Capital stock of a stock association shall be issued pursuant to the following requirements:

(a) Except for stock issued pursuant to a stock dividend, stock split, reverse stock split, reclassification of outstanding stock into stock of another class, exchange of outstanding stock for stock of another class or other change affecting outstanding stock or an employee stock option plan or 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 money paid, debts or securities canceled or tangible or intangible property actually received either by the association or by a wholly owned subsidiary. The par value or stated value of stock shall be maintained as the permanent capital of the association and any additional amount paid in shall be credited to paid-in surplus.

(b) 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 division, capital stock shall not be retired until final liquidation of the association.

(c) 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 would cause the par or stated value of outstanding capital stock to be less than the minimum required by this division or would result in less than adequate statutory net worth as the commissioner may determine under Section 6475.

(d) No association shall retire any part of its capital stock unless the retirement is approved by the commissioner.

(e) No association shall make loans secured by its capital stock.

(f) With the written approval of the commissioner, an association may purchase its capital stock or may contract with a stockholder for purchase of stock upon the stockholder’s death. However, 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. An association which agrees with a stockholder to purchase that stockholder’s capital stock upon death may purchase insurance upon the life of the stockholder to fund or partially fund the purchase.

(Amended by Stats. 1987, Ch. 1162, Sec. 6. Effective September 26, 1987.)