, resolicitation of purchasers may be required, provided, however,
that a resolicitation will not be required (i) if the number of shares increases
by up to 15% above the Range Maximum, or (ii) if the Range Minimum is achieved
by applying Holding Company Conversion Stock toward the Merger Shares as
described in Section 7.6.4. Any such resolicitation shall be effected in such
manner and within such time as the MHC shall establish, with the approval of the
Commissioner and the FRB, if required.
5.2.5 CONFIRMATION OF VALUATION. Notwithstanding the foregoing, no
sale of Holding Company Conversion Stock may be consummated unless, before such
consummation, the Independent Appraiser confirms to the MHC and to the
Commissioner and the FRB that, to the best knowledge of the Independent
Appraiser, nothing of a material nature has occurred which, taking into account
all relevant factors, would cause the Independent Appraiser to conclude that the
aggregate value of all shares of Holding Company Conversion Stock ordered, at
the Subscription Price, is incompatible with its estimate of the aggregate
consolidated pro forma market value of the Holding Company Conversion Stock. An
increase in the aggregate value of the Holding Company Conversion Stock by up to
15% above the Range Maximum would not be deemed to be material. If such
confirmation is not received, the MHC may cancel the Conversion, resolicit and
extend the Conversion and establish a new Subscription Price and/or Estimated
Valuation Range, or hold a new Conversion or take such other action as the
Commissioner and the FRB may permit. The estimated pro forma market value of the
Holding Company Conversion Stock shall be determined for such purpose by an
Independent Appraiser on the basis of such appropriate factors as are not
inconsistent with the Regulations and will be confirmed upon completion of the
Conversion. In any case, the total number of shares of Holding Company
Conversion Stock to be issued and sold will be determined by the MHC as follows:
(a) the estimated aggregate pro forma market value of the Holding Company
Conversion Stock, immediately after Conversion as determined by the Independent
Appraiser, expressed in terms of a specific aggregate dollar amount rather than
as a range, shall be divided by (b) the Subscription Price.
ARTICLE 6.
SUBSCRIPTION RIGHTS AND ORDERS FOR COMMON STOCK
6.1. DISTRIBUTION OF PROSPECTUS. The Conversion shall be conducted in
compliance with the Regulations and applicable SEC regulations. As soon as
practicable after the prospectus prepared by the MHC has been declared effective
by the Commissioner and the SEC, copies of the prospectus and order forms will
be distributed to all Eligible Account Holders, Supplemental Eligible Account
Holders, any Tax-Qualified Employee Plan and Employees, Officers, directors and
trustees at their last known addresses appearing on the records of the Bank for
the purpose of subscribing for shares of Holding Company Conversion Stock in the
Subscription Offering and will be made available (if and when a Community
Offering is held) for use by those Persons
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entitled to purchase in the Community Offering. Instead of distributing the
prospectus and order forms, the MHC may distribute a notice of availability of
the prospectus and the order form, together with a request card and a
postage-prepaid return envelope for use in requesting such prospectus and order
form. If the latter method is employed by the MHC, such notices shall be mailed
to those eligible to subscribe in the Subscription Offering not less than thirty
(30) calendar days before the expiration of the Subscription Offering.
6.2. ORDER FORMS. Each order form will be preceded or accompanied by
the prospectus describing the Stock Holding Company, the Bank, the Chart
Acquisition, the Holding Company Conversion Stock and the Subscription and
Community Offerings. Each order form will contain, among other things, the
following:
6.2.1 A specified date by which all order forms must be received by
the MHC, which date shall be not less than 20 nor more than 45 days following
the date on which the order forms are mailed by the MHC, and which date will
constitute the expiration of the Subscription Offering, unless extended;
6.2.2 The Subscription Price per share for shares of Holding Company
Conversion Stock to be sold in the Offering;
6.2.3 A description of the minimum and maximum number of shares of
Holding Company Conversion Stock that may be subscribed for pursuant to the
exercise of subscription rights or otherwise purchased in the Offering;
6.2.4 Instructions as to how the recipient of the order form is to
indicate thereon the number of shares of Holding Company Conversion Stock for
which such Person elects to subscribe and the available alternative methods of
payment therefor;
6.2.5 An acknowledgment that the recipient of the order form has
received a copy of the prospectus before execution of the order form;
6.2.6 A statement indicating the consequences of failing to properly
complete and return the order form, including a statement to the effect that all
subscription rights are nontransferable, will be void at the end of the
Subscription Offering, and can only be exercised by delivering to the MHC within
the Subscription Offering period such properly completed and executed order
form, together with a check or money order in the full amount of the purchase
price as specified in the order form for the shares of Holding Company
Conversion Stock for which the recipient elects to subscribe in the Subscription
Offering (or by authorizing on the order form that the Bank withdraw said amount
from the Deposit Account at the Bank maintained by such Person, but only if the
MHC elects to permit such withdrawals from the type of such Deposit Account);
6.2.7 A statement to the effect that the executed order form, once
received by the MHC, may not be modified or amended by the subscriber without
the consent of the MHC; and
6.2.8 An acknowledgment by the Person submitting the order form that
such Person understands and agrees that by submitting such order form such
Person is approving the Chart Acquisition and is voting by written consent
(pursuant to M.G.L. ch. 156D, Section 7.04) all
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Holding Company Conversion Stock to be purchased by such Person in favor of the
Chart Acquisition.
Notwithstanding the above, the MHC reserves the right in its sole
discretion to accept or reject orders received on photocopied or faxed order
forms.
6.3. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT.
