CHAPTER 106
SENATE BILL No. 412
An Act concerning banks and banking; relating to rules and
regulations of the bank com-
missioner; establishing the state banking code; providing for the
conversion of federal
savings associations or banks; concerning boards of directors of
banks and trust com-
panies; amending K.S.A. 9-1713 and K.S.A. 1999 Supp. 9-539, 9-808
and 9-1114 and
repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 1999 Supp. 9-539
is hereby amended to read as
follows: 9-539. The commissioner shall adopt such rules and
regulations
as shall be necessary to carry out the intent and purposes of
K.S.A. 9-519
through 9-524, and amendments thereto, and K.S.A. 9-532 through
9-
539 9-541, and amendments thereto, which
shall be known as the bank
holding company act. All rules and regulations of general
application shall
first be submitted by the commissioner to the state banking board
for its
approval and upon approval shall be filed as provided by article 4
of
chapter 77 of the Kansas Statutes Annotated.
Sec. 2. K.S.A. 1999 Supp. 9-808 is
hereby amended to read as fol-
lows: 9-808. (a) After first applying for and receiving approval
from the
commissioner, any national bank incorporated,
federal savings association
or federal savings bank organized under the laws of the
United States
may become a state bank upon the affirmative vote of not less than
two-
thirds 2/3 of its outstanding voting stock.
Any national bank, federal savings
association or federal savings bank desiring to become a
state bank shall
file a certified copy of its articles of association,
together with the tran-
script of the minutes of the meeting of its stockholders
showing approval,
together with its articles of incorporation duly executed
as required by
state law with the secretary of state who immediately shall
transmit the
same to the commissioner apply to the
commissioner for permission to
convert to a state bank, and shall submit a certified copy of
its articles of
association, a transcript of the minutes of the meeting of its
stockholders
showing approval of the proposed conversion and any other
information
required in the application form prescribed by the commissioner.
A fed-
eral savings association or federal savings bank operating in a
mutual
form must also convert to a stock form prior to converting to a
state bank
and shall submit appropriate documentation to the commissioner
to show
that the appropriate federal regulator has approved such mutual
to stock
conversion. Upon receipt of each of the items required by
this section
the commissioner shall make or cause to be made such investigation
as
the commissioner deems necessary to determine whether:
(1) All state and federal requirements
for a conversion have been
satisfied;
(2) the conversion will not adversely
affect the interests of the de-
positors; and
(3) the resulting state bank will have an
adequate capital structure.If
the commissioner determines each of these matters favorably the
con-
version shall be approved and the commissioner shall issue a
certificate
of authority. Upon issuance of a certificate of authority, the
articles of
incorporation, duly executed as required by state law, shall be
filed with
the secretary of state.
(b) In any conversion authorized by this
section the capital require-
ments of this act shall apply, and the new name for such resulting
bank
shall be approved by the commissioner. In any conversion authorized
by
this section the resulting state bank shall have authority to issue
its shares
of stock for shares of stock in the national bank, federal
savings association
or federal savings bank or property of the national bank,
federal savings
association or federal savings bank for and upon such
valuation as shall
be agreed upon, and approved by the commissioner. In any
conversion
authorized by this section the resulting state bank by operation of
law
shall continue all trust functions being exercised by the national
bank,
federal savings association or federal savings bank and
shall be substituted
for the national bank, federal savings association or federal
savings bank
and shall have the right to exercise trust or fiduciary powers
created by
any instrument designating the national bank, federal savings
association
or federal savings bank even though such instruments are not
yet effec-
tive.
(c) In any conversion authorized by this
section the resulting state
bank shall succeed by operation of law without any conveyance or
transfer
by the act of the national bank, federal savings association or
federal
savings bank to all the actual or potential assets, real
property, tangible
personal property, intangible personal property, rights, franchises
and in-
terests, including those in a fiduciary capacity of the national
bank, federal
savings association or federal savings bank and shall be
subject to all of
the liabilities of the national bank, federal savings
association or federal
savings bank.
