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Texas Business Organizations Code - Section 21.169. Terms And Conditions Of Rights And Options

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 21.169. Terms And Conditions Of Rights And Options

§ 21.169. TERMS AND CONDITIONS OF RIGHTS AND 
OPTIONS.  (a) The terms and conditions of rights or options may 
include restrictions or conditions that:
		(1)  prohibit or limit the exercise, transfer, or 
receipt of the rights or options by certain persons or classes of 
persons, including:
			(A)  a person who beneficially owns or offers to 
acquire a specified number or percentage of the outstanding common 
shares, voting power, or other securities of the corporation;  or
			(B)  a transferee of a person described by 
Paragraph (A);  or              
		(2)  invalidate or void the rights or options held by a 
person or transferee described by Subdivision (1).
	(b)  Rights or options created or issued before the effective 
date of this code that comply with this section and are not in 
conflict with other provisions of this code are ratified.
	(c)  Unless otherwise provided under the terms of rights or 
options or the agreement or plan under which the rights or options 
are issued, the authority to grant, amend, redeem, extend, or 
replace the rights or options on behalf of a corporation is vested 
exclusively in the board of directors of the corporation.  A bylaw 
may not require the board to grant, amend, redeem, extend, or 
replace the rights or options.
	(d)  The terms of rights or options or the agreement or plan 
under which the rights or options are issued may provide that the 
board of directors by resolution may authorize one or more officers 
of the corporation to:
		(1)  designate officers and employees of the 
corporation or of any subsidiary of the corporation to receive 
rights or options created by the corporation;  or
		(2)  determine the number of rights or options to be 
received under Subdivision (1).
	(e)  A resolution adopted under Subsection (d)(1) must 
specify the total number of rights or options the authorized 
officer or officers may award.  An officer may not be designated as 
a recipient of any rights or options that the officer is authorized 
to award under Subsection (d)(1).

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.  Amended by 
Acts 2005, 79th Leg., ch. 64, § 46, eff. Jan. 1, 2006.

Last modified: August 11, 2007