35-14-101. Short title. This chapter may be cited as the "Montana Business Corporation Act".

35-14-102. Reservation of power to amend or repeal. The legislature has power to amend or repeal all or part of this chapter at any time, and all domestic and foreign corporations subject to this chapter are governed by the amendment or repeal.

35-14-103 through 35-14-119 reserved.

35-14-120. Requirements for documents -- extrinsic facts. (1) A document must satisfy the requirements of this section and any other section that adds to or varies these requirements to be entitled to filing by the secretary of state.

(2) This chapter must require or permit filing the document in the office of the secretary of state.

(3) The document must contain the information required by this chapter and may contain other information.

(4) The document must be typewritten or printed or, if electronically transmitted, must be in a format that can be retrieved or reproduced in typewritten or printed form.

(5) The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals.

(6) The document must be signed:

(a) by the chairman of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers;

(b) if directors have not been selected or the corporation has not been formed, by an incorporator; or

(c) if the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

(7) The person executing the document shall sign it and state beneath or opposite the signature the person's name and the capacity in which the document is signed. The document may but need not contain a corporate seal, attestation, acknowledgment, or verification.

(8) If the secretary of state has prescribed a mandatory form for the document under 35-14-121(1), the document must be in or on the prescribed form.

(9) The document must be delivered to the office of the secretary of state for filing by electronic transmission. The secretary of state may authorize exceptions to the requirement of filing documents by electronic transmission.

(10) When the document is delivered to the office of the secretary of state for filing, the correct filing fee and any franchise tax, license fee, or penalty required by this chapter or other law to be paid at the time of delivery for filing must be paid or provision for payment made in a manner permitted by the secretary of state.

(11) Whenever a provision of this chapter permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, the following provisions apply:

(a) The manner in which the facts will operate on the terms of the plan or filed document must be set forth in the plan or filed document.

(b) The facts may include:

(i) any of the following that is available in a nationally recognized news or information medium, either in print or electronically:

(A) statistical or market indices;

(B) market prices of any security or group of securities;

(C) interest rates;

(D) currency exchange rates; or

(E) similar economic or financial data;

(ii) a determination or action by any person or body, including the corporation or any other party to a plan or filed document; or

(iii) the terms of or actions taken under an agreement to which the corporation is a party or any other agreement or document.

(c) As used in this subsection (11):

(i) "filed document" means a document filed by the secretary of state under any provision of this chapter except part 15 or 35-14-1621; and

(ii) "plan" means a plan of domestication, conversion, merger, or share exchange.

(d) The following provisions of a plan or filed document may not be made dependent on facts outside the plan or filed document:

(i) the name and address of any person required in a filed document;

(ii) the registered office of any entity required in a filed document;

(iii) the registered agent of any entity required in a filed document;

(iv) the number of authorized shares and designation of each class or series of shares;

(v) the effective date of a filed document; and

(vi) any required statement in a filed document of the date on which the underlying transaction was approved or the manner in which that approval was given.

(e) If a provision of a filed document is made dependent on a fact ascertainable outside the filed document and if that fact is not ascertainable by reference to a source described in subsection (11)(b)(i) or a document that is a matter of public record and the affected shareholders have not received notice of the fact from the corporation, then the corporation shall file with the secretary of state articles of amendment to the filed document setting forth the fact promptly after the time when the fact referred to is first ascertainable or subsequently changes. Articles of amendment under this subsection (11)(e) are considered to be authorized by the authorization of the original filed document to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders.

35-14-121. Forms. (1) (a) The secretary of state may prescribe and furnish on request forms for:

(i) an application for a certificate of existence or certificate of registration;

(ii) a foreign corporation's registration statement;

(iii) a foreign corporation's statement of withdrawal;

(iv) a foreign corporation's transfer of registration statement; and

(v) the annual report.

(b) If the secretary of state requires, use of these forms is mandatory.

(2) The secretary of state may prescribe and furnish on request forms for other documents required or permitted to be filed by this chapter, but their use is not mandatory.

35-14-122. Filing -- service -- copying fees. (1) The secretary of state shall establish fees for:

(a) the filing of documents delivered to the secretary of state as required by this part;

(b) issuing certificates and statements as required by this part; and

(c) copying and transmitting documents, priority handling, and responding to requests for information.

(2) Fees authorized under this section must be set and deposited in accordance with 2-15-405.

35-14-123. Effective date -- filed document. (1) Except to the extent otherwise provided in 35-14-124(3) and 35-14-145 through 35-14-152, a document accepted for filing is effective:

(a) on the date and at the time of filing, as provided in 35-14-125(2);

(b) on the date of filing and at the time specified in the document as its effective time if later than the time under subsection (1)(a);

(c) at a specified delayed effective date and time, which may not be more than 90 days after filing; or

(d) if a delayed effective date is specified but no time is specified, at 12:01 a.m. on the date specified, which may not be more than 90 days after the date of filing.

(2) If a filed document does not specify the time zone or place at which a date or time or both are to be determined, the date or time or both at which it becomes effective are those prevailing at the place of filing in this state.

35-14-124. Correcting filed document. (1) A document filed by the secretary of state pursuant to this chapter may be corrected if:

(a) the document contains an inaccuracy;

(b) the document was defectively signed, attested, sealed, verified, or acknowledged; or

(c) the electronic transmission was defective.

(2) A document is corrected:

(a) by preparing articles of correction that:

(i) describe the document, including its filing date, or attach a copy of it to the articles of correction;

(ii) specify the inaccuracy or defect to be corrected; and

(iii) correct the inaccuracy or defect; and

(b) by delivering the articles of correction to the secretary of state for filing.

(3) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.

35-14-125. Filing duty -- secretary of state. (1) If a document delivered to the office of the secretary of state for filing satisfies the requirements of 35-14-120, the secretary of state shall file it.

(2) The secretary of state files a document by recording it as filed on the date and time of receipt. After filing a document, the secretary of state shall return to the person who delivered the document for filing a copy of the document with an acknowledgment of the date and time of filing.

(3) If the secretary of state refuses to file a document, it must be returned to the person who delivered the document for filing within 10 days after the document was delivered, together with a brief, written explanation of the reason for the refusal.

(4) The secretary of state's duty to file documents under this section is ministerial. The secretary of state's filing or refusing to file a document does not create a presumption that:

(a) the document does or does not conform to the requirements of this chapter; or

(b) the information contained in the document is correct or incorrect.

(5) The secretary of state may correct errors caused by a filing officer. The error and the correction must be retained in the file containing the document in which the error appeared. For the purposes of this subsection, a filing officer is a person employed in a filing office as defined in 30-9A-102.

(6) The secretary of state shall file a document that otherwise complies with the requirements of 35-14-120 and this section for any entity that originated under the laws of entity formation of a federally recognized Indian tribe.

35-14-126. Appeal from secretary of state -- refusal to file document. (1) If the secretary of state refuses to file a document delivered for filing, the person that delivered the document for filing may petition the district court of the first judicial district to compel its filing. The document and the explanation of the secretary of state of the refusal to file must be attached to the petition. The court may decide the matter in a summary proceeding.

(2) The court may order the secretary of state to file the document or take other action the court considers appropriate.

(3) The court's final decision may be appealed as in other civil proceedings.

35-14-127. Evidentiary effect -- certified copy of filed document. A certificate from the secretary of state delivered with a copy of a document filed by the secretary of state is conclusive evidence that the original document is on file with the secretary of state.

35-14-128. Certificate of existence or registration. (1) Any person may apply to the secretary of state to furnish a certificate of existence for a domestic corporation or a certificate of registration for a foreign corporation.

(2) A certificate of existence sets forth:

(a) the domestic corporation's corporate name;

(b) that the domestic corporation is duly incorporated under the law of this state, the date of its incorporation, and the period of its duration if less than perpetual;

(c) that all fees, taxes, and penalties owed to this state have been paid if:

(i) payment is reflected in the records of the secretary of state; and

(ii) nonpayment affects the existence of the domestic corporation;

(d) that its most recent annual report required by 35-14-1621 has been filed with the secretary of state;

(e) that articles of dissolution have not been filed;

(f) that the corporation is not administratively dissolved and a proceeding is not pending under 35-14-1421; and

(g) other facts of record in the office of the secretary of state that may be requested by the applicant.

(3) A certificate of registration sets forth:

(a) the foreign corporation's name used in this state;

(b) that the foreign corporation is registered to do business in this state;

(c) that all fees, taxes, and penalties owed to this state have been paid if:

(i) payment is reflected in the records of the secretary of state; and

(ii) nonpayment affects the registration of the foreign corporation;

(d) that its most recent annual report required by 35-14-1621 has been filed with the secretary of state; and

(e) other facts of record in the office of the secretary of state that may be requested by the applicant.

(4) Subject to any qualification stated in the certificate, a certificate of existence or registration issued by the secretary of state may be relied on as conclusive evidence of the facts stated in the certificate.

35-14-129. Penalty -- signing false document. (1) The execution of any document required to be filed with the secretary of state under this part constitutes an affirmation, under the penalties of false swearing, by each person executing the document that the facts stated in the document are true.

(2) The secretary of state shall provide for the printing of a warning to this effect on each form prescribed by the secretary of state under this part.

35-14-130. Powers. (1) The secretary of state has the power reasonably necessary to perform the duties required of the secretary of state by this chapter.

(2) The secretary of state may adopt rules to perform the duties required of the secretary of state under this part, including establishing necessary fees.

35-14-131 through 35-14-139 reserved.

35-14-140. General definitions. For the purposes of this chapter, unless otherwise specified, the following definitions apply:

(1) "Articles of incorporation" means the articles of incorporation described in 35-14-202, all amendments to the articles of incorporation, and any other documents permitted or required to be delivered for filing by a domestic business corporation with the secretary of state under any provision of this chapter that modify, amend, supplement, restate, or replace the articles of incorporation. After an amendment of the articles of incorporation or any other document filed under this chapter that restates the articles of incorporation in their entirety, the articles of incorporation may not include any prior documents. When used with respect to a foreign corporation or a domestic or foreign nonprofit corporation, the "articles of incorporation" of the entity means the document of the entity that is equivalent to the articles of incorporation of a domestic business corporation.

(2) "Authorized shares" means the shares of all classes a domestic or foreign corporation is authorized to issue.

(3) "Beneficial shareholder" means a person who owns the beneficial interest in shares, which may be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee.

(4) "Conspicuous" means written, displayed, or presented so that a reasonable person against whom the writing is to operate should have noticed it.

(5) "Corporation", "domestic corporation", "business corporation", or "domestic business corporation" means a corporation for profit, which is not a foreign corporation, incorporated under this chapter.

(6) "Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, mail, and commercial delivery and, if authorized in accordance with 35-14-141, by electronic transmission.

(7) "Distribution" means a direct or indirect transfer of cash or other property except a corporation's own shares or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of:

(a) a payment of a dividend;

(b) a purchase, redemption, or other acquisition of shares;

(c) a distribution of indebtedness;

(d) a distribution in liquidation; or

(e) another form.

(8) "Document" means:

(a) any tangible medium on which information is inscribed and includes handwritten, typed, printed, or similar instruments and copies of those instruments; or

(b) an electronic record.

(9) "Domestic", with respect to an entity, means an entity governed as to its internal affairs by the law of this state.

(10) "Effective date", when referring to a document accepted for filing by the secretary of state, means the time and date determined in accordance with 35-14-123.

(11) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(12) "Electronic record" means information that is stored in an electronic or other nontangible medium and is retrievable in paper form through an automated process used in conventional commercial practice unless otherwise authorized in accordance with 35-14-141(10).

(13) "Electronic transmission" or "electronically transmitted" means any form or process of communication not directly involving the physical transfer of paper or another tangible medium that:

(a) is suitable for the retention, retrieval, and reproduction of information by the recipient; and

(b) is retrievable in paper form by the recipient through an automated process used in conventional commercial practice unless otherwise authorized in accordance with 35-14-141(10).

(14) "Eligible entity" means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation.

(15) "Eligible interests" means interests or memberships.

(16) "Employee" includes an officer but not a director. A director may accept duties that make the director also an employee.

(17) "Entity" includes:

(a) a domestic and foreign business corporation;

(b) a domestic and foreign nonprofit corporation;

(c) an estate;

(d) a trust;

(e) a domestic and foreign unincorporated entity; and

(f) a state, the United States, and a foreign government.

(18) "Expenses" means reasonable expenses of any kind that are incurred in connection with a matter, including attorney fees.

(19) "Filing entity" means an unincorporated entity, other than a limited liability partnership, that is of a type that is created by filing a public organic record or is required to file a public organic record that evidences its creation.

(20) "Foreign", with respect to an entity, means an entity governed as to its internal affairs by the organic law of a jurisdiction other than this state, including a federally recognized Indian tribe.

(21) "Foreign corporation" or "foreign business corporation" means a corporation incorporated under a law other than the law of this state, including the laws of a federally recognized Indian tribe, that would be a business corporation if incorporated under the law of this state.

(22) "Foreign nonprofit corporation" means a corporation incorporated under a law other than the law of this state, including the laws of a federally recognized Indian tribe, that would be a nonprofit corporation if incorporated under the law of this state.

