PLAN OF CONVERSION AND REORGANIZATION
OF
WAYNE SAVINGS BANKSHARES, M.H.C.
TABLE OF CONTENTS
1. INTRODUCTION............................................................................................1
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2. DEFINITIONS.............................................................................................1
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3. PROCEDURES FOR CONVERSION...............................................................................5
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4. HOLDING COMPANY APPLICATIONS AND APPROVALS..............................................................7
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5. SALE OF SUBSCRIPTION SHARES.............................................................................7
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6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES........................................................8
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7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY.................................................8
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8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)........................................8
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9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY).................................................9
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10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY)..........................9
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11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY).................................................10
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12. COMMUNITY OFFERING.....................................................................................10
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13. SYNDICATED COMMUNITY OFFERING..........................................................................10
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14. LIMITATIONS ON PURCHASES...............................................................................11
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15. PAYMENT FOR HOLDING COMPANY COMMON STOCK...............................................................12
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16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS...........................................13
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17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT........................................14
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18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES......................................................14
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19. ESTABLISHMENT OF LIQUIDATION ACCOUNT...................................................................14
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20. VOTING RIGHTS OF STOCKHOLDERS..........................................................................15
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21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION.......................................................15
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22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION....................16
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23. TRANSFER OF DEPOSIT ACCOUNTS...........................................................................16
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24. REGISTRATION AND MARKETING.............................................................................16
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25. TAX RULINGS OR OPINIONS................................................................................16
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26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS..........................................................16
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27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY................................................17
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28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK...........................................................18
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29. CHARTER AND BYLAWS.....................................................................................18
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30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE..........................................................18
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31. EXPENSES OF CONVERSION.................................................................................18
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32. AMENDMENT OR TERMINATION OF PLAN.......................................................................18
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33. CONDITIONS TO CONVERSION...............................................................................19
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34. INTERPRETATION.........................................................................................19
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EXHIBIT A AGREEMENT OF MERGER BETWEEN WAYNE SAVINGS BANCSHARES, INC.,
WAYNE INTERIM I AND WAYNE SAVINGS COMMUNITY BANK
EXHIBIT B AGREEMENT OF MERGER BETWEEN WAYNE SAVINGS BANKSHARES, M.H.C.,
WAYNE SAVINGS INTERM SAVINGS BANK II AND WAYNE SAVINGS COMMUNITY
BANK
EXHIBIT C AGREEMENT OF MERGER BETWEEN WAYNE SAVINGS COMMUNITY BANK AND WAYNE
INTERIM III
EXHIBIT D CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY
EXHIBIT E BYLAWS OF THE HOLDING COMPANY
PLAN OF CONVERSION AND REORGANIZATION OF
WAYNE SAVINGS BANKSHARES, M.H.C.
1. INTRODUCTION
This Plan of Conversion and Reorganization (the "Plan") provides for
the conversion of Wayne Savings Bankshares, M.H.C., a federal mutual holding
company (the "Mutual Holding Company") into the capital stock form of
organization. The Mutual Holding Company currently owns a majority of the common
stock of Wayne Savings Bancshares, Inc., a federal corporation (the "Mid-Tier
Holding Company"), which owns 100% of the common stock of Wayne Savings
Community Bank (the "Bank"), an Ohio savings and loan association that is
headquartered in Wooster, Ohio. The purpose of the Conversion is to provide the
Bank and its stock holding company resulting from the conversion (the "Holding
Company") with greater operating flexibility and capital resources to respond to
changing regulatory and market conditions, and to effect corporate transactions,
including mergers and acquisitions. The Holding Company will offer for sale
Holding Company Common Stock upon the terms and conditions set forth herein to
Eligible Account Holders, the Employee Plans established by the Bank or the
Holding Company, Supplemental Eligible Account Holders and Other Members
according to the respective priorities set forth in this Plan. Any shares not
subscribed for by the foregoing classes of Persons will be offered for sale to
certain members of the public directly by the Holding Company through a
Community Offering or a Syndicated Community Offering or through an underwritten
firm commitment public offering, or through a combination thereof. As part of
the Conversion, each Minority Stockholder will receive Holding Company Common
Stock in exchange for Minority Shares. The Conversion will result in the voting
interests of the Mutual Holding Company's Members being transferred to Persons
who purchase Holding Company Common Stock in the Offering. The Conversion will
have no impact on depositors, borrowers or customers of the Bank. The Bank will
continue to be a member of the Federal Home Loan Bank System and all insured
savings deposits in the Bank will continue to be insured by the FDIC to the
extent provided by applicable law.
This Plan has been adopted by the Board of Directors of the Mutual
Holding Company, and must also be approved by (i) a majority of the total number
of votes entitled to be cast by Voting Members of the Mutual Holding Company at
a Special Meeting of Members to be called for that purpose, and (ii) at least
two-thirds of the outstanding common stock of the Mid-Tier Holding Company at
the Special Meeting of Stockholders, including at least a majority of the votes
cast, in person or by proxy, by Minority Stockholders. Prior to presenting this
Plan to the Voting Members and stockholders of the Mid-Tier Holding Company for
consideration, the Plan must be approved by the OTS.
2. DEFINITIONS
For the purposes of this Plan, the following terms have the following
meanings:
ACCOUNT HOLDER - Any Person holding a Deposit Account in the Bank.
ACTING IN CONCERT - The term Acting in Concert means (i) knowing
participation in a joint activity or interdependent 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 contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise. A
Person or company which acts in concert with another Person or company ("other
party") shall also be deemed to be acting in concert with any Person or company
who is also acting in concert with that other party, except that any
Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in
concert with its trustee or a Person who serves in a similar capacity solely for
the purpose of determining whether stock held by the trustee and stock held by
the plan will be aggregated.
AFFILIATE - Any Person that controls, is controlled by, or is under
common control with another Person.
APPRAISED VALUE RANGE - The range of the estimated consolidated pro
forma market value of the Holding Company, which shall also be equal to the
estimated pro forma market value of the total number of shares of Holding
Company Common Stock to be issued in the Conversion, as determined by the
Independent Appraiser prior to the
Subscription Offering and as it may be amended from time to time thereafter. The
maximum and minimum of the Appraised Value Range will vary within 15% above and
15% below, respectively, of the midpoint of the Appraised Value Range.
ASSOCIATE - The term Associate when used to indicate a relationship
with any Person, means (i) any corporation or organization (other than the
Mid-Tier Holding Company, the Bank or a majority owned subsidiary of the Bank)
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 for the purposes of this Plan relating to subscriptions in the
Offering the term "Associate" does not include any NonTax-Qualified Employee
Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan in which a
Person has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity, and except that for purposes of aggregating total
shares that may be held by Officers and Directors the term "Associate" does not
include any Tax-Qualified Employee Stock Benefit Plan, 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 of the Mid-Tier Holding Company, the
Bank or the Holding Company, or any of their parents or subsidiaries.
BANK - Wayne Savings Community Bank.
BANK MERGER - The merger of Interim with the Bank as set forth in this
Plan.
CODE - The Internal Revenue Code of 1986, as amended.
COMMUNITY - The Ohio Counties in which a branch office of the Bank or
Village Savings Bank is located.
COMMUNITY OFFERING - The offering for sale to certain members of the
general public directly by the Holding Company of shares not subscribed for in
the Subscription Offering.
CONTROL - (including the terms "controlled by", "controlling" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
CONVERSION - The conversion and reorganization of the Mutual Holding
Company to stock form pursuant to this Plan, and all steps incident or necessary
thereto, include the Exchange Offer and the Offering.
DEPOSIT ACCOUNT - The term Deposit Account means any withdrawable
account as defined in Section 561.42 of the Rules and Regulations of the OTS,
and shall include all demand deposit accounts and certificates of deposit.
DIRECTOR - A member of the Board of Directors of the Bank, the Mid-Tier
Holding Company, the Holding Company or the Mutual Holding Company, as
appropriate in the context.
ELIGIBLE ACCOUNT HOLDER - Any Person holding a Qualifying Deposit on
the Eligibility Record Date for purposes of determining subscription rights and
establishing subaccount balances in the Liquidation Account.
ELIGIBILITY RECORD DATE - June 30, 2000, the date for determining
Eligible Account Holders of the Bank.
EMPLOYEES - All Persons who are employed by the Bank, the Mid-Tier
Holding Company or the Mutual Holding Company.
EMPLOYEE PLANS - Any Tax-Qualified Employee Stock Benefit Plan of the
Bank or the Holding Company, including any ESOP and 401(k) Plan.
ESOP - Any Employee Stock Ownership Plan and related trust of the Bank
or the Holding Company.
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EXCHANGE OFFER - The offer of Holding Company Common Stock to Minority
Stockholders in exchange for Minority Shares.
EXCHANGE RATIO - The rate at which shares of Holding Company Common
Stock are exchanged for Minority Shares upon consummation of the Conversion. The
Exchange Ratio shall be determined as of the closing of the Conversion and shall
be the rate that will result in the Minority Stockholders owning in the
aggregate the same percentage of the outstanding shares of Holding Company
Common Stock immediately upon completion of the Conversion (without giving
effect to any shares purchased in the Offering and any cash issued in lieu of
fractional shares), as the percentage of Mid-Tier Holding Company common stock
owned by them in the aggregate immediately prior to the consummation of the
Conversion.
EXCHANGE SHARES - Shares of Holding Company Common Stock issued to
Minority Stockholders in exchange for Minority Shares.
FDIC - The Federal Deposit Insurance Corporation.
HOLDING COMPANY - The Delaware corporation formed for the purpose of
acquiring all of the shares of capital stock of the Bank in connection with the
Conversion. The Holding Company will be the successor to the Mid-Tier Holding
Company. Shares of Holding Company Common Stock will be issued in the Conversion
to Participants and others in the Conversion.
HOLDING COMPANY COMMON STOCK - The common stock, par value $.10 per
share, of the Holding Company.
INDEPENDENT APPRAISER - The appraiser retained by the Mutual Holding
Company and the Bank to prepare an appraisal of the pro forma market value of
the Holding Company Common Stock issued in the Conversion.
INTERIM - Interim III, the interim federal savings bank subsidiary of
the Holding Company established to effect the Conversion.
LIQUIDATION ACCOUNT - One or more accounts established in accordance
with 12 C.F.R. 563b.3(f) and OTS policy.
MAJORITY OWNERSHIP INTEREST - The percentage of common stock of the
Mid-Tier Holding Company owned by the Mutual Holding Company immediately prior
to the completion of the Conversion.
MEMBER - Any Person or entity who qualifies as a member of the Mutual
Holding Company pursuant to its charter and bylaws.
MHC MERGER - The conversion of the Mutual Holding Company into an
interim federal stock savings bank and subsequent merger with and into the Bank
as set forth in this Plan.
MID-TIER HOLDING COMPANY - Wayne Savings Bancshares, Inc., the
federal mid-tier stock holding company that owns 100% of the Bank's common
stock, and any successor thereto.
MID-TIER MERGER - The conversion of the Mid-Tier Holding Company into
an interim federal stock savings bank and subsequent merger with and into the
Bank as set forth in this Plan.
MINORITY SHARE(S) - Any outstanding common stock of the Mid-Tier
Holding Company, or shares of common stock of the Mid-Tier Holding Company
issuable upon the exercise of options or grant of stock awards, in each case
held by persons other than the Mutual Holding Company.
MINORITY STOCKHOLDER - Any owner of Minority Shares.
MUTUAL HOLDING COMPANY - Wayne Savings Bankshares, M.H.C., the mutual
holding company of the Bank.
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OTS - The Office of Thrift Supervision of the Department of the
Treasury and any successor thereto.
OFFERING - The offering for sale, pursuant to this Plan, of Holding
Company Common Stock in a Subscription Offering, Community Offering, and
Syndicated Community Offering (or underwritten public offering), as the case may
be. The term "Offering" does not include the Holding Company Common Stock issued
in exchange for Minority Shares pursuant to this Plan.
OFFERING RANGE - The number of shares of Holding Company Stock offered
for sale in the Offering multiplied by the Subscription Price. The Offering
Range shall be equal to the Appraised Value Range multiplied by the Majority
Ownership Percentage.
OFFICER - An executive officer of the Bank, the Mid-Tier Holding
Company, the Holding Company or the Mutual Holding Company as appropriate in the
context, which includes the Chief Executive Officer, President, Senior Vice
Presidents, Executive Vice President in charge of principal business functions,
Secretary and Controller and any Person performing functions similar to those
performed by the foregoing persons.
ORDER FORM - Any form (together with any attached cover letter and/or
certifications or acknowledgments), sent by the Bank to any Participant or
Person containing among other things a description of the alternatives available
to such Person under the Plan and by which any such Person may make elections
regarding purchases of Holding Company Common Stock in the Subscription and
Community Offerings.
OTHER MEMBER - Any Member on the Voting Record Date who is not an
Eligible Account Holder or Supplemental Eligible Account Holder.
PARTICIPANT - Any Eligible Account Holder, Employee Plan, Supplemental
Eligible Account Holder, or Other Member.
PERSON - An individual, a corporation, a partnership, an association, a
joint stock company, a trust (including Individual Retirement Accounts and KEOGH
Accounts), any unincorporated organization, a government or political
subdivision thereof or any other entity.
PLAN - This Plan of Conversion and Reorganization of the Mutual Holding
Company as it exists on the date hereof and as it may hereafter be amended in
accordance with its terms.
PROSPECTUS - The one or more documents used in offering the Holding
Company Common Stock in the Offering and the Exchange Offer.
QUALIFYING DEPOSIT - The aggregate balance of all Deposit Accounts in
the Bank of (i) an Eligible Account Holder at the close of business on the
Eligibility Record Date, provided such aggregate balance is not less than $50,
and (ii) a Supplemental Eligible Account Holder at the close of business on the
Supplemental Eligibility Record Date, provided such aggregate balance is not
less than $50.
RESIDENT - Any Person who occupies a dwelling within the Community, has
a present intent to remain within the Community for a period of time, and
manifests the genuineness of that intent by establishing an ongoing physical
presence within the Community together with an indication that such presence
within the Community is something other than merely transitory in nature. To the
extent the Person is a corporation or other business entity, the principal place
of business or headquarters shall be in the Community. To the extent a Person is
a personal benefit plan, the circumstances of the beneficiary shall apply with
respect to this definition. In the case of all other benefit plans,
circumstances of the trustee shall be examined for purposes of this definition.
The Bank may utilize deposit or loan records or such other evidence provided to
it to make a determination as to whether a Person is a resident. In all cases,
however, such a determination shall be in the sole discretion of the Mutual
Holding Company and the Bank. A Participant or Person must be a "Resident" for
purposes of determining whether such Person "resides" in the Community as such
term is used in this Plan.
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SEC - The Securities and Exchange Commission.
SPECIAL MEETING OF MEMBERS - The special meeting of Members of the
Mutual Holding Company and any adjournments thereof held to consider and vote
upon this Plan.
SPECIAL MEETING OF STOCKHOLDERS - The special meeting of stockholders
of the Mid-Tier Holding Company and any adjournments thereof held to consider
and vote upon the Plan.
