HARRY HUGHES, Governor

4559

The holders of capital stock of such corporation shall
not, as such, have any preemptive or preferential right to
purchase or subscribe for any part of the unissued or new
issue of capital stock of such corporation, whether now or
hereafter authorized or issued, or to purchase or subscribe
for any bonds or other obligations, whether or not
convertible into stock of such corporation, now or hereafter
authorized or issued.

[424.] 13. Annual audit and report.

Such corporation shall be subject to an annual
examination and audit by one or more certified public
accountants to be selected by the board of directors,
sufficient to reflect the result of the operations during
and the condition of the corporation at the end of the
fiscal year. A report of such examination, audit and
condition of such corporation shall be made in writing to
each of the members and stockholders of such corporation and
to the Secretary of State of Maryland on or before the one
hundred and twentieth day of each succeeding fiscal year of
said corporation.

[425.] 14. Earned surplus; depositories; loans to officers
or officers' firms.

(a)   Each year the corporation shall set apart as
earned surplus not less than ten percent of its net earnings
for the preceding fiscal year until such surplus shall be
equal in value to one half of the amount paid in on the
capital stock then outstanding. Said earned surplus shall
be kept and used to meet losses and contingencies of such
corporation; and, whenever the amount of earned surplus
shall become impaired, it shall be built up again to the
required amount in the manner provided for its original
accumulation.

(b)  Such corporation shall not deposit any of its
funds in any banking organization unless such banking
organization has been designated as a depository by a vote
of the majority of all of the directors of such corporation
exclusive of any director who is an officer or director of
the depository so designated, and unless such banking
organization is doing business within the State of Maryland.
Such corporation shall not receive money on deposit. Such
corporation shall not make any loans directly or indirectly
to any of its officers or to any firm in which any of its
officers is a member or officer.

[426.] 15. State [credit and State] officials.

[In furtherance of the purposes set forth in subsection
(a) of § 414 of this article, the faith and credit of the
State of Maryland, with the approval of the board of public
works, may be pledged to secure bonds, debentures, notes, or