AMENDED
PLAN OF STOCK ISSUANCE
K-FED BANCORP
Covina, California
January 20, 2004
PLAN OF STOCK ISSUANCE OF
K-FED BANCORP
TABLE OF CONTENTS
PAGE
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I. GENERAL................................................................ 1
II. DEFINITIONS............................................................ 2
III. CONDITIONS TO COMPLETION OF STOCK OFFERING............................. 5
IV. STOCK ISSUANCE PROCEDURE............................................... 5
V. STOCK OFFERING......................................................... 6
A. Total Number of Shares and Purchase Price of Common Stock........... 6
B. Subscription Rights................................................. 8
C. Direct Community Offering and Syndicated Community Offering......... 9
D. Additional Limitations Upon Purchases of Shares of Stock
Holding Company Common Stock...................................... 11
E. Restrictions and Other characteristics of Stock Holding Company..... 12
F. Exercise of Subscription Rights; Order Forms........................ 13
G. Method of Payment................................................... 14
H. Undelivered, Defective or Late Order Forms; Insufficient Payment.... 15
I. Member in Non-Qualified States or in Foreign Countries.............. 15
VI. CHARTER AND BYLAWS OF THE MHC, STOCK HOLDING
COMPANY AND THE ASSOCIATION.......................................... 16
VII. STOCK BENEFIT PLANS.................................................... 16
VIII. SECURITIES REGISTRATION AND MARKET MAKING.............................. 17
IX STATUS OF DEPOSIT ACCOUNTS AND LOAN SUBSEQUENT TO
STOCK OFFERING....................................................... 17
X. RESTRICTIONS ON ACQUISITION OF THE STOCK HOLDING
COMPANY AND THE ASSOCIATION.......................................... 17
XI. AMENDMENT OR TERMINATION OF PLAN....................................... 17
i
XII. EXPENSES OF THE STOCK OFFERING......................................... 18
XIII. TAX RULING............................................................. 18
XIV. EXTENSION OF CREDIT FOR PURCHASE OF STOCK.............................. 18
XV. CONVERSION OF MHC TO STOCK FORM........................................ 18
ii
AMENDED
PLAN OF STOCK ISSUANCE
K-FED BANCORP
Covina, California
I. GENERAL
On July 1, 2003, Kaiser Federal Bank (the "Association") reorganized into a
mutual holding company structure whereby the Association became a wholly owned
subsidiary of K-Fed Bancorp (the "Stock Holding Company") and the Stock Holding
Company became a wholly owned subsidiary of K-Fed Mutual Holding Company (the
"MHC"). On January 20, 2004, the Boards of Directors of the Association, the
Stock Holding Company and the MHC unanimously adopted this Plan whereby the
Stock Holding Company will conduct a stock offering, in compliance with OTS
regulations, of up to 49.9% of the aggregate total voting stock of the Stock
Holding Company. The Plan provides that non-transferable subscription rights to
purchase Stock Holding Company Common Stock will be offered first to Eligible
Account Holders of record as of the Eligibility Record Date, then to Tax
Qualified Employee Plans and then to Supplemental Eligible Account Holders of
record as of the Supplemental Eligibility Record Date. Concurrently with, at any
time during, or promptly after the Subscription Offering, and on a lowest
priority basis, an opportunity to subscribe may also be offered to the general
public in a Direct Community Offering or a Syndicated Community Offering. The
price of the Common Stock of the Stock Holding Company will be based upon an
independent appraisal of the Association and will reflect its estimated pro
forma market value following the Stock Offering. It is the desire of the Board
of Directors of the Association to attract new capital to the Association in
order to increase its capital position, support future growth and increase the
amount of funds available for residential and other lending. The Association is
also expected to benefit from its management and other personnel having a stock
ownership in its business, since stock ownership is viewed as an effective
performance incentive and a means of attracting, retaining and compensating
management and other personnel.
In connection with the Stock Offering, the Association will apply to the
OTS to have the Stock Holding Company retain up to 50% of the net proceeds of
the Stock Offering, or such other amount as may be determined by the Boards of
Directors of the Association and the Stock Holding Company. The Stock Holding
Company has the power to issue shares of Capital Stock to persons other than the
MHC. However, so long as the MHC is in existence, the MHC will be required to
own at least a majority of the Voting Stock of the Stock Holding Company. The
Stock Holding Company may issue any amount of Non-Voting Stock to persons other
than the MHC. The Stock Holding Company is authorized to undertake one or more
Minority Stock Offerings of less than 50% in the aggregate of the total
outstanding Common Stock of the Stock Holding Company, and the Stock Holding
Company intends to offer for sale up to 49.9% of its Common Stock in the Stock
Offering. The Association believes that capitalization of the MHC and the Stock
Holding Company will provide the MHC and the Stock Holding Company with economic
strength separate and apart from the Association and could facilitate future
activities by the MHC and the Stock Holding Company.
II. DEFINITIONS
ACTING IN CONCERT: The term "acting in concert" shall have the same meaning
given it in ss.574.2(c) of the Rules and Regulations of the OTS as reasonably
interpreted solely within the discretion of the Board of Directors of the
Association and the Stock Holding Company.
ACTUAL SUBSCRIPTION PRICE: The price per share, determined as provided in
Section V of this Plan, at which Stock Holding Company Common Stock will be sold
in the Subscription Offering.
AFFILIATE: An "affiliate" of, or a Person "affiliated" with, a specified
Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.
ASSOCIATE: The term "associate," when used to indicate a relationship with
any Person, means (i) any corporation or organization (other than the
Association, the Stock Holding Company or the MHC or a majority-owned subsidiary
of any of them) of which such Person is a director, officer or partner or is,
directly or indirectly, the beneficial owner of ten percent or more of any class
of equity securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity, 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 MHC, the Stock Holding Company or the
Association or any subsidiary of the MHC or the Stock Holding Company or any
Affiliate thereof; and any person acting in concert with any persons or entities
specified in clauses (i) through (iii) above; provided, however, that any
Tax-Qualified or Non-Tax-Qualified Employee Plan shall not be deemed to be an
associate of any Director or Officer of the Stock Holding Company or the
Association, to the extent provided herein. When used to refer to a Person other
than an Officer or Director of the Association, the Association in its sole
discretion may determine the Persons that are Associates of other Persons.
ASSOCIATION: Kaiser Federal Bank.
CAPITAL STOCK: Any and all authorized stock of the Stock Holding Company or
the Association.
COMMON STOCK: Common stock, par value $.01 per share, issued by the Stock
Holding Company, pursuant to its stock charter.
DEPOSIT ACCOUNT: Any withdrawable or repurchasable account or deposit in
the Association including Savings Accounts and demand accounts.
DIRECT COMMUNITY OFFERING: The offering to the general public of any
unsubscribed shares which may be effected as provided in Section V hereof.
DIRECTOR: A member of the Board of Directors of the Association and, where
applicable, a member of the Board of Directors of the MHC and the Stock Holding
Company.
ELIGIBILITY RECORD DATE: The close of business on October 31, 2001.
ELIGIBLE ACCOUNT HOLDER: Any Person holding a Qualifying Deposit in the
Association on the Eligibility Record Date.
EMPLOYEE: A Person who is employed by the Association at the commencement
of the Stock Offering.
ESOP: The Stock Holding Company's employee stock ownership plan.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
Independent Appraiser: The appraiser retained by the Association to prepare
an appraisal of the pro forma market value of the Association and the Stock
Holding Company.
MARKET MAKER: A dealer (i.e., any Person who engages directly or indirectly
as agent, broker or principal in the business of offering, buying, selling, or
otherwise dealing or trading in securities issued by another Person) who, with
respect to a particular security, (i) regularly publishes bona fide, competitive
bid and offer quotations in a recognized inter-dealer quotation system; or (ii)
furnishes bona fide competitive bid and offer quotations on request; and (iii)
is ready, willing, and able to effect transactions in reasonable quantities at
his quoted prices with other brokers or dealers.
MAXIMUM SUBSCRIPTION PRICE: The price per share of Stock Holding Company
Common Stock to be paid initially by subscribers in the Subscription Offering.
MEMBER: Any person holding a Deposit Account in the Association.
MHC: K-Fed Mutual Holding Company.
MINORITY STOCK OFFERING: One or more offerings of less than 50% in the
aggregate of the outstanding Common Stock of the Stock Holding Company to
persons other than the MHC.
MINORITY STOCKHOLDER: Any owner of the Stock Holding Company's Common
Stock, other than the MHC.
NON-TAX-QUALIFIED EMPLOYEE PLAN: Any defined benefit plan or defined
contribution plan of the Association or the Stock Holding Company, such as an
Employee stock ownership plan, stock bonus plan, profit-sharing plan or other
plan, which with its related trust does not meet the requirements to be
"qualified" under Section 401 of the Internal Revenue Code.
NON-VOTING STOCK: Any capital stock other than Voting Stock.
OTS: Office of Thrift Supervision, Department of the Treasury, and its
successors.
OFFICER: An executive officer of the MHC, Stock Holding Company or the
Association, including the Chairman of the Board, President, Executive Vice
Presidents, Senior Vice Presidents in charge of principal business functions,
and any person participating in major policy making functions of the
Association.
ORDER FORMS: Forms to be used in the Subscription Offering to exercise
Subscription Rights.
PERSON: An individual, a corporation, a partnership, an association, a
joint-stock company, a trust, any unincorporated organization, a government or
political subdivision thereof or any other entity.
PLAN: This Amended Plan of Stock Issuance, including any amendment approved
as provided in this Plan.
QUALIFYING DEPOSIT: The aggregate balance of $50 or more of each Deposit
Account of an Eligible Account Holder as of the Eligibility Record Date or of a
Supplemental Eligible Account Holder as of the Supplemental Eligibility Record
Date.
SAIF: The Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation.
SAVINGS ACCOUNT: The term "Savings Account" means any withdrawable account
in the Association including a demand account.
SEC: U.S. Securities and Exchange Commission.
STOCK HOLDING COMPANY: The federal stock corporation that is majority owned
by the MHC.
STOCK OFFERING: The offering of Stock Holding Company Common Stock to
persons other than the MHC in a Subscription Offering, and to the extent shares
remain available, in a Direct Community Offering or otherwise.
SUBSCRIPTION OFFERING: The offering of shares of Stock Holding Company
Common Stock for subscription and purchase pursuant to this Plan.
SUBSCRIPTION RIGHTS: Non-transferable, non-negotiable, personal rights of
the Association's Eligible Account Holders, Tax-Qualified Employee Plans and
Supplemental Eligible Account Holders to subscribe for shares of Stock Holding
Company Common Stock in the Subscription Offering.
SUPPLEMENTAL ELIGIBILITY RECORD DATE: The last day of the calendar quarter
preceding approval of the Plan by the OTS.
SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER: Any person holding a Qualifying
Deposit in the Association (other than an Officer or Director and their
Associates) on the Supplemental Eligibility Record Date.
SYNDICATED COMMUNITY OFFERING: The offering for sale by a syndicate of
broker-dealers to the general public of any shares of Stock Holding Company
Common Stock not subscribed for in the Subscription Offering or the Direct
Community Offering, if any.
SYNDICATED COMMUNITY OFFERING PRICE: The price per share at which any
unsubscribed shares of the Stock Holding Company Common Stock are initially
offered for sale in the Syndicated Community Offering.
TAX-QUALIFIED EMPLOYEE PLANS: Any defined benefit plan or defined
contribution plan of the Association or the Stock Holding Company, 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.
VOTING STOCK: 1. Common or preferred stock, or similar interests if the
shares by statute, charter or in any manner, entitle the holder to: (i) vote for
or to select Directors of the Association or the Stock Holding Company; and (ii)
vote on or direct the conduct of the operations or other significant policies of
the Association or the Stock Holding Company
2. Notwithstanding anything in paragraph (1) above, preferred stock is not
"Voting Stock" if: (i) voting rights associated with the preferred stock are
limited solely to the type customarily provided by statute with regard to
matters that would significantly and adversely affect the rights or preferences
of the preferred stock, such as the issuance of additional amounts or classes of
senior securities, the modification of the terms of the preferred stock, the
dissolution of the Association or the Stock Holding Company, or the payment of
dividends by the Association or the Stock Holding Company when preferred
dividends are in arrears; (ii) the preferred stock represents an essentially
passive investment or financing device and does not otherwise provide the holder
with control over the issuer; and (iii) the preferred stock does not at the time
entitle the holder, by statute, charter, or otherwise, to select or to vote for
the selection of directors of the Association or the Stock Holding Company.
3. Notwithstanding anything in paragraphs (1) and (2) above, "Voting Stock"
shall be deemed to include preferred stock and other securities that, upon
transfer or otherwise, are convertible into Voting Stock or exercisable to
acquire Voting Stock where the holder of the stock, convertible security or
right to acquire Voting Stock has the preponderant economic risk in the
underlying Voting Stock. Securities immediately convertible into Voting Stock at
the option of the holder without payment of additional consideration shall be
deemed to constitute the Voting Stock into which they are convertible; other
convertible securities and rights to acquire Voting Stock shall not be deemed to
vest the holder with the preponderant economic risk in the underlying Voting
Stock if the holder has paid less than 50% of the consideration required to
directly acquire the Voting Stock and has no other economic interest in the
underlying Voting Stock.
III. CONDITIONS TO COMPLETION OF STOCK OFFERING
Completion of the Stock Offering is expressly conditioned upon the
following:
A. The Board of Directors shall adopt this Plan by not less than a two-thirds
vote.
B. The MHC shall notify its Members of the adoption of the Plan by publishing
a statement in a newspaper having a general circulation in each community
in which the Association maintains an office.
