12 U.S.C. § 61 — Shareholders’ voting rights; cumulative and distributive voting; preferred stock; trust shares; proxies, liability restrictions; percentage requirement exclusion of trust shares

submitted 93 years ago by Pub. L. 86-114 to r/title-12-BANKS-AND-BANKING · 359 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law sets how shareholders vote at national bank meetings. In director elections, they can spread or stack their votes across candidates if the bank's rules allow it; on other matters, each share gets one vote. It also limits who can vote as a proxy or trustee.

In electing directors, each shareholder can vote their shares for as many people as there are director seats. If the bank's articles of association allow it, a shareholder can instead "cumulate" their shares — giving one candidate a number of votes equal to the shares times the number of open director seats — or split that same total among several candidates as they choose. On every other question voted on at shareholder meetings, each shareholder gets one vote per share, except: (1) This does not limit the voting rights that preferred stockholders have under the bank's articles of association or amendments adopted under section 51b of this title. (2) When a national bank holds its own stock as the sole trustee — whether registered in the bank's name or its nominee's name — the bank cannot vote those shares in director elections, unless the trust lets a donor or beneficiary decide how to vote them and that donor or beneficiary actually gives voting instructions. (3) When a national bank and one or more other people hold the bank's own stock together as trustees, those other trustees may vote the shares just as if they were the sole trustee. Shareholders may vote by written proxy, but a bank officer, clerk, teller, or bookkeeper cannot serve as a proxy, and a shareholder whose debt to the bank is past due and unpaid cannot vote. When shares can't be voted because the bank holds them as sole trustee, those shares are left out when figuring whether a shareholder vote met the required percentage.

the actual law source: uscode.house.gov ↗public domain

In all elections of directors, each shareholder shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected, or, if so provided by the articles of association of the national bank, to cumulate such shares and give one candidate as many votes as the number of directors multiplied by the number of his shares shall equal or to distribute them on the same principle among as many candidates as he shall think fit; and in deciding all other questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock held by him; except that (1) this shall not be construed as limiting the voting rights of holders of preferred stock under the terms and provisions of articles of association, or amendments thereto, adopted pursuant to the provisions of section 51b of this title; (2) in the election of directors, shares of its own stock held by a national bank as sole trustee, whether registered in its own name as such trustee or in the name of its nominee, shall not be voted by the registered owner unless under the terms of the trust the manner in which such shares shall be voted may be determined by a donor or beneficiary of the trust and unless such donor or beneficiary actually directs how such shares shall be voted; and (3) shares of its own stock held by a national bank and one or more persons as trustees may be voted by such other person or persons, as trustees, in the same manner as if he or they were the sole trustee. Shareholders may vote by proxies duly authorized in writing; but no officer, clerk, teller, or bookkeeper of such bank shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. Whenever shares of stock cannot be voted by reason of being held by the bank as sole trustee such shares shall be excluded in determining whether matters voted upon by the shareholders were adopted by the requisite percentage of shares.

Source credit: (R.S. § 5144; June 16, 1933, ch. 89, § 19, 48 Stat. 186; Aug. 23, 1935, ch. 614, title III, § 311, 49 Stat. 710; Sept. 3, 1954, ch. 1263, § 21, 68 Stat. 1234; Pub. L. 86–114, § 4, July 28, 1959, 73 Stat. 264; Pub. L. 89–485, § 13(c), July 1, 1966, 80 Stat. 242; Pub. L. 109–351, title III, § 301, Oct. 13, 2006, 120 Stat. 1969.)

history & why it existsrecord from the source credit

1933Enacted · Act of June 16, 1933, ch. 89 · 48 Stat. 186
1935Amended · Act of Aug. 23, 1935, ch. 614 · 49 Stat. 710
1954Amended · Act of Sept. 3, 1954, ch. 1263 · 68 Stat. 1234
1959Amended · Pub. L. 86-114 · 73 Stat. 264
1966Amended · Pub. L. 89-485 · 80 Stat. 242
2006Amended · Pub. L. 109-351 · 120 Stat. 1969

A history note hasn’t been published yet. The record shows enactment by Pub. L. 86-114 on 1933-06-16.

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