North Carolina Administrative Code › Title 04 - COMMERCE › Chapter 16 - SAVINGS INSTITUTIONS › Subchapter G - MUTUAL TO STOCK CONVERSIONS › Section .0300 - GENERAL PRINCIPLES FOR CONVERSIONS › Section 16G .0312 - OPTIONAL PROVISIONS IN PLAN OF CONVERSION

Current through Register Vol. 39, No. 2, July 15, 2024
The plan of conversion may provide any of the
					 following:
(1) The applicant may
				  commence the direct community offering or the public offering, or both,
				  concurrently with or at any time during the subscription offering. The
				  subscription offering may be commenced concurrently with or at any time after
				  the mailing to members of the proxy statement authorized for use by the
				  Commissioner of Banks. The subscription offering may be closed before the
				  meeting of the members held to vote on the plan of conversion, provided that
				  the offer and sale of capital stock shall be conditioned upon the approval of
				  the plan of conversion by the members.
(2) Directors, executive officers, and
				  employees of the converting savings institution shall receive, without payment,
				  nontransferable subscription rights to purchase shares of capital stock, to the
				  extent that shares are available after satisfying the subscriptions of eligible
				  account holders, supplemental eligible account holders, and voting members
				  provided for under Items (2), (4) and (5) of Rule .0311 of this Section. The
				  shares shall be allocated among directors, officers, and employees on an
				  equitable basis such as by giving weight to length of service, compensation,
				  and position, subject to the limitation in Item (7) of Rule .0311 of this
				  Section on the amount of shares that may be purchased by any person, associate,
				  or group of affiliated persons or group of persons otherwise acting in
				  concert.
(3) Any account holder
				  receiving rights to purchase stock in the subscription offering shall also
				  receive, without payment, nontransferable subscription rights to purchase up to
				  one percent of the total offering of shares of capital stock, to the extent
				  that the shares are available after satisfying the subscriptions provided for
				  under Items (2), (4), and (5) of Rule .0311 of this Section, subject to
				  conditions as may be provided in the plan of conversion. In the event of an
				  oversubscription for the additional shares, the shares available shall be
				  allocated among the subscribing eligible account holders, supplemental eligible
				  account holders, and voting members on an equitable basis related to the
				  amounts of their respective subscriptions, as may be provided in the plan of
				  conversion.
(4) The applicant may
				  require members to return by a date certain a postage-paid written
				  communication provided by the applicant, requesting receipt of a subscription
				  offering cicular or a preliminary or final offering circular in an offering
				  pursuant to Item (10) of this Rule, in order to be entitled to receive an
				  offering circular from the applicant; provided, that the subscription offering
				  or the offering pursuant to Item (10) of this Rule shall not be closed until 30
				  days after the mailing by the applicant to members of the postage-paid written
				  communication. If the subscription offering or the offering pursuant to Item
				  (10) of this Rule is not commenced within 45 days after the meeting of members,
				  any converting savings institution adopting this optional provision shall
				  transmit, not more than 30 days prior to the commencement of the subscription
				  offering or the offering pursuant to Item (10) of this Rule to each member who
				  had been furnished with proxy solicitation materials, written notice of the
				  commencement of the offering that shall state that the converting savings
				  institution is not required to furnish an offering circular to a member unless
				  the member returns by a date certain the postage-paid written communication
				  provided by the converting savings institution requesting receipt of an
				  offering circular.
(5) The
				  applicant may require eligible account holders and supplemental eligible
				  account holders who are not voting members to return by a date certain a
				  postage-paid written communication in accordance with the procedure established
				  in Item (4) of this Rule.
(6) Any
				  residue of shares of the converting savings institution not sold in the
				  subscription offering, in a public offering, or direct community offering may
				  be sold as provided in the plan of conversion with the written consent of the
				  Commissioner of Banks.
(7) The
				  number of shares that any person or group of persons affiliated with each other
				  or otherwise acting in concert may subscribe for in the subscription offering
				  may be made subject to a limit of not less than one percent of the total
				  offering of the shares.
