Section .0100 ‑ Scope

Link to law: http://reports.oah.state.nc.us/ncac/title 04 - commerce/chapter 16 - savings institutions division, savings institutions commission/subchapter g/subchapter g rules.html
Published: 2015

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SUBCHAPTER 16G ‑ MUTUAL TO STOCK CONVERSIONS

 

SECTION .0100 ‑ SCOPE

 

 

04 NCAC 16G .0101          GENERAL

04 NCAC 16G .0102          PROVISIONS OF PRESCRIBED FORMS

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Amended Eff. September 1, 1983;

Repealed Eff. January 1, 1986.

 

 

04 NCAC 16G .0103          DEFINITIONS

As used in this Subchapter and in the forms prescribed under

this Subchapter, the words and phrases defined by G.S. 54C‑4 and the

following definitions apply, unless the context otherwise requires:

(1)           "Affiliate," "an affiliate of,"

or "a person affiliated with" used in connection with another

specified person shall mean a person that directly, or indirectly through one

or more intermediaries, controls or is under common control with, the person

specified.

(2)           "Amount," when used in regard to

securities, shall mean the principal amount if relating to evidences of

indebtedness, the number of shares if relating to shares of stock, and the

number of units if relating to any other kind of security.

(3)           "Applicant" shall mean a savings bank

which has applied to convert to stock ownership pursuant to this Subchapter.

(4)           "Broker" shall mean any person engaged in

the business of effecting transactions in securities for the account of others.

(5)           "Capital stock" shall mean common stock,

permanent stock, guaranty stock, permanent reserve stock, or any similar

certificate evidencing nonwithdrawable capital.

(6)           "Dealer" shall mean any person who

engages either for all or part of his time, directly or indirectly, as agent,

broker, or principal, in the business of offering, buying, selling, or

otherwise dealing or trading in securities issued by another person.

(7)           "Deposit account" shall mean that part of

the liability of the savings bank which is credited to the account of the

holder thereof, including certificates of deposit.

(8)           "Eligibility record date" shall mean the

record date for determining eligible account holders of a converting savings

bank.

(9)           "Eligible account holder" shall mean any

person holding a qualifying deposit as determined in accordance with Rule .0313

of this Subchapter.

(10)         "Employee" shall not mean a director or

executive officer of a savings bank.

(11)         "Equity security" shall mean any stock or

similar security, or any security convertible, with or without considerations,

into such security, or carrying any warrant or right to subscribe to or

purchase such security, or any such warrant or right.

(12)         "Executive Officer" shall mean any person

performing a policy making function with respect to any organization whether

incorporated or unincorporated.

(13)         "Investment representative" shall mean a

professional investment advisor acting as agent for the purchaser and

independent of the seller and not acting on behalf of the seller in connection

with the transaction.

(14)         "Market maker" shall mean a dealer who,

with respect to a particular security:

(a)           regularly publishes a bona fide, competitive

bid and offer quotations in a recognized inter‑dealer quotation system;

or furnishes bona fide competitive bid and offer quotations on request; and

(b)           is ready, willing and able to effect

transactions in reasonable quantities at his quoted prices with other brokers

or dealers.

(15)         "Material," when used to qualify a

requirement for the furnishing of information as to any subject, limits the

information required to those matters as to which an average prudent investor

ought reasonably to be informed before purchasing an equity security of the

applicant, or matters as to which an average prudent savings bank member ought

reasonably to be informed in voting upon the plan of conversion of the

applicant.

(16)         "Negotiated transactions" shall mean 

transactions in which the securities are offered and the terms and arrangements

relating to any sale of the securities are arrived at through direct

communications between the seller or any person acting in its behalf, and the

purchaser or his investment representative.

(17)         "Offer," "offer to sell," or

"offer of sale" shall mean every attempt or offer to dispose of, or

solicitation of an offer to buy, a security or interest in a security, for

value.  These terms shall not include preliminary negotiations or agreements

between an applicant and any underwriter or among underwriters who are or will

be in privity of contract with an applicant.

(18)         "Person" includes an individual and entity

as defined in G.S. 55‑1‑40.

(19)         "Proxy" shall mean every form of

authorization by which a person is, or may be deemed to be, designated to act

for a savings bank member in the exercise of his voting rights in the affairs

of a savings bank.  Such an authorization may take the form of failure to

dissent or object.

(20)         "Purchase" and "buy" shall mean

every contract to purchase, buy, or otherwise acquire a security or interest in

a security for value.

(21)         "Sale" and "sell" shall mean

every contract to sell or otherwise dispose of a security or interest in a

security for value.

(22)         "Security" shall mean any note, stock,

treasury stock, bond, debenture, transferable share, investment contract,

voting‑trust certificate, or in general, any instrument commonly known as

a "security".  It shall also include any certificate of interest or

participation in, temporary or interim certificate for, receipt for, or warrant

or right to subscribe to or purchase, any of the forgoing.

(23)         "Solicitation" and "solicit"

shall mean:

(a)           any request for a proxy whether or not

accompanied by or included in a form of proxy;

(b)           any request to execute, not execute, or

revoke a proxy; or

(c)           the furnishing of a form of proxy or other communication

to savings bank members under circumstances reasonably calculated to result in

the procurement, withholding, or revocation of a proxy.  The terms do not

apply, however, to the furnishing of a form of proxy to a savings bank member

upon the unsolicited request of the member, the performance of acts required by

Rule .0514 of this Subchapter, or to the performance by any person of

ministerial acts on behalf of a person soliciting a proxy.

(24)         "Subscription offering" shall mean the

offering of shares of capital stock, through nontransferable subscription

rights issued to:

(a)           eligible account holders as required by Rule

.0311(2) of this Subchapter;

(b)           supplemental eligible account holders as

required by Rule .0311(4) of this Subchapter;

(c)           members entitled to vote at the meeting

called to consider the conversion as required by Rule .0311(5) of this

Subchapter;

(d)           directors, executive officers, and

employees, as permitted by Rule .0312(2) of this Subchapter; and

(e)           eligible account holders, supplemental

eligible account holders, and voting members as permitted by Rule .0312(3) of

this Subchapter.

(25)         "Subsidiary" of a specified person shall

mean a person controlled, directly or indirectly, through one or more

intermediaries by the specified person.

(26)         "Supplemental eligible account holder"

shall mean any person holding a qualifying deposit, except executive officers,

directors, and their associates, as of the supplemental eligibility record date

required by Rule .0311 of this Subchapter.

(27)         "Underwriter" shall mean any person who

has purchased from an applicant with a view to, or offers or sells for an

applicant in connection with, the distribution of any security; or participates

or has a direct or indirect participation in the direct or indirect

underwriting of any such undertaking.  Such term shall not include a person

whose interest is limited to a commission from an underwriter or dealer not in

excess of the usual and customary distributors' or sellers' commission.  The

term "principal underwriter" shall mean an underwriter in privity of

contract with the applicant or other issuer of securities as to which he is the

underwriter.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0104          GENERAL REQUIREMENTS

(a)  No application for conversion shall be approved by the

administrator unless:

(1)           The conversion will be conducted as

provided by law and this Subchapter and pursuant to a plan of conversion

approved by the administrator.

(2)           The conversion will not result in a taxable

reorganization under the Internal Revenue Code.

(b)  The corporate existence of a mutual savings bank

converting to stock ownership shall not terminate.  The converted savings bank

shall be deemed to be a continuation of the savings bank so converted.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0105          APPLICATION FOR CONVERSION

An applicant that desires to convert in accordance with this

Subchapter shall file a copy of an Application To Convert A Mutual Savings Bank

Into A Stock Owned Savings Bank.  This form can be obtained from the Division

at its mailing address.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0106          CONFIDENTIAL INFORMATION

Should the applicant desire to submit any information it

deems to be of a confidential nature regarding the answer to any item or a part

of any exhibit included in the Application for Conversion, such information

pertaining to such item or exhibit shall be separately bound and labeled

"confidential," and a statement shall be submitted therewith briefly

setting forth the grounds on which such information should be treated as

confidential under G.S. 54C‑60.  Only general reference thereto need be

made in that portion of the application which the applicant deems not to be

confidential.  Applications under this Subchapter shall be made available for

inspection by the public, except for portions which are bound and labeled

"confidential" and which the administrator determine to be of a

confidential nature under G.S. 54C‑60.  The administrator will withhold

the public availability of preliminary copies of proxy soliciting materials

without the necessity of their being bound and labeled as

"confidential".  The applicant will be advised of any decision by the

administrator to make public information designated as "confidential"

by the applicant.  Even though sections of the application are considered "confidential"

as far as public inspection thereof is concerned, the administrator, to the

extent permitted by G.S. 54C‑60, may comment on such confidential

submissions in any public statement in connection with any decision on the

application without prior notice to the applicant.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. January 15, 1992.

 

 

 

 

 

SECTION .0200 ‑ DEFINITIONS

 

04 NCAC 16G .0201          DEFINITIONS

04 NCAC 16G .0202          OTHER TERMS

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred With Change From 4 NCAC 9I Eff. August 31,

1981;

Amended Eff. September 1, 1983; October 1, 1982;

Repealed Eff. January 1, 1986.

 

 

 

 

 

SECTION .0300 ‑ GENERAL PRINCIPLES FOR CONVERSIONS

 

04 NCAC 16G .0301          GENERAL REQUIREMENTS

04 NCAC 16G .0302          REQUIRED PROVISIONS IN PLAN OF

CONVERSION

04 NCAC 16G .0303          OPTIONAL PROVISIONS IN PLAN OF

CONVERSION

04 NCAC 16G .0304          AMOUNT OF DEPOSIT: PREDECESSOR AND

SUCCESSOR ACCOUNTS

04 NCAC 16G .0305          LIQUIDATION ACCOUNT

04 NCAC 16G .0306          RESTRICTIONS: REPURCHASE OF STOCK:

PAYMENT OF DIVIDENDS

04 NCAC 16G .0307          MANIPULATIVE AND DECEPTIVE DEVICES

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred With Change From 4 NCAC 9I Eff. August 31,

1981;

Amended Eff. September 1, 1983; February 1, 1983; October

1, 1982; July 1, 1982;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0308          ACQUISITION OF CONVERTED ASSOCIATION

 

History Note:        Authority G.S. 54‑24; 54‑24.1;

54‑33.2; 54A‑13; 150A‑12;

Eff. January 1, 1980;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Repealed Eff. October 1, 1982.

