Ch. DFI-SB 21 Note
Note: Chapter SB 21 was renumbered ch. DFI-SB 21 under s. 13.93 (2m) (b) 1., Stats., and corrections made under s. 13.93 (2m) (b) 6. and 7., Stats.,
Register, November, 1997, No. 503.
DFI-SB 21.01(1)(a)1.
1. Knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; or
DFI-SB 21.01(1)(a)2.
2. A combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise.
DFI-SB 21.01(1)(b)
(b) A person or company which acts in concert with another person or company (“other party") shall also be acting in concert with any person or company who is also acting in concert with that other party, except that an employee benefit plan will not be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated. No officer or director of an applicant shall be considered acting in concert with another officer or director merely by reason of holding those positions.
DFI-SB 21.01(2)
(2) An “affiliate" of, or a person “affiliated" with, a specified person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
DFI-SB 21.01(3)
(3) “Amount", when used in regard to securities, means the principal amount if relating to evidence of indebtedness, the number of shares if relating to shares of securities and the number of units if relating to any other kind of securities.
DFI-SB 21.01(4)
(4) “Applicant" means a state savings bank organized in mutual form.
DFI-SB 21.01(5)
(5) “Associate", when indicating a relationship between persons, means:
DFI-SB 21.01(5)(a)
(a) Any corporation or organization other than the applicant or a majority-owned subsidiary of the applicant of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities;
DFI-SB 21.01(5)(b)
(b) Any trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity, except that, for the purposes of s.
DFI-SB 21.10 (6),
(7) or
(8) or
21.11 (4), it does not include any employee benefit plan in which a person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity; or
DFI-SB 21.01(5)(c)
(c) Any relative by blood or marriage of the natural person, or any relative by blood or marriage of the spouse, who has the same legal residence as or shares living quarters with the person or who is a director or officer of the applicant or of any of the applicant's parent organizations or subsidiaries.
DFI-SB 21.01(6)
(6) “Broker-dealer" means a person in the business of effecting transactions in securities for the account of others or for the person's own account and a person who acts, 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 corporation.
DFI-SB 21.01(7)
(7) “Capital stock" includes permanent stock, guaranty stock, permanent reserve stock, common stock, preferred stock, convertible preferred stock and any similar certificate evidencing nonwithdrawable capital of an applicant, savings bank holding company or a subsidiary of the savings bank or savings bank holding company.
DFI-SB 21.01(8)
(8) “Control" means the power to direct or cause the direction of the management and policies of a person, through ownership of voting securities, by contract or otherwise.
DFI-SB 21.01(9)
(9) “Deposit account holder" means a person who holds a deposit account in an applicant and includes an eligible account holder and a supplemental eligible account holder.
DFI-SB 21.01(10)
(10) “Eligibility record date" means the record date for determining eligible account holders of an applicant which shall be at least 90 days prior to the date of the adoption of the plan of conversion by the board of directors.
DFI-SB 21.01(11)
(11) “Eligible account holder" means any person holding a deposit account as of the eligibility record date subject to s.
DFI-SB 21.12.
DFI-SB 21.01(12)
(12) “Employee" does not include a director or officer unless also employed by the applicant.
DFI-SB 21.01(13)
(13) An “employee benefit plan" includes any “tax-qualified employee stock benefit plan" whether a defined benefit plan or defined contribution plan such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which, with its related trust, meets the requirements to be “qualified" under section
401 of the internal revenue code, as well as any“non-tax-qualified employee stock benefit plan" established for the purpose of providing stock or stock related benefits to employees and which is not so qualified.
DFI-SB 21.01(14)
(14) “Equity security" means any stock or similar security; or any security convertible, with or without consideration, into the security, or carrying any warrant or right to subscribe to or purchase the security; or any warrant or right.
DFI-SB 21.01(15)
(15) “Market maker" means a dealer who, with respect to a particular security:
DFI-SB 21.01(15)(a)1.1. Regularly publishes bona fide, competitive bid and offer quotations in a recognized inter-dealer quotation system; or
DFI-SB 21.01(15)(b)
(b) Is ready, willing and able to effect transactions in reasonable quantities at his or her quoted prices with other brokers or dealers.
DFI-SB 21.01(16)
(16) “Member" means a holder of a deposit account in a mutual savings bank under s.
214.30, Stats.
DFI-SB 21.01(17)
(17) Except as provided in s.
DFI-SB 21.16 (1) (b), “offer" includes every attempt to offer to dispose of, or to solicit an offer to buy, a security or interest in a security, for value and does not include preliminary negotiations or agreements between an applicant and any underwriter or among underwriters who are or are to be in privity of contract with an applicant.
DFI-SB 21.01(18)
(18) “Officer", for purposes of the purchase of stock in a converting applicant under this chapter, means the applicant's chairperson of the board of directors, president, vice presidents, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any other person performing similar functions with respect to the applicant.
DFI-SB 21.01(19)
(19) Except as provided in s.
DFI-SB 21.16 (1) (c), “person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization, or a government or political subdivision thereof.
