[Federal Register Volume 65, Number 12 (Wednesday, January 19, 2000)]
[Notices]
[Pages 2928-2929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1219]


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DEPARTMENT OF AGRICULTURE

Rural Telephone Bank


Amendments to Bylaws

AGENCY:  Rural Telephone Bank, USDA.

ACTION:  Notice of revised bylaws.

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SUMMARY:  The Board of Directors of the Rural Telephone Bank (Bank) 
adopted amendments on November 9, 1999, to the bylaws of the Bank. The 
bylaw amendments will allow Bank borrowers to convert their Class B 
stock earned as patronage refunds into Class C stock before full 
repayment of Bank debt.

EFFECTIVE DATE:  This action was effective November 9, 1999.

FOR FURTHER INFORMATION CONTACT:  Roberta D. Purcell, Assistant 
Governor, Rural Telephone Bank, (202) 720-9554.

SUPPLEMENTARY INFORMATION:  The amendments to the bylaws adopted by the 
Board allow for the conversion of a portion of the Class B stock 
received by a stockholder as patronage refund or purchased by the 
borrower, into Class C stock before the principal of the stockholder's 
loans from the Bank has been fully repaid. For example, if a borrower 
has repaid 50 percent of one of its notes, it would be eligible to 
convert 50 percent of the Class B stock issued to date, through 
patronage capital earned on that note, into Class C stock. In the past, 
all indebtedness to the Bank had to be fully repaid before borrowers 
could convert any of their Class B stock to Class C stock.
    With regard, however, to Class B stock purchased by a borrower as a 
requirement for a loan, borrowers may convert such Class B stock 
related to a loan only upon payment in full of the note made in 
connection with the loan. The Board-approved policy that implements the 
bylaw amendments is set forth in Resolution No. 99-8B.
    Article II, Capital Stock and Special Fund Equivalents, subsection 
2.2(b) and Article VIII, Patronage Capital, subsection 8.2(b) of the 
bylaws were amended as follows:
    1. The third sentence of subsection 2.2(b) is amended by inserting 
``(1)'' between the words ``for'' and ``the'', by inserting ``all'' 
between the words ``of'' and ``amounts'' and adding the following to 
the end of the sentence:
    ``; and (2) for the conversion of a portion of the Class B stock, 
received by a stockholder as patronage refund or purchased by the 
borrower, into Class C stock before the principal of the stockholder's 
loans from the Bank has been fully repaid.''
    2. Subsection 8.2(b) is amended by striking all of the section 
following the word ``addition'' and replacing it with the following:
    ``to the partial or full conversions authorized in section 2.2(b) 
hereof.''
    The bylaws subsection 2.2(b) and subsection 8.2(b) as revised read 
as follows:

Article II--Capital Stock and Special Fund Equivalents

    Subsection 2.2(b). ``Class B stock shall have a par value of one 
dollar ($1.00) per share, shall be issued only at par, shall be held 
only by the recipients of loans made under section 408 of the Act, and 
shall be voting stock. No dividends shall be payable on Class B stock, 
but the holders thereof shall be entitled to patronage refunds in Class 
B stock as hereinafter provided. Prior to dissolution or liquidation of 
the Bank, Class B stock may be redeemed and retired only after all 
shares of Class A stock shall have been redeemed and retired: Provided, 
however, That the Board may, under rules of general application adopted 
by it and upon agreement with the stockholder, provide for (1) the 
conversion of Class B stock into Class C stock upon payment of all 
amounts owned by a holder of Class B stock to the Bank and upon 
surrender of sufficient shares of Class B stock, supplemented by cash 
if necessary, to equal the par value of each share of Class C stock to 
be issued inasmuch as fractional shares of Class C stock shall not be 
issued; and (2) for the conversion of a portion of the Class B stock, 
received by a stockholder as a patronage refund or purchased by the 
borrower, into Class C stock before the principal of the stockholder's 
loans from the Bank has been fully repaid. Upon dissolution or 
liquidation of the Bank, holders of Class B stock shall be entitled to 
share

[[Page 2929]]

pro rata with the holder of Class A stock then outstanding in the 
surpluses and contingency reserves remaining after the payment of all 
of the Bank's liabilities and after retirement of all classes of stock 
at par as provided in section 411 of the Act. Class B stock shall not 
be transferable, either absolutely or by way of collateral, except in 
connection with the assumption by the transferee, with the approval of 
the Governor, of all or part of the transferor's loan from the Bank.''

Article VIII--Patronage Capital

    Subsection 8.2(b). ``If, at any time after all Class A stock has 
been retired, the Board should determine that the Bank's financial 
condition will not be impaired thereby, it may establish procedures for 
the retirement of Class B stock in full or in part or its conversion to 
Class C stock in addition to the partial or full conversions authorized 
in section 2.2(b) hereof.''

    Dated: January 12, 2000.
Christopher A. McLean,
Acting Governor, Rural Telephone Bank.
[FR Doc. 00-1219 Filed 1-18-00; 8:45 am]
BILLING CODE 3410-15-P