 

 

 

04 NCAC 16G .0309          MERGER OF CONVERTED ASSOCIATIONS

 

History Note:        Authority G.S. 54B‑33;

Eff. December 15, 1980;

Amended Eff. January 14, 1981;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Amended Eff. September 1, 1983;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0310          ACQUISITION/SECURITIES:

CONVERTING/CONVERTED ASSOCIATION

 

History Note:        Authority G.S. 54B‑33;

Eff. October 1, 1982;

Repealed Eff. September 1, 1983.

 

 

 

04 NCAC 16G .0311          REQUIRED PROVISIONS IN PLAN OF

CONVERSION

The plan of conversion shall:

(1)           Provide that the converting savings bank shall

issue and sell its capital stock at a total price equal to the estimated pro

forma market value of such stock in the converted savings bank, based on an

independent valuation, as provided in Rule .0717 of this Subchapter.

(2)           Provide that each eligible account holder shall

receive without payment, nontransferable subscription rights to purchase

capital stock.  Subscription rights shall be allocated among the eligible

account holders on an equitable basis in an amount not greater than the maximum

purchase limitation established for the public offering or the direct community

offering.  The plan of conversion shall provide a comprehensive description of

this allocation including a detailed description of the allocation in the event

of an oversubscription of the capital stock.  In the event of an

oversubscription, shares shall be allocated on an equitable basis that is related

to the amount of the subscriber's qualifying deposits.

(3)           Provide that nontransferable subscription rights to

purchase capital stock received by executive officers and directors of the

applicant and their associates based on their increased deposits in the

applicant savings bank in the one‑year period preceding the eligibility

record date shall be subordinated to all other subscriptions involving the

exercise of nontransferable subscription rights to purchase shares pursuant to

Paragraph (2) of this Rule.

(4)           Provide that, in plans involving an eligibility

record date that is more than 15 months prior to the date of the latest

amendment to the application for conversion filed prior to the administrator's

approval, a supplemental eligibility record date shall be determined whereby

each supplemental eligible account holder of the applicant shall receive

without payment, nontransferable subscription rights to purchase capital stock

in an amount related to his/her respective qualifying deposits.

(a)           Subscription rights received pursuant to

Paragraph (4) of this Rule shall be subordinated to all rights received by

eligible account holders to purchase shares pursuant to Paragraphs (2) and (3)

of this Rule.

(b)           Any nontransferable subscription rights to

purchase shares received by an eligible account holder in accordance with

Paragraph (2) of this Rule shall be applied in partial satisfaction of the

subscription rights to be distributed pursuant to this Paragraph.

(c)           In the event of an oversubscription for supplemental

shares pursuant to this Paragraph, shares shall be allocated among the

subscribing supplemental eligible account holders on such equitable basis,

related to the amounts of their respective qualifying deposits, as may be

provided in the plan of conversion.

(5)           Provide that voting members who are not either

eligible account holders or supplemental eligible account holders shall

receive, without payment, nontransferable subscription rights to purchase

capital stock on an equitable basis defined in the plan of conversion. 

Subscription rights received pursuant to this Paragraph shall be subordinated

to all rights received by eligible account holders and supplemental eligible

account holders to purchase shares pursuant to Paragraphs (2), (3), and (4) of

this Rule.  In the event of an oversubscription of capital stock pursuant to

this Paragraph, shares shall be allocated among the subscribing voting members

on such equitable basis as may be provided in detail in the plan of conversion.

(6)           Provide that any shares of the applicant not sold

to persons with subscription rights shall either be sold in a public offering

through an underwriter or directly by the applicant in a direct community

offering, subject to the applicant demonstrating to the administrator the

feasibility of the method of sale and to such conditions as may be provided in

the plan of conversion.  Such conditions shall include, but not be limited to:

(a)           A condition limiting purchases in the public

offering or the direct community offering by any person together with any

associate or group of persons acting in concert to a percentage of the total

offering of shares not exceeding five percent; except that any one or more tax‑qualified

employee stock benefit plans of the applicant may purchase in the aggregate not

more than ten percent of the total offering of shares and shall be entitled to

purchase such amount regardless of the number of shares to be purchased by

other parties, and that shares held by one or more tax‑qualified employee

stock benefit plans and attributed to a person shall not be aggregated with

other shares purchased directly by or otherwise attributable to that person.

(b)           A condition requiring that orders for stock

in any public offering or direct community offering shall first be filled up to

a maximum of two percent of the conversion stock per order and thereafter

remaining shares shall be allocated on an equal number of shares basis per

order until all orders have been filled.

(c)           A condition requiring the stock to be

offered and sold in the public offering or the direct community offering to be

offered and sold in a manner that will achieve the widest distribution of the

stock.

(d)           A condition that any direct community

offering by the applicant shall give a preference to natural persons residing

in the counties in which the applicant has an office.

(7)           Provide that the number of shares which any person

together with any associate or group of persons acting in concert may subscribe

or purchase in the conversion shall not exceed five percent of the total

offering of shares; except that any one or more tax‑qualified employee

stock benefit plans of the applicant may purchase in the aggregate not more

than 10 percent of the total offering of shares.  Shares held by one or more

tax‑qualified or non‑tax‑qualified employee stock benefit

plans and attributed to a person shall not be aggregated with shares purchased

directly by or otherwise attributable to that person.  For purpose of this

Paragraph, the members of the converting savings bank's board of directors

shall not be deemed to be associates or a group of persons acting in concert

solely as a result of their board membership.

(8)           Provide that for a period of three years following

the conversion no executive officer or director or any associate of an

executive officer or director shall purchase without the prior written approval

of the administrator the capital stock of the converted savings bank except

from a broker or dealer registered with the Secretary of State of North Carolina

and/or the Securities and Exchange Commission.  This provision shall not apply

to negotiated transactions involving more than one percent of the outstanding

capital stock of the converted savings bank or to purchases of stock made by

and held by any one or more tax qualified or non‑tax‑qualified

employee stock benefit plans of the applicant which may be attributable to

executive officers or directors.

(9)           Provide that the sales price of the shares of

capital stock to be sold in the conversion shall be a uniform price determined

in accordance with Rule .0714 of this Subchapter and specify the underwriting

and other marketing arrangements to be made to assure the sale of any shares

not sold in the subscription offering.

(10)         Provide that each deposit account holder of the

converting savings bank shall receive, without payment, a deposit account or

accounts in the converted savings bank equal in amount to the value of such

account holder's deposit account or accounts in the converting savings bank.

(11)         Provide for the establishment and maintenance of a

liquidation account for the benefit of eligible account holders and

supplemental eligible account holders in the event of a subsequent complete

liquidation of the converted savings bank, in accordance with the provisions of

Rule .0314 of this Section.

(12)         Provide for an eligibility record date which shall

be not less than 90 days prior to the date of adoption of the plan by the

converting savings bank's board of directors.

(13)         Provide that the holders of the capital stock of the

converted savings bank shall have exclusive voting rights.

(14)         Provide that the plan of conversion adopted by the

applicant's board of directors may be substantively amended by such board of

directors prior to the solicitation of proxies from members to vote on the plan

and at any time thereafter with the concurrence of the administrator; and that

the conversion may be terminated by the board of directors at any time prior to

the meeting of members called to consider the plan of conversion and at any

time thereafter with the concurrence of the administrator.

(15)         Establish a time period within which the conversion

must be completed prior to termination.  This time period shall be not more

than 12 months from the date the members approve the plan of conversion.  This

time period may be extended an additional 12 months by a plan amendment.

(16)         Provide that all shares of capital stock purchased

by directors and executive officers on original issue in the conversion either

directly from the applicant (by subscription or otherwise) or from an

underwriter of such shares, shall be subject to the restriction that such

shares shall not be sold for a period of not less than one year following the

date of purchase, except in the event of death of the director or executive

officer.  The administrator may grant permission for the transfer of restricted

stock upon a determination that the restriction imposes a substantial personal

financial hardship on such individual due to changed unforeseeable circumstances

outside the control of such individual.

(17)         Provide that, in connection with shares of capital

stock subject to restriction on sale under Paragraph (16) of this Rule:

(a)           Each certificate for such stock shall bear a

legend giving appropriate notice of the applicable restrictions;

(b)           Appropriate 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 with respect to any restricted stock shall be subject to the

same restrictions as may apply to the restricted stock.

(18)         Provide that 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 issued in

connection with the conversion; and

(b)           use its best efforts to list those shares

issued in connection with the conversion on a national or regional securities

exchange or on the NASDAQ system.

(19)         Provide that the expenses incurred in the conversion

shall be reasonable.

(20)         Contain no provision which the administrator may

determine to be inequitable or detrimental to the applicant, its account

holders or other savings banks or to be contrary to the public interest.

(21)         Contain no provision which the administrator finds

will harm the community and public served by the savings bank.

(22)         Provide that the converting savings bank shall not

loan 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.

(23)         Provide that the savings bank may make scheduled

discretionary contributions to a tax‑qualified employee stock benefit

plan provided such contributions do not cause the savings bank to fail to meet

its net worth requirements.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992;

Amended Eff. May 3, 1993.

 

 

 

04 NCAC 16G .0312          OPTIONAL PROVISION IN PLAN OF

CONVERSION

The plan of conversion may provide any or all of the

following:

(1)           That 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

pursuant to Rule .0607 of this Subchapter of the proxy statement authorized for

use by the administrator.  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 as provided in Section .0600 of this

Subchapter.

