§ 563.580 What standards and procedures will govern OTS review of the substance of my notice? The OTS will disapprove a notice if, pursuant to the standard set forth in 12 U.S.C. 18311(e), the OTS finds that the competence, experience, character, or integrity of the proposed director or senior executive officer indicates that it would not be in the best interests of the depositors of the savings association or of the public to permit the individual to be employed by, or associated with, the savings association or savings and loan holding company. If the OTS disapproves a notice, it will issue a written notice that explains why the OTS disapproved the notice. The OTS will send the notice to the savings association or savings and loan holding company and the individual. § 563.585 When may a proposed director or senior executive officer begin service? (a) A proposed director or senior executive officer may begin service 30 days after the date the OTS receives all required information, unless: (1) The OTS notifies you that it has disapproved the notice; or (2) The OTS extends the 30-day period for an additional period not to exceed 60 days. If the OTS extends the 30-day period, it will notify you in writing that the period has been extended, and will state the reason for the extension. The proposed director or senior executive officer may begin service upon expiration of the extended period, unless the OTS notifies you that it has disapproved the notice during the extended period. (b) Notwithstanding paragraph (a) of this section, a proposed director or senior executive officer may begin service after the OTS notifies you, in writing, of its intention not to disapprove the notice. $563.590 When will the OTS waive the prior notice requirement? (a) Waiver request. (1) An individual may serve as a director or senior executive officer before filing a notice under this subpart if the OTS issues a written finding that: (i) Delay would threaten the safety or soundness of the savings association; (ii) Delay would not be in the public interest; or (iii) Other extraordinary circumstances exist that justify waiver of prior notice. (2) If the OTS grants a waiver, you must file a notice under this subpart within the time period specified by the OTS. (b) Automatic waiver. An individual may serve as a director before filing a notice under this subpart, if the individual was not nominated by management and the individual submits a notice under this subpart within seven days after election as a director. (c) Subsequent OTS action. The OTS may disapprove a notice within 30 days after the OTS issues a waiver under paragraph (a) of this section or within 30 days after the election of an individual who has filed a notice and is serving pursuant to an automatic waiver under paragraph (b) of this section. PART 563b-CONVERSIONS FROM MUTUAL TO STOCK FORM Sec. 563b.5 What does this part do? 563b.10 May I form a holding company as part of my conversion? 563b.15 May I form a charitable organization as part of my conversion? 563b.20 May I acquire another insured stock depository institution as part of my conversion? 563b.25 What definitions apply to this part? Subpart A-Standard Conversions PRIOR TO CONVERSION 563b.100 What must I do before a conversion? 563b.105 What information must I include in my business plan? 563b.110 Who must review my business plan? 563b.115 How will OTS review my business plan? 563b.120 May I discuss my plans to convert with others? PLAN OF CONVERSION 563b.125 Must my board of directors adopt a plan of conversion? 563b.130 What must I include in my plan of conversion? 563b.135 How do I notify my members that my board of directors approved a plan of conversion? 563b.140 May I amend my plan of conversion? FILING REQUIREMENTS 563b.150 What must I include in my application for conversion? 563b.155 How do I file my application for conversion? 563b.160 May I keep portions of my application for conversion confidential? 563b.165 How do I amend my application for conversion? NOTICE OF FILING OF APPLICATION AND COMMENT PROCESS 563b.180 How do I notify the public that I filed an application for conversion? 563b.185 How may a person comment on my application for conversion? OTS REVIEW OF THE APPLICATION FOR 563b.200 What actions may OTS take on my application? 563b.205 May a court review OTS's final action on my conversion? VOTE BY MEMBERS 563b.225 Must I submit the plan of conversion to my members for approval? 563b.230 Who is eligible to vote? 563b.235 How must I notify my members of the meeting? 563b.240 What must I submit to OTS after the members' meeting? PROXY SOLICITATION 563b.250 Who must comply with these proxy solicitation provisions? 563b.255 What must the form of proxy include? 563b.260 May I use previously executed proxies? 563b.265 How may I use proxies executed under this part? 563b.270 What must I include in my proxy statement? 563b.275 How do I file revised proxy materials? 563b.280 Must I mail a member's proxy solicitation material? 563b.285 What solicitations are prohibited? 563b.290 What will OTS do if a solicitation violates these prohibitions? 563b.295 Will OTS require me to re-solicit proxies? OFFERING CIRCULAR 563b.300 What must happen before OTS declares my offering circular effective? 563b.305 When may I distribute the offering circular? 563b.310 When must I file a post-effective amendment to the offering circular? OFFERS AND SALES OF STOCK 563b.320 Who has priority to purchase my conversion shares? 563b.325 When may I offer to sell my conversion shares? 563b.330 How do I price my conversion shares? 563b.335 How do I sell my conversion shares? 563b.340 What sales practices are prohibited? 563b.345 How may a subscriber pay for my conversion shares? 563b.350 Must I pay interest on payments for conversion shares? 