Chapter 12

COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 1CHAPTER 12 INDUSTRIAL DEVELOPMENT CORPORA TIONS § 12101. Definitions. § 12102. Articles of Incorporation. § 12103. Corporate Powers. § 12104. Acquiring and Disposing of Bonds, etc. § 12105. Membership. Loans to the Corporation. § 12106. Duration of Mem bership. Withdrawal. § 12107. Powers of Stockholders and Members. § 12108. Amendment of Articles of Incorporation. § 12109. Board of Directors. § 12110. Surplus. § 12111. Depositories. § 12112. Examination of Accounts. § 12113. First Meeting. § 1211 4.Duration of Existence. § 12115. Dissolution. § 12116. Pledging Credit. § 12117. Definition of Development Company . § 12118. Tax Exemptions, etc. § 12119. Payment of Fee. § 12120. Fiscal Y ear. § 12121. Provisions Severable. § 12101. Definitions. As used in this Chapter, the following words and phrase s, unless differ - ently defined or described, shall have meanings and references as follows: (a) Corporation means a Territory of Guam industri al development corporation created under this Chapter . (b) Financial institution means any banking cor poration or trust company , savings and loan institu

oration means a Territory of Guam industri al development corporation created under this Chapter . (b) Financial institution means any banking cor poration or trust company , savings and loan institu tion, insur ance company or related corporation, part - nership, foundation, or other institution engaged primarily in lending or investing funds. (b) Finan cial institution means any banking corporation or trust company , savings and loan institution, insurance company or related COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 2corporation, partnership, foundation, or other institution engaged primarily in lending or investing. (c) Member means any financial institution autho rized to do business within this territory which shall undertake to lend money to a corporation created under this Chapter , upon its call, and in accordance with the provisions of this Chapter . (d) Loan limit means for any member , the m aximum amount permitted to be outstanding at one time on loans made by such membe r to the corporation, as determined under the provisions of this Chapter. SOURCE: CC § 606; added by P .L. 9-118 (8/25/67).

amount permitted to be outstanding at one time on loans made by such membe r to the corporation, as determined under the provisions of this Chapter. SOURCE: CC § 606; added by P .L. 9-118 (8/25/67). All references, unless otherwise noted, will be to P.L. 9-118. § 12102. Articles of Incorporation. Ten or more persons, a majority of whom shall be resi dents of this territory , who may desire to create an industrial develop ment corporation under the provisions of this Chapter, for the purpose of promo ting, developing, and advancing the pros perity and economic welfare of the territory and, to that end, to exercise the powers and privileg es hereinafter provided, may be incorporated by filing with the Director of Revenue & Taxation, as hereinafter provi ded, articles of incorpora tion. The articles of incorporation shall contain: (a) The name of the corporation, which shall include the words Industrial Development Corpo ration of Guam. (b) The location of the principal office of the corporation. (c) Th e purpose for which the corporation is founded, which shall be to promote, stimu late, devel op and advance the business pros perity and economic welfare of Guam and its citizens; to

poration. (c) Th e purpose for which the corporation is founded, which shall be to promote, stimu late, devel op and advance the business pros perity and economic welfare of Guam and its citizens; to encourage and assist through loans, investments or other business transac tions in the location of new business and industry in this territory and to rehabilitate and assist existing business and industry; to stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business developm ent and main tain the economic stability of this territory , provide maximum opportunities for employ - ment, encour age thrift and improve the stan dard of living of the citizens of this territory; similar ly to cooperate and act in conjunction with other o rgani zations, public or private, in the promotion and ad - vancement of industri al, commercial, agricultural and recreational COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 3develop ments in this territory; and to provide financing for the promotion, development and conduct of all kinds of business acti vity in this territo ry.

CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 3develop ments in this territory; and to provide financing for the promotion, development and conduct of all kinds of business acti vity in this territo ry. (d) The names and post office addresses of the members of the first board of direc tors, who, unless otherwise provided by the articles of incorporation or the bylaws, shall hold office for the first year of existence of the corp oration or until their successors are elected and have qualified. (e) Any provision which the incorporators may choose to insert for the regulation of the business and for the conduct of the affairs of the corporation and any provision creating, dividing, limiting and regu - lating the powers of the corporation, the direc tors, stockhold ers or any class of the stockholders, includ ing, but not limited to, a list of the officers and provi sions governing the issuance of stock certificates to replace lost or destroyed certificates, provided that no provision shall be contained for cumulative voting for directors. (f) The amount of authorized capital stock and the number of shares into which it is divided, the par value of each share and the amount of capital

l be contained for cumulative voting for directors. (f) The amount of authorized capital stock and the number of shares into which it is divided, the par value of each share and the amount of capital with which it will commence business and, if there is more than one class of stock, a description of the different class es, the names and post office addresses of the subscribers of stock and the number of shares sub scribed by each. The aggregate of the subscription shall be the minimum amount of capital with which the corporation shall commence business which shall not be less than three hundred thousand dollars ($300,000.00). The articles of incorporation may also contain any provision consistent with t he la wsof this territory for the regulation of the affairs of the corpo ration. (g) The articles of incorporation shall be in writing, subscribed by not less than three (3) natural persons competent to contract and acknowledged by each of the subscribers before an officer authorized to take acknowl edgments and filed in the office of the Direc tor of Revenue and T axation. A duplicate so subscribed and acknowledged may also be filed.

the subscribers before an officer authorized to take acknowl edgments and filed in the office of the Direc tor of Revenue and T axation. A duplicate so subscribed and acknowledged may also be filed. (h) The articles of incorporation shall recite that the corporation is organized under the provisions of this Chapter . COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 4The Director of Revenue and T axation shall not approve the articles of incorporation for a corporation organized under this Chapter until a total of at least three (3) national banks, state banks, savings banks , industrial savings banks, federal savings and loan associations, public corporations created for the purpose of imple menting economic development and which are recognized by the Small Business Administration as approved lending institutions, domestic bu ilding and loan associa tions, or insurance companies authorized to do business within this territory , or any combination thereof, have agreed in writing to become members of said corporation; and said written agreement shall be filed with the Direc tor of Revenue and T axation with the articles of incorpo ration, and

n thereof, have agreed in writing to become members of said corporation; and said written agreement shall be filed with the Direc tor of Revenue and T axation with the articles of incorpo ration, and the filing of same shall be a condition prece dent to the approval of the articles of incorporation by the Director of Revenue and Taxation. Whenever the articles of incorpora tion shall have been filed in the office of the Director of Revenue and T axation and approved by him, and all filing fees prescribed bystatute have been paid, the subscribers, their successors and assigns shall consti tute a corporation, and said corporation shall then b e authorized to commence busi ness, and stock thereof to the extent herein or hereafter duly authorized may from time to time be issued. SOURCE: CC § 607. Director of Finance changed to Revenue and T axation pursuant to P.L. 9 -228. § 12103. Corporate Power s. In furtherance of its purpos es and in addition to the powers now or hereafter conferred on business corporations by Part 1 of this Title, the corpora tion shall, subject to the restrictions and limita tions herein contained, have the following powers: (a) To elect, appoint and employ

ed on business corporations by Part 1 of this Title, the corpora tion shall, subject to the restrictions and limita tions herein contained, have the following powers: (a) To elect, appoint and employ officers, agents and employees; to make contracts and incur liabili ties for any of the purposes of the corporation; provided that the corporation shall not incur any secondary liability by way of guaranty or endorse ment of the obligations of any person, firm, corpora tion, joint -stock company , association or trust, or in any other manner . (b) T o borrow money from its members and the Small Business Administration and any other similar Federal agency for any of the purposes of the corpo ration; to issue therefor its bonds, debentures, notes or other evi dences of indebtedness, whether secured or unsecured, and to secure the same by mort gage, pledge, deed of trust COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 5or other lien on its property , franchises, rights and privile ges of every kind and nature, or any part thereof of interest therein, without securing stockholder or member approval.

