Document:

exv10w1

 

Exhibit 10.1

FEDFIRST FINANCIAL CORPORATION

PLAN OF STOCK ISSUANCE

DATED AS OF NOVEMBER 22, 2004

AMENDED AS OF JANUARY 19, 2005

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TABLE OF CONTENTS
  
PAGE
  

    	 	 	 	 	3
	1. Introduction
          
	 	 	 	 
	 
	 	 	 	 
	2. Definitions
          
	 	 	 	3
	 
	 	 	 	 
	3. General
            Procedure for the Stock Issuance. 
	 	 	 	7
	 
	 	 	 	 
	4. Total
            Number of Shares and Purchase Price of Common Stock 
	 	 	 	8
	 
	 	 	 	 
	5. Subscription
            Rights of Eligible Account Holders (First Priority) 
	 	 	 	8
	 
	 	 	 	 
	6. Subscription
            Rights of Tax-Qualified Employee Stock Benefit Plans (Second Priority)
          
	 	 	 	9
	 
	 	 	 	 
	7. Subscription
            Rights of Supplemental Eligible Account Holders (Third Priority) 
	 	 	 	10
	 
	 	 	 	 
	8. Subscription
            Rights of Other Members (Fourth Priority) 
	 	 	 	10
	 
	 	 	 	 
	9. Community
            Offering, Syndicated Community Offering, Public Offering and Other
            Offerings 
	 	 	 	11
	 
	 	 	 	 
	10. Limitations
            on Subscriptions and Purchases of Common Stock 
	 	 	 	12
	 
	 	 	 	 
	11. Timing
            of Subscription Offering; Manner of Exercising Subscription Rights
            and Order Forms
	 	 	 	14
	 
	 	 	 	 
	12. Payment
            for Common Stock 
	 	 	 	15
	 
	 	 	 	 
	13. Account
            Holders in Nonqualified States or Foreign Countries 
	 	 	 	17
	 
	 	 	 	 
	14. Requirements
            Following the Stock Issuance for Registration, Market Making and Stock
            Exchange Listing 
	 	 	 	17
	 
	 	 	 	 
	15. Completion
            of the Stock Offering 
	 	 	 	17
	 
	 	 	 	 
	16. Requirements
            for Stock Purchases by Directors and Officers Following the Stock
            Issuance 
	 	 	 	17
	 
	 	 	 	 
	17. Restrictions
            on Transfer of Stock 
	 	 	 	18
	 
	 	 	 	 
	18. Stock
            Compensation Plans 
	 	 	 	18
	 
	 	 	 	 
	19. Dividend
            and Repurchase Restrictions on Stock 
	 	 	 	19
	 
	 	 	 	 
	20. Amendment
            or Termination of the Plan 
	 	 	 	19
	 
	 	 	 	 
	21. Interpretation of the Plan
	 	 	 	19

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1. INTRODUCTION.

     For purposes of this section, all capitalized terms have the meanings ascribed to them in
Section 2.

     On January 21, 1999, First Federal Savings Bank (the “Bank”) reorganized into the mutual
holding company form of organization whereby the Bank became a wholly owned subsidiary of FedFirst
Financial Corporation (the “Holding Company”) and the Holding Company became a wholly owned
subsidiary of FedFirst Financial Mutual Holding Company (the “MHC”). This Plan of Stock Issuance
provides for a stock offering, in compliance with OTS regulations, of up to 49.9% of the aggregate
total voting stock of the Holding Company. This Plan of Stock Issuance provides that
non-transferable subscription rights to purchase up to 49.9% of the Common Stock of the Holding
Company shall be granted to certain Members of the MHC pursuant to the Plan and in accordance with
the rules and regulations of the OTS. The Stock Issuance will permit the Bank to control the
amount of capital being raised, while at the same time enabling the Bank to: (1) support future
lending and operational growth, including branching activities and acquisitions of other financial
institutions or financial services companies; (2) increase its ability to render services to the
communities it serves; (3) compete more effectively with commercial banks and other financial
institutions for new business opportunities; and (4) increase its equity capital base and access
the capital markets when needed. Upon completion of the Stock Issuance, the MHC will continue to
own at least a majority of the Common Stock of the Holding Company.

2. DEFINITIONS.

     As used in this Plan, the terms set forth below have the following meaning:

     ACTING IN CONCERT means (i) knowing participation in a joint activity or interdependent
conscious parallel action towards a common goal whether or not pursuant to an express agreement or
understanding; or (ii) a combination or pooling of voting or other interests in the securities of
an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or
other arrangement, whether written or otherwise. A Person or company which acts in concert with
another Person or company (“other party”) shall also be deemed to be acting in concert with any
Person or company who is also acting in concert with that other party, except that any
Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert with its
trustee or a person who serves in a similar capacity solely for the purpose of determining whether
stock held by the trustee and stock held by the plan will be aggregated and participants or
beneficiaries of any such Tax- Qualified Employee Stock Benefit Plan will not be deemed to be
acting in concert solely as a result of their common interests as participants or beneficiaries.
When Persons act together for such purpose, their group is deemed to have acquired their stock. The
determination of whether a group is Acting in Concert shall be made solely by the Board of
Directors of the Holding Company or Officers delegated by such Board and may be based on any
evidence upon which the Board or such delegatee chooses to rely, including, without limitation,
joint account relationships or the fact that such Persons have filed joint Schedules 13D or
Schedules 13G with the SEC with respect to other companies. Directors of the Holding Company, the
Bank and the MHC shall not be deemed to be Acting in Concert solely as a result of their membership
on any such board or boards.

     ACTUAL PURCHASE PRICE means the price per share at which the Common Stock is ultimately sold
by the Holding Company in the Offerings in accordance with the terms hereof.

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     AFFILIATE means a Person who, directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with the Person specified.

     ASSOCIATE of a Person means (i) a corporation or organization (other than the MHC, the Holding
Company, the Bank or a majority-owned subsidiary of the MHC, the Holding Company or the Bank), if
the Person is a senior officer or partner or beneficially owns, directly or indirectly, 10% or more
of any class of equity securities of the corporation or organization, (ii) a trust or other estate,
if the Person has a substantial beneficial interest in the trust or estate or is a trustee or
fiduciary of the trust or estate, provided, however, that such term shall not include any
Tax-Qualified Employee Stock Benefit Plan of the MHC, the Holding Company or the Bank in which such
Person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary
capacity, and (iii) any person who is related by blood or marriage to such Person and who lives in
the same home as the Person or who is a director or senior officer of the MHC, the Holding Company
or the Bank or any of their subsidiaries.

     BANK means First Federal Savings Bank.

     BANK BENEFIT PLAN(S) includes, but is not limited to, Tax Qualified Employee Stock Benefit
Plans and Non-Tax Qualified Employee Stock Benefit Plans.

     CODE means the Internal Revenue Code of 1986, as amended.

     COMMON STOCK means the shares of common stock, par value $0.01 per share, to be issued by the
Holding Company to the MHC and to be issued and sold by the Holding Company in the Offerings, all
pursuant to the Plan. The Common Stock will not be insured by the Federal Deposit Insurance
Corporation.

     COMMUNITY OFFERING means the offering for sale by the Holding Company of any shares of Common
Stock not subscribed for in the Subscription Offering to such Persons as may be selected by the
Holding Company in its sole discretion and to whom a copy of the Prospectus is delivered by or on
behalf of the Holding Company.