In the event order forms (a) are not delivered for any reason or are returned
undelivered to the MHC by the United States Postal Service, (b) are not received
back by the MHC or are received by the MHC after the expiration date specified
thereon, (c) are defectively filled out or executed, (d) are not accompanied by
the full required payment for the shares of Holding Company Conversion Stock
subscribed for (including cases in which Deposit Accounts from which withdrawals
are authorized are insufficient to cover the amount of the required payment), or
(e) are not mailed pursuant to a "NO MAIL" order placed in effect by the account
holder, the subscription rights of the Person to whom such rights have been
granted will lapse as though such Person failed to return the contemplated order
form within the time period specified thereon; provided, however, that the MHC
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 MHC may specify, and all
interpretations by the MHC of terms and conditions of this Plan and of the order
forms will be final.
6.4. PAYMENT FOR STOCK.
6.4.1 All payments for Holding Company Conversion Stock subscribed
for or ordered in the Conversion must be delivered in full to the MHC, together
with a properly completed and executed order form, except in the case of the
Syndicated Community Offering, on or before the expiration date specified on the
order form, unless such date is extended by the MHC; provided, however, that if
any Employee Plan subscribes for shares during the Subscription Offering, such
plan will not be required to pay for the shares at the time it subscribes but
rather may pay for such shares of Holding Company Conversion Stock subscribed
for by such plan at the Subscription Price upon consummation of the Conversion,
provided, however, that, in the case of the ESOP there is in force from the time
of its subscription until the consummation of the Conversion, a loan commitment
to lend to the ESOP, at such time, the aggregated Subscription Price of the
shares for which it subscribed. The Stock Holding Company or the Bank may make
scheduled discretionary contributions to an Employee Plan provided such
contributions from the Bank, if any, do not cause the Bank to fail to meet its
regulatory capital requirement. Payment for Holding Company Conversion Stock may
also be made by a participant in an Employee Plan (including the Bank's 401(k)
plan) causing funds held for such participant's benefit by an Employee Plan to
be paid over for such purchase to the extent that such plan allows participants
or any related trust established for the benefit of such participants to direct
that some or all of their individual accounts or sub-accounts be invested in
Holding Company Conversion Stock.
6.4.2 Payment for Holding Company Conversion Stock shall be made
either by check, bank draft or money order, or if a purchaser has a Deposit
Account in the Bank (and if the MHC has elected to permit such withdrawals from
the type of Deposit Account maintained by such Person), such purchaser may pay
for the shares subscribed for by authorizing the Bank to
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make a withdrawal from the purchaser's Deposit Account at the Bank in an amount
equal to the aggregate purchase price of such shares. No wire transfers will be
accepted. Any authorized withdrawal, whether from a savings, passbook or
certificate account, shall be without penalty as to premature withdrawal. If the
authorized withdrawal is from a certificate account, and the remaining balance
does not meet the applicable minimum balance requirements, the certificate shall
be canceled at the time of withdrawal, without penalty, and the remaining
balance will earn interest at the passbook rate. Funds for which a withdrawal is
authorized will remain in the purchaser's Deposit Account but may not be used by
the purchaser pending consummation of the Conversion or expiration of the 45-day
period (or such longer period as may be approved by the Commissioner) following
termination of the Subscription Offering, whichever occurs first. After
consummation of the Conversion, the withdrawal will be given effect only to the
extent necessary to satisfy the subscription (to the extent it can be filled) at
the Subscription Price. Interest submitted will continue to be earned on any
amounts authorized for withdrawal until such withdrawal is given effect.
Interest on checks and money orders will be paid by the Bank at the Bank's
passbook rate. Such interest will be paid from the date payment is received by
the Bank until consummation or termination of the Conversion. If for any reason
the Conversion is not consummated, all payments made by subscribers in the
Conversion will be refunded to them with interest. In case of amounts authorized
for withdrawal from Deposit Accounts, refunds will be made by canceling the
authorization for withdrawal.
ARTICLE 7.
STOCK PURCHASE PRIORITIES
7.1. PRIORITIES FOR OFFERING. All purchase priorities established by
this Article 7 shall be subject to the purchase limitations set forth in, and
shall be subject to adjustment as provided in, Article 8 of this Plan. In
addition to the priorities set forth in this Article 7, the MHC may establish
other priorities for the purchase of Holding Company Conversion Stock, subject
to the approval of the Commissioner and the FRB. The priorities for the purchase
of shares in the Conversion are set forth in the following Sections.
7.2. CERTAIN DETERMINATIONS. All interpretations or determinations of
whether prospective purchasers are "RESIDENTS," "ASSOCIATES," or "ACTING IN
CONCERT", and any other interpretations of any and all other provisions of the
Plan shall be made by and at the sole discretion of the MHC, and may be based on
whatever evidence the MHC may choose to use in making any such determination.
7.3. MINIMUM PURCHASE; NO FRACTIONAL SHARES. The minimum purchase by
any Person shall be 25 shares (to the extent that shares of Holding Company
Conversion Stock are available for purchase), provided, however, that the
aggregate purchase price for any minimum share purchase shall not exceed $500.
No fractional shares will be allocated or issued.
7.4. OVERVIEW OF PRIORITIES. In descending order of priority, the
opportunity to purchase Holding Company Conversion Stock shall be given in the
Subscription Offering to: (1) Eligible Account Holders; (2) Supplemental
Eligible Account Holders; (3) any Tax-Qualified Employee Plan; and (4)
Employees, Officers, directors and trustees of the MHC and the Bank. Any shares
of Holding Company Conversion Stock that are not subscribed for in the
Subscription Offering at the discretion of the MHC may be offered for sale in a
Direct Community Offering and/or a
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Syndicated Community Offering on terms and conditions and procedures
satisfactory to the MHC.
