PART VII. 
SHARES AND DISTRIBUTIONS



 



A.  Shares



 



[§414-71]  Authorized shares.  (a)  The
articles of incorporation must prescribe the classes of shares and the number
of shares of each class that the corporation is authorized to issue.  If more
than one class of shares is authorized, the articles of incorporation must
prescribe a distinguishing designation for each class, and, prior to the
issuance of shares of a class, the preferences, limitations, and relative
rights of that class must be described in the articles of incorporation.  All
shares of a class must have preferences, limitations, and relative rights
identical with those of other shares of the same class except to the extent
otherwise permitted by section 414-72.



(b)  The articles of incorporation must
authorize:



(1)  One or more classes of shares that together have
unlimited voting rights; and



(2)  One or more classes of shares (which may be the
same class or classes as those with voting rights) that together are entitled
to receive the net assets of the corporation upon dissolution.



(c)  The articles of incorporation may
authorize one or more classes of shares that:



(1)  Have special, conditional, or limited voting
rights, or no right to vote, except to the extent prohibited by this chapter;



(2)  Are redeemable or convertible as specified in the
articles of incorporation:



(A)  At the option of the corporation, the
shareholder, or another person or upon the occurrence of a designated event;



(B)  For cash, indebtedness, securities, or
other property; and



(C)  In a designated amount or in an amount
determined in accordance with a designated formula or by reference to extrinsic
data or events;



(3)  Entitle the holders to distributions calculated
in any manner, including dividends that may be cumulative, noncumulative, or
partially cumulative; or



(4)  Have preference over any other class of shares
with respect to distributions, including dividends and distributions upon the
dissolution of the corporation.



(d)  The description of the designations, preferences,
limitations, and relative rights of share classes in subsection (c) is not
exhaustive. [L 2000, c 244, pt of §1]