RCW 32.32.010
Chapter exclusive
—
Prohibition on conversion without approval
—
Waiver of requirements.
This chapter shall exclusively govern the conversion of mutual savings banks to capital stock savings banks. No mutual savings bank may convert to the capital stock form of organization without the prior written approval of the director pursuant to this chapter, except that the director may waive requirements of this chapter in appropriate cases.
[
1994 c 92 s 349
;
1981 c 85 s 1
.]
RCW 32.32.015
Forms.
The director may prescribe under this chapter such forms as the director deems appropriate for use by a mutual savings bank seeking to convert to a capital stock savings bank pursuant to this chapter.
[
1994 c 92 s 350
;
1981 c 85 s 2
.]
RCW 32.32.020
Request of noncompliance
—
Requirements.
(1) If an applicant finds that compliance with any provision of this chapter would be in conflict with applicable federal law, the director shall grant or deny a request of noncompliance with the provision. The request may be incorporated in the application for conversion; otherwise, the applicant shall file the request in accordance with the requirements of the director.
(2) In making any such request, the applicant shall:
(a) Specify the provision or provisions of this chapter with respect to which the applicant desires waiver;
(b) Furnish an opinion of counsel demonstrating that applicable federal law is in conflict with the specified provision or provisions of this chapter; and
(c) Demonstrate that the requested waiver would not result in any effects that would be inequitable or detrimental to the applicant, its account holders, or other financial institutions or would be contrary to the public interest.
[
1994 c 92 s 351
;
1981 c 85 s 3
.]
RCW 32.32.025
Definitions.
As used in this chapter, the following definitions apply, unless the context otherwise requires:
(1) Except as provided in RCW 32.32.230, an "affiliate" of, or a person "affiliated" with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
(2) The term "amount," when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to shares, and the number of units if relating to any other kind of security.
(3) An "applicant" is a mutual savings bank which has applied to convert pursuant to this chapter.
(4) The term "associate," when used to indicate a relationship with any person, means (a) any corporation or organization (other than the applicant or a majority-owned subsidiary of the applicant) of which the person is an officer or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, (b) any trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity, and (c) any relative who would be a "class A beneficiary" if the person were a decedent.
(5) The term "broker" means any person engaged in the business of effecting transactions in securities for the account of others.
(6) The term "capital stock" includes permanent stock, guaranty stock, permanent reserve stock, any similar certificate evidencing nonwithdrawable capital, or preferred stock, of a savings bank converted under this chapter or of a subsidiary institution or holding company.
(7) The term "charter" includes articles of incorporation, articles of reincorporation, and certificates of incorporation, as amended, effecting (either with or without filing with any governmental agency) the organization or creation of an incorporated person.
(8) Except as provided in RCW 32.32.230, the term "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
(9) The term "dealer" means any person who engages either for all or part of his or her time, directly or indirectly, as agent, broker, or principal, in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another person.
(10) The term "deposits" refers to the deposits of a savings bank that is converting under this chapter, and may refer in addition to the deposits or share accounts of any other financial institution that is converting to the stock form in connection with a merger with and into a savings bank.
(11) The term "director" means any director of a corporation, any trustee of a mutual savings bank, or any person performing similar functions with respect to any organization whether incorporated or unincorporated.
(12) The term "eligibility record date" means the record date for determining eligible account holders of a converting mutual savings bank.
(13) The term "eligible account holder" means any person holding a qualifying deposit as determined in accordance with RCW 32.32.180
.
(14) The term "employee" does not include a director or officer.
(15) The term "equity security" means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right.
(16) The term "market maker" means a dealer who, with respect to a particular security, (a) regularly publishes bona fide, competitive bid and offer quotations in a recognized interdealer quotation system; or (b) furnishes bona fide competitive bid and offer quotations on request; and (c) is ready, willing, and able to effect transaction in reasonable quantities at his or her quoted prices with other brokers or dealers.
(17) The term "material," when used to qualify a requirement for the furnishing of information as to any subject, limits the information required to those matters as to which an average prudent investor ought reasonably to be informed before purchasing an equity security of the applicant.
(18) The term "mutual savings bank" means a mutual savings bank organized and operating under Title
32
RCW.
(19) Except as provided in RCW 32.32.435, the term "offer," "offer to sell," or "offer of sale" shall include every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, for value. These terms shall not include preliminary negotiations or agreements between an applicant and any underwriter or among underwriters who are or are to be in privity of contract with an applicant.
(20) The term "officer," for purposes of the purchase of stock in a conversion under this chapter or the sale of this stock, means the chair of the board, president, vice president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any other person performing similar functions with respect to any organization whether incorporated or unincorporated.
(21) Except as provided in RCW 32.32.435, the term "person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, any unincorporated organization, or a government or political subdivision thereof.
(22) The term "proxy" includes every form of authorization by which a person is or may be deemed to be designated to act for a stockholder in the exercise of his or her voting rights in the affairs of an institution. Such an authorization may take the form of failure to dissent or object.
(23) The terms "purchase" and "buy" include every contract to purchase, buy, or otherwise acquire a security or interest in a security for value.
(24) The terms "sale" and "sell" include every contract to sell or otherwise dispose of a security or interest in a security for value; but these terms do not include an exchange of securities in connection with a merger or acquisition approved by the director.
(25) The term "savings account" means deposits established in a mutual savings bank and includes certificates of deposit.
(26) Except as provided in RCW 32.32.435, the term "security" includes any note, stock, treasury stock, bond, debenture, transferable share, investment contract, voting-trust certificate, or in general, any instrument commonly known as a "security"; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase any of the foregoing.
(27) The term "series of preferred stock" refers to a subdivision, within a class of preferred stock, each share of which has preferences, limitations, and relative rights identical with those of other shares of the same series.
(28) The term "subscription offering" refers to the offering of shares of capital stock, through nontransferable subscription rights issued to: (a) Eligible account holders as required by RCW 32.32.045
; (b) supplemental eligible account holders as required by RCW 32.32.055
; (c) directors, officers, and employees, as permitted by RCW 32.32.140
; and (d) eligible account holders and supplemental eligible account holders as permitted by RCW 32.32.145
.
(29) A "subsidiary" of a specified person is an affiliate controlled by the person, directly or indirectly through one or more intermediaries.
(30) The term "supplemental eligibility record date" means the supplemental record date for determining supplemental eligible account holders of a converting savings bank required by RCW 32.32.055
. The date shall be the last day of the calendar quarter preceding director approval of the application for conversion.
(31) The term "supplemental eligible account holder" means any person holding a qualifying deposit, except officers, directors, and their associates, as of the supplemental eligibility record date.
(32) The term "underwriter" means any person who has purchased from an applicant with a view to, or offers or sells for an applicant in connection with, the distribution of any security, or participates or has a direct or indirect participation in the direct or indirect underwriting of any such undertaking; but the term does not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers commission. The term "principal underwriter" means an underwriter in privity of contract with the applicant or other issuer of securities as to which that person is the underwriter.
Terms defined in other chapters of this title, when used in this chapter, shall have the meanings given in those definitions, to the extent those definitions are not inconsistent with the definitions contained in this chapter unless the context otherwise requires.
[
2011 c 336 s 755
;
1995 c 134 s 7
. Prior:
1994 c 256 s 105
;
1994 c 92 s 352
;
1985 c 56 s 16
;
1981 c 85 s 4
.]
NOTES:
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.030
Prohibition on approval of certain applications for conversion.
No application for conversion may be approved by the director if:
(1) The plan of conversion adopted by the applicant's board of directors is not in accordance with this chapter;
(2) The conversion would result in a reduction of the applicant's net worth below requirements established by the director;
(3) The conversion may result in a taxable reorganization of the applicant under the United States Internal Revenue Code of 1954, as amended; or
(4) The converted savings bank does not meet the insurance requirements as established by the director.
[
1994 c 92 s 353
;
1981 c 85 s 5
.]
RCW 32.32.035
Requirements of plan of conversion.
The plan of conversion shall contain all of the provisions set forth in RCW 32.32.040
through
32.32.125
.
[
1981 c 85 s 6
.]
RCW 32.32.040
Issuance of capital stock
—
Price.
A converted savings bank or a holding company organized pursuant to chapter
32.34
RCW shall issue and sell capital stock at a total price equal to the estimated pro forma market value of the stock issued in connection with the conversion, based on an independent valuation, as provided in RCW 32.32.305
. In the conversion of a mutual savings bank or holding company, either of which is in the process of merging with, being acquired by, or consolidating with a stock savings bank, or a savings bank holding company owned by stockholders, or a subsidiary thereof, the following subsections apply:
(1) The price per share of the shares offered for subscription and issued in the conversion shall be not less than the price reported for stock which is listed on a national or regional stock exchange, or the bid price for stock which is traded on the NASDAQ system, as of the day before any public offering or other completion of the sale of stock in the conversion: PROVIDED, That for stock not so listed and not traded on the NASDAQ system, and any stock whose price has been affected, as of the day specified above, by a violation of RCW 32.32.225, the price per share shall be determined by the director, upon the submission of such information as the director may request.
(2) The independent valuation as provided in RCW 32.32.305
shall determine the aggregate value of shares for which subscription rights are granted pursuant to RCW 32.32.045, 32.32.050, and
32.32.055, rather than a price per share or number of shares as provided in RCW 32.32.290, 32.32.325, and
32.32.330
. This independent valuation may be replaced by a demonstration, to the satisfaction of the director, of the fairness of the price of the shares issued.
[
1994 c 92 s 354
;
1985 c 56 s 17
;
1981 c 85 s 7
.]
RCW 32.32.042
Shares
—
Certificate not required.
(1) Shares of a savings bank may, but need not be, represented by certificates. Unless this title expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates. At a minimum, each share certificate must state the information required to be stated and must be signed as provided in RCW 23B.06.250
and/or
23B.06.270
for corporations.
(2) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a savings bank may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the savings bank.
(3) Within a reasonable time after the issue or transfer of shares without certificates, the savings bank shall send the shareholder a written statement of the information required to be stated on certificates under subsection (1) of this section.
[
1994 c 256 s 114
.]
NOTES:
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.045
Stock purchase subscription rights
—
Eligible account holders.