C. Copies of the Plan adopted by the Board of Directors shall be made
available for inspection at each office of the Association.
D. The Association will promptly cause an Application for Minority Stock
Issuance to be prepared and filed with the OTS, and a Registration
Statement on Form S-1 to be prepared and filed with the SEC.
E. Upon receipt of notice from the OTS to do so, the MHC shall notify its
Members that the Stock Holding Company has filed the Application for
Approval of a Minority Stock Issuance by posting notice in each of the
Association's offices and by publishing notice in a newspaper having
general circulation in each community in which the Association maintains an
office.
IV. STOCK ISSUANCE PROCEDURE
The Stock Holding Company Common Stock will be offered for sale in the
Subscription Offering at the Maximum Subscription Price to Eligible Account
Holders, Tax-Qualified Employee Plans, and to Supplemental Eligible Account
Holders. The Association may, either concurrently with, at any time during, or
promptly after the Subscription Offering, also offer the Stock Holding Company
Stock to and
accept subscriptions from other Persons in a Direct Community Offering or a
Syndicated Community Offering; provided that the Association's Eligible Account
Holders, Tax-Qualified Employee Plans, and Supplemental Eligible Account Holders
shall have the priority rights to subscribe for Stock Holding Company Common
Stock as set forth in Section V of this Plan.
The period for the Subscription Offering and Direct Community Offering will
be not less than 20 days nor more than 45 days unless extended by the
Association and the Stock Holding Company. Upon completion of the Subscription
Offering and Direct Community Offering, if any, any unsubscribed shares of Stock
Holding Company Common Stock may be sold through a syndicate of broker-dealers
to selected members of the general public in the Syndicated Community Offering.
If for any reason all of the shares are not sold in the Subscription Offering,
Direct Community Offering, if any, and Syndicated Community Offering, if any,
the Stock Holding Company and the Association will use their best efforts to
obtain other purchasers, subject to OTS approval. Completion of the sale of all
shares of Stock Holding Company Common Stock not sold in the Subscription
Offering is required within 90 days after the offering circular was declared
effective by the OTS unless an extension is approved by the Stock Holding
Company, the Association and the OTS. In connection with such extensions,
subscribers and other purchasers will be permitted to increase, decrease or
rescind their subscriptions or purchase orders to the extent required by the OTS
in approving the extensions. Completion of the sale of all shares of Stock
Holding Company Common Stock is required within 24 months after the date of
approval of the Plan by the OTS.
V. STOCK OFFERING
A. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF COMMON STOCK
The total number of shares of Stock Holding Company Common Stock
to be issued in the Stock Offering will be determined jointly by the
Boards of Directors of the Stock Holding Company and the Association
prior to the commencement of the Subscription Offering, subject to
adjustment if necessitated by market or financial conditions prior to
consummation of the Stock Offering. The total number of shares of
Stock Holding Company Common Stock shall also be subject to increase
in connection with any oversubscriptions in the Subscription Offering
or Direct Community Offering. The total number of shares of Common
Stock that may be issued to persons other than the MHC must be less
than 50% of the issued and outstanding shares of the Stock Holding
Company.
The aggregate price for which all shares of Stock Holding Company
Common Stock to be sold will be based on an independent appraisal of
the estimated total pro forma market value of the Stock Holding
Company and the Association. Such appraisal shall be performed in
accordance with OTS guidelines and will be updated as appropriate as
required by applicable regulations. The appraisal will be made by an
Independent Appraiser experienced in the area of thrift institution
appraisals. The appraisal will include, among other things, an
analysis of the historical and pro forma operating results and net
worth of the Association and a comparison of the Stock Holding
Company, the Association and the Stock Holding Stock Company Common
Stock with comparable thrift institutions and holding companies and
their respective outstanding capital stocks. Based upon the
independent appraisal, the Boards of Directors of the Stock Holding
Company and the Association will jointly fix the Maximum Subscription
Price. The sales price of the Common Stock shall be at a uniform price
determined in accordance with OTS regulations.
If, following completion of the Subscription Offering and Direct
Community Offering, if any, a Syndicated Community Offering is
effected, the Actual Subscription Price for each share of Stock
Holding Company Common Stock will be the same as the Syndicated
Community Offering Price at which unsubscribed shares of Stock Holding
Company Common Stock are initially offered for sale in the Syndicated
Community Offering.
If, upon completion of the Subscription Offering, Direct Community
Offering, if any, and Syndicated Community Offering, if any, all of
the Stock Holding Company Common Stock is subscribed for or only a
limited number of shares remain unsubscribed for, subject to Part V
hereof, the Actual Subscription Price for each share of Stock Holding
Company Common Stock will be determined by dividing the estimated
appraised aggregate pro forma market value of the Stock Holding
Company and the Association, based on the independent appraisal as
updated upon completion of the Subscription Offering or other sale of
all of the Stock Holding Company Common Stock, by the total number of
shares of Stock Holding Company Common Stock to be issued by the Stock
Holding Company upon completion of the Stock Offering. Such appraisal
will then be expressed in terms of a specific aggregate dollar amount
rather than as a range.
Prior to the commencement of the Stock Offering, an estimated
valuation range will be established, which range may vary within 15%
above to 15% below the midpoint of such range, and up to 15% greater
than the maximum of such range, as determined by the Board of
Directors at the time of the Stock Offering and consistent with OTS
regulations. The Stock Holding Company intends to issue up to 49.9% of
its common stock in the Offering. The number of shares of Common Stock
to be issued and the ownership interest of the MHC may be increased or
decreased by the Stock Holding Company, taking into consideration any
change in the independent valuation and other factors, at the
discretion of the Board of Directors of the Association and the Stock
Holding Company.
Based upon the independent valuation as updated prior to the
commencement of the Stock Offering, the Board of Directors may
establish the minimum ownership percentage applicable to the Stock
Offering, may fix the ownership percentage of the Minority
Stockholders, or may establish the minimum and maximum aggregate
dollar amount of shares to be sold. In the event the ownership
percentage of the Minority Stockholders is not fixed in the Stock
Offering, the minority ownership percentage (the "Minority Ownership
Percentage") will be determined as follows: (a) the product of (x) the
total number of shares of Common Stock issued by the Stock Holding
Company and (y) the purchase price per share divided by (b) the
estimated aggregate pro forma market value of the Association and the
Stock Holding Company immediately after the Stock Offering as
determined by the Independent Appraiser, expressed in terms of a
specific aggregate dollar amount rather than as a range, upon the
closing of the Stock Offering or sale of all the Common Stock.
Notwithstanding the foregoing, no sale of Common Stock may be
consummated unless, prior to such consummation, the Independent
Appraiser confirms to the Stock Holding Company, the Association 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 aggregate value of the Common Stock to be issued is incompatible
with its estimate of the aggregate consolidated pro forma market value
of the Stock Holding Company and the Association. If such confirmation
is not received, the Stock Holding Company may cancel the Stock
Offering, extend the Stock Offering and establish a new estimated
valuation range and/or estimated price range, extend, reopen or hold a
new Stock Offering or take such other action as the OTS may permit.
The estimated market value of the Stock Holding Company and
the Association shall be determined for such purpose by an Independent
Appraiser on the basis of such appropriate factors as are not
inconsistent with OTS regulations. The Common Stock to be issued in
the Stock Offering shall be fully paid and nonassessable.
If there is a Direct Community Offering or Syndicated
Community Offering of shares of Common Stock not subscribed for in the
Subscription Offering, the price per share at which the Common Stock
is sold in such Direct Community Offering or Syndicated Community
Offering shall be equal to the purchase price per share at which the
Common Stock is sold to Persons in the Subscription Offering. Shares
sold in the Direct Community Offering or Syndicated Community Offering
will be subject to the same limitations as shares sold in the
Subscription Offering.
B. SUBSCRIPTION RIGHTS
Non-transferable Subscription Rights to purchase Stock Holding Company
Stock will be issued without payment therefor to Eligible Account Holders,
Tax-Qualified Employee Plans and Supplemental Eligible Account Holders of
the Association as set forth below.
1. Preference Category No. 1: Eligible Account Holders
Each Eligible Account Holder shall receive non-transferable
Subscription Rights to subscribe for shares of Stock Holding
Company Common Stock in an amount equal to the greater of
$150,000, or one-tenth of one percent (.10%) of the total
offering of shares, or 15 times the product (rounded down to the
next whole number) obtained by multiplying the total number of
shares of Stock Holding Company Common Stock to be issued by a
fraction of which the numerator is the amount of the Qualifying
Deposit of the Eligible Account Holder and the denominator is the
total amount of Qualifying Deposits of all Eligible Account
Holders in the Association in each case on the Eligibility Record
Date.
If sufficient shares are not available, shares shall be
allocated first to permit each subscribing Eligible Account
Holder to purchase to the extent possible 100 shares, and
thereafter among each subscribing Eligible Account Holder pro
rata in the same proportion that his Qualifying Deposit bears to
the total Qualifying Deposits of all subscribing Eligible Account
Holders whose subscriptions remain unsatisfied.
Non-transferable Subscription Rights to purchase Stock
Holding Company Common Stock received by Directors and Officers
of the Association and their Associates, based on their increased
deposits in the Association in the one-year period preceding the
Eligibility Record Date, shall be subordinated to
all other subscriptions involving the exercise of non-transferable
Subscription Rights of Eligible Account Holders.
2. PREFERENCE CATEGORY NO. 2 : TAX-QUALIFIED EMPLOYEE PLANS
Each Tax-Qualified Employee Plan shall be entitled to receive
non-transferable Subscription Rights to purchase up to 10% of the
shares of Stock Holding Company Common Stock, provided that
singly or in the aggregate such plans (other than that portion of
such plans which is self-directed) shall not purchase more than
10% of the shares of the Stock Holding Company Common Stock.
Subscription Rights received pursuant to this Category shall be
subordinated to all Subscription Rights received by Eligible
Account Holders to purchase shares pursuant to Category No. 1;
provided, however, that notwithstanding any other provision of
this Plan to the contrary, the Tax-Qualified Employee Plans shall
have a first priority Subscription Right to the extent that the
total number of shares of Stock Holding Company Common Stock sold
in the Stock Offering exceeds the maximum of the estimated
valuation range as set forth in the subscription prospectus.
3. PREFERENCE CATEGORY NO. 3: SUPPLEMENTAL ELIGIBLE ACCOUNT
HOLDERS
Each Supplemental Eligible Account Holder shall receive
non-transferable Subscription Rights to subscribe for shares of
Stock Holding Company Common Stock in an amount equal to the
greater of $150,000, or one-tenth of one percent (.10%) of the
total offering of Stock Holding Company Common Stock, or 15 times
the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Stock Holding Company
Stock to be issued by a fraction of which the numerator is the
amount of the Qualifying Deposit of the Supplemental Eligible
Account Holder and the denominator is the total amount of
Qualifying Deposits of all Supplemental Eligible Account Holders
in the Association in each case on the Supplemental Eligibility
Record Date.
Subscription Rights received pursuant to this Category
shall be subordinated to all Subscription Rights received by
Eligible Account Holders and Tax-Qualified Employee Plans
pursuant to Category Numbers 1 and 2 above.
Any non-transferable Subscription Rights to purchase shares
received by an Eligible Account Holder in accordance with Category
No. 1 shall reduce to the extent thereof the Subscription Rights
to be distributed to such person pursuant to this Category.
In the event of an oversubscription for shares under this
Category, the shares available shall be allocated first to permit
each subscribing Supplemental Eligible Account Holder, to the
extent possible, to purchase a number of shares sufficient to
make his total allocation (including the number of shares, if any,
allocated in accordance with Category No. 1) equal to 100 shares,
and thereafter among each subscribing Supplemental Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied.
C. DIRECT COMMUNITY OFFERING AND SYNDICATED COMMUNITY OFFERING
1. Any shares of Stock Holding Company Common Stock not subscribed
for in the Subscription Offering may be offered for sale in a
Direct Community Offering. This may involve an offering of all
unsubscribed shares directly to the general public with a
preference to those natural Persons residing in the counties in
which the Association has an office. The Direct Community
Offering, if any, shall be for a period of not less than 20 days
nor more than 45 days unless extended by the Stock Holding
Company and the Association, and shall commence concurrently
with, during or promptly after the Subscription Offering. The
purchase price per share to the general public in a Direct
Community Offering shall be the same as the actual subscription
price. The Stock Holding Company and the Association may use an
investment banking firm or firms on a best efforts basis to sell
the unsubscribed shares in the Subscription and Direct Community
Offering. The Stock Holding Company and the Association may pay a
commission or other fee to such investment banking firm or firms
as to the shares sold by such firm or firms in the Subscription
and Direct Community Offering and may also reimburse such firm or
firms for expenses incurred in connection with the sale. The
Stock Holding Company Common Stock will be offered and sold in
the Direct Community Offering, if any, in accordance with OTS
regulations, so as to achieve the widest distribution of the
Stock Holding Company Common Stock. No Person may subscribe for
or purchase more than $150,000 of Stock Holding Company Common
Stock in the Direct Community Offering, if any. Further, the
Association may limit total subscriptions under this Section
V.C.1 so as to assure that the number of shares available for the
Syndicated Community Offering may be up to a specified percentage
of the number of shares of Stock Holding Company Common Stock.
Finally, the Association may reserve shares offered in the Direct
Community Offering for sales to institutional investors.
Orders received in the Direct Community Offering and
Syndicated Community Offering shall be filled up to a maximum of
2% of the Common Stock and thereafter remaining shares shall be
allocated on an equal number of shares basis per order until all
orders have been filled.
