organization to conduct banking business; stockholders, … · 2016-01-26 · organization to...

Chapter 7072013 EDITION

Organization to Conduct Banking Business; Stockholders, Directors and Officers

ORGANIZATION TO CONDUCT BANKING BUSINESS

(Generally)707.005 Organization required to engage in bank-

ing or trust business707.007 Organization of Oregon bank as limited

liability company707.010 Certificate required to transact banking

business707.020 Violation of ORS 707.005 or 707.010; inves-

tigation; injunction707.025 Organization of banking institution for

purpose of merging with, acquiring assetsof or assuming liabilities of financial in-stitution; procedure; conditions

707.035 Conversion of trust company to Oregonbank

707.050 Initial paid-in capital requirement707.070 Application for authority to organize

banking institution; fee; contents707.075 Banking institution name707.080 Investigation and ruling on application;

conditional approval; appeal707.090 Refusal to file articles of incorporation or

grant charter after approval of application707.100 Time for submitting articles of incorpo-

ration707.110 Execution and submission of articles of

incorporation; contents707.120 Issuance of certificate of incorporation

when filings conform to law707.140 Submission of organization information;

issuance of charter707.145 Grounds for refusing authority to organ-

ize707.150 Refusal of authority to organize; appeal707.155 Authority to require additional investi-

gatory information; fingerprinting707.160 Transaction of business prior to organiza-

tion; failure to complete organization; li-ability

707.170 Effective date of charter; commencementof business; effect of failure to commencebusiness

707.180 Location of principal place of business;change upon approval

707.182 Registered agent; registered office707.184 Changes in registered office or agent707.186 Resignation of registered agent; discon-

tinuance of registered office707.188 Service of process on institution or Ore-

gon stock savings bank707.195 Offering documents for sale of stock; ap-

proval by director707.200 Payments by subscribers of full amount

of stock subscriptions; escrow

707.210 Stock issuance after obtaining charter;form of stock certificate; issuance ofstock without certificate

707.220 Stock record; contents; inspection707.230 Transfer of stock707.242 Bylaws

(Amendment of Articles of Incorporation)707.244 Amendment of articles of incorporation;

purposes for amendment707.246 Manner of amending articles of incorpo-

ration707.248 Shareholders authorized to vote on

amendment to articles of incorporation707.250 Execution of amendments to articles of

incorporation707.252 Filing of amended articles of incorpo-

ration707.254 Effective date of amended articles of in-

corporation; effect on existing cause ofaction

707.256 Restated articles of incorporation

(Shares)707.258 Terms of class of shares or series within

class determined by board of directors707.260 Fractional shares; scrip707.262 Share options; limits on issuance707.266 Expenses of organization or issue of

shares707.268 Restrictions on redemption of shares707.270 Effect of redemption of shares; statement

of cancellation707.272 Paid-in capital; use; retained earnings re-

serve; approval of director for redemptionof shares; rules

707.350 Payment prior to issuance of certificateof stock; consideration; approvals

707.380 Limitation on dividends707.400 Suspension of payment of dividends707.410 Record of dividends declared707.415 Report of dividends declared

STOCKHOLDERS, DIRECTORS AND OFFICERS

(Stockholder Meetings)707.610 Annual and special stockholder meetings;

notice of orders707.611 Notice of meeting707.612 Action without meeting707.613 Shareholder waiver of notice; effect of

attendance at meeting707.615 Record date707.617 Shareholders list for meeting707.619 Voting entitlement of shares

Title 53 (2013 Edition)

FINANCIAL INSTITUTIONS

707.620 Special stockholder meeting called by di-rector

707.621 Quorum707.623 Modification of quorum or voting require-

ments707.625 Exemption from personal liability for good

faith acts or omissions in compliance withstatute, rule or order

(Directors and Officers)707.642 Organizational meeting of directors; no-

tice707.644 Committees of board of directors; limita-

tions707.646 Staggered terms for directors707.648 Removal of directors by shareholders707.660 General standards for directors707.665 General standards for officers707.670 Regular meetings of directors; rules; quo-

rum; notice; meetings using communica-tions equipment

707.675 Report of loans and investments707.680 Special board meetings called by director;

penalty for failure to attend707.690 Filling director vacancy707.700 Selection and control of officers by direc-

tors; effect of removal of officers

707.705 Investigation of new director, presidentand chief executive officer; fingerprinting;disapproval of election or appointment

707.710 Removal of officer or director707.720 Violation of law or omission of duty by

officer or director707.730 Official communications from Department

of Consumer and Business Services; sub-mission to directors

707.735 Officers and directors to notify law en-forcement officers of certain criminal vi-olations; investigations; costs

707.740 Examining or audit committee; duties

(Indemnification of Directors, Officers, Employees and Agents)

707.744 Definitions for ORS 707.744 to 707.764707.746 Authority to indemnify directors707.748 Mandatory indemnification707.752 Advance for expenses707.754 Court-ordered indemnification707.756 Determination and authorization of in-

demnification707.758 Indemnification of officers, employees and

agents707.762 Insurance707.764 Application of ORS 707.744 to 707.762


ORGANIZATION TO CONDUCT BANKING BUSINESS 707.010

ORGANIZATION TO CONDUCTBANKING BUSINESS

(Generally)707.005 Organization required to en-

gage in banking or trust business. It isunlawful for any person to engage in ortransact a banking or trust business withinthis state except by means of an entity dulyorganized for the purpose. [1973 c.797 §50; 1997c.631 §29]

707.007 Organization of Oregon bankas limited liability company. (1) As an al-ternative to being organized as a corporationunder this chapter, an Oregon bank may beorganized as a limited liability company.

(2) With respect to any Oregon bank thatis organized as a limited liability company,as used in the Bank Act:

(a) “Articles of incorporation” means theOregon bank’s articles of organization, asdefined in ORS 63.001.

(b) “Bylaws” means the Oregon bank’soperating agreement, as defined in ORS63.001.

(c) “Certificate of incorporation” meansa certificate of organization issued to theOregon bank.

(d) “Corporation,” means a limited liabil-ity company, as defined in ORS 63.001.

(e) “Director,” “directors” or “board ofdirectors” means the Oregon bank’s manageror managers, as defined in ORS 63.001.

(f) “Dividends” means distributions, asdefined in ORS 63.001, declared or paid bythe Oregon bank.

(g) “Incorporator” means the Oregonbank’s organizer, as defined in ORS 63.001.

(h) “Share” or “stock” means a member-ship interest in the Oregon bank, as definedin ORS 63.001.

(i) “Stockholder,” “stockholders,” “share-holder” or “shareholders” means the Oregonbank’s member or members, as defined inORS 63.001.

(3) An Oregon bank organized as a lim-ited liability company shall be organized un-der the authority of the Director of theDepartment of Consumer and Business Ser-vices under this chapter. Except as set forthin subsection (4) of this section, with respectto all other aspects of its operation and ex-istence, an Oregon bank that is organized asa limited liability company is subject to theprovisions of ORS chapter 63, to the extentthat ORS chapter 63 does not conflict withthe Bank Act. In the event of any conflictbetween the Bank Act and ORS chapter 63,the Bank Act controls.

(4)(a) Notwithstanding any provision ofORS chapter 63, the articles of organization

of an Oregon bank that is organized as alimited liability company shall:

(A) State that the existence of the Ore-gon bank is perpetual; and

(B) Provide that the Oregon bank is tobe managed by a board of not fewer than fivemanagers.

(b) Notwithstanding any provision ofORS chapter 63, an Oregon bank that is or-ganized as a limited liability company shallbe managed exclusively by its board of man-agers in substantially the same manner as anOregon bank that is organized as a corpo-ration is managed by its board of directors.The board of managers of an Oregon bankthat is organized as a limited liability com-pany has substantially the same rights, pow-ers, privileges, duties and responsibilities asthe board of directors of an Oregon bankthat is organized as a corporation and issubject to the provisions of this chapter per-taining to directors.

(c) Notwithstanding any provision of ORSchapter 63, membership interests in an Ore-gon bank that is organized as a limited li-ability company are freely transferable, andconsent of the Oregon bank or its membersor managers is not required for a person toacquire or transfer a membership interest inthe Oregon bank. Immediately upon thecompletion of the transfer of the membershipinterest to a person, the person becomes amember and has all the rights of a member.

(d) ORS 63.621 (2) to (4) do not apply toan Oregon bank organized as a limited li-ability company.

(5) The articles of organization of an Or-egon bank that is organized as a limited li-ability company shall require that liquidationof the Oregon bank conform with the re-quirements of the Bank Act.

(6) An Oregon bank that is organized asa limited liability company shall have the of-ficers described in ORS 707.700. The officersshall be elected by the board of managers ofthe Oregon bank and are subject to the pro-visions of this chapter.

(7) Each Oregon bank that is organizedas a limited liability company shall have awritten operating agreement containing anyprovisions for the affairs of the Oregon bankas may be agreed upon by its members andthat are consistent with the Bank Act.

(8) Any number of persons, not fewerthan five, may act as organizers of an Ore-gon bank that is organized as a limited li-ability company. [2005 c.134 §2]

707.010 Certificate required to trans-act banking business. A person who hasnot received a certificate to do a bankingbusiness from the Director of the Depart-


707.020 FINANCIAL INSTITUTIONS

ment of Consumer and Business Services,except a national bank, shall not:

(1) Advertise that it is receiving or ac-cepting money on deposit.

(2) Use a sign at its place of businesscontaining words indicating that the place isa place of business:

(a) Of a banking institution;(b) Where deposits are received or pay-

ments made on check; or(c) Where any other form of banking

business is transacted.(3) Make use of or circulate any letter-

heads, blank notes, blank receipts, certif-icates, circulars or any written or printedpaper containing words indicating that thebusiness is the business of a banking institu-tion.

(4) Transact business under any namethat the director determines leads the publicto believe that its business is that of abanking institution or that it is affiliatedwith a banking institution.

(5) Solicit or receive deposits or transactbusiness in the manner of a banking institu-tion or in such a manner as to lead the pub-lic to believe that its business is that of abanking institution. [Amended by 1973 c.797 §51;1997 c.631 §30]

707.020 Violation of ORS 707.005 or707.010; investigation; injunction. (1) TheDirector of the Department of Consumer andBusiness Services may examine the accounts,books and papers of every person the direc-tor has reasonable cause to believe is violat-ing any provision of ORS 707.005 or 707.010.

(2) When the director believes, from evi-dence satisfactory to the director, that anyperson is violating the provisions of ORS707.005 or 707.010, the director may cause acomplaint to be filed in the circuit court ofthe county in which the person conductsbusiness to enjoin and restrain the personfrom continuing the violation. The courtshall have jurisdiction of the proceeding andmay make and enter an order or judgmentawarding such preliminary or final injunctiverelief as in its judgment is proper. [Amendedby 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 insti-tution for purpose of merging with, ac-quiring assets of or assuming liabilitiesof financial institution; procedure; condi-tions. (1) A banking institution may be or-ganized under this section solely for thepurpose of merging with, acquiring the assetsof or assuming the liabilities of one or moreexisting financial institutions pursuant toORS chapter 711 and, except as otherwiseprovided in this section, without authority to

engage in or transact banking or trust busi-ness.

(2) The banking institution may be or-ganized under this section by one or morepersons or a corporation.

(3) Notwithstanding ORS 707.050, 707.070,707.080 to 707.120, 707.140, 707.170, 707.200and 707.210 (1) and such other sections asmay specifically be inconsistent with thissection, a banking institution described insubsection (1) of this section shall be organ-ized as follows:

(a) The incorporator shall submit to theDirector of the Department of Consumer andBusiness Services for filing articles of incor-poration executed in duplicate, signed by theprospective incorporator or incorporators,and such other information as the directormay require, which may include the addi-tional information required in an applicationunder ORS 707.070 or 716.028 if the bankinginstitution organized under this section is tosurvive the merger, will purchase assets orwill assume liabilities, together with an or-ganizational fee of $2,500.

(b) Such articles of incorporation shallspecify:

(A) The name and address of each incor-porator.

(B) The information required under ORS707.110 (2)(a), (b) and (h) and (3).

(C) The term of its existence, which maybe perpetual.

(D) The purpose of the corporation,which shall be limited to the purposes setforth in subsection (1) of this section. How-ever, if the corporation is to be the resultingbank in such merger, the articles may alsocontain all purposes allowed a banking insti-tution under the Bank Act, provided the im-plementation of such purposes areconditioned upon consummation of suchmerger.

(E) The name and address of each direc-tor of the board of directors, which shall becomposed of not less than three directors.

(4) Unless the director finds that ap-proval of the articles would violate ORS707.145 or other applicable law, the directorshall file the articles and issue a certificateof incorporation in accordance with ORS707.120, if:

(a) The director finds that the articlesconform to subsection (3) of this section; and

(b) The director finds that the bankinginstitution, following any merger or assump-tion of liabilities, will meet the requirementsof ORS 707.080 (1) and (2).