7.5. PRIORITIES FOR SUBSCRIPTION OFFERING.
7.5.1 FIRST PRIORITY: ELIGIBLE ACCOUNT HOLDERS. Upon approval of the
Plan by the Corporators and the receipt of permission from the Commissioner and
the FRB to offer the Holding Company Conversion Stock for sale, each Eligible
Account Holder shall receive, without payment therefor, nontransferable
subscription rights on a first priority basis to subscribe for a number of
shares of Holding Company Conversion Stock equal to the greatest of (x) a number
determined by dividing the Individual Maximum Purchase Limit (as such term is
defined in Section 8.2) by the per share Subscription Price, (y) one-tenth of
one percent (.10%) of the shares offered in the Conversion, or (z) 15 times the
product (rounded down to the nearest whole number) obtained by multiplying (1)
the total number of shares of Holding Company Conversion Stock to be issued in
the Conversion by (2) a fraction, of which the numerator is the Qualifying
Deposit of the Eligible Account Holder and the denominator is the total amount
of Qualifying Deposits of all Eligible Account Holders. If there are
insufficient shares available to satisfy all subscriptions of Eligible Account
Holders, shares will be allocated to Eligible Account Holders so as to permit
each such subscribing Eligible Account Holder to purchase a number of shares of
Holding Company Conversion Stock sufficient to make his or her total allocation
equal to the lesser of 100 shares or the number of shares subscribed for.
Thereafter, unallocated shares of Holding Company Conversion Stock will be
allocated pro rata to remaining subscribing Eligible Account Holders whose
subscriptions remain unfilled in the same proportion that each such subscriber's
Qualifying Deposit bears to the total amount of Qualifying Deposits of all
subscribing Eligible Account Holders whose subscriptions remain unfilled.
Subscription rights to purchase Holding Company Conversion Stock received by
corporators, Trustees, Officers, and directors of the MHC and the Bank (and
their Associates) based on their increased deposits in the Bank in the one year
preceding the Eligibility Record Date shall be subordinated to the subscription
rights of other Eligible Account Holders. To ensure proper allocation of stock,
each Eligible Account Holder must list on his or her subscription order form all
Deposit Accounts in which he had an ownership interest as of the Eligibility
Record Date.
7.5.2 SECOND PRIORITY: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. To the
extent there are shares remaining after satisfaction of subscriptions by
Eligible Account Holders, each Supplemental Eligible Account Holder shall
receive non-transferable subscription rights to subscribe for a number of shares
of Holding Company Conversion Stock equal to the greatest of (x) a number
determined by dividing the Individual Maximum Purchase Limit by the per share
Subscription Price, (y) one-tenth of one percent (.10%) of the shares offered in
the Conversion, or (z) 15 times the product (rounded down to the nearest whole
number) obtained by multiplying (1) the total number of shares of Holding
Company Conversion Stock to be issued in the Conversion by (2) a fraction, of
which the numerator is the Qualifying Deposit of the Supplemental Eligible
Account Holder and the denominator is the total amount of Qualifying Deposits of
all Supplemental Eligible Account Holders. In the event Supplemental Eligible
Account Holders subscribe for a number of shares of Holding Company Conversion
Stock which, when added to the shares subscribed for by Eligible Account
Holders, exceed available shares, the available shares of Holding Company
Conversion Stock will be allocated among subscribing Supplemental Eligible
Account Holders so as to permit each subscribing
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Supplemental Eligible Account Holder to purchase a number of shares of Holding
Company Conversion Stock sufficient to make his or her total allocation equal to
the lesser of 100 shares or the number of shares subscribed for. Thereafter,
unallocated shares will be allocated to each subscribing Supplemental Eligible
Account Holder whose subscription remains unfilled in the same proportion that
such subscriber's Qualifying Deposit on the Supplemental Eligibility Record Date
bears to the total amount of Qualifying Deposits of all subscribing Supplemental
Eligible Account Holders whose subscriptions remain unfilled.
7.5.3 THIRD PRIORITY: TAX-QUALIFIED EMPLOYEE PLAN. To the extent
there are shares remaining after satisfaction of subscriptions by Eligible
Account Holders and Supplemental Eligible Account Holders, the Tax-Qualified
Employee Plan shall be given the opportunity to purchase in the aggregate up to
10% of the Holding Company Conversion Stock issued in the Conversion. In the
event that the total number of shares of Holding Company Conversion Stock
offered in the Conversion is increased to an amount greater than the Range
Maximum, the Tax-Qualified Employee Plan shall have a priority right to purchase
any such shares exceeding the Range Maximum (up to the aggregate of 10% of
Holding Company Conversion Stock to be issued in the Conversion). If any
Tax-Qualified Employee Plan chooses not to fill its order in the Offering, then
the Tax-Qualified Employee Plan may purchase shares in the open market following
consummation of the Conversion.
7.5.4 FOURTH PRIORITY: EMPLOYEES, OFFICERS, DIRECTORS AND TRUSTEES.
To the extent there are shares remaining after satisfaction of subscriptions by
Eligible Account Holders, Supplemental Eligible Account Holders, and any
Tax-Qualified Employee Plan, each Employee, Officer, director and trustee of the
MHC or the Bank who is not an Eligible Account Holder or a Supplemental Eligible
Account Holder shall receive non-transferable subscription rights to subscribe
for shares of Holding Company Conversion Stock offered in the Conversion in an
amount equal to the Individual Maximum Purchase Limit; provided, however, that
the aggregate number of shares of Holding Company Conversion Stock that may be
purchased by Employees, Officers, directors and trustees in the Conversion shall
be limited to 30% of the total number of shares of Holding Company Conversion
Stock issued in the Conversion (including shares purchased by Employees,
Officers, directors and trustees under this Section 7.5.4 and under the
preceding priority categories, but not including shares purchased by the ESOP).