The Association and the Stock Holding Company, in their sole
discretion, may reject subscriptions, in whole or in part,
received from any Person under this Section V.C.1. Further, the
Association and the Stock Holding Company may, at their sole
discretion, elect to forego a Direct Community Offering and
instead effect a Syndicated Community Offering as described below.
2. Any shares of Stock Holding Company Common Stock not sold in the
Subscription Offering or in the Direct Community Offering, if
any, may then be sold through the syndicate of broker-dealers to
members of the general public in the Syndicated Community
Offering. It is expected that the Syndicated Community Offering
will commence as soon as practicable after termination of
the Subscription Offering and the Direct Community Offering, if
any. The Association and the Stock Holding Company, in their sole
discretion, may reject any subscription, in whole or in part,
received in the Syndicated Community Offering. The Syndicated
Community Offering shall be completed within 90 days after the
termination of the Subscription Offering, unless such period is
extended as provided in Section IV hereof. No person may purchase
more than $150,000 of Holding Company Common Stock in the
Syndicated Community Offering, if any.
3. If for any reason any shares remain unsold after the Subscription
Offering, Direct Community Offering, if any, and Syndicated
Community Offering, if any, the Boards of Directors of the Stock
Holding Company and the Association will seek to make other
arrangements for the sale of the remaining shares of Stock
Holding Company Common Stock. Such other arrangements will be
subject to the approval of the OTS and to compliance with
applicable securities laws.
D. ADDITIONAL LIMITATIONS UPON PURCHASES OF SHARES OF STOCK HOLDING
COMPANY COMMON STOCK
The following additional limitations shall be imposed on all purchases
of Stock Holding Company Common Stock in the Stock Offering :
1. No Person, by himself or herself, or with an Associate or group
of Persons acting in concert, may subscribe for or purchase in
the Stock Offering a number of shares of Stock Holding Company
Common Stock which exceeds an amount of shares equal to more than
$600,000 or 60,000 shares of Holding Company Common Stock issued
in the Stock Offering. For purposes of this paragraph, an
Associate of a Person does not include a Tax-Qualified or Non-Tax
Qualified Employee Plan in which the Person has a substantial
beneficial interest or serves as a trustee or in a similar
fiduciary capacity. Moreover, for purposes of this paragraph,
shares held by one or more Tax-Qualified or Non-Tax Qualified
Employee Plans attributed to a Person shall not be aggregated with
shares purchased directly by or otherwise attributable to that
Person.
2. Directors and Officers and their Associates may not purchase in
all categories in the Stock Offering an aggregate of more than
27% of the Stock Holding Company Common Stock issued in the Stock
Offering or 27% of the stockholders' equity held by persons other
than the MHC. For purposes of this paragraph, an Associate of a
Person does not include any Tax-Qualified Employee Plan.
Moreover, any shares attributable to the Officers and Directors
and their Associates, but held by one or more Tax-Qualified
Employee Plans shall not be included in calculating the number of
shares which may be purchased under the limitation in this
paragraph.
3. The minimum number of shares of Stock Holding Company Common
Stock that may be purchased by any Person in the Stock Offering
is 25 shares, provided sufficient shares are available.
4. The aggregate amount of all Common Stock issued in the Stock
Offering by all stock benefits plans, other than the ESOP, shall
not exceed 25% of the outstanding Common Stock held by persons
other than the MHC.
5. The Boards of Directors of the Stock Holding Company and the
Association may, in their sole discretion, increase the maximum
purchase limitation referred to in paragraph 1 of this subpart D,
up to 9.99% of the Common Stock, provided that orders for shares
exceeding 5% of the Stock Holding Company Common Stock offered in
the Stock Offering shall not exceed, in the aggregate, 10% of the
Stock Holding Company Common Stock being offered in the Stock
Offering. Requests to purchase additional shares of Holding
Company Common Stock under this provision will be allocated by
the Boards of Directors on a pro rata basis giving priority in
accordance with the priority rights set forth in this Section V.
Depending upon market and financial conditions, the Boards of
Directors of the Stock Holding Company and the Association, with the
approval of the OTS, may increase or decrease any of the above
purchase limitations.
For purposes of this Section V, the Directors of the Stock
Holding Company and the Association shall not be deemed to be
Associates or a group acting in concert solely as a result of their
serving in such capacities.
Each Person purchasing Stock Holding Company Common Stock in
the Stock Offering shall be deemed to confirm that such purchase does
not conflict with the above purchase limitations. All questions
concerning whether any persons are Associates or a group acting in
concert or whether any purchase conflicts with the purchase
limitations in this Plan or otherwise violates any provision of this
Plan shall be determined by the Stock Holding Company and the
Association in their sole discretion. Such determination shall be
conclusive and binding on all Persons and the Stock Holding Company or
the Association may take any remedial action, including without
limitation rejecting the purchase or referring the matter to the OTS
for action, as in its sole discretion the Association may deem
appropriate.
E. RESTRICTIONS AND OTHER CHARACTERISTICS OF STOCK HOLDING COMPANY COMMON
STOCK
1. TRANSFERABILITY. Stock Holding Company Stock purchased by Persons
other than Directors and Officers of the Stock Holding Company or
the Association will be transferable without restriction. Shares
purchased by Directors or Officers shall not be sold or otherwise
disposed of for value for a period of one year from the date of
the completion of the Stock Offering, except for any disposition
of such shares (i) following the death of the original purchaser,
or (ii) resulting from an exchange of securities in a merger or
acquisition approved by the applicable regulatory authorities.
Any transfers that could result in a change in control of the
Association or the Stock Holding Company or result in the
ownership by any Person or group acting in concert of more than
10% of any class of the Association's or the Stock Holding
Company's equity securities are subject to the prior approval of
the OTS.
The certificates representing shares of Stock Holding Company
Common Stock issued to Directors and Officers shall bear a legend
giving appropriate notice of the one-year holding period
restriction. Appropriate instructions shall be given to the
transfer agent for such stock with respect to the applicable
restrictions relating to the transfer of restricted stock. Any
shares of Common Stock of the Stock Holding Company subsequently
issued as a stock dividend, stock split, or otherwise, with
respect to any such restricted stock, shall be subject to the
same holding period restrictions for Stock Holding Company or
Association Directors and Officers as may be then applicable to
such restricted stock.
No Director or Officer of the Stock Holding Company or of the
Association, or Associate of such a Director or Officer, shall
purchase any outstanding shares of capital stock of the Stock
Holding Company for a period of three years following the Stock
Offering without the prior written approval of the OTS, except
through a broker or dealer registered with the SEC. Such
restrictions shall not apply to (i) "negotiated transactions"
involving more than one percent of the then-outstanding shares of
common stock of the Stock Holding Company or (ii) purchases of
stock made by and held by any Tax-Qualified or Non-Tax Qualified
Employee Plan of the Association or the Stock Holding Company
even if such stock is attributed to Directors and Officers of the
Association.
2. REPURCHASE AND DIVIDEND RIGHTS. Any cash dividend by the
Association or stock repurchase by the Stock Holding Company will,
to the extent required, be made in accordance with OTS regulations
and policies as in effect at the time of such cash dividends or
stock repurchase. Subject to the approval of the OTS, the MHC may
wave its right to receive dividends declared by the Stock Holding
Company or the Association.
F. EXERCISE OF SUBSCRIPTION RIGHTS; ORDER FORMS
1. As soon as practicable after the prospectus has been approved by
the OTS and declared effective by the SEC, Order Forms shall be
distributed to each Eligible Account Holder, Tax Qualified
Employee Plan and Supplemental Eligible Account Holder at their
last known address shown on the records of the Association. Each
Order Form will be preceded or accompanied by a prospectus
describing the Stock Holding Company and the Association and the
shares of Stock Holding Company Common Stock being offered for
subscription and containing all other information required by the
OTS or the SEC or necessary to enable Persons to make informed
investment decisions regarding the purchase of Stock Holding
Company Common Stock.
2. The Order Forms (or accompanying instructions) used for the
Subscription Offering will contain, among other things, the
following:
(i) A clear and intelligible explanation of the
Subscription Rights granted under the Plan to Eligible
Account Holders, Tax-Qualified Employee Plans and
Supplemental Eligible Account Holders;
(ii) A specified expiration date by which Order Forms must
be returned to and actually received by the Association
or its representative for purposes of exercising
Subscription Rights, which date will be not less than
20 days after the Order Forms are mailed by the
Association;
(iii) The Maximum Subscription Price to be paid for each
share subscribed for when the Order Form is returned;
(iv) A statement that 25 shares is the minimum number of
shares of Stock Holding Company Common Stock that may
be subscribed for under the Plan;
(v) A specifically designated blank space for indicating
the number of shares being subscribed for;
(vi) A set of detailed instructions as to how to complete
the Order Form including a statement as to the
available alternative methods of payment for the shares
being subscribed for;
(vii) Specifically designated blank spaces for dating and
signing the Order Form;
(viii) An acknowledgment that the subscriber has received the
subscription prospectus;
(ix) A statement of the consequences of failing to properly
complete and return the Order Form, including a
statement that the Subscription Rights will expire on
the expiration date specified on the Order Form unless
such expiration date is extended by the Stock Holding
Company and the Association, and that the Subscription
Rights may be exercised only by delivering the Order
Form, properly completed and executed, to the
Association or its representative by the expiration
date, together with required payment of the Maximum
Subscription Price for all shares of Stock Holding
Company Common Stock subscribed for;
(x) A statement that the Subscription Rights are
non-transferable and that all shares of Stock Holding
Company Common Stock subscribed for upon exercise of
Subscription Rights must be purchased on behalf of the
Person exercising the Subscription Rights for his own
account; and
(xi) A statement that, after receipt by the Association or
its representative, a subscription may not be modified,
withdrawn or canceled without the consent of the
Association.
G. METHOD OF PAYMENT
Payment for all shares of Stock Holding Company Common Stock
subscribed for must accompany all completed Order Forms. Payment may be
made in cash (if presented in Person), by check, or, if the subscriber has
a Deposit Account in the Association (including a certificate of
deposit), the subscriber may authorize the Association to charge the
subscriber's Deposit Account.
If a subscriber authorizes the Association to charge his or her
Deposit Account, the funds will continue to earn interest, but may not be
used by the subscriber until all Stock Holding Company Common Stock has
been sold or the Plan is terminated, whichever is earlier. The Association
will allow subscribers to purchase shares by withdrawing funds from
certificate accounts without the assessment of early withdrawal penalties
with the exception of prepaid interest in the form of promotional gifts. In
the case of early withdrawal of only a portion of such account, the
certificate evidencing such account shall be canceled if the remaining
balance of the account is less than the applicable minimum balance
requirement, in which event the remaining balance will earn interest at the
passbook rate. This waiver of the early withdrawal penalty is applicable
only to withdrawals made in connection with the purchase of Stock Holding
Company Common Stock under the Plan. Interest will also be paid, at not
less than the then-current passbook rate, on all orders paid in cash, by
check or money order, from the date payment is received until consummation
of the Stock Offering. Payments made in cash, by check or money order will
be placed by the Association in an escrow or other account established
specifically for this purpose.
In the event of an unfilled amount of any subscription order, the
Association will make an appropriate refund or cancel an appropriate
portion of the related withdrawal authorization, after consummation of the
Stock Offering, including any difference between the Maximum Subscription
Price and the Actual Subscription Price (unless subscribers are afforded
the right to apply such difference to the purchase of additional whole
shares). If for any reason the Stock Offering is not consummated,
purchasers will have refunded to them all payments made and all withdrawal
authorizations will be canceled in the case of subscription payments
authorized from Deposit Accounts at the Association.
If any Tax-Qualified Employee Plans or Non-Tax-Qualified Employee
Plans subscribe for shares during the Subscription Offering, such plans
will not be required to pay for the shares subscribed for at the time they
subscribe, but may pay for such shares of Stock Holding Company Common
Stock subscribed for upon consummation of the Stock Offering. In the event
that, after the completion of the Subscription Offering, the amount of
shares to be issued is increased above the maximum of the appraisal range
included in the subscription prospectus, the Tax Qualified and Non-Tax
Qualified Employee Plans shall be entitled to increase their subscriptions
by a percentage equal to the percentage increase in the amount of shares to
be issued above the maximum of the appraisal range provided that such
subscriptions shall continue to be subject to applicable purchase limits
and stock allocation procedures.
H. UNDELIVERED, DEFECTIVE OR LATE ORDER FORMS; INSUFFICIENT PAYMENT
The Boards of Directors of the Stock Holding Company and the
Association shall have the absolute right, in their sole discretion, to
reject any Order Form, including but not limited to, any Order Forms which
(i) are not delivered or are returned by the United States Postal Service
(or the addressee cannot be located); (ii) are not received back by the
Association or its representative, or are received after the expiration
date specified thereon; (iii) are defectively completed or executed; (iv)
are not accompanied by the total required payment for the shares of Stock
Holding Company Common Stock subscribed for (including cases in which the
subscribers' Deposit Accounts or certificate accounts are insufficient to
cover the authorized withdrawal for the required payment); or (v) are
submitted by or on behalf of a Person whose representations the
Boards of Directors of the Stock Holding Company and the Association
believe to be false or who they otherwise believe, either alone or acting
in concert with others, is violating, evading or circumventing, or intends
to violate, evade or circumvent, the terms and conditions of the Plan. In
such event, the Subscription Rights of the Person to whom such rights have
been granted will not be honored and will be treated as though such Person
failed to return the completed Order Form within the time period specified
therein. The Association may, but will not be required to, waive any
irregularity relating to any Order Form or require submission of corrected
Order Forms or the remittance of full payment for subscribed shares by such
date as the Association may specify. The interpretation of the Stock
Holding Company and the Association of the terms and conditions of the Plan
and of the proper completion of the Order Form will be final, subject to
the authority of the OTS.
