Oregon Chapter 707
Chapter 707 — Organization to Conduct Banking Business; Stockholders, Directors and OfficersDownload Full 2005 Oregon Revised Statutes (coming soon!)
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Chapter 707 —
Organization to Conduct Banking Business; Stockholders,
Directors and
Officers
2007 EDITION
ORGANIZATION TO CONDUCT BANKING BUSINESS
FINANCIAL INSTITUTIONS
ORGANIZATION TO CONDUCT BANKING BUSINESS
(Generally)
707.005 Organization
required to engage in banking or trust business
707.007 Organization
of Oregon bank as limited liability company
707.010 Certificate
required to transact banking business
707.020 Violation
of ORS 707.005 or 707.010; investigation; injunction
707.025 Organization
of banking institution for purpose of merging with, acquiring assets of or
assuming liabilities of financial institution; procedure; conditions
707.035 Conversion
of trust company to Oregon bank
707.050 Initial
paid-in capital requirement
707.070 Application
for authority to organize banking institution; fee; contents
707.075 Banking
institution name
707.080 Investigation
and ruling on application; conditional approval; appeal
707.090 Refusal
to file articles of incorporation or grant charter after approval of
application
707.100 Time
for submitting articles of incorporation
707.110 Execution
and submission of articles of incorporation; contents
707.120 Issuance
of certificate of incorporation when filings conform to law
707.140 Submission
of organization information; issuance of charter
707.145 Grounds
for refusing authority to organize
707.150 Refusal
of authority to organize; appeal
707.155 Authority
to require additional investigatory information; fingerprinting
707.160 Transaction
of business prior to organization; failure to complete organization; liability
707.170 Effective
date of charter; commencement of business; effect of failure to commence
business
707.180 Location
of principal place of business; change upon approval
707.182 Registered
agent; registered office
707.184 Changes
in registered office or agent
707.186 Resignation
of registered agent; discontinuance of registered office
707.188 Service
of process on institution or
707.195 Offering
documents for sale of stock; approval by director
707.200 Payments
by subscribers of full amount of stock subscriptions; escrow
707.210 Stock
issuance after obtaining charter; form of stock certificate; issuance of stock
without certificate
707.220 Stock
record; contents; inspection
707.230 Transfer
of stock
707.242 Bylaws
(Amendment of Articles of Incorporation)
707.244 Amendment
of articles of incorporation; purposes for amendment
707.246 Manner
of amending articles of incorporation
707.248 Shareholders
authorized to vote on amendment to articles of incorporation
707.250 Execution
of amendments to articles of incorporation
707.252 Filing
of amended articles of incorporation
707.254 Effective
date of amended articles of incorporation; effect on existing cause of action
707.256 Restated
articles of incorporation
(Shares)
707.258 Terms
of class of shares or series within class determined by board of directors
707.260 Fractional
shares; scrip
707.262 Share
options; limits on issuance
707.266 Expenses
of organization or issue of shares
707.268 Restrictions
on redemption of shares
707.270 Effect
of redemption of shares; statement of cancellation
707.272 Paid-in
capital; use; retained earnings reserve; approval of director for redemption of
shares; rules
707.350 Payment
prior to issuance of certificate of stock; consideration; approvals
707.380 Limitation
on dividends
707.400 Suspension
of payment of dividends
707.410 Record
of dividends declared
707.415 Report
of dividends declared
STOCKHOLDERS, DIRECTORS AND OFFICERS
(Stockholder Meetings)
707.610 Annual
and special stockholder meetings; notice of orders
707.611 Notice
of meeting
707.612 Action
without meeting
707.613 Shareholder
waiver of notice; effect of attendance at meeting
707.615 Record
date
707.617 Shareholders
list for meeting
707.619 Voting
entitlement of shares
707.620 Special
stockholder meeting called by director
707.621 Quorum
707.623 Modification
of quorum or voting requirements
707.625 Exemption
from personal liability for good faith acts or omissions in compliance with
statute, rule or order
(Directors and Officers)
707.642 Organizational
meeting of directors; notice
707.644 Committees
of board of directors; limitations
707.646 Staggered
terms for directors
707.648 Removal
of directors by shareholders
707.660 General
standards for directors
707.665 General
standards for officers
707.670 Regular
meetings of directors; quorum; notice; meetings using communications equipment
707.675 Report
of loans and investments
707.680 Special
board meetings called by director; penalty for failure to attend
707.690 Filling
director vacancy
707.700 Selection
and control of officers by directors; effect of removal of officers
707.705 Investigation
of new director, president and chief executive officer; fingerprinting;
disapproval of election or appointment
707.710 Removal
of officer or director
707.720 Violation
of law or omission of duty by officer or director
707.730 Official
communications from Department of Consumer and Business Services; submission to
directors
707.735 Officers
and directors to notify law enforcement officers of certain criminal
violations; investigations; costs
707.740 Examining
or audit committee; duties
(Indemnification of Directors, Officers, Employees
and Agents)
707.744 Definitions
for ORS 707.744 to 707.764
707.746 Authority
to indemnify directors
707.748 Mandatory
indemnification
707.752 Advance
for expenses
707.754 Court-ordered
indemnification
707.756 Determination
and authorization of indemnification
707.758 Indemnification
of officers, employees and agents
707.762 Insurance
707.764 Application
of ORS 707.744 to 707.762
ORGANIZATION TO CONDUCT BANKING BUSINESS
(Generally)
707.005
Organization required to engage in banking or trust business. It is unlawful for any person to engage in
or transact a banking or trust business within this state except by means of an
entity duly organized for the purpose. [1973 c.797 §50; 1997 c.631 §29]
707.007
Organization of Oregon bank as limited liability company. (1) As an alternative to being organized as
a corporation under this chapter, an Oregon bank may be organized as a limited
liability company.
(2) With respect to any Oregon bank that
is organized as a limited liability company, as used in the Bank Act:
(a) “Articles of incorporation” means the
Oregon bank’s articles of organization, as defined in ORS 63.001.
(b) “Bylaws” means the Oregon bank’s
operating agreement, as defined in ORS 63.001.
(c) “Certificate of incorporation” means a
certificate of organization issued to the Oregon bank.
(d) “Corporation,” means a limited
liability company, as defined in ORS 63.001.
(e) “Director,” “directors” or “board of
directors” means the Oregon bank’s manager or managers, as defined in ORS 63.001.
(f) “Dividends” means distributions, as
defined in ORS 63.001, declared or paid by the Oregon bank.
(g) “Incorporator” means the Oregon bank’s
organizer, as defined in ORS 63.001.
(h) “Share” or “stock” means a membership
interest in the Oregon bank, as defined in ORS 63.001.
(i) “Stockholder,” “stockholders,” “shareholder”
or “shareholders” means the Oregon bank’s member or members, as defined in ORS
63.001.
(3) An Oregon bank organized as a limited
liability company shall be organized under the authority of the Director of the
Department of Consumer and Business Services under this chapter. Except as set
forth in subsection (4) of this section, with respect to all other aspects of
its operation and existence, an Oregon bank that is organized as a limited
liability company is subject to the provisions of ORS chapter 63, to the extent
that ORS chapter 63 does not conflict with the Bank Act. In the event of any
conflict between the Bank Act and ORS chapter 63, the Bank Act controls.
(4)(a) Notwithstanding any provision of
ORS chapter 63, the articles of organization of an Oregon bank that is
organized as a limited liability company shall:
(A) State that the existence of the Oregon
bank is perpetual; and
(B) Provide that the Oregon bank is to be
managed by a board of not fewer than five managers.
(b) Notwithstanding any provision of ORS
chapter 63, an Oregon bank that is organized as a limited liability company
shall be managed exclusively by its board of managers in substantially the same
manner as an Oregon bank that is organized as a corporation is managed by its
board of directors. The board of managers of an Oregon bank that is organized
as a limited liability company has substantially the same rights, powers,
privileges, duties and responsibilities as the board of directors of an Oregon
bank that is organized as a corporation and is subject to the provisions of
this chapter pertaining to directors.
(c) Notwithstanding any provision of ORS
chapter 63, membership interests in an Oregon bank that is organized as a
limited liability company are freely transferable, and consent of the Oregon
bank or its members or managers is not required for a person to acquire or
transfer a membership interest in the Oregon bank. Immediately upon the
completion of the transfer of the membership interest to a person, the person
becomes a member and has all the rights of a member.
(d) ORS 63.621 (2) to (4) do not apply to
an Oregon bank organized as a limited liability company.
(5) The articles of organization of an
Oregon bank that is organized as a limited liability company shall require that
liquidation of the Oregon bank conform with the requirements of the Bank Act.
(6) An Oregon bank that is organized as a
limited liability company shall have the officers described in ORS 707.700. The
officers shall be elected by the board of managers of the Oregon bank and are
subject to the provisions of this chapter.
(7) Each Oregon bank that is organized as
a limited liability company shall have a written operating agreement containing
any provisions for the affairs of the Oregon bank as may be agreed upon by its
members and that are consistent with the Bank Act.
(8) Any number of persons, not fewer than
five, may act as organizers of an Oregon bank that is organized as a limited
liability company. [2005 c.134 §2]
707.010
Certificate required to transact banking business. A person who has not received a certificate
to do a banking business from the Director of the Department of Consumer and
Business Services, except a national bank, shall not:
(1) Advertise that it is receiving or
accepting money on deposit.
(2) Use a sign at its place of business
containing words indicating that the place is a place of business:
(a) Of a banking institution;
(b) Where deposits are received or
payments made on check; or
(c) Where any other form of banking
business is transacted.
(3) Make use of or circulate any
letterheads, blank notes, blank receipts, certificates, circulars or any
written or printed paper containing words indicating that the business is the
business of a banking institution.
(4) Transact business under any name that
the director determines leads the public to believe that its business is that
of a banking institution or that it is affiliated with a banking institution.
(5) Solicit or receive deposits or
transact business in the manner of a banking institution or in such a manner as
to lead the public to believe that its business is that of a banking
institution. [Amended by 1973 c.797 §51; 1997 c.631 §30]
707.020
Violation of ORS 707.005 or 707.010; investigation; injunction. (1) The Director of the Department of
Consumer and Business Services may examine the accounts, books and papers of
every person the director has reasonable cause to believe is violating any provision
of ORS 707.005 or 707.010.
(2) When the director believes, from
evidence satisfactory to the director, that any person is violating the
provisions of ORS 707.005 or 707.010, the director may cause a complaint to be
filed in the circuit court of the county in which the person conducts business
to enjoin and restrain the person from continuing the violation. The court
shall have jurisdiction of the proceeding and may make and enter an order or
judgment awarding such preliminary or final injunctive relief as in its
judgment is proper. [Amended by 1973 c.797 §52; 1997 c.631 §31]
707.023 [1993 c.229 §7; repealed by 1997 c.631 §567]
707.025
Organization of banking institution for purpose of merging with, acquiring
assets of or assuming liabilities of financial institution; procedure;
conditions. (1) A banking
institution may be organized under this section solely for the purpose of
merging with, acquiring the assets of or assuming the liabilities of one or
more existing financial institutions pursuant to ORS chapter 711 and, except as
otherwise provided in this section, without authority to engage in or transact
banking or trust business.