     CONTROL (including the terms “controlling,” “controlled by,” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

     DEPOSIT ACCOUNT means any withdrawable account as defined in Section 561.42 of the Rules and
Regulations of the OTS, including a demand account as defined in Section 561.16 of the Rules and
Regulations of the OTS.

     ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying Deposit on the Eligibility
Record Date for purposes of determining Subscription Rights.

     ELIGIBILITY RECORD DATE means the date for determining Qualifying Deposits of Eligible Account
Holders and is the close of business on September 30, 2003.

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     ESOP means a Tax Qualified Employee Stock Benefit Plan adopted by the MHC, the Holding Company
or the Bank in connection with the Stock Issuance, the purpose of which shall be to acquire the
Common Stock.

     ESTIMATED PRICE RANGE means the range of the estimated aggregate pro forma market value
of the total number of shares of Common Stock to be issued in the Offerings, as determined by the
Independent Appraiser in accordance with Section 4 hereof.

     FDIC means the Federal Deposit Insurance Corporation or any successor thereto.

     HOLDING COMPANY means FedFirst Financial Corporation, the federal stock corporation that holds
all of the outstanding capital stock of the Bank.

     INDEPENDENT APPRAISER means the independent investment banking or financial consulting firm
retained by the Holding Company and the Bank to prepare an appraisal of the estimated pro forma
market value of the Common Stock.

     INITIAL PURCHASE PRICE means the price per share to be paid initially by Participants for
shares of Common Stock subscribed for in the Subscription Offering and by Persons for shares of
Common Stock ordered in the Community Offering and/or Syndicated Community Offering.

     MANAGEMENT PERSON means any Officer or director of the Bank or the Holding Company or any
Affiliate of the Bank or the Holding Company and any person Acting in Concert with such Officer or
director.

     MEMBER means any Person qualifying as a member of the MHC in accordance with its mutual
charter and bylaws and the laws of the United States.

     MHC means FedFirst Financial Mutual Holding Company, the federal mutual holding company, that,
upon completion of the Stock Issuance, shall hold at least 50.1% of the Common Stock.

     MINORITY STOCKHOLDER means any owner of the Common Stock other than the
MHC.

     OFFERINGS
mean the offering of Common Stock to Persons other than the MHC in the Subscription Offering, the Community Offering and the Syndicated Community or Public
Offering.

     OFFICER means the president, chief executive officer, vice-president, secretary, treasurer or
principal financial officer, comptroller or principal accounting officer and any other person
performing similar functions with respect to any organization whether incorporated or
unincorporated.

     ORDER FORM means the form or forms to be provided by the Holding Company, containing all such
terms and provisions as set forth in Section 11 hereof, to a Participant or other Person by which
Common Stock may be ordered in the Offerings.

     OTHER MEMBER means a Voting Member who is not an Eligible Account Holder or a Supplemental
Eligible Account Holder.

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     OTS means the Office of Thrift Supervision or any successor thereto.

     PARTICIPANT means any Eligible Account Holder, Tax-Qualified Employee Stock Benefit
Plan, Supplemental Eligible Account Holder or Other Member, but does not include the MHC.

     PERSON means an individual, a corporation, a partnership, an association, a joint-stock
company, a limited liability company, a trust, an unincorporated organization or a government or
political subdivision of a government.

     PLAN and PLAN OF STOCK ISSUANCE mean this Plan of Stock Issuance as adopted by the Board of
Directors of the Holding Company and any amendment hereto approved as provided herein.

     PROSPECTUS means the one or more documents to be used in offering the Common Stock in the
Offerings.

     PUBLIC OFFERING means an underwritten firm commitment offering to the public through one or
more underwriters.

     QUALIFYING DEPOSIT means the aggregate balance of all Deposit Accounts in the Bank of (i) an
Eligible Account Holder at the close of business on the Eligibility Record Date, provided such
aggregate balance is not less than $50, and (ii) a Supplemental Eligible Account Holder at the
close of business on the Supplemental Eligibility Record Date, provided such aggregate balance is
not less than $50.

     SEC means the Securities and Exchange Commission.

     STOCK ISSUANCE means the shares of Common Stock sold in the Offerings and the shares of Common
Stock issued to the MHC.

     SUBSCRIPTION OFFERING means the offering of the Common Stock to Participants.

     SUBSCRIPTION RIGHTS mean nontransferable rights to subscribe for Common Stock granted to
Participants pursuant to the terms of this Plan.

     SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER means any Person, except directors and Officers of the
Bank, the Holding Company or the MHC and their Associates, holding a Qualifying Deposit at the
close of business on the Supplemental Eligibility Record Date.

     SUPPLEMENTAL ELIGIBILITY RECORD DATE, if applicable, means the date for determining
Supplemental Eligible Account Holders and shall be required if the Eligibility Record Date is more
than 15 months prior to the date of the approval of the Stock Issuance by the OTS. If applicable,
the Supplemental Eligibility Record Date shall be the last day of the calendar quarter preceding
OTS approval of the Stock Issuance.

     SYNDICATED COMMUNITY OFFERING means the offering for sale by a syndicate of broker-dealers to
the general public of shares of Common Stock not purchased in the Subscription

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Offering and the Community Offering.

     TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means any defined benefit plan or defined
contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan
or other plan, which is established for the benefit of the employees of the Holding Company and/or
the Bank and any Affiliate thereof and which, with its related trust, meets the requirements to be
“qualified” under Section 401 of the Code as from time to time in effect. A “Non-Tax-Qualified
Employee Stock Benefit Plan” is any defined benefit plan or defined contribution stock benefit plan
that is not so qualified.

     VOTING MEMBER means a Person who, at the close of business on the last business day of the
month prior to the month in which the Plan is approved by the OTS, is entitled to vote as a Member
of the Mutual Holding Company in accordance with its charter and bylaws.

3. GENERAL PROCEDURE FOR THE STOCK ISSUANCE.

     (a)     Stock Issuance

     The Holding Company will offer for sale in the Offerings shares of Common Stock representing
up to 49.9% of the pro forma market value of the Holding Company and the Bank. The Holding Company
will apply to the OTS to allow it to retain up to 50% of the net proceeds of the Offerings, or such
other amount as may be determined by the Board of Directors. The Bank may distribute additional
capital to the Holding Company following the Stock Issuance, subject to the OTS regulations
governing capital distributions.

     (b)     Applications and Regulatory Approval

     The Holding Company will take the necessary steps to prepare and file the Application for
Approval of a Minority Stock Issuance, including the Plan, together with all requisite material,
with the OTS for approval.

     The Holding Company shall cause to be filed with the SEC a Registration Statement to register
the Common Stock under the Securities Act of 1933, as amended. The Holding Company shall also
register or qualify the Common Stock under any applicable state securities laws, subject to Section
13 hereof.

     (c)     Expenses

     The Holding Company and the Bank may retain and pay for the services of financial and other
advisors and investment bankers to assist in connection with any or all aspects of the Stock
Issuance, including the payment of fees to brokers for assisting Persons in
completing and/or submitting Order Forms. The Holding Company shall use its best efforts to
ensure that all fees, expenses, retainers and similar items shall be reasonable.

