Exhibit 1.2
Engagement Letter between Pioneer Bank, a Federal
Savings Bank and Xxxxxxx Xxxx & Co.
KBW Xxxxxxx Xxxx & Company [LOGO]
A Division of
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
March 5, 1997
Xx. Xxx X. Xxxxxx
President and Chief Executive Officer
Pioneer Bank, A Federal Savings Bank
0000 Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxx 00000-3339
Dear Xx. Xxxxxx:
This proposal is in connection with Pioneer Bank, A Federal Savings Bank's (the
"Bank") intention to convert from a mutual to a capital stock form of
organization (the "Conversion"). In order to effect the Conversion, it is
contemplated that all of the Bank's common stock to be outstanding pursuant to
the Conversion will be issued to a holding company (the "Company") to be formed
by the Bank, and that the Company will offer and sell shares of its common stock
first to eligible persons (pursuant to the Bank's Plan of Conversion) in a
Subscription and Community Offering.
Xxxxxxx Xxxx & Company ("Xxxx"), a Division of Xxxxx, Xxxxxxxx and Xxxxx, Inc.
("KBW"), will act as the Bank's and the Company's exclusive financial advisor
and marketing agent in connection with the Conversion. This letter sets forth
selected terms and conditions of our engagement.
1. Advisory/Conversion Services. As the Bank's and Company's financial advisor
and marketing agent, Xxxx will provide the Bank and the Company with a
comprehensive program of conversion services designed to promote an orderly,
efficient, cost-effective and long-term stock distribution. Xxxx will provide
financial and logistical advice to the Bank and the Company concerning the
offering and related issues. Xxxx will assist in providing conversion
enhancement services intended to maximize stock sales in the Subscription
Offering and to residents of the Bank's market area, if necessary, in the
Community Offering.
Xxxx shall provide financial advisory services to the Bank which are typical in
connection with an equity offering and include, but are not limited to, overall
financial analysis of the client with a focus on identifying factors which
impact the valuation of the common stock and provide the appropriate
recommendations for the betterment of the equity valuation.
Additionally, post conversion financial advisory services will include advice on
shareholder relations, NASDAQ listing, dividend policy (for both regular and
special dividends), stock
Investment Bankers and Financial Advisors
000 Xxxxxxxxx x Xxxxxx, Xxxx 00000-3541 o 000-000-0000 o Fax:000-000-0000
Xx. Xxx X. Xxxxxx
March 5, 1997
Page 2 of 5
repurchase strategy and communication with market makers. Prior to the closing
of the offering, Xxxx shall furnish to client a Post-Conversion reference manual
which will include specifics relative to these items. (The nature of the
services to be provided by Xxxx as the Bank's and the Company's financial
advisor and marketing agent are further described in Exhibit A attached hereto.)
2. Preparation of Offering Documents. The Bank, the Company and their counsel
will draft the Registration Statement, Application for Conversion, Prospectus
and other documents to be used in connection with the Conversion. Xxxx will
attend meetings to review these documents and advise you on their form and
content. Xxxx and its counsel will draft appropriate agency agreement and
related documents as well as marketing materials other than the Prospectus.
3. Due Diligence Review. Prior to filing the Registration Statement, Application
for Conversion or any offering or other documents naming Xxxx as the Bank's and
the Company's financial advisor and marketing agent, Xxxx and their
representatives will undertake substantial investigations to learn about the
Bank's business and operations ("due diligence review") in order to confirm
information provided to us and to evaluate information to be contained in the
Bank's and/or the Company's offering documents. The Bank agrees that it will
make available to Xxxx all relevant information, whether or not publicly
available, which Xxxx reasonably requests, and will permit Xxxx to discuss with
management the operations and prospects of the Bank. Xxxx will treat all
material non-public information as confidential. The Bank acknowledges that Xxxx
will rely upon the accuracy and completeness of all information received from
the Bank, its officers, directors, employees, agents and representatives,
accountants and counsel including this letter to serve as the Bank's and the
Company's financial advisor and marketing agent.
4. Regulatory Filings. The Bank and/or the Company will cause appropriate
offering documents to be filed with all regulatory agencies including, the
Securities and Exchange Commission ("SEC"), the National Bank of Securities
Dealers ("NASD"), Office of Thrift Supervision ("OTS") and such state securities
commissioners as may be determined by the Bank.
5. Agency Agreement. The specific terms of the conversion services, conversion
offering enhancement and syndicated offering services contemplated in this
letter shall be set forth in an Agency Agreement between Xxxx and the Bank and
the Company to be executed prior to commencement of the offering, and dated the
date that the Company's Prospectus is declared effective and/or authorized to be
disseminated by the appropriate regulatory agencies, the SEC, the NASD, the OTS
and such state securities commissioners and other regulatory agencies as
required by applicable law.
6. Representations, Warranties and Covenants. The Agency Agreement will provide
for customary representations, warranties and covenants by the Bank and Xxxx,
and for the Company to indemnify Xxxx and their controlling persons (and, if
applicable, the members of
Xx. Xxx X. Xxxxxx
March 5, 1997
Page 3 of 5
the selling group and their controlling persons), and for Xxxx to indemnify the
Bank and the Company against certain liabilities, including, without limitation,
liabilities under the Securities Act of 1933.