In the event that Employees, Officers, directors, and trustees subscribe under
this Section 7.5.4 for more shares of Holding Company Conversion Stock than are
available for purchase by them, the shares of Holding Company Conversion Stock
available for purchase will be allocated by the MHC among such subscribing
Persons on an equitable basis, such as by giving weight to the period of
service, compensation and position of the individual subscriber.
7.6. PRIORITIES FOR DIRECT COMMUNITY OFFERING.
7.6.1 Any shares of Holding Company Conversion Stock not subscribed
for in the Subscription Offering may be offered for sale in a Direct Community
Offering. This will involve an offering of all unsubscribed shares of Holding
Company Conversion Stock directly to the general public. The Direct Community
Offering, if any, shall be for a period of not more than 45 days unless extended
by the MHC, and shall commence concurrently with, during or promptly after the
Subscription Offering. The MHC may use an investment banking firm or firms on a
best efforts basis to sell the unsubscribed shares in the Subscription and
Direct Community Offering. The MHC may pay a commission or other fee to such
investment banking
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firm or firms as to the shares sold by such firm or firms in the Subscription
and Direct Community Offering and may also reimburse such firm or firms for
expenses incurred in connection with the sale. The Holding Company Conversion
Stock will be offered and sold in the Direct Community Offering, in accordance
with the Regulations, so as to achieve the widest distribution of the Holding
Company Conversion Stock. In making the Direct Community Offering, the Bank will
give preference to natural persons residing in the Local Community. Orders
accepted in the Direct Community Offering shall be filled up to a maximum not to
exceed the Individual Maximum Purchase Limit. No Person may subscribe for or
purchase more than the Individual Maximum Purchase Limit of Holding Company
Conversion Stock in the Direct Community Offering. The MHC, in its sole
discretion, may reject subscriptions, in whole or in part, received from any
Person under this Section 7.6.
7.6.2 In the event of an oversubscription for shares in the Direct
Community Offering, available shares will be allocated (to the extent shares
remain available) first to cover orders of natural Persons residing in the Local
Community, so that each such Person may receive 100 shares, and thereafter, on a
pro rata basis to such Persons based on the amount of their respective
subscriptions or on such other reasonable basis as may be determined by the MHC.
If oversubscription does not occur among natural Persons residing in the Local
Community, the allocation process to cover orders of other Person subscribing
for shares in the Direct Community Offering shall be as described above for
natural Persons.
7.6.3 The terms "RESIDENCE," "RESIDE," or "RESIDING" as used herein
with respect to any Person shall mean any Person who occupies a dwelling within
the Local Community, has an intent to remain with the Local Community for a
period of time, and manifests the genuineness of that intent by establishing an
ongoing physical presence within the Local Community together with an indication
that such presence within the Local Community is not merely transitory in
nature. To the extent the Person is a corporation or other business entity, the
principal place of business or headquarters must be in the Local Community. The
Bank may use deposit or loan records or such other evidence provided to it to
determine whether a Person is a resident. In all cases, however, such a
determination shall be in the sole discretion of the MHC.
7.6.4 If:
(i) aggregate subscriptions totaling at least the minimum of the
Estimated Valuation Range (the "RANGE MINIMUM") are not received in the
Subscription Offering and Direct Community Offering, and the MHC, in its
sole discretion, determines that a Syndicated Community Offering is not in
the best interests of the MHC; or
(ii) aggregate subscriptions and orders totaling at least the Range
Minimum are not received in the Subscription Offering, Direct Community
Offering and the Syndicated Community Offering;
then, subject to regulatory approval, the MHC may, in its sole discretion, apply
unsubscribed/unordered Holding Company Conversion Stock toward the stock
consideration to be issued to Chart stockholders in exchange for their shares of
Chart Bank, or in any other manner that facilitates the completion of the Chart
Acquisition, provided that the total Merger Shares, including Merger Shares
issued pursuant to this Section 7.6.4, represent no more than
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49% of the outstanding Holding Company Common Stock immediately after the
closing of the Conversion and Chart Acquisition. Holding Company Conversion
Stock may only be issued as Merger Shares in order to achieve the Range Minimum.
7.7. PRIORITIES FOR SYNDICATED COMMUNITY OFFERING.
7.7.1 Any shares of Holding Company Conversion Stock not sold in the
Subscription Offering or in the Direct Community Offering, if any, may be
offered for sale to the general public by a selling group of broker-dealers in a
Syndicated Community Offering, subject to terms, conditions and procedures as
may be determined by the MHC in a manner that is intended to achieve the widest
distribution of the Holding Company Conversion Stock subject to the rights of
the MHC to accept or reject in whole or in part all orders in the Syndicated
Community Offering. No Person may purchase in the Syndicated Community Offering
more than the Individual Maximum Purchase Limit of Holding Company Conversion
Stock. It is expected that the Syndicated Community Offering will commence as
soon as practicable after termination of the Direct Community Offering, if any.
The Syndicated Community Offering shall be completed within 45 days after the
termination of the Subscription Offering, unless such period is extended as
provided herein. The commission in the Syndicated Community Offering shall be
determined by a marketing agreement between the MHC and the Marketing Agent.
Such agreement shall be filed with the FRB, the Division and the SEC.
7.7.2 If for any reason a Syndicated Community Offering of
unsubscribed shares of Holding Company Conversion Stock cannot be effected or is
not deemed to be advisable, and any shares remain unsold after the Subscription
Offering and the Community Offering, if any, the MHC may seek to make other
arrangements for the sale of the remaining shares in order to meet the Range
Minimum, including an underwritten public offering. Such other arrangements will
be subject to the approval of the Commissioner and the FRB and to compliance
with applicable state and federal securities laws.
