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



(b)  Dividends in excess of eight per cent on
the actual cash value of the consideration received by the association shall
not be paid on common or preferred stock or membership capital, but dividends
may be cumulative.



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



(d)  The bylaws may fix a time within which a
member shall receive from the association, after the member has notified the
association of the member's withdrawal, or after the adoption of a resolution
by the board terminating the member's membership, the value in money of the
member's membership interest in the association as appraised by the board of
directors.  If the board of directors approves the member's designation of a
transferee of the member's membership interest, the association shall be under
no obligation to pay the member the value of the member's interest.



(e)  An association may issue preferred stock
to members and nonmembers.  Preferred stock may be redeemed or retired by the
association on such terms and conditions as may be provided in the articles and
printed on the stock certificate.  Preferred stockholders shall not be entitled
to vote, but no change in their priority or preference rights shall be
effective until the written consent of the holders of two-thirds of the
preferred stock has been obtained.  Payment for preferred stock may be made in
cash, 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; RL
1955, §176-12; HRS §421-11; am L 1982, c 257, §1; gen ch 1985]