17:12B-281. Definitions

As used in this act:

a. "Insured institution" and "savings and loan holding company" shall have the respective meanings set forth in Title IV, section 408 of the "National Housing Act," as amended (12 U.S.C. s. 1730a).

b. "State association" means any savings and loan association, building and loan association, or any corporation, however named, operating pursuant to the provisions of P.L. 1963, c. 144 (C. 17:12B-1 et seq.). "State association" shall also include a person who controls an association when used in section 4 of this act.

c. "Person" means an individual or company.

d. "Company" means any corporation, partnership, trust, joint-stock company, association or similar organization, but does not include the Federal Savings and Loan Insurance Corporation, any Federal Home Loan Bank, or any company the majority of the shares of which is owned by the United States or any state, or by an officer of the United States or any state in his official capacity, or by an instrumentality of the United States or any state.

e. (1) "Control" of an insured institution or state association means:

(a) Owning, controlling, or having power to vote 25% or more of the outstanding shares of any class of voting securities of an insured institution, directly or indirectly, or acting through one or more persons;

(b) Controlling in any manner the election of a majority of the directors, trustees, general partners, or individuals exercising similar functions of the insured institution; or

(c) Exercising or having the power to exercise directly or indirectly a controlling influence over the management or policies of an insured institution;

(2) A person which is a state association shall not be deemed to control voting securities or assets of a state association acquired: (a) in good faith in a fiduciary capacity, except where those voting securities are held in a trust that constitutes a company; or (b) in the regular course of securing or collecting a debt previously contracted in good faith which securities are disposed of within a period of two years after the date on which they were acquired or after the enactment of this act, whichever is later;

(3) A person is deemed to control voting securities or assets owned, controlled, or held directly or indirectly:

(a) by any subsidiary of the person; or

(b) in a fiduciary capacity, including by pension and profit-sharing trusts, for the benefit of the shareholders, members, employees, or individuals serving in similar capacities, of the person or of any of its subsidiaries; or

(c) in a fiduciary capacity for the benefit of the person or any of its subsidiaries.

f. "Subsidiary" means any person or company which is controlled by another person or company.

g. "Voting securities" means shares of common or preferred stock, general or limited partnership shares or interests or similar interests if the shares or interests, by statute, charter, or in any manner, entitle the holder:

(1) to vote for or to select directors, trustees, partners, or persons exercising similar functions for the issuing company; or

(2) to vote on or to direct the conduct of the operations or other significant policies of the issuing person.

Preferred shares, limited partnership shares or interests, or similar interests are not "voting securities" if:

(1) any voting rights associated with the shares or interests, including the right to select or vote for the selection of directors, trustees, or partners or persons exercising similar functions, are limited solely to the type customarily provided by statute with regard to matters that would significantly and adversely affect the rights or preference of the security or other interest, such as the issuance of additional amounts or classes of senior securities, the modification of the terms of the security or interest, the dissolution of the issuing person, or the payment of dividends by the issuing person when preferred dividends are in arrears, or, entitle the holder thereof to vote for the election of directors, trustees or partners or persons exercising similar functions only as the result of the failure to pay a dividend or to fulfill an obligation or satisfy a condition specified by the terms of the shares or interests; and

(2) the shares or interests represent an essentially passive investment or financing device and do not otherwise provide the holder with control over the issuing person.

h. "Commissioner" means the Commissioner of Banking.

i. "Department" means the Department of Banking.

j. "United States" means the United States and includes any of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, and the Virgin Islands.

L. 1987, c. 225, s. 1.