(2)           That directors, executive officers, and employees

of the converting savings bank 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 Paragraphs (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 Paragraph (7) of Rule .0311 of this

Section on the amount of shares which may be purchased by any person, associate

thereof, or group of affiliated persons or group of persons otherwise acting in

concert.

(3)           That 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 such shares

are available after satisfying the subscriptions provided for under Paragraphs

(2), (4), and (5) of Rule .0311 of this Section, subject to such conditions as

may be provided in the plan of conversion.  In the event of an oversubscription

for such additional shares, the shares available shall be allocated among the

subscribing eligible account holders, supplemental eligible account holders,

and voting members on such equitable basis, related to the amounts of their

respective subscriptions, as may be provided in the plan of conversion.

(4)           That the applicant may require members to return by

a reasonable date certain a postage‑paid written communication provided

by the applicant requesting receipt of a subscription offering circular, or a

preliminary or final offering circular in an offering pursuant to Paragraph

(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 Paragraph (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

Paragraph (10) of this Rule is not commenced within 45 days after the meeting

of members, any converting savings bank adopting this optional provision shall

transmit not more than 30 days prior to the commencement of the subscription

offering or the offering pursuant to Paragraph (10) of this Rule to each member

who had been furnished with proxy solicitation materials, written notice of the

commencement of the offering which notice shall state that the converting

savings bank is not required to furnish an offering circular to a member unless

the member returns by a reasonable date certain the postage‑paid written

communication provided by the converting savings bank requesting receipt of an

offering circular.

(5)           That the applicant may require eligible account

holders and supplemental eligible account holders who are not voting members

pursuant to Rule .0608 of this Subchapter to return by a reasonable date

certain  a postage‑paid written communication in accordance with the

procedure established in Paragraph (4) of this Rule.

(6)           That any insignificant residue of shares of the

converting savings bank not sold in the subscription offering or in a public

offering or direct community offering may be sold in such other manner as provided

in the plan of conversion with the written consent of the administrator.

(7)           That the number of shares which 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)           That 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)           That the converted savings bank 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 such units of equity securities unless the context otherwise requires.

(10)         That, instead of a separate subscription offering,

all subscription rights issued in connection with the conversion shall be

exercisable by delivery of properly 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 administrator the

feasibility of the method of exercising such right and to such conditions as

shall be provided in the plan of conversion.

(11)         That the administrator may approve such other

equitable provisions as necessary to avert imminent injury to the converting

savings bank.

(12)         That the proxy statement required by Rule .0607 of

this Subchapter may be in summary form, provided:

(a)           A statement is made in bold‑faced type

on the summary proxy statement that a more detailed description of the proposed

transaction may be obtained by returning an attached postage‑paid

postcard or other written communication requesting a supplemental information

statement which, together with the summary proxy statement, complies with the

requirements of Form PS contained in the Application for Conversion.

(b)           The date on which the summary proxy

statement is mailed to members will be deemed the date on which notice is given

for purposes of Rule .0607 of this Subchapter.  Without the prior written

consent of the administrator, 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.

(c)           The supplemental information statement

required to be furnished to members pursuant to Subparagraph (a) of this

Paragraph may be combined with Form OC, if the subscription offering is

commenced concurrently with or during the proxy solicitation period pursuant to

Paragraph (1) of this Rule.

(d)           The form of the summary proxy statement has

been approved by the administrator.

(13)         That, 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 Subparagraphs (2), (4), and (5) of Rule .0311 of this Section, the plan

of conversion may provide that such ESOP may purchase up to 10 percent of the

aggregate shares offered in the conversion prior to offering any shares to

eligible account holders, supplemental eligible account holders or other voting

members.

(14)         That eligible accountholders shall be divided into

two subcategories for purposes of determining the aggregate number of shares of

conversion stock allocated to be purchased by such accountholders 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.  The plan of conversion 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 such 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 accountholders 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

accountholders residing inside the market area and the denominator of which is

the sum of all qualifying deposits.

(b)           That each eligible accountholder who resides

outside the applicant's market area shall receive nontransferable subscription

rights to purchase a number of shares based on such accountholder'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 accountholders 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 to be sold in the offering times a fraction the numerator of

which is the sum of qualifying deposits held by eligible accountholders

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 such subcategory which relates to an eligible accountholder's

qualifying deposit balance.

(d)           For the purposes of this Paragraph, a

converting institution shall define its "market area" to include each

county in which it has an office and may include such additional counties

contiguous to those counties in which it maintains an office (regardless of

whether such counties are in the State of North Carolina) as it may designate

to be part of its "market area" in its plan of conversion.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992;

Amended Eff. September 1, 1993; April 15, 1993.

 

 

 

04 NCAC 16G .0313          RECORD DATES FOR QUALIFYING DEPOSITS

Unless otherwise provided in the plan of conversion, for the

purposes of this Section, the amount of the qualifying deposit of an eligible

account holder or supplemental eligible account holder shall be the total of

the deposit balances in the eligible account holder's or supplemental eligible

account holder's deposit accounts in the converting savings bank as of the

close of business on the eligibility record date or supplemental eligibility

record date.  However, the plan of conversion may provide that any deposit

accounts with total deposit balances of less than fifty dollars ($50.00) or any

lesser amount shall not constitute a qualifying deposit.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0314          LIQUIDATION ACCOUNT

(a)  Each converted savings bank shall, at the time of

conversion, establish a liquidation account in an amount equal to the amount of

net worth of the converting savings bank as of the latest practicable date

prior to conversion.  For the purpose of this Rule, the savings bank shall use

the net worth figure set forth in its latest statement of financial condition

contained in the final offering circular.  The function of the liquidation

account is to establish a priority on liquidation and, except as provided in

Paragraph (f) of this Rule, the existence of the liquidation account shall not

operate to restrict the use or application of any of the net worth of the

converted savings bank.

(b)  The liquidation account shall be maintained by the

converted savings bank for the benefit of eligible account holders and

supplemental eligible account holders who maintain their deposit accounts in

the savings bank.  Each eligible account holder and supplemental eligible

account holder shall, with respect to each deposit account held, have a related

inchoate interest in a portion of the liquidation account balance

("subaccount").

(c)  In the event of a complete liquidation of the converted

savings bank and only in such event, each eligible account holder and

supplemental eligible account holder shall be entitled to receive a liquidation

distribution from the liquidation account, in the amount of the then current

adjusted subaccount balances for deposit accounts then held, before any liquidation

distribution may be made with respect to capital stock, except with respect to

preferred stock issued in exchange for the surrender at the time of the

conversion of mutual capital certificates issued by the savings bank prior to

conversion.  Preferred stock issued in exchange for mutual capital certificates

may receive distributions in liquidation prior to those with respect to the

liquidation account to the same extent that the holders of the mutual capital

certificates would have been entitled to priority over the residual rights of

depositors had the savings bank not been converted as of the date of

liquidation.  No merger, consolidation, purchase of bulk assets with assumption

of deposit accounts and other liabilities, or similar  transactions in which

the converted savings bank is not the surviving depository institution is

considered to be a complete liquidation for this purpose.  In such transactions

the liquidation account shall be assumed by the surviving depository

institution.

(d)  The initial subaccount balance for a deposit account

held by an eligible account holder or supplemental eligible account holder

shall be determined by multiplying the opening balance in the liquidation

account by a fraction of which the numerator is the greater of the amount of

qualifying deposits in such deposit account on the eligibility record date

and/or the supplemental eligibility record date and the denominator is the

total amount of qualifying deposits for all eligible account holders and

supplemental eligible account holders in the converted savings bank.  Such

initial subaccount balance shall not be increased and shall be subject to

downward adjustment as provided in Paragraph (e) of this Rule.

(e)  If the balance in any qualifying deposit account of an

eligible account holder or supplemental eligible account holder at the close of

business on any annual closing date subsequent to the date of conversion is

less than the lesser of the deposit balance in the savings account at the close

of business on any other annual closing date subsequent to the conversion date

or the amount of qualifying deposit as of the eligibility record date or the

supplemental eligibility record date, the subaccount balance for the savings

account shall be adjusted by reducing the subaccount balance in an amount

appropriate to the reduction in the deposit balance.  In the event of a

downward adjustment, the subaccount balance shall not be subsequently

increased, notwithstanding any increase in the deposit balance of the related savings

account.  The converted savings bank shall not be required to recompute the

liquidation account and subaccount balances provided the converted savings bank

maintains records sufficient to make necessary computations in the event of a

complete liquidation or such other events as may require a computation of the

balance of the liquidation account.  The liquidation subaccount of an account

holder shall be maintained for as long as the account holder maintains an

account with the same Social Security number.

(f)  No converted saving bank shall declare or pay a cash

dividend on, or repurchase any of, its capital stock if the effect thereof

would cause the net worth of the converted savings bank to be reduced below the

amount required for the liquidation account.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0315          MANIPULATIVE AND DECEPTIVE DEVICES

In the offer, sale, or purchase of securities issued

incident to its conversion, no savings bank, or any director, executive

officer, attorney, agent or employee thereof shall:

(1)           employ any device, scheme, or artifice to defraud;

or

(2)           obtain money or property by means of any untrue

statement of a material fact or any omission to state a material fact necessary

in order to make the statements made, in the light of the circumstances under

which they were made, not misleading; or

(3)           engage in any act, transaction, practice, or course

of business which operates or would operate as a fraud or deceit upon a

purchaser or seller.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0316          MERGER OF CONVERTED SAVINGS BANKS

When a converted savings bank merges with an existing stock

savings institution the resulting savings institution will be treated as a

converted savings institution and must comply with the provisions of Rules

.0314 and .0315 of this Section and 4 NCAC 16A .0105.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .0400 ‑ NOTICE OF FILING: PUBLIC STATEMENTS:

CONFIDENTIALITY

 

04 NCAC 16G .0401          INFORMATION PRIOR TO APPROVAL OF PLAN

OF CONVERSION

04 NCAC 16G .0402          NOTICE OF FILING

04 NCAC 16G .0403          CONFIDENTIAL INFORMATION

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred With Change From 4 NCAC 9I Eff. August 31,

1981;

Amended Eff. October 1, 1982;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0404          INFORMATION PRIOR TO APPROVAL OF PLAN

OF CONVERSION

(a)  A savings bank which is considering converting pursuant

to this Subchapter and its directors, executive officers, and employees shall

keep such consideration confidential and shall only discuss the potential

conversion as would be consistent with the need to prepare information for

filing an application for conversion.  Should this confidence be breached the

administrator may require remedial measures including:

(1)           a public statement by the savings bank that

its board of directors is currently considering converting pursuant to this

Subchapter;

(2)           providing for an eligibility record date

which shall be as of such a date prior to the adoption of the plan by the

converting association's board of directors as to assure the equitability of

the conversion;

(3)           limitation of the subscription rights of

any person violating or aiding the violation of this Section to an amount

deemed appropriate by the administrator; and

(4)           any other action the administrator may deem

appropriate and necessary to assure the fairness and equitability of the

conversion.