7. Fees. For the services hereunder, the Bank and/or Company shall pay the
following fees to Xxxx at closing unless stated otherwise:
(a) A Management Fee of $25,000 payable in four consecutive monthly
installments of $6,250 commencing with the signing of this letter.
Such fees shall be deemed to have been earned when due. Should the
Conversion be terminated for any reason not attributable to the action
or inaction of Xxxx, Xxxx shall have earned and be entitled to be paid
fees accruing through the stage at which point the termination
occurred.
(b) A Success Fee of 1.5% of the aggregate Purchase Price of Common Stock
sold in the Subscription Offering and Community Offering excluding
shares purchased by the Bank's officers, directors, or employees (or
members of their immediate families) plus any ESOP, tax-qualified or
stock based compensation plans (except IRA's) or similar plan created
by the Bank for some or all of its directors or employees. The
Management Fee described in 7(a) will be applied against the Success
Fee.
(c) If any shares of the Company's stock remain available after the
subscription offering, at the request of the Bank, Xxxx will seek to
form a syndicate of registered broker-dealers to assist in the sale of
such common stock on a best efforts basis, subject to the terms and
conditions set forth in the selected dealers agreement. Xxxx will
endeavor to distribute the common stock among dealers in a fashion
which best meets the distribution objectives of the Bank and the Plan
of Conversion. Xxxx will be paid a fee not to exceed 5.5% of the
aggregate Purchase Price of the shares of common stock sold by them.
Xxxx will pass onto selected broker-dealers, who assist in the
syndicated community, an amount competitive with gross underwriting
discounts charged at such time for comparable amounts of stock sold at
a comparable price per share in a similar market environment. Fees
with respect to purchases affected with the assistance of a
broker/dealer other than Xxxx shall be transmitted by Xxxx to such
broker/dealer. THE DECISION TO UTILIZE SELECTED BROKER-DEALERS WILL BE
MADE BY THE BANK upon consultation with Xxxx. In the event, with
respect to any stock purchases, fees are paid pursuant to this
subparagraph 7(c), such fees shall be in lieu of, and not in addition
to, payment pursuant to subparagraph 7(a) and 7(b).
Xx. Xxx X. Xxxxxx
March 5, 1997
Page 4 of 5
8. Additional Services. Xxxx further agrees to provide financial advisory
assistance to the Company and the Bank for a period of one year following
completion of the Conversion, including formation of a dividend policy and share
repurchase program, assistance with shareholder reporting and shareholder
relations matters, general advice on mergers and acquisitions and other related
financial matters, without the payment by the Company and the Bank of any fees
in addition to those set forth in Section 7 hereof. Nothing in this Agreement
shall require the Company and the Bank to obtain such services from Xxxx.
Following this initial one year term, if both parties wish to continue the
relationship, a fee will be negotiated and an agreement entered into at that
time.
9. Expenses. The Bank will bear those expenses of the proposed offering
customarily borne by issuers, including, without limitation, regulatory filing
fees, SEC, "Blue Sky," and NASD filing and registration fees; the fees of the
Bank's accountants, attorneys, appraiser, transfer agent and registrar,
printing, mailing and marketing and syndicate expenses associated with the
Conversion; the fees set forth in Section 7; and fees for "Blue Sky" legal work.
If Xxxx incurs expenses on behalf of Client, Client will reimburse Xxxx for such
expenses.
Xxxx shall be reimbursed for reasonable out-of-pocket expenses, including costs
of travel, meals and lodging, photocopying, telephone, facsimile and couriers
and reasonable fees and expenses of their counsel (such fees of counsel will not
be incurred without the prior approval of Client). The selection of such counsel
will be done by Xxxx, with the approval of the Bank. Such reimbursement of legal
fees will not exceed $35,000.
10. Conditions. Xxxx'x willingness and obligation to proceed hereunder shall be
subject to, among other things, satisfaction of the following conditions in
Xxxx'x opinion, which opinion shall have been formed in good faith by Xxxx after
reasonable determination and consideration of all relevant factors: (a) full and
satisfactory disclosure of all relevant material, financial and other
information in the disclosure documents and a determination by Xxxx, in its sole
discretion, that the sale of stock on the terms proposed is reasonable given
such disclosures; (b) no material adverse change in the condition or operations
of the Bank subsequent to the execution of the agreement; and (c) no adverse
market conditions at the time of offering which in Xxxx'x opinion make the sale
of the shares by the Company inadvisable.
12. Benefit. This Agreement shall inure to the benefit of the parties hereto and
their respective successors and to the parties indemnified pursuant to the terms
and conditions of the Agency Agreement and their successors, and the obligations
and liabilities assumed hereunder by the parties hereto shall be binding upon
their respective successors provided, however, that this Agreement shall not be
assignable by Xxxx.