(5) Upon issuance of the certificate ofincorporation, the corporate existence of the



banking institution shall begin and thebanking institution may issue stock.

(6)(a) After the issuance of the certificateof incorporation, the new banking institutionshall file a certified copy of its bylaws withthe director within 90 days. If the directorfinds such bylaws to be consistent with therequirements of the Bank Act, the directorshall issue a provisional charter to suchbank.

(b) The provisional charter shall expireone year after its date of issuance. However,the director may extend such expiration pe-riod. If a merger or assumption of liabilitiesis not consummated before the provisionalcharter expires, the interim bank shall ceaseto exist and its articles of incorporation andcharter shall be void.

(c) For purposes of ORS chapter 711, aprovisional charter issued under this sectionshall be deemed a charter, where appropri-ate.

(d) If the merger or assumption of liabil-ities is consummated and the banking insti-tution organized under this section survivesthe transaction, the director shall issue tothe banking institution a charter to do abanking business either as an Oregon com-mercial bank or as an Oregon stock savingsbank.

(7) A banking institution organized solelyfor the purposes set forth in subsection (1)of this section for which a charter has beenissued may, with the director’s approval,have initial paid-in capital in an amount lessthan that required by ORS 707.050 prior toconsummation 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 companyto Oregon bank. A trust company that de-sires to also conduct a banking business mayconvert to an Oregon bank in accordancewith the provisions of ORS 711.070 and711.080. [1997 c.631 §39]

707.040 [Repealed by 1973 c.797 §428]

707.050 Initial paid-in capital require-ment. (1) Every institution or Oregon stocksavings bank shall have at the time of issu-ance of its charter, initial paid-in capital ofnot less than $1,500,000. The Director of theDepartment of Consumer and Business Ser-vices may require a lesser or greater amountof initial paid-in capital for a particular in-stitution or Oregon stock savings bank if thedirector determines that the lesser or greateramount is sufficient or is necessary for safeand sound operation of the institution or Or-egon stock savings bank.

(2) The initial paid-in capital of an insti-tution or Oregon stock savings bank must bepaid either in cash or by exchange of realproperty and improvements thereon. The realproperty and improvements must be approvedby the director as meeting all applicable re-quirements of law and all other conditionsand standards that the director adopts byrule, including but not limited to a properappraisal by a qualified appraiser. [Amendedby 1963 c.195 §3; 1973 c.797 §53; 1985 c.786 §24; 1997 c.631§33]

707.060 [Repealed by 1973 c.797 §428]

707.070 Application for authority toorganize banking institution; fee; con-tents. Any number of persons, not less thanfive, desiring to organize a banking institu-tion shall, as prospective incorporators, firstsubmit an application to the Director of theDepartment of Consumer and Business Ser-vices for a permit to organize a banking in-stitution. The applicants shall pay to thedirector at the time of their application a feeof $2,500, no part of which shall be refunded.The application shall be signed by one of theapplicants and shall include the followinginformation:

(1) The proposed location of the initialprincipal place of business.

(2) The class or classes of stock proposedto be issued, the proposed offering price pershare and the aggregate dollar amount of theproposed initial paid-in capital.

(3) The corporate name.(4) The names of the proposed senior of-

ficers and the initial directors, at least threeof whom shall also be among the incorpo-rators.

(5) The residence addresses and occupa-tions of the proposed incorporators and di-rectors.

(6) The proposed articles of incorporationmeeting the requirements of ORS 707.110.

(7) The number of shares of voting stockproposed to be subscribed for by the incor-porators and each of the proposed directorsand senior officers, and the names of anyother persons who are expected to subscribefor, to own or to control more than 10 per-cent of the voting stock and the amount ofstock for which each proposes to subscribe.

(8) Evidence satisfactory to the directorof the character, financial responsibility andability of the incorporators, directors andsenior officers.

(9) Evidence satisfactory to the director,in the form of a business plan and such ad-ditional information as the director may re-quire, demonstrating that the proposedbanking institution is likely to be financiallysuccessful.



(10) The proposed operating policies ofthe banking institution.

(11) A statement as to whether thebanking institution is to be a trust company,an Oregon commercial bank or an Oregonstock savings bank, and, if the proposed Or-egon commercial bank or Oregon stocksavings bank is applying for trust powers, astatement to that effect.

(12) Any other information that the di-rector may require. [Amended by 1971 c.68 §3; 1973c.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 phrasethat indicates or implies that it is organizedfor any purpose other than one or more ofthe purposes contained in its articles of in-corporation.

(b) Shall be distinguishable from anyother financial institution, corporate, profes-sional corporate, nonprofit corporate, coop-erative, limited liability company, limitedpartnership, business trust, reserved or reg-istered name currently on file with the Sec-retary of State or Director of the Departmentof Consumer and Business Services, or anassumed business name registered as pro-vided in ORS 648.010.

(2) The director may refuse to permit theuse of any name if the director determinesthat the name is deceptively similar to thename of a financial institution already law-fully transacting banking business or accept-ing deposits in this state.

(3) Nothing contained in this sectionshall preclude a banking institution fromtransacting business under one or more as-sumed business names, if the names meet therequirements of subsection (1) of this section,unless the director determines that thenames will be confusingly similar to any fi-nancial institution, corporate, professionalcorporate, nonprofit corporate, cooperative,limited liability company, limited partner-ship, business trust, reserved or registeredname currently on file with the Secretary ofState or Director of the Department of Con-sumer and Business Services, or an assumedbusiness name registered as provided in ORS648.010. [1985 c.762 §36; 1997 c.631 §37]

707.080 Investigation and ruling onapplication; conditional approval; appeal.(1) When an application to organize has beensubmitted, the Director of the Department ofConsumer and Business Services shall deter-mine whether:

(a) The purposes of the proposed bankinginstitution as stated in the proposed bankinginstitution’s articles of incorporation and theapplication are consistent with the BankAct;

(b) The character, financial responsibilityand general fitness of the persons named inthe application are such as to command theconfidence of the community in which theproposed banking institution is to be locatedand to warrant the belief that the businessof the proposed corporation will be honestlyand efficiently conducted;

(c) The proposed directors and officersare competent to manage successfully abanking institution;

(d) The suggested capitalization is ade-quate for the proposed banking institution’santicipated development and growth withina reasonable period of time; and

(e) There is reasonable assurance of suf-ficient volume of business for the proposedbanking institution to be economically via-ble.

(2) If the director is satisfied that theapplicant meets the standards prescribed insubsection (1) of this section the directorshall note the approval and the date on eachcopy of the application. If the director is notsatisfied or believes that the public interestwill be endangered the director shall notethe disapproval of the director and the dateon each copy of the application.

(3) The director shall acknowledge re-ceipt of an application and shall notify theapplicants of approval or disapproval of theapplication. The director shall file the ori-ginal of an approved application in the officeof the director.

(4) The director shall act to approve ordisapprove an application within 60 daysfrom receipt of the application, unless a ma-jority of the applicants and the directoragree to extend the time an additional 30days.

(5) The director may grant conditionalapproval of any application and require theapplicants to make additional showing orchanges in the proposed banking institutionas the director considers advisable.

(6) The applicants may appeal the deci-sion of the director to any court of appropri-ate jurisdiction. [Amended by 1973 c.797 §55; 1975c.544 §8a; 1997 c.631 §40]

707.090 Refusal to file articles of in-corporation or grant charter after ap-proval of application. If, after approvingthe application for authority to organize, itappears to the Director of the Departmentof Consumer and Business Services that thearticles of incorporation, the organization orproposed manner of conducting business donot comply with the terms of the application,the requirements of approval or the require-ments of law, the director may refuse to file



the articles of incorporation or to grant acharter. [Amended by 1973 c.797 §56; 1997 c.631 §41]

707.100 Time for submitting articlesof incorporation. Within 30 days after au-thority to organize has been finally granted,the prospective incorporators shall submit tothe Director of the Department of Consumerand Business Services articles of incorpo-ration. If articles of incorporation are notreceived by the director within the specifiedtime, the authority to organize is void.[Amended by 1973 c.797 §57; 1997 c.631 §42]

707.110 Execution and submission ofarticles of incorporation; contents. (1)Any number of persons, not less than five,may associate themselves by articles of in-corporation to establish an institution or Or-egon stock savings bank. The articles ofincorporation shall be executed in duplicate,signed by the prospective incorporators andsubmitted to the Director of the Departmentof Consumer and Business Services.

(2) The articles of incorporation shallspecify:

(a) The name of the institution or Oregonstock savings bank.

(b) The initial principal place where itsbusiness is to be transacted, designated bylegal description or street and number in thecity or town.

(c) The address, including street andnumber, and mailing address, if different, ofits initial registered office and the name ofits initial registered agent at that office.

(d) The names of the prospective incor-porators.

(e) The term of its existence, which maybe perpetual.

(f) The purpose for which the institutionor Oregon stock savings bank is formed.

(g) The initial board of directors of theinstitution or Oregon stock savings bank,composed of not fewer than five persons, atleast three of whom shall be prospective in-corporators.

(h) If the stockholders will havepreemptive rights, a statement of such rights.

(3) In addition, the articles of incorpo-ration:

(a) Must prescribe the classes of sharesand the number of shares of each class thatthe institution or Oregon stock savings bankis authorized to issue. If more than one classof shares is authorized, the articles of incor-poration must prescribe a distinguishing des-ignation for each class, and prior to theissuance of shares of a class, the preferences,limitations and relative rights of that classmust be described in the articles of incorpo-ration. All shares of a class must have pref-

erences, limitations and relative rightsidentical to those of other shares of the sameclass except to the extent otherwise permit-ted by ORS 707.262.

(b) Must authorize one or more classesof shares that together have unlimited votingrights, and one or more classes of shareswhich may be the same class or classes asthose with voting rights, that together areentitled to receive the net assets of the in-stitution or Oregon stock savings bank upondissolution.

(c) May authorize one or more classes ofshares that:

(A) Have special, conditional or limitedvoting rights, or no voting rights, except tothe extent prohibited by this chapter;

(B) Are redeemable or convertible asspecified in the articles of incorporation:

(i) At the option of the institution or Or-egon stock savings bank, the shareholder oranother person or upon the occurrence of adesignated event;

(ii) For cash, indebtedness, securities orother property; or

(iii) In a designated amount or in anamount determined in accordance with adesignated formula or by reference toextrinsic data or events;

(C) Entitle the holders to distributionscalculated in any manner, including divi-dends that may be cumulative, noncumula-tive or partially cumulative; or

(D) Have preference over any other classof shares with respect to distributions, in-cluding dividends and distributions upon thedissolution of the institution or Oregon stocksavings bank.

(4) The description of the designations,preferences, limitations and relative rightsof share classes in subsection (3)(c) of thissection is not exhaustive.

(5) The articles of incorporation also maycontain any lawful provisions:

(a) Regulating the business or conduct ofaffairs of the institution or Oregon stocksavings bank;

(b) Defining, limiting and regulating thepowers of the directors; or

(c) Eliminating or limiting the personalliability of a director to the institution orOregon stock savings bank or its sharehold-ers for monetary damages for conduct as adirector, provided that no such provisionsshall eliminate or limit the liability of a di-rector for any act or omission occurringprior to the date when such provision be-comes effective, and such provision shall noteliminate or limit the liability of a directorfor:



(A) Any breach of the director’s duty ofloyalty to the institution or Oregon stocksavings bank or its shareholders;

(B) Acts or omissions not in good faithor which involve intentional misconduct ora knowing violation of law;

(C) Any unlawful distribution under theBank Act; or

(D) Any transaction from which the di-rector 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 in-corporation when filings conform to law.(1) If the Director of the Department ofConsumer and Business Services finds thatthe articles of incorporation conform to law,the director shall within 60 days after re-ceiving the articles of incorporation andwhen all fees have been paid:

(a) Indorse on each of the duplicate ori-ginals the word “Filed,” and the month, dayand year of the filing.

(b) File one of the duplicate originals inthe office of the director.

(c) Issue a certificate of incorporation towhich the director shall affix the other du-plicate original.

(2) The certificate of incorporation, withone of the duplicate originals affixed theretoshall be returned to the incorporators ortheir representative.

(3) Upon issuance of the certificate ofincorporation the corporate existence of abanking institution begins. [Amended by 1973c.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 in-formation; issuance of charter. (1) Whensubscriptions totaling not less than theamount of the initial paid-in capital havebeen received, the incorporators shall submitfor filing with the Director of the Depart-ment 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 agentholding moneys in escrow as payment forsubscriptions to stock of the institution orOregon stock savings bank showing theamount held.

(c) A list of the directors and senior offi-cers elected.

(d) A copy of its bylaws certified to by itspresident or cashier.

(e) Evidence of approval by the FederalDeposit Insurance Corporation of the Oregon

commercial bank’s or Oregon stock savingsbank’s application for deposit insurance.