(2) The banking institution may be
organized under this section by one or more persons or a corporation.
(3) Notwithstanding ORS 707.050, 707.070,
707.080 to 707.120, 707.140, 707.170, 707.200 and 707.210 (1) and such other
sections as may specifically be inconsistent with this section, a banking
institution described in subsection (1) of this section shall be organized as
follows:
(a) The incorporator shall submit to the
Director of the Department of Consumer and Business Services for filing
articles of incorporation executed in duplicate, signed by the prospective
incorporator or incorporators, and such other information as the director may
require, which may include the additional information required in an
application under ORS 707.070 or 716.028 if the banking institution organized
under this section is to survive the merger, will purchase assets or will assume
liabilities, together with an organizational fee of $2,500.
(b) Such articles of incorporation shall
specify:
(A) The name and address of each
incorporator.
(B) The information required under ORS
707.110 (2)(a), (b) and (h) and (3).
(C) The term of its existence, which may
be perpetual.
(D) The purpose of the corporation, which
shall be limited to the purposes set forth in subsection (1) of this section.
However, if the corporation is to be the resulting bank in such merger, the
articles may also contain all purposes allowed a banking institution under the
Bank Act, provided the implementation of such purposes are conditioned upon
consummation of such merger.
(E) The name and address of each director
of the board of directors, which shall be composed of not less than three
directors.
(4) Unless the director finds that
approval of the articles would violate ORS 707.145 or other applicable law, the
director shall file the articles and issue a certificate of incorporation in
accordance with ORS 707.120, if:
(a) The director finds that the articles
conform to subsection (3) of this section; and
(b) The director finds that the banking
institution, following any merger or assumption of liabilities, will meet the
requirements of ORS 707.080 (1) and (2).
(5) Upon issuance of the certificate of
incorporation, the corporate existence of the banking institution shall begin
and the banking institution may issue stock.
(6)(a) After the issuance of the
certificate of incorporation, the new banking institution shall file a
certified copy of its bylaws with the director within 90 days. If the director
finds such bylaws to be consistent with the requirements of the Bank Act, the
director shall issue a provisional charter to such bank.
(b) The provisional charter shall expire
one year after its date of issuance. However, the director may extend such
expiration period. If a merger or assumption of liabilities is not consummated
before the provisional charter expires, the interim bank shall cease to exist
and its articles of incorporation and charter shall be void.
(c) For purposes of ORS chapter 711, a
provisional charter issued under this section shall be deemed a charter, where
appropriate.
(d) If the merger or assumption of
liabilities is consummated and the banking institution organized under this
section survives the transaction, the director shall issue to the banking
institution a charter to do a banking business either as an
(7) A banking institution organized solely
for the purposes set forth in subsection (1) of this section for which a
charter has been issued may, with the director’s approval, have initial paid-in
capital in an amount less than that required by ORS 707.050 prior to
consummation of a proposed merger. [1979 c.88 §8; 1997 c.631 §32; 2005 c.192 §13]
707.029 [1985 c.12 §3; 1987 c.216 §1; 1987 c.371 §2;
1987 c.373 §51a; 1995 c.6 §5; repealed by 1997 c.631 §567]
707.030 [Repealed by 1973 c.797 §428]
707.035
Conversion of trust company to Oregon bank. A trust company that desires to also conduct a banking business may
convert to an Oregon bank in accordance with the provisions of ORS 711.070 and
711.080. [1997 c.631 §39]
707.040 [Repealed by 1973 c.797 §428]
707.050
Initial paid-in capital requirement. (1) Every institution or
(2) The initial paid-in capital of an
institution or
707.060 [Repealed by 1973 c.797 §428]
707.070
Application for authority to organize banking institution; fee; contents. Any number of persons, not less than five,
desiring to organize a banking institution shall, as prospective incorporators,
first submit an application to the Director of the Department of Consumer and
Business Services for a permit to organize a banking institution. The
applicants shall pay to the director at the time of their application a fee of
$2,500, no part of which shall be refunded. The application shall be signed by
one of the applicants and shall include the following information:
(1) The proposed location of the initial
principal place of business.
(2) The class or classes of stock proposed
to be issued, the proposed offering price per share and the aggregate dollar
amount of the proposed initial paid-in capital.
(3) The corporate name.
(4) The names of the proposed senior
officers and the initial directors, at least three of whom shall also be among
the incorporators.
(5) The residence addresses and
occupations of the proposed incorporators and directors.
(6) The proposed articles of incorporation
meeting the requirements of ORS 707.110.
(7) The number of shares of voting stock
proposed to be subscribed for by the incorporators and each of the proposed
directors and senior officers, and the names of any other persons who are
expected to subscribe for, to own or to control more than 10 percent of the
voting stock and the amount of stock for which each proposes to subscribe.
(8) Evidence satisfactory to the director
of the character, financial responsibility and ability of the incorporators,
directors and senior officers.
(9) Evidence satisfactory to the director,
in the form of a business plan and such additional information as the director
may require, demonstrating that the proposed banking institution is likely to
be financially successful.
(10) The proposed operating policies of
the banking institution.
(11) A statement as to whether the banking
institution is to be a trust company, an Oregon commercial bank or an Oregon
stock savings bank, and, if the proposed Oregon commercial bank or Oregon stock
savings bank is applying for trust powers, a statement to that effect.
(12) Any other information that the director
may require. [Amended by 1971 c.68 §3; 1973 c.797 §54; 1977 c.135 §13; 1979
c.88 §9; 1997 c.631 §36]
707.075
Banking institution name.
(1) The corporate name of a banking institution:
(a) Shall not contain any word or phrase
that indicates or implies that it is organized for any purpose other than one
or more of the purposes contained in its articles of incorporation.
(b) Shall be distinguishable from any
other financial institution, corporate, professional corporate, nonprofit
corporate, cooperative, limited liability company, limited partnership,
business trust, reserved or registered name currently on file with the
Secretary of State or Director of the Department of Consumer and Business
Services, or an assumed business name registered as provided in ORS 648.010.
(2) The director may refuse to permit the
use of any name if the director determines that the name is deceptively similar
to the name of a financial institution already lawfully transacting banking
business or accepting deposits in this state.
(3) Nothing contained in this section
shall preclude a banking institution from transacting business under one or
more assumed business names, if the names meet the requirements of subsection
(1) of this section, unless the director determines that the names will be
confusingly similar to any financial institution, corporate, professional
corporate, nonprofit corporate, cooperative, limited liability company, limited
partnership, business trust, reserved or registered name currently on file with
the Secretary of State or Director of the Department of Consumer and Business
Services, or an assumed business name registered as provided in ORS 648.010. [1985
c.762 §36; 1997 c.631 §37]
707.080
Investigation and ruling on application; conditional approval; appeal. (1) When an application to organize has been
submitted, the Director of the Department of Consumer and Business Services
shall determine whether:
(a) The purposes of the proposed banking
institution as stated in the proposed banking institution’s articles of
incorporation and the application are consistent with the Bank Act;
(b) The character, financial
responsibility and general fitness of the persons named in the application are
such as to command the confidence of the community in which the proposed
banking institution is to be located and to warrant the belief that the
business of the proposed corporation will be honestly and efficiently
conducted;
(c) The proposed directors and officers
are competent to manage successfully a banking institution;
(d) The suggested capitalization is
adequate for the proposed banking institution’s anticipated development and
growth within a reasonable period of time; and
(e) There is reasonable assurance of
sufficient volume of business for the proposed banking institution to be
economically viable.
(2) If the director is satisfied that the
applicant meets the standards prescribed in subsection (1) of this section the
director shall note the approval and the date on each copy of the application.
If the director is not satisfied or believes that the public interest will be
endangered the director shall note the disapproval of the director and the date
on each copy of the application.
(3) The director shall acknowledge receipt
of an application and shall notify the applicants of approval or disapproval of
the application. The director shall file the original of an approved
application in the office of the director.
(4) The director shall act to approve or
disapprove an application within 60 days from receipt of the application,
unless a majority of the applicants and the director agree to extend the time
an additional 30 days.
(5) The director may grant conditional
approval of any application and require the applicants to make additional
showing or changes in the proposed banking institution as the director
considers advisable.
(6) The applicants may appeal the decision
of the director to any court of appropriate jurisdiction. [Amended by 1973
c.797 §55; 1975 c.544 §8a; 1997 c.631 §40]
707.090
Refusal to file articles of incorporation or grant charter after approval of
application. If, after
approving the application for authority to organize, it appears to the Director
of the Department of Consumer and Business Services that the articles of
incorporation, the organization or proposed manner of conducting business do
not comply with the terms of the application, the requirements of approval or
the requirements of law, the director may refuse to file the articles of
incorporation or to grant a charter. [Amended by 1973 c.797 §56; 1997 c.631 §41]
707.100
Time for submitting articles of incorporation. Within 30 days after authority to organize
has been finally granted, the prospective incorporators shall submit to the
Director of the Department of Consumer and Business Services articles of
incorporation. If articles of incorporation are not received by the director
within the specified time, the authority to organize is void. [Amended by 1973
c.797 §57; 1997 c.631 §42]
707.110
Execution and submission of articles of incorporation; contents. (1) Any number of persons, not less than
five, may associate themselves by articles of incorporation to establish an
institution or
(2) The articles of incorporation shall
specify:
(a) The name of the institution or
(b) The initial principal place where its
business is to be transacted, designated by legal description or street and
number in the city or town.
(c) The address, including street and
number, and mailing address, if different, of its initial registered office and
the name of its initial registered agent at that office.
(d) The names of the prospective
incorporators.
(e) The term of its existence, which may
be perpetual.
(f) The purpose for which the institution
or
(g) The initial board of directors of the
institution or
(h) If the stockholders will have
preemptive rights, a statement of such rights.
(3) In addition, the articles of
incorporation:
(a) Must prescribe the classes of shares
and the number of shares of each class that the institution or
(b) Must authorize one or more classes of
shares that together have unlimited voting rights, and one or more classes of
shares which may be the same class or classes as those with voting rights, that
together are entitled to receive the net assets of the institution or Oregon
stock savings bank upon dissolution.
(c) May authorize one or more classes of
shares that:
(A) Have special, conditional or limited
voting rights, or no voting rights, except to the extent prohibited by this
chapter;
(B) Are redeemable or convertible as
specified in the articles of incorporation:
(i) At the option of the institution or
(ii) For cash, indebtedness, securities or
other property; or
(iii) In a designated amount or in an
amount determined in accordance with a designated formula or by reference to
extrinsic data or events;
(C) Entitle the holders to distributions
calculated in any manner, including dividends that may be cumulative,
noncumulative or partially cumulative; or
(D) Have preference over any other class
of shares with respect to distributions, including dividends and distributions
upon the dissolution of the institution or
(4) The description of the designations,
preferences, limitations and relative rights of share classes in subsection
(3)(c) of this section is not exhaustive.
