USA Statutes : oregon
Title : TITLE 53 FINANCIAL INSTITUTIONS
Chapter : Chapter 707 Organization to Conduct Banking Business; Stockholders, Directors and Officers
A person
who has not received a certificate to do a banking business from the
Director of the Department of Consumer and Business Services, except a
national bank, shall not:

(1) Advertise that it is receiving or accepting money on deposit.

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

(a) Of a banking institution;

(b) Where deposits are received or payments made on check; or

(c) Where any other form of banking business is transacted.

(3) Make use of or circulate any letterheads, blank notes, blank
receipts, certificates, circulars or any written or printed paper
containing words indicating that the business is the business of a
banking institution.

(4) Transact business under any name that the director determines
leads the public to believe that its business is that of a banking
institution or that it is affiliated with a banking institution.

(5) Solicit or receive deposits or transact business in the manner
of a banking institution or in such a manner as to lead the public to
believe that its business is that of a banking institution. [Amended by
1973 c.797 §51; 1997 c.631 §30](1) The Director of the Department of Consumer and Business
Services may examine the accounts, books and papers of every person the
director has reasonable cause to believe is violating any provision of
ORS 707.005 or 707.010.

(2) When the director believes, from evidence satisfactory to the
director, that any person is violating the provisions of ORS 707.005 or
707.010, the director may cause a complaint to be filed in the circuit
court of the county in which the person conducts business to enjoin and
restrain the person from continuing the violation. The court shall have
jurisdiction of the proceeding and may make and enter an order or
judgment awarding such preliminary or final injunctive relief as in its
judgment is proper. [Amended by 1973 c.797 §52; 1997 c.631 §31](1) A banking institution may be
organized under this section solely for the purpose of merging with,
acquiring the assets of or assuming the liabilities of one or more
existing financial institutions pursuant to ORS chapter 711 and, except
as otherwise provided in this section, without authority to engage in or
transact banking or trust business.

(2) The banking institution may be organized under this section by
one or more persons or a corporation.

(3) Notwithstanding ORS 707.050, 707.070, 707.080 to 707.120,
707.140, 707.170, 707.200 and 707.210 (1) and such other sections as may
specifically be inconsistent with this section, a banking institution
described in subsection (1) of this section shall be organized as follows:

(a) The incorporator shall submit to the Director of the Department
of Consumer and Business Services for filing articles of incorporation
executed in duplicate, signed by the prospective incorporator or
incorporators, and such other information as the director may require,
which may include the additional information required in an application
under ORS 707.070 or 716.028 if the banking institution organized under
this section is to survive the merger, will purchase assets or will
assume liabilities, together with an organizational fee of $2,500.

(b) Such articles of incorporation shall specify:

(A) The name and address of each incorporator.

(B) The information required under ORS 707.110 (2)(a), (b) and (h)
and (3).

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

(D) The purpose of the corporation, which shall be limited to the
purposes set forth in subsection (1) of this section. However, if the
corporation is to be the resulting bank in such merger, the articles may
also contain all purposes allowed a banking institution under the Bank
Act, provided the implementation of such purposes are conditioned upon
consummation of such merger.

(E) The name and address of each director of the board of
directors, which shall be composed of not less than three directors.

(4) Unless the director finds that approval of the articles would
violate ORS 707.145 or other applicable law, the director shall file the
articles and issue a certificate of incorporation in accordance with ORS
707.120, if:

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

(b) The director finds that the banking institution, following any
merger or assumption of liabilities, will meet the requirements of ORS
707.080 (1) and (2).

(5) Upon issuance of the certificate of incorporation, the
corporate existence of the banking institution shall begin and the
banking institution may issue stock.

(6)(a) After the issuance of the certificate of incorporation, the
new banking institution shall file a certified copy of its bylaws with
the director within 90 days. If the director finds such bylaws to be
consistent with the requirements of the Bank Act, the director shall
issue a provisional charter to such bank.

(b) The provisional charter shall expire one year after its date of
issuance. However, the director may extend such expiration period. If a
merger or assumption of liabilities is not consummated before the
provisional charter expires, the interim bank shall cease to exist and
its articles of incorporation and charter shall be void.

(c) For purposes of ORS chapter 711, a provisional charter issued
under this section shall be deemed a charter, where appropriate.

(d) If the merger or assumption of liabilities is consummated and
the banking institution organized under this section survives the
transaction, the director shall issue to the banking institution a
charter to do a banking business either as an Oregon commercial bank or
as an Oregon stock savings bank.

(7) A banking institution organized solely for the purposes set
forth in subsection (1) of this section for which a charter has been
issued may, with the director’s approval, have initial paid-in capital in
an amount less than that required by ORS 707.050 prior to consummation of
a proposed merger. [1979 c.88 §8; 1997 c.631 §32; 2005 c.192 §13] A trust company
that desires to also conduct a banking business may convert to an Oregon
bank in accordance with the provisions of ORS 711.070 and 711.080. [1997
c.631 §39] (1) Every institution
or Oregon stock savings bank shall have at the time of issuance of its
charter, initial paid-in capital of not less than $1,500,000. The
Director of the Department of Consumer and Business Services may require
a lesser or greater amount of initial paid-in capital for a particular
institution or Oregon stock savings bank if the director determines that
the lesser or greater amount is sufficient or is necessary for safe and
sound operation of the institution or Oregon stock savings bank.

(2) The initial paid-in capital of an institution or Oregon stock
savings bank must be paid either in cash or by exchange of real property
and improvements thereon. The real property and improvements must be
approved by the director as meeting all applicable requirements of law
and all other conditions and standards that the director adopts by rule,
including but not limited to a proper appraisal by a qualified appraiser.
[Amended by 1963 c.195 §3; 1973 c.797 §53; 1985 c.786 §24; 1997 c.631 §33]Any number of persons, not less than five, desiring to
organize a banking institution shall, as prospective incorporators, first
submit an application to the Director of the Department of Consumer and
Business Services for a permit to organize a banking institution. The
applicants shall pay to the director at the time of their application a
fee of $2,500, no part of which shall be refunded. The application shall
be signed by one of the applicants and shall include the following
information:

(1) The proposed location of the initial principal place of
business.

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

(3) The corporate name.

(4) The names of the proposed senior officers and the initial
directors, at least three of whom shall also be among the incorporators.

(5) The residence addresses and occupations of the proposed
incorporators and directors.

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

(7) The number of shares of voting stock proposed to be subscribed
for by the incorporators and each of the proposed directors and senior
officers, and the names of any other persons who are expected to
subscribe for, to own or to control more than 10 percent of the voting
stock and the amount of stock for which each proposes to subscribe.

(8) Evidence satisfactory to the director of the character,
financial responsibility and ability of the incorporators, directors and
senior officers.

(9) Evidence satisfactory to the director, in the form of a
business plan and such additional information as the director may
require, demonstrating that the proposed banking institution is likely to
be financially successful.

(10) The proposed operating policies of the banking institution.

(11) A statement as to whether the banking institution is to be a
trust company, an Oregon commercial bank or an Oregon stock savings bank,
and, if the proposed Oregon commercial bank or Oregon stock savings bank
is applying for trust powers, a statement to that effect.

(12) Any other information that the director may require. [Amended
by 1971 c.68 §3; 1973 c.797 §54; 1977 c.135 §13; 1979 c.88 §9; 1997 c.631
§36] (1) The corporate name of a
banking institution:

(a) Shall not contain any word or phrase that indicates or implies
that it is organized for any purpose other than one or more of the
purposes contained in its articles of incorporation.

(b) Shall be distinguishable from any other financial institution,
corporate, professional corporate, nonprofit corporate, cooperative,
limited liability company, limited partnership, business trust, reserved
or registered name currently on file with the Secretary of State or
Director of the Department of Consumer and Business Services, or an
assumed business name registered as provided in ORS 648.010.

(2) The director may refuse to permit the use of any name if the
director determines that the name is deceptively similar to the name of a
financial institution already lawfully transacting banking business or
accepting deposits in this state.

(3) Nothing contained in this section shall preclude a banking
institution from transacting business under one or more assumed business
names, if the names meet the requirements of subsection (1) of this
section, unless the director determines that the names will be
confusingly similar to any financial institution, corporate, professional
corporate, nonprofit corporate, cooperative, limited liability company,
limited partnership, business trust, reserved or registered name
currently on file with the Secretary of State or Director of the
Department of Consumer and Business Services, or an assumed business name
registered as provided in ORS 648.010. [1985 c.762 §36; 1997 c.631 §37](1) When an application to organize has been submitted,
the Director of the Department of Consumer and Business Services shall
determine whether:

(a) The purposes of the proposed banking institution as stated in
the proposed banking institution’s articles of incorporation and the
application are consistent with the Bank Act;

(b) The character, financial responsibility and general fitness of
the persons named in the application are such as to command the
confidence of the community in which the proposed banking institution is
to be located and to warrant the belief that the business of the proposed
corporation will be honestly and efficiently conducted;

(c) The proposed directors and officers are competent to manage
successfully a banking institution;

(d) The suggested capitalization is adequate for the proposed
banking institution’s anticipated development and growth within a
reasonable period of time; and

(e) There is reasonable assurance of sufficient volume of business
for the proposed banking institution to be economically viable.

(2) If the director is satisfied that the applicant meets the
standards prescribed in subsection (1) of this section the director shall
note the approval and the date on each copy of the application. If the
director is not satisfied or believes that the public interest will be
endangered the director shall note the disapproval of the director and
the date on each copy of the application.

(3) The director shall acknowledge receipt of an application and
shall notify the applicants of approval or disapproval of the
application. The director shall file the original of an approved
application in the office of the director.

(4) The director shall act to approve or disapprove an application
within 60 days from receipt of the application, unless a majority of the
applicants and the director agree to extend the time an additional 30
days.

(5) The director may grant conditional approval of any application
and require the applicants to make additional showing or changes in the
proposed banking institution as the director considers advisable.

