Louisiana Administrative Code › Title 10 - FINANCIAL INSTITUTIONS, CONSUMER CREDIT, INVESTMENT SECURITIES AND UCC › Part VII - Savings Banks › Chapter 3 - Conversions › Section VII-305 - Contents of Plan of Conversion

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				Each plan of conversion shall contain all of the following provisions.
1. Stock Valuation. The converting savings
				bank shall issue and sell its capital stock at a price based on an independent
				valuation in accordance with §331. F The sale price of the shares of
				capital stock sold in the conversion shall be a uniform price and the plan
				shall specify the underwriting or other marketing arrangements or both to
				ensure the sale of all shares not sold to persons with subscription
				rights.
2. Eligibility Record Date.
				An eligibility record date shall be stated which shall be not less than one
				year prior to the date of the board of director's adoption of the plan of
				conversion, but which date shall be fair to a majority of the deposit account
				holders.
3. Eligible Account
				Holders' Subscription Rights
a. Eligible
				account holders have a priority to purchase conversion stock over all other
				eligible subscribers, subject to the acquisition limits of Paragraph A.9 of
				this Section. The plan shall define which deposit account holders constitute
				eligible account holders, in accordance with §309 Each eligible account
				holder shall receive, without payment, nontransferable subscription rights to
				purchase capital stock in an amount equal to the greater of:
i. the maximum purchase limitation
				established pursuant to Paragraph A.9 of this Section;
ii. 1/10 of 1 percent of the total offering
				of shares; or
iii. fifteen times
				the product (rounded down to the next whole number) obtained by multiplying the
				total number of shares of capital stock to be issued by a fraction of which the
				numerator is the amount of the qualifying deposit of the eligible account
				holder and the denominator is the total amount of qualifying deposits of all
				eligible account holders in the applicant.
b. If there is an oversubscription to the
				conversion stock, shares shall be allocated among subscribing eligible account
				holders so as to permit each such account holder, to the extent possible, to
				purchase a number of shares sufficient to make that person's total allocation
				equal to 100 shares. Any shares remaining shall be allocated among subscribing
				eligible account holders on such equitable basis as provided in the plan of
				conversion. The plan of conversion shall provide a detailed description of the
				allocation in the event of an oversubscription of the capital stock.
4. Employee Stock Benefit Plans'
				Subscription Rights. Tax-qualified employee stock benefit plan(s) have a
				priority to purchase conversion stock after all eligible account holders. If an
				oversubscription occurs at the eligible account holder level, shares may be
				sold to the tax-qualified employee stock benefit plan(s), subject to the
				acquisition limits stated in Paragraph A.9 of this Section.
5. Subordination of Subscription Rights of
				Insiders. Of the eligible account holder subscription rights to purchase stock
				which are received by officers, directors, and their associates, that portion
				which is based on their increased deposits in the converting savings bank which
				were made in the one-year period preceding the eligibility record date, shall
				be subordinated to all subscription rights received by eligible account holders
				and employee benefit plans under Paragraphs A.3 and 4 of this
				Section.
6. Supplemental Eligible
				Account Holders' Subscription Rights
a. In
				plans involving an eligibility record date that is more than 24 months prior to
				the date of the latest amendment to the application for conversion filed prior
				to OFI's approval, a supplemental eligibility record date shall be determined
				whereby supplemental eligible account holders shall receive, without payment,
				nontransferable subscription rights to purchase conversion stock in an amount
				equal to the same limits established in Subparagraph A.3.a of this Section, but
				substituting "supplemental eligible account holder(s)" for the term "eligible
				account holder(s)" in Subparagraph A.3.a.
b. Subscription rights received under this
				Subparagraph shall be subordinated to all rights received by eligible account
				holders and employee benefit plans under Paragraphs A.3, 4 and 5 of this
				Section; further, shares received by an eligible account holder shall be
				applied in partial satisfaction of the subscription rights to be distributed to
				that person pursuant to this Subparagraph.
c. If an oversubscription to conversion stock
				occurs, shares shall be allocated among the subscribing supplemental eligible
				account holders so as to permit each, to the extent possible, to purchase a
				number of shares sufficient to make the person's total allocation of shares
				(including those allocated to them as an eligible account holder) equal to 100
				shares. Any shares thereafter remaining shall be allocated on an equitable
				basis, as may be provided in the plan of conversion in a detailed
				description.
