§5-16-31. Reorganizations.

(a) The board of directors of any association may at a meeting called for that purpose adopt a plan of reorganization of the association. Five copies of the proposed plan of reorganization, signed and acknowledged before an officer competent to take acknowledgments of deed, by the secretary or an assistant secretary of the association, shall be submitted to the commissioner. If the commissioner shall approve the proposed plan of reorganization, he shall endorse his approval upon three copies thereof. Upon the approval by the Commissioner of the proposed plan of reorganization, he shall file a copy thereof in the permanent files of his office, forward a copy to the Secretary of State for filing and return a copy to the association. After such approval, such approved plan shall be presented to the members at an annual meeting or special meeting called for the purpose of considering and voting upon such approved plan. If at such meeting the majority of the votes cast thereat are in favor of such approved plan, the association may proceed to reorganize in accordance therewith. Five copies of the resolution adopted approving such plan of reorganization, certified by the secretary or an assistant secretary, shall be filed with the commissioner. The commissioner shall place a copy of such certified resolution in the permanent files of his office and transmit a copy to the Secretary of State. Unless the plan of reorganization fixes the effective date thereof, the effective date of reorganization shall be the date upon which the commissioner accepts for filing the certified copies of the resolution of the members adopting the approved plan of reorganization. The plan of reorganization may provide for reincorporation under the existing name of the association or under a different name. In addition to all other lawful provisions, the plan may provide for the exchange of shares or accounts in the association for accounts of the reorganized association.

(b) Without limiting the generality of the methods by which an association may reorganize, any association may:

(1) Transfer title to any of its assets to a new association organized under this chapter solely to liquidate such assets in an orderly manner. Such liquidating association shall be in dissolution and shall dissolve in accordance with the provisions of Section 5-16-32. Unless the commissioner shall otherwise approve, the board of directors of the reorganizing association shall be the board of directors of the liquidating association. The liquidating association shall pay to the reorganizing association for the assets acquired the aggregate book value of such assets on the books of the reorganizing association by issuing pro rata and delivering to the account holders and shareholders of the reorganizing association accounts of an aggregate participation value equal to the aggregate book value of the assets so acquired. The participation value of the accounts or shares of such account holders or shareholders of the reorganizing association shall be written down in an amount equal to the participation value of the account of such account holder in the liquidating association. Title to the assets transferred to the liquidating association pursuant to this section shall vest in the liquidating association by operation of law with the same legal effect as provided in Section 5-16-29 in the case of merger;

(2) Set up a "participating reserve" by transferring thereto the aggregate book value of any assets of the association. The participation value of the shares and accounts of the association then outstanding shall be reduced pro rata by an aggregate amount equal to the aggregate book value of assets so transferred to the participating reserve. The association shall issue pro rata to such shareholders and account holders nonrepurchasable "participating reserve accounts" of an aggregate participation value equal to the aggregate book value of assets transferred to the participating reserve. The assets so represented by the participating reserve shall be identified on the books of the association as participating reserve assets, and the aggregate book value of such assets as shown by the participating reserve shall be reported on any balance sheet of the association opposite the item "participating reserve assets," and such assets shall be and remain a separate fund from the other assets of the association for the sole use and benefit of the holders of participating reserve accounts. In such event, the directors shall have with respect to the liquidation of the participating reserve assets all of the powers set forth in Section 5-16-32. As and when the participating reserve assets are liquidated, all proceeds therefrom shall be paid pro rata from time to time as the board of directors may determine to the holders of participating reserve accounts at the option of the board of directors either in cash or by credit upon an account of the association. If the proceeds of the final liquidating of participating reserve assets do not equal the participation value of participating reserve accounts, the loss shall be absorbed pro rata by the holders of participating reserve accounts, and the association shall have no further liability in relation thereto or arising therefrom; and

(3) Reduce its liability to each of its account holders pro rata to the amount credited to the account of each such account holder on the books of the association in such a manner as to distribute the loss equally among such account holders whenever the losses of an association resulting from the depreciation in value of its assets or otherwise are such as to result in an impairment of capital.

(c) All rights of and obligations to any reorganizing association shall inure to the benefit of the reorganized association and be enforceable by it and in its name, and any demands, claims or rights of action against any reorganizing association may be enforced against the reorganized association as fully and completely as they might have been enforced theretofore, and all deeds, notes, mortgages, contracts, judgments, transactions and proceedings whatsoever theretofore made, received, entered into, carried on or done by the association before the reorganization shall be as good, valid and effectual for and against the reorganized association as though such reorganization had never taken place. Upon the vote of the members of an association in approval of a proposed plan of reorganization, all pending applications for repurchase of shares or accounts shall be cancelled.

(d) Notwithstanding any other provision of law, an existing mutual association currently operating within this state may convert to a capital stock form of organization in accordance with this section and applicable regulations of the Federal Home Loan Bank Board. The board of directors of an association shall first adopt a plan to convert the association to the stock form. Five copies of the proposed plan of conversion shall be submitted to the commissioner. The commissioner shall not approve a plan unless such plan is fair to the members of the converting association and the association's insurance of accounts will remain in effect after the conversion. If the commissioner approves the proposed plan, he shall endorse his approval upon three copies thereof. After such approval, such approved plan shall be presented to the members at a meeting called to consider and vote upon the plan. If the majority of such votes cast at such meeting are in favor of the plan, the association may proceed to convert in accordance therewith. Five copies of the resolution adopted approving the plan of conversion, certified by the secretary or an assistant secretary of the association, together with five executed copies of the association's proposed stock certificate of incorporation approved at the meeting and executed by the association's chief executive officer and corporate secretary, shall be filed with the commissioner. The effective date of conversion shall be the date upon which the commissioner endorses the executed stock certificates of incorporation, which shall coincide with the date the association executes all orders for its conversion stock and issues its stock certificates. Two copies of the endorsed certificates of incorporation shall thereupon be transmitted to the converted association.

(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §237; Acts 1981, No. 81-392, p. 617.)