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Exhibit 2
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION
PLAN OF CONVERSION
TABLE OF CONTENTS
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1. Introduction.......................................................................................................1
2. Definitions........................................................................................................1
3. Procedures for the Conversion......................................................................................4
4. Purchase Price of Common Shares and Number of Shares to be Offered in Connection with the Conversion...............5
5. Subscription Rights of Eligible Account Holders....................................................................5
6. Subscription Rights of Tax-Qualified Employee Stock Benefit Plans..................................................6
7. Subscription Rights of Supplemental Eligible Account Holders.......................................................6
8. Subscription Rights of Other Eligible Members......................................................................7
9. Community Offering.................................................................................................7
10. Additional Limitations on Purchases................................................................................7
11. Procedures for the Subscription Offering and the Community Offering................................................9
12. Payment for Common Shares..........................................................................................9
13. Expiration of Subscription Rights; Undelivered, Defective or Late Order Forms; Insufficient Payment...............10
14. Compliance with Securities Laws...................................................................................11
15. Rights of Shareholders After Completion of Conversion.............................................................11
16. Establishment of Liquidation Account..............................................................................11
17. Accounts in Converted Association.................................................................................12
18. Restrictions on Purchases and Sales of Common Shares by Officers and Directors Following Conversion...............12
19. Restrictions on Acquisition of the Association or Holding Company.................................................13
20. Amendment or Termination of this Plan.............................................................................13
21. Consummation of Conversion........................................................................................13
22. Tax Rulings/Opinions..............................................................................................13
23. Directors and Officers of the Association.........................................................................13
24. Stock Benefit Plans...............................................................................................13
25. Registration of Common Shares; Market for Common Shares...........................................................13
26. Expenses of Conversion............................................................................................14
27. Mailing of Proxy Materials........................................................................................14
28. Interpretation of the Plan........................................................................................14
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BRIDGEPORT SAVINGS AND LOAN ASSOCIATION
PLAN OF CONVERSION
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1. INTRODUCTION.
This Plan of Conversion, adopted by the Board of Directors of
Bridgeport Savings and Loan Association (hereinafter referred to as the
"Association") on March 24, 1997 (hereinafter referred to as this "Plan"),
provides for the conversion of the Association from a mutual savings and loan
association incorporated under Ohio law to a permanent capital stock savings
and loan association incorporated under Ohio law (hereinafter referred to as
the "Conversion") and the acquisition by a holding company to be formed at the
direction of the Association of all of the capital stock to be issued by the
Association in the Conversion. The purpose of the Conversion is to provide the
Association with additional capital to expand lending and investment
activities, enhance customer services and pursue other lawful activities which
the Board of Directors may deem to be in the best interests of the Association.
After the completion of the Conversion, savings accounts in the
Association will be equivalent in amount, interest rate and other terms to the
savings accounts in the Association immediately prior to the Conversion and
will continue to be insured by the Federal Deposit Insurance Corporation to the
maximum extent permitted by law. Rights of account holders with respect to
liquidation and voting will change, however, as a result of the Conversion. As
a permanent capital stock savings and loan association, the Association will
succeed to all of the presently existing rights, interests, duties and
obligations of the Association in mutual form to the extent provided by law,
including, but not limited to, all rights to and interests in its assets and
properties, both real and personal.
This Plan must be approved at the Special Meeting (hereinafter
defined) of Members (hereinafter defined) by the affirmative vote of a majority
of the total outstanding votes entitled to be cast at the Special Meeting.
Before this Plan may be submitted to the members of the Association for
approval at the Special Meeting, however, this Plan must be approved by the OTS
(hereinafter defined) and the Division (hereinafter defined). The Amended
Articles of Incorporation and Amended Constitution of the Association must also
be approved at the Special Meeting by the affirmative vote of at least
three-fifths of the votes cast in person or by proxy at the Special Meeting.
2. DEFINITIONS.
As used in this Plan, the following terms have the corresponding
meanings:
ACTING IN CONCERT means (a) knowing participation in a joint activity
or interdependent conscious parallel action towards a common goal
whether or not pursuant to an express agreement, or (b) a combination
or pooling of voting or other interests in the securities of an issuer
for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or
otherwise.
AFFILIATE, when used to indicate a relationship with a specified Person
(hereinafter defined), means a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is
under common control with the Person specified.
AMENDED ARTICLES means the Amended Articles of Incorporation of the
Association which are in the form attached hereto as Exhibit I and
which authorize the issuance of capital stock and which will be filed
with the Ohio Secretary of State on the date on which the Conversion
becomes effective.
AMENDED CONSTITUTION means the Amended Constitution of the Association
which is in the form attached hereto as Exhibit II and which will be
filed with the Division on the date on which the Conversion becomes
effective.
APPLICATION means the Application for Conversion on Form AC to be filed
by the Association with the OTS pursuant to Title 12, Code of Federal
Regulations, Part 563b and with the Division pursuant to Ohio
Administrative Code Section 1301-2-1-16.
ASSOCIATE, when used to indicate a relationship with any Person, means
(i) any corporation or organization (other than the Association, the
Holding Company (hereinafter defined) or a majority-owned subsidiary of
the Association or the
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Holding Company) of which such Person is an Officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of any
class of equity securities, (ii) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary capacity, except
that such term will not include a Tax-Qualified Employee Stock Benefit
Plan (hereinafter defined), and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such
Person or who is a director or Officer (hereinafter defined) of the
Association, the Holding Company or any of their subsidiaries.
ASSOCIATION means Bridgeport Savings and Loan Association, in its
mutual form or stock form, as appropriate.
BROKER means any Person engaged in the business of effecting
transactions in securities for the account of others.
COMMON SHARES means the common shares of the Holding Company to be
offered and sold by the Holding Company in connection with the
Conversion.
COMMUNITY MEMBER means any natural person who, on the date of
submission of an Order Form (hereinafter defined), is a resident of
Belmont County, the county in which the offices of the Association are
located.
COMMUNITY OFFERING means the offering of Common Shares to the public
concurrently with or after the completion of the Subscription Offering
(hereinafter defined) in a manner by which Community Members are given
preference.
CONVERSION means the change in the form of the Association from the
mutual to the permanent capital stock form upon (i) the filing of the
Amended Articles and the Amended Constitution; (ii) the sale and
issuance of Common Shares by the Holding Company in the Subscription
Offering (hereinafter defined) and the Community Offering, and (iii)
the purchase by the Holding Company of the capital stock of the
Association.
DEALER means any Person who engages either for all or part of such
person's time, directly or indirectly, as an agent, Broker or
principal, in the business of offering, buying, selling or otherwise
dealing or trading in securities issued by another Person.
DIVISION means the Division of Financial Institutions of the Department
of Commerce of the State of Ohio.
ELIGIBILITY RECORD DATE means the close of business on December 31,
1995, the record date set by the Association for determining Eligible
Account Holders (hereinafter defined).
ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying Deposit
(hereinafter defined) in the Association on the Eligibility Record
Date.
FDIC means the Federal Deposit Insurance Corporation, an agency of the
United States Government.
HOLDING COMPANY means the corporation to be formed at the direction of
the Association under Ohio law for the purpose of becoming a savings
and loan holding company through the acquisition of all of the capital
stock to be issued by the Association in connection with the
Conversion.
INDEPENDENT APPRAISER means the firm employed by the Association to
determine the estimated pro forma market value of the Association to be
used as the basis for determining the price of the Common Shares.
LIQUIDATION ACCOUNT means the account established in accordance with
Section 16 of this Plan for Eligible Account Holders and Supplemental
Eligible Account Holders (hereinafter defined) who continue to maintain
a Savings Account (hereinafter defined) at the Association after the
Conversion.
MEMBER means any Person qualifying as a member of the Association under
its articles of incorporation and constitution in effect on the date of
the Special Meeting.
OFFICER means an executive officer of the Holding Company or the
Association, including the Chairman of the Board of Directors, the
President, a Vice President, the Secretary, the Treasurer or principal
financial officer, or the comptroller or principal accounting officer
of the Holding Company or the Association and any other person
performing similar functions for the Holding Company or the
Association.
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ORDER FORMS means the original forms which will be sent to the Eligible
Account Holders, Tax-Qualified Employee Stock Benefit Plans,
Supplemental Eligible Account Holders and Other Eligible Members
(hereinafter defined) to enable such Persons to exercise their
respective Subscription Rights (hereinafter defined) in accordance with
this Plan and which may be sent to others in the Community Offering.
OTHER ELIGIBLE MEMBERS means those Persons, other than Eligible Account
Holders and Supplemental Eligible Account Holders, who are eligible to
purchase Common Shares pursuant to this Plan by reason of being Voting
Members (hereinafter defined).
OTS means the Department of the Treasury, Office of Thrift Supervision,
an agency of the United States Government.
PERSON means an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated
organization, or a government or political subdivision thereof.
PROSPECTUS means the document describing the terms and conditions of
the Subscription Offering and the Community Offering, including a
complete description of the business and affairs of the Association and
the Holding Company.
PROXY means the form of authorization by which a Person is, or may be
deemed to be, designated to act for a Voting Member in the exercise of
his or her voting rights in the affairs of the Association.
PROXY MATERIALS means the Notice of Special Meeting, the Proxy
Statement and the form of Proxy used in connection with soliciting
Proxies from Members for use at the Special Meeting.
PURCHASE PRICE means the actual uniform price per share at which Common
Shares will be sold in the Subscription Offering and may be offered in
the Community Offering. Such price shall be based upon the appraised
estimated pro forma market value of such shares, determined as provided
in Section 4 of this Plan.
QUALIFYING DEPOSIT means the aggregate balance of all Savings Accounts
(hereinafter defined) owned by an Eligible Account Holder or a
Supplemental Eligible Account Holder at the close of business on the
Eligibility Record Date or the Supplemental Eligibility Record Date
(hereinafter defined), respectively; provided, however, that Savings
Accounts with aggregate deposit balances of less than $50 will not
constitute Qualifying Deposits.