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4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF COMMON STOCK.

     (a)      The aggregate price at which shares of Common Stock shall be sold in the Offerings
shall be based on a pro forma valuation of the aggregate market value of the Common Stock prepared
by the Independent Appraiser. The valuation shall be based on financial information relating to
the Holding Company and the Bank, market, financial and economic conditions, a comparison of the
Holding Company and the Bank with selected publicly-held financial institutions and holding
companies and with comparable financial institutions and holding companies and such other factors
as the Independent Appraiser may deem to be important, including, but not limited to, the projected
operating results and financial condition of the Holding Company and Bank. The valuation shall be
stated in terms of an Estimated Price Range, the maximum of which shall be no more than 15% above
the average of the minimum and maximum of such price range and the minimum of which shall be no
more than 15% below such average. The valuation shall be updated during the Stock Issuance as
market and financial conditions warrant and as may be required by the OTS.

     (b)      Based upon the independent valuation, the Board of Directors of the Holding Company shall
fix the Initial Purchase Price and the number of shares of Common Stock to be offered in the
Offerings. The purchase price per share for the Common Stock shall be a uniform price determined in
accordance with applicable OTS rules and regulations. The Actual Purchase Price and the total
number of shares of Common Stock to be issued in the Offerings shall be determined by the Board of
Directors of the Holding Company upon conclusion of the Offerings in consultation with the
Independent Appraiser and any financial advisor or investment banker retained by the Holding
Company in connection with such offering.

     (c)      Subject to the approval of the OTS, the Estimated Price Range may be increased or
decreased to reflect market, financial and economic conditions prior to completion of the Stock
Issuance or to fill the Order of the Tax-Qualified Employee Stock Benefit Plans, and under such
circumstances the Holding Company may increase or decrease the total number of shares of Common
Stock to be issued in the Stock Issuance to reflect any such change. Notwithstanding anything to
the contrary contained in this Plan, no resolicitation of subscribers shall be required and
subscribers shall not be permitted to modify or cancel their subscriptions unless the gross
proceeds from the sale of the Common Stock in the Offerings are less than the minimum or more than
15% above the maximum of the Estimated Price Range set forth in the Prospectus. In the event of an
increase in the total number of shares offered in the Offerings due to an increase in the Estimated
Price Range, the priority of share allocation shall be as set forth in this Plan.

5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY).

     (a) Each Eligible Account Holder shall receive, as first priority and without payment,
Subscription Rights to purchase up to the greater of (i) $150,000 of Common Stock (or such maximum
purchase limitation as may be established for the Community Offering and/or Syndicated Community
Offering), (ii) one-tenth of 1% of the total offering of shares in the Subscription Offering, or
(iii) 15 times the product (rounded down to the next whole number) obtained by multiplying the
total number of shares of Common Stock offered in the Subscription Offering by a fraction, of which
the numerator is the amount of the Qualifying Deposits of the Eligible Account Holder and the denominator is
the total amount of all Qualifying Deposits of all Eligible Account Holders, in each case subject
to Section 10 hereof.

     (b) In the event of an oversubscription for shares of Common Stock pursuant to Section 5(a),

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available shares shall be allocated among subscribing Eligible Account Holders so as to permit each
such Eligible Account Holder, to the extent possible, to purchase a number of shares which will
make his or her total allocation equal to the lesser of the number of shares subscribed for or 100
shares. Any available shares remaining after each subscribing Eligible Account Holder has been
allocated the lesser of the number of shares subscribed for or 100 shares shall be allocated among
the subscribing Eligible Account Holders whose subscriptions remain unsatisfied in the proportion
that the Qualifying Deposit of each such subscribing Eligible Account Holder bears to the total
Qualifying Deposits of all such subscribing Eligible Account Holders whose orders are unfilled,
provided that no fractional shares shall be issued.

     Subscription Rights of Eligible Account Holders who are also directors or Officers of
the Holding Company or the Bank and their Associates shall be subordinated to those of other
Eligible Account Holders to the extent that they are attributable to increased deposits during the
one-year period preceding the Eligibility Record Date.

6. SUBSCRIPTION RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS (SECOND PRIORITY).

     Tax-Qualified Employee Stock Benefit Plans shall receive, without payment, Subscription Rights
to purchase in the aggregate up to 10% of the Common Stock sold in the Offerings, including any
shares of Common Stock to be issued as a result of an increase in the Estimated Price Range after
commencement of the Subscription Offering and prior to completion of the Offerings, but excluding
shares issued to the MHC. The subscription rights granted to Tax-Qualified Employee Stock Benefit
Plans shall be subject to the availability of shares of Common Stock after taking into account the
shares of Common Stock purchased by Eligible Account Holders; provided, however, that if the total
number of shares of Common Stock is increased to any amount greater than the number of shares
representing the maximum of the Estimated Price Range as set forth in the Prospectus (“Maximum
Shares”), the ESOP shall have a priority right to purchase any such shares exceeding the Maximum
Shares up to an aggregate of 10% of Common Stock sold in the Offerings, excluding shares issued to
the MHC. Shares of Common Stock purchased by any individual participant (“Plan Participant”) in a
Tax-Qualified Employee Stock Benefit Plan using funds therein pursuant to the exercise of
subscription rights granted to such Participant in his individual capacity as an Eligible Account
Holder and/or supplemental Eligible Account Holder and/or purchases by such Plan Participant in the
Community Offering shall not be deemed to be purchases by a Tax-Qualified Employee Stock Benefit
Plan for purposes of calculating the maximum amount of Common Stock that Tax-Qualified Employee
Stock Benefit Plans may purchase pursuant to the first sentence of this Section 6 if the individual
Plan Participant controls or directs the investment authority with respect to such account or
subaccount. Consistent with applicable laws and regulations and policies and practices of the OTS,
the Tax-Qualified Employee Stock Benefit Plans may use funds contributed by the Holding Company or
the Bank and/or borrowed from an independent financial institution to exercise such Subscription
Rights, and the Holding Company and the Bank may make scheduled discretionary contributions
thereto, provided that such contributions do not cause the Bank to fail to meet any applicable
regulatory capital requirement.

     The Tax-Qualified Employee Stock Benefit Plans shall not be deemed to be an Associate or
Affiliate of or Person Acting in Concert with any Management Person.

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7. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY).

     (a)      In the event that the Eligibility Record Date is more than 15 months prior to the
date of OTS approval of the Plan, then, and only in that event, a Supplemental Eligibility Record
Date shall be set and each Supplemental Eligible Account Holder shall receive, without payment,
Subscription Rights to purchase up to the greater of (i) $150,000 of Common Stock (or such maximum
purchase limitation as may be established for the Community Offering and/or Syndicated Community
Offering), (ii) one-tenth of 1% of the total offering of shares in the Subscription Offering and
(iii) 15 times the product (rounded down to the next whole number) obtained by multiplying the
total number of shares of Common Stock offered in the Subscription Offering by a fraction, of which
the numerator is the amount of the Qualifying Deposits of the Supplemental Eligible Account Holder
and the denominator is the total amount of all Qualifying Deposits of all Supplemental Eligible
Account Holders, in each case subject to Section 10 hereof and the availability of shares of Common
Stock for purchase after taking into account the shares of Common Stock purchased by Eligible
Account Holders and Tax-Qualified Employee Stock Benefit Plans through the exercise of Subscription
Rights under Sections 5 and 6 hereof.

