SECTION 85:25-3-61. Conversion from mutual to stock savings & loan association

(a)   In order to convert from a mutual to a stock association, the association must first file Notice of Intent to Convert with the Commissioner which shall contain the following:

(1)   Resolution to convert adopted by two-thirds (2/3) of the board of directors of the applicant and the proposed plan of conversion;

(2)   Proposed Articles of Incorporation and by-laws;

(3)   Opinion Letter from Counsel representing the filing association that:

(A)   the proposed plan of conversion, Resolution, Articles and by-laws are in proper legal form and comply with the Oklahoma Statutes applicable to conversion; and

(B)   Opinion Letter from Counsel or Tax Counsel showing the conversion will not be a taxable event under the provisions of the Internal Revenue Code;

(4)   Such financial information relative to the association and the directors and officers as required by the Commissioner.

(b)   The Commissioner shall, within thirty (30) days of receipt of the material, determine whether or not the Notice of Intent is complete.

(1)   If such Notice is incomplete, the Commissioner shall return the Notice to the applicant advising of the deficiencies;

(2)   If the Notice is complete, the Commissioner shall notify the applicant of its acceptance, and shall set the matter for hearing.

(c)   Within sixty (60) days after the filing of the Notice of Intent to Convert, the Board shall hold a hearing. At the time of the hearing, the applicant shall submit the following documents to the Board:

(1)   Plan of Conversion;

(2)   Proxy statements and Offering Circular;

(3)   The savings account balance of association's directors and officers as of the record date;

(4)   The expenses expected to be incurred in the conversion.

(d)   The Plan shall provide:

(1)   That the proposed institution sell and issue its capital stock at a total price equal to market value and also contain the method to be used in determining this market value in a reasonable manner;

(2)   That no person, associate of a person, as defined in Section 381.50 of the Code, alone, or acting in concert with another person or associate of a person, may subscribe for more than 20% of the total amount of the capital stock offering as determined by (1) of this subsection unless expressly permitted by the Board;

(3)   That at the expiration of three (3) years, there is no limit on the ownership of the stock;

(4)   That the subscription price of the shares of capital stock to be sold shall be at a uniform price and specific arrangements are to be made to assure the sale of all shares not sold in the subscription offering;

(5)   That the account holders who opened their account after the record date and prior to the members' meeting held to vote on the Plan of Conversion, have an opportunity to subscribe for any capital stock not sold on the initial offering. Officers and directors would not be eligible for this subscription;

(6)   That all shares of capital stock purchased by directors and officers on the original issue in the conversion, either directly or from an underwriter, shall not be sold for a period not less than one (1) year following purchase, except in the event of death of the director or officer;

(7)   The converted institution would have legal and federal insurance reserves of not less than 5% of savings deposits.

(8)   The Proxy information shall be included.

(e)   If the Board determines that the Plan is complete and that same is fair and equitable to all members and that sufficient provisions are made to protect the interests of the depositors of the prospective capital stock association in accordance with 18 O.S. Section 381.50(B), it shall grant conditional approval to applicant.

(f)   The applicant shall within sixty (60) days after the conditional approval is given, file with the Commissioner:

(1)   A Certificate from the secretary or assistant secretary of the applicant that the Plan of Conversion was adopted in conformity with Section 381.50 of the Code, together with a tally of the votes cast for and against;

(2)   Certified copy of Articles of Incorporation (or amended Articles of Incorporation), which have been filed with the Secretary of State;

(3)   Certified copy of the by-laws of the Corporation which have been adopted by the shareholders or directors;

(4)   Approval of conversion by the Federal Home Loan Bank, and Federal Savings & Loan Insurance Corporation;

(5)   A statement of expenses.

(g)   Applicant shall certify that all the information included in the Notice of Intent to Convert is still applicable.

(h)   The Commissioner shall without further notice, hearing or action by the Board, file the approved Resolution with the Secretary of State and the conversion shall be completed in accordance with Section 381.50 of the Code.

(i)   In the event any change has occurred in the Board membership, additional financial information may be required.

(j)   Notice of hearings will be given as required by the Administrative Procedures Act and Rule 625:1-1-7.

(k)   If a savings and loan association shall fail to commence business within six (6) months after the issuance of the Certificate of Authority, or any additional period allowed by the Board, the Commissioner shall cancel its Certificate of Authority; however, permission is hereby granted to the Commissioner to give additional extensions of time in which the savings and loan shall commence business if the reasons are valid, and in the opinion of the Commissioner, are reasonable, after approval by the Board.

[Source: Transferred from 625:10-7-2 (see Editor’s Note at beginning of this Chapter)]