TITLE XXXV BANKS AND BANKING; LOAN ASSOCIATIONS; CREDIT UNIONS
CHAPTER 383-B DEPOSITORY BANK ACT
ARTICLE 6 Mutual Banks and Mutual Holding Companies
Section 383-B:6-608
383-B:6-608 Conversion From Mutual to Stock Form. –
(a) Any mutual bank or mutual holding company may convert to stock form in the same manner as prescribed for a federal savings bank or a federal mutual holding company under federal law. However, no conversion under this subsection shall be permitted that includes as part of the conversion transaction the issuance of securities of any bank or holding company other than securities of the converting bank or holding company or the securities of a holding company organized by the converting bank in order to acquire its capital stock, unless in addition to procedures required by the rules adopted under this section, it is ratified by the depositors of a mutual bank or the depositors of a subsidiary bank or subsidiary banks of a mutual holding company. Ratification by depositors shall not be required if the conversion is part of a reorganization into a mutual holding company or the conversion is required by federal or state regulatory authorities.
(b) The depositor voting procedures shall be the same as those prescribed for a federal savings bank or a federal mutual holding company under federal law.
(c) In connection with a proposed conversion under the provisions of this section, no new compensation arrangement shall be provided for directors, officers, or employees unless the commissioner finds that it is fair and reasonable, based upon all of the facts and circumstances of the conversion and the future management and operational needs of the mutual bank or mutual holding company, including comparable compensation arrangements at similarly situated banks or holding companies. In addition, no conversion or reorganization shall be approved by the commissioner unless the commissioner finds that the process of obtaining corporate decisions and approvals was conducted in a lawful, informed, and independent manner, the rights of the depositors of the converting mutual bank or of the subsidiary bank or subsidiary banks of the converting mutual holding company are not impaired under the plan of conversion or reorganization, the depositors are not treated detrimentally or inequitably under the terms of the proposed conversion or reorganization, and the plan of conversion or reorganization does not provide corporators, if any, directors, officers, or employees with any benefit, privilege, or advantage with respect to the purchase, if any, of the capital stock in the conversion or reorganization which is not generally available to the depositors.