§5-16-27. Adoption, etc., of bonus plans and payment of cash bonuses on accounts; bonus reserve account.

(a) In order to stimulate systematic thrift and to provide regular funds for the financing of homes, the members at a regular or special meeting may adopt the short-term bonus or the long-term bonus, or both the short-term and long-term bonuses prescribed below. The members may adopt the short-term bonus plan by adopting the following resolution and causing three copies thereof, certified by the secretary, to be filed with the commissioner: "RESOLVED, That effective on the next succeeding dividend date, the association shall be obligated to pay a cash bonus on the short-term bonus plan prescribed in the Savings and Loan Act." The members may adopt the long-term bonus plan by adopting the following resolution: "RESOLVED, That effective on the next succeeding dividend date, the association shall be obligated to pay a cash bonus on the long-term bonus plan prescribed in the Savings and Loan Act." The members may adopt both the short-term and long-term bonus plan by adopting the following resolution: "RESOLVED, That effective on the next succeeding dividend date, the association shall be obligated to pay a cash bonus on both the short-term bonus plan and the long-term bonus plan prescribed in the Savings and Loan Act." Upon the filing with the commissioner of the required certified copies of any such resolution, the association is authorized to proceed to put such bonus plan into effect on the next succeeding dividend date.

(b) If, after the adoption of the bonus plan, a member desiring a short-term bonus shall agree to make regular monthly payments of any specified amount on an account until the participation value thereof shall equal 100 times the agreed monthly payment, and if the agreed monthly payments shall be made each and every month thereafter until the participation value thereof shall equal 100 times the agreed monthly payment, without a delay of more than 60 days in the payment of any monthly payment, without any prepayment of more than 12 months, and if during such period no application has been made for repurchase of any part of such account, the bonus shall be payable on the date on which the participation value of such account shall equal or exceed 100 times the agreed monthly payment. The bonus rate on such short-term account shall be one half of one percent per annum and the amount of the bonus shall be determined as follows: Divide the dollar amount of each semiannual dividend declared on such account by a figure equal to twice the annual rate of percent of such semiannual dividend declared. The amount of the bonus is the sum of the quotients obtained.

(c) If, after the adoption of the bonus plan, a member desiring a long-term bonus shall agree to make regular monthly payments of any specified amount on an account until the participation value thereof shall equal 200 times the agreed monthly payment, and if the agreed monthly payments shall be made each and every month thereafter until the participation value thereof shall equal 200 times the agreed monthly payment, without a delay of more than 60 days in the payment of any monthly payment, and without any prepayment of more than 12 months, and if during such period no application has been made for the repurchase of any part of such account, the bonus shall be payable on the date on which the participation value of such account shall equal or exceed 200 times the agreed monthly payment. The bonus rate on such long-term account shall be one percent per annum, and the amount of the bonus shall be determined as follows: Divide the dollar amount of each semiannual dividend declared on such account by a figure equal to the annual rate of percent of such semiannual dividend declared. The amount of the bonus is the sum of the quotients obtained.

(d) The members at a regular or special meeting may abolish the bonus plan or plans as to accounts opened after the date of such action. Simultaneous with the declaration of each semiannual dividend after the adoption of a bonus plan or plans, the board of directors shall transfer out of net earnings to an account designated "Bonus Reserve" an amount which, together with existing credits to the bonus reserve, is sufficient to pay the bonus on all accounts then entitled to participation in the bonus reserve in accordance with the provisions of this section. The board of directors may transfer any excess in the bonus reserve to the undivided profits account. The association which has become obligated as provided in this section to pay a cash bonus may advertise the short-term bonus plan and may refer to the bonus rate on such short-term bonus plan as being a bonus of one half of one percent per annum and may advertise the long-term bonus plan and may refer to the bonus rate on such long-term plan as being a bonus of one percent per annum.

(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §233.)