ARTICLE 8.
ADDITIONAL LIMITATIONS ON PURCHASES
8.1. GENERAL. Purchases of Holding Company Conversion Stock in the
Conversion will be subject to the purchase limitations set forth in this Article
8.
8.2. INDIVIDUAL MAXIMUM PURCHASE LIMIT. This Section 8.2 sets forth the
"INDIVIDUAL MAXIMUM PURCHASE LIMIT." No Person (or Persons exercising
subscription rights through a single qualifying deposit account held jointly)
may purchase in the Offering (including the Subscription Offering, the Direct
Community Offering and the Syndicated Community Offering) more than $150,000 of
Holding Company Conversion Stock, except that: (i) the MHC may, in its sole
discretion and without further notice to or solicitation of subscribers or other
prospective purchasers, (x) increase such Individual Maximum Purchase Limit to
up to 5% of the number of shares of Holding Company Conversion Stock offered in
the Conversion or (y) decrease such Individual Maximum Purchase Limit to no less
than one-tenth of one percent (.10%) of the number of shares of Holding Company
Conversion Stock offered in the Conversion; and (ii) Tax-Qualified Employee Plan
may purchase up to 10% of the shares issued in the Conversion. If the MHC
increases the Individual Maximum Purchase Limit (as permitted by this
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Section 8.2), subscribers in the Subscription Offering who ordered the
previously-effective maximum amount will be, and certain other large subscribers
in the sole discretion of the MHC may be, given the opportunity to increase
their subscriptions up to the then applicable limit. Requests to purchase
additional shares of Holding Company Conversion Stock under this provision will
be determined by the MHC, in its sole discretion.
8.3. GROUP ACTING IN CONCERT. This Section 8.3 sets forth the "GROUP
MAXIMUM PURCHASE LIMIT." No Person and his or her Associates or group of Persons
Acting in Concert, may purchase in the Offering (including the Subscription
Offering, the Direct Community Offering and the Syndicated Community Offering)
more than $250,000 of Holding Company Conversion Stock, except that: (i) the MHC
may, in its sole discretion and without further notice to or solicitation of
subscribers or other prospective purchasers, (x) increase such Group Maximum
Purchase Limit to up to 5% of the number of shares of Holding Company Conversion
Stock offered in the Conversion or (y) decrease such Group Maximum Purchase
Limit to no less than one-tenth of one percent (.10%) of the number of shares of
Holding Company Conversion Stock offered in the Conversion; and (ii) the
Tax-Qualified Employee Plan may purchase up to 10% of the shares issued in the
Conversion. Notwithstanding the foregoing, in the event that the MHC increases
the Individual Maximum Purchase Limit (as permitted by Section 8.2) to a number
that is in excess of the Group Maximum Purchase Limit established by this
Section 8.3, the Group Maximum Purchase Limit shall automatically be increased
so as to be equal to the Individual Maximum Purchase Limit, as adjusted.
8.4. PURCHASES BY OFFICERS, DIRECTORS, TRUSTEES AND CORPORATORS. The
aggregate number of shares of Holding Company Conversion Stock to be purchased
in the Offering by Officers, Directors, Trustees and Corporators of the MHC and
the Bank (and their Associates) shall not exceed 30% of the total number of
shares of Holding Company Conversion Stock issued in the Conversion.
8.5. SPECIAL RULE FOR TAX-QUALIFIED EMPLOYEE PLAN. Shares of Holding
Company Conversion Stock purchased by any individual participant ("PLAN
PARTICIPANT") in a Tax-Qualified Employee Plan using funds therein pursuant to
the exercise of subscription rights granted to such Participant in his
individual capacity as an Eligible Account Holder or Supplemental Eligible
Account Holder shall not be deemed to be purchases by a Tax-Qualified Employee
Plan for purposes of calculating the maximum amount of Holding Company
Conversion Stock that Tax-Qualified Employee Plans may purchase pursuant to this
Plan, if the individual Plan Participant controls or directs the investment
authority with respect to such account or subaccount.
8.6. INCREASE IN THE TOTAL NUMBER OF SHARES OFFERED. In the event that
(i) the total number of shares of Holding Company Conversion Stock offered in
the Conversion is increased to an amount greater than the Range Maximum, and
(ii) there shall be additional shares of Holding Company Conversion Stock
available after any Tax-Qualified Employee Plan shall have exercised its
priority right (established pursuant to Section 7.5.3) to purchase shares
exceeding the Range Maximum, any additional shares not purchased by a
Tax-Qualified Employee Plan will be issued to fill unfulfilled subscriptions of
other subscribers according to their respective priorities set forth in the
Plan.
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8.7. ILLEGAL PURCHASES. Notwithstanding any other provision of the
Plan, no Person shall be entitled to purchase any Holding Company Conversion
Stock to the extent such purchase would be illegal under any federal law or
state law or regulation or would violate regulations or policies of the National
Association of Securities Dealers, Inc., particularly those regarding free
riding and withholding. The MHC and/or its agents may ask for an acceptable
legal opinion from any purchaser as to the legality of such purchase and may
refuse to honor any purchase order if such opinion is not timely furnished.
8.8. REJECTION OF ORDERS. The MHC has the right in its sole discretion
to reject any order submitted by a Person whose representations the MHC believes
to be false or who it otherwise believes, either alone or Acting in Concert with
others, is violating, circumventing, or intends to violate, evade or circumvent
the terms and conditions of the Plan.
8.9. SUBSCRIBERS IN NON-QUALIFIED STATES OR IN FOREIGN COUNTRIES. The
MHC, in its sole discretion, may make reasonable efforts to comply with the
securities laws of any state in the United States in which its depositors
reside, and will only offer and sell the Holding Company Conversion Stock in
states in which the offers and sales comply with such states' securities laws.