(2) Upon receiving the items referred toin subsection (1) of this section, the directorshall examine the condition of the institutionor Oregon stock savings bank. If, upon ex-amination, the director determines that theinstitution or Oregon stock savings bank hascomplied with the requirements of the BankAct and that the amount of the institution’sor Oregon stock savings bank’s initial paid-incapital has been paid or is held in escrow forrelease upon issuance of a charter, the di-rector shall issue to the institution or Ore-gon stock savings bank a charter, which,depending on the form of the application andthe approval of the director, shall be to do abanking business either as an Oregon com-mercial bank or as an Oregon stock savingsbank, or to do a trust business, or to do botha banking and trust business. [Amended by 1973c.797 §61; 1987 c.216 §2; 1997 c.631 §47]

707.145 Grounds for refusing authorityto organize. The Director of the Departmentof Consumer and Business Services may dis-approve an application for a permit to or-ganize or refuse to approve the articles ofincorporation or to grant a charter upon afinding that any person named in the appli-cation to organize or in other documentssubmitted for filing:

(1) Is insolvent, either in the sense thatthe person’s liabilities exceed the person’sassets or that the person cannot meet theperson’s obligations as they mature, or is insuch financial condition that the person can-not continue in business with safety to theperson’s customers;

(2) Has engaged in dishonest, fraudulentor illegal practices or conduct in any busi-ness or profession;

(3) Has willfully or repeatedly violated orfailed to comply with any provisions of theBank Act or any rule or order of the direc-tor;

(4) Has been convicted of a crime, an es-sential element of which is fraud;

(5) Is not qualified to conduct a bankingbusiness on the basis of such factors astraining, experience and knowledge of thebusiness;

(6) Is permanently or temporarily en-joined by a court of competent jurisdictionfrom engaging in or continuing any conductor practice involving any aspect of the bank-ing business or other business that may law-fully be conducted by an insured institution;

(7) Is the subject of an order of the di-rector subjecting the person to a civil pen-alty, or removing the person from an officein any entity regulated by the director; or



(8) Is the subject of an order enteredwithin the past five years, directing the per-son to cease and desist from any fraudulentor unlawful business or banking practice,subjecting the person to a civil penalty, orremoving the person from an office in a fi-nancial institution or a consumer financecompany issued by the banking supervisor ofanother state or by the Comptroller of theCurrency, the Board of Governors of theFederal Reserve System or by any otheragency of the federal government or anotherstate with regulatory authority over such fi-nancial institutions or consumer financecompanies. [1977 c.135 §19; 1985 c.762 §§37,37a; 1985c.786 §25; 1987 c.373 §52; 1997 c.631 §48; 2011 c.597 §288]

707.150 Refusal of authority to organ-ize; appeal. Notwithstanding the provisionsof ORS chapter 183, the Director of the De-partment of Consumer and Business Servicesmay, without prior hearing or opportunitytherefor, refuse to grant authority to organ-ize a banking institution. In case authorityto organize is refused by the director, theapplicants may within 30 days after the re-fusal appeal the decision to any court of ap-propriate jurisdiction. [Amended by 1971 c.734§172; 1973 c.797 §62; 1975 c.544 §8b; 1997 c.631 §49]

707.155 Authority to require additionalinvestigatory information; fingerprinting.(1) In the course of investigating any personnamed in the application to organize or inother documents submitted for filing, the Di-rector of the Department of Consumer andBusiness Services may require the person toprovide additional information for thedirector’s further inquiry. For the purpose ofsuch further inquiry, the director may re-quire any of the following persons to submitto fingerprinting:

(a) Any person required to be named inthe application to organize.

(b) Any person named in the proposedarticles of incorporation of the banking in-stitution or documents submitted for filingas a prospective incorporator or as a direc-tor, president or chief executive officer of thebanking institution.

(2) Fingerprints acquired under subsec-tion (1) of this section may be submitted toappropriate law enforcement agencies, in-cluding the Federal Bureau of Investigation,for the purpose of discovering any unlawfulactivities of the person. [1985 c.786 §23; 1997 c.631§50]

707.160 Transaction of business priorto organization; failure to complete or-ganization; liability. (1) A banking institu-tion shall not transact any business, exceptas is incidental or necessary to its organiza-tion, until it has received its charter fromthe Director of the Department of Consumerand Business Services.

(2) An institution or Oregon stocksavings bank that fails to obtain paid sub-scriptions in at least the amount of its ap-proved initial paid-in capital and complete itsorganization and receive from the director acharter, within one year after the date ofapproval of its articles of incorporation,ceases to exist and the articles of incorpo-ration are void.

(3) All persons purporting to act as or onbehalf of a banking institution, knowingthere was no incorporation, are jointly andseverally liable for all liabilities createdwhile so acting. [Amended by 1969 c.44 §1; 1973c.797 §63; 1989 c.324 §5; 1997 c.631 §51]

707.170 Effective date of charter;commencement of business; effect offailure to commence business. (1) A char-ter shall specify the date on which it be-comes effective, which shall not be morethan 90 days after the date of issuance of thecharter, unless an extension of time isgranted by the Director of the Departmentof Consumer and Business Services.

(2) A banking institution shall commencebusiness on the effective date specified in itscharter. If a banking institution fails tocommence business on the effective datespecified in the charter or according to anyextension of time granted by the director itceases to exist and its articles of incorpo-ration and charter are void. [Amended by 1973c.797 §64; 1997 c.631 §52]

707.180 Location of principal place ofbusiness; change upon approval. The ini-tial principal place of business of a bankinginstitution shall be specified in its articlesof incorporation. The principal place of busi-ness may be changed upon application of thebanking institution to the Director of theDepartment of Consumer and Business Ser-vices. The director shall determine whetherthe change in location is advisable or justi-fied and whether the public convenience andadvantage will be promoted and shall ap-prove or disapprove the change of location.An appeal from the decision of the directormay be taken to any court of appropriate ju-risdiction. [Amended by 1973 c.797 §65; 1975 c.544 §8c;1997 c.631 §53]

707.182 Registered agent; registeredoffice. (1) Each institution and each Oregonstock savings bank shall continuously main-tain in this state a registered agent and reg-istered office that may be, but need not be,the same as any of its places of business.

(2) A registered agent shall be:(a) An individual who resides in this

state and whose business office is identicalto the registered office;

(b) A domestic corporation, domestic lim-ited liability company, domestic professional



corporation or domestic nonprofit corpo-ration whose business office is identical tothe registered office; or

(c) A foreign corporation, foreign limitedliability company, foreign professional corpo-ration or foreign nonprofit corporation au-thorized to transact business in this statewhose business office is identical to the reg-istered office. [2005 c.192 §2]

707.184 Changes in registered office oragent. (1) An institution or Oregon stocksavings bank may change its registered officeor registered agent by delivering to the Di-rector of the Department of Consumer andBusiness Services for filing a statement ofchange that sets forth:

(a) The name of the institution or Oregonstock savings bank;

(b) If the registered office is to bechanged, the address, including street andnumber, of the new registered office;

(c) If the registered agent is to bechanged, the name of the new registeredagent and that the new agent has consentedto the appointment; and

(d) That after the change or changes aremade, the street addresses of its registeredoffice and the business office of its registeredagent will be identical.

(2) If a registered agent changes thestreet address of the agent’s business office,the registered agent shall change the streetaddress of the registered office of the insti-tution or Oregon stock savings bank forwhich the agent is the registered agent bynotifying the institution or Oregon stocksavings bank in writing of the change andsigning, either manually or in facsimile, anddelivering to the director a statement thatcomplies with the requirements of subsection(1) of this section and recites that the insti-tution or Oregon stock savings bank hasbeen notified of the change.

(3) The filing of the statement by the di-rector terminates the existing registered of-fice or agent, or both, on the effective dateof the filing and establishes the newly ap-pointed registered office or agent, or both, asthat of the institution or Oregon stocksavings bank. [2005 c.192 §3]

707.186 Resignation of registeredagent; discontinuance of registered office.(1) A registered agent may resign as agentupon delivering a signed statement to theDirector of the Department of Consumer andBusiness Services and giving notice in theform of a copy of the statement to the insti-tution or Oregon stock savings bank. Thestatement may include a statement that theregistered office is also discontinued.

(2) Upon delivery of the signed state-ment, the director shall file the resignationstatement. The copy of the statement givento the institution or Oregon stock savingsbank under subsection (1) of this sectionshall be addressed to the institution or Ore-gon stock savings bank at its mailing addressor principal office as shown by the recordsof the director.

(3) The agency appointment is terminatedand the registered office discontinued, if soprovided, on the 31st day after the date onwhich the statement was filed by the directorunless, prior to that date, the institution orOregon stock savings bank appoints a suc-cessor registered agent as provided in ORS707.184, thereby terminating the capacity ofsuch agent. [2005 c.192 §4]

707.188 Service of process on institu-tion or Oregon stock savings bank. (1)The registered agent appointed by an insti-tution or Oregon stock savings bank shall bean agent of the institution or Oregon stocksavings bank upon whom any process, noticeor demand required or permitted by law tobe served upon the institution or Oregonstock savings bank may be served.

(2) The Director of the Department ofConsumer and Business Services shall be anagent of an institution or Oregon stocksavings bank, including a dissolved institu-tion or Oregon stock savings bank, uponwhom any such process, notice or demandmay be served whenever the institution orOregon stock savings bank fails to appointor maintain a registered agent in this stateor whenever the institution’s or Oregonstock savings bank’s registered agent cannotwith reasonable diligence be found at theregistered office.

(3) Service shall be made on the directorby:

(a) Serving the director or a clerk onduty at the office of the director a copy ofthe process, notice or demand, with any pa-pers required by law to be delivered in con-nection with the service, and the requiredfee for each party being served or by mailingto the office of the director a copy of theprocess, notice or demand and the requiredfee for each party being served by certifiedor registered mail;

(b) Transmittal by the person institutingthe proceedings of notice of the service onthe director and a copy of the process, noticeor demand and accompanying papers to theinstitution or Oregon stock savings bank be-ing served by certified or registered mail:

(A) At the last registered office of theinstitution or Oregon stock savings bank asshown by the records of the director; and



(B) At such address the use of which theperson initiating the proceedings knows or,on the basis of reasonable inquiry, has rea-son to believe is most likely to result in ac-tual notice; and

(c) Filing with the appropriate court orother body, as part of the return of service,the return receipt of mailing and an affidavitof the person initiating the proceedings stat-ing that this section has been complied with.

(4) The director shall keep a record of allprocesses, notices and demands served uponthe director under this section.

(5) After completion of initial serviceupon the director, no additional documentsneed be served upon the director to maintainjurisdiction in the same proceeding or to givenotice of any motion or provisional process.

(6) Nothing contained in this sectionshall limit or affect the right to serve anyprocess, notice or demand required or per-mitted by law to be served upon an institu-tion or Oregon stock savings bank in anyother manner now or hereafter permitted bylaw, or enlarge the purposes for which ser-vice on the director is permitted where suchpurposes are limited by other provisions oflaw. [2005 c.192 §5]

707.190 [Repealed by 1973 c.797 §428]

707.195 Offering documents for sale ofstock; approval by director. At or after thetime the articles of incorporation are sub-mitted for filing, the incorporators shall sub-mit the proposed offering documents for thesale of the banking institution’s stock to theDirector of the Department of Consumer andBusiness Services for review. No sub-scriptions for stock in the institution or Or-egon stock savings bank may be acceptedprior to the date on which the director ap-proves the offering documents. [1997 c.631 §46]

707.200 Payments by subscribers offull amount of stock subscriptions;escrow. The subscribers to the stock of anewly organized institution or Oregon stocksavings bank shall pay in, prior to the timea charter is issued, directly to the institutionor Oregon stock savings bank or by depositwith an escrow agent acceptable to the Di-rector of the Department of Consumer andBusiness Services to be released upon the is-suance of a charter, the full amount of theirstock subscriptions, which shall total an ag-gregate amount not less than the initialpaid-in capital approved by the director. Thepayment must be in cash or by exchange ofreal property and improvements thereon. Thereal property and improvements are subjectto approval by the director as provided inORS 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 obtainingcharter; form of stock certificate; issu-ance of stock without certificate. (1) Aninstitution or Oregon stock savings bankshall not issue any share of stock until itscharter has been issued and ORS 707.200 hasbeen complied with.

(2) Except as provided in subsection (3)of this section, each certificate representingshares of the stock of an institution or Ore-gon stock savings bank shall:

(a) Be signed by two officers of the insti-tution or Oregon stock savings bank desig-nated in the bylaws, and may be sealed withthe seal of the institution or Oregon stocksavings bank or a facsimile thereof. The sig-natures of the officers upon a certificate maybe facsimiles if the certificate is manuallysigned on behalf of a transfer agent or regis-trar other than the institution or Oregonstock savings bank itself or an employee ofthe institution or Oregon stock savings bank.In the case of any person who, as an officer,has signed or whose facsimile signature hasbeen placed upon such certificate and hasceased being such officer before such certif-icate is issued, the certificate may be issuedby the institution or Oregon stock savingsbank with the same effect as if the personwere such officer at the date of its issue.