13. Definitive Agreement. This letter reflects Xxxx'x present intention of
proceeding to work with the Bank on its proposed conversion. It does not create
a binding obligation on the
Xx. Xxx X. Xxxxxx
March 5, 1997
Page 5 of 5
part of the Bank, the Company or Xxxx except as to the agreement to maintain the
confidentiality of non-public information set forth in Section 3, the payment of
certain fees as set forth in Section 7(a) and 7(b) and the assumption of
expenses as set forth in Section 9, all of which shall constitute the binding
obligations of the parties hereto and which shall survive the termination of
this Agreement or the completion of the services furnished hereunder and shall
remain operative and in full force and effect. You further acknowledge that any
report or analysis rendered by Xxxx pursuant to this engagement is rendered for
use solely by the management of the Bank and its agents in connection with the
Conversion. Accordingly, you agree that you will not provide any such
information to any other person without our prior written consent.
Xxxx acknowledges that in offering the Company's stock no person will be
authorized to give any information or to make any representation not contained
in the offering prospectus and related offering materials filed as part of a
registration statement to be declared effective in connection with the offering.
Accordingly, Xxxx agrees that in connection with the offering it will not give
any unauthorized information or make any unauthorized representation. We will be
pleased to elaborate on any of the matters discussed in this letter at your
convenience.
If the foregoing correctly sets forth our mutual understanding, please so
indicate by signing and returning the original copy of this letter to the
undersigned.
Very truly yours,
XXXXXXX XXXX & COMPANY,
A DIVISION OF XXXXX, XXXXXXXX & XXXXX, INC.
By: /s/Xxxxxxxx X. XxXxxxx
---------------------------
Xxxxxxxx X. XxXxxxx
Executive Vice President
PIONEER BANK, A FEDERAL SAVINGS BANK
By: /s/Xxx X. Xxxxxx Date: 4/9/97
--------------------------------------- ------
Xxx X. Xxxxxx,
President and Chief Executive Officer
EXHIBIT A
CONVERSION SERVICES PROPOSAL
TO PIONEER BANK, A FEDERAL SAVINGS BANK
Xxxxxxx Xxxx & Company provides thrift institutions converting from mutual to
stock form of ownership with a comprehensive program of conversion services
designed to promote an orderly, efficient, cost-effective and long-term stock
distribution. The following list is representative of the conversion services,
if appropriate, we propose to perform on behalf of the Bank.
General Services
Assist management and legal counsel with the design of the transaction
structure.
Analyze and make recommendations on bids from printing, transfer agent, and
appraisal firms.
Assist officers and directors in obtaining bank loans to purchase stock, if
requested.
Assist in drafting and distribution of press releases as required or
appropriate.
Conversion Offering Enhancement Services
Establish and manage Stock Information Center at the Bank. Stock Information
Center personnel will track prospective investors; record stock orders; mail
order confirmations; provide the Bank's senior management with daily reports;
answer customer inquiries; and handle special situations as they arise.
Assign Xxxx'x personnel to be at the Bank through completion of the Subscription
and Community Offerings to manage the Stock Information Center, meet with
prospective shareholders at individual and community information meetings,
solicit local investor interest through a tele-marketing campaign, answer
inquiries, and otherwise assist in the sale of stock in the Subscription and
Community Offerings. This effort will be lead by a Principal of Xxxx/KBW.
Create target investor list based upon review of the Bank's depositor base.
Provide intensive financial and marketing input for drafting of the prospectus.
Conversion Offering Enhancement Services- Continued
Prepare other marketing materials, including prospecting letters and brochures,
and media advertisements.
Arrange logistics of community information meeting(s) as required.
Prepare audio-visual presentation by senior management for community information
meeting(s).
Prepare management for question-and-answer period at community information
meeting(s).
Attend and address community information meeting(s) and be available to answer
questions.
Broker-Assisted Sales Services.
Arrange for broker information meeting(s) as required.
Prepare audio-visual presentation for broker information meeting(s).
Prepare script for presentation by senior management at broker information
meeting(s).
Prepare management for question-and-answer period at broker information
meeting(s).
Attend and address broker information meeting(s) and be available to answer
questions.
Produce confidential broker memorandum to assist participating brokers in
selling the Bank's common stock.
Aftermarket Support Services.
Xxxx will use their best efforts to secure market making and on-going research
commitment from at least two NASD firms, one of which will be Xxxxx, Xxxxxxxx &
Xxxxx, Inc.
Exhibit 3.1
Articles of Incorporation of Oregon Trail Financial Corp.
ARTICLES OF INCORPORATION
OF
OREGON TRAIL FINANCIAL CORP.
ARTICLE I
Name
The name of the corporation is Oregon Trail Financial Corp.(herein the
"Corporation").
ARTICLE II
Registered Office
The address of the Corporation's registered office in the State of Oregon
is 0000 Xxxxx Xxxxxx xx xxx Xxxx xx Xxxxx Xxxx, Xxxxxx xx Xxxxx. The name of the
Corporation's registered agent at such address is Xxx X. Xxxxxx. The above
address is also the mailing address for notices.
ARTICLE III
Powers
The purpose for which the Corporation is organized is to act as a savings
and loan holding company and to transact all other lawful business for which
corporations may be incorporated pursuant to the laws of the State of Oregon.