(b)  If it should become essential as a result of rumors

prior to the adoption of a plan of conversion by the applicant's board of

directors, a public statement limited to that purpose may be made by the

applicant.

(c)  Promptly after the adoption of a plan of conversion by

not less than two‑thirds of its board of directors, the savings bank

shall:

(1)           Notify its members of such action by

publishing a statement in a newspaper having general circulation in each

community in which an office of the savings bank is located or by mailing a

letter to each of its members; and

(2)           Have copies of the adopted plan of

conversion available for inspection by its members at each office of the

savings bank.  The savings bank may also issue a press release with respect to

such action.  Copies of the statement, letter, and press release shall be filed

with the administrator as a part of the application for conversion.

(d)  The statement, letter, and press release, unless

otherwise authorized by the administrator upon a showing that fairness or

accuracy requires additional disclosures, shall be limited to, but need not

contain all of, the following:

(1)           a statement that at least two‑thirds

of the board of directors has adopted a proposed plan to convert the savings

bank from mutual to stock ownership;

(2)           a statement that the proposed plan of

conversion must be approved by at least a majority of the votes eligible to be

cast either in person or by proxy by members at a meeting at which the plan

will be submitted for their approval;

(3)           a statement that new proxies will be

solicited for voting on the proposed plan of conversion;

(4)           a statement that a proxy statement setting

forth more detailed information with respect to the proposed plan of conversion

will be sent to members prior to the meeting of members;

(5)           a statement that the proposed plan of

conversion is subject to approval by the administrator before such plan can

become effective and that members of the applicant will have an opportunity to

file written comments with the administrator, including any objections and

materials supporting such objections;

(6)           a statement that the proposed plan of

conversion is contingent upon obtaining favorable tax rulings or opinions;

(7)           a statement that there is no assurance that

the approval of the administrator will be obtained, and also no assurance that

favorable tax rulings or tax opinions will be received;

(8)           the proposed record date for determining

the eligible account holders entitled to receive nontransferable subscription

rights to purchase capital stock of the applicant;

(9)           a brief statement describing the

circumstances that would require supplemental eligible account holders to

receive nontransferable subscription rights to purchase capital stock of the

applicant;

(10)         a brief statement as to the extent to which

voting members will participate in the conversion;

(11)         a brief description of the proposed plan of

conversion;

(12)         the approximate number of shares of capital

stock to be issued and sold under the proposed plan of conversion;

(13)         a brief statement as to the extent to which

directors, officers, and employees will participate in the conversion;

(14)         a statement that savings account holders

will continue to hold accounts in the converted savings bank identical as to

dollar amount, rate of return, and general terms, and that their accounts will

continue to be insured by the Federal Deposit Insurance Corporation;

(15)         a statement that borrower's loans will be

unaffected by conversion, and that the amount, rate, maturity, security and

other conditions will remain contractually as they existed prior to conversion;

(16)         a statement that the normal business of the

savings bank in accepting deposits and making loans will continue without

interruption; that the converted savings bank will continue after conversion to

conduct its present services to savings account holders and borrowers under

current policies to be carried on in existing offices and by the present

management and staff;

(17)         a statement that the proposed plan of

conversion may be substantively amended by the board of directors as a result

of comments from the regulatory authorities or otherwise prior to the meeting,

and that the proposed plan may also be terminated by the board of directors;

and

(18)         a statement that questions of members will

be answered in the proxy material to be sent after the regulatory approvals of

the proposed plan of conversion have been obtained and that any questions at

this time may be answered by telephoning or writing to the savings bank.

(e)  Such statement, letter, and press release shall not in

any manner solicit proxies, include financial statements, or describe the

benefits of conversion or the value of the capital stock of the savings bank

upon conversion.  In replying to inquiries, the savings bank shall limit its

answers to the matters listed in Paragraph (d) of this Rule.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0405          NOTICE OF FILING

(a)  Upon determination that an application for conversion

is properly executed and is not materially incomplete, the administrator will

advise the applicant, in writing, to publish a notice of the filing of the application. 

Promptly after receipt of such advice, the applicant shall prominently post the

notice in each of its offices and publish a notice of such filing in a

newspaper having general circulation in each community in which an office of

the applicant is located, as follows:

 

NOTICE OF FILING OF

AN APPLICATION FOR CONVERSION

TO A STOCK SAVINGS

BANK

 

Notice is hereby given that, pursuant to General Statute 54C‑33,

 

_________________________________________________________

(fill in name of

applicant)

has filed an application with the administrator of the

Savings Institutions Division for approval to convert to the stock form of

organization.  Copies of the application have been delivered to the Savings

Institutions Division, 1110 Navaho Drive, Suite 301, Raleigh, North Carolina,

27609.

Written comments, including any objections to the plan of

conversion and materials supporting such objections, from any member of the

applicant or any aggrieved person will be considered by the administrator if

filed within 10 business days after the date of this notice.  Failure to make

such written comments or objections may preclude the pursuit of any

administrative or judicial remedies.  Any comments or objections shall be sent

to the administrator at the address noted above.  The proposed plan of

conversion and any comments thereon will be available for inspection by any

member of the applicant at the office of the administrator.  A copy of the plan

may also be inspected at each office of the applicant.

(b)  If a significant number of the applicant's members only

speak a language other than English and a newspaper in that language is

published in the area served by the applicant, an appropriate translation of

the notice shall also be published in that newspaper.

(c)  Promptly after publication of the notice prescribed in

Paragraph (a) of this Rule, the applicant shall file a copy of the notice with

the administrator.  The applicant shall also file a copy of an affidavit of

publication from each newspaper publisher.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .0500 ‑ SOLICITATION OF PROXIES: PROXY STATEMENT

 

04 NCAC 16G .0501          SOLICITATIONS TO WHICH RULES APPLY

04 NCAC 16G .0502          USE OF PROXY SOLICITING MATERIAL TO BE

AUTHORIZED

04 NCAC 16G .0503          INFORMATION TO BE FURNISHED

ASSOCIATION MEMBERS

04 NCAC 16G .0504          REQUIREMENTS AS TO PROXY

04 NCAC 16G .0505          MATERIAL REQUIRED TO BE FILED

04 NCAC 16G .0506          MAILING COMMUNICATIONS FOR

ASSOCIATIONS MEMBERS

04 NCAC 16G .0507          FALSE OR MISLEADING STATEMENTS

04 NCAC 16G .0508          PROHIBITION OF CERTAIN SOLICITATIONS

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred From With Change 4 NCAC 9I Eff. August 31,

1981;

Amended Eff. September 1, 1983;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0509          SOLICITATIONS TO WHICH RULES APPLY

This Section applies to every solicitation of a proxy from a

member of a savings bank for the meeting at which a plan of conversion will be

voted upon, except the following:

(1)           any solicitation made otherwise than on behalf of

the management of the savings bank where the total number of persons solicited

is not more than 50;

(2)           any solicitation through the medium of a newspaper

advertisement which informs members, following approval of the plan of conversion,

of a source from which they may obtain copies of a proxy statement, form of

proxy, or any other solicitation material and does no more than:

(a)           name the savings bank,

(b)           state the reason for the advertisement,

(c)           identify the proposal or proposals to be

acted upon by members, and

(d)           urge members to vote at the meeting.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0510          USE OF PROXY SOLICITING MATERIAL TO BE

AUTHORIZED

No proxy solicitation material required to be filed with the

administrator prior to use shall be furnished to members or otherwise released

for distribution until the use of such material has been authorized in writing

by the administrator.  Proxy material authorized for use by the administrator

shall be mailed to the members within 10 days of such authorization or within

10 days of the date such material is declared effective by the Securities and

Exchange Commission, if applicable, whichever is later.  The administrator may

extend such date upon a showing that adherence to the 10 day rule would work a

hardship upon the savings institution and that the delay, if approved in

writing, would not be disadvantageous to any interested party.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992;

Amended Eff. April 15, 1993.

 

 

 

04 NCAC 16G .0511          INFORMATION TO BE FURNISHED MEMBERS

No solicitation shall be made unless each person solicited

is concurrently furnished, or has previously been furnished, a written proxy

statement the use of which has been authorized in writing by the administrator.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0512          REQUIREMENTS AS TO PROXY

(a)  The form of proxy shall:

(1)           indicate in bold face type whether the

proxy is solicited on behalf of management;

(2)           provide specifically designated blank

spaces for dating and signing the proxy;

(3)           identify clearly and impartially each

matter or group of related matters intended to be acted upon;

(4)           be clearly labeled "Revocable

Proxy" in bold face type of at least 18 point;

(5)           describe any charter or state law

requirement restricting or conditioning voting by proxy;

(6)           contain an acknowledgement by the person

giving the proxy that the person has received a proxy statement prior to

signing the form of proxy;

(7)           contain the date, time, and place of

meeting, if practicable;

(8)           provide, by a box or otherwise, a means

whereby the person solicited is afforded an opportunity to specify by ballot a

choice between approval or disapproval of each matter intended to be acted

upon; and

(9)           indicate in bold face type how the proxy

shall be voted on each such matter if no choice is specified.

