81-12-61 - Conversion of capital stock association organized under state law into federal association.
§ 81-12-61. Conversion of capital stock association organized under state law into federal association.
(1) A capital stock association organized under this chapter may vote to convert itself into a federal mutual or capital stock savings or savings and loan association, hereinafter in this subsection referred to as a "federal association," at any legal meeting called to consider the action. The required affirmative vote to effect the conversion shall be not less than sixty-six and two-thirds percent (66-2/3%) of the issued and outstanding stock of such association. Notice of the meeting giving the time, place and purpose thereof, together with a proxy statement and proxy form covering all matters properly brought before the meeting shall be mailed at least thirty (30) days prior thereto to the commissioner and the appropriate federal regulatory authority and to each stockholder at his last address as shown on the books of the association. A copy of the minutes of the proceedings of the meeting, verified by the affidavit of the secretary or an assistant secretary of the association, shall be filed in the office of the commissioner within ten (10) days after the date of the meeting. When filed, a verified copy of the proceedings of the meeting is presumptive evidence of the holding of the meeting and of the action taken. Any stockholder challenging the accuracy of such minutes by sworn objection may appeal to the commissioner. Within three (3) months after the date of the meeting, the association shall take such further action, in the manner prescribed and authorized by the laws of the United States, as shall make it a federal association. Three (3) copies of the charter issued by the appropriate federal regulatory authority, or three (3) copies of a certificate showing the organization of the association as a federal association, certified by the secretary or an assistant secretary of the appropriate federal regulatory authority shall be filed with the commissioner. Upon the payment of the fees prescribed by law, the commissioner shall note the filing upon each of the copies and shall retain one (1) copy in his office, file one (1) copy with the Secretary of State, and return one (1) copy to the association. The failure to file the instruments with the commissioner shall not affect the validity of the conversion. Upon the grant to any association of a charter by the appropriate federal regulatory authority, the association shall cease to be an association incorporated under this chapter and shall no longer be subject to the supervision and control of the department. All provisions regarding property and other rights contained in Section 81-12-53 above apply to the conversion of a capital stock association into a federal association.
(2) (a) The plan of conversion must provide:
(i) That each savings account holder of the mutual association will receive a withdrawable account in the capital stock association equal in amount to his withdrawable account in the mutual association;
(ii) That each savings account holder of record as provided in paragraph (iii) will be entitled to receive voting stock or rights to purchase voting stock in equal proportion to the amount his account bears to all savings accounts;
(iii) That the record date fixed by the commissioner for determining savings account holders is to be used. During the month of January each year the commissioner shall publish a record date which shall be used in determining the respective interests of account holders. The date shall be not more than eighteen (18) months prior to its publication;
(iv) That the business purpose to be accomplished by the conversion is set forth with particularity;
(v) Such other information in such form as required by the commissioner to enable him to determine whether the plan is fair and equitable to members of the association and that the interest of the savings account holders and the public is adequately protected.
(b) A plan of conversion will not be considered unfair or inequitable merely because it contains provisions which provide:
(i) That shares of stock will be issued to savings account holders with or without cost;
(ii) That shares of stock will be issued with cost to all savings account holders and that no stock will be issued without cost;
(iii) That savings account holders will or will not have preemptive rights to all stock proposed to be issued;
(iv) That those persons who were savings account holders during a particular number of years have preemptive rights to purchase voting stock at the fair market value thereof;
(v) That employment contracts are provided for officers and employees of the association;
(vi) That no more than ten percent (10%) of the voting stock proposed to be issued pursuant to the plan of conversion is reserved by the association for stock options for officers and employees.
Sources: Laws, 1977, ch. 445, § 13 (4, 5); reenacted, 1982, ch. 301, § 31; Laws, 1990 Ex Sess, ch. 52, § 32; Laws, 1993, ch. 441, § 32; reenacted and amended, 1994, ch. 622, § 64; reenacted without change, Laws, 1997, ch. 496, § 29; reenacted without change, Laws, 2001, ch. 488, § 30, eff from and after July 1, 2001.