Each eligible account holder shall receive, without payment, nontransferable subscription rights to purchase capital stock in an amount equal to the greatest of two hundred shares, one-tenth of one percent of the total offering of shares, or fifteen times 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 savings bank. If the allotment made in this section results in an oversubscription, shares shall be allocated among subscribing eligible account holders so as to permit each such account holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation equal to one hundred shares. Any shares not so allocated shall be allocated among the subscribing eligible account holders on such equitable basis, related to the amounts of their respective qualifying deposits, as may be provided in the plan of conversion.
[
2011 c 336 s 756
;
1981 c 85 s 8
.]
RCW 32.32.050
Stock purchase subscription rights received by officers, directors, and their associates
—
Subordination.
Nontransferable subscription rights to purchase capital stock received by officers and directors and their associates of the converting savings bank based on their increased deposits in the converting savings bank in the one-year period preceding the eligibility record date shall be subordinated to all other subscriptions involving the exercise of nontransferable subscription rights to purchase shares pursuant to RCW 32.32.045
.
[
1981 c 85 s 9
.]
RCW 32.32.055
Supplemental share purchase subscription rights
—
Supplemental eligible account holder
—
Conditions.
In plans involving an eligibility record date that is more than fifteen months prior to the date of the latest amendment to the application for conversion filed prior to the director approval, a supplemental eligibility record date shall be determined whereby each supplemental eligible account holder of the converting savings bank shall receive, without payment, nontransferable subscription rights to purchase supplemental shares in an amount equal to the greatest of two hundred shares, one-tenth of one percent of the total offering of shares, or fifteen times 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 supplemental eligible account holder and the denominator is the total amount of the qualifying deposits of all supplemental eligible account holders in the converting savings bank on the supplemental eligibility record date.
(1) Subscription rights received pursuant to this section shall be subordinated to all rights received by eligible account holders to purchase shares pursuant to RCW 32.32.045
and
32.32.050
.
(2) Any nontransferable subscription rights to purchase shares received by an eligible account holder in accordance with RCW 32.32.045
shall be applied in partial satisfaction of the subscription rights to be distributed pursuant to this section.
(3) In the event of an oversubscription for supplemental shares pursuant to this section, shares shall be allocated among the subscribing supplemental eligible account holders as follows:
(a) Shares shall be allocated among subscribing supplemental eligible account holders so as to permit each such supplemental account holder, to the extent possible, to purchase a number of shares sufficient to make the supplemental account holder's total allocation (including the number of shares, if any, allocated in accordance with RCW 32.32.045
) equal to one hundred shares.
(b) Any shares not allocated in accordance with subsection (3)(a) of this section shall be allocated among the subscribing supplemental eligible account holders on such equitable basis, related to the amounts of their respective qualifying deposits, as may be provided in the plan of conversion.
[
1994 c 92 s 355
;
1981 c 85 s 10
.]
RCW 32.32.060
Sale of shares not sold in subscription offering
—
Methods
—
Conditions.
Any shares of the converting savings bank not sold in the subscription offering shall either be sold in a public offering through an underwriter or directly by the converting savings bank in a direct community marketing, subject to the applicant demonstrating to the director the feasibility of the method of sale and to such conditions as may be provided in the plan of conversion. The conditions shall include, but not be limited to:
(1) A condition limiting purchases by each officer and director or their associates in this phase of the offering to one-tenth of one percent of the total offering of shares.
(2) A condition limiting purchases by any person and that person's associates in this phase of the offering to a number of shares or a percentage of the total offering so long as the limitation does not exceed two percent of the shares to be sold in the total offering.
(3) A condition that any direct community offering by the converting savings bank shall give a preference to natural persons residing in the counties in which the savings bank has an office. The methods by which preference shall be given shall be approved by the director.
[
1994 c 92 s 356
;
1981 c 85 s 11
.]
RCW 32.32.065
Limitation on subscription and purchase of shares by person with associate or group
—
Amount.
The number of shares which any person together with any associate or group of persons acting in concert may subscribe for or purchase in the conversion shall not exceed five percent of the total offering of shares. For purposes of this section, the members of the converting savings bank's board of directors shall not be deemed to be associates or a group acting in concert solely as a result of their board membership.
[
1981 c 85 s 12
.]
RCW 32.32.070
Limitation on purchase of shares by officers, directors, and their associates
—
Amount.
The number of shares which officers and directors of the converting savings bank and their associates may purchase in the conversion shall not exceed twenty-five percent of the total offering of shares.
[
1981 c 85 s 13
.]
RCW 32.32.075
Prohibition on purchase of shares by officers, directors, and their associates
—
Exception.
No officer or director, or their associates, may purchase without the prior written approval of the director the capital stock of the converted savings bank except from a broker or a dealer registered with the Securities and Exchange Commission for a period of three years following the conversion. This provision shall not apply to negotiated transactions involving more than one percent of the outstanding capital stock of the converted savings bank.
As used in this section, the term "negotiated transactions" means transactions in which the securities are offered and the terms and arrangements relating to any sale of the securities are arrived at through direct communications between the seller or any person acting on the seller's behalf and the purchaser or the purchaser's investment representative. The term "investment representative" means a professional investment adviser acting as agent for the purchaser and independent of the seller and not acting on behalf of the seller in connection with the transaction.
[
1994 c 92 s 357
;
1981 c 85 s 14
.]
RCW 32.32.080
Uniform sales price of shares required
—
Application to specify arrangements on sale of shares not sold in subscription offering.
The sales price of the shares of capital stock to be sold in the conversion shall be a uniform price determined in accordance with RCW 32.32.290, 32.32.305, and
32.32.325
. The applicant shall specify in its conversion application the underwriting and/or other marketing arrangements to be made to assure the sale of all shares not sold in the subscription offering.
[
1981 c 85 s 15
.]
RCW 32.32.085
Savings account holder to receive withdrawable savings account(s)
—
Amount.
Each savings account holder of the converting savings bank shall receive, without payment, a withdrawable savings account or accounts in the converted savings bank equal in withdrawable amount to the withdrawal value of the account holder's savings account or accounts in the converting savings bank.
[
1981 c 85 s 16
.]
RCW 32.32.090
Liquidation account
—
Establishment and maintenance required.
A converting savings bank shall establish and maintain a liquidation account for the benefit of eligible account holders and supplemental eligible account holders in the event of a subsequent complete liquidation of the converted savings bank, in accordance with RCW 32.32.185
through
32.32.205
.
[
1981 c 85 s 17
.]
RCW 32.32.095
Establishment of eligibility record date required.
The applicant shall establish an eligibility record date, which shall not be less than ninety days prior to the date of adoption of the plan by the converting savings bank's board of directors.
[
1981 c 85 s 18
.]
RCW 32.32.100
Capital stock
—
Voting rights.
The holders of the capital stock of the converted savings bank shall have exclusive voting rights.
[
1981 c 85 s 19
.]
RCW 32.32.105
Amendment and termination of plan of conversion.
The plan of conversion adopted by the applicant's board of directors may be amended by the board of directors with the concurrence of the director at any time prior to final approval of the director and may be terminated with the concurrence of the director at any time prior to issuance of the authorization certificate by the director.
[
1994 c 92 s 358
;
1981 c 85 s 20
.]
RCW 32.32.110
Restriction on sale of shares of stock by directors and officers.
All shares of capital stock purchased by directors and officers on original issue in the conversion either directly from the savings bank (by subscription or otherwise) or from an underwriter of the shares shall be subject to the restriction that the shares shall not be sold for a period of not less than three years following the date of purchase, except in the event of death of the director or officer.
[
1981 c 85 s 21
.]
RCW 32.32.115
Conditions on shares of stock subject to restriction on sale.
In connection with shares of capital stock subject to restriction on sale for a period of time:
(1) Each certificate for the stock shall bear a legend giving appropriate notice of the restriction;
(2) Appropriate instructions shall be issued to the transfer agent for the capital stock with respect to applicable restrictions on transfer of any such restricted stock; and
(3) Any shares issued as a stock dividend, stock split, or otherwise with respect to any such restricted stock shall be subject to the same restrictions as may apply to the restricted stock.
[
1985 c 56 s 18
;
1981 c 85 s 22
.]
RCW 32.32.120
Registration of securities
—
Marketing of securities
—
Listing of shares on securities exchange or NASDAQ quotation system.
A converted savings bank or holding company formed under chapter
32.34
RCW shall:
(1) Promptly following its conversion register the securities issued in connection therewith pursuant to the Securities and Exchange Act of 1934 and undertake not to deregister the securities for a period of three years thereafter;
(2) Use its best efforts to encourage and assist a market maker to establish and maintain a market for the securities issued in connection with the conversion; and
(3) Use its best efforts to list those shares issued in connection with the conversion on a national or regional securities exchange or on the NASDAQ quotation system.
[
1985 c 56 s 19
;
1981 c 85 s 23
.]
RCW 32.32.125
Reasonable expenses required.
The expenses incurred in the conversion shall be reasonable.
[
1981 c 85 s 24
.]
RCW 32.32.130
Plan of conversion
—
Prohibited provisions.
The plan of conversion shall contain no provision which the director determines to be inequitable or detrimental to the applicant, its savings account holders, or other savings banks or to be contrary to the public interest.
[
1994 c 92 s 359
;
1981 c 85 s 25
.]
RCW 32.32.135
Plan of conversion
—
Permissible provisions.
The plan of conversion may contain any of the provisions set forth in RCW 32.32.140
through
32.32.170
.
[
1981 c 85 s 26
.]
RCW 32.32.140
Purchase of certain shares of stock by directors, officers, and employees permitted
—
Conditions.
