California Code of Regulations
Title 10 - Investment
Chapter 2 - Savings and Loan Commissioner
Subchapter 3 - Applications and Hearings
Article 2 - Applications and Hearings for Mergers, Consolidations, or Transfers of Property and Assets of Existing Associations
Section 103.210 - Proxy Statement Filing
Universal Citation: 10 CA Code of Regs 103.210
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) No copies of the proxy statement, form of proxy, or any other soliciting material shall be furnished to stockholders or shareholders unless copies thereof, in triplicate, are filed either as a part of the application or separately with the Commissioner for approval and approved fifteen (15) days prior to the date that copies of such material are first sent or given to stockholders or shareholders or such shorter period prior to that date as the Commissioner may authorize upon good cause therefor.
(b) Every "Registered Association" shall, and any other association may, prepare its proxy statement in accordance with the proxy regulations of the Securities and Exchange Commission.
Each association with prepares its proxy statement in accordance with the proxy regulations of the Securities and Exchange Commission shall also include the material in subsection 103.210(e)(7) required of other associations.
(c) The proxy statement of each association which is not prepared in accordance with the proxy regulations of the Securities and Exchange Commission shall contain all information and disclose all material facts necessary for the making of an informed judgment on the advisability of the merger and ordinarily shall contain substantially all of the following information:
(1) Table of
contents;
(2) Date of proxy
statement, which shall be the approximate date of first mailing to stockholders
or shareholders;
(3) Identification
of person making solicitation;
(4)
Statement of use to be made of stockholders' or shareholders' proxy and its
revocability and that only proxies obtained by this solicitation are to be
voted on the merger;
(5) Statement
of method of solicitation and payment of costs;
(6) With respect to outstanding voting
securities and voting rights, statements:
(A)
Of record date, meeting date and number of outstanding shares or
votes;
(B) Listing all persons who,
together with associates, are known to own of record or beneficially, five
percent (5%) or more of outstanding guarantee stock or voting shares of the
association.
(C) For each person
listed, showing amount and percent of stock or shares held of record and of
beneficial ownership.
(D) As to
each class of voting securities entitled to be voted at the meeting, the number
of shares of stock outstanding and the number of votes to which each class is
entitled.
(7) Brief
description under separate heading of the nature of any material relationship
of the association and its officers, directors and five percent (5%) owners and
their associates to each of the other constituent associations, its officers,
directors and five percent (5%) owner and their associates:
(8) Description of any agreement made with or
consideration furnished, directly or indirectly, to any of the officers,
directors or stockholders of any constituent association in connection with the
merger other than by the terms of the merger agreement.
(d) Plan of merger containing at least:
(1) Brief description of the material
features of the plan of merger, including:
(A)
Identity of the surviving association;
(B) The nature and amount of consideration to
be paid, and to whom, including:
(7) An outline of the rights of dissenting stockholders of the disappearing association(s) and statutory procedure required to be followed.
(2) A
brief outline of the facts bearing upon the question of the fairness of the
consideration, including:
(A) The number of
shares to be acquired by cash purchase, the amount proposed to be paid per
share, and in total; the method by which the purchase price was determined and
the source of the funds to be applied to the purchase;
(B) The number of shares to be acquired by
exchange of stock, the exchange ratio, the method by which the ratio was
determined, and classes or series of shares to be exchanged; and the number of
shares in the disappearing association which will be canceled;
(C) The difference, if any, in amount of
consideration to be paid to holders of various classes of stock or of the same
class;
(D) The latest available
market price quotations (closing or bid and ask prices) for the stock of each
association and quarterly range of sales or bid and asked prices over preceding
two years, if available on basis of an adequate market; and
(E) Treatment of fractional shares;
(F) Statement of dividends for each year of
the three years prior to the date of the application paid by each of the
constituent associations and the dividends paid by the holding company if the
holding company stock is to be a consideration in the
transaction.
(3)
Statement of reasons for recommendation of plan. If formation of a holding
company or public offering of stock in the surviving association is
contemplated, so state.
