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The Vermont Statutes Online



Title

11A

:
Vermont Business Corporations






Chapter

006

:
SHARES AND DISTRIBUTIONS






Subchapter

003
:
SUBSEQUENT ACQUISITION OF SHARES










 

§

6.30. Shareholders' preemptive rights

(a) The

shareholders of a corporation do not have a preemptive right to acquire the

corporation's unissued shares unless the articles of incorporation contain a

statement that "the corporation elects to have preemptive rights," or

words of similar import.

(b) A

corporation electing to have preemptive rights may include in its articles of

incorporation a statement prescribing the type and extent of preemptive rights

granted to the shareholders. The statement may include, modify, or exclude any

of the terms provided under subdivisions (1) through (6) of this subsection. If

the articles of incorporation of a corporation electing to have preemptive

rights do not include a statement prescribing the preemptive rights, the

following terms shall apply:

(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 upon the decision of the board of

directors to issue them.

(2) A

shareholder may waive his or her 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 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 affiliates;

(C) shares

authorized in articles of incorporation that are issued within six months from

the effective date of incorporation;

(D) shares sold

otherwise than for money.

(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

subject to preemptive rights 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 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" include a security convertible into or

carrying a right to subscribe for or acquire shares. (Added 1993, No. 85, § 2,

eff. Jan. 1, 1994.)