Directors, officers, and employees of the converting savings bank, as part of the subscription offering, may be entitled to purchase shares of capital stock, to the extent that shares are available after satisfying the subscriptions of eligible account holders and supplemental eligible account holders, subject to the following conditions:
(1) The total number of shares which may be purchased under this section shall not exceed twenty-five percent of the total number of shares to be issued in the case of a converting savings bank with total assets of less than fifty million dollars or fifteen percent in the case of a converting savings bank with total assets of five hundred million dollars or more; in the case of a converting savings bank with total assets of fifty million dollars or more but less than five hundred million dollars, the percentage shall be no more than a correspondingly appropriate number of shares based on total asset size (for example, twenty percent in the case of a converting savings bank with total assets of approximately two hundred seventy five million dollars); and
(2) The shares shall be allocated among directors, officers, and employees on an equitable basis such as by giving weight to period of service, compensation, and position, subject to a reasonable limitation on the amount of shares which may be purchased by any person or associate thereof, or group of affiliated persons or group of persons otherwise acting in concert.
[
1981 c 85 s 27
.]
RCW 32.32.145
Receipt of certain subscription rights by account holders permitted
—
Amount
—
Conditions.
Any account holder receiving rights to purchase stock in the subscription offering may also receive, without payment, nontransferable subscription rights to purchase up to one percent of the total offering of shares of capital stock, to the extent that the shares are available after satisfying the subscription under RCW 32.32.045
and
32.32.055, subject to such conditions as may be provided in the plan of conversion. In the event of an oversubscription for the additional shares, the shares available shall be allocated among the subscribing eligible account holders and supplemental eligible account holders on such equitable basis, related to the amounts of their respective subscriptions, as may be provided in the plan of conversion. Where possible the subscriptions shall be allocated in such a manner that total purchases by eligible account holders and supplemental eligible account holders shall be rounded to the nearest one hundred shares.
[
1981 c 85 s 28
.]
RCW 32.32.150
Permissible sales of insignificant residue of shares.
Any insignificant residue of shares not sold in the subscription offering or in a public offering referred to in RCW 32.32.060
may be sold in such other manner as provided in the plan with the director's approval.
[
1994 c 92 s 360
;
1985 c 56 s 20
;
1981 c 85 s 29
.]
RCW 32.32.155
Limitation on number of shares subscribed in subscription offering permitted.
The number of shares which any person, or group of persons affiliated with each other or otherwise acting in concert, may subscribe for in the subscription offering may be made subject to a limit of not less than one percent of the total offering of shares.
[
1981 c 85 s 30
.]
RCW 32.32.160
Minimum purchase requirement in exercise of subscription rights permitted.
Any person exercising subscription rights to purchase capital stock may be required to purchase a minimum of up to twenty-five shares to the extent the shares are available (but the aggregate price for any minimum share purchase shall not exceed five hundred dollars).
[
1981 c 85 s 31
.]
RCW 32.32.165
Stock option plan permitted
—
Reserved shares.
A stock option plan may be adopted by the board of directors at the meeting at which the plan of conversion is voted upon. The number of shares reserved for the stock option plans should be limited to ten percent of the number of shares sold in the conversion.
[
1981 c 85 s 32
.]
RCW 32.32.170
Issuance of securities in lieu of capital stock permitted
—
References to capital stock.
The converted savings bank may issue and sell, in lieu of shares of its capital stock, units of securities consisting of capital stock or other equity securities, in which event any reference in this chapter to capital stock shall apply to the units of equity securities unless the context otherwise requires.
[
1981 c 85 s 33
.]
RCW 32.32.175
Approval of other equitable provisions.
The director may approve such other equitable provisions as are necessary to avert imminent injury to the converting savings bank.
[
1994 c 92 s 361
;
1981 c 85 s 34
.]
RCW 32.32.180
Amount of qualifying deposit of eligible account holder or supplemental eligible account holder.
(1) Unless otherwise provided in the plan of conversion, the amount of the qualifying deposit of an eligible account holder or supplemental eligible account holder shall be the total of the deposit balances in the eligible account holder's or supplemental eligible account holder's savings accounts in the converting savings bank as of the close of business on the eligibility record date or supplemental eligibility record date. However, the plan of conversion may provide that any savings accounts with total deposit balances of less than fifty dollars (or any lesser amount) shall not constitute a qualifying deposit.
(2) As used in this section, the term "savings account" includes a predecessor or successor account of a given savings account which is held only in the same right and capacity and on the same terms and conditions as the given savings account. However, the plan of conversion may provide for lesser requirements for consideration as a predecessor or successor account.
[
1981 c 85 s 35
.]
RCW 32.32.185
Liquidation account
—
Establishment required
—
Amount
—
Function.
Each converted savings bank shall, at the time of conversion, establish a liquidation account in an amount equal to the amount of net worth of the converting savings bank as of the latest practicable date prior to conversion. For the purposes of this section, the savings bank shall use the net worth figure no later than that set forth in its latest statement of financial condition contained in the final offering circular. The function of the liquidation account is to establish a priority on liquidation and, except as provided in RCW 32.32.215, the existence of the liquidation account shall not operate to restrict the use or application of any of the net worth accounts of the converted savings bank.
[
1981 c 85 s 36
.]
RCW 32.32.190
Liquidation account
—
Maintenance required
—
Subaccounts.
The liquidation account shall be maintained by the converted savings bank for the benefit of eligible account holders and supplemental eligible account holders who maintain their savings accounts in the bank. Each such eligible account holder shall, with respect to each savings account, have a related inchoate interest in a portion of the liquidation account balance ("subaccount").
[
1981 c 85 s 37
.]
RCW 32.32.195
Liquidation account
—
Distribution upon complete liquidation.
In the event of a complete liquidation of the converted savings bank (and only in this event), each eligible account holder and supplemental eligible account holder shall be entitled to receive a liquidation distribution from the liquidation account, in the amount of the then current adjusted subaccount balances for savings accounts then held, before any liquidation distribution may be made with respect to capital stock. No merger, consolidation, purchase of bulk assets with assumption of savings accounts and other liabilities, or similar transaction, in which the converted savings bank is not the survivor, is considered to be a complete liquidation for this purpose. In these transactions, the liquidation account shall be assumed by the surviving institution.
[
1981 c 85 s 38
.]
RCW 32.32.200
Liquidation account
—
Determination of subaccount balances.
The initial subaccount balance for a savings account held by an eligible account holder and/or supplemental eligible account holder shall be determined by multiplying the opening balance in the liquidation account by a fraction of which the numerator is the amount of qualifying deposits in the savings account on the eligibility record date and/or the supplemental eligibility record date and the denominator is the total amount of qualifying deposits of all eligible account holders and supplemental eligible account holders in the converting savings bank on these dates. For savings accounts in existence at both dates, separate subaccounts shall be determined on the basis of the qualifying deposits in these savings accounts on these record dates. The initial subaccount balances shall not be increased, and it shall be subject to downward adjustment as provided in RCW 32.32.205
.
[
1981 c 85 s 39
.]
RCW 32.32.205
Reduction of subaccount balance.
If the deposit balance in any savings account of an eligible account holder or supplemental eligible account holder at the close of business on any annual closing date subsequent to the respective record dates is less than the lesser of (1) the deposit balance in the savings account at the close of business on any other annual closing date subsequent to the eligibility record date or (2) the amount of qualifying deposit as of the eligibility record date or the supplemental eligibility record date, the subaccount balance for the savings account shall be adjusted by reducing the subaccount balance in an amount proportionate to the reduction in the deposit balance. In the event of such a downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding any increase in the deposit balance of the related savings account. If any such savings account is closed, the related subaccount balance shall be reduced to zero.
[
1981 c 85 s 40
.]
RCW 32.32.210
Converted savings bank prohibited from repurchasing its stock without approval.
No converted savings bank may repurchase any of its capital stock from any person unless the repurchase is approved by the director either in advance or at the time of repurchase.
[
1994 c 92 s 362
;
1985 c 56 s 21
;
1981 c 85 s 41
.]
RCW 32.32.215
Limitation on cash dividends.
Except as provided in RCW 32.32.222, no converted savings bank may declare or pay a cash dividend unless the declaration or payment of the dividend would be in accordance with the requirements of *RCW 30.04.180
and would not have the effect of reducing the net worth of the converted savings bank below (1) the amount required for the liquidation account or (2) the amount required by the director.
[
1994 c 92 s 363
;
1985 c 56 s 22
;
1981 c 85 s 42
.]
NOTES:
*Reviser's note:
RCW 30.04.180
was recodified as RCW 30A.04.180
pursuant to 2014 c 37 s 4, effective January 5, 2015.
RCW 32.32.220
Limitation on certain cash dividends within ten years of conversion.
Except as provided in RCW 32.32.222, no converted savings bank may, without the prior approval of the director, for a period of ten years after the date of its conversion, declare or pay a cash dividend on its capital stock in an amount in excess of one-half of the greater of:
(1) The savings bank's net income for the current fiscal year; or
(2) The average of the savings bank's net income for the current fiscal year and not more than two of the immediately preceding fiscal years.
For purposes of this chapter, "net income" shall be determined by generally accepted accounting principles.
[
1994 c 92 s 364
;
1985 c 56 s 23
;
1981 c 85 s 43
.]
RCW 32.32.222
Dividends on preferred stock.
A converted mutual savings bank may pay dividends on preferred stock at the rate or rates agreed in connection with the issuance of preferred stock if such issuance has been approved by the director.
[
1994 c 92 s 365
;
1985 c 56 s 24
.]
RCW 32.32.225
Prohibitions on offer, sale, or purchase of securities.
In the offer, sale, or purchase of securities issued incident to its conversion, no savings bank, or any director, officer, attorney, agent, or employee thereof, may (1) employ any device, scheme, or artifice to defraud, or (2) obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (3) engage in any act, transaction, practice, or course of business which operates or would operate as a fraud or deceit upon a purchaser or seller.
[
1981 c 85 s 44
.]
RCW 32.32.228
Acquisition of control of a converted savings bank
—
State reciprocity
—
Definitions.
(1) As used in this section, the following definitions apply:
(a) "Control" means directly or indirectly alone or in concert with others to own, control, or hold the power to vote twenty-five percent or more of the outstanding stock or voting power of the controlled entity;
(b) "Acquiring depository institution" means a bank or bank holding company, or a converted mutual savings bank or the holding company of a mutual savings bank, or a savings and loan association or the holding company of a savings and loan association, which is chartered in or whose principal office is located in another state, and which seeks to acquire control of a Washington savings bank;
(c) "Acquiring party" means the person acquiring control of a bank through the purchase of stock;
(d) "Person" means any individual, corporation, partnership, group acting in concert, association, business trust, or other organization.