(5) The articles of incorporation also may
contain any lawful provisions:
(a) Regulating the business or conduct of
affairs of the institution or
(b) Defining, limiting and regulating the
powers of the directors; or
(c) Eliminating or limiting the personal
liability of a director to the institution or Oregon stock savings bank or its
shareholders for monetary damages for conduct as a director, provided that no
such provisions shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective, and such provision shall not eliminate or limit the liability of a
director for:
(A) Any breach of the director’s duty of
loyalty to the institution or
(B) Acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law;
(C) Any unlawful distribution under the
Bank Act; or
(D) Any transaction from which the
director derived an improper personal benefit. [Amended by 1973 c.797 §58; 1987
c.197 §1a; 1989 c.324 §3; 1997 c.631 §43; 2005 c.192 §6]
707.120
Issuance of certificate of incorporation when filings conform to law. (1) If the Director of the Department of
Consumer and Business Services finds that the articles of incorporation conform
to law, the director shall within 60 days after receiving the articles of
incorporation and when all fees have been paid:
(a) Indorse on each of the duplicate
originals the word “Filed,” and the month, day and year of the filing.
(b) File one of the duplicate originals in
the office of the director.
(c) Issue a certificate of incorporation
to which the director shall affix the other duplicate original.
(2) The certificate of incorporation, with
one of the duplicate originals affixed thereto shall be returned to the
incorporators or their representative.
(3) Upon issuance of the certificate of
incorporation the corporate existence of a banking institution begins. [Amended
by 1973 c.797 §59; 1997 c.631 §44]
707.130 [Amended by 1973 c.797 §60; 1987 c.197 §1b;
1989 c.324 §4; repealed by 1997 c.631 §567]
707.140
Submission of organization information; issuance of charter. (1) When subscriptions totaling not less
than the amount of the initial paid-in capital have been received, the
incorporators shall submit for filing with the Director of the Department of
Consumer and Business Services:
(a) A list of stockholders, showing name,
address, number of shares and amount paid, certified by the president or
cashier.
(b) A certificate of any escrow agent
holding moneys in escrow as payment for subscriptions to stock of the
institution or
(c) A list of the directors and senior
officers elected.
(d) A copy of its bylaws certified to by
its president or cashier.
(e) Evidence of approval by the Federal
Deposit Insurance Corporation of the
(2) Upon receiving the items referred to
in subsection (1) of this section, the director shall examine the condition of
the institution or
707.145
Grounds for refusing authority to organize. The Director of the Department of Consumer and Business Services may
disapprove an application for a permit to organize or refuse to approve the
articles of incorporation or to grant a charter upon a finding that any person
named in the application to organize or in other documents submitted for
filing:
(1) Is insolvent, either in the sense that
the person’s liabilities exceed the person’s assets or that the person cannot
meet the person’s obligations as they mature, or is in such financial condition
that the person cannot continue in business with safety to the person’s
customers;
(2) Has engaged in dishonest, fraudulent
or illegal practices or conduct in any business or profession;
(3) Has willfully or repeatedly violated
or failed to comply with any provisions of the Bank Act or any rule or order of
the director;
(4) Has been convicted of a crime, an
essential element of which is fraud;
(5) Is not qualified to conduct a banking
business on the basis of such factors as training, experience and knowledge of
the business;
(6) Is permanently or temporarily enjoined
by a court of competent jurisdiction from engaging in or continuing any conduct
or practice involving any aspect of the banking business or other business that
may lawfully be conducted by an insured institution;
(7) Is the subject of an order of the
director subjecting the person to a fine or a civil penalty, or removing the
person from an office in any entity regulated by the director; or
(8) Is the subject of an order entered
within the past five years, directing the person to cease and desist from any
fraudulent or unlawful business or banking practice, subjecting the person to a
fine or other civil penalty, or removing the person from an office in a
financial institution or a consumer finance company issued by the banking supervisor
of another state or by the Comptroller of the Currency, the Board of Governors
of the Federal Reserve System or by any other agency of the federal government
or another state with regulatory authority over such financial institutions or
consumer finance companies. [1977 c.135 §19; 1985 c.762 §§37,37a; 1985 c.786 §25;
1987 c.373 §52; 1997 c.631 §48]
707.150
Refusal of authority to organize; appeal. Notwithstanding the provisions of ORS chapter 183, the Director of the
Department of Consumer and Business Services may, without prior hearing or
opportunity therefor, refuse to grant authority to organize a banking
institution. In case authority to organize is refused by the director, the
applicants may within 30 days after the refusal appeal the decision to any
court of appropriate jurisdiction. [Amended by 1971 c.734 §172; 1973 c.797 §62;
1975 c.544 §8b; 1997 c.631 §49]
707.155
Authority to require additional investigatory information; fingerprinting. (1) In the course of investigating any
person named in the application to organize or in other documents submitted for
filing, the Director of the Department of Consumer and Business Services may
require the person to provide additional information for the director’s further
inquiry. For the purpose of such further inquiry, the director may require any
of the following persons to submit to fingerprinting:
(a) Any person required to be named in the
application to organize.
(b) Any person named in the proposed
articles of incorporation of the banking institution or documents submitted for
filing as a prospective incorporator or as a director, president or chief
executive officer of the banking institution.
(2) Fingerprints acquired under subsection
(1) of this section may be submitted to appropriate law enforcement agencies,
including the Federal Bureau of Investigation, for the purpose of discovering
any unlawful activities of the person. [1985 c.786 §23; 1997 c.631 §50]
707.160
Transaction of business prior to organization; failure to complete organization;
liability. (1) A banking
institution shall not transact any business, except as is incidental or
necessary to its organization, until it has received its charter from the
Director of the Department of Consumer and Business Services.
(2) An institution or
(3) All persons purporting to act as or on
behalf of a banking institution, knowing there was no incorporation, are
jointly and severally liable for all liabilities created while so acting. [Amended
by 1969 c.44 §1; 1973 c.797 §63; 1989 c.324 §5; 1997 c.631 §51]
707.170
Effective date of charter; commencement of business; effect of failure to
commence business. (1) A
charter shall specify the date on which it becomes effective, which shall not
be more than 90 days after the date of issuance of the charter, unless an
extension of time is granted by the Director of the Department of Consumer and
Business Services.
(2) A banking institution shall commence
business on the effective date specified in its charter. If a banking
institution fails to commence business on the effective date specified in the
charter or according to any extension of time granted by the director it ceases
to exist and its articles of incorporation and charter are void. [Amended by
1973 c.797 §64; 1997 c.631 §52]
707.180
Location of principal place of business; change upon approval. The initial principal place of business of a
banking institution shall be specified in its articles of incorporation. The
principal place of business may be changed upon application of the banking
institution to the Director of the Department of Consumer and Business
Services. The director shall determine whether the change in location is
advisable or justified and whether the public convenience and advantage will be
promoted and shall approve or disapprove the change of location. An appeal from
the decision of the director may be taken to any court of appropriate
jurisdiction. [Amended by 1973 c.797 §65; 1975 c.544 §8c; 1997 c.631 §53]
707.182
Registered agent; registered office. (1) Each institution and each
(2) A registered agent shall be:
(a) An individual who resides in this
state and whose business office is identical to the registered office;
(b) A domestic corporation, domestic
limited liability company, domestic professional corporation or domestic
nonprofit corporation whose business office is identical to the registered
office; or
(c) A foreign corporation, foreign limited
liability company, foreign professional corporation or foreign nonprofit
corporation authorized to transact business in this state whose business office
is identical to the registered office. [2005 c.192 §2]
707.184
Changes in registered office or agent. (1) An institution or
(a) The name of the institution or
(b) If the registered office is to be
changed, the address, including street and number, of the new registered
office;
(c) If the registered agent is to be
changed, the name of the new registered agent and that the new agent has
consented to the appointment; and
(d) That after the change or changes are
made, the street addresses of its registered office and the business office of
its registered agent will be identical.
(2) If a registered agent changes the
street address of the agent’s business office, the registered agent shall
change the street address of the registered office of the institution or Oregon
stock savings bank for which the agent is the registered agent by notifying the
institution or Oregon stock savings bank in writing of the change and signing,
either manually or in facsimile, and delivering to the director a statement
that complies with the requirements of subsection (1) of this section and
recites that the institution or Oregon stock savings bank has been notified of
the change.
(3) The filing of the statement by the
director terminates the existing registered office or agent, or both, on the
effective date of the filing and establishes the newly appointed registered
office or agent, or both, as that of the institution or
707.186
Resignation of registered agent; discontinuance of registered office. (1) A registered agent may resign as agent
upon delivering a signed statement to the Director of the Department of
Consumer and Business Services and giving notice in the form of a copy of the
statement to the institution or
(2) Upon delivery of the signed statement,
the director shall file the resignation statement. The copy of the statement
given to the institution or
(3) The agency appointment is terminated
and the registered office discontinued, if so provided, on the 31st day after
the date on which the statement was filed by the director unless, prior to that
date, the institution or
707.188
Service of process on institution or
(2) The Director of the Department of Consumer
and Business Services shall be an agent of an institution or Oregon stock
savings bank, including a dissolved institution or Oregon stock savings bank,
upon whom any such process, notice or demand may be served whenever the
institution or Oregon stock savings bank fails to appoint or maintain a
registered agent in this state or whenever the institution’s or Oregon stock
savings bank’s registered agent cannot with reasonable diligence be found at
the registered office.
(3) Service shall be made on the director
by:
(a) Serving the director or a clerk on
duty at the office of the director a copy of the process, notice or demand,
with any papers required by law to be delivered in connection with the service,
and the required fee for each party being served or by mailing to the office of
the director a copy of the process, notice or demand and the required fee for
each party being served by certified or registered mail;
(b) Transmittal by the person instituting
the proceedings of notice of the service on the director and a copy of the
process, notice or demand and accompanying papers to the institution or Oregon
stock savings bank being served by certified or registered mail:
(A) At the last registered office of the
institution or Oregon stock savings bank as shown by the records of the
director; and
(B) At such address the use of which the
person initiating the proceedings knows or, on the basis of reasonable inquiry,
has reason to believe is most likely to result in actual notice; and
(c) Filing with the appropriate court or
other body, as part of the return of service, the return receipt of mailing and
an affidavit of the person initiating the proceedings stating that this section
has been complied with.
(4) The director shall keep a record of
all processes, notices and demands served upon the director under this section.
(5) After completion of initial service
upon the director, no additional documents need be served upon the director to
maintain jurisdiction in the same proceeding or to give notice of any motion or
provisional process.