RESIDENT means any person who, on the Voting Record Date, maintains a
bona fide residence within Belmont County, Ohio, as determined in the
sole discretion of the Association and the Holding Company.
SAVINGS ACCOUNT has the same meaning as specified in Title 12, Code of
Federal Regulations, Part 561, as in effect on the date this Plan is
adopted by the Board of Directors of the Association, and includes
certificates of deposit.
SEC means the Securities and Exchange Commission, an agency of the
United States Government.
SPECIAL MEETING means the meeting of the Voting Members of the
Association called for the specific purpose of submitting this Plan to
the Voting Members for approval.
SUBSCRIPTION OFFERING means the offering of Common Shares to the
holders of Subscription Rights.
SUBSCRIPTION RIGHTS means the nontransferable rights issued by the
Association to the Eligible Account Holders, Tax-Qualified Employee
Stock Benefit Plans, Supplemental Eligible Account Holders and Other
Eligible Members to purchase Common Shares in the Subscription Offering
pursuant to this Plan.
SUPPLEMENTAL ELIGIBILITY RECORD DATE means the record date used for
determining Supplemental Eligible Account Holders. Such date will be
the last day of the calendar quarter preceding the approval of the
Application by the OTS.
SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER means any Person holding a
Qualifying Deposit at the close of business on the Supplemental
Eligibility Record Date, except Officers and directors of the
Association and the Holding Company and their Associates.
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TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means any defined benefit
plan or defined contribution plan of the Holding Company or the
Association, such as an employee stock ownership plan, stock bonus
plan, profit sharing plan or other plan which, with its related trust,
meets the requirements for qualification under Section 401 of the
Internal Revenue Code of 1986, as amended.
VOTING MEMBER means any Member of the Association eligible to vote at
the Special Meeting.
VOTING RECORD DATE means the record date fixed by the Board of
Directors of the Association in accordance with Ohio law and the
Articles of Incorporation and Constitution of the Association for
determining the eligibility of Members to vote on this Plan at the
Special Meeting.
3. PROCEDURES FOR THE CONVERSION.
The following procedures will be followed to effect the Conversion:
(a) Promptly after the adoption of this Plan by a vote of at
least two-thirds of the members of the Board of Directors of the
Association, the Association will publish a notice of the adoption of
this Plan in an English language newspaper having general circulation
in Bridgeport, Ohio. Copies of such notice will also be made available
for inspection by Members at the office of the Association.
(b) The Holding Company will be incorporated under Ohio law,
after which the Board of Directors of the Holding Company will consent
to the Plan by at least a two-thirds vote.
(c) The Association will submit this Plan for approval,
together with all other requisite materials, to the OTS and the
Division in the form of the Application.
(d) After the filing of the Application with the OTS and the
Division, the Association (i) will prominently post in the office of
the Association and publish in an English language newspaper having
general circulation in Bridgeport, Ohio a notice to the effect that the
Association has filed the Application with the OTS, and (ii) when
advised by the Division, will prominently post in the office of the
Association and publish in an English language newspaper having general
circulation in Bridgeport, Ohio a notice to the effect that the
Association has filed the Application with the Division.
(e) After the OTS and the Division approve the Application,
the Association will mail Proxy Materials to each of the Voting Members
as of the Voting Record Date at his or her last known address appearing
on the records of the Association for the purpose of soliciting the
Proxies of Voting Members for use at the Special Meeting. The approval
of this Plan will require the affirmative vote, cast in person or by
Proxy, of a majority of the total outstanding votes entitled to be cast
at the Special Meeting.
(f) Subject to the approval of this Plan by the Voting Members
at the Special Meeting, the following will occur:
(i) Common Shares will be offered simultaneously to
the Eligible Account Holders, the Tax-Qualified Employee Stock
Benefit Plans, the Supplemental Eligible Account Holders and
the Other Eligible Members in the respective priorities set
forth in Sections 5, 6, 7 and 8 of this Plan. All sales of
Common Shares to Eligible Account Holders, the Tax-Qualified
Employee Stock Benefit Plans, Supplemental Eligible Account
Holders and Other Eligible Members will be completed at the
earliest practicable date following expiration of the
Subscription Rights provided for in this Plan. Notwithstanding
anything in this Plan to the contrary, the Association, in its
sole discretion, may commence the Subscription Offering
concurrently with or at any time after the mailing to the
Voting Members of the Proxy Materials and may complete the
Subscription Offering before the Special Meeting if the
completion of the offer and sale of the Common Shares is
conditioned upon the approval of this Plan by the Voting
Members. In the event that the Association elects, in its
discretion, to commence the Subscription Offering after the
Special Meeting, the Subscription Offering will be commenced
not later than 45 days after the date on which the Special
Meeting is adjourned, except as may otherwise be approved by
the OTS.
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(ii) Concurrently with, following the commencement of
or following the completion of the Subscription Offering, the
Association may also offer Common Shares in the Community
Offering, subject to the prior satisfaction of the
Subscription Rights of Eligible Account Holders, Tax-Qualified
Employee Stock Benefit Plans, Supplemental Eligible Account
Holders and Other Eligible Members.
(g) All other steps considered necessary or desirable by the
Boards of Directors of the Association and the Holding Company to
effect the Conversion will be taken pursuant to applicable laws and
regulations.
4. PURCHASE PRICE OF COMMON SHARES AND NUMBER OF COMMON SHARES TO BE
OFFERED IN CONNECTION WITH THE CONVERSION.
The Purchase Price will be determined by the Boards of Directors of the
Association and the Holding Company before the commencement of the Subscription
Offering, subject to adjustment as described below. The number of Common Shares
to be sold in connection with the Conversion will be determined by the Boards of
Directors of the Association and the Holding Company before the completion of
all sales of Common Shares contemplated by this Plan on the basis of the
estimated pro forma market value of the Association, as converted, and the
Purchase Price. No fractional shares will be issued in connection with the
Conversion.
The estimated pro forma market value of the Association, as converted,
will be determined by the Independent Appraiser, based upon such factors as the
Independent Appraiser deems appropriate and as are consistent with the
regulations of the OTS and the Division. Immediately before the commencement of
the Subscription Offering, a range will be established for the aggregate
Purchase Price of Common Shares to be offered in the Subscription Offering and
the Community Offering. The maximum of such range shall be 15% above the pro
forma market value of the Association and the minimum of such range shall be 15%
below the pro forma market value of the Association. The Independent Appraiser
will review, from time to time as appropriate or as required by law or
regulation, developments subsequent to its valuation to determine whether the
estimated pro forma market value of the Association, as converted, should be
revised. If, after the commencement of the Subscription Offering, the
Independent Appraiser determines that the estimated pro forma market value of
the Association, as converted, has increased or decreased due to subsequent
developments, the Conversion may be completed without notifying Persons who have
subscribed for Common Shares and without a resolicitation of subscriptions from
such Persons if such pro forma market value is not less than the minimum of the
valuation range approved by the OTS and the Division and does not exceed the
maximum point of the valuation range by more than 15%. If, however, as a result
of any such change, the estimated pro forma market value of the Association is
less than the minimum of the valuation range or exceeds the maximum point of
such valuation range by more than 15%, a new estimated pro forma market
valuation range may be established and the Board of Directors may, with the
approval of the OTS and the Division, elect to increase or decrease the number
of Common Shares to be sold in connection with the Conversion or increase or
decrease the Purchase Price, in which case Persons who have subscribed for
Common Shares will be notified and will be given the opportunity to increase,
decrease or rescind their subscriptions.
5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS.
Eligible Account Holders will have the following rights to subscribe
for and to purchase Common Shares:
(a) Each Eligible Account Holder will receive, without payment
therefor, nontransferable Subscription Rights to purchase a number of
Common Shares up to the greater of (i) the amount which may be
purchased in the Community Offering, (ii) .10% of the total number of
Common Shares to be sold in connection with the Conversion, and (iii)
15 times the product (rounded down to the next whole number) obtained
by multiplying the total number of Common Shares to be sold in
connection with the Conversion by a fraction, the numerator of which is
the amount of the Eligible Account Holder's Qualifying Deposit and the
denominator of which is the total amount of Qualifying Deposits of all
Eligible Account Holders, in each case on the Eligibility Record Date,
subject to the overall purchase limitations set forth in Section 10 of
this Plan and subject to adjustment by the Boards of Directors of the
Association and the Holding Company as set forth in Section 10 of this
Plan.
In the event that subscriptions for Common Shares are received
from Eligible Account Holders upon the exercise of Subscription Rights
pursuant to paragraph (a) of this Section 5 in excess of the number of
Common Shares available for such subscriptions, the Common Shares
available for purchase will be allocated among the subscribing Eligible
Account Holders in a manner by which each subscribing Eligible Account
Holder, to the extent possible, will be permitted to subscribe for a
number of shares sufficient to make such Eligible Account Holder's
total allocation of Common Shares equal to the lesser of (i) 100 shares
and (ii) the number of
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shares subscribed for by such Eligible Account Holder. Any shares
remaining after such allocation will be allocated among the subscribing
Eligible Account Holders whose subscriptions remain unsatisfied in the
proportion which the amount of each Eligible Account Holder's
Qualifying Deposit bears to the total of the Qualifying Deposits of all
subscribing Eligible Account Holders. No fractional shares will,
however, be issued in connection with the Conversion.
For purposes of this paragraph (a), Subscription Rights held
by Eligible Account Holders who are also Officers or directors of the
Association or the Holding Company, and their Associates, to the extent
that they are attributable to increased deposits during the one-year
period preceding the Eligibility Record Date, will be subordinated to
the Subscription Rights of all other Eligible Account Holders.
(b) The Subscription Rights of the Eligible Account Holders
are subordinate to the limited priority rights of the Tax-Qualified
Employee Stock Benefit Plans of the Association as set forth in Section
6 of this Plan.
