Section 19-3-10

Conversion or exchange, etc., of securities upon merger, consolidation, etc.

(a) Definitions. - As used in this section, unless the context or subject matter otherwise requires, the following terms shall have the meanings respectively ascribed to them by this subsection:

(1) TRUST. An express trust created by a written instrument, including a will, whereby a trustee has the duty to administer a trust asset for the benefit of a named or otherwise described income or principal beneficiary or beneficiaries, or both.

(2) TRUST INSTITUTION. Any state bank, any national bank or corporation, including a trust company, authorized to act in a fiduciary capacity.

(3) FIDUCIARY. Any trust institution or natural person acting as a trustee of a trust, an executor, an administrator with the will annexed, an administrator de bonis non, an administrator, a guardian or a conservator, whether solely or together with others, regardless of how or by whom appointed. "Fiduciary" also includes fiduciaries, a successor, substitute or added fiduciary and the successor in interest of a deceased fiduciary.

(4) SECURITY. Such term includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease, collateral trust certificate, transferable share, trustees' share, investment trust debenture, unit, share or bond, voting trust certificate or, in general, any interest or instrument commonly known as a security or, with respect to any of the foregoing, any certificate, including a temporary or interim certificate of interest or participation, any receipt or certificate of deposit or any warrant or right to subscribe or purchase.

(b) Authority given fiduciaries. - A fiduciary which is authorized by the governing instrument, by judgment of a court, or by law to hold and retain a particular security, including a security issued in its individual corporate capacity by the fiduciary or any of the fiduciaries or any affiliated, associated or related issuer, is authorized, unless expressly prohibited by the governing instrument or by judgment of a court, to convert, exchange or surrender the particular security for, or to accept, receive, hold and retain any other security or securities:

(1) Into which the particular security may be converted;

(2) For which the particular security may be exchanged;

(3) Which may be issued in lieu of or in addition to the particular security; or

(4) Which may be derived from or declared on the particular security, as a result of any merger, consolidation, combination, reorganization, recapitalization, change of charter or name, dividend (in stock or otherwise), distribution, stock split, liquidation, exchange, tender offer, sale or lease of any or all of its business, properties, assets, rights, privileges or franchises, formation or organization of, or issuance of a security or securities by, a corporation or trust institution which is or becomes affiliated or associated with or related to the corporation or trust institution which issued the particular security, provision of, or applicable to, the particular security, or transaction similar to any one or more of the above, with the same rights, powers, authorities and duties as the fiduciary had with respect to the particular security, whether any such other security or the business of the issuer of such other security is substantially equivalent to the particular security or the business of the issuer of the particular security, whether any such other security is a legal investment of trust funds, whether there is a conflict of interest, and whether any such other security is a security issued in its individual corporate capacity by the fiduciary or any of the fiduciaries or by a corporation or trust institution which is or becomes affiliated or associated with or related to the fiduciary or any of the fiduciaries.

(c) Applicability. - This section shall apply to any security with respect to which subsection (b) of this section gives authority to a fiduciary, whether the fiduciary relationship was established before or after September 1, 1971, and whether such security was acquired before or after September 1, 1971.

(Acts 1971, No. 609, p. 1324, §3.)