(b) If the institution or Oregon stocksavings bank is authorized to issue shares ofmore than one class, state upon the face orback of the certificate, or state that the in-stitution or Oregon stock savings bank willfurnish to any shareholder upon request andwithout charge, a full statement of the des-ignations, preferences, limitations and rela-tive rights of the shares of each classauthorized to be issued, and, if the institu-tion or Oregon stock savings bank is author-ized to issue any class in series, state thevariations in the relative rights and prefer-ences between the shares of each such seriesso far as the same have been fixed and de-termined and the authority of the board ofdirectors to fix and determine the relativerights and preferences of subsequent series.

(c) State that the institution or Oregonstock savings bank is organized under thelaws of this state.

(d) State the name of the person to whomissued.

(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 repres-enting shares under subsection (2) of thissection, the board of directors of an institu-tion or Oregon stock savings bank may au-thorize the institution or Oregon stocksavings bank to issue some or all of the



shares of any or all of its classes or serieswithout certificates. The authorization shallnot affect shares already represented by cer-tificates until the shares are surrendered tothe institution or Oregon stock savings bank.Within a reasonable time after the issuanceor transfer of shares without certificates, theinstitution or Oregon stock savings bankshall send the shareholder a written state-ment of the information required on certif-icates under subsection (2) of this section.

(4) No share shall be issued until suchshare is fully paid.

(5) At the request of any holder of twoor more certificates of the stock of any in-stitution or Oregon stock savings bank or-ganized under the laws of this state, suchinstitution or Oregon stock savings bankshall, upon the surrender of the certificates,issue to the holder of such stock one certif-icate, or a statement pursuant to subsection(3) of this section, for all shares of stock ofany one class in such institution or Oregonstock savings bank owned by the stockholderif the number of such shares owned by thestockholder in the particular class equals orexceeds 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; in-spection. (1) An institution or Oregon stocksavings bank shall keep a stock ledger orregister that shall show the name and mail-ing address of and the number of shares heldby each stockholder of record. The institu-tion or Oregon stock savings bank shall alsomaintain a record of transfers of stock, stat-ing the time when made, the number ofshares transferred and to whom transferred.

(2) The stock ledger or register shall beavailable for inspection and copying, duringregular business hours at a reasonable lo-cation specified by the institution or Oregonstock savings bank, by a stockholder of theinstitution or Oregon stock savings bankupon at least five days’ prior written noticeif:

(a) The stockholder’s demand for inspec-tion is made in good faith and for a properpurpose;

(b) The stockholder described with rea-sonable particularity the stockholder’s pur-pose; and

(c) The stock ledger or register requestedis directly connected to the stockholder’spurpose. [Amended by 1973 c.797 §69; 1997 c.631 §56]

707.230 Transfer of stock. The sharesof stock of an institution or Oregon stocksavings bank shall be transferred on thebooks of the institution or Oregon stock

savings bank in such manner as the bylawsmay provide and as required in ORS 707.220.A transfer of stock is not valid while an in-stitution or Oregon stock savings bank isunder notice from the Director of the De-partment of Consumer and Business Servicesto make good any impairment of itsstockholders’ equity, until the impairmenthas been made good. [Amended by 1973 c.797 §70;1997 c.631 §57]

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 aninstitution shall be adopted by its board ofdirectors. The power to alter, amend or re-peal the bylaws or adopt new bylaws shallbe vested in the board of directors unless re-served to the shareholders by the articles ofincorporation or by bylaws. The bylaws maycontain any provisions for the regulation andmanagement of the affairs of the institutionnot inconsistent with law or the articles ofincorporation. [1989 c.324 §9; 1997 c.631 §58]

(Amendment of Articles of Incorporation)

707.244 Amendment of articles of in-corporation; purposes for amendment. (1)An institution or Oregon stock savings bankmay amend its articles of incorporation, fromtime to time, in any and as many respects asmay be desired, so long as its articles of in-corporation, as amended, contain only suchprovisions as might be lawfully contained inthe original articles of incorporation at thetime of making such amendment.

(2) In particular, and without limitationupon such general power of amendment, aninstitution or Oregon stock savings bankmay amend its articles of incorporation, fromtime to time, so as:

(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 Oregon stocksavings bank has authority to issue.

(e) To exchange, classify, reclassify orcancel all or any part of its shares, whetherissued or unissued.

(f) To change the designation of all orany part of its shares, whether issued or un-issued, and to change the preferences, limi-tations and relative rights in respect to allor any part of its shares, whether issued orunissued.

(g) To change the shares of any class,whether issued or unissued, into a differentnumber of shares of the same class or into



the same or a different number of shares ofother classes.

(h) To create new classes of shares withrights and preferences either prior and supe-rior or subordinate and inferior to the sharesof any class then authorized, whether issuedor unissued.

(i) To cancel or otherwise affect the rightof the holders of the shares of any class toreceive dividends which have accrued buthave not been declared.

(j) To divide any class of shares, whetherissued or unissued, into series and fix anddetermine the designations of such series andthe variations in the relative rights andpreferences as between the shares of suchseries.

(k) To authorize the board of directors toestablish, out of authorized but unissuedshares, series of any class of shares and fixand determine the relative rights and prefer-ences of the shares of any series so estab-lished.

(L) To authorize the board of directors tofix and determine the relative rights andpreferences of the authorized but unissuedshares of series theretofore established inrespect to which either the relative rightsand preferences have not been fixed and de-termined or the relative rights and prefer-ences theretofore fixed and determined areto be changed.

(m) To revoke, diminish or enlarge theauthority of the board of directors to estab-lish series out of authorized but unissuedshares of any class and fix and determine therelative rights and preferences of the sharesof any series so established.

(n) To limit, deny or grant to sharehold-ers of any class the preemptive right to ac-quire additional or treasury shares of theinstitution or Oregon stock savings bank,whether then or thereafter authorized. [1989c.324 §10; 1997 c.631 §59]

707.246 Manner of amending articlesof incorporation. Amendments to the arti-cles of incorporation shall be made in thefollowing manner:

(1) If an institution or Oregon stocksavings bank has issued shares of stock:

(a) The board of directors shall adopt aresolution setting forth the proposed amend-ment and directing that it be submitted to avote at a meeting of shareholders, which maybe either an annual or a special meeting.

(b) Written or printed notice setting forththe proposed amendment or a summary ofthe changes to be effected shall be given toeach shareholder of record entitled to votewithin the time and in the manner providedin this chapter for giving notice of meetings

of shareholders. If the meeting is an annualmeeting, the proposed amendment or suchsummary may be included in the notice ofsuch annual meeting.

(c) At such meeting, a vote of the share-holders entitled to vote thereon shall betaken on the proposed amendment. The pro-posed amendment shall be adopted upon re-ceiving the affirmative vote of the holders ofat least a majority of the shares entitled tovote thereon, unless any class of shares isentitled to vote thereon as a class, in whichevent the proposed amendment shall beadopted upon receiving the affirmative voteof the holders of at least a majority of theshares of each class of shares entitled to votethereon as a class and of the total sharesentitled to vote thereon.

(2)(a) If an institution or Oregon stocksavings bank has not issued any shares ofstock, the articles of incorporation may beamended by resolution adopted by a majorityof the directors.

(b) If the provisions of the articles of in-corporation relating to the duration, pur-poses, authorized shares, rights orpreferences of shares, or internal affairs ofthe institution or Oregon stock savings bankare amended by the directors prior to the is-suance of stock, the directors shall imme-diately notify in writing each person who isa party to any agreement for the subscriptionof stock of the institution or Oregon stocksavings bank. Such notice shall set forth thetext of the amendment and state that thesubscriber may, within 30 days after deliveryor mailing of the notice of amendment,rescind the subscriber’s subscription by no-tice in writing delivered or mailed to the di-rectors at an address specified. If a notice ofrescission is not delivered or mailed within30 days, the subscriber may not thereafterassert the fact of the amendment as the basisfor avoiding the subscription agreement orasserting any claim against any person.

(3) Any number of amendments may besubmitted to the shareholders or directorsand voted upon by them at one meeting. [1989c.324 §11; 1997 c.631 §60]

707.248 Shareholders authorized tovote on amendment to articles of incor-poration. (1) The holders of the outstandingshares of a class shall be entitled to vote asa class upon a proposed amendment, whetheror not entitled to vote thereon by the pro-visions of the articles of incorporation, if theamendment would:

(a) Increase or decrease the aggregatenumber of authorized shares of such class.

(b) Effect an exchange, reclassification orcancellation of all or part of the shares ofsuch class.



(c) Effect an exchange, or create a rightof exchange, of all or any part of the sharesof another class into the shares of such class.

(d) Change the designations, preferences,limitations or relative rights of the shares ofsuch class.

(e) Change the shares of such class intothe same or a different number of shares ofthe same class or another class or classes.

(f) Create a new class of shares withrights and preferences prior and superior tothe shares of such class, or increase therights and preferences of any class withrights and preferences prior or superior tothe shares of such class.

(g) Divide the shares of such class intoseries and fix and determine the designationof such series and the variations in the rela-tive rights and preferences between theshares of such series or authorize the boardof directors to do so.

(h) Limit or deny the existing preemptiverights of the shares of such class.

(i) Cancel or otherwise affect dividendson the shares of such class which had ac-crued but had not been declared.

(2) Different series of the same class ofshares shall not constitute different classesof shares for the purpose of voting by classesupon a proposed amendment, except when aseries will be adversely affected by anamendment in a manner different from othershares of the same class. [1989 c.324 §12; 1997c.631 §61]

707.250 Execution of amendments toarticles of incorporation. The articles ofamendment shall be executed in duplicate bythe institution or Oregon stock savings bankby its president or a vice president and by itscashier, its secretary or an assistant secre-tary and shall set forth:

(1) The name of the institution or Oregonstock savings bank.

(2) If the amendment alters or changesany provision of the original or amended ar-ticles of incorporation, an identification byreference or description of the affected pro-vision and a statement of its text as it isamended to read. If the amendment strikesor deletes any provision of the original oramended articles of incorporation, an iden-tification by reference or description of theprovision so stricken or deleted and a state-ment that it is stricken or deleted. If theamendment is an addition to the original oramended articles of incorporation, a state-ment of that fact and the full text of eachprovision added.

(3) The date of the adoption of theamendment by the shareholders.

(4) The number of shares outstanding andthe number of shares entitled to votethereon, and if the shares of any class areentitled to vote thereon as a class, the des-ignation and number of outstanding sharesentitled to vote thereon of each such class.

(5) The number of shares voted for andagainst such amendment, respectively, and,if the shares of any class are entitled to votethereon as a class, the number of shares ofeach such class voted for and against suchamendment, respectively.

(6) If such amendment provides for anexchange, reclassification or cancellation ofissued shares, and, if the manner in whichthe same shall be effected is not set forth inthe amendment, a statement of the mannerin which the same shall be effected.

(7) If such amendment was adopted by amajority of the directors pursuant to ORS707.246 (2)(a), then, in lieu of the informationrequired by subsections (3), (4) and (5) of thissection, a statement that no shares have yetbeen issued and that the amendment wasauthorized as provided in ORS 707.246 (2)(a).The date of the adoption of the amendmentby a majority of the directors shall be in-cluded. Articles of amendment under thissubsection may be executed as provided inthis section or by a majority of the directors.[1989 c.324 §13; 1997 c.631 §62]

707.252 Filing of amended articles ofincorporation. Duplicate originals of thearticles of amendment shall be delivered tothe Director of the Department of Consumerand Business Services. If the director findsthat the articles of amendment conform tolaw, the director shall, when all fees andcharges have been paid as in this chapterprescribed:

(1) Indorse on each such duplicate ori-ginals the word “Filed” and the month, dayand year of the filing thereof.

(2) File one of such duplicate originals inthe office of the director.

(3) Return one duplicate original of thearticles of amendment to the banking insti-tution or its representative. [1989 c.324 §14; 1997c.631 §63]

707.254 Effective date of amended ar-ticles of incorporation; effect on existingcause of action. (1) Upon approval and fil-ing of the amendment by the Director of theDepartment of Consumer and Business Ser-vices, the amendment shall become effectiveand the articles of incorporation shall bedeemed to be amended accordingly.

(2) No amendment shall affect any exist-ing cause of action in favor of or againstsuch banking institution, any pending suit towhich such banking institution shall be aparty or the existing rights of persons other



than shareholders. In the event the corporatename shall be changed by amendment, nosuit brought by or against such banking in-stitution under its former name shall abatefor that reason. [1989 c.324 §15; 1997 c.631 §64]

707.256 Restated articles of incorpo-ration. (1) An institution or Oregon stocksavings bank may, by action taken in thesame manner as required for amendment ofarticles of incorporation, adopt restated arti-cles of incorporation. The restated articlesof incorporation may contain any changes inthe articles of incorporation that could bemade by amendment regularly adopted.Adoption of restated articles of incorporationcontaining any such changes shall have theeffect of amending the existing articles ofincorporation to conform to the restated ar-ticles of incorporation, without further ac-tion of the board of directors orshareholders. Restated articles of incorpo-ration shall contain a statement that theysupersede the previously existing articles ofincorporation and amendments thereto. Re-stated articles of incorporation shall containall the statements required by ORS 707.110to be included in the original articles of in-corporation except that no statement need bemade with respect to the initial principalplace of business or the number or names ofdirectors constituting the initial board of di-rectors or the names of the incorporators.