(23) "Foreign registration statement" means the foreign registration statement described in 35-14-1503.

(24) "Governmental subdivision" includes an authority, a county, a district, and a municipality.

(25) "Governor" means any person under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed pursuant to the organic law governing the entity and its organic rules.

(26) "Includes" and "including" denote a partial definition or a nonexclusive list.

(27) "Individual" means a natural person.

(28) "Interest" means either or both of the following rights under the organic law governing an unincorporated entity:

(a) the right to receive distributions from the entity either in the ordinary course or upon liquidation; or

(b) the right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business and affairs.

(29) "Interest holder" means a person who holds of record an interest.

(30) (a) "Interest holder liability" means:

(i) personal liability for a debt, obligation, or other liability of a domestic or foreign corporation or eligible entity that is imposed on a person:

(A) solely by reason of the person's status as a shareholder, member, or interest holder; or

(B) by the articles of incorporation of the domestic corporation or the organic rules of the eligible entity or foreign corporation that make one or more specified shareholders, members, or interest holders or categories of shareholders, members, or interest holders liable in their capacity as shareholders, members, or interest holders for all or specified liabilities of the corporation or eligible entity; or

(ii) an obligation of a shareholder, member, or interest holder under the articles of incorporation of a domestic corporation or the organic rules of an eligible entity or foreign corporation to contribute to the entity.

(b) Except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law or organic rules of an eligible entity or a foreign corporation, interest holder liability arises under subsection (30)(a) when the corporation or eligible entity incurs the liability.

(31) "Jurisdiction of formation" means the state, tribal government, or country the law of which includes the organic law governing a domestic or foreign corporation or eligible entity.

(32) "Means" denotes an exhaustive definition.

(33) "Membership" means the rights of a member in a domestic or foreign nonprofit corporation.

(34) "Merger" means a transaction pursuant to 35-14-1102.

(35) "Nonfiling entity" means an unincorporated entity that is of a type that is not created by filing a public organic record.

(36) "Nonprofit corporation" or "domestic nonprofit corporation" means a corporation incorporated under the laws of this state and subject to the provisions of the Montana Nonprofit Corporation Act.

(37) "Organic law" means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity.

(38) "Organic rules" means the public organic record and private organic rules of a domestic or foreign corporation or eligible entity.

(39) "Person" includes an individual and an entity.

(40) "Principal office" means the office, whether in this state or out of this state, designated in the annual report or foreign registration statement as the place where the principal executive offices of a domestic or foreign corporation are located.

(41) (a) "Private organic rules" means:

(i) the bylaws of a domestic or foreign business or nonprofit corporation; or

(ii) the rules, regardless of whether in writing, that govern the internal affairs of an unincorporated entity, are binding on all its interest holders, and are not part of its public organic record, if any.

(b) When private organic rules have been amended or restated, the term means the private organic rules as last amended or restated.

(42) "Proceeding" includes a civil suit and a criminal, administrative, and investigatory action.

(43) (a) "Public organic record" means:

(i) the articles of incorporation of a domestic or foreign business or nonprofit corporation; or

(ii) the document, if any, the filing of which is required to create an unincorporated entity or that creates the unincorporated entity and is required to be filed.

(b) When a public organic record has been amended or restated, the term means the public organic record as last amended or restated.

(44) "Record date" means the date fixed for determining the identity of the corporation's shareholders and their shareholdings for purposes of this chapter. Unless another time is specified when the record date is fixed, the determination must be made as of the close of business at the principal office of the corporation on the record date.

(45) "Record shareholder" means:

(a) the person in whose name shares are registered in the records of the corporation; or

(b) the person identified as the beneficial owner of shares in a beneficial ownership certificate pursuant to 35-14-723 on file with the corporation to the extent of the rights granted by the certificate.

(46) "Registered foreign corporation" means a foreign corporation registered to do business in this state pursuant to part 15 of this chapter.

(47) "Secretary" means the corporate officer to whom the board of directors has delegated responsibility under 35-14-840(3) to maintain the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.

(48) "Share exchange" means a transaction pursuant to 35-14-1103.

(49) "Shareholder" means a record shareholder.

(50) "Shares" means the units into which the proprietary interests in a domestic or foreign corporation are divided.

(51) "Sign" or "signature" means, with present intent to authenticate or adopt a document:

(a) to execute or adopt a tangible symbol to a document, including any manual, facsimile, or conformed signature; or

(b) to attach to or logically associate with an electronic transmission an electronic sound, symbol, or process, including an electronic signature in an electronic transmission.

(52) "State", when referring to a part of the United States, includes a state, commonwealth, or territory or insular possession of the United States and their agencies and governmental subdivisions.

(53) "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.

(54) "Type of entity" means a generic form of entity:

(a) recognized at common law; or

(b) formed under an organic law, regardless of whether some entities formed under that law are subject to provisions of that law that create different categories of the form of entity.

(55) (a) "Unincorporated entity" means an organization or artificial legal person that either has a separate legal existence or has the power to acquire an estate in real property in its own name and that is not any of the following:

(i) a domestic or foreign business or nonprofit corporation;

(ii) a series of a limited liability company or of another type of entity;

(iii) an estate;

(iv) a trust; or

(v) a state, the United States, a tribal government, or a foreign government.

(b) The term includes a general partnership, limited liability partnership, limited liability company, limited partnership, limited liability limited partnership, business trust, joint stock association, and unincorporated nonprofit association.

(56) "United States" includes a district, authority, bureau, commission, department, and any other agency of the United States.

(57) "Unrestricted voting trust beneficial owner" means, with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement.

(58) "Voting group" means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group.

(59) "Voting power" means the current power to vote in the election of directors.

(60) "Voting trust beneficial owner" means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to 35-14-730(1).

(61) "Writing" or "written" means any information in the form of a document.

35-14-141. Notices and other communications. (1) A notice under this chapter must be in writing unless oral notice is reasonable in the circumstances. Unless otherwise agreed between the sender and the recipient, words in a notice or other communication under this chapter must be in English.

(2) A notice or other communication may be given by any method of delivery, except that electronic transmissions must be in accordance with this section. If the methods of delivery are impracticable, a notice or other communication may be given by means of a broad nonexclusionary distribution to the public, which may include:

(a) a newspaper of general circulation in the area where published;

(b) radio, television, or other form of public broadcast communication; or

(c) other methods of distribution that the corporation has previously identified to its shareholders.

(3) A notice or other communication to a domestic corporation or to a foreign corporation registered to do business in this state may be delivered to the corporation's registered agent at its registered office or to the secretary at the corporation's principal office shown in its most recent annual report or, in the case of a foreign corporation that has not yet delivered an annual report, in its foreign registration statement.

(4) A notice or other communications may be delivered by electronic transmission if consented to by the recipient or if authorized by subsection (10). A corporation that files documents with the office of the secretary of state under this chapter is considered to have given its irrevocable consent to delivery of notices or other communications by the office of the secretary of state to the corporation by electronic transmission.

(5) Any consent under subsection (4) may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. A consent is considered revoked if:

(a) the corporation is unable to deliver two consecutive electronic transmissions given by the corporation in accordance with the consent; and

(b) the inability becomes known to the secretary or an assistant secretary or to the transfer agent or other person responsible for the giving of notice or other communications. However, the inadvertent failure to treat the inability as a revocation does not invalidate any meeting or other action.

(6) Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when:

(a) it enters an information processing system that the recipient has designated or uses for the purposes of receiving electronic transmissions or information of the type sent and from which the recipient is able to retrieve the electronic transmission; and

(b) it is in a form capable of being processed by that system.

(7) Receipt of an electronic acknowledgment from an information processing system described in subsection (6)(a) establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.

(8) An electronic transmission is received under this section even if no person is aware of its receipt.

(9) A notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following:

(a) if in a physical form, the earliest of when it is actually received or when it is left at:

(i) a shareholder's address shown on the corporation's record of shareholders maintained by the corporation under 35-14-1601(4);

(ii) a director's residence or usual place of business; or

(iii) the corporation's principal office;

(b) if mailed postage prepaid and correctly addressed to a shareholder, on deposit in the United States mail;

(c) if mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest of when it is actually received or:

(i) if sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee; or

(ii) 5 days after it is deposited in the United States mail;

(d) if an electronic transmission, when it is received as provided in subsection (6); and

(e) if oral, when communicated.

(10) A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if:

(a) the electronic transmission is otherwise retrievable in perceivable form; and

(b) the sender and the recipient have consented in writing to the use of that form of electronic transmission.

(11) If this chapter prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications not inconsistent with this section or other provisions of this chapter, those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.

(12) In the event that any provisions of this chapter are determined to modify, limit, or supersede the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001, et seq., the provisions of this chapter control to the maximum extent permitted by section 102(a)(2) of that federal act.

(13) (a) Whenever notice would otherwise be required to be given under any provision of this chapter to a shareholder, the notice need not be given if:

(i) notices to shareholders of two consecutive annual meetings, and all notices of meetings during the period between the two consecutive annual meetings, have been sent, other than by electronic transmission, to the shareholder at the shareholder's address as shown on the records of the corporation and have been returned undeliverable or could not be delivered; or

(ii) all, but not less than two, distributions to shareholders during a 12-month period, or two consecutive distributions to shareholders during a period of more than 12 months, have been sent to the shareholder at the shareholder's address as shown on the records of the corporation and have been returned undeliverable or could not be delivered.

(b) If any shareholder to which this subsection (13) applies delivers to the corporation a written notice setting forth the shareholder's then-current address, the requirement that notice be given to the shareholder must be reinstated.

35-14-142. Number of shareholders. (1) For purposes of this chapter, the following, identified as a shareholder in a corporation's current record of shareholders, constitutes one shareholder:

(a) three or fewer co-owners;

(b) a corporation, partnership, trust, estate, or other entity; and

(c) the trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account.

(2) For purposes of this chapter, shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person.

35-14-143. Qualified director. (1) A qualified director is a director who, at the time action is to be taken under:

(a) 35-14-202(2)(f), is not a director:

(i) to whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply; or

(ii) who has a material relationship with any other person to whom the limitation or elimination would apply;

(b) 35-14-744, does not have:

(i) a material interest in the outcome of the proceeding; or

(ii) a material relationship with a person who has such an interest;

(c) 35-14-853 or 35-14-855:

(i) is not a party to the proceeding;

(ii) is not a director as to whom a transaction is a director's conflicting interest transaction or who sought a disclaimer of the corporation's interest in a business opportunity under 35-14-870, which transaction or disclaimer is challenged in the proceeding; and

(iii) does not have a material relationship with a director described in subsection (1)(c)(i) or (1)(c)(ii);

(d) 35-14-862, is not a director:

(i) as to whom the transaction is a director's conflicting interest transaction; or

(ii) who has a material relationship with another director as to whom the transaction is a director's conflicting interest transaction; or

(e) 35-14-870, is not a director who:

(i) pursues or takes advantage of the business opportunity directly or indirectly through or on behalf of another person; or

(ii) has a material relationship with a director or officer who pursues or takes advantage of the business opportunity, directly or indirectly through or on behalf of another person.

(2) For purposes of this section:

(a) "material interest" means an actual or potential benefit or detriment, other than one that would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken; and

(b) "material relationship" means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

(3) The presence of one or more of the following circumstances does not automatically prevent a director from being a qualified director:

(a) nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter (or by any person that has a material relationship with that director), acting alone or participating with others;

(b) service as a director of another corporation of which a director who is not a qualified director with respect to the matter (or any individual who has a material relationship with that director) is or was also a director; or

(c) with respect to action to be taken under 35-14-744, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.

35-14-144. Householding. (1) A corporation has delivered written notice or any other report or statement under this chapter, the articles of incorporation, or the bylaws to all shareholders who share a common address if:

(a) the corporation delivers one copy of the notice, report, or statement to the common address;

(b) the corporation addresses the notice, report, or statement to those shareholders either as a group or to each of those shareholders individually or to the shareholders in a form to which each of those shareholders has consented; and

(c) each of those shareholders consents to delivery of a single copy of the notice, report, or statement to the shareholders' common address.

(2) Any consent described in subsection (1)(b) or (1)(c) is revocable by any of the shareholders who deliver written notice of revocation to the corporation. If a written notice of revocation is delivered, the corporation shall begin providing individual notices, reports, or other statements to the revoking shareholder no later than 30 days after delivery of the written notice of revocation.

(3) Any shareholder who fails to object by written notice to the corporation within 60 days of written notice by the corporation of its intention to deliver single copies of notices, reports, or statements to shareholders who share a common address as permitted by subsection (1) is considered to have consented to receiving a single copy at the common address, provided that the notice of intention explains that consent may be revoked and the method for revoking.

35-14-145. Definitions -- ratification of defective corporate actions. In 35-14-145 through 35-14-152, the following definitions apply:

(1) "Corporate action" means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders.

(2) "Date of the defective corporate action" means the date, or the approximate date if the exact date is unknown, the defective corporate action was purported to have been taken.

(3) "Defective corporate action" means:

(a) any corporate action purportedly taken that is, and at the time the corporate action was purportedly taken would have been, within the power of the corporation but is void or voidable due to a failure of authorization; and

(b) an overissue.