7. Other
				Voting Members
a. Savings bank voting members
				who are not either eligible account holders or supplemental eligible account
				holders shall receive, without payment, nontransferable subscription rights to
				purchase conversion stock in an amount equal to the greater of:
i. the maximum purchase limitations
				established pursuant to Paragraph A.9 of this Section; or
ii. 1/10 of 1 percent of the total offering
				of shares.
b. The stock
				to be offered and sold in the subscription offering shall give a preference to
				voting members residing in the savings bank's local community or within 100
				miles of its home or branch office(s). Subscription rights received under this
				Subparagraph shall be subordinated to all rights received by eligible account
				holders, employee benefit plans and supplemental eligible account holders under
				Paragraphs A.3, 4, 5 and 6 of this Section. If there is an oversubscription,
				shares shall be allocated among the subscribing voting members on such
				equitable basis as may be provided in the plan of conversion.
8. Public or Community Offering.
				Any shares of the converting savings bank not sold to persons with subscription
				rights shall be sold either in a public offering through an underwriter, or
				directly by the converting savings bank in a direct community offering, subject
				to the applicant demonstrating to the commissioner the feasibility of the
				method of sale, an equitable plan of distribution, and to any conditions as may
				be provided in the plan of conversion. Those conditions are subject to the
				prior written approval of the commissioner. In a public offering, the stock
				should be offered and sold in a manner that will achieve the widest
				distribution of the stock. A direct community offering by the converting
				savings bank should give a preference to natural persons residing in the local
				community or within 100 miles of the savings bank's home or branch office(s).
				The maximum purchase limitations of Paragraph A.9 of this Section apply to
				purchases made in the public and/or community offerings.
9. Stock Purchase Limits in Conversion. The
				total of shares which any person and any associate or group of persons acting
				in concert may subscribe for or purchase in the conversion, including any
				public or direct community offering, shall not exceed 5 percent of the total
				offering of shares, except that any one or more tax-qualified employee stock
				benefit plans may purchase in the aggregate not more than 10 percent of the
				total offering of shares. Shares held by one or more tax-qualified plans and
				attributable to a person shall not be aggregated with shares purchased directly
				by or otherwise attributable to that person.
10. Insiders' Aggregate Purchase Limits in
				Conversion. The officers and directors of the converting savings bank and their
				associates may purchase in the conversion, in the aggregate, up to 35 percent
				of the total offering of shares if the applicant has less than $50,000,000 in
				total assets, and up to 25 percent of the total offering if the applicant has
				more than $500,000,000 in total assets. If the applicant has between $50
				million and $500 million in total assets, the maximum percentage shall be equal
				to 35 percent minus one percent multiplied by the quotient of the total assets
				less $50 million divided by $45 million. In calculating the number of shares
				which may be purchased, any shares attributable to the officers and directors
				and their associates but held by one or more tax-qualified employee stock
				benefit plans shall not be included. In the case of merger conversions pursuant
				to this rule, any shares owned prior to the conversion by officers, directors,
				and their associates shall not be included in calculating the aggregate amount
				which may be purchased by such persons.
11. Post-Conversion Restrictions on Insiders'
				Stock Purchases. For a period of three years following the conversion,
				officers, directors and their associates shall not purchase, without the prior
				written approval of the commissioner, the capital stock of the converted
				savings bank except from a broker-dealer registered with the Commissioner of
				Securities for the State of Louisiana and the Securities and Exchange
				Commission. This Paragraph shall not apply to:
a. purchases of stock made by and held by any
				one or more tax- or non-tax-qualified employee stock benefit plans which may be
				attributable to individual officers or directors; or
b. negotiated transactions involving more
				than one percent of the outstanding capital stock of the converted
				institution.
12. Limits
				on the Acquisition of Securities. Limits on the acquisition of securities of
				converting savings banks pursuant to
				§311 of this
				rule shall be described in detail in the plan of conversion.
13. Restrictions on Insiders' Stock Sales.
				All shares of capital stock purchased by directors and officers on original
				issue in the conversion either directly from the savings bank (by subscription
				or otherwise) or from an underwriter, shall be subject to the restriction that
				the shares shall not be sold, for a period of at least one year following the
				date of purchase, except upon the death of the director or officer.