(2)(a) It is unlawful for any person to acquire control of a converted savings bank until thirty days after filing with the director a completed application. The application shall be under oath or affirmation, and shall contain substantially all of the following information plus any additional information that the director may prescribe as necessary or appropriate in the particular instance for the protection of bank depositors, borrowers, or shareholders and the public interest:
(i) The identity and banking and business experience of each person by whom or on whose behalf acquisition is to be made;
(ii) The financial and managerial resources and future prospects of each person involved in the acquisition;
(iii) The terms and conditions of any proposed acquisition and the manner in which the acquisition is to be made;
(iv) The source and amount of the funds or other consideration used or to be used in making the acquisition, and a description of the transaction and the names of the parties if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition;
(v) Any plan or proposal which any person making the acquisition may have to liquidate the bank, to sell its assets, to merge it with any other bank, or to make any other major change in its business or corporate structure or management;
(vi) The identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on its behalf, who makes solicitations or recommendations to shareholders for the purpose of assisting in the acquisition and a brief description of the terms of the employment, retainer, or arrangement for compensation;
(vii) Copies of all invitations for tenders or advertisements making a tender offer to shareholders for the purchase of their stock to be used in connection with the proposed acquisition; and
(viii) Such additional information as shall be necessary to satisfy the director, in the exercise of the director's discretion, that each such person and associate meets the standards of character, responsibility, and general fitness established for incorporators of a savings bank under RCW 32.08.040
.
(b)(i) Notwithstanding any other provision of this section, and subject to (b)(ii) of this subsection, an acquiring depository institution must apply to the director and notify the savings bank to be acquired of an intent to acquire control and the date of the proposed acquisition of control at least thirty days before the date of the acquisition of control.
(ii) Except to the extent of any conflict with applicable federal law, (b)(i) of this subsection does not apply to an acquiring depository institution that is seeking to acquire control of a Washington savings bank unless the home state of the acquiring depository institution permits a Washington converted mutual savings bank, or the Washington-chartered holding company of a mutual savings bank, to acquire control of a controlled entity that is chartered in or whose principal office is located in that home state, unless under terms and conditions that are substantially the same as, or at least as favorable to entry as, those provided under (b)(i) of this subsection.
(c) When a person, other than an individual or corporation, is required to file an application under this section, the director may require that the information required by (a)(i), (ii), (vi), and (viii) of this subsection be given with respect to each person, as defined in subsection (1)(d) of this section, who has an interest in or controls a person filing an application under this subsection.
(d) When a corporation is required to file an application under this section, the director may require that information required by (a)(i), (ii), (vi), and (viii) of this subsection be given for the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of twenty-five percent or more of the outstanding voting securities of the corporation.
(e) If any tender offer, request, or invitation for tenders or other agreements to acquire control is proposed to be made by means of a registration statement under the securities act of 1933 (48 Stat. 74, 15 U.S.C. Sec. 77(a)) [15 U.S.C. Sec. 77a], as amended, or in circumstances requiring the disclosure of similar information under the securities exchange act of 1934 (48 Stat. 881, 15 U.S.C. Sec. 78(a)) [15 U.S.C. Sec. 78a], as amended, the registration statement or application may be filed with the director in lieu of the requirements of this section.
(f) Any acquiring party shall also deliver a copy of any notice or application required by this section to the savings bank proposed to be acquired within two days after such notice or application is filed with the director.
(g) Any acquisition of control in violation of this section shall be ineffective and void.
(h) Any person who willfully or intentionally violates this section or any rule adopted under this section is guilty of a gross misdemeanor pursuant to chapter
9A.20
RCW. Each day's violation shall be considered a separate violation, and any person shall upon conviction be fined not more than one thousand dollars for each day the violation continues.
(3) The director may disapprove the acquisition of a savings bank within thirty days after the filing of a complete application pursuant to subsections (1) and (2) of this section or an extended period not exceeding an additional fifteen days if:
(a) The poor financial condition of any acquiring party might jeopardize the financial stability of the savings bank or might prejudice the interest of depositors, borrowers, or shareholders;
(b) The plan or proposal of the acquiring party to liquidate the savings bank, to sell its assets, to merge it with any person, or to make any other major change in its business or corporate structure or management is not fair and reasonable to its depositors, borrowers, or stockholders or is not in public interest;
(c) The banking and business experience and integrity of any acquiring party who would control the operation of the savings bank indicates that approval would not be in the interest of the savings bank's depositors, borrowers, or shareholders;
(d) The information provided by the application is insufficient for the director to make a determination or there has been insufficient time to verify the information provided and conduct an examination of the qualification of the acquiring party; or
(e) The acquisition would not be in the public interest.
An acquisition may be made prior to expiration of the disapproval period if the director issues written notice of intent not to disapprove the action.
The director shall set forth the basis for disapproval of any proposed acquisition in writing and shall provide a copy of such findings and order to the applicants and to the bank involved. Such findings and order shall not be disclosed to any other party and shall not be subject to public disclosure under chapter
42.56
RCW unless the findings and/or order are appealed pursuant to chapter
34.05
RCW.
Whenever such a change in control occurs, each party to the transaction shall report promptly to the director any changes or replacement of its chief executive officer or of any director occurring in the next twelve-month period, including in its report a statement of the past and current business and professional affiliations of the new chief executive officer or directors.
(4)(a) For a period of ten years following the acquisition of control by any person, neither such acquiring party nor any associate shall receive any loan or the use of any of the funds of, nor purchase, lease, or otherwise receive any property from, nor receive any consideration from the sale, lease, or any other conveyance of property to, any savings bank in which the acquiring party has control except as provided in (b) of this subsection.
(b) Upon application by any acquiring party or associate subject to (a) of this subsection, the director may approve a transaction between a converted savings bank and such acquiring party, person, or associate, upon finding that the terms and conditions of the transaction are at least as advantageous to the savings bank as the savings bank would obtain in a comparable transaction with an unaffiliated person.
(5) Except with the consent of the director, no converted savings bank shall, for the purpose of enabling any person to purchase any or all shares of its capital stock, pledge or otherwise transfer any of its assets as security for a loan to such person or to any associate, or pay any dividend to any such person or associate. Nothing in this section shall prohibit a dividend of stock among shareholders in proportion to their shareholdings. In the event any clause of this section is declared to be unconstitutional or otherwise invalid, all remaining dependent and independent clauses of this section shall remain in full force and effect.
[
2005 c 348 s 5
;
2005 c 274 s 259
;
1994 c 92 s 366
;
1989 c 180 s 6
;
1985 c 56 s 25
.]
NOTES:
Reviser's note:
This section was amended by 2005 c 274 s 259 and by 2005 c 348 s 5, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025
(2). For rule of construction, see RCW 1.12.025
(1).
Effective date
—
2005 c 348:
See note following RCW 30A.38.005
.
RCW 32.32.230
Nonapproval of conversion unless acquisition of control within three years by certain companies prohibited.
(1) No conversion may be approved by the director unless the plan of conversion provides that the converted savings bank shall enter into an agreement with the director, in form satisfactory to the director, which shall provide that for a period of three years following the conversion any company significantly engaged in an unrelated business activity, either directly or through an affiliate thereof, shall not be permitted, regardless of the form of the transaction, to acquire control of the converted savings bank. Any acquisition of a converted savings bank shall also comply with RCW 32.32.228
.
(2) As used in this section:
(a) The term "affiliate" means any person or company which controls, is controlled by, or is under common control with, a specified company.
(b) A person or company shall be deemed to have "control" of:
(i) A savings bank if the person directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, or holds with power to vote, or holds proxies representing, more than twenty-five percent of the voting shares of the savings bank, or controls in any manner the election of a majority of the directors of the bank;
(ii) Any other company if the person directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, or holds with power to vote, or holds proxies representing, more than twenty-five percent of the voting shares or rights of the other company, or controls in any manner the election or appointment of a majority of the directors or trustees of the other company, or is a general partner in or has contributed more than twenty-five percent of the capital of the other company;
(iii) A trust if the person is a trustee thereof; or
(iv) A savings bank or any other company if the director determines, after reasonable notice and opportunity for hearing, that the person directly or indirectly exercises a controlling influence over the management or policies of the savings bank or other company.
(c) A company shall be deemed to be "significantly engaged" in an unrelated business activity if its unrelated business activities would represent, on either an actual or a pro forma basis, more than fifteen percent of its consolidated net worth at the close of this preceding fiscal year or of its consolidated net earnings for such fiscal year.
(d) The term "unrelated business activity" means any business activity not authorized for a savings bank or any subsidiary thereof.
[
1994 c 92 s 367
;
1985 c 56 s 26
;
1981 c 85 s 45
.]
RCW 32.32.235
Plan of conversion
—
Charter restrictions permitted.
To the extent permitted by applicable federal or state law, a plan of conversion may provide for a provision in the charter of the converted savings bank containing, in substance, the restriction set forth in RCW 32.32.230
. There may also be included a restriction providing that the charter provision may be amended only by a vote of up to seventy-five percent of the votes eligible to be cast at a regular or special meeting of shareholders of the converted savings bank. If the converted savings bank elects to adopt the foregoing optional charter provision, the director shall impose, as a condition to approval of the conversion, a requirement that the converted savings bank fully enforce the charter provision.
[
1994 c 92 s 368
;
1981 c 85 s 46
.]
RCW 32.32.240
Confidentiality of consideration to convert
—
Remedial measures for breach.
A savings bank which is considering converting pursuant to this chapter and its directors, officers, and employees shall keep this consideration in the strictest confidence and shall only discuss the potential conversion as would be consistent with the need to prepare information for filing an application for conversion. Should this confidence be breached the director may require remedial measures including:
(1) A public statement by the savings bank that its board of directors is currently considering converting pursuant to this chapter;
(2) Providing for an eligibility record date which shall be as of such a date prior to the adoption of the plan by the converting savings bank's board of directors as to assure the equitability of the conversion;
(3) Limitation of the subscription rights of any person violating or aiding the violation of this section to an amount deemed appropriate by the director; and
(4) Any other actions the director may deem appropriate and necessary to assure the fairness and equitability of the conversion.