     (b)      In the event of an oversubscription for shares of Common Stock pursuant to Section 7(a),
available shares shall be allocated among subscribing Supplemental Eligible Account Holders so as
to permit each such Supplemental Eligible Account Holder, to the extent possible, to purchase a
number of shares sufficient to make his or her total allocation (including the number of shares, if
any, allocated in accordance with Section 5(a)) equal to the lesser of the number of shares
subscribed for or 100 shares. Any remaining available shares shall be allocated among subscribing
Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that
the amount of their respective Qualifying Deposits bears to the total amount of the Qualifying
Deposits of all such subscribing Supplemental Eligible Account Holders whose orders are unfilled,
provided that no fractional shares shall be issued.

8. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY).

     (a)      Each Other Member shall receive, without payment, Subscription Rights to purchase up to
the greater of (i) $150,000 of Common Stock (or such maximum purchase limitation as may be
established for the Community Offering and/or Syndicated Community Offering) and (ii) one-tenth of
1% of the total offering of shares in the Subscription Offering, subject to Section 10 hereof and
the availability of shares of Common Stock for purchase after taking into account the shares of
Common Stock purchased by Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans and
Supplemental Eligible Account Holders, if any, through the exercise of Subscription Rights under
Sections 5, 6 and 7 hereof.

     (b)      If, pursuant to this Section 8, Other Members subscribe for a number of shares of Common
Stock in excess of the total number of shares of Common Stock remaining, available shares shall be
allocated among subscribing Other Members so as to permit each such Other Member, to the extent
possible, to purchase a number of shares which will make his or her total allocation equal to the
lesser of the number of shares subscribed for or 100 shares. Any remaining available shares shall
be allocated among subscribing Other Members whose subscriptions remain unsatisfied on a pro rata
basis in the same proportion as each such Other Member’s subscription bears to the total
subscriptions of all such subscribing Other Members, provided that no fractional shares shall be
issued.

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9. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING, PUBLIC OFFERING AND OTHER OFFERINGS.

     (a)      If less than the total number of shares of Common Stock offered by the Holding Company are
sold in the Subscription Offering, it is anticipated that all remaining shares of Common Stock
shall, if practicable, be sold in a Community Offering. Subject to the requirements set forth
herein, the manner in which the Common Stock is sold in the Community Offering shall have as the
objective the achievement of the widest possible distribution of such stock.

     (b)      In the event of a Community Offering, all shares of Common Stock that are not subscribed
for in the Subscription Offering shall be offered for sale by means of a direct community marketing
program, which may provide for the use of brokers, dealers or investment banking firms experienced
in the sale of financial institution securities. Any available shares in excess of those not
subscribed for in the Subscription Offering will be available for purchase by members of the
general public to whom a Prospectus is delivered
by the Holding Company or on its behalf, with preference given first to natural persons and
trusts of natural persons residing in Fayette, Washington and Westmoreland Counties, Pennsylvania
(“Preferred Subscribers”).

     (c)      A Prospectus and Order Form shall be furnished to such Persons as the Holding Company may
select in connection with the Community Offering, and each order for Common Stock in the Community
Offering shall be subject to the absolute right of the Holding Company to accept or reject any such
order in whole or in part either at the time of receipt of an order or as soon as practicable
following completion of the Community Offering. Available shares will be allocated first to each
Preferred Subscriber whose order is accepted in an amount equal to the lesser of 100 shares or the
number of shares subscribed for by each such Preferred Subscriber, if possible. Thereafter,
unallocated shares shall be allocated among the Preferred Subscribers whose accepted orders remain
unsatisfied in the same proportion that the unfilled order bears to the total unfilled orders of
all Preferred Subscribers whose accepted orders remain unsatisfied, provided that no fractional
shares shall be issued. If there are any shares remaining after all accepted orders by Preferred
Subscribers have been satisfied, such remaining shares shall be allocated to other members of the
general public who purchase in the Community Offering, applying the same allocation described above
for Preferred Subscribers.

     (d)      The amount of Common Stock that any Person may purchase in the Community Offering shall
not exceed $150,000 of Common Stock, provided, however, that this amount may be increased to up to
5% of the total offering of shares of Common Stock or decreased to less than $150,000, subject to
any required regulatory approval but without the resolicitation of subscribers; and provided
further that to the extent applicable, and subject to the preferences set forth in Section 9(b) and
(c) of this Plan and the limitations on purchases of Common Stock set forth in this Section 9(d)
and Section 10 of this Plan, orders for Common Stock in the Community Offering shall first be
filled to a maximum of 2% of the total number of shares of Common Stock sold in the Offerings and
thereafter any remaining shares shall be allocated on an equal number of shares basis per order
until all orders have been filled, provided no fractional shares shall be issued. The Holding
Company may commence the Community Offering concurrently with, at any time during, or as soon as practicable after
the end of, the Subscription Offering, and the Community Offering must be completed within 45 days
after the completion of the Subscription Offering, unless extended by the Holding Company with any
required regulatory approval.

     (e)      Subject to such terms, conditions and procedures as may be determined by the
Holding Company, all shares of Common Stock not subscribed for in the Subscription Offering or
ordered in the Community Offering may be sold by a syndicate of broker-dealers to the general
public in a Syndicated

11

 

Community Offering. Each order for Common Stock in the Syndicated Community
Offering shall be subject to the absolute right of the Holding Company to accept or reject any such
order in whole or in part either at the time of receipt of an order or as soon as practicable after
completion of the Syndicated Community Offering. The amount of Common Stock that any Person may
purchase in the Syndicated Community Offering shall not exceed $150,000 of Common Stock, provided,
however, that this amount may be increased to up to 5% of the total offering of shares of Common
Stock or decreased to less than $150,000, subject to any required regulatory approval but without
the resolicitation of subscribers; and provided further that, to the extent applicable, and subject
to the limitations on purchases of Common Stock set forth in this Section 9(e) and Section 10 of
this Plan, orders for Common Stock in the Syndicated Community Offering shall first be filled to a
maximum of 2% of the total number of shares of Common Stock sold in the Offerings and thereafter
any remaining shares shall be allocated on an equal number of shares basis per order until all
orders have been filled, provided no fractional shares shall be issued. The Holding Company may
commence the Syndicated Community Offering concurrently with, at any time during, or as soon as
practicable after the end of, the Subscription Offering and/or Community Offering, and the
Syndicated Community Offering must be completed within 45 days after the completion of the
Subscription Offering, unless extended by the Holding Company with any required regulatory
approval.

     (f)      The Holding Company may sell any shares of Common Stock remaining following the
Subscription Offering, Community Offering and/or the Syndicated Community Offering in a Public
Offering. The provisions of Section 10 hereof shall not be applicable to the sales to underwriters
for purposes of the Public Offering but shall be applicable to sales by the underwriters to the
public. The price to be paid by the underwriters in such an offering shall be equal to the Actual
Purchase Price less an underwriting discount to be negotiated among such underwriters and the
Holding Company, subject to any required regulatory approval or consent.

