Shareholders' and Directors' Meetings
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