Alabama Proposed Amendment to the Certificate of Incorporation to Authorize up to 10,000,000 Shares of Preferred Stock with Amendment The Alabama Proposed Amendment to the Certificate of Incorporation seeks to introduce a significant change to the corporate structure by authorizing the issuance of up to 10,000,000 shares of preferred stock. This amendment aims to provide flexibility and additional options for capitalization and financing for businesses in the state. Preferred stock is a type of ownership in a company that grants certain privileges and preferences to shareholders. By proposing this amendment, Alabama aims to enable corporations to issue preferred stock and utilize it as a strategic tool to attract investors, raise capital, and facilitate business growth. The proposed amendment acts as an extension to the existing certificate of incorporation, expanding the range of financial instruments available to corporations within the state. With the authorization to issue preferred stock, businesses have the opportunity to raise funds through various means. Preferred shareholders typically receive certain advantages over common shareholders, such as priority in dividend payments, liquidation preferences, and potentially higher voting rights. These rights and privileges can make preferred shares an appealing investment option for individuals and institutions seeking stable returns and potential upside. This proposed amendment provides corporations in Alabama with the flexibility to structure the terms of their preferred stock offerings to suit their unique needs and attract specific types of investors. Different types of preferred stock include: 1. Cumulative Preferred Stock: This type of preferred stock accumulates any unpaid dividends, which must be paid before the company can distribute dividends to common shareholders. If the dividends are not paid in a particular period, they are carried forward and become payable in subsequent periods. 2. Convertible Preferred Stock: Convertible preferred stock allows shareholders to convert their shares into a predetermined number of common shares at their discretion. This feature provides potential upside to investors if the company experiences significant growth or upon certain specified conditions. 3. Participating Preferred Stock: Shareholders of participating preferred stock are entitled to receive dividends at a specified rate and also have the right to receive additional dividends if common shareholders receive dividends beyond a certain threshold. This type of preferred stock offers potential for increased returns if the company performs exceptionally well. 4. Non-Cumulative Preferred Stock: Unlike cumulative preferred stock, non-cumulative preferred stock does not accumulate unpaid dividends. If the company fails to pay dividends during a specific period, the shareholders have no claim to these unpaid dividends in the future. By introducing this proposed amendment, Alabama aims to create an environment conducive to business growth and investment. It provides corporations with a valuable tool to attract capital, diversify their investor base, and unlock new avenues for financial stability and expansion. The authorization of up to 10,000,000 shares of preferred stock highlights Alabama's commitment to fostering a thriving business ecosystem that encourages innovation, competitiveness, and sustained economic development.