[
1994 c 92 s 369
;
1981 c 85 s 47
.]
RCW 32.32.245
Public statement authorized.
If it should become essential as a result of rumors prior to the adoption of a plan of conversion by the applicant's board of directors, a public statement limited to that purpose may be made by the applicant.
[
1981 c 85 s 48
.]
RCW 32.32.250
Adoption of plan of conversion
—
Notice to and inspection by account holders
—
Statement and letter
—
Press release authorized.
Promptly after the adoption of a plan of conversion by not less than two-thirds of its board of directors, the savings bank shall:
(1) Notify its account holders of the action by publishing a statement in a newspaper having general circulation in each community in which an office of the savings bank is located and/or by mailing a letter to each of its account holders; and
(2) Have copies of the adopted plan of conversion available for inspection by its account holders at each office of the savings bank.
The savings bank may also issue a press release with respect to the action. Copies of the proposed statement, letter, and press release are not required to be filed with the director but may be submitted to the director for comment. Copies of the definitive statement, letter, and press release shall be filed with the director as part of the application for conversion.
[
1994 c 92 s 370
;
1981 c 85 s 49
.]
RCW 32.32.255
Statement, letter, and press release
—
Content permitted.
The statement, letter, and press release of the applicant issued pursuant to RCW 32.32.250, unless otherwise authorized by the director, shall contain only (but need not contain all of) the following:
(1) A statement that the board of directors has adopted a plan to convert the savings bank from a mutual savings bank to a capital stock savings bank;
(2) A statement that the plan of conversion is subject to approval by the director and by the appropriate federal regulatory authority or authorities (naming such an authority or authorities) before the plan can become effective and that account holders of the applicant will have an opportunity to file written comments including objections and materials supporting the objections with the director;
(3) A statement that the plan of conversion is contingent upon obtaining favorable tax rulings from the Internal Revenue Service or an appropriate tax opinion;
(4) A statement that there is no assurance that the approval of the director or the approval of any appropriate federal authority or authorities will be obtained, and also no assurance that the favorable tax rulings or tax opinion will be received;
(5) The proposed record date for determining the eligible account holders entitled to receive nontransferable subscription rights to purchase capital stock of the applicant;
(6) A brief statement describing the circumstances that would require supplemental eligible account holders to receive nontransferable subscription rights to purchase capital stock of the applicant;
(7) A brief description of the plan of conversion;
(8) The par value and approximate number of shares of capital stock to be issued and sold under the plan of conversion;
(9) A brief statement as to the extent to which directors, officers, and employees will participate in the conversion;
(10) A statement that savings account holders will continue to hold accounts in the converted savings bank identical as to dollar amount, rate of return, and general terms and that their accounts will continue to be insured by the Federal Deposit Insurance Corporation;
(11) A statement that borrowers' loans will be unaffected by conversion and that the amount, rate, maturity, security, and other conditions will remain contractually fixed as they existed prior to conversion;
(12) A statement that the normal business of the savings bank in accepting savings and making loans will continue without interruption; that the converted savings bank will continue after conversion to conduct its present services to savings account holders and borrowers under current policies to be carried on in existing offices and by the present management and staff;
(13) A statement that the plan of conversion may be substantively amended or terminated by the board of directors with the concurrence of the director; and
(14) A statement that questions of account holders may be answered by telephoning or writing to the savings bank.
[
1994 c 92 s 371
;
1981 c 85 s 50
.]
RCW 32.32.260
Statement, letter, and press release
—
Contents prohibited
—
Inquiries.
The statement, letter, and press release of the applicant issued pursuant to RCW 32.32.250
shall not include financial statements or describe the benefits of conversion or the value of the capital stock of the savings bank upon conversion. In replying to inquiries, the savings bank should limit its answers to the matters listed in RCW 32.32.255
.
[
1981 c 85 s 51
.]
RCW 32.32.265
Notices of filing of application
—
Requests for subscription offering circular.
Upon determination that an application for conversion is properly executed and is not materially incomplete, the director shall advise the applicant, in writing, to publish notices of the filing of the application. Promptly after receipt of the advice, the applicant shall furnish a written notice of the filing to each eligible account holder and also publish a notice of the filing in a newspaper printed in the English language and having general circulation in each community in which an office of the applicant is located, as follows:
NOTICE OF FILING OF AN APPLICATION
FOR APPROVAL TO CONVERT TO A
STOCK SAVINGS BANK
Notice is hereby given that, pursuant to chapter
32.32
of the Revised Code of Washington
. . . .
(fill in name of applicant)
has filed an application with the Director of Financial Institutions for approval to convert to the stock form of organization. Copies of the application have been delivered to
(address)
.
Written comments, including objections to the plan of conversion and materials supporting the objections, from any account holder of the applicant or aggrieved person, will be considered by the director if filed within twenty business days after the date of this notice. Failure to make written comments in objection may preclude the pursuit of any administrative or judicial remedies. Three copies of the comments should be sent to the aforementioned. The proposed plan of conversion and any comments thereon will be available for inspection by any account holder of the applicant at
(address)
.  A copy of the plan may also be inspected at each office of the applicant.
If a significant number of the applicant's account holders speak a language other than English and a newspaper in that language is published in the area served by the applicant, an appropriate translation of the notice shall also be published in that newspaper. A notice sent by mail may be accompanied by the statement that the converting institution will not mail a subscription offering circular to an eligible account holder or a supplemental eligible account holder unless the eligible account holder or the supplemental eligible account holder, prior to the commencement of the subscription offering, requests the subscription offering circular by returning a postcard. The issuer of stock in the conversion shall pay the postage of this postcard and shall inform the eligible account holder or supplemental eligible holder that the postage is paid.
[
1994 c 92 s 372
;
1985 c 56 s 27
;
1981 c 85 s 52
.]
RCW 32.32.270
Filing of notice and affidavit of publication required.
Promptly after publication of the notices prescribed in RCW 32.32.265, the applicant shall file with the director the notice and affidavit of publication from each newspaper publisher in the manner the director shall require.
[
1994 c 92 s 373
;
1981 c 85 s 53
.]
RCW 32.32.275
Applications available for public inspection
—
Confidential information.
Should the applicant desire to submit any information it deems to be of a confidential nature regarding any item or a part of any exhibit included in any application under this chapter, the information pertaining to the item or exhibit shall be separately bound and labeled "confidential", and a statement shall be submitted therewith briefly setting forth the grounds on which the information should be treated as confidential. Only general reference thereto need be made in that portion of the application which the applicant deems not to be confidential. Applications under this chapter shall be made available for inspection by the public, except for portions which are bound and labeled "confidential" and which the director determines to withhold from public availability under chapter
42.56
RCW. The applicant shall be advised of any decision by the director to make public information designated as "confidential" by the applicant. Even though sections of the application are considered "confidential" as far as public inspection thereof is concerned, to the extent the director deems necessary the director may comment on the confidential submissions in any public statement in connection with the director's decision on the application without prior notice to the applicant.
[
2005 c 274 s 260
;
1994 c 92 s 374
;
1981 c 85 s 54
.]
RCW 32.32.280
Offers and sales of securities
—
Prohibitions.
No offer to sell securities of an applicant pursuant to a plan of conversion may be made prior to approval by the director of the application for conversion. No sale of these securities in the subscription offering may be made except by means of the final offering circular for the subscription offering. No sale of unsubscribed securities may be made except by means of the final offering circular for the public offering or direct community marketing. The offering of shares in the direct community marketing may commence during the subscription offering upon the declaration of effectiveness by the director of the offering circular proposed for the community offering. This section shall not apply to preliminary negotiations or agreements between an applicant and any underwriter or among underwriters who are to be in privity of contract with the applicant.
[
1994 c 92 s 375
;
1981 c 85 s 55
.]
RCW 32.32.285
Distribution of offering circulars authorized.
Any preliminary offering circular for the subscription offering, the public offering, or the direct community marketing which has been filed with the director may be distributed to eligible account holders or supplemental eligible account holders and to others in connection with the offering after the director has advised the applicant in writing that the application is properly executed and is not materially incomplete under RCW 32.32.265
. No final offering circular may be distributed until the offering circular has been declared effective by the director.
[
1994 c 92 s 376
;
1981 c 85 s 56
.]
RCW 32.32.290
Preliminary offering circular for subscription offering
—
Estimated subscription price range required.
With respect to the capital stock of the applicant to be sold under the plan of conversion, any preliminary offering circular for the subscription offering shall set forth the estimated subscription price range. The maximum of the price range should normally be no more than fifteen percent above the average of the minimum and maximum of the price range and the minimum should normally be no more than fifteen percent below this average. The maximum price used in the price range should normally be no more than fifty dollars per share and the minimum no less than five dollars per share.
[
1994 c 256 s 106
;
1981 c 85 s 57
.]
NOTES:
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.295
Review of price information by director.
The director shall review the price information required under RCW 32.32.290
in determining whether to give approval to an application for conversion. No representations may be made in any manner that the price information has been approved by the director or that the shares of capital stock sold pursuant to the plan of conversion have been approved or disapproved by the director or that the director has passed upon the accuracy or adequacy of any offering circular covering the shares.
[
1994 c 92 s 377
;
1981 c 85 s 58
.]
RCW 32.32.300
Underwriting commissions.
Underwriting commissions shall not exceed an amount or percentage per share acceptable to the director. No underwriting commission may be allowed or paid with respect to shares of capital stock sold in the subscription offering; however, an underwriter may be reimbursed for accountable expenses in connection with the subscription offering where the public offering is so small that reasonable underwriting commissions thereon would not be sufficient to cover total accountable expenses. The term "underwriting commissions" includes underwriting discounts.
[
1994 c 92 s 378
;
1981 c 85 s 59
.]
RCW 32.32.305
Consideration of pricing information by director
—
Guidelines.