(2) Restated articles of incorporationwhen executed and submitted for filing withthe Director of the Department of Consumerand Business Services shall supersede thepreviously existing articles of incorporationand amendments thereto. The director shall,upon request, certify a copy of the articlesof incorporation, the articles of incorporationas restated or any amendments to eitherthereof.

(3) The restated articles of incorporation,when submitted for filing, shall be accompa-nied by a statement, executed in duplicate bythe institution or Oregon stock savings bankby its president or a vice president and by itscashier, its secretary or an assistant secre-tary, setting forth the following:


(b) The date of the adoption of the re-stated articles of incorporation by the share-holders.

(c) The number of shares outstanding andthe number of shares entitled to votethereon, and, if the shares of any class areentitled to vote thereon as a class, the des-ignation and number of outstanding sharesentitled to vote thereon of each such class.

(d) The number of shares voted for andagainst the restated articles of incorporation,

respectively, and, if the shares of any classare entitled to vote thereon as a class, thenumber of shares of each such class voted forand against the restated articles of incorpo-ration, respectively.

(e) If the restated articles of incorpo-ration provide for an exchange, reclassifica-tion or cancellation of issued shares, and ifthe manner in which the same shall be ef-fected is not set forth in the restated articlesof incorporation, a statement of the mannerin 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 boardof directors. (1) If the articles of incorpo-ration so provide, the board of directors maydetermine, in whole or part, the preferences,limitations and relative rights, within thelimits set forth in ORS 707.110, of any classof shares before the issuance of any sharesof that class or of one or more series withina class before the issuance of any shares ofthat series.

(2) Each series of a class must be givena distinguishing designation.

(3) All shares of a series must have pref-erences, limitations and relative rights iden-tical with those of other shares of the sameseries and, except to the extent otherwiseprovided in the description of the series, ofthose of other series of the same class.

(4) Before issuing any shares of a classor series created under this section, the in-stitution or Oregon stock savings bank mustdeliver to the Director of the Department ofConsumer and Business Services for filing,articles of amendment which are effectivewithout shareholder action that set forth:

(a) The name of the institution or Oregonstock savings bank;

(b) The text of the amendment determin-ing 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. [1989c.324 §28; 1997 c.631 §66]

707.260 Fractional shares; scrip. (1) Aninstitution or Oregon stock savings bankmay:

(a) Issue fractions of a share or pay inmoney the value of fractions of a share;

(b) Arrange for disposition of fractionalshares by the shareholders; or

(c) Issue scrip in registered or bearerform entitling the holder to receive a fullshare upon surrendering enough scrip toequal a full share.



(2) Each certificate representing scripmust be conspicuously labeled “scrip” andmust contain the following information:

(a) The name of the issuing institutionor Oregon stock savings bank and a state-ment that it is organized under the law ofthis state;

(b) The name of the person to whom thescrip is issued; and

(c) The number and class of shares andthe designation of the series, if any, forwhich the certificate may be exchanged.

(3) The holder of a fractional share isentitled to exercise the rights of a share-holder, including the right to vote, receivedividends and participate in the assets of theinstitution or Oregon stock savings bankupon liquidation. The holder of scrip is notentitled to any of these rights unless thescrip provides for them.

(4) The board of directors may authorizethe issuance of scrip subject to any conditionconsidered desirable, including:

(a) That the scrip will become void if notexchanged for full shares before a specifieddate; or

(b) That the shares for which the scrip isexchangeable may be sold and the proceedspaid to the scripholders. [1989 c.324 §32; 1997 c.631§67]

707.262 Share options; limits on issu-ance. (1) Subject to any provisions set forthin its articles of incorporation and subject topreemptive rights, if any, of existing share-holders, an institution or Oregon stocksavings bank may create and issue, whetheror not in connection with the issuance andsale of any of its shares or other securities,rights or options entitling the holders thereofto purchase from the institution or Oregonstock savings bank shares of any class orclasses. Such rights or options shall be evi-denced in such manner as the board of di-rectors shall approve and, subject to theprovisions of the articles of incorporation,shall set forth the terms upon which, thetime or times within which and the price orprices at which such shares may be pur-chased from the institution or Oregon stocksavings bank on the exercise of any suchright or option.

(2) The rights or options described insubsection (1) of this section may not be is-sued to a director, officer or employee of theinstitution or Oregon stock savings bank orof any subsidiary thereof unless the issuance:

(a) Is to all shareholders of the institu-tion, Oregon stock savings bank or subsid-iary thereof;

(b) Is approved at the annual meeting ora special meeting by the holders of at least

two-thirds of the outstanding shares entitledto vote thereon; or

(c) Is pursuant to a plan previously soapproved.

(3) In the absence of fraud in the trans-action, the judgment of the board of directorsas to the adequacy of the consideration re-ceived for the rights or options described insubsection (1) of this section shall be con-clusive. [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 orissue of shares. The reasonable charges andexpenses of organization or reorganization ofan institution or Oregon stock savings bank,and the reasonable expenses of and compen-sation for the sale or underwriting of itsshares, may be paid or allowed by such in-stitution or Oregon stock savings bank outof the consideration received by it in pay-ment for its shares without rendering suchshares not fully paid and nonassessable. [1989c.324 §31; 1997 c.631 §69]

707.268 Restrictions on redemption ofshares. No redemption or purchase of sharesshall be made by an institution or Oregonstock savings bank when it is insolvent orwhen such redemption or purchase wouldrender it insolvent, or which would reducethe net assets below the aggregate amountpayable to the shareholders with prior orequal rights to the assets of the institutionor Oregon stock savings bank upon involun-tary dissolution. [1989 c.324 §33; 1997 c.631 §70]

707.270 Effect of redemption of shares;statement of cancellation. (1) When sharesof an institution or Oregon stock savingsbank are redeemed, the shares shall be re-stored to the status of authorized but unis-sued shares, unless the articles ofincorporation provide that shares when re-deemed shall not be reissued, in which casea statement of cancellation shall be submit-ted for filing as provided in this section,shall constitute an amendment to the articlesof incorporation and shall reduce the numberof shares of the class so canceled, which theinstitution or Oregon stock savings bank isauthorized to issue by the number of sharesso canceled.

(2) The statement of cancellation shall beexecuted in duplicate by the institution orOregon stock savings bank by an authorizedofficer and shall set forth:


(b) The number of shares canceledthrough redemption, itemized by classes andseries.

(c) The number of shares that the insti-tution or Oregon stock savings bank has au-



thority to issue, itemized by classes andseries, after giving effect to such cancella-tion.

(3) Duplicate originals of such statementshall be submitted to the Director of the De-partment of Consumer and Business Servicesfor filing. If the director finds that suchstatement conforms to law, the directorshall, when all fees and charges have beenpaid as prescribed by this chapter:

(a) Indorse on each duplicate original theword “Filed” and the month, day and yearof the filing thereof.

(b) File one duplicate original in the of-fice of the director.

(c) Return the other duplicate original tothe institution or Oregon stock savings bankor its representative.

(4) Nothing contained in this sectionshall be construed to forbid a cancellation ofshares or a reduction in the number of au-thorized shares of any class in any othermanner permitted by the Bank Act. [1989 c.324§34; 1997 c.631 §71]

707.272 Paid-in capital; use; retainedearnings reserve; approval of director forredemption of shares; rules. (1) The paid-incapital of an institution or Oregon stocksavings bank may be increased from time totime by resolution of the board of directorsdirecting that all or a part of the retainedearnings of the institution or Oregon stocksavings bank be transferred to paid-in capi-tal.

(2) An institution or Oregon stocksavings bank may, by resolution of its boardof directors and with the approval of the Di-rector of the Department of Consumer andBusiness Services, apply part of its paid-incapital to the reduction or elimination of anydeficit in retained earnings arising fromlosses.

(3) An institution or Oregon stocksavings bank may, by resolution of its boardof directors, create a reserve or reserves outof its retained earnings for any proper pur-pose or purposes and may abolish any suchreserve in the same manner. Retained earn-ings of the institution or Oregon stocksavings bank to the extent so reserved shallnot be available for the payment of dividendsor other distributions by the institution orOregon stock savings bank except as ex-pressly permitted by the Bank Act.

(4) An institution or Oregon stocksavings bank may redeem shares of its stockonly with the prior approval of the director.A class or series of shares may be designatedredeemable upon certain terms and condi-tions in advance of its issuance with theprior approval of the director, in which eventno further approval shall be required to re-

deem the shares in accordance with theterms and conditions approved.

(5) The director may refuse to approve areduction in paid-in capital under subsection(2) of this section or redemption of sharesunder subsection (4) of this section if the di-rector determines that the remaining paid-incapital of the institution or Oregon stocksavings bank would be inadequate for thesafe and sound operation of the institutionor Oregon stock savings bank.

(6) The director may by rule or orderwaive the requirement for prior approval ofredemptions 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 by1997 c.631 §567]

707.320 [Amended by 1973 c.797 §73; repealed by1997 c.631 §567]



707.345 [1963 c.500 §2; repealed by 1973 c.797 §428]

707.350 Payment prior to issuance ofcertificate of stock; consideration; ap-provals. (1) An institution or Oregon stocksavings bank may not issue any certificateof stock until full payment for the stock hasbeen received. Stock sold after initial organ-ization of the institution or Oregon stocksavings bank to a person other than a direc-tor, officer or employee of the institution orOregon stock savings bank shall be paid inthe same manner as required in the organ-ization of an institution or Oregon stocksavings bank under ORS 707.200. Stock is-sued after the initial organization of the in-stitution or Oregon stock savings bank to adirector, officer or employee of the institu-tion or Oregon stock savings bank may beissued for consideration consisting of cash,real property and improvements to realproperty, tangible personal property, othersecurities of the institution or Oregon stocksavings bank or, subject to subsection (2) ofthis section, services performed or servicesto be performed under contract. In the ab-sence of fraud, the judgment of the board ofdirectors of the institution or Oregon stocksavings bank as to the sufficiency of theconsideration for the stock issued under thissection is conclusively presumed to be valid.

(2) Stock may not be issued to directors,officers or employees of an institution or Or-egon stock savings bank in consideration ofservices performed or services to be per-formed under contract unless the plan to is-sue the stock is approved as follows:

(a) The Director of the Department ofConsumer and Business Services approves



the plan. For purposes of this subsection, thedirector approves the plan if the director ei-ther approves the plan in writing or does notdisapprove the plan in a writing delivered tothe institution or Oregon stock savings bankwithin 30 days after the director receivesnotice and a copy of the plan.

(b) The holders of at least two-thirds ofthe outstanding shares of the institution orOregon stock savings bank entitled to voteon the plan approve the plan in a vote takenat the annual shareholders’ meeting or aspecial shareholders’ meeting. Written orprinted notice of the plan must be deliveredpersonally or by mail to each shareholderentitled to vote at the meeting. The noticemust be delivered or mailed not less than 10days and not more than 60 days before thedate of the meeting during which the votewill be taken. The notice must describe theplan in reasonable detail, state that the planmust be approved in accordance with thissubsection and state that issuing shares un-der the plan will dilute the interests of ex-isting shareholders in the institution orOregon stock savings bank.

(3) Notwithstanding subsections (1) and(2) of this section, an institution or Oregonstock savings bank shall have the power tocreate and issue the number of shares ofstock stated in its articles of incorporationor the amendments thereto. [Amended by 1969c.635 §2; 1973 c.797 §76; 1977 c.135 §16; 1983 c.37 §4; 1997c.631 §73; 2007 c.348 §1]

707.355 [1977 c.135 §15; repealed by 1997 c.631 §567]

707.360 [Amended by 1969 c.635 §3; repealed by 1973c.797 §428]


707.380 Limitation on dividends. Theboard of directors of an institution or Oregonstock savings bank may, at any regularmeeting, declare a dividend, but the amountof the dividend shall not be greater than itsunreserved retained earnings, deductingtherefrom, to the extent not already chargedagainst earnings or reflected in a reserve,the following:

(1) All bad debts, which are debts onwhich interest is past due and unpaid for atleast six months, unless the debt is fully se-cured and in the process of collection.

(2) All other assets charged off as re-quired by the Director of the Department ofConsumer and Business Services or a stateor federal examiner.

