TITLE 5

Banking

Banks and Trust Companies

CHAPTER 7. CORPORATION LAW FOR STATE BANKS AND TRUST COMPANIES

Subchapter III. Conduct of Internal Corporate Affairs


A corporation may adopt bylaws for the proper management of its affairs, and may establish regulations controlling the assignment and transfer of its shares. The first set of bylaws shall be adopted at the meeting of the incorporators, as provided in § 727 of this title, but thereafter the power to make, alter or repeal bylaws shall be in the stockholders, provided that any corporation may, in the certificate of incorporation, confer that power upon the directors.

38 Del. Laws, c. 94, § 12; Code 1935, § 2381; 5 Del. C. 1953, § 741; 50 Del. Laws, c. 381, § 1.;

(a) The business of every corporation organized under this chapter shall be managed by a board of directors. The number of directors which shall constitute the whole board shall be such as may be specified in the articles of association, but in no case shall the number be less than 5. The bylaws shall prescribe how many directors shall constitute a quorum for the transaction of business.

(b) The directors elected at the organization meeting of the incorporators, as provided in § 727 of this title, shall hold office until the succeeding annual meeting of the stockholders and until their successors have been duly chosen and qualified, and thereafter directors shall be elected at the annual meeting of the stockholders or at an adjournment of the annual meeting. Vacancies in the board of directors shall be filled by a majority of the remaining directors, though less than a quorum, and the directors so chosen shall hold office until the next annual election and until their successors shall be duly elected and qualified.

(c) Every director shall be sworn to the faithful performance of the director's duties.

32 Del. Laws, c. 103, § 17; 38 Del. Laws, c. 94, § 11; Code 1935, §§ 2305, 2380; 5 Del. C. 1953, § 742; 49 Del. Laws, c. 124; 63 Del. Laws, c. 142, § 3; 64 Del. Laws, c. 156, § 1; 70 Del. Laws, c. 186, § 1.;

(a) Meetings of stockholders (except the meeting of incorporators referred to in § 727 of this title) shall be held in this State. The bylaws shall fix the time of the annual meeting and may provide for special or called meetings of stockholders.

(b) Any meeting of the stockholders may be adjourned and at such adjourned meeting, any business may be transacted that could have been acted on at the meeting which was adjourned.

(c) The bylaws may prescribe what number of shares shall be represented at any stockholders' meeting to constitute a quorum, but in the absence of such a provision, any number of shares represented at a stockholders' meeting shall be sufficient for the transaction of business thereat.

38 Del. Laws, c. 94, § 12; Code 1935, § 2381; 5 Del. C. 1953, § 743; 63 Del. Laws, c. 219, § 1.;

Each stockholder shall, at every meeting of the stockholders, be entitled to 1 vote in person or by proxy for each share of the capital stock held by such stockholder on all issues on which such stockholder is entitled to vote. No stock shall be voted which shall have been transferred on the books of the corporation within 20 days next preceding the stockholders' meeting.

38 Del. Laws, c. 94, § 12; Code 1935, § 2381; 5 Del. C. 1953, § 744; 60 Del. Laws, c. 350, § 1.;

The capital stock of a bank organized under this chapter shall be as follows: not less than $500,000 if the bank is located in a city or town having a population of more than 50,000 persons; not less than $350,000 if the bank is located in a city or town of not more than 50,000 nor less than 5,000 persons; and not less than $250,000 if the bank is located in a town of not more than 5,000 persons, or such greater amount as the Commissioner may require after review of the charter, business plan and proposed activities of the bank. The capital stock of a trust company or limited purpose trust company organized under the law of this State shall not in any case be less than $500,000; provided, however, that this requirement shall not apply to trust companies organized under the laws of this State prior to February 28, 1933, and authorized by a certificate issued by the State Bank Commissioner to transact the business of a trust company on January 1, 1997. In addition to the capital stock required by the foregoing, every such bank, trust company or limited purpose trust company shall have a paid-in surplus account equal to no less than one-half of the minimum capital stock required by this section. The minimum capital stock and paid-in surplus required to be maintained by such corporation in its banking or trust company business pursuant to this section may not be utilized to satisfy the capital or reserve requirements to which the corporation may be subject with respect to any activity authorized by § 761(a)(14) of this title.

38 Del. Laws, c. 94, § 13; Code 1935, § 2382; 5 Del. C. 1953, § 745; 63 Del. Laws, c. 261, § 5; 67 Del. Laws, c. 55, § 1; 67 Del. Laws, c. 223, § 3; 71 Del. Laws, c. 19, § 20.;

The capital stock shall be divided into shares of a stated par value. No business shall be transacted by the corporation until the whole amount of its capital stock is subscribed for and actually paid in in cash. No stock shall be issued by any corporation until the par value thereof shall be fully paid in in cash. Any corporation may, subject to the approval of the State Bank Commissioner, increase or reduce its capital stock in the manner hereinafter provided. In the case of a reduction, the capital stock shall not be reduced to less than the amount required by § 745 of this title.

38 Del. Laws, c. 94, § 13; Code 1935, § 2382; 49 Del. Laws, c. 120; 51 Del. Laws, c. 14; 64 Del. Laws, c. 386, § 2.;

The private property of the stockholders shall not be subject to the payment of the corporate debts except as otherwise provided in the articles of association.

