PART VII. SHARES AND DISTRIBUTIONS

 

A.  Shares

 

[§414-71]  Authorized shares.  (a)  Thearticles of incorporation must prescribe the classes of shares and the numberof shares of each class that the corporation is authorized to issue.  If morethan one class of shares is authorized, the articles of incorporation mustprescribe a distinguishing designation for each class, and, prior to theissuance of shares of a class, the preferences, limitations, and relativerights of that class must be described in the articles of incorporation.  Allshares of a class must have preferences, limitations, and relative rightsidentical with those of other shares of the same class except to the extentotherwise permitted by section 414-72.

(b)  The articles of incorporation mustauthorize:

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

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

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

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

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

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

(B)  For cash, indebtedness, securities, orother property; and

(C)  In a designated amount or in an amountdetermined in accordance with a designated formula or by reference to extrinsicdata or events;

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

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

(d)  The description of the designations, preferences,limitations, and relative rights of share classes in subsection (c) is notexhaustive. [L 2000, c 244, pt of §1]