(4) "Failure of authorization" means the failure to authorize, approve, or otherwise effect a corporate action in compliance with the provisions of this chapter, the articles of incorporation or bylaws, a corporate resolution, or any plan or agreement to which the corporation is a party if and to the extent the failure would render the corporate action void or voidable.

(5) "Overissue" means the purported issuance of:

(a) shares of a class or series in excess of the number of shares of a class or series the corporation has the power to issue under 35-14-601 at the time of the issuance; or

(b) shares of any class or series that is not then authorized for issuance by the articles of incorporation.

(6) "Putative shares" means the shares of any class or series (including shares issued upon exercise of rights, options, warrants, or other securities convertible into shares of the corporation or interests with respect to those shares) that were created or issued as a result of a defective corporate action and that:

(a) but for any failure of authorization would constitute valid shares; or

(b) cannot be determined by the board of directors to be valid shares.

(7) "Valid shares" means the shares of any class or series that have been duly authorized and validly issued in accordance with this chapter, including as a result of ratification or validation under 35-14-145 through 35-14-152.

(8) (a) "Validation effective time", with respect to any defective corporate action ratified under 35-14-145 through 35-14-152, means the later of:

(i) the time at which the ratification of the defective corporate action is approved by the shareholders or, if approval of shareholders is not required, the time at which the notice required by 35-14-149 becomes effective in accordance with 35-14-141; or

(ii) the time at which any articles of validation filed in accordance with 35-14-151 become effective.

(b) The validation effective time is not affected by the filing or pendency of a judicial proceeding under 35-14-152 or otherwise unless ordered by the court.

35-14-146. Defective corporate actions. (1) A defective corporate action is not void or voidable if ratified in accordance with 35-14-147 or validated in accordance with 35-14-152.

(2) Ratification under 35-14-147 or validation under 35-14-152 may not be considered the exclusive means of ratifying or validating a defective corporate action, and the absence or failure of ratification in accordance with 35-14-145 through 35-14-152 does not, of itself, affect the validity or effectiveness of any corporate action properly ratified under common law or otherwise or create a presumption that any corporate action is or was a defective corporate action or is void or voidable.

(3) In the case of an overissue, putative shares are valid shares effective as of the date originally issued or purportedly issued on:

(a) the effectiveness under 35-14-145 through 35-14-152 and under part 10 of this chapter of an amendment to the articles of incorporation authorizing, designating, or creating the shares; or

(b) the effectiveness of any other corporate action under 35-14-145 through 35-14-152 ratifying the authorization, designation, or creation of the shares.

35-14-147. Ratification -- defective corporate actions. (1) To ratify a defective corporate action under this section, other than the ratification of an election of the initial board of directors under subsection (2), the board of directors shall take action ratifying the action in accordance with 35-14-148, stating:

(a) the defective corporate action to be ratified and, if the defective corporate action involved the issuance of putative shares, the number and type of putative shares purportedly issued;

(b) the date of the defective corporate action;

(c) the nature of the failure of authorization with respect to the defective corporate action to be ratified; and

(d) that the board of directors approves the ratification of the defective corporate action.

(2) In the event that a defective corporate action to be ratified relates to the election of the initial board of directors of the corporation under 35-14-205(1)(b), a majority of the persons who, at the time of the ratification, are exercising the powers of directors may take an action stating:

(a) the name of the person or persons who first took action in the name of the corporation as the initial board of directors of the corporation;

(b) the earlier of the date on which those persons first took action or the date on which they were purported to have been elected as the initial board of directors; and

(c) that the ratification of the election of the person or persons as the initial board of directors is approved.

(3) If any provision of this chapter, the articles of incorporation or bylaws, any corporate resolution, or any plan or agreement to which the corporation is a party that is in effect at the time action under subsection (1) is taken requires shareholder approval or would have required shareholder approval at the date of the occurrence of the defective corporate action, the ratification of the defective corporate action approved in the action taken by the directors under subsection (1) must be submitted to the shareholders for approval in accordance with 35-14-148.

(4) Unless otherwise provided in the action taken by the board of directors under subsection (1), after the action by the board of directors has been taken and, if required, approved by the shareholders, the board of directors may abandon the ratification at any time before the validation effective time without further action of the shareholders.

35-14-148. Action on ratification. (1) The quorum and voting requirements applicable to a ratifying action by the board of directors under 35-14-147(1) are the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time the ratifying action is taken.

(2) If the ratification of the defective corporate action requires approval by the shareholders under 35-14-147(3) and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative shares, regardless of whether entitled to vote, as of the record date for notice of the meeting and as of the date of the occurrence of defective corporate action, provided that notice is not required to be given to holders of valid or putative shares whose identities or addresses for notice cannot be determined from the records of the corporation. The notice must state that the purpose or one of the purposes of the meeting is to consider ratification of a defective corporate action and must be accompanied by:

(a) either a copy of the action taken by the board of directors in accordance with 35-14-147(1) or the information required by 35-14-147(1)(a) through (1)(d); and

(b) a statement that any claim that the ratification of the defective corporate action and any putative shares issued as a result of the defective corporate action should not be effective or should be effective only on certain conditions must be brought within 120 days from the applicable validation effective time.

(3) Except as provided in subsection (4) with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the shareholders required by 35-14-147(3) must be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of the shareholder approval.

(4) The approval by shareholders to ratify the election of a director requires that the votes cast within the voting group favoring ratification exceed the votes cast opposing ratification of the election at a meeting at which a quorum is present.

(5) Putative shares on the record date for determining the shareholders entitled to vote on any matter submitted to shareholders under 35-14-147(3) (and without giving effect to any ratification of putative shares that becomes effective as a result of the vote) are neither entitled to vote nor counted for quorum purposes in a vote to approve the ratification of a defective corporate action.

(6) If the approval under this section of putative shares would result in an overissue, in addition to the approval required by 35-14-147, approval of an amendment to the articles of incorporation under part 10 of this chapter to increase the number of shares of an authorized class or series or to authorize the creation of a class or series of shares so there would be no overissue is also required.

35-14-149. Notice requirements. (1) Unless shareholder approval is required under 35-14-147(3), prompt notice of an action taken under 35-14-147 must be given to each holder of valid and putative shares, regardless of whether entitled to vote, as of:

(a) the date of the action by the board of directors; and

(b) the date the defective corporate action was ratified, provided that notice may not be required to be given to holders of valid and putative shares whose identities or addresses for notice cannot be determined from the records of the corporation.

(2) The notice must contain:

(a) either:

(i) a copy of the action taken by the board of directors in accordance with 35-14-147(1) or (2); or

(ii) the information required by 35-14-147(1)(a) through (1)(d) or (2)(a) through (2)(c), as applicable; and

(b) a statement that any claim that the ratification of the defective corporate action and any putative shares issued as a result of the defective corporate action should not be effective or should be effective only on certain conditions must be brought within 120 days from the applicable validation effective time.

(3) No notice under this section is required with respect to any action required to be submitted to shareholders for approval under 35-14-147(3) if notice is given in accordance with 35-14-148(2).

(4) A notice required by this section may be given in any manner permitted by 35-14-141 and, for any corporation subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, may be given by means of a filing or furnishing of the notice with the United States securities and exchange commission.

35-14-150. Effect of ratification. From and after the validation effective time and without regard to the 120-day period during which a claim may be brought under 35-14-152:

(1) each defective corporate action ratified in accordance with 35-14-147 may not be void or voidable as a result of the failure of authorization identified in the action taken under 35-14-147(1) or (2) and is considered a valid corporate action effective as of the date of the defective corporate action;

(2) the issuance of each putative share or fraction of a putative share purportedly issued pursuant to a defective corporate action identified in the action taken under 35-14-147 may not be void or voidable, and such putative share or fraction of a putative share is considered an identical share or fraction of a valid share as of the time it was purportedly issued; and

(3) any corporate action taken subsequent to the defective corporate action ratified in accordance with 35-14-145 through 35-14-152 in reliance on the defective corporate action having been validly effected and any subsequent defective corporate action resulting directly or indirectly from the original defective corporate action are valid as of the time taken.

35-14-151. Filings. (1) If the defective corporate action ratified under 35-14-145 through 35-14-152 would have required under any other section of this chapter a filing in accordance with this chapter, then, regardless of whether a filing was previously made with respect to the defective corporate action and in lieu of a filing otherwise required by this chapter, the corporation shall file articles of validation in accordance with this section, and the articles of validation serve to amend or substitute for any other filing with respect to the defective corporate action required by this chapter.

(2) The articles of validation must set forth:

(a) the defective corporate action that is the subject of the articles of validation, including, in the case of any defective corporate action involving the issuance of putative shares, the number and type of putative shares issued and the date or dates on which the putative shares were purported to have been issued;

(b) the date of the defective corporate action;

(c) the nature of the failure of authorization in respect of the defective corporate action;

(d) a statement that the defective corporate action was ratified in accordance with 35-14-147, including the date on which the board of directors ratified the defective corporate action and the date, if any, on which the shareholders approved the ratification of the defective corporate action; and

(e) the information required by subsection (3).

(3) The articles of validation must also contain the following information:

(a) if a filing was previously made with respect to the defective corporate action and no changes to the filing are required to give effect to the ratification of the defective corporate action in accordance with 35-14-147, the articles of validation must set forth:

(i) the name, title, and filing date of the filing previously made and any articles of correction to that filing; and

(ii) a statement that a copy of the filing previously made, together with any articles of correction to that filing, is attached as an exhibit to the articles of validation;

(b) if a filing was previously made with respect to the defective corporate action and the filing requires any change to give effect to the ratification of the defective corporate action in accordance with 35-14-147, the articles of validation must set forth:

(i) the name, title, and filing date of the filing previously made and any articles of correction to that filing; and

(ii) a statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to the defective corporate action is attached as an exhibit to the articles of validation; and

(iii) the date and time that the filing is considered to have become effective; or

(c) if a filing was not previously made in respect of the defective corporate action and the defective corporate action ratified under 35-14-147 would have required a filing under any other section of this chapter, the articles of validation must set forth:

(i) a statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to the defective corporate action is attached as an exhibit to the articles of validation; and

(ii) the date and time that the filing is considered to have become effective.

35-14-152. Judicial proceedings -- validity of corporate actions. (1) Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation, including any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under 35-14-147, or any other person claiming to be substantially and adversely affected by a ratification under 35-14-147, the district court in the county where the corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may:

(a) determine the validity and effectiveness of any corporate action or defective corporate action;

(b) determine the validity and effectiveness of any ratification under 35-14-147;

(c) determine the validity of any putative shares; and

(d) modify or waive any of the procedures specified in 35-14-147 or 35-14-148 to ratify a defective corporate action.

(2) In connection with an action under this section, the court may make findings or orders and take into account any factors or considerations regarding matters it considers proper under the circumstances.

(3) Service of process of the application under subsection (1) on the corporation may be made in any manner provided by statute of this state or by rule of the applicable court for service on the corporation, and no other party need be joined in order for the court to adjudicate the matter. In an action filed by the corporation, the court may require that notice of the action be provided to other persons specified by the court and permit the other persons to intervene in the action.

(4) Notwithstanding any other provision of this section or otherwise under applicable law, any action asserting that the ratification of any defective corporate action and any putative shares issued as a result of the defective corporate action should not be effective or should be effective only on certain conditions must be brought within 120 days of the validation effective time.

35-14-201. Incorporators. One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the secretary of state for filing.

35-14-202. Articles of incorporation. (1) The articles of incorporation must set forth:

(a) a corporate name for the corporation that satisfies the requirements of 35-14-401;

(b) the number of shares the corporation is authorized to issue;

(c) the street and mailing addresses of the corporation's initial registered office and the name of its initial registered agent at that office; and

(d) the name and address of each incorporator.

(2) The articles of incorporation may set forth:

(a) the names and addresses of the individuals who are to serve as the initial directors;

(b) provisions not inconsistent with law regarding:

(i) the purpose or purposes for which the corporation is organized;

(ii) managing the business and regulating the affairs of the corporation;

(iii) defining, limiting, and regulating the powers of the corporation, its board of directors, and its shareholders;

(iv) a par value for authorized shares or classes of shares; or

(v) the imposition of interest holder liability on shareholders;

(c) any provision that under this chapter is required or permitted to be set forth in the bylaws;

(d) a provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages for any action taken or any failure to take any action as a director, except liability for:

(i) the amount of a financial benefit received by a director to which the director is not entitled;

(ii) an intentional infliction of harm on the corporation or the shareholders;

(iii) a violation of 35-14-832; or

(iv) an intentional violation of criminal law;

(e) a provision permitting or making obligatory indemnification of a director for liability as defined in 35-14-850 to any person for any action taken or any failure to take any action as a director, except liability for:

(i) receipt of a financial benefit to which the director is not entitled;

(ii) an intentional infliction of harm on the corporation or its shareholders;

(iii) a violation of 35-14-832; or

(iv) an intentional violation of criminal law; and

(f) a provision limiting or eliminating any duty of a director or any other person to offer the corporation the right to have or participate in any or one or more classes or categories of business opportunities before the pursuit or taking of the opportunity by the director or other person, provided that any application of such a provision to an officer or a related person of that officer:

(i) also requires approval of that application by the board of directors, subsequent to the effective date of the provision, by action of qualified directors taken in compliance with the procedures set forth in 35-14-862; and

(ii) may be limited by the authorizing action of the board.