The Corporation shall have all the powers of a corporation organized under the
Oregon Business Corporation Act, as amended ("OBCA").
ARTICLE IV
Term
The Corporation is to have perpetual existence.
ARTICLE V
Incorporator
The name and mailing address of the incorporator is as follows:
Name Mailing Address
Xxx X. Xxxxxx 0000 Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxx 00000
ARTICLE VI
Initial Directors
The number of directors constituting the initial board of directors of the
Corporation is seven (7), and the names and addresses of the persons who are to
serve as directors until their successors are elected and qualified, together
with the classes of directorships to which such persons have been signed, are:
Name Address Class
---- ------- -----
Xxx X. Xxxxxx 0000 Xxxxx Xxxxxx X
Xxxxx Xxxx, Xxxxxx 00000
Xxxx X. Xxxxxxxxxxx 0000 Xxxxx Xxxxxx X
Xxxxx Xxxx, Xxxxxx 00000
Xxxx X. Xxxxxx 0000 Xxxxx Xxxxxx X
Xxxxx Xxxx, Xxxxxx 00000
Xxxxxx X. Xxxx 0000 Xxxxx Xxxxxx XX
Xxxxx Xxxx, Xxxxxx 00000
Xxxxxx X. Xxxxxx 0000 Xxxxx Xxxxxx XX
Xxxxx Xxxx, Xxxxxx 00000
Xxxxxxx X. Xxxxxxxxxx 0000 Xxxxx Xxxxxx XXX
Xxxxx Xxxx, Xxxxxx 00000
Xxxxxxx X. Xxxxx 0000 Xxxxx Xxxxxx XXX
Xxxxx Xxxx, Xxxxxx 00000
ARTICLE VII
Capital Stock
The aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 8,250,000, of which 8,000,000 are to be
shares of common stock, $.01 par value per share, and of which 250,000 are to be
shares of serial preferred stock, $.01 par value per share. The shares may be
issued by the Corporation from time to time as approved by the board of
directors of the Corporation without the approval of stockholders except as
otherwise provided in this Article VII or the rules of a national securities
exchange, if applicable. The consideration for the issuance of the shares shall
be paid to or received by the Corporation in full before their issuance and
shall not be less than the par value per share. The consideration for the
issuance of the shares shall be cash, services rendered, personal property
(tangible or intangible), real property, leases of real property or any
combination of the foregoing. In the absence of actual fraud in the transaction,
the judgment of the board of directors as to the value of such consideration
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, the
part of the surplus of the Corporation which is transferred to stated capital
upon the issuance of shares as a stock dividend shall be deemed to be the
consideration for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series (if
any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:
A. Common Stock. Except as provided in these Articles, 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
holders.
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 sinking fund or retirement fund or other retirement payments, if
any, to which such
2
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, but only when as declared by the board
of directors of the Corporation.
In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class having preference
over the common stock in any such event, the full preferential amounts to which
they are respectively entitled, the holders of the common stock and of any class
or series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets shall be entitled, after payment or provision for payment
of all debts and liabilities of the Corporation, to receive the remaining assets
of the Corporation available for distribution, in cash or in kind.
Each share of common stock shall have the same relative powers, preferences
and rights as, and shall be identical in all respects with, all the other shares
of common stock of the Corporation.
B. Serial Preferred Stock. Except as provided in these Articles, the board
of directors of the Corporation is authorized, by resolution or resolutions from
time to time adopted, to provide for the issuance of preferred stock in series
and to fix and state the powers, designations, preferences and relative,
participating, optional or other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof, including, but not
limited to determination of any of the following:
1. the distinctive serial designation and the number of shares constituting
such series;
2. the dividend rates 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 or dates, the payment date or dates for dividends, and the participating or
other special rights, if any, with respect to dividends;
3. the voting powers, full or limited, if any, of the shares of such
series;
4. whether the shares of such series shall be redeemable and, if so, the
price or prices at which, and the terms and conditions upon which such shares
may be redeemed;
5. the amount or amounts payable upon the shares of such series in the
event of voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
6. whether the shares of such series shall be entitled to the benefits 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 or prices at which such shares may be redeemed
or purchased through the application of such funds;
7. whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or any other series of
the same or any other class or classes of stock of the Corporation and, if so
convertible or exchangeable, the conversion price or prices, or the rate or
rates 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;
8. the subscription or purchase price and form of consideration for which
the shares of such series shall be issued; and
9. 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.
3
Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of the Corporation of the same series.
ARTICLE VIII
Preemptive Rights
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of any class or series or carrying
any right to purchase stock of any class or series; but any such unissued stock,
bonds, certificates of indebtedness, debentures or other securities convertible
into or exchangeable for stock or carrying any right to purchase stock may be
issued pursuant to resolution of the board of directors of the Corporation to
such persons, firms, corporations or associations, whether or not holders
thereof, and upon such terms as may be deemed advisable by the board of
directors in the exercise of its sole discretion.
ARTICLE IX
Repurchase of Shares
The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences of indebtedness, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.