563b.355 What subscription rights must I give to each eligible account holder and each supplemental eligible account holder? 563b.360 Are my officers, directors, and their associates eligible account holders? 563b.365 May other voting members purchase conversion shares in the conversion? 563b.370 Does OTS limit the aggregate purchases by officers, directors, and their associates? 563b.375 How do I allocate my conversion shares if my shares are oversubscribed? 563b.380 May my employee stock ownership plan purchase conversion shares? 563b.385 May I impose any purchase limitations? 563b.390 Must I provide a purchase preference to persons in my local community? 563b.395 What other conditions apply when I offer conversion shares in a community offering, a public offering, or both? COMPLETION OF THE OFFERING 563b.400 When must I complete the sale of my stock? 563b.405 How do I extend the offering period? COMPLETION OF THE CONVERSION 563b.420 When must I complete my conversion? 563b.425 Who may terminate the conversion? 563b.430 What happens to my old charter? 563b.435 What happens to my corporate existence after conversion? 563b.440 What voting rights must I provide to stockholders after the conversion? 563b.445 What must I provide my savings account holders? LIQUIDATION ACCOUNT 563b.450 What is a liquidation account? 563b.455 What is the initial balance of the liquidation account? CONTRIBUTIONS TO CHARITABLE 563b.550 May I donate conversion shares or conversion proceeds to a charitable organization? 563b.555 How do my members approve a charitable contribution? 563b.560 How much may I contribute to a charitable organization? 563b.565 What must the charitable organization include in its organizational documents? 563b.570 How do I address conflicts of inter- SUBPART B-VOLUNTARY SUPERVISORY 563b.600 What does this subpart do? 563b.605 How may I conduct a voluntary supervisory conversion? 563b.610 Do my members have rights in a voluntary supervisory conversion? ELIGIBILITY 563b.625 When is a savings association eligible for a voluntary supervisory conversion? 563b.630 When is a BIF-insured state-chartered savings bank eligible for a voluntary supervisory conversion? PLAN OF SUPERVISORY CONVERSION 563b.650 What must I include in my plan of voluntary supervisory conversion? VOLUNTARY SUPERVISORY CONVERSION APPLICATION 563b.660 What must I include in my voluntary supervisory conversion application? OTS REVIEW OF THE VOLUNTARY SUPERVISORY CONVERSION APPLICATION 563b.670 Will OTS approve my voluntary supervisory conversion application? 563b.675 What conditions will OTS impose on an approval? OFFERS AND SALES OF STOCK 563b.680 How do I sell my shares? POST-CONVERSION 563b.690 Who may not acquire additional shares after the voluntary supervisory conversion? AUTHORITY: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 2901; 15 U.S.C. 78c, 781, 78m, 78n, 78w. SOURCE: 67 FR 52020, Aug. 9, 2002, unless otherwise noted. § 563b.5 What does this part do? (a) General. This part governs how a savings association ("you") may convert from the mutual to the stock form of ownership. Subpart A of this part governs standard mutual-to-stock conversions. Subpart B of this part governs voluntary supervisory mutual-tostock conversions. This part supersedes all inconsistent charter and bylaw provisions of federal savings associations converting to stock form. (b) Prescribed forms. You must use the forms prescribed under this part and provide such information as OTS may require under the forms by regulation or otherwise. The forms required under this part include: Form AC (Application for Conversion); Form PS (Proxy Statement); Form OC (Offering Circular); and Form OF (Order Form). (c) Waivers. OTS may waive any requirement of this part or a provision in any prescribed form. To obtain a waiver, you must file a written request with OTS that: (1) Specifies the requirement(s) or provision(s) you want OTS to waive; (2) Demonstrates that the waiver is equitable; is not detrimental to you, your account holders, or other savings associations; and is not contrary to the public interest; and (3) Includes an opinion of counsel demonstrating that applicable law does not conflict with the requirement or provision. § 563b.10 May I form a holding_company as part of my conversion? You may convert to the stock form of ownership as part of a transaction where you organize a holding company to acquire all of your shares upon their issuance. In such a transaction, your holding company will offer rights to purchase its shares instead of your shares. All of the requirements of subpart A generally apply to the holding company as they apply to the savings association. Section 574.6 of this chapter contains OTS's holding company application requirements. § 563b.15 May I form a charitable organization as part of my conversion? When you convert to the stock form, you may form a charitable organization. Your contributions to the charitable organization are governed by the requirements of §§ 563b.550 through 563b.575. § 563b.20 May I acquire another insured stock depository institution as part of my conversion? When you convert to stock form, you may acquire for cash or stock another insured depository institution that is already in the stock form of ownership. § 563b.25 What definitions apply to this part? The following definitions apply to this part and the forms prescribed under this part: Acting in concert has the same meaning as in §574.2(c) of this chapter. The rebuttable presumptions of §574.4(d) of this chapter, other than §§ 574.4(d)(1) and (d)(2) of this chapter, apply to the share purchase limitations at §§ 563b.355 through 563b.395. Affiliate of, or a person affiliated with, a specified person is a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified person. Associate