(b)  No proxy obtained pursuant to the conversion shall

confer authority to vote at any meeting other than the meeting, or any

adjournment thereof, to vote on the plan of conversion.  A proxy may be deemed

to confer authority to vote with respect to matters incident to the conduct of

such meeting.  If the plan of conversion is considered at an annual meeting,

existing proxies may be voted with respect to matters not related to the plan

of conversion or in accordance with Paragraph (d) of this Rule.

(c)  The proxy statement or form of proxy shall provide that

the votes represented by the proxy will be voted.  Where the person solicited

specifies by means of a ballot provided pursuant to Subsection (a)(8) of this

Rule a choice with respect to any matter to be acted upon, the votes will be

voted in accordance with the specifications.  If no choice is specified, the

votes will be cast as indicated in bold face type on the form of proxy.

(d)  Notwithstanding any other provisions of this Rule, the

proxy may be in a form previously obtained from a voting member and conferring

general authority to vote on any and all matters at any meeting of the members

or other authority to vote on matters to be presented at the special meeting;

provided, that such voting member has been furnished a proxy statement and the

voting member does not grant a later‑dated proxy to vote at the meeting

to consider the plan of conversion or attend the meeting and vote in person.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0513          MATERIAL REQUIRED TO BE FILED

(a)  An applicant shall file a preliminary copy of the proxy

materials to be used by such applicant as a part of the application for

conversion filed with the administrator.

(b)  A preliminary copy of any additional solicitation

material, including press releases and radio or television scripts, to be used

or furnished to members subsequent to furnishing the proxy statement, shall be

filed with the administrator at least five business days prior to the date on

which the administrator is requested to authorize the use of such material. 

Speeches may, but need not, be filed with the administrator prior to use.

(c)  A copy of the proxy statement and a copy of the form of

proxy and all other solicitation material, in the form in which such material

is furnished to members, shall be filed with or mailed for filing to the

administrator not later than the date such material is first sent or given to

members.  All materials filed pursuant to this Paragraph shall be accompanied

by a statement of the date on which copies of such materials are to be released

to members.

(d)  If the solicitation is to be made in whole or in part

by personal solicitation, a preliminary copy of all written instructions or

other material which discusses, reviews or comments upon the merits of any

matter to be acted upon and which is to be furnished to the individuals making

the actual solicitation for their use directly or indirectly in connection with

the solicitation shall be filed with the administrator at least five business

days prior to the date on which the administrator is requested to authorize the

use of such material.

(e)  All preliminary copies of material filed pursuant to

Paragraphs (a), (b), and (d) of this Rule shall be clearly marked on the cover

page "Preliminary Copy."  Such preliminary copies shall be for the

information of the administrator only and shall not be deemed available for

public inspection except that such material may be disclosed to any department

or agency of the United States, this State, or any other state, that has

concurrent jurisdiction over the applicant.  The administrator may make such

inquiries or investigation in regard to the material as may be necessary for an

adequate review.

(f)  Unless requested by the administrator, copies of

replies to inquiries from members and copies of communications which do no more

than request that forms of proxy theretofore solicited be signed and returned

need not be filed pursuant to this Rule.

(g)  Where any proxy statement, form of proxy or other

material filed pursuant to this Rule is amended or revised, a copy of such

amended or revised material filed with the administrator shall be marked to

indicate clearly and precisely the changes effected subsequent to the previous

filing.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992;

Amended Eff. April 15, 1993.

 

 

 

04 NCAC 16G .0514          MAILING COMMUNICATIONS FOR MEMBERS

If the applicant has adopted a plan of conversion, the

applicant shall perform such of the following acts as may be duly requested in

writing with respect to a matter to be considered at the meeting to vote on the

plan of conversion by any member who will defray the reasonable expenses to be

incurred by the applicant in the performance of the act or acts requested:

(1)           The applicant shall mail or otherwise furnish to

such member the following information as promptly as practicable after the

receipt of such request:

(a)           a statement of the approximate number of

members who have been or are to be solicited on behalf of management, or any

group of members which the member shall designate;

(b)           an estimate of the cost of mailing a

specified proxy statement, form of proxy, or other communication to such

members.

(2)           Copies of any proxy statement, form of proxy, or

other communication furnished by the member and as approved by the

administrator shall be mailed by the applicant to such of the members specified

in Paragraph (1)(a) of this Rule as the member may designate.

(3)           Any such material which is furnished by the member

shall be mailed with reasonable promptness by the applicant after receipt of

the material to be mailed, including envelopes or other containers, and the

appropriate postage or payment for postage.

(4)           Neither management nor the applicant shall be

responsible for such proxy statement, form of proxy, or other communication.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0515          FALSE OR MISLEADING STATEMENTS

(a)  No solicitation of a proxy by the applicant, its

management, or any other person for the meeting to vote on the plan of

conversion shall be made by means of any proxy statement, form of proxy, notice

of meeting, or other communication, written or oral, containing any statement

which, at the time and in the light of the circumstances under which it is

made, is false or misleading with respect to any material fact, or which omits

to state any material fact necessary in order to make the statements therein

not false or misleading or necessary to correct any statement in any earlier

communication with respect to the solicitation of a proxy for the meeting which

has become false or misleading.

(b)  The fact that a proxy statement, form of proxy, or

other solicitation material has been filed with or examined by the

administrator and authorized for use shall not be deemed a finding by the

Administrator that such material is accurate or complete or not false or misleading,

or that the administrator has passed upon the merits of or approved any

proposal contained therein.  No representation to the contrary shall be made by

any person.

(c)  If a solicitation by management violates any provision

of this Rule, the administrator may require remedial measures including:

(1)           correction of any such violation by means

of a retraction and new solicitation,

(2)           rescheduling of the meeting for a vote on

the plan of conversion, and

(3)           any other actions the administrator may deem

appropriate under the circumstances in order to ensure a fair vote.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0516          PROHIBITION OF CERTAIN SOLICITATIONS

No person soliciting a proxy from a member for the meeting

to vote on the plan of conversion shall solicit:

(1)           any updated or post‑dated proxy; or

(2)           any proxy which provides that it shall be deemed to

be dated as of any date subsequent to the date on which it is signed by the

members; or

(3)           any proxy which is not revocable at will by the

member giving it; or

(4)           any proxy which is part of any other document or

instrument, such as an account card.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .0600 ‑ VOTE BY MEMBERS

 

04 NCAC 16G .0601          VOTE AT SPECIAL MEETING

04 NCAC 16G .0602          DETERMINING MEMBERS ELIGIBLE TO VOTE

04 NCAC 16G .0603          NOTICE TO MEMBERS

04 NCAC 16G .0604          REQUIRED VOTE

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Amended Eff. September 1, 1983;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0605          NOTICE TO ELIGIBLE AND SUPPLEMENTAL

ACCOUNT HOLDERS

 

History Note:        Authority G.S. 54B‑33;

Eff. October 1, 1982;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0606          VOTE AT MEMBERS MEETING

Following approval of the plan of conversion by the

administrator, the plan of conversion shall be submitted for consideration to

an annual or special meeting of members.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0607          NOTICE TO MEMBERS

Notice of the meeting to consider a plan of conversion shall

be given by means of the proxy statement authorized for use by the

administrator.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0608          ELECTIVE NOTICE TO NON‑VOTING

ACCOUNT HOLDERS

The applicant may give notice in accordance with this

Subchapter of the proposed conversion and the meeting of the members by letter

or other written communication authorized for use by the administrator to

eligible account holders and supplemental account holders who are not voting

members.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .0700 ‑ PRICING AND SALE OF SECURITIES

 

04 NCAC 16G .0701          GENERAL

04 NCAC 16G .0702          DISTRIBUTION OF OFFERING MATERIALS

04 NCAC 16G .0703          ESTIMATED PRICE INFORMATION: PROXY

STATEMENTS

04 NCAC 16G .0704          PROHIBITED REPRESENTATIONS

04 NCAC 16G .0705          UNDERWRITING EXPENSES

04 NCAC 16G .0706          PRICING MATERIALS

04 NCAC 16G .0707          ORDER FORMS FOR PURCHASE OF CAPITAL

STOCK

04 NCAC 16G .0708          WITHDRAWAL FROM CERTIFICATE ACCOUNTS

04 NCAC 16G .0709          PERIOD FOR COMPLETION OF SALE

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred With Change From 4 NCAC 9I Eff. August 31,

1981;

Amended Eff. September 1, 1983; October 1, 1982;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0710          INTEREST/SUBSCRIPTION/COMMUNITY

PURCHASE ORDERS

04 NCAC 16G .0711          EXTENSIONS OF TIME TO COMPLETE

OFFERINGS

 

History Note:        Authority G.S. 54B‑33;

Eff. October 1, 1982;

Amended Eff. September 1, 1983;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0712          GENERAL

(a)  No offer to sell securities of an applicant pursuant to

a plan of conversion may be made prior to approval by the administrator of the

plan of conversion and until the proxy statement has been authorized for use by

the administrator.  No sale of securities may be made except by means of a

final offering circular which meets the requirements of this Section and which

has been declared effective by the administrator.  The provisions of this Rule

shall not apply to preliminary negotiations or agreements between an applicant

and any underwriter or among underwriters who are to be in privity of contract

with the applicant.

