32-2-254. Conversion of mutual to capital stock association -- mandatory plan requirements. The following requirements are mandatory in any plan of conversion from the mutual form to a capital stock form of organization:

(1) Each savings account holder must receive a withdrawable account of the same general class in the converted association equal in amount and time tenure to the holder's withdrawable account in the converting association. A payment may not be required from the account holder for this change of accounts.

(2) The plan must specify the aggregate dollar amount of voting capital stock and the total number of shares to be issued to accomplish the conversion. The distribution of the stock must be in accordance with subsection (3).

(3) All voting capital stock issued by the association to accomplish a conversion must be subscribed and fully paid for in cash, labor, or services actually performed in the conversion process and may not be eligible, either directly or indirectly, as security for a loan or other credit advance to facilitate its own purchase. Each account holder has the right for a period of 60 days to purchase a proportionate share of the stock at a price equal to the initial stated value of the stock. Any stock remaining unsubscribed must, during the succeeding 60-day period, be offered for sale to those savings account holders of record who have purchased their proportionate share during the initial period. Any stock remaining unsubscribed may be offered for sale to others or transferred to others in consideration for labor or services actually performed in the conversion process.

(4) The record date for determining savings account holders' rights to distribution under subsection (3) must be set by the converting association's board of directors but may not be less than 120 days prior to the date of approval of the conversion plan by the directors.

(5) The conversion plan must make specific provision with respect to the surplus, reserves, undivided profits, and capital stock of the converted association, specifying types of accounts, amounts, priorities, any voting rights, and how the accounts are to be disposed of or retained.

(6) The plan must contain other information and be in the form that is required by the department to enable it to make a determination of whether:

(a) the plan is fair and equitable;

(b) the interests of the applicant, members or stockholders, savings account holders, and the public are adequately protected; and

(c) the converting applicant has complied with the requirements of 32-2-251 through 32-2-257.