ARTICLE X
Meetings of Stockholders; Cumulative Voting
A. Special meetings of the stockholders of the Corporation for any purpose
or purposes may be called at any time by the board of directors of the
Corporation, or by a committee of the board of directors which has been duly
designated by the board of directors and whose powers and authorities, as
provided in a resolution of the board of directors or in the Bylaws of the
Corporation, include the power and authority to call such meetings, or as
otherwise provided by the OBCA.
B. There shall be no cumulative voting by stockholders of any class or
series in the election of directors of the Corporation.
C. Meetings of stockholders may be held at such place as the Bylaws may
provide.
ARTICLE XI
Notice for Nominations and Proposals
A. Nominations for the election of directors and proposals for any new
business to be taken up at any annual or special meeting of stockholders may be
made by the board of directors of the Corporation or by any stockholder of the
Corporation entitled to vote generally in the election of directors. In order
for a stockholder of the Corporation to make any such nominations and/or
proposals, he or she shall give notice thereof in writing, delivered or mailed
by first class United States mail, postage prepaid, to the Secretary of the
Corporation not less than thirty days nor
4
more than sixty days prior to any such meeting; provided, however, that if less
than thirty-one days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
the Corporation not later than the close of the tenth day following the day on
which notice of the meeting was mailed to stockholders. Each such notice given
by a stockholder with respect to nominations for election of directors shall set
forth (i) the name, age, business address and, if known, residence address of
each nominee proposed in such notice, (ii) the principal occupation or
employment of each such nominees, (iii) the number of shares of stock of the
Corporation which are beneficially owned by each such nominee, (iv) such other
information as would be required to be included in a proxy statement soliciting
proxies for the election of the proposed nominee pursuant to Regulation 14A of
the Securities Exchange Act of 1934, including, without limitation, such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director, if elected, and (v) as to the stockholder giving such
notice (a) his name and address as they appear on the Corporation's books, and
(b) the class and number of shares of the Corporation which are beneficially
owned by such stockholder. In addition, the stockholder making such nomination
shall promptly provide any other information reasonably requested by the
Corporation.
B. Each such notice given by a stockholder to the Secretary with respect to
business proposals to bring before a meeting shall set forth in writing as to
each matter: (i) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
(ii) the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business; (iii) the class and number of shares of the
Corporation which are beneficially owned by the stockholder; and (iv) any
material interest of the stockholder in such business. Notwithstanding anything
in these Articles to the contrary, no business shall be conducted at the meeting
except in accordance with the procedures set forth in this Article.
C. The Chairman of the annual or special meeting of stockholders may, if
the facts warrant, determine and declare to the meeting that a nomination or
proposal was not made in accordance with the foregoing procedure, and, if he
should so determine, he shall so declare to the meeting and the defective
nomination or proposal shall be disregarded and laid over for action at the next
succeeding adjourned, special or annual meeting of the stockholders taking place
thirty days or more thereafter. This provision shall not require the holding of
any adjourned or special meeting of stockholders for the purpose of considering
such defective nomination or proposal.
ARTICLE XII
Directors
A. Number; Vacancies. The number of directors of the Corporation shall be
such number, not less than 5 nor more than 25 (exclusive of directors, if any,
to be elected by holders of preferred stock of the Corporation, voting
separately as a class), as shall be provided from time to time in or in
accordance with the bylaws, provided that no decrease in the number of directors
shall have the effect of shortening the term of any incumbent director, and
provided further that no action shall be taken to decrease or increase the
number of directors from time to time unless at least two-thirds of the
directors then in office shall concur in said action. Vacancies in the board of
directors of the Corporation, however caused, and newly created directorships
shall be filled only by a vote of two-thirds of the directors then in office,
whether or not a quorum, and any director so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of the class to
which the director has been chosen expires and when the director's successor is
elected and qualified.
B. Classified Board. Provided that the board of directors consists of six
or more directors (or such other minimum number as the OBCA may hereafter
require, if any), the board of directors of the Corporation shall be divided
into three classes of directors which shall be designated Class I, Class II and
Class III. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. Such classes shall be as
nearly equal in number as the then total number of directors constituting the
entire board of directors shall permit, with the terms of office of all members
of one class expiring each year. At the first annual meeting of stockholders,
directors in Class I shall be elected to hold office for a term expiring at the
third succeeding annual meeting thereafter. At the second annual meeting of
stockholders, directors of Class II shall be elected to hold office
5
for a term expiring at the third succeeding meeting thereafter. At the third
annual meeting of stockholders, directors of Class III shall be elected to hold
office for a term expiring at the third succeeding meeting thereafter.
Thereafter, at each succeeding annual meeting, directors of each class shall be
elected for three year terms. Notwithstanding the foregoing, the director whose
term shall expire at any annual meeting shall continue to serve until such time
as his successor shall have been duly elected and shall have qualified unless
his position on the board of directors shall have been abolished by action taken
to reduce the size of the board of directors prior to said meeting.
