17:9A-126. Priorities; preferences; rights; limitations

Every issue of preferred stock shall be subject to the following:

(1) The issue price for each share shall be not less than the par value, and shall be the same for all shares included within a single class;

(2) So long as a bank is not in default in the payment of dividends on preferred stock, or in meeting any requirements specified in its certificate of incorporation or in a merger agreement providing for the issuance of preferred stock for the maintenance of a sinking fund for the retirement of preferred stock, the holders of preferred stock shall have no greater voting rights than the holders of common stock; but, if so provided in the certificate of incorporation or merger agreement, the holders of preferred stock of any class or classes shall, upon either such default, have two votes for each share of such stock so held;

(3) The retirement price, if any, of each share of preferred stock shall be not less than its par value or greater than its issue price, plus any accrued dividends thereon;

(4) No more than the par value of shares of preferred stock shall be charged against the capital stock of a bank upon retirement of such stock;

(5) No preferred stock shall be retired if the effect of such retirement would be to reduce the capital stock of the bank below the minimum specified in section 121;

(6) The valuation placed upon preferred stock for the purpose of its conversion into common stock shall be not less than its par value nor greater than the price approved by the commissioner on the issue of such preferred stock, plus any accrued dividends thereon. The valuation placed upon common stock issued on the conversion of preferred stock shall be not less than par value of such common stock;

(7) The dividend rate shall not exceed 6% per annum of the par value of such stock or of the issue price thereof, if the issue price is greater; except that the commissioner may approve a rate in excess of 6% per annum if, upon application, the commissioner deems a higher rate is appropriate after giving consideration to the bank's capital surplus, and earnings.

L.1948, c. 67, p. 279, s. 126. Amended by L.1977, c. 417, s. 4, eff. Feb. 24, 1978.