(a) (1) Any state bank may, through action of its board of directors and without requiring any action by stockholders, with the written consent of the Bank Commissioner, issue and sell its capital notes at not less than par.
(2) The capital notes may be sold for cash or, with the written consent and approval of the commissioner, for property.
(b) (1) The capital notes shall be in such denominations, and the holders thereof shall be entitled to such annual return thereon, as the commissioner may approve.
(2) The capital notes shall provide that they may be retired at such time or times and in such manner as may be fixed by the board of directors of the state bank but in no event later than twenty (20) years after the date of their issuance.
(3) The par value of the notes shall not exceed one-half (1/2) of the capital base of the issuing state bank.
(4) (A) The state bank, in connection with the issue, subscription, or sale of capital notes, may confer upon the holder of each capital note the right to convert the note into shares of the common stock of the state bank on such terms as are set forth in the instrument evidencing the conversion rights. The terms may include any agreements not repugnant to law for the protection of the conversion rights, including, but without limiting, the generality of such authority:
(i) Restrictions upon the authorization or issuance of additional shares;
(ii) Provisions for the adjustment of the conversion price or ratio;
(iii) Provisions concerning rights in the event of reorganization, merger, consolidation, or sale or other disposition of all, or substantially all, of the assets of the corporation; and
(iv) Provisions for the reservation of authorized but unissued shares to satisfy the conversion rights.
(B) If the shares into which the obligations are convertible would be subject to preemptive rights if issued for cash, the conferring of the conversion rights must be authorized at a stockholders' meeting on a vote of at least a majority of the shares of the issued and outstanding capital stock of the state bank. The vote shall release the preemptive rights to the shares required to satisfy such conversion rights.
(c) (1) Capital notes shall at the time of their issuance be, and shall at all times thereafter remain, subordinate in rank and subject to the prior payment of all types of deposits of the state bank.
(2) The state bank may, for the security and protection of the holders of the capital notes, agree upon such restrictions on the distribution or payment of dividends on its capital stock as the board of directors may decide.
(d) (1) Capital notes and accrued return thereon may be retired at any time, in whole or in part, with the written approval of the commissioner, unless otherwise provided in the capital notes.
(2) In any case in which capital notes issued under the provisions of this section are callable in a period less than twenty (20) years after their issuance, the state bank issuing the capital notes may, by a provision inserted therein to that effect, reserve the right, from time to time, to extend the time for the retirement of the capital notes. In that event, the state bank issuing the capital notes may, by vote of a majority of its board of directors, with the consent of the commissioner, make the extension.
Section: Previous 23-48-308 23-48-309 23-48-310 23-48-311 23-48-312 23-48-313 23-48-314 23-48-315 23-48-316 23-48-317 23-48-318 23-48-319 23-48-320 23-48-321 23-48-322 NextLast modified: November 15, 2016