However, no Person will be offered or allowed to purchase any Holding Company
Conversion Stock under the Plan if he or she resides in a foreign country or in
a state of the United States with respect to which any of the following apply:
(i) a small number of Persons otherwise eligible to purchase shares under the
Plan reside in such state or foreign county; (ii) the offer or sale of shares of
Holding Company Conversion Stock to such Persons would require the Stock Holding
Company or its Employees to register, under the securities laws of such state or
foreign country, as a broker or dealer or to register or otherwise qualify its
securities for sale in such state or foreign country; or (iii) such registration
or qualification would be impracticable for reasons of cost or otherwise.
8.10. NO OFFER TO TRANSFER SHARES. Before the consummation of the
Conversion, no Person shall offer to transfer, or enter into any agreement or
understanding to transfer the legal or beneficial ownership of any subscription
rights or shares of Holding Company Conversion Stock, except pursuant to the
Plan. The following shall not constitute impermissible transfers under this
Plan. Any Person having subscription rights in his individual capacity as an
Eligible Account Holder or Supplemental Eligible Account Holder may exercise
such subscription rights by causing a tax-qualified plan to make such purchase
using funds allocated to such Person in such tax-qualified plan if such
individual plan participant controls or directs the investment authority with
respect to such account or subaccount. A tax-qualified plan that maintains an
Eligible Deposit Account in the Bank as trustee for or for the benefit of a
Person who controls or directs the investment authority with respect to such
account or subaccount ("BENEFICIARY") may, in exercising its subscription
rights, direct that the Holding Company Conversion Stock be issued in the name
of such individual Beneficiary in his individual capacity.
8.11. CONFIRMATION BY PURCHASERS. Each Person ordering Holding Company
Conversion Stock in the Conversion will be deemed to confirm that such purchase
does not conflict with the purchase limitations in the Plan. All questions
concerning whether any Persons are Associates or a Group Acting in Concert or
whether any purchase conflicts with the purchase limitations in the Plan or
otherwise violates any provision of the Plan shall be determined by the MHC in
its sole discretion. Such determination shall be conclusive, final and binding
on all
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Persons and the MHC may take any remedial action, including without limitation
rejecting the purchase or referring the matter to the Commissioner for action,
as in its sole discretion the MHC may deem appropriate.
ARTICLE 9.
POST OFFERING MATTERS
9.1. STOCK PURCHASES AFTER THE CONVERSION. For a period of three years
after the proposed Conversion, no Officer or director of the Stock Holding
Company or the Bank, or his or her Associates, may purchase, without the prior
written approval of the Commissioner, any Holding Company Common Stock except
from a broker-dealer registered with the SEC, provided that the foregoing shall
not apply to (x) negotiated transactions involving more than 1% of the
outstanding Holding Company Common Stock, or (y) purchases of stock made by and
held by or otherwise made pursuant to any Tax-Qualified Employee Plan or
Non-Tax-Qualified Employee Benefit Plan of the Bank or the Stock Holding Company
even if such stock is attributable to Officers, directors or their Associates.
9.2. RESALES OF STOCK BY MANAGEMENT PERSONS. Holding Company Conversion
Stock purchased in the Conversion by Officers, directors, trustees and
Corporators of the Bank, the Stock Holding Company and the MHC may not be resold
for a period of at least one year following the date of purchase, except in the
case of death or substantial disability, as determined by the Commissioner, of
such person, or upon the written approval of the Commissioner.
9.3. STOCK CERTIFICATES. Each stock certificate shall bear a legend
giving appropriate notice of the restrictions set forth in Section 9.2.
Appropriate instructions shall be issued to the Stock Holding Company's transfer
agent with respect to applicable restrictions on transfers of such stock. Any
shares of stock issued as a stock dividend, stock split or otherwise with
respect to such restricted stock, shall be subject to the same restrictions as
apply to the restricted stock.
9.4. RESTRICTION ON FINANCING STOCK PURCHASES. The Stock Holding
Company will not offer or sell any of the Holding Company Common Stock proposed
to be issued to any Person whose purchase would be financed by funds loaned,
directly or indirectly, to the Person by the Stock Holding Company, Bank or any
of their Affiliates.
9.5. STOCK BENEFIT PLANS. The Board of Directors of the Bank and/or the
Stock Holding Company are permitted under the Regulations, and may decide, to
adopt one or more stock benefit plans for the benefit of the Employees, Officers
and directors of the Bank and Stock Holding Company, including an ESOP, an
Employer Stock Fund option in the 401(k) plan, stock award plans and stock
option plans, which will be authorized to purchase Holding Company Common Stock
and grant options for Holding Company Common Stock. However, only Tax-Qualified
Employee Plan will be permitted to purchase Holding Company Conversion Stock in
the Conversion subject to the purchase priorities set forth in the Plan.
