§ 396:9 — Preferred Stock or Shares

Notwithstanding any other provision of law the stock or shareholders of any institution under the supervision of the commissioner, with or without conservatorship, having capital stock or shares, including certificates of ownership of capital, surplus and undivided profits or guaranty or special funds may by majority vote of said stock or shares, with the approval of the commissioner, issue such additional stock or shares as the needs of such institution require. Such additional stock or shares may be of such classes of preference over other stock or shares as to dividends, retirement, and distribution in liquidation, and such classes may be of such par value as the commissioner shall determine. No dividends on stock or shares issued and outstanding at the time of the first issue of preferred stock or shares hereunder shall be declared or paid until all preferred stock or shares issued hereunder shall have been retired unless such preferred stock or shares shall otherwise provide. No filing fee or franchise tax shall be assessed upon or on account of any preferred stock or shares issued under the provisions of this chapter. Such preferred stock or shares may be given voting rights, shall not be subject to assessment, and the owners thereof shall not be liable for any debts, contracts, or engagements of the issuing institution. Each share of each class shall be equal in all respects to every other share of the same class. No preferred stock or share shall be issued until the par value thereof shall have been paid in by cash, other assets approved by the commissioner, or charged against the deposit of the purchaser in the issuing institution. One class of such preferred stock or shares may be set aside for sale to depositors and other creditors of the institution in proportion to their deposits or undisputed claims. Notice of such right to purchase shall be given each depositor and other creditor by mail postpaid addressed at his or its last known post-office address. Such notice may be waived in writing. Any unpurchased stock or shares of such class remaining after 90 days after such notice or waiver may be sold, with the approval of the commissioner, without further restriction as to purchaser. Notwithstanding any other provision of law, any trustee, guardian, conservator, or other fiduciary, administrator, and executor or other legal representative may purchase stock or shares of such preferred class to the extent of the amount standing to their credit in the issuing institution or their claim against the same but such purchase shall be made only through charge against their deposit in or claim against such institution. The commissioner may call meetings of stock or shareholders at any time for the purpose of taking action on a proposal to issue a class or classes of preferred stock or shares. Notice of any meeting of stock or shareholders for that purpose called by the commissioner or otherwise legally called shall be sufficient if sent by registered mail to each stock or shareholder at his address as it appears on the records of the institution 14 days at least before the day of said meeting and the commissioner may send such notice. Such notice may be waived. Whenever any preferred stock or shares shall have been authorized under the provisions of this section, the charter, articles of association or agreement, and bylaws of the institution affected shall be construed to have been amended to give effect to such change. Notwithstanding any other provision of law any institution, under the supervision of the commissioner, by majority vote of its stock or shares, or by majority vote of corporation members if a mutual savings bank, with the approval of the commissioner, may issue preferred creditors certificates. The commissioner may approve such issue when it appears to him that the needs of the institution or bank cannot otherwise be met or reasonably anticipated. Such preferred creditors certificates shall be of such amounts and on such terms as the commissioner shall determine. They shall not be issued at discount nor for satisfaction of existing obligations. They shall be issued only for cash for the purpose of raising new capital or money. They shall constitute a holder thereof a preferred creditor of the issuing institution or bank.

Legislative History

1933, 114:1. RL 317:9.