As Amended
SEC. 79-4-6.01. 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 (1) 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 terms, including the preferences, rights, and limitations * * * of that class must be described in the articles of incorporation. All shares of a class must have terms, including preferences, rights and limitations * * * identical with those of other shares of the same class except to the extent otherwise permitted by this section or Section 79-4-6.02.
(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 Section 79-4-1.01 et seq.;
(2) Are redeemable or convertible as specified in the articles of incorporation (i) at the option of the corporation, the shareholder or another person or upon the occurrence of a designated event; (ii) for cash, indebtedness, securities or other property; (iii) 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;
(4) Have preference over any other class of shares with respect to distributions, including dividends and distributions, upon the dissolution of the corporation.
(5) Have terms, including preferences, rights and limitations, that are made dependent upon facts ascertainable outside the articles and that may vary among holders of the same class so long as the manner in which such facts and variations shall operate on the preferences, rights and limitations of such class is clearly and expressly set forth in the articles; "facts ascertainable outside the articles": include (i) an action or determination by any person, including the corporation, its board of directors, an officer or agent of the corporation, or any other person affiliated with the corporation; (ii) the contents of any agreement to which the corporation is a party or any other document; and (iii) any other event.
(d) The description of the designations, preferences, limitations and relative rights of share classes in subsection (c) is not exhaustive.
SOURCES: Laws, 1987, ch. 486, § 6.01; Laws, 1988, ch. 368, § 4; Laws, 2001, ch. 435, § 1, SB 2452, eff from and after July 1, 2001.
PREVIOUS VERSIONS: Pre-2001