SECTIONS 670 - California Statutes

FINANCIAL CODE

SECTION 670

670. A bank at any time may, with the approval of its board, issue,
sell or hypothecate its capital notes or debentures which may be
payable upon such terms and may bear such rate of interest, if any,
as may be provided therein or which may be convertible into shares.
Such capital notes and debentures shall be subordinate to the claims
of creditors and depositors and it shall be provided in any such
capital notes or debentures that in the event of liquidation all
depositors and other creditors of the bank shall be entitled to be
paid in full with such interest as may be provided by law before any
payment shall be made on account of principal of or interest on such
capital notes or debentures and it may be provided in any such
capital notes or debentures that after payment in full of all sums
owing to such depositors and creditors the holders of such capital
notes or debentures shall be entitled to be paid from the remaining
assets of the bank the unpaid principal amount of the capital notes
or debentures plus accrued and unpaid interest thereon before any
payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any shares of the bank. It
shall be provided in such capital notes or debentures that no payment
shall at any time be made on account of the principal thereof,
unless following such payment the aggregate of the shareholders'
equity and capital notes or debentures thereafter outstanding shall
be the equal of such aggregate at the date of the original issue of
such capital notes or debentures, or as may be otherwise authorized
by the commissioner.