Section 33.30 - Disposition of Stock and Operating Restrictions(1)Activities Restrictions. A mutual holding company and its subsidiary holding company shall only engage in those activities authorized for a mutual holding company pursuant to M.G.L. c.167H and 209 CMR 33.21 through 33.32. A subsidiary holding company shall be subject to the Commissioner's supervision, regulation and examination to the same extent as a mutual holding company under M.G.L. c. 167H and M.G.L. c. 167A.(2)Disposition of Stock. A mutual holding company shall provide written notice to the Commissioner at least 30 days prior to the effective date of any direct or indirect transfer of any of the stock it holds in a subsidiary holding company, a resulting subsidiary banking institution, an acquiree subsidiary banking institution, or any subsidiary banking institution that was in the mutual form when acquired by the mutual holding company, including stock transferred in connection with a pledge pursuant to 209 CMR 33.30(3) or any transfer of all or a substantial portion of the assets or liabilities of any such subsidiary holding company or subsidiary banking institution.(3)Pledging stock.(a) No mutual holding company may pledge the stock of its resulting subsidiary banking institution, an acquiree subsidiary banking institution, or any subsidiary banking institution that was in the mutual form when acquired by the mutual holding company (or its parent mutual holding company), unless the proceeds of the loan secured by the pledge are infused into the subsidiary banking institution whose stock is pledged. No mutual holding company may pledge the stock of its subsidiary holding company unless the proceeds of the loan secured by the pledge are infused into any banking institution subsidiary of the subsidiary holding company that is a resulting subsidiary banking institution, an acquiree subsidiary banking institution, or a subsidiary banking institution that was in the mutual form when acquired by the subsidiary holding company (or its parent mutual holding company). In the event the subsidiary holding company has more than one subsidiary banking institutions, the loan proceeds shall unless otherwise approved by the Commissioner, be infused in equal amounts to each subsidiary banking institution. Any amount of the stock of such subsidiary banking institution or subsidiary holding company may be pledged for these purposes. Nothing in 209 CMR 33.30(3)(a) shall be deemed to prohibit: 1. the payment of dividends from a subsidiary banking institution to its mutual holding company parent to the extent otherwise permissible; or2. the payment of dividends from a subsidiary holding company to its mutual holding company parent to the extent otherwise permissible; or(b) Within ten days after its pledge of stock pursuant to 209 CMR 33.30(3)(a), a mutual holding company shall provide written notice to the Commissioner regarding the terms of the transaction (including the amount of principal and interest, repayment terms, maturity date, the nature and amount of collateral, and the terms governing seizure of the collateral) and shall include in such notice a certification that the proceeds of the loan have been transferred to the subsidiary banking institution whose stock (or the stock of its parent subsidiary holding company) has been pledged.(c) Any mutual holding company that fails to make any payment on a loan secured by the pledge of stock under 209 CMR 33.30(3)(a) on or before the date on which such payment is due shall, on the first day after such payment is due, provide written notice of nonpayment to the Commissioner.(4)Restrictions on stock repurchases. No subsidiary banking institution of a mutual holding company that has any stockholders other than the subsidiary banking institution's mutual holding company and no subsidiary holding company that has any stockholders other than its parent mutual holding company shall repurchase any share of stock within three years of its date of issuance, unless the repurchase: (a) is part of a general repurchase made on a pro rata basis pursuant to an offer approved by the Commissioner and made to all stockholders of the subsidiary banking institution or subsidiary holding company (except that the parent mutual holding company may be excluded from the repurchase with the Commissioner's approval);(b) is limited to the repurchase of qualifying shares of a director; or(c) is purchased in the open market by a tax-qualified or nontax-qualified employee stock benefit plan of the subsidiary banking institution or subsidiary holding company in an amount reasonable and appropriate to fund such plan.(d) is limited to stock repurchases of no greater than 5% of the outstanding capital stock of the subsidiary banking institution or subsidiary holding company where compelling and valid business reasons are established to the satisfaction of the Commissioner.(5)Restrictions on waiver of dividends. No mutual holding company may waive its right to receive any dividend declared by a subsidiary unless either: (a) no insider of the mutual holding company, associate of an insider, or tax-qualified or nontax-qualified employee stock benefit plan of the mutual holding company holds any share of stock in the class of stock to which the waiver would apply; or(b) the mutual holding company provides the Commissioner with written notice of its intent to waive its right to receive dividends 30 days prior to the proposed date of payment of the dividend, and the Commissioner does not object. The Commissioner shall not object to a notice of intent to waive dividends if:1. the waiver would not be detrimental to the safe and sound operation of the subsidiary banking institution; and2. the board of directors of the mutual holding company expressly determines that waiver of the dividend by the mutual holding company is consistent with the directors' fiduciary duties to the mutual members of such company. A dividend waiver notice shall include a copy of the resolution of the board of directors of the mutual holding company, in form and substance satisfactory to the Commissioner, together with any supporting materials relied upon by the board, concluding that the proposed dividend waiver is consistent with the board's fiduciary duties to the mutual members of the mutual holding company.(c) A subsidiary holding company may issue one or more classes of common stock, including separate classes of common stock to the mutual holding company and minority stock holders, subject the the Commissioner's prior written approval, provided that the terms of such classes of stock are consistent with the board's fiduciary duties to the mutual members of the mutual holding company.(6)Restrictions on issuance of stock to insiders. A subsidiary of a mutual holding company that is not a subsidiary banking institution or subsidiary holding company may issue stock to any insider, associate of an insider or tax-qualified or nontax-qualified employee stock benefit plan of the mutual holding company or any subsidiary of the mutual holding company, provided that such persons or plans provide written notice to the Commissioner at least 30 days prior to the stock issuance. Subsidiary banking institutions and subsidiary holding companies may issue stock to such persons only in accordance with 209 CMR 33.27.(7)Commitments relative to future stock issuance and mutual holding company conversion plans. (a) A mutual banking institution reorganizing into a mutual holding company under 209 CMR 33.23 through 209 CMR 33.26 shall provide the Commissioner a written commitment relative to any future plans to issue securities under 209 CMR 33.27 through 209 CMR 33.29 or to fully convert the reorganized mutual holding company under 209 CMR 33.32 through 209 CMR 33.41. Commitments shall be reasonably specific as to the time period and circumstances under which any stock issuance or conversion would occur.(b) A subsidiary of a mutual holding company initially issuing securities under 209 CMR 33.23 through 209 CMR 33.26 shall provide the Commissioner a written commitment relative to any future plans to fully convert the reorganized mutual holding company under 209 CMR 33.32 through 209 CMR 33.41. Commitments shall be reasonably specific as to the time period and circumstances under which any conversion would occur. Such commitment shall be for a minimum period of three years from the date of its reorganization under 209 CMR 33. 23 through 209 CMR 33.26 or three years from the date of its initial stock issuance under 209 CMR 33.27 through 209 CMR 33.29.(c) The Commissioner may waive the written commitments made under 209 CMR 33.30(7) for supervisory reasons or compelling and valid business reasons established to the satisfaction of the Commissioner.