T CORPORA TIONS 5or other lien on its property , franchises, rights and privile ges of every kind and nature, or any part thereof of interest therein, without securing stockholder or member approval. (c) T o make loans to any person, firm, corpora tion, joint -stock company , association or trust and to estab lish and regulate the terms and conditions with respect to any such loans and the charges for interest and service connected therewith; provided, however, that the corporation shall not approve any applica tion for a loan unless and until the person applying for said loan shall show that he has applied for the loan through ordinary banking channels and that the loan has been refused by at least one (1) bank or other financial institution. (d) To purchase, receive, hold, lease or otherwise acquire, and to sell, convey , transfer , lease , or other wise dispose of real and personal property , together with such rights and privileges as may be incidental and appurtenant thereto and the use thereof, includ ing, but not restricted to, any real or personal proper tyacquired by the corporation from time to time in the satisfaction of debts or enforcement of obliga - tions.

reto and the use thereof, includ ing, but not restricted to, any real or personal proper tyacquired by the corporation from time to time in the satisfaction of debts or enforcement of obliga - tions. (e) T o acquire the good will, business, rights, real and personal property and other assets, or any part thereof, or interest therein, of any persons, firms, corporation, joint -stock companies, associations or trusts, and to assume, undertake, or pay the obliga tions, debts and liabilities of any such per son, firm, corporation, joint -stock company , association or trust; to acquire improved or unimproved real estate for the purpo seof constructing industrial plants or other busi ness establishments thereon or for the pur pose of disposing of such real estate to others for the con struction of industrial plants or other business estab lishments; and to acquire, construct or recon struct, alter, repair , maintain, operate, sell, convey , transfer, lease or otherwise dispose of indus trial plants or business establishments. (f) To acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the sto ck, shares, bonds, debentures, notes or other

ial plants or business establishments. (f) To acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the sto ck, shares, bonds, debentures, notes or other securities and evidences of interest in, or indebtedness of any person, firm, corporation, joint -stock company , association or trust, and while the owner or holder thereof to exercise all the rights, powers and privileges to ownership, including the right to vote thereon.COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 6(g) T o mortgage, pledge or otherwise encumber any property , right or thing of value, acquired pursu ant to the powers contained in subsections (4), (5) or (6) as security for the payment of any part of the purchase price thereof. (h) To cooperate with and avail itself of the facilities of the United States Department of Com merce, the Guam Economic Development Authority and any other similar Government of Guam or Federal govern mental agencies; and to cooperate with and assist and other wise encourage organiza tions in the various communities of the territory in the promotion, assis tance and development of the business

ern mental agencies; and to cooperate with and assist and other wise encourage organiza tions in the various communities of the territory in the promotion, assis tance and development of the business prosperity and economic welfare of such communities or of this territory or o f any part there of. (i) To do all acts and things necessary or conve nient to carry out the powers expressly granted in this Chapter . SOURCE: CC § 608. § 12104. Acquiring and Disposing of Bonds, etc. Notwithstanding any rule or common law or any provi sion of any general or special law or any provision in their respec tive charters, agreements of association, articles of organiza tion or trust indentures: (a) Any person, including all domestic corpora tions organized for the purpose of carrying on busi ness within this territory , and further including without implied limita tion public utility companies and insur ance companies and foreign corporations licensed to do business within this territory and all financial institu tions as defined herein, and all trusts, are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mort gage, pledge or otherwise dispose of any bonds, securities, or

inancial institu tions as defined herein, and all trusts, are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mort gage, pledge or otherwise dispose of any bonds, securities, or other evidences of indebtedness created by , or the shares of the capital stock of the corporation, and while owners of said stock to exercise all the rights, powers and privileges of ownership, including the right to vote thereon, all with out the approval of any regulatory authority of the territory except as otherwise provid ed in this Chapter; provid ed,however, that a finan cial institution which does not become a member of the corporation shall not be per mitted to acquire any shares of the capital stock of the corporation.COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 7(b) All financial institutions are hereby autho rized to become members of the corpora tion and to make loans to the corporation as provided herein. (c) Each financial institution which be comes a member of the corporation is hereby authorized to acquire, purchase, hold, sell, assign, transfer , mort gage, pledge, or other wise dispos e of any bonds, securities, or other

