Texas Business Organizations Code - Section 21.170. Consideration For Rights, Options, And Convertible Indebtedness
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Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 21.170. Consideration For Rights, Options, And Convertible Indebtedness
§ 21.170. CONSIDERATION FOR RIGHTS, OPTIONS, AND
CONVERTIBLE INDEBTEDNESS. (a) In the absence of fraud in the
transaction, the judgment of the board of directors of a
corporation as to the adequacy of the consideration received for
rights, options, or convertible indebtedness is conclusive.
(b) A corporation may issue rights or options to its
shareholders, officers, consultants, independent contractors,
employees, or directors without consideration if, in the judgment
of the board of directors, the issuance of the rights or options is
in the interests of the corporation.
(c) The consideration for shares having a par value, other
than treasury shares, and issued on the exercise of the rights or
options may not be less than the par value of the shares.
(d) A privilege of conversion may not be conferred on, or
altered with respect to, any indebtedness that would result in the
corporation receiving less than the minimum consideration required
to be received on issuance of the shares.
(e) The consideration for shares issued on the exercise of
rights, options, or convertible indebtedness shall be determined as
provided by Section 21.161.
Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.
Section: 21.163 21.164 21.165 21.166 21.167 21.168 21.169 21.170 21.171 21.172 21.173 21.201 21.202 21.203 21.204
Last modified: August 11, 2007
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