Should the number of directors of the Corporation be reduced, the
directorship(s) eliminated shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the immediately
preceding paragraph. The board of directors shall designate, by the name of the
incumbent(s), the position(s) to be abolished. Notwithstanding the foregoing, no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director. Should the number of directors of the Corporation be
increased, the additional directorships shall be allocated among classes as
appropriate so that the number of directors in each class is as specified in the
immediately preceding paragraph.
Whenever the holders of any one or more series of preferred stock of the
Corporation shall have the right, voting separately as a class, to elect one or
more directors of the Corporation, the board of directors shall consist of said
directors so elected in addition to the number of directors fixed as provided
above in this Article XII. Notwithstanding the foregoing, and except as
otherwise may be required by law, whenever the holders of any one or more series
of preferred stock of the Corporation shall have the right, voting separately as
a class, to elect one or more directors of the Corporation, the terms of the
director or directors elected by such holders shall expire at the next
succeeding annual meeting of stockholders.
ARTICLE XIII
Removal of Directors
Notwithstanding any other provision of these Articles or the Bylaws of the
Corporation, any director or the entire board of directors of the Corporation
may be removed by shareholders, at any time, but only for cause and only by the
affirmative vote of the holders of at least 80% of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose. Notwithstanding the foregoing, whenever
the holders of any one or more series of preferred stock of the Corporation
shall have the right, voting separately as a class, to elect one or more
directors of the Corporation, the preceding provisions of this Article XIII
shall not apply with respect to the director or directors elected by such
holders of preferred stock.
ARTICLE XIV
Acquisition of Capital Stock
A. Five Year Prohibition. For a period of five years from the effective
date of the completion of the conversion of Pioneer Bank, A Federal Savings Bank
from mutual to stock form (which entity shall become a wholly owned subsidiary
of the Corporation upon such conversion), no person shall directly or indirectly
offer to acquire or acquire beneficial ownership of more than 10% of any class
of equity security of the Corporation, unless such offer or acquisition shall
have been approved in advance by a two-thirds vote of the Continuing Directors,
as defined this Article XIV. In addition, for a period for five years from the
completion of the conversion of Pioneer Bank, A Federal Savings Bank from mutual
to stock form (which entity shall become a wholly owned subsidiary of the
Corporation upon such conversion), and notwithstanding any provision to the
contrary in these Articles or in the Bylaws of the Corporation, where any person
directly or indirectly acquires beneficial ownership of more than 10% of any
class of equity security of the Corporation in violation of this Article XIV,
the securities beneficially owned in excess of 10% shall not be counted as
shares entitled to vote, shall not be voted by any person or counted as voting
shares in connection with any matter submitted to the stockholders for a vote,
and shall not be counted as
6
outstanding for purposes of determining a quorum or the affirmative vote
necessary to approve any matter submitted to the stockholders for a vote.
B. Prohibition after Five Years. If, at any time after five years from the
effective date of the completion of the conversion of Pioneer Bank, A Federal
Savings Bank from mutual to stock form (which entity shall become a wholly owned
subsidiary of the Corporation upon such conversion), any person shall acquire
the beneficial ownership of more than 10% of any class of equity security of the
Corporation without the prior approval by a two-thirds vote of the Continuing
Directors then the record holders of voting stock of the Corporation
beneficially owned by such acquiring person shall have only the voting rights
set forth in this paragraph B on any matter requiring their vote or consent.
With respect to each vote in excess of 10% of the voting power of the
outstanding shares of voting stock of the Corporation which such record holders
would otherwise be entitled to cast without giving effect to this paragraph B,
the record holders in the aggregate shall be entitled to cast only one-hundredth
of a vote, and the aggregate voting power of such record holders, so limited for
all shares of voting stock of the Corporation beneficially owned by such
acquiring person, shall be allocated proportionately among such record holders.
For each such record holder, this allocation shall be accomplished by
multiplying the aggregate voting power, as so limited, of the outstanding shares
of voting stock of the Corporation beneficially owned by such acquiring person
by a fraction whose numerator is the number of votes represented by the shares
of voting stock of the Corporation and whose denominator is the total number of
votes represented by the shares of voting stock of the Corporation that are
beneficially owned by such acquiring person. A person who is a record owner of
shares of voting stock of the Corporation that are beneficially owned
simultaneously by more than one person shall have, with respect to such shares,
the right to cast the least number of votes that such person would be entitled
to cast under this paragraph B by virtue of such shares being so beneficially
owned by any of such acquiring persons.
C. Definitions. The term "person" means 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 acting in concert formed for the purpose of acquiring, holding or
disposing of securities of the Corporation. The term "acquire" includes every
type of acquisition, whether effected by purchase, exchange, operation of law or
otherwise. The term "group acting in concert" includes (a) knowing participation
in a joint activity or conscious parallel action towards a common goal whether
or not pursuant to an express agreement, and (b) a combination or pooling of
voting or other interest in the Corporation's outstanding shares for a common
purpose, pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise. The term "beneficial ownership"
shall have the meaning defined in Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as amended. The term
"Continuing Directors" means any member of the board of directors of the
Corporation who is unaffiliated with any person subject to the provisions of
this Article XIV and who was a member of the board prior to the time that the
such person became subject to the provisions of this Article XIV, and any
successor of a Continuing Director who is unaffiliated with the such person and
is recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board.
