§ 7-106-205 — Share options and other rights - definitions

(1) For purposes of
this section:

(a) Rights means rights, options, warrants, or convertible securities
entitling the holders thereof to purchase, receive, or acquire shares or fractions of
shares of the corporation or assets or debts or other obligations of the corporation.

(b) Significant shareholder means any person owning, or offering to
acquire, directly or indirectly, a number or percentage, as stated by the board of
directors, of the outstanding voting shares of a corporation, or any transferee of
such person.

(2) A corporation may create and issue rights, except as precluded or limited
by provisions contained in the articles of incorporation at the time of such creation
or issuance. The board of directors shall determine the terms upon which the rights
are issued, their form and content, and the consideration, if any, for which shares or
fractions of shares, assets, or debts or other obligations of the corporation are to be
issued pursuant to the rights. In the absence of fraud in the transaction, the
judgment of the board of directors as to the adequacy of consideration received for
such rights shall be conclusive.

(3) Notwithstanding any other provision of articles 101 to 117 of this title, the
terms determined by the board of directors pursuant to subsection (2) of this
section for rights issued before, on, or after January 1, 1994, to any shareholders, by
way of distribution or otherwise, may, without limitation:

(a) Preclude or limit any significant shareholder from exercising, converting,
transferring, or receiving rights;

(b) Impose conditions upon the exercise, conversion, transfer, or receipt of
rights by any significant shareholder that differ from those imposed on other
holders of the same class of rights; or

(c) Provide that, upon exercise or conversion, any significant shareholder
shall be entitled to receive securities, obligations, or assets, the terms or nature of
which may differ from the securities, obligations, or assets to be received by the
other holders of the same class of rights.

(4) Nothing contained in this section shall be construed to effect a change in
the fiduciary duties of directors.

Legislative History

Source: L. 93: Entire article added, p. 757, � 1, effective July 1, 1994. L. 2003: (1)(b) amended, p. 2317, � 231, effective July 1, 2004.