(a) The board of a state trust company shall be governed by the provisions of the Arkansas Business Corporation Act, § 4-27-101 et seq., provided that the board must consist of not fewer than three directors, the majority of whom must be residents of this state.
(b) Unless the Bank Commissioner consents otherwise in writing, a person may not serve as director of a state trust company if:
(1) The state trust company incurs an unreimbursed loss attributable to a charged-off obligation of or holds a judgment against the person or an entity that was controlled by the person at the time of funding and at the time of default on the loan that gave rise to the judgment or charged-off obligation;
(2) The person has been convicted of a felony; or
(3) The person has violated a provision of this chapter, relating to loan of trust funds and purchase or sale of trust property by the trustee, and the violation has not been corrected.
(c) If a state trust company does not elect directors prior to sixty (60) days after the date of its regular annual meeting, the commissioner may commence a proceeding to appoint a receiver pursuant to § 23-51-164 to operate the state trust company and elect directors or managers, as appropriate. If the conservator is unable to locate or elect persons willing and able to serve as directors, the commissioner may close the state trust company for liquidation.
(d) A vacancy on the board that reduces the number of directors to fewer than three must be filed not later than ninety (90) days after the date the vacancy occurs. If the vacancy has not been filled upon the expiration of ninety (90) days following the date the vacancy occurs, the commissioner may commence a proceeding to appoint a receiver pursuant to § 23-51-164 to operate the state trust company and elect a board of not fewer than three persons to resolve the vacancy. If the conservator is unable to locate or elect three persons willing and able to serve as directors, the commissioner may close the state trust company for liquidation.
(e) Before each term to which a person is elected to serve as a director of a state trust company, the person shall submit an affidavit for filing in the minutes of the state trust company stating that the person, to the extent applicable:
(1) Accepts the position and is not disqualified from serving in the position;
(2) Will not violate or knowingly permit an officer, director, or employee of the state trust company to violate any law applicable to the conduct of business of the state trust company; and
(3) Will diligently perform the duties of the position.
(f) An advisory director is not considered a director if the advisory director:
(1) Is not elected by the shareholders of the state trust company;
(2) Does not vote on matters before the board or a committee of the board and is not counted for purposes of determining a quorum of the board or committee; and
(3) Provides solely general policy advice to the board.