ution which be comes a member of the corporation is hereby authorized to acquire, purchase, hold, sell, assign, transfer , mort gage, pledge, or other wise dispos e of any bonds, securities, or other evidences of indebtedness created by , or the shares of the capital stock of the corpora tion, and while owners of said stock to exercise all the rights, powers and privileges of ownership, including the right to vote th ereon, all without the approval of any regulatory authority of territory; provided, that the amount of the capital stock of the corporation which may be acquired by any member pursuant to the authority granted herein shall not exceed ten percent (10%) of t he loan limit of such member. The amount of capital stock of the corporation which any member is authorized to acquire pursuant to the authority granted herein is in addition to the amount of capital stock in corpo rations which such member may otherwise b e authorized to acquire. SOURCE: CC § 609. § 12105. Membership. Loans to the Corpora tion. Any financial institution may request membership in the corporation bymaking appli cation to the board of direc tors on such form and in such manner as said boar d of

ship. Loans to the Corpora tion. Any financial institution may request membership in the corporation bymaking appli cation to the board of direc tors on such form and in such manner as said boar d of directors may require, and membership shall become effective upon acceptance of such application by said board. Each member of the corporation shall make loans to the corporation as and when called upon by it to do so on such terms and other condi tions as shall be approved from time to time by the board of directors, subject to the following conditions: (a) All loan limits shall be established at the thousand dollar amount nearest to the amount comput ed in accordance with the provisions of this secti on. (b) No loan to the corporation shall be made if immediately thereafter the total amount of the obliga tions of the corporation would exceed ten (10) times the amount then paid in on the outstanding capital stock of the corporation.COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 8(c) The total amount outstanding on loans to the corporation made byany member at any one time, when added to the amount of the investment in the capital stock of the

TRIAL DEVELOPMENT CORPORA TIONS 8(c) The total amount outstanding on loans to the corporation made byany member at any one time, when added to the amount of the investment in the capital stock of the corporation then held by such member, shall not exceed: (1) Twenty percent (20%) of the total amount then outstanding on loans to the corporation by all members, including in said total amount outstand ing amounts validly called for loan but not yet loaned. (2) The following limit to be determined as of the time such member becomes a member on the basis of the a udited balance sheet of such member at the close of its fiscal year immediate ly preced ing its appli cation for membership, or in the case of an insurance company , its last annu al statement to the territorial Commis sioner of Banking and Insurance ; two a nd one -half percent (2 2%) of the capital and surplus of com mercial banks and trust companies; one -half of one percent (0.5%) of the total outstanding loans made by savings and loan associations, and build ing and loan associa tions; two and one -half per cent (22%) of the capital and unassigned sur plus of stock insur ance companies, except fire insurance companies;

gs and loan associations, and build ing and loan associa tions; two and one -half per cent (22%) of the capital and unassigned sur plus of stock insur ance companies, except fire insurance companies; two and one -half percent (2 2%) of the unas signed surplus of mutual insurance compa nies, except fire insurance compa nies; one -tenth of one percent (0.1%) of the assets of fire insur ance companie s; and such limits as may be approved by the board of directors of the corporation for other financial institutions. (d) Subject to Paragraph (1) of subsection (c) of this section, each call made by the corporation shall be prorated among the members of the corporation in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members. The adjusted loan limit of a member shal l be the amount of such mem ber's loan limit, reduced by the balance of outstanding loans made by such member to the corporation and the investment in capital stock of the corpo ration held by such member at the time of such call. (e) All loans to the cor poration by members shall be evidenced by bonds, deben tures, notes or other

the investment in capital stock of the corpo ration held by such member at the time of such call. (e) All loans to the cor poration by members shall be evidenced by bonds, deben tures, notes or other evidences of indebted ness of the corporation, which shall be freely transferable at all times, and which COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 9shall bear interest at a rate of not less than one -quarter of one percent (0.25%) in excess of the rate of interest determined by the board of direc tors to be the prime rate prevailing at the date of issuance thereof on unsecured com mercial loans. SOURCE: CC § 610. 2011 NOTE: Reference to the 'Insurance Commisioner' changed to the 'Commissioner of Banking and Insurance' pursuant to P.L. 27 -088:10 (May 6, 2004). § 12106. Duration of Membership. Withdrawal. Mem bership in the corporation shall be for the duration of the corporation; provided that upon written notice given to the corporation five (5) years in advance, a member may withdraw from membership in the corpora tion at the expiration date of such notice.