     (g)      If for any reason a Syndicated Community Offering or Public Offering of shares of Common
Stock not sold in the Subscription Offering and the Community Offering cannot be effected, or if
any insignificant residue of shares of Common Stock is not sold in the Subscription Offering,
Community Offering or Syndicated Community Offering, the Holding Company shall use its best efforts
to obtain other purchasers for such shares in such manner and upon such conditions as may be
satisfactory to the OTS.

10. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF COMMON STOCK.

The following limitations shall apply to all purchases of Common Stock in the Offerings:

     (a)      The aggregate amount of outstanding Common Stock owned or controlled by persons other
than the MHC at the close of the Offerings shall be less than 50% of the Holding Company’s total
outstanding Common Stock.

     (b)      Except in the case of Tax-Qualified Employee Stock Benefit Plans in the aggregate, as set
forth in Section 10(e) hereof, and certain Eligible Account Holders and Supplemental Eligible
Account Holders, as set forth in Sections 5(a)(ii) and (iii) and 7(a)(ii) and (iii) hereof, and in
addition to the other restrictions and limitations set forth herein, the amount of Common Stock
that any Person, any Person together with any Associates, or Persons otherwise Acting in Concert
may, directly or indirectly, subscribe for or purchase in the Offerings, shall not exceed $250,000.

12

 

     (c)      No Person may purchase fewer than 25 shares of Common Stock in the Offerings, to the
extent such shares are available; provided, however, that if the Actual Purchase Price is greater
than $20.00 per share, such minimum number of shares shall be adjusted so that the aggregate Actual
Purchase Price for such minimum shares will not exceed $500.00.

     (d)      The aggregate amount of Common Stock acquired in the Offerings by any Non-Tax-Qualified
Employee Stock Benefit Plan or any Management Person and his or her Associates, exclusive of any
Common Stock acquired by such plan or Management Person and his or her Associates in the secondary
market, shall not exceed 4.9% of (i) the outstanding shares of Common Stock at the conclusion of
the Stock Issuance or (ii) the stockholders’ equity of the Holding Company at the conclusion of the
Stock Issuance. In calculating the number of shares held by any Management Person and his or her
Associates under this paragraph, shares held by any Tax-Qualified Employee Stock Benefit Plan or
Non-Tax-Qualified Employee Stock Benefit Plan of the Holding Company or the Bank that are
attributable to such Person shall not be counted.

     (e)      The aggregate amount of Common Stock acquired in the Offerings by any one or more
Tax-Qualified Employee Stock Benefit Plans, exclusive of any shares of Common Stock acquired by
such plans in the secondary market, shall not exceed 4.9% of (i) the outstanding shares of Common
Stock at the conclusion of the Stock Issuance or (ii) the stockholders’ equity of the Holding
Company at the conclusion of the Stock Issuance.

     (f)      The aggregate amount of Common Stock acquired in the Offerings by all stock benefit plans
of the Holding Company or the
Bank, other than employee stock ownership plans, shall not exceed 25% of the outstanding
common stock of the Holding Company held by persons other than the MHC.

     (g)      The aggregate amount of Common Stock acquired in the Offerings by all Non-Tax-Qualified
Employee Stock Benefit Plans or Management Persons and their Associates, exclusive of any Common
Stock acquired by such plans or Management Persons and their Associates in the secondary market,
shall not exceed 29% of (i) the outstanding shares of Common Stock held by persons other than the
MHC at the conclusion of the Offerings or (ii) of the stockholders’ equity of the Holding Company
held by persons other than the MHC at the conclusion of the Offerings. In calculating the number
of shares held by Management Persons and their Associates under this paragraph, shares held by any
Tax-Qualified Employee Stock Benefit Plan or Non-Tax-Qualified Employee Stock Benefit Plan that are
attributable to such persons shall not be counted.

     (h)      For purposes of the foregoing limitations and the determination of Subscription Rights,
(i) directors, Officers and employees of the MHC, the Holding Company, the Bank or their
subsidiaries shall not be deemed to be Associates or a group Acting in Concert solely as a result
of their capacities as such, (ii) shares purchased by Tax-Qualified Employee Stock Benefit Plans
shall not be attributable to the individual trustees or beneficiaries of any such plan for purposes
of determining compliance with the limitations set forth in Section 10(b) hereof, and (iii) shares
purchased by a Tax-Qualified Employee Stock Benefit Plan pursuant to instructions of an individual
in an account in such plan in which the individual has the right to direct the investment,
including any plan of the Bank qualified under Section 401(k) of the Code, shall be aggregated and
included in that individual’s purchases and not attributed to the Tax-Qualified Employee Stock
Benefit Plan.

     (i)      Subject to any required regulatory approval and the requirements of applicable laws and
regulations, but without the resolicitation of subscribers, the Holding Company may increase or
decrease

13

 

any of the individual or aggregate purchase limitations set forth herein to a percentage
which does not exceed 5% of the total offering of shares of Common Stock in the Offerings whether
prior to, during or after the Subscription Offering, Community Offering and/or Syndicated Community
Offering. If an individual purchase limitation is increased after commencement of the Subscription
Offering or any other offering, the Holding Company shall permit any Person who subscribed for the
maximum number of shares of Common Stock to purchase an additional number of shares, so that such
Person shall be permitted to subscribe for the then maximum number of shares permitted to be
subscribed for by such Person, subject to the rights and preferences of any Person who has priority
Subscription Rights. If any of the individual or
aggregate purchase limitations are decreased after commencement of the Subscription Offering
or any other offering, the orders of any Person who subscribed for more than the new purchase
limitation shall be decreased by the minimum amount necessary so that such Person shall be in
compliance with the then maximum number of shares permitted to be subscribed for by such Person. In
the event that the maximum purchase limitation is increased to 5% of the shares sold in the
Offerings, such limitation may be further increased to 9.99%, provided that orders for Common Stock
exceeding 5% of the shares of Common Stock sold in the Offerings shall not exceed in the aggregate
10% of the total shares of Common Stock sold in the Offerings.

     (j)     The Holding Company shall have the right to take all such action as it may, in
its sole discretion, deem necessary, appropriate or advisable to monitor and enforce the terms,
conditions, limitations and restrictions contained in this Section 10 and elsewhere in this Plan
and the terms, conditions and representations contained in the Order Form, including, but not
limited to, the absolute right (subject only to any necessary regulatory approvals or concurrences)
to reject, limit or revoke acceptance of any subscription or order and to delay, terminate or
refuse to consummate any sale of Common Stock that it believes might violate, or is designed to, or
is any part of a plan to, evade or circumvent such terms, conditions, limitations, restrictions and
representations. Any such action shall be final, conclusive and binding on all persons, and the
MHC, the Holding Company, the Bank and their respective Boards shall be free from any liability to
any Person on account of any such action.

11. TIMING OF SUBSCRIPTION OFFERING; MANNER OF EXERCISING SUBSCRIPTION RIGHTS AND ORDER FORMS.

     (a)      The Offerings shall be conducted in compliance with 12 C.F.R. part 563g and, to the extent
applicable, Form OC.

