17:12B-284. Notice of proposed acquisition to commissioner

a. No person, acting directly or indirectly, or through or in concert with one or more other persons, shall acquire or offer to acquire or exercise control of a state association unless the commissioner has been given 60 days' prior written notice of the proposed acquisition, and has not issued a notice disapproving the proposed acquisition during that period or during an additional 30-day period immediately thereafter. The period for disapproval may be further extended only if the commissioner determines that any acquiring party has not furnished all the information required under subsection f. of this section or that in his judgment any material information submitted is substantially inaccurate. An acquisition may be made prior to expiration of the disapproval period if the commissioner issues written notice of his intent not to disapprove the acquisition.

b. If the commissioner determines that he must act immediately upon notice of a proposed acquisition in order to prevent the probable failure of the state association involved in the proposed acquisition, he may waive the approval process requirements of this section.

c. Within three days after the date of the commissioner's decision to disapprove any proposed acquisition, the commissioner shall notify the acquiring party in writing of the disapproval. The notice shall provide a statement of the basis for the disapproval.

d. Within 10 days of receipt of a notice of disapproval, the acquiring party may ask the commissioner in writing to hold a hearing on the proposed acquisition. The hearing shall be held in accordance with the provisions of the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.) and any rules or regulations adopted thereunder.

e. The commissioner's disapproval of a proposed acquisition following a hearing shall be subject to review by the Appellate Division of the Superior Court.

f. Except as otherwise provided by rule or regulation, a notice of proposed acquisition filed pursuant to this section shall contain the following information:

(1) The identity, personal history, business background and experience of each person by whom or on whose behalf the acquisition is to be made, including material business activities and affiliations during the past five years, and a description of any material, pending legal or administrative proceedings in which the person is a party and any criminal indictment or conviction of the person issued by a state or federal court;

(2) A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five fiscal years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of those fiscal years, all prepared in accordance with generally accepted accounting principles consistently applied, and an interim statement of the assets and liabilities for each person, together with related statements of income and source and application of funds, as of a date not more than 90 days prior to the date of the filing of the notice;

(3) The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made;

(4) The identity, source and amount of the funds or other consideration used or to be used in making the acquisition, and if any of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings between or among the parties;

(5) Any plans or proposals which any acquiring party making the acquisition may have to liquidate the state association or savings and loan holding company, sell its assets or merge it with any company, or make any other major changes in its business or corporate structure or management;

(6) The identification of any person employed, retained or to be compensated by the acquiring party, or by any person on his behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a brief description of the terms of that employment, retainer, or arrangement for compensation;

(7) Copies of all invitations, tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition; and

(8) Any additional relevant information in such form as the commissioner may require by rule or regulation or by specific request in connection with any particular notice.

g. In determining whether to approve a proposed acquisition pursuant to this section, the commissioner may consider the following factors with respect to the applicant:

(1) The financial and the managerial resources and experience of the applicant;

(2) The competence, character, and integrity of the applicant;

(3) The applicant's plans and intentions with respect to the operation of the state association;

(4) Any other factors which the commissioner may deem relevant to the acquisition.

h. In determining whether to approve a proposed acquisition pursuant to this section, the commissioner may consider the following factors with respect to the state association:

(1) The financial condition and prospects of the state association, which shall include consideration as to the sufficiency of current or projected capital positions, as well as the level of indebtedness of the state association, before and after the acquisition;

(2) The convenience and needs of the depositors and the communities served by the state association; and

(3) The effect of the proposed acquisition on the safety and soundness of the state association.

i. The commissioner may disapprove any proposed acquisition if:

(1) The financial condition of any acquiring person is such as might jeopardize the financial stability of the state association or prejudice the interests of the depositors of the state association;

(2) The competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the state association, or in the interest of the public to permit such person to control the state association; or

(3) Any acquiring person neglects, fails, or refuses to furnish all the information required by the commissioner.

j. Whenever any state association makes a loan or loans, secured, or to be secured, by 25% or more of the outstanding voting stock of a state association, the president or other chief executive officer of the lending state association shall promptly report this fact to the department upon obtaining knowledge of the loan or loans, except that no report need be made in those cases where the borrower has been the owner of record of the stock for a period of one year or more or where the stock is that of the newly organized state association prior to its opening.

k. The report required by subsection j. of this section shall contain the information required by subsection f. of this section, and any other relevant information the department may require by rule or regulation or by specific request in connection with any particular report.

l. Within 12 months after a change of control, a state association shall report promptly to the commissioner any change or replacement of its chief executive officer or of any director, and shall include in the report a statement of the past and current business and professional affiliations of any new chief executive officer or director.

m. This section shall not apply to the following transactions:

(1) Any transaction subject to regulation 563.22 of the Federal Home Loan Bank Board's rules governing the Federal Savings and Loan Insurance Corporation (12 CFR 563.22) or the provisions of Article XIII of P.L. 1963, c. 144 (C. 17:12B-198 through 17:12B-212);

(2) The acquisition of additional shares of a class of voting securities of a state association or person by any person who has lawfully acquired and maintained control of 25% or more of that class of voting securities after filing the notice required under this section;

(3) The acquisition of voting securities in good faith in a fiduciary capacity, except that in circumstances described in subparagraph (b) of paragraph (2) of subsection e. of section 1 of this act, the person in control of the voting securities shall within 60 days of acquisition provide the commissioner with a notice containing the information specified in subsection f. of this section and dispose of the voting securities if the commissioner objects to the control, or in situations where the fiduciary has sole discretionary voting authority, provide the commissioner with a notice containing the information specified in subsection f. and dispose of the sole voting power if the commissioner objects to the voting authority;

(4) The acquisition of voting securities, which would otherwise require a notice under this section, in satisfaction of a debt previously contracted in good faith if the commissioner is notified within 60 calendar days after acquisition and the acquiring party provides any relevant information requested by the commissioner;

(5) The acquisition of voting securities through inheritance or a bona fide gift if the commissioner is notified within 60 calendar days after acquisition and the acquiring party provides any relevant information requested by the commissioner;

(6) The acquisition of the power to vote securities through receipt of a revocable proxy in connection with a proxy solicitation for the purposes of conducting business at a regular or special meeting of a state association or person in control of a state association, if the proxy terminates within a reasonable time after the meeting;

(7) The receipt of voting securities through a stock dividend or stock split if the proportional interest of the recipient in a state association or person in control of a state association remains substantially the same;

(8) The acquisition of voting securities acquired in connection with the underwriting of securities if the securities are held only for a period of time as will permit the sale thereof on a reasonable basis;

(9) Acquisition by any corporation the majority of the shares of which are owned by the United States;

(10) Transactions entered into prior to the effective date of this act;

(11) Any transaction for which the approval of the commissioner is required prior to consummation other than pursuant to this section;

(12) Transactions which the commissioner shall determine to be exempt from the application of this section; or

(13) Acquisition by any company which immediately prior to that acquisition could be examined by the commissioner pursuant to section 3 of this act, but in such case the commissioner shall be notified within 30 calendar days after the acquisition.

L. 1987, c. 225, s. 4.