[RP FINANCIAL, LC. LETTERHEAD]
December 15, 1999
Board of Directors
First Federal Savings and Loan Association of Olathe
100 East Park Street
Olathe, Kansas 66061
Re: Plan of Conversion: Subscription Rights
First Federal Savings and Loan Association of Olathe
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Gentlemen:
All capitalized terms not otherwise defined in this letter have the
meanings given such terms in the Plan of Conversion adopted by the Board of
Directors of First Federal Savings and Loan Association of Olathe, ("First
Federal" or the "Association") whereby the Association will convert from a
federally chartered mutual savings association to a federally chartered stock
savings association and issue all of the Association's outstanding capital stock
to First Federal of Olathe Bancorp, Inc. (the "Holding Company").
Simultaneously, the Holding Company will issue shares of common stock.
We understand that in accordance with the Plan of Conversion,
subscription rights to purchase shares of common stock in the Holding Company
are to be issued to: (1) Eligible Account Holders; (2) the Employee Stock
Ownership Plan; (3) Supplemental Eligible Account Holders; (4) Other Members;
and, (5) Officers, Directors and Employees. Based solely upon our observation
that the subscription rights will be available to such parties without cost,
will be legally non-transferable and of short duration, and will afford such
parties the right only to purchase shares of common stock at the same price as
will be paid by members of the general public in the community offering, but
without undertaking any independent investigation of state or federal law or the
position of the Internal Revenue Service with respect to this issue, we are of
the belief that, as a factual matter:
(1) the subscription rights will have no ascertainable market value;
and,
(2) the price at which the subscription rights are exercisable will
not be more or less than the pro forma market value of the shares
upon issuance.
Changes in the local and national economy, the legislative and
regulatory environment, the stock market, interest rates, and other external
forces (such as natural disasters or significant world events) may occur from
time to time, often with great unpredictability and may materially impact the
value of thrift stocks as a whole or the Holding Company's value alone.
Accordingly, no assurance can be given that persons who subscribe to shares of
common stock in the subscription offering will thereafter be able to buy or sell
such shares at the same price paid in the subscription offering.
Sincerely,
/s/ RP Financial, LC.
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RP FINANCIAL, LC.
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