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1. One vote per share.
2. Dividends payable only when, if, and as declared at
a maximum rate of 10 percent per annum after 1990.
Dividends are non-cumulative.
3. Redemption by company at any time upon 10 days
notice at 105 percent.
4. Priority on liquidation equal to original purchase
price per share.
5. Shares are not convertible into common stock.
Petitioners claim that the certificates prove that the
preferred shares could not be worth more than approximately
$1,650, which could only be realized upon liquidation or upon
redemption of the shares. We disagree. First, in their briefs,
petitioners inserted "of par" into the redemption rights to read
"Redemption by company at any time upon 10 days notice at 105
percent of par." The preferred stock could instead be redeemable
for 105 percent of, e.g., the retained earnings. Similarly, with
respect to liquidation rights, "priority on liquidation equal to
original purchase price per share" is also subject to multiple
interpretations. The shares could be entitled to the original
purchase price first but also allowed to share with the common
stock in the remaining assets. Original purchase price could
include a value set for the uncompensated services of the manager
(Ballard, Lisle, and Kanter). That value could be tied to the
retained earnings of the corporations or at an annual amount.
Without a resolution by the board of directors setting forth
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