(a) Board review of a voluntary supervisory conversion application. The
Board will generally approve the application to engage in a voluntary
supervisory conversion unless it determines:
(1) The mutual holding company does not
meet the eligibility requirements for a voluntary supervisory conversion
under sections 239.65(d) or because the proceeds from the sale of
the conversion stock, less the expenses of the conversion, would be
insufficient to satisfy any applicable viability requirement;
(2) The transaction is detrimental
to or would cause potential injury to the mutual holding company,
its subsidiary savings association, or the Deposit Insurance Fund
or is contrary to the public interest;
(3) The mutual holding company or the acquiror,
or the controlling parties or directors and officers of the mutual
holding company or the acquiror, have engaged in unsafe or unsound
practices in connection with the voluntary supervisory conversion;
or
(4) The mutual holding
company fails to justify an employment contract incidental to the
conversion, or the employment contract will be an unsafe or unsound
practice or represent a sale of control. In a voluntary supervisory
conversion, the Board generally will not approve employment contracts
of more than one year for the existing management.
(b) Conditions the Board may
impose on an approval.
(1) The Board will condition approval of
a voluntary supervisory conversion application on all of the following.
(i) The conversion stock sale must be complete within three months
after the Board approves the application. The Board may grant an extension
for good cause.
(ii) The mutual holding company and the resulting stock holding company
must comply with all filing requirements of subpart E of this part.
(iii) The mutual holding
company must submit an opinion of independent legal counsel indicating
that the sale of the shares complies with all applicable state securities
law requirements.
(iv) The mutual holding company and the resulting stock holding company
must comply with all applicable laws, rules, and regulations.
(v) The mutual holding company
and the resulting stock holding company must satisfy any other requirements
or conditions the Board may impose.
(2) The Board may condition approval of
a voluntary supervisory conversion application on either of the following:
(i) The mutual holding company and the resulting stock holding company
must satisfy any conditions and restrictions the Board imposes to
prevent unsafe or unsound practices, to protect the Deposit Insurance
Fund and the public interest, and to prevent potential injury or detriment
to the mutual holding company before and after the conversion. The
Board may impose these conditions and restrictions on the mutual holding
company and the resulting stock holding company (before and after
the conversion), the acquiror, controlling parties, or directors and
officers of the mutual holding company or the acquiror; or
(ii) The mutual holding
company or the resulting stock holding company must infuse a larger
amount of capital, if necessary, for safety and soundness reasons.
