§939. Plan of conversion from mutual to capital stock association; mandatory and permissive requirements

A. The plan of conversion shall provide:

(1) That each savings account holder of the mutual association shall receive a withdrawable account in the capital stock association equal in amount to his withdrawable account in the mutual association.

(2) That each eligible account holder shall receive, without payment, nontransferable subscription rights to purchase entitlement shares of stock in an amount equal to the product, rounded down to the next whole number, obtained by multiplying the total number of shares of capital stock to be issued by a fraction of which the numerator is the amount of the qualifying deposit of the eligible account holder and the denominator is the total amount of qualifying deposits of all eligible account holders in the converting insured institution.

(3) That if the commissioner fixes a record date, that record date shall be used for determining savings account holders.

(4) With particularity, the business purpose to be accomplished by the conversion.

(5) That savings account holders shall have preemptive rights to all stock proposed to be issued.

(6) Other information in a form, as is required by the commissioner to enable him to determine that 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 shall not be considered unfair or inequitable merely because it contains provisions:

(1) That shares of stock will be issued to savings account holders with or without cost.

(2) That shares of stock will be issued at cost to all savings account holders and that no stock will be issued without cost.

(3) That savings account holders, including or excluding past savings account holders, will have a right to purchase shares of voting common stock at the fair market value thereof.

(4) That those persons who were savings account holders during a particular number of years will have preemptive rights to purchase voting common stock at the fair market value thereof.

(5) That employment contracts will be provided for officers and employees of the association.

(6) That after all subscriptions of the members of the association have been satisfied, officers, directors, and employees, in their capacity as such, will be permitted to purchase an amount no greater than twenty percent of the total stock being offered.

C. A plan of conversion may include provisions for a stock option plan to be implemented as part of the plan of conversion. The number of shares of stock to be allocable to such stock option plan shall be approved by the commissioner and the Federal Deposit Insurance Corporation.

D. The commissioner may add further mandatory or permissive requirements which he determines are necessary for an equitable conversion or which may be necessary to comply with regulations of the Federal Deposit Insurance Corporation or the Federal Home Loan Bank Board.

Acts 1983, No. 675, §1.