§ 12 — Board of directors; executive committee

Section 12. The business of such corporation shall be managed by a board of not less than 7 nor more than 25 directors. A majority of the directors shall be citizens of the commonwealth and residents therein; provided, however, upon application in writing by a bank engaged in a global custody business, the commissioner may waive or modify this requirement and may take into consideration factors including, but not limited to, the impact on the safety and soundness of the bank, or the current or prospective board composition and their expertise, experience and qualifications. The directors shall be elected, in such manner as is provided in the by-laws, by the stockholders at their annual meeting or at a special meeting called for the purpose; provided, however, that if the by-laws so prescribe, a number of directors, not exceeding 2, may be elected by vote of a majority of the directors then in office. The directors shall hold office for such term, not exceeding 3 years, as is provided in the by-laws and until their successors are selected and have qualified. A director shall be eligible for reelection. Any vacancy in the board may be filled by appointment by the remaining directors and any director so appointed shall hold the office until the next election.Each director shall own, in the director's own right and free of any lien or encumbrance, common stock, either of such corporation or of a company owning 75 per cent or more of the stock of such corporation, having a par value, or a fair market value on the date the person became a director, of not less than $1,000. Any director who ceases to be the owner of the required number of shares of stock, or who becomes in any other manner disqualified, shall vacate the office forthwith. Each director, when appointed or elected, shall take an oath that the director will faithfully perform the duties of the office and that the director is the owner, in the director's own right and free of any lien or encumbrance, of the amount of stock required by this section. The oath shall be taken before a notary public or justice of the peace, and a record of the oath shall be made a part of the records of such corporation.The office of any director who seeks, or against whom, an order of relief is entered in a personal capacity, pursuant to Title 11 of the United States Code, or who, on examination in a supplementary process proceeding, has been found unable to pay a judgment, shall thereby be vacated. A record of any such vacancy shall be entered upon the books of the corporation. Any director whose office is so vacated shall again be eligible to serve as director upon: the receipt of a discharge in bankruptcy under chapter 7 of said Title 11; the completion of all payments required pursuant to a plan of reorganization under chapter 11 of said Title 11; the completion of all payments under a plan of debt adjustment under chapter 13 of said Title 11; or the payment of said judgment.In determining what a director reasonably believes to be in the best interests of such corporation, in considering proposed business combinations, as defined in paragraph (c) of section 3 of chapter 110F, a director may consider the interests of the corporation's employees, suppliers, creditors and customers, the economy of the state, region and nation, community and societal considerations, and the long-term and short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation.Each such corporation shall have an executive committee of not less than 3 members, who shall be elected by and from the directors and shall hold office during their pleasure. An executive committee may take any action that could be taken by the board of directors except that an executive committee may not: (1) authorize dividends or other distributions to shareholders; (2) approve or propose to the corporation's shareholders actions that require the approval of the corporation's shareholders; (3) change the number of members of the board of directors, remove directors from office or fill vacancies on the board of directors; (4) amend the corporation's articles of organization; (5) adopt, amend or repeal the corporation's by-laws; (6) authorize or approve reacquisition of shares of capital stock, except according to a formula or method prescribed by the board of directors; (7) take any action specifically required by law or regulation to be taken by the entire board of directors; or (8) approve a transaction described in section 8 of chapter 167I.