(6) The applicants may appeal the decision of the director to any
court of appropriate jurisdiction. [Amended by 1973 c.797 §55; 1975 c.544
§8a; 1997 c.631 §40]If, after approving the application for
authority to organize, it appears to the Director of the Department of
Consumer and Business Services that the articles of incorporation, the
organization or proposed manner of conducting business do not comply with
the terms of the application, the requirements of approval or the
requirements of law, the director may refuse to file the articles of
incorporation or to grant a charter. [Amended by 1973 c.797 §56; 1997
c.631 §41] Within 30
days after authority to organize has been finally granted, the
prospective incorporators shall submit to the Director of the Department
of Consumer and Business Services articles of incorporation. If articles
of incorporation are not received by the director within the specified
time, the authority to organize is void. [Amended by 1973 c.797 §57; 1997
c.631 §42](1) Any number of persons, not less than five, may associate
themselves by articles of incorporation to establish an institution or
Oregon stock savings bank. The articles of incorporation shall be
executed in duplicate, signed by the prospective incorporators and
submitted to the Director of the Department of Consumer and Business
Services.

(2) The articles of incorporation shall specify:

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

(b) The initial principal place where its business is to be
transacted, designated by legal description or street and number in the
city or town.

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

(d) The names of the prospective incorporators.

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

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

(g) The initial board of directors of the institution or Oregon
stock savings bank, composed of not fewer than five persons, at least
three of whom shall be prospective incorporators.

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

(3) In addition, the articles of incorporation:

(a) Must prescribe the classes of shares and the number of shares
of each class that the institution or Oregon stock savings bank is
authorized to issue. If more than one class of shares is authorized, the
articles of incorporation must prescribe a distinguishing designation for
each class, and prior to the issuance of shares of a class, the
preferences, limitations and relative rights of that class must be
described in the articles of incorporation. All shares of a class must
have preferences, limitations and relative rights identical to those of
other shares of the same class except to the extent otherwise permitted
by ORS 707.262.

(b) Must authorize one or more classes of shares that together have
unlimited voting rights, and one or more classes of shares which may be
the same class or classes as those with voting rights, that together are
entitled to receive the net assets of the institution or Oregon stock
savings bank upon dissolution.

(c) May authorize one or more classes of shares that:

(A) Have special, conditional or limited voting rights, or no
voting rights, except to the extent prohibited by this chapter;

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

(i) At the option of the institution or Oregon stock savings bank,
the shareholder or another person or upon the occurrence of a designated
event;

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

(iii) In a designated amount or in an amount determined in
accordance with a designated formula or by reference to extrinsic data or
events;

(C) Entitle the holders to distributions calculated in any manner,
including dividends that may be cumulative, noncumulative or partially
cumulative; or

(D) Have preference over any other class of shares with respect to
distributions, including dividends and distributions upon the dissolution
of the institution or Oregon stock savings bank.

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

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

(a) Regulating the business or conduct of affairs of the
institution or Oregon stock savings bank;

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

(c) Eliminating or limiting the personal liability of a director to
the institution or Oregon stock savings bank or its shareholders for
monetary damages for conduct as a director, provided that no such
provisions shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective, and such provision shall not eliminate or limit the liability
of a director for:

(A) Any breach of the director’s duty of loyalty to the institution
or Oregon stock savings bank or its shareholders;

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

(C) Any unlawful distribution under the Bank Act; or

(D) Any transaction from which the director derived an improper
personal benefit. [Amended by 1973 c.797 §58; 1987 c.197 §1a; 1989 c.324
§3; 1997 c.631 §43; 2005 c.192 §6](1) If the Director of the Department of Consumer and
Business Services finds that the articles of incorporation conform to
law, the director shall within 60 days after receiving the articles of
incorporation and when all fees have been paid:

(a) Indorse on each of the duplicate originals the word “Filed,”
and the month, day and year of the filing.

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

(c) Issue a certificate of incorporation to which the director
shall affix the other duplicate original.

(2) The certificate of incorporation, with one of the duplicate
originals affixed thereto shall be returned to the incorporators or their
representative.

(3) Upon issuance of the certificate of incorporation the corporate
existence of a banking institution begins. [Amended by 1973 c.797 §59;
1997 c.631 §44](1) When subscriptions totaling not less than the amount of the
initial paid-in capital have been received, the incorporators shall
submit for filing with the Director of the Department of Consumer and
Business Services:

(a) A list of stockholders, showing name, address, number of shares
and amount paid, certified by the president or cashier.

(b) A certificate of any escrow agent holding moneys in escrow as
payment for subscriptions to stock of the institution or Oregon stock
savings bank showing the amount held.

(c) A list of the directors and senior officers elected.

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

(e) Evidence of approval by the Federal Deposit Insurance
Corporation of the Oregon commercial bank’s or Oregon stock savings
bank’s application for deposit insurance.

(2) Upon receiving the items referred to in subsection (1) of this
section, the director shall examine the condition of the institution or
Oregon stock savings bank. If, upon examination, the director determines
that the institution or Oregon stock savings bank has complied with the
requirements of the Bank Act and that the amount of the institution’s or
Oregon stock savings bank’s initial paid-in capital has been paid or is
held in escrow for release upon issuance of a charter, the director shall
issue to the institution or Oregon stock savings bank a charter, which,
depending on the form of the application and the approval of the
director, shall be to do a banking business either as an Oregon
commercial bank or as an Oregon stock savings bank, or to do a trust
business, or to do both a banking and trust business. [Amended by 1973
c.797 §61; 1987 c.216 §2; 1997 c.631 §47] The Director of
the Department of Consumer and Business Services may disapprove an
application for a permit to organize or refuse to approve the articles of
incorporation or to grant a charter upon a finding that any person named
in the application to organize or in other documents submitted for filing:

(1) Is insolvent, either in the sense that the person’s liabilities
exceed the person’s assets or that the person cannot meet the person’s
obligations as they mature, or is in such financial condition that the
person cannot continue in business with safety to the person’s customers;

(2) Has engaged in dishonest, fraudulent or illegal practices or
conduct in any business or profession;

(3) Has willfully or repeatedly violated or failed to comply with
any provisions of the Bank Act or any rule or order of the director;

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

(5) Is not qualified to conduct a banking business on the basis of
such factors as training, experience and knowledge of the business;

(6) Is permanently or temporarily enjoined by a court of competent
jurisdiction from engaging in or continuing any conduct or practice
involving any aspect of the banking business or other business that may
lawfully be conducted by an insured institution;

(7) Is the subject of an order of the director subjecting the
person to a fine or a civil penalty, or removing the person from an
office in any entity regulated by the director; or

(8) Is the subject of an order entered within the past five years,
directing the person to cease and desist from any fraudulent or unlawful
business or banking practice, subjecting the person to a fine or other
civil penalty, or removing the person from an office in a financial
institution or a consumer finance company issued by the banking
supervisor of another state or by the Comptroller of the Currency, the
Board of Governors of the Federal Reserve System or by any other agency
of the federal government or another state with regulatory authority over
such financial institutions or consumer finance companies. [1977 c.135
§19; 1985 c.762 §§37,37a; 1985 c.786 §25; 1987 c.373 §52; 1997 c.631 §48] Notwithstanding
the provisions of ORS chapter 183, the Director of the Department of
Consumer and Business Services may, without prior hearing or opportunity
therefor, refuse to grant authority to organize a banking institution. In
case authority to organize is refused by the director, the applicants may
within 30 days after the refusal appeal the decision to any court of
appropriate jurisdiction. [Amended by 1971 c.734 §172; 1973 c.797 §62;
1975 c.544 §8b; 1997 c.631 §49](1) In the course of investigating any person named in
the application to organize or in other documents submitted for filing,
the Director of the Department of Consumer and Business Services may
require the person to provide additional information for the director’s
further inquiry. For the purpose of such further inquiry, the director
may require any of the following persons to submit to fingerprinting:

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

(b) Any person named in the proposed articles of incorporation of
the banking institution or documents submitted for filing as a
prospective incorporator or as a director, president or chief executive
officer of the banking institution.

(2) Fingerprints acquired under subsection (1) of this section may
be submitted to appropriate law enforcement agencies, including the
Federal Bureau of Investigation, for the purpose of discovering any
unlawful activities of the person. [1985 c.786 §23; 1997 c.631 §50](1) A banking institution shall not
transact any business, except as is incidental or necessary to its
organization, until it has received its charter from the Director of the
Department of Consumer and Business Services.

(2) An institution or Oregon stock savings bank that fails to
obtain paid subscriptions in at least the amount of its approved initial
paid-in capital and complete its organization and receive from the
director a charter, within one year after the date of approval of its
articles of incorporation, ceases to exist and the articles of
incorporation are void.

(3) All persons purporting to act as or on behalf of a banking
institution, knowing there was no incorporation, are jointly and
severally liable for all liabilities created while so acting. [Amended by
1969 c.44 §1; 1973 c.797 §63; 1989 c.324 §5; 1997 c.631 §51](1) A charter shall specify the date on
which it becomes effective, which shall not be more than 90 days after
the date of issuance of the charter, unless an extension of time is
granted by the Director of the Department of Consumer and Business
Services.

(2) A banking institution shall commence business on the effective
date specified in its charter. If a banking institution fails to commence
business on the effective date specified in the charter or according to
any extension of time granted by the director it ceases to exist and its
articles of incorporation and charter are void. [Amended by 1973 c.797
§64; 1997 c.631 §52]The initial principal place of business of a banking
institution shall be specified in its articles of incorporation. The
principal place of business may be changed upon application of the
banking institution to the Director of the Department of Consumer and
Business Services. The director shall determine whether the change in
location is advisable or justified and whether the public convenience and
advantage will be promoted and shall approve or disapprove the change of
location. An appeal from the decision of the director may be taken to any
court of appropriate jurisdiction. [Amended by 1973 c.797 §65; 1975 c.544
§8c; 1997 c.631 §53] (1) Each institution
and each Oregon stock savings bank shall continuously maintain in this
state a registered agent and registered 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 identical to the registered office;

(b) A domestic corporation, domestic limited liability company,
domestic professional corporation or domestic nonprofit corporation whose
business office is identical to the registered office; or

(c) A foreign corporation, foreign limited liability company,
foreign professional corporation or foreign nonprofit corporation
authorized to transact business in this state whose business office is
identical to the registered office. [2005 c.192 §2] (1) An institution
or Oregon stock savings bank may change its registered office or
registered agent by delivering to the Director of the Department of
Consumer and Business Services for filing a statement of change that sets
forth:

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

(b) If the registered office is to be changed, the address,
including street and number, of the new registered office;

(c) If the registered agent is to be changed, the name of the new
registered agent and that the new agent has consented to the appointment;
and

(d) That after the change or changes are made, the street addresses
of its registered office and the business office of its registered agent
will be identical.

