(a) With the
approval of commissioner, a converted institution may implement a stock option
plan or management or employee stock benefit plan not later than twelve months
after the conversion if such institution meets all of the following
requirements:
(1) It disclosed the plans in
its proxy statement and offering circular and indicated in the offering
circular that there would be a separate vote on the plans at least six months
after the conversion;
(2) It does
not grant stock options under its stock option plan in excess of ten per cent
of the shares issued in the conversion;
(3) It does not permit the management stock
benefit plans, in the aggregate, to hold more than three per cent of the shares
issued in the conversion, provided if it has tangible capital of ten per cent
or more following the conversion, the commissioner may permit it to establish a
management stock benefit plan that holds up to four per cent of the shares
issued in the conversion;
(4) It
does not permit any tax-qualified employee stock benefit plan and management
stock benefit plan, in the aggregate, to hold more than ten per cent of the
shares issued in the conversion, provided if it has tangible capital of ten per
cent or more following the conversion, the commissioner may permit the
tax-qualified employee stock benefit plans and management stock benefit plans,
in the aggregate, to hold up to twelve per cent of the shares issued in the
conversion;
(5) No individual
receives more than twenty-five per cent of the shares under any plan;
(6) Directors who are not employees do not
receive more than five per cent of the shares of any plan individually or
thirty per cent of the shares of any plan in the aggregate;
(7) Shareholders approve each plan by a
majority of the total votes eligible to be cast at a duly called meeting before
establishment or implementation of the plan. The converted institution shall
not hold such meeting until at least six months after the conversion;
(8) Any proxies or related material
distributed to shareholders in connection with the vote on a plan state that
the plan complies with Connecticut statutes and regulations and that the
commissioner does not endorse or approve the plan in any way. The converted
institution shall not make any written or oral representation to the
contrary;
(9) The converted
institution does not grant stock options at less than the market price at the
time such options are granted;
(10)
The converted institution does not use stock issued at the time of conversion
to fund management or employee stock benefit plans;
(11) The plan does not begin to vest earlier
than one year after the shareholders approve the plan and does not vest at a
rate exceeding twenty per cent per year;
(12) The plan permits accelerated vesting
only for disability or death or if there is a change of control; and
(13) The plan provides that officers or
directors shall exercise or forfeit their options if the institution becomes
critically undercapitalized under applicable federal law, is subject to an
enforcement action by the commissioner or receives a capital directive from the
commissioner.
(b) Not
later than five calendar days after the shareholders approve the plan, the
converted institution shall file a copy of the approved stock option plan or
management or employee stock benefit plan with the commissioner and certify to
the commissioner, in writing, that the plan approved by the shareholders is the
same plan that the converted institution filed with and disclosed in the proxy
materials distributed to shareholders in connection with the vote on the
plan.
(c) The converted institution
may provide dividend equivalent rights or dividend adjustment rights to allow
for stock splits or other adjustments to the stock in stock option plans or
management or employee stock benefit plans under this section.
(d) If the plan is amended more than one year
following the conversion, any material deviations to the requirements in
subsection (a) of this section shall be ratified by the shareholders.