(4)
Statement of the votes needed for approval.
(5) A statement that an Internal Revenue
Service ruling or opinion of tax counsel on federal income tax consequences to
stockholders, members and associations will be sought and the merger
consummated only if it is determined to be a tax-free reorganization from the
standpoint of the association and stockholders. Normally, an IRS ruling should
be applied for if the transaction is being treated as a tax-free
reorganization. If transaction is not tax-free either as to the association or
the stockholders, it should be stated, including a summary of the tax
consequences.
(6) Statement of
necessary approvals from state and federal authorities.
(e) Financial statements, including:
(1) A statement of condition of each
constituent association as of a date within ninety (90) days prior to the date
of the proxy statement. In addition, the constituent associations shall include
an audited statement of conditions as of a date within one (1) year of the date
of the proxy statement unless the fiscal year of the constituent association
has ended within ninety (90) days prior to the date of the proxy statement, in
which case the statement of condition as of the end of the preceding fiscal
year.
(2) An audited statement of
operations of each constituent association for each of the last three (3)
fiscal years and an interim unaudited statement of operations for the period
between the end of the last fiscal year and the date of the latest statement of
condition in the proxy statement. If the last fiscal year ended within ninety
(90) days prior to the date of the proxy statement and an audited statement is
not available for that fiscal year, there shall be included with the proxy
statement audited statements of operations for the latest three (3) years
available, and an unaudited statement of operations for the last fiscal year
and following interim period.
(3) A
pro forma statement of condition and statement of operations giving effect to
the proposed merger. The pro forma statement of condition shall be as of a date
within ninety (90) days prior to the date of the proxy statement and as of the
end of the preceding fiscal year. The pro forma statement of operations should
cover the year to date period ended within ninety (90) days prior to the date
of the proxy statement and for the prior fiscal year.
(4) Any differences form generally accepted
accounting principles reflected in the individual and pro forma financial
statements which have a material effect on the financial statements shall be
fully explained. The amounts and effects of those differences shall be
stated.
(5) A calculation of book
value per share for each constituent association as of the same dates a the
statement of condition referred to in (1) above and pro forma statements of
condition referred to in (3) above.
(6) A calculation of the earnings per share
on a comparable basis for each constituent association as of the same dates as
the statement of operations referred to in (2) above and pro forma statement of
operations referred to in (3) above.
(7) A table setting forth for each
constituent association for each of the three (3) years immediately preceding
the date of the proxy statement the dollar amount, and percentage to total
assets of:
(A) Real estate owned acquired
through foreclosure or by deed in lieu of foreclosure.
(B) Loans to facilitate, including contracts
of sale.
(C) Slow
loans.
(8) If the
constituent association is a subsidiary of a corporate holding company, as
defined by Section
11500 of
the Financial Code, the proxy statement shall include both unconsolidated
statements of the parent holding company and consolidated financial statements
of the parent holding company and its subsidiaries as follows:
(A) A statement of condition as of a date
within ninety (90) days prior to the date of the proxy statement and an audited
statement of condition as of a date within one (1) year of the date of the
proxy statement unless the fiscal year for the constituent has ended within
ninety (90) days prior to the date of the proxy statement, in which case to
latest statement of condition may be unaudited, but the proxy statement shall
also contain an audited statement of condition as of the end of the preceding
fiscal year.
(B) An audited
statement of operations covering a fiscal year ended within one (1) year of the
proxy statement date; provided that if the fiscal year of the constituent has
ended within ninety (90) days prior to the date of the proxy statement, the
audited statement of operations may cover the preceding fiscal year. An interim
unaudited statement of operations shall also be included for the period, if
any, between the close of the latest fiscal year and the date of the latest
statement of condition.
(9) The audited financial statements shall be
accompanied by the report of the independent accountant who examined such
financial statements and by a letter from each independent accountant, dated
not more than five (5) days prior to the date of the proxy statement,
consenting to the use of his accountant's report in the proxy
statement.