(b)  If the financial statements in a filing are in excess

of 135 days prior to the date of the administrator's approval of the plan of

conversion, an interim financial statement as of a date within 135 days of such

approval shall be furnished.  This interim financial statement shall be at

least as current as the most recent quarterly financial statement filed with

the administrator.  This interim financial statement may be unaudited.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0713          DISTRIBUTION OF OFFERING MATERIALS

Any preliminary offering circular which has been filed with

the administrator may be distributed in connection with the offering at the

same time as or after the proxy statement is mailed to members pursuant to Rule

.0607 of this Subchapter.  No final offering circular shall be distributed

until it has been declared effective by the administrator.  The declaration of

the effectiveness of the final offering circular by the administrator shall not

extend beyond the maximum time period specified for the completion of the sale

of all the capital stock in Rule .0720 of this Section, or beyond such period

of time the administrator shall establish upon a subsequent declaration of

effectiveness in the event of the granting of an extension of time under Rule

.0722 of this Section.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0714          ESTIMATED PRICE INFORMATION: PROXY

STATEMENTS

If the offering is to commence prior to the meeting of the

members held to vote on the plan of conversion, the proxy statement authorized

for use by the administrator shall set forth the estimated price range.  Any

preliminary offering circular shall set forth the estimated price range. The

maximum of such price range shall be not more than fifty dollars ($50.00) per

share or 15 percent above the average of the minimum and maximum of such price

range and the minimum shall be no less than five dollars ($5.00) per share or

no more than 15 percent below such average. The administrator may approve a

price range outside these maximums and minimums upon a showing that such price

range enhances or does not discourage a broad dispersion of ownership and is

not manipulative of the conversion process.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0715          PROHIBITED REPRESENTATIONS

The administrator will review the price information required

under this Section in determining whether to give approval to the plan of

conversion when the offering is to commence prior to the meeting of the members,

and the administrator will review the information in determining whether to

declare a final offering circular effective.  No representations may be made in

any manner that the price information has been approved by the administrator or

that the shares of capital stock sold pursuant to the plan of conversion have

been approved or disapproved by the administrator or that the administrator has

passed upon the accuracy or adequacy of any offering circular covering such

shares.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0716          UNDERWRITING EXPENSES

Underwriting commissions shall not exceed an amount or

percentage per share accepted as reasonable by the administrator.  The term

"underwriting commissions" includes underwriting discounts.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0717          PRICING MATERIALS

(a)  In considering the pricing information required under

Rule .0714 of this Section, the administrator will apply the following

guidelines:

(1)           The materials shall be prepared by persons

independent of the applicant who are experienced and expert in the area of

corporate appraisal.

(2)           The materials shall contain a brief summary

of data that is sufficient to support the conclusions reached therein.

(3)           To the extent that the appraisal is based

on the capitalization of the pro forma income of the converted savings bank,

the materials must indicate the basis for determination of the income to be

derived from the proceeds of the sale of stock and demonstrate the

appropriateness of the earnings multiple used, including assumptions made as to

future earnings growth.  To the extent that the appraisal is based on a

comparison of the capital stock of the applicant with the outstanding capital

stock of existing stock savings banks, the existing stock savings banks must be

reasonably comparable to the applicant in terms of such factors as size, market

area, competitive conditions, profit history, and expected future earnings.

(b)  In addition to the information required in Paragraph

(a) of this Rule, the applicant shall submit information demonstrating to the

satisfaction of the administrator the independence and expertise of any person

preparing materials under this Rule and the person must be acceptable in these

respects to the administrator.  A person will not be considered as lacking

independence for the reason that such person will participate in effecting a

sale of capital stock under the plan of conversion or will receive a fee from

the applicant for services rendered in connection with such appraisal.

(c)  In addition to the information required in Paragraphs

(a) and (b) of this Rule, the applicant shall file with the administrator such

additional information with respect to the pricing of the capital stock of the

applicant as the administrator may request, including, without limitation, a

full appraisal.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0718          ORDER FORMS FOR PURCHASE OF CAPITAL

STOCK

(a)  Promptly after the administrator has declared effective

the offering circular for the subscription offering, the applicant shall

distribute order forms for the purchase of shares of capital stock in the

offering to all eligible account holders, supplemental eligible account holders

(if applicable), voting members and other persons who may subscribe for such

shares of capital stock under the plan of conversion.  If the applicant has

adopted in its plan of conversion the optional provisions set forth in

Paragraphs (4), (5) or (10) of Rule .0312 of this Subchapter, the applicant

shall deliver order forms to the eligible account holders, supplemental

eligible account holders and voting members who requested receipt of the

offering circular.

(b)  Each order form shall be accompanied or preceded by the

final offering circular for the subscription offering or the public offering,

as the case may be, and a set of detailed instructions explaining how to

properly complete the order forms.  The offering circular and order form

instructions may be included in the same document.

(c)  The maximum subscription price stated on each order

form shall be the amount to be paid when the order form is returned.  The maximum

subscription price and the actual subscription price shall be within the

subscription price range stated in the administrator's approval and the

offering circular.  If either the maximum subscription price or the actual

subscription price is not within such subscription price range, the applicant

must obtain the written consent of the administrator.  If appropriate, the

administrator will condition the amended approval by requiring a resolicitation

of proxies or order forms or both.  If the actual public offering price is less

than the maximum subscription price stated on the order form, the actual

subscription price shall be correspondingly reduced and the difference shall be

refunded to those who have paid the maximum subscription price, unless the

subscribers affirmatively elect to have the difference applied to the purchase

of additional shares of capital stock.

(d)  Each order form shall be prepared so as to indicate to

the person receiving it, in as simple, clear, and intelligible a manner as possible,

the actions which are required or available to him with respect to the form and

the capital stock offered for purchase thereby.  Specifically, each order form

shall:

(1)           indicate the maximum number of shares which

may be purchased pursuant to the subscription offering;

(2)           indicate the period of time within which

the subscription rights must be exercised, which period of time shall not be

less than 20 days and no more than 45 days following the date of the mailing of

the subscription offering order form;

(3)           state the maximum subscription price per

share of capital stock;

(4)           indicate any requirements as to the minimum

number of shares of capital stock which must be purchased;

(5)           provide a specifically designated blank

space or spaces for indicating the number of shares of capital stock which the

eligible account holder or other person wishes to purchase;

(6)           indicate the manner of required payment

and, if such payment may be made by withdrawal from a certificate of deposit,

indicate that such withdrawal may be made without penalty.  If payment is to be

made by a withdrawal from a deposit account or certificate of deposit, a box to

check shall be provided;

(7)           provide specifically designated blank

spaces for dating and signing the order form;

(8)           contain an acknowledgement by the account

holder or other person signing the order form that the person has received the

final offering circular for the subscription offering prior to signing the

order form; and

(9)           indicate the consequences of failing to

properly complete and return the order form, including a statement that the

subscription rights are nontransferable and will become void at the end of the

subscription period.  The order form may, and the set of instructions shall,

indicate the place or places to which the order forms are to be returned and

when the order forms shall be deemed to be received.

(e)  The order form may provide that it may not be modified

without the applicant's consent after the order form has been returned to the

applicant. If payment is to be made by withdrawal from a deposit account or

certificate of deposit, the applicant may, but need not, cause such withdrawal

to be made upon receipt of the order form.  If such withdrawal is made at any

time prior to the closing date of the public offering, the applicant shall pay

interest to the account holder on the amount withdrawn as if such amount had

remained in the account from which it was withdrawn until the closing date.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0719          WITHDRAWAL FROM CERTIFICATE ACCOUNTS

Notwithstanding any regulatory provision regarding penalties

for early withdrawal from certificate accounts, the applicant may allow payment

for capital stock pursuant to the exercise of subscription rights by withdrawal

from a certificate account without the assessment of such penalties.  In the

case of early withdrawal of only a portion of such account, the certificate

evidencing such account shall be cancelled if the applicable minimum balance

requirement ceases to be met.  The remaining balance will earn interest at the

passbook rate.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0720          PERIOD FOR COMPLETION OF SALE

The sale of all shares of capital stock of the applicant to

be made under the plan of conversion, including any sale in a public offering

or direct community marketing, shall be completed as promptly as possible.  The

applicant shall obtain the prior written approval of the administrator to sell

shares of stock more than 45 days after the last day of the subscription

period.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0721          INTEREST: SUBSCRIPTION/COMMUNITY

PURCHASE ORDERS

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992;

Repealed Eff. April 15, 1993.

 

 

 

04 NCAC 16G .0722          EXTENSIONS OF TIME TO COMPLETE

OFFERINGS

(a)  The administrator may grant one or more extensions of

time required to complete the sale of all shares of capital stock under Rule

.0720 of this Section, provided that no single extension of time shall exceed

90 days.  No such extension shall be granted unless the savings institution

shows that the circumstances leading to the request for an extension were

beyond the control of the savings institution and that the investors who

purchased stock during the initial subscription period will not be

disadvantaged by the extension.

(b)  Immediately upon the granting of an extension of time

pursuant to Paragraph (a) of this Rule, the applicant shall distribute to each

subscriber in the offering, and, if applicable, each person who has ordered

stock in the direct community offering, a post‑effective amendment to the

offering circular filed under an amendment to the application for conversion

and declared effective by the administrator pursuant to Paragraph (d) of this

Rule which shall notify each subscriber and each ordering person of the

granting of the extension of time, and of the right of each subscriber and each

ordering person to increase, decrease, or rescind his subscription either at

any time prior to 20 days before the end of the extension period or at any time

prior to the date of the commencement of the public offering or the direct

community offering, provided that if the public offering or the direct

community offering is not completed within 20 days after its commencement, all

instructions from subscribers and ordering persons to increase, decrease or

rescind their subscriptions or orders received during the 20‑day offering

period shall be honored by the applicant.

(c)  For the purpose of this Rule, the public offering shall

be deemed to commence upon the filing with the administrator of the preliminary

offering circular for the public offering.  The direct community offering shall

be deemed to commence upon the declaration of effectiveness by the

administrator of the final offering circular.

(d)  After the expiration of the subscription rights, the

converting savings bank shall file with and have declared effective by the

administrator a post‑effective amendment to the offering circular upon the

occurrence of any event, circumstance, or change of circumstance which would be

material to the investment decision of a subscriber or, if applicable, a person

who has ordered capital stock in the direct community offering.