D. Exclusion for Employee Benefit Plans, Directors, Officers, Employees and
Certain Proxies. The restrictions contained in this Article XIV shall not apply
to (i) any underwriter or member of an underwriting or selling group involving a
public sale or resale of securities of the Corporation or a subsidiary thereof;
provided, however, that upon completion of the sale or resale of such
securities, no such underwriter or member of such selling group is a beneficial
owner of more than 10% of any class of equity security of the Corporation, (ii)
any proxy granted to one or more Continuing Directors by a stockholder of the
Corporation or (iii) any employee benefit plans of the Corporation. In addition,
the Continuing Directors of the Corporation, the officers and employees of the
Corporation and its subsidiaries, the directors of subsidiaries of the
Corporation, the employee benefit plans of the Corporation and its subsidiaries,
entities organized or established by the Corporation or any subsidiary thereof
pursuant to the terms of such plans and trustees and fiduciaries with respect to
such plans acting in such capacity shall not be deemed to be a group with
respect to their beneficial ownership or voting stock of the Corporation solely
by virtue of their being directors, officers or employees of the Corporation or
a subsidiary thereof or by virtue of the Continuing Directors of the
Corporation, the officers and employees of the Corporation and its subsidiaries
and
7
the directors of subsidiaries of the Corporation being fiduciaries or
beneficiaries of an employee benefit plan of the Corporation or a subsidiary of
the Corporation. Notwithstanding the foregoing, no director, officer or employee
of the Corporation or any of its subsidiaries or group of any of them shall be
exempt from the provisions of this Article XIV should any such person or group
become a beneficial owner of more than 10% of any class or equity security of
the Corporation.
E. Determinations. A majority of the Continuing Directors shall have the
power to construe and apply the provisions of the Article and to make all
determinations necessary or desirable to implement such provisions, including
but not limited to matters with respect to (a) the number of shares beneficially
owned by any person, (b) whether a person has an agreement, arrangement, or
understanding with another as to the matters referred to in the definition of
beneficial ownership, (c) the application of any other definition or operative
provision of this Article XIV to the given facts or (d) any other matter
relating to the applicability or effect of this Article XIV. Any constructions,
applications, or determinations made by the Continuing Directors pursuant to
this Article XIV in good faith and on the basis of such information and
assistance as was then reasonably available for such purpose shall be conclusive
and binding upon the Corporation and its stockholders.
ARTICLE XV
Approval of Certain Business Combinations
A. Definitions. For purposes of this Article XV:
(1) The term "Beneficially Own," when used with respect to a person's
interest in shares of capital stock, shall mean that said person has or
shares with affiliates or associates (or has or shares with affiliates or
associates the right, whether the right is exercisable immediately or only
after the passage of time, to acquire under any option, warrant, conversion
right or other right), directly or indirectly, the power to vote, the power
to dispose of, the power to direct the voting or disposition of, or the
right to enjoy the economic benefits of such shares pursuant to any
agreement, arrangement or understanding, whether or not in writing.
(2) The term "Interested Person" shall mean any individual,
corporation, partnership, joint venture, company, trust association or
entity (including any group of such persons acting together) which,
together with its affiliates or associates, Beneficially Owns in the
aggregate 15% or more of the outstanding shares of capital stock of the
Corporation at anytime within the three-year period immediately prior to
the date on which it is sought to be determined whether such person is an
"Interested Person."
(3) The term "Substantial Assets" shall mean assets with an aggregate
fair market value equal to 10% or more of either the aggregate market value
of all of the consolidated assets of the Corporation or the aggregate
market value of all of the outstanding stock of the Corporation.
(4) The term "Business Combination" shall mean (a) any merger or plan
of exchange of the Corporation or any direct or indirect majority-owned
subsidiary of the Corporation with or into an Interested Person or any
other corporation if the merger or plan of exchange is caused by an
Interested Person and as a result thereof the provisions of Section 60.835
of the OBCA is not applicable to the surviving corporation (or an affiliate
of an Interested Person), (b) any sale, lease, exchange, mortgage, pledge
transfer, or other disposition of Substantial Assets either of the
Corporation (including without limitation any securities of a subsidiary)
or of any direct or indirect majority-owned subsidiary of the Corporation,
to an Interested Person (or an affiliate of an Interested Person), (c) the
issuance or transfer of any securities of the Corporation or any direct or
indirect majority-owned subsidiary of the Corporation to an Interested
Person (or an affiliate of an Interested Person), except (i) pursuant to
the exercise, exchange or conversion of securities exercisable for,
exchangeable for or convertible into shares of the Corporation or any
subsidiary where the securities were outstanding prior to the time that the
Interest Person became an Interested Person or were distributed pro rata to
all holders of a class or series of shares of the Corporation or any
subsidiary subsequent to the time the Interested Person became an
Interested Person, (ii) pursuant to a dividend or distribution
8
paid or made pro rata to all holders of a class or series of shares of the
Corporation or any subsidiary subsequent to the time the Interested Person
became an interested shareholder, provided that there is no increase in the
Interested Person's proportionate shares of any class or series of shares of the
Corporation or of the voting stock of the Corporation, or (iii) pursuant to the
exchange offer by the Corporation to purchase shares made on the same terms to
all holders of the shares, provided that there is no increase in the Interested
Person's proportionate share of any class or series of shares of the Corporation
or of the voting stock of the Corporation; (d) any reclassification, exchange of
shares or other recapitalization that would have the effect of increasing the
proportion of shares of common stock or other capital stock of the Corporation
or any direct or indirect majority-owned subsidiary or transfer of the
Corporation Beneficially Owned by an Interested Person (or an affiliated of an
Interested Person), (e) any receipt by the Interested Person of the direct or
indirect benefit of any loans, advances, guarantees, pledges or other financial
benefits, provided by or through the Corporation or any direct or indirect
majority-owned subsidiary, and (f) any agreement, contract or other arrangement
providing for any of the foregoing transactions.