(3) The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter.

(4) Provisions of the articles of incorporation may be made dependent on facts objectively ascertainable outside the articles of incorporation in accordance with 35-14-120(11).

(5) As used in this section, "related person" has the meaning specified in 35-14-860.

35-14-203. Incorporation. (1) Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.

(2) The secretary of state's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

35-14-204. Liability for preincorporation transactions. All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting.

35-14-205. Organization of corporation. (1) After incorporation:

(a) if initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting; or

(b) if initial directors are not named in the articles of incorporation, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:

(i) to elect initial directors and complete the organization of the corporation; or

(ii) to elect a board of directors who shall complete the organization of the corporation.

(2) Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.

(3) An organizational meeting may be held in or out of this state.

35-14-206. Bylaws. (1) The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.

(2) The bylaws of a corporation may contain any provision that is not inconsistent with law or the articles of incorporation.

(3) The bylaws may contain one or both of the following provisions:

(a) a requirement that if the corporation solicits proxies or consents with respect to an election of directors, the corporation include in its proxy statement and any form of its proxy or consent, to the extent and subject to the procedures or conditions provided in the bylaws, one or more individuals nominated by a shareholder in addition to individuals nominated by the board of directors; and

(b) a requirement that the corporation reimburse the expenses incurred by a shareholder in soliciting proxies or consents in connection with an election of directors, to the extent and subject to procedures and conditions provided in the bylaws, provided that no bylaw so adopted applies to elections for which any record date precedes its adoption.

(4) Notwithstanding 35-14-1020(2)(b), the shareholders in amending, repealing, or adopting a bylaw described in subsection (3) may not limit the authority of the board of directors to amend or repeal any condition or procedure set forth in or to add any procedure or condition to the bylaw to provide for a reasonable, practical, and orderly process.

35-14-207. Emergency bylaws. (1) Unless the articles of incorporation provide otherwise, the board of directors may adopt bylaws to be effective only in an emergency as provided in subsection (4). The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including:

(a) procedures for calling a meeting of the board of directors;

(b) quorum requirements for the meeting; and

(c) designation of additional or substitute directors.

(2) All provisions of the regular bylaws not inconsistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.

(3) Corporate action taken in good faith in accordance with the emergency bylaws:

(a) binds the corporation; and

(b) may not be used to impose liability on a director, officer, employee, or agent of the corporation.

(4) An emergency exists for purposes of this section if a quorum of the board of directors cannot readily be assembled because of some catastrophic event.

35-14-208. Forum selection. (1) The articles of incorporation or the bylaws may require that any or all internal corporate claims must be brought exclusively in any specified court or courts of this state and, if so specified, in any additional courts in this state or in any other jurisdictions with which the corporation has a reasonable relationship.

(2) A provision of the articles of incorporation or bylaws adopted under subsection (1) may not have the effect of conferring jurisdiction on any court or over any person or claim and may not apply if none of the courts specified by the provision has the requisite personal and subject matter jurisdiction. If the court or courts of this state specified in a provision adopted under subsection (1) do not have the requisite personal and subject matter jurisdiction and another court of this state does have the jurisdiction, then the internal corporate claim may be brought in that other court of this state, notwithstanding that the other court of this state is not specified in the provision, and in any other court specified in the provision that has the requisite jurisdiction.

(3) No provision of the articles of incorporation or the bylaws may prohibit bringing an internal corporate claim in the courts of this state or require the claims to be determined by arbitration.

(4) For the purposes of this section, "internal corporate claim" means:

(a) any claim that is based on a violation of a duty under the laws of this state by a current or former director, officer, or shareholder in such capacity;

(b) any derivative action or proceeding brought on behalf of the corporation;

(c) any action asserting a claim arising pursuant to any provision of this chapter or the articles of incorporation or bylaws; or

(d) any action asserting a claim governed by the internal affairs doctrine that is not included in this subsection (4).

35-14-301. Purposes. (1) Every corporation incorporated under this chapter has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation.

(2) A corporation engaging in a business that is subject to regulation under another statute of this state may incorporate under this chapter only if permitted by and subject to all limitations of the other statute.

35-14-302. General powers. Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including power:

(1) to sue and be sued, complain, and defend in its corporate name;

(2) to have a corporate seal, which may be altered at will, and to use it or a facsimile of it by impressing or affixing it or in any other manner reproducing it;

(3) to make and amend bylaws not inconsistent with its articles of incorporation or with the laws of this state for managing the business and regulating the affairs of the corporation;

(4) to purchase, receive, lease, or otherwise acquire and to own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in property, wherever located;

(5) to sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;

(6) to purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of and deal in and with shares or other interests in or obligations of any other entity;

(7) to make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other securities and obligations, which may be convertible into or include the option to purchase other securities of the corporation, and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;

(8) to lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;

(9) to be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity;

(10) to conduct its business, locate offices, and exercise the powers granted by this chapter within or outside this state;

(11) to elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit;

(12) to pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents;

(13) to make donations for the public welfare or for charitable, scientific, or educational purposes;

(14) to transact any lawful business that will aid governmental policy; and

(15) to make payments or donations or do any other act not inconsistent with law that furthers the business and affairs of the corporation.

35-14-303. Emergency powers. (1) In anticipation of or during an emergency as provided in subsection (4), the board of directors of a corporation may:

(a) modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent; and

(b) relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

(2) During an emergency as provided in subsection (4), unless emergency bylaws provide otherwise:

(a) notice of a meeting of the board of directors must be given only to those directors whom it is practicable to reach and may be given in any practicable manner; and

(b) one or more officers of the corporation present at a meeting of the board of directors may be considered to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.

(3) Corporate action taken in good faith during an emergency under this section to further the ordinary business affairs of the corporation:

(a) binds the corporation; and

(b) may not be used to impose liability on a director, officer, employee, or agent.

(4) An emergency exists for purposes of this section if a quorum of the board of directors cannot readily be assembled because of some catastrophic event.

35-14-304. Lack of power to act. (1) Except as provided in subsection (2), the validity of corporate action may not be challenged on the grounds that the corporation lacks or lacked power to act.

(2) A corporation's power to act may be challenged:

(a) in a proceeding by a shareholder against the corporation to enjoin the act;

(b) in a proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee, or agent of the corporation; or

(c) in a proceeding by the attorney general under 35-14-1430.

(3) In a shareholder's proceeding under subsection (2)(a) to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party because of enjoining the unauthorized act.

35-14-401. Corporate name. (1) A corporate name:

(a) must contain the word "corporation", "incorporated", "company", or "limited", the abbreviation "corp.", "inc.", "co.", or "ltd.", or words or abbreviations of similar meaning in another language; and

(b) may not contain language stating or implying that the corporation is organized for a purpose other than that permitted by 35-14-301 and its articles of incorporation.

(2) Except as authorized by subsections (3) and (4), a corporate name must be distinguishable in the records of the secretary of state from:

(a) the corporate name of a corporation incorporated in this state that is not administratively dissolved. If the corporation has been administratively dissolved, this provision applies to its corporate name for a period of 120 days following the effective date of its administrative dissolution.

(b) a corporate name reserved or registered under 35-14-402 or 35-14-403 or any similar provision of the law of this state;

(c) the name of a foreign corporation registered to do business in this state or an alternate name adopted by a foreign corporation registered to do business in this state because its corporate name is unavailable;

(d) the corporate name of a nonprofit corporation incorporated in this state that is not administratively dissolved. If the nonprofit corporation has been administratively dissolved, this provision applies to its corporate name for a period of 120 days following the effective date of its administrative dissolution.

(e) the name of a foreign nonprofit corporation registered to do business in this state or an alternate name adopted by a foreign nonprofit corporation registered to do business in this state because its real name is unavailable;

(f) the name of a domestic filing entity or limited liability partnership that is not administratively dissolved. If the domestic filing entity or limited liability partnership has been administratively dissolved, this provision applies to its corporate name for a period of 120 days following the effective date of its administrative dissolution.

(g) the name of a foreign unincorporated entity registered to do business in this state or an alternate name adopted by a foreign unincorporated entity registered to do business in this state because its real name is unavailable; and

(h) any assumed business name, trademark, or service mark reserved or registered with the secretary of state.

(3) A corporation may apply to the secretary of state for authorization to use a name that is not distinguishable in the secretary of state's records from one or more of the names described in subsection (2). The secretary of state shall authorize use of the name applied for if:

(a) the other corporation or unincorporated entity consents to the use in writing and submits an undertaking in a form satisfactory to the secretary of state to change its name to a name that is distinguishable in the records of the secretary of state from the name of the applying corporation; or

(b) the applicant delivers to the secretary of state a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.

(4) A corporation, domestic filing entity, or limited liability partnership may use the name, including the fictitious name, of another domestic or foreign corporation, domestic or foreign filing entity, or domestic or foreign limited liability partnership that is used in this state if the other corporation, filing entity, or limited liability partnership is incorporated or authorized to transact business in this state and the proposed user corporation, domestic filing entity, or limited liability partnership:

(a) has merged with the other corporation, filing entity, or limited liability partnership;

(b) has been formed by reorganization of the other corporation, filing entity, or limited liability partnership;

(c) has acquired all or substantially all of the assets, including the name, of the other corporation, filing entity, or limited liability partnership; or

(d) has obtained written permission from the other corporation, filing entity, or limited liability partnership for use of the name and has filed a copy of the grant of permission with the secretary of state.

(5) This chapter does not control the use of fictitious names.

35-14-402. Reserved name. (1) A person may reserve the exclusive use of a corporate name, including a fictitious or alternate name for a foreign corporation whose corporate name is not available, by delivering an application to the secretary of state for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the secretary of state finds that the corporate name applied for is available, the secretary of state shall reserve the name for the applicant's exclusive use for a nonrenewable 120-day period.

(2) The owner of a reserved corporate name may transfer the reservation to another person by delivering to the secretary of state a signed notice of the transfer that states the name and address of the transferee.

35-14-403. Registered name. (1) A foreign corporation may register its corporate name, or its corporate name with the addition of any word or abbreviation listed in 35-14-401(1)(a) if necessary for the corporate name to comply with 35-14-401(1)(a), if the name is distinguishable in the records of the secretary of state from the corporate names that are not available under 35-14-401(2).

(2) A foreign corporation registers its corporate name, or its corporate name with any addition permitted by subsection (1), by delivering to the secretary of state for filing an application setting forth that name, the state, tribe, or country and date of its incorporation, and a brief description of the nature of the business that is to be conducted in this state.

(3) The name is registered for the applicant's exclusive use on the effective date of the application and for the remainder of the calendar year unless renewed.

(4) A foreign corporation whose name registration is effective may renew it for successive years by delivering to the secretary of state for filing a renewal application that complies with the requirements of subsection (2) between October 1 and December 31 of each year the registration is effective. The renewal application when filed renews the registration for the following calendar year.

(5) A foreign corporation whose name registration is effective may:

(a) register to do business as a foreign corporation under the registered name if it complies with 35-14-401(1)(b); or

(b) consent in writing to the use of that name by a domestic corporation subsequently incorporated under this chapter or by another foreign corporation. The registration terminates when the domestic corporation is incorporated or the foreign corporation registers to do business under that name.

35-14-501. Registered office and agent -- domestic and registered foreign corporations. (1) Each corporation shall continuously maintain in this state a registered office and a registered agent in compliance with Title 35, chapter 7.

(2) As used in this part, "corporation" means both a domestic corporation and a registered foreign corporation.

35-14-502. Change -- registered office -- registered agent. A corporation may change its registered office or registered agent in compliance with Title 35, chapter 7.

35-14-503.  Resignation -- registered agent. A registered agent may resign as agent for a corporation in compliance with Title 35, chapter 7.

35-14-504. Service on corporation. (1) A corporation's registered agent is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the corporation.

(2) If a corporation does not have a registered agent or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary at the corporation's principal office. Service is perfected under this subsection at the earliest of:

(a) the date the corporation receives the mail;

(b) the date shown on the return receipt if signed on behalf of the corporation; or

(c) 5 days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.

(3) If process, notice, or demand cannot be served on a corporation pursuant to subsection (1) or (2) or is to be served on a registered foreign corporation that has withdrawn its registration pursuant to 35-14-1507 or 35-14-1509 or the registration of which has been terminated pursuant to 35-14-1511, then the secretary of state is an agent of the corporation on whom process, notice, or demand may be served. Service of any process, notice, or demand on the secretary of state as agent for a corporation may be made by delivering to the secretary of state duplicate copies of the process, notice, or demand. If process, notice, or demand is served on the secretary of state, the secretary of state shall forward one of the copies by registered or certified mail, return receipt requested, to the corporation at the last address shown in the records of the secretary of state. Service is effected under this subsection at the earliest of:

(a) the date the corporation receives the process, notice, or demand;

(b) the date shown on the return receipt if signed on behalf of the corporation; or

(c) 5 days after the process, notice, or demand is deposited in the United States mail by the secretary of state.