(2) If a registered agent changes the street address of the agent’s
business office, the registered agent shall change the street address of
the registered office of the institution or Oregon stock savings bank for
which the agent is the registered agent by notifying the institution or
Oregon stock savings bank in writing of the change and signing, either
manually or in facsimile, and delivering to the director a statement that
complies with the requirements of subsection (1) of this section and
recites that the institution or Oregon stock savings bank has been
notified of the change.

(3) The filing of the statement by the director terminates the
existing registered office or agent, or both, on the effective date of
the filing and establishes the newly appointed registered office or
agent, or both, as that of the institution or Oregon stock savings bank.
[2005 c.192 §3](1) A registered agent may resign as agent upon
delivering a signed statement to the Director of the Department of
Consumer and Business Services and giving notice in the form of a copy of
the statement to the institution or Oregon stock savings bank. The
statement may include a statement that the registered office is also
discontinued.

(2) Upon delivery of the signed statement, the director shall file
the resignation statement. The copy of the statement given to the
institution or Oregon stock savings bank under subsection (1) of this
section shall be addressed to the institution or Oregon stock savings
bank at its mailing address or principal office as shown by the records
of the director.

(3) The agency appointment is terminated and the registered office
discontinued, if so provided, on the 31st day after the date on which the
statement was filed by the director unless, prior to that date, the
institution or Oregon stock savings bank appoints a successor registered
agent as provided in ORS 707.184, thereby terminating the capacity of
such agent. [2005 c.192 §4](1) The registered agent appointed by an institution or Oregon
stock savings bank shall be an agent of the institution or Oregon stock
savings bank upon whom any process, notice or demand required or
permitted by law to be served upon the institution or Oregon stock
savings bank may be served.

(2) The Director of the Department of Consumer and Business
Services shall be an agent of an institution or Oregon stock savings
bank, including a dissolved institution or Oregon stock savings bank,
upon whom any such process, notice or demand may be served whenever the
institution or Oregon stock savings bank fails to appoint or maintain a
registered agent in this state or whenever the institution’s or Oregon
stock savings bank’s registered agent cannot with reasonable diligence be
found at the registered office.

(3) Service shall be made on the director by:

(a) Serving the director or a clerk on duty at the office of the
director a copy of the process, notice or demand, with any papers
required by law to be delivered in connection with the service, and the
required fee for each party being served or by mailing to the office of
the director a copy of the process, notice or demand and the required fee
for each party being served by certified or registered mail;

(b) Transmittal by the person instituting the proceedings of notice
of the service on the director and a copy of the process, notice or
demand and accompanying papers to the institution or Oregon stock savings
bank being served by certified or registered mail:

(A) At the last registered office of the institution or Oregon
stock savings bank as shown by the records of the director; and

(B) At such address the use of which the person initiating the
proceedings knows or, on the basis of reasonable inquiry, has reason to
believe is most likely to result in actual notice; and

(c) Filing with the appropriate court or other body, as part of the
return of service, the return receipt of mailing and an affidavit of the
person initiating the proceedings stating that this section has been
complied with.

(4) The director shall keep a record of all processes, notices and
demands served upon the director under this section.

(5) After completion of initial service upon the director, no
additional documents need be served upon the director to maintain
jurisdiction in the same proceeding or to give notice of any motion or
provisional process.

(6) Nothing contained in this section shall limit or affect the
right to serve any process, notice or demand required or permitted by law
to be served upon an institution or Oregon stock savings bank in any
other manner now or hereafter permitted by law, or enlarge the purposes
for which service on the director is permitted where such purposes are
limited by other provisions of law. [2005 c.192 §5]
At or after the time the articles of incorporation are submitted for
filing, the incorporators shall submit the proposed offering documents
for the sale of the banking institution’s stock to the Director of the
Department of Consumer and Business Services for review. No subscriptions
for stock in the institution or Oregon stock savings bank may be accepted
prior to the date on which the director approves the offering documents.
[1997 c.631 §46]The subscribers to the stock of a newly organized
institution or Oregon stock savings bank shall pay in, prior to the time
a charter is issued, directly to the institution or Oregon stock savings
bank or by deposit with an escrow agent acceptable to the Director of the
Department of Consumer and Business Services to be released upon the
issuance of a charter, the full amount of their stock subscriptions,
which shall total an aggregate amount not less than the initial paid-in
capital approved by the director. The payment must be in cash or by
exchange of real property and improvements thereon. The real property and
improvements are subject to approval by the director as provided in ORS
707.050. [Amended by 1973 c.797 §66; 1983 c.296 §2; 1985 c.786 §26; 1987
c.216 §3; 1997 c.631 §54](1) An institution or
Oregon stock savings bank shall not issue any share of stock until its
charter has been issued and ORS 707.200 has been complied with.

(2) Except as provided in subsection (3) of this section, each
certificate representing shares of the stock of an institution or Oregon
stock savings bank shall:

(a) Be signed by two officers of the institution or Oregon stock
savings bank designated in the bylaws, and may be sealed with the seal of
the institution or Oregon stock savings bank or a facsimile thereof. The
signatures of the officers upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent or registrar
other than the institution or Oregon stock savings bank itself or an
employee of the institution or Oregon stock savings bank. In the case of
any person who, as an officer, has signed or whose facsimile signature
has been placed upon such certificate and has ceased being such officer
before such certificate is issued, the certificate may be issued by the
institution or Oregon stock savings bank with the same effect as if the
person were such officer at the date of its issue.

(b) If the institution or Oregon stock savings bank is authorized
to issue shares of more than one class, state upon the face or back of
the certificate, or state that the institution or Oregon stock savings
bank will furnish to any shareholder upon request and without charge, a
full statement of the designations, preferences, limitations and relative
rights of the shares of each class authorized to be issued, and, if the
institution or Oregon stock savings bank is authorized to issue any class
in series, state the variations in the relative rights and preferences
between the shares of each such series so far as the same have been fixed
and determined and the authority of the board of directors to fix and
determine the relative rights and preferences of subsequent series.

(c) State that the institution or Oregon stock savings bank is
organized under the laws of this state.

(d) State the name of the person to whom issued.

(e) State the number and class of shares, and the designation of
the series, if any, which such certificate represents.

(3) In lieu of issuing certificates representing shares under
subsection (2) of this section, the board of directors of an institution
or Oregon stock savings bank may authorize the institution or Oregon
stock savings bank to issue some or all of the shares of any or all of
its classes or series without certificates. The authorization shall not
affect shares already represented by certificates until the shares are
surrendered to the institution or Oregon stock savings bank. Within a
reasonable time after the issuance or transfer of shares without
certificates, the institution or Oregon stock savings bank shall send the
shareholder a written statement of the information required on
certificates under subsection (2) of this section.

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

(5) At the request of any holder of two or more certificates of the
stock of any institution or Oregon stock savings bank organized under the
laws of this state, such institution or Oregon stock savings bank shall,
upon the surrender of the certificates, issue to the holder of such stock
one certificate, or a statement pursuant to subsection (3) of this
section, for all shares of stock of any one class in such institution or
Oregon stock savings bank owned by the stockholder if the number of such
shares owned by the stockholder in the particular class equals or exceeds
100. [Amended by 1959 c.108 §1; 1965 c.189 §1; 1973 c.797 §67; 1987 c.197
§2; 1989 c.324 §6; 1995 c.131 §1; 1997 c.631 §55] (1) An institution or
Oregon stock savings bank shall keep a stock ledger or register that
shall show the name and mailing address of and the number of shares held
by each stockholder of record. The institution or Oregon stock savings
bank shall also maintain a record of transfers of stock, stating the time
when made, the number of shares transferred and to whom transferred.

(2) The stock ledger or register shall be available for inspection
and copying, during regular business hours at a reasonable location
specified by the institution or Oregon stock savings bank, by a
stockholder of the institution or Oregon stock savings bank upon at least
five days’ prior written notice if:

(a) The stockholder’s demand for inspection is made in good faith
and for a proper purpose;

(b) The stockholder described with reasonable particularity the
stockholder’s purpose; and

(c) The stock ledger or register requested is directly connected to
the stockholder’s purpose. [Amended by 1973 c.797 §69; 1997 c.631 §56] The shares of stock of an institution or
Oregon stock savings bank shall be transferred on the books of the
institution or Oregon stock savings bank in such manner as the bylaws may
provide and as required in ORS 707.220. A transfer of stock is not valid
while an institution or Oregon stock savings bank is under notice from
the Director of the Department of Consumer and Business Services to make
good any impairment of its stockholders’ equity, until the impairment has
been made good. [Amended by 1973 c.797 §70; 1997 c.631 §57] The initial bylaws of an institution shall be
adopted by its board of directors. The power to alter, amend or repeal
the bylaws or adopt new bylaws shall be vested in the board of directors
unless reserved to the shareholders by the articles of incorporation or
by bylaws. The bylaws may contain any provisions for the regulation and
management of the affairs of the institution not inconsistent with law or
the articles of incorporation. [1989 c.324 §9; 1997 c.631 §58](Amendment of Articles of Incorporation)(1) An institution or Oregon stock savings bank may amend its
articles of incorporation, from time to time, in any and as many respects
as may be desired, so long as its articles of incorporation, as amended,
contain only such provisions as might be lawfully contained in the
original articles of incorporation at the time of making such amendment.

