Section 1075.640  Ownership of Capital Stock of Service Corporation

a)         A minimum of 51% of all classes of capital stock of a first-tier service corporation shall be owned by one or more savings banks, bank, or savings and loan associations. First-tier service corporation means any corporation which is 51% or more owned by one or more savings banks, bank, or savings and loan associations whose purpose or purposes are reasonably incident to the accomplishment of the powers conferred upon savings banks by the Act.

b)         Subject to approval by the Director, an amount not to exceed 49% of all classes of capital stock of a service corporation may be owned by a person or persons other than a savings bank. The ownership shall be approved if the Director finds:

1)         the sale or issuance of stock is at no less than the book value of the stock;

2)         if no sale is involved, that the stock issuance to employees or officers is part of the compensation program documented by a written employment contract; and

3)         the ownership of the stock is subject to a repurchase agreement that provides that the service corporation has the right of first refusal to reacquire the stock from the person or persons or the estate of the person or persons at book value at the time of death or termination of employment.

c)         The book value of the stock shall be determined in accordance with generally accepted accounting principles by the independent auditor of the service corporation.

(Source:  Amended at 30 Ill. Reg. 19068, effective December 1, 2006)