(4) This section does not prescribe the only means or necessarily the required means of serving a corporation.

35-14-601. Authorized shares. (1) The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and, before the issuance of shares of a class or series, describe the terms, including the preferences, rights, and limitations, of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights, and limitations, that are identical with those of other shares of the same class or series.

(2) The articles of incorporation must authorize:

(a) one or more classes or series of shares that together have full voting rights; and

(b) one or more classes or series of shares, which may be the same class, classes, or series as those with voting rights, that together are entitled to receive the net assets of the corporation on dissolution.

(3) The articles of incorporation may authorize one or more classes or series of shares that:

(a) have special, conditional, or limited voting rights or no right to vote, except to the extent otherwise provided by this chapter;

(b) are redeemable or convertible as specified in the articles of incorporation:

(i) at the option of the corporation, the shareholder, or another person or on the occurrence of a specified event;

(ii) for cash, indebtedness, securities, or other property; and

(iii) at prices and in amounts specified or determined in accordance with a formula;

(c) entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative; or

(d) have preference over any other class or series of shares with respect to distributions, including distributions on the dissolution of the corporation.

(4) Terms of shares may be made dependent on facts objectively ascertainable outside the articles of incorporation in accordance with 35-14-120(11).

(5) Any of the terms of shares may vary among holders of the same class or series so long as the variations are expressly set forth in the articles of incorporation.

(6) The description of the preferences, rights, and limitations of classes or series of shares in subsection (3) is not exhaustive.

35-14-602. Terms of class or series -- determination by board of directors. (1) If the articles of incorporation so provide, the board of directors is authorized, without shareholder approval, to:

(a) classify any unissued shares into one or more classes or into one or more series within a class;

(b) reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes; or

(c) reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class.

(2) If the board of directors acts pursuant to subsection (1), it shall determine the terms, including the preferences, rights, and limitations, to the same extent permitted under 35-14-601, of:

(a) any class of shares before the issuance of any shares of that class; or

(b) any series within a class before the issuance of any shares of that series.

(3) Before issuing any shares of a class or series created under this section, the corporation shall deliver to the secretary of state for filing articles of amendment setting forth the terms determined under subsection (2).

35-14-603. Issued and outstanding shares. (1) A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or canceled.

(2) The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection (3) and to 35-14-640.

(3) At all times that shares of the corporation are outstanding, one or more shares that together have full voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.

35-14-604. Fractional shares. (1) A corporation may issue fractions of a share or in lieu of doing so may:

(a) pay in cash the value of fractions of a share;

(b) issue scrip in registered or bearer form entitling the holder to receive a full share on surrendering enough scrip to equal a full share; or

(c) arrange for disposition of fractional shares by the holders of those shares.

(2) Each certificate representing scrip must be conspicuously labeled "scrip" and must contain the information required by 35-14-625(2).

(3) The holder of a fractional share is entitled to exercise the rights of a shareholder, including the rights to vote, to receive dividends, and to receive distributions upon dissolution. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.

(4) The board of directors may authorize the issuance of scrip subject to any condition, including that:

(a) the scrip will become void if not exchanged for full shares before a specified date; and

(b) the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

35-14-605 through 35-14-619 reserved.

35-14-620. Subscription for shares -- before incorporation. (1) A subscription for shares entered into before incorporation is irrevocable for 6 months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

(2) The board of directors may determine the payment terms of subscriptions for shares that were entered into before incorporation unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series unless the subscription agreement specifies otherwise.

(3) Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

(4) If a subscriber defaults in payment of cash or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid for more than 20 days after the corporation delivers a written demand for payment to the subscriber.

35-14-621. Issuance of shares. (1) The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation.

(2) 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, contracts for services to be performed, or other securities of the corporation.

(3) Before the corporation issues shares, the board of directors shall 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.

(4) When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued are fully paid and nonassessable.

(5) The corporation may place in escrow shares issued for a contract for future services or benefits or for a promissory note or make other arrangements to restrict the transfer of the shares and may credit distributions in respect of the shares against their purchase price until the services are performed, the benefits are received, or the note is paid. If the services are not performed, the benefits are not received, or the note is not paid, the shares escrowed or restricted and the distributions credited may be canceled in whole or part.

(6) (a) 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 a majority, or a greater number the articles of incorporation may prescribe, of the votes entitled to be cast on the matter exists if:

(i) the shares, other securities, or rights are to be issued for consideration other than cash or cash equivalents; and

(ii) 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 20% of the voting power of the shares of the corporation that were outstanding immediately before the transaction.

(b) In this subsection (6):

(i) 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 or other securities convertible into or rights exercisable for shares is the greater of:

(A) the voting power of the shares to be issued; or

(B) 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.

(ii) A series of transactions is integrated only if consummation of one transaction is made contingent on consummation of one or more of the other transactions.

35-14-622. Liability of shareholders. (1) A purchaser from a corporation of the corporation's own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued or specified in the subscription agreement.

(2) A shareholder of a corporation is not personally liable for any liabilities of the corporation, including liabilities arising from acts of the corporation, except:

(a) to the extent provided in a provision of the articles of incorporation permitted by 35-14-202(2)(b)(v); and

(b) that a shareholder may become personally liable by reason of the shareholder's own acts or conduct.

35-14-623. Share dividends. (1) Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series of shares. An issuance of shares under this subsection is a share dividend.

(2) Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless:

(a) the articles of incorporation authorize the issue;

(b) a majority of the votes entitled to be cast by the class or series to be issued approve the issue; or

(c) there are no outstanding shares of the class or series to be issued.

(3) The board of directors may fix the record date for determining shareholders entitled to a share dividend, which may not be retroactive. If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, the record date is the date the board of directors authorizes the share dividend.

35-14-624. Share rights -- options -- warrants -- awards. (1) A corporation may issue rights, options, or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine:

(a) the terms and conditions upon which the rights, options, or warrants are issued; and

(b) the terms, including the consideration, for which the shares or other securities are to be issued. The authorization by the board of directors for the corporation to issue the rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options, or warrants are exercisable.

(2) The terms and conditions of the rights, options, or warrants may include restrictions or conditions that:

(a) preclude or limit the exercise, transfer, or receipt of the rights, options, or warrants by any person owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation or by any transferee of the person; or

(b) invalidate or void the rights, options, or warrants held by any person or transferee described in subsection (2)(a).

(3) The board of directors may authorize one or more officers to:

(a) designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of shares; and

(b) determine, within an amount and subject to any other limitations established by the board of directors and, if applicable, the shareholders, the number of rights, options, warrants, or other equity compensation awards and the terms of the rights, options, warrants, or awards to be received by the recipients, provided that an officer may not use this authority to designate the officer or any other person the board of directors may specify as a recipient of those rights, options, warrants, or other equity compensation awards.

35-14-625. Certificates -- form -- content. (1) Shares may be, but need not be, represented by certificates. Unless this chapter or another statute expressly provides otherwise, the rights and obligations of shareholders are identical regardless of whether their shares are represented by certificates.

(2) At a minimum, each share certificate must state on its face:

(a) the name of the corporation and that it is organized under the law of this state;

(b) the name of the person to whom issued; and

(c) the number and class of shares and the designation of the series, if any, the certificate represents.

(3) If the corporation is authorized to issue different classes of shares or series of shares within a class, the front or back of each certificate must summarize:

(a) the preferences, rights, and limitations applicable to each class and series;

(b) any variations in preferences, rights, and limitations among the holders of the same class or series; and

(c) the authority of the board of directors to determine the terms of future classes or series. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

(4) Each share certificate must be signed by two officers designated in the bylaws.

(5) If the person who signed a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

35-14-626. Shares without certificates. (1) Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issuance of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

(2) Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall deliver to the shareholder a written statement of the information required on certificates by 35-14-625(2) and (3) and, if applicable, 35-14-627.

35-14-627. Restriction on transfer of shares. (1) The articles of incorporation, the bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation or may impose restrictions on, including the alteration or elimination of, the application of 35-14-1434. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

(2) A restriction described in subsection (1) is valid and enforceable against a shareholder or a transferee of the shareholder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by 35-14-626(2). Unless so noted or contained, a restriction is not enforceable against a person without knowledge of the restriction.

(3) A restriction described in subsection (1) is authorized:

(a) to maintain the corporation's status when it is dependent on the number or identity of its shareholders;

(b) to preserve exemptions under federal or state securities law; or

(c) for any other reasonable purpose.

(4) A restriction described in subsection (1) may:

(a) obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares;

(b) obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares;

(c) require the corporation, the holders of any class or series of its shares, or other persons to approve the transfer of the restricted shares if the requirement is not manifestly unreasonable; or

(d) prohibit the transfer of the restricted shares to designated persons or classes of persons if the prohibition is not manifestly unreasonable.

(5) For purposes of this section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

35-14-628 and 35-14-629 reserved.

35-14-630. Preemptive rights -- shareholder. (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 provide that right.

(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.

(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:

(i) shares issued as compensation to directors, officers, employees, or agents of the corporation or its subsidiaries or affiliates;

(ii) shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, employees, or agents of the corporation or its subsidiaries or affiliates;

(iii) shares authorized in the articles of incorporation that are issued within 6 months from the effective date of incorporation; or

(iv) shares sold otherwise than for cash.

(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 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 1 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 1 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.

35-14-631. Corporation's acquisition of its own shares. (1) A corporation may acquire its own shares, and shares so acquired constitute authorized but unissued shares.

(2) If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired.

35-14-632 through 35-14-639 reserved.

35-14-640. Distributions to shareholders. (1) A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (3).

(2) The board of directors may fix the record date for determining shareholders entitled to a distribution, which may not be retroactive. If the board of directors does not fix a record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption, or other acquisition of the corporation's shares, the record date is the date the board of directors authorizes the distribution.

(3) No distribution may be made if, after giving it effect:

(a) the corporation would not be able to pay its debts as they become due in the usual course of business; or

(b) the corporation's total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights on dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

(4) The board of directors may base a determination that a distribution is not prohibited under subsection (3) either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

(5) Except as provided in subsection (7), the effect of a distribution under subsection (3) is measured:

(a) in the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of:

(i) the date cash or other property is transferred or debt to a shareholder is incurred by the corporation; or

(ii) the date the shareholder ceases to be a shareholder with respect to the acquired shares;

(b) in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and

(c) in all other cases, as of:

(i) the date the distribution is authorized if the payment occurs within 120 days after the date of authorization; or

(ii) the date the payment is made if it occurs more than 120 days after the date of authorization.

(6) A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

(7) Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under subsection (3) if its terms provide that payment of principal and interest is made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.

(8) This section does not apply to distributions in liquidation under part 14 of this chapter.

35-14-701. Annual meeting. (1) Unless directors are elected by written consent in lieu of an annual meeting as permitted by 35-14-704, a corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws at which directors must be elected.

(2) Unless the board of directors determines to hold the meeting solely by means of remote communication in accordance with 35-14-709(3), annual meetings may be held:

(a) in or out of this state at the place stated in or fixed in accordance with the bylaws; or

(b) if no place is stated in or fixed in accordance with the bylaws, at the corporation's principal office.

(3) The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action.

35-14-702. Special meeting. (1) A corporation shall hold a special meeting of shareholders:

(a) on call of its board of directors or of the person or persons authorized to do so by the articles of incorporation or bylaws; or

(b) if shareholders holding at least 10% of all the votes entitled to be cast on an issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation one or more written demands for the meeting describing the purpose or purposes for which it is to be held, provided that the articles of incorporation may fix a lower percentage or a higher percentage, not exceeding 25%, of all the votes entitled to be cast on any issue proposed to be considered. Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing to that effect received by the corporation before the receipt by the corporation of demands sufficient in number to require the holding of a special meeting.

(2) If not otherwise fixed under 35-14-703 or 35-14-707, the record date for determining shareholders entitled to demand a special meeting is the first date on which a signed shareholder demand is delivered to the corporation. No written demand for a special meeting is effective unless, within 60 days of the earliest date on which the demand delivered to the corporation as required by this section was signed, written demands signed by shareholders holding at least the percentage of votes specified in or fixed in accordance with subsection (1)(b) have been delivered to the corporation.

(3) Unless the board of directors determines to hold the meeting solely by remote participation in accordance with 35-14-709(3), special meetings of shareholders may be held:

(a) in or out of this state at the place stated in or fixed in accordance with the bylaws; or

(b) if no place is stated in or fixed in accordance with the bylaws, at the corporation's principal office.

(4) Only business within the purpose or purposes described in the meeting notice required by 35-14-705(3) may be conducted at a special meeting of shareholders.

35-14-703. Court-ordered meeting. (1) The district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may summarily order a meeting to be held:

(a) on application of any shareholder of the corporation if an annual meeting was not held or action by written consent in lieu of an annual meeting did not become effective within the earlier of 6 months after the end of the corporation's fiscal year or 15 months after its last annual meeting; or

(b) on application of one or more shareholders who signed a demand for a special meeting valid under 35-14-702 if:

(i) notice of the special meeting was not given within 30 days after the first day on which the requisite number of demands was delivered to the corporation; or

(ii) the special meeting was not held in accordance with the notice.