(d) In any conversion authorized by this
section the rights and re-
sponsibilities of any shareholder of the national bank, federal
savings as-
sociation or federal savings bank who objects or dissents to
the proposed
conversion shall be governed by the provisions of K.S.A.
17-6712, and
amendments thereto, as though the national bank, federal
savings asso-
ciation or federal savings bank was a Kansas corporation and
the objecting
or dissenting shareholder was objecting or dissenting to a
proposed
merger transaction. In any conversion authorized by this section
the cor-
porate existence of the national bank, federal savings
association or fed-
eral savings bank shall be merged into and shall be
continued in the
resulting state bank, and the resulting state bank shall be deemed
to be
the identical corporate entity as the national bank, federal
savings asso-
ciation or federal savings bank.
(e) Within a reasonable time after the
effective date of the conversion,
the resulting bank shall divest itself of all assets and
liabilities that do not
conform to state banking laws and rules and regulations. The
length of
this transition period shall be determined by the commissioner
and shall
be specified when the application for conversion is
approved.
Sec. 3. K.S.A. 9-1713 is hereby
amended to read as follows: 9-1713.
The Except as otherwise provided by law,
the state bank commissioner
shall adopt such rules and regulations as shall be necessary to
carry out
the intent and purposes of K.S.A. 9-701
et seq. section 5, and
amendments
thereto, commonly known as the state banking code. All rules
and regu-
lations of general application shall first be submitted by the
commissioner
to the state banking board for its approval and upon approval shall
be
filed as provided by article 4 of chapter 77 of the Kansas Statutes
An-
notated.
Sec. 4. K.S.A. 1999 Supp. 9-1114 is
hereby amended to read as fol-
lows: 9-1114. The business of any bank or trust company shall be
managed
and controlled by its board of directors and this shall include the
authority
to provide for bonus payments, in addition to ordinary compensation
for
any or all of its officers and employees. The board shall consist
of not less
than five nor more than 25 members who shall be elected by the
stock-
holders at any regular annual meeting which shall be held
during the first
120 days of each calendar year on such date of
each calendar year as the
bank or trust company may specify in its bylaws. If the date
specified in
the bylaws falls on a legal holiday, the meeting shall be held,
and the
directors elected, on the next following business day. If for
any reason the
election of directors is not made on the day fixed, or in the
event of a legal
holiday, on the next business day, an election may be held on
any sub-
sequent day within 60 days of the day fixed, to be designated by
the board
of directors, or, if the directors fail to fix the day, by the
shareholders
representing 2/3 of the shares. In all cases, at least 10 days'
notice of the
date for the annual meeting shall have been given by first-class
mail to
the shareholders. If the number of directors elected is less
than 25, the
number of directors may be increased so long as the total number
does
not exceed 25 and when the number is increased the first
additional
directors may be elected at a special meeting of the stockholders.
The
directors shall be elected in the manner provided in the general
corpo-
ration code. Vacancies in the board of directors may be filled in
the man-
ner provided in the general corporation code. A majority of the
directors
shall be residents of this state. Any director of any bank or trust
company
who shall become indebted to such bank or trust company on any
judg-
ment or charged off indebtedness shall forfeit such person's
position as
director and such vacancy shall be filled as provided by law.
New Sec. 5. Articles 5, 7, 8, 9,
10, 11, 12, 13, 14, 15, 16, 17, 18, 19,
20 and 21 of Chapter 9 of the Kansas Statutes Annotated, K.S.A.
74-3004,
74-3005, 74-3006, 75-1304, 75-1305 and 75-1306, and K.S.A. 1999
Supp.
75-1308, and amendments thereto shall constitute and may be cited
as
the state banking code.
Sec. 6. K.S.A. 9-1713 and K.S.A.
1999 Supp. 9-539, 9-808 and 9-1114
are hereby repealed.
Sec. 7. This act shall take effect
and be in force from and after its
publication in the Kansas register.
Approved April 19, 2000.
Published in the Kansas Register April 27, 2000.
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