(2) In particular, and without limitation upon such general power
of amendment, an institution or Oregon stock savings bank may amend its
articles of incorporation, from time 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 stock savings bank
has authority to issue.

(e) To exchange, classify, reclassify or cancel all or any part of
its shares, whether issued or unissued.

(f) To change the designation of all or any part of its shares,
whether issued or unissued, and to change the preferences, limitations
and relative rights in respect to all or any part of its shares, whether
issued or unissued.

(g) To change the shares of any class, whether issued or unissued,
into a different number of shares of the same class or into the same or a
different number of shares of other classes.

(h) To create new classes of shares with rights and preferences
either prior and superior or subordinate and inferior to the shares of
any class then authorized, whether issued or unissued.

(i) To cancel or otherwise affect the right of the holders of the
shares of any class to receive dividends which have accrued but have not
been declared.

(j) To divide any class of shares, whether issued or unissued, into
series and fix and determine the designations of such series and the
variations in the relative rights and preferences as between the shares
of such series.

(k) To authorize the board of directors to establish, out of
authorized but unissued shares, series of any class of shares and fix and
determine the relative rights and preferences of the shares of any series
so established.

(L) To authorize the board of directors to fix and determine the
relative rights and preferences of the authorized but unissued shares of
series theretofore established in respect to which either the relative
rights and preferences have not been fixed and determined or the relative
rights and preferences theretofore fixed and determined are to be changed.

(m) To revoke, diminish or enlarge the authority of the board of
directors to establish series out of authorized but unissued shares of
any class and fix and determine the relative rights and preferences of
the shares of any series so established.

(n) To limit, deny or grant to shareholders of any class the
preemptive right to acquire additional or treasury shares of the
institution or Oregon stock savings bank, whether then or thereafter
authorized. [1989 c.324 §10; 1997 c.631 §59] Amendments to
the articles of incorporation shall be made in the following manner:

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

(a) The board of directors shall adopt a resolution setting forth
the proposed amendment and directing that it be submitted to a vote at a
meeting of shareholders, which may be either an annual or a special
meeting.

(b) Written or printed notice setting forth the proposed amendment
or a summary of the changes to be effected shall be given to each
shareholder of record entitled to vote within the time and in the manner
provided in this chapter for giving notice of meetings of shareholders.
If the meeting is an annual meeting, the proposed amendment or such
summary may be included in the notice of such annual meeting.

(c) At such meeting, a vote of the shareholders entitled to vote
thereon shall be taken on the proposed amendment. The proposed amendment
shall be adopted upon receiving the affirmative vote of the holders of at
least a majority of the shares entitled to vote thereon, unless any class
of shares is entitled to vote thereon as a class, in which event the
proposed amendment shall be adopted upon receiving the affirmative vote
of the holders of at least a majority of the shares of each class of
shares entitled to vote thereon as a class and of the total shares
entitled to vote thereon.

(2)(a) If an institution or Oregon stock savings bank has not
issued any shares of stock, the articles of incorporation may be amended
by resolution adopted by a majority of the directors.

(b) If the provisions of the articles of incorporation relating to
the duration, purposes, authorized shares, rights or preferences of
shares, or internal affairs of the institution or Oregon stock savings
bank are amended by the directors prior to the issuance of stock, the
directors shall immediately notify in writing each person who is a party
to any agreement for the subscription of stock of the institution or
Oregon stock savings bank. Such notice shall set forth the text of the
amendment and state that the subscriber may, within 30 days after
delivery or mailing of the notice of amendment, rescind the subscriber’s
subscription by notice in writing delivered or mailed to the directors at
an address specified. If a notice of rescission is not delivered or
mailed within 30 days, the subscriber may not thereafter assert the fact
of the amendment as the basis for avoiding the subscription agreement or
asserting any claim against any person.

(3) Any number of amendments may be submitted to the shareholders
or directors and voted upon by them at one meeting. [1989 c.324 §11; 1997
c.631 §60](1) The holders of the outstanding shares of a class shall
be entitled to vote as a class upon a proposed amendment, whether or not
entitled to vote thereon by the provisions of the articles of
incorporation, if the amendment would:

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

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

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

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

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

(f) Create a new class of shares with rights and preferences prior
and superior to the shares of such class, or increase the rights and
preferences of any class with rights and preferences prior or superior to
the shares of such class.

(g) Divide the shares of such class into series and fix and
determine the designation of such series and the variations in the
relative rights and preferences between the shares of such series or
authorize the board of directors to do so.

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

(i) Cancel or otherwise affect dividends on the shares of such
class which had accrued but had not been declared.

(2) Different series of the same class of shares shall not
constitute different classes of shares for the purpose of voting by
classes upon a proposed amendment, except when a series will be adversely
affected by an amendment in a manner different from other shares of the
same class. [1989 c.324 §12; 1997 c.631 §61] The
articles of amendment shall be executed in duplicate by the institution
or Oregon stock savings bank by its president or a vice president and by
its cashier, its secretary or an assistant secretary and shall set forth:

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

(2) If the amendment alters or changes any provision of the
original or amended articles of incorporation, an identification by
reference or description of the affected provision and a statement of its
text as it is amended to read. If the amendment strikes or deletes any
provision of the original or amended articles of incorporation, an
identification by reference or description of the provision so stricken
or deleted and a statement that it is stricken or deleted. If the
amendment is an addition to the original or amended articles of
incorporation, a statement of that fact and the full text of each
provision added.

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

(4) The number of shares outstanding and the number of shares
entitled to vote thereon, and if the shares of any class are entitled to
vote thereon as a class, the designation and number of outstanding shares
entitled to vote thereon of each such class.

(5) The number of shares voted for and against such amendment,
respectively, and, if the shares of any class are entitled to vote
thereon as a class, the number of shares of each such class voted for and
against such amendment, respectively.

(6) If such amendment provides for an exchange, reclassification or
cancellation of issued shares, and, if the manner in which the same shall
be effected is not set forth in the amendment, a statement of the manner
in which the same shall be effected.

(7) If such amendment was adopted by a majority of the directors
pursuant to ORS 707.246 (2)(a), then, in lieu of the information required
by subsections (3), (4) and (5) of this section, a statement that no
shares have yet been issued and that the amendment was authorized as
provided in ORS 707.246 (2)(a). The date of the adoption of the amendment
by a majority of the directors shall be included. Articles of amendment
under this subsection may be executed as provided in this section or by a
majority of the directors. [1989 c.324 §13; 1997 c.631 §62] Duplicate
originals of the articles of amendment shall be delivered to the Director
of the Department of Consumer and Business Services. If the director
finds that the articles of amendment conform to law, the director shall,
when all fees and charges have been paid as in this chapter prescribed:

(1) Indorse on each such duplicate originals the word “Filed” and
the month, day and year of the filing thereof.

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

(3) Return one duplicate original of the articles of amendment to
the banking institution or its representative. [1989 c.324 §14; 1997
c.631 §63](1) Upon approval and filing of the
amendment by the Director of the Department of Consumer and Business
Services, the amendment shall become effective and the articles of
incorporation shall be deemed to be amended accordingly.

(2) No amendment shall affect any existing cause of action in favor
of or against such banking institution, any pending suit to which such
banking institution shall be a party or the existing rights of persons
other than shareholders. In the event the corporate name shall be changed
by amendment, no suit brought by or against such banking institution
under its former name shall abate for that reason. [1989 c.324 §15; 1997
c.631 §64] (1) An institution or
Oregon stock savings bank may, by action taken in the same manner as
required for amendment of articles of incorporation, adopt restated
articles of incorporation. The restated articles of incorporation may
contain any changes in the articles of incorporation that could be made
by amendment regularly adopted. Adoption of restated articles of
incorporation containing any such changes shall have the effect of
amending the existing articles of incorporation to conform to the
restated articles of incorporation, without further action of the board
of directors or shareholders. Restated articles of incorporation shall
contain a statement that they supersede the previously existing articles
of incorporation and amendments thereto. Restated articles of
incorporation shall contain all the statements required by ORS 707.110 to
be included in the original articles of incorporation except that no
statement need be made with respect to the initial principal place of
business or the number or names of directors constituting the initial
board of directors or the names of the incorporators.

(2) Restated articles of incorporation when executed and submitted
for filing with the Director of the Department of Consumer and Business
Services shall supersede the previously existing articles of
incorporation and amendments thereto. The director shall, upon request,
certify a copy of the articles of incorporation, the articles of
incorporation as restated or any amendments to either thereof.

(3) The restated articles of incorporation, when submitted for
filing, shall be accompanied by a statement, executed in duplicate by the
institution or Oregon stock savings bank by its president or a vice
president and by its cashier, its secretary or an assistant secretary,
setting forth the following:

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

(b) The date of the adoption of the restated articles of
incorporation by the shareholders.

(c) The number of shares outstanding and the number of shares
entitled to vote thereon, and, if the shares of any class are entitled to
vote thereon as a class, the designation and number of outstanding shares
entitled to vote thereon of each such class.

(d) The number of shares voted for and against the restated
articles of incorporation, respectively, and, if the shares of any class
are entitled to vote thereon as a class, the number of shares of each
such class voted for and against the restated articles of incorporation,
respectively.

(e) If the restated articles of incorporation provide for an
exchange, reclassification or cancellation of issued shares, and if the
manner in which the same shall be effected is not set forth in the
restated articles of incorporation, a statement of the manner in which
the same shall be effected. [1989 c.324 §16; 1997 c.631 §65](Shares)(1) If the articles of incorporation so provide,
the board of directors may determine, in whole or part, the preferences,
limitations and relative rights, within the limits set forth in ORS
707.110, of any class of shares before the issuance of any shares of that
class or of one or more series within a class before the issuance of any
shares of that series.