(2) The court may fix the time and place of the meeting, determine the shares entitled to participate in the meeting, specify a record date or dates for determining shareholders entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting or direct that the shares represented at the meeting constitute a quorum for action on those matters, and enter other orders necessary to accomplish the purpose or purposes of the meeting.

(3) For purposes of subsection (1)(a), "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

35-14-704. Action without meeting. (1) Action required or permitted by this chapter to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, be signed by all the shareholders entitled to vote on the action, and be delivered to the corporation for filing by the corporation with the minutes or corporate records.

(2) The articles of incorporation may provide that any action required or permitted by this chapter to be taken at a shareholders' meeting may be taken without a meeting, and without prior notice, if consents in writing setting forth the action to be taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted. However, if a corporation's articles of incorporation authorize shareholders to cumulate their votes when electing directors pursuant to 35-14-728, directors may not be elected by less than unanimous written consent. A written consent must bear the date of signature of the shareholder who signs the consent and be delivered to the corporation for filing by the corporation with the minutes or corporate records.

(3) If not otherwise fixed under 35-14-707 and if prior action by the board of directors is not required respecting the action to be taken without a meeting, the record date for determining the shareholders entitled to take action without a meeting is the first date on which a signed written consent is delivered to the corporation. If not otherwise fixed under 35-14-707 and if prior action by the board of directors is required respecting the action to be taken without a meeting, the record date is the close of business on the day the resolution of the board of directors taking the prior action is adopted. No written consent is effective to take the corporate action referred to in the consent unless, within 60 days of the earliest date on which a consent delivered to the corporation as required by this section was signed, written consents signed by sufficient shareholders to take the action have been delivered to the corporation. A written consent may be revoked by a writing to that effect delivered to the corporation before unrevoked written consents sufficient in number to take the corporate action have been delivered to the corporation.

(4) A consent signed pursuant to the provisions of this section has the effect of a vote taken at a meeting and may be described in that manner in any document. Unless the articles of incorporation, the bylaws, or a resolution of the board of directors provides for a reasonable delay to permit tabulation of written consents, the action taken by written consent is effective when written consents signed by sufficient shareholders to take the action have been delivered to the corporation.

(5) If this chapter requires that notice of a proposed action be given to nonvoting shareholders and the action is to be taken by written consent of the voting shareholders, the corporation shall give its nonvoting shareholders written notice of the action not more than 10 days after:

(a) written consents sufficient to take the action have been delivered to the corporation; or

(b) the date on which tabulation of consents is completed pursuant to an authorization under subsection (4). The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of this chapter, would have been required to be sent to nonvoting shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action.

(6) If action is taken by less than unanimous written consent of the voting shareholders, the corporation shall give its nonconsenting voting shareholders written notice of the action not more than 10 days after:

(a) written consents sufficient to take the action have been delivered to the corporation; or

(b) the date on which tabulation of consents is completed pursuant to an authorization under subsection (4). The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of this chapter, would have been required to be sent to voting shareholders in a notice of a meeting at which the action would have been submitted to the shareholders for action.

(7) The notice requirements in subsections (5) and (6) may not delay the effectiveness of actions taken by written consent, and a failure to comply with those notice requirements does not invalidate actions taken by written consent. However, this subsection may not be considered to limit judicial power to fashion any appropriate remedy in favor of a shareholder adversely affected by a failure to give notice within the required time period.

35-14-705. Notice of meeting. (1) A corporation shall notify shareholders of the date, time, and place, if any, of each annual and special shareholders' meeting no fewer than 10 or more than 60 days before the meeting date. If the board of directors has authorized participation by means of remote communication pursuant to 35-14-709 for holders of any class or series of shares, the notice to the holders of that class or series of shares must describe the means of remote communication to be used. The notice must include the record date for determining the shareholders entitled to vote at the meeting if that date is different from the record date for determining shareholders entitled to notice of the meeting. Unless this chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting as of the record date for determining the shareholders entitled to notice of the meeting.

(2) Unless this chapter or the articles of incorporation require otherwise, the notice of an annual meeting of shareholders need not include a description of the purpose or purposes for which the meeting is called.

(3) Notice of a special meeting of shareholders must include a description of the purpose or purposes for which the meeting is called.

(4) If not otherwise fixed under 35-14-703 or 35-14-707, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the day before the first notice is delivered to shareholders.

(5) Unless the bylaws require otherwise, if an annual or special shareholders' meeting is adjourned to a different date, time, or place, if any, notice need not be given of the new date, time, or place, if any, if the new date, time, or place, if any, is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under 35-14-707, however, notice of the adjourned meeting must be given under this section to shareholders entitled to vote at the adjourned meeting as of the record date fixed for notice of the adjourned meeting.

35-14-706. Waiver of notice. (1) A shareholder may waive any notice required by this chapter or the articles of incorporation or bylaws, before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for filing by the corporation with the minutes or corporate records.

(2) A shareholder's attendance at a meeting:

(a) waives objection to lack of notice or defective notice of the meeting unless the shareholder, at the beginning of the meeting, objects to holding the meeting or transacting business at the meeting; and

(b) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice unless the shareholder objects to considering the matter when it is presented.

35-14-707. Record date for meeting. (1) The bylaws may fix or provide the manner of fixing the record date or dates for one or more voting groups to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or provide for fixing a record date, the board of directors may fix the record date.

(2) A record date fixed under this section may not be more than 70 days before the meeting or action requiring a determination of shareholders and may not be retroactive.

(3) A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date or dates, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

(4) If a court orders a meeting adjourned to a date more than 120 days after the date fixed for the original meeting, it may provide that the original record date or dates continue in effect or it may fix a new record date or dates.

(5) The record dates for a shareholders' meeting fixed by or in the manner provided in the bylaws or by the board of directors is the record date for determining shareholders entitled both to notice of and to vote at the shareholders' meeting unless, in the case of a record date fixed by the board of directors and to the extent not prohibited by the bylaws, the board, at the time it fixes the record date for shareholders entitled to notice of the meeting, fixes a later record date on or before the date of the meeting to determine the shareholders entitled to vote at the meeting.

35-14-708. Conduct of meeting. (1) At each meeting of shareholders, a chair shall preside. The chair must be appointed as provided in the bylaws or, in the absence of that provision, by the board of directors.

(2) The chair, unless the articles of incorporation or bylaws provide otherwise, shall determine the order of business and may establish rules for the conduct of the meeting.

(3) Rules adopted for the meeting and the conduct of the meeting must be fair to shareholders.

(4) The chair of the meeting shall announce at the meeting when the polls close for each matter voted on. If no announcement is made, the polls are considered to have closed on the final adjournment of the meeting. After the polls close, no ballots, proxies, or votes and no revocations or changes to ballots, proxies, or votes may be accepted.

35-14-709. Remote participation -- shareholder's meetings. (1) Shareholders of any class or series of shares may participate in any meeting of shareholders by means of remote communication to the extent the board of directors authorizes the participation for that class or series. Participation as a shareholder by means of remote communication is subject to guidelines and procedures the board of directors adopts and must be in conformity with subsection (2).

(2) Shareholders participating in a shareholders' meeting by means of remote communication are considered present and may vote at the meeting if the corporation has implemented reasonable measures:

(a) to verify that each person participating remotely as a shareholder is a shareholder; and

(b) to provide those shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate and to read or hear the proceedings of the meeting substantially concurrently with the proceedings.

(3) Unless the bylaws require the meeting of shareholders to be held at a place, the board of directors may determine that any meeting of shareholders may not be held at any place and must instead be held solely by means of remote communication, but only if the corporation implements the measures specified in subsection (1).

35-14-710 through 35-14-719 reserved.

35-14-720. Shareholders' list for meeting. (1) After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. If the board of directors fixes a different record date under 35-14-707(5) to determine the shareholders entitled to vote at the meeting, a corporation also shall prepare an alphabetical list of the names of all its shareholders who are entitled to vote at the meeting. A list must be arranged by voting group and, within each voting group, by class or series of shares and must show the address of and number of shares held by each shareholder. Nothing in this subsection requires the corporation to include on the list the electronic mail address or other electronic contact information of a shareholder.

(2) (a) The shareholders' list for notice must be available for inspection by any shareholder, beginning 2 business days after notice is given of the meeting for which the list was prepared and continuing through the meeting:

(i) at the corporation's principal office or at a place identified in the meeting notice in the city where the meeting will be held; or

(ii) on a reasonably accessible electronic network, provided that the information required to gain access to the list is provided with the notice of the meeting. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that the information is available only to shareholders of the corporation.

(b) A shareholders' list for voting must be similarly available for inspection promptly after the record date for voting. A shareholder or the shareholder's agent or attorney is entitled on written demand to inspect and, subject to the requirements of 35-14-1602(3), to copy the list, during regular business hours and at the shareholder's expense, during the period it is available for inspection.

(3) If the meeting is to be held at a place, the corporation shall make the list of shareholders entitled to vote available at the meeting, and any shareholder or the shareholder's agent or attorney is entitled to inspect the list at any time during the meeting or any adjournment. If the meeting is to be held solely by means of remote communication, then the list must also be open to inspection during the meeting on a reasonably accessible electronic network, and the information required to access the list must be provided with the notice of the meeting.

(4) If the corporation refuses to allow a shareholder or the shareholder's agent or attorney to inspect a shareholders' list before or at the meeting or to copy a list as permitted by subsection (2), the district court of the county where the corporation's principal office is located or, if its principal office is not located in this state, the first judicial district, on application of the shareholder, may summarily order the inspection or copying at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete.

(5) Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting.

35-14-721. Voting entitlements of shares. (1) Except as provided in subsections (2) and (4) or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class or series, is entitled to one vote on each matter voted on at a shareholders' meeting. Only shares are entitled to vote.

(2) Shares of a corporation are not entitled to vote if they are owned by or otherwise belong to the corporation:

(a) directly; or

(b) indirectly through an entity of which a majority of the voting power is held directly or indirectly by the corporation or that is otherwise controlled by the corporation.

(3) Shares held by the corporation in a fiduciary capacity for the benefit of any person are entitled to vote unless they are held for the benefit of or otherwise belong to the corporation:

(a) directly; or

(b) indirectly through an entity of which a majority of the voting power is held directly or indirectly by the corporation or that is otherwise controlled by the corporation.

(4) Redeemable shares are not entitled to vote after delivery of written notice of redemption is effective and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

(5) For purposes of this section, "voting power" means the current power to vote in the election of directors of a corporation or to elect, select, or appoint governors of another entity.

35-14-722. Proxies. (1) A shareholder may vote the shareholder's shares in person or by proxy.

(2) A shareholder or the shareholder's agent or attorney-in-fact may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by an electronic transmission. An electronic transmission must contain or be accompanied by information from which the recipient can determine the date of the transmission and that the transmission was authorized by the sender or the sender's agent or attorney-in-fact.

(3) An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for the term provided in the appointment form and, if no term is provided, is valid for 11 months unless the appointment is irrevocable under subsection (4).

(4) An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of:

(a) a pledgee;

(b) a person who purchased or agreed to purchase the shares;

(c) a creditor of the corporation who extended it credit under terms requiring the appointment;

(d) an employee of the corporation whose employment contract requires the appointment; and

(e) a party to a voting agreement created under 35-14-731.

(5) The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.

(6) An appointment made irrevocable under subsection (4) is revoked when the interest with which it is coupled is extinguished.

(7) Unless it provides otherwise, an appointment made irrevocable under subsection (4) continues in effect after a transfer of the shares and after a transferee takes subject to the appointment, except that a transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when acquiring the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

(8) Subject to 35-14-724 and to any express limitation on the proxy's authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.

35-14-723. Shares held by intermediaries and nominees. (1) A corporation's board of directors may establish a procedure under which a person on whose behalf shares are registered in the name of an intermediary or nominee may elect to be treated by the corporation as the record shareholder by filing with the corporation a beneficial ownership certificate. The terms, conditions, and limitations of this treatment must be specified in the procedure. To the extent a person is treated under the procedure as having rights or privileges that the record shareholder otherwise would have, the record shareholder does not have those rights or privileges.

(2) The procedure must specify:

(a) the types of intermediaries or nominees to which it applies;

(b) the rights or privileges that the corporation recognizes in a person with respect to whom a beneficial ownership certificate is filed;

(c) the manner in which the procedure is selected, which must include that the beneficial ownership certificate must be signed or assented to by or on behalf of the record shareholder and the person on whose behalf the shares are held;

(d) the information that must be provided when the procedure is selected;

(e) the period for which selection of the procedure is effective;

(f) requirements for notice to the corporation with respect to the arrangement; and

(g) the form and contents of the beneficial ownership certificate.

(3) The procedure may specify any other aspects of the rights and duties created by the filing of a beneficial ownership certificate.

35-14-724. Acceptance of votes -- other instruments. (1) If the name signed on a vote, ballot, consent, waiver, shareholder demand, or proxy appointment corresponds to the name of a shareholder, the corporation, if acting in good faith, is entitled to accept the vote, ballot, consent, waiver, shareholder demand, or proxy appointment and give it effect as the act of the shareholder.

