Wis. Admin. Code Department of Financial Institutions § DFI-SB 21.16 - Acquisition of the securities of converted savings banks

Current through March 28, 2022

(1) DEFINITIONS. In this section:
(a) "Acquire" includes every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise.
(b) "Offer" does not include:
1. Inquiries directed solely to the officers of a savings bank, and not intended to be communicated to stockholders, designed to elicit an indication of officers' receptivity to the basic structure of a potential acquisition with respect to the amount of securities, manner of acquisition and formula for determining price; or
2. Nonbinding expressions of understanding or letters of intent with the management of a savings bank regarding the basic structure of a potential acquisition with respect to the amount of securities, manner of acquisition and formula for determining price.
(c) "Person" includes an individual, a group acting in concert, a corporation, a partnership, a savings bank, a joint stock company, a trust, an unincorporated organization, a syndicate or any other group formed for the purpose of acquiring, holding or disposing of securities of a savings bank.
(d) "Security" includes nontransferable subscription rights issued under a plan of conversion and a "security" as defined in 15 USC 78 c(a) (10).
(2) PROHIBITED TRANSFERS. Except as provided in sub. (5), prior to the completion of a conversion, no person may transfer or receive, or enter into any agreement to transfer or receive, the legal or beneficial ownership of conversion subscription rights, or the underlying securities to or from another. Violations of this subsection by:
(a) An eligible account holder or supplemental eligible account holder shall void the person's subscription rights transferred in violation of sub. (1) (intro.) and forfeit up to $10,000 of any consideration received for them shall be surrendered to the division for the school fund.
(b) Any person who acquires securities in violation of sub. (1) (intro.) shall surrender the securities but not to exceed $10,000 of value, valued as of their date of issuance, to the division for the school fund.
(3) PROHIBITION OF OFFERS AND CERTAIN ACQUISITIONS. Except as provided in sub. (5), prior to the completion of a conversion, no person may do any of the following in excess of the maximum purchase limitations established in the plan of conversion: offer or announce an offer for any security of the savings bank issued in connection with the conversion or knowingly acquire securities of the savings bank issued in connection with the conversion.
(4) PROHIBITION ON OFFERS AND ACQUISITIONS OF STOCK FOR 5 YEARS FOLLOWING CONVERSION. Except as provided in sub. (5):
(a) For 5 years following the date of the completion of the conversion, no person may, directly or indirectly, offer to acquire or acquire the beneficial ownership of more than 10% of any class of an equity security of a savings bank converted under this chapter without requesting in writing and, receiving the prior written approval of the division if the requester has made a sufficient written justification to the division demonstrating the need for the division's approval. When any person, directly or indirectly, acquires beneficial ownership of more than 10% of any class of any equity security of a savings bank converted under this chapter without the prior written approval of the division, the securities beneficially owned by the person in excess of 10% shall not be counted as shares entitled to vote and shall not be voted by any person or counted as voting shares in any matter submitted to the stockholders for a vote.
(b) A conversion shall be deemed complete on the date all of the conversion stock was sold.
(c) An acquisition of shares shall be presumed to have been made if the acquirer entered into a binding written agreement for the transfer of shares. An offer shall be deemed made when communicated.
(5) EXCEPTIONS.
(a) Subsections (2) and (3) shall not apply to a transfer, agreement, understanding to transfer, offer, or announcement of an offer or intent to make an offer which:
1. Pertains only to securities to be purchased under s. DFI-SB 21.10(5) or 21.11(6) or (7); and
2. Has the prior written approval of the division after the requester has made a sufficient written justification to the division demonstrating the basis for the division's approval.
(b) Subsections (3) and (4) shall not apply to any offer to facilitate a public resale made exclusively to the savings bank or to people who are selling the stock on the savings bank's behalf, such as an underwriter.
(c) Unless made applicable by the division by prior notice in writing, sub. (4) does not apply to any offer or announcement of an offer which, if consummated, would result in the acquisition by a person, together with all other acquisitions by the person of the same class of securities during the preceding 12-month period, of not more than 1% of the same class of securities.
(d) Subsection (4) does not apply to any offer to acquire or acquisition of beneficial ownership of more than 10% of the common stock of an institution by a corporation whose ownership is or will be substantially the same as the ownership of the savings bank if the offer or acquisition is made more than one year following the date of completion of the conversion.
(e) Subsections (2) and (4) do not apply to the acquisition of securities of the savings bank or its holding company by any one or more employee benefit plans of the savings bank or its holding company, provided that, the plan or plans do not have beneficial ownership in the aggregate of more than 25% of any class of equity security of the savings bank or its holding company.
(6) CRITERIA FOR APPROVAL. The division may deny an application involving an offer or acquisition of any security or proxies to vote securities of a savings bank submitted under sub. (4) (a) if he or she finds that the proposed acquisition:
(a) Would frustrate the purposes of this chapter;
(b) Would be manipulative or deceptive;
(c) Would subvert the fairness of the conversion;
(d) Would be likely to result in injury to the savings bank;
(e) Would not be consistent with economical home financing;
(f) Would otherwise violate a law or rule; or
(g) Would not contribute to the prudent deployment of the savings bank's conversion proceeds.

Notes

Wis. Admin. Code Department of Financial Institutions § DFI-SB 21.16
CR Register, February, 1994, No. 458, eff. 3-1-94.

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