Section 10.06.428. Shareholders' preemptive rights.

   (a) Except to the extent limited or denied by this section or by the articles of incorporation, shareholders have a preemptive right to acquire unissued shares or securities convertible into such shares or carrying a right to subscribe to or acquire shares.
   (b) Unless otherwise provided in the articles of incorporation,
        (1) there is no preemptive right
             (A) to acquire any shares issued to directors, officers, or employees if approved by the outstanding shares or if authorized by and consistent with a plan previously approved by the outstanding shares; or
             (B) to acquire shares sold for consideration other than for cash;
        (2) holders of shares of a class that is preferred or limited as to dividends or assets are not entitled to a preemptive right;
        (3) holders of shares of common stock are not entitled to a preemptive right to shares of a class that is preferred or limited as to dividends or assets or to any obligations, unless convertible into shares of common stock or carrying a right to subscribe to or acquire shares of common stock;
        (4) holders of common stock without voting power are not entitled to a preemptive right to shares of common stock with voting power;
        (5) a preemptive right is only an opportunity to acquire shares or other securities under the terms and conditions as the board may fix for the purpose of providing a fair and reasonable opportunity for the exercise of the preemptive right.

Notes

History

(Sec. 1 ch 166 SLA 1988)