the corporation; provided that upon written notice given to the corporation five (5) years in advance, a member may withdraw from membership in the corpora tion at the expiration date of such notice. A member shall not be obligated to make any loans to the corporation pursuant to calls made subsequent to notice of the intended withdrawal of said member . SOURCE: CC § 611. § 12107. Powers of S tockholders and Members. The stockholders and the members of the corpo ration shall have the following powers of the corporation: (a) To determine the number of and elect dire ctors as provided in § 12109 hereof. (b)To make, amend and repeal bylaws. (c)To amend this charter as provided in § 12108. (d)To dissolve the corporation as provid ed in § 12115. (e) T o do all things necessary or desirable to secure aid, assistance, loans and other financing from any financial institutions and from any agency established under the Small Business Investment Act of 1958, Public Law 85 -699, 85th Congress, or other similar Federal laws now or hereafter enacted. (f) T o ex ercise such other of the powers of the corporation consistent with this Chap ter as may be conferred on the stockholders and the

ss, or other similar Federal laws now or hereafter enacted. (f) T o ex ercise such other of the powers of the corporation consistent with this Chap ter as may be conferred on the stockholders and the members by the bylaws. As to all matters requiring action by the stockholders and the members of the corporation, said stockholders COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 10and said memb ers shall vote separately thereon by classes, and except as other wise herein provided, such matters shall require the affirmative vote of a majority of the votes to which the stockhold ers present or represented at the meeting shall be enti tled and the a ffirmative vote of a majority of the votes to which the members present or represented at the meeting shall be entitled. Each stockholder shall have one (1) vote, in person or by proxy , for each share of capital stock held by him, and each member shall have one (1) vote, in person or by proxy , except that any member having a loan limit of more than one thousand ($1,000.00) dollars shall have one (1) additional vote, in person or by proxy , for each additional one thou sand dollars ($1,000.00),

pt that any member having a loan limit of more than one thousand ($1,000.00) dollars shall have one (1) additional vote, in person or by proxy , for each additional one thou sand dollars ($1,000.00), which such mem ber is authorized to have outstanding on loans to the corporation at any one time as determined under Paragraph (2) of subsection (c) of § 12105. SOURCE: CC § 612. § 12108. Amendment of Articles of Incorpora tion. The articles of incorporation may be am ended by the votes of the stockholders and the members of the corpora tion, voting separate ly by classes, and such amendments shall re quire approval by the affirmative vote of two -thirds (2/3) of the votes to which the stockholders shall be entitled and two-thirds (2/3) of the votes to which the members shall be entitled; provided that no amendment of the articles of incorporation which is inconsistent with the general purposes expressed herein or which authoriz es any addi tional class of capital stock t o be issued, or which elimi nates or cur - tails the right of the Director of Revenue and T axation to examine the corporation or the obligation of the corporation to make reports as provided in § 12012, shall be

or which elimi nates or cur - tails the right of the Director of Revenue and T axation to examine the corporation or the obligation of the corporation to make reports as provided in § 12012, shall be made; and provided further that no amendment o f the articles of incorporation which increas es the obligation of a member to make loans to the corporation, or makes any change in the principal amount, interest rate, maturity date, or in the security or credit position of any outstanding loan of a memb er to the corporation, or affects a membe r's right to withdraw from membership as provided herein, or affects a member's voting rights as provided herein, shall be made without the consent of each member affected by such amendment. Within thirty (30) days after any meeting at which an amendment of the articles of incorpo ration has been adopted, articles of amendment signed and sworn to by the president, treasurer and a majority of the directors, COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 11setting forth such amendment and due adoption thereof, shall be submitted to the Director of Revenue and T axation who shall examine them, and if he

NCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 11setting forth such amendment and due adoption thereof, shall be submitted to the Director of Revenue and T axation who shall examine them, and if he finds that they conform to the requirements of this Chapter, shall so certify and endorse his ap proval thereon. Thereupon, the articles of amendment shall be filed in t he office of the Director of Revenue and T axation, and no such amendment shall take effect until such articles of amend ment shall have been filed as aforesaid. SOURCE: CC § 613. § 12109. Board of Directors. The business and affairs of the corporation s hall be managed and conducted by a board of directors, a presi dent, a vice -president, a secretary , a treasurer and such other officers and such agents as the corporation by its bylaws shall authorize. The board of directors shall consist of such number not less than three (3) nor more than eleven (11), as shall be determined in the first instance by the incorporators and thereafter annually by the members and the stockholders of the corpo ration. The board of directors may exercise all the powers of the co rporation except such as are con ferred bylawor by the

rs and thereafter annually by the members and the stockholders of the corpo ration. The board of directors may exercise all the powers of the co rporation except such as are con ferred bylawor by the bylaws of the corpo ration upon the stockholders or mem - bers and shall choose and appoint all the agents and officer of the corporation and fill all vacancies except vacancies in the office of direct or, which shall be filled as hereinafter provided. The board of directors shall be elected in the first instance by the incorporators and thereafter at the annual meeting, which annual meeting shall be held during the month of January or, if no annual meet ing shall be held in the year of incorporation, then within ninety (90) days after the approval of the articles of incorporation at a special meeting as hereinafter provided. At each annual meeting, or at each special meeting held as provided in this secti on, the members of the corporation shall elect two -thirds (2/3) of the board of directors, and the stockholders shall elect the remaining directors. The directors shall hold office until the next annual meeting of the corpora tion or special meeting held i n lieu of the annual

f directors, and the stockholders shall elect the remaining directors. The directors shall hold office until the next annual meeting of the corpora tion or special meeting held i n lieu of the annual meeting after the election and until their successors are elected and qualified unless sooner removed in accordance with the provisions of the bylaws. Any vacancy in the office of a director elected by the members shall be filled by th e directors elected by the members, and any vacancy in the office of a director elected by the stockholders shall be filled by the direc tors elected by the stockholders.COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 12Directors and officers shall not be responsible for losses unless the same shall have been occasioned by the willful misconduct of such directors and officers. SOURCE: CC § 614. § 12110. Surplus. Each year the corporation shall set apart as earned surplus not le ss than ten percent (10%) of its net earnings for the preceding fiscal year until such surplus shall be equal in value to one -half (2) of the amount paid in on the capital stock then outstand ing.

e ss than ten percent (10%) of its net earnings for the preceding fiscal year until such surplus shall be equal in value to one -half (2) of the amount paid in on the capital stock then outstand ing. When ever the amount of surplus established herein shall become impaired, it shall be built up again to the required amount in the mann er provided for its original accumula tion. Net earnings and surplus shall be deter mined by the board of directors, after providing for such reserves as said directors deem desirable, and the determi nation of the directors made in good faith shall be con clusive on all persons. SOURCE: CC § 615. § 12111. Depositories. The corporation shall not deposit any of its funds in any banking institution unless such institution has been designated as a depository by a vote of a majori ty of the directors present at an autho rized meeting of the board of directors, exclusive of any director who is an officer or director of the depository so designat ed. The corporation shall not receive money on deposit. SOURCE: CC § 616. § 12112. Examination of Accounts. The co rporation shall be examined at least once annually by the Director of Revenue and T axation and

poration shall not receive money on deposit. SOURCE: CC § 616. § 12112. Examination of Accounts. The co rporation shall be examined at least once annually by the Director of Revenue and T axation and shall make reports of its condition not less than annually to said Director of Reve nue and T axation and more frequently upon call of the Direc tor of Revenue and T axation, who in turn shall make copies of such reports available to the territorial Commissioner of Banking and Insurance and the Gover nor; and the corporation shall also furnish such other information as may from time to time be required by the Gove rnor and Lieutenant Gover nor of Guam. The corporation shall pay the actual cost of said examinations. The Director of Revenue and T axation shall exercise the same power and authority over corporations organized under this Chapter as is now exercised over banks and trust companies by the provisions of the Guam banking code, where such banking code is not in COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 13conflict with this Chapter . SOURCE: CC § 617. Reference to Secretary of Guam changed to Lieutenant Governor by Com piler.

GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 13conflict with this Chapter . SOURCE: CC § 617. Reference to Secretary of Guam changed to Lieutenant Governor by Com piler. The position of Secretary of Guam was abol ished with the Elective Gover nor Act of 1968 and in its place is the position of Lieutenant Gover nor. 2011 NOTE: Reference to the 'Insurance Commisioner' changed to the 'Commissioner of Banking and Insurance' pursuant to P.L. 27 -088:10 (Ma y 6, 2004). § 12113. First Meeting. The first meeting of the corpo ration shall be called by a notice signed bythree (3) or more of the incorporators, stating the time, place and purpose of the meeting, a copy of which notice shall be mailed or delivered to each incorporator at least five (5) days before the day appointed for the meet ing. Said first meeting may be held without such notice upon agreement in writing to that effect, signed by all the incorporators. There shall be recorded in the minutes of the meeting a copy of said notice or of such unanimous agreement of the incorporators. At such first meeting, the incorporators shall orga nizeby the choice, by ballot, of a tempo rary clerk; by the

the meeting a copy of said notice or of such unanimous agreement of the incorporators. At such first meeting, the incorporators shall orga nizeby the choice, by ballot, of a tempo rary clerk; by the adoption of bylaws; by the election by ballot of directo rs; and by action upon such other matters within the powers of the corporation as the incorporators may see fit. The temporary clerk shall be sworn and shall make and attest a record of the proceedings. Three (3) of the incorporators shall be a quorum for the transaction of business. SOURCE: CC § 618. § 12114. Duration of Existence. The period of duration of the corporation shall be fifty (50) years, subject, however, to the right of the stockholders and the members to dissolve the corporation prior to t he expira tion of said period as provided in § 12115. SOURCE: CC § 619. § 12115. Dissolution. The corporation may , upon the affirmative vote of two -thirds (2/3) of the votes to which the stockholders shall be entitled and two -thirds (2/3) of the votes t o which the members shall be entitled, dissolve said corporation. Upon any dissolution of the corporation, none of the corporation's assets shall be distributed to the

wo -thirds (2/3) of the votes t o which the members shall be entitled, dissolve said corporation. Upon any dissolution of the corporation, none of the corporation's assets shall be distributed to the stockholders until all sums due the members of the corpo ration as creditors thereof hav e been paid in full. COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 14SOURCE: CC § 620. § 12116. Pledging Credit. Under no circum stances shall the credit of the Territory of Guam be pledged to any corporation organized under the provisions of this Chapter . SOURCE: CC § 621. § 12117. Definition of Dev elopment Company. Any corporation organized under the provisions of this Chapter shall be a territorial development company , as defined in the Small Business Investment Act of 1958, Public Law 85 -699, 85th Congress, or any other similar federal legisla tion, and shall be authorized to operate on a territory - wide basis. SOURCE: CC § 622. § 12118. T ax Exemptions, etc. Any tax ex emptions, tax credits, or tax privileges granted to banks, savings and loan associations, trust companies and other finan cial institutions by any general laws are granted to

mptions, etc. Any tax ex emptions, tax credits, or tax privileges granted to banks, savings and loan associations, trust companies and other finan cial institutions by any general laws are granted to corporations organ ized pursuant to this Chapter . SOURCE: CC § 623. § 12119. Payment of Fee. Every corporation orga nized and engaged in business under the provisions of this Chapter shall pay an annual fee o f fifty dollars ($50.00) to the Treasurer of Guam. SOURCE: CC § 624. § 12120. Fiscal Year. Corporations organized under this Chapter shall adopt the calendar year as their fiscal year. SOURCE: CC § 625. § 12121. Provisions Severable. The provisions of this Chapter are severable, and if any of its provisions shall be held unconstitutional by any court of compe tent jurisdic - tion, the decision of such court shall not affect or impair any of the remaining provisions. COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS 15SOURCE: CC § 626.COL 0307201118GCA BUSINESS STRUCTURE &FUNCTION CH.12INDUSTRIAL DEVELOPMENT CORPORA TIONS