§412:3-402  Capital stock.  Thefollowing provisions shall apply to all shares of capital stock of a Hawaiistock financial institution:

(1)  Subject to any restrictions in chapter 414 or thearticles of incorporation, the consideration to be paid for the issuance ofauthorized capital stock of a Hawaii stock financial institution shall beauthorized by the board of directors of the financial institution and shall bepaid only in money or such other consideration as may be authorized by chapter414 or this chapter, but not in labor or services actually performed for thefinancial institution; provided that upon authorization by the board ofdirectors, the financial institution may issue its own authorized shares ofcapital stock in exchange for or in conversion of its outstanding shares, ordistribute its own shares pro rata to its shareholders or the shareholders ofone or more classes or series, to effectuate stock dividends or splits, and anysuch transaction shall not require consideration; provided further that no suchissuance of shares of any class or series shall be made to the holders ofshares of any other class or series unless it is either expressly provided forin the articles of incorporation, or is authorized by the affirmative vote orthe written consent of the holders of at least a majority of the outstandingshares of the class or series in which a distribution is to be made.

(2)  No Hawaii financial institution shall issue anyshare of its capital stock unless and until the full amount of anyconsideration therefor as authorized by the board of directors shall have beenpaid into or received by the financial institution.

(3)  No Hawaii stock financial institution other thana nondepository financial services loan company shall issue preferred stockwithout first obtaining the written approval of the commissioner as to theamount and terms thereof.  While any preferred stock of a financial institutionis held as owner or pledgee by any federal agency or entity established by lawfor the purpose of providing financial assistance to financial institutions,such preferred stock and any dividends paid thereon shall be exempt fromtaxation by this State.

(4)  No Hawaii stock financial institution other thana nondepository financial services loan company shall decrease its authorizedcapital stock or the par value of capital stock having par value, or decreaseits outstanding capital stock by the acquisition of its own shares, withoutfirst receiving the written approval of the commissioner. [L 1993, c 350, pt of§1; am L 2002, c 40, §18]