(6) Nothing contained in this section
shall limit or affect the right to serve any process, notice or demand required
or permitted by law to be served upon an institution or Oregon stock savings
bank in any other manner now or hereafter permitted by law, or enlarge the
purposes for which service on the director is permitted where such purposes are
limited by other provisions of law. [2005 c.192 §5]
707.190 [Repealed by 1973 c.797 §428]
707.195
Offering documents for sale of stock; approval by director. At or after the time the articles of
incorporation are submitted for filing, the incorporators shall submit the
proposed offering documents for the sale of the banking institution’s stock to
the Director of the Department of Consumer and Business Services for review. No
subscriptions for stock in the institution or
707.200
Payments by subscribers of full amount of stock subscriptions; escrow. The subscribers to the stock of a newly
organized institution or Oregon stock savings bank shall pay in, prior to the
time a charter is issued, directly to the institution or Oregon stock savings bank
or by deposit with an escrow agent acceptable to the Director of the Department
of Consumer and Business Services to be released upon the issuance of a
charter, the full amount of their stock subscriptions, which shall total an
aggregate amount not less than the initial paid-in capital approved by the
director. The payment must be in cash or by exchange of real property and
improvements thereon. The real property and improvements are subject to
approval by the director as provided in ORS 707.050. [Amended by 1973 c.797 §66;
1983 c.296 §2; 1985 c.786 §26; 1987 c.216 §3; 1997 c.631 §54]
707.210
Stock issuance after obtaining charter; form of stock certificate; issuance of stock
without certificate. (1) An
institution or
(2) Except as provided in subsection (3)
of this section, each certificate representing shares of the stock of an
institution or
(a) Be signed by two officers of the
institution or
(b) If the institution or Oregon stock
savings bank is authorized to issue shares of more than one class, state upon
the face or back of the certificate, or state that the institution or Oregon
stock savings bank will furnish to any shareholder upon request and without
charge, a full statement of the designations, preferences, limitations and
relative rights of the shares of each class authorized to be issued, and, if
the institution or Oregon stock savings bank is authorized to issue any class
in series, state the variations in the relative rights and preferences between
the shares of each such series so far as the same have been fixed and
determined and the authority of the board of directors to fix and determine the
relative rights and preferences of subsequent series.
(c) State that the institution or
(d) State the name of the person to whom
issued.
(e) State the number and class of shares,
and the designation of the series, if any, which such certificate represents.
(3) In lieu of issuing certificates
representing shares under subsection (2) of this section, the board of
directors of an institution or Oregon stock savings bank may authorize the
institution or Oregon stock savings bank to issue some or all of the shares of
any or all of its classes or series without certificates. The authorization
shall not affect shares already represented by certificates until the shares
are surrendered to the institution or
(4) No share shall be issued until such
share is fully paid.
(5) At the request of any holder of two or
more certificates of the stock of any institution or Oregon stock savings bank
organized under the laws of this state, such institution or Oregon stock
savings bank shall, upon the surrender of the certificates, issue to the holder
of such stock one certificate, or a statement pursuant to subsection (3) of
this section, for all shares of stock of any one class in such institution or
Oregon stock savings bank owned by the stockholder if the number of such shares
owned by the stockholder in the particular class equals or exceeds 100. [Amended
by 1959 c.108 §1; 1965 c.189 §1; 1973 c.797 §67; 1987 c.197 §2; 1989 c.324 §6;
1995 c.131 §1; 1997 c.631 §55]
707.215 [1973 c.797 §68; 1987 c.197 §3; 1989 c.324 §7;
repealed by 1997 c.631 §567]
707.220
Stock record; contents; inspection. (1) An institution or
(2) The stock ledger or register shall be
available for inspection and copying, during regular business hours at a
reasonable location specified by the institution or Oregon stock savings bank,
by a stockholder of the institution or Oregon stock savings bank upon at least
five days’ prior written notice if:
(a) The stockholder’s demand for
inspection is made in good faith and for a proper purpose;
(b) The stockholder described with
reasonable particularity the stockholder’s purpose; and
(c) The stock ledger or register requested
is directly connected to the stockholder’s purpose. [Amended by 1973 c.797 §69;
1997 c.631 §56]
707.230
Transfer of stock. The
shares of stock of an institution or
707.240 [1969 c.635 §1; 1973 c.797 §71; 1995 c.130 §1;
repealed by 1997 c.631 §567]
707.242
Bylaws. The initial bylaws
of an institution shall be adopted by its board of directors. The power to
alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the
board of directors unless reserved to the shareholders by the articles of
incorporation or by bylaws. The bylaws may contain any provisions for the
regulation and management of the affairs of the institution not inconsistent
with law or the articles of incorporation. [1989 c.324 §9; 1997 c.631 §58]
(Amendment of
Articles of Incorporation)
707.244
Amendment of articles of incorporation; purposes for amendment. (1) An institution or
(2) In particular, and without limitation
upon such general power of amendment, an institution or
(a) To change its corporate name.
(b) To change its period of duration.
(c) To change, enlarge or diminish its
corporate purposes.
(d) To increase or decrease the aggregate
number of shares, or shares of any class, which the institution or
(e) To exchange, classify, reclassify or
cancel all or any part of its shares, whether issued or unissued.
(f) To change the designation of all or
any part of its shares, whether issued or unissued, and to change the
preferences, limitations and relative rights in respect to all or any part of
its shares, whether issued or unissued.
(g) To change the shares of any class,
whether issued or unissued, into a different number of shares of the same class
or into the same or a different number of shares of other classes.
(h) To create new classes of shares with
rights and preferences either prior and superior or subordinate and inferior to
the shares of any class then authorized, whether issued or unissued.
(i) To cancel or otherwise affect the
right of the holders of the shares of any class to receive dividends which have
accrued but have not been declared.
(j) To divide any class of shares, whether
issued or unissued, into series and fix and determine the designations of such
series and the variations in the relative rights and preferences as between the
shares of such series.
(k) To authorize the board of directors to
establish, out of authorized but unissued shares, series of any class of shares
and fix and determine the relative rights and preferences of the shares of any
series so established.
(L) To authorize the board of directors to
fix and determine the relative rights and preferences of the authorized but
unissued shares of series theretofore established in respect to which either
the relative rights and preferences have not been fixed and determined or the
relative rights and preferences theretofore fixed and determined are to be
changed.
(m) To revoke, diminish or enlarge the
authority of the board of directors to establish series out of authorized but
unissued shares of any class and fix and determine the relative rights and
preferences of the shares of any series so established.
(n) To limit, deny or grant to
shareholders of any class the preemptive right to acquire additional or
treasury shares of the institution or
707.246
Manner of amending articles of incorporation. Amendments to the articles of incorporation shall be made in the
following manner:
(1) If an institution or
(a) The board of directors shall adopt a
resolution setting forth the proposed amendment and directing that it be
submitted to a vote at a meeting of shareholders, which may be either an annual
or a special meeting.
(b) Written or printed notice setting
forth the proposed amendment or a summary of the changes to be effected shall
be given to each shareholder of record entitled to vote within the time and in
the manner provided in this chapter for giving notice of meetings of
shareholders. If the meeting is an annual meeting, the proposed amendment or
such summary may be included in the notice of such annual meeting.
(c) At such meeting, a vote of the
shareholders entitled to vote thereon shall be taken on the proposed amendment.
The proposed amendment shall be adopted upon receiving the affirmative vote of
the holders of at least a majority of the shares entitled to vote thereon,
unless any class of shares is entitled to vote thereon as a class, in which
event the proposed amendment shall be adopted upon receiving the affirmative
vote of the holders of at least a majority of the shares of each class of
shares entitled to vote thereon as a class and of the total shares entitled to
vote thereon.
(2)(a) If an institution or
(b) If the provisions of the articles of
incorporation relating to the duration, purposes, authorized shares, rights or
preferences of shares, or internal affairs of the institution or Oregon stock
savings bank are amended by the directors prior to the issuance of stock, the
directors shall immediately notify in writing each person who is a party to any
agreement for the subscription of stock of the institution or Oregon stock
savings bank. Such notice shall set forth the text of the amendment and state
that the subscriber may, within 30 days after delivery or mailing of the notice
of amendment, rescind the subscriber’s subscription by notice in writing
delivered or mailed to the directors at an address specified. If a notice of
rescission is not delivered or mailed within 30 days, the subscriber may not
thereafter assert the fact of the amendment as the basis for avoiding the
subscription agreement or asserting any claim against any person.
(3) Any number of amendments may be
submitted to the shareholders or directors and voted upon by them at one
meeting. [1989 c.324 §11; 1997 c.631 §60]
707.248
Shareholders authorized to vote on amendment to articles of incorporation. (1) The holders of the outstanding shares of
a class shall be entitled to vote as a class upon a proposed amendment, whether
or not entitled to vote thereon by the provisions of the articles of
incorporation, if the amendment would:
(a) Increase or decrease the aggregate
number of authorized shares of such class.
(b) Effect an exchange, reclassification
or cancellation of all or part of the shares of such class.
(c) Effect an exchange, or create a right
of exchange, of all or any part of the shares of another class into the shares
of such class.
(d) Change the designations, preferences,
limitations or relative rights of the shares of such class.
(e) Change the shares of such class into
the same or a different number of shares of the same class or another class or
classes.
(f) Create a new class of shares with
rights and preferences prior and superior to the shares of such class, or
increase the rights and preferences of any class with rights and preferences
prior or superior to the shares of such class.
(g) Divide the shares of such class into
series and fix and determine the designation of such series and the variations
in the relative rights and preferences between the shares of such series or
authorize the board of directors to do so.
(h) Limit or deny the existing preemptive
rights of the shares of such class.
(i) Cancel or otherwise affect dividends
on the shares of such class which had accrued but had not been declared.
(2) Different series of the same class of
shares shall not constitute different classes of shares for the purpose of
voting by classes upon a proposed amendment, except when a series will be
adversely affected by an amendment in a manner different from other shares of
the same class. [1989 c.324 §12; 1997 c.631 §61]
707.250
Execution of amendments to articles of incorporation. The articles of amendment shall be executed
in duplicate by the institution or
(1) The name of the institution or
(2) If the amendment alters or changes any
provision of the original or amended articles of incorporation, an
identification by reference or description of the affected provision and a
statement of its text as it is amended to read. If the amendment strikes or
deletes any provision of the original or amended articles of incorporation, an
identification by reference or description of the provision so stricken or
deleted and a statement that it is stricken or deleted. If the amendment is an
addition to the original or amended articles of incorporation, a statement of that
fact and the full text of each provision added.
(3) The date of the adoption of the
amendment by the shareholders.
(4) The number of shares outstanding and
the number of shares entitled to vote thereon, and if the shares of any class
are entitled to vote thereon as a class, the designation and number of
outstanding shares entitled to vote thereon of each such class.
(5) The number of shares voted for and
against such amendment, respectively, and, if the shares of any class are
entitled to vote thereon as a class, the number of shares of each such class
voted for and against such amendment, respectively.
(6) If such amendment provides for an
exchange, reclassification or cancellation of issued shares, and, if the manner
in which the same shall be effected is not set forth in the amendment, a
statement of the manner in which the same shall be effected.
(7) If such amendment was adopted by a
majority of the directors pursuant to ORS 707.246 (2)(a), then, in lieu of the
information required by subsections (3), (4) and (5) of this section, a
statement that no shares have yet been issued and that the amendment was
authorized as provided in ORS 707.246 (2)(a). The date of the adoption of the
amendment by a majority of the directors shall be included. Articles of
amendment under this subsection may be executed as provided in this section or
by a majority of the directors. [1989 c.324 §13; 1997 c.631 §62]
707.252
Filing of amended articles of incorporation. Duplicate originals of the articles of amendment shall be delivered to
the Director of the Department of Consumer and Business Services. If the
director finds that the articles of amendment conform to law, the director
shall, when all fees and charges have been paid as in this chapter prescribed:
(1) Indorse on each such duplicate
originals the word “Filed” and the month, day and year of the filing thereof.
(2) File one of such duplicate originals
in the office of the director.