I. MEMBER IN NON-QUALIFIED STATES OR IN FOREIGN COUNTRIES
The Stock Holding Company and the Association will make reasonable
efforts to comply with the securities laws of all states in the United
States in which Persons entitled to subscribe for Stock Holding Company
Common Stock pursuant to the Plan reside. However, no shares will be
offered or sold under the Plan to any such Person who (1) resides in a
foreign country or (2) resides in a state of the United States in which a
small number of Persons otherwise eligible to subscribe for shares under
the Plan reside or as to which the Stock Holding Company and the
Association determine that compliance with the securities laws of such
state would be impracticable for reasons of cost or otherwise, including,
but not limited to, a requirement that the Stock Holding Company or the
Association or any of their Officers, Directors or Employees register,
under the securities laws of such state, as a broker, dealer, salesman or
agent. No payments will be made in lieu of the granting of Subscription
Rights to any such Person.
VI. CHARTER AND BYLAWS OF THE MHC, STOCK HOLDING COMPANY AND THE ASSOCIATION
As part of the Stock Offering, the charter and bylaws of the MHC, the Stock
Holding Company and the Association shall be revised as necessary in connection
with the Stock Offering. The proposed revised charter and bylaws of the Stock
Holding Company and the Association are attached hereto as Exhibits A and B,
respectively and made a part of this Plan.
VII. STOCK BENEFIT PLANS
The Board of Directors of the Association and/or the Stock Holding Company
intend to adopt one or more stock benefit plans for its Employees, Officers and
Directors, including an ESOP, stock award plans and stock option plans, which
will be authorized to purchase Common Stock and grant options for Common Stock.
However, only the Tax-Qualified Employee Plans will be permitted to purchase
Common Stock in the Stock Offering subject to the purchase priorities set forth
in this Plan. The Board of Directors of the Association intends to establish the
ESOP and authorize the ESOP and any other Tax-Qualified Employee Plans to
purchase in the aggregate up to 10% of the shares issued, excluding shares
issued to the MHC. The Association or the Stock Holding Company may make
scheduled discretionary contributions to one or more Tax-Qualified Employee
Plans to purchase Common Stock issued in the Stock Offering or to purchase
issued and outstanding shares of Common Stock or authorized but unissued shares
of Common Stock subsequent to the completion of the Stock Offering, provided
such contributions do not cause the Association to fail to meet any of its
regulatory capital requirements.
This Plan specifically authorizes the grant and issuance by the Stock
Holding Company of (i) awards of Common Stock after the Stock Offering pursuant
to one or more stock recognition and award plans (the "Recognition Plans") in an
amount equal to up to 4% of the number of shares of Common Stock issued in the
Stock Offering, (ii) options to purchase a number of shares of the Stock Holding
Company's Common Stock in an amount equal to up to 10% of the number of shares
of Common Stock issued in the Stock Offering and shares of Common Stock issuable
upon exercise of such options, and (iii) Common Stock to one or more
Tax-Qualified Employee Plans, including the ESOP, at the closing of the Stock
Offering or at any time thereafter, in an amount equal to up tp 8% of the share
issued, provided, however, that the aggregate amount of Common Stock acquired by
such Tax-Qualified Employee Plans shall not exceed 4.9% of the outstanding
shares of Common Stock of the Stock Holding Company at the close of the Stock
Offering or 4.9% of the stockholders' equity at the close of the Stock Offering.
In addition, the aggregate amount of Common Stock acquired by any Non-Tax
Qualified Employee Plan, Directors, Officers and their Associates may not exceed
4.9% of the outstanding shares of Common Stock of the Stock Holding Company or
4.9% of its stockholder's equity at the close of the Stock Offering, provided,
however, shares held by any Non-Tax Qualified Employee Plan or Tax-Qualified
Employee Plan available to such person shall not be counted. Shares awarded to
the Tax-Qualified Employee Plans or pursuant to the Recognition Plans, and
shares issued upon exercise of options may be authorized but unissued shares of
the Stock Holding Company's Common Stock, or shares of Common Stock purchased by
the Stock Holding Company or such plans in the open market. Any awards of Common
Stock under the Recognition Plans and the stock option plans will be subject to
prior stockholder approval.
VIII. SECURITIES REGISTRATION AND MARKET MAKING
Promptly following the Stock Offering, the Stock Holding Company will
register its stock with the SEC pursuant to the Exchange Act. In connection with
the registration, the Stock Holding Company will undertake not to deregister
such stock, without the approval of the OTS, for a period of three years
thereafter.
The Stock Holding Company shall use its best efforts to encourage and
assist two or more market makers to establish and maintain a market for its
common stock promptly following the completion of the Stock Offering. The Stock
Holding Company will also use its best efforts to cause its common stock to be
quoted on the Nasdaq System or to be listed on a national or regional securities
exchange.
IX. STATUS OF DEPOSIT ACCOUNTS AND LOANS SUBSEQUENT TO STOCK OFFERING
Each Deposit Account holder shall retain, without payment, a withdrawable
Deposit Account or Accounts in the Association, equal in amount to the
withdrawable value of such account holder's Deposit Account or Accounts prior to
the Stock Offering. All Deposit Accounts will continue to be insured by the SAIF
up to the applicable limits of insurance coverage, and shall be subject to the
same terms and conditions as such Deposit Account in the Association at the time
of the Stock Offering. All loans shall retain the same status after the Stock
Offering as such loans had prior to the Stock Offering.
X. RESTRICTIONS ON ACQUISITION OF THE STOCK HOLDING COMPANY AND THE
ASSOCIATION
Regulations of the OTS limit acquisitions, and offers to acquire, direct
or indirect beneficial ownership of more than 10% of any class of an equity
security of the Association or the Stock Holding Company. In addition,
consistent with the regulations of the OTS, the charter of the Stock Holding
Company and the Association shall provide that for a period of five years
following completion of the Stock Offering: (i) no Person (i.e., no individual,
group acting in concert, corporation, partnership, association, joint stock
company, trust, or unincorporated organization or similar company, syndicate, or
any other group formed for the purpose of acquiring, holding or disposing of
securities of an insured institution) shall directly or indirectly offer to
acquire or acquire beneficial ownership of more than 10% of any class of the
Association's Stock Holding Compnay or the equity securities. Shares
beneficially owned in violation of this charter provision shall not be counted
as shares entitled to vote and shall not be voted by any Person or counted as
voting shares in connection with any matter submitted to the shareholders for a
vote. This limitation shall not apply to any offer to acquire or acquisition of
beneficial ownership of more than 10% of the common stock of the Association by
a corporation whose ownership is or will be substantially the same as the
ownership of the Association, provided that the offer or acquisition is made
more than one year following the date of completion of the Stock Offering ; (ii)
stockholders shall not be permitted to cumulate their votes for elections of
Directors; and (iii) special meetings of the stockholders relating to changes in
control or amendment of the charter may only be called by the Board of
Directors.
XI. AMENDMENT OR TERMINATION OF PLAN
If necessary or desirable, the Plan may be amended at any time prior to
the commencement of the Stock Offering by a two-thirds vote of the respective
Boards of Directors of the Stock Holding Company and the Association and at any
time thereafter by a two-thirds vote of the respective Boards of Directors of
the Stock Holding Company and the Association only with the concurrence of the
OTS.
The Plan may be terminated by a two-thirds vote of the Association's and
the Stock Holding Company's Board of Directors at any time prior to the
completion of the Stock Offering, and at any time following completion of the
Stock Offering with the concurrence of the OTS. In its discretion, the Board of
Directors of the Association and the Stock Holding Company may modify or
terminate the Plan upon the order or with the approval of the OTS. The Plan
shall terminate if the sale of all shares of Stock Holding Company Common Stock
is not completed within 24 months of the date of the commencement of the Stock
Offering. A specific resolution approved by a majority of the Board of Directors
of the Association and the Stock Holding Company is required in order for the
Association and the Stock Holding Company to terminate the Plan prior to the end
of such 24-month period.
XII. EXPENSES OF THE STOCK OFFERING
The Stock Holding Company and the Association shall use their best efforts
to assure that expenses incurred by them in connection with the Stock Offering
shall be reasonable.
XIII. TAX RULING
Consummation of the Stock Offering is expressly conditioned upon prior
receipt of either a ruling of the United States Internal Revenue Service or an
opinion of tax counsel with respect to federal taxation, and either a ruling of
the California taxation authorities or an opinion of tax counsel or other tax
advisor with respect to California taxation, to the effect that consummation of
the transactions contemplated herein will not be taxable to the Stock Holding
Company or the Association.
XIV. EXTENSION OF CREDIT FOR PURCHASE OF STOCK
The Association may not knowingly loan funds or otherwise extend credit
to any Person to purchase shares of the Stock Holding Company Common Stock in
the Stock Offering.
XV. CONVERSION OF MHC TO STOCK FORM
Once the Stock Offering is completed, the MHC, if approved by the OTS,
may elect to convert to the stock form of ownership pursuant to federal law. As
long as required by federal law or regulation, any such conversion is also
subject to the approval of the Members of the MHC. The terms and conditions of
such a conversion cannot be determined at this time and there is no assurance
when, if ever, such a conversion will occur. If the conversion does not occur,
the MHC will always own a majority of the Common Stock of the Stock Holding
Company.
If the MHC converts to stock form, either on a stand-alone basis or in
the context of a conversion-merger ("Conversion Transaction"), under federal
law, shares of stock issued in connection with the Conversion Transaction shall
be subject to subscription rights granted in accordance with OTS regulations. In
addition, pursuant to federal law and OTS regulations, in the Conversion
Transaction the shares of stock held by the stockholders of the Stock Holding
Company shall be exchanged for shares of the converted MHC in a proportion
established by independent appraisals of the MHC, the Stock Holding Company and
the Association. If, in a Conversion Transaction, the stockholders of the
Association or Stock Holding Company do not receive, for any reason, shares of
the converted MHC (or its successor) on such proportionate basis, the MHC (or
its successor) shall be obligated to purchase all shares not owned by it
simultaneously with the closing of such Conversion Transaction at the fair
market value of such shares, determined as if such shares had such exchange
rights, as determined by the independent appraisals. Moreover, in the event that
the MHC converts to stock form in a Conversion Transaction, any options or other
convertible securities held by any Officer, Director, or Employee of the Stock
Holding Company shall be convertible into shares of the converted MHC (or its
successor), provided, that any exchange ratio shall provide the holder of such
options or convertible securities with shares at least equal in value to those
exchanged; provided, further however, that if such shares cannot be so
converted, the holders of such options or other convertible securities shall be
entitled to receive cash payment for such options and other convertible
securities in an amount equal to the appraised value of the underlying
securities represented by such options or other convertible securities.
In any Conversion Transaction, stockholders of the Stock Holding
Company other than the MHC ("Minority Stockholders"), if any, will be entitled
to maintain the same percentage ownership interest in the Stock Holding Company
after the Conversion Transaction as their ownership interest in the Stock
Holding Company immediately prior to the Conversion Transaction, subject only to
certain adjustments (i.e., the transfer of assets held solely by the MHC to the
resulting stock company) that may be required by the OTS. These adjustments may
result in a decrease of ownership interest of the Minority Stockholders.
Each certificate representing shares of Common Stock shall bear a legend
giving appropriate notice of the provisions applicable to a Conversion
Transaction.
Attachments A-1 and A-2 Charter and Bylaws of the Stock Holding Company
Attachments B-1 and B-2 Charter and Bylaws of the Association
Federal MHC Subsidiary Holding Company Charter
K-FED BANCORP
SECTION 1. CORPORATE TITLE. The full corporate title of the MHC subsidiary
holding company is "K-Fed Bancorp."
SECTION 2. DOMICILE. The domicile of the MHC subsidiary holding company
shall be in the City of Covina, in the State of California.
SECTION 3. DURATION. The duration of the MHC subsidiary holding company is
perpetual.
SECTION 4. PURPOSE AND POWERS. The purpose of the MHC subsidiary holding
company is to pursue any or all of the lawful objectives of a federal mutual
holding company chartered under section 10(o) of the Home Owners' Loan Act, 12
U.S.C. 1467a(o), and to exercise all of the express, implied, and incidental
powers conferred thereby and by all acts amendatory thereof and supplemental
thereto, subject to the Constitution and laws of the United States as they are
now in effect, or as they may hereafter be amended, and subject to all lawful
and applicable rules, regulations, and orders of the Office of Thrift
Supervision ("Office").
SECTION 5. CAPITAL STOCK. The total number of shares of all classes of the
capital stock which the MHC subsidiary holding company has the authority to
issue is 20,000,000, of which 18,000,000 shall be common stock of par value of
$.01 per share, and of which 2,000,000 shall be serial preferred stock of par
value $.01 per share. The shares may be issued from time to time as authorized
by the board of directors without further approval of stockholders, except as
otherwise provided in this Section 5 or to the extent that such approval is
required by governing law, rule or regulation. The consideration for the
issuance of the shares shall be paid in full before their issuance and shall not
be less than the par value. Neither promissory notes nor future services shall
constitute payment or part payment for the issuance of shares of the MHC
subsidiary holding company. The consideration for the shares shall be cash,
tangible or intangible property (to the extent direct investment in such
property would be permitted), labor, or services actually performed for the MHC
subsidiary holding company or any combination of the foregoing. In the absence
of actual fraud in the transaction, the value of such property, labor, or
services, as determined by the board of directors of the MHC subsidiary holding
company, shall be conclusive. Upon payment of such consideration, such shares
shall be deemed to be fully paid and nonassessable. In the case of a stock
dividend, that part of the surplus of the MHC subsidiary holding company which
is transferred to stated capital upon the issuance of shares as a share dividend
shall be deemed to be the consideration for their issuance.
