702. Liability of fiduciaries owning stock [Back]

Persons holding stock as executors, administrators, guardians or trustees shall not be personally subject to any liabilities as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust funds would be, if living and competent to act and hold the stock in his own name.

703. Liability of preferred shareholders [Back]

The holders of preferred stock shall not be held individually responsible as such holders for any debts, contracts, or engagements of the bank or trust company and shall not be liable for assessments to restore impairment in the capital of such corporation as now provided by law with reference to holders of common stock.

704. Repealed by Laws 1984, c. 133, º 10, eff. Oct. 1, 1984 [Back]

705. Transfer of shares [Back]

Except as otherwise provided for in the Oklahoma General Corporation Act, the transfer of stock and the certificates of stock which represent the stock or uncertificated stock shall be governed by the Uniform Commercial Code - Investment Securities. To the extent that any provision of the Oklahoma General Corporation Act is inconsistent with any provision of the Uniform Commercial Code - Investment Securities, the provisions of the Uniform Commercial Code - Investment Securities shall be controlling.

706. Stock as personalty-Transfer on books-Shareholders indebted to bank or trust company-Lending on stock prohibited-Purchases of treasury stock [Back]

A. Transfer of shares The shares of stock of a bank or trust company shall be deemed personal property and shall be transferred on the books of the bank or trust company, in such manner as the bylaws may prescribe but no stock shall be transferred on the books of any bank or trust company where the registered holder thereof is indebted to the bank or trust company for any matured and unpaid obligations. The shares of stock of a stockholder indebted to the bank or trust company, as provided herein, may be transferred or any claims of the bank or trust company, as herein defined, may be waived at any time by written consent of the bank or trust company, executed by an officer other than the borrowing stockholder.

B. Lending on stock prohibited It shall be unlawful for any bank or trust company to loan its funds to any stockholder, on its stock or its holding company stock as collateral security; provided, that any bank or trust company may hold its stock to secure the indebtedness previously in good faith contracted.

C. Purchases of treasury stock With the approval of the Commissioner and subject to the conditions as the Commissioner may prescribe, a bank may purchase its own stock as treasury stock.

707. Issuance of preferred stock; classes; procedure-Reduction of common stock and issuance of preferred stock; one meeting-Preferred stock as capital [Back]

A. Issuance of preferred stock-Classes-Procedure Subject to the provisions of subsection C of Section 303.1 of this title relating to newly organized banks, any bank or trust company now or hereafter organized may, with the approval of the Commissioner, and by majority vote of the outstanding voting stock at a meeting held after thirty (30) days' notice, given by restricted delivery, pursuant to action taken by its board of directors, issue, from time to time, preferred stock of one or more classes, in such amounts and with such par values as shall be approved by the Commissioner, and may amend its certificate of incorporation accordingly. A copy of the minutes of such directors' and shareholders' meetings, certified to by the proper officers and under the corporate seal of the bank or trust company and accompanied by the written approval of the Commissioner and amended certificate of incorporation, may be immediately filed in the office of the Secretary of State, and when so filed shall be deemed and treated as an amendment to the certificate of incorporation of such bank or trust company.

B. Reduction of common stock and issuance of preferred stock-One meeting Should the shareholders of any bank or trust company, with the approval of the Commissioner, determine to authorize the issuance of preferred stock, reduce its common stock and amend its certificate of incorporation to accomplish such issuance and reduction as authorized by this Code, the shareholders may at one meeting, called by one action of its board of directors, by one notice being given, and by one vote, authorize the issuance of such preferred stock and the reduction of its common stock and amend its certificate of incorporation.

C. Preferred stock as capital For the purposes of this Code, the term "capital" or "capital stock" shall include the amount of outstanding preferred stock issued and unimpaired by a bank or trust company.

