Current through Register Vol. 48, No. 38, September 20, 2024
a) As used in this Section, the following
definitions apply:
1) "Affiliate" means any
company that controls, is controlled by, or is under common control with a
person.
2) "Company" means a
corporation, a partnership, an association, a joint stock company, a trust or
an unincorporated organization.
3)
"Control" means the ability of any person, entity, persons, or entities acting
alone or in concert with one or more persons or entities, to own, hold, or
direct with power to vote, or to hold proxies representing, 10% or more of the
voting shares or rights of a savings bank, savings bank subsidiary, savings
bank affiliate, or savings bank holding company, or the ability to achieve in
any manner the election or appointment of a majority of the directors of a
savings bank. This definition shall not apply to the voting of proxies obtained
from depositors if the proxies are voted as directed by a majority of the board
of directors of the savings bank or of a committee of organization directors
when the committee's composition and powers may be revoked by a majority vote
of the board of directors.
4)
"Person" means an individual, a company or a group acting in concert.
5) "Associate", when used to indicate
relationship with any person, means:
A) any
corporation or organization (other than the applicant or a wholly owned
subsidiary of the applicant) of which the person is an officer or partner or
is, directly or indirectly, either alone or together with one or more members
of his or her immediate family, the beneficial owner of 10% or more of any
class of securities;
B) any trust
or other estate in which the person has a substantial beneficial interest or as
to which the person serves as trustee or in a similar fiduciary
capacity;
C) any relative or spouse
of the person or any relative of the spouse, who has the same home as the
person or who is an organization director or officer of the savings bank or a
related entity; or
D) anyone who
has an agreement, arrangement, or understanding, with the person, the purpose
or effect of which is to enable the person to enter into and consummate any
transaction described in subsection (m) on terms more advantageous than had the
transaction been entered into or consummated by a person who was not a party to
the agreement, arrangement, or understanding.
6) "Savings Bank Holding Company" means any
company defined by Section 2001.35 of the Act.
b) It is unlawful for any person to acquire
control of a savings bank or related entity unless acquired pursuant to this
Section. Any acquisition of control in violation of this Section shall be
ineffective and void.
c)
Application to acquire control of a savings bank shall be made to the Director.
The application shall be under oath or affirmation, and shall contain
substantially all the following information, plus any additional information
that the Director may prescribe as necessary or appropriate to protect
depositors, borrowers, stockholders, creditors, or the public interest.
1) The identity and banking and business
experience of each person by whom or on whose behalf the acquisition is to be
made, including, but not limited to, his or her business activities and
affiliations during the past 10 years, and a description of any pending legal
or administrative proceedings in which he or she is a party and any criminal
indictment or any conviction of such person by any state or federal
court.
2) If not entirely described
in subsection (c)(1), for each person by whom or on whose behalf the
acquisition is to be made, any past (for the past 10 years), present or
proposed affiliation with an insured depository institution, including, but not
limited to, any past, present or proposed employment and all affiliation or
connection of the kind described under the definition of "affiliated person of
a savings bank or insured institution" as defined in this Section.
3) Financial Statements
A) A statement of the assets and liabilities,
including contingent liabilities, of each person by whom or on whose behalf the
acquisition is to be made, as of the end of the fiscal year for each of the 5
years immediately preceding the date of the notice, including statements of
income and source and application of funds for each of the fiscal years then
concluded, all prepared in accordance with generally accepted accounting
principles consistently applied.
B)
An interim statement of the assets and liabilities, including contingent
liabilities, for each person by whom or on whose behalf the acquisition is to
be made, including related statements of income and source and application of
funds, as of a date not more than 90 days before the date of the filing of the
notice.
4) The terms of
the proposed acquisition and the manner in which the acquisition is to be
made.
5) The identity, source and
amount of the funds or other consideration used, or to be used, in making the
acquisition. If any part of these funds or other consideration has been or is
to be borrowed or otherwise obtained to make the acquisition, a description of
the transaction, the names of the parties, and any arrangements, agreements, or
understandings with those parties.
6) Any plans or proposals that any acquiring
party may have to liquidate the bank, to sell its assets or merge it with any
company or to make any other major change in its business or corporate
structure or management.
7) The
identity of any person employed, retained, or to be compensated by the
acquiring party, or by any person on his or her behalf, to make solicitations
or recommendations to stockholders to assist in the acquisition, and a brief
description of the terms of the employment, retainer, or arrangement for
compensation.
8) Copies of all
invitations or tenders or advertisements making a tender offer to stockholders
for purchase of their stock to be used in connection with the proposed
acquisition.
