Connecticut Administrative Code
Title 36a - The Banking Law of Connecticut
136 - Conversion of Mutual Connecticut Banks to Capital Stock Connecticut Banks
Section 36a-136-42 - Acquisition of shares after conversion

Universal Citation: CT Reg of State Agencies 36a-136-42

Current through September 9, 2024

(a) For three years after the conversion or such longer period as provided in the certificate of incorporation or plan of conversion, no person may, directly or indirectly, acquire or offer to acquire the beneficial ownership of more than ten per cent of any class of the equity securities of the converted institution without the commissioner's prior written approval. If a person violates this prohibition, the converted institution shall not permit the person to vote shares in excess of ten per cent and shall not count the shares in excess of ten per cent in any shareholder vote.

(b) A person acquires beneficial ownership of more than ten per cent of a class of shares when such person holds any combination of stock or revocable or irrevocable proxies under circumstances that give rise to a conclusive control determination under 12 CFR 574.4(a) or a rebuttable control determination under 12 CFR 574.4(b). The commissioner will presume that a person has acquired shares if such person entered into a binding written agreement for the transfer of shares. For purposes of this section, an offer is made when it is communicated. An offer does not include non-binding expressions of understanding or letters of intent regarding the terms of a potential acquisition.

(c) Notwithstanding the restrictions in this section:

(1) Subsections (a) and (b) of this section do not apply to any offer with a view toward public resale made solely and exclusively to the converted institution, the underwriters or a selling group acting on the converted institution's behalf;

(2) Unless the commissioner objects in writing, any person may offer or announce an offer to acquire up to one per cent of any class of shares. In computing the one per cent limit, the person shall include all of such person's acquisitions of the same class of shares during the prior twelve months;

(3) A corporation whose ownership is or will be substantially the same as the converted institution's ownership may acquire or offer to acquire more than ten per cent of the common stock if it makes the offer or acquisition more than one year after the conversion; and

(4) One or more of the converted institution's tax-qualified employee stock benefit plans may acquire the shares if the plan or plans do not beneficially own more than twenty-five per cent of any class of the shares in the aggregate.

(d) The commissioner may deny an application under subsection (a) of this section if the proposed acquisition:

(1) Is contrary to the purposes of sections 36a-136-1 to 36a-136-48, inclusive, of the Regulations of Connecticut State Agencies;

(2) Is manipulative or deceptive;

(3) Subverts the fairness of the conversion;

(4) Is likely to injure the converted institution;

(5) Is inconsistent with the converted institution's plan to meet the credit and lending needs of its proposed market area;

(6) Otherwise violates laws or regulations; or

(7) Does not prudently deploy the conversion proceeds.

Disclaimer: These regulations may not be the most recent version. Connecticut may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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