B. Approval Required for Certain Transactions.
In addition to any vote or approval required by law, the Corporation
shall not engage in any Business Combination with any Interested Person for
a period of three years after the date that the person became an Interested
Person, unless:
(1) Prior to such date the board of directors of the Corporation
approved either the Business Combination or the transactions which resulted
in the person becoming an Interested Person;
(2) Upon consummation of the transaction which resulted in the person
becoming an Interested Person, the Interested Person beneficially owned at
least 85% of the voting stock of the Corporation outstanding at the time
the transactions commenced (excluding shares beneficially owned by persons
who are directors and also officers, and employee share plans in which
employee participants do not have the right to determine confidentiality
whether such shares will be tendered in a tender or exchange offer); or
(3) On or subsequent to such date, the Business Combination is
approved by the board of directors of the Corporation and authorized at an
annual or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least 66 2/3 of the outstanding voting stock not
Beneficially Owned by the Interested Person.
ARTICLE XVI
Evaluation of Business Combinations
In connection with the exercise of its judgment in determining what is in
the best interests of the Corporation and of the stockholders, when evaluating a
Business Combination (as defined in Article XV) or a tender or exchange offer,
the board of directors of the Corporation shall, in addition to considering the
adequacy of the amount to be paid in connection with any such transaction,
consider all of the following factors and any other factors which it deems
relevant; (i) the social and economic effects of the transaction on the
Corporation and its subsidiaries, employees, depositors, loan and other
customers, creditors and other elements of the communities in which the
Corporation and its subsidiaries operate or are located; (ii) the business and
financial condition and earnings prospects of the acquiring person or entity,
including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
acquisition and other likely financial obligations of the acquiring person or
entity and the possible effect of such conditions upon the Corporation and its
subsidiaries and the other elements of the communities in which the Corporation
and its subsidiaries operate or are located; and (iii) the competence,
experience, and integrity of the acquiring person or entity and its or their
management.
9
ARTICLE XVII
Elimination of Directors' Liability
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for conduct as a director,
except for: (i) any breach of the director's duty of loyalty to the Corporation
or its stockholders, (ii) acts or omissions not made in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) any unlawful
distribution under Section 60.367 of the OBCA, or (iv) any transaction from
which the director derived an improper personal benefit. If the OBCA is amended
after the date of filing of these Articles to further eliminate or limit the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the OBCA, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
ARTICLE XVIII
Indemnification and Insurance
The Corporation shall indemnify and advance expenses to, and maintain
indemnification insurance for its directors, officers, agents and employees to
the fullest extent provided by the OBCA, even if such acts may be deemed
optional under the OBCA.
ARTICLE XIX
Amendment of Bylaws
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to make,
repeal, alter, amend and rescind the Bylaws of the Corporation by a two-thirds
vote of the board. Notwithstanding any other provision of these Articles or the
Bylaws of the Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law), the Bylaws shall not be adopted, repealed,
altered, amended or rescinded by the stockholders of the Corporation except by
the vote of the holders of not less than 80% of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose (provided that notice of such proposed
adoption, repeal, alteration, amendment or rescission is included in the notice
of such meeting), or, as set forth above, by the board of directors.
ARTICLE XX
Amendment of Articles of Incorporation
The Corporation reserves the right to repeal, alter, amend or rescind any
provision contained in these Articles in the manner now or hereafter prescribed
by law, and all rights conferred on stockholders herein are granted subject to
this reservation. Notwithstanding the foregoing, the provisions set forth in
Articles X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX and this Article XX
may not be repealed, altered, amended or rescinded in any respect unless the
same is approved by the affirmative vote of the holders of not less than 80% of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as a single
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed adoption, repeal, alteration, amendment or
rescission is included in the notice of such meeting).
* * *
10
THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose
of forming a corporation pursuant to the OBCA, do make these Articles of
Incorporation, hereby declaring and certifying that this is my act and deed and
the facts herein stated are true, and accordingly have hereunto set my hand this
6th day of June 1997.
/s/Xxx X. Xxxxxx
-------------
Xxx X. Xxxxxx
Incorporator
11
