La. Admin. Code tit. 10 § VII-311

Current through Register Vol. 50, No. 11, November 20, 2024

Section VII-311 - Prohibited Stock Transfers, Offers, and Post-Conversion Acquisition Limit; Stock Options and Insider Benefits

A. Prohibited Transfers. Except as provided in Paragraph D.1, 2 or 5 of this Section, prior to the completion of a conversion, no person shall transfer or receive, or enter into any agreement to transfer or receive, the legal or beneficial ownership of conversion subscription rights, or the underlying securities, to or from another. Violations of this Subsection may void the person's subscription rights.

B. Prohibition of Offers and Certain Acquisitions. Except as provided in Paragraph D.1, 2 or 5, prior to the completion of a conversion, no person shall offer, or announce an offer, for any security of the converting savings bank issued in connection with the conversion nor shall any person knowingly acquire securities of the converted savings bank issued in connection with the conversion in excess of the maximum purchase limitations established in the applicant's plan of conversion and allowed by this rule.

C. Limitation on Acquisitions of Stock for Three to Five Years Following Conversion

1. Except as provided in Subsection D, for (specify number of years from three to five) following the date of the completion of the conversion, no person shall, directly or indirectly, offer to acquire or acquire the beneficial ownership of more than 10 percent of any class of an equity security of a savings bank converted under this rule without the prior written approval of the commissioner. When any person violates this Paragraph, the securities beneficially owned by such person in excess of 10 percent shall not be counted as shares entitled to vote and shall not be voted by any person or counted as voting shares in any matter submitted to the stockholders for a vote. Shares held by one or more tax-qualified employee stock benefit plans and attributed to a person shall not be aggregated with shares purchased directly by or otherwise attributable to that person. Shares held by non-tax-qualified employee benefit or similar plans shall be so aggregated. The limitations discussed in this Paragraph shall be contained in the plan of conversion and in the articles of incorporation of the converting institution.

2. A conversion shall be deemed complete on the date all of the conversion stock was sold.

3. An acquisition of shares shall be presumed to have been made if the acquirer entered into a binding written agreement for the transfer of shares. An offer shall be deemed made when communicated.

4. The commissioner may deny an application involving an offer or acquisition of any security or proxies to vote securities of a converted savings bank submitted under this Subsection C if the proposed acquisition:

a. would frustrate the purposes of this rule;

b. would be manipulative or deceptive;

c. would subvert the fairness of the conversion;

d. would be likely to result in injury to the savings bank;

e. would not be consistent with economical home financing;

f. would otherwise violate a law or rule; or

g. would not contribute to the prudent deployment of the savings bank's conversion proceeds.

5. Pursuant to R.S. 6:1237, any person acting directly or indirectly or through or in concert with one or more persons, shall give the commissioner 60 days written notice of intent to acquire control of 10 percent or more of a savings bank or savings bank affiliate.

D. Exceptions

1. Subsections A and B of this Section shall not apply to a transfer, agreement, understanding to transfer, offer, or announcement of an offer or intent to make an offer which:

a. pertains only to securities to be purchased under §305. A.8 (public or community offering), §307. A.5 (unsold shares), or §307. A.8 (other provisions); and

b. has the prior written approval of the commissioner.

2. Subsections B and C of this Section shall not apply to any offer with a view toward public resale made exclusively to the savings bank or to the underwriters or a selling group acting on its behalf.

3. Unless made applicable by the commissioner by prior notice in writing, Subsection C shall not apply to any offer or announcement of an offer which, if consummated, would result in the acquisition by a person, together with all other acquisitions by the person of the same class of securities during the preceding 12-month period, of not more than one percent of the same class of securities.

4. Subsection C shall not apply to any offer to acquire or acquisition of the beneficial ownership of more than 10 percent of the common stock of a savings bank by a corporation whose ownership is or will be substantially the same as the ownership of the savings bank if the offer or acquisition is made more than one year following the date of completion of the conversion.

5. Subsections A, B and C shall not apply to the acquisition of securities of a savings bank or its holding company by any one or more tax-qualified employee stock benefit plan(s) of such savings bank or holding company, provided that, the plan(s) do not have beneficial ownership in the aggregate of more than 25 percent of any class of equity security of the converted savings bank or holding company.

E. Use of Stock Option and Management or Employee Stock Benefit Plans. No converted savings bank shall, for a one-year period from the date of the conversion, implement a stock option plan or management or employee stock benefit plan, other than a tax-qualified plan complying with this rule, unless each of the following requirements are met:

1. each of the plans was fully disclosed in the proxy soliciting and conversion stock offering materials;

2. all such plans, prior to their establishment and implementation, are approved by the holders of a majority of the total votes eligible to be cast at any duly called annual or special meeting of the shareholders of the savings bank or its holding company, to be held no earlier than six months after completion of the conversion;

3. in the case of a savings bank subsidiary of a mutual holding company, all such plans, prior to their establishment and implementation, are approved by the holders (other than its parent mutual holding company) of a majority of the total votes eligible to be cast at any duly called annual or special meeting of shareholders, to be held no earlier than six months after completion of the conversion;

4. for stock option plans, stock options are granted at not less than the market price at which the stock is trading at the time of grant;

5. for management or employee stock benefit plans, no conversion stock is used to fund the plans;

6. the commissioner may limit the number of shares or percent of total shares issued in the conversion which may be sold to or granted to particular persons, including management or employee stock benefit plans; and

7. prior to implementation, all such plans are submitted to the commissioner for review and approval in accordance with the foregoing standards. In connection with such review, the commissioner shall consider all relevant supervisory information, including, among other things, the savings bank's capital level, operating history and size of the savings bank.

La. Admin. Code tit. 10, § VII-311

Promulgated by the Department of Economic Development, Office of Financial Institutions, LR 21:1069 (October 1995).

AUTHORITY NOTE: Promulgated in accordance with R.S. 6:1141.