DFI-SB 21.01(20)
(20) “Proxy" includes every form of authorization by which a person is, or may be considered to be, designated to act for an applicant's member in the exercise of his or her voting rights in the business of an applicant. An authorization may take the form of failure to dissent or object.
DFI-SB 21.01(21)
(21) “Purchase" includes every contract to purchase, buy or otherwise acquire a security or interest in a security for value.
DFI-SB 21.01(22)
(22) “Sale" includes every contract to sell or otherwise dispose of a security or interest in a security for value but does not include an exchange of securities in connection with a merger or acquisition.
DFI-SB 21.01(23)
(23) “Security" includes any note, stock, treasury stock, bond, debenture, transferable share, investment contract, voting trust certificate, or any instrument commonly known as a “security". It also includes 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 above items.
DFI-SB 21.01(24)(a)1.
1. Any request for a proxy whether or not accompanied by or included in a form of proxy;
DFI-SB 21.01(24)(a)3.
3. The furnishing of a form of proxy or other communication to an applicant's members under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy.
DFI-SB 21.01(24)(b)
(b) The terms do not apply to the furnishing of a form of proxy to an applicant's member upon the unsolicited request of the member, the performance of acts required by s.
DFI-SB 21.23 (7) or to the performance by any person of ministerial acts on behalf of a person soliciting a proxy.
DFI-SB 21.01(25)
(25) “Subscription offering" means the offering of shares of capital stock, through nontransferable subscription rights issued to:
DFI-SB 21.01(25)(e)
(e) Any other classes of persons granted subscription rights in a plan of conversion.
DFI-SB 21.01(26)
(26) “Supplemental eligibility record date" means the date for determining supplemental eligible account holders of an applicant required by s.
DFI-SB 21.10 (5). The date shall be the last day preceding adoption of a plan of conversion by the institution's board of directors.
DFI-SB 21.01(27)
(27) “Supplemental eligible account holder" means any person holding a qualifying deposit account, except officers, directors and their associates, as of the supplemental eligibility record date.
DFI-SB 21.01(28)
(28) “Underwriter" means 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 of these activities; but the term shall not include a person whose interest is limited to a commission from an underwriter or broker-dealer not in excess of the usual and customary distributor's or seller's commission. “Principal underwriter" means an underwriter in privity of contract with the applicant or other issuer of securities as to which he or she is the underwriter.
DFI-SB 21.01 Note
Note: This section interprets or implements s.
214.685, Stats.
DFI-SB 21.01 History
History: Cr.
Register, February, 1994, No. 458, eff. 3-1-94.
DFI-SB 21.10
DFI-SB 21.10
Contents of plan of conversion. A plan of conversion shall contain all of the following provisions:
DFI-SB 21.10(1)
(1)
Stock sale. The savings bank shall issue and sell its capital stock at a price based on an independent valuation.
DFI-SB 21.10(2)
(2)
Priority to purchase stock. Eligible account holders and supplemental eligible account holders with subscription rights have a priority to purchase conversion stock prior to an employee benefit plan.
DFI-SB 21.10(3)(a)
(a) Each eligible account holder shall receive, without payment, nontransferable subscription rights to purchase capital stock.
DFI-SB 21.10(3)(b)
(b) If there is an oversubscription to the capital stock, shares shall be allocated among subscribing eligible account holders so as to permit each eligible account holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation equal to 100 shares.
DFI-SB 21.10(3)(c)
(c) Any shares not allocated under par. (b) shall be allocated among the subscribing eligible account holders as provided in the plan of conversion.
DFI-SB 21.10(4)
(4)
Subordinated subscription rights. Nontransferable subscription rights to purchase capital stock received by officers and directors of the savings bank and their associates based on their increased deposits in the 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 under sub. (3).
DFI-SB 21.10(5)
(5)
Supplemental eligible account holders' subscription rights. Each supplemental eligible account holder of the savings bank shall receive, without payment, nontransferable subscription rights to purchase capital stock as provided in the plan of conversion.
DFI-SB 21.10(5)(a)
(a) Subscription rights received under this subsection shall be subordinated to all rights received by eligible account holders to purchase shares under subs. (3) and (4).
DFI-SB 21.10(5)(b)
(b) Any nontransferable subscription rights to purchase shares received by an eligible account holder under sub. (3) shall be applied in partial satisfaction of the subscription rights to be distributed under this section.
DFI-SB 21.10(5)(c)
(c) If an oversubscription to capital stock occurs, shares shall be allocated among the subscribing supplemental eligible account holders so as to permit each subscribing supplemental account holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation, including the number of shares, if any, allocated under sub. (3) equal to 100 shares.
DFI-SB 21.10(5)(d)
(d) Any shares not allocated under par. (c) shall be allocated among the subscribing supplemental eligible account holders on an equitable basis, related to the amount of their qualifying deposits, as provided in the plan of conversion.
DFI-SB 21.10(6)
(6)
Shares not purchased by subscription. Any shares of the savings bank not sold to persons with subscription rights shall be sold either in a public offering through an underwriter or directly by the converting institution in a direct community offering, subject to the applicant demonstrating in writing to the division the feasibility of the method of sale and to any conditions as may be provided in the plan of conversion. Those conditions shall be approved by the division in writing if there has been a sufficient showing of why the method of sale has been chosen.
