Tennessee § 45-3-1108 - Plan of conversion — Mandatory and permissive requirements.

§ 45-3-1108. Plan of conversion — Mandatory and permissive requirements.

Mandatory Provisions. The plan of conversion shall provide as follows: Each depositor shall receive a deposit account in the converted association equal in amount to the depositor's account in the converting association; provided, that if the conversion contemplates a purchase of capital stock by deposit account holders in the converting association, then the plan may provide that all or a proportionate part of each deposit account, if the deposit account holder so elects, shall be credited or otherwise applied to the purchase of stock in the capital stock association; In the event of a conversion from a state mutual association or federal association to a state capital stock association, no capital stock shall be issued to any deposit account holder free of charge, and each deposit account holder shall be entitled to receive rights to purchase the capital stock; In the event of a conversion from a state capital stock association to a state mutual association or federal association, the plan of conversion shall show how the rights of the stockholders to a return of capital shall be effected; The plan of conversion shall show with particularity the business purpose to be accomplished by the conversion; and The plan of conversion shall contain other information and be in the form required by the commissioner to enable the commissioner to determine whether the plan is fair and equitable and that the interests of deposit account holders, creditors, stockholders, or members and the public are adequately protected. Permissive Provisions. A plan of conversion shall not be considered unfair or inequitable merely because it contains provisions that provide that: Deposit account holders shall have a right to purchase shares of capital stock at the fair market value thereof; Deposit account holders shall or shall not have preemptive rights to all stock proposed to be issued; Stockholders shall have the option of accepting a redemption of their shares of stock in return for cash or other property or that the value of the shares of stock may be converted into one (1) or more deposit accounts in the name of the stockholder; Employment contracts are provided for officers and employees of the converted association; or Not more than fifteen percent (15%) of the capital stock proposed to be issued pursuant to the plan of conversion is reserved by the association for stock options for officers and employees. Acts 1978, ch. 708, § 4.16; T.C.A., § 45-1616.