708. Common stock dividend on retirement of preferred stock [Back]

The certificate of incorporation, or as the same may be amended, of any such bank or trust company may provide that upon retirement of any preferred stock of such bank or trust company issued pursuant to the provisions of this Code, the board of directors may, without further action of its stockholders, and without further action of the Commissioner, declare and pay a common stock dividend by the issuance of shares or fractional shares of common stock equal in aggregate par value to the aggregate par value of the preferred stock so retired.

709. Rights of preferred shareholders-Dividends-Voting and conversion rights [Back]

A. Dividends Notwithstanding any other provision of law, whether related to restrictions upon payment of dividends upon capital stock or otherwise, the holders of preferred stock shall be entitled to receive cumulative dividends only if provided for in the bank or trust company's certificate of incorporation or amendment thereto.

B. Dividends on common stock may not be paid until dividends on preferred stock have been paid-Retirement. No dividends shall be declared or paid on common stock until the cumulative dividends on the preferred stock shall have been paid in full. If the bank or trust company is placed in voluntary or involuntary liquidation, no dividends shall be paid to the holders of common stock until the holders of preferred stock shall have been paid in full the par value or the retirement price (whichever is greater) of such stock plus any authorized accumulated dividends.

C. Voting rights-Conversion-Retirement Preferred stock shall have such voting and conversion rights and such control of management, and shall be subject to retirement at such price and in such manner and upon such conditions, as may be provided in the certificate of incorporation or any amendment thereto, with the approval of the Board.

710. Stockholders' meetings of banks and trust companies-Proxies-Cumulative voting-Voting trusts-Preemptive right-Stockbook available for inspection [Back]

A. Stockholders' meetings

1. An annual meeting of shareholders shall be held for the election of directors on a date and at a time designated by or in the manner provided for in the bylaws. Any other proper business may be transacted at the annual meeting.

Additional meetings shall be held as may be provided in the bylaws.

2. Notice shall be mailed at least ten (10) days before a meeting to every person who was a stockholder of record twenty (20) days before the date of the meeting or at such longer period as may be provided in the bylaws. Such notice shall be mailed to the stockholder's address on the records of the bank. No business shall be transacted at a special meeting which is not specified in the notice thereof or necessary or proper in connection with, or incidental to, the business specified.

3. If any meeting of the shareholders be adjourned to another time or place, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such adjournment is taken, unless otherwise provided in the bylaws; provided, however, that in the event such meeting be adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.

4. Notice of the time, place and purpose of any meeting of shareholders, whether required by this Code, by the certificate of incorporation, or by the bylaws, may be waived in writing by any shareholder or by the attendance of the shareholder at such meeting. Such waiver may be given before or after the meeting, and shall be filed with the secretary or entered upon the records of the meeting.

5. The holders of a majority of the outstanding voting shares, or their authorized representatives, shall constitute a quorum. In the absence of a quorum, a meeting may be adjourned from time to time without notice to the stockholders.

B. Voting-Cumulative voting-Bank or trust company may not vote own shares-Exceptions Except on the election of directors, when cumulative voting is provided for in the certificate of incorporation or as it may be amended, each share of common stock shall have one vote which may be cast by the owner of record on the record date, or the proxy of the owner, whether or not the owner of record has the beneficial interest therein. The bank or trust company may not vote shares which it holds in any capacity other than as fiduciary.

C. Proxies Each shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporation action in writing without a meeting may authorize another person or persons to act for the shareholder by written proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.

D. Voting trust-Board approval required No shares deposited under a voting trust agreement shall be voted by the trustee unless the agreement has been approved by the Board. Approval shall be withheld, or, if previously granted, revoked whenever it appears that the existence of the trust would tend to reduce competition among lending institutions or to affect adversely the character or competence of the management or the bank's policies or operating procedures. In the absence of such approval, the record owner may vote the owner's share. No shares held by a licensed securities broker, or by any person, firm or corporation acting for such broker or who is an owner, employee, associate shareholder or partner of a licensed securities broker, shall be directly or indirectly voted unless the bank's bylaws expressly authorized the voting of such broker-held shares.

