Massachusetts General Laws
Chapter 167j - Corporate Governance Provisions and Requirements
Section 14 - Capital Stock of Stock Corporation

Section 14. The capital stock of a stock corporation shall be subject to the following provisions:
(A) Classes.—The capital stock of such corporation may consist of common stock and 1 or more classes of preferred stock. The issuance of any such capital stock shall require the prior approval of the commissioner and shall be subject to such conditions as the commissioner may impose.
(B) Preferred Stock.—The preferred stock may contain such provisions relative to preferences, voting powers, retirement, dividend and conversion rights and participation in control and management as the by-laws and articles of organization may, with the approval of the commissioner, provide; provided, however, that the holders thereof shall not be held individually responsible as such holders for any debts, contracts or engagements of such corporation and shall not be liable for assessments to restore impairments in its capital. In case dividends on the preferred stock are to be cumulative, no dividends shall be declared or paid on common stock until all such cumulative dividends shall have been paid in full and all requirements of any retirement fund shall have been met; and if such corporation is placed in voluntary liquidation, or a conservator is appointed therefor, or possession of its property and business has been taken by the commissioner, no payments shall be made to the holders of the common stock until the holders of the preferred stock shall have been paid in full such amounts as may, with the approval of the commissioner, be provided in the articles of organization or amendments thereof, not in excess of the purchase price or other consideration received by the corporation for such preferred stock, plus all accumulated unpaid dividends.
(C) Issue.—No stock specified in the agreement of association shall be issued until the par value and pro rata portion of surplus account and undivided profits account shall be paid in full in cash. No additional stock shall be issued until the par value thereof is paid in full in cash or such other consideration as shall be approved by the commissioner or is in its possession as surplus account; provided, however, that no stock shall be issued against the surplus account unless, after such issue, the surplus account shall amount to at least 50 per cent of the total capital stock.
(D) Increase or Reduction.—Any such corporation may, subject to the approval of the commissioner, increase or reduce its capital stock in the manner provided by section 10.03 of chapter 156D; provided, however, that the capital stock shall not be reduced to less than the minimum amounts set forth by law; and provided, further, that, in the case of reorganization of any such corporation in possession of the commissioner under section 22 of chapter 167 or in possession of a conservator under chapter 167, the capital stock outstanding at the time of possession taken by the commissioner or conservator may be cancelled in whole or in part or other disposition thereof made in accordance with any plan of reorganization approved by the commissioner and the supreme judicial court.
(E) Change of Par Value.—Any such stock corporation may change the par value of its shares in the manner provided by section 10.03 of chapter 156D.
(F) Rights and Options.—The terms and conditions of any rights or options issued by any such stock corporation, including those outstanding on the effective date of this section, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer, receipt or holding of such rights or options by any person or persons owning or offering to acquire a specified number or percentage of the outstanding stock or other securities of the corporation, or any transferees of any such persons, or that preclude or limit such actions based on such other factors, including the nature or identity of such persons, as the directors determine to be reasonable and in the best interests of the corporation. Nothing contained in this section shall affect the duties or standard of care of a director. The issuance of any shares of the capital stock of the corporation upon the exercise of any such options or rights shall require the prior approval of the commissioner and shall be subject to such conditions as the commissioner may impose.

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