(8) Any
				  person exercising subscription rights to purchase capital stock shall be
				  required to purchase a minimum number of shares, but the aggregate price for
				  any minimum share purchase shall not exceed five hundred dollars
				  ($500.00).
(9) The converted
				  savings institution shall issue and sell, in lieu of shares of its capital
				  stock, units of securities consisting of capital stock and long-term warrants
				  or other equity securities, in which event any reference in the provisions of
				  this Subchapter to capital stock shall apply to units of equity securities
				  unless the context otherwise requires.
(10) Instead of a separate subscription
				  offering, all subscription rights issued in connection with the conversion
				  shall be exercisable by delivery of completed and executed order forms to the
				  underwriters or selling group for the public offering or pursuant to any other
				  procedure, subject to the applicant demonstrating to the Commissioner of Banks
				  the feasibility of the method of exercising such right and to such conditions
				  as shall be provided in the plan of conversion.
(11) The Commissioner of Banks may approve
				  other equitable provisions as necessary to avert injury to the converting
				  savings institution.
(12) The proxy
				  statement authorized by
				  G.S.
				  54B-33 or
				  G.S.
				  54C-33 may be in summary form, provided the
				  proxy meets the requirements.
The date on which the summary proxy statement is mailed to
					 members shall be deemed the date on which notice is given. Without the prior
					 written consent of the Commissioner of Banks, the meeting of members shall not
					 be held less than 20 days after the date on which the supplemental information
					 statement is mailed to requesting members.
(13) In the event that the converting
				  institution is establishing a tax-qualified employee stock ownership plan
				  (ESOP) for the benefit of its employees, then notwithstanding the priorities
				  established under Items (2), (4), and (5) of Rule .0311 of this Section, the
				  plan of conversion may provide that the ESOP may purchase up to 10 percent of
				  the aggregate shares offered in the conversion prior to offering shares to
				  eligible account holders, supplemental eligible account holders, or other
				  voting members.
(14) Eligible
				  account holders shall be divided into two subcategories for purposes of
				  determining the aggregate number of shares of conversion stock allocated to be
				  purchased by account holders in each subcategory: those whose permanent
				  residence is within the market area of the converting institution and those
				  whose permanent residence is outside the market area of the converting
				  institution. A plan of conversion that divides account holders into
				  subcategories shall provide:
(a) That each
				  eligible accountholder who resides within the applicant's market area shall
				  receive nontransferable subscription rights to purchase a number of shares
				  based on the accountholder's qualifying deposit balance up to the maximum
				  purchase limitation established pursuant to Rule .0311(7) of this Section,
				  provided that the aggregate number of shares of conversion stock to be
				  allocated for purchase by eligible account holders within the converting
				  institution's market area shall equal that number of shares (rounded to the
				  nearest whole number) determined by multiplying the total number of shares of
				  stock to be sold in the offering times a fraction the numerator of which is the
				  sum of qualifying deposits held by eligible account holders residing inside the
				  market area and the denominator of which is the sum of all qualifying
				  deposits.
(b) That each eligible
				  account holder who resides outside the applicant's market area shall receive
				  nontransferable subscription rights to purchase a number of shares based on the
				  account holder's qualifying deposit balance up to the maximum purchase
				  limitations established pursuant to Rule .0311(7) of this Section, provided
				  that the aggregate number of shares of conversion stock to be allocated for
				  purchase by eligible account holders outside the converting institution's
				  market area shall equal that number of shares (rounded to the nearest whole
				  number) determined by multiplying the total number of shares of stock to be
				  sold in the offering times a fraction the numerator of which is the sum of
				  qualifying deposits held by eligible account holders residing outside the
				  converting institution's market area and the denominator of which is the sum of
				  all qualifying deposits.
(c) Within
				  each subcategory, a formula to be used in the event of an oversubscription for
				  the equitable allocation of shares of stock within the subcategory that relates
				  to an eligible account holder's qualifying deposit balance.
(d) For the purposes of this Item, a
				  converting institution shall define its "market area" to include each county in
				  which it has an office and may include additional counties contiguous to those
				  counties in which it maintains an office, regardless of whether such counties
				  are in the State of North Carolina.