6. SUBSCRIPTION RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS.
The Tax-Qualified Employee Stock Benefit Plans of the Association will
receive non-transferable Subscription Rights to purchase up to 10% of the Common
Shares to be sold in connection with the Conversion, subject to adjustment by
the Boards of Directors of the Association and the Holding Company as set forth
in Section 10 of this Plan. The Subscription Rights of the Tax-Qualified
Employee Stock Benefit Plans are subordinate to the Subscription Rights of
Eligible Account Holders pursuant to Section 5 of this Plan, except that if the
final pro forma market value of the Association exceeds the maximum of the
valuation range determined pursuant to Section 4 of this Plan, the Tax-Qualified
Employee Stock Benefit Plans shall have first priority with respect to the
amount of Common Shares sold in excess of the maximum of the valuation range.
7. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS.
Supplemental Eligible Account Holders will have the following rights to
subscribe for and to purchase Common Shares:
(a) Each Supplemental Eligible Account Holder will receive,
without payment therefor, nontransferable Subscription Rights to
purchase a number of Common Shares up to the greater of (i) the amount
which may be purchased in the Community Offering, (ii) .10% of the
total number of Common Shares to be sold in connection with the
Conversion, and (iii) 15 times the product (rounded down to the next
whole number) obtained by multiplying the total number of Common Shares
to be sold in connection with the Conversion by a fraction, the
numerator of which is the amount of the Supplemental Eligible Account
Holder's Qualifying Deposit and the denominator of which is the total
amount of Qualifying Deposits of all Supplemental Eligible Account
Holders, in each case on the Supplemental Eligibility Record Date,
subject to the overall purchase limitations set forth in Section 10 of
this Plan and subject to adjustment by the Boards of Directors of the
Association and the Holding Company as set forth in Section 10 of this
Plan.
(b) In the event that subscriptions for Common Shares are
received from Supplemental Eligible Account Holders upon the exercise
of Subscription Rights pursuant to paragraph (a) of this Section 7 in
excess of the number of Common Shares available for such subscriptions,
the Common Shares available for purchase will be allocated among the
subscribing Supplemental Eligible Account Holders in a manner by which
each subscribing Supplemental Eligible Account Holder, to the extent
possible, will be permitted to subscribe for a number of Common Shares
sufficient to make such Supplemental Eligible Account Holder's total
allocation of Common Shares equal to the lesser of (i) 100 shares and
(ii) the number of Common Shares subscribed for by such Supplemental
Eligible Account Holder. Any Common Shares remaining after such
allocation will be allocated among the subscribing Supplemental
Eligible Account Holders whose subscriptions remain unsatisfied in the
proportion which the amount of each such Supplemental Eligible Account
Holder's Qualifying Deposit bears to the total amount of the Qualifying
Deposits of all such subscribing Supplemental Eligible Account Holders.
No fractional shares will be issued, however, in connection with the
Conversion.
(c) Subscription Rights received pursuant to this Section 7
are subordinate to the Subscription Rights of Eligible Account Holders
and the Tax-Qualified Employee Stock Benefit Plans pursuant to Sections
5 and 6 of this Plan. Any Subscription Rights received by an Eligible
Account Holder pursuant to Section 5 of this Plan will be applied in
partial satisfaction of Subscription Rights received pursuant to this
Section 7.
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8. SUBSCRIPTION RIGHTS OF OTHER ELIGIBLE MEMBERS.
Other Eligible Members will have the following rights to subscribe for
and to purchase Common Shares:
a) Each Other Eligible Member will receive, without payment
therefor, nontransferable Subscription Rights to purchase a number of
Common Shares up to the greater of (i) the amount of Common Shares
which may be purchased in the Community Offering, and (ii) .10% of the
total number of Common Shares to be sold in connection with the
Conversion, subject to adjustment by the Boards of Directors of the
Association and the Holding Company as set forth in Section 10 of this
Plan.
b) In the event that subscriptions for Common Shares are
received from Other Eligible Members upon the exercise of Subscription
Rights pursuant to paragraph (a) of this Section 8 in excess of the
number of Common Shares available for such subscriptions, the Common
Shares available for purchase will be allocated among the subscribing
Other Eligible Members in the same proportion that their respective
subscriptions bear to the aggregate subscriptions of all Other Eligible
Members; provided, however, that, to the extent sufficient Common
Shares are available, each subscribing Other Eligible Member shall be
permitted to purchase 25 Common Shares before the remaining available
Common Shares are allocated.
c) Subscription Rights received by Other Eligible Members
pursuant to this Section 8 are subordinate to the Subscription Rights
received by Eligible Account Holders, the Tax-Qualified Employee Stock
Benefit Plans and Supplemental Eligible Account Holders pursuant to
Sections 5, 6 and 7 of this Plan.
9. COMMUNITY OFFERING.
Concurrently with or at any time after the commencement or completion
of the Subscription Offering, the Holding Company may offer Common Shares in
the Community Offering in accordance with the following procedures and
conditions:
a) Any Common Shares not subscribed for in the Subscription
Offering may be offered and sold in the Community Offering. If
conducted, the Community Offering will be conducted in a manner which
will give Community Members a preference in the purchase of Common
Shares and will seek to achieve the widest distribution of Common
Shares.
b) The maximum amount of Common Shares which may be subscribed
for or purchased in the Community Offering by any Person, together with
any Associates or group of Persons Acting in Concert, will be $140,000,
subject to the overall purchase limitations set forth in Section 10 of
this Plan and subject to adjustment by the Boards of Directors of the
Association and the Holding Company as set forth in Section 10 of this
Plan.
c) Orders for Common Shares in the Community Offering will
first be filled up to a maximum of two percent of the Common Shares and
thereafter any remaining shares will be allocated on an equal number of
shares per order basis until all orders for Common Shares have been
filled, subject to the limitations provided in Section 10 of this Plan.
d) The Association or the Holding Company may retain a Broker
to assist in selling the Common Shares in the Community Offering.
e) The Association and the Holding Company reserve the right
to reject, in whole or in part, any order to purchase Common Shares
from any Person in the Community Offering.
10. ADDITIONAL LIMITATIONS ON PURCHASES
The minimum number and maximum number of Common Shares which may be
subscribed for or purchased in connection with the Conversion are as follows:
(a) A minimum of 25 Common Shares must be purchased by each
Person purchasing Common Shares in connection with the Conversion to
the extent Common Shares are available; provided, however, that if the
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Purchase Price is greater than $20 per share, the minimum number of
Common Shares to which a Person may subscribe will be adjusted in a
manner by which the aggregate Purchase Price required to be paid for
such minimum number of Common Shares does not exceed $500. No
fractional shares will be issued, however, in connection with the
Conversion.
(b) If a Qualifying Deposit is held in the name of more than
one Person, the aggregate amount of Common Shares which may be
subscribed for or purchased by all Persons having an interest in such
Qualifying Deposit shall be subject to the applicable purchase
limitations set forth in Sections 5, 7, 8, and 9 of this Plan.
(c) Eligible Account Holders, Supplemental Eligible Account
Holders and Other Eligible Members may purchase Common Shares in the
Community Offering subject to the purchase limitations set forth in
Section 9 of this Plan; provided, however, that the maximum amount of
Common Shares which may be subscribed for or purchased in connection
with the Conversion by any Person, together with any Associate or group
of Persons Acting in Concert, will be $140,000, except that any one or
more of the Tax-Qualified Employee Stock Benefit Plans may purchase in
the aggregate not more than 10% of the Common Shares to be sold in
connection with the Conversion and will be entitled to purchase such
amount regardless of the number of Common Shares purchased by other
Persons. Common Shares held by one or more Tax-Qualified Employee Stock
Benefit Plans or non-tax-qualified employee stock benefit plans and
attributed to a Person will not be aggregated with Common Shares
purchased directly by or otherwise attributable to such Person. For the
purpose of this Section 10, the members of the Boards of Directors of
the Association and the Holding Company will not be deemed to be
Associates or a group of Persons Acting in Concert solely as a result
of their membership on such Boards of Directors.
(d) The maximum number of Common Shares which may be
subscribed for or purchased in connection with the Conversion by
Officers and directors of the Association and their Associates will not
exceed, in the aggregate, 35% of the total number of Common Shares to
be sold in connection with the Conversion. Common Shares held by one or
more Tax-Qualified Employee Stock Benefit Plans or non-tax-qualified
employee stock benefit plans and attributed to a Person will not be
aggregated with Common Shares purchased directly by or otherwise
attributable to such Person.
(e) Subject to any required regulatory approval and the
requirements of applicable laws and regulations, but without further
approval of the Members, the purchase limitations set forth in Sections
9 and 10 of this Plan may be increased or decreased at the sole
discretion of the Boards of Directors of the Association and the
Holding Company at any time. If such limitation is increased after the
commencement of the Subscription Offering, persons who subscribed for
the maximum amount will be given the opportunity to increase their
subscriptions up to the then applicable limit, subject to the rights
and preferences of any person who has priority Subscription Rights. The
Boards of Directors of the Association and the Holding Company may, in
their sole discretion, increase such maximum purchase limitation up to
9.99%; provided, however, that orders for Common Shares exceeding 5% of
the Common Shares to be sold in connection with the Conversion shall
not exceed, in the aggregate, 10% of the Common Shares to be sold in
connection with the Conversion. In the event that the purchase
limitation is decreased after commencement of the Subscription
Offering, the order of any Person who subscribed for the maximum number
of Common Shares shall be decreased by the minimum amount necessary so
that such Person shall be in compliance with the then maximum number of
Common Shares permitted to be subscribed for by such Person. The
maximum purchase limitation for Eligible Account Holders, Supplemental
Eligible Account Holders and Other Eligible Members shall not be
decreased below 1% of the total number of Common Shares to be issued in
connection with the Conversion.
(f) The Subscription Rights granted under this Plan are
nontransferable. Each Subscription Right may be exercised only by the
Person to whom it is issued and only for such Person's own account.
Each Person exercising Subscription Rights will be required to certify
that he or she is purchasing for his or her own account and that he or
she has no agreement or understanding for the sale or transfer of the
Common Shares for which he or she subscribes. The Board of Directors of
the Association may reject any subscription which it reasonably
believes involves an impermissible transfer of a Subscription Right.