In considering the pricing information required under RCW 32.32.290, the director shall apply the following guidelines:
(1) The materials shall be prepared by persons independent of the applicant, experienced and expert in the area of corporate appraisal, and acceptable to the director;
(2) The materials shall contain data which are sufficient to support the conclusions reached therein;
(3) The materials shall contain a complete and detailed description of the appraisal methodology employed; and
(4) To the extent that the appraisal is based on a capitalization of the pro forma income of the converted savings bank, the materials shall indicate the basis for determination of the income to be derived from the proceeds of the sale of stock and demonstrate the appropriateness of the earnings multiple used, including assumptions made as to future earnings growth. To the extent that the appraisal is based on comparison of the capital stock of the applicant with outstanding capital stock of existing stock savings banks or stock savings and loan associations, the materials shall demonstrate the appropriate comparability of the form and substance of the outstanding capital stock and the appropriate comparability of the existing stock savings banks and stock savings and loan associations in terms of such factors as size, market area, competitive conditions, profit history, and expected future earnings.
[
1994 c 92 s 379
;
1981 c 85 s 60
.]
RCW 32.32.310
Submission of information by applicant.
In addition to the information required in RCW 32.32.305, the applicant shall submit information demonstrating to the satisfaction of the director the independence and expertise of any person preparing materials under RCW 32.32.305
. However, a person will not be considered as lacking independence for the reason that the person will participate in effecting a sale of capital stock under the plan of conversion or will receive a fee from the applicant for services rendered in connection with the appraisal.
[
1994 c 92 s 380
;
1981 c 85 s 61
.]
RCW 32.32.315
Subscription offering
—
Distribution of order forms for the purchase of shares.
Promptly after the director has declared the offering circular for the subscription offering effective, the applicant shall distribute order forms for the purchase of shares of capital stock in the subscription offering to all eligible account holders, supplemental eligible account holders (if applicable), and other persons who may subscribe for the shares under the plan of conversion.
[
1994 c 92 s 381
;
1981 c 85 s 62
.]
RCW 32.32.320
Order forms
—
Final offering circular and detailed instructions.
Each order form distributed pursuant to RCW 32.32.315
shall be accompanied or preceded by the final offering circular for the subscription offering and a set of detailed instructions explaining how to properly complete the order forms.
[
1981 c 85 s 63
.]
RCW 32.32.325
Subscription price.
The maximum subscription price stated on each order form distributed pursuant to RCW 32.32.315
shall be the amount to be paid when the order form is returned. The maximum subscription price and the actual subscription price shall be within the subscription price range stated in the director's approval and the offering circular. If either the maximum subscription price or the actual subscription price is not within this subscription price range, the applicant shall obtain an amendment to the director's approval. If appropriate, the director shall condition the giving of amended approval by requiring a resolicitation of order forms. If the actual public offering price is less than the maximum subscription price stated on the order form, the actual subscription price shall be correspondingly reduced and the difference shall be refunded to those who have paid the maximum subscription price.
[
1994 c 92 s 382
;
1981 c 85 s 64
.]
RCW 32.32.330
Order form
—
Contents.
Each order form distributed pursuant to RCW 32.32.315
shall be prepared so as to indicate to the person receiving it, in as simple, clear, and intelligible a manner as possible, the actions which are required or available to the person with respect to the form and the capital stock offered for purchase thereby. Specifically, each order form shall:
(1) Indicate the maximum number of shares that may be purchased pursuant to the subscription offering;
(2) Indicate the period of time within which the subscription rights must be exercised, which period of time shall not be less than twenty days following the date of the mailing of the order form;
(3) State the maximum subscription price per share of capital stock;
(4) Indicate any requirements as to the minimum number of shares of capital stock which may be purchased;
(5) Provide a specifically designated blank space or spaces for indicating the number of shares of capital stock which the eligible account holder or other person wishes to purchase;
(6) Indicate that payment may be made by cash if delivered in person or by check or by withdrawal from an account holder's savings account. If payment is to be made by withdrawal, a box to check should be provided;
(7) Provide specifically designated blank spaces for dating and signing the order form;
(8) Contain an acknowledgment by the account holder or other person signing the order form that the person has received the final offering circular for the subscription offering prior to signing; and
(9) Indicate the consequences of failing to properly complete and return the order form, including a statement that the subscription rights are nontransferable and will become void at the end of the subscription period. The order form may, and the set of instructions shall, indicate the place or places to which the order forms are to be returned and when the applicant will consider order forms received, such as by date and time of actual receipt in the applicant's offices or by date and time of postmark.
[
1981 c 85 s 65
.]
RCW 32.32.335
Order form
—
Additional provision authorized
—
Payment by withdrawal.
The order form distributed pursuant to RCW 32.32.315
may provide that it may not be modified without the applicant's consent after its receipt by the applicant. If payment is to be made by withdrawal from a savings account the applicant may, but need not, cause the withdrawal to be made upon receipt of the order form. If the withdrawal is made at any time prior to the closing date of the public offering, the applicant shall pay interest to the account holder on the account withdrawn as if the amount had remained in the account from which it was withdrawn until the closing date.
[
1981 c 85 s 66
.]
RCW 32.32.340
Time period for completion of sale of all shares of capital stock.
The sale of all shares of capital stock of the converting savings bank to be made under the plan of conversion, including any sale in a public offering or direct community marketing, shall be completed as promptly as possible and within forty-five calendar days after the last day of the subscription period, unless extended by the director.
[
1994 c 92 s 383
;
1981 c 85 s 67
.]
RCW 32.32.345
Copies of application for approval to be filed.
An applicant that desires to convert in accordance with this chapter shall file copies of an application for approval in the form and number prescribed by the director.
[
1994 c 92 s 384
;
1981 c 85 s 68
.]
RCW 32.32.350
Nonacceptance and return of applications.
Any application for approval that is improperly executed, or that does not contain copies of a plan of conversion, amendments to the charter of the applicant in the form of new articles of incorporation, and preliminary offering circulars for the subscription offering and for the public offering or direct community marketing shall not be accepted for filing and shall be returned to the applicant. Any application for approval containing a materially incomplete plan of conversion or offering circular may be returned by the director to the applicant.
[
1994 c 92 s 385
;
1981 c 85 s 69
.]
RCW 32.32.355
Continuity of corporate existence.
Upon the filing of the articles of incorporation of a converted savings bank with the secretary of state in accordance with RCW 32.32.485, the corporate existence of the mutual savings bank converting to a stock savings bank pursuant to this chapter shall not terminate but the converted savings bank shall be deemed to be a continuation of the entity of the mutual savings bank so converted having the same rights and obligations as it had prior to the conversion.
[
1981 c 85 s 70
.]
RCW 32.32.360
Form of application.
The form of the application shall comply with the requirements of the director.
[
1994 c 92 s 386
;
1981 c 85 s 71
.]
RCW 32.32.365
Representations upon filing of application.
Except as provided in RCW 32.32.370, the filing of any application or amendment thereto under this chapter shall constitute a representation of the applicant by its duly authorized representative, the applicant's principal executive officer, the applicant's principal financial officer, and the applicant's principal accounting officer, and each member of the applicant's board of directors (whether or not the director has signed the application or any amendment thereto) severally that (1) he or she has read the application or amendment, (2) in the opinion of each such person he or she has made such examination and investigation as is necessary to enable him or her to express an informed opinion that the application or amendment complies to the best of his or her knowledge and belief with the applicable requirements of this chapter, and (3) each such person holds this informed opinion.
[
1981 c 85 s 72
.]
RCW 32.32.370
Representations upon filing of application
—
Exception.
The representations specified in RCW 32.32.365
shall not be deemed to have been made by any director of the applicant who did not sign the application or any amendment thereto, if, and only to the extent that, the director files with the director within ten business days after the filing of the application or amendment a statement describing those portions of the filing as to which he or she does not so represent.
[
1994 c 92 s 387
;
1981 c 85 s 73
.]
RCW 32.32.375
Application to furnish information.
Every application shall furnish information in accordance with this chapter and with the requirements and forms prescribed by the director.
[
1994 c 92 s 388
;
1981 c 85 s 74
.]
RCW 32.32.380
Application
—
Additional information required.
In addition to the information expressly required to be included in any application under this chapter, there shall be added such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.
[
1981 c 85 s 75
.]
RCW 32.32.385
Omission of certain information permitted
—
Conditions.
Information required need be given only insofar as it is known or reasonably available to the applicant. If any required information is unknown and not reasonably available to the applicant, either because the obtaining thereof would involve unreasonable effort or expense or because it rests peculiarly within the knowledge of another person not affiliated with the applicant, the information may be omitted, subject to the following conditions:
(1) The applicant shall give such information on the subject as it possesses or can acquire without unreasonable effort or expense, together with the sources thereof.
(2) The applicant shall include a statement either showing that unreasonable effort or expense would be involved or indicating the absence of any affiliation with the person within whose knowledge the information rests and stating the result of a request made to the person for the information.
[
1981 c 85 s 76
.]
RCW 32.32.390
Offering circular
—
Certain manner of presentation of required information prohibited.
The information required in an offering circular shall not be set forth in such fashion as to obscure any of the required information or any information necessary to keep the required information from being incomplete or misleading.
[
1981 c 85 s 77
.]
RCW 32.32.395
Form and contents of filings.
The form and contents of any filing made under this chapter need conform only to the applicable requirements and forms prescribed by the director then in effect, and contain the information, including financial statements, required at the time the filing is made, notwithstanding subsequent changes, except as otherwise provided in any such amendment or in RCW 32.32.400
.
[
1994 c 92 s 389
;
1981 c 85 s 78
.]
RCW 32.32.400
Conformance required to order prohibiting the use of any filing.
Whenever the director prohibits by order or otherwise the use of any filing under this chapter, the form and contents of any filing used thereafter shall conform to the requirements of the order.
[
1994 c 92 s 390
;
1981 c 85 s 79
.]
RCW 32.32.405
Application
—
Certain named persons
—
Filing of written consent required.
(1) If any accountant, attorney, investment banker, appraiser, or other persons whose professions give authority to a statement made in any application under this chapter is named as having prepared, reviewed, passed upon, or certified any part thereof, or any report or valuation for use in connection therewith, the written consent of the person shall be filed with the application. If any portion of a report of an expert is quoted or summarized as such in any filing under this chapter, the written consent of the expert shall expressly state that the expert consents to this quotation or summarization.