(3) Return one duplicate original of the
articles of amendment to the banking institution or its representative. [1989
c.324 §14; 1997 c.631 §63]
707.254
Effective date of amended articles of incorporation; effect on existing cause
of action. (1) Upon approval
and filing of the amendment by the Director of the Department of Consumer and
Business Services, the amendment shall become effective and the articles of
incorporation shall be deemed to be amended accordingly.
(2) No amendment shall affect any existing
cause of action in favor of or against such banking institution, any pending
suit to which such banking institution shall be a party or the existing rights
of persons other than shareholders. In the event the corporate name shall be
changed by amendment, no suit brought by or against such banking institution
under its former name shall abate for that reason. [1989 c.324 §15; 1997 c.631 §64]
707.256
Restated articles of incorporation. (1) An institution or
(2) Restated articles of incorporation
when executed and submitted for filing with the Director of the Department of
Consumer and Business Services shall supersede the previously existing articles
of incorporation and amendments thereto. The director shall, upon request,
certify a copy of the articles of incorporation, the articles of incorporation
as restated or any amendments to either thereof.
(3) The restated articles of
incorporation, when submitted for filing, shall be accompanied by a statement,
executed in duplicate by the institution or
(a) The name of the institution or
(b) The date of the adoption of the
restated articles of incorporation by the shareholders.
(c) The number of shares outstanding and
the number of shares entitled to vote thereon, and, if the shares of any class
are entitled to vote thereon as a class, the designation and number of
outstanding shares entitled to vote thereon of each such class.
(d) The number of shares voted for and
against the restated articles of incorporation, respectively, and, if the
shares of any class are entitled to vote thereon as a class, the number of
shares of each such class voted for and against the restated articles of
incorporation, respectively.
(e) If the restated articles of
incorporation provide for an exchange, reclassification or cancellation of
issued shares, and if the manner in which the same shall be effected is not set
forth in the restated articles of incorporation, a statement of the manner in
which the same shall be effected. [1989 c.324 §16; 1997 c.631 §65]
(Shares)
707.258
Terms of class of shares or series within class determined by board of
directors. (1) If the
articles of incorporation so provide, the board of directors may determine, in
whole or part, the preferences, limitations and relative rights, within the
limits set forth in ORS 707.110, of any class of shares before the issuance of
any shares of that class or of one or more series within a class before the
issuance of any shares of that series.
(2) Each series of a class must be given a
distinguishing designation.
(3) All shares of a series must have
preferences, limitations and relative rights identical with those of other
shares of the same series and, except to the extent otherwise provided in the
description of the series, of those of other series of the same class.
(4) Before issuing any shares of a class
or series created under this section, the institution or
(a) The name of the institution or
(b) The text of the amendment determining
the terms of the class or series of shares;
(c) The date it was adopted; and
(d) A statement that the amendment was
duly adopted by the board of directors. [1989 c.324 §28; 1997 c.631 §66]
707.260
Fractional shares; scrip.
(1) An institution or
(a) Issue fractions of a share or pay in
money the value of fractions of a share;
(b) Arrange for disposition of fractional
shares by the shareholders; or
(c) Issue scrip in registered or bearer
form entitling the holder to receive a full share upon surrendering enough
scrip to equal a full share.
(2) Each certificate representing scrip
must be conspicuously labeled “scrip” and must contain the following
information:
(a) The name of the issuing institution or
(b) The name of the person to whom the
scrip is issued; and
(c) The number and class of shares and the
designation of the series, if any, for which the certificate may be exchanged.
(3) The holder of a fractional share is
entitled to exercise the rights of a shareholder, including the right to vote,
receive dividends and participate in the assets of the institution or
(4) The board of directors may authorize
the issuance of scrip subject to any condition considered desirable, including:
(a) That the scrip will become void if not
exchanged for full shares before a specified date; or
(b) That the shares for which the scrip is
exchangeable may be sold and the proceeds paid to the scripholders. [1989 c.324
§32; 1997 c.631 §67]
707.262
Share options; limits on issuance. (1) Subject to any provisions set forth in its articles of
incorporation and subject to preemptive rights, if any, of existing
shareholders, an institution or Oregon stock savings bank may create and issue,
whether or not in connection with the issuance and sale of any of its shares or
other securities, rights or options entitling the holders thereof to purchase
from the institution or Oregon stock savings bank shares of any class or
classes. Such rights or options shall be evidenced in such manner as the board
of directors shall approve and, subject to the provisions of the articles of
incorporation, shall set forth the terms upon which, the time or times within
which and the price or prices at which such shares may be purchased from the
institution or Oregon stock savings bank on the exercise of any such right or
option.
(2) The rights or options described in
subsection (1) of this section may not be issued to a director, officer or
employee of the institution or Oregon stock savings bank or of any subsidiary
thereof unless the issuance:
(a) Is to all shareholders of the
institution,
(b) Is approved at the annual meeting or a
special meeting by the holders of at least two-thirds of the outstanding shares
entitled to vote thereon; or
(c) Is pursuant to a plan previously so
approved.
(3) In the absence of fraud in the
transaction, the judgment of the board of directors as to the adequacy of the
consideration received for the rights or options described in subsection (1) of
this section shall be conclusive. [1989 c.324 §29; 1997 c.631 §68; 2001 c.377 §58]
707.264 [1989 c.324 §30; repealed by 1997 c.631 §567]
707.266
Expenses of organization or issue of shares. The reasonable charges and expenses of organization or reorganization
of an institution or Oregon stock savings bank, and the reasonable expenses of
and compensation for the sale or underwriting of its shares, may be paid or
allowed by such institution or Oregon stock savings bank out of the
consideration received by it in payment for its shares without rendering such
shares not fully paid and nonassessable. [1989 c.324 §31; 1997 c.631 §69]
707.268
Restrictions on redemption of shares. No redemption or purchase of shares shall be made by an institution or
Oregon stock savings bank when it is insolvent or when such redemption or
purchase would render it insolvent, or which would reduce the net assets below
the aggregate amount payable to the shareholders with prior or equal rights to
the assets of the institution or Oregon stock savings bank upon involuntary
dissolution. [1989 c.324 §33; 1997 c.631 §70]
707.270
Effect of redemption of shares; statement of cancellation. (1) When shares of an institution or Oregon
stock savings bank are redeemed, the shares shall be restored to the status of
authorized but unissued shares, unless the articles of incorporation provide
that shares when redeemed shall not be reissued, in which case a statement of
cancellation shall be submitted for filing as provided in this section, shall
constitute an amendment to the articles of incorporation and shall reduce the
number of shares of the class so canceled, which the institution or Oregon
stock savings bank is authorized to issue by the number of shares so canceled.
(2) The statement of cancellation shall be
executed in duplicate by the institution or
(a) The name of the institution or
(b) The number of shares canceled through
redemption, itemized by classes and series.
(c) The number of shares that the
institution or
(3) Duplicate originals of such statement
shall be submitted to the Director of the Department of Consumer and Business
Services for filing. If the director finds that such statement conforms to law,
the director shall, when all fees and charges have been paid as prescribed by
this chapter:
(a) Indorse on each duplicate original the
word “Filed” and the month, day and year of the filing thereof.
(b) File one duplicate original in the
office of the director.
(c) Return the other duplicate original to
the institution or
(4) Nothing contained in this section
shall be construed to forbid a cancellation of shares or a reduction in the
number of authorized shares of any class in any other manner permitted by the
Bank Act. [1989 c.324 §34; 1997 c.631 §71]
707.272
Paid-in capital; use; retained earnings reserve; approval of director for redemption
of shares; rules. (1) The
paid-in capital of an institution or Oregon stock savings bank may be increased
from time to time by resolution of the board of directors directing that all or
a part of the retained earnings of the institution or Oregon stock savings bank
be transferred to paid-in capital.
(2) An institution or
(3) An institution or
(4) An institution or
(5) The director may refuse to approve a
reduction in paid-in capital under subsection (2) of this section or redemption
of shares under subsection (4) of this section if the director determines that
the remaining paid-in capital of the institution or Oregon stock savings bank
would be inadequate for the safe and sound operation of the institution or
Oregon stock savings bank.
(6) The director may by rule or order
waive the requirement for prior approval of redemptions of shares. [1989 c.324 §35;
1997 c.631 §72]
707.310 [Amended by 1973 c.797 §72; 1973 c.823 §140;
1974 c.36 §23; 1987 c.197 §4; 1987 c.916 §1; 1989 c.324 §36; 1989 c.331 §28;
1989 c.701 §64; 1995 c.334 §3; repealed by 1997 c.631 §567]
707.320 [Amended by 1973 c.797 §73; repealed by 1997
c.631 §567]
707.330 [Amended by 1973 c.797 §74; repealed by 1997
c.631 §567]
707.340 [Amended by 1973 c.797 §75; repealed by 1997
c.631 §567]
707.345 [1963 c.500 §2; repealed by 1973 c.797 §428]
707.350
Payment prior to issuance of certificate of stock; consideration; approvals. (1) An institution or
(2) Stock may not be issued to directors,
officers or employees of an institution or
(a) The Director of the Department of
Consumer and Business Services approves the plan. 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 delivered to the
institution or
(b) The holders of at least two-thirds of
the outstanding shares of the institution or
(3) Notwithstanding subsections (1) and
(2) of this section, an institution or
707.355 [1977 c.135 §15; repealed by 1997 c.631 §567]
707.360 [Amended by 1969 c.635 §3; repealed by 1973
c.797 §428]
707.370 [Amended by 1973 c.797 §78; repealed by 1997
c.631 §567]
707.380
Limitation on dividends. The
board of directors of an institution or Oregon stock savings bank may, at any
regular meeting, declare a dividend, but the amount of the dividend shall not
be greater than its unreserved retained earnings, deducting therefrom, to the
extent not already charged against earnings or reflected in a reserve, the
following:
(1) All bad debts, which are debts on
which interest is past due and unpaid for at least six months, unless the debt
is fully secured and in the process of collection.
(2) All other assets charged off as
required by the Director of the Department of Consumer and Business Services or
a state or federal examiner.
(3) All accrued expenses, interest and
taxes of the institution or
707.390 [Repealed by 1973 c.797 §428]
707.400
Suspension of payment of dividends. The Director of the Department of Consumer and Business Services may
require any institution or Oregon stock savings bank to suspend the payment of
any dividends if the director determines that the payment of dividends would
result in the remaining stockholders’ equity of the institution or Oregon stock
savings bank being inadequate for the safe and sound operation of the institution
or Oregon stock savings bank. [Amended by 1963 c.580 §82; 1973 c.797 §80; 1997
c.631 §75]
707.410
Record of dividends declared.
At meetings of the board of directors where dividends are declared, a complete
record of the proceedings and business transacted by the board of directors
shall be entered in the minutes in the manner required by the Director of the
Department of Consumer and Business Services. The minutes shall show that a
detailed financial statement as of the last day of the month previous to the
month during which the meeting is held was the basis of the decision of the
board. [Amended by 1963 c.195 §4; 1973 c.797 §81]
707.415
Report of dividends declared.