     (b)      The exact timing of the commencement of the Subscription Offering shall be determined by
the Holding Company in consultation with the Independent Appraiser and any financial or advisory or
investment banking firm retained by it in connection with the Stock Issuance. The Holding Company
may consider a number of factors, including, but not limited to, its current and projected future
earnings, local and national economic conditions, and the prevailing market for stocks in general
and stocks of financial institutions in particular. The Holding Company shall have the right to
withdraw, terminate, suspend, delay, revoke or modify any such Subscription Offering, at any time
and from time to time, as it in its sole discretion may determine, without liability to any Person,
subject to compliance with applicable securities laws and any necessary regulatory approval or
concurrence.

     (c)      Promptly after the SEC has declared the Registration Statement, which includes the
Prospectus, effective and all required regulatory approvals have been obtained, the Holding Company
shall, distribute or make available the Prospectus, together with Order Forms for the purchase of
Common Stock, to all Participants for the purpose of enabling them to exercise their respective
Subscription Rights, subject to Section 13 hereof.

14

 

     (d)      A single Order Form for all Deposit Accounts maintained with the Bank by an Eligible
Account Holder and any Supplemental Eligible Account Holder may be furnished, irrespective of the
number of Deposit Accounts maintained with the Bank on the Eligibility Record Date and Supplemental
Eligibility Record Date, respectively. No person holding a Subscription Right may exceed any
otherwise applicable purchase limitation by submitting multiple orders for Common Stock. Multiple
orders are subject to adjustment, as appropriate, on a pro rata basis and deposit balances will be
divided equally among such orders in allocating shares in the event of an oversubscription.

     (e)      The recipient of an Order Form shall have no less than 20 days and no more than 45
days from the date of mailing of the Order Form (with the exact termination date to be set forth on
the Order Form) to properly complete and execute the Order Form and deliver it to the Holding
Company. The Holding Company may extend such period by such amount of time as it determines is
appropriate. Failure of any Participant to deliver a properly executed Order Form to the Holding
Company, along with full payment (or authorization for full payment by withdrawal) for the shares
of Common Stock subscribed for, within the time limits prescribed, shall be deemed a waiver and
release by such person of any rights to subscribe for shares of Common Stock. Each Participant
shall be required to confirm to the Holding Company by executing an Order Form that such Person has
fully complied with all of the terms, conditions, limitations and restrictions in the Plan.

     (f)      The Holding Company shall have the absolute right, in its sole discretion and without
liability to any Participant or other Person, to reject any Order Form, including, but not limited
to, any Order Form that is (i) improperly completed or executed; (ii) not timely received; (iii)
not accompanied by the proper and full payment (or authorization of withdrawal for full payment)
or, in the case of institutional investors in the Community Offering, not accompanied by an
irrevocable order together with a legally binding commitment to pay the full amount of the purchase
price prior to 48 hours before the completion of the Offerings; or (iv) submitted by a Person whose
representations the Holding Company believes to be false or who it otherwise believes, 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. Furthermore, in the event
Order Forms (i) are not delivered and are returned to the Holding Company by the United States
Postal Service or the Holding Company is unable to locate the addressee, or (ii) are not mailed
pursuant to a “no mail” order placed in effect by the account holder, the Subscription Rights of
the Person to which such rights have been granted will lapse as though such Person failed to return
the contemplated Order Form within the time period specified thereon. The Holding Company may, but
will not be required to, waive any irregularity on any Order Form or may require the submission of
corrected Order Forms or the remittance of full payment for shares of Common Stock by such date as
it may specify. The interpretation of the Holding Company of the terms and conditions of the Order
Forms shall be final and conclusive.

12. PAYMENT FOR COMMON STOCK.

     (a)      Payment for shares of Common Stock subscribed for by Participants in the Subscription
Offering and payment for shares of Common Stock ordered by Persons in the Community Offering shall
be equal to the Initial Purchase Price multiplied by the number of shares that are being subscribed
for or ordered, respectively. Such payment may be made in cash, if delivered in person, or by
check, bank draft or money order at the time the Order Form is delivered to the Holding Company,
provided that checks will only be accepted subject to collection. The Holding Company, in its sole
and absolute discretion, may also elect to receive payment for shares of Common Stock by wire
transfer. In addition, the Holding

15

 

Company may elect to provide Participants and/or other Persons who have
a Deposit Account with the Bank the opportunity to pay for shares of Common Stock by authorizing
the Bank to withdraw from such Deposit Account an amount equal to the aggregate Initial Purchase
Price of such shares. Payment may also be made by a Participant using funds held for such
Participant’s benefit by a Bank Benefit Plan to the extent that such plan allows participants or
any related trust established for the benefit of such participants to direct that some or all of
their individual accounts or sub-accounts be invested in Common Stock. If the Actual Purchase
Price is less than the Initial Purchase Price, the Holding Company shall refund the difference to
all Participants and other Persons, unless the Holding Company chooses to provide Participants and
other Persons the opportunity on the Order Form to elect to have such difference applied to the
purchase of additional whole shares of Common Stock. If the Actual Purchase Price is more than the
Initial Purchase Price, the Holding Company shall reduce the number of shares of Common Stock
ordered by Participants and other Persons and refund any remaining amount that is attributable to a
fractional share interest, unless the Holding Company chooses to provide Participants and other
Persons the opportunity to increase the Actual Purchase Price submitted by them.

     (b)      Notwithstanding the above, if the Tax-Qualified Employee Stock Benefit Plans
subscribe for shares during the Subscription Offering, such plans will not be required to pay for
the shares at the time they subscribe but rather may pay for such shares of Common Stock subscribed
for by such plans at the Actual Purchase Price upon consummation of the Stock Offering, provided
that, in the case of the employee stock ownership plan, there is in force from the time of its
subscription until the consummation of the Stock Offering, a loan commitment to lend to the
employee stock ownership plan, at such time, the aggregate price of the shares for which it
subscribed.

     (c)      If a Participant or other Person authorizes the Bank to withdraw the amount of the Initial
Purchase Price from his or her Deposit Account, the Bank shall have the right to make such
withdrawal or to freeze funds equal to the aggregate Initial Purchase Price upon receipt of the
Order Form. Notwithstanding any regulatory provisions regarding penalties for early withdrawals
from certificate accounts, the Bank may allow payment by means of withdrawal from certificate
accounts without the assessment of such penalties. In the case of an early withdrawal of only a
portion of such account, the certificate evidencing such account shall be canceled if any
applicable minimum balance requirement ceases to be met. In such case, the remaining balance will
earn interest at the regular passbook rate. However, where any applicable minimum balance is
maintained in such certificate account, the rate of return on the balance of the certificate
account shall remain the same as prior to such early withdrawal. This waiver of the early
withdrawal penalty applies only to withdrawals made in connection with the purchase of Common Stock
and is entirely within the discretion of the Holding Company and the Bank.

     (d)      The subscription funds will be held by the Bank or, in the Bank’s discretion, in an escrow
account at an unaffiliated financial institution. The Holding Company shall pay interest, at not
less than the Bank’s passbook rate, for all amounts paid in cash, by check, bank draft or money
order to purchase shares of Common Stock in the Subscription Offering and the Community Offering
from the date payment is received until the date the Offerings are completed or terminated.

     (e)      The Holding Company will not offer or sell any of the Common Stock proposed to be issued
to any Person whose purchase would be financed by funds loaned, directly or indirectly, to the
Person by the Bank.

     (f)      Each share of Common Stock shall be non-assessable upon payment in full of the Actual
Purchase Price.

16

 

13. ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES.

