§ 21-242 — Issuance of shares

Nebraska § 21-242

• Jurisdiction: Nebraska
• Ch. 21: Corporations and Other Companies

Text

(MBCA 6.21) (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 canceled 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:
(i) The shares, other securities,
or rights are issued for consideration other than cash or cash equivalents;
and
(ii)
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:
(i) 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 (A) the voting power of the shares to be issued or (B) 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; and
(ii)
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

Source: Laws 2014, LB749, § 42.