SUBSCRIPTION OFFERING - The offering of Subscription Shares to
Participants.
SUBSCRIPTION PRICE - The price per Subscription Share to be paid by
Participants in the Subscription Offering and by Persons in the Community
Offering and any Syndicated Community Offering. The Subscription Price will be
determined by the Board of Directors of the Mutual Holding Company and fixed
prior to the commencement of the Subscription Offering.
SUBSCRIPTION SHARES - Shares of Holding Company Common Stock
issued in the Subscription Offering. Subscription Shares do not include Exchange
Shares.
SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER - Any Person, other than Directors
and Officers of the Bank, the Mid-Tier Holding Company or the Mutual Holding
Company and their Associates, holding a Qualifying Deposit on the Supplemental
Eligibility Record Date, who is not an Eligible Account Holder.
SUPPLEMENTAL ELIGIBILITY RECORD DATE - The date for determining
Supplemental Eligible Account Holders, which shall be the last day of the
calendar quarter preceding OTS approval of the application for conversion.
SYNDICATED COMMUNITY OFFERING - The offering of Holding Company Common
Stock following the Subscription and Community Offerings through a syndicate of
broker-dealers.
TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN - Any defined benefit plan or
defined contribution plan, such as an employee stock ownership plan, stock bonus
plan, profit-sharing plan or other plan, which, with its related trust, meets
the requirements to be "qualified" under Section 401 of the Internal Revenue
Code. The Bank may make scheduled discretionary contributions to a tax-qualified
employee stock benefit plan, PROVIDED such contributions do not cause the Bank
to fail to meet its regulatory capital requirement. A "NonTax-Qualified Employee
Stock Benefit Plan" is any defined benefit plan or defined contribution plan
which is not so qualified.
VOTING MEMBER - Any Person who at the close of business on the Voting
Record Date is entitled to vote as a Member of the Mutual Holding Company
pursuant to its charter and bylaws.
VOTING RECORD DATE - The date fixed by the Directors in accordance with
OTS regulations for determining eligibility to vote at the Special Meeting of
Members and/or the Special Meeting of Stockholders.
3. PROCEDURES FOR CONVERSION
A. After approval of the Plan by the Boards of Directors of the
Bank and the Mutual Holding Company, the Plan together with all other requisite
material shall be submitted to the OTS for its approval. Notice of the adoption
of the Plan by the Boards of Directors of the Bank, the Mid-Tier Holding Company
and the Mutual Holding Company and the submission of the Plan to the OTS for its
approval will be published in a newspaper having general circulation in each
community in which an office of the Bank is located, and copies of the Plan will
be made available at each office of the Bank for inspection by the Members. Upon
receipt of notice from the OTS to do so, the Mutual Holding Company also will
publish a notice of the filing with the OTS of an application to convert in
accordance with the provisions of this Plan.
B. Promptly following approval by the OTS, the Plan will be
submitted to a vote of (i) the Voting Members at the Special Meeting of Members,
and (ii) the Stockholders of the Mid-Tier Holding Company at the Special
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Meeting of Stockholders. The Mutual Holding Company will mail to all Members as
of the Voting Record Date, at their last known address appearing on the records
of the Bank, a proxy statement in either long or summary form describing the
Plan which will be presented to a vote of the Members at the Special Meeting of
Members. The Mid-Tier Holding Company also will mail to all stockholders as of
the Voting Record Date, a proxy statement describing the Plan and the
Conversion, which will be presented to a vote of stockholders at the Special
Meeting of Stockholders. The Holding Company will also mail to all Participants
either a Prospectus and Order Form for the purchase of Subscription Shares or a
letter informing them of their right to receive a Prospectus and Order Form and
a postage prepaid card to request such materials, subject to other provisions of
this Plan. In addition, all Participants will receive, or be given the
opportunity to request by either returning a postage prepaid card which may be
distributed with the proxy statement or by letter addressed to the Bank's
Secretary, a copy of the Plan as well as the certificate of incorporation or
bylaws of the Holding Company. Upon approval of the Plan by (i) a majority of
the total number of votes entitled to be cast by the Voting Members, (ii) at
least two-thirds of the outstanding common stock of the Mid-Tier Holding
Company, and (iii) a majority vote of Minority Stockholders present in person or
by proxy, the Mutual Holding Company, the Holding Company and the Bank will take
all other necessary steps pursuant to applicable laws and regulations to
consummate the Conversion and Offering. The Conversion must be completed within
24 months of the approval of the Plan by the Voting Members, unless a longer
time period is permitted by governing laws and regulations.
C. The Conversion will be effected as follows, or in any other
manner which is consistent with the purposes of this Plan and applicable laws
and regulations. The choice of which method to use to effect the Conversion will
be made by the Board of Directors of the Mutual Holding Company immediately
prior to the closing of the Conversion. Each of the steps set forth below shall
be deemed to occur in such order as is necessary to consummate the Conversion
pursuant to the Plan, the intent of the Boards of Directors of the Mutual
Holding Company and the Bank, and OTS regulations. Approval of the Plan by the
Members and by the stockholders of the Mid-Tier Holding Company shall also
constitute approval of each of the transactions necessary to implement the Plan.
(1) The Bank will establish the Holding Company as a first-tier
Delaware chartered stock holding company subsidiary.
(2) The Holding Company will charter Interim as a wholly-owned
subsidiary.
(3) The Mid-Tier Holding Company will convert into or exchange its
charter for an interim federal stock savings bank (which shall
continue to be referred to as "Mid-Tier Holding Company") and
will merge with and into the Bank (the "Mid-Tier Merger") with
the Bank as the resulting entity, pursuant to the Agreement of
Merger attached hereto as Exhibit A, whereby the Mid-Tier Holding
Company stockholders will constructively receive shares of Bank
common stock in exchange for their Mid-Tier Holding Company
common stock.
(4) The Mutual Holding Company will exchange its charter for an
interim stock savings bank charter and simultaneously merge with
and into the Bank (the "MHC Merger") pursuant to the Agreement of
Merger attached hereto as Exhibit B between the Mutual Holding
Company and the Bank, whereby the shares of common stock of the
Bank constructively held by the Mutual Holding Company will be
canceled and each Eligible Account Holder and Supplemental
Eligible Account Holder will receive an interest in a Liquidation
Account of the Bank in exchange for such person's interest in the
Mutual Holding Company.
(5) Contemporaneously with the MHC Merger, Interim will merge with
and into the Bank with the Bank as the surviving entity (the
"Bank Merger") pursuant to the Agreement of Merger attached
hereto as Exhibit C between the Bank and Interim, whereby the
Holding Company will become the sole stockholder of the Bank.
Constructive shareholders of the Bank (i.e., Minority
Stockholders) will exchange the shares of Bank common stock that
they constructively received in the Mid-Tier Merger for Holding
Company Common Stock.
(6) Contemporaneously with the Bank Merger, the Holding Company will
offer for sale its Common Stock in the Offering.
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D. As part of the Conversion, each Minority Share shall
automatically, without further action of the holder thereof, be converted into
and become the right to receive Holding Company Common Stock based upon the
Exchange Ratio. The basis for exchange of Minority Shares for Holding Company
Common Stock shall be fair and reasonable. Options to purchase shares of
Mid-Tier Holding Company common stock which are outstanding immediately prior to
the consummation of the Conversion shall be converted into options to purchase
shares of Holding Company Common Stock, with the number of shares subject to the
option and the exercise price per share to be adjusted based upon the Exchange
Ratio so that the aggregate exercise price remains unchanged, and with the
duration of the option remaining unchanged.
E. Concurrently with the filing of the Conversion application
with the OTS, the Holding Company shall also seek to register the Holding
Company Common Stock with the SEC and any appropriate state securities
authorities. In addition, the Mid-Tier Holding Company shall prepare preliminary
proxy materials as well as other applications and information for review by the
SEC and the OTS in connection with the solicitation of stockholder approval of
the Plan.
F. The Certificate of Incorporation of the Holding Company
(the "Certificate") shall read substantially in the form of Exhibit D.
G. The home office and branch offices of the Bank shall be
unaffected by the Conversion. The executive offices of the Holding Company shall
be located at the current offices of the Mutual Holding Company.
4. HOLDING COMPANY APPLICATIONS AND APPROVALS
The Board of Directors of the Holding Company and the Mutual Holding
Company will take all necessary steps to convert the Mutual Holding Company to
stock form, form the Holding Company and complete the Offering. The Holding
Company shall make timely applications for any requisite regulatory approvals,
including an Application on Form AC and a Holding Company Application on Form
H-(e)1, to be filed with the OTS and a Registration Statement to be filed with
the SEC.
5. SALE OF SUBSCRIPTION SHARES
The Subscription Shares will be offered simultaneously in the
Subscription Offering to the Participants in the respective priorities set forth
in this Plan. Subscription Shares will be available for purchase only in the
priorities set forth in this Plan. The Subscription Offering may begin as early
as the mailing of the proxy statement for the Special Meeting of Members. The
Holding Company Common Stock will not be insured by the FDIC. The Bank will not
knowingly lend funds or otherwise extend credit to any Person to purchase shares
of Holding Company Common Stock.
Any Subscription Shares not subscribed for in the Subscription Offering
may be offered for sale in the Community Offering. The Subscription Offering may
begin prior to the Special Meeting of Members and, in that event, the Community
Offering may also begin prior to the Special Meeting of Members. The offer and
sale of Holding Company Common Stock prior to the Special Meeting of Members
will, however, be conditioned upon approval of the Plan by the Voting Members
and stockholders of the Mid-Tier Holding Company.
If feasible, any shares of Holding Company Common Stock remaining after
the Subscription and Community Offerings, will be offered for sale in a
Syndicated Community Offering or underwritten public offering in a manner that
will achieve the widest distribution of the Holding Company Common Stock. The
sale of all Holding Company Common Stock purchased in the Subscription and
Community Offerings will be consummated simultaneously with the sale of any
Holding Company Common Stock in the Syndicated Community Offering or
underwritten public offering.
6. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES
The total number of shares (or a range thereof) of Holding Company
Common Stock to be offered for sale in the Offering will be determined jointly
by the Boards of Directors of the Mid-Tier Holding Company and the Holding
Company immediately prior to the commencement of the Subscription and Community
Offerings, and will be equal to the Offering Range divided by the Subscription
Price. The Offering Range will be equal to the Appraised Value Range
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multiplied by the Majority Ownership Interest. The estimated pro forma
consolidated market value of the Holding Company will be subject to adjustment
within the Appraised Value Range if necessitated by market or financial
conditions, with the approval of the OTS, if necessary, and the maximum of the
Appraised Value Range may be increased by up to 15% subsequent to the
commencement of the Subscription and Community Offerings to reflect changes in
market and financial conditions. The number of shares of Holding Company Common
Stock issued in the Conversion will be equal to the estimated pro forma
consolidated market value of the Holding Company, as may be amended, divided by
the Subscription Price, and the number of shares of Holding Company Common Stock
sold in the Offering will be equal to the product of (i) the estimated pro forma
consolidated market value of the Holding Company, as may be amended, divided by
the Subscription Price, and (ii) the Majority Ownership Interest.
In the event that the Subscription Price multiplied by the number of
shares of Holding Company Common Stock to be issued in the Conversion is below
the minimum of the Appraised Value Range, or materially above the maximum of the
Appraised Value Range, a resolicitation of purchasers may be required, PROVIDED
that up to a 15% increase above the maximum of the Appraised Value Range will
not be deemed material so as to require a resolicitation. Any such
resolicitation shall be effected in such manner and within such time as the Bank
and the Mutual Holding Company shall establish, with the approval of the OTS if
required.
Notwithstanding the foregoing, shares of Holding Company Common Stock
will not be issued unless, prior to the consummation of the Conversion, the
Independent Appraiser confirms to the Bank, the Mutual Holding Company, the
Holding Company and to the OTS that, to the best knowledge of the Independent
Appraiser, nothing of a material nature has occurred which, taking into account
all relevant factors, would cause the Independent Appraiser to conclude that the
number of shares of Holding Company Common Stock issued in the Conversion
multiplied by the Subscription Price is incompatible with its estimate of the
aggregate pro forma consolidated market value of the Holding Company. An
increase in the aggregate value of the Holding Company Common Stock by up to 15%
above the maximum of the Appraised Value Range, would not be deemed to be
material. If such confirmation is not received, the Holding Company may cancel
the Offering, extend the Conversion, establish a new Subscription Price and/or
Appraised Value Range and reopen or hold a new Offering, or take such other
action as the OTS may permit.
The Holding Company Common Stock to be issued in the Conversion shall
be fully paid and nonassessable.
7. RETENTION OF CONVERSION PROCEEDS BY THE HOLDING COMPANY
The Holding Company will apply to the OTS to retain up to 50% of the
proceeds of the Offering. The Holding Company believes that the Offering
proceeds will provide economic strength to the Holding Company and the Bank in a
highly competitive financial services industry, and would facilitate the
possible expansion through acquisitions of other financial institutions,
possible diversification into other related businesses and for other business
and investment purposes, including the possible payment of dividends and future
repurchases of the Holding Company Common Stock.
8. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY)
A. Each Eligible Account Holder shall receive, without payment,
nontransferable subscription rights to subscribe in the Subscription Offering
for a number of shares equal to up to the greater of 25,000 shares, .10% of the
total number of shares of Holding Company Common Stock issued in the Offering,
or fifteen times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Holding Company Common Stock issued in
the Offering by a fraction, the numerator of which is the amount of the Eligible
Account Holder's Qualifying Deposit and the denominator is the total amount of
Qualifying Deposits of all Eligible Account Holders, in each case on the
Eligibility Record Date, subject to the provisions of Section 14.
B. In the event that Eligible Account Holders exercise subscription
rights for a number of Subscription Shares in excess of the total number of such
shares eligible for subscription, the Subscription Shares shall be allocated
among the subscribing Eligible Account Holders so as to permit each subscribing
Eligible Account Holder to purchase a number of shares sufficient to make his or
her total allocation of Subscription Shares equal to the lesser of 100 shares or
the number of shares for which such Eligible Account Holder has subscribed. Any
remaining shares will be allocated among the subscribing Eligible Account
Holders whose subscriptions remain unsatisfied in the proportion that the
8
amount of the Qualifying Deposit of each Eligible Account Holder whose
subscription remains unsatisfied bears to the total amount of the Qualifying
Deposits of all Eligible Account Holders whose subscriptions remain unsatisfied.
If the amount so allocated exceeds the amount subscribed for by any one or more
Eligible Account Holders, the excess shall be reallocated (one or more times as
necessary) among those Eligible Account Holders whose subscriptions are still
not fully satisfied on the same basis until all available shares have been
allocated.
C. Subscription rights of Directors, Officers and their Associates as
Eligible Account Holders which are based on deposits made by such Persons during
the twelve (12) months preceding the Eligibility Record Date shall be
subordinated to the subscription rights of all other Eligible Account Holders.
9. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)
If Subscription Shares remain available after all subscriptions of
Eligible Account Holders have been satisfied, the Employee Plans of the Holding
Company and the Bank shall receive, without payment, subscription rights to
purchase in the aggregate up to 8% of the total number of shares of Holding
Company Common Stock issued in the Offering. Management shall determine the
total amount of subscription rights that the Employee Plans shall exercise, and
number of shares for which the Employee Plans shall subscribe, which amount
shall be 8% or less. The Employee Plans may purchase any shares of Holding
Company Common Stock to be issued in the Offering as a result of an increase in
the maximum of the Appraised Value Range after commencement of the Subscription
Offering and prior to completion of the Conversion, notwithstanding the
subscription rights of Eligible Account Holders. Consistent with applicable laws
and regulations and practices and policies of the OTS, the Employee Plans may
use funds contributed by the Holding Company or the Bank and/or borrowed from an
independent financial institution to exercise such subscription rights, and the
Holding Company and the Bank may make scheduled discretionary contributions
thereto, provided that such contributions do not cause the Holding Company or
the Bank to fail to meet any applicable regulatory capital requirements. The
Employee Plans shall not be deemed to be Associates or Affiliates of or Persons
Acting in Concert with any Director or Officer of the Holding Company or the
Bank.
10. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD
PRIORITY)
A. Each Supplemental Eligible Account Holder shall receive, without
payment, nontransferable subscription rights to subscribe in the Subscription
Offering for a number of shares equal to up to the greater of 25,000 shares,
.10% of the total number of shares of Holding Company Common Stock issued in the
Offering, or fifteen times the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of Holding Company Common
Stock issued in the Offering by a fraction, the numerator of which is the amount
of the Supplemental Eligible Account Holder's Qualifying Deposit and the
denominator 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 availability of sufficient shares after filling in full all
subscription orders of the Eligible Account Holders and Employee Plans and to
the purchase limitations specified in Section 14.
B. In the event that Supplemental Eligible Account Holders exercise
subscription rights for a number of Subscription Shares in excess of the total
number of such shares eligible for subscription, the Subscription Shares shall
be allocated among the subscribing Supplemental Eligible Account Holders so as
to permit each such subscribing Supplemental Eligible Account Holder, to the
extent possible, to purchase a number of shares sufficient to make his or her
total allocation of Subscription Shares equal to the lesser of 100 shares or the
number of shares for which each such Supplemental Eligible Account Holder has
subscribed. Any remaining shares will be allocated among the subscribing
Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in
the proportion that the amount of the Qualifying Deposit of each such
Supplemental Eligible Account Holder bears to the total amount of the Qualifying
Deposits of all Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied. If the amount so allocated exceeds the amount subscribed for by any
one or more Supplemental Eligible Account Holders, the excess shall be
reallocated (one or more times as necessary) among those Supplemental Eligible
Account Holders whose subscriptions are still not fully satisfied on the same
basis until all available shares have been allocated or all subscriptions
satisfied.
9
11. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY)
A. Each Other Member shall receive, without payment, nontransferable
subscription rights to subscribe in the Subscription Offering for a number of
Subscription Shares equal to up to the greater of 25,000 shares, or .10% of the
total number of shares of Holding Company Common Stock issued in the Offering,
subject to the availability of sufficient shares after filling in full all
subscription orders of Eligible Account Holders, Employee Plans and Supplemental
Eligible Account Holders and to the purchase limitations specified in Section
14.
B. In the event that such Other Members subscribe for a number of
Subscription Shares which, when added to the Subscription Shares subscribed for
by the Eligible Account Holders, Employee Plans and Supplemental Eligible
Account Holders, is in excess of the total number of Subscription Shares to be
issued, the subscriptions of such Other Members will be allocated to Other
Members in proportion to the amounts of their relative subscriptions.
12. COMMUNITY OFFERING
If less than the total number of shares of Holding Company Common Stock
to be sold in the Offering are subscribed for in the Subscription Offering,
shares remaining unsubscribed for may be made available for purchase in the
Community Offering to members of the general public. In the Community Offering,
any Person may purchase up to 25,000 shares, subject to the overall purchase
limitations specified in Section 14. The shares may be made available in the
Community Offering through a direct community marketing program which may
provide for a broker, dealer, consultant or investment banking firm experienced
and expert in the sale of savings institutions securities. Such entities may be
compensated on a fixed fee basis or on a commission basis, or a combination
thereof. In the event orders for Holding Company Common Stock in the Community
Offering exceed the number of shares available for sale, shares may be allocated
(to the extent shares remain available) first to cover orders of Minority
Stockholders as of the Voting Record Date, next to cover orders of natural
persons residing in the Community, and thereafter to cover orders of other
members of the general public. In the event orders for Holding Company Common
Stock in any of these categories exceed the number of shares available for sale,
shares any be allocated on a pro rata basis within a category based on the
amount of the respective orders. The Holding Company shall make the distribution
of Holding Company Common Stock to be sold in the Community Offering in such a
manner as to promote a wide distribution of the Holding Company Common Stock.
The Holding Company reserves the right to reject any or all orders, in whole or
in part, which are received in the Community Offering.
13. SYNDICATED COMMUNITY OFFERING
If feasible, the Board of Directors may determine to offer for sale in
a Syndicated Community Offering shares of Holding Company Common Stock not
purchased in the Subscription and Community Offerings, subject to such terms,
conditions and procedures as may be determined by the Holding Company, in a
manner that will achieve the widest distribution of the Holding Company Common
Stock, subject to the right of the Bank to accept or reject in whole or in part
any subscriptions in the Syndicated Community Offering. In the Syndicated
Community Offering, any Person may purchase up to 25,000 shares, subject to the
overall purchase limitations specified in Section 14. Provided the Subscription
Offering has begun, the Bank may begin the Syndicated Community Offering at any
time after the mailing to the Members of the proxy statement to be used in
connection with the Special Meeting of Members, PROVIDED that the completion of
the offer and sale of Holding Company Common Stock in the Conversion shall be
conditioned upon the approval of this Plan by the Voting Members. If the
Syndicated Community Offering does not begin pursuant to the provisions of the
preceding sentence, the Syndicated Community Offering will begin as soon as
practicable following the date upon which the Subscription and Community
Offerings terminate.
Alternatively, if a Syndicated Community Offering is not held, the Bank
shall have the right to sell any shares of Holding Company Common Stock
remaining following the Subscription and Community Offerings in an underwritten
firm commitment public offering. The provisions of Section 14 shall not be
applicable to sales to underwriters for purposes of such an offering but shall
be applicable to the sales by the underwriters to the public. The price to be
paid by the underwriters in such an offering shall be equal to the Subscription
Price less an underwriting discount to be negotiated among such underwriters and
the Bank, which will in no event exceed an amount deemed to be acceptable by the
OTS.
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If for any reason a Syndicated Community Offering or an underwritten
firm commitment public offering of shares of Holding Company Common Stock not
sold in the Subscription and Community Offerings cannot be effected, or in the
event that any insignificant residue of shares of Holding Company Common Stock
is not sold in the Subscription and Community Offerings or in the Syndicated
Community or underwritten firm commitment public offering, other arrangements
will be made for the disposition of unsubscribed shares by the Bank, if
possible. Such other purchase arrangements will be subject to the approval of
the OTS.
14. LIMITATIONS ON PURCHASES
The following limitations shall apply to all purchases of shares of
Holding Company Common Stock in the Conversion:
A. The maximum number of shares of Holding Company Common Stock which
may be subscribed for or purchased in all categories in the Offering by any
Person or Participant together with any Associate or group of Persons Acting in
Concert shall not exceed 25,000 shares of Holding Company Common Stock, except
for the Employee Plans which may subscribe for up to 8% of the Holding Company
Common Stock issued in the Offering (including shares issued in the event of an
increase in the maximum of the Offering Range of up to15%).
B. The maximum number of shares of Holding Company Common Stock which
may be purchased in all categories of the Offering by Officers and Directors and
their Associates in the aggregate, when combined with Exchange Shares received
by such persons, shall not exceed 29% of the shares of Holding Company Common
Stock issued in the Conversion.
C. A minimum of 25 shares of Holding Company Common Stock must be
purchased by each Person purchasing shares in the Offering to the extent those
shares are available; PROVIDED, HOWEVER, that in the event the minimum number of
shares of Holding Company Common Stock purchased times the price per share
exceeds $500, then such minimum purchase requirement shall be reduced to such
number of shares which when multiplied by the price per share shall not exceed
$500, as determined by the Board.
D. The maximum number of shares of Holding Company Common Stock which
may be subscribed for or purchased in all categories of the Offering by any
Person or Participant together with any Associate or group of Persons Acting in
Concert, combined with Exchange Shares received by any such Person or
Participant together with any Associate or group of Persons Acting in Concert,
shall not exceed 5% of the shares of Holding Company Common Stock, except for
the Employee Plans which may subscribe for up to 8% of the shares of Holding
Company Common Stock issued in the Offering (including shares issued in the
event of an increase in the maximum of the Offering Range of 15%).
If the number of shares of Holding Company Common Stock otherwise
allocable pursuant to Sections 8 through 13, inclusive, to any Person or that
Person's Associates would be in excess of the maximum number of shares permitted
as set forth above, the number of shares of Holding Company Common Stock
allocated to each group consisting of a Person and that Person's Associates
shall be reduced so that the aggregate allocation to that Person and his or her
Associates complies with the above limits.
Depending upon market or financial conditions, the Board of Directors
of the Holding Company, with the approval of the OTS and without further
approval of the Members, may decrease or further increase the purchase
limitations in this Plan, PROVIDED that the maximum purchase limitations may not
be increased to a percentage in excess of 5% of the shares issued in the
Conversion except as provided below. If the Holding Company increases the
maximum purchase limitations, the Holding Company is only required to resolicit
Persons who subscribed in the Subscription Offering for the maximum purchase
amount and may, in the sole discretion of the Holding Company, resolicit certain
other large subscribers. In the event that the maximum purchase limitation is
increased to 5% of the shares issued in the Conversion, such limitation may be
further increased to 9.99% of the shares issued in the Conversion, PROVIDED that
orders for Holding Company Common Stock exceeding 5% of the shares of Holding
Company Common Stock issued in the Conversion shall not exceed in the aggregate
10% of the total shares of Holding Company Common Stock issued in the
Conversion. Requests to purchase additional shares of the Holding Company Common
Stock in the event that the
11
purchase limitation is so increased will be determined by the Board of Directors
of the Holding Company in its sole discretion. In the event of an increase in
the total number of shares offered in the Subscription Offering due to an
increase in the maximum of the Offering Range of up to 15% (the "Adjusted
Maximum"), the additional shares will be used in the following order of
priority: (i) to fill the Employee Plans' subscription to the Adjusted Maximum;
(ii) in the event that there is an oversubscription at the Eligible Account
Holder, Supplemental Eligible Account Holder or Other Member levels, to fill
unfulfilled subscriptions of such subscribers according to such respective
priorities; and (iii) to fill unfulfilled subscriptions in the Community
Offering with preference given first to Minority Stockholders as of the Voting
Record Date and then to natural persons residing in the Community.
For purposes of this Section 14, the Directors of the Bank, the
Mid-Tier Holding Company and the Holding Company shall not be deemed to be
Associates or a group affiliated with each other or otherwise Acting in Concert
solely as a result of their being Directors of the Bank, the Mid-Tier Holding
Company, the Mutual Holding Company or the Holding Company.
Each Person purchasing Holding Company Common Stock in the Conversion
shall be deemed to confirm that such purchase does not conflict with the above
purchase limitations contained in this Plan.
15. PAYMENT FOR HOLDING COMPANY COMMON STOCK
All payments for Holding Company Common Stock purchased in the
Subscription and Community Offerings must be delivered in full to the Holding
Company, together with a properly completed and executed Order Form, on or prior
to the expiration date of the Offering; PROVIDED, HOWEVER, that if the Employee
Plans subscribe for shares during the Subscription Offering, such plans will not
be required to pay for the shares at the time they subscribe but rather may pay
for such shares of Holding Company Common Stock subscribed for by such plans at
the Subscription Price upon consummation of the Conversion. Notwithstanding the
foregoing, the Holding Company shall have the right, in its sole discretion, to
permit institutional investors to submit contractually irrevocable orders in the
Offering and to thereafter submit payment by wire transfer for the Holding
Company Common Stock for which they are subscribing in the Offering at any time
prior to 48 hours before the completion of the Conversion, unless such 48 hour
period is waived by the Holding Company in its sole discretion.
Payment for Holding Company Common Stock subscribed for shall be made
either by check, money order or bank draft. Alternatively, subscribers in the
Subscription and Community Offerings may pay for the shares for which they have
subscribed by authorizing the Bank on the Order Form to make a withdrawal from
the types of Deposit Accounts at the Bank indicated on the Order Form in an
amount equal to the Subscription Price of such shares. Such authorized
withdrawal, whether from a savings passbook or certificate account, shall be
without penalty as to premature withdrawal. If the authorized withdrawal is from
a certificate account, and the remaining balance does not meet the applicable
minimum balance requirement, the certificate shall be canceled at the time of
withdrawal, without penalty, and the remaining balance will earn interest at the
Bank's passbook rate. Funds for which a withdrawal is authorized will remain in
the subscriber's Deposit Account but may not be used by the subscriber during
the Offering. Thereafter, the withdrawal will be given effect only to the extent
necessary to satisfy the subscription (to the extent it can be filled) at the
Subscription Price per share. Interest will continue to be earned on any amounts
authorized for withdrawal until such withdrawal is given effect. Interest will
be paid by the Bank at the passbook rate on payments for Holding Company Common
Stock received by check. Such interest will be paid from the date payment is
received by the Bank until consummation or termination of the Conversion. If for
any reason the Conversion is not consummated, all payments made by subscribers
in the Subscription and Community Offerings will be refunded to them with
interest. In case of amounts authorized for withdrawal from Deposit Accounts,
refunds will be made by canceling the authorization for withdrawal. The Bank is
prohibited by regulation from knowingly making any loans or granting any lines
of credit for the purchase of stock in the Conversion, and therefore, will not
do so.
16. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS
As soon as practicable after the Prospectus prepared by the Holding
Company and Bank has been declared effective by the SEC, Order Forms will be
distributed to the Eligible Account Holders, Employee Plans, Supplemental
Eligible Account Holders and Other Members at their last known addresses
appearing on the records of the Bank for the
12
purpose of subscribing for shares of Holding Company Common Stock in the
Subscription Offering and will be made available for use by Persons in the
Community Offering. Notwithstanding the foregoing, the Bank may elect to send
Order Forms only to those Persons who request them after receipt of such notice
in a form approved by the OTS and which is adequate to apprise the Eligible
Account Holders, Employee Plans, Supplemental Eligible Account Holders and Other
Members of the pendency of the Subscription Offering. Such notice may be
included with the proxy statement for the Special Meeting of Members and the
proxy statement for the Special Meeting of Stockholders, and may also be
included in the notice of the pendency of the Conversion and the Special Meeting
of Members sent to all Eligible Account Holders in accordance with regulations
of the OTS.