Except for shares issued in connection with the initial organization of the
MHC subsidiary holding company, no shares of capital stock (including shares
issuable upon conversion, exchange, or exercise of other securities) shall be
issued, directly or indirectly, to officers, directors, or controlling persons
(except for shares issued to the parent mutual holding company) of the MHC
subsidiary holding company other than as part of a general public offering or as
qualifying shares to a director, unless their issuance or the plan under which
they would be issued has been approved by a majority of the total votes eligible
to be cast at a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or a series of capital stock to
vote as a separate class or series or to more than one vote per share, and there
shall be no right to cumulate votes in an election of directors: Provided, that
this restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of preferred stock,
voting as a class or series, to elect some members of the board of
directors, less than a majority thereof, in the event of default in
the payment of dividends on any class or series of preferred stock;
(ii) To any provision which would require the holders of preferred stock,
voting as a class or series, to approve the merger or consolidation of
the MHC subsidiary holding company with another corporation or the
sale, lease, or conveyance (other than by mortgage or pledge) of
properties or business in exchange for securities of a corporation
other than the MHC subsidiary holding company if the preferred stock
is exchanged for securities of such other corporation: Provided, That
no provision may require such approval for transactions undertaken
with the assistance or pursuant to the direction of the Office or the
Federal Deposit Insurance Corporation;
(iii) To any amendment which would adversely change the specific terms of
any class or series of capital stock as set forth in this Section 5
(or in any supplementary sections hereto), including any amendment
which would create or enlarge any class or series ranking prior
thereto in rights and preferences. An amendment which increases the
number of authorized shares of any class or series of capital stock,
or substitutes the surviving MHC subsidiary holding company in a
merger or consolidation for the MHC subsidiary holding company, shall
not be considered to be such an adverse change.
A description of the different classes and series (if any) of the MHC
subsidiary holding company's capital stock and a statement of the designations,
and the relative rights, preferences, and limitations of the shares of each
class and series (if any) of capital stock are as follows:
Page 2 of 6
A. COMMON STOCK. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of the common stock shall
exclusively possess all voting power. Each holder of shares of common stock
shall be entitled to one vote for each share held by such holder.
Whenever there shall have been paid, or declared and set aside for payment,
to the holders of the outstanding shares of any class of stock having preference
over the common stock as to the payment of dividends, the full amount of
dividends and of sinking fund, retirement fund, or other retirement payments, if
any, to which such holders are respectively entitled in preference to the common
stock, then dividends may be paid on the common stock and on any class or series
of stock entitled to participate therewith as to dividends out of any assets
legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the MHC
subsidiary holding company, the holders of the common stock (and the holders of
any class or series of stock entitled to participate with the common stock in
the distribution of assets) shall be entitled to receive, in cash or in kind,
the assets of the MHC subsidiary holding company available for distribution
remaining after: (i) Payment or provision for payment of the MHC subsidiary
holding company's debts and liabilities; (ii) distributions or provision for
distributions in settlement of its liquidation account; and (iii) distributions
or provisions for distributions to holders of any class or series of stock
having preference over the common stock in the liquidation, dissolution, or
winding up of the MHC subsidiary holding company. Each share of common stock
shall have the same relative rights as and be identical in all respects with all
the other shares of common stock.
B. PREFERRED STOCK. The MHC subsidiary holding company may provide in
supplementary sections to its charter for one or more classes of preferred
stock, which shall be separately identified. The shares of any class may be
divided into and issued in series, with each series separately designated so as
to distinguish the shares thereof from the shares of all other series and
classes. The terms of each series shall be set forth in a supplementary section
to the charter. All shares of the same class shall be identical except as to the
following relative rights and preferences, as to which there may be variations
between different series:
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rate or the amount of dividends to be paid on the shares
of such series, whether dividends shall be cumulative and, if so, from
which date(s), the payment date(s) for dividends, and the
participating or other special rights, if any, with respect to
dividends;
(c) The voting powers, full or limited, if any, of shares of such series;
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(d) Whether the shares of such series shall be redeemable and, if so, the
price(s) at which, and the terms and conditions on which such shares
may be redeemed;
(e) The amount(s) payable upon the shares of such series in the event of
voluntary or involuntary liquidation, dissolution, or winding up of
the MHC subsidiary holding company;
(f) Whether the shares of such series shall be entitled to the benefit of
a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the amount of such fund
and the manner of its application, including the price(s) at which
such shares may be redeemed or purchased through the application of
such fund;
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes of stock of the
MHC subsidiary holding company and, if so, the conversion price(s), or
the rate(s) of exchange, and the adjustments thereof, if any, at which
such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange;
(h) The price or other consideration for which the shares of such series
shall be issued; and
(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of
the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption of
supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established by a
supplementary charter section adopted by the board of directors, the MHC
subsidiary holding company shall file with the Secretary to the Office a dated
copy of that supplementary section of this charter established and designating
the series and fixing and determining the relative rights and preferences
thereof.
SECTION 6. PREEMPTIVE RIGHTS. Holders of the capital stock of the MHC
subsidiary holding company shall not be entitled to preemptive rights with
respect to any shares of the MHC subsidiary holding company which may be issued.
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SECTION 7. DIRECTORS. The MHC subsidiary holding company shall be under the
direction of a board of directors. The authorized number of directors, as stated
in the MHC subsidiary holding company's bylaws, shall not be fewer than five nor
more than fifteen except when a greater number is approved by the Director of
the Office.
SECTION 8. CERTAIN PROVISIONS APPLICABLE FOR FIVE YEARS. Notwithstanding
anything contained in the MHC subsidiary holding company's charter or bylaws to
the contrary, for a period of five years from completion of the MHC subsidiary
holding company's stock offering, the following provisions shall apply:
A. Beneficial ownership limitation. No person other than K-Fed Mutual
Holding Company, the holding company of the MHC subsidiary 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 MHC
subsidiary holding company. This limitation shall not apply to a transaction in
which the MHC subsidiary holding company forms a holding company without change
in the respective beneficial ownership interests of its stockholders other than
pursuant to the exercise of any dissenter and appraisal rights, the purchase of
shares by underwriters in connection with a public offering, or the purchase of
shares by a tax-qualified employee stock benefit plan which is exempt from the
approval requirements under ss. 574.3(c)(1)(vi) of the Office's regulations.
In the event shares are acquired in violation of this Section 8, all shares
beneficially owned by any person in excess of 10% shall be considered "excess
shares" and shall not be counted as shares entitled to vote and shall not be
voted by any person or counted as voting shares in connection with any matters
submitted to the stockholders for a vote.
For purposes of this Section 8, the following definitions apply:
(1) The term "person" includes an individual, a group acting in concert, a
corporation, a partnership, an association, a joint stock company, a trust, an
unincorporated organization or similar company, a syndicate or any other group
formed for the purpose of acquiring, holding or disposing of the equity
securities of the MHC subsidiary holding company.
(2) The term "offer" includes every offer to buy or otherwise 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.
(4) The term "acting in concert" means (a) knowing participation in a joint
activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) a combination or pooling of voting or
other interests in the
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securities of an issuer for a common purpose pursuant to any contract,
understanding, relationship, agreement or other arrangements, whether written or
otherwise.
B. CALL FOR SPECIAL MEETINGS. Special meetings of stockholders relating
to changes in control of the MHC subsidiary holding company or amendments to its
charter shall be called only upon direction of the board of directors.
SECTION 9. Amendment of charter. Except as provided in Section 5, no
amendment, addition, alteration, change or repeal of this charter shall be made,
unless such is proposed by the board of directors of the MHC subsidiary holding
company, approved by the shareholders by a majority of the votes eligible to be
cast at a legal meeting, unless a higher vote is otherwise required, and
approved or preapproved by the Office.
K-FED BANCORP
Attest: ____________________________ By: ______________________________
Rita H. Zwern, Secretary Kay M. Hoveland, President and
Chief Executive Officer
DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION
Attest: ____________________________ By: ______________________________
Secretary of the Office of Director of the Office of
Thrift Supervision Thrift Supervision
Effective Date:__________________________
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BYLAWS
OF
K-FED BANCORP
ARTICLE I
HOME OFFICE
The home office of the K-Fed Bancorp ("MHC subsidiary holding company")
shall be in the City of Covina, in the State of California.
ARTICLE II
SHAREHOLDERS
SECTION 1. PLACE OF MEETINGS. All annual and special meetings of
shareholders shall be held at the home office of the MHC subsidiary holding
company or at such other convenient place as the board of directors may
determine.
SECTION 2. ANNUAL MEETING. A meeting of the shareholders of the MHC
subsidiary holding company for the election of directors and for the transaction
of any other business of the MHC subsidiary holding company shall be held
annually within 150 days after the end of the MHC subsidiary holding company's
fiscal year on the fourth Tuesday of September at 5:30 p.m. if not a legal
holiday, and if a legal holiday, then on the next day following which is not a
legal holiday, at 5:30 p.m., or at such other date and time within such 150 day
period as the board of directors may determine.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision ("Office"), may be called at any time by the
chairman of the board, the president, or a majority of the board of directors,
and shall be called by the chairman of the board, the president, or the
secretary upon the written request of the holders of not less than one-tenth of
all of the outstanding capital stock of the MHC subsidiary holding company
entitled to vote at the meeting. Such written request shall state the purpose or
purposes of the meeting and shall be delivered to the home office of the MHC
subsidiary holding company addressed to the chairman of the board, the
president, or the secretary.
SECTION 4. CONDUCT OF MEETINGS. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
board of directors
adopts another written procedure for the conduct of meetings. The board of
directors shall designate, when present, either the chairman of the board or
president to preside at such meetings.
SECTION 5. NOTICE OF MEETINGS. Written notice stating the place, day, and
hour of the meeting and the purpose(s) for which the meeting is called shall be
delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the shareholder at the address as it appears on the stock transfer
books or records of the MHC subsidiary holding company as of the record date
prescribed in Section 6 of this Article II with postage prepaid. When any
shareholders' meeting, either annual or special, is adjourned for 30 days or
more, notice of the adjourned meeting shall be given as in the case of an
original meeting. It shall not be necessary to give any notice of the time and
place of any meeting adjourned for less than 30 days or of the business to be
transacted at the meeting, other than an announcement at the meeting at which
such adjournment is taken. Compliance with the provisions of this Section 5
shall not be applicable for so long as the MHC subsidiary holding company is a
wholly-owned institution.
SECTION 6. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the board of directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more than
60 days and, in case of a meeting of shareholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment.
SECTION 7. VOTING LISTS. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the MHC subsidiary holding company shall make a complete list of the
shareholders of record entitled to vote at such meeting, or any adjournment
thereof, arranged in alphabetical order, with the address and the number of
shares held by each. This list of shareholders shall be kept on file at the home
office of the MHC subsidiary holding company and shall be subject to inspection
by any shareholder of record or the shareholder's agent at any time during usual
business hours for a period of 20 days prior to such meeting. Such list shall
also be produced and kept open at the time and place of the meeting and shall be
subject to inspection by any shareholder of record or any shareholder's agent
during the entire time of the meeting. The original stock transfer book shall
constitute prima facie evidence of the shareholders entitled to examine such
list or transfer books or to vote at any meeting of shareholders. In lieu of
making the shareholder list available for inspection by shareholders as provided
in the preceding paragraph, the board of directors may elect to follow the
procedures prescribed in ss. 552.6(d) of the Office's regulations as now or
hereafter in effect. Compliance with the provisions of this Section 7 shall not
be applicable for so long as the MHC subsidiary holding company is a
wholly-owned institution.
SECTION 8. QUORUM. A majority of the outstanding shares of the MHC
subsidiary holding company entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders. If less than a majority
of the outstanding shares is represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to constitute less than a quorum. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter. Directors, however, are elected by a
plurality of the votes cast at an election of directors.
SECTION 9. PROXIES. At all meetings of shareholders, a shareholder may vote
by proxy executed in writing by the shareholder or by his or her duly authorized
attorney in fact. Proxies may be given telephonically or electronically as long
as the holder uses a procedure for verifying the identity of the shareholder.
Proxies solicited on behalf of the management shall be voted as directed by the
shareholder or, in the absence of such direction, as determined by a majority of
the board of directors. No proxy shall be valid more than eleven months from the
date of its execution except for a proxy coupled with an interest.
SECTION 10. VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS. When
ownership stands in the name of two or more persons, in the absence of written
directions to the MHC subsidiary holding company to the contrary, at any meeting
of the shareholders of the MHC subsidiary holding company any one or more of
such shareholders may cast, in person or by proxy, all votes to which such
ownership is entitled. In the event an attempt is made to cast conflicting
votes, in person or by proxy, by the several persons in whose names shares of
stock stand, the vote or votes to which those persons are entitled shall be cast
as directed by a majority of those holding such and present in person or by
proxy at such meeting, but no votes shall be cast for such stock if a majority
cannot agree.
SECTION 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws
of such corporation may prescribe, or, in the absence of such provision, as the
board of directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares held in trust in an IRA or Keogh Account, however, may be voted by the
MHC subsidiary holding company if no other instructions are received. Shares
standing in the name of a receiver may be voted by such receiver, and shares
held by or under the control of a receiver may be voted by such receiver without
the transfer into his or her name if authority to do so is contained in an
appropriate order of the court or other public authority by which such receiver
was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the MHC subsidiary holding
company nor shares held by another corporation, if a majority of the shares
entitled to vote for the election of directors of such other corporation are
held by the MHC subsidiary holding company, shall be voted at any meeting or
counted in determining the total number of outstanding shares at any given time
for purposes of any meeting.