(2) All written consents filed pursuant to this section shall be dated and signed manually. A list of the consents shall be filed with the application. Where the consent of the expert is contained in the expert's report, a reference shall be made in the list to the report containing the consent.
[
1981 c 85 s 80
.]
RCW 32.32.410
Offering circular
—
Certain named persons
—
Filing of written consent required.
If any person who has not signed an application is named in the offering circular as about to become a director, the written consent of this person shall be filed with the director in the form the director prescribes.
[
1994 c 92 s 391
;
1981 c 85 s 81
.]
RCW 32.32.415
Date of receipt
—
Date of filing.
The date on which any documents are actually received by the office of the director of financial institutions shall be the date of filing thereof.
[
1994 c 92 s 392
;
1981 c 85 s 82
.]
RCW 32.32.420
Availability for conferences in advance of filing of application
—
Refusal of prefiling review.
(1) The staff of the director shall be available for conferences with prospective applicants or their representatives in advance of filing an application to convert. These conferences may be held for the purpose of discussing generally the problems confronting an applicant in effecting conversion or to resolve specific problems of an unusual nature.
(2) Prefiling review of an application may be refused by the staff of the director if the review would delay the examination and processing of material which has already been filed or would favor certain applicants at the expense of others. In any conference under this section, the staff of the director shall not undertake to prepare material for filing but shall limit itself to indicating the kind of information required, leaving the actual drafting to the applicant and its representatives.
[
1994 c 92 s 393
;
1981 c 85 s 83
.]
RCW 32.32.425
Appeal from refusal to approve application.
From the director of financial institutions' refusal to approve an application for conversion, the applicant may, within thirty days from the date of the mailing by the director of financial institutions of notice of refusal to approve, appeal to a board of appeal composed of the governor or the governor's designee, the attorney general, and the director of financial institutions by filing in the office of the director of financial institutions a notice that it appeals to this board from the director of financial institutions' refusal. The procedure upon the appeal shall be such as the board may prescribe, and its determination shall be certified, filed, and recorded in the same manner as the director of financial institutions', and shall be final.
[
1994 c 92 s 394
;
1981 c 85 s 84
.]
RCW 32.32.430
Postconversion reports.
The applicant shall file such postconversion reports concerning its conversion as the director may require.
[
1994 c 92 s 395
;
1981 c 85 s 85
.]
RCW 32.32.435
Definitions.
For purposes of RCW 32.32.440
through
32.32.475, the following definitions shall apply:
(1) The term "offer" includes every offer to buy or acquire, solicitation of an offer to sell, tender offer for, or request or invitation for tenders of, a security or interest in a security for value.
(2) The term "person" means an individual, a group acting in concert, a corporation, a partnership, an association, a joint stock company, a trust, and any unincorporated organization or similar company.
(3) Without limitation on the generality of its meaning, the term "security" includes nontransferable subscription rights issued to a plan of conversion.
[
1981 c 85 s 86
.]
RCW 32.32.440
Certain agreement to transfer and transfers of ownership in rights or securities prohibited.
Prior to completion of a conversion, no person may transfer or enter into any agreement or understanding to transfer the legal or beneficial ownership of conversion subscription rights, or the underlying securities, to the account of another.
[
1981 c 85 s 87
.]
RCW 32.32.445
Certain offers and announcements on securities prohibited.
Prior to completion of a conversion, no person may make any offer, or announcement of an offer or intent to make an offer, for any security of a converting savings bank issued or to be issued in connection with the conversion.
[
1981 c 85 s 88
.]
RCW 32.32.450
Certain offers and acquisitions prohibited.
No person for a period of three years following the date of the conversion may directly or indirectly offer to acquire or acquire the beneficial ownership of more than ten percent of any class of an equity security of any savings bank converted in accordance with this chapter without the prior written approval of the director of financial institutions.
[
1994 c 92 s 396
;
1981 c 85 s 89
.]
RCW 32.32.455
Nonapplicability of RCW 32.32.440
and
32.32.445
.
RCW 32.32.440
and
32.32.445
shall not apply to a transfer, agreement or understanding to transfer, offer, or announcement of an offer or intent to make an offer which (1) pertains only to securities to be purchased pursuant to RCW 32.32.060, 32.32.150, or
32.32.175
; and (2) has prior written approval of the director.
[
1994 c 92 s 397
;
1981 c 85 s 90
.]
RCW 32.32.460
Nonapplicability of RCW 32.32.445
and
32.32.450
.
RCW 32.32.445
and
32.32.450
shall not apply to any offer with a view toward public resale made exclusively to the savings bank or underwriters or selling group acting on its behalf.
[
1981 c 85 s 91
.]
RCW 32.32.465
Nonapplicability of RCW 32.32.450
.
Unless made applicable by the director by prior advice in writing, the prohibition contained in RCW 32.32.450
shall not apply to any offer or announcement of an offer which if consummated would result in acquisition by a person, together with all other acquisitions by the person of the same class of securities during the preceding twelve-month period, of not more than one percent of the same class of securities.
[
1994 c 92 s 398
;
1981 c 85 s 92
.]
RCW 32.32.470
Approval of certain applications prohibited.
The director shall not approve an application involving an offer for, an announcement thereof, or an acquisition of any security of a converted savings bank submitted under RCW 32.32.450
if the director finds that the offer frustrates the purposes of this chapter, is manipulative or deceptive, subverts the fairness of the conversion, is likely to result in injury to the savings bank, is not consistent with savings banking under Title
32
RCW, or is otherwise violative of law or regulation.
[
1994 c 92 s 399
;
1981 c 85 s 93
.]
RCW 32.32.475
Penalty for violations.
For willful violation or assistance of such a violation of any provision of RCW 32.32.440
through
32.32.470, any person who (1) has any connection with the management of a converting or converted savings bank, including any director, officer, employee, attorney, or agent, or (2) controls more than ten percent of the outstanding shares of any class of equity security or voting rights thereto of a converting or converted savings bank shall be subject to a civil penalty of not more than five hundred dollars (which penalty shall be cumulative to any other remedies) for each day that the violation continues, which penalty the director may recover by suit or otherwise for the director's own use. The director in his or her discretion may, at any time before collection of the penalty (whether before or after the bringing of any action or other legal proceedings, the obtaining of any judgment or other recovery, or the issuance or levy of any execution or other legal process thereof), compromise or remit in whole or in part the penalty.
[
1994 c 92 s 400
;
1981 c 85 s 94
.]
RCW 32.32.480
Name of converted savings bank.
A savings bank shall not be forbidden or required to change its corporate name as a result of its conversion pursuant to this chapter.
[
1994 c 256 s 107
;
1981 c 85 s 95
.]
NOTES:
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.485
Amendments to charter required in application
—
Articles of incorporation
—
Filing of certificate required
—
Contents
—
Issuance and filing of authorization certificate.
(1) An application for conversion under this chapter shall include amendments to the charter of the converting savings bank. The charter of the converted savings bank, as amended, shall be known after the conversion as the articles of incorporation of the converted savings bank. The articles of incorporation may limit or permit the preemptive rights of a shareholder to acquire unissued shares of the converted savings bank and may thereafter by amendment limit, deny, or grant to shareholders of any class of stock or of any series of preferred stock the preemptive right to acquire additional shares of the converted savings bank whether then or thereafter authorized. The articles of incorporation may establish or may specify procedures, in accordance with *RCW 30.08.083, for the division of a class of preferred stock into series. In addition to such provisions and the provisions permitted pursuant to RCW 23B.17.030, the articles of incorporation shall contain such other provisions not inconsistent with this chapter as the board of directors of the converting savings bank may determine and as shall be approved by the director of financial institutions.
(2) When all of the stock of a converting savings bank has been subscribed for in accordance with the plan and any amendments thereto, the board of trustees shall thereupon issue the stock and shall cause to be filed with the director of financial institutions, in triplicate, a certificate subscribed by the persons who are to be directors of the converted savings bank, stating:
(a) That all of the stock of the converted mutual savings bank has been issued;
(b) That the attached articles of incorporation have been executed by all of the persons who are to be directors of the converted mutual savings bank;
(c) The place where the bank is to be located and its business transacted, naming the city or town and county, which city or town shall be the same as that where the principal place of business of the mutual savings bank has theretofore been located;
(d) The name, occupation, residence, and post office address of each signer of the certificate; and
(e) The amount of the assets of the mutual savings bank, the amount of its liabilities, and the amount of its guaranty fund and nondivided profits as of the first day of the current calendar month.
(3) Upon the filing of the certificate in triplicate, the director of financial institutions shall, within thirty days thereafter, if satisfied that the corporation has complied with all the provisions of this chapter, issue in triplicate an authorization certificate stating that the corporation has complied with all the requirements of law, and that it has authority to transact at the place designated in its articles of incorporation the business of a converted mutual savings bank. One of the director of financial institutions' certificates of authorization shall be attached to each of the articles of incorporation, and one set of these shall be filed and retained by the director of financial institutions, one set shall be filed in the office of the secretary of state, and one set shall be transmitted to the bank for its files. Upon the receipt from the corporation of the same fees as are required for filing and recording other incorporation certificates or articles the secretary of state shall record the same; whereupon the conversion of the mutual savings bank shall be deemed complete, the requirements of RCW 32.08.010
relating to the incorporation certificate of an unconverted mutual savings bank shall no longer apply, and the signers of the articles of incorporation and their successors shall be a corporation having the powers and being subject to the duties and obligations prescribed by the laws of this state applicable to converted mutual savings banks, and the time of existence of the corporation shall be perpetual, unless terminated pursuant to law.
[
1994 c 256 s 108
;
1994 c 92 s 401
;
1981 c 85 s 96
.]
NOTES:
Reviser's note:
*(1) RCW 30.08.083
was recodified as RCW 30A.08.083
pursuant to 2014 c 37 s 4, effective January 5, 2015.
(2) This section was amended by 1994 c 92 s 401 and by 1994 c 256 s 108, each without reference to the other. Both amendments are incorporated in the publication of this section pursuant to RCW 1.12.025
(2). For rule of construction, see RCW 1.12.025
(1).
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.490
Amendments to articles of incorporation.