E. Preemptive rights of shareholders. All voting shares of capital stock of any bank or trust company shall vest preemptive rights to subscribe for any additional shares or any obligations convertible into shares to be allotted or used by such bank or trust company unless specifically negated by the original certificate of incorporation or unless the rights have been specifically waived at the time of authorization of new offering. Any amendment to the certificate of incorporation to remove preemptive rights must be made pursuant to unanimous approval by the shareholders of the bank. The preemptive rights of shareholders shall not extend to fractional shares.

F. The stockbook and the minutes of shareholders' meeting shall be available for examination by a stockholder of the corporation at the principal place of business during business hours.

711. Directors and officers-Banks and trust companies [Back]

A. The affairs of a bank or trust company shall be managed by a board of directors which shall exercise its powers and be responsible for the discharge of its duties. The number of directors, which shall not be less than five, shall be fixed by the bylaws and the number so fixed shall be the board regardless of vacancies. Directors need not be stockholders of the bank or trust company unless so required by the bylaws of the bank or trust company. A director who is disqualified shall be removed by the board of directors or by the Commissioner. No action taken by a director prior to resignation or removal shall be subject to attack on the ground of the disqualification of such director.

B. Unless otherwise restricted by the certificate of incorporation or bylaws, the board of directors shall have the authority to fix a reasonable compensation for the directors.

C. Directors shall be elected by the stockholders at the first meeting and thereafter at the annual meeting or at a special meeting called for that purpose. If the certificate of incorporation or amendments thereto provide for cumulative voting, the votes of each share may be cast for one person or divided among two or more, as the stockholder may choose. The person or persons (to the number of directors to be elected) having the largest number of votes shall be elected.

D. Each director, when appointed or elected, shall take an oath that the director will, so far as the duly devolves on the director, diligently and honestly administer the affairs of such bank or trust company, and will not knowingly violate or willingly permit to be violated any of the provisions of the Oklahoma Banking Code. The oath shall be taken before a notary public, properly authorized and commissioned by the state in which the director resides, or before any other officer having an official seal and authorized by the state to administer oaths, except that the oath shall not be taken before any such notary public or other officer who is an officer of the director's bank. The oath, subscribed by the director making it, and certified by the notary public or other officer before whom it is taken, shall be immediately transmitted to the Commissioner and shall be filed and preserved in the office of the Department for a period of ten (10) years.

E. Honorary or advisory members of the board of directors may be appointed by a state bank to act in advisory capacities without the power or responsibility of final decision in matters concerning the business of the bank. Any listing of such honorary or advisory directors must distinguish between them and the bank's board of directors or indicate their advisory status.

F. The terms of office of directors shall be one (1) year. Each director shall hold office until a successor is elected and qualified or until an earlier resignation or removal. Vacancies may be filled by vote of the board of directors until the next meeting of the stockholders.

G. A director may be removed by the stockholders at a meeting. Where cumulative voting for directors is provided in the certificate of incorporation or amendment thereto, no director shall be removed unless the votes cast against a motion for the removal are less than the total number of shares outstanding divided by the number of authorized directors, but all of the directors shall be removed if a majority of the outstanding shares approves a motion for the removal of all.

H. The officers designated by the bylaws shall be elected by the board of directors. The president and managing officer shall be members of the board of directors. The president may also serve as managing officer. The board of directors of a state bank may enter into employment contracts with its officers and employees upon reasonable terms and conditions. An officer may be removed by the board of directors at any time but removal shall not prejudice any rights that the officer may have to damages for breach of contract of employment.

711.1 Transfer of bank personnel-purchase of residence [Back]

As a legitimate part of a program for the development and efficient utilization of bank personnel, a state bank may, subject to board approval, purchase the residence of an employee who has been transferred or required by his or her employment with the bank to move to another area. The bank should arrange for early divestment of title to such property.