Within 10 days after the declaration of any dividend, an institution or
707.420 [Amended by 1973 c.797 §82; repealed by 1997
c.631 §567]
707.430 [Amended by 1961 c.57 §1; 1973 c.797 §83;
1975 c.544 §9; 1985 c.627 §1; 1989 c.582 §1; 1989 c.596 §1; 1995 c.373 §1;
repealed by 1997 c.631 §567]
707.440 [1989 c.324 §38; repealed by 1997 c.631 §567]
707.450 [1987 c.916 §12; repealed by 1997 c.631 §567]
STOCKHOLDERS,
DIRECTORS AND OFFICERS
(Stockholder
Meetings)
707.610
Annual and special stockholder meetings; notice of orders. (1) A stockholders’ meeting for the election
of a board of directors and transaction of other business shall be held in this
state within 120 days after the close of the fiscal year of the institution or
(a) A copy of ORS 706.580; and
(b) A statement that the institution or
(2) A special meeting of stockholders may
be called at any time by the chief executive officer, a majority of the board
of directors, any other person or group authorized by the articles of
incorporation or bylaws of the institution or Oregon stock savings bank to call
such meetings, or not fewer than three stockholders holding in the aggregate
not less than one-third of the outstanding voting stock of the institution or
Oregon stock savings bank. The articles of incorporation or bylaws of the
institution or Oregon stock savings bank may reserve to an officer or the board
of directors the authority to designate the time and place of such a meeting.
However, the meetings shall be held in the State of
707.611
Notice of meeting. Written
or printed notice stating the place, date and hour of the meeting and, in case
of a special meeting, the purpose or purposes for which the meeting is called
shall be delivered not less than 10 days nor more than 60 days before the date
of the meeting, either personally or by mail, by or at the direction of the
president, the cashier, the secretary or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
707.612
Action without meeting. Any
action required by this chapter to be taken at a meeting of the shareholders or
directors of an institution or Oregon stock savings bank or any other action
which may be taken at a meeting of the shareholders, directors or of a
committee may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by all of the shareholders or directors or all of
the members of the committee entitled to vote with respect to the subject
matter thereof. The consent shall be delivered to the institution or
707.613
Shareholder waiver of notice; effect of attendance at meeting. (1) A shareholder may, at any time, waive
any notice required by this chapter, the articles of incorporation or bylaws.
The waiver must be in writing, be signed by the shareholder entitled to the
notice and be delivered to the institution or
(2) Attendance at a meeting by a
shareholder waives objection to:
(a) Lack of notice or defective notice of
the meeting, unless the shareholder at the beginning of the meeting objects to
the holding of the meeting or the transacting of business at the meeting; and
(b) Consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
meeting notice, unless the shareholder objects to considering the matter when
it is presented. [1989 c.324 §51; 1997 c.631 §81]
707.615
Record date. (1) For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof or entitled to receive
payment of any dividend, or in order to make a determination of shareholders
for any other proper purpose, the board of directors of an institution or
Oregon stock savings bank may provide that the stock transfer books shall be
closed for a stated period, not to exceed in any case 70 days. If the stock
transfer books shall be closed for the purpose of determining the shareholders
entitled to notice of or to vote at a meeting of shareholders, such books shall
be closed for at least 10 days immediately preceding such meeting.
(2) In lieu of closing the stock transfer
books, the bylaws or, in the absence of an applicable bylaw, the board of
directors may fix in advance a date as the record date for any such
determination of shareholders. The record date, in any case, shall be not more
than 70 days and, in the case of a meeting of shareholders, not less than 10
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the close of business on the
business day before the date on which notice of the meeting is mailed or the
date on which the resolution of the board of directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders.
(3) When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof, unless
the meeting is adjourned to a date more than 120 days from the original meeting
date. [1989 c.324 §44; 1997 c.631 §82]
707.617
Shareholders list for meeting.
(1) The officer or agent having charge of the stock transfer books for shares
of an institution or Oregon stock savings bank shall make, at least 10 days
prior to each meeting of shareholders, a complete list of the shareholders entitled
to vote at such meeting or any adjournment thereof. The list shall be arranged
in alphabetical order, with the address of and the number of shares held by
each shareholder and, for a period of 10 days prior to such meeting, shall be
kept on file at the registered office of the institution or Oregon stock
savings bank and shall be subject to inspection by any shareholder at any time
during usual business hours. Such list also shall be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original stock transfer
books shall be prima facie evidence as to which shareholders are entitled to
examine such list or transfer books or to vote at any meeting of shareholders.
(2) Failure to comply with the
requirements of this section shall not affect the validity of any action taken
at such meeting. [1989 c.324 §45; 1997 c.631 §83]
707.619
Voting entitlement of shares.
(1) Each outstanding share, regardless of class, shall be entitled to one vote
on each matter submitted to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class or classes are limited
or denied by the articles of incorporation as permitted by the Bank Act.
(2) Neither shares of its own stock held
by the institution or Oregon stock savings bank in a fiduciary capacity, nor
shares held by another corporation if a majority of the shares entitled to vote
for the election of directors of such other corporation is held by the
institution or Oregon stock savings bank shall be voted at any meeting or
counted in determining the total number of outstanding shares at any given
time. The prohibition of this subsection does not apply if, under the terms of
a trust in which such shares are held, the manner in which such shares shall be
voted may be determined by the trustee, by a donor or beneficiary of the trust
or by some other person named in the trust, and such shares are actually voted
in the manner determined or directed by the trustee, donor, beneficiary or
other person so authorized.
(3) A shareholder may vote either in
person or by proxy executed in writing by the shareholder or by the shareholder’s
duly authorized attorney in fact. No proxy shall be valid after 11 months from
the date of its execution, unless otherwise provided in the proxy.
(4) In electing each director for whose
election the shareholder has a right to vote, every shareholder entitled to
vote at such election shall have the right to vote, either in person or by
proxy, the number of shares owned by the shareholder. If the articles of
incorporation specifically permit cumulative voting, every shareholder shall
have the right to cumulate the shareholder’s votes either by giving one candidate
as many votes as the number of such directors multiplied by the number of the
shareholder’s shares shall equal or by distributing such votes on the same
principle among any number of such candidates.
(5) Shares standing in the name of another
domestic or foreign corporation, a limited liability company, a partnership or
another entity may be voted by such officer, agent or proxy as the governing
documents of the entity may prescribe or, in absence of such provision, as the
board of directors or other governing body of the entity holding the shares may
determine.
(6) Shares held by a personal
representative, administrator, executor, guardian or conservator may be voted
by such person, either in person or by proxy, without a transfer of such shares
into such person’s name. Shares standing in the name of a trustee may be voted
by the trustee, either in person or by proxy, but no trustee shall be entitled
to vote shares held by the trustee without a transfer of the shares to the name
of the trustee.
(7) Shares standing in the name of a
receiver may be voted by such receiver, and shares held by or under control of
a receiver may be voted by such receiver without a transfer into the receiver’s
name if authority to do so is contained in an appropriate order of the court by
which such receiver was appointed.
(8) Shares may be voted by a pledgee or
attorney-in-fact of the shareholder if authorized by the pledge agreement or
power of attorney and evidence of such authority is presented to the
institution or
(9) On and after the date on which written
notice of redemption of shares has been mailed to the holders thereof and a sum
sufficient to redeem such shares has been deposited with another institution or
Oregon stock savings bank with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates
therefor, such shares shall not be entitled to vote on any matter and shall not
be deemed to be outstanding shares. [1989 c.324 §47; 1997 c.631 §84]
707.620
Special stockholder meeting called by director. If the Director of the Department of
Consumer and Business Services considers it expedient the director may call a
meeting of the stockholders of any institution or
707.621
Quorum. (1) Unless otherwise
provided in the articles of incorporation, a majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at a meeting
of shareholders. If a quorum is present, the affirmative vote of the majority
of the shares represented at the meeting at the time the vote is taken and
entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number or voting by classes is required by the
Bank Act or the articles of incorporation.
(2) Once a share is represented at a
meeting, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record date is or
must be set for that adjourned meeting. [1989 c.324 §46; 1997 c.631 §86]
707.623
Modification of quorum or voting requirements. (1) The articles of incorporation may
provide for a lesser or greater quorum requirement for shareholders, or voting
groups of shareholders, than is provided for by this chapter, but in no event
shall a quorum for shareholders, or any voting group of shareholders, consist
of less than one-third of the votes entitled to be cast on any matter by the
shareholders or voting group of shareholders. The articles of incorporation may
provide for a greater voting requirement for shareholders, or voting groups of
shareholders, than is provided for by this chapter.
(2) An amendment to the articles of
incorporation that adds a greater quorum or voting requirement must meet the
quorum requirement and be adopted by the vote and voting groups required to
take action under the quorum and voting requirements then in effect. An
amendment to the articles of incorporation that changes or deletes a greater
quorum or voting requirement must meet the quorum requirement and be adopted by
the vote and voting groups required to take action immediately prior to the
change or deletion. [1989 c.324 §48; 1997 c.631 §87]
707.625
Exemption from personal liability for good faith acts or omissions in
compliance with statute, rule or order. A person may not be held personally liable for an act done or omitted
by the person in good faith and in compliance with a statute, rule or order of
the Director of the Department of Consumer and Business Services under this
chapter regardless of whether the statute, rule or order is later amended,
rescinded or determined to be invalid by judicial or other authority. [1987
c.445 §4; 1997 c.631 §88]
707.630 [Repealed by 1973 c.797 §428]
707.640 [Amended by 1973 c.797 §86; 1985 c.786 §28;
repealed by 1997 c.631 §567]
(Directors
and Officers)
707.642
Organizational meeting of directors; notice. After the issuance of the certificate of incorporation, an
organizational meeting of the board of directors named in the articles of
incorporation shall be held, either within or without this state, at the call
of a majority of the incorporators, for the purpose of adopting bylaws,
electing officers and transacting such other business as may come before the
meeting. The incorporators who called the meeting shall give at least three
days’ notice thereof by mail to each director so named, which notice shall
state the time, place and purpose of the meeting. [1989 c.324 §27; 1997 c.631 §89]
707.644
Committees of board of directors; limitations. (1) If provided by the articles of
incorporation or the bylaws, the board of directors, by resolution adopted by a
majority of all the directors in office when the action is taken, may designate
from among its members one or more committees. To the extent provided in the
resolution or in the articles of incorporation or the bylaws of the banking
institution, the committees shall have and may exercise all the authority of
the board of directors in the management of the banking institution.
(2) No committee shall have the authority
of the board of directors in reference to:
(a) Amending the articles of
incorporation;
(b) Approving dividends or other
distributions to shareholders of an institution or
(c) Filling vacancies on the board of
directors or on any of its committees;
(d) Approving the reacquisition of shares
of the institution or
(e) Adopting a plan of merger or
consolidation;
(f) Recommending to the shareholders the
sale, lease, exchange, mortgage, pledge or other disposition of all or
substantially all the property and assets of the institution or Oregon stock
savings bank other than in the usual and regular course of its business;
(g) Recommending to the shareholders a
voluntary dissolution of the institution or
(h) Amending the bylaws of the banking
institution; or
(i) Approving the issuance or sale or
contract for sale of shares or determining the designation and relative rights,
preferences and limitations of a class or series of shares of the institution
or
(3) Notwithstanding subsection (2) of this
section, the board of directors may authorize a committee to take action
described in subsection (2)(i) of this section pursuant to a stock option or
other stock compensation plan, or by approving the maximum number of shares to
be issued and delegating to the committee the authority to determine all or any
part of the terms of the issuance or sale or contract of sale and the
determination of the designation and relative rights, preferences and
limitations of the class or series of shares.
