(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, written 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) Except as otherwise provided in subsection (f), the corporation must place in escrow shares issued for a contract for future services or benefits or for a promissory note. Any share dividends in respect of the shares escrowed also must be placed in escrow. Distributions in respect of escrowed shares must be escrowed or credited against their purchase price. The shares and distributions escrowed must remain in escrow until the services are performed, the note is paid, or the benefits are received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed and the distributions credited may be canceled in whole or in part and the distributions escrowed may be reclaimed by the corporation.
(f) A corporation subject to the registration requirements of Section 12 of the Securities Exchange Act of 1934 may issue shares for a contract for future services without having to place the shares and share dividends and distributions in respect of the shares in escrow and without having to credit distributions against their purchase price if the shares are issued or authorized pursuant to a plan that has been approved by the shareholders of the corporation.
HISTORY: Derived from 1976 Code Section 33-9-60 [1962 Code Section 12-15.5; 1962 (52) 1996; 1981 Act No. 146, Section 2; Repealed, 1988 Act No. 444, Section 2], Section 33-9-70 [1962 Code Section 12-15.6; 1952 Code Sections 12-232, 12-233; 1942 Code Sections 7728, 7731; 1932 Code Sections 7728, 7731; Civ. C. '22 Section 4303; Civ. C. '12 Section 2836; Civ. C. '02 Section 1882; 1896 (22) 92; 1897 (22) 522; 1927 (35) 218; 1928 (35) 1256; 1962 (52) 1996; 1963 (53) 327; 1981 Act No. 146, Section 2; Repealed, 1988 Act No. 444, Section 2], and Section 33-9-80 [1962 Code Section 12-15.7; 1952 Code Section 12-232; 1942 Code Section 7728; 1932 Code Section 7728; Civ. C. '22 Section 4303; Civ. C. '12 Section 2836; Civ. C. '02 Section 1882; 1896 (22) 92; 1897 (22) 522; 1962 (52) 1996; 1981 Act No. 146, Section 2; Repealed, 1988 Act No. 444, Section 2]; 1988 Act No. 444, Section 2; 1992 Act No. 376, Sections 1, 2.