of a person is: (1) A corporation or organization (other than you or your majorityowned subsidiaries), if the person is a senior officer or partner, or bene ficially owns, directly or indirectly, 10 percent or more of any class of equity securities of the corporation or organization. (2) A trust or other estate, if the person has a substantial beneficial interest in the trust or estate or is a trustee or fiduciary of the trust or estate. For purposes of §§ 563b.370, 563b.380, 563b.385, 563b.390, 563b.395 and 563b.505, a person who has a substantial beneficial interest in your tax-qualified or non-taxqualified employee stock benefit plan, or who is a trustee or a fiduciary of the plan, is not an associate of the plan. For the purposes of § 563b.370, your taxqualified employee stock benefit plan is not an associate of a person. (3) Any person who is related by blood or marriage to such person and: (i) Who lives in the same home as the person; or (ii) Who is your director or senior officer, or a director or senior officer of your holding company or your subsidiary. Association members or members are persons who, under applicable law, are eligible to vote at the meeting on conversion. Control (including controlling, controlled by, and under common control with) means the direct or indirect power to direct or exercise a controlling influence over the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise as described in part 574 of this chapter. Eligibility record date is the date for determining eligible account holders. The eligibility record date must be at least one year before the date your board of directors adopts the plan of conversion. Eligible account holders are any persons holding qualifying deposits on the eligibility record date. IRS is the Internal Revenue Service. Local community includes: (1) Every county, parish, or similar governmental subdivision in which you have a home or branch office; (2) Each county's, parish's, or subdivision's metropolitan statistical area; (3) All zip code areas in your Community Reinvestment Act assessment area; and (4) Any other area or category you set out in your plan of conversion, as approved by OTS. Offer, offer to sell, or offer for sale is an attempt or offer to dispose of, or a solicitation of an offer to buy, a security or interest in a security for value. Preliminary negotiations or agreements with an underwriter, or among underwriters who are or will be in privity of contract with you, are not offers, offers to sell, or offers for sale. Person is an individual, a corporation, a partnership, an association, a joint-stock company, a limited liability company, a trust, an unincorporated organization, or a government or political subdivision of a government. Proxy soliciting material includes a proxy statement, form of proxy, or other written or oral communication regarding the conversion. Purchase or buy includes every contract to acquire a security or interest in a security for value. Qualifying deposit is the total balance in an account holder's savings accounts at the close of business on the eligibility or supplemental eligibility record date. Your plan of conversion may provide that only savings accounts with total deposit balances of $50 or more will qualify. Sale or sell includes every contract to dispose of a security or interest in a security for value. An exchange of securities in a merger or acquisition approved by OTS is not a sale. Savings account is any withdrawable account as defined in § 561.42 of this chapter, including a demand account as defined in § 561.16 of this chapter. Solicitation and solicit is a request for a proxy, whether or not accompanied by or included in a form of proxy; a request to execute, not execute, or revoke a proxy; or the furnishing of a form of proxy or other communication reasonably calculated to cause your members to procure, withhold, or revoke a proxy. Solicitation or solicit does not include providing a form of proxy at the unsolicited request of a member, the acts required to mail communications for members, or ministerial acts performed on behalf of a person soliciting a proxy. (3) Supplemental eligible account holders under § 563b.355; and (4) Other voting members under § 563b.365. Supplemental eligibility record date is the date for determining supplemental eligible account holders. The supplemental eligibility record date is the last day of the calendar quarter before OTS approves your conversion and will only occur if OTS has not approved your conversion within 15 months after the eligibility record date. Supplemental eligible account holders are any persons, except your officers, directors, and their associates, holding qualifying deposits on the supplemental eligibility record date. Tax-qualified employee stock benefit plan is any defined benefit plan or defined contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan, or other plan, and a related trust, that is qualified under sec. 401 of the Internal Revenue Code (26 U.S.C. 401). Underwriter is any person who purchases any securities from you with a view to distributing the securities, offers or sells securities for you in connection with the securities' distribution, or participates or has a direct or indirect participation in the direct or indirect underwriting of any such undertaking. Underwriter does not include a person whose interest is limited to a usual and customary distributor's or seller's commission from an underwriter or dealer. Subpart A-Standard Conversions PRIOR TO CONVERSION § 563b.100 What must I do before a conversion? (a) Your board, or a subcommittee of your board, must meet with OTS before you pass your plan of conversion. The meeting may occur at OTS or your offices at your option. At that meeting you must provide OTS with a written |