The Board of Directors of the Association may require any Person who
the Board reasonably believes to be involved in an impermissible
transfer of a Subscription Right to provide such information or
assurances as the Board may request to verify the validity of a
Subscription Right.
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11. PROCEDURES FOR THE SUBSCRIPTION OFFERING AND THE COMMUNITY OFFERING.
The Subscription Offering and the Community Offering shall be conducted
in the following manner:
(a) Prior to the commencement of the Subscription Offering,
the Holding Company will file a registration statement with the SEC. No
Prospectus may be distributed to Persons who have Subscription Rights
or to Community Members or to any other person who is not a participant
in the preparation of the Prospectus until and unless the SEC has
declared the Prospectus effective.
(b) At the time the Proxy Materials are mailed to the Voting
Members at their last known addresses appearing on the records of the
Association, pursuant to the authorization of the OTS and the Division,
the Association and the Holding Company may commence the Subscription
Offering and the Community Offering.
(c) The Prospectus will contain all the information required
by the OTS, the Division, the SEC and all applicable laws and
regulations necessary to enable the recipients of the Order Forms to
make informed investment decisions regarding the purchase of Common
Shares.
(d) The Order Forms will contain all the information required
by the OTS, the Division and all applicable laws and regulations.
(e) The offer of Common Shares to Persons who have
Subscription Rights, to Community Members and to others will be
conditioned upon the approval of this Plan by the Voting Members at the
Special Meeting.
(f) The Subscription Offering and the Community Offering may
be closed before the Special Meeting.
12. PAYMENT FOR COMMON SHARES.
Common Shares will be paid for in accordance with the following
procedure:
(a) Full payment for all Common Shares subscribed for must be
received by the Association, together with properly completed and
manually signed original Order Forms therefor, before the expiration
time, which will be specified on the Order Forms, unless such date is
extended by the Association. Order Forms which have been photocopied or
reproduced in any other manner will not be accepted. The amount of the
required payment will be the amount which equals the Purchase Price
(which will be specified in the Order Forms or accompanying materials),
multiplied by the number of Common Shares subscribed for in accordance
with the terms of this Plan.
(b) Payment for Common Shares ordered in the Subscription
Offering will be permitted to be made:
(i) In cash, if delivered in person;
(ii) By check, bank draft, money order or negotiable
order of withdrawal; provided, however, that any payment by
check will be accepted subject to payment of such check by the
drawee of such check; or
(iii) By appropriate authorization of withdrawal from
any Savings Account at the Association.
For the purpose of determining the withdrawal balance of any Savings
Account, such withdrawals will be deemed to have been made upon receipt
of appropriate authorization therefor, but interest at the rates
applicable to such accounts will be paid by the Association on the
amounts deemed to have been withdrawn until the date on which the
Conversion is completed or terminated, at which time the authorized
withdrawal actually will be made. Interest will be paid by the
Association on payments for Common Shares paid in cash or by check,
negotiable order of withdrawal or money order at an annual rate equal
to the passbook account rate at the Association or such higher rate as
may be determined by the Association. Such interest will be paid from
the date payments are received by the Association until consummation or
termination of the Conversion.
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11
(c) The Order Forms will contain appropriate means by which
authorization of withdrawals from Savings Accounts may be made to pay
for subscribed Common Shares. Once a withdrawal has been authorized,
none of the designated withdrawal amount may be withdrawn from the
designated Savings Account (except by the Association as payment for
Common Shares) while this Plan remains in effect. Savings Accounts will
be permitted to be established for the purpose of making payment for
subscribed Common Shares. Notwithstanding any regulatory provisions
regarding penalties for early withdrawal from certificate accounts and
minimum qualifying balances for such accounts, payment for Common
Shares will be permitted through authorization of withdrawals from such
accounts without the assessment of such penalties. If, after such
withdrawal, the applicable minimum balance requirement ceases to be
met, such certificate account will be canceled and the remaining
balance thereof will earn interest only at the passbook account rate at
the Association.
(d) The Association will not lend funds or otherwise extend
credit to any Person to purchase Common Shares.
13. EXPIRATION OF SUBSCRIPTION RIGHTS; UNDELIVERED, DEFECTIVE OR LATE
ORDER FORMS; INSUFFICIENT PAYMENT.
Subscription Rights will expire or terminate in accordance with the
following:
(a) All Subscription Rights provided for in this Plan,
including, without limitation, the Subscription Rights of all Persons
whose Order Forms are returned by the United States Post Office as
undeliverable, will expire at a specified time on a specified date
which will be not less than 20 days nor more than 45 days following the
date on which Order Forms are first sent to Eligible Account Holders,
Supplemental Eligible Account Holders and Other Eligible Members;
provided, however, that the Association will have the power to extend
such expiration time in its discretion only for a reasonable time
beyond such 45-day period.
(b) If the Association is unable to locate particular persons
granted Subscription Rights under this Plan, or if Order Forms (i) are
returned as undeliverable by the United States Post Office, (ii) are
not received by the Association prior to the expiration date specified
thereon, (iii) are defectively filled out or executed, or (iv) are not,
when received by the Association, accompanied by the full required
payment for the Common Shares subscribed for (including cases in which
Savings Accounts from which withdrawals are authorized contain
insufficient funds to satisfy the required payment or the check, bank
draft, negotiable order of withdrawal or money order is not paid by the
drawee thereof), the Subscription Rights will lapse as though the
Person to whom such rights have been granted failed to return the
completed Order Form within the time period specified thereon. In any
such case as discussed in this paragraph (b), all payments accompanying
the Order Forms will be refunded and, in the case of payments
authorized through withdrawal from Savings Accounts as permitted by
Section 12 of this Plan, such withdrawals will not be made.
(c) The Association may, but will not be obligated to, waive
any irregularity on any Order Form or require the submission of a
corrected Order Form or waive the remittance of full payment for shares
subscribed for by such date as it may specify. An executed Order Form,
once received by the Association, may not be modified, amended or
rescinded without the consent of the Association, unless (i) the
Community Offering is not completed within 45 days after the expiration
time of the Subscription Offering, or (ii) the final valuation of the
Association, as converted, is less than the minimum of the valuation
range established by the Independent Appraiser before the commencement
of the Subscription Offering or exceeds the maximum of such valuation
range by more than 15%. If either of those events occurs, persons who
have subscribed for Common Shares in the Subscription Offering will
receive written notice that they have a right to affirm, increase,
decrease or rescind their subscriptions. Subject to the authority of
the OTS and the Division, all interpretations by the Association and
the Holding Company of the terms and conditions of this Plan and of the
Order Forms will be final.
(d) The sale of all Common Shares must be completed within 45
days after the termination of the Subscription Offering, unless
extended by the Association with the consent of the OTS and the
Division, and within 24 months of approval of this Plan by the Voting
Members at the Special Meeting. The 24-month period may not be extended
by the Association, the OTS or the Division.
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14. COMPLIANCE WITH SECURITIES LAWS.
The Association and the Holding Company will make reasonable efforts to
comply with the securities laws of the United States and all other jurisdictions
in which Eligible Account Holders, Supplemental Eligible Account Holders and
Other Eligible Members reside. No person, however, will be offered any
Subscription Rights or sold any Common Shares under this Plan if such Person
resides in a foreign country or in any jurisdiction of the United States in
respect of which (a) the granting of Subscription Rights or the offer or sale of
Common Shares under this Plan to such persons would require the Association, the
Holding Company or their directors, Officers or employees to register under the
securities laws of such jurisdiction as a Broker, Dealer or agent or to register
or otherwise qualify the Common Shares for sale in such state or (b) the
Association determines that compliance with the securities laws of such
jurisdiction would be impracticable for reasons of cost or otherwise. No
payments will be made in lieu of the granting of Subscription Rights to such
persons.
15. RIGHTS OF SHAREHOLDERS AFTER COMPLETION OF CONVERSION.
After the Conversion, the Holding Company will be the sole shareholder
of the Association and will exercise all rights attendant to owning the shares
of the Association. Voting rights in respect of the Holding Company will be held
and exercised exclusively by the holders of the issued and outstanding common
shares of the Holding Company. Neither borrowers from the Association nor
holders of Savings Accounts in the Association will have any voting rights in
the Association or the Holding Company on the basis of such borrowings or
Savings Accounts. The shareholders of the Holding Company will have the
exclusive rights, subject to the rights of Eligible Account Holders and
Supplemental Eligible Account Holders in the Liquidation Account provided for in
Section 16 of this Plan, to receive the distribution of any assets remaining
after payment of creditors' claims, including the claims of Savings Account
holders to the withdrawal value of their accounts, in the event of any voluntary
or involuntary liquidation of the Association after the Conversion.
16. ESTABLISHMENT OF LIQUIDATION ACCOUNT.
A Liquidation Account will be established on the effective date of the
Conversion in accordance with the following:
(a) For purposes of granting a limited priority claim to the
assets of the Association in the event of a complete liquidation
thereof to Eligible Account Holders and Supplemental Eligible Account
Holders who continue to maintain a Savings Account at the Association
after the Conversion, the Association will, at the time of the
Conversion, establish the Liquidation Account in an amount equal to the
retained earnings of the Association as set forth in its latest
statement of financial condition contained in the Prospectus for the
sale of Common Shares. The Liquidation Account will not operate to
restrict the use or application of any of the regulatory capital of the
Association.
(b) Each Eligible Account Holder and Supplemental Eligible
Account Holder will have a separate inchoate interest in a portion of
the Liquidation Account for each Savings Account making up such account
holder's Qualifying Deposit (herein referred to as the "Subaccount").
