§ 192.135 Notifying members of adopted plan of conversion. ( a ) *Notice.* A savings association must promptly notify its members that the board of directors adopted a plan of conversion and that a copy of the plan is available for the members' inspection in the savings association's home office and in its branch offices. The savings association must provide this notice by sending to each member a letter, through the mail or electronically if the member receives electronic communication, or by publishing a notice in the local newspaper in every local community where the savings association has an office. The savings association also may issue a press release and may make this notice available on its website. The appropriate Federal banking agency may require broader publication, if necessary, to ensure adequate notice to the savings association's members.
( b ) *Contents of notice.* The savings association may include only the following statements and descriptions in the letter, notice, or press release. ( 1 ) The savings association's board of directors adopted a proposed plan to convert from a mutual to a stock savings institution.
( 2 ) The savings association will send its members a proxy statement with detailed information on the proposed conversion before the savings association convenes a members' meeting to vote on the conversion.
( 3 ) The savings association's members will have an opportunity to approve or disapprove the proposed conversion at a meeting. A majority of the eligible votes must approve the conversion.
( 4 ) The savings association will not vote existing proxies to approve or disapprove the conversion. The savings association will solicit new proxies for voting on the proposed conversion.
( 5 ) The appropriate Federal banking agency, and in the case of a State-chartered savings association, the appropriate State regulator, must approve the conversion before the conversion will be effective. The savings association's members will have an opportunity to file written comments, including objections and materials supporting the objections, with the appropriate Federal banking agency.
( 6 ) The IRS must issue a favorable tax ruling, or a tax expert must issue an appropriate tax opinion, on the tax consequences of the savings association's conversion before the appropriate Federal banking agency will approve the conversion. The ruling or opinion must indicate the conversion will be a tax-free reorganization.
( 7 ) The appropriate Federal banking agency, and in the case of a State-chartered savings association, the appropriate State regulator, might not approve the conversion, and the IRS or a tax expert might not issue a favorable tax ruling or tax opinion.
( 8 ) Savings account holders will continue to hold accounts in the converted savings association with the same dollar amounts, rates of return, and general terms as existing deposits. The FDIC will continue to insure the accounts.
( 9 ) The savings association's conversion will not affect borrowers' loans, including the amount, rate, maturity, security, and other contractual terms.
( 10 ) The savings association's business of accepting deposits and making loans will continue without interruption.
( 11 ) The savings association's current management and staff will continue to conduct current services for depositors and borrowers under current policies and in existing offices.
( 12 ) The savings association may substantively amend its proposed plan of conversion before the members' meeting.
( 13 ) The savings association may terminate the proposed conversion.
( 14 ) After the appropriate Federal banking agency, and in the case of a State-chartered savings association, the appropriate State regulator, approves the proposed conversion, the savings association will send proxy materials providing additional information. After the savings association sends proxy materials, members may telephone or write to the savings association with additional questions.
( 15 ) The proposed record date for determining the eligible account holders who are entitled to receive subscription rights to purchase the savings association's shares.
( 16 ) A brief description of the circumstances under which supplemental eligible account holders will receive subscription rights to purchase the savings association's shares.
( 17 ) A brief description of how voting members may participate in the conversion.
( 18 ) A brief description of how directors, officers, and employees will participate in the conversion.
( 19 ) A brief description of the proposed plan of conversion.
( 20 ) The par value (if any) and approximate number of shares the savings association will issue and sell in the conversion.
( c ) *Other requirements.* ( 1 ) The savings association may not solicit proxies, provide financial statements, describe the benefits of conversion, or estimate the value of its shares upon conversion in the letter, notice, or press release.
( 2 ) If the savings association responds to inquiries about the conversion, it may address only the matters listed in paragraph (b) of this section.