Arkansas
State Bank Department
Shareholders’ and Directors’ Meetings
(updated
March 3, 2004)
The
corporation’s bylaws normally contain a provision for holding an annual
shareholders’ meeting. This meeting is
held for the purpose of electing a directorate for the ensuing twelve months
and to present to shareholders the financial condition of the holding company
and its subsidiaries. The minutes of the
shareholders’ meeting is to contain the number of shares of voting stock
present and by proxy. If a percentage is
calculated for the number of shares represented, this percentage is to be
calculated utilizing the number of voting shares outstanding rather than number
of shares issued. “Outstanding” shares
are determined by subtracting the number of treasury shares from the number of
shares issued. Treasury stock does not
have voting rights and does not receive dividends. Shareholders’ minutes should reflect any
approved amendments to Articles of Incorporation and/or Bylaws.
Following the
annual shareholders’ meeting, the newly elected directorate holds a meeting to
elect officers of the corporation and to conduct other appropriate
business. The bylaws of the corporation
normally provide for at least an annual meeting of the directorate; however,
directors’ meetings may be held as often as needed. Minutes for the directors’ meetings are
normally maintained separate from the minutes of the bank subsidiary’s board
meetings.
Items
recommended for discussion and inclusion in the minutes include, but are not
limited to the following:
Report of Treasury stock transactions and/or
establishing annual “repurchase/resale” prices
Declaration of dividend payment to the parent
company’s shareholders
Review of debt structure and cash flow
requirements
Annual review of the audit program (internal
audit) for the parent company and all subsidiaries
Review and approval of all Federal Reserve
System reports
Approval of various policies originated by the
parent company for the entire organization
Annual review of management fee contracts,
accompanied by documentation supporting fair market arrangement with the bank
subsidiary
Review and approval of consolidated strategic
plan, when appropriate or required by regulators
Review of consolidated capital plan after
organization exceeds $150 million in consolidated assets and when the
consolidated organization is not “well-capitalized”
Review of regulatory reports
and preparation of a response letter
Review of the financial institution bond
and/or excess liability bond for the bank subsidiary, which should name the
holding company as an insured
Annual review of tax
allocation agreement to determine that practices conform to the agreement or if
amendments are necessitated by changes to tax laws
Review of intercompany
tax reconcilement following the filing of tax returns to ensure bank
subsidiaries do not overpay taxes to the holding company, which can be
construed as unsecured lending to an affiliate
Review of financial summaries for each entity
within the organization
Interim changes in the directorate and/or
election of new directors/officers of the holding company
Annual review for
director/executive officer indebtedness secured by holding company stock