12 C.F.R. § 563b.500 May I implement a stock option plan or management or employee stock benefit plan?
Title 12 - Banks and Banking
(a) You may implement a stock option plan or management or employee stock benefit plan within 12 months after your conversion, if you meet all of the following requirements. (1) You disclose the plans in your proxy statement and offering circular and indicate in the offering circular that there will be a separate vote on the plans at least six months after the conversion. (2) You do not grant stock options under your stock option plan in excess of 10 percent of shares that you issued in the conversion. (3) You do not permit your management stock benefit plans, in the aggregate, to hold more than three percent of the shares that you issued in the conversion. However, if you have tangible capital of 10 percent or more following the conversion, OTS may permit you to establish a management stock benefit plan that holds up to four percent of the shares that you issued in the conversion. (4) You do not permit your tax-qualified employee stock benefit plan(s) and your management stock benefit plans, in the aggregate, to hold more than 10 percent of the shares that you issued in the conversion. However, if you have tangible capital of 10 percent or more following the conversion, OTS may permit your tax-qualified employee stock benefit plan(s) and your management stock benefit plans, in the aggregate, to hold up to 12 percent of the shares that you issued in the conversion. (5) No individual receives more than 25 percent of the shares under any plan. (6) Your directors who are not your employees do not receive more than five percent of the shares of any plan individually, or 30 percent of the shares of any plan in the aggregate. (7) Your shareholders approve each plan by a majority of the total votes eligible to be cast at a duly called meeting before you establish or implement the plan. You may not hold this meeting until six months after your conversion. If you are a subsidiary of a mutual holding company, a majority of the total votes eligible to be cast (other than your parent mutual holding company) must approve each plan before you may establish or implement the plan. (8) When you distribute proxies or related material to shareholders in connection with the vote on a plan, you state that the plan complies with OTS regulations and that OTS does not endorse or approve the plan in any way. You may not make any written or oral representation to the contrary. (9) You do not grant stock options at less than the market price at the time of grant. (10) You do not use stock issued at the time of conversion to fund management or employee stock benefit plans. (11) Your plan does not begin to vest earlier than one year after your shareholders approve the plan, and does not vest at a rate exceeding 20 percent a year. (12) Your plan permits accelerated vesting only for disability or death, or if you undergo a change of control. (13) Your plan provides that your executive officers or directors must exercise or forfeit their options in the event the institution becomes critically undercapitalized (as defined in §565.4 of this chapter), is subject to OTS enforcement action, or receives a capital directive under §565.7 of this chapter. (14) You file a copy of the approved stock option plan or management or employee stock benefit plan with OTS and certify to OTS in writing that the plan approved by the shareholders is the same plan that you filed with, and disclosed in, the proxy materials distributed to shareholders in connection with the vote on the plan. (15) You file the plan and the certification with OTS within five calendar days after your shareholders approve the plan. (b) You may provide dividend equivalent rights or dividend adjustment rights to allow for stock splits or other adjustments to your stock in stock option plans or management or employee stock benefit plans under this section. (c) If the plan is amended more than one year following your conversion, any material deviations to the requirements in paragraph (a) of this section must be ratified by your shareholders.
Title 12: Banks and Banking
PART 563b—CONVERSIONS FROM MUTUAL TO STOCK FORM
Subpart A—Standard Conversions
Post-Conversion
§ 563b.500 May I implement a stock option plan or management or employee stock benefit plan?
