Mutual To Stock Conversions

TITLE 26 BANKS AND BANKING CHAPTER 18 SAVINGS BANKS 26-1813. Mutual to stock conversions. A mutual savings bank may change its form of organization to that of a stock savings bank by filing an application with the director. As part of the application, the savings bank will include a plan of conversion, which the director may approve, with or without amendment, if it appears that: (1)  After conversion the savings bank will be in sound financial condition; (2)  The conversion will be fair and equitable to the members of the savings bank and no person whether member, employee or otherwise, will receive any inequitable gain or advantage by reason of the conversion; (3)  The savings bank services provided to the public by the savings bank will not be adversely affected by the conversion; (4)  The plan has been approved by a vote of two-thirds (2/3) of the board of directors of the savings bank; (5)  All shares of stock issued in connection with the conversion are offered first to the members of the savings bank; (6)  All stock shall be offered to members of the savings bank and others under a formula and procedure that is fair and equitable and will be fairly disclosed to all interested persons; and (7)  The plan provides a statement as to whether stockholders shall have preemptive rights to acquire additional or treasury shares of the savings bank. The plan shall be submitted to the members, but only after it has been approved by the director. After lawful notice to the members of the savings bank and full and fair disclosure, the substance of the plan must be approved by a majority of the total votes that members of the savings bank are eligible and entitled to cast. The vote by the members may be in person or by proxy. Any votes by proxy must be specific to the plan and not a general proxy. Following the vote of the members, the results of the vote certified by an appropriate officer of the savings bank shall be filed with the director. The director shall then either approve or disapprove the requested change in corporate form. After approval, the director shall supervise the conversion process and shall ensure that the process is conducted lawfully and under the approved plan.