DFI-SB 21.10(7)
(7)
Limit on shares by officers and directors. The officers and directors of the savings bank and their associates may purchase, in the conversion, up to an aggregate total of 35% of the total offering of shares of the savings bank. In calculating the number of shares which may be purchased, any shares attributable to the officers and directors and their associates but held by one or more tax-qualified employee stock benefit plans shall not be included. In the case of a merger conversion under s.
DFI-SB 21.27 any shares owned prior to the merger conversion by officers, directors, and their associates shall not be included in calculating the aggregate amount which may be purchased by those persons.
DFI-SB 21.10(8)
(8)
Exceptions to limits of officers and directors. An officer or director or his or her associates shall not purchase, without the prior written approval of the division, the capital stock of the savings bank except from a broker-dealer licensed under ch.
551, Stats., or a broker-dealer registered with the securities and exchange commission, for 3 years following the date of the conversion, except that this subsection shall not apply to purchases of stock made by and held by any one or more employee benefit plans which may be attributable to individual officers or directors.
DFI-SB 21.10(9)
(9)
Sale price of stock. The sale price of the shares of capital stock sold in the conversion shall be a uniform price under s.
DFI-SB 21.25, and the plan shall specify the underwriting or other marketing arrangements or both to ensure the sale of all shares not sold to persons with subscription rights.
DFI-SB 21.10(10)
(10)
Set time period for conversion. A time period must be established within which the conversion must be completed. The time period shall be not more than 24 months from the date the savings bank's members approve the plan of conversion and may not be extended.
DFI-SB 21.10(11)
(11)
Transfer of deposit accounts. Each deposit account holder of the converting savings bank shall receive, without payment, withdrawable deposit accounts in the converted savings bank equal in withdrawable amount to the withdrawal value of each of the deposit account holder's deposit accounts.
DFI-SB 21.10(12)
(12)
Liquidation accounts. A liquidation account shall be established and maintained for the benefit of deposit account holders if a complete liquidation of the converted savings bank occurs. A savings bank shall include in its articles of incorporation the following section:
“LIQUIDATION ACCOUNT. The savings bank shall establish and maintain a liquidation account for the benefit of its deposit account holders as of ___________ (“eligible savers"). If there is a complete liquidation, it shall comply with any laws and rules with respect to the amount and the priorities on liquidation of each of the savings bank's eligible saver's interest in the liquidation account, to the extent it is still in existence. However, an eligible saver's interest in the liquidation account shall not entitle that person to any voting rights at meetings of the stockholders."
DFI-SB 21.10(13)
(13)
Eligibility record date. An eligibility record date shall be stated which shall be not less than 90 days prior to the date of the board of director's adoption of the plan of conversion.
DFI-SB 21.10(14)
(14)
Voting rights. The holders of the capital stock of the savings bank shall have exclusive voting rights.
DFI-SB 21.10(15)
(15)
Amendments. The plan of conversion may be amended by the board of directors prior to the solicitation of proxies from members to vote on the plan and at any later time with the approval of the division. The conversion may be terminated by the board of directors at any time prior to the meeting of members called to consider the plan and at any later time with the division's approval.
DFI-SB 21.10(16)
(16)
Restrictions on certain stock sales. All shares of capital stock purchased by directors, officers or an associate of either on original issue in the conversion either directly from the savings bank by subscription or otherwise or from an underwriter shall be subject to the restriction that the shares shall not be sold for a period of not less than one year following the date of purchase, except upon the death of the director or officer or an associate of either.
DFI-SB 21.10(17)
(17)
Restrictions stated on stock certificate. In connection with shares of capital stock subject to restriction on sale for a period of time:
DFI-SB 21.10(17)(b)
(b) Instructions shall be issued to the transfer agent for the savings bank's capital stock with respect to applicable restrictions on transfer of any restricted stock.
DFI-SB 21.10(17)(c)
(c) Any shares issued as a stock dividend, stock split or otherwise relating to any restricted stock shall be subject to the same restrictions as apply to the restricted stock.
DFI-SB 21.10(18)
(18)
Reasonable expenses. The expenses incurred in the conversion shall be reasonable. Approximate amounts, by categories, shall be stated.
DFI-SB 21.10(19)
(19)
Fairness of plan. No provision may be included which the division shall determine to be inequitable or detrimental to the applicant, its deposit account holders or any other institution or to be contrary to the public interest.
DFI-SB 21.10(20)
(20)
No loans to purchase stock. The converting savings bank shall not lend funds or otherwise extend credit to any person to purchase the capital stock of the savings bank.
DFI-SB 21.10(21)
(21)
Discretionary distributions. The savings bank may make scheduled, discretionary contributions to a tax-qualified employee benefit plan if the contributions do not cause the savings bank to fail to meet its regulatory capital requirement under s.
214.43, Stats.
DFI-SB 21.10(22)(a)
(a) Following the conversion, promptly register the securities issued under the securities exchange act of 1934 and not undertake to deregister these securities for 3 years thereafter.
