HARRY HUGHES, Governor

189

REVISOR'S NOTE TO SECTION: Present CA  §§ 6-120(b) and

6—141(a), which relate to the minimum par value

of capital stock, now appear in § 3—202(b)(7) of
this title.

3-302. PREFERRED STOCK.

(A)       GENERAL RULE.

IF THE BANK COMMISSIONER APPROVES, A COMMERCIAL BANK
MAY ISSUE PREFERRED STOCK, IN THE AMOUNT AND WITH THE PAR
VALUE THAT THE BANK COMMISSIONER APPROVES, AS PROVIDED IN
THIS SECTION.

(B)   PREFERRED STOCK NOT VALID UNTIL FULLY PAID.

UNLESS OTHERWISE PROVIDED BY LAW, PREFERRED STOCK
ISSUED UNDER THIS SECTION IS NOT VALID UNTIL THE COMMERCIAL
BANK RECEIVES THE PURCHASE PRICE IN AN AMOUNT THAT EQUALS AT
LEAST PAR VALUE.

(C)   PREFERRED STOCK MAY BE CONVERTIBLE.

IF THE BANK COMMISSIONER APPROVES, PREFERRED STOCK MAY
BE CONVERTIBLE INTO COMMON STOCK ON THE TERMS AND CONDITIONS
THAT THE CHARTER PROVIDES. HOWEVER, PREFERRED STOCK IS NOT
CONVERTIBLE:

(1)   INTO COMMON STOCK OF A GREATER TOTAL PAR
VALUE; OR

(2)   AT ANY TIME WHEN THE COMMERCIAL BANK DOES
NOT HAVE A SURPLUS IN AN AMOUNT THAT EQUALS AT LEAST 20
PERCENT OF ITS CAPITAL STOCK:

(I)   OUTSTANDING IMMEDIATELY BEFORE THE
CONVERSION; AND

(II)   OUTSTANDING IMMEDIATELY AFTER THE
CONVERSION.

(D)   DIVIDENDS.

(1)   THE HOLDER OF PREFERRED STOCK IS ENTITLED TO
CUMULATIVE DIVIDENDS AT A RATE NOT EXCEEDING 6 PERCENT A
YEAR OF ITS PAR VALUE.

(2)   DIVIDENDS ON COMMON STOCK MAY NOT BE
DECLARED OR PAID UNTIL THE CUMULATIVE DIVIDENDS ON THE
PREFERRED STOCK ARE FULLY PAID.

(E)   VOTING RIGHTS.

EACH HOLDER OF PREFERRED STOCK HAS THE VOTING RIGHTS
THAT THE CHARTER PROVIDES AND THE BANK COMMISSIONER
APPROVES.