(c) The initial balance of each Subaccount will be an amount
determined by multiplying the amount in the Liquidation Account by a
fraction, the numerator of which is the amount of the account holder's
Qualifying Deposits as of the close of business on the Eligibility
Record Date or the Supplemental Eligibility Record Date, as the case
may be, and the denominator of which is the total amount of all
Qualifying Deposits of Eligible Account Holders and Supplemental
Eligible Account Holders on the corresponding record date. For Savings
Accounts in existence on both the Eligibility Record Date and the
Supplemental Eligibility Record Date, separate Subaccounts will be
determined on the basis of the Qualifying Deposits in such Savings
Accounts on each such date. The balance of each Subaccount will never
be increased above the initial balance. If the balance in the Savings
Account to which a Subaccount relates, at the close of business on the
last day of each fiscal year of the Holding Company subsequent to the
respective record dates, is less than the lesser of (i) the deposit
balance in such Savings Account at the close of business on the last
day of each fiscal year of the Holding Company subsequent to the
Eligibility Record Date or the Supplemental Eligibility Record Date and
(ii) the amount of the Qualifying Deposit as of the Eligibility Record
Date or the Supplemental Eligibility Record Date, the balance of the
Subaccount for such Savings Account will be adjusted in proportion to
the reduction in such Savings Account balance. In the event of any such
downward adjustment, such Subaccount balance will not be subsequently
increased notwithstanding any increase in the deposit balance of the
related Savings Account. If any Savings Account is closed, its related
Subaccount will be
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reduced to zero upon such closing. The Subaccount of an account holder
will be maintained for as long as the account holder maintains the
related Savings Account with the same Social Security or tax
identification number.
(d) In the event of a complete liquidation of the converted
Association (and only in such event), each Eligible Account Holder and
Supplemental Eligible Account Holder will be entitled to receive from
the Liquidation Account a distribution equal to the current adjusted
balance in each of such account holder's Subaccounts before any
liquidation distribution may be made to any holders of the capital
stock of the Association. No merger, consolidation, sale of bulk assets
or similar combination or transaction with another savings association,
the accounts of which are insured by the FDIC, will be deemed to be a
complete liquidation for this purpose and, in any such transaction, the
Liquidation Account will be assumed by the surviving insured
institution.
17. ACCOUNTS IN CONVERTED ASSOCIATION.
Each Savings Account in the Association at the time of the Conversion
will constitute, without payment or further action by the account holder, a
Savings Account in the Association as converted, equal in withdrawable amount to
the withdrawal value, and subject to the same terms and conditions, except as to
voting and liquidation rights, as such Savings Account in the Association
immediately before the Conversion.
18. RESTRICTIONS ON PURCHASES AND SALES OF COMMON SHARES BY OFFICERS AND
DIRECTORS FOLLOWING CONVERSION.
Purchases and sales of shares of the Holding Company after the
Conversion will be restricted in accordance with the following:
(a) All Common Shares purchased by Officers or directors of
the Holding Company or the Association or their Associates pursuant to
this Plan will be subject to the restriction that no such shares will
be sold for a period of one year following the date of purchase of such
shares, except in the event of the death of the Officer, director or
Associate.
(b) With respect to all Common Shares subject to the
restriction on subsequent disposition pursuant to paragraph (a) of this
Section 18, each of the following provisions will apply:
(i) Each certificate representing such shares will
bear the following legend prominently stamped thereon giving
notice of such restriction on transfer:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD BY THE REGISTERED HOLDER HEREOF FOR A PERIOD
OF NOT LESS THAN ONE YEAR FROM THE DATE OF ISSUANCE
HEREOF, EXCEPT IN THE EVENT OF THE DEATH OF
THE REGISTERED HOLDER OF SUCH SHARES.
(ii) Instructions will be given to the transfer agent
for the Holding Company, if any, not to recognize or effect
any transfer of any certificates representing such shares or
any change of record ownership thereof in violation of such
restriction on transfer; and
(iii) Any shares of capital stock of the Holding
Company issued as a stock dividend, stock split or otherwise
with respect to outstanding Common Shares subject to
restrictions on transfer hereunder will be subject to the same
restrictions as are applicable to the Common Shares with
respect to which such shares of stock are issued.
(c) For a period of three years following the Conversion, no
Officer or director of the Association or the Holding Company, or any
Associates of such Officer or director shall, without the prior written
approval of the OTS, purchase the capital stock of the Holding Company
other than from a Broker or Dealer registered with the SEC. This
provision will not apply to (i) negotiated transactions involving more
than 1% of a class of outstanding capital stock of the Holding Company
or (ii) purchases of shares of capital stock made by and held by any
one or more tax-qualified or non-tax-qualified employee stock benefit
plans which may be attributable to individual Officers or directors of
the Holding Company or the Association.
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19. RESTRICTIONS ON ACQUISITION OF THE ASSOCIATION OR THE HOLDING COMPANY.
Acquisition of the capital stock of the Association or the Holding
Company after the Conversion will be subject to various restrictions contained
in the Amended Articles, the Amended Constitution, the Articles of Incorporation
of the Holding Company, the Code of Regulations of the Holding Company and
various state and federal laws and regulations. In addition, the Articles of
Incorporation of the Holding Company or the Amended Articles may include the
limitation that, for a period of up to five years from the date of completion of
the Conversion of the Association from mutual to stock form, no Person may
directly or indirectly offer to acquire or acquire beneficial ownership of more
than 10% of any class of an equity security of the Association or the Holding
Company.
20. AMENDMENT OR TERMINATION OF THIS PLAN.
If deemed necessary or desirable by the Boards of Directors of the
Association and the Holding Company, this Plan may be amended by the Boards of
Directors of the Association and the Holding Company in their sole discretion at
any time prior to the solicitation of Proxies from Voting Members entitled to
vote on this Plan and at any time thereafter with the concurrence of the OTS and
the Division. The Conversion pursuant to this Plan may be terminated by the
Boards of Directors of the Association and the Holding Company in their sole
discretion at any time prior to the Special Meeting and at any time thereafter
with the concurrence of the OTS and the Division.
21. CONSUMMATION OF CONVERSION.
The Conversion of the Association from mutual to stock form will be
deemed to have taken place and to be effective at the time and date provided in
the regulations of the OTS and the Division. The Conversion must be completed
within 24 months of the approval of this Plan by the Members.
22. TAX RULINGS/OPINIONS.
The Conversion is expressly conditioned upon the prior receipt by the
Association and the Holding Company of either rulings from the Internal Revenue
Service and the appropriate Ohio taxing authorities or opinions of legal counsel
or other tax advisors to the Association in form and substance satisfactory to
the Association and to the effect, among other things, that the Conversion will
constitute a tax-free "reorganization" as defined in Section 368(a) of the
Internal Revenue Code of 1986, as amended, and comparable provisions of
applicable state law, or that consummation of the transactions provided for in
this Plan will not otherwise result in any federal, state or other tax
consequences to the Association or the converted Association deemed materially
adverse by the Board of Directors of the Association or the Board of Directors
of the Holding Company.
23. DIRECTORS AND OFFICERS OF THE ASSOCIATION.
It is not intended that the Conversion will result in any change in the
directors or Officers of the Association. The persons serving as Officers on the
date the Application is filed with the OTS and the Division will continue to
serve at the discretion of the Board of Directors of the Association in their
respective capacities as Officers of the converted the Association. The persons
serving as directors of the Association on the date the Application is filed
with the OTS and the Division will continue to serve as directors following the
Conversion until their terms expire or their earlier death, resignation or
removal from office.
24. STOCK BENEFIT PLANS.
Following the completion of the Conversion, the Association or the Holding
Company may establish one or more stock option plans and management recognition
plans to the extent permitted by OTS regulations. The Association and the
Holding Company may make scheduled or discretionary contributions to one or more
stock benefit plans maintained by the Association or the Holding Company for the
benefit of the directors, Officers or employees of the Association or the
Holding Company, provided such contributions do not cause the Association to
fail to meet its regulatory capital requirement.
25. REGISTRATION OF COMMON SHARES; MARKET FOR COMMON SHARES.
(a) Before or promptly following the Conversion, the Holding
Company will register the Common Shares with the SEC pursuant to the
Securities Exchange Act of 1934 and will not deregister such shares for
a period of three years thereafter.
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(b) While there is no assurance that an active market for
the Common Shares will develop following the Conversion, the Holding
Company will use its best efforts to encourage and assist a market
maker to establish and maintain a market for the Common Shares and
will use its best efforts to cause such shares to be quoted on The
Nasdaq Stock Market (or any comparable quotation system which may
hereafter be developed) or listed on a national or regional
securities exchange.
26. EXPENSES OF CONVERSION.
The Association and the Holding Company will use their best efforts to
ensure that the expenses incurred in connection with the Conversion will be
reasonable.
27. MAILING OF PROXY MATERIALS.
The Proxy Materials will only be sent to Voting Members as of the
Voting Record Date.
28. INTERPRETATION OF THE PLAN.
The Boards of Directors of the Association and the Holding Company will
interpret this Plan. To the extent permitted by law, all interpretations of this
Plan by the Boards of Directors of the Association and the Holding Company will
be final.
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AMENDED
ARTICLES OF INCORPORATION
OF
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION
FIRST: The name of the corporation shall be Bridgeport Savings
and Loan Association.
SECOND: The place in Ohio where the principal office of the
corporation is to be located is Bridgeport, Belmont County.
THIRD: The purposes for which the corporation is formed are to
raise money to be loaned to its members and others and to engage in any other
lawful act or activity for which corporations may be formed under Chapter 1151
of the Ohio Revised Code.
FOURTH: The authorized capital of the corporation shall be Ten
Million Dollars ($10,000,000) divided into Ten Million (10,000,000) shares,
$1.00 par value per share.
FIFTH: To the extent permitted by law, the directors of the
corporation shall have the power to cause the corporation from time to time and
at any time to purchase, hold, sell, transfer or otherwise deal with (A) shares
of any class or series issued by it, (B) any security or other obligation of the
corporation which may confer upon the holder thereof the right to convert the
same into shares of any class or series authorized by the articles of the
corporation and (C) any security or other obligation which may confer upon the
holder thereof the right to purchase shares of any class or series authorized by
the articles of the corporation. To the extent permitted by law, the corporation
shall have the right to repurchase, if and when any shareholder desires to sell,
or on the happening of any event is required to sell, shares of any class or
series issued by the corporation. The authority granted in this Article Fifth of
these articles shall not otherwise limit the authority of the directors to
purchase, hold, sell, transfer or otherwise deal with shares of any class or
series, securities, or other obligations issued by the corporation or authorized
by its articles.