9) In lieu of the
application and information required by subsections (c)(1) through (8), the
Director may accept a certified true and accurate copy of notice or application
filed with the federal depository institution regulator for the purpose of
gaining approval of the proposed change in control or acquisition transaction;
provided that the federal application or notice is filed in compliance with the
60 day notice period prescribed by Section 8015 of the Act. Nothing in this
subsection (c)(9) precludes the Director from requiring the applicant to file
additional information as permitted by this Section.
d) When a person, other than an individual or
corporation, is required to file an application under this Section, the
Director may require that the information required by subsections (c)(1), (2),
(3), and (7) be given with respect to each person, as defined in subsection
(a)(3), who has an interest in or controls a person filing an application under
this Section.
e) When a corporation
is required to file an application under this Section, the Director may require
that information required by subsections (c)(1), (2), (3), and (7) be given for
the corporation, each officer and director of the corporation, and each person
who is directly or indirectly the beneficial owner of 25% or more of the
outstanding voting securities of the corporation.
f) If any tender offer, request, or
invitation for tenders or other agreements to acquire control is proposed to be
made by a registration statement under the Securities Act of 1933 (
15 USC
77 a et seq.), or in circumstances requiring
the disclosure of similar information under the Securities Exchange Act of 1934
( 15 USC 78 a et seq.), the registration statement or application may be filed
with the Director instead of the requirements of this Section.
g) Any acquiring party shall deliver a copy
of any notice or application required by this Section to the savings bank
proposed to be acquired within 2 days after the notice or application is filed
with the Director.
h) Any person
who willfully or intentionally violates this Section is subject to Section
11006(1) of the Act. Each day's violation shall be considered a separate
violation. This subsection in no way limits investigation, examination,
prosecution, conviction, levying of fines, or any other legal action or remedy
carried out pursuant to any other applicable state or federal law.
i) The Director may disapprove the
acquisition of a savings bank after the filing of a complete application if:
1) The poor financial condition of any
acquiring party may adversely affect the financial stability of the savings
bank or may adversely affect the interest of depositors, borrowers, creditors,
or stockholders;
2) The plan or
proposal of the acquiring party to liquidate the savings bank, to sell its
assets, to merge it with any person, or to make any other major change in its
business, corporate structure, or management may adversely affect the financial
stability of the savings bank, is not fair and reasonable to its depositors,
borrowers, creditors, or stockholders or is not otherwise in the public
interest;
3) Insufficient banking
and business experience or a lack of competence or integrity of any acquiring
party may adversely affect the savings bank or the savings bank's depositors,
borrowers, creditors, or stockholders;
4) The information provided by the
application is insufficient for the Director to determine whether the
acquisition should be approved or the Director is unable to verify the
information provided or to examine the qualifications of the acquiring party;
or
5) The acquisition is not
otherwise in the public interest.
j) The Director shall set forth the basis for
disapproval of any proposed acquisition in writing and shall provide a copy of
the findings and order to the applicants and to the bank involved. The findings
and order shall not be disclosed to any other party and shall not be subject to
public disclosure unless the findings or order are appealed and subject to
hearing.
k) Whenever a change in
control occurs, each party to the transaction shall report promptly to the
Director any changes or replacement of its chief executive officer or of any
organization director occurring in the next 12 month period, including in its
report a statement of the past and current business and professional
affiliations of the new chief executive officers or organization
directors.
l) For a period of 10
years following the acquisition of control by any person, neither the acquiring
party nor any associate or affiliate of the acquiring party or the acquired
savings bank shall receive any loan or the use of any of the funds of, nor
purchase, lease, or otherwise receive any property from, nor receive any
consideration from the sale, lease, or any other conveyance of property to, any
savings bank in which the acquiring party has control; except that:
1) the provisions of this subsection (l)
shall not apply to transactions permitted under sections 22(g), 22(h), 23A or
23B of the Federal Reserve Act (
12
USC 375 a, 375b, 371c and 371c-1), or
transactions with any person (including such person's affiliates and
associates) after the person ceases to be in control of the savings bank, or
ceases to be an affiliate or associate of a person in control of a savings
bank; and
2) upon application by
any acquiring party or associate or affiliate or affiliated person of a savings
bank or insured institution subject to this subsection (l), the Director may
approve a transaction between a savings bank and the acquiring party, person,
or associate or affiliate or affiliated person of a savings bank or insured
institution, upon finding that the terms of the transaction are at least as
advantageous to the savings bank as the savings bank would obtain in a
comparable transaction with any person that is not an acquiring party or an
associate or affiliate of the acquiring party.
m) To enable any person to purchase any or
all shares of its capital stock, no savings bank shall make a loan to, pledge
or otherwise transfer any of its assets as security for a loan to such person
or to any associate or affiliate or affiliated person of a savings bank or
insured institution, or except as otherwise permitted in this subsection, pay
any dividends to any such person or associate or affiliate or affiliated person
of a savings bank or insured institution except upon a finding by the Director
that such transactions are fair to stockholders, depositors, borrowers, and
creditors and does not otherwise violate any provision of the Act. Nothing in
this Section shall prohibit a dividend among shareholders in proportion to
their shareholdings.
n) The
accuracy and completeness of any information submitted by the applicants may be
determined by the Director pursuant to the Director's examination
authority.
