§ 707.350 — Payment prior to issuance of certificate of stock; consideration; approvals

Oregon § 707.350

• Jurisdiction: Oregon
• Vol.: 18
• Title 53: Financial Institutions
• Ch. 707: Organization to Conduct Banking Business; Stockholders, Directors and

Text

(1) An institution or Oregon stock savings bank may not issue any certificate of stock until the institution or Oregon stock savings bank receives full payment for the stock. A person other than a director, officer or employee of the institution or Oregon stock savings bank that purchases stock after the initial organization of the institution or Oregon stock savings bank must pay for the purchase in cash or by exchanging real property or improvements on real property. The Director of the Department of Consumer and Business Services must approve the real property and improvements the person uses for payment as meeting all applicable requirements of law and all other conditions and standards that the director adopts by rule, including but not limited to a proper appraisal by a qualified appraiser. Stock that the institution or Oregon stock savings bank issues after initial organization to a director, officer or employee of the institution or Oregon stock savings bank may be issued for consideration that consists of cash, real property and improvements to real property, tangible personal property, other securities of the institution or Oregon stock savings bank or, subject to subsection (2) of this section, services the director, officer or employee performed or will perform under contract. In the absence of fraud, the judgment of the board of directors of the institution or Oregon stock savings bank as to the adequacy of the consideration received for the stock issued under this section is conclusive and upon issuance in payment of such consideration shall be fully paid.
(2) An institution or Oregon stock savings bank may not issue stock to a director, officer or employee of the institution or Oregon stock savings bank in consideration of services the director, officer or employee performed or will perform under contract unless the plan to issue the stock is approved as follows:
(a) The institution or Oregon stock savings bank shall submit the plan to the Director of the Department of Consumer and Business Services for approval. For purposes of this subsection, the director approves the plan if the director either approves the plan in writing or does not disapprove the plan in a writing the director delivers to the institution or Oregon stock savings bank within 30 days after the director receives a copy of the plan.
(b) The holders of at least two-thirds of the outstanding shares of the institution or Oregon stock savings bank entitled to vote on the plan approve the plan in a vote at the annual shareholders’ meeting or a special shareholders’ meeting. Written or printed notice of the plan must be delivered personally or by mail to each shareholder entitled to vote at the meeting. The notice must be delivered or mailed not less than 10 days and not more than 60 days before the date of the meeting during which the vote will be taken. The notice must describe the plan in reasonable detail, state that the Director of the Department of Consumer and Business Services must approve or not disapprove the plan, that the holders of at least two-thirds of the outstanding shares of the institution or Oregon stock savings bank that are entitled to vote on the plan must approve the plan in accordance with this paragraph and that issuing shares under the plan will dilute the interests of existing shareholders in the institution or the Oregon stock savings bank.
(3) Notwithstanding subsections (1) and (2) of this section, an institution or Oregon stock savings bank may create and issue the number of shares of stock stated in the articles of incorporation or amendments to the articles of incorporation.

Legislative History

Amended by 1969 c.635 §2; 1973 c.797 §76; 1977 c.135 §16; 1983 c.37 §4; 1997 c.631 §73; 2007 c.348 §1; 2015 c.244 §25