38 Del. Laws, c. 94, § 14; Code 1935, § 2383; 5 Del. C. 1953, § 747.;

The directors of a bank or trust company may declare dividends on common or preferred stock of so much of the net profits of the corporation as they shall judge expedient; but the corporation shall, before the declaration of a dividend on common stock from the net profits, carry 50% of its net profits of the preceding period for which the dividend is paid to its surplus fund until the same shall amount to 50% of its capital stock; and thereafter shall carry 25% of its net profits of the preceding period for which the dividend is paid to its surplus fund until the same shall amount to 100% of its capital stock.

32 Del. Laws, c. 103, § 19; 38 Del. Laws, c. 93, § 1(8); 38 Del. Laws, c. 94, § 28; Code 1935, §§ 2307, 2397; 5 Del. C. 1953, § 748; 60 Del. Laws, c. 458, § 1.;

(a) Banks and trust companies heretofore or hereafter created by or under this Code or any other special act or general law of this State, except as provided in Chapters 15 or 16 of this title, shall hereafter amend their charters, certificates of incorporation, certificates of formation or articles of association by and under this section.

(b) Any bank or trust company in this State whether created under this chapter or by special act of the General Assembly (but not under Chapters 15 or 16 of this title), may, from time to time, when and as desired, amend its charter, certificate of incorporation or articles of association relating to the regulation and governance of corporations established under Title 8, or, in the case of a trust company that is a limited liability company, its certificate of formation or articles of association relating to regulation and governance of limited liability companies formed under Title 6, in each case where the same are not inconsistent with the express provisions of this chapter, including, but not limited to, addition to its corporate powers and purposes, or diminution thereof, or both (provided such additional corporate power or purpose to be such as is authorized or contemplated under any of the provisions of this chapter); or by increasing or decreasing its authorized capital stock (provided that such increase or decrease be expressly approved by the State Bank Commissioner, and provided also that the capital stock shall not be reduced below the amount prescribed by § 745 of this title); by changing the number or par value of its shares of stock; or by changing its corporate title (provided that the word "savings" shall not be used in the amended title, and provided further that no corporation not authorized to do a trust company business shall use the word "trust" in its amended title); and by increasing or decreasing its number of directors (provided that in no case shall the whole number of directors be less than 5). Any or all such changes or alterations may be effected by 1 certificate of amendment. No amendment shall contain a provision which would not have been lawful and proper to insert in an original charter, certificate of incorporation, certificate of formation or articles of association adopted granted or issued under this chapter, but nothing contained in this section shall prohibit the increase in capital stock of a trust company organized prior to February 28, 1933 and authorized by a certificate issued by the State Bank Commissioner to transact the business of a trust company on January 1, 1997, to any amount which may be less than required in § 745 of this title. In the case of an increase of capital stock, the amendment may provide that the increased stock may in whole or in part be disposed of without being offered to the stockholders, but in no case shall any stock be issued except upon payment in full in cash.

(c) The procedure for amendment and the manner of making and effecting the same shall be as prescribed in Chapter 1 of Title 8 for the amendment of the certificate of incorporation of a corporation having a capital stock or, in the case of a trust company that is a limited liability company, as prescribed in Chapter 18 of Title 6 for the amendment of the certificate of formation or limited liability company agreement of a limited liability company. No certificate of amendment shall be received or filed by the Secretary of State or be deemed or held to be effective unless and until the proposed certificate of amendment shall have been submitted to the State Bank Commissioner and shall have been approved both in substance and in form by said Commissioner.

38 Del. Laws, c. 94, §§ 3, 30; Code 1935, §§ 2372, 2399; 46 Del. Laws, c. 251, § 3; 5 Del. C. 1953, § 749; 49 Del. Laws, c. 121; 51 Del. Laws, c. 15; 57 Del. Laws, c. 740, § 19A; 64 Del. Laws, c. 386, § 3; 66 Del. Laws, c. 26, § 1; 71 Del. Laws, c. 19, § 21; 71 Del. Laws, c. 25, §§ 9, 10; 76 Del. Laws, c. 383, §§ 9-13.;

Repealed by 70 Del. Laws, c. 327, § 4, eff. May 2, 1996.;

(a) No bank or trust company doing business in this State, whether or not organized under this chapter, shall merge or consolidate with, sell any substantial portion of its assets to, or take over any substantial portion of the assets and/or assume the liabilities, in whole or in part, of any other bank or trust company, savings bank, national bank, federal savings association (as defined in the Home Owners' Loan Act, 12 U.S.C. § 1461 et seq.) or out-of-state bank (as defined in § 795 of this title) (whether any of the foregoing is then doing business or has ceased to do business or has surrendered its charter or has dissolved) unless and until such action shall be approved by the State Bank Commissioner.

(b) The Commissioner may require that he or she be furnished with such information as to the assets and liabilities and as to the condition of the banks or trust companies concerned as he or she deems necessary or proper to determine whether to give or withhold his approval.

The State Bank Commissioner shall refuse his or her approval whenever in his opinion the transaction will weaken or tend to weaken any bank or trust company concerned.

(c) No title to any property shall pass where the transaction is in violation of this section.

37 Del. Laws, c. 131, § 1; 32 Del. Laws, c. 103; Code 1935, § 2314; 5 Del. C. 1953, § 751; 70 Del. Laws, c. 112, §§ 6, 7.;

Repealed by 70 Del. Laws, c. 327, § 4, eff. May 2, 1996.;