(1) Amendments to the articles of incorporation of the converted savings bank shall be made only with the approvals of the director, of two-thirds of the directors of the savings bank, and of the holders of a majority of each class of the outstanding shares of capital stock or such greater percentage of these shares as may be specified in the articles of the converted savings bank.
(2) Unless the articles of incorporation provide otherwise, the board of directors of a savings bank may, by majority vote, amend the savings bank's articles of incorporation as provided in this section without shareholder action:
(a) If the savings bank has only one class of shares outstanding, to provide, change, or eliminate any provision with respect to the par value of any class of shares;
(b) To delete the name and address of the initial directors;
(c) If the savings bank has only one class of shares outstanding, solely to change the number of authorized shares to effectuate a split of, or stock dividend in, the savings bank's own shares, or solely to do so and to change the number of authorized shares in proportion thereto;
(d) To change the savings bank's name; or
(e) To make any other change expressly permitted by this title to be made without shareholder action.
[
1994 c 256 s 109
;
1994 c 92 s 402
;
1985 c 56 s 28
;
1981 c 85 s 97
.]
NOTES:
Reviser's note:
This section was amended by 1994 c 92 s 402 and by 1994 c 256 s 109, each without reference to the other. Both amendments are incorporated in the publication of this section pursuant to RCW 1.12.025
(2). For rule of construction, see RCW 1.12.025
(1).
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.495
Directors
—
Election
—
Meetings
—
Quorum
—
Oath
—
Vacancies.
(1) Every converted savings bank shall be managed by not less than five directors, except that a bank having a capital of fifty thousand dollars or less may have only three directors. Directors shall be elected by the stockholders and hold office for one year and until their successors are elected and have qualified. In the first instance the directors shall be those named in the articles of incorporation and afterwards, those elected at the annual meeting of the stockholders to be held at least once each year on a day to be specified by the converted savings bank's bylaws but not later than May 15th of each year. If for any cause an election is not held at that time, it may be held at an adjourned meeting or at a subsequent meeting called for that purpose in the manner prescribed by the corporation's bylaws. Each director shall be a resident of a state of the United States. The directors shall meet at least nine times each year and whenever required by the director. A majority of the board of directors shall constitute a quorum for the transaction of business. At all stockholders' meetings, each share shall be entitled to one vote, unless the articles of incorporation provide otherwise. Any stockholder may vote in person or by written proxy.
(2) If the board of directors consists of nine or more members, in lieu of electing the entire number of directors annually, the converted savings bank's articles of incorporation or bylaws may provide that the directors be divided into either two or three classes, each class to be as nearly equal in number as possible, the term of office of directors of the first class to expire at the first annual meeting of shareholders after their election, that of the second class to expire at the second annual meeting after their election, and that of the third class, if any, to expire at the third annual meeting after their election. At each annual meeting after such classification, the number of directors equal to the number of the class whose term expires at the time of such meeting shall be elected to hold office until the second succeeding annual meeting, if there are two classes, or until the third succeeding annual meeting, if there are three classes. A classification of directors shall not be effective prior to the first annual meeting of shareholders.
(3) Each director, so far as the duty devolves upon him or her, shall diligently and honestly administer the affairs of the corporation and shall not knowingly violate or willingly permit to be violated any provision of law applicable to the corporation.
(4) A vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors. A director elected to fill a vacancy shall be elected for the unexpired term of the director's predecessor in office. A directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors for a term of office continuing only until the next election of directors by the shareholders.
[
1994 c 256 s 110
;
1994 c 92 s 403
;
1985 c 56 s 29
;
1983 c 44 s 3
;
1981 c 85 s 98
.]
NOTES:
Reviser's note:
This section was amended by 1994 c 92 s 403 and by 1994 c 256 s 110, each without reference to the other. Both amendments are incorporated in the publication of this section pursuant to RCW 1.12.025
(2). For rule of construction, see RCW 1.12.025
(1).
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.497
Conversions incident to acquisition by savings bank holding company or merger or consolidation with savings bank holding company subsidiary
—
Application of RCW 32.32.110
and
32.32.115
.
(1) In a conversion of an unconverted mutual savings bank that is in the process of acquisition by a savings bank holding company or in the process of merger or consolidation with a subsidiary of a savings bank holding company, the restrictions imposed by RCW 32.32.110
on resale of stock apply to shares of the holding company purchased on original issue by any director or officer of the converting savings bank that is in the process of acquisition, merger, or consolidation, and the restrictions imposed by this chapter apply to the ownership of capital stock in the holding company with the same force and effect as they would apply to the ownership of capital stock of the unconverted mutual savings bank if shares of this savings bank were offered to depositors or the public pursuant to this chapter.
(2) The tender of shares by directors and officers of a converted savings bank in exchange for shares of another converted savings bank, or for shares of a holding company, do not constitute a sale for purposes of RCW 32.32.110
. However, the restrictions of RCW 32.32.110
and
32.32.115
apply to the resale of the shares they receive in such an exchange with the same force and effect as to the shares of the converted savings bank they purchased on original issue for a period of three years following the date of such purchase on original issue.
[
1985 c 56 s 30
.]
RCW 32.32.500
Merger, consolidation, conversion, etc.
—
Approval
—
Concentration limits.
(1) A savings bank may merge with, consolidate with, convert into, acquire a branch or branches of, or sell its branch or branches to any depository institution as defined in 12 U.S.C. Sec. 461, any financial institution chartered or authorized to do business under the laws of any state, territory, province, or other jurisdiction of the United States or another nation, or any holding company or subsidiary of such an institution, subject to the approval of (a) the director of financial institutions if the surviving institution is one chartered under Title *30, 31, 32, or 33 RCW, or (b) if the surviving institution is to be a bank, savings bank, savings and loan association, or other depository institution that is federally chartered under the laws of the United States, the federal regulatory authority having jurisdiction over the transaction under the applicable laws, or (c) if the surviving institution is to be a bank, savings bank, savings and loan association, or other depository or financial institution that is chartered under the laws of another state or territory of the United States, the regulatory authority having jurisdiction over that transaction under the applicable laws, or (d) if the surviving institution is to be a bank, savings bank, savings and loan association, or other depository or financial institution that is chartered under the laws of a nation other than the United States or of a state, territory, province, or other jurisdiction of such nation, the director of financial institutions, or (e) if the surviving institution is to be a bank holding company or financial holding company, the Federal Reserve Board or its successor under 12 U.S.C. Sec. 1842 (a) and (d).
(2) In the case of a liquidation, acquisition, merger, consolidation, or conversion of a converted savings bank, chapter
32.34
RCW shall apply.
(3) The concentration limits applicable to these transactions, pursuant to 12 U.S.C. Sec. 1831u(b)(2)(C) with respect to interstate transactions, shall be those imposed pursuant to 12 U.S.C. Sec. 1828(c)(5), as applied by the federal regulatory authority having jurisdiction over that transaction under the applicable law, in lieu of the concentration limits of 12 U.S.C. Sec. 1831u(b)(2)(B).
[
2003 c 24 s 9
;
1999 c 14 s 30
;
1996 c 2 s 28
. Prior:
1994 c 256 s 111
;
1994 c 92 s 404
;
1985 c 56 s 31
;
1981 c 85 s 99
.]
NOTES:
*Reviser's note:
Title
30
RCW was recodified and/or repealed pursuant to 2014 c 37, effective January 5, 2015.
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.505
Intent
—
References in the Revised Code of Washington.
(1) It is the intention of the legislature to grant, by this chapter, authority to permit conversions by mutual savings banks to capital stock form, and the rights, powers, restrictions, limitations, and requirements of Title
32
RCW shall apply to a converted mutual savings bank except that, in the event of conflict between the provisions of this chapter and other provisions of Title
32
RCW, the other provisions shall be construed in favor of the accomplishment of the purposes of this chapter.
(2) References in the Revised Code of Washington as of the most recent effective date of any amendment, to mutual savings banks shall refer also to stock savings banks. References in the Revised Code of Washington to the board of trustees of a mutual savings bank shall refer also to the board of directors of a stock savings bank. The provisions of *Title
30
RCW shall not apply to a converted savings bank except insofar as the provisions would apply to a mutual savings bank.
[
1994 c 256 s 112
;
1985 c 56 s 32
;
1981 c 85 s 100
.]
NOTES:
*Reviser's note:
Title
30
RCW was recodified and/or repealed pursuant to 2014 c 37, effective January 5, 2015.
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.515
Guaranty fund.
The guaranty fund of a mutual savings bank converted under this chapter shall become surplus of the converted savings bank, but shall not be available after conversion for purposes other than those purposes for which a guaranty fund may be used by a mutual savings bank under Title
32
RCW. No contribution need be made to the guaranty fund by the converted savings bank after conversion. When any provision of any other chapter of this title refers to the amount of the guaranty fund for the purpose of determining the extent of the authority of a savings bank, and not for purposes of prescribing the use of funds in or contributions to the guaranty fund, such provision shall be deemed to refer to an amount including capital surplus and paid-in capital of a stock savings bank.
[
1994 c 256 s 113
;
1981 c 85 s 102
.]
NOTES:
Findings
—
Construction
—
1994 c 256:
See RCW 43.320.007
.
RCW 32.32.520
"Funds" defined.
The "funds" of a converted savings bank, as the term is used in Title
32
RCW, shall mean deposits, sums credited to the liquidation account, capital stock, the principal balance of any outstanding capital notes, capital debentures, borrowings, undivided profits and income derived from the foregoing or the proceeds of the foregoing as listed in this section.
[
1999 c 14 s 31
;
1981 c 85 s 103
.]
RCW 32.32.525
Prohibition on certain securities and purchases
—
Exception.
After July 26, 1981, no converted savings bank may make any loan or discount on the security of its own capital stock, nor be the purchaser or holder of any such shares, unless the security or purchase is necessary to prevent loss upon a debt previously contracted in good faith, in which case the stocks so purchased or acquired shall be sold at public or private sale, or otherwise disposed of, within six months from the time of its purchase or acquisition. The prohibitions of this section do not apply to a purchase of shares approved by the director pursuant to RCW 32.32.210
.
[
1994 c 92 s 405
;
1983 c 44 s 4
;
1981 c 85 s 104
.]