The corporation shall have common stock, without par value, which shall be vested with all voting rights, each share being entitled to one vote with rights of cumulative voting. Shares may be held beneficially and of record only by member financial institutions, shall be transferable only on the books of the corporation, and shall be subject to the following conditions:
(a)
The board of directors of the corporation shall, from time to time, establish a stated value for shares issued and sold by it, and a minimum number of shares which shall be owned by any member financial institution. The minimum number of shares shall be the higher of (1) a fixed minimum per member financial institutions and (2) a minimum expressed as a percentage of such member’s sales of loans to the corporation.
(b)
Dividends may be declared by the board of directors, in its discretion, to be paid by the corporation to the holders of its common stock, but in any one fiscal year the aggregate amount of cash dividends paid on account of any share of stock shall not exceed the percentage dividend rate paid for that year by the Federal Home Loan Bank of San Francisco.
(c)
If the corporation’s dividend rate in any one year does not equal the dividend rate paid for that year by the Federal Home Loan Bank of San Francisco, the difference in these rates may be applied to the corporation’s dividend rate in any subsequent year, even if it would mean exceeding that dividend rate for that year.