MARVIN MANDEL, Governor

1537

Present §20(b)(2) is deleted as unnecessary
since it duplicates present §20(d) and is
reflected in the introductory phrase of
subsection (b)(2) of this section.

This section contains the basic rules

governing the power of a corporation to issue

stock. Sec. 2—203 details the procedure to be

followed by the board in authorizing stock
issuance.

The only other changes are in style.

2-205. PREEMPTIVE RIGHTS.

(A)     CIRCUMSTANCES IN WHICH PREEMPTIVE RIGHTS DO
NOT ACCRUE.

UNLESS THE CHASTER PROVIDES OTHERWISE, A
STOCKHOLDER DOES NOT HAVE ANY PREEMPTIVE RIGHTS WITH
RESPECT TO:

(1)    STOCK ISSUED TO OBTAIN ANY OF THE
CAPITAL REQUIRED TO INITIATE THE CORPORATE ENTERPRISE;

(2)     STOCK ISSUED FOR AT LEAST ITS FAIR
VALUE IN EXCHANGE FOR CONSIDERATION OTHER THAN MONEY;

(3)    STOCK REMAINING UNSUBSCRIBED FOR AFTER
BEING OFFERED TO STOCKHOLDERS;

(4) TREASURY STOCK SOLD FOR AT LEAST ITS
FAIR VALUE;

(5)    STOCK ISSUED OR ISSUABLE UNDER ARTICLES
OF MERGER;

(6)    STOCK WHICH IS NOT PRESENTLY ENTITLED TO
BE VOTED IN THE ELECTION OF DIRECTORS ISSUED FOR AT
LEAST ITS FAIR VALUE;

(7)     STOCK, INCLUDING TREASURY STOCK, ISSUED
TO AN OFFICER OR OTHER EMPLOYEE OF THE CORPORATION OR
ITS SUBSIDIARY ON TERMS AND CONDITIONS APPROVED BY THE
STOCKHOLDERS BY THE AFFIRMATIVE VOTE OF TWO-THIRDS OF ALL
THE VOTES ENTITLED TO BE CAST ON THE MATTER; AND

(8)   ANY OTHER ISSUANCE OF SHARES IF THE
APPLICABILITY OF PREEMPTIVE RIGHTS IS IMPRACTICABLE.

(B)   FAIR VALUE.

IN THE ABSENCE OF ACTUAL FRAUD OR GROSS DISPARITY IN
THE DETERMINATION, THE FAIR VALUE OF STOCK DETERMINED BY