(2) If the name signed on a vote, ballot, consent, waiver, shareholder demand, or proxy appointment does not correspond to the name of its shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, ballot, consent, waiver, shareholder demand, or proxy appointment and give it effect as the act of the shareholder if:

(a) the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;

(b) the name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, ballot, consent, waiver, shareholder demand, or proxy appointment;

(c) the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, ballot, consent, waiver, shareholder demand, or proxy appointment;

(d) the name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, ballot, consent, waiver, shareholder demand, or proxy appointment; or

(e) two or more persons are the shareholder as co-tenants or fiduciaries, the name signed purports to be the name of at least one of the co-owners, and the person signing appears to be acting on behalf of all the co-owners.

(3) The corporation is entitled to reject a vote, ballot, consent, waiver, shareholder demand, or proxy appointment if the person authorized to accept or reject the instrument, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder.

(4) Neither the corporation, any person authorized by it, nor an inspector of election appointed under 35-14-729 that accepts or rejects a vote, ballot, consent, waiver, shareholder demand, or proxy appointment in good faith and in accordance with the standards of 35-14-722(2) or this section is liable in damages to the shareholder for the consequences of the acceptance or rejection.

(5) Corporate action based on the acceptance or rejection of a vote, ballot, consent, waiver, shareholder demand, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

(6) If an inspector of election has been appointed under 35-14-729, the inspector of election also may request information and make determinations under subsections (1), (2), and (3). Any determination made by the inspector of election under those subsections is controlling.

35-14-725. Quorum and voting requirements -- voting groups. (1) Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation provide otherwise, shares representing a majority of the votes entitled to be cast on the matter by the voting group constitute a quorum of that voting group for action on that matter. When this chapter requires a particular quorum for a specified action, the articles of incorporation may not provide for a lower quorum.

(2) Once a share is represented for any purpose at a meeting, it is considered present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be fixed for that adjourned meeting.

(3) If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action unless the articles of incorporation or this chapter requires a greater number of affirmative votes.

(4) An amendment of the articles of incorporation adding, changing, or deleting a quorum or voting requirement for a voting group greater than specified in subsection (1) or (3) is governed by 35-14-727.

(5) The election of directors is governed by 35-14-728.

(6) When a provision of this chapter provides for voting of classes or series as separate voting groups, the rules provided in 35-14-1004 for amendments of the articles of incorporation apply to that provision.

35-14-726. Action by single and multiple voting groups. (1) If the articles of incorporation or this chapter provides for voting by a single voting group on a matter, action on that matter is taken when it is voted on by that voting group as provided in 35-14-725.

(2) If the articles of incorporation or this chapter provides for voting by two or more voting groups on a matter, action on that matter is taken only when it is voted on by each of those voting groups counted separately as provided in 35-14-725. Action may be taken by different voting groups on a matter at different times.

35-14-727. Modifying quorum or voting requirements. An amendment to the articles of incorporation that adds, changes, or deletes a quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

35-14-728. Voting for directors -- cumulative voting. (1) Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

(2) Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation provide for that right.

(3) A statement included in the articles of incorporation that "[all] [a designated voting group of] shareholders are entitled to cumulate their votes for directors" or words of similar meaning means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and to cast the product for a single candidate or distribute the product among two or more candidates.

(4) Shares otherwise entitled to vote cumulatively may not be voted cumulatively at a particular meeting unless:

(a) the meeting notice or proxy statement accompanying the notice states conspicuously that cumulative voting is authorized; or

(b) a shareholder who has the right to cumulate the shareholder's votes gives notice to the corporation not less than 48 hours before the time set for the meeting of the shareholder's intent to cumulate votes during the meeting. If one shareholder gives this notice, all other shareholders in the same voting group participating in the election are entitled to cumulate their votes without giving further notice.

35-14-729. Inspectors of election. (1) A corporation that has a class of equity securities registered pursuant to section 12 of the Securities Exchange Act of 1934 shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders in connection with determining voting results. Each inspector shall verify in writing that the inspector will faithfully execute the duties of inspector with strict impartiality and according to the best of the inspector's ability. An inspector may be an officer or employee of the corporation. The inspectors may appoint or retain other persons to assist the inspectors in the performance of the duties of inspector under subsection (2) and may rely on information provided by those and other persons, including those appointed to tabulate votes, unless the inspectors believe reliance is unwarranted.

(2) The inspectors shall:

(a) ascertain the number of shares outstanding and the voting power of each;

(b) determine the shares represented at a meeting;

(c) determine the validity of proxy appointments and ballots;

(d) count the votes; and

(e) make a written report of the results.

(3) In performing their duties, the inspectors may examine:

(a) the proxy appointment forms and any other information provided in accordance with 35-14-722(2);

(b) any envelope or related writing submitted with the proxy appointment forms;

(c) any ballots;

(d) any evidence or other information specified in 35-14-724; and

(e) the relevant books and records of the corporation relating to its shareholders and their entitlement to vote, including any securities position list provided by a depository clearing agency.

(4) The inspectors also may consider other information that they believe is relevant and reliable for the purpose of performing any of the duties assigned to them pursuant to subsection (2), including the purpose of evaluating inconsistent, incomplete, or erroneous information and reconciling information submitted on behalf of banks, brokers, their nominees, or similar persons that indicates more votes being cast than a proxy authorized by the record shareholder is entitled to cast. If the inspectors consider other information allowed by this subsection, they shall in their report under subsection (2) specify the information considered by them, including the purpose or purposes for which the information was considered, the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained, and the basis for the inspectors' belief that the information is relevant and reliable.

(5) Determinations of law by the inspectors of election are subject to de novo review by a court in a proceeding under 35-14-749 or other judicial proceeding.

35-14-730. Voting trusts. (1) One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust, which may include anything consistent with its purpose, and transferring their shares to the trustee. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all voting trust beneficial owners, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the corporation at its principal office.

(2) A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name.

(3) Limits, if any, on the duration of a voting trust are as set forth in the voting trust. A voting trust that became effective prior to June 1, 2020, remains governed by the statute concerning duration then in effect unless the voting trust is amended to provide otherwise by unanimous agreement of the parties to the voting trust.

35-14-731. Voting agreements. (1) Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of 35-14-730.

(2) A voting agreement created under this section is specifically enforceable.

35-14-732. Shareholder agreements. (1) An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this chapter in that it:

(a) eliminates the board of directors or restricts the discretion or powers of the board of directors;

(b) governs the authorization or making of distributions, regardless of whether they are in proportion to ownership of shares, subject to the limitations in 35-14-640;

(c) establishes who may be directors or officers of the corporation or their terms of office or manner of selection or removal;

(d) governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;

(e) establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them;

(f) transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;

(g) requires dissolution of the corporation at the request of one or more of the shareholders or on the occurrence of a specified event or contingency; or

(h) otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation or among any of them and is not contrary to public policy.

(2) An agreement authorized by this section is:

(a) as set forth:

(i) in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement; or

(ii) in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation; and

(b) subject to amendment only by all persons who are shareholders at the time of the amendment unless the agreement provides otherwise.

(3) The existence of an agreement authorized by this section must be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by 35-14-626(2). If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement does not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement is entitled to rescission of the purchase. A purchaser is considered to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or before the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of 90 days after discovery of the existence of the agreement or 2 years after the time of purchase of the shares.

(4) If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation's articles of incorporation or bylaws, adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.

(5) An agreement authorized by this section that limits the discretion or powers of the board of directors relieves the directors of and imposes on the person or persons in whom the discretion or powers are vested liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.

(6) The existence or performance of an agreement authorized by this section may not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.

(7) Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.

(8) Limits, if any, on the duration of an agreement authorized by this section must be set forth in the agreement.

35-14-733 through 35-14-739 reserved.

35-14-740. Definitions -- derivative proceedings. In 35-14-740 through 35-14-747, the following definitions apply:

(1) "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided in 35-14-747, in the right of a foreign corporation.

(2) "Shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

35-14-741. Standing. A shareholder may not commence or maintain a derivative proceeding unless the shareholder:

(1) was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time; and

(2) fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

35-14-742. Demand. A shareholder may not commence a derivative proceeding until:

(1) a written demand has been made on the corporation to take suitable action; and

(2) 90 days have expired from the date delivery of the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the 90-day period.

35-14-743. Stay of proceedings. If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for any period the court considers appropriate.

35-14-744. Dismissal. (1) A derivative proceeding must be dismissed by the court on motion by the corporation if one of the groups specified in subsection (2) or (5) has determined in good faith, after conducting a reasonable inquiry on which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.

(2) Unless a panel is appointed pursuant to subsection (5), the determination in subsection (1) must be made by:

(a) a majority vote of qualified directors present at a meeting of the board of directors if the qualified directors constitute a quorum; or

(b) a majority vote of a committee consisting of two or more qualified directors appointed by majority vote of qualified directors present at a meeting of the board of directors, regardless of whether those qualified directors constitute a quorum.

(3) If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the complaint must allege with particularity facts establishing either:

(a) that a majority of the board of directors did not consist of qualified directors at the time the determination was made; or

(b) that the requirements of subsection (1) have not been met.

(4) If a majority of the board of directors consisted of qualified directors at the time the determination was made, the plaintiff has the burden of proving that the requirements of subsection (1) have not been met. If not, the corporation has the burden of proving that the requirements of subsection (1) have been met.

(5) Upon motion by the corporation, the court may appoint a panel of one or more individuals to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation. In that case, the plaintiff has the burden of proving that the requirements of subsection (1) have not been met.

35-14-745. Discontinuance -- settlement. A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation's shareholders or a class or series of shareholders, the court shall direct that notice be given to the shareholders affected.

35-14-746. Payment of expenses. On termination of the derivative proceeding, the court may:

(1) order the corporation to pay the plaintiff's expenses incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation;

(2) order the plaintiff to pay any defendant's expenses incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose; or

(3) order a party to pay an opposing party's expenses incurred because of the filing of a pleading, motion, or other paper if it finds that the pleading, motion, or other paper:

(a) was not well grounded in fact after reasonable inquiry or warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; or

(b) was interposed for an improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation.

35-14-747. Applicability to foreign corporations. In any derivative proceeding in the right of a foreign corporation, the matters covered by 35-14-740 through 35-14-747 are governed by the laws of the jurisdiction of incorporation of the foreign corporation except 35-14-743, 35-14-745, and 35-14-746.

35-14-748. Shareholder action to appoint custodian or receiver. (1) The district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may appoint one or more persons to be custodians, or, if the corporation is insolvent, to be receivers of and for a corporation in a proceeding by a shareholder in which it is established that:

(a) the directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered; or

(b) the directors or those in control of the corporation are acting fraudulently and irreparable injury to the corporation is threatened or being suffered.

(2) The court:

(a) may issue injunctions, appoint a temporary custodian or temporary receiver with all the powers and duties the court directs, take other action to preserve the corporate assets, wherever located, and carry on the business of the corporation until a full hearing is held;

(b) shall hold a full hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a custodian or receiver; and

(c) has jurisdiction over the corporation and all of its property, wherever located.

(3) The court may appoint an individual, a domestic corporation, or a foreign corporation registered to do business in this state as a custodian or receiver and may require the custodian or receiver to post bond, with or without sureties, in an amount the court directs.

(4) The court shall describe the powers and duties of the custodian or receiver in its appointing order, which may be amended from time to time. Among other powers:

(a) a custodian may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the business and affairs of the corporation; and

(b) a receiver:

(i) may dispose of all or any part of the assets of the corporation, wherever located, at a public or private sale if authorized by the court; and

(ii) may sue and defend in the receiver's own name as receiver in all courts of this state.

(5) The court during a custodianship may redesignate the custodian a receiver, and during a receivership may redesignate the receiver a custodian, if doing so is in the best interests of the corporation.

(6) The court from time to time during the custodianship or receivership may order compensation to be paid and expense disbursements or reimbursements to be made to the custodian or receiver from the assets of the corporation or proceeds from the sale of its assets.

(7) In this section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

35-14-749. Judicial determination -- corporate offices -- review of elections and shareholder votes. (1) Upon application of or in a proceeding commenced by a person specified in subsection (2), the district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may determine:

(a) the result or validity of the election, appointment, removal, or resignation of a director or officer of the corporation;

(b) the right of an individual to hold the office of director or officer of the corporation;

(c) the result or validity of any vote by the shareholders of the corporation;

(d) the right of a director to membership on a committee of the board of directors; and

(e) the right of a person to nominate or an individual to be nominated as a candidate for election or appointment as a director of the corporation and any right under a bylaw adopted pursuant to 35-14-206(3) or any comparable right under any provision of the articles of incorporation, contract, or applicable law.

(2) An application or proceeding pursuant to subsection (1) may be filed or commenced by any of the following persons:

(a) the corporation;

(b) any record shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation;

(c) a director of the corporation, an individual claiming the office of director, or a director whose membership on a committee of the board of directors is contested, in each case who is seeking a determination of the person's right to the office or membership;

(d) an officer of the corporation or an individual claiming to be an officer of the corporation, in each case who is seeking a determination of the person's right to the office; and

(e) a person claiming a right covered by subsection (1)(e) and seeking a determination of that right.

