Connecticut Administrative Code › Title 36a - The Banking Law of Connecticut › 136 - Conversion of Mutual Connecticut Banks to Capital Stock Connecticut Banks › Section 36a-136-38 - Implementation of a stock option plan or management or employee stock benefit plan

Current through July 10, 2024
(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.