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

(3) All shares of a series must have preferences, limitations and
relative rights identical with those of other shares of the same series
and, except to the extent otherwise provided in the description of the
series, of those of other series of the same class.

(4) Before issuing any shares of a class or series created under
this section, the institution or Oregon stock savings bank must deliver
to the Director of the Department of Consumer and Business Services for
filing, articles of amendment which are effective without shareholder
action that set forth:

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

(b) The text of the amendment determining the terms of the class or
series of shares;

(c) The date it was adopted; and

(d) A statement that the amendment was duly adopted by the board of
directors. [1989 c.324 §28; 1997 c.631 §66] (1) An institution or Oregon stock
savings bank may:

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

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

(c) Issue scrip in registered or bearer form entitling the holder
to receive a full share upon surrendering enough scrip to equal a full
share.

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

(a) The name of the issuing institution or Oregon stock savings
bank and a statement that it is organized under the law of this state;

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

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

(3) The holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, receive dividends
and participate in the assets of the institution or Oregon stock savings
bank upon liquidation. The holder of scrip is not entitled to any of
these rights unless the scrip provides for them.

(4) The board of directors may authorize the issuance of scrip
subject to any condition considered desirable, including:

(a) That the scrip will become void if not exchanged for full
shares before a specified date; or

(b) That the shares for which the scrip is exchangeable may be sold
and the proceeds paid to the scripholders. [1989 c.324 §32; 1997 c.631
§67] (1) Subject to any
provisions set forth in its articles of incorporation and subject to
preemptive rights, if any, of existing shareholders, an institution or
Oregon stock savings bank may create and issue, whether or not in
connection with the issuance and sale of any of its shares or other
securities, rights or options entitling the holders thereof to purchase
from the institution or Oregon stock savings bank shares of any class or
classes. Such rights or options shall be evidenced in such manner as the
board of directors shall approve and, subject to the provisions of the
articles of incorporation, shall set forth the terms upon which, the time
or times within which and the price or prices at which such shares may be
purchased from the institution or Oregon stock savings bank on the
exercise of any such right or option.

(2) The rights or options described in subsection (1) of this
section may not be issued to a director, officer or employee of the
institution or Oregon stock savings bank or of any subsidiary thereof
unless the issuance:

(a) Is to all shareholders of the institution, Oregon stock savings
bank or subsidiary thereof;

(b) Is approved at the annual meeting or a special meeting by the
holders of at least two-thirds of the outstanding shares entitled to vote
thereon; or

(c) Is pursuant to a plan previously so approved.

(3) In the absence of fraud in the transaction, the judgment of the
board of directors as to the adequacy of the consideration received for
the rights or options described in subsection (1) of this section shall
be conclusive. [1989 c.324 §29; 1997 c.631 §68; 2001 c.377 §58] The reasonable
charges and expenses of organization or reorganization of an institution
or Oregon stock savings bank, and the reasonable expenses of and
compensation for the sale or underwriting of its shares, may be paid or
allowed by such institution or Oregon stock savings bank out of the
consideration received by it in payment for its shares without rendering
such shares not fully paid and nonassessable. [1989 c.324 §31; 1997 c.631
§69] No redemption or
purchase of shares shall be made by an institution or Oregon stock
savings bank when it is insolvent or when such redemption or purchase
would render it insolvent, or which would reduce the net assets below the
aggregate amount payable to the shareholders with prior or equal rights
to the assets of the institution or Oregon stock savings bank upon
involuntary dissolution. [1989 c.324 §33; 1997 c.631 §70]
(1) When shares of an institution or Oregon stock savings bank are
redeemed, the shares shall be restored to the status of authorized but
unissued shares, unless the articles of incorporation provide that shares
when redeemed shall not be reissued, in which case a statement of
cancellation shall be submitted for filing as provided in this section,
shall constitute an amendment to the articles of incorporation and shall
reduce the number of shares of the class so canceled, which the
institution or Oregon stock savings bank is authorized to issue by the
number of shares so canceled.

(2) The statement of cancellation shall be executed in duplicate by
the institution or Oregon stock savings bank by an authorized officer and
shall set forth:

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

(b) The number of shares canceled through redemption, itemized by
classes and series.

(c) The number of shares that the institution or Oregon stock
savings bank has authority to issue, itemized by classes and series,
after giving effect to such cancellation.

(3) Duplicate originals of such statement shall be submitted to the
Director of the Department of Consumer and Business Services for filing.
If the director finds that such statement conforms to law, the director
shall, when all fees and charges have been paid as prescribed by this
chapter:

(a) Indorse on each duplicate original the word “Filed” and the
month, day and year of the filing thereof.

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

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

(4) Nothing contained in this section shall be construed to forbid
a cancellation of shares or a reduction in the number of authorized
shares of any class in any other manner permitted by the Bank Act. [1989
c.324 §34; 1997 c.631 §71](1) The paid-in capital of an
institution or Oregon stock savings bank may be increased from time to
time by resolution of the board of directors directing that all or a part
of the retained earnings of the institution or Oregon stock savings bank
be transferred to paid-in capital.

(2) An institution or Oregon stock savings bank may, by resolution
of its board of directors and with the approval of the Director of the
Department of Consumer and Business Services, apply part of its paid-in
capital to the reduction or elimination of any deficit in retained
earnings arising from losses.

(3) An institution or Oregon stock savings bank may, by resolution
of its board of directors, create a reserve or reserves out of its
retained earnings for any proper purpose or purposes and may abolish any
such reserve in the same manner. Retained earnings of the institution or
Oregon stock savings bank to the extent so reserved shall not be
available for the payment of dividends or other distributions by the
institution or Oregon stock savings bank except as expressly permitted by
the Bank Act.

(4) An institution or Oregon stock savings bank may redeem shares
of its stock only with the prior approval of the director. A class or
series of shares may be designated redeemable upon certain terms and
conditions in advance of its issuance with the prior approval of the
director, in which event no further approval shall be required to redeem
the shares in accordance with the terms and conditions approved.

(5) The director may refuse to approve a reduction in paid-in
capital under subsection (2) of this section or redemption of shares
under subsection (4) of this section if the director determines that the
remaining paid-in capital of the institution or Oregon stock savings bank
would be inadequate for the safe and sound operation of the institution
or Oregon stock savings bank.

(6) The director may by rule or order waive the requirement for
prior approval of redemptions of shares. [1989 c.324 §35; 1997 c.631 §72]
(1) An institution or Oregon stock savings bank shall not issue any
certificate of stock until full payment for the stock has been received.
Stock sold after initial organization of the institution or Oregon stock
savings bank shall be paid in the same manner as required in the
organization of an institution or Oregon stock savings bank.

(2) Notwithstanding subsection (1) of this section, an institution
or Oregon stock savings bank shall have the power to create and issue the
number of shares of stock stated in its articles of incorporation or the
amendments thereto. [Amended by 1969 c.635 §2; 1973 c.797 §76; 1977 c.135
§16; 1983 c.37 §4; 1997 c.631 §73] The board of directors of an
institution or Oregon stock savings bank may, at any regular meeting,
declare a dividend, but the amount of the dividend shall not be greater
than its unreserved retained earnings, deducting therefrom, to the extent
not already charged against earnings or reflected in a reserve, the
following:

(1) All bad debts, which are debts on which interest is past due
and unpaid for at least six months, unless the debt is fully secured and
in the process of collection.

(2) All other assets charged off as required by the Director of the
Department of Consumer and Business Services or a state or federal
examiner.

(3) All accrued expenses, interest and taxes of the institution or
Oregon stock savings bank. [Amended by 1973 c.797 §79; 1997 c.631 §74] The Director of the
Department of Consumer and Business Services may require any institution
or Oregon stock savings bank to suspend the payment of any dividends if
the director determines that the payment of dividends would result in the
remaining stockholders’ equity of the institution or Oregon stock savings
bank being inadequate for the safe and sound operation of the institution
or Oregon stock savings bank. [Amended by 1963 c.580 §82; 1973 c.797 §80;
1997 c.631 §75] At meetings of the board of
directors where dividends are declared, a complete record of the
proceedings and business transacted by the board of directors shall be
entered in the minutes in the manner required by the Director of the
Department of Consumer and Business Services. The minutes shall show that
a detailed financial statement as of the last day of the month previous
to the month during which the meeting is held was the basis of the
decision of the board. [Amended by 1963 c.195 §4; 1973 c.797 §81] Within 10 days after the
declaration of any dividend, an institution or Oregon stock savings bank
shall forward to the Director of the Department of Consumer and Business
Services a report of the dividend declared. This report shall also be
included in the report required in ORS 706.660. [1997 c.631 §77]STOCKHOLDERS, DIRECTORS AND OFFICERS(Stockholder Meetings)
(1) A stockholders’ meeting for the election of a board of directors and
transaction of other business shall be held in this state within 120 days
after the close of the fiscal year of the institution or Oregon stock
savings bank. If an institution or Oregon stock savings bank was issued
one or more orders by the Director of the Department of Consumer and
Business Services under ORS 706.580 within the fiscal year immediately
preceding the date of the stockholders’ meeting, the institution or
Oregon stock savings bank shall include in every notice required for the
stockholders’ meeting under ORS 707.611:

(a) A copy of ORS 706.580; and

(b) A statement that the institution or Oregon stock savings bank
received such an order or orders.