(e)  Any post‑effective amendment to an offering

circular shall be distributed by the converting savings bank immediately after

the declaration of effectiveness.  It shall be distributed to each subscriber,

and, if applicable, each person who has ordered stock in the direct community offering. 

The converting savings bank shall grant to each subscriber and ordering person

the right to increase, decrease, or rescind his subscription or order for a

period which shall be the greater of 10 days from the date of the mailing of

the post‑effective amendment or the period remaining in an extension of

time granted by the administrator pursuant to the provisions of Paragraph (b)

of this Rule.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .0800 ‑ PROCEDURAL REQUIREMENTS

 

04 NCAC 16G .0801          FILING AN APPLICATION FOR CONVERSION

04 NCAC 16G .0802          IMPROPERLY EXECUTED OR MATERIALLY

INCOMPLETE FILINGS

04 NCAC 16G .0803          ADDITIONAL FILING REQUIREMENTS

04 NCAC 16G .0804          NUMBER OF COPIES: PLACE OF FILING:

BINDING: SIGNATURES

04 NCAC 16G .0805          REQUIREMENTS AS TO PAPER AND PRINTING

04 NCAC 16G .0806          METHOD OF PREPARATION

04 NCAC 16G .0807          INTERPRETATION OF REQUIREMENTS

04 NCAC 16G .0808          ADDITIONAL INFORMATION

04 NCAC 16G .0809          INFORMATION UNKNOWN OR NOT REASONABLY

AVAILABLE

04 NCAC 16G .0810          INCORPORATION OF CERTAIN INFORMATION

BY REFERENCE

04 NCAC 16G .0811          SUMMARIES OR OUTLINES OF DOCUMENTS

04 NCAC 16G .0812          LEGIBILITY OF MATERIALS

04 NCAC 16G .0813          PRESENTATION OF INFORMATION

04 NCAC 16G .0814          APPLICATION OF AMENDMENTS TO

REGULATIONS AND FORMS

04 NCAC 16G .0815          CONSENTS OF EXPERTS

04 NCAC 16G .0816          CONSENTS OF PERSONS ABOUT TO BECOME

DIRECTORS

04 NCAC 16G .0817          DATE OF FILING

04 NCAC 16G .0818          AMENDMENTS

04 NCAC 16G .0819          PRE‑FILING CONFERENCES WITH

APPLICANTS

04 NCAC 16G .0820          REVIEW OF THE COMMISSION ACTION

04 NCAC 16G .0821          POST‑CONVERSION REPORTS

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Amended Eff. September 1, 1983; October 1, 1982;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0822          IMPROPERLY EXECUTED OR MATERIALLY

INCOMPLETE FILINGS

(a)  Any application for conversion that is improperly

executed shall not be accepted for filing and shall be returned to the

applicant.

(b)  Subject to the provisions of Paragraph (c) of this

Rule, any application for conversion that does not contain copies of a plan of

conversion, a preliminary proxy statement with signed financial statements, and

a preliminary form of proxy, shall not be accepted for filing and shall be

returned to the applicant.  Any application for conversion containing a

materially incomplete plan of conversion, proxy statement, or form of proxy may

not be accepted for filing and if not accepted for filing, shall be returned to

the applicant.

(c)  Any application for conversion which contains, at a

minimum, a materially complete plan of conversion shall be accepted for filing

if the application is accompanied by the written request of the applicant that

the application not be reviewed by the administrator until the applicant

requests and the administrator consents to the filing of the additional

materials set forth in Paragraph (b) of this Rule.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0823          ADDITIONAL FILING REQUIREMENTS

An applicant whose plan of conversion has been approved by

the administrator shall fulfill the following requirements:

(1)           The applicant shall file with the administrator

promptly after the meeting of members called to consider the plan of conversion

a certified copy of each resolution adopted at the meeting relating to the plan

of conversion, together with the following information:

(a)           the total number of votes eligible to be

cast,

(b)           the total number of votes represented in

person or by proxy at the meeting,

(c)           the total number of votes cast in favor of

and against each such matter, and

(d)           the percentage of votes necessary to approve

each such matter.

The compilation of the votes cast at the meeting may be

prepared by an independent public accountant or by an independent transfer

agent.

(2)           The applicant shall file with the administrator,

promptly after the meeting of members called to consider the plan of

conversion, an opinion of counsel to the effect that:

(a)           the meeting of members was duly held in

accordance with all requirements of applicable state and federal law and

regulation;

(b)           all requirements of state and federal law

applicable to the conversion have been complied with; and

(c)           if the savings bank has used proxies

executed prior to the proxy solicitation required by Rule .0511 of this

Subchapter, the authority conferred by such proxies includes authority to vote

on this plan of conversion.

(3)           Each offering circular for the offering shall be

prepared in compliance with this Subchapter.  The applicant shall file with the

administrator a copy of each preliminary offering circular and a copy of each

final offering circular.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0824          APPLICATION SIGNATURES

(a)  Every application and every amendment thereto filed

shall be manually signed by:

(1)           a duly authorized representative of the

applicant on its behalf,

(2)           its principal executive officer,

(3)           its principal financial officer,

(4)           its principal accounting officer, and

(5)           at least two‑thirds of its directors.

(b)  If any name is signed to an application or any

amendment thereto pursuant to a power of attorney, a manually signed copy of

such power of attorney shall be filed with the application.

(c)  Except as provided in Paragraph (d) of this Rule, the

filing of any application or amendment thereto under this Subchapter shall

constitute a representation of the applicant by its duly authorized

representative, the applicant's principal executive officer, the applicant's

principal financial officer, and the applicant's principal accounting officer,

and each member of the applicant's board of directors (whether or not such

directors has signed the application or any amendment thereto) severally that:

(1)           He or she has read such application or

amendment;

(2)           In the opinion of each such person, he or

she has made such examination and investigation as is necessary to enable him

or her to express an informed opinion that such application or amendment

complies, to the best of his or knowledge and belief, with the applicable

requirements of this Subchapter and forms prescribed hereunder; and

(3)           Each such person holds such informed

opinion.

(d)  The representations specified in Paragraph (c) of this

Rule shall not be deemed to have been made by any director of the applicant who

did not sign the application or any amendment thereto, if and only to the

extent that such director files with the administrator within 10 business days

after the filing of the application or amendment a statement describing those

portions of any filing with which there is no such representation.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0825          REQUIREMENTS AS TO PAPER AND PRINTING

(a)  Applications shall be filed on unglazed, white paper 8‑

by 13 or 8‑ by 11 inches in size, insofar as practicable. 

However, tables, charts, maps, and financial statements may be on larger paper

if folded to such sizes.  Plan of conversion, proxy statement, and offering

circular may be on smaller paper if the applicant so desires.

(b)  Applications and, insofar as practicable, all papers

and documents filed as part thereof shall be printed, lithographed,

mimeographed, or typewritten.  However, applications or any portion thereof may

be prepared by any similar process which, in the opinion of the administrator,

produces copies suitable for a permanent record.  Irrespective of the process

used, all copies of any such material shall be clear, easily readable, and

suitable for repeated photocopying.  Debits in credit categories and credits in

debit categories shall be designated so as to be clearly distinguishable as

such on photocopies.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0826          METHOD OF PREPARATION

Every application shall furnish information in item‑and‑answer

form in response to the items of the appropriate form and shall include the

captions of the form but omit the text of all items and instructions.  Every

proxy statement and offering circular shall present information as provided in

Rule .0829 of this Section in response to the items of the appropriate form in

lieu of furnishing the information in item‑and‑answer form and

shall omit the captions and text of all items and instructions.  Every

application shall include a cross reference sheet showing the location in the

proxy statement and offering circular of the response to the items of the

appropriate form.  If any such item is inapplicable or the answer thereto is in

the negative and is omitted, a statement to that effect shall be made in the

cross reference sheet.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0827          INFORMATION UNKNOWN OR NOT REASONABLY

AVAILABLE

Required information need be given only insofar as it is

known or reasonably available to the applicant.  If any required information is

unknown and not reasonably available to the applicant, either because obtaining

it would involve unreasonable effort or expense, or because it rests peculiarly

within the knowledge of another person not affiliated with the applicant, the

information may be omitted, subject to the following conditions:

(1)           The applicant shall give such information on the

subject as it possesses or can acquire without unreasonable effort or expense,

together with the source thereof; or

(2)           The applicant shall include a statement either

showing that unreasonable effort or expense would be involved or indicating the

absence of any affiliation with the person within whose knowledge the

information rests and stating the result of a request made to such person for

the information.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0828          INCORPORATION OF CERTAIN INFORMATION

BY REFERENCE

(a)  Where an item in an application calls for information

not required to be included in the proxy statement or offering circular, matter

contained in any part of the application, including exhibits, may be

incorporated by reference in answer, or partial answer, to such items.  No

information may be incorporated by reference in a proxy statement or offering

circular, unless the document containing such information is attached thereto

or is summarized or outlined.  However, an offering circular may incorporate by

reference the information contained in a proxy statement previously delivered

without need of summary or outline.

(b)  Material incorporated by reference shall be clearly identified

in the reference.  An express statement that the specified matter is

incorporated by reference shall be made at the particular place in the

application where the information is required.  Matter shall not be

incorporated by reference in any case where such incorporation would render the

statement incomplete, unclear, or confusing.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0829          PRESENTATION OF INFORMATION

(a)  The information required in a proxy statement or

offering circular need not follow the order of the items or other requirements

in the appropriate form.  Such information shall not, however, be set forth in

any fashion which obscures any of the required information or any information

necessary to keep the required information from being incomplete or

misleading.  Where an item requires information to be given in tabular form, it

shall be given in substantially the tabular form specified in the item.