SIXTH: Until the expiration of five years from the date of the
acquisition by Ohio State Financial Services, Inc. (the "Holding Company") of
the capital stock of the corporation to be issued in connection with the
conversion of the corporation from mutual to stock form, no Person (hereinafter
defined) shall directly or indirectly Offer (hereinafter defined) to Acquire
(hereinafter defined) or Acquire the Beneficial Ownership (hereinafter defined)
of more than 10% of any class of any equity security of the corporation;
provided, however, that such prohibition shall not apply to the purchase of
shares by underwriters in connection with a public offering or the power of
trustees to vote shares of the corporation held by an employee stock ownership
plan for the benefit of employees of the corporation or the Holding Company. In
the event that any shares of the corporation are Acquired in violation of this
Article Sixth, all shares Beneficially Owned by any Person in excess of 10% of
any class of equity security of the corporation shall not be counted as shares
entitled to vote, shall not be voted by any Person and shall not be counted as
voting shares in connection with any matter submitted to the shareholders for a
vote. For purposes of this Article Sixth, the following terms shall have the
meanings set forth below:
(A) "Person" includes an individual, a group acting in
concert, a corporation, a partnership, an
association, a joint stock company, a trust, an
unincorporated organization or similar company, a
syndicate or any other group formed for the purpose
of acquiring or disposing of the equity securities of
the corporation, but does not include an employee
stock ownership plan for the benefit of employees of
the corporation or the Holding Company.
(B) "Offer" includes every offer to buy or otherwise
acquire, solicitations or an offer to sell, tender
offer for, or request or invitation for tenders of, a
security or interest in a security for value.
17
(C) "Acquire" includes every type of acquisition, whether
effected by purchase, exchange, operation of law or
otherwise.
(D) "Acting in concert" means (i) participation in a
joint activity or conscious parallel action towards a
common goal, whether or not pursuant to an express
agreement, or (ii) a combination or pooling of voting
or other interests in the securities of an issuer for
a common purpose pursuant to any contracts,
understanding, relationship, agreement or other
arrangement, whether written or otherwise.
(E) "Affiliate" shall mean a Person that directly or
indirectly, through one or more intermediaries,
controls or is controlled by, or is under common
control with, another Person.
(F) "Associate" of a Person shall mean (i) any
corporation or organization (other than the
corporation or a subsidiary of the corporation) of
which the Person is an officer or partner or is,
directly or indirectly, the beneficial owner of ten
percent or more of any class of equity securities,
(ii) any trust or other estate in which the Person
has a substantial beneficial interest or as to which
the Person serves as trustee or in a similar
fiduciary capacity, except a tax-qualified employee
stock benefit plan in which the Person has a
substantial beneficial interest or serves as a
trustee or in a similar fiduciary capacity or a
tax-qualified employee stock benefit plan, and (iii)
any relative or spouse of the Person, or any relative
of such spouse, who has the same home as the Person
or is a director or officer of the corporation or any
of its parents or subsidiaries.
(G) "Beneficial Ownership" shall include, without
limitation, (i) all shares directly or indirectly
owned by a Person, by an Affiliate of such Person or
by an Associate of such Person or such Affiliate,
(ii) all shares which such Person, Affiliate or
Associate has the right to acquire through the
exercise of any option, warrant or right (whether or
not currently exercisable), through the conversion of
a security, pursuant to the power to revoke a trust,
discretionary account or similar arrangement, or
pursuant to the automatic termination of a trust,
discretionary account or similar arrangement, and
(iii) all shares as to which such Person, Affiliate
or Associate directly or indirectly through any
contract, arrangement, understanding, relationship or
otherwise (including, without limitation, any written
or unwritten agreement to act in concert) has or
shares voting power (which includes the power to
dispose or to direct the disposition of such shares)
or both.
SEVENTH: No shareholder of the corporation shall have, as a
matter of right, the pre-emptive right to purchase or subscribe for shares of
any class, now or hereafter authorized, or to purchase or subscribe for
securities or other obligations convertible into or exchangeable for such shares
or which by warrants or otherwise entitle the holders thereof to subscribe for
or purchase any such share.
EIGHTH: No shareholder of the corporation shall have the right
to vote cumulatively in the election of directors.
These Amended Articles of Incorporation supersede the existing
Articles of Incorporation of the corporation.
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AMENDED
CONSTITUTION
OF
BRIDGEPORT SAVINGS AND LOAN ASSOCIATION
ARTICLE ONE
SECTION 1. NAME. The name of this savings and loan association
shall be Bridgeport Savings and Loan Association (this "Association"), and the
principal office of this Association shall be located in Belmont County, Ohio.
ARTICLE TWO
SECTION 1. PURPOSES. The purposes for which this Association
is formed are to raise money to be loaned to its members and others and to
engage in any other lawful act or activity for which corporations may be formed
under Chapter 1151 of the Ohio Revised Code.
ARTICLE THREE
SECTION 1. AUTHORIZED SHARES. The authorized capital of this
Association shall be $10,000,000 divided into 10,000,000 shares, $1.00 par value
per share.
SECTION 2. REPURCHASE OF SHARES. This Association shall have
the power to repurchase its common shares to the fullest extent provided by law.
ARTICLE FOUR
SECTION 1. MEMBERS. Any person who subscribes for, or in any
manner according to law becomes the owner of, any of the common shares of this
Association shall be a member of this Association entitled to all of the
benefits and privileges and subject to all of the liabilities and duties
prescribed by this Constitution, the Bylaws of this Association and the laws of
the State of Ohio.
SECTION 2. ANNUAL MEETINGS. The annual meeting of the
shareholders of this Association for the election of directors, the
consideration of reports to be laid before such meeting and the transaction of
such other business as may properly come before such meeting shall be held on
the third Wednesday in April in each year, at 1:00 p.m., or on such other date
and at such time as may be fixed from time to time by the directors.
SECTION 3. SPECIAL MEETINGS. Special meetings of the
shareholders of this Association may be called only by the chairman of the
board, president, vice president, a majority of the members of the board of
directors, or by persons who hold at least twenty-five percent of all shares
outstanding and entitled to vote thereat.
SECTION 4. PLACE OF MEETINGS. All meetings of shareholders of
this Association shall be held at the principal office of this Association,
unless otherwise provided by action of the directors. Meetings of shareholders
may be held at any place within or outside the State of Ohio.
SECTION 5. NOTICE OF MEETINGS.
(A) Written notice stating the time, place and purposes of a
meeting of the shareholders of this Association shall be given, by or at the
direction of the president or the secretary, either by personal delivery or by
mail not less than seven nor more than sixty days before the date of the meeting
to each shareholder of record entitled to notice of the meeting. If mailed, such
notice shall be addressed to the shareholder at his address as it appears on the
records of this Association. Notice of adjournment of a meeting need not be
given if the time and place to which it is adjourned are fixed and announced at
such
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meeting. In the event of a transfer of shares after the record date for
determining the shareholders who are entitled to receive notice of a meeting of
shareholders, it shall not be necessary to give notice to the transferee.
Nothing herein contained shall prevent the setting of a record date in the
manner provided by law, the Articles of Incorporation of this Association (the
"Articles") or this Constitution for the determination of shareholders who are
entitled to receive notice of or to vote at any meeting of shareholders or for
any purpose required or permitted by law.
(B) Following receipt by the president or the secretary of a
request in writing, specifying the purpose or purposes for which the persons
properly making such request have called a meeting of the shareholders,
delivered either in person or by registered mail to such officer by any persons
entitled to call a meeting of shareholders, such officer shall cause to be given
to the shareholders entitled thereto notice of a meeting to be held on a date
not less than seven nor more than sixty days after the receipt of such request,
as such officer may fix. If such notice is not given within fifteen days after
the receipt of such request by the president or the secretary, then, and only
then, the persons properly calling the meeting may fix the time of the meeting
and give notice thereof in accordance with the provisions of this Constitution.
SECTION 6. WAIVER OF NOTICE. Notice of the time, place and
purpose or purposes of any meeting of shareholders of this Association may be
waived in writing, either before or after the holding of such meeting, by any
shareholder, which writing shall be filed with or entered upon the records of
such meeting. The attendance of any shareholder, in person or by proxy, at any
such meeting without protesting the lack of proper notice, prior to or at the
commencement of the meeting, shall be deemed to be a waiver by such shareholder
of notice of such meeting.
SECTION 7. QUORUM. At any meeting of shareholders of this
Association, the holders of a majority of the voting shares of this Association
then outstanding and entitled to vote thereat, present in person or by proxy,
shall constitute a quorum for such meeting. The holders of a majority of the
voting shares represented at a meeting, whether or not a quorum is present, or
the chairman of the board, the president, or the officer of the corporation
acting as chairman of the meeting, may adjourn such meeting from time to time,
and if a quorum is present at such adjourned meeting any business may be
transacted as if the meeting had been held as originally called.
SECTION 8. VOTES REQUIRED. At all elections of directors the
candidates receiving the greatest number of votes shall be elected. Any other
matter submitted to the shareholders for their vote shall be decided by the vote
of such proportion of the shares, or of any class of shares, or of each class,
as is required by law, the Articles or this Constitution.
SECTION 9. ORDER OF BUSINESS. The order of business at any
meeting of shareholders shall be determined by the officer of this Association
acting as chairman of such meeting unless otherwise determined by a vote of the
holders of a majority of the voting shares of this Association then outstanding,
present in person or by proxy, and entitled to vote at such meeting.
SECTION 10. SHAREHOLDERS ENTITLED TO VOTE. Each shareholder of
record on the books of this Association on the record date for determining the
shareholders who are entitled to vote at a meeting of shareholders shall be
entitled at such meeting to one vote for each share of this Association standing
in his name on the books of this Association on such record date. The directors
may fix a record date for the determination of the shareholders who are entitled
to receive notice of and to vote at a meeting of shareholders, which record date
shall not be a date earlier than the date on which the record date is fixed and
which record date may be a maximum of sixty days preceding the date of the
meeting of shareholders.