(2) A special meeting of stockholders may be called at any time by
the chief executive officer, a majority of the board of directors, any
other person or group authorized by the articles of incorporation or
bylaws of the institution or Oregon stock savings bank to call such
meetings, or not fewer than three stockholders holding in the aggregate
not less than one-third of the outstanding voting stock of the
institution or Oregon stock savings bank. The articles of incorporation
or bylaws of the institution or Oregon stock savings bank may reserve to
an officer or the board of directors the authority to designate the time
and place of such a meeting. However, the meetings shall be held in the
State of Oregon. Unless the director consents to a later meeting date,
the meetings shall be held not later than 45 days after the call for the
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] Written or printed notice stating the
place, date and hour of the meeting and, in case of a special meeting,
the purpose or purposes for which the meeting is called shall be
delivered not less than 10 days nor more than 60 days before the date of
the meeting, either personally or by mail, by or at the direction of the
president, the cashier, the secretary or the officer or persons calling
the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at the
shareholder’s address as it appears on the stock transfer books of the
institution or Oregon stock savings bank, with postage prepaid. [1989
c.324 §43; 1997 c.631 §79] Any action required by this chapter
to be taken at a meeting of the shareholders or directors of an
institution or Oregon stock savings bank or any other action which may be
taken at a meeting of the shareholders, directors or of a committee may
be taken without a meeting if a consent in writing setting forth the
action so taken is signed by all of the shareholders or directors or all
of the members of the committee entitled to vote with respect to the
subject matter thereof. The consent shall be delivered to the institution
or Oregon stock savings bank for inclusion in the minutes or for filing
with the corporate records. The action shall be effective on the date on
which the last signature is placed on the consent or consents or at such
earlier time as is set forth therein. Such consent or consents shall have
the same force and effect as a unanimous vote of such shareholders,
directors or committee members and may be stated as such in any articles
or document filed under this chapter. If not otherwise determined in
accordance with ORS 707.615, the record date for determining shareholders
entitled to take action by consent without a meeting is the date the
first shareholder signs the consent. [1989 c.324 §52; 1997 c.631 §80](1) A shareholder may, at any time, waive any notice required by
this chapter, the articles of incorporation or bylaws. The waiver must be
in writing, be signed by the shareholder entitled to the notice and be
delivered to the institution or Oregon stock savings bank for inclusion
in the corporate records.

(2) Attendance at a meeting by a shareholder waives objection to:

(a) Lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting objects to the holding of the
meeting or the transacting of business at the meeting; and

(b) Consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless
the shareholder objects to considering the matter when it is presented.
[1989 c.324 §51; 1997 c.631 §81] (1) For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof or entitled to receive payment of
any dividend, or in order to make a determination of shareholders for any
other proper purpose, the board of directors of an institution or Oregon
stock savings bank may provide that the stock transfer books shall be
closed for a stated period, not to exceed in any case 70 days. If the
stock transfer books shall be closed for the purpose of determining the
shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least 10 days immediately
preceding such meeting.

(2) In lieu of closing the stock transfer books, the bylaws or, in
the absence of an applicable bylaw, the board of directors may fix in
advance a date as the record date for any such determination of
shareholders. The record date, in any case, shall be not more than 70
days and, in the case of a meeting of shareholders, not less than 10 days
prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer
books are not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend,
the close of business on the business day before the date on which notice
of the meeting is mailed or the date on which the resolution of the board
of directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders.

(3) When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof, unless the meeting
is adjourned to a date more than 120 days from the original meeting date.
[1989 c.324 §44; 1997 c.631 §82] (1) The officer or agent
having charge of the stock transfer books for shares of an institution or
Oregon stock savings bank shall make, at least 10 days prior to each
meeting of shareholders, a complete list of the shareholders entitled to
vote at such meeting or any adjournment thereof. The list shall be
arranged in alphabetical order, with the address of and the number of
shares held by each shareholder and, for a period of 10 days prior to
such meeting, shall be kept on file at the registered office of the
institution or Oregon stock savings bank and shall be subject to
inspection by any shareholder at any time during usual business hours.
Such list also shall be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock transfer books
shall be prima facie evidence as to which shareholders are entitled to
examine such list or transfer books or to vote at any meeting of
shareholders.

(2) Failure to comply with the requirements of this section shall
not affect the validity of any action taken at such meeting. [1989 c.324
§45; 1997 c.631 §83] (1) Each outstanding share,
regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of shareholders, except to the extent
that the voting rights of the shares of any class or classes are limited
or denied by the articles of incorporation as permitted by the Bank Act.

(2) Neither shares of its own stock held by the institution or
Oregon stock savings bank in a fiduciary capacity, nor shares held by
another corporation if a majority of the shares entitled to vote for the
election of directors of such other corporation is held by the
institution or Oregon stock savings bank shall be voted at any meeting or
counted in determining the total number of outstanding shares at any
given time. The prohibition of this subsection does not apply if, under
the terms of a trust in which such shares are held, the manner in which
such shares shall be voted may be determined by the trustee, by a donor
or beneficiary of the trust or by some other person named in the trust,
and such shares are actually voted in the manner determined or directed
by the trustee, donor, beneficiary or other person so authorized.

(3) A shareholder may vote either in person or by proxy executed in
writing by the shareholder or by the shareholder’s duly authorized
attorney in fact. No proxy shall be valid after 11 months from the date
of its execution, unless otherwise provided in the proxy.

(4) In electing each director for whose election the shareholder
has a right to vote, every shareholder entitled to vote at such election
shall have the right to vote, either in person or by proxy, the number of
shares owned by the shareholder. If the articles of incorporation
specifically permit cumulative voting, every shareholder shall have the
right to cumulate the shareholder’s votes either by giving one candidate
as many votes as the number of such directors multiplied by the number of
the shareholder’s shares shall equal or by distributing such votes on the
same principle among any number of such candidates.

(5) Shares standing in the name of another domestic or foreign
corporation, a limited liability company, a partnership or another entity
may be voted by such officer, agent or proxy as the governing documents
of the entity may prescribe or, in absence of such provision, as the
board of directors or other governing body of the entity holding the
shares may determine.

(6) Shares held by a personal representative, administrator,
executor, guardian or conservator may be voted by such person, either in
person or by proxy, without a transfer of such shares into such person’s
name. Shares standing in the name of a trustee may be voted by the
trustee, either in person or by proxy, but no trustee shall be entitled
to vote shares held by the trustee without a transfer of the shares to
the name of the trustee.

(7) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under control of a receiver may be voted
by such receiver without a transfer into the receiver’s name if authority
to do so is contained in an appropriate order of the court by which such
receiver was appointed.

(8) Shares may be voted by a pledgee or attorney-in-fact of the
shareholder if authorized by the pledge agreement or power of attorney
and evidence of such authority is presented to the institution or Oregon
stock savings bank upon request.

(9) On and after the date on which written notice of redemption of
shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with another institution or Oregon
stock savings bank with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates
therefor, such shares shall not be entitled to vote on any matter and
shall not be deemed to be outstanding shares. [1989 c.324 §47; 1997 c.631
§84] If the
Director of the Department of Consumer and Business Services considers it
expedient the director may call a meeting of the stockholders of any
institution or Oregon stock savings bank by giving 15 days’ notice of the
meeting to the stockholders in the manner prescribed in ORS 707.611. All
necessary expense incurred in the serving of the notice shall be paid by
the institution or Oregon stock savings bank. [Amended by 1973 c.797 §85;
1997 c.631 §85] (1) Unless otherwise provided in the articles of
incorporation, a majority of the shares entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting of
shareholders. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting at the time the vote is
taken and entitled to vote on the subject matter shall be the act of the
shareholders, unless the vote of a greater number or voting by classes is
required by the Bank Act or the articles of incorporation.

(2) Once a share is represented at a meeting, it is deemed present
for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set
for that adjourned meeting. [1989 c.324 §46; 1997 c.631 §86] (1) The
articles of incorporation may provide for a lesser or greater quorum
requirement for shareholders, or voting groups of shareholders, than is
provided for by this chapter, but in no event shall a quorum for
shareholders, or any voting group of shareholders, consist of less than
one-third of the votes entitled to be cast on any matter by the
shareholders or voting group of shareholders. The articles of
incorporation may provide for a greater voting requirement for
shareholders, or voting groups of shareholders, than is provided for by
this chapter.

(2) An amendment to the articles of incorporation that adds a
greater quorum or voting requirement must meet the quorum requirement and
be adopted by the vote and voting groups required to take action under
the quorum and voting requirements then in effect. An amendment to the
articles of incorporation that changes or deletes a greater quorum or
voting requirement must meet the quorum requirement and be adopted by the
vote and voting groups required to take action immediately prior to the
change or deletion. [1989 c.324 §48; 1997 c.631 §87]A person may not be
held personally liable for an act done or omitted by the person in good
faith and in compliance with a statute, rule or order of the Director of
the Department of Consumer and Business Services under this chapter
regardless of whether the statute, rule or order is later amended,
rescinded or determined to be invalid by judicial or other authority.
[1987 c.445 §4; 1997 c.631 §88](Directors and Officers) After the
issuance of the certificate of incorporation, an organizational meeting
of the board of directors named in the articles of incorporation shall be
held, either within or without this state, at the call of a majority of
the incorporators, for the purpose of adopting bylaws, electing officers
and transacting such other business as may come before the meeting. The
incorporators who called the meeting shall give at least three days’
notice thereof by mail to each director so named, which notice shall
state the time, place and purpose of the meeting. [1989 c.324 §27; 1997
c.631 §89] (1) If
provided by the articles of incorporation or the bylaws, the board of
directors, by resolution adopted by a majority of all the directors in
office when the action is taken, may designate from among its members one
or more committees. To the extent provided in the resolution or in the
articles of incorporation or the bylaws of the banking institution, the
committees shall have and may exercise all the authority of the board of
directors in the management of the banking institution.

(2) No committee shall have the authority of the board of directors
in reference to:

(a) Amending the articles of incorporation;

(b) Approving dividends or other distributions to shareholders of
an institution or Oregon stock savings bank;

(c) Filling vacancies on the board of directors or on any of its
committees;

(d) Approving the reacquisition of shares of the institution or
Oregon stock savings bank;

(e) Adopting a plan of merger or consolidation;

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

(g) Recommending to the shareholders a voluntary dissolution of the
institution or Oregon stock savings bank or a revocation thereof;

(h) Amending the bylaws of the banking institution; or

(i) Approving the issuance or sale or contract for sale of shares
or determining the designation and relative rights, preferences and
limitations of a class or series of shares of the institution or Oregon
stock savings bank.