(3) All accrued expenses, interest andtaxes of the institution or Oregon stocksavings bank. [Amended by 1973 c.797 §79; 1997 c.631§74]

707.390 [Repealed by 1973 c.797 §428]

707.400 Suspension of payment of div-idends. The Director of the Department ofConsumer and Business Services may requireany institution or Oregon stock savings bankto suspend the payment of any dividends ifthe director determines that the payment ofdividends would result in the remainingstockholders’ equity of the institution or Or-egon stock savings bank being inadequate forthe safe and sound operation of the institu-tion or Oregon stock savings bank. [Amendedby 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 wheredividends are declared, a complete record ofthe proceedings and business transacted bythe board of directors shall be entered in theminutes in the manner required by the Di-rector of the Department of Consumer andBusiness Services. The minutes shall showthat a detailed financial statement as of thelast day of the month previous to the monthduring which the meeting is held was thebasis of the decision of the board. [Amendedby 1963 c.195 §4; 1973 c.797 §81]

707.415 Report of dividends declared.Within 10 days after the declaration of anydividend, an institution or Oregon stocksavings bank shall forward to the Directorof the Department of Consumer and BusinessServices a report of the dividend declared.This report shall also be included in the re-port required in ORS 706.660. [1997 c.631 §77]


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 stock-

holder meetings; notice of orders. (1) Astockholders’ meeting for the election of aboard of directors and transaction of otherbusiness shall be held in this state within120 days after the close of the fiscal year ofthe institution or Oregon stock savings bank.If an institution or Oregon stock savingsbank was issued one or more orders by theDirector of the Department of Consumer andBusiness Services under ORS 706.580 withinthe fiscal year immediately preceding thedate of the stockholders’ meeting, the insti-tution or Oregon stock savings bank shallinclude in every notice required for thestockholders’ meeting under ORS 707.611:

(a) A copy of ORS 706.580; and



(b) A statement that the institution orOregon stock savings bank received such anorder or orders.

(2) A special meeting of stockholders maybe called at any time by the chief executiveofficer, a majority of the board of directors,any other person or group authorized by thearticles of incorporation or bylaws of the in-stitution or Oregon stock savings bank tocall such meetings, or not fewer than threestockholders holding in the aggregate notless than one-third of the outstanding votingstock of the institution or Oregon stocksavings bank. The articles of incorporationor bylaws of the institution or Oregon stocksavings bank may reserve to an officer or theboard of directors the authority to designatethe time and place of such a meeting. How-ever, the meetings shall be held in the Stateof Oregon. Unless the director consents to alater meeting date, the meetings shall beheld not later than 45 days after the call forthe meeting is issued. [Amended by 1957 c.59 §1;1967 c.170 §1; 1973 c.797 §84; 1983 c.296 §3; 1985 c.786 §27;1987 c.177 §1; 1989 c.324 §39; 1997 c.631 §78]

707.611 Notice of meeting. Written orprinted notice stating the place, date andhour of the meeting and, in case of a specialmeeting, the purpose or purposes for whichthe meeting is called shall be delivered notless than 10 days nor more than 60 days be-fore the date of the meeting, either per-sonally or by mail, by or at the direction ofthe president, the cashier, the secretary orthe officer or persons calling the meeting, toeach shareholder of record entitled to voteat such meeting. If mailed, such notice shallbe deemed to be delivered when deposited inthe United States mail addressed to theshareholder at the shareholder’s address asit appears on the stock transfer books of theinstitution or Oregon stock savings bank,with postage prepaid. [1989 c.324 §43; 1997 c.631§79]

707.612 Action without meeting. Anyaction required by this chapter to be takenat a meeting of the shareholders or directorsof an institution or Oregon stock savingsbank or any other action which may betaken at a meeting of the shareholders, di-rectors or of a committee may be takenwithout a meeting if a consent in writingsetting forth the action so taken is signed byall of the shareholders or directors or all ofthe members of the committee entitled tovote with respect to the subject matterthereof. The consent shall be delivered to theinstitution or Oregon stock savings bank forinclusion in the minutes or for filing withthe corporate records. The action shall beeffective on the date on which the last sig-nature is placed on the consent or consentsor at such earlier time as is set forth therein.Such consent or consents shall have the

same force and effect as a unanimous voteof such shareholders, directors or committeemembers and may be stated as such in anyarticles or document filed under this chapter.If not otherwise determined in accordancewith ORS 707.615, the record date for deter-mining shareholders entitled to take actionby consent without a meeting is the date thefirst shareholder signs the consent. [1989 c.324§52; 1997 c.631 §80]

707.613 Shareholder waiver of notice;effect of attendance at meeting. (1) Ashareholder may, at any time, waive any no-tice required by this chapter, the articles ofincorporation or bylaws. The waiver must bein writing, be signed by the shareholder en-titled to the notice and be delivered to theinstitution or Oregon stock savings bank forinclusion in the corporate records.

(2) Attendance at a meeting by a share-holder waives objection to:

(a) Lack of notice or defective notice ofthe meeting, unless the shareholder at thebeginning of the meeting objects to the hold-ing of the meeting or the transacting ofbusiness at the meeting; and

(b) Consideration of a particular matterat the meeting that is not within the purposeor purposes described in the meeting notice,unless the shareholder objects to consideringthe matter when it is presented. [1989 c.324 §51;1997 c.631 §81]

707.615 Record date. (1) For the purposeof determining shareholders entitled to no-tice of or to vote at any meeting of share-holders or any adjournment thereof orentitled to receive payment of any dividend,or in order to make a determination ofshareholders for any other proper purpose,the board of directors of an institution orOregon stock savings bank may provide thatthe stock transfer books shall be closed fora stated period, not to exceed in any case 70days. If the stock transfer books shall beclosed for the purpose of determining theshareholders entitled to notice of or to voteat a meeting of shareholders, such booksshall be closed for at least 10 days imme-diately preceding such meeting.

(2) In lieu of closing the stock transferbooks, the bylaws or, in the absence of anapplicable bylaw, the board of directors mayfix in advance a date as the record date forany such determination of shareholders. Therecord date, in any case, shall be not morethan 70 days and, in the case of a meetingof shareholders, not less than 10 days priorto the date on which the particular action,requiring such determination of sharehold-ers, is to be taken. If the stock transferbooks are not closed and no record date isfixed for the determination of shareholdersentitled to notice of or to vote at a meeting



of shareholders, or shareholders entitled toreceive payment of a dividend, the close ofbusiness on the business day before the dateon which notice of the meeting is mailed orthe date on which the resolution of the boardof directors declaring such dividend isadopted, as the case may be, shall be the re-cord date for such determination of share-holders.

(3) When a determination of shareholdersentitled to vote at any meeting of sharehold-ers has been made as provided in this sec-tion, such determination shall apply to anyadjournment thereof, unless the meeting isadjourned to a date more than 120 days fromthe original meeting date. [1989 c.324 §44; 1997c.631 §82]

707.617 Shareholders list for meeting.(1) The officer or agent having charge of thestock transfer books for shares of an institu-tion or Oregon stock savings bank shallmake, at least 10 days prior to each meetingof shareholders, a complete list of the share-holders entitled to vote at such meeting orany adjournment thereof. The list shall bearranged in alphabetical order, with the ad-dress of and the number of shares held byeach shareholder and, for a period of 10 daysprior to such meeting, shall be kept on fileat the registered office of the institution orOregon stock savings bank and shall be sub-ject to inspection by any shareholder at anytime during usual business hours. Such listalso shall be produced and kept open at thetime and place of the meeting and shall besubject to the inspection of any shareholderduring the whole time of the meeting. Theoriginal stock transfer books shall be primafacie evidence as to which shareholders areentitled to examine such list or transferbooks or to vote at any meeting of share-holders.

(2) Failure to comply with the require-ments of this section shall not affect the va-lidity 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 ofclass, shall be entitled to one vote on eachmatter submitted to a vote at a meeting ofshareholders, except to the extent that thevoting rights of the shares of any class orclasses are limited or denied by the articlesof incorporation as permitted by the BankAct.

(2) Neither shares of its own stock heldby the institution or Oregon stock savingsbank in a fiduciary capacity, nor shares heldby another corporation if a majority of theshares entitled to vote for the election of di-rectors of such other corporation is held bythe institution or Oregon stock savings bankshall be voted at any meeting or counted in

determining the total number of outstandingshares at any given time. The prohibition ofthis subsection does not apply if, under theterms of a trust in which such shares areheld, the manner in which such shares shallbe voted may be determined by the trustee,by a donor or beneficiary of the trust or bysome other person named in the trust, andsuch shares are actually voted in the mannerdetermined or directed by the trustee, donor,beneficiary or other person so authorized.

(3) A shareholder may vote either in per-son or by proxy executed in writing by theshareholder or by the shareholder’s duly au-thorized attorney in fact. No proxy shall bevalid after 11 months from the date of itsexecution, unless otherwise provided in theproxy.

(4) In electing each director for whoseelection the shareholder has a right to vote,every shareholder entitled to vote at suchelection shall have the right to vote, eitherin person or by proxy, the number of sharesowned by the shareholder. If the articles ofincorporation specifically permit cumulativevoting, every shareholder shall have theright to cumulate the shareholder’s votes ei-ther by giving one candidate as many votesas the number of such directors multipliedby the number of the shareholder’s sharesshall equal or by distributing such votes onthe same principle among any number ofsuch candidates.

(5) Shares standing in the name of an-other domestic or foreign corporation, a lim-ited liability company, a partnership oranother entity may be voted by such officer,agent or proxy as the governing documentsof the entity may prescribe or, in absence ofsuch provision, as the board of directors orother governing body of the entity holdingthe shares may determine.

(6) Shares held by a personal represen-tative, administrator, executor, guardian orconservator may be voted by such person,either in person or by proxy, without atransfer of such shares into such person’sname. Shares standing in the name of atrustee may be voted by the trustee, eitherin person or by proxy, but no trustee shallbe entitled to vote shares held by the trusteewithout a transfer of the shares to the nameof the trustee.

(7) Shares standing in the name of a re-ceiver may be voted by such receiver, andshares held by or under control of a receivermay be voted by such receiver without atransfer into the receiver’s name if authorityto do so is contained in an appropriate orderof the court by which such receiver was ap-pointed.

(8) Shares may be voted by a pledgee orattorney-in-fact of the shareholder if author-



ized by the pledge agreement or power of at-torney and evidence of such authority ispresented to the institution or Oregon stocksavings bank upon request.

(9) On and after the date on which writ-ten notice of redemption of shares has beenmailed to the holders thereof and a sum suf-ficient to redeem such shares has been de-posited with another institution or Oregonstock savings bank with irrevocable instruc-tion and authority to pay the redemptionprice to the holders thereof upon surrenderof certificates therefor, such shares shall notbe entitled to vote on any matter and shallnot be deemed to be outstanding shares. [1989c.324 §47; 1997 c.631 §84]

707.620 Special stockholder meetingcalled by director. If the Director of theDepartment of Consumer and Business Ser-vices considers it expedient the director maycall a meeting of the stockholders of any in-stitution or Oregon stock savings bank bygiving 15 days’ notice of the meeting to thestockholders in the manner prescribed inORS 707.611. All necessary expense incurredin the serving of the notice shall be paid bythe institution or Oregon stock savings bank.[Amended by 1973 c.797 §85; 1997 c.631 §85]

707.621 Quorum. (1) Unless otherwiseprovided in the articles of incorporation, amajority of the shares entitled to vote, rep-resented in person or by proxy, shall consti-tute a quorum at a meeting of shareholders.If a quorum is present, the affirmative voteof the majority of the shares represented atthe meeting at the time the vote is taken andentitled to vote on the subject matter shallbe the act of the shareholders, unless thevote of a greater number or voting by classesis required by the Bank Act or the articlesof incorporation.

(2) Once a share is represented at ameeting, it is deemed present for quorumpurposes for the remainder of the meetingand for any adjournment of that meeting un-less a new record date is or must be set forthat adjourned meeting. [1989 c.324 §46; 1997 c.631§86]

707.623 Modification of quorum orvoting requirements. (1) The articles of in-corporation may provide for a lesser orgreater quorum requirement for sharehold-ers, or voting groups of shareholders, than isprovided for by this chapter, but in no eventshall a quorum for shareholders, or any vot-ing group of shareholders, consist of lessthan one-third of the votes entitled to be caston any matter by the shareholders or votinggroup of shareholders. The articles of incor-poration may provide for a greater votingrequirement for shareholders, or votinggroups of shareholders, than is provided forby this chapter.