14. Restrictions Stated on Stock Certificate.
				In connection with shares of capital stock subject to restriction on sale for a
				period of time:
a. each certificate of stock
				shall bear a legend stating the restriction;
b. instructions shall be issued to the
				transfer agent for the converted savings bank's capital stock with respect to
				applicable restrictions on transfer of any restricted stock; and
c. any shares issued as a stock dividend,
				stock split or otherwise relating to any restricted stock shall be subject to
				the same restrictions as apply to the restricted stock.
15. No Loans to Purchase Stock. The
				converting savings bank shall not lend funds or otherwise extend credit on an
				unsecured basis or upon the security of the savings bank's capital stock to any
				person to purchase the capital stock of the converting savings bank.
16. Contributions to Employee Benefit Plans.
				The savings bank may make scheduled, discretionary contributions to
				tax-qualified employee benefit plans if the contributions do not cause the
				savings bank to fail to meet its regulatory capital requirements.
17. Marketing the Stock. The converting
				savings bank shall:
a. use its best efforts to
				encourage and assist a market maker to establish and maintain a market for the
				securities; and
b. use its best
				efforts to list shares issued in connection with the conversion on a national
				or regional securities exchange or on the NASDAQ quotation system.
18. Time Period for Conversion. A
				time period must be established within which the conversion must be completed.
				The time period shall be not more than 12 months from the date the savings
				bank's members approve the plan of conversion. This time period may be extended
				up to an additional 12 months with the prior written approval of the
				commissioner. Further extensions may be granted for good cause shown.
19. Transfer of Deposit Accounts. Each
				deposit account holder of the converting savings bank shall receive, without
				payment, withdrawable deposit accounts in the converted savings bank equal in
				withdrawable amount to the withdrawal value of the account holder's deposit
				accounts in the converting savings bank.
20. Liquidation Accounts. A liquidation
				account shall be established and maintained, pursuant to §315, for the
				benefit of deposit account holders if a complete liquidation of the converted
				savings bank occurs. A savings bank shall include in its articles of
				incorporation the following section:
"LIQUIDATION ACCOUNT. The savings bank shall establish and
				  maintain a liquidation account for the benefit of its deposit account holders
				  as of the eligibility and/or supplemental eligibility record date. If there is
				  a complete liquidation, it shall comply with any laws and rules with respect to
				  the amount and the priorities on liquidation of each of the savings bank's
				  (eligible/supplemental eligible) account holder's interest in the liquidation
				  account, to the extent it is still in existence. However, an account holder's
				  interest in the liquidation account shall not entitle that person to any voting
				  rights at meetings of the stockholders."
21. Voting Rights. The holders of the capital
				stock of the converted savings bank shall have exclusive voting
				rights.
22. Reasonable Expenses.
				The expenses incurred in the conversion shall be reasonable. The plan of
				conversion shall state, in approximate amounts, the categories of expenses
				incurred.
23. Fairness of the Plan.
				The plan of conversion shall not contain any provision which the commissioner
				may determine to be inequitable or detrimental to the applicant, its deposit
				account holders or any other savings bank, or to be contrary to the public or
				community interest.
24. Amendments.
				The plan of conversion may be amended by the board of directors prior to the
				solicitation of proxies from members to vote on the plan, and at any time
				thereafter with the prior written approval of the commissioner. The conversion
				may be terminated by the board of directors at any time prior to the meeting of
				members called to consider the plan and at any later time with the
				commissioner's prior written approval.
25. Additional Info. The application shall
				include such additional information as the commissioner directs.
26. Full Disclosure Required. The plan of
				conversion, proxy and offering materials must contain thorough disclosures of
				all material facts and particularly as to all benefits which may be obtained by
				any person in the conversion. In addition, they shall address in detail:
a. the benefits to officers, directors, their
				associates, the applicant's employees and nonmembers (including charitable or
				community organizations) and any compensation agreements that will be entered
				into, with disclosure in chart form in addition to any textual
				descriptions;
b. the reasons for
				the conversion, including the relative advantages and disadvantages of
				undertaking the transaction proposed instead of other types of conversions and
				a comparison of any competing offers if merger or acquisition by or with
				another institution is involved;
c.
				whether management believes the conversion is in the best interests of the
				savings bank and its account holders, and the basis of that belief;
				and
d. the fiduciary duties owed to
				account holders by the savings bank's officers and directors and why the
				conversion is in accord with those duties and is otherwise equitable to the
				account holders and the savings bank.