     The Holding Company shall make reasonable efforts to comply with the securities laws of all
jurisdictions in the United States in which Participants reside. However, no Participant will be
offered or receive any Common Stock under the Plan if such Participant resides in a foreign country
or resides in a jurisdiction of the United States with respect to which any of the following apply:
(a) there are few Participants otherwise eligible to subscribe for shares under this Plan who
reside in such jurisdiction; (b) the granting of Subscription Rights or the offer or sale of shares
of Common Stock to such Participants would require any of the Holding Company or the Bank or their
respective directors and Officers, under the laws of such jurisdiction, to register as a
broker-dealer, salesman or selling agent or to register or otherwise qualify the Common Stock for
sale in such jurisdiction, or any of the Holding Company or the Bank would be required to qualify
as a foreign corporation or file a consent to service of process in such jurisdiction; or (c) such
registration, qualification or filing in the judgment of the Holding Company would be impracticable
or unduly burdensome for reasons of cost or otherwise.

14. REQUIREMENTS FOLLOWING THE STOCK ISSUANCE FOR REGISTRATION, MARKET MAKING AND STOCK
EXCHANGE LISTING.

     In connection with the Stock Issuance, the Holding Company shall register the Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, and shall undertake not
to deregister such stock for a period of three years thereafter. The Holding Company also shall
use its best efforts to (i) encourage and assist a market maker to establish and maintain a market
for the Common Stock, and (ii) list the Common Stock on a national or regional securities exchange
or to have quotations for such stock disseminated on the Nasdaq Stock Market.

15. COMPLETION OF THE STOCK OFFERING.

     The Offerings will be terminated if not completed within 90 days of the date of approval
of the Plan by the OTS, unless an extension is approved by the OTS.

16. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE STOCK ISSUANCE.

     For a period of three years following the Stock Issuance, the directors and Officers of
the Holding Company and the Bank and their Associates may not purchase Common Stock without the
prior written approval of the OTS except from a broker-dealer registered with the SEC. This
prohibition shall not apply, however, to (i) a negotiated transaction involving more than 1% of the
outstanding Common Stock, and (ii) purchases of stock made by and held by any Tax-Qualified
Employee Stock Benefit Plan (and purchases of stock made by and held by any Non-Tax-Qualified
Employee Stock Benefit Plan following the receipt of shareholder approval of such plan) even if
such Common Stock may be attributable to individual Officers or directors and their Associates.
The foregoing restriction on purchases of Common Stock shall be in addition to any restrictions
that may be imposed by federal and state securities laws.

17

 

	17.	 	RESTRICTIONS ON TRANSFER OF STOCK.

     All shares of Common Stock that are purchased by Persons other than directors and Officers of
the Holding Company or the Bank shall be transferable without restriction. Shares of Common Stock
purchased by directors and Officers of the Holding Company or the Bank and their Associates on
original issue from the Holding Company (by subscription or otherwise) shall be subject to the
restriction that such shares shall not be sold or otherwise disposed of for value for a period of
one year following the date of purchase, except for any disposition of such shares following the
death of the original purchaser. The shares of Common Stock issued by the Holding Company to such
directors and Officers shall bear the following legend giving appropriate notice of such one-year
restriction:

“The shares of stock evidenced by this Certificate are restricted as
to transfer for a period of one year from the date of this
Certificate pursuant to Part 575 of the Rules and Regulations of the
Office of Thrift Supervision. These shares may not be transferred
during such one-year period without a legal opinion of counsel for
the Company that said transfer is permissible under the provisions
of applicable law and regulation. This restrictive legend shall be
deemed null and void after one year from the date of this
Certificate.”

In addition, the Holding Company shall give appropriate instructions to the transfer agent
for the Holding Company with respect to the applicable restrictions relating to the transfer of
restricted stock. Any shares issued at a later date as a stock dividend, stock split or otherwise
with respect to any such restricted stock shall be subject to the same holding period restrictions
as may then be applicable to such restricted stock. The foregoing restriction on transfer shall be
in addition to any restrictions on transfer that may be imposed by federal and state securities
laws.

18. STOCK COMPENSATION PLANS.

     (a)      The Holding Company and the Bank are authorized to adopt Tax-Qualified Employee Stock
Benefit Plans in connection with the Stock Issuance, including without limitation an employee stock
ownership plan.

     (b)      Subsequent to the Stock Issuance, the Holding Company and the Bank are authorized to adopt
Non-Tax Qualified Employee Stock Benefit Plans, including without limitation, stock option plans
and restricted stock plans, provided however that, with respect to any such plan, the total number
of shares of common stock for which options may be granted and the total amount of common stock
granted as restricted stock must not exceed the limitations set forth in Section 10 hereof. In
addition, any such plan implemented during the one-year period subsequent to the date of
consummation of the Stock Issuance: (i) shall be disclosed in the Prospectus; (ii) in the case of
stock option plans and employee recognition or grant plans, shall be submitted for approval by the
holders of the Common Stock no earlier than six months following consummation of the Stock
Issuance; and (iii) shall comply with all other applicable requirements of the OTS.

     (c)      Existing, as well as any newly-created, Tax-Qualified Employee Stock Benefit Plans may
purchase shares of Common Stock in the Offerings, to the extent permitted by the terms of such
benefit plans and this Plan.

     (d)      The Holding Company and the Bank are authorized to enter into employment or severance
agreements with their executive officers.

18

 

19. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK.

     The Holding Company may not declare or pay a cash dividend on its Common Stock if the effect
thereof would cause the regulatory capital of the Bank to be reduced below the amount required
under § 567.2 of the OTS rules and regulations. Otherwise, the Holding Company may declare
dividends or make other capital distributions in accordance with § 563b.520 of the OTS rules and
regulations. Following completion of the Stock Offering, the Holding Company may repurchase its
Common Stock consistent with § 563b.510 and § 563b.515 of the OTS rules and regulations relating to
stock repurchases, as long as such repurchases do not cause the regulatory capital of the Bank to
be reduced below the amount required under the OTS rules and regulations. The MHC may from time to
time purchase Common Stock of the Holding Company. Subject to any notice or approval requirements
of the OTS under the OTS rules and regulations, the MHC may waive its right to receive dividends
declared by the Holding Company.

20. AMENDMENT OR TERMINATION OF THE PLAN.

     If deemed necessary or desirable by the Board of Directors of the Holding Company, this
Plan may be substantively amended, as a result of comments from regulatory authorities or
otherwise, at any time prior to the approval of the Plan by the OTS and at any time thereafter with
the concurrence of the OTS. Prior to the approval of the Plan by the OTS, this Plan may be
terminated by the Board of Directors of the Holding Company without approval of the OTS; after
approval of the Plan by the OTS, the Board of Directors may terminate this Plan only with the
concurrence of the OTS.

21. INTERPRETATION OF THE PLAN.

     All interpretations of this Plan and application of its provisions to particular circumstances
by a majority of the Board of Directors of the Holding Company shall be final, subject to the
authority of the OTS.

19exv10w1

 

Exhibit 10.1

HEALTH BENEFITS CONTINUATION

AGREEMENT

     This AGREEMENT, made and entered into on                                         , 2005 is by and between THOMAS &
BETTS CORPORATION, a Tennessee Corporation (“T&B”), and DOMINIC J. PILEGGI (“Pileggi”).