712. Liability of directors, officers, and other persons - Overdrafts [Back]

A. Liability for violation of bank and trust laws. Any director, officer or other person who shall knowingly participate in any violation of the laws of this state, relative to banks and banking and trust companies, shall be liable for all damages which the corporation, its stockholders, depositors, creditors or owners of trust funds shall sustain in consequence of such violation; and upon proper showing that any director or directors knowingly assented to, participated in, acquiesced in after failure to make due inquiry, or caused a loan to be made in excess of the amounts prescribed in Article VIII of this Code such director or directors shall be individually liable for the amount of such loan and shall be required to eliminate the same from the assets of the bank upon the request of the Commissioner.

B. Liability for overdrafts. Any bank officer or employee who shall knowingly, willfully and fraudulently, for the purpose of defrauding the bank, pay out of the funds of said bank upon the check, order or draft of any individual, firm, corporation or association, which has not on deposit with such bank a sum equal to such check, order or draft, shall be personally liable to such a bank for the amount so paid and such liability shall be covered by his official bond.

C. After August 9, 1989, no claim or action seeking to recover money damages shall be brought by the Federal Deposit Insurance Corporation, Resolution Trust Corporation or other federal banking regulatory agency against any director or officer, including any former director or officer, of any insured financial depository institution as defined in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 unless such claim or action arises out of the gross negligence, or willful or intentional misconduct of such officer or director during his term of office with such insured financial institution.

712.1 Indemnification-Personal Liability [Back]

A. The bylaws of a bank or trust company, as adopted or amended by the stockholders, may provide that it shall indemnify every officer, director, and employee, heirs, executors and administrators of the officer, director or employee, against judgments resulting from and the expenses reasonably incurred by the officer, director or employee in connection with any action to which the officer, director or employee may be made a party by reason of such person being an officer, director or employee of the bank or trust company, including any action based upon any alleged act or omission on the part of such person as an officer, director or employee of the bank or trust company, except in relation to matters as to which such person shall be finally adjudged in such action to be liable for the negligence or misconduct. In the event of a settlement out of court, indemnification shall be provided only in connection with such matters covered by the settlement as to which the bank or trust company is advised by its counsel that the person to be indemnified was not liable for such negligence or misconduct. The foregoing rights of indemnification shall not be exclusive of other rights to which such officers, directors and employees may be entitled.

B. The bylaws or a resolution of a bank or bank holding company, as adopted or amended by the stockholders, may include a provision eliminating or limiting the personal liability of a director to the bank or its holding company, or to the stockholders of either for monetary damages for breach of fiduciary duty as a director but not for:

1. Any breach of the director's duty of loyalty to the bank or its holding company, or to the stockholders of either;

2. Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

3. Payment of any unlawful dividend or for any unlawful stock purchase or redemption; or

4. Any transaction from which the director derived an improper personal benefit.

713. Fidelity bonds and other insurance [Back]

A. Directors must require fidelity bonds The directors of a bank or trust company shall require good and sufficient fidelity bonds on all active officers and employees, whether or not they draw salary or compensation, which bonds shall provide for indemnity to such bank or trust company on account of any losses sustained by it as the result of any dishonest, fraudulent or criminal conduct by them acting independently or in collusion or combination with any person or persons. Such bonds may be in individual, schedule or blanket form, and the premiums therefor shall be paid by the corporation.

B. Other insurance The said directors shall also require suitable insurance protection to the bank or trust company against burglary, robbery, theft and other insurable hazard to which the bank or trust company may be exposed in the operations of its business on the premises or elsewhere.