Each Order Form will be preceded or accompanied by a Prospectus
describing the Holding Company, the Bank, the Holding Company Common Stock and
the Offering. Each Order Form will contain, among other things, the following:
A. A specified date by which all Order Forms must be received by
the Holding Company, which date shall be not less than twenty (20), nor more
than forty-five (45) days, following the date on which the Order Forms are
mailed by the Holding Company, and which date will constitute the termination of
the Subscription Offering;
B. The Subscription Price per share for shares of Holding
Company Common Stock to be sold in the Offering;
C. A description of the minimum and maximum number of
Subscription Shares which may be subscribed for pursuant to the exercise of
subscription rights or otherwise purchased in the Community Offering;
D. Instructions as to how the recipient of the Order Form is
to indicate thereon the number of Subscription Shares for which such person
elects to subscribe and the available alternative methods of payment therefor;
E. An acknowledgment that the recipient of the Order Form
has received a final copy of the Prospectus prior to execution of the Order
Form;
F. A statement to the effect that all subscription rights are
nontransferable, will be void at the end of the Subscription Offering, and can
only be exercised by delivering to the Holding Company within the subscription
period such properly completed and executed Order Form, together with payment in
the full amount of the aggregate purchase price as specified in the Order Form
for the shares of Holding Company Common Stock for which the recipient elects to
subscribe (or by authorizing on the Order Form that the Bank withdraw said
amount from the subscriber's Deposit Account at the Bank); and
G. A statement to the effect that the executed Order Form, once
received by the Holding Company, may not be modified or amended by the
subscriber without the consent of the Holding Company.
Notwithstanding the above, the Holding Company reserves the right in
its sole discretion to accept or reject orders received on photocopied or
facsimiled Order Forms.
17. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT
In the event Order Forms (a) are not delivered and are returned to the
Holding Company or the Bank by the United States Postal Service, (b) are not
received by the Holding Company or are received by the Holding Company after the
expiration date specified thereon, (c) are completed or executed defectively,
(d) are not accompanied by the full required payment, or, in the case of
institutional investors in the Community Offering, by delivering irrevocable
orders together with a legally binding commitment to pay by wire transfer the
full amount of the Subscription Price prior to 48 hours before the completion of
the Conversion, unless waived by the Holding Company, for the shares of Holding
Company Common Stock subscribed or ordered (including cases in which Deposit
Accounts from which withdrawals are authorized are insufficient to cover the
amount of the required payment), or (e) are not mailed pursuant to a "no mail"
order placed in effect by the Account Holder, the subscription rights of the
Person to whom such rights have been granted will lapse as though such Person
failed to return the completed Order Form within the time period specified
13
thereon; PROVIDED, HOWEVER, that the Holding Company may, but will not be
required to, waive any immaterial irregularity on any Order Form or require the
submission of corrected Order Forms or the remittance of full payment for
subscribed or ordered shares by such date as the Holding Company may specify.
The interpretation of the Holding Company of terms and conditions of this Plan
and of the Order Forms will be final, subject to the authority of the OTS.
18. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES
The Holding Company will make reasonable efforts to comply with the
securities laws of all states in the United States in which Persons entitled to
subscribe for shares of Holding Company Common Stock pursuant to this Plan
reside. However, no such Person will be granted subscription rights or be
permitted to purchase shares of Holding Company Common Stock in the Subscription
Offering if such Person resides in a foreign country, or in a state of the
United States with respect to which any of the following apply: (A) a small
number of Persons otherwise eligible to subscribe for shares under the Plan
reside in such state; (B) the issuance of subscription rights or the offer or
sale of shares of Holding Company Common Stock to such Persons would require the
Holding Company under the securities laws of such state, to register as a
broker, dealer, salesman or agent or to register or otherwise qualify its
securities for sale in such state; (C) such registration or qualification would
be impracticable for reasons of cost or otherwise.
19. ESTABLISHMENT OF LIQUIDATION ACCOUNT
The Bank shall establish at the time of the MHC Merger a Liquidation
Account in an amount equal to the greater of: (a) the percentage of the
outstanding shares of the common stock of the Mid-Tier Holding Company owned by
the Mutual Holding Company prior to the Mid-Tier Merger multiplied by the
Mid-Tier Holding Company's total stockholders' equity as reflected in the latest
statement of financial condition contained in the final Prospectus utilized in
the Conversion; or (b) the retained earnings of the Bank at the time the Bank
underwent its mutual holding company reorganization. Following the Conversion,
the Liquidation Account will be maintained by the Bank for the benefit of the
Eligible Account Holders and Supplemental Eligible Account Holders who continue
to maintain their Deposit Accounts at the Bank. Each Eligible Account Holder and
Supplemental Eligible Account Holder shall, with respect to his Deposit Account,
hold a related inchoate interest in a portion of the Liquidation Account
balance, in relation to his Deposit Account balance at the Eligibility Record
Date or Supplemental Eligibility Record Date, respectively, or to such balance
as it may be subsequently reduced, as hereinafter provided.
In the unlikely event of a complete liquidation of the Bank (and only
in such event), following all liquidation payments to creditors (including those
to Account Holders to the extent of their Deposit Accounts), each Eligible
Account Holder and Supplemental Eligible Account Holder shall be entitled to
receive a liquidating distribution from the Liquidation Account in the amount of
the then adjusted subaccount balance of his Deposit Account then held, before
any liquidation distribution may be made to any holders of the Bank's capital
stock. No merger, consolidation, purchase of bulk assets with assumption of
Deposit Accounts and other liabilities, or similar transactions with an FDIC
insured institution, in which the Bank is not the surviving institution, shall
be deemed to be a complete liquidation for this purpose. In such transactions,
the Liquidation Account shall be assumed by the surviving institution.
The initial subaccount balance for a Deposit Account held by an
Eligible Account Holder and Supplemental Eligible Account Holder shall be
determined by multiplying the opening balance in the Liquidation Account by a
fraction, the numerator of which is the amount of the Qualifying Deposits of
such Account Holder and the denominator of which is the total amount of all
Qualifying Deposits of all Eligible Account Holders and Supplemental Eligible
Account Holders. Such initial subaccount balance shall not be increased, but
shall be subject to downward adjustment as described below. If, at the close of
business on any December 31 annual closing date, commencing on or after the
effective date of the Conversion, the deposit balance in the Deposit Account of
an Eligible Account Holder or Supplemental Eligible Account Holder is less than
the lesser of (i) the balance in the Deposit Account at the close of business on
any other annual closing date subsequent to the Eligibility Record Date or
Supplemental Eligibility Record Date, or (ii) the amount of the Qualifying
Deposit in such Deposit Account as of the Eligibility Record Date or
Supplemental Eligibility Record Date, the subaccount balance for such Deposit
Account shall be adjusted by reducing such subaccount balance in an amount
proportionate to the reduction in such deposit balance. In the event of such
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any subsequent increase in the deposit balance of the related
Deposit Account. If any such Deposit Account is closed, the related subaccount
shall be reduced to zero.
14
The creation and maintenance of the Liquidation Account shall not
operate to restrict the use or application of any of the net worth accounts of
the Bank, except that the Bank shall not declare or pay a cash dividend on, or
repurchase any of, its capital stock if the effect thereof would cause its net
worth to be reduced below (i) the amount required for the Liquidation Account;
or (ii) the minimum regulatory capital requirements of the Bank contained in
Part 567 of the Rules and Regulations of the OTS.
20. VOTING RIGHTS OF STOCKHOLDERS
Following consummation of the Conversion, voting rights with respect to
the Bank shall be held and exercised exclusively by the holders of its capital
stock. The holders of the voting capital stock of the Holding Company shall have
the exclusive voting rights with respect to the Holding Company.
21. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION
A. All shares of Holding Company Common Stock purchased by
Directors or Officers in the Offering shall be subject to the restriction that,
except as provided in this Section or as may be approved by the OTS, no interest
in such shares may be sold or otherwise disposed of for value for a period of
one year following the date of purchase in the Offering.
B. The restriction on disposition of Holding Company Common
Stock set forth above in this Section shall not apply to the following:
(1) Any exchange of such shares in connection with a merger or
acquisition involving the Bank or the Holding Company, as the
case may be, which has been approved by the OTS; and
(2) Any disposition of such shares following the death of the
person to whom such shares were initially sold under the terms
of this Plan.
C. With respect to all shares of Holding Company Common Stock
subject to the restrictions on resale or subsequent disposition described in
paragraph A above, each of the following provisions shall apply:
(1) Each certificate representing shares restricted by this
section shall bear a legend prominently stamped on its face
giving notice of the restriction;
(2) Instructions shall be issued to the stock transfer agent for
the Holding Company not to recognize or effect any transfer of
any certificate or record of ownership of any such shares in
violation of the restriction on transfer; and
(3) Any shares of capital stock of the Holding Company issued with
respect to a stock dividend, stock split, or otherwise with
respect to ownership of outstanding shares of Holding Company
Common Stock subject to the restriction on transfer hereunder
shall be subject to the same restriction as is applicable to
such Holding Company Common Stock.
22. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING
THE CONVERSION
For a period of three years following the Conversion, no Officer,
Director or their Associates shall purchase, without the prior written approval
of the OTS, any outstanding shares of Holding Company Common Stock except from a
broker-dealer registered with the SEC. This provision shall not apply to
negotiated transactions involving more than 1% of the outstanding shares of
Holding Company Common Stock, the exercise of any options pursuant to a stock
option plan or purchases of Holding Company Common Stock made by or held by any
Tax-Qualified Employee Stock Benefit Plan or NonTax-Qualified Employee Stock
Benefit Plan of the Bank or the Holding Company (including the Employee Plans)
which may be attributable to any Officer or Director. As used herein, the term
"negotiated transaction" means a transaction in which the securities are offered
and the terms and arrangements relating to any sale are arrived at through
15
direct communications between the seller or any Person acting on its behalf and
the purchaser or his investment representative. The term "investment
representative" shall mean a professional investment advisor acting as agent for
the purchaser and independent of the seller and not acting on behalf of the
seller in connection with the transaction.
23. TRANSFER OF DEPOSIT ACCOUNTS
Each Person holding a Deposit Account at the Bank at the time of
Conversion shall retain an identical Deposit Account at the Bank following the
Conversion in the same amount and subject to the same terms and conditions
(except as to voting and liquidation rights).
24. REGISTRATION AND MARKETING
Within the time period required by applicable laws and regulations, the
Holding Company will register the securities issued in connection with the
Conversion pursuant to the Securities Exchange Act of 1934 (or will be a
successor issuer that succeeds to the registration of the Mid-Tier Holding
Company) and will not deregister such securities for a period of at least three
years thereafter, except that the maintenance of registration for three years
requirement may be fulfilled by any successor to the Bank or any holding company
of the Bank. In addition, the Bank or Holding Company will use its best efforts
to encourage and assist a market-maker to establish and maintain a market for
the Holding Company Common Stock and to list those securities on a national or
regional securities exchange or the Nasdaq Stock Market.
25. TAX RULINGS OR OPINIONS
Consummation of the Conversion is expressly conditioned upon prior
receipt by the Mutual Holding Company, the Mid-Tier Holding Company and the Bank
of either a ruling or an opinion of counsel with respect to federal tax laws,
and either a ruling, an opinion of counsel, or a letter of advice from their tax
advisor with respect to Ohio tax laws, to the effect that consummation of the
transactions contemplated by the Conversion and this Plan will not result in a
taxable reorganization under the provisions of the applicable codes or otherwise
result in any adverse tax consequences to the Mutual Holding Company, the
Mid-Tier Holding Company, the Holding Company or the Bank, or the Account
Holders receiving subscription rights before or after the Conversion, except in
each case to the extent, if any, that subscription rights are deemed to have
value on the date such rights are issued.
26. STOCK BENEFIT PLANS AND EMPLOYMENT AGREEMENTS
A. The Holding Company and the Bank are authorized to adopt
Tax-Qualified Employee Stock Benefit Plans and Non-Tax-Qualified Employee Stock
Benefit Plans in connection with the Conversion, including without limitation,
an ESOP. Any existing as well as any newly created such plan may purchase shares
of Holding Company Common Stock in the Conversion, to the extent permitted by
the terms of such benefit plans and this Plan.
B. As a result of the Conversion, the Holding Company shall be
deemed to have ratified and approved the stock benefit plans maintained by the
Bank and the Mid-Tier Holding Company and shall have agreed to issue (and
reserve for issuance) Holding Company Common Stock in lieu of common stock of
the Mid-Tier Holding Company pursuant to the terms of such benefit plans. Upon
consummation of the Conversion, the Mid-Tier Holding Company common stock held
by such benefit plans shall be converted into Holding Company Common Stock based
upon the Exchange Ratio. Also upon consummation of the Conversion, (i) all
rights to purchase, sell or receive Mid-Tier Holding Company common stock and
all rights to elect to make payment in Mid-Tier Holding Company common stock
under any agreement between the Bank or the Mid-Tier Holding Company and any
Director, Officer or Employee thereof or under any plan or program of the Bank
or the Mid-Tier Holding Company shall automatically, by operation of law, be
converted into and shall become an identical right to purchase, sell or receive
Holding Company Common Stock and an identical right to make payment in Holding
Company Common Stock under any such agreement between the Bank or the Mid-Tier
Holding Company and any Director, Officer or Employee thereof or under such plan
or program of the Bank, and (ii) rights outstanding under the any stock option
plan of the Bank or the Mid-Tier Holding Company shall be assumed by the Holding
Company and thereafter shall be rights only for shares of Holding Company Common
Stock, with each such right being for a number of shares of Holding Company
Common Stock based upon the Exchange Ratio
16
and the number of shares of Mid-Tier Holding Company common stock that were
available thereunder immediately prior to consummation of the Conversion, with
the price adjusted to reflect the Exchange Ratio but with no change in any other
term or condition of such right.
C. The Holding Company and the Bank are authorized to enter into
employment agreements with their executive officers.
D. The Holding Company and the Bank are authorized to adopt stock
option plans, restricted stock grant plans and other Non-Tax-Qualified Employee
Stock Benefit Plans, provided that such plans conform to any applicable
requirements of OTS regulations.
27. RESTRICTIONS ON ACQUISITION OF BANK AND HOLDING COMPANY
A. In accordance with OTS regulations, for a period of three
years from the date of consummation of the Conversion, no Person, other than the
Holding Company, shall directly or indirectly offer to acquire or acquire the
beneficial ownership of more than 10% of any class of an equity security of the
Bank without the prior written consent of the OTS.
(1) To the extent permitted by regulatory authority, the charter
of the Bank may contain a provision stipulating that no
Person, except the Holding Company, for a period of five years
following the closing date of the Conversion, may directly or
indirectly offer to acquire or acquire the beneficial
ownership of more than 10.0% of any class of an equity
security of the Bank, without the prior written approval of
the OTS. In addition, such charter may also provide that for a
period of five years following the closing date of the
Conversion, shares beneficially owned in violation of the
above-described charter provision shall not be entitled to
vote and shall not be voted by any Person or counted as voting
stock in connection with any matter submitted to stockholders
for a vote. In addition, special meetings of the stockholders
relating to changes in control or amendment of the charter may
only be called by the Board of Directors, and shareholders
shall not be permitted to cumulate their votes for the
election of Directors.
