§ 12:1-621 — Issuance of shares

Louisiana § 12:1-621

• Jurisdiction: Louisiana
• Title 12: Conservation of Cultural Resources

Text

§1-621. Issuance of shares
A. The powers granted in this Section to the board of directors may be reserved to
the shareholders by the articles of incorporation.
B. The board of directors may authorize shares to be issued for consideration
consisting of any tangible or intangible property or benefit to the corporation, including cash,
promissory notes, services performed, contracts for services to be performed, or other
securities of the corporation.
C. Before the corporation issues shares, the board of directors must determine that
the consideration received or to be received for shares to be issued is adequate. That
determination by the board of directors is conclusive insofar as the adequacy of consideration
for the issuance of shares relates to whether the shares are validly issued, fully paid, and
nonassessable.
D. When the corporation receives the consideration for which the board of directors
authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.
E. The corporation may place in escrow shares issued for a contract for future
services or benefits or a promissory note, or make other arrangements to restrict the transfer
of the shares, and may credit distributions in respect of the shares against their purchase
price, until the services are performed, the note is paid, or the benefits received. If the
services are not performed, the note is not paid, or the benefits are not received, the shares
escrowed or restricted and the distributions credited may be cancelled in whole or part.
F.(1) An issuance of shares or other securities convertible into or rights exercisable
for shares, in a transaction or a series of integrated transactions, requires approval of the
shareholders, at a meeting at which a quorum consisting of at least a majority of the votes
entitled to be cast on the matter exists, if both of the following conditions are satisfied:
(a) The shares, other securities, or rights are issued for consideration other than cash
or cash equivalents.
(b) The voting power of shares that are issued and issuable as a result of the
transaction or series of integrated transactions will comprise more than twenty percent of the
voting power of the shares of the corporation that were outstanding immediately before the
transaction.
(2) In this Subsection, both of the following shall apply:
(a) For purposes of determining the voting power of shares issued and issuable as a
result of a transaction or series of integrated transactions, the voting power of shares shall
be the greater of the following:
(i) The voting power of the shares to be issued.
(ii) The voting power of the shares that would be outstanding after giving effect to
the conversion of convertible shares and other securities and the exercise of rights to be
issued.
(b) A series of transactions is integrated if consummation of one transaction is made
contingent on consummation of one or more of the other transactions.

Legislative History

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.