(4) The designation of committees and the
delegation thereto of authority shall not operate to relieve the board of
directors, or any member thereof, of any responsibility imposed upon the board
of directors or such member by law. [1989 c.324 §50; 1997 c.631 §90]
707.646
Staggered terms for directors.
(1) If there are six or more directors, the articles of incorporation or the
bylaws may provide for staggering their terms by dividing the total number of
directors into two or three groups, with each group to be as nearly equal in
number as possible. In that event, the terms of directors in the first group
expire at the first annual meeting after their election; the terms of the
second group expire at the second annual meeting after their election; and the
terms of the third group, if any, expire at the third annual meeting after
their election. Thereafter, directors shall be chosen for a term of two years
or three years, as the case may be, to succeed those whose terms expire.
(2) If the institution or
707.648
Removal of directors by shareholders. (1) The shareholders may remove one or more directors with or without
cause unless the articles of incorporation provide that directors may be
removed only for cause.
(2) If a director is elected by a voting
group of shareholders, only the shareholders of that voting group may
participate in the vote to remove the director.
(3) If cumulative voting is authorized, a
director may not be removed if the number of votes sufficient to elect the
director under cumulative voting is voted against the director’s removal. If
cumulative voting is not authorized, a director may be removed only if the
number of votes cast to remove the director exceeds the number of votes cast
not to remove the director.
(4) A director may be removed by the
shareholders only at a meeting called for the purpose of removing the director,
and the meeting notice must state that the purpose, or one of the purposes, of
the meeting is removal of the director. [1989 c.324 §49]
707.650 [Amended by 1973 c.797 §87; 1975 c.544 §9a;
1977 c.135 §17; 1983 c.37 §5; repealed by 1983 c.296 §12]
707.660
General standards for directors. (1) In discharging the duties of a director, a director is entitled to
rely on information, opinions, reports or statements, including financial
statements and other financial data, if prepared or presented by:
(a) One or more officers or employees of
the banking institution whom the director reasonably believes to be reliable
and competent in the matters presented;
(b) Legal counsel, public accountants or
other persons as to matters the director reasonably believes are within the
person’s professional or expert competence; or
(c) A committee of the board of directors
of which the director is not a member, if the director reasonably believes the
committee merits confidence.
(2) A director is not acting in good faith
if the director has knowledge concerning a matter in question that makes
reliance otherwise permitted by subsection (1) of this section unwarranted.
(3) When evaluating any offer of another
party to make a tender or exchange offer for any equity security of the banking
institution, or any proposal to merge the banking institution with another
banking institution or to purchase or otherwise acquire all or substantially
all the properties and assets of the banking institution, the directors of a
banking institution may, in determining what the directors believe to be in the
best interests of the banking institution, give due consideration to the
social, legal and economic effects on employees, customers and suppliers of the
banking institution and on the communities and geographical areas in which the
banking institution and its subsidiaries operate, the economy of the state and
nation, the long term as well as short term interests of the banking
institution and its stockholders, including the possibility that these
interests may be best served by the continued independence of the banking
institution, and other relevant factors. [Amended by 1973 c.797 §88; 1975 c.725
§7; 1997 c.631 §92]
707.665
General standards for officers.
(1) In discharging the duties of an officer, an officer is entitled to rely on
information, opinions, reports or statements, including financial statements
and other financial data, if prepared or presented by:
(a) One or more officers or employees of
the banking institution whom the officer reasonably believes to be reliable and
competent in the matters presented; or
(b) Legal counsel, public accountants or
other persons as to matters the officer reasonably believes are within the
person’s professional or expert competence.
(2) An officer is not acting in good faith
if the officer has knowledge concerning the matter in question that makes
reliance otherwise permitted by subsection (1) of this section unwarranted. [1997
c.631 §94]
707.670
Regular meetings of directors; quorum; notice; meetings using communications
equipment. (1)(a) The board
of directors of a banking institution shall hold regular meetings as provided
in this subsection.
(b) Unless paragraph (c) of this
subsection is applicable, the board of directors shall hold a regular meeting
at least once every month.
(c) Notwithstanding paragraph (b) of this
subsection, with the approval of the Director of the Department of Consumer and
Business Services, the board of directors of a banking institution may hold
regular meetings as infrequently as once each calendar quarter.
(2) A quorum at any meeting of the board
of directors shall consist of:
(a) If the banking institution has a fixed
board size, a majority of the members of the whole board.
(b) If the banking institution has a variable-range
board size, a majority of the number of directors prescribed or, if no number
is prescribed, a majority of the number in office immediately before the
meeting begins.
(3) If less than a quorum of directors is
present at a meeting, they may adjourn until the next meeting.
(4) If a quorum is present when a vote is
taken, the affirmative vote of a majority of directors present is the act of
the board of directors unless the articles of incorporation or bylaws require
the vote of a greater number of directors.
(5) Meetings of the board of directors,
regular or special, may be held either within or without this state.
(6) Meetings of the board of directors
shall be held upon such notice as is prescribed in the bylaws. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at nor the purpose of any
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting unless required by the bylaws or by law.
(7) Unless otherwise restricted by the
articles of incorporation or bylaws, members of the board of directors of a
banking institution or any committee designated by the board may hold a meeting
of the board or committee by means of conference telephone or similar
communications equipment that allows all persons participating in the meeting
to hear each other. Participation in a meeting under this subsection shall
constitute presence in person at the meeting. [Amended by 1963 c.166 §1; 1973
c.797 §89; 1983 c.296 §4; 1989 c.324 §40; 1993 c.255 §1; 1997 c.631 §95]
707.675
Report of loans and investments. The board of directors shall designate an officer of the banking
institution to prepare and submit to the board at every meeting or to a
committee of not less than three members of the board of directors a report, in
such detail as the board may direct, of the loans and investments made during
the preceding month or since the last report, and information concerning loans
to officers, directors and employees. The board of directors shall examine the
report and make it a part of the record of the meeting by recording the report
in full in the minutes. [1973 c.797 §90; 1995 c.316 §3; 1997 c.631 §96]
707.680
Special board meetings called by director; penalty for failure to attend. (1) The Director of the Department of
Consumer and Business Services may call a meeting of the board of directors of
any banking institution by mailing a notice of the meeting to each director.
The notice shall state the purpose of the meeting and designate the time and
place where the meeting shall be held.
(2) A director who fails to appear at the
meeting without proper cause is subject to a penalty of up to $1,000 for each
meeting the director fails to attend. The penalty shall be collected in the
manner prescribed by ORS 706.570. [Amended by 1973 c.797 §91; 1997 c.631 §97]
707.690
Filling director vacancy.
Subject to ORS 707.705, any vacancy in the board of directors may be filled by
the board for the unexpired term at a regular meeting after the vacancy occurs
or as otherwise provided in the bylaws of the banking institution. [Amended by
1985 c.786 §29; 1997 c.631 §98]
707.700
Selection and control of officers by directors; effect of removal of officers. (1) After a charter has been issued to a
banking institution, the board of directors shall elect a chief executive
officer who shall also be a director, a president who also may be the chief
executive officer, at least one vice president, and a cashier or secretary, and
may appoint such other officers and employees as the board of directors considers
necessary or appropriate.
(2) The board of directors may define the
duties, fix the compensation, dismiss, fill vacancies and require bonds or
irrevocable letters of credit for the faithful performance of the duties of the
employees and officers of the banking institution.
(3) In the event the board dismisses an
officer, the officer shall no longer serve as a director.
(4) Any officer or agent elected or
appointed by the board of directors may be removed by the board of directors
whenever, in its judgment, the best interests of the banking institution will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights. [Amended by 1973 c.797 §92;
1983 c.37 §6; 1985 c.786 §32; 1989 c.324 §41; 1991 c.331 §110; 1997 c.631 §99]
707.705
Investigation of new director, president and chief executive officer;
fingerprinting; disapproval of election or appointment. (1) Before a person first takes office as
director, president or chief executive officer of a banking institution, the
name of the person shall be submitted to the Director of the Department of
Consumer and Business Services, with any information about the person that the
director may require.
(2) The director shall investigate each
person whose name is submitted under this section to determine the character,
honesty, financial responsibility and competence of the person. In the course
of investigating any person under this section, the director may require the
person to provide additional information for the director’s further inquiry.
For the purpose of such further inquiry, the director may require the person to
submit to fingerprinting. Fingerprints acquired under this subsection may be
submitted to appropriate law enforcement agencies, including the Federal Bureau
of Investigation, for the purpose of discovering any unlawful activities of the
person.
(3) The director may disapprove the
election or appointment of the person for any reason stated in ORS 707.145. The
director shall issue the disapproval in writing to the board of directors that
submitted the person’s name. A copy of the disapproval shall be served
personally or by certified mail upon the disapproved person. The disapproval
may be issued without a prior administrative hearing.
(4) A person whom the director disapproves
under this section may appeal the disapproval as a contested case pursuant to
ORS 183.415 to 183.500. [1985 c.786 §31; 1997 c.631 §100]
707.710
Removal of officer or director.
(1) For any reason specified in subsection (2) of this section, the Director of
the Department of Consumer and Business Services by order may direct the board
of directors of a banking institution to remove a director or officer of the
banking institution.
(2) The director may issue an order of
removal under subsection (1) of this section:
(a) For any reason stated in ORS 707.145;
or
(b) If the person who is the subject of
the order has refused otherwise to comply with any written requirements or
instructions of the director.
(3) An order of removal under this section
shall be in writing and may be issued without a prior administrative hearing. A
copy of the order shall be served personally or by certified mail upon the
person to be removed.
(4) Upon receipt of an order of removal
the director or officer shall be suspended from office.
(5) The person suspended from office may
appeal the order of the director as a contested case under ORS 183.415 to 183.500.
(6) Upon expiration of the period in which
to file an appeal under ORS 183.415 to 183.500 or when the order of the
director is affirmed on appeal, the board of directors by resolution shall
remove the person from office and declare the office vacant.
(7) Any officer or director of a banking
institution who is suspended or removed under this section shall not act in any
official capacity, conduct any of the business of the banking institution or
have access to the books, records or assets of the banking institution as an
officer, director or stockholder, without receiving permission from the
director. [Amended by 1973 c.797 §93; 1983 c.296 §5; 1985 c.762 §§38,38a; 1985
c.786 §33; 1997 c.631 §101]
707.720
Violation of law or omission of duty by officer or director. An officer or director of a banking
institution shall not, as an officer or director, willfully do any act which is
expressly forbidden by the Bank Act or omit to perform any duty imposed upon
the officer or director by the Bank Act. [Amended by 1973 c.797 §94; 1997 c.631
§102]
707.730
Official communications from Department of Consumer and Business Services;
submission to directors.
