§421-11  Membership or stock certificates,transfers, dividends, preferred stock.  (a)  No certificate for membershipor stock shall be issued until fully paid for, but bylaws may provide that amember may vote and hold office prior to payment in full for the member'smembership or stock.

(b)  Dividends in excess of eight per cent onthe actual cash value of the consideration received by the association shallnot be paid on common or preferred stock or membership capital, but dividendsmay be cumulative.

(c)  Net margins in excess of dividends andadditions to reserves and excess shall be distributed on the basis ofpatronage, and if the bylaws so provide, distribution of such net margins maybe restricted to members or may be made at the same or different rate formembers and nonmembers.  The books of the association shall show the interestof members and nonmembers in the reserves and excess.  The bylaws may providethat any distribution to a nonmember, eligible for membership, may be creditedto the nonmember until the amount thereof equals the value of a membershipcertificate or a share of the association's common stock.  The distributioncredited to the account of a nonmember may be transferred to the reserve fundat the option of the board if, after two years, the amount is less than thevalue of the membership certificate or a share of common stock.

(d)  The bylaws may fix a time within which amember shall receive from the association, after the member has notified theassociation of the member's withdrawal, or after the adoption of a resolutionby the board terminating the member's membership, the value in money of themember's membership interest in the association as appraised by the board ofdirectors.  If the board of directors approves the member's designation of atransferee of the member's membership interest, the association shall be underno obligation to pay the member the value of the member's interest.

(e)  An association may issue preferred stockto members and nonmembers.  Preferred stock may be redeemed or retired by theassociation on such terms and conditions as may be provided in the articles andprinted on the stock certificate.  Preferred stockholders shall not be entitledto vote, but no change in their priority or preference rights shall beeffective until the written consent of the holders of two-thirds of thepreferred stock has been obtained.  Payment for preferred stock may be made incash, services, or property on the basis of the fair value of the stock,services, and property as determined by the board. [L 1949, c 234, pt of §1; RL1955, §176-12; HRS §421-11; am L 1982, c 257, §1; gen ch 1985]