(2) An amendment to the articles of in-corporation that adds a greater quorum orvoting requirement must meet the quorumrequirement and be adopted by the vote andvoting groups required to take action underthe quorum and voting requirements then ineffect. An amendment to the articles of in-corporation that changes or deletes a greaterquorum or voting requirement must meet thequorum requirement and be adopted by thevote and voting groups required to take ac-tion immediately prior to the change or de-letion. [1989 c.324 §48; 1997 c.631 §87]

707.625 Exemption from personal li-ability for good faith acts or omissions incompliance with statute, rule or order. Aperson may not be held personally liable foran act done or omitted by the person in goodfaith and in compliance with a statute, ruleor order of the Director of the Departmentof Consumer and Business Services underthis chapter regardless of whether the stat-ute, rule or order is later amended, rescindedor determined to be invalid by judicial orother 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 di-

rectors; notice. After the issuance of thecertificate of incorporation, an organizationalmeeting of the board of directors named inthe articles of incorporation shall be held,either within or without this state, at thecall of a majority of the incorporators, forthe purpose of adopting bylaws, electing offi-cers and transacting such other business asmay come before the meeting. The incorpo-rators who called the meeting shall give atleast three days’ notice thereof by mail toeach director so named, which notice shallstate the time, place and purpose of themeeting. [1989 c.324 §27; 1997 c.631 §89]

707.644 Committees of board of direc-tors; limitations. (1) If provided by the ar-ticles of incorporation or the bylaws, theboard of directors, by resolution adopted bya majority of all the directors in office whenthe action is taken, may designate fromamong its members one or more committees.To the extent provided in the resolution orin the articles of incorporation or the bylawsof the banking institution, the committeesshall have and may exercise all the authorityof the board of directors in the managementof the banking institution.

(2) No committee shall have the author-ity of the board of directors in reference to:

(a) Amending the articles of incorpo-ration;



(b) Approving dividends or other distrib-utions to shareholders of an institution orOregon stock savings bank;

(c) Filling vacancies on the board of di-rectors or on any of its committees;

(d) Approving the reacquisition of sharesof the institution or Oregon stock savingsbank;

(e) Adopting a plan of merger or consol-idation;

(f) Recommending to the shareholders thesale, lease, exchange, mortgage, pledge orother disposition of all or substantially allthe property and assets of the institution orOregon stock savings bank other than in theusual and regular course of its business;

(g) Recommending to the shareholders avoluntary dissolution of the institution orOregon stock savings bank or a revocationthereof;

(h) Amending the bylaws of the bankinginstitution; or

(i) Approving the issuance or sale orcontract for sale of shares or determining thedesignation and relative rights, preferencesand limitations of a class or series of sharesof the institution or Oregon stock savingsbank.

(3) Notwithstanding subsection (2) of thissection, the board of directors may authorizea committee to take action described in sub-section (2)(i) of this section pursuant to astock option or other stock compensationplan, or by approving the maximum numberof shares to be issued and delegating to thecommittee the authority to determine all orany part of the terms of the issuance or saleor contract of sale and the determination ofthe designation and relative rights, prefer-ences and limitations of the class or seriesof shares.

(4) The designation of committees andthe delegation thereto of authority shall notoperate to relieve the board of directors, orany member thereof, of any responsibilityimposed upon the board of directors or suchmember 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 ar-ticles of incorporation or the bylaws mayprovide for staggering their terms by dividingthe total number of directors into two orthree groups, with each group to be as nearlyequal in number as possible. In that event,the terms of directors in the first group ex-pire at the first annual meeting after theirelection; the terms of the second group ex-pire at the second annual meeting after theirelection; and the terms of the third group, ifany, expire at the third annual meeting aftertheir election. Thereafter, directors shall be

chosen for a term of two years or threeyears, as the case may be, to succeed thosewhose terms expire.

(2) If the institution or Oregon stocksavings bank has cumulative voting, termsof directors may be staggered only if author-ized by the articles of incorporation, and noclass shall have fewer than three members.[1989 c.324 §26; 1997 c.631 §91]

707.648 Removal of directors byshareholders. (1) The shareholders may re-move one or more directors with or withoutcause unless the articles of incorporationprovide that directors may be removed onlyfor cause.

(2) If a director is elected by a votinggroup of shareholders, only the shareholdersof that voting group may participate in thevote to remove the director.

(3) If cumulative voting is authorized, adirector may not be removed if the numberof votes sufficient to elect the director undercumulative voting is voted against thedirector’s removal. If cumulative voting isnot authorized, a director may be removedonly if the number of votes cast to removethe director exceeds the number of votes castnot to remove the director.

(4) A director may be removed by theshareholders only at a meeting called for thepurpose of removing the director, and themeeting notice must state that the purpose,or one of the purposes, of the meeting is re-moval 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 direc-tors. (1) In discharging the duties of a di-rector, a director is entitled to rely oninformation, opinions, reports or statements,including financial statements and other fi-nancial data, if prepared or presented by:

(a) One or more officers or employees ofthe banking institution whom the directorreasonably believes to be reliable and com-petent in the matters presented;

(b) Legal counsel, public accountants orother persons as to matters the director rea-sonably believes are within the person’s pro-fessional or expert competence; or

(c) A committee of the board of directorsof which the director is not a member, if thedirector reasonably believes the committeemerits confidence.

(2) A director is not acting in good faithif the director has knowledge concerning amatter in question that makes reliance oth-erwise permitted by subsection (1) of thissection unwarranted.

(3) When evaluating any offer of anotherparty to make a tender or exchange offer for



any equity security of the banking institu-tion, or any proposal to merge the bankinginstitution with another banking institutionor to purchase or otherwise acquire all orsubstantially all the properties and assets ofthe banking institution, the directors of abanking institution may, in determining whatthe directors believe to be in the best inter-ests of the banking institution, give due con-sideration to the social, legal and economiceffects on employees, customers and suppli-ers of the banking institution and on thecommunities and geographical areas inwhich the banking institution and its subsid-iaries operate, the economy of the state andnation, the long term as well as short terminterests of the banking institution and itsstockholders, including the possibility thatthese interests may be best served by thecontinued independence of the banking insti-tution, and other relevant factors. [Amendedby 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, anofficer is entitled to rely on information,opinions, reports or statements, including fi-nancial statements and other financial data,if prepared or presented by:

(a) One or more officers or employees ofthe banking institution whom the officerreasonably believes to be reliable and com-petent in the matters presented; or

(b) Legal counsel, public accountants orother persons as to matters the officer rea-sonably believes are within the person’s pro-fessional or expert competence.

(2) An officer is not acting in good faithif the officer has knowledge concerning thematter in question that makes reliance oth-erwise permitted by subsection (1) of thissection unwarranted. [1997 c.631 §94]

707.670 Regular meetings of directors;rules; quorum; notice; meetings usingcommunications equipment. (1) The boardof directors of a banking institution shallhold regular meetings. The Director of theDepartment of Consumer and Business Ser-vices may specify by rule, in accordance withORS 183.315, 183.330, 183.335 and 183.341 to183.410, the minimum frequency with whicha board of directors of a banking institutionmust meet.

(2) A quorum at any meeting of the boardof directors consists of:

(a) If the banking institution has a fixedboard size, a majority of the members of thewhole board.

(b) If the banking institution has avariable-range board size, a majority of thenumber of directors prescribed or, if nonumber is prescribed, a majority of the num-

ber in office immediately before the meetingbegins.

(3) If less than a quorum of directors ispresent at a meeting, the directors may ad-journ until the next meeting.

(4) If a quorum is present when a vote istaken, the affirmative vote of a majority ofdirectors present is the act of the board ofdirectors unless the articles of incorporationor bylaws require the vote of a greater num-ber of directors.

(5) Meetings of the board of directors,regular or special, may be held either withinor outside this state.

(6) Meetings of the board of directorsmust be held upon such notice as is pre-scribed in the bylaws. A director’s attend-ance at a meeting constitutes a waiver ofnotice of the meeting, except where a direc-tor attends a meeting for the express purposeof objecting to the transaction of any busi-ness because the meeting is not lawfullycalled or convened. The notice or waiver ofnotice of a meeting of the board of directorsdoes not need to specify either the businessto be transacted at or the purpose of themeeting unless required by the bylaws or bylaw.

(7) Unless the articles of incorporationor bylaws provide otherwise, members of theboard of directors of a banking institution orany committee designated by the board mayhold a meeting of the board or committee bymeans of conference telephone or similarcommunications equipment that allows allpersons participating in the meeting to heareach other. Participation in a meeting underthis subsection constitutes presence in per-son 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; 2013 c.104 §1]

707.675 Report of loans and invest-ments. The board of directors shall desig-nate an officer of the banking institution toprepare and submit to the board at everymeeting or to a committee of not less thanthree members of the board of directors areport, in such detail as the board may di-rect, of the loans and investments made dur-ing the preceding month or since the lastreport, and information concerning loans toofficers, directors and employees. The boardof directors shall examine the report andmake it a part of the record of the meetingby recording the report in full in the min-utes. [1973 c.797 §90; 1995 c.316 §3; 1997 c.631 §96]

707.680 Special board meetings calledby director; penalty for failure to attend.(1) The Director of the Department of Con-sumer and Business Services may call ameeting of the board of directors of anybanking institution by mailing a notice of the



meeting to each director. The notice shallstate the purpose of the meeting and desig-nate the time and place where the meetingshall be held.

(2) A director who fails to appear at themeeting without proper cause is subject to apenalty of up to $1,000 for each meeting thedirector fails to attend. The penalty shall becollected in the manner prescribed by ORS706.570. [Amended by 1973 c.797 §91; 1997 c.631 §97]

707.690 Filling director vacancy. Sub-ject to ORS 707.705, any vacancy in theboard of directors may be filled by the boardfor the unexpired term at a regular meetingafter the vacancy occurs or as otherwiseprovided in the bylaws of the banking insti-tution. [Amended by 1985 c.786 §29; 1997 c.631 §98]

707.700 Selection and control of offi-cers by directors; effect of removal of of-ficers. (1) After a charter has been issued toa banking institution, the board of directorsshall elect a chief executive officer who shallalso be a director, a president who also maybe the chief executive officer, at least onevice president, and a cashier or secretary,and may appoint such other officers and em-ployees as the board of directors considersnecessary or appropriate.

(2) The board of directors may define theduties, fix the compensation, dismiss, fill va-cancies and require bonds or irrevocable let-ters of credit for the faithful performance ofthe duties of the employees and officers ofthe banking institution.

(3) In the event the board dismisses anofficer, the officer shall no longer serve as adirector.

(4) Any officer or agent elected or ap-pointed by the board of directors may be re-moved by the board of directors whenever, inits judgment, the best interests of the bank-ing institution will be served thereby, butsuch removal shall be without prejudice tothe contract rights, if any, of the person soremoved. Election or appointment of an offi-cer or agent shall not of itself create con-tract rights. [Amended by 1973 c.797 §92; 1983 c.37§6; 1985 c.786 §32; 1989 c.324 §41; 1991 c.331 §110; 1997c.631 §99]

707.705 Investigation of new director,president and chief executive officer; fin-gerprinting; disapproval of election orappointment. (1) Before a person first takesoffice as director, president or chief execu-tive officer of a banking institution, thename of the person shall be submitted to theDirector of the Department of Consumer andBusiness Services, with any informationabout the person that the director may re-quire.

(2) The director shall investigate eachperson whose name is submitted under this

section to determine the character, honesty,financial responsibility and competence ofthe person. In the course of investigating anyperson under this section, the director mayrequire the person to provide additional in-formation for the director’s further inquiry.For the purpose of such further inquiry, thedirector may require the person to submit tofingerprinting. Fingerprints acquired underthis subsection may be submitted to appro-priate law enforcement agencies, includingthe Federal Bureau of Investigation, for thepurpose of discovering any unlawful activ-ities of the person.

(3) The director may disapprove theelection or appointment of the person for anyreason stated in ORS 707.145. The directorshall issue the disapproval in writing to theboard of directors that submitted theperson’s name. A copy of the disapprovalshall be served personally or by certifiedmail upon the disapproved person. The dis-approval may be issued without a prior ad-ministrative hearing.

(4) A person whom the director disap-proves under this section may appeal thedisapproval as a contested case pursuant toORS 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 Depart-ment of Consumer and Business Services byorder may direct the board of directors of abanking institution to remove a director orofficer of the banking institution.

(2) The director may issue an order ofremoval 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 theorder has refused otherwise to comply withany written requirements or instructions ofthe director.

(3) An order of removal under this sec-tion shall be in writing and may be issuedwithout a prior administrative hearing. Acopy of the order shall be served personallyor by certified mail upon the person to beremoved.

(4) Upon receipt of an order of removalthe director or officer shall be suspendedfrom office.

(5) The person suspended from office mayappeal the order of the director as a con-tested case under ORS 183.415 to 183.500.

(6) Upon expiration of the period inwhich to file an appeal under ORS 183.415 to183.500 or when the order of the director isaffirmed on appeal, the board of directors by



resolution shall remove the person from of-fice and declare the office vacant.

