Section 45-3-110 - Capital stock associations - Issuance of capital stockAn association may issue the shares of capital stock authorized by its charter and none other. The capital stock of an association, when issued, shall not be retired or withdrawn except as hereinafter provided until all liabilities of the association have been satisfied in full, including the withdrawal value of all deposit accounts. An association may issue shares of common stock and preferred stock, with or without par value, and the common and preferred stock may be divided into classes and the classes into series. Capital stock of an association shall be issued pursuant to the following requirements:
(1) Consideration for Issuance of Stock. Except for stock issued pursuant to an employee stock option plan, or pursuant to a plan of merger, consolidation, conversion from a mutual to a stock association, or other type of reorganization that has been approved by the commissioner, the consideration for the issuance of capital stock shall be paid in cash and the par value or stated value thereof shall be maintained as the permanent capital of the association, and any excess shall be credited to paid-in surplus;(2) Permanent Capital - Reduction and Retirement. The aggregate par value or stated value of all outstanding shares of capital stock shall be the permanent capital of the association, and, except as otherwise specifically provided by this chapter, the capital stock shall not be retired until final liquidation of the association. No association shall reduce the par or stated value of its outstanding capital stock without first obtaining the written approval of the commissioner, and approval shall be withheld if the reduction will cause the par or stated value of outstanding capital stock to be less than the minimum required by this chapter, or will result in less than adequate net worth as the commissioner may, in the commissioner's discretion, determine. No association shall retire any part of its capital stock unless the retirement is approved by the commissioner. With the written approval of the commissioner, an association may purchase its capital stock from the personal representative of a deceased stockholder; and with the written approval, an association may contract with a living stockholder for the purchase upon the stockholder's death. The purchase shall be for a price, and upon terms and conditions, that are agreed upon by the association and the stockholder or personal representative; provided, that the purchase shall not reduce the net worth accounts of the association, or any of them, to an amount less than required by applicable law or by the approved insurer of the association's deposit accounts. An association agreeing with a stockholder to purchase that stockholder's capital stock upon the stockholder's death may purchase insurance upon the life of the stockholder to fund or partially fund the purchase. Any stock purchased from a decedent's personal representative may be resold by the association at the price, and upon terms and conditions, that the board of directors of the association approves or may be retired; provided, that prior to resale, notice shall be filed with the commissioner disclosing the price, terms, and conditions of the proposed resale.Acts 1978, ch. 708, § 1.10; T.C.A., § 45-1310.