(2) The Certificate of Incorporation of the Holding Company will
contain a provision stipulating that in no event shall any
record owner of any outstanding shares of Holding Company
Common Stock who beneficially owns in excess of 10% of such
outstanding shares be entitled or permitted to any vote in
respect to any shares held in excess of 10%. In addition, the
Certificate of Incorporation and Bylaws of the Holding Company
contain provisions which provide for staggered terms of the
Directors, noncumulative voting for Directors, limitations on
the calling of special meetings and certain notice
requirements.
B. For the purposes of this section:
(1) The term "Person" includes an individual, a firm, a
corporation or other entity;
(2) The term "offer" includes every offer to buy or acquire,
solicitation of an offer to sell, tender offer for, or request
or invitation for tenders of, a security or interest in a
security for value;
(3) The term "acquire" includes every type of acquisition,
whether effected by purchase, exchange, operation of law or
otherwise; and
(4) The term "security" includes nontransferable subscription
rights issued pursuant to a plan of conversion as well as a
"security" as defined in Section 2(a)(l) of the Securities Act
of 1933.
17
28. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK
A. The Holding Company shall comply with any applicable OTS
regulation in the repurchase of any shares of its capital stock during the first
year following consummation of the Conversion.
B. The Bank shall not declare or pay a cash dividend on, or
repurchase any of, its capital stock if the effect thereof would cause its
regulatory capital to be reduced below (i) the amount required for the
Liquidation Account or (ii) the minimum regulatory capital requirement in
Section 567.2 of the Rules and Regulations of the OTS. Otherwise, the Bank may
declare dividends or make capital distributions in accordance with applicable
law and regulations, including 12 C.F.R. Section 563.141 or its successor.
29. CHARTER AND BYLAWS
By voting to adopt this Plan, Members of the Mutual Holding Company
will be voting to adopt a Stock Certificate of Incorporation and Bylaws for the
Holding Company attached as Exhibits E and F to this Plan.
30. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE
The Effective Date of the Conversion shall be the date upon which the
Articles of Combination shall be filed with the OTS with respect to the MHC
Merger, the Mid-Tier Merger and the Bank Merger. The Articles of Combination
shall be filed with the OTS after all requisite regulatory, member and
stockholder approvals have been obtained, all applicable waiting periods have
expired, and sufficient subscriptions and orders for Subscription Shares have
been received. The Closing of the sale of all shares of Holding Company Common
Stock sold in the Subscription Offering, Community Offering and/or Syndicated
Community Offering shall occur simultaneously on the effective date of the
Closing.
31. EXPENSES OF CONVERSION
The Mutual Holding Company, the Mid-Tier Holding Company, the Bank and
the Holding Company may retain and pay for the services of legal, financial and
other advisors to assist in connection with any or all aspects of the
Conversion, including the Offering, and such parties shall use their best
efforts to assure that such expenses shall be reasonable.
32. AMENDMENT OR TERMINATION OF PLAN
This Plan may be substantively amended by the Board of Directors of the
Mutual Holding Company at the discretion of the Board of Directors or as a
result of comments from regulatory authorities at any time prior to the
solicitation of proxies from Members and Mid-Tier Holding Company stockholders
to vote on this Plan, and at any time thereafter by the Board of Directors of
the Mutual Holding Company with the concurrence of the OTS. Any amendment to
this Plan made after approval by the Members and Mid-Tier Holding Company
stockholders with the approval of the OTS shall not necessitate further approval
by the Members unless otherwise required by the OTS. This Plan may be terminated
by the Board of Directors of the Mutual Holding Company at any time prior to the
Special Meeting of Members and the Special Meeting of Stockholders to vote on
this Plan, and at any time thereafter with the concurrence of the OTS.
By adoption of the Plan, the Members of the Mutual Holding Company
authorize the Board of Directors of the Mutual Holding Company to amend or
terminate the Plan under the circumstances set forth in this Section.
33. CONDITIONS TO CONVERSION
Consummation of the Conversion pursuant to this Plan is expressly
conditioned upon the following:
18
A. Prior receipt by the Mutual Holding Company, the Mid-Tier
Holding Company, and the Bank of rulings of the United States Internal Revenue
Service and the Ohio State taxing authorities, or opinions of counsel or tax
advisers as described in Section 25 hereof;
B. The sale of the shares of Holding Company Common Stock offered
in the Conversion; and
C. The completion of the Conversion within the time period
specified in Section 3 of this Plan.
34. INTERPRETATION
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of the Board of Directors of the Mutual
Holding Company shall be final, subject to the authority of the OTS.
Dated: July 10, 2001.
19
EXHIBIT A
AGREEMENT OF MERGER
BETWEEN
WAYNE SAVINGS BANCSHARES, INC.,
WAYNE INTERIM I
AND WAYNE SAVINGS COMMUNITY BANK
FORM OF AGREEMENT OF MERGER BETWEEN
WAYNE SAVINGS BANCSHARES, INC. (A FEDERAL CORPORATION),
WAYNE INTERIM I
AND WAYNE SAVINGS COMMUNITY BANK
THIS AGREEMENT OF MERGER (this "Merger Agreement"), dated as of
_____________, 2001, is made by and between Wayne Savings Bancshares, Inc., a
federal corporation (the "Mid-Tier Holding Company"), Wayne Savings Community
Bank (the "Bank") and Wayne Interim I, an interim federal savings bank ("Interim
I").
R E C I T A L S :
1. Mid-Tier Holding Company is a federal company that owns 100%
of the common stock of Wayne Savings Community Bank (the "Bank"). As of the date
hereof, Mid-Tier Holding Company has authorized capital stock consisting of
20,000,000 shares of common stock and 10,000,000 shares of preferred stock.
2. Pursuant to this Merger Agreement, Mid-Tier Holding Company
will convert to or exchange its charter for the federal interim savings bank
charter of Interim I, and Interim I shall merge with and into the Bank with the
Bank as the surviving entity (the "Mid-Tier Merger"). Mid-Tier Holding Company /
Interim I stockholders shall constructively receive shares of Bank common stock
in exchange for Mid-Tier Holding Company Interim I common stock that they
actually or constructively hold.
3. At least two-thirds of the members of the boards of directors
of the Bank, Interim I and Mid-Tier Holding Company have approved this Merger
Agreement under which Mid-Tier Holding Company shall convert its charter to
Interim I and Interim I shall be merged with and into the Bank with the Bank as
the surviving or resulting institution (the "Resulting Institution"), and
authorized the execution and delivery thereof.
4. This Merger Agreement (and the transactions contemplated
hereby) are being entered into to facilitate the conversion of Wayne Savings
Bankshares, M.H.C. to stock form pursuant to that certain Plan of Conversion and
Reorganization of Wayne Savings Bankshares, M.H.C. ("the Plan").
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. MERGER. At and on the Effective Date (as defined below), (i)
Mid-Tier Holding Company shall exchange its charter for the charter of Interim
I, and Interim I will merge with and into the Bank (the "Mid-Tier Merger") with
the Bank as the Resulting Institution, and (ii) Mid-Tier Holding Company/Interim
I stockholders shall constructively receive shares of Bank common stock in
exchange for their Mid-Tier Holding Company/Interim I common stock.
2. EFFECTIVE DATE. The Mid-Tier Merger shall not be effective
until and unless it is approved by the Office of Thrift Supervision (the "OTS")
after approval by (i) at least two-thirds of the outstanding common stock of
Mid-Tier Holding Company and (ii) a majority vote of the Minority Stockholders,
and the Articles of Combination shall have been filed with the OTS with respect
to the Mid-Tier Merger.
3. NAME. The name of the Resulting Institution shall be Wayne
Savings Community Bank.
4. OFFICES. The main office of the Resulting Institution
shall be 151 North Market Street, Wooster, Ohio. The offices of the Bank that
were in lawful operation prior to the Mid-Tier Merger shall be operated as
offices of the Resulting Institution after the Mid-Tier Merger.
5. DIRECTORS AND OFFICERS. The directors and officers of the
Bank immediately prior to the Effective Date shall be the directors and officers
of the Resulting Institution after the Effective Date.
A-1
6. RIGHTS AND DUTIES OF THE RESULTING INSTITUTION. At the
Effective Date, the Mid-Tier Holding Company shall convert to Interim I, which
shall be merged with and into the Bank with the Bank as the Resulting
Institution. The business of the Resulting Institution shall be that of a
savings and loan association as provided in its charter. All assets, rights,
interests, privileges, powers, franchises and property (real, personal and
mixed) of Mid-Tier Holding Company, Interim I and the Bank shall be
automatically transferred to and vested in the Resulting Institution by virtue
of the Mid-Tier Merger without any deed or other document of transfer. The
Resulting Institution, without any order or action on the part of any court or
otherwise and without any documents of assumption or assignment, shall hold and
enjoy all of the properties, franchises and interests, including appointments,
powers, designations, nominations and all other rights and interests as the
agent or other fiduciary in the same manner and to the same extent as such
rights, franchises, and interests and powers were held or enjoyed by Mid-Tier
Holding Company, Interim I and the Bank. The Resulting Institution shall be
responsible for all of the liabilities, restrictions and duties of every kind
and description of Mid-Tier Holding Company, Interim I and the Bank immediately
prior to the Mid-Tier Merger, including liabilities for all debts, obligations
and contracts of Mid-Tier Holding Company, Interim I and the Bank, matured or
unmatured, whether accrued, absolute, contingent or otherwise and whether or not
reflected or reserved against on balance sheets, books of accounts or records of
the Mid-Tier Holding Company and the Bank. The stockholders of the Bank shall
possess all voting rights with respect to the shares of stock of the Bank. All
rights of creditors and other obligees and all liens on property of Mid-Tier
Holding Company, Interim I and the Bank shall be preserved and shall not be
released or impaired.
7. OTHER TERMS. All terms used in this Merger Agreement shall,
unless defined herein, have the meanings set forth in the Plan. The Plan is
incorporated herein by this reference and made a part hereof to the extent
necessary or appropriate to effect and consummate the terms of this Merger
Agreement and the Conversion.
IN WITNESS WHEREOF, Mid-Tier Holding Company, Interim I and the Bank
have caused this Merger Agreement to be executed as of the date first above
written.
WAYNE SAVINGS BANCSHARES, INC.
(a federal corporation)
ATTEST:
By:
------------------------------- By: /s/ Charles F. Finn
, Secretary -------------------------------
------------- Charles F. Finn, President
WAYNE SAVINGS COMMUNITY BANK
ATTEST:
By: By: /s/ Charles F. Finn
------------------------------- -------------------------------
, Secretary Charles F. Finn, President
-------------
WAYNE INTERIM I
ATTEST:
By: By: /s/ Charles F. Finn
------------------------------- --------------------------------
, Secretary Charles F. Finn, President
-------------
A-2
EXHIBIT B
AGREEMENT OF MERGER
BETWEEN
WAYNE SAVINGS BANKSHARES, M.H.C.,
WAYNE INTERIM II
AND WAYNE SAVINGS COMMUNITY BANK
FORM OF AGREEMENT OF MERGER
BETWEEN
WAYNE SAVINGS BANKSHARES, M.H.C.,
WAYNE INTERIM II
AND WAYNE SAVINGS COMMUNITY BANK
THIS AGREEMENT OF MERGER (this "Merger Agreement"), dated as of
___________, 2001, is made by and between Wayne Savings Bankshares, M.H.C., a
federal mutual holding company (the "Mutual Holding Company"), Wayne Savings
Community Bank (the "Bank"), and Wayne Interim II, an interim federal savings
bank ("Interim II").
R E C I T A L S :
1. The Mutual Holding Company is a federal mutual holding
company with no authorized shares of capital stock.
2. After the merger of Wayne Savings Bancshares, Inc., a federal
mid-tier holding company and Wayne Interim I into the Bank, the majority of the
shares of common stock of the Bank will be owned by the Mutual Holding Company,
and the remainder of the shares of common stock of the Bank will be owned and
held constructively by the Bank's employees, directors and the public (the
"Minority Stockholders").
3. Pursuant to this Merger Agreement, the Mutual Holding Company
will convert to or exchange its charter for the federal interim savings bank
charter of Interim II, and Interim II shall merge with and into the Bank with
the Bank as the surviving entity (the "MHC Merger"). Each Eligible Account
Holder and Supplemental Eligible Account Holder, as defined in the Plan of
Conversion and Reorganization of Wayne Savings Bankshares, M.H.C. (the "Plan"),
will receive as interest in a liquidation account ("Liquidation Account") of the
Bank in exchange for such person's interest in the Mutual Holding Company.
4. At least two-thirds of the members of the boards of directors
of the Bank and the Mutual Holding Company have approved this Merger Agreement
and the MHC Merger (as described below) and authorized the execution and
delivery thereof.
5. This Merger Agreement (and the transactions contemplated
hereby) are being entered into to facilitate the conversion of the Mutual
Holding Company to stock form pursuant to the Plan.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. MERGER. At and on the Effective Date (as defined below), (i)
the Mutual Holding Company shall convert to or exchange its charter for the
charter of Interim II, and Interim II will merge with and into the Bank (the
"MHC Merger") with the Bank as the surviving or resulting institution (the
"Resulting Institution"), (ii) each share of Bank common stock owned by the
Mutual Holding Company shall be canceled, and (iii) each Eligible Account Holder
and Supplemental Eligible Account Holder shall automatically receive an interest
in the Liquidation Account established in the Bank in exchange for such person's
interest in the Mutual Holding Company, as set forth in the Plan.
2. EFFECTIVE DATE. The MHC Merger shall not be effective until
and unless it is approved by the Office of Thrift Supervision (the "OTS") after
approval by (i) two-thirds of the outstanding common stock of the Bank, and (ii)
a majority of the members of the Mutual Holding Company, and the Articles of
Combination shall have been filed with the OTS with respect to the MHC Merger.
Approval of the Plan by the members of the Mutual Holding Company shall also
constitute approval of this Merger Agreement.
3. NAME. The name of the Resulting Institution shall be Wayne
Savings Community Bank.
B-1
4. OFFICES. The main offices of the Resulting Institution
shall be 151 North Market Street, Wooster, Ohio. The offices of the Bank that
were in lawful operation prior to the MHC Merger shall continue to be operated
as the offices of the Resulting Institution after the MHC Merger.
5. DIRECTORS and OFFICERS. The directors and officers of
the Bank immediately prior to the Effective Date shall be the directors and
officers of the Resulting Institution after the Effective Date.
6 RIGHTS AND DUTIES OF THE RESULTING INSTITUTION. At the
Effective Date, the Mutual Holding Company shall convert to Interim II, which
shall merge with and into the Bank with the Bank as the Resulting Institution.