WITNESSETH

     WHEREAS, Pileggi is President and Chief Executive Officer of T&B; and

     WHEREAS, T&B has determined that it is in the best interests of T&B to agree to provide health
benefits under the circumstances described below to Pileggi;

     NOW, THEREFORE, IN CONSIDERATION of the mutual promises, covenants and agreements set forth
below and for other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties agree as follows:

SECTION 1

DEFINITIONS

     “Benefits” shall mean medical (including prescription drug) and dental benefits
coverage under the Welfare Plan, or the alternative benefits described in Section 2(b)(ii).

     “Cause” shall mean Pileggi’s termination of employment due to his conviction of, or
plea of guilty or nolo contendere to, a felony, or the willful engaging by Pileggi in gross
misconduct which is materially and demonstrably injurious to the Company, as determined by the
Board of Directors of T&B, in its sole discretion.

     “Dependent” shall mean any dependent of Pileggi (including Pileggi’s spouse) who is
receiving medical (including prescription drug) or dental coverage under the Welfare Plan
immediately prior to Pileggi’s Retirement. An individual shall not be eligible for Benefits under
this Agreement if he or she (a) becomes a dependent of Pileggi after the date of Pileggi’s
Retirement, or (b) is not covered under the Welfare Plan immediately prior to Pileggi’s Retirement.

     “Retirement” shall mean severance from employment with T&B and its affiliates after
attaining age 50 and completing at least five Years of Credited Service (as defined in Part A of
the Thomas & Betts Pension Plan, as amended and restated effective January 1, 2002).

     “Welfare Plan” shall mean the comprehensive medical benefits and dental benefits
maintained by T&B for its employees generally, as amended from time to time. In the event T&B
maintains more than one medical program or dental program, the program offered by T&B to active
employees at its corporate headquarters (as amended from time to time) shall be the Welfare Plan.

SECTION 2

BENEFITS

     (a) Eligibility. Upon his Retirement, Pileggi and his Dependents shall
receive Benefits as provided in this Agreement. If Pileggi’s severance from employment with T&B
and its affiliates occurs

 

 

prior to Retirement or for Cause, Pileggi and his Dependents shall not be eligible for any
Benefits under this Agreement.

     (b) Benefits Provided.

          (i) Benefits Under Welfare Plan. If Pileggi is eligible for Benefits under
this Agreement, Pileggi and his Dependents shall be entitled to Benefits under the Welfare Plan as
if Pileggi had continued to be employed by T&B during his lifetime, at the same level of benefits
generally available to active employees of T&B (as such level may change from time to time in T&B’s
sole discretion); provided, however, that Pileggi and his Dependents shall not be required to pay
all or any part of the cost of Benefits hereunder; and further provided that for purposes of
coordination of benefits, Pileggi shall not be treated as if he were employed by T&B (so that, for
example, in the event coverage is available under Medicare or the medical or dental benefits
program maintained by Pileggi’s then employer, the Welfare Plan shall provide secondary coverage.
The level and terms and conditions of Benefits provided to active employees under the Welfare Plan
at the time Pileggi or his Dependent incurs an expense (and not the level provided at the time of
Retirement) shall determine the level and terms and conditions of Benefits provided to Pileggi and
his Dependent(s) under this Agreement.

          (ii) Alternative Benefits. Notwithstanding Section 2(b)(i), if T&B
reasonably determines that the Benefits required under Section 2(b)(i) would cause the Welfare Plan
to violate any provision of the Internal Revenue Code of 1986, as amended, prohibiting
discrimination in favor of highly compensated employees or key employees, or if any Benefits
described in Section 2(b)(i) cannot be provided under the Welfare Plan (or T&B determines that it
does not wish to provide such Benefits under the Welfare Plan), T&B shall provide the Benefits
described in Section 2(b)(i) outside the Welfare Plan at no cost (including, without limitation,
tax costs) to Pileggi or, as determined by T&B in its sole discretion, T&B shall pay Pileggi the
cash equivalent thereof.

          (iii)  General Requirements. The Benefits provided under this Agreement,
whether pursuant to Section 2(b)(i) or Section 2(b)(ii), shall be subject to all the terms and
conditions set forth in the Welfare Plan including, but not limited to, coordination of benefits
and subrogation; provided, however, that (A) in no event shall Pileggi or his Dependents be
required to pay all or any part of the cost of Benefits under this Agreement, (B) in no event shall
T&B have the right to terminate Pileggi’s Benefits under this Agreement for any reason, and (C) in
no event shall T&B have the right to terminate a Dependent’s Benefits under this Agreement except
as provided in Section 2(c).

     (c) Duration of Benefits. Benefits provided under this Agreement to Pileggi
shall continue during Pileggi’s lifetime. Benefits provided under this Agreement to a Dependent
shall cease if the Dependent ceases to be a Dependent for any reason (including, but not limited
to, divorce or failure to meet the requirements for dependent coverage under the Welfare Plan)
other than Pileggi ceasing to have coverage under the Welfare Plan. Such Dependent coverage shall
cease on the date coverage would cease under the terms of the Welfare Plan if Pileggi were then an
employee of T&B.

SECTION 3

MISCELLANEOUS

     (a) Termination Protection Agreement. This Agreement shall have no effect on the
Termination Protection Agreement (or any successor thereto) between Pileggi and T&B that provides
certain welfare benefits in the event of a change in control.

- 2 -

 

     (b) Amendment or Termination. This Agreement may not be amended or terminated other
than by an instrument in writing, signed by the parties hereto. Notwithstanding anything contained
herein to the contrary, this Agreement shall automatically terminate if Pileggi’s employment with
T&B and it affiliates is terminated for Cause or for any reason prior to Retirement.

     (c) Mergers/Transfers. This Agreement shall be binding upon and inure to the benefit
of T&B and its successors and assigns and Pileggi and his Dependents. Nothing in this Agreement
shall preclude T&B from consolidating or merging into or with, or transferring all or substantially
all of its assets to, another entity. T&B shall require any such successor to expressly assume
this Agreement and all obligations of T&B hereunder. Upon such a consolidation, merger or transfer
of assets and assumption, the term “T&B” shall refer to such other entity and this Agreement shall
continue in full force and effect.

     (d) No Contract of Employment. This Agreement shall not be construed as conferring
any legal right upon Pileggi for a continuation of employment, nor shall it interfere with the
right of T&B to discharge Pileggi.

     (e) Termination for Cause. In the event Pileggi is terminated for Cause he and his
dependents shall have no rights to any payments or benefits under this Agreement.

     (f) Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Tennessee, excepting its choice of law provisions.

     IN WITNESS WHEREOF, THOMAS AND BETTS CORPORATION has caused this Agreement to be executed and
its corporate seal to be affixed and attested by its duly authorized officer, and Pileggi has
executed this Agreement, as of the day and year first written above.

	 	 	 	 	 	 	 
	Attest:	 	THOMAS & BETTS CORPORATION
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	 
	By:

	 	 	 	 	 	     Robert A. Kenkel
	

	 	

	 	 	 	     Chairman, Compensation Committee
	

	 	     Connie C. Muscarella
	 	 	 	     of the Board of Directors
	

	 	     Vice President, Human Resources

          and Administration	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Dominic
	 	J. Pileggi

- 3 -

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