SECTION 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the board of directors may appoint any person other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the board of
directors in advance of the meeting or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares and the voting
power of each share, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; receiving votes,
ballots, or consents; hearing and determining all challenges and questions in
any way arising in connection with the rights to vote; counting and tabulating
all votes or consents; determining the result; and such acts as may be proper to
conduct the election or vote with fairness to all shareholders.
SECTION 13. NOMINATING COMMITTEE. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of nominee substituted as a result of the death or
other incapacity of a management nominee, the nominating committee shall deliver
written nominations to the secretary at least 20 days prior to the date of the
annual meeting. Upon delivery, such nominations shall be posted in a conspicuous
place in each office of the MHC subsidiary holding company. No nominations for
directors except those made by the nominating committee shall be voted upon at
the annual meeting unless other nominations by shareholders are made in writing
and delivered to the secretary of the MHC subsidiary holding company at least
five days prior to the date of the annual meeting. Upon delivery, such
nominations shall be posted in a conspicuous place in each office of the MHC
subsidiary holding company. Ballots bearing the names of all persons nominated
by the nominating committee and by shareholders shall be provided for use at the
annual meeting. However, if the nominating committee shall fail or refuse to act
at least 20 days prior to the annual meeting, nominations for directors may be
made at the annual meeting by any shareholder entitled to vote and shall be
voted upon.
SECTION 14. NEW BUSINESS. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the secretary of the MHC
subsidiary holding company at least five days before the date of the annual
meeting, and all business so stated, proposed, and filed shall be considered at
the annual meeting; but no other proposal shall be acted upon at the annual
meeting. Any shareholder may make any other proposal at the annual meeting and
the same may be discussed and considered, but unless stated in writing and filed
with the secretary at least five days before the meeting, such proposal shall be
laid over for action at an adjourned, special, or annual meeting of the
shareholders taking place 30 days or more thereafter. This provision shall not
prevent the consideration and approval or disapproval at the annual meeting of
reports of officers, directors, and committees; but in connection with such
reports, no new business shall be acted upon at such annual meeting unless
stated and filed as herein provided.
SECTION 15. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of shareholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
shareholders entitled to vote with respect to the subject matter.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the MHC subsidiary
holding company shall be under the direction of its board of directors. The
board of directors shall annually elect a chairman of the board and a president
from among its members and shall designate, when present, either the chairman of
the board or the president to preside at its meetings.
SECTION 2. NUMBER AND TERM. The board of directors shall consist of seven
members, and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually. Directors may be elected for a term of office to expire
earlier than the third succeeding annual meeting of stockholders after their
election if necessary to balance the classes of directors.
SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held without other notice than this bylaw following the annual meeting
of shareholders. The board of directors may provide, by resolution, the time and
place, for the holding of additional regular meetings without other notice than
such resolution. Directors may participate in a meeting by means of a conference
telephone or similar communications device through which all persons
participating can hear each other at the same time. Participation by such means
shall constitute presence in person for all purposes.
SECTION 4. QUALIFICATION. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the MHC
subsidiary holding company unless the MHC subsidiary holding company is a wholly
owned subsidiary of a holding company.
SECTION 5. SPECIAL MEETINGS. Special meetings of the board of directors may
be called by or at the request of the chairman of the board, the president, or
one-third of the directors. The persons authorized to call special meetings of
the board of directors may fix any place, within the MHC subsidiary holding
company's normal business area, as the place for holding any special meeting of
the board of directors called by such persons.
Members of the board of directors may participate in special meetings by
means of conference telephone or similar communications equipment by which all
persons participating in the meeting can hear and speak to each other. Such
participation shall constitute presence in person for all purposes.
SECTION 6. NOTICE. Written notice of any special meeting shall be given to
each director at least 24 hours prior thereto when delivered personally or by
telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the mail so addressed, with postage
prepaid if mailed, when delivered to the telegraph company if sent by telegram,
or when the MHC subsidiary holding company receives notice of delivery if
electronically transmitted. Any director may waive notice of any
meeting by a writing filed with the secretary. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
SECTION 7. QUORUM. A majority of the number of directors fixed by Section 2
of this Article III shall constitute a quorum for the transaction of business at
any meeting of the board of directors; but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time. Notice of any adjourned meeting shall be given in the same manner
as prescribed by Section 5 of this Article III.
SECTION 8. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.
SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken by the board of directors at a meeting may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the directors.
SECTION 10. RESIGNATION. Any director may resign at any time by sending a
written notice of such resignation to the home office of the MHC subsidiary
holding company addressed to the chairman of the board or the president. Unless
otherwise specified, such resignation shall take effect upon receipt by the
chairman of the board or the president. More than three consecutive absences
from regular meetings of the board of directors, unless excused by resolution of
the board of directors, shall automatically constitute a resignation, effective
when such resignation is accepted by the board of directors.
SECTION 11. VACANCIES. Any vacancy occurring on the board of directors may
be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected to serve only until the next election of
directors by the shareholders. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the board of
directors for a term of office continuing only until the next election of
directors by the shareholders.
SECTION 12. COMPENSATION. Directors, as such, may receive a stated salary
for their services. By resolution of the board of directors, a reasonable fixed
sum, and reasonable expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the board of directors. Members
of either standing or
special committees may be allowed such compensation for attendance at committee
meetings as the board of directors may determine.
SECTION 13. PRESUMPTION OF ASSENT. A director of the MHC subsidiary holding
company who is present at a meeting of the board of directors at which action on
any MHC subsidiary holding company matter is taken shall be presumed to have
assented to the action taken unless his or her dissent or abstention shall be
entered in the minutes of the meeting or unless he or she shall file a written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the secretary of the MHC subsidiary holding company within five days after
the date a copy of the minutes of the meeting is received. Such right to dissent
shall not apply to a director who voted in favor of such action.
SECTION 14. REMOVAL OF DIRECTORS. At a meeting of shareholders called
expressly for that purpose, any director may be removed only for cause by a vote
of the holders of a majority of the shares then entitled to vote at an election
of directors. Whenever the holders of the shares of any class are entitled to
elect one or more directors by the provisions of the charter or supplemental
sections thereto, the provisions of this section shall apply, in respect to the
removal of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.
ARTICLE IV
EXECUTIVE AND OTHER COMMITTEES
SECTION 1. APPOINTMENT. The board of directors, by resolution adopted by a
majority of the full board, may designate the chief executive officer and two or
more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
SECTION 2. AUTHORITY. The executive committee, when the board of directors
is not in session, shall have and may exercise all of the authority of the board
of directors except to the extent, if any, that such authority shall be limited
by the resolution appointing the executive committee; and except also that the
executive committee shall not have the authority of the board of directors with
reference to: the declaration of dividends; the amendment of the charter or
bylaws of the MHC subsidiary holding company, or recommending to the
shareholders a plan of merger, consolidation, or conversion; the sale, lease, or
other disposition of all or substantially all of the property and assets of the
MHC subsidiary holding company otherwise than in the usual and regular course of
its business; a voluntary dissolution of the MHC subsidiary holding company; a
revocation of any of the foregoing; or the approval of a transaction in which
any member of the executive committee, directly or indirectly, has any material
beneficial interest.
SECTION 3. TENURE. Subject to the provisions of Section 8 of this Article
IV, each member of the executive committee shall hold office until the next
regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.
SECTION 4. MEETINGS. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating the
place, date, and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
SECTION 5. QUORUM. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
SECTION 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken by the executive committee at a meeting may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
of the members of the executive committee.
SECTION 7. VACANCIES. Any vacancy in the executive committee may be filled
by a resolution adopted by a majority of the full board of directors.
SECTION 8. RESIGNATIONS AND REMOVAL. Any member of the executive committee
may be removed at any time with or without cause by resolution adopted by a
majority of the full board of directors. Any member of the executive committee
may resign from the executive committee at any time by giving written notice to
the president or secretary of the MHC subsidiary holding company. Unless
otherwise specified, such resignation shall take effect upon its receipt; the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 9. PROCEDURE. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
SECTION 10. OTHER COMMITTEES. The board of directors may by resolution
establish an audit, loan or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
MHC subsidiary holding company and may prescribe the duties, constitution and
procedures thereof.
ARTICLE V
OFFICERS
SECTION 1. POSITIONS. The officers of the MHC subsidiary holding company
shall be a president, one or more vice presidents, a secretary, and a treasurer
or comptroller, each of whom shall be elected by the board of directors. The
board of directors may also designate the chairman of the board as an officer.
The offices of the secretary and treasurer or comptroller may be held by the
same person and a vice president may also be either the secretary or the
treasurer or comptroller. The board of directors may designate one or more vice
presidents as executive vice president or senior vice president. The board of
directors may also elect or authorize the appointment of such other officers as
the business of the MHC subsidiary holding company may require. The officers
shall have such authority and perform such duties as the board of directors may
from time to time authorize or determine. In the absence of action by the board
of directors, the officers shall have such powers and duties as generally
pertain to their respective offices.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the MHC subsidiary
holding company shall be elected annually at the first meeting of the board of
directors held after each annual meeting of the shareholders. If the election of
officers is not held at such meeting, such election shall be held as soon
thereafter as possible. Each officer shall hold office until a successor has
been duly elected and qualified or until the officer's death, resignation, or
removal in the manner hereinafter provided. Election or appointment of an
officer, employee or agent shall not of itself create contractual rights. The
board of directors may authorize the MHC subsidiary holding company to enter
into an employment contract with any officer in accordance with regulations of
the Office; but no such contract shall impair the right of the board of
directors to remove any officer at any time in accordance with Section 3 of this
Article V.
SECTION 3. REMOVAL. Any officer may be removed by the board of directors
whenever in its judgment the best interests of the MHC subsidiary holding
company will be served thereby, but such removal, other than for cause, shall be
without prejudice to the contractual rights, if any, of the person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the board
of directors for the unexpired portion of the term.
SECTION 5. REMUNERATION. The remuneration of the officers shall be fixed
from time to time by the board of directors.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. To the extent permitted by regulations of the Office,
and except as otherwise prescribed by these bylaws with respect to certificates
for shares, the board of directors may authorize any officer, employee, or agent
of the MHC subsidiary holding company to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the MHC subsidiary
holding company. Such authority may be general or confined to specific
instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the MHC
subsidiary holding company and no evidence of indebtedness shall be issued in
its name unless authorized by the board of directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the MHC subsidiary holding company shall be signed by one or more officers,
employees or agents of the MHC subsidiary holding company in such manner as
shall from time to time be determined by the board of directors.
SECTION 4. DEPOSITS. All funds of the MHC subsidiary holding company not
otherwise employed shall be deposited from time to time to the credit of the MHC
subsidiary holding company in any duly authorized depositories as the board of
directors may select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
capital stock of the MHC subsidiary holding company shall be in such form as
shall be determined by the board of directors and approved by the Office. Such
certificates shall be signed by the chief executive officer or by any other
officer of the MHC subsidiary holding company authorized by the board of
directors, attested by the secretary or an assistant secretary, and sealed with
the corporate seal or a facsimile thereof. The signatures of such officers upon
a certificate may be facsimiles if the certificate is manually signed on behalf
of a transfer agent or a registrar other than the MHC subsidiary holding company
itself or one of its employees. Each certificate for shares of capital stock
shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares are issued, with the number of shares
and date of issue, shall be entered on the stock transfer books of the MHC
subsidiary holding company. All certificates surrendered to the MHC subsidiary
holding company for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares has been
surrendered and cancelled, except that in the case of a lost or destroyed
certificate, a new certificate may be issued upon such terms and indemnity to
the MHC subsidiary holding company as the board of directors may prescribe.
SECTION 2. TRANSFER OF SHARES. Transfer of shares of capital stock of the
MHC subsidiary holding company shall be made only on its stock transfer books.
Authority for such transfer shall be given only by the holder of record or by
his or her legal representative, who shall furnish proper evidence of such
authority, or by his or her attorney authorized by a duly executed power of
attorney and filed with the MHC subsidiary holding company. Such transfer shall
be made only on surrender for cancellation of the certificate for such shares.
The person in whose name shares of capital stock stand on the books of the MHC
subsidiary holding company shall be deemed by the MHC subsidiary holding company
to be the owner for all purposes.
ARTICLE VIII
FISCAL YEAR; APPOINTMENT OF ACCOUNTANTS
The fiscal year of the MHC subsidiary holding company shall end on June 30
of each year. The appointment of accountants shall be subject to annual
ratification by the shareholders.
ARTICLE IX
DIVIDENDS
Subject to the terms of the MHC subsidiary holding company's charter and
the regulations and orders of the Office, the board of directors may, from time
to time, declare, and the MHC subsidiary holding company may pay, dividends on
its outstanding shares of capital stock.
ARTICLE X
CORPORATE SEAL
The board of directors shall provide a corporate seal which shall be two
concentric circles between which shall be the name of the MHC subsidiary holding
company. The year of incorporation, or an emblem may appear in the center.
ARTICLE XI
AMENDMENTS
These bylaws may be amended in a manner consistent with regulations of the
Office and shall be effective after: (i) approval of the amendment by a majority
vote of the authorized board of directors, or by a majority vote of the votes
cast by the shareholders of the MHC subsidiary holding company at any legal
meeting, and (ii) receipt of any applicable regulatory approval. When a MHC
subsidiary holding company fails to meet its quorum requirements, solely due to
vacancies on the board, then the affirmative vote of a majority of the sitting
board will be required to amend the bylaws.
