10-630

10-630. Shareholders' preemptive rights;
definition

A. The shareholders of a corporation do not have any preemptive right to acquire
the corporation's unissued shares except to the extent the articles of incorporation so
provide.

B. A statement included in the articles of incorporation that "the corporation
elects to have preemptive rights" or words of similar import means that the following
principles apply except to the extent the articles of incorporation expressly provide
otherwise:

1. The shareholders of the corporation have a preemptive right, granted on uniform
terms and conditions prescribed by the board of directors, to provide a fair and
reasonable opportunity to exercise the right to acquire proportional amounts of the
corporation's unissued shares on the decision of the board of directors to issue them.

2. A shareholder may waive his preemptive right. A waiver evidenced by a writing
is irrevocable even though it is not supported by consideration.

3. There is no preemptive right with respect to:

(a) Shares issued as compensation to directors, officers, agents or employees of
the corporation, its subsidiaries or its affiliates.

(b) Shares issued to satisfy conversion or option rights created to provide
compensation to directors, officers, agents or employees of the corporation, its
subsidiaries or its affiliates.

(c) Shares authorized in articles of incorporation that are issued within six
months from the effective date of incorporation.

(d) Shares issued in transactions for which shareholder approval is required by
chapters 1 through 17 of this title.

4. Holders of shares of any class without general voting rights but with
preferential rights to distributions or assets have no preemptive rights with respect to
shares of any class.

5. Holders of shares of any class with general voting rights but without
preferential rights to distributions or assets have no preemptive rights with respect to
shares of any class with preferential rights to distributions or assets unless the shares
with preferential rights are convertible into or carry a right to subscribe for or
acquire shares without preferential rights.

6. Shares that are subject to preemptive rights and that are not acquired by
shareholders may be issued to any person for a period of one year after being offered to
shareholders at a consideration set by the board of directors that is not lower than the
consideration set for the exercise of preemptive rights. An offer at a lower
consideration or after the expiration of one year is subject to the shareholders'
preemptive rights.

C. For purposes of this section, "shares" includes a security convertible into or
carrying a right to subscribe for or acquire shares.