The business of the Resulting Institution shall be that of a savings and loan
association as provided in its Charter. All assets, rights, interests,
privileges, powers, franchises and property (real, personal and mixed) of the
Mutual Holding Company, Interim II and the Bank shall be automatically
transferred to and vested in the Resulting Institution by virtue of such merger
without any deed or other document of transfer. The Resulting Institution,
without any order or action on the part of any court or otherwise and without
any documents of assumption or assignment, shall hold and enjoy all of the
properties, franchises and interests, including appointments, powers,
designations, nominations and all other rights and interests as the agent or
other fiduciary in the same manner and to the same extent as such rights,
franchises, and interests and powers were held or enjoyed by the Mutual Holding
Company, Interim II and the Bank. The Resulting Institution shall be responsible
for all of the liabilities, restrictions and duties of every kind and
description of both the Mutual Holding Company, Interim II and the Bank
immediately prior to the MHC Merger, including liabilities, debts, obligations
and contracts of the Mutual Holding Company, Interim II and the Bank, matured or
unmatured, whether accrued, absolute, contingent or otherwise and whether or not
reflected or reserved against on balance sheets, books of accounts or records of
the Mutual Holding Company, Interim II and the Bank. The stockholders of the
Bank shall possess all voting rights with respect to the shares of stock of the
Bank. All rights of creditors and other obligees and all liens on property of
either the Mutual Holding Company, Interim II and the Bank shall be preserved
and shall not be released or impaired.
7. OTHER TERMS. All terms used in this Merger Agreement shall,
unless defined herein, have the meanings set forth in the Plan. The Plan is
incorporated herein by this reference and made a part hereof to the extent
necessary or appropriate to effect and consummate the terms of this Merger
Agreement and the Conversion.
IN WITNESS WHEREOF, the Mutual Holding Company, Interim II and the Bank
have caused this Merger Agreement to be executed as of the date first above
written.
WAYNE SAVINGS BANKSHARES, M.H.C.
ATTEST:
By: By: /s/ Charles F. Finn
---------------------------- ------------------------------
, Secretary Charles F. Finn, President
------------
WAYNE SAVINGS COMMUNITY BANK
ATTEST:
By: By: /s/ Charles F. Finn
---------------------------- ------------------------------
, Secretary Charles F. Finn, President
------------
WAYNE INTERIM II
ATTEST:
By: By: /s/ Charles F. Finn
---------------------------- ------------------------------
, Secretary Charles F. Finn, President
------------
B-2
EXHIBIT C
AGREEMENT OF MERGER
BETWEEN
WAYNE SAVINGS COMMUNITY BANK
AND WAYNE INTERIM III
FORM OF AGREEMENT OF MERGER
BETWEEN
WAYNE SAVINGS COMMUNITY BANK
AND WAYNE INTERIM III
THIS AGREEMENT OF MERGER (this "Merger Agreement"), dated as of
__________________, 2001, is made by and between Wayne Savings Community Bank,
an Ohio-chartered savings and loan association (the "Bank"), and Wayne Interim
III, an interim federal savings Bank ("Interim").
R E C I T A L S :
1. The Bank is an Ohio-chartered savings and loan association
that immediately prior to the transactions contemplated by this Merger Agreement
and the Plan of Conversion and Reorganization of Wayne Savings Bankshares,
M.H.C. (the "Plan") was a wholly-owned subsidiary of Wayne Savings Bancshares,
Inc. (the "Mid-Tier Holding Company"), a federal corporation. The Mid-Tier
Holding Company was a majority-owned subsidiary of Wayne Savings Bankshares,
M.H.C. (the "Mutual Holding Company").
2. Pursuant to the Plan and its related merger agreements,
(i) the Mid-Tier Holding Company shall convert into Wayne Interim I, an interim
federal savings bank ("Interim I") and merge with and into the Bank (the
"Mid-Tier Merger") with the Bank as the resulting entity, (ii) the Mid-Tier
Holding Company stockholders shall constructively receive shares of Bank common
stock in exchange for their Mid-Tier Holding Company common stock, (iii) the
Mutual Holding Company will convert to, or exchange its charter for, a federal
interim savings bank ("Interim II") which shall merge with and into the Bank
with the Bank as the resulting entity, and (iv) each Eligible Account Holder and
Supplemental Eligible Account Holder (as defined in the Plan) shall receive an
interest in a Liquidation Account of the Bank in exchange for such person's
interest in the Mutual Holding Company.
3. Pursuant to the Plan and this Merger Agreement, the Bank
shall organize Wayne Savings Bancshares, Inc., a Delaware corporation (the
"Holding Company"), which will become the holding company of the Bank.
4. At least two-thirds of the members of the boards of directors
of the Bank and Interim have approved this Merger Agreement under which Interim
shall be merged with and into the Bank with the Bank as the surviving or
resulting institution, and authorized the execution and delivery thereof.
5. This Merger Agreement (and the transactions contemplated
hereby) is being entered into to facilitate the conversion of Wayne Savings
Bankshares, M.H.C. to stock form pursuant to the Plan.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto have agreed as follows:
1. MERGER. At and on the Effective Date (as defined below) and
immediately following the Mid-Tier Merger and the MHC Merger (i) Interim will
merge with and into the Bank (the "Bank Merger") with the Bank as the surviving
or resulting institution ("Resulting Institution"), whereby (ii) all
constructive shareholders of the Bank (I.E., Minority Stockholders immediately
prior to the Conversion) will exchange the shares of Bank common stock that they
constructively received in the Mid-Tier Merger for Holding Company Common Stock.
2. STOCK OFFERING. Immediately after the Bank Merger, the
Holding Company shall sell shares of its common stock in a subscription and
community offering as described in the Plan.
3. EFFECTIVE DATE. The Bank Merger shall not be effective until
and unless it isapproved by the Office of Thrift Supervision (the "OTS") after
approval by at least two-thirds of the outstanding common stock of the Bank and
Interim, and the Articles of Combination shall have been filed with the OTS with
respect to the Bank Merger.
4. NAME. The name of the Resulting Institution shall be Wayne
Savings Community Bank.
C-1
5. OFFICES. The main offices of the Resulting Institution
shall be 151 North Market Street, Wooster, Ohio. The offices of the Bank that
were in lawful operation prior to the Bank Merger shall be operated as offices
of the Resulting Institution after the Bank Merger.
6. DIRECTORS AND OFFICERS. The directors and officers of the
Bank immediately prior to the Effective Date shall be the directors and officers
of the Resulting Institution after the Effective Date.
7. RIGHTS AND DUTIES OF THE RESULTING INSTITUTION. At the
Effective Date, Interim shall be merged with and into the Bank with the Bank as
the Resulting Institution. The business of the Resulting Institution shall be
that of a savings and loan association as provided in its charter. All assets,
rights, interests, privileges, powers, franchises and property (real, personal
and mixed) of Interim and the Bank shall be automatically transferred to and
vested in the Resulting Institution by virtue of the Bank Merger without any
deed or other document of transfer. The Resulting Institution, without any order
or action on the part of any court or otherwise and without any documents of
assumption or assignment, shall hold and enjoy all of the properties, franchises
and interests, including appointments, powers, designations, nominations and all
other rights and interests as the agent or other fiduciary in the same manner
and to the same extent as such rights, franchises, and interests and powers were
held or enjoyed by Interim and the Bank. The Resulting Institution shall be
responsible for all of the liabilities, restrictions and duties of every kind
and description of Interim and the Bank immediately prior to the Bank Merger,
including liabilities for all debts, obligations and contracts of Bank and
Interim, matured or unmatured, whether accrued, absolute, contingent or
otherwise and whether or not reflected or reserved against on balance sheets,
books of accounts or records of Interim and the Bank. The stockholders of the
Bank shall possess all voting rights with respect to the shares of stock of the
Bank. All rights of creditors and other obligees and all liens on property of
Interim and the Bank shall be preserved and shall not be released or impaired.
8. OTHER TERMS. All terms used in this Merger Agreement shall,
unless defined herein, have the meanings set forth in the Plan. The Plan is
incorporated herein by this reference and made a part hereof to the extent
necessary or appropriate to effect and consummate the terms of the Merger
Agreement and the Conversion.
IN WITNESS WHEREOF, the Bank and Interim have caused this Merger
Agreement to be executed as of the date first above written.
WAYNE SAVINGS COMMUNITY BANK
ATTEST:
By: By: /s/ Charles F. Finn
----------------------------- ---------------------------------
, Secretary Charles F. Finn, President
------------
WAYNE INTERIM III
ATTEST:
By: By: /s/ Charles F. Finn
----------------------------- --------------------------------
, Secretary Charles F. Finn, President
------------
C-2
EXHIBIT D
CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY
CERTIFICATE OF INCORPORATION
OF
WAYNE SAVINGS BANCSHARES, INC.
FIRST: The name of the Corporation is Wayne Savings Bancshares, Inc.
(hereinafter referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of Delaware.
FOURTH:
A. The total number of shares of all classes of stock that the
Corporation shall have authority to issue is eight million, five-hundred
thousand (8,500,000) consisting of:
1. five-hundred thousand (500,000) shares of Preferred
Stock, par value ten cents ($.10) per share (the "Preferred Stock");
and
2. eight million (8,000,000) shares of Common Stock, par
value ten cents ($.10) per share (the "Common Stock").
B. The Board of Directors is authorized, subject to any
limitations prescribed by law, to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware (such certificate being hereinafter
referred to as a "Preferred Stock Designation"), to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences, and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. The number of
authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock, without a vote of the holders of
the Preferred Stock, or of any series thereof, unless a vote of any such holders
is required pursuant to the terms of any Preferred Stock Designation.
C. 1. Notwithstanding any other provision of this
Certificate of Incorporation, in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who, as of any record date for the determination of stockholders
entitled to vote on any matter, beneficially owns in excess of 10% of the
then-outstanding shares of Common Stock (the "Limit"), be entitled, or permitted
to any vote in respect of the shares held in excess of the Limit. The number of
votes which may be cast by any record owner by virtue of the provisions hereof
in respect of Common Stock beneficially owned by such person owning shares in
excess of the Limit shall be a number equal to the total number of votes which a
single record owner of all Common Stock owned by such person would be entitled
to cast, multiplied by a fraction, the numerator of which is the number of
shares of such class or series which are both beneficially owned by such person
and owned of record by such record owner and the denominator of which is the
total number of shares of Common Stock beneficially owned by such person owning
shares in excess of the Limit.
2. The following definitions shall apply to this Section C of
this Article FOURTH:
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(a) "Affiliate" shall have the meaning ascribed to it in
Rule 12b-2 of the General Rules and Regulations under
the Securities Act of 1934, as in effect on the date
of filing of this Certificate of Incorporation.
(b) "Beneficial ownership" shall be determined pursuant
to Rule 13d-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934 (or any
successor rule or statutory provision), or, if said
Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto,
pursuant to said Rule 13d-3 as in effect on the date
of filing of this Certificate of Incorporation;
provided, however, that a person shall, in any event,
also be deemed the "beneficial owner" of any Common
Stock:
(1) which such person or any of its affiliates
beneficially owns, directly or indirectly; or
(2) which such person or any of its affiliates has
(i) the right to acquire (whether such right is
exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement
or understanding (but shall not be deemed to be
the beneficial owner of any voting shares solely
by reason of an agreement, contract, or other
arrangement with this Corporation to effect any
transaction which is described in any one or more
clauses of Section A of Article EIGHTH) or upon
the exercise of conversion rights, exchange
rights, warrants, or options or otherwise, or
(ii) sole or shared voting or investment power
with respect thereto pursuant to any agreement,
arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the
beneficial owner of any voting shares solely by
reason of a revocable proxy granted for a
particular meeting of stockholders, pursuant to a
public solicitation of proxies for such meeting,
with respect to shares of which neither such
person nor any such affiliate is otherwise deemed
the beneficial owner); or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such
first mentioned person or any of its affiliates
acts as a partnership, limited partnership,
syndicate or other group pursuant to any
agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or
disposing of any shares of capital stock of this
Corporation;
and provided further, however, that (1) no Director
or Officer of this Corporation (or any affiliate of
any such Director or Officer) shall, solely by reason
of any or all of such Directors or Officers acting in
their capacities as such, be deemed, for any purposes
hereof, to beneficially own any Common Stock
beneficially owned by another such Director or
Officer (or any affiliate thereof), and (2) neither
any employee stock ownership plan or similar plan of
this Corporation or any subsidiary of this
Corporation, nor any trustee with respect thereto or
any affiliate of such trustee (solely by reason of
such capacity of such trustee), shall be deemed, for
any purposes hereof, to beneficially own any Common
Stock held under any such plan. For purposes of
computing the percentage beneficial ownership of
Common Stock of a person, the outstanding Common
Stock shall include shares deemed owned by such
person through application of this subsection but
shall not include any other Common Stock which may be
issuable by this Corporation pursuant to any
agreement, or upon exercise of conversion rights,
warrants or options, or otherwise. For all other
purposes, the outstanding Common Stock shall include
only Common Stock then outstanding and shall not
include any Common Stock which may be issuable by
this Corporation pursuant to any agreement, or upon
the exercise of conversion rights, warrants or
options, or otherwise.
(c) A "person" shall mean any individual, firm,
corporation, or other entity.
3. The Board of Directors shall have the power to construe and
apply the provisions of this section and to make all determinations necessary or
desirable to implement such provisions, including but not limited to matters
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with respect to (i) the number of shares of Common Stock beneficially owned by
any person, (ii) whether a person is an affiliate of another, (iii) whether a
person has an agreement, arrangement, or understanding with another as to the
matters referred to in the definition of beneficial ownership, (iv) the
application of any other definition or operative provision of this section to
the given facts, or (v) any other matter relating to the applicability or effect
of this section.
4. The Board of Directors shall have the right to demand that
any person who is reasonably believed to beneficially own Common Stock in excess
of the Limit (or holds of record Common Stock beneficially owned by any person
in excess of the Limit) supply the Corporation with complete information as to
(i) the record owner(s) of all shares beneficially owned by such person who is
reasonably believed to own shares in excess of the Limit, and (ii) any other
factual matter relating to the applicability or effect of this section as may
reasonably be requested of such person.
5. Except as otherwise provided by law or expressly provided
in this section, the presence, in person or by proxy, of the holders of record
of shares of capital stock of the Corporation entitling the holders thereof to
cast a majority of the votes (after giving effect, if required, to the
provisions of this section) entitled to be cast by the holders of shares of
capital stock of the Corporation entitled to vote shall constitute a quorum at
all meetings of the stockholders, and every reference in this Certificate of
Incorporation to a majority or other proportion of capital stock (or the holders
thereof) for purposes of determining any quorum requirement or any requirement
for stockholder consent or approval shall be deemed to refer to such majority or
other proportion of the votes (or the holders thereof) then entitled to be cast
in respect of such capital stock.
6. Any constructions, applications, or determinations made by
the Board of Directors pursuant to this section in good faith and on the basis
of such information and assistance as was then reasonably available for such
purpose shall be conclusive and binding upon the Corporation and its
stockholders.
7. In the event any provision (or portion thereof) of this
section shall be found to be invalid, prohibited or unenforceable for any
reason, the remaining provisions (or portions thereof) of this section shall
remain in full force and effect, and shall be construed as if such invalid,
prohibited or unenforceable provision had been stricken herefrom or otherwise
rendered inapplicable, it being the intent of this Corporation and its
stockholders that such remaining provision (or portion thereof) of this section
remain, to the fullest extent permitted by law, applicable and enforceable as to
all stockholders, including stockholders owning an amount of stock over the
Limit, notwithstanding any such finding.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Directors and stockholders:
A. The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors. In addition to the powers
and authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the Bylaws of the Corporation, the Directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
B. The Directors of the Corporation need not be elected by
written ballot unless the Bylaws so provide.
C. Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
D. Special meetings of stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directorships (whether or not there
exist any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption) (the "Whole Board") or as
otherwise provided in the Bylaws.
SIXTH:
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A. The number of Directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the Whole Board. The Directors shall be divided into three classes,
as nearly equal in number as reasonably possible, with the term of office of the
first class to expire at the first annual meeting of stockholders, the term of
office of the second class to expire at the annual meeting of stockholders one
year thereafter and the term of office of the third class to expire at the
annual meeting of stockholders two years thereafter. At each annual meeting of
stockholders following such initial classification and election, Directors
elected to succeed those Directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of stockholders
after their election.
B. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of Directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of the
Directors then in office, though less than a quorum, and Directors so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been chosen expires. No
decrease in the number of Directors constituting the Board of Directors shall
shorten the term of any incumbent Director.
C. Advance notice of stockholder nominations for the election
of Directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
D. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any Director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 80 percent of the voting
power of all of the then-outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of Directors (after giving effect to
the provisions of Article FOURTH of this Certificate of Incorporation ("Article
FOURTH")), voting together as a single class.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend
or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of
the Bylaws of the Corporation by the Board of Directors shall require the
approval of two-thirds of the Whole Board. The stockholders shall also have
power to adopt, amend or repeal the Bylaws of the Corporation; provided,
however, that, in addition to any vote of the holders of any class or series of
stock of the Corporation required by law or by this Certificate of
Incorporation, the affirmative vote of the holders of at least 80 percent of the
voting power of all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of Directors (after
giving effect to the provisions of Article FOURTH), voting together as a single
class, shall be required to adopt, amend or repeal any provisions of the Bylaws
of the Corporation.
EIGHTH:
A. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly provided in this
section:
1. any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate (as hereinafter defined) of an
Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Interested Stockholder, or any Affiliate of any Interested
Stockholder, of any assets of the Corporation or any Subsidiary having
an aggregate Fair Market Value (as hereinafter defined) equaling or
exceeding 25% or more of the combined assets of the Corporation and its
Subsidiaries; or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any
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Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate Fair Market Value (as hereinafter defined) equaling or
exceeding 25% of the combined Fair Market Value of the then-outstanding
common stock of the Corporation and its Subsidiaries, except pursuant
to an employee benefit plan of the Corporation or any Subsidiary
thereof; or
4. the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of an Interested Stockholder;
or
5. any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or otherwise involving
an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportional share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
an Interested Stockholder or any Affiliate of an Interested
Stockholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of Directors (the "Voting Stock") (after giving effect to
the provision of Article FOURTH), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or by any other
provisions of this Certificate of Incorporation or any Preferred Stock
Designation or in any agreement with any national securities exchange or
otherwise.
The term "Business Combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of paragraphs 1
through 5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only the affirmative vote of the majority of the
outstanding shares of capital stock entitled to vote, or such vote as is
required by law or by this Certificate of Incorporation, if, in the case of any
Business Combination that does not involve any cash or other consideration being
received by the stockholders of the Corporation solely in their capacity as
stockholders of the Corporation, the condition specified in the following
paragraph 1 is met or, in the case of any other Business Combination, all of the
conditions specified in either of the following paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by
two-thirds of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the
Business Combination of consideration other than cash
to be received per share by the holders of Common
Stock in such Business Combination shall at least be
equal to the higher of the following:
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Stockholder
or any of its Affiliates for any shares of Common
Stock acquired by it (i) within the two-year
period immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date"), or (ii) in
the transaction in which it became an Interested
Stockholder, whichever is higher; and
(2) the Fair Market Value per share of Common Stock
on the Announcement Date or on the date on which
the Interested Stockholder became an Interested
Stockholder (such latter date is referred to in
this Article EIGHTH as the "Determination Date"),
whichever is higher.
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(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the
Business Combination of consideration other than cash
to be received per share by holders of shares of any
class of outstanding Voting Stock other than Common
Stock shall be at least equal to the highest of the
following (it being intended that the requirements of
this subparagraph (b) shall be required to be met
with respect to every such class of outstanding
Voting Stock, whether or not the Interested
Stockholder has previously acquired any shares of a
particular class of Voting Stock):
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Stockholder
for any shares of such class of Voting Stock
acquired by it (i) within the two-year period
immediately prior to the Announcement Date, or
(ii) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(2) (if applicable) the highest preferential amount
per share to which the holders of shares of such
class of Voting Stock are entitled in the event
of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; and
(3) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(c) The consideration to be received by holders of a
particular class of outstanding Voting Stock
(including Common Stock) shall be in cash or in the
same form as the Interested Stockholder has paid for
shares of such class of Voting Stock. If the
Interested Stockholder has previously paid for shares
of any class of Voting Stock with varying forms of
consideration, the form of consideration to be
received per share by holders of shares of such class
of Voting Stock shall be either cash or the form used
to acquire the largest number of shares of such class
of Voting Stock previously acquired by the Interested
Stockholder. The price determined in accordance with
subparagraph B.2 of this Article EIGHTH shall be
subject to appropriate adjustment in the event of any
stock dividend, stock split, combination of shares or
similar event.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation
of such Business Combination: (1) except as approved
by a majority of the Disinterested Directors, there
shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) on any outstanding stock
having preference over the Common Stock as to
dividends or liquidation; (2) there shall have been
(i) no reduction in the annual rate of dividends paid
on the Common Stock (except as necessary to reflect
any subdivision of the Common Stock), except as
approved by a majority of the Disinterested
Directors, and (ii) an increase in such annual rate
of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar
transaction which has the effect of reducing the
number of outstanding shares of the Common Stock,
unless the failure to so increase such annual rate is
approved by a majority of the Disinterested
Directors; and (3) neither such Interested
Stockholder or any of its Affiliates shall have
become the beneficial owner of any additional shares
of Voting Stock except as part of the transaction
which results in such Interested Stockholder becoming
an Interested Stockholder.
(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder
shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.
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(f) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to stockholders of the
Corporation at least 30 days prior to the
consummation of such Business Combination (whether or
not such proxy or information statement is required
to be mailed pursuant to such Act or subsequent
provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, a group acting in
concert, a corporation, a partnership, an association, a joint venture,
a pool, a joint stock company, a trust, an unincorporated organization
or similar company, a syndicate or any other group formed for the
purpose of acquiring, holding or disposing of securities.
2. "Interested Stockholder" shall mean any person (other than
the Corporation or any holding company or Subsidiary thereof) who or
which:
(a) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the outstanding
Voting Stock; or
(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of
10% or more of the voting power of the then-outstanding Voting
Stock; or
(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question
beneficially owned by an Interested Stockholder, if such
assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
3. For purposes of this Article EIGHTH, "beneficial ownership"
shall be determined in the manner provided in Section C of Article
FOURTH hereof.
4. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
the date of filing of this Certificate of Incorporation.
5. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition
of Interested Stockholder set forth in paragraph 2 of this section, the
term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
6. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors prior to the time that the Interested
Stockholder became an Interested Stockholder, and any Director who is
thereafter chosen to fill any vacancy of the Board of Directors or who
is elected and who, in either event, is unaffiliated with the
Interested Stockholder and in connection with his or her initial
assumption of office is recommended for appointment or election by a
majority of Disinterested Directors then on the Board of Directors.
7. "Fair Market Value" means: (a) in the case of stock, the
highest closing sales price of the stock during the 30-day period
immediately preceding the date in question of a share of such stock on
the National Association of Securities Dealers Automated Quotation
System or any system then in use, or, if such stock is admitted to
trading on a principal United States securities exchange registered
under the Securities Exchange Act of 1934, Fair Market Value shall be
the highest sales price reported during the 30-day period preceding the
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date in question, or, if no such quotations are available, the Fair
Market Value on the date in question of a share of such stock as
determined by the Board of Directors in good faith, in each case with
respect to any class of stock, appropriately adjusted for any dividend
or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification
of outstanding shares of such stock into a smaller number of shares of
such stock, and (b) in the case of property other than cash or stock,
the Fair Market Value of such property on the date in question as
determined by the Board of Directors in good faith.
8. Reference to "Highest Per Share Price" shall in each case
with respect to any class of stock reflect an appropriate adjustment
for any dividend or distribution in shares of such stock or any stock
split or reclassification of outstanding shares of such stock into a
greater number of shares of such stock or any combination or
reclassification of outstanding shares of such stock into a smaller
number of shares of such stock.
9. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in subparagraphs (a) and (b) of paragraph 2 of
Section B of this Article EIGHTH shall include the shares of Common
Stock and/or the shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
D. A majority of the Directors of the Corporation shall have the
power and duty to determine for the purposes of this Article EIGHTH, on the
basis of information known to them after reasonable inquiry: (a) whether a
person is an Interested Stockholder; (b) the number of shares of Voting Stock
beneficially owned by any person; (c) whether a person is an Affiliate or
Associate of another; and (d) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary in any Business
Combination has an aggregate Fair Market Value equaling or exceeding 25% of the
combined Fair Market Value of the common stock of the Corporation and its
Subsidiaries. A majority of the Directors shall have the further power to
interpret all of the terms and provisions of this Article EIGHTH.
E. Nothing contained in this Article EIGHTH shall be
construed to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least 80 percent of the voting power of all of the
then-outstanding shares of the Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal this Article EIGHTH.
NINTH: The Board of Directors of the Corporation, when evaluating any
offer of another Person (as defined in Article EIGHTH hereof) to (A) make a
tender or exchange offer for any equity security of the Corporation, (B) merge
or consolidate the Corporation with another corporation or entity or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, the social and economic effect of acceptance of such offer on the
Corporation's present and future customers and employees and those of its
Subsidiaries (as defined in Article EIGHTH hereof); on the communities in which
the Corporation and its Subsidiaries operate or are located; on the ability of
the Corporation to fulfill its corporate objectives as a savings bank holding
company and on the ability of its subsidiary savings bank to fulfill the
objectives of a stock savings bank under applicable statutes and regulations.
TENTH:
A. Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a Director or an
Officer of the Corporation or is or was serving at the request of the
Corporation as a Director, Officer, employee or agent of another corporation or
of a partnership, joint venture,
D-8
trust or other enterprise, including service with respect to an employee benefit
plan (hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a Director, Officer, employee or agent
or in any other capacity while serving as a Director, Officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such indemnitee in
connection therewith; provided, however, that, except as provided in Section C
hereof with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this
Article TENTH shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a Director of Officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections A and B of this Article TENTH shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a Director, Officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not
paid in full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article TENTH or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of
expenses conferred in this Article TENTH shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, the
Corporation's Certificate of Incorporation, Bylaws, agreement, vote of
stockholders or disinterested Directors or otherwise.
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E. The Corporation may maintain insurance, at its expense, to
protect itself and any Director, Officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article TENTH with respect to the
indemnification and advancement of expenses of Directors and Officers of the
Corporation.
ELEVENTH: A Director of this Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except for liability (i) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the Director derived an
improper personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of Directors, then the liability of a Director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a Director of the Corporation existing at the time of such repeal
or modification.
TWELFTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of the
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors (after giving effect to
the provisions of Article FOURTH), voting together as a single class, shall be
required to amend or repeal this Article TWELFTH, Section C of Article FOURTH,
Sections C or D of Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH
or Article TENTH.
THIRTEENTH: The name and mailing address of the sole incorporator are
as follows:
NAME MAILING ADDRESS
Kenneth R. Lehman 5335 Wisconsin Avenue, N.W.
Suite 400
Washington, D.C. 20015
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a
corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, do certify that the facts herein stated are
true, and accordingly, have hereto set my hand this 17 day of September, 2001.
/s/ Kenneth R. Lehman
--------------------------
Kenneth R. Lehman
Incorporator
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D-11
EXHIBIT E
BYLAWS OF THE HOLDING COMPANY
WAYNE SAVINGS BANCSHARES, INC.
BY-LAWS
ARTICLE I - STOCKHOLDERS
SECTION 1. ANNUAL MEETING.
An annual meeting of the stockholders, for the election of Directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix, which date
shall be within thirteen (13) months subsequent to the later of the date of
incorporation or the last annual meeting of stockholders.
SECTION 2. SPECIAL MEETINGS.
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, special meetings of stockholders of the
Corporation may be called by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of Directors which the Corporation
would have if there were no vacancies on the Board of Directors (hereinafter the
"Whole Board").
SECTION 3. NOTICE OF MEETINGS.
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned meeting shall be given in conformity herewith.
At any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
SECTION 4. QUORUM.
At any meeting of the stockholders, the holders of a majority of all of
the shares of the stock entitled to vote at the meeting, present in person or by
proxy (after giving effect to the Article FOURTH of the Corporation's
Certificate of Incorporation), shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger number may be
required by law. Where a separate vote by a class or classes is required, a
majority of the shares of such class or classes present in person or represented
by proxy shall constitute a quorum entitled to take action with respect to that
vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock entitled to vote who
are present, in person or by proxy, may adjourn the meeting to another place,
date, or time.
If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held with
those present constituting a quorum, then except as otherwise required by law,
those present at such adjourned meeting shall constitute a quorum, and all
matters shall be determined by a majority of the votes cast at such meeting.
SECTION 5. ORGANIZATION.
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Such person as the Board of Directors may have designated or, in the
absence of such a person, the Chairman of the Board of the Corporation or, in
his or her absence, the Chief Executive Officer or, in his or her absence, such
person as may be chosen by the holders of a majority of the shares entitled to
vote who are present, in person or by proxy, shall call to order any meeting of
the stockholders and act as chairman of the meeting. In the absence of the
Secretary of the Corporation, the secretary of the meeting shall be such person
as the chairman appoints.
SECTION 6. CONDUCT OF BUSINESS.
(a) The chairman of any meeting of stockholders shall determine
the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to him
or her in order. The date and time of the opening and closing of the polls for
each matter upon which the stockholders will vote at the meeting shall be
announced at the meeting.
(b) At any annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting: (i) by or at
the direction of the Board of Directors or: (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the business must
relate to a proper subject matter for stockholder action and the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered or mailed to
and received at the principal executive offices of the Corporation not less than
ninety (90) days prior to the anniversary date of the mailing of proxy materials
by the Corporation in connection with the immediately preceding annual meeting
of stockholders of the Corporation or, in the case of the first annual meeting
of stockholders of the Corporation, not less than ninety (90) days prior to the
anniversary date of the mailing of proxy materials by Wayne Savings Bancshares,
Inc., a federal corporation, in connection with that corporation's immediately
preceding annual meeting of stockholders. A stockholder's notice to the
Secretary shall set forth as to each matter such stockholder proposes to bring
before the annual meeting: (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting; (ii) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business; (iii) the class
and number of shares of the Corporation's capital stock that are beneficially
owned by such stockholder and (iv) any material interest of such stockholder in
such business. Notwithstanding anything in these By-laws to the contrary, no
business shall be brought before or conducted at an annual meeting except in
accordance with the provisions of this Section 6(b). The Officer of the
Corporation or other person presiding over the annual meeting shall, if the
facts so warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 6(b) and, if he or she should so determine, he or she shall so declare
to the meeting and any such business so determined to be not properly brought
before the meeting shall not be transacted.