Every official communication directed by the Director of the Department of
Consumer and Business Services or any examiner to a banking institution or to
any officer of a banking institution, relating to an investigation or
examination conducted by the Department of Consumer and Business Services or
containing suggestions or recommendations as to the conduct of the business of
the banking institution, shall be submitted by the officer receiving it to the
board of directors at the next meeting of the board and noted in the minutes of
the meeting of the board in the manner prescribed by the director. [Amended by
1973 c.797 §95; 1985 c.762 §39; 1997 c.631 §103]
707.735
Officers and directors to notify law enforcement officers of certain criminal
violations; investigations; costs. (1) If an officer or director of a banking institution has reason to
believe that a person has violated any provision of law that has resulted or
could result in loss to the banking institution and for which criminal
prosecution is provided, the officer or director shall give the information
relative to the violation to the appropriate federal, state or local law
enforcement officer having jurisdiction of the violation, and to the Director
of the Department of Consumer and Business Services.
(2) If the matter is referred to a
district attorney or to the Attorney General, such officer promptly shall
investigate the violation and institute such action against the person as the
information and investigation requires or justifies. The cost of the
investigation and action shall be paid by the county or state in the manner in
which other criminal actions are paid. [1979 c.88 §7; 1997 c.631 §104]
707.740
Examining or audit committee; duties. The board of directors of a banking institution shall annually appoint
an examining or audit committee of not fewer than three directors of the
banking institution who are not active officers of the banking institution or
not fewer than three other persons who are approved by the Director of the
Department of Consumer and Business Services. The examining or audit committee
shall examine and study the report of each examination made by bank supervising
authorities and report to the board of directors within 60 days after receipt
of the report relative to criticisms and suggestions contained in the report
and comment on any matter relative to the affairs of the banking institution
that in its judgment should be known to the directors. The report shall be
recorded in the minute book of the banking institution, and a certified copy
transmitted to the director within five days. [Amended by 1973 c.797 §96; 1981
c.192 §5; 1985 c.786 §34; 1997 c.631 §105]
(Indemnification
of Directors, Officers, Employees and Agents)
707.744
Definitions for ORS 707.744 to 707.764. As used in ORS 707.744 to 707.764:
(1) “Director” means an individual who is
or was a director of a banking institution or an individual who, while a
director of a banking institution, is or was serving at the banking institution’s
request as a director, officer, partner, trustee, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. A director is considered to be serving an
employee benefit plan at the banking institution’s request if the director’s
duties to the banking institution also impose duties on or otherwise involve
services by the director to the plan or to participants in or beneficiaries of
the plan. “Director” includes, unless the context requires otherwise, the
estate or personal representative of a director.
(2) “Expenses” includes counsel fees.
(3) “Banking institution” includes any
domestic or foreign predecessor entity of a banking institution in a merger or
other transaction in which the predecessor’s existence ceased upon the
consummation of the transaction.
(4) “Liability” means the obligation to
pay a judgment, settlement, penalty or fine, including an excise tax assessed
with respect to an employee benefit plan or reasonable expenses incurred with
respect to a proceeding.
(5) “Officer” means an individual who is
or was an officer of a banking institution or an individual who, while an
officer of a banking institution, is or was serving at the banking institution’s
request as a director, officer, partner, trustee, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. An officer is considered to be serving an
employee benefit plan at the banking institution’s request if the officer’s
duties to the banking institution also impose duties on or include services by
the officer to the employee benefit plan or to participants in or beneficiaries
of the plan. “Officer” includes, unless the context requires otherwise, the
estate or personal representative of an officer.
(6) “Party” includes an individual who
was, is or is threatened to be made a named defendant or respondent in a
proceeding.
(7) “Proceeding” means any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether formal or informal. [1989 c.324 §17;
1997 c.631 §106]
707.746
Authority to indemnify directors. (1) Except as provided in subsection (4) of this section, a banking
institution may indemnify an individual made a party to a proceeding because
the individual is or was a director against liability incurred in the
proceeding if:
(a) The conduct of the individual was in
good faith;
(b) The individual reasonably believed
that the individual’s conduct was in the best interests of the banking
institution, or at least not opposed to its best interests; and
(c) In the case of any criminal
proceeding, the individual had no reasonable cause to believe the individual’s
conduct was unlawful.
(2) A director’s conduct with respect to
an employee benefit plan for a purpose the director reasonably believed to be
in the best interests of the participants in and beneficiaries of the plan is
conduct that satisfies the requirement of subsection (1)(b) of this section.
(3) The termination of a proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent is not, of itself, determinative that the director did not meet
the standard of conduct described in this section.
(4) A banking institution may not
indemnify a director under this section:
(a) In connection with a proceeding by or
in the right of the banking institution in which the director was adjudged
liable to the banking institution; or
(b) In connection with any other
proceeding charging improper personal benefit to the director in which the
director was adjudged liable on the basis that personal benefit was improperly
received by the director.
(5) Indemnification permitted under this
section in connection with a proceeding by or in the right of the banking
institution is limited to reasonable expenses incurred in connection with the
proceeding. [1989 c.324 §18; 1997 c.631 §107]
707.748
Mandatory indemnification.
Unless limited by its articles of incorporation, a banking institution shall
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party because of
being a director of the banking institution against reasonable expenses
incurred by the director in connection with the proceeding. [1989 c.324 §19;
1997 c.631 §108]
707.749 [1985 c.786 §20; 1987 c.216 §4; renumbered
707.849 in 1989]
707.750 [1977 c.135 §20; 1981 c.192 §6; repealed by
1985 c.786 §70]
707.752
Advance for expenses. (1) A
banking institution may pay for or reimburse the reasonable expenses incurred by
a director who is a party to a proceeding in advance of final disposition of
the proceeding if:
(a) The director furnishes the banking
institution a written affirmation of the director’s good faith belief that the
director has met the standard of conduct described in ORS 707.746; and
(b) The director furnishes the banking
institution a written undertaking, executed personally or on the director’s
behalf, to repay the advance if it is ultimately determined that the director
did not meet the standard of conduct.
(2) The undertaking required by subsection
(1)(b) of this section must be an unlimited general obligation of the director
but need not be secured and may be accepted without reference to financial
ability to make repayment.
(3) Any authorization of payments under
this section may be made by provision in the articles of incorporation, or
bylaws, by a resolution of the shareholders or board of directors or by
contract. [1989 c.324 §20; 1997 c.631 §109]
707.754
Court-ordered indemnification.
Unless the banking institution’s articles of incorporation provide otherwise, a
director of the banking institution who is a party to a proceeding may apply
for indemnification to the court conducting the proceeding or to another court
of competent jurisdiction. On receipt of an application, the court, after
giving any notice the court considers necessary, may order indemnification if
it determines:
(1) The director is entitled to mandatory
indemnification under ORS 707.748, in which case the court shall also order the
banking institution to pay the director’s reasonable expenses incurred to
obtain court-ordered indemnification; or
(2) The director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances, whether
or not the director met the standard of conduct set forth in ORS 707.746 or was
adjudged liable as described in ORS 707.746 (4), whether the liability is based
on a judgment, settlement or proposed settlement or otherwise. [1989 c.324 §21;
1997 c.631 §110]
707.755 [1985 c.786 §21; renumbered 707.855 in 1989]
707.756
Determination and authorization of indemnification. (1) A banking institution may not indemnify
a director under ORS 707.746 unless authorized in the specific case after a
determination has been made that indemnification of the director is permissible
in the circumstances because the director has met the standard of conduct set
forth in ORS 707.746.
(2) A determination that indemnification
of a director is permissible shall be made:
(a) By the board of directors by majority
vote of a quorum consisting of directors not at the time parties to the
proceeding;
(b) If a quorum cannot be obtained under
paragraph (a) of this subsection, by a majority vote of a committee duly
designated by the board of directors consisting solely of two or more directors
not at the time parties to the proceeding. However, directors who are parties
to the proceeding may participate in designation of the committee;
(c) By special legal counsel selected by
the board of directors or its committee in the manner prescribed in paragraph
(a) or (b) of this subsection, or if a quorum of the board of directors cannot
be obtained under paragraph (a) of this subsection and a committee cannot be
designated under paragraph (b) of this subsection, the special legal counsel
shall be selected by majority vote of the full board of directors, including
directors who are parties to the proceeding; or
(d) In the case of an institution or
(3) Authorization of indemnification and
evaluation as to reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of indemnification
and evaluation as to reasonableness of expenses shall be made by those entitled
under subsection (2)(c) of this section to select counsel. [1989 c.324 §22;
1997 c.631 §111]
707.758
Indemnification of officers, employees and agents. Unless a banking institution’s articles of
incorporation provide otherwise:
(1) An officer of the banking institution
is entitled to mandatory indemnification under ORS 707.748 and is entitled to
apply for court-ordered indemnification under ORS 707.754, in each case to the
same extent as a director under ORS 707.748 and 707.754.
(2) The banking institution may indemnify
and advance expenses under ORS 707.744 to 707.762 to an officer, employee or
agent of the banking institution to the same extent as to a director. [1989
c.324 §23; 1997 c.631 §112]
707.760 [1985 c.786 §22; renumbered 707.860 in 1989]
707.762
Insurance. A banking
institution may purchase and maintain insurance on behalf of an individual
against liability asserted against or incurred by the individual who is or was
a director, officer, employee or agent of the banking institution or who, while
a director, officer, employee or agent of the banking institution, is or was
serving at the request of the banking institution as a director, officer,
partner, trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.
The banking institution may purchase and maintain the insurance even if the
banking institution has no power to indemnify the individual against the same
liability under ORS 707.746 or 707.748. [1989 c.324 §24; 1997 c.631 §113]
707.764
Application of ORS 707.744 to 707.762. (1) The indemnification and provisions for advancement of expenses
provided by ORS 707.744 to 707.762 shall not be deemed exclusive of any other
rights to which directors, officers, employees or agents may be entitled under
the banking institution’s articles of incorporation or bylaws, any agreement,
general or specific action of its board of directors, vote of shareholders or
otherwise, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. Specifically and not by way of
limitation, a banking institution shall have the power to make or agree to make
any further indemnification, including advancement of expenses, of:
(a) Any director as authorized by the
articles of incorporation, any bylaws approved, adopted or ratified by the
shareholders or any resolution or agreement approved, adopted or ratified,
before or after such indemnification or agreement is made, by the shareholders,
provided that no such indemnification shall indemnify any director from or on
account of acts or omissions for which liability could not be eliminated under
ORS 707.110 (5)(c); and
(b) Any officer, employee or agent who is
not a director as authorized by its articles of incorporation or bylaws,
general or specific action of its board of directors or agreement. Unless the
articles of incorporation, or any such bylaws, agreement or resolution provide
otherwise, any determination as to any further indemnity under this paragraph
shall be made in accordance with ORS 707.756.
(2) If articles of incorporation limit
indemnification or advance of expenses, any indemnification and advance of
expenses are valid only to the extent consistent with the articles of
incorporation.
(3) ORS 707.744 to 707.762 do not limit a
banking institution’s power to pay or reimburse expenses incurred by a director
in connection with the director’s appearance as a witness in a proceeding at a
time when the director has not been made a named defendant or respondent to a
proceeding. [1989 c.324 §25; 1997 c.631 §114]
707.849 [Formerly 707.749; repealed by 1995 c.314 §3]
707.855 [Formerly 707.755; repealed by 1997 c.631 §567]
707.860 [Formerly 707.760; 1995 c.314 §1; repealed
by 1997 c.631 §567]
707.990 [Repealed by 1973 c.797 §428]
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