SECTION 11. PROXIES. At meetings of the shareholders, any
shareholder of record entitled to vote thereat may be represented and may vote
by a proxy or proxies appointed by an instrument in writing signed by such
shareholder, but such instrument shall be filed with the secretary of the
meeting before the person holding such proxy shall be allowed to vote
thereunder. No proxy shall be valid after the expiration of eleven months after
the date of its execution, unless the shareholder executing it shall have
specified therein the length of time it is to continue in force.
SECTION 12. INSPECTORS OF ELECTION. In advance of any meeting
of shareholders of this Association, the directors may appoint one or more
inspectors of election to act at such meeting or any adjournment thereof. If
inspectors are not so appointed, the officer of this Association acting as
chairman of any such meeting may make such appointment. In case any person
appointed as inspector fails to appear or act, the vacancy may be filled only by
appointment made by the directors in advance of such meeting or, if not so
filled, at the meeting by the officer of this Association acting as chairman of
such meeting. No other person or persons may appoint or require the appointment
of inspectors of election.
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ARTICLE FIVE
DIRECTORS
SECTION 1. AUTHORITY AND QUALIFICATIONS. Except where the law,
the Articles or this Constitution otherwise provide, all authority of this
Association shall be vested in and exercised by its directors. Directors need
not be shareholders of this Association.
SECTION 2. NUMBER OF DIRECTORS AND TERM OF OFFICE.
(A) Until changed in accordance with the provisions of this
Constitution, the number of directors of this Association shall be five (5).
Each director shall serve for a term of one year until his successor is duly
elected and qualified or until his earlier resignation, removal from office or
death.
(B) The number of directors may be fixed or changed, but in no
event to fewer than five (5), by the directors or by the shareholders at a
meeting of the shareholders of this Association called for the purpose of
electing directors at which a quorum is present, only by the affirmative vote of
the holders of not less than a majority of the voting shares which are
represented at the meeting, in person or by proxy, and entitled to vote on such
proposal.
(C) The directors may fill any director's office that is
created by an increase in the number of directors.
(D) No reduction in the number of directors shall of itself
have the effect of shortening the term of any incumbent director.
SECTION 3. NOMINATION AND ELECTION.
(A) Any nominee for election as a director of this Association
may be proposed only by the directors or by any shareholder entitled to vote for
the election of directors. No person, other than a nominee proposed by the
directors, may be nominated for election as a director of this Association
unless such person shall have been proposed in a written notice, delivered or
mailed by first-class United States mail, postage prepaid, to the secretary of
this Association at the principal offices of this Association. In the case of a
nominee proposed for election as a director at an annual meeting of
shareholders, such written notice of a proposed nominee shall be received by the
secretary of this Association not later than the close of business on the
fourteenth calendar day preceding such annual meeting. In the case of a nominee
proposed for election as a director at a special meeting of shareholders at
which directors are to be elected, such written notice of a proposed nominee
shall be received by the secretary of this Association not later than the close
of business on the fourteenth calendar day preceding such special meeting.
Each such written notice of a proposed nominee shall set forth
(i) the name, age, business or residence address of each nominee proposed in
such notice, (ii) the principal occupation or employment of each such nominee,
and (iii) the number of common shares of this Association owned beneficially
and/or of record by each such nominee and the length of time any such shares
have been so owned.
(B) If a shareholder shall attempt to nominate one or more
persons for election as a director at any meeting at which directors are to be
elected without having identified each such person in a written notice given as
contemplated by, and/or without having provided therein the information
specified in, subparagraph (A) of this Section 3, each such attempted nomination
shall be invalid and shall be disregarded unless the person acting as chairman
of the meeting determines that the facts warrant the acceptance of such
nomination.
(C) The election of directors shall be by ballot whenever
requested by the person acting as chairman of the meeting or by the holders of a
majority of the outstanding shares entitled to vote at such meeting and present
in person or by proxy, but unless such request is made, the election shall be by
voice vote.
SECTION 4. REMOVAL. A director or directors may be removed
from office, with or without assigning any cause, only by the vote of the
holders of shares entitling them to exercise not less than 75% of the voting
power of this Association to elect directors in place of those to be removed. In
case of any such removal, a new director may be elected at the same meeting
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for the unexpired term of each director removed. Failure to elect a director to
fill the unexpired term of any director removed shall be deemed to create a
vacancy in the board.
SECTION 5. VACANCIES. Vacancies in the board may be filled in
the manner provided by law, the Articles or this Constitution. The directors
shall have the right to fill all vacancies occurring in the board for the
unexpired term.
SECTION 6. MEETINGS. A meeting of the directors shall be held
immediately following the adjournment of each annual meeting of shareholders of
this Association at which directors are elected, and notice of such meeting need
not be given. The directors shall hold a regular meeting at least once each
month at a day and hour fixed by resolution of the board and may hold such other
meetings as may from time to time be called. Such meetings of directors may be
called only by the chairman of the board, the president, or any two directors.
Meetings of the directors may be held through any communications equipment if
all persons participating can hear each other, and participation in a meeting
pursuant to this provision shall constitute presence at such meeting.
SECTION 7. NOTICE OF MEETINGS. Notice of the time and place of
each meeting of directors for which such notice is required by law, the
Articles, this Constitution or the Bylaws shall be given to each of the
directors by at least one of the following methods:
(A) In a writing mailed not less than three days before such
meeting and addressed to the residence or usual place of business of a director,
as such address appears on the records of the corporation; or
(B) By telegraph, facsimile or a writing sent or delivered to
the residence or usual place of business of a director as the same appears on
the records of the corporation, not later than the day before the date on which
such meeting is to be held.
Notice given to a director by either one of the methods specified in this
Constitution shall be sufficient, and the method of giving notice to all
directors need not be uniform. Notice of any meeting of directors may be given
only by the chairman of the board, the president or the secretary of this
Association. Any such notice need not specify the purpose or purposes of the
meeting. Notice of adjournment of a meeting of directors need not be given if
the time and place to which it is adjourned are fixed and announced at such
meeting.
SECTION 8. WAIVER OF NOTICE. Notice of any meeting of
directors may be waived in writing, either before or after the holding of such
meeting, by any director, which writing shall be filed with or entered upon the
records of the meeting. The attendance of any director at any meeting of
directors without protesting, prior to or at the commencement of the meeting,
the lack of proper notice, shall be deemed to be a waiver by him of notice of
such meeting.
SECTION 9. QUORUM. A majority of the whole authorized number
of directors shall be necessary to constitute a quorum for a meeting of
directors, except that a majority of the directors in office shall constitute a
quorum for filling a vacancy in the board. The act of a majority of the
directors present at a meeting at which a quorum is present is the act of the
board, except as otherwise provided by law, the Articles or this Constitution.
SECTION 10. EXECUTIVE COMMITTEE. The directors may create an
executive committee or any other committee of directors, to consist of not less
than three directors, and may authorize the delegation to such executive
committee or other committees of any of the authority of the directors, however
conferred, other than that of filling vacancies among the directors or in the
executive committee or in any other committee of the directors.
Such executive committee or any other committee of directors
shall serve at the pleasure of the directors, shall act only in the intervals
between meetings of the directors, and shall be subject to the control and
direction of the directors. Such executive committee or other committee of
directors may act by a majority of its members at a meeting or by a writing or
writings signed by all of its members.
Any act or authorization of any act by the executive committee
or any other committee within the authority delegated to it shall be as
effective for all purposes as the act or authorization of the directors. No
notice of a meeting of the executive committee or of any other committee of
directors shall be required. A meeting of the executive committee or of any
other committee of directors may be called only by the president or by a member
of such executive or other committee of
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directors. Meetings of the executive committee or of any other committee of
directors may be held through any communications equipment if all persons
participating can hear each other, and participation in such a meeting shall
constitute presence thereat.
SECTION 11. COMPENSATION. The compensation of the directors
shall be fixed by the shareholders at the annual meeting of shareholders and
shall be reasonable in view of the services performed and the financial
condition of this Association.
SECTION 12. DIRECTORS' BYLAWS. The directors shall have the
power to adopt, amend, repeal, and enforce such bylaws, resolutions and orders
as they may deem necessary to enable them to manage and control all the
business, property and rights of this Association.
SECTION 13. ASSESSMENTS. The directors shall have the power to
assess and collect from members and others such fines for late payment of loans
and such premiums on loans made or other assessments as they may deem
appropriate.
ARTICLE SIX
OFFICERS
SECTION 1. OFFICERS. The officers of this Association to be
elected by the directors shall include a president, a secretary and a treasurer
and such other officers and assistant officers as the directors may from time to
time elect. One officer shall be designated as the executive managing officer of
the Association. The directors may elect a chairman of the board, who must be a
director. Officers need not be shareholders of this Association, and may be paid
such compensation as the board of directors may determine. Any two or more
offices may be held by the same person, but no officer shall execute,
acknowledge, or verify any instrument in more than one capacity if such
instrument is required by law, the Articles, this Constitution or the Bylaws to
be executed, acknowledged, or verified by two or more officers.
SECTION 2. TENURE OF OFFICE. The officers of this Association
shall hold office at the pleasure of the directors. Any officer may be removed,
either with or without cause, at any time, by the affirmative vote of a majority
of all of the directors then in office; such removal, however, shall be without
prejudice to the contract rights, if any, of the person so removed.
SECTION 3. DUTIES OF THE OFFICERS. The duties of the officers
shall be established by the directors either in the Bylaws of this Association
or by resolution.
SECTION 4. COMPENSATION. The directors shall set the
compensation of the officers of this Association. The compensation of all
officers of this Association shall be reasonable in view of the services
performed and the financial condition of this Association.
ARTICLE SEVEN
SHARES
SECTION 1. CERTIFICATES. Certificates evidencing ownership of
shares of this Association shall be issued to those entitled to them. Each
certificate evidencing shares of this Association shall bear a distinguishing
number, the signatures of the chairman of the board, the president, or a vice
president, and of the secretary or an assistant secretary (except that when any
such certificate is countersigned by an incorporated transfer agent or
registrar, such signatures may be facsimile, engraved, stamped or printed), and
such recitals as may be required by law. Certificates evidencing shares of this
Association shall be of such tenor and design as the directors may from time to
time adopt and may bear such recitals as are permitted by law.
