Preemptive rights of stockholders in corporations organized before October 1, 1991.
1. The provisions of this section apply to corporations organized in this State before October 1, 1991.
2. Except to the extent limited or denied by this section or the articles of incorporation, shareholders have a preemptive right to acquire unissued shares, treasury shares or securities convertible into such shares.
3. Unless otherwise provided in the articles of incorporation:
(a) A preemptive right does not exist:
(1) To acquire any shares issued to directors, officers or employees pursuant to approval by the affirmative vote of the holders of a majority of the shares entitled to vote or when authorized by a plan approved by such a vote of shareholders;
(2) To acquire any shares sold for a consideration other than cash;
(3) To acquire any shares issued at the same time that the shareholder who claims a preemptive right acquired his shares;
(4) To acquire any shares issued as part of the same offering in which the shareholder who claims a preemptive right acquired his shares; or
(5) To acquire any shares, treasury shares or securities convertible into such shares, if the shares or the shares into which the convertible securities may be converted are upon issuance registered pursuant to section 12 of the Securities Exchange Act of 1934, 15 U.S.C. § 781.
(b) Holders of shares of any class that is preferred or limited as to dividends or assets are not entitled to any preemptive right.
(c) Holders of common stock are not entitled to any preemptive right to shares of any 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.
(d) Holders of common stock without voting power have no preemptive right to shares of common stock with voting power.
(e) The preemptive right is only an opportunity to acquire shares or other securities upon such terms as the board of directors fixes for the purpose of providing a fair and reasonable opportunity for the exercise of such right.
Last modified: February 26, 2006