26-214. POWER OF BANKS TO GRANT OPTIONS TO PURCHASE OR SELL SHARES OF ITS STOCK TO ITS EMPLOYEES. (1) Any bank may grant options to purchase, sell or enter into agreements to sell, shares of its stock to its employees whether or not such transactions qualify for special tax treatment under the Internal Revenue Code of 1954 as defined in section 63-3004, Idaho Code, and regulations promulgated thereunder, provided that the following conditions are met:

(a) Application for approval shall be made to the director of the department of finance in the form of a letter accompanied by the following information:

1. Description of all material provisions of the plan.

2. Proposed notice of stockholders’ meeting, proxy and proxy statement.

3. The number of shares of authorized but unissued stock to be allocated to the plan.

4. Proposed amendments, if any, to articles of incorporation creating authorized but unissued stock and eliminating preemptive rights as to the shares reserved under the plan.

(b) The plan is administered by a committee, none of whose members may participate in the plan;

(c) The number of shares allocable to any person under the plan is reasonable in relation to the purpose of the plan and the needs of the bank; and

(d) In the case of a stock option plan, the number of shares subject to the plan is not unreasonable in relation to the bank’s capital structure and anticipated growth.

(2) (a) Employees’ stock option and stock purchase plans or agreements may provide that options may be exercisable or that shares may be purchased on any business day. Stock certificates representing the shares purchased pursuant to the exercise of options may be validly issued to such purchasers on receipt of the purchase price.

(b) The increase in capital represented by stock certificates issued pursuant to this section will not be applicable for the purposes of permitted investment in banking premises, permitted indebtedness, lending limits, branches, banking facilities and other like purposes until it has been duly paid in as part of the capital of such bank.

History:

[26-214, added 1979, ch. 41, sec. 2, p. 74.]