FEDERAL STOCK CHARTER
KAISER FEDERAL BANK
SECTION 1. CORPORATE TITLE. The full corporate title of the savings
association is Kaiser Federal Bank (the "Savings Association").
SECTION 2. OFFICE. The home office shall be located in Covina, California.
SECTION 3. DURATION. The duration of the Savings Association is perpetual.
SECTION 4. PURPOSE AND POWERS. The purpose of the Savings Association is to
pursue any or all of the lawful objectives of a Federal Savings Association
chartered under section 5 of the Home Owners' Loan Act and to exercise all of
the express, implied, and incidental powers conferred thereby and by all acts
amendatory thereof and supplemental thereto, subject to the Constitution and
laws of the United States as they are now in effect, or as they may hereafter be
amended, and subject to all lawful and applicable rules, regulations, and orders
of the Office of Thrift Supervision ("Office").
SECTION 5. CAPITAL STOCK. The total number of shares of all classes of the
capital stock that the Savings Association has the authority to issue is
20,000,000, of which 18,000,000 shall be common stock of par value of $.01 per
share, and of which 2,000,000 shall be serial preferred stock of par value $.01
per share. The shares may be issued from time to time as authorized by the board
of directors without further approval of stockholders, except as otherwise
provided in this Section 5 or to the extent that such approval is required by
governing law, rule or regulation. The consideration for the issuance of the
shares shall be paid in full before their issuance and shall not be less than
the par value. Neither promissory notes nor future services shall constitute
payment or part payment for the issuance of shares of the Savings Association.
The consideration for the shares shall be cash, tangible or intangible property
(to the extent direct investment in such property would be permitted), labor, or
services actually performed for the Savings Association, or any combination of
the foregoing. In the absence of actual fraud in the transaction, the value of
such property, labor, or services, as determined by the board of directors of
the Savings Association, shall be conclusive. Upon payment of such
consideration, such shares shall be deemed to be fully paid and nonassessable.
In the case of a stock dividend, that part of the retained earnings of the
Savings Association that is transferred to common stock or paid-in capital
accounts upon the issuance of shares as a stock dividend shall be deemed to be
the consideration for their issuance.
Except for shares issued in the initial organization of the Savings
Association or in connection with the conversion of the Savings Association from
the mutual to the stock form of capitalization, no shares of capital stock
(including shares issuable upon conversion, exchange, or exercise of other
securities) shall be issued, directly or indirectly, to officers, directors, or
controlling persons of the Savings Association other
than as part of a general public offering or as qualifying shares to a director,
unless their issuance or the plan under which they would be issued has been
approved by a majority of the total votes eligible to be cast at a legal
meeting.
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class of a series of capital stock to
vote as a separate class or series or to more than one vote per share, and there
shall be no right to cumulate votes in an election of directors: PROVIDED, That
this restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of preferred
stock, voting as a class or series, to elect some members of the
board of directors, less than a majority thereof, in the event of
default in the payment of dividends on any class or series of
preferred stock;
(ii) To any provision that would require the holders of preferred stock,
voting as a class or series, to approve the merger or consolidation
of the Savings Association with another corporation or the sale,
lease, or conveyance (other than by mortgage or pledge) of
properties or business in exchange for securities of a corporation
other than the Savings Association if the preferred stock is
exchanged for securities of such other corporation: Provided, That
no provision may require such approval for transactions undertaken
with the assistance or pursuant to the direction of the Office or
the Federal Deposit Insurance Corporation;
(iii) To any amendment which would adversely change the specific terms of
any class or series of capital stock as set forth in this Section 5
(or in any supplementary sections hereto), including any amendment
which would create or enlarge any class or series ranking prior
thereto in rights and preferences. An amendment which increases the
number of authorized shares of any class or series of capital stock,
or substitutes the surviving savings association in a merger or
consolidation for the Savings Association, shall not be considered
to be such an adverse change.
A description of the different classes and series (if any) of the Savings
Association's capital stock and a statement of the designations, and the
relative rights, preferences, and limitations of the shares of each class and
series (if any) of capital stock are as follows:
A. COMMON STOCK. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of the common stock shall
exclusively possess all voting power. Each holder of shares of common stock
shall be entitled to one vote for each share held by such holder.
Whenever there shall have been paid, or declared and set aside for payment,
to the holders of the outstanding shares of any class of stock having preference
over the
common stock as to the payment of dividends, the full amount of dividends and of
sinking fund, retirement fund, or other retirement payments, if any, to which
such holders are respectively entitled in preference to the common stock, then
dividends may be paid on the common stock and on any class or series of stock
entitled to participate therewith as to dividends out of any assets legally
available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the Savings
Association, the holders of the common stock (and the holders of any class or
series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the Savings Association available for distribution remaining after:
(i) payment or provision for payment of the Savings Association's debts and
liabilities; (ii) distributions or provision for distributions in settlement of
its liquidation account; and (iii) distributions or provisions for distributions
to holders of any class or series of stock having preference over the common
stock in the liquidation, dissolution, or winding up of the Savings Association.
Each share of common stock shall have the same relative rights as and be
identical in all respects with all the other shares of common stock.
B. Preferred Stock. The Savings Association may provide in supplementary
sections to its charter for one or more classes of preferred stock, which shall
be separately identified. The shares of any class may be divided into and issued
in series, with each series separately designated so as to distinguish the
shares thereof from the shares of all other series and classes. The terms of
each series shall be set forth in a supplementary section to the charter. All
shares of the same class shall be identical except as to the following relative
rights and preferences, as to which there may be variations between different
series:
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rate or the amount of dividends to be paid on the shares
of such series, whether dividends shall be cumulative and, if so, from
which date(s), the payment date(s) for dividends, and the
participating or other special rights, if any, with respect to
dividends;
(c) The voting powers, full or limited, if any, of shares of such series;
(d) Whether the shares of such series shall be redeemable and, if so, the
price(s) at which, and the terms and conditions on which such shares
may be redeemed;
(e) The amount(s) payable upon the shares of such series in the event of
voluntary or involuntary liquidation, dissolution, or winding up of
the Savings Association;
(f) Whether the shares of such series shall be entitled to the benefit of
a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the amount of such fund
and the manner of its application, including the price(s) at which
such shares may be redeemed or purchased through the application of
such fund;
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes of stock of the
Savings Association and, if so, the conversion price(s), or the
rate(s) of exchange, and the adjustments thereof, if any, at which
such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange;
(h) The price or other consideration for which the shares of such series
shall be issued; and
(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of
the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption of
supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established by a
supplementary charter section adopted by the board of directors, the Savings
Association shall file with the Secretary to the Office a dated copy of that
supplementary section of this charter established and designating the series and
fixing and determining the relative rights and preferences thereof.
SECTION 6. PREEMPTIVE RIGHTS. Holders of the capital stock of the Savings
Association shall not be entitled to preemptive rights with respect to any
shares of the Savings Association which may be issued.
SECTION 7. DIRECTORS. The Savings Association shall be under the direction
of a board of directors. The authorized number of directors, as stated in the
Savings Association's bylaws, shall not be fewer than five nor more than fifteen
except when a greater or lesser number is approved by the Director of the
Office, or his or her delegate.
SECTION 8. PRIORITY OF ACCOUNTS. In any situation which the priority of the
accounts of the Savings Association is in controversy, all such accounts shall,
to the extent of their withdrawable value, be debts of the Savings Association
having at least as high a priority as the claims of general creditors of the
Savings Association not having priority (other than any priority arising or
resulting from consensual subordination) over other general creditors of the
Savings Association.
SECTION 9. CERTAIN PROVISIONS APPLICABLE FOR FIVE YEARS. Notwithstanding
anything contained in the Savings Association's charter or bylaws to the
contrary, for a period of five years from the completion of the stock offering
by K-Fed Bancorp, the following provisions shall apply:
A. BENEFICIAL OWNERSHIP LIMITATION. No person other than K-Fed Bancorp, the
parent holding company of the Savings Association or K-Fed Mutual Holding
Company, the parent holding company of K-Fed Bancorp, 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 Savings Association. This limitation
shall not apply to a transaction in which the Savings Association forms a
holding company without change in the respective beneficial ownership interests
of its stockholders other than pursuant to the exercise of any dissenter and
appraisal rights, the purchase of shares by underwriters in connection with a
public offering, or the purchase of shares by a tax-qualified employee stock
benefit plan which is exempt from the approval requirements under ss.
574.3(c)(1)(vi) of the Office's regulations.
In the event shares are acquired in violation of this Section 8, all shares
beneficially owned by any person in excess of 10% shall be considered "excess
shares" and shall not be counted as shares entitled to vote and shall not be
voted by any person or counted as voting shares in connection with any matters
submitted to the stockholders for a vote.
For purposes of this Section 8, the following definitions apply:
(1) The term "person" includes an individual, a group acting in concert, a
corporation, a partnership, an association, a joint stock company, a trust, an
unincorporated organization or similar company, a syndicate or any other group
formed for the purpose of acquiring, holding or disposing of the equity
securities of the Savings Association.
(2) The term "offer" includes every offer to buy or otherwise 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.
(4) The term "acting in concert" means (a) knowing participation in a
joint activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) 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 arrangements,
whether written or otherwise.
B. CALL FOR SPECIAL MEETINGS. Special meetings of stockholders relating to
changes in control of the Savings Association or amendments to its charter shall
be called only upon direction of the board of directors.
SECTION 10. AMENDMENT OF CHARTER. Except as provided in Section 5, no
amendment, addition, alteration, change or repeal of this charter shall be made,
unless such is proposed by the board of directors of the Savings Association,
approved by the shareholders by a majority of the votes eligible to be cast at a
legal meeting, unless a higher vote is otherwise required, and approved or
preapproved by the Office.
KAISER FEDERAL BANK
ATTEST: By:
----------------------------- -----------------------------
Rita H. Zwern, Secretary Kay M. Hoveland, President
and Chief Executive Officer
OFFICE OF THRIFT SUPERVISION
ATTEST By:
----------------------------- -----------------------------
Secretary of the Office of Director of the Office of
Thrift Supervision Thrift Supervision
Effective Date:
----------------------------
BYLAWS
OF
KAISER FEDERAL BANK
ARTICLE I
HOME OFFICE
The home office of Kaiser Federal Bank (the "Association") shall be in the
City of Covina, in the State of California.
ARTICLE II
SHAREHOLDERS
SECTION 1. PLACE OF MEETINGS. All annual and special meetings of
shareholders shall be held at the home office of the Association or at such
other convenient place as the board of directors may determine.
SECTION 2. ANNUAL MEETING. A meeting of the shareholders of the
Association for the election of directors and for the transaction of any other
business of the Association shall be held annually within 150 days after the end
of the Association's fiscal year on the fourth Tuesday of September at 5:30 p.m.
if not a legal holiday, and if a legal holiday, then on the next day following
which is not a legal holiday, at 5:30 p.m., or at such other date and time
within such 150 day period as the board of directors may determine.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision ("Office"), may be called at any time by the
chairman of the board, the president, or a majority of the board of directors,
and shall be called by the chairman of the board, the president, or the
secretary upon the written request of the holders of not less than one-tenth of
all of the outstanding capital stock of the Association entitled to vote at the
meeting. Such written request shall state the purpose or purposes of the meeting
and shall be delivered to the home office of the Association addressed to the
chairman of the board, the president, or the secretary.
SECTION 4. CONDUCT OF MEETINGS. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
board of directors adopts another written procedure for the conduct of meetings.
The board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
SECTION 5. NOTICE OF MEETINGS. Written notice stating the place, day, and
hour of the meeting and the purpose(s) for which the meeting is called shall be
delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the shareholder at the address as it appears on the stock transfer
books or records of the Association as of the record date prescribed in Section
6 of this Article II with postage prepaid. When any shareholders' meeting,
either annual or special, is adjourned for 30 days or more, notice of the
adjourned meeting shall be given as in the case of an original meeting. It shall
not be necessary to give any notice of the time and place of any meeting
adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken. Compliance with the provisions of this Section 5 shall not be applicable
for so long as the Association is a wholly owned institution.
SECTION 6. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the board of directors shall fix in advance a date as the record
date for any such determination of shareholders. Such date in any case shall be
not more than 60 days and, in case of a meeting of shareholders, not fewer than
10 days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.
SECTION 7. VOTING LISTS. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the Association shall make a complete list of the shareholders of
record entitled to vote at such meeting, or any adjournment thereof, arranged in
alphabetical order, with the address and the number of shares held by each. This
list of shareholders shall be kept on file at the home office of the Association
and shall be subject to inspection by any shareholder of record or the
shareholder's agent at any time during usual business hours for a period of 20
days prior to such meeting. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to inspection by any
shareholder of record or any shareholder's agent during the entire time of the
meeting. The original stock transfer book shall constitute prima facie evidence
of the shareholders entitled to examine such list or transfer books or to vote
at any meeting of shareholders. In lieu of making the shareholder list available
for inspection by shareholders as provided in this paragraph, the board of
directors may elect to follow the procedures prescribed in ss. 552.6(d) of the
Office's regulations as now or hereafter in effect. Compliance with the
provisions of this Section 7 shall not be applicable for so long as the
Association is a wholly owned institution.
SECTION 8. QUORUM. A majority of the outstanding shares of the Association
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. If less than a majority of the outstanding shares
is represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such adjourned meeting
at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to constitute less than a quorum. If a quorum is present, the
affirmative vote of the majority of the shares represented at the meeting and
entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter. Directors, however, are elected by a
plurality of the votes cast at an election of directors.