(3) Notwithstanding subsection (2) of this section, the board of
directors may authorize a committee to take action described in
subsection (2)(i) of this section pursuant to a stock option or other
stock compensation plan, or by approving the maximum number of shares to
be issued and delegating to the committee the authority to determine all
or any part of the terms of the issuance or sale or contract of sale and
the determination of the designation and relative rights, preferences and
limitations of the class or series of shares.

(4) The designation of committees and the delegation thereto of
authority shall not operate to relieve the board of directors, or any
member thereof, of any responsibility imposed upon the board of directors
or such member by law. [1989 c.324 §50; 1997 c.631 §90] (1) If there are six or more
directors, the articles of incorporation or the bylaws may provide for
staggering their terms by dividing the total number of directors into two
or three groups, with each group to be as nearly equal in number as
possible. In that event, the terms of directors in the first group expire
at the first annual meeting after their election; the terms of the second
group expire at the second annual meeting after their election; and the
terms of the third group, if any, expire at the third annual meeting
after their election. Thereafter, directors shall be chosen for a term of
two years or three years, as the case may be, to succeed those whose
terms expire.

(2) If the institution or Oregon stock savings bank has cumulative
voting, terms of directors may be staggered only if authorized by the
articles of incorporation, and no class shall have fewer than three
members. [1989 c.324 §26; 1997 c.631 §91] (1) The shareholders
may remove one or more directors with or without cause unless the
articles of incorporation provide that directors may be removed only for
cause.

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

(3) If cumulative voting is authorized, a director may not be
removed if the number of votes sufficient to elect the director under
cumulative voting is voted against the director’s removal. If cumulative
voting is not authorized, a director may be removed only if the number of
votes cast to remove the director exceeds the number of votes cast not to
remove the director.

(4) A director may be removed by the shareholders only at a meeting
called for the purpose of removing the director, and the meeting notice
must state that the purpose, or one of the purposes, of the meeting is
removal of the director. [1989 c.324 §49] (1) In discharging the
duties of a director, a director is entitled to rely on information,
opinions, reports or statements, including financial statements and other
financial data, if prepared or presented by:

(a) One or more officers or employees of the banking institution
whom the director reasonably believes to be reliable and competent in the
matters presented;

(b) Legal counsel, public accountants or other persons as to
matters the director reasonably believes are within the person’s
professional or expert competence; or

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

(2) A director is not acting in good faith if the director has
knowledge concerning a matter in question that makes reliance otherwise
permitted by subsection (1) of this section unwarranted.

(3) When evaluating any offer of another party to make a tender or
exchange offer for any equity security of the banking institution, or any
proposal to merge the banking institution with another banking
institution or to purchase or otherwise acquire all or substantially all
the properties and assets of the banking institution, the directors of a
banking institution may, in determining what the directors believe to be
in the best interests of the banking institution, give due consideration
to the social, legal and economic effects on employees, customers and
suppliers of the banking institution and on the communities and
geographical areas in which the banking institution and its subsidiaries
operate, the economy of the state and nation, the long term as well as
short term interests of the banking institution and its stockholders,
including the possibility that these interests may be best served by the
continued independence of the banking institution, and other relevant
factors. [Amended by 1973 c.797 §88; 1975 c.725 §7; 1997 c.631 §92] (1) In discharging the
duties of an officer, an officer is entitled to rely on information,
opinions, reports or statements, including financial statements and other
financial data, if prepared or presented by:

(a) One or more officers or employees of the banking institution
whom the officer reasonably believes to be reliable and competent in the
matters presented; or

(b) Legal counsel, public accountants or other persons as to
matters the officer reasonably believes are within the person’s
professional or expert competence.

(2) An officer is not acting in good faith if the officer has
knowledge concerning the matter in question that makes reliance otherwise
permitted by subsection (1) of this section unwarranted. [1997 c.631 §94](1)(a) The board of directors of a
banking institution shall hold regular meetings as provided in this
subsection.

(b) Unless paragraph (c) of this subsection is applicable, the
board of directors shall hold a regular meeting at least once every month.

(c) Notwithstanding paragraph (b) of this subsection, with the
approval of the Director of the Department of Consumer and Business
Services, the board of directors of a banking institution may hold
regular meetings as infrequently as once each calendar quarter.

(2) A quorum at any meeting of the board of directors shall consist
of:

(a) If the banking institution has a fixed board size, a majority
of the members of the whole board.

(b) If the banking institution has a variable-range board size, a
majority of the number of directors prescribed or, if no number is
prescribed, a majority of the number in office immediately before the
meeting begins.

(3) If less than a quorum of directors is present at a meeting,
they may adjourn until the next meeting.

(4) If a quorum is present when a vote is taken, the affirmative
vote of a majority of directors present is the act of the board of
directors unless the articles of incorporation or bylaws require the vote
of a greater number of directors.

(5) Meetings of the board of directors, regular or special, may be
held either within or without this state.

(6) Meetings of the board of directors shall be held upon such
notice as is prescribed in the bylaws. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
meeting of the board of directors need be specified in the notice or
waiver of notice of such meeting unless required by the bylaws or by law.

(7) Unless otherwise restricted by the articles of incorporation or
bylaws, members of the board of directors of a banking institution or any
committee designated by the board may hold a meeting of the board or
committee by means of conference telephone or similar communications
equipment that allows all persons participating in the meeting to hear
each other. Participation in a meeting under this subsection shall
constitute presence in person at the meeting. [Amended by 1963 c.166 §1;
1973 c.797 §89; 1983 c.296 §4; 1989 c.324 §40; 1993 c.255 §1; 1997 c.631
§95] The board of directors
shall designate an officer of the banking institution to prepare and
submit to the board at every meeting or to a committee of not less than
three members of the board of directors a report, in such detail as the
board may direct, of the loans and investments made during the preceding
month or since the last report, and information concerning loans to
officers, directors and employees. The board of directors shall examine
the report and make it a part of the record of the meeting by recording
the report in full in the minutes. [1973 c.797 §90; 1995 c.316 §3; 1997
c.631 §96](1) The Director of the Department of Consumer and
Business Services may call a meeting of the board of directors of any
banking institution by mailing a notice of the meeting to each director.
The notice shall state the purpose of the meeting and designate the time
and place where the meeting shall be held.

(2) A director who fails to appear at the meeting without proper
cause is subject to a penalty of up to $1,000 for each meeting the
director fails to attend. The penalty shall be collected in the manner
prescribed by ORS 706.570. [Amended by 1973 c.797 §91; 1997 c.631 §97]Subject to ORS 707.705, any
vacancy in the board of directors may be filled by the board for the
unexpired term at a regular meeting after the vacancy occurs or as
otherwise provided in the bylaws of the banking institution. [Amended by
1985 c.786 §29; 1997 c.631 §98](1) After a charter has been issued to a banking
institution, the board of directors shall elect a chief executive officer
who shall also be a director, a president who also may be the chief
executive officer, at least one vice president, and a cashier or
secretary, and may appoint such other officers and employees as the board
of directors considers necessary or appropriate.

(2) The board of directors may define the duties, fix the
compensation, dismiss, fill vacancies and require bonds or irrevocable
letters of credit for the faithful performance of the duties of the
employees and officers of the banking institution.

(3) In the event the board dismisses an officer, the officer shall
no longer serve as a director.

(4) Any officer or agent elected or appointed by the board of
directors may be removed by the board of directors whenever, in its
judgment, the best interests of the banking institution will be served
thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights. [Amended by
1973 c.797 §92; 1983 c.37 §6; 1985 c.786 §32; 1989 c.324 §41; 1991 c.331
§110; 1997 c.631 §99](1) Before a person first takes office as director,
president or chief executive officer of a banking institution, the name
of the person shall be submitted to the Director of the Department of
Consumer and Business Services, with any information about the person
that the director may require.

(2) The director shall investigate each person whose name is
submitted under this section to determine the character, honesty,
financial responsibility and competence of the person. In the course of
investigating any person under this section, the director may require the
person to provide additional information for the director’s further
inquiry. For the purpose of such further inquiry, the director may
require the person to submit to fingerprinting. Fingerprints acquired
under this subsection may be submitted to appropriate law enforcement
agencies, including the Federal Bureau of Investigation, for the purpose
of discovering any unlawful activities of the person.

(3) The director may disapprove the election or appointment of the
person for any reason stated in ORS 707.145. The director shall issue the
disapproval in writing to the board of directors that submitted the
person’s name. A copy of the disapproval shall be served personally or by
certified mail upon the disapproved person. The disapproval may be issued
without a prior administrative hearing.

(4) A person whom the director disapproves under this section may
appeal the disapproval as a contested case pursuant to ORS 183.415 to
183.500. [1985 c.786 §31; 1997 c.631 §100] (1) For any reason
specified in subsection (2) of this section, the Director of the
Department of Consumer and Business Services by order may direct the
board of directors of a banking institution to remove a director or
officer of the banking institution.

(2) The director may issue an order of removal under subsection (1)
of this section:

(a) For any reason stated in ORS 707.145; or

(b) If the person who is the subject of the order has refused
otherwise to comply with any written requirements or instructions of the
director.

(3) An order of removal under this section shall be in writing and
may be issued without a prior administrative hearing. A copy of the order
shall be served personally or by certified mail upon the person to be
removed.

(4) Upon receipt of an order of removal the director or officer
shall be suspended from office.

(5) The person suspended from office may appeal the order of the
director as a contested case under ORS 183.415 to 183.500.

(6) Upon expiration of the period in which to file an appeal under
ORS 183.415 to 183.500 or when the order of the director is affirmed on
appeal, the board of directors by resolution shall remove the person from
office and declare the office vacant.

