Iowa Code § 490.630
Shareholders’ preemptive rights
Redline — January 1, 2012 → current.View current text →
Current — January 1, 2023
As of January 1, 2012
1. The shareholders of a corporation do not have a preemptive right to acquire the corporation’s unissued shares except to the extent the articles of incorporation so provide.
1. The shareholders of a corporation do not have a preemptive right to acquire the corporation’s unissued shares except to the extent the articles of incorporation so provide.
2. A statement included in the articles of incorporation that “the corporation elects to have preemptive rights”, or words of similar import, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:
2. A statement included in the articles of incorporation that “the corporation elects to have preemptive rights”, or words of similar effect, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:
a. The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares upon the decision of the board of directors to issue them.
a. The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares upon the decision of the board of directors to issue them.
b. A shareholder may waive the shareholder’s preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.
b. A preemptive right may be waived by a shareholder. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.
c. There is no preemptive right with respect to:
c. There is no preemptive right with respect to any of the following:
(1) Shares issued as compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or its affiliates.
(1) Shares issued as compensation to directors, officers, employees, or agents of the corporation, its subsidiaries, or its affiliates.
(2) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or its affiliates.
(2) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, employees, or agents of the corporation, its subsidiaries, or its affiliates.
(3) Shares authorized in articles of incorporation that are issued within six months from the effective date of incorporation.
(3) Shares authorized in the articles of incorporation that are issued within six months from the effective date of incorporation.
(4) Shares sold otherwise than for money.
(4) Shares sold otherwise than for cash.
d. Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class.
d. Holders of shares of any class or series without voting power but with preferential rights to distributions have no preemptive rights with respect to shares of any class or series.
e. Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights.
e. Holders of shares of any class or series with voting power but without preferential rights to distributions have no preemptive rights with respect to shares of any class or series with preferential rights to distributions unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire the shares without preferential rights.
f. Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders’ preemptive rights.
f. Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders’ preemptive rights.
3. For purposes of this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares.
3. As used in this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares.
89 Acts, ch 288, §50; 2006 Acts, ch 1089, §8
89 Acts, ch 288, §50; 2006 Acts, ch 1089, §8; 2021 Acts, ch 165, §55, 230
Referred to in
Official source: Iowa Legislature. Reproduced from public-domain Iowa statutes; confirm against the official source for the current text. Not legal advice.