SECTION 9. PROXIES. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by the shareholder or by his or
her duly authorized attorney in fact. Proxies may be given telephonically or
electronically as long as the holder uses a procedure for verifying the identity
of the shareholder. A proxy may designate as holder a corporation, partnership
or company as prescribed in ss. 552.6(f) of the Office's regulations, or other
person. Proxies solicited on behalf of the management shall be voted as directed
by the shareholder or, in the absence of such direction, as determined by a
majority of the board of directors. No proxy shall be valid more than eleven
months from the date of its execution except for a proxy coupled with an
interest.
SECTION 10. VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS. When
ownership stands in the name of two or more persons, in the absence of written
directions to the Association to the contrary, at any meeting of the
shareholders of the Association any one or more of such shareholders may cast,
in person or by proxy, all votes to which such ownership is entitled. In the
event an attempt is made to cast conflicting votes, in person or by proxy, by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such and present in person or by proxy at such meeting, but no
votes shall be cast for such stock if a majority cannot agree.
SECTION 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares held in trust in an IRA or Keogh Account, however,
may be voted by the Association if no other instructions are received. Shares
standing in the name of a receiver may be voted by such receiver, and shares
held by or under the control of a receiver may be voted by such receiver without
the transfer into his or her name if authority to do so is contained in an
appropriate order of the court or other public authority by which such receiver
was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Association nor shares
held by another corporation, if a majority of the shares entitled to vote for
the election of directors of such other corporation are held by the Association,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time for purposes of any meeting.
SECTION 12. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the board of directors may appoint any person other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the board of
directors in advance of the meeting or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares and the voting
power of each share, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; receiving votes,
ballots, or consents; hearing and determining all challenges and questions in
any way arising in connection with the rights to vote; counting and tabulating
all votes or consents; determining the result; and such acts as may be proper to
conduct the election or vote with fairness to all shareholders.
SECTION 13. NOMINATING COMMITTEE. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at least 20 days prior to the date
of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the Association. No nominations for
directors except those made by the nominating
committee shall be voted upon at the annual meeting unless other nominations by
shareholders are made in writing and delivered to the secretary of the
Association at least five days prior to the date of the annual meeting. Upon
delivery, such nominations shall be posted in a conspicuous place in each office
of the Association. Ballots bearing the names of all persons nominated by the
nominating committee and by shareholders shall be provided for use at the annual
meeting. However, if the nominating committee shall fail or refuse to act at
least 20 days prior to the annual meeting, nominations for directors may be made
at the annual meeting by any shareholder entitled to vote and shall be voted
upon.
SECTION 14. NEW BUSINESS. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the secretary of the
Association at least five days before the date of the annual meeting, and all
business so stated, proposed, and filed shall be considered at the annual
meeting; but no other proposal shall be acted upon at the annual meeting. Any
shareholder may make any other proposal at the annual meeting and the same may
be discussed and considered, but unless stated in writing and filed with the
secretary at least five days before the meeting, such proposal shall be laid
over for action at an adjourned, special, or annual meeting of the shareholders
taking place 30 days or more thereafter. This provision shall not prevent the
consideration and approval or disapproval at the annual meeting of reports of
officers, directors, and committees; but in connection with such reports, no new
business shall be acted upon at such annual meeting unless stated and filed as
herein provided.
SECTION 15. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders, or any other action that may be taken at
a meeting of shareholders, may be taken without a meeting if consent in writing,
setting forth the action so taken, shall be given by all of the shareholders
entitled to vote with respect to the subject matter. ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the Association
shall be under the direction of its board of directors. The board of directors
shall annually elect a chairman of the board and a president from among its
members and shall designate, when present, either the chairman of the board or
the president to preside at its meetings.
SECTION 2. NUMBER AND TERM. The board of directors shall consist of seven
members, and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually. Directors may be elected for a term of office to expire
earlier than the third succeeding annual meeting of stockholders after their
election if necessary to balance the classes of directors.
SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held without other notice than this bylaw immediately following and at
the same place as, the annual meeting of shareholders. The board of directors
may provide, by resolution, the time and place, for the holding of additional
regular meetings without other notice than such resolution. Directors may
participate in a meeting by means of a conference telephone or similar
communications device through which all persons participating can hear each
other at the same time. Participation by such means shall constitute presence in
person for all purposes.
SECTION 4. QUALIFICATION. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the Association
unless the Association is a wholly owned subsidiary of a holding company.
SECTION 5. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the president,
or one-third of the directors. The persons authorized to call special meetings
of the board of directors may fix any place, within the Association's normal
lending territory, as the place for holding any special meeting of the board of
directors called by such persons.
Members of the board of directors may participate in special meetings by
means of conference telephone or similar communications equipment by which all
persons participating in the meeting can hear and speak to each other. Such
participation shall constitute presence in person for all purposes.
SECTION 6. NOTICE. Written notice of any special meeting shall be given to
each director at least 24 hours prior thereto when delivered personally or by
telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the mail so addressed, with postage
prepaid if mailed, when delivered to the telegraph company if sent by telegram,
or when the Association receives notice of delivery if electronically
transmitted. Any director may waive notice of any meeting by a writing filed
with the secretary. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
SECTION 7. QUORUM. A majority of the number of directors fixed by Section
2 of this Article III shall constitute a quorum for the transaction of business
at any meeting of the board of directors; but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time. Notice of any adjourned meeting shall be given in the
same manner as prescribed by Section 6 of this Article III.
SECTION 8. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.
SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken by the board of directors at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the directors.
SECTION 10. RESIGNATION. Any director may resign at any time by sending a
written notice of such resignation to the home office of the Association
addressed to the chairman of the board or the president. Unless otherwise
specified, such resignation shall take effect upon receipt by the chairman of
the board or the president. More than three consecutive absences from regular
meetings of the board of directors, unless excused by resolution of the board of
directors, shall automatically constitute a resignation, effective when such
resignation is accepted by the board of directors.
SECTION 11. VACANCIES. Any vacancy occurring on the board of directors may
be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected to serve only until the next election of
directors by the shareholders. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the board of
directors for a term of office continuing only until the next election of
directors by the shareholders.
SECTION 12. COMPENSATION. Directors, as such, may receive a stated salary
for their services. By resolution of the board of directors, a reasonable fixed
sum, and reasonable expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the board of directors. Members
of either standing or special committees may be allowed such compensation for
attendance at committee meetings as the board of directors may determine.
SECTION 13. PRESUMPTION OF ASSENT. A director of the Association who is
present at a meeting of the board of directors at which action on any
Association matter is taken shall be presumed to have assented to the action
taken unless his or her dissent or abstention shall be entered in the minutes of
the meeting or unless he or she shall file a written dissent to such action with
the person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the secretary of the
Association within five days after the date a copy of the minutes of the meeting
is received. Such right to dissent shall not apply to a director who voted in
favor of such action.
SECTION 14. REMOVAL OF DIRECTORS. At a meeting of shareholders called
expressly for that purpose, any director may be removed only for cause by a vote
of the
holders of a majority of the shares then entitled to vote at an election
of directors. Whenever the holders of the shares of any class are entitled to
elect one or more directors by the provisions of the charter or supplemental
sections thereto, the provisions of this section shall apply, in respect to the
removal of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.
ARTICLE IV
EXECUTIVE AND OTHER COMMITTEES
SECTION 1. APPOINTMENT. The board of directors, by resolution adopted by a
majority of the full board, may designate the chief executive officer and two or
more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
SECTION 2. AUTHORITY. The executive committee, when the board of directors
is not in session, shall have and may exercise all of the authority of the board
of directors except to the extent, if any, that such authority shall be limited
by the resolution appointing the executive committee; and except also that the
executive committee shall not have the authority of the board of directors with
reference to: the declaration of dividends; the amendment of the charter or
bylaws of the Association, or recommending to the shareholders a plan of merger,
consolidation, or conversion; the sale, lease, or other disposition of all or
substantially all of the property and assets of the Association otherwise than
in the usual and regular course of its business; a voluntary dissolution of the
Association; a revocation of any of the foregoing; or the approval of a
transaction in which any member of the executive committee, directly or
indirectly, has any material beneficial interest.
SECTION 3. TENURE. Subject to the provisions of Section 8 of this Article
IV, each member of the executive committee shall hold office until the next
regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.
SECTION 4. MEETINGS. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating the
place, date, and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
SECTION 5. QUORUM. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
SECTION 6. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken by the executive committee at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the members of the executive committee.
SECTION 7. VACANCIES. Any vacancy in the executive committee may be filled
by a resolution adopted by a majority of the full board of directors.
SECTION 8. RESIGNATIONS AND REMOVAL. Any member of the executive committee
may be removed at any time with or without cause by resolution adopted by a
majority of the full board of directors. Any member of the executive committee
may resign from the executive committee at any time by giving written notice to
the president or secretary of the Association. Unless otherwise specified, such
resignation shall take effect upon its receipt; the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 9. PROCEDURE. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
SECTION 10. OTHER COMMITTEES. The board of directors may by resolution
establish an audit, loan or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
Association and may prescribe the duties, constitution and procedures thereof.
ARTICLE V
OFFICERS
SECTION 1. POSITIONS. The officers of the Association shall be a
president, one or more vice presidents, a secretary, and a treasurer or
comptroller, each of whom shall be elected by the board of directors. The board
of directors may also designate the chairman of the board as an officer. The
offices of the secretary and treasurer or comptroller may be held by the same
person and a vice president may also be either the secretary or the treasurer or
comptroller. The board of directors may designate one or more vice presidents as
executive vice president or senior vice president. The board of directors may
also elect or authorize the appointment of such other officers as the business
of the Association may require. The officers shall have such authority and
perform such duties as the board of directors may from time to time authorize or
determine. In the absence of action by the board of directors, the officers
shall have such powers and duties as generally pertain to their respective
offices.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Association
shall be elected annually at the first meeting of the board of directors held
after each annual meeting of the shareholders. If the election of officers is
not held at such meeting, such election shall be held as soon thereafter as
possible. Each officer shall hold office until a successor has been duly elected
and qualified or until the officer's death, resignation, or removal in the
manner hereinafter provided. Election or appointment of an officer, employee or
agent shall not of itself create contractual rights. The board of directors may
authorize the Association to enter into an employment contract with any officer
in accordance with regulations of the Office; but no such contract shall impair
the right of the board of directors to remove any officer at any time in
accordance with Section 3 of this Article V.
SECTION 3. REMOVAL. Any officer may be removed by the board of directors
whenever in its judgment the best interests of the Association will be served
thereby, but such removal, other than for cause, shall be without prejudice to
the contractual rights, if any, of the person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the board
of directors for the unexpired portion of the term.
SECTION 5. REMUNERATION. The remuneration of the officers shall be fixed
from time to time by the board of directors.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. To the extent permitted by regulations of the
Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the board of directors may authorize any officer,
employee, or agent of the Association to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Association. Such
authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Association and no evidence of indebtedness shall be issued in its name unless
authorized by the board of directors. Such authority may be general or confined
to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Association shall be signed by one or more officers, employees or agents of
the
Association in such manner as shall from time to time be determined by the
board of directors.
SECTION 4. DEPOSITS. All funds of the Association not otherwise employed
shall be deposited from time to time to the credit of the Association in any
duly authorized depositories as the board of directors may select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
capital stock of the Association shall be in such form as shall be determined by
the board of directors and approved by the Office. Such certificates shall be
signed by the chief executive officer or by any other officer of the Association
authorized by the board of directors, attested by the secretary or an assistant
secretary, and sealed with the corporate seal or a facsimile thereof. The
signatures of such officers upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent or a registrar
other than the Association itself or one of its employees. Each certificate for
shares of capital stock shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares are issued, with the
number of shares and date of issue, shall be entered on the stock transfer books
of the Association. All certificates surrendered to the Association for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares has been surrendered and cancelled,
except that in the case of a lost or destroyed certificate, a new certificate
may be issued upon such terms and indemnity to the Association as the board of
directors may prescribe.
SECTION 2. TRANSFER OF SHARES. Transfer of shares of capital stock of the
Association shall be made only on its stock transfer books. Authority for such
transfer shall be given only by the holder of record or by his or her legal
representative, who shall furnish proper evidence of such authority, or by his
or her attorney authorized by a duly executed power of attorney and filed with
the Association. Such transfer shall be made only on surrender for cancellation
of the certificate for such shares. The person in whose name shares of capital
stock stand on the books of the Association shall be deemed by the Association
to be the owner for all purposes.
ARTICLE VIII
FISCAL YEAR; APPOINTMENT OF ACCOUNTANTS
The fiscal year of the Association shall end on June 30th of each year, or
on such other date as the board of directors shall, by resolution, determine.
ARTICLE IX
DIVIDENDS
Subject to the terms of the Association's charter and the regulations and
orders of the Office, the board of directors may, from time to time, declare,
and the Association may pay, dividends on its outstanding shares of capital
stock.
ARTICLE X
CORPORATE SEAL
The board of directors may provide a Association seal which shall be two
concentric circles between which shall be the name of the Association. The year
of incorporation or an emblem may appear in the center.
ARTICLE XI
AMENDMENTS
These bylaws may be amended in a manner consistent with regulations of the
Office and shall be effective after: (i) approval of the amendment by a majority
vote of the authorized board of directors, or by a majority vote of the votes
cast by the shareholders of the Association at any legal meeting, and (ii)
receipt of any applicable regulatory approval. When an Association fails to meet
its quorum requirements, solely due to vacancies on the board, then the
affirmative vote of a majority of the sitting board will be required to amend
the bylaws.