(7) Any officer or director of a banking institution who is
suspended or removed under this section shall not act in any official
capacity, conduct any of the business of the banking institution or have
access to the books, records or assets of the banking institution as an
officer, director or stockholder, without receiving permission from the
director. [Amended by 1973 c.797 §93; 1983 c.296 §5; 1985 c.762 §§38,38a;
1985 c.786 §33; 1997 c.631 §101]An officer or director of a banking institution shall not, as
an officer or director, willfully do any act which is expressly forbidden
by the Bank Act or omit to perform any duty imposed upon the officer or
director by the Bank Act. [Amended by 1973 c.797 §94; 1997 c.631 §102]Every official communication
directed by the Director of the Department of Consumer and Business
Services or any examiner to a banking institution or to any officer of a
banking institution, relating to an investigation or examination
conducted by the Department of Consumer and Business Services or
containing suggestions or recommendations as to the conduct of the
business of the banking institution, shall be submitted by the officer
receiving it to the board of directors at the next meeting of the board
and noted in the minutes of the meeting of the board in the manner
prescribed by the director. [Amended by 1973 c.797 §95; 1985 c.762 §39;
1997 c.631 §103](1) If an officer
or director of a banking institution has reason to believe that a person
has violated any provision of law that has resulted or could result in
loss to the banking institution and for which criminal prosecution is
provided, the officer or director shall give the information relative to
the violation to the appropriate federal, state or local law enforcement
officer having jurisdiction of the violation, and to the Director of the
Department of Consumer and Business Services.

(2) If the matter is referred to a district attorney or to the
Attorney General, such officer promptly shall investigate the violation
and institute such action against the person as the information and
investigation requires or justifies. The cost of the investigation and
action shall be paid by the county or state in the manner in which other
criminal actions are paid. [1979 c.88 §7; 1997 c.631 §104] The board of
directors of a banking institution shall annually appoint an examining or
audit committee of not fewer than three directors of the banking
institution who are not active officers of the banking institution or not
fewer than three other persons who are approved by the Director of the
Department of Consumer and Business Services. The examining or audit
committee shall examine and study the report of each examination made by
bank supervising authorities and report to the board of directors within
60 days after receipt of the report relative to criticisms and
suggestions contained in the report and comment on any matter relative to
the affairs of the banking institution that in its judgment should be
known to the directors. The report shall be recorded in the minute book
of the banking institution, and a certified copy transmitted to the
director within five days. [Amended by 1973 c.797 §96; 1981 c.192 §5;
1985 c.786 §34; 1997 c.631 §105](Indemnification of Directors, Officers, Employees and Agents) As used in ORS
707.744 to 707.764:

(1) “Director” means an individual who is or was a director of a
banking institution or an individual who, while a director of a banking
institution, is or was serving at the banking institution’s request as a
director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. A director is considered to be serving
an employee benefit plan at the banking institution’s request if the
director’s duties to the banking institution also impose duties on or
otherwise involve services by the director to the plan or to participants
in or beneficiaries of the plan. “Director” includes, unless the context
requires otherwise, the estate or personal representative of a director.

(2) “Expenses” includes counsel fees.

(3) “Banking institution” includes any domestic or foreign
predecessor entity of a banking institution in a merger or other
transaction in which the predecessor’s existence ceased upon the
consummation of the transaction.

(4) “Liability” means the obligation to pay a judgment, settlement,
penalty or fine, including an excise tax assessed with respect to an
employee benefit plan or reasonable expenses incurred with respect to a
proceeding.

(5) “Officer” means an individual who is or was an officer of a
banking institution or an individual who, while an officer of a banking
institution, is or was serving at the banking institution’s request as a
director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. An officer is considered to be serving
an employee benefit plan at the banking institution’s request if the
officer’s duties to the banking institution also impose duties on or
include services by the officer to the employee benefit plan or to
participants in or beneficiaries of the plan. “Officer” includes, unless
the context requires otherwise, the estate or personal representative of
an officer.

(6) “Party” includes an individual who was, is or is threatened to
be made a named defendant or respondent in a proceeding.

(7) “Proceeding” means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal. [1989 c.324 §17; 1997
c.631 §106] (1) Except as provided in
subsection (4) of this section, a banking institution may indemnify an
individual made a party to a proceeding because the individual is or was
a director against liability incurred in the proceeding if:

(a) The conduct of the individual was in good faith;

(b) The individual reasonably believed that the individual’s
conduct was in the best interests of the banking institution, or at least
not opposed to its best interests; and

(c) In the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual’s conduct was unlawful.

(2) A director’s conduct with respect to an employee benefit plan
for a purpose the director reasonably believed to be in the best
interests of the participants in and beneficiaries of the plan is conduct
that satisfies the requirement of subsection (1)(b) of this section.

(3) The termination of a proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this section.

(4) A banking institution may not indemnify a director under this
section:

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

(b) In connection with any other proceeding charging improper
personal benefit to the director in which the director was adjudged
liable on the basis that personal benefit was improperly received by the
director.

(5) Indemnification permitted under this section in connection with
a proceeding by or in the right of the banking institution is limited to
reasonable expenses incurred in connection with the proceeding. [1989
c.324 §18; 1997 c.631 §107] Unless limited by its articles
of incorporation, a banking institution shall indemnify a director who
was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which the director was a party because of being a director
of the banking institution against reasonable expenses incurred by the
director in connection with the proceeding. [1989 c.324 §19; 1997 c.631
§108] (1) A banking institution may pay for
or reimburse the reasonable expenses incurred by a director who is a
party to a proceeding in advance of final disposition of the proceeding
if:

(a) The director furnishes the banking institution a written
affirmation of the director’s good faith belief that the director has met
the standard of conduct described in ORS 707.746; and

(b) The director furnishes the banking institution a written
undertaking, executed personally or on the director’s behalf, to repay
the advance if it is ultimately determined that the director did not meet
the standard of conduct.

(2) The undertaking required by subsection (1)(b) of this section
must be an unlimited general obligation of the director but need not be
secured and may be accepted without reference to financial ability to
make repayment.

(3) Any authorization of payments under this section may be made by
provision in the articles of incorporation, or bylaws, by a resolution of
the shareholders or board of directors or by contract. [1989 c.324 §20;
1997 c.631 §109] Unless the banking
institution’s articles of incorporation provide otherwise, a director of
the banking institution who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another
court of competent jurisdiction. On receipt of an application, the court,
after giving any notice the court considers necessary, may order
indemnification if it determines:

(1) The director is entitled to mandatory indemnification under ORS
707.748, in which case the court shall also order the banking institution
to pay the director’s reasonable expenses incurred to obtain
court-ordered indemnification; or

(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not
the director met the standard of conduct set forth in ORS 707.746 or was
adjudged liable as described in ORS 707.746 (4), whether the liability is
based on a judgment, settlement or proposed settlement or otherwise.
[1989 c.324 §21; 1997 c.631 §110] (1) A
banking institution may not indemnify a director under ORS 707.746 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances
because the director has met the standard of conduct set forth in ORS
707.746.

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

(a) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the proceeding;

(b) If a quorum cannot be obtained under paragraph (a) of this
subsection, by a majority vote of a committee duly designated by the
board of directors consisting solely of two or more directors not at the
time parties to the proceeding. However, directors who are parties to the
proceeding may participate in designation of the committee;

(c) By special legal counsel selected by the board of directors or
its committee in the manner prescribed in paragraph (a) or (b) of this
subsection, or if a quorum of the board of directors cannot be obtained
under paragraph (a) of this subsection and a committee cannot be
designated under paragraph (b) of this subsection, the special legal
counsel shall be selected by majority vote of the full board of
directors, including directors who are parties to the proceeding; or

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

(3) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be
made by those entitled under subsection (2)(c) of this section to select
counsel. [1989 c.324 §22; 1997 c.631 §111] Unless a
banking institution’s articles of incorporation provide otherwise:

(1) An officer of the banking institution is entitled to mandatory
indemnification under ORS 707.748 and is entitled to apply for
court-ordered indemnification under ORS 707.754, in each case to the same
extent as a director under ORS 707.748 and 707.754.

(2) The banking institution may indemnify and advance expenses
under ORS 707.744 to 707.762 to an officer, employee or agent of the
banking institution to the same extent as to a director. [1989 c.324 §23;
1997 c.631 §112] A banking institution may purchase and maintain
insurance on behalf of an individual against liability asserted against
or incurred by the individual who is or was a director, officer, employee
or agent of the banking institution or who, while a director, officer,
employee or agent of the banking institution, is or was serving at the
request of the banking institution as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise. The banking institution may purchase and maintain the
insurance even if the banking institution has no power to indemnify the
individual against the same liability under ORS 707.746 or 707.748. [1989
c.324 §24; 1997 c.631 §113] (1) The
indemnification and provisions for advancement of expenses provided by
ORS 707.744 to 707.762 shall not be deemed exclusive of any other rights
to which directors, officers, employees or agents may be entitled under
the banking institution’s articles of incorporation or bylaws, any
agreement, general or specific action of its board of directors, vote of
shareholders or otherwise, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Specifically and not by way of limitation, a banking institution shall
have the power to make or agree to make any further indemnification,
including advancement of expenses, of:

(a) Any director as authorized by the articles of incorporation,
any bylaws approved, adopted or ratified by the shareholders or any
resolution or agreement approved, adopted or ratified, before or after
such indemnification or agreement is made, by the shareholders, provided
that no such indemnification shall indemnify any director from or on
account of acts or omissions for which liability could not be eliminated
under ORS 707.110 (5)(c); and

(b) Any officer, employee or agent who is not a director as
authorized by its articles of incorporation or bylaws, general or
specific action of its board of directors or agreement. Unless the
articles of incorporation, or any such bylaws, agreement or resolution
provide otherwise, any determination as to any further indemnity under
this paragraph shall be made in accordance with ORS 707.756.

(2) If articles of incorporation limit indemnification or advance
of expenses, any indemnification and advance of expenses are valid only
to the extent consistent with the articles of incorporation.

(3) ORS 707.744 to 707.762 do not limit a banking institution’s
power to pay or reimburse expenses incurred by a director in connection
with the director’s appearance as a witness in a proceeding at a time
when the director has not been made a named defendant or respondent to a
proceeding. [1989 c.324 §25; 1997 c.631 §114]

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