(b)  All information contained in a plan of conversion,

proxy statement, or offering circular shall be set forth under appropriate

captions or headings reasonably indicative of the principal subject matters set

forth thereunder.  Except as to financial statements and other tabular data,

all information set forth in any form under this Subchapter shall be divided

into reasonably short paragraphs or sections.

(c)  Every proxy statement and offering circular shall include

in the forepart a reasonably detailed table of contents showing the subject

matter of its various sections or subdivisions and the page number on which

each such section or subdivision begins.

(d)  All information required to be included in a proxy statement

or offering circular shall be clearly understandable without the necessity of

referring to the particular form or to the regulations under this Subchapter. 

Except as to financial statements and information required in tabular form, the

information set forth in a proxy statement or offering circular may be

expressed in condensed or summarized form.

(e)  Financial statements are to be set forth in comparative

form and shall include the notes thereto and the accountant's certificate or

certificates.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0830          CONSENTS OF EXPERTS

(a)  If any accountant, attorney, investment banker,

appraiser, or other persons whose professions give authority to a statement

made in any application under this Subchapter is named as having prepared,

received, passed upon, or certified any part thereof, or any report or

valuation for use in connection therewith, the written consent of such person

shall be filed with the application.  If any portion of a report of an expert

is quoted or summarized as such in any filing under this Subchapter, the

written consent of the expert shall expressly state that the expert consents to

such quotation or summarization.

(b)  All written consents filed pursuant to this Rule shall

be dated and signed manually.  A list of such consents shall be filed with the

application.  Where the consent of the expert is contained in the report, a

reference shall be made in the list to the report containing such consent.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0831          CONSENTS OF PERSONS ABOUT TO BECOME

DIRECTORS

If any person who has not signed an application is named in

the proxy statement or offering circular as a potential director, the written

consent of such person shall be filed with the appropriate form.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0832          AMENDMENTS

All amendments to any application under this Subchapter

shall be filed under cover of an appropriate facing sheet, shall be numbered

consecutively in the order in which they are filed, and shall conform to all

pertinent regulations applicable to the type of application which they amend.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0833          POST‑CONVERSION REPORTS

The applicant shall file such post‑conversion reports

concerning its conversion as the administrator may require.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .0900 ‑ ACQUISITIONS OF SECURITIES OF CONVERTED

ASSOCIATIONS

 

04 NCAC 16G .0901          DEFINITIONS

04 NCAC 16G .0902          PROHIBITED TRANSFERS

04 NCAC 16G .0903          PROHIBITION OF OFFERS AND CERTAIN

ACQUISITIONS

04 NCAC 16G .0904          PROHIBITION OF OFFERS TO ACQUIRE AND

ACQUISITIONS OF STOCK

04 NCAC 16G .0905          EXCEPTIONS

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Amended Eff. December 1, 1984; May 1, 1984; September 1,

1983;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0906          CRITERIA FOR DENIAL

04 NCAC 16G .0907          OPTIONAL CHARTER PROVISION

 

History Note:        Authority G.S. 54B‑33;

Eff. September 1, 1983;

Amended Eff. December 1, 1984; May 1, 1984;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .0908          DEFINITIONS

(a)  For the purpose of this Section, the term

"offer" includes every offer to buy or acquire, solicitation of an

offer to sell, tender offer for, or request or invitation for tenders of, a

security or interest in a security for value.

(b)  For the purpose of this Section, the term

"person" means an individual, a group acting in concert, a

corporation, a partnership, an association, a joint stock company, a trust, an

unincorporated organization or similar company or a syndicate.

(c)  Without limitation on the generality of its meaning,

the term "security" includes nontransferable subscription rights

issued pursuant to a plan of conversion.

(d)  For purposes of this Section, the term

"acquire" includes every type of acquisition, whether affected by

purchase, exchange, operation of law, or otherwise.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0909          PROHIBITED TRANSFERS

Prior to completion of a conversion, no person shall

transfer or enter into any agreement or understanding to transfer the legal or

beneficial ownership of conversion subscription rights or the underlying

securities to the account of another.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0910          PROHIBITION OF OFFERS AND CERTAIN

ACQUISITIONS

Prior to completion of a conversion, no person shall make

any offer, or any announcement of an offer, for any security of the converting

savings bank issued in connection with the conversion nor shall any person

knowingly acquire securities of the converted savings bank issued in connection

with the conversion in excess of the maximum purchase limitations established

in the approved plan of conversion.

 

History Note:        Authority G.S. 54C‑33; 54C‑53.

Eff. February 15, 1992

 

 

 

04 NCAC 16G .0911          EXCEPTIONS

(a)  Rules .0909 and .0910 of this Section shall not apply

to a transfer, agreement, or understanding to transfer, offer, or announcement

of an offer or intent to make an offer which:

(1)           pertains only to securities to be purchased

pursuant to Paragraph (6) of Rule .0311 and Paragraphs (6) and (11) of Rule

.0312 of this Subchapter; and

(2)           has the prior written approval of the

administrator.

(b)  Rule .0910 of this Section shall not apply to any offer

with a view toward public resale made exclusively to the savings bank or its

underwriters or selling group acting on the savings bank's behalf.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

04 NCAC 16G .0912          CRITERIA FOR DENIAL

The administer shall not approve an application involving an

offer for, or an announcement thereof, or an acquisition of any security of a

converted savings bank submitted under 4 NCAC 16A .0105(d) if it finds that such

offer frustrates the purpose of the provisions of this Subchapter, is

manipulative or deceptive, subverts the fairness of the conversion, is likely

to result in injury to the savings bank, or is otherwise violative of law or

regulation.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

Eff. February 15, 1992.

 

 

 

 

 

SECTION .1000 ‑ FORMS

 

04 NCAC 16G .1001          FACING SHEET

04 NCAC 16G .1002          FORM AC: APPLICATION FORM

04 NCAC 16G .1003          FORM PS: PROXY STATEMENT

04 NCAC 16G .1004          FORM OC: OFFERING CIRCULAR FORM

 

History Note:        Authority G.S. 54B‑33;

Eff. January 1, 1980;

Transferred From 4 NCAC 9I Eff. August 31, 1981;

Repealed Eff. September 1, 1983.

 

 

 

 

 

SECTION .1100 ‑ SALE‑OF‑CONTROL CONVERSIONS

 

04 NCAC 16G .1101          DEFINITIONS

04 NCAC 16G .1102          SALE‑OF‑CONTROL CONVERSION

OF AN ASSOCIATION

04 NCAC 16G .1103          ADDITIONAL REQUIREMENTS FOR SALE‑OF‑CONTROL

CONVERSION

04 NCAC 16G .1104          ADDITIONAL NOTICE REQUIREMENTS

04 NCAC 16G .1105          RECORD DATE/NOTICE REQUIREMENTS

04 NCAC 16G .1106          COMPETING SALE‑OF‑CONTROL

OFFERS

04 NCAC 16G .1107          MANAGEMENT'S PROXY/MAILING

COMMUNICATIONS FOR PROPONENTS

04 NCAC 16G .1108          ADDITIONAL DISCLOSURE REQUIREMENTS

 

History Note:        Authority G.S. 54B‑33;

Eff. September 1, 1983;

Repealed Eff. April 1, 1984.

 

 

 

 

 

SECTION .1200 ‑ CONVERSION: MERGERS: ACQUISITIONS

 

04 NCAC 16G .1201          CONVERSION IN CONNECTION WITH

ACQUISITION OR MERGER

04 NCAC 16G .1202          RIGHTS OF MEMBERS

 

History Note:        Authority G.S. 54B‑33; 54B‑55;

Eff. February 1, 1984;

Repealed Eff. January 1, 1986.

 

 

 

04 NCAC 16G .1203          CONVERSION IN CONNECTION WITH

ACQUISITION

(a)  A mutual savings bank may convert to stock form as part

of a transaction whereby an existing holding company acquires all its

conversion stock; provided that the eligible account holders, supplemental

eligible account holders, and voting members of the converting savings bank

shall receive, without payment, nontransferable rights to purchase capital

stock of the existing holding company the same as they would have to purchase

capital stock of the converting savings bank in a standard conversion under the

provisions of this Subchapter.

(b)  If the existing holding company acquiring the

converting savings bank has consolidated total assets which are 10 times

greater than the total assets of the converting savings bank which it is

acquiring and the capital stock of such holding company is listed on a national

or regional stock exchange or is quoted on the National Association of

Securities Dealers Quotation (NASDAQ) System, then the plan of conversion shall

not be required to contain provisions of Subparagraphs (6), (7), (8), (16),

(17) and (18) of Rule .0311 of this Subchapter.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

54C‑195;

Eff. February 15, 1992;

Amended Eff. April 15, 1993.

 

 

 

04 NCAC 16G .1204          CONVERSION IN CONNECTION WITH MERGER

(a)  A mutual savings bank may convert to stock form by

merging with an existing stock depository institution as part of a transaction

in which the equity securities of the existing stock depository institution or

its holding company acquiring all of the conversion stock are issued; provided

that the eligible account holders, supplemental eligible account holders, and

voting members of the converting savings bank shall receive, without payment,

nontransferable rights to purchase capital stock of the existing stock

depository institution, or its holding company the same as they would have to

purchase capital stock of the converting savings bank in a standard conversion

under the provisions of this Subchapter.

(b)  If the existing depository institution, or its holding

company, whose equity securities will be issued in connection with the merger

of the converting savings bank has consolidated total assets which are 10 times

greater than the total assets of the converting savings bank which it is

acquiring and the capital stock of such existing depository institution, or its

holding company, is listed on a national or regional stock exchange or is

quoted on the National Association of Securities Dealers Quotation (NASDAQ)

System, then the plan of conversion shall not be required to contain provisions

of Subparagraphs (6), (7), (8), (16), (17) and (18) of Rule .0311 of this

Subchapter.

 

History Note:        Authority G.S. 54C‑33; 54C‑53;

54C‑195;

Eff. February 15, 1992;

Amended Eff. April 15, 1993.