Sec. 33-683. Shareholder's preemptive rights.
Sec. 33-683. Shareholder's preemptive rights. (a) The shareholders of a corporation do not have a preemptive right to acquire the corporation's unissued shares except
to the extent the certificate of incorporation so provides or as set forth in subsection (d)
of this section.
(b) A statement included in the certificate 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 certificate of incorporation expressly provides
otherwise:
(1) 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.
(2) A shareholder may waive his preemptive right. A waiver evidenced by a writing
is irrevocable even though it is not supported by consideration.
(3) There is no preemptive right with respect to: (A) Shares issued as compensation
to directors, officers, agents or employees of the corporation, its subsidiaries or affiliates;
(B) shares issued to satisfy conversion or option rights created to provide compensation
to directors, officers, agents or employees of the corporation, its subsidiaries or affiliates;
(C) shares authorized in the certificate of incorporation that are issued within six months
from the effective date of incorporation; (D) shares sold otherwise than for money.
(4) 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.
(5) 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.
(6) 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.
(c) For purposes of this section, "shares" includes a security convertible into or
carrying a right to subscribe for or acquire shares.
(d) Notwithstanding any provision of this section to the contrary, the shareholders
of a corporation which was incorporated under the laws of this state, whether under
chapter 599 of the general statutes, revised to January 1, 1995, or any other general law
or special act, prior to January 1, 1997, shall, unless the certificate of incorporation
expressly provides otherwise, have the preemptive rights provided in subsection (b) of
this section.
(P.A. 94-186, S. 53, 215; P.A. 96-271, S. 43, 254.)
History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 replaced "articles" of incorporation with "certificate" of
incorporation where appearing and amended Subsec. (d) to replace "January 1, 1996" with "January 1, 1997", effective
January 1, 1997.
Annotation to former section 33-343:
Subsec. (b):
Cited. 35 CA 812.