47-1A-621.1. Issuance of shares requiring approval of shareholders.
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:
(1)The shares, other securities, or rights are issued for consideration other than cash or cash equivalents; and
(2)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.
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 voting power of the shares to be issued, or 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. For the purposes of this section, a series of transactions is integrated if consummation of one transaction is made contingent on consummation of one or more of the other transactions.
Source: SL 2005, ch 239, §66.