§ 10A-2A-6.24 — Stock Rights, Options, Warrants, and Awards

Alabama § 10A-2A-6.24

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 2A: Alabama Business Corporation Law
• Art. 6: Stock and Distributions
• Div. B: Issuance of Stock

Text

(a) A corporation may issue rights, options, or warrants for the purchase of stock or other securities of the corporation. The board of directors shall determine (i) the terms and conditions upon which the rights, options, or warrants are issued; and (ii) the terms, including the consideration for which the stock or other securities acquired from the corporation upon the exercise of any rights, options, or warrants are to be issued. The authorization by the board of directors for the corporation to issue rights, options, or warrants constitutes authorization of the issuance of the stock or other securities for which the rights, options, or warrants are exercisable.
(b) The board of directors may adopt a resolution to delegate to a person or body, in addition to the board of directors, the authority to enter into one or more transactions to issue rights, options, or warrants, and with respect to those transactions, the rights, options, or warrants may be issued in the numbers, at the time and for the consideration as the person or body may determine; provided that the resolution fixes (i) the maximum number of rights, options, or warrants, and the maximum number of shares of stock issuable upon exercise thereof, that may be issued pursuant to the resolution, (ii) a time period during which the rights, options, or warrants, and during which the stock issuable upon exercise thereof, may be issued, and (iii) a minimum amount of consideration (if any) for which the rights, options, or warrants may be issued and a minimum amount of consideration for the stock issuable upon exercise thereof. No resolution shall permit a person or body to issue rights, options, or warrants to that person or body.
(c) Any provision in a resolution contemplated by subsection (a) or subsection (b) may be made dependent on facts ascertainable outside the resolution, which facts shall be determined in accordance with Section 10A-2A-1.20(c).
(d)
The terms and conditions of rights, options, or warrants may include restrictions or conditions that:
(1) preclude or limit the exercise, transfer, or receipt of rights, options, or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding stock or other securities of the corporation or by any transferee or transferees of that person or persons, or
(2) invalidate or void rights, options, or warrants held by that person or persons or any of that person’s transferee or transferees.
(e)
The board of directors
or the person or body authorized pursuant to subsection (b)
may authorize one or more officers to (i) designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of stock and (ii) determine, within an amount and subject to any other limitations established by the board of directors
, the person or body authorized pursuant to subsection (b)
and, if applicable, the stockholders, the number of the rights, options, warrants, or other equity compensation awards and the terms of the rights, options, warrants, or awards to be received by the recipients, provided that an officer may not use that authority to designate himself or herself or any other persons as the board of directors may specify as a recipient of rights, options, warrants, or other equity compensation awards.

Legislative History

(Act 2019-94, §1; Act 2024-413, §1.)