SECTION 2. TRANSFERS. Where a certificate evidencing a share
or shares of this Association is presented to this Association or its proper
agents with a request to register transfer, the transfer shall be registered as
requested if:
(1) An appropriate person signs on each certificate so
presented or signs on a separate document an assignment or transfer of shares
evidenced by each such certificate, or signs a power to assign or transfer such
shares, or when the signature of an appropriate person is written without more
on the back of each such certificate; and
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(2) Reasonable assurance is given that the endorsement of each
appropriate person is genuine and effective; and
(3) All applicable laws, if any, relating to the collection of
transfer or other taxes have been complied with; and
(4) This Association or its agents are not otherwise required
or permitted to refuse to register such transfer.
This Association may refuse to register a transfer of shares
unless the signature of each appropriate person is guaranteed by a commercial
bank or trust company having an office or a correspondent in the City of New
York or by a firm having membership in the New York Stock Exchange.
SECTION 3. TRANSFER AGENTS AND REGISTRARS. The directors may
appoint one or more agents to transfer or to register shares of this
Association, or both.
SECTION 4. LOST, WRONGFULLY TAKEN OR DESTROYED CERTIFICATES.
Except as otherwise provided by law, where the owner of a certificate evidencing
shares of this Association claims that such certificate has been lost, destroyed
or wrongfully taken, the directors must cause this Association to issue a new
certificate in place of the original certificate if the owner:
(1) So requests before this Association has notice that such
original certificate has been acquired by a bona fide purchaser; and
(2) Files with this Association, unless waived by the
directors, an indemnity bond, with surety or sureties satisfactory to this
Association, in such sums as the directors may, in their discretion, deem
reasonably sufficient as indemnity against any loss or liability that this
Association may incur by reason of the issuance of each such new certificate;
and
(3) Satisfies any other reasonable requirements which may be
imposed by the directors, in their discretion.
ARTICLE EIGHT
INDEMNIFICATION AND INSURANCE
SECTION 1. To the fullest extent permitted by applicable law,
this Association shall indemnify or agree to indemnify any person who was or is
a party or is threatened to be made a party, to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, other than an action by or in the right of this Association,
by reason of the fact that he is or was a director or officer of this
Association, or is or was serving at the request of this Association as a
director, trustee, officer, employee, or agent of another corporation, domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, against expenses, including attorney's fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of this
Association and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of this
Association and, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. This Association shall indemnify or agree to
indemnify any person who was or is a party or is threatened to be made a party,
to any threatened, pending or completed action or suit by or in the right of
this Association to procure a judgment in its favor by reason of the fact that
he is or was a director or officer of this Association or is or was serving at
the request of this Association as a director, trustee, officer, employee, or
agent of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust or other enterprise, against expenses,
including attorney's fees, actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a
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manner he reasonably believed to be in or not opposed to the best interests of
this Association, except that no indemnification shall be made in respect of any
of the following:
(A) Any claim, issue or matter as to which such person is
adjudged to be liable for negligence or misconduct in the performance of his
duty to this Association unless, and only to the extent that, the Court of
Common Pleas of Belmont County, Ohio, or the court in which such action or suit
was brought determines upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the Court of
Common Pleas of Belmont County, Ohio, or such other court shall deem proper;
(B) Any action or suit in which the only liability asserted
against a director is pursuant to 1701.95 of the Ohio Revised Code.
SECTION 3. To the extent that a director or officer has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 1 or 2 of this Article Eight, or in defense
of any claim, issue, or matter therein, he shall be indemnified against
expenses, including attorney's fees, actually and reasonably incurred by him in
connection with the action, suit, or proceeding.
SECTION 4. Any indemnification under Sections 1 or 2 of this
Article Eight, unless ordered by a court, shall be made by this Association only
as authorized in the specific case upon a determination that indemnification of
the director or officer is proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 1 or 2 of this Article
Eight. Such determination shall be made as follows:
(A) By a majority vote of a quorum consisting of directors of
this Association who were not and are not parties to or threatened with any such
action, suit, or proceeding;
(B) If the quorum described in Subsection (A) of this Section
4 is not obtainable or if a majority vote of a quorum of disinterested directors
so directs, in a written opinion by independent legal counsel other than an
attorney, or a firm having associated with it an attorney, who has been retained
by or who has performed services for this Association or any person to be
indemnified within the past five years;
(C) By the shareholders;
(D) By the Court of Common Pleas of Belmont County, Ohio, or
the court in which such action, suit, or proceeding was brought.
Any determination made by the disinterested directors under
Subsection (A) of this Section 4 or by independent legal counsel under
Subsection (B) of this Section 4 shall be promptly communicated to the person
who threatened or brought the action or suit by or in the right of this
Association under Section 2 of this Article Eight, and within ten days after
receipt of such notification, such person shall have the right to petition the
Court of Common Pleas of Belmont County, Ohio, or the court in which such action
or suit was brought to review the reasonableness of such determination.
SECTION 5.
(A) Expenses, including attorney's fees, incurred by a
director in defending the action, suit, or proceeding shall be paid by this
Association as they are incurred, in advance of the final disposition of the
action, suit, or proceeding upon receipt of an undertaking by or on behalf of
the director in which he agrees to do both of the following:
(i)Repay such amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his action or
failure to act involved an act or omission undertaken with deliberate intent to
cause injury to this Association or undertaken with reckless disregard for the
best interests of this Association;
(ii) Reasonably cooperate with this Association
concerning the action, suit, or proceeding.
(B) Expenses, including attorney's fees, incurred by a
director, trustee, officer, employee, or agent in defending any action, suit, or
proceeding referred to in Section 2 of this Article Eight, may be paid by this
Association as they are
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incurred, in advance of the final disposition of the action, suit, or proceeding
as authorized by the directors in the specific case upon receipt of an
undertaking by or on behalf of the director, trustee, officer, employee, or
agent to repay such amount, if it ultimately is determined that he is not
entitled to be indemnified by this Association.
SECTION 6. The indemnification authorized by this Article
Eight shall not be exclusive of, and shall be in addition to, any other rights
granted to those seeking indemnification under the Articles or the Constitution
of this Association or any agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director or officer and shall inure to the benefit
of the heirs, executors, and administrators of such a person.
SECTION 7. This Association may purchase and maintain
insurance or furnish similar protection, including but not limited to trust
funds, letters of credit, or self-insurance, on behalf of or for any person who
is or was a director, officer, employee, or agent of this Association, or is or
was serving at the request of this Association as a director, trustee, officer,
employee, or agent of another corporation, domestic or foreign, nonprofit or for
profit, partnership, joint venture, trust, or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not this Association would have
the power to indemnify him against such liability under this section. Insurance
may be purchased from or maintained with a person in which this Association has
a financial interest.
SECTION 8. The authority of this Association to indemnify
persons pursuant to Sections 1 or 2 of this Article Eight does not limit the
payment of expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to Sections 5, 6 and 7 of this Article
Eight. Sections 1 and 2 of this Article Eight do not create any obligation to
repay or return payments made by this Association pursuant to Sections 5, 6 or 7
of this Article Eight.
SECTION 9. As used in this Article Eight, references to this
Association include all constituent corporations in a consolidation or merger
and the new or surviving corporation, so that any person who is or was a
director, officer, employee, or agent of such a constituent corporation, or is
or was serving at the request of such constituent corporation as a director,
trustee, officer, employee, or agent of another corporation, domestic or
foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, shall stand in the same position under this section with respect to
the new or surviving corporation as he would if he had served the new or
surviving corporation in the same capacity.
SECTION 10. Any action, suit or proceeding to determine a
claim for indemnification under this Article Eight may be maintained by the
person claiming such indemnification, or by the Association, in the Court of
Common Pleas of Belmont County, Ohio. This Association and (by claiming such
indemnification) each such person consent to the exercise of jurisdiction over
its or his person by the Court of Common Pleas of Belmont County, Ohio, in any
such action, suit or proceeding.
ARTICLE NINE
DISSOLUTION
SECTION 1. To dissolve this Association, a resolution in
writing asking for such dissolution shall be adopted by the board of directors
or requested in writing in the form of a resolution by the holders of at least
twenty-five percent of the voting shares of this Association.
SECTION 2. Upon the presentation to the board of directors of
one of the resolutions specified in Section 1 of this Article Nine, the board of
directors shall call a special meeting of the shareholders for the purpose of
considering and acting upon such resolution. If at such special meeting, the
holders of a majority of the voting shares of this Association entitled to vote
under the provisions of this Constitution vote for dissolution, the board of
directors shall take the necessary steps to wind up the affairs of this
Association, subject to the contract rights of its borrowers, in accordance with
statutory requirements existing at the date such action is taken.
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ARTICLE TEN
MISCELLANEOUS
SECTION 1. AMENDMENTS. This Constitution may be amended at any
annual or special meeting of the shareholders of this Association by the
affirmative vote of the holders of three-fifths of the shares of record
represented in person or by proxy at such meeting. All proposals to amend this
Constitution shall be presented in writing to the board of directors at a
regular meeting thereof at least thirty (30) days before such annual or special
meeting of the shareholders, and the amendment adopted shall be substantially
the same as proposed.
SECTION 2. ACTION BY SHAREHOLDERS OR DIRECTORS WITHOUT A
MEETING. Anything contained in this Constitution to the contrary
notwithstanding, any action which may be authorized or taken at a meeting of the
shareholders or of the directors or of a committee of the directors, as the case
may be, may be authorized or taken without a meeting with the affirmative vote
or approval of, and in a writing or writings signed by, all the shareholders who
would be entitled to notice of a meeting of the shareholders held for such
purpose, or all the directors, or all the members of such committee of the
directors, respectively, which writings shall be filed with or entered upon the
records of this Association.
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