C. Annual review of bonds and insurance by board of directors-Insurance-Bonds and insurance subject to approval of Commissioner and to regulations of board The directors of every bank and trust company shall be responsible for prescribing at least once in each calendar year the amount or penal sum of the bonds and policies specified in this section and the sureties or underwriters thereon, after giving due and careful consideration to all known elements and factors constituting such risk or hazard. Such action shall be recorded in the minutes of the board of directors and thereafter be reported to the Commissioner and be subject to his approval. Evidence of any and all such bonds shall be filed with the Commissioner as soon as procured.

714. Directors-Meetings and duties [Back]

A. The board of directors of a bank shall meet at least once every month and the board of directors of a trust company shall meet at least once every quarter. Board members of the bank may participate in such meeting by teleconference, video conference, or other means by which any board member not physically present at a meeting location may vote and otherwise participate in the meeting and be aware of all communication and business being transacted at the meeting at the same time as it occurs. The State Commissioner, a director or an executive officer may call a special meeting. A majority of the board of directors shall constitute a quorum. The board shall keep minutes of each meeting, including a record of attendance and a record of all votes of the directors that would be pertinent to the business of the bank, to any officer, or to any stockholder. A copy of the minutes of each meeting of the board of directors shall be furnished to the Commissioner within forty (40) days after the board meeting. A copy shall be signed by the chairman of the board or the secretary to the board and retained at the bank. The minutes may be transmitted to the Commissioner electronically.

B. The board of directors of each bank shall review at least monthly and the board of directors of each trust company shall review at least quarterly written reports prepared by the president or other officer of the corporation setting forth such transactions occurring during the calendar month or quarter, as appropriate preceding the meeting as the Commissioner shall require by appropriate regulations.

C. The board of directors of every bank and trust company shall examine, at least once in each calendar year at intervals of not more than fifteen (15) months, all the affairs of the corporation including the character and value of investments and loans, the efficiency of operating procedures and such other matters as the Commissioner may require. However, upon request by a bank or trust company, the Commissioner may allow the examination called for by this subsection to occur at intervals less frequent than called for in this subsection or may condition the requirement of such examination upon the occurrence of some event. A report of the examination shall be submitted promptly to the Commissioner and shall embody such information as the Commissioner requires. The board of directors may provide that such examination shall be conducted by a committee of not less than three directors, by certified public accountants, or by independent auditors responsible only to the board of directors. Such examination shall be made when practicable without the assistance of the executive officers of the bank or trust company. Such report of examination shall be reviewed by the directors at the next meeting of the board of directors.

D. A bank authorized to exercise trust powers shall not accept or voluntarily relinquish a fiduciary account without approval or ratification of the board of directors or of a committee of officers or directors designated by the board to perform this function, but the board of directors or the committee may prescribe general rules governing acceptance or relinquishment of fiduciary accounts, and action taken by an officer in accordance with these rules is sufficient approval. Any committee so designated shall keep minutes of its meetings and report at each monthly meeting of the board of directors all action taken since the previous meeting of the board. The board of directors shall designate one or more committees of not less than three qualified officers or directors to supervise the investment of fiduciary funds. No investment shall be made, retained or disposed of without the approval of a committee to which the bank has delegated investment or review responsibility. The committee, in making investment decisions, shall be subject to the provisions of the Oklahoma Uniform Prudent Investor Act. The committee shall keep minutes of its meetings and shall report at each monthly meeting of the board of directors its conclusions on all questions.

E. Every official communication directed by the Commissioner or any examiner to any bank or trust company or to any officer thereof, relating to an investigation or examination conducted by the Department or containing suggestions or recommendations as to the conduct of the business of the bank or trust company, shall be submitted by the officer receiving it to the board of directors at the next meeting of the board and duly noted in the minutes of the meeting of the board in such form and in such manner as may be prescribed and directed by the Commissioner. No officer of any bank or trust company shall fail to comply with this subsection.

715. Applicability of Oklahoma General Corporation Act [Back]

The provisions of the Oklahoma General Corporation Act, shall, insofar as the same are not inconsistent herewith, govern corporations operating under the provisions of this Code.