At any special meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting by or at the direction
of the Board of Directors.
(c) Only persons who are nominated in accordance with the
procedures set forth in these By-laws shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of stockholders at which Directors are to
be elected only: (i) by or at the direction of the Board of Directors or; (ii)
by any stockholder of the Corporation entitled to vote for the election of
Directors at the meeting who complies with the notice procedures set forth in
this Section 6(c). Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made by timely notice in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice must
be delivered or mailed to and received at the principal executive offices of the
Corporation not less than ninety (90) days prior to the anniversary date of the
mailing of proxy materials by the Corporation in connection with the immediately
preceding annual meeting of stockholders of the Corporation or, in the case of
the first annual meeting of stockholders of the Corporation, not less than
ninety (90) days prior to the anniversary date of the mailing of proxy materials
by Wayne Savings Bancshares, Inc., a federal corporation, in connection with
that corporation's immediately preceding annual meeting of stockholders. Such
stockholder's notice shall set forth: (i) as to each person whom such
stockholder proposes to nominate for election or re-election as a Director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for the election of Directors, or is
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otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934 (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a Director if elected); and
(ii) as to the stockholder giving notice (x) the name and address, as they
appear on the Corporation's books, of such stockholder and (y) the class and
number of shares of the Corporation's capital stock that are beneficially owned
by such stockholder. At the request of the Board of Directors any person
nominated by the Board of Directors for election as a Director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a Director of the Corporation unless nominated
in accordance with the provisions of this Section 6(c). The Officer of the
Corporation or other person presiding at the meeting shall, if the facts so
warrant, determine that a nomination was not made in accordance with such
provisions and, if he or she should so determine, he or she shall declare to the
meeting and the defective nomination shall be disregarded.
SECTION 7. PROXIES AND VOTING.
At any meeting of the stockholders, every stockholder entitled to vote
may vote in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure established
for the meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this paragraph
may be substituted or used in lieu of the original writing or transmission for
any and all purposes for which the original writing or transmission could be
used, provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or transmission.
All voting, including on the election of Directors but excepting where
otherwise required by law or by the governing documents of the Corporation, may
be by a voice vote; provided, however, that upon demand therefor by a
stockholder entitled to vote or by his or her proxy, a stock vote shall be
taken. Every stock vote shall be taken by ballots, each of which shall state the
name of the stockholder or proxy voting and such other information as may be
required under the procedure established for the meeting. The Corporation shall,
in advance of any meeting of stockholders, appoint one or more inspectors to act
at the meeting and make a written report thereof. The Corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his or her ability.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by the Certificate of Incorporation or by law, all
other matters shall be determined by a majority of the votes present and cast at
a properly called meeting of stockholders.
SECTION 8. STOCK LIST.
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held.
The stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the identity
of the stockholders entitled to vote at the meeting and the number of shares
held by each of them.
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SECTION 9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING.
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, any action required or permitted to be taken
by the stockholders of the Corporation must be effected at an annual or special
meeting of stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders.
ARTICLE II - BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS, NUMBER AND TERM OF OFFICE.
The business and affairs of the Corporation shall be under the
direction of its Board of Directors. The number of Directors who shall
constitute the Whole Board shall be such number as the Board of Directors shall
from time to time have designated by resolution. The Board of Directors shall
annually elect a Chairman of the Board from among its members who shall, when
present, preside at its meetings.
The Directors, other than those who may be elected by the holders of
any class or series of Preferred Stock, shall be divided, with respect to the
time for which they severally hold office, into three classes, with the term of
office of the first class to expire at the first annual meeting of stockholders,
the term of office of the second class to expire at the annual meeting of
stockholders one year thereafter and the term of office of the third class to
expire at the annual meeting of stockholders two years thereafter, with each
Director to hold office until his or her successor shall have been duly elected
and qualified. At each annual meeting of stockholders, commencing with the first
annual meeting, Directors elected to succeed those Directors whose terms then
expire shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election, with each Director to hold
office until his or her successor shall have been duly elected and qualified.
SECTION 2. VACANCIES AND NEWLY CREATED DIRECTORSHIPS.
Subject to the rights of the holders of any class or series of
preferred stock, and unless the Board of Directors otherwise determines, newly
created Directorships resulting from any increase in the authorized number of
Directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
may be filled only by a majority vote of the Directors then in office, though
less than a quorum, and Directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires and until such Director's
successor shall have been duly elected and qualified. No decrease in the number
of authorized Directors constituting the Board shall shorten the term of any
incumbent Director.
SECTION 3. REGULAR MEETINGS.
Regular meetings of the Board of Directors shall be held at such place
or places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all Directors. A
notice of each regular meeting shall not be required.
SECTION 4. SPECIAL MEETINGS.
Special meetings of the Board of Directors may be called by one-third
(1/3) of the Directors then in office (rounded up to the nearest whole number)
or by the Chairman of the Board and shall be held at such place, on such date,
and at such time as they or he or she shall fix. Notice of the place, date, and
time of each such special meeting shall be given to each Director by whom it is
not waived by mailing written notice not less than five (5) days before the
meeting or be telegraphing or telexing or by facsimile transmission of the same
not less than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.
SECTION 5. QUORUM.
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At any meeting of the Board of Directors, a majority of the Whole Board
shall constitute a quorum for all purposes. If a quorum shall fail to attend any
meeting, a majority of those present may adjourn the meeting to another place,
date, or time, without further notice or waiver thereof.
SECTION 6. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
SECTION 7. CONDUCT OF BUSINESS.
At any meeting of the Board of Directors, business shall be transacted
in such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the Directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
SECTION 8. POWERS.
The Board of Directors may, except as otherwise required by law,
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, including, without limiting the generality of the
foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance
with law;
(2) To purchase or otherwise acquire any property, rights
or privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such
form as it may determine, of written obligations of
every kind, negotiable or non-negotiable, secured or
unsecured, and to do all things necessary in connection
therewith;
(4) To remove any Officer of the Corporation with or
without cause, and from time to time to devolve the
powers and duties of any Officer upon any other person
for the time being;
(5) To confer upon any Officer of the Corporation the power
to appoint, remove and suspend subordinate Officers,
employees and agents;
(6) To adopt from time to time such stock, option, stock
purchase, bonus or other compensation plans for
Directors, Officers, employees and agents of the
Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement,
and other benefit plans for Directors, Officers,
employees and agents of the Corporation and its
subsidiaries as it may determine; and
(8) To adopt from time to time regulations, not
inconsistent with these By-laws, for the management of
the Corporation's business and affairs.
SECTION 9. COMPENSATION OF DIRECTORS.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as Directors,
including, without limitation, their services as members of committees of the
Board of Directors.
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ARTICLE III - COMMITTEES
SECTION 1. COMMITTEE OF THE BOARD OF DIRECTORS.
The Board of Directors, by a vote of a majority of the Whole Board, may
from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a Director or Directors to serve as the member or members, designating, if
it desires, other Directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so designated
may exercise the power and authority of the Board of Directors to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law if the resolution which designates the committee or a supplemental
resolution of the Board of Directors shall so provide. In the absence or
disqualification of any member of any committee and any alternate member in his
or her place, the member or members of the committee present at the meeting and
not disqualified from voting, whether or not he or she or they constitute a
quorum, may by unanimous vote appoint another member of the Board of Directors
to act at the meeting in the place of the absent or disqualified member.
SECTION 2. CONDUCT OF BUSINESS.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filled with the minutes of
the proceedings of such committee.
SECTION 3. NOMINATING COMMITTEE.
The Board of Directors shall appoint a Nominating Committee of the
Board, consisting of not less than three (3) members, one of which shall be the
Chairman of the Board. The Nominating Committee shall have authority (a) to
review any nominations for election to the Board of Directors made by a
stockholder of the Corporation pursuant to Section 6(c) (ii) of Article I of
these By-laws in order to determine compliance with such By-law provision and
(b) to recommend to the Whole Board nominees for election to the Board of
Directors to replace those Directors whose terms expire at the annual meeting of
stockholders next ensuing.
ARTICLE IV - OFFICERS
SECTION 1. GENERALLY.
(a) The Board of Directors as soon as may be practicable after the
annual meeting of stockholders shall choose a Chairman of the Board, a President
and Chief Executive Officer, one or more Vice Presidents, and a Secretary and
from time to time may choose such other Officers as it may deem proper. The
Chairman of the Board shall be chosen from among the Directors. Any number of
offices may be held by the same person.
(b) The term of office of all Officers shall be until the next annual
election of Officers and until their respective successors are chosen, but any
Officer may be removed from office at any time by the affirmative vote of
two-thirds of the authorized number of Directors then constituting the Board of
Directors.
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(c) All Officers chosen by the Board of Directors shall each have such
powers and duties as generally pertain to their respective offices, subject to
the specific provisions of this Article IV. Such Officers shall also have such
powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof.
SECTION 2. CHAIRMAN OF THE BOARD.
The Chairman of the Board shall, subject to the provisions of these
By-laws and to the direction of the Board of Directors, serve in a general
executive capacity and, when present, shall preside at all meetings of the Board
of Directors. The Chairman of the Board shall perform all duties and have all
powers which are commonly incident to the office of Chairman of the Board or
which are delegated to him or her by the Board of Directors. He or she shall
have power to sign all stock certificates, contracts and other instruments of
the Corporation which are authorized.
SECTION 3. PRESIDENT AND CHIEF EXECUTIVE OFFICER.
The President and Chief Executive Officer (the "President") shall have
general responsibility for the management and control of the business and
affairs of the Corporation and shall perform all duties and have all powers
which are commonly incident to the offices of President and Chief Executive
Officer or which are delegated to him or her by the Board of Directors. Subject
to the direction of the Board of Directors, the President shall have power to
sign all stock certificates, contracts and other instruments of the Corporation
which are authorized and shall have general supervision of all of the other
Officers (other than the Chairman of the Board), employees and agents of the
Corporation.
SECTION 4. VICE PRESIDENT.
The Vice President or Vice Presidents shall perform the duties of the
President in his or her absence or during his disability to act. In addition,
the Vice Presidents shall perform the duties and exercise the powers usually
incident to their respective offices and/or such other duties and powers as may
be properly assigned to them by the Board of Directors, the Chairman of the
Board or the President. A Vice President or Vice Presidents may be designated as
Executive Vice President or Senior Vice President or any such designation as the
Board of Directors, Chairman of the Board or President deems appropriate.
SECTION 5. SECRETARY.
The Secretary or an Assistant Secretary shall issue notices of
meetings, shall keep their minutes, shall have charge of the seal and the
corporate books, shall perform such other duties and exercise such other powers
as are usually incident to such offices and/or such other duties and powers as
are properly assigned thereto by the Board of Directors, the Chairman of the
Board or the President.
SECTION 6. ASSISTANT SECRETARIES AND OTHER OFFICERS.
The Board of Directors may appoint one or more Assistant Secretaries
and such other Officers who shall have such powers and shall perform such duties
as are provided in these By-laws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the President.
SECTION 7. ACTION WITH RESPECT TO SECURITIES OF OTHER
CORPORATIONS.
Unless otherwise directed by the Board of Directors, the President or
any Officer of the Corporation authorized by the President shall have power to
vote and otherwise act on behalf of the Corporation, in person or by proxy, at
any meeting of stockholders of or with respect to any action of stockholders of
any other corporation in which the Corporation may hold securities and otherwise
to exercise any and all rights and powers which the Corporation may possess by
reason of its ownership of securities in such other corporation.
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ARTICLE V - STOCK
SECTION 1. CERTIFICATES OF STOCK
Each stockholder shall be entitled to a certificate signed by, or in
the name of the Corporation by, the Chairman of the Board or the President, and
by the Secretary or an Assistant Secretary, or any Treasurer or Assistant
Treasurer, certifying the number of shares owned by him or her. Any or all of
the signatures on the certificate may be by facsimile.
SECTION 2. TRANSFERS OF STOCK.
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these
By-laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.
SECTION 3. RECORD DATE.
In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held, and, for determining stockholders entitled to
receive payment of any dividend or other distribution or allotment of rights or
to exercise any rights of change, conversion or exchange of stock or for any
other purpose, the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES.
In the event of the loss, theft or destruction of any certificate of
stock, another may be issued in its place pursuant to such regulations as the
Board of Directors may establish concerning proof of such loss, theft or
destruction and concerning the giving of a satisfactory bond or bonds of
indemnity.
SECTION 5. REGULATIONS.
The issue, transfer, conversion and registration of certificates of
stock shall be governed by such other regulations as the Board of Directors may
establish.
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ARTICLE VI - NOTICES
SECTION 1. NOTICES.
Except as otherwise specifically provided herein or required by law,
all notices required to be given to any stockholder, Director, Officer, employee
or agent shall be in writing and may in every instance be effectively given by
hand delivery to the recipient thereof, by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram or mailgram or other
courier. Any such notice shall be addressed to such stockholder, Director,
Officer, employee or agent at his or her last known address as the same appears
on the books of the Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails or by telegram or
mailgram or other courier, shall be the time of the giving of the notice.
SECTION 2. WAIVERS.
A written waiver of any notice, signed by a stockholder, Director,
Officer, employee or agent, whether before or after the time of the event for
which notice is to be given, shall be deemed equivalent to the notice required
to be given to such stockholder, Director, Officer, employee or agent. Neither
the business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII - MISCELLANEOUS
SECTION 1. FACSIMILE SIGNATURES.
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-laws, facsimile signatures of any Officer or
Officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
SECTION 2. CORPORATE SEAL.
The Board of Directors may provide a suitable seal, containing the name
of the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Comptroller or by an Assistant Secretary or
an assistant to the Comptroller.
SECTION 3. RELIANCE UPON BOOKS, REPORTS AND RECORDS.
Each Director, each member of any committee designated by the Board of
Directors, and each Officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its Officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such Director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
SECTION 4. FISCAL YEAR.
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
SECTION 5. TIME PERIODS.
In applying any provision of these By-laws which requires that an act
be done or not be done a specified number of days prior to an event or that an
act be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
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ARTICLE VIII - AMENDMENT
The Board of Directors may by a two-thirds vote amend, alter or repeal
these By-laws at any meeting of the Board, provided notice of the proposed
change is given not less than two days prior to the meeting. The stockholders
shall also have power to amend, alter or repeal these By-laws at any meeting of
stockholders, provided notice of the proposed change was given in the Notice of
the Meeting; provided, however, that, notwithstanding any other provisions of
these By-laws or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock Designation or these By-laws, the
affirmative votes of the holders of at least 80% of the voting power of all the
then-outstanding shares of the Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal any provisions of these By-laws.
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