6-189. Capital obligations; approval; convertibility
A. A capital obligation is an unsecured indebtedness of the bank subordinate to the claims of depositors and all other creditors of the bank regardless of whether the claims arose before or after the issuance of the note or debenture representing the capital obligation. In the event of liquidation all depositors and other creditors of the bank are to be paid in full before any payment of principal or interest is made on capital obligations.
B. No capital obligations shall be incurred without the prior order of approval of the superintendent. Capital obligations authorized by such order may be retired in accordance with the mandatory payment provisions of the obligation without further authorization. No payment shall be made under an optional right of payment reserved to the bank without the separate authorization of the superintendent which may be granted in his initial order of approval or by subsequent order.
C. Capital obligations may be convertible into shares of any class of stock in accordance with their terms approved by the superintendent. No shareholder has any preemptive right to purchase capital obligations or to purchase stock issued upon conversion of capital obligations unless provided by the articles of incorporation or specified in the corporate authority to incur the obligation.
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