Pursuant to the Regulations, the Stock Holding Company may authorize the ESOP
and any other Tax-Qualified Employee Plan to purchase in the aggregate up to 10%
of the Holding Company Conversion Stock to be issued. The Bank or the Stock
Holding Company may make scheduled discretionary contributions to one or more
Tax-Qualified Employee Plans to purchase Holding Company Common Stock or to
purchase issued and outstanding shares of Holding Company Common Stock or
authorized but unissued shares of Holding Company Common Stock subsequent to the
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completion of the Conversion, provided, however, that such contributions do not
cause the Bank to fail to meet any of its regulatory capital requirements. The
Plan specifically authorizes the grant and issuance by the Stock Holding Company
of (i) awards of Holding Company Common Stock after the Conversion pursuant to
one or more stock recognition and award plans (the "RECOGNITION PLANS") in an
amount equal to up to 4% of the number of shares of Holding Company Conversion
Stock issued in the Conversion, (ii) options to purchase a number of shares of
Holding Company Common Stock in an amount equal to up to 10% of the number of
shares of Holding Company Conversion Stock issued in the Conversion, and shares
of Holding Company Common Stock issuable upon exercise of such options, and
(iii) Holding Company Common Stock to one or more Tax Qualified Employee Plans,
including the ESOP, at the closing of the Conversion or at any time thereafter,
in an amount equal to up to 10% of the number of shares of Holding Company
Conversion Stock issued in the Conversion. Shares awarded to the Tax Qualified
Employee Plans or pursuant to the Recognition Plans, and shares issued upon
exercise of options may be authorized but unissued shares of the Stock Holding
Company's Holding Company Common Stock, or shares of Holding Company Common
Stock purchased by the Stock Holding Company or such plans in the open market.
No Recognition Plans or stock option plans have yet been adopted by the Board of
the Holding Company, and no such plans will be submitted for the approval of the
Stock Holding Company's stockholders at a meeting held earlier than six months
after completion of the Conversion.
9.6. MARKET FOR HOLDING COMPANY COMMON STOCK. If at the close of the
Conversion the Stock Holding Company has more than 300 shareholders of any class
of stock, the Stock Holding Company shall use its best efforts to:
9.6.1 Encourage and assist a Market Maker to establish and maintain
a market for that class of stock; and
9.6.2 List that class of stock on a national or regional securities
exchange, or on the Nasdaq system.
9.6.3 Register the Holding Company Common Stock with the SEC
pursuant to the Exchange Act, and undertake not to deregister such Holding
Company Common Stock for a period of three years thereafter.
9.7. LIQUIDATION ACCOUNT.
9.7.1 The MHC shall, at the time of the Conversion, establish a
Liquidation Account in an amount equal to the net worth of the MHC as set forth
in the latest consolidated statement of financial condition contained in the
final Prospectus distributed in connection with the Conversion. The function of
the Liquidation Account is to establish a priority on liquidation and, except as
otherwise provided in this Section 9.7, the existence of the Liquidation Account
shall not operate to restrict the use or application of any of the net worth
accounts of the Stock Holding Company. The Liquidation Account will be
maintained by the MHC for the benefit of the Eligible Account Holders and
Supplemental Eligible Account Holders who continue to maintain Deposit Accounts
with the Bank following the Conversion. Each Eligible Account Holder and
Supplemental Eligible Account Holder shall, with respect to each Deposit
Account, hold a related inchoate interest in a portion of the Liquidation
Account balance, in relation to
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each Deposit Account balance at the Eligibility Record Date or Supplemental
Eligibility Record Date, as the case may be, or to such balance as it may be
subsequently reduced, as hereinafter provided. The initial Liquidation Account
balance shall not be increased, and shall be subject to downward adjustment to
the extent of any downward adjustment of any subaccount balance of any Eligible
Account Holder or Supplemental Eligible Account Holder in accordance with 209
CMR 33.05(12).
9.7.2 In the unlikely event of a complete liquidation of the Stock
Holding Company (and only in such event), following all liquidation payments to
creditors (including those to depositors to the extent of their Deposit
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 balances for his or her
deposit accounts then held, before any liquidating distribution may be made to
any holders of the Stock Holding Company's capital stock. No merger,
consolidation, reorganization, or purchase of bulk assets with assumption of
deposit accounts and other liabilities, or similar transactions with an
FDIC-insured institution, in which the Stock Holding Company 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.
9.7.3 The initial subaccount balance for a Deposit Account held by
an Eligible Account Holder and/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
or 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 Holders in the Bank. For Deposit
Accounts in existence on both dates, separate subaccounts shall be determined on
the basis of the Qualifying Deposits in such Deposit Accounts on such record
dates. Such initial subaccount balance shall not be increased by additional
Deposits, but shall be subject to downward adjustment as described below.
9.7.4 If, at the close of business on the last day of any period for
which the Stock Holding Company has prepared audited financial statements
subsequent to the effective date of the Conversion, the deposit balance in the
Deposit Account of an Eligible Account Holder or Supplemental Eligible Account
Holder is less than the lesser of: (i) the balance in the Deposit Account at the
close of business on the last day of any period for which the Stock Holding
Company has prepared audited financial statements subsequent to the Eligibility
Record Date or Supplemental Eligibility Record Date, or (ii) the amount in such
Deposit Account as of the Eligibility Record Date or Supplemental Eligibility
Record Date, then the subaccount balance for such Deposit Account shall be
adjusted by reducing such subaccount balance in an amount proportionate to the
reduction in the balance of such Deposit Account. 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
Deposit Account. If any such Deposit Account is closed, the related subaccount
shall be reduced to zero. For purposes of this Section 9.7, a time account shall
be deemed to be closed upon its maturity date regardless of any renewal thereof.
A distribution of each subaccount balance may be made only in the event of a
complete liquidation of the Stock Holding Company subsequent to the Conversion
and only out of funds available for such purpose after payment of all creditors.
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9.7.5 The Stock Holding Company shall not be required to set aside
funds for the purpose of establishing the Liquidation Account, and 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 Holding Company,
except that the Stock Holding Company shall not declare or pay a cash dividend
on, or repurchase any of, its capital stock if the effect thereof would cause
its net worth to be reduced below the amount required for the Liquidation
Account.
9.8. PAYMENT OF DIVIDENDS. The Stock Holding Company may not declare or
pay a cash dividend on the Holding Company Common Stock if the effect thereof
would cause its regulatory capital to be reduced below the amount required to
maintain the Liquidation Account and under FDIC rules and regulations.