(7) Any officer or director of a bankinginstitution who is suspended or removed un-der this section shall not act in any officialcapacity, conduct any of the business of thebanking institution or have access to thebooks, records or assets of the banking insti-tution as an officer, director or stockholder,without receiving permission from the direc-tor. [Amended by 1973 c.797 §93; 1983 c.296 §5; 1985c.762 §§38,38a; 1985 c.786 §33; 1997 c.631 §101]

707.720 Violation of law or omissionof duty by officer or director. An officeror director of a banking institution shall not,as an officer or director, willfully do any actwhich is expressly forbidden by the Bank Actor omit to perform any duty imposed uponthe officer or director by the Bank Act.[Amended by 1973 c.797 §94; 1997 c.631 §102]

707.730 Official communications fromDepartment of Consumer and BusinessServices; submission to directors. Everyofficial communication directed by the Di-rector of the Department of Consumer andBusiness Services or any examiner to abanking institution or to any officer of abanking institution, relating to an investi-gation or examination conducted by the De-partment of Consumer and Business Servicesor containing suggestions or recommen-dations as to the conduct of the business ofthe banking institution, shall be submittedby the officer receiving it to the board of di-rectors at the next meeting of the board andnoted in the minutes of the meeting of theboard in the manner prescribed by the direc-tor. [Amended by 1973 c.797 §95; 1985 c.762 §39; 1997c.631 §103]

707.735 Officers and directors to notifylaw enforcement officers of certain crim-inal violations; investigations; costs. (1)If an officer or director of a banking institu-tion has reason to believe that a person hasviolated any provision of law that has re-sulted or could result in loss to the bankinginstitution and for which criminal prose-cution is provided, the officer or directorshall give the information relative to the vi-olation to the appropriate federal, state orlocal law enforcement officer having juris-diction of the violation, and to the Directorof the Department of Consumer and BusinessServices.

(2) If the matter is referred to a districtattorney or to the Attorney General, suchofficer promptly shall investigate the vio-lation and institute such action against theperson as the information and investigationrequires or justifies. The cost of the investi-gation and action shall be paid by the countyor state in the manner in which other crimi-nal actions are paid. [1979 c.88 §7; 1997 c.631 §104]

707.740 Examining or audit commit-tee; duties. The board of directors of abanking institution shall annually appoint anexamining or audit committee of not fewerthan three directors of the banking institu-tion who are not active officers of the bank-ing institution or not fewer than three otherpersons who are approved by the Director ofthe Department of Consumer and BusinessServices. The examining or audit committeeshall examine and study the report of eachexamination that bank supervising author-ities make and report to the board of direc-tors within 60 days after receiving the reportconcerning the criticisms and suggestionscontained in the report and comment on anymatter relative to the affairs of the bankinginstitution that in the audit committee’sjudgment should be known to the directors.The report must be recorded in the minutebook of the banking institution, and a copytransmitted to the director upon thedirector’s request. [Amended by 1973 c.797 §96; 1981c.192 §5; 1985 c.786 §34; 1997 c.631 §105; 2013 c.104 §2]

(Indemnification of Directors, Officers,Employees and Agents)

707.744 Definitions for ORS 707.744 to707.764. As used in ORS 707.744 to 707.764:

(1) “Director” means an individual whois or was a director of a banking institutionor an individual who, while a director of abanking institution, is or was serving at thebanking institution’s request as a director,officer, partner, trustee, employee or agentof another foreign or domestic corporation,partnership, joint venture, trust, employeebenefit plan or other enterprise. A directoris considered to be serving an employee ben-efit plan at the banking institution’s requestif the director’s duties to the banking insti-tution also impose duties on or otherwise in-volve services by the director to the plan orto participants in or beneficiaries of the plan.“Director” includes, unless the context re-quires otherwise, the estate or personal rep-resentative of a director.

(2) “Expenses” includes counsel fees.(3) “Banking institution” includes any

domestic or foreign predecessor entity of abanking institution in a merger or othertransaction in which the predecessor’s exist-ence ceased upon the consummation of thetransaction.

(4) “Liability” means the obligation topay a judgment, settlement, penalty or fine,including an excise tax assessed with respectto an employee benefit plan or reasonableexpenses incurred with respect to a proceed-ing.

(5) “Officer” means an individual who isor was an officer of a banking institution or



an individual who, while an officer of abanking institution, is or was serving at thebanking institution’s request as a director,officer, partner, trustee, employee or agentof another foreign or domestic corporation,partnership, joint venture, trust, employeebenefit plan or other enterprise. An officeris considered to be serving an employee ben-efit plan at the banking institution’s requestif the officer’s duties to the banking institu-tion also impose duties on or include servicesby the officer to the employee benefit planor to participants in or beneficiaries of theplan. “Officer” includes, unless the contextrequires otherwise, the estate or personalrepresentative of an officer.

(6) “Party” includes an individual whowas, is or is threatened to be made a nameddefendant or respondent in a proceeding.

(7) “Proceeding” means any threatened,pending or completed action, suit or pro-ceeding, whether civil, criminal, administra-tive or investigative, and whether formal orinformal. [1989 c.324 §17; 1997 c.631 §106]

707.746 Authority to indemnify direc-tors. (1) Except as provided in subsection (4)of this section, a banking institution mayindemnify an individual made a party to aproceeding because the individual is or wasa director against liability incurred in theproceeding if:

(a) The conduct of the individual was ingood faith;

(b) The individual reasonably believedthat the individual’s conduct was in the bestinterests of the banking institution, or atleast not opposed to its best interests; and

(c) In the case of any criminal proceed-ing, the individual had no reasonable causeto believe the individual’s conduct was un-lawful.

(2) A director’s conduct with respect toan employee benefit plan for a purpose thedirector reasonably believed to be in the bestinterests of the participants in and benefici-aries of the plan is conduct that satisfies therequirement of subsection (1)(b) of this sec-tion.

(3) The termination of a proceeding byjudgment, order, settlement, conviction orupon a plea of nolo contendere or its equiv-alent is not, of itself, determinative that thedirector did not meet the standard of conductdescribed in this section.

(4) A banking institution may not indem-nify a director under this section:

(a) In connection with a proceeding byor in the right of the banking institution inwhich the director was adjudged liable to thebanking institution; or

(b) In connection with any other pro-ceeding charging improper personal benefitto the director in which the director wasadjudged liable on the basis that personalbenefit was improperly received by the di-rector.

(5) Indemnification permitted under thissection in connection with a proceeding byor in the right of the banking institution islimited to reasonable expenses incurred inconnection with the proceeding. [1989 c.324 §18;1997 c.631 §107]

707.748 Mandatory indemnification.Unless limited by its articles of incorpo-ration, a banking institution shall indemnifya director who was wholly successful, on themerits or otherwise, in the defense of anyproceeding to which the director was a partybecause of being a director of the bankinginstitution against reasonable expenses in-curred by the director in connection with theproceeding. [1989 c.324 §19; 1997 c.631 §108]

707.749 [1985 c.786 §20; 1987 c.216 §4; renumbered707.849 in 1989]

707.750 [1977 c.135 §20; 1981 c.192 §6; repealed by1985 c.786 §70]

707.752 Advance for expenses. (1) Abanking institution may pay for or reimbursethe reasonable expenses incurred by a direc-tor who is a party to a proceeding in advanceof final disposition of the proceeding if:

(a) The director furnishes the bankinginstitution a written affirmation of thedirector’s good faith belief that the directorhas met the standard of conduct described inORS 707.746; and

(b) The director furnishes the bankinginstitution a written undertaking, executedpersonally or on the director’s behalf, to re-pay the advance if it is ultimately determinedthat the director did not meet the standardof conduct.

(2) The undertaking required by subsec-tion (1)(b) of this section must be an unlim-ited general obligation of the director butneed not be secured and may be acceptedwithout reference to financial ability tomake repayment.

(3) Any authorization of payments underthis section may be made by provision in thearticles of incorporation, or bylaws, by aresolution of the shareholders or board ofdirectors or by contract. [1989 c.324 §20; 1997 c.631§109]

707.754 Court-ordered indemnification.Unless the banking institution’s articles ofincorporation provide otherwise, a directorof the banking institution who is a party toa proceeding may apply for indemnificationto the court conducting the proceeding or toanother court of competent jurisdiction. Onreceipt of an application, the court, after



giving any notice the court considers neces-sary, may order indemnification if it deter-mines:

(1) The director is entitled to mandatoryindemnification under ORS 707.748, in whichcase the court shall also order the bankinginstitution to pay the director’s reasonableexpenses incurred to obtain court-ordered in-demnification; or

(2) The director is fairly and reasonablyentitled to indemnification in view of all therelevant circumstances, whether or not thedirector met the standard of conduct setforth in ORS 707.746 or was adjudged liableas described in ORS 707.746 (4), whether theliability is based on a judgment, settlementor proposed settlement or otherwise. [1989c.324 §21; 1997 c.631 §110]

707.755 [1985 c.786 §21; renumbered 707.855 in 1989]

707.756 Determination and authori-zation of indemnification. (1) A bankinginstitution may not indemnify a director un-der ORS 707.746 unless authorized in thespecific case after a determination has beenmade that indemnification of the director ispermissible in the circumstances because thedirector has met the standard of conduct setforth in ORS 707.746.

(2) A determination that indemnificationof a director is permissible shall be made:

(a) By the board of directors by majorityvote of a quorum consisting of directors notat the time parties to the proceeding;

(b) If a quorum cannot be obtained underparagraph (a) of this subsection, by a major-ity vote of a committee duly designated bythe board of directors consisting solely oftwo or more directors not at the time partiesto the proceeding. However, directors whoare parties to the proceeding may participatein designation of the committee;

(c) By special legal counsel selected bythe board of directors or its committee in themanner prescribed in paragraph (a) or (b) ofthis subsection, or if a quorum of the boardof directors cannot be obtained under para-graph (a) of this subsection and a committeecannot be designated under paragraph (b) ofthis subsection, the special legal counselshall be selected by majority vote of the fullboard of directors, including directors whoare parties to the proceeding; or

(d) In the case of an institution or Ore-gon stock savings bank, by the shareholders.

(3) Authorization of indemnification andevaluation as to reasonableness of expensesshall be made in the same manner as thedetermination that indemnification is per-missible, except that if the determination ismade by special legal counsel, authorizationof indemnification and evaluation as to rea-sonableness of expenses shall be made by

those entitled under subsection (2)(c) of thissection to select counsel. [1989 c.324 §22; 1997c.631 §111]

707.758 Indemnification of officers,employees and agents. Unless a bankinginstitution’s articles of incorporation provideotherwise:

(1) An officer of the banking institutionis entitled to mandatory indemnification un-der ORS 707.748 and is entitled to apply forcourt-ordered indemnification under ORS707.754, in each case to the same extent asa director under ORS 707.748 and 707.754.

(2) The banking institution may indem-nify and advance expenses under ORS707.744 to 707.762 to an officer, employee oragent of the banking institution to the sameextent 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 institutionmay purchase and maintain insurance on be-half of an individual against liability assertedagainst or incurred by the individual who isor was a director, officer, employee or agentof the banking institution or who, while adirector, officer, employee or agent of thebanking institution, is or was serving at therequest of the banking institution as a direc-tor, officer, partner, trustee, employee oragent of another foreign or domestic corpo-ration, partnership, joint venture, trust, em-ployee benefit plan or other enterprise. Thebanking institution may purchase and main-tain the insurance even if the banking insti-tution has no power to indemnify theindividual against the same liability underORS 707.746 or 707.748. [1989 c.324 §24; 1997 c.631§113]

707.764 Application of ORS 707.744 to707.762. (1) The indemnification and pro-visions for advancement of expenses providedby ORS 707.744 to 707.762 shall not bedeemed exclusive of any other rights towhich directors, officers, employees or agentsmay be entitled under the bankinginstitution’s articles of incorporation or by-laws, any agreement, general or specific ac-tion of its board of directors, vote ofshareholders or otherwise, and shall continueas to a person who has ceased to be a direc-tor, officer, employee or agent and shallinure to the benefit of the heirs, executorsand administrators of such a person. Specif-ically and not by way of limitation, a bank-ing institution shall have the power to makeor agree to make any further indemnifica-tion, including advancement of expenses, of:

(a) Any director as authorized by the ar-ticles of incorporation, any bylaws approved,adopted or ratified by the shareholders orany resolution or agreement approved,adopted or ratified, before or after such in-



demnification or agreement is made, by theshareholders, provided that no such indemni-fication shall indemnify any director from oron account of acts or omissions for which li-ability could not be eliminated under ORS707.110 (5)(c); and

(b) Any officer, employee or agent who isnot a director as authorized by its articlesof incorporation or bylaws, general or spe-cific action of its board of directors oragreement. Unless the articles of incorpo-ration, or any such bylaws, agreement orresolution provide otherwise, any determi-nation as to any further indemnity under thisparagraph shall be made in accordance withORS 707.756.

(2) If articles of incorporation limit in-demnification or advance of expenses, any

indemnification and advance of expenses arevalid only to the extent consistent with thearticles of incorporation.

(3) ORS 707.744 to 707.762 do not limit abanking institution’s power to pay or reim-burse expenses incurred by a director inconnection with the director’s appearance asa witness in a proceeding at a time when thedirector has not been made a named defend-ant 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 by1997 c.631 §567]

707.990 [Repealed by 1973 c.797 §428]


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