(10) When unaudited
financial statements are used as the basis for determining the purchase price
or value for the exchange, or when requested by the Commissioner, the
independent accountant shall perform certain specified procedures with respect
to the unaudited financial statements and issue a separate letter to the
Commissioner describing the procedures performed. Such procedures as a minimum
shall include:
(A) A reading of the unaudited
financial statements, comparison of such statements to the prior comparable
period and, if practicable, agreement of such statements with the underlying
books.
(B) A test to determine if
the unaudited financial statements include normal recurring accruals.
(C) Appropriate inquiries to officials of the
company and its subsidiaries who have responsibility for financial and
accounting matters which may affect such financial
statements.
(f) Management of constituent associations, including:
(1) The name, position, principal occupation
for past five (5) years, and length of service in present capacity, of all
directors and principal officers of constituent associations of the holding
company, if any.
(2) A list of
proposed principal officers and directors of surviving association if
known.
(3) The renumeration from
constituent associations of the foregoing persons, including:
(A) Direct compensation during the last
calendar year including profit sharing, salary and bonus:
1. individually, if over $30,000;
and
2. all officers and directors
as a group.
(B)
Retirement or pension benefits accrued, if any.
(C) Stock options granted including terms and
extent exercised.
(4)
Amount of stock beneficially owned by foregoing persons and associates. If
acquired within preceding year, state the consideration paid and from whom
acquired.
(5) Nature and amount of
any material interest of any of the persons named in subsections (c) and (f) of
this section and his associates in any loan from or material transaction with a
constituent association during the current and preceding three (3) calendar
years, including description of the transaction or loans.
(6) Business of affiliates as defined in
Section
5075 of the
Financial Code:
(A) Describe the nature and
total dollar amount of business or financial transaction occurring within the
past three (3) years between each constituent association with each affiliate,
as defined in Section
5075 of the
Financial Code, (including a description of the nature of such affiliate
relationship), and with the holding company where the amount involved in the
transaction or series of similar transactions exceed the sum of $30,000 in any
one year.
1. Describe any arrangements or
agreements with respect to any affiliate which will be associated with or
serving the surviving association.
(B) For affiliates listed under (A) above
describe the nature of the affiliate
relationship.
(g) Information about the surviving association:
(1) Describe briefly the location
and description of officers of the surviving association and any major changes
with regard to saving activities or lending activities which will result from
the merger.
(2) Any arrangements by
which any affiliate agrees to provide services to borrowers from the surviving
association.
(3) Description of any
bonus, profit sharing, stock option, pension, retirement or other remuneration
plan, or employment contract, proposed or already adopted, with respect to the
surviving association.
(4)
Capitalization. Capitalization of each constituent association showing pro
forma adjustments and pro forma capitalizations after the merger.
(5) Statement of stockholders' equity for
each year for the three-year period ended within ninety (90) days prior to the
date of the proxy statement.
(6)
Dividend voting and liquidation rights.
(7) Policy on payment of dividends.
(8) Taxation.
(A) Federal.
A pro forma statement regarding the qualifying loan reserve as a percentage of qualifying loans. Permitted reserve transfer and position of the association.
(B)
State.
(h) Execution. One (1) copy of the proxy statement shall be normally signed by the chief executive officer and the chief financial officer of each constituent association and filed with the Commissioner.
(i) Exhibits to be attached.
(1) Merger agreement.
The foregoing schedule of required information is not intended as a required form of presentation. This order of items need not be followed so long as the information is clearly presented under appropriate subject headings. The Commissioner may require additional information or for good cause shown waive the inclusion of certain of the forgoing items in a particular case.
1. Change without regulatory effect renumbering former Section 205 to Section 103.210 (Register 87, No. 14). For prior history, see Registers 77, No. 11 and 71, No. 48.
Note: Authority cited: Section 5255, Financial Code. Reference: Sections 9200- 9218, Financial Code.
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