271B.6-300 Shareholders' preemptive rights.
(1)
(2)
(3)
The shareholders of a corporation shall not have a preemptive right to acquire the
corporation's unissued shares except:
(a) To the extent the articles of incorporation so provide; and
(b) To the extent provided in subsection (4) of this section.
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:
(a) The shareholders of the corporation shall 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 upon the decision of the board of
directors to issue them.
(b) A shareholder may waive his preemptive right. A waiver evidenced by a
writing shall be irrevocable even though it is not supported by consideration.
(c) There shall be no preemptive right with respect to:
1.
Shares issued as compensation to directors, officers, agents, or
employees of the corporation, its subsidiaries or affiliates;
2.
Shares issued to satisfy conversion or option rights created to provide
compensation to directors, officers, agents, or employees of the
corporation, its subsidiaries or affiliates;
3.
Shares authorized in articles of incorporation that are issued within six
(6) months from the effective date of incorporation; and
4.
Shares sold otherwise than for money.
(d) Holders of shares of any class without general voting rights but with
preferential rights to distributions or assets shall have no preemptive rights
with respect to shares of any class.
(e) Holders of shares of any class with general voting rights but without
preferential rights to distributions or assets shall 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.
(f) Shares subject to preemptive rights that are not acquired by shareholders may
be issued to any person for a period of one (1) 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 (1) year shall be subject to
the shareholders' preemptive rights.
For purposes of this section, "shares" include a security convertible into or carrying
a right to subscribe for or acquire shares.
(4)
Except to the extent limited or denied by this subsection, shareholders of a
corporation that existed on January 1, 1989, whose articles of incorporation did not
on January 1, 1989, contain a provision specifically addressing preemptive rights
shall have a preemptive right to acquire unissued shares or securities convertible
into such shares or carrying a right to subscribe to or acquire shares.
(a) No preemptive right shall 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 thereon or when authorized by and
consistent with a plan theretofore approved by such a vote of
shareholders; or
2.
To acquire any shares sold otherwise than for cash.
(b) Holders of shares of any class that is preferred or limited as to dividends or
assets shall not be entitled to any preemptive right.
(c) Holders of shares of any class with general voting rights but without
preferential rights to distributions or assets shall not be 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 any
class with general voting rights but without preferential rights to distributions
or assets, or carrying a right to subscribe to or acquire shares of any class with
general voting rights but without preferential rights to distributions or assets.
(d) Holders of shares of any class without general voting rights shall have no
preemptive rights to shares of a class which is identical as to rights except that
the class has general voting rights.
(e) The preemptive right shall be only an opportunity to acquire shares or other
securities under such terms and conditions as the board of directors may fix
for the purpose of providing a fair and reasonable opportunity to exercise such
right.
(f) This subsection shall not apply to any class of stock of any corporation after
the corporation's articles of incorporation are amended to limit or deny the
preemptive rights of any class of its stock.
Effective: July 13, 1990
History: Amended 1990 Ky. Acts ch. 441, sec. 1, effective July 13, 1990. -- Created
1988 Ky. Acts ch. 23, sec. 46, effective January 1, 1989.
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