Otherwise, the Stock Holding Company may declare dividends in accordance with
applicable laws and regulations.
9.9. REPURCHASE OF STOCK. The Stock Holding Company has no present
intention of repurchasing any of the Holding Company Common Stock. However,
based upon facts and circumstances following the Conversion and subject to
applicable regulatory and accounting requirements, the Board of Directors of the
Stock Holding Company may determine to repurchase stock in the future. Such
facts and circumstances may include but not be limited to: (i) market and
economic factors such as the price at which the Holding Company Common Stock is
trading in the market, the volume of trading, the attractiveness of other
investment alternatives in terms of the rate of return and risk involved in the
investment, the ability to increase the book value and/or earnings per share of
the remaining outstanding shares, and the opportunity to improve the Stock
Holding Company's return on equity; (ii) the avoidance of dilution to
stockholders by not having to issue additional shares to cover the exercise of
stock options or the purchase of shares by the ESOP in the event the ESOP is
unable to acquire shares in the Subscription Offering, or to fund the any stock
plans adopted after the consummation of the Conversion; and (iii) any other
circumstances in which repurchases would be in the best interests of the Stock
Holding Company and its shareholders.
9.10. CONVERSION EXPENSES. The Regulations require that the expenses of
the Conversion must be reasonable. The MHC will use its best efforts to assure
that the expenses incurred by the MHC in effecting the Conversion will be
reasonable.
9.11. PUBLIC INSPECTION OF CONVERSION APPLICATION. The MHC will
maintain a copy of the Application in the main banking office of the Bank and
such copy will be available for public inspection.
9.12. ENFORCEMENT OF TERMS AND CONDITIONS. The MHC shall have the right
to take all such action as it, in its sole discretion, may deem necessary,
appropriate or advisable in order to monitor and enforce the terms, conditions,
limitations and restrictions contained in the Plan and the terms, conditions and
representations contained in the Order Forms, including, but not limited to, the
right to require any subscriber or purchaser to provide evidence, in a form
satisfactory to the MHC, of such Person's eligibility to subscribe for or
purchase shares of the Holding Company Conversion Stock under the terms of the
Plan and the absolute right (subject only to any necessary regulatory approvals
or concurrence) to reject, limit or revoke acceptance of any subscription or
order and to delay, terminate or refuse to consummate any sale of Holding
Company Conversion Stock that it believes might violate, or is designed to, or
is any part of a
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plan to, evade or circumvent such terms, conditions, limitations, restrictions
and representations. Any such action shall be final, conclusive and binding on
all Persons, and the MHC, the Bank and their Board of Trustees, Board of
Directors, Officers, Employees and agents shall be free from any liability to
any Person on account of any such action.
9.13. VOTING RIGHTS IN CONVERTED BANK. Following the Conversion, the
holders of the capital stock of the Stock Holding Company shall have exclusive
voting rights in the Stock Holding Company.
ARTICLE 10.
MISCELLANEOUS
10.1. INTERPRETATION OF PLAN. All interpretations of the Plan and
application of its provisions to particular circumstances by the MHC shall be
final, subject to the authority of the Commissioner. When a reference is made in
this Agreement to Sections or Exhibits, such reference shall be to a Section of
or Exhibit to the Plan unless otherwise indicated. The recitals hereto
constitute an integral part of the Plan. References to Sections include
subsections, which are part of the related Section (e.g., a section numbered
"Section 5.5.1" would be part of "Section 5.5" and references to "Section 5.5"
would also refer to material contained in the subsection described as "Section
5.5.1"). The table of contents and headings contained in the Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the Plan. Whenever the words "include", "includes" or
"including" are used in the Plan, they shall be deemed to be followed by the
words "without limitation".
10.2. AMENDMENT OR TERMINATION OF THE PLAN. If deemed necessary or
desirable, the terms of the Plan may be substantively amended by a majority vote
of the members of the Board of Trustees as a result of comments from regulatory
authorities at any time prior to approval of the Plan by the Commissioner and at
any time thereafter with the concurrence of the Commissioner. If amendments to
the Plan are made after the Special Meeting, no further approval of the
Corporators will be necessary unless otherwise required by the Commissioner. The
Plan may be terminated by the Board of Trustees in its sole discretion, by
reason of the termination of the Acquisition Agreement or otherwise, at any time
prior to the Special Meeting and at any time thereafter with the concurrence of
the Commissioner. The Plan will terminate if the sale of all shares of Holding
Company Conversion Stock is not completed within twenty four months from the
date of approval of the Plan by the Board of Trustees.
10.3. AUTHORITY OF THE COMMISSIONER TO APPROVE OTHER PROVISIONS. The
Commissioner may approve such other equitable provisions as may be necessary to
avert imminent injury to the MHC and Benjamin Franklin Bank.
Dated:
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EXHIBIT 3.4
PROPOSED CHARTER AND BYLAWS OF THE STOCK HOLDING COMPANY
-27-
EXHIBIT 3.5
PROPOSED AMENDED AND RESTATED CHARTER AND BYLAWS OF THE BANK
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EXHIBIT 3.7
INITIAL MEMBERS OF THE BOARD OF DIRECTORS OF THE STOCK HOLDING COMPANY
NAME TERM EXPIRES
- ---- ------------
Dr. Mary Ambler 2008
Mr. William P. Bissonnette 2006
Dr. William F. Brady 2007
Mr. John C. Fuller 2007
Ms. Anne M. King 2006
Mr. Richard D. Mann 2007
Mr. John D. Murphy 2006
Mr. Charles F. Oteri 2008
Mr. Thomas R. Venables 2008
Mr. Alfred H. Wahlers 2007
Mr. Charles Yergatian 2006
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