(3) In connection with any application or proceeding under subsection (1), the following must be named as defendants unless the person made the application or commenced the proceeding:

(a) the corporation;

(b) any individual whose right to office or membership on a committee of the board of directors is contested;

(c) any individual claiming the office or membership at issue; and

(d) any person claiming a right covered by subsection (1)(e) that is at issue.

(4) In connection with any application or proceeding under subsection (1), service of process may be made on each of the persons specified in subsection (3) by either:

(a) service of process on the corporation addressed to the person in any manner provided by statute of this state or by rule of the applicable court for service on the corporation; or

(b) service of process on the person in any manner provided by statute of this state or by rule of the applicable court.

(5) When service of process is made on a person other than the corporation by service on the corporation pursuant to subsection (4)(a), the plaintiff and the corporation or its registered agent shall promptly provide written notice of the service, together with copies of all process and the application or complaint, to the person at the person's last-known residence or business address or as permitted by statute of this state or by rule of the applicable court.

(6) In connection with any application or proceeding under subsection (1), the court shall dispose of the application or proceeding on an expedited basis and also may:

(a) order additional or further notice the court considers proper under the circumstances;

(b) order that additional persons be joined as parties to the proceeding if the court determines that joinder is necessary for a just adjudication of matters before the court;

(c) order that an election or meeting be held in accordance with the provisions of 35-14-703(2) or otherwise;

(d) appoint a master to conduct an election or meeting;

(e) enter temporary, preliminary, or permanent injunctive relief;

(f) resolve, solely for the purpose of this proceeding, any legal or factual issues necessary for the resolution of any of the matters specified in subsection (1), including the right and power of persons claiming to own shares to vote at any meeting of the shareholders; and

(g) order any other relief the court determines is equitable, just, and proper.

(7) It is not necessary to make a shareholder a party to a proceeding or application pursuant to this section unless the shareholder is a required defendant under subsection (3)(d), relief is sought against the shareholder individually, or the court orders joinder pursuant to subsection (6)(b).

(8) Nothing in this section limits, restricts, or abolishes the subject matter jurisdiction or powers of the court that existed before the enactment of this section, and an application or proceeding pursuant to this section is not the exclusive remedy or proceeding available with respect to the matters specified in subsection (1).

35-14-801. Board of directors -- requirements -- functions. (1) Except as may be provided in an agreement authorized under 35-14-732, each corporation must have a board of directors.

(2) Except as may be provided in an agreement authorized under 35-14-732 and subject to any limitation in the articles of incorporation permitted by 35-14-202(2), all corporate powers must be exercised by or under the authority of the board of directors, and the business and affairs of the corporation must be managed by or under the direction of and subject to the oversight of the board of directors.

35-14-802. Qualifications of directors. (1) The articles of incorporation or bylaws may prescribe qualifications for directors or for nominees for directors. Qualifications must be reasonable as applied to the corporation and must be lawful.

(2) A requirement that is based on a past, prospective, or current action or expression of opinion by a nominee or director that could limit the ability of a nominee or director to discharge the duties of a director is not a permissible qualification under this section. However, qualifications may include not being or having been subject to specified criminal, civil, or regulatory sanctions or not having been removed as a director by judicial action or for cause.

(3) A director need not be a resident of this state or a shareholder unless the articles of incorporation or bylaws prescribe those requirements.

(4) A qualification for nomination for director prescribed before a person's nomination applies to the person at the time of nomination. A qualification for nomination for director prescribed after a person's nomination does not apply to the person with respect to the nomination.

(5) A qualification for director prescribed before a director has been elected or appointed applies only at the time an individual becomes a director or during a director's term. A qualification prescribed after a director has been elected or appointed does not apply to that director before the end of that director's term.

35-14-803. Directors -- number -- election. (1) A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.

(2) The number of directors may be increased or decreased from time to time by amendment to or in the manner provided in the articles of incorporation or bylaws.

(3) Directors are elected at the first annual shareholders' meeting and at each annual shareholders' meeting thereafter unless elected by written consent in lieu of an annual meeting as permitted by 35-14-704 or unless their terms are staggered under 35-14-806.

35-14-804. Election of directors -- certain classes or series of shares. If the articles of incorporation or action by the board of directors pursuant to 35-14-602 authorizes dividing the shares into classes or series, the articles of incorporation may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes or series of shares. A class or series or multiple classes or series of shares entitled to elect one or more directors constitute a separate voting group for purposes of the election of directors.

35-14-805. Terms of directors generally. (1) The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.

(2) The terms of all other directors expire at the next or, if their terms are staggered in accordance with 35-14-806, at the applicable second or third annual shareholders' meeting following their election, except to the extent:

(a) provided in 35-14-1022 if a bylaw electing to be governed by that section is in effect; or

(b) a shorter term is specified in the articles of incorporation in the event of a director nominee failing to receive a specified vote for election.

(3) A decrease in the number of directors does not shorten an incumbent director's term.

(4) The term of a director elected to fill a vacancy expires at the next shareholders' meeting at which directors are elected unless the bylaws state that a director elected or appointed to fill a vacancy is elected or appointed for the unexpired term of the director's predecessor in office.

(5) Except to the extent otherwise provided in the articles of incorporation or under 35-14-1022 if a bylaw electing to be governed by that section is in effect, despite the expiration of a director's term, the director continues to serve until the director's successor is elected and qualifies or there is a decrease in the number of directors.

35-14-806. Staggered terms for directors. The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing half or one-third of the total, as near as may be practicable. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of the second group expire at the second annual shareholders' meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders' meeting after their election. At each annual shareholders' meeting held subsequently, directors are elected for a term of 2 years or 3 years, as the case may be, to succeed those whose terms expire.

35-14-807. Resignation of directors. (1) A director may resign at any time by delivering a written notice of resignation to the board of directors or its chair or to the secretary.

(2) A resignation is effective as provided in 35-14-141(9) unless the resignation provides for a delayed effectiveness, including effectiveness determined on a future event or events. A resignation that is conditioned on failing to receive a specified vote for election as a director may provide that it is irrevocable.

35-14-808. Removal of directors by shareholders. (1) The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

(2) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.

(3) A director may be removed if the number of votes cast to remove exceeds the number of votes cast not to remove the director, except to the extent the articles of incorporation or bylaws require a greater number. However, if cumulative voting is authorized, a director may not be removed if, in the case of a meeting, the number of votes sufficient to elect the director under cumulative voting is cast against removal and, if action is taken by less than unanimous written consent, voting shareholders entitled to the number of votes sufficient to elect the director under cumulative voting do not consent to the removal.

(4) A director may be removed by the shareholders only at a meeting called for the purpose of removing the director, and the meeting notice must state that removal of the director is the purpose of the meeting.

35-14-809. Removal of directors by judicial proceeding. (1) The district court of the county where a corporation's principal office is located or, if its principal office is not located in this state, of the first judicial district may remove a director from office or may order other relief, including barring the director from reelection for a period prescribed by the court, in a proceeding commenced by or in the right of the corporation if the court finds that:

(a) the director engaged in fraudulent conduct with respect to the corporation or its shareholders, grossly abused the position of director, or intentionally inflicted harm on the corporation; and

(b) considering the director's course of conduct and the inadequacy of other available remedies, removal or other relief would be in the best interests of the corporation.

(2) A shareholder proceeding on behalf of the corporation under subsection (1) of this section must comply with all of the requirements of 35-14-740 through 35-14-747 except 35-14-741(1).

35-14-810. Vacancy -- board of directors. (1) Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:

(a) the shareholders may fill the vacancy;

(b) the board of directors may fill the vacancy; or

(c) if the directors remaining in office are less than a quorum, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

(2) If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders, and only the remaining directors elected by that voting group, even if less than a quorum, are entitled to fill the vacancy if it is filled by the directors.

(3) A vacancy that will occur at a specific later date, by reason of a resignation effective at a later date under 35-14-807(2) or otherwise, may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.

35-14-811. Compensation of directors. Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

35-14-812 through 35-14-819 reserved.

35-14-820. Meetings. (1) The board of directors may hold regular or special meetings in or out of this state.

(2) Unless restricted by the articles of incorporation or bylaws, any or all directors may participate in any meeting of the board of directors through the use of any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is considered to be present in person at the meeting.

(3) If requested by a director, minutes of any regular or special meeting must be prepared and be distributed to each director.

35-14-821. Action without meeting. (1) Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this chapter to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation.

(2) Action taken under this section is the act of the board of directors when one or more consents signed by all the directors are delivered to the corporation. The consent may specify a later time as the time at which the action taken is to be effective. A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation before delivery to the corporation of unrevoked written consents signed by all the directors.

(3) A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described in that manner in any document.

35-14-822. Notice of meeting. (1) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.

(2) Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least 2 days' notice of the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation or bylaws.

35-14-823. Waiver of notice. (1) A director may waive any notice required by this chapter, the articles of incorporation, or the bylaws before or after the date and time stated in the notice. Except as provided by subsection (2), the waiver must be in writing, be signed by the director entitled to the notice, and be delivered to the corporation for filing by the corporation with the minutes or corporate records.

(2) A director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director, at the beginning of the meeting or promptly upon arrival, objects to holding the meeting or transacting business at the meeting and does not after objecting vote for or assent to action taken at the meeting.

35-14-824. Quorum and voting. (1) Unless the articles of incorporation or bylaws provide for a greater or lesser number or unless otherwise expressly provided in this chapter, a quorum of a board of directors consists of a majority of the number of directors specified in or fixed in accordance with the articles of incorporation or bylaws.

(2) The quorum of the board of directors specified in or fixed in accordance with the articles of incorporation or bylaws may not consist of less than one-third of the specified or fixed number of directors.

(3) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the articles of incorporation or bylaws require the vote of a greater number of directors or unless otherwise expressly provided in this chapter.

(4) A director who is present at a meeting of the board of directors or a committee when corporate action is taken is considered to have assented to the action taken unless:

(a) the director objects, at the beginning of the meeting or promptly upon arrival, to holding it or transacting business at the meeting;

(b) the dissent or abstention from the action taken is entered in the minutes of the meeting; or

(c) the director delivers written notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

35-14-825. Committees of board. (1) Unless this chapter, the articles of incorporation, or the bylaws provide otherwise, a board of directors may establish one or more board committees composed exclusively of one or more directors to perform functions of the board of directors.

(2) The establishment of a board committee and appointment of members to it must be approved by the greater of:

(a) a majority of all the directors in office when the action is taken; or

(b) the number of directors required by the articles of incorporation or bylaws to take action under 35-14-824 unless, in either case, this chapter or the articles of incorporation provide otherwise.

(3) Sections 35-14-820 through 35-14-824 apply to board committees and their members.

(4) A board committee may exercise the powers of the board of directors under 35-14-801 to the extent specified by the board of directors or in the articles of incorporation or bylaws, except that a board committee may not:

(a) authorize or approve distributions except according to a formula or method, or within limits, prescribed by the board of directors;

(b) approve or propose to shareholders action that this chapter requires to be approved by shareholders;

(c) fill vacancies on the board of directors or, subject to subsection (5), on any board committees;

(d) adopt, amend, or repeal bylaws;

(e) approve a plan of merger, including plans not requiring shareholder approval;

(f) authorize or approve reacquisition of shares except according to a formula or method prescribed by the board of directors; or

(g) authorize or approve the issuance of or sale or contract for sale of shares or determine the designation and relative rights, preferences, and limitations of a class or series of shares. However, the board of directors may authorize a committee or a senior executive officer of the corporation to do so within limits specifically prescribed by the board of directors.

(5) The board of directors may appoint one or more directors as alternate members of any board committee to replace any absent or disqualified member during the member's absence or disqualification. If the articles of incorporation, the bylaws, or the resolution creating the board committee so provide, the member or members present at any board committee meeting and not disqualified from voting may, by unanimous action, appoint another director to act in place of an absent or disqualified member during that member's absence or disqualification.

35-14-826. Submission of matters for shareholder vote. A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

35-14-827 through 35-14-829 reserved.

35-14-830. Standards of conduct for directors. (1) Each member of the board of directors, when discharging the duties of a director, shall act:

(a) in good faith; and

(b) in a manner the director reasonably believes to be in the best interests of the corporation.

(2) The members of the board of directors or a board committee, when becoming informed in connection with their decisionmaking function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.

(3) In discharging board or board committee duties, a director shall disclose or cause to be disclosed to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decisionmaking or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.

(4) In discharging board or board committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in subsection (6)(a) or (6)(c) to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board's functions that are delegable under applicable law.

(5) In discharging board or board committee duties, a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection (6).

(6) A director is entitled to rely, in accordance with subsection (4) or (5), on:

(a) one or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided;

(b) legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters:

(i) within the particular person's professional or expert competence; or

(ii) as to which the particular person merits confidence; or

(c) a board committee of which the director is not a member if the director reasonably believes the committee merits confidence.

35-14-831. Standards of liability for directors. (1) A director may not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director unless the party asserting liability in a proceeding establishes that:

(a) no defense interposed by the director precludes liability based on:

(i) any provision in the articles of incorporation authorized by 35-14-202(2)(d) or (2)(f);

(ii) the protection afforded by 35-14-861 for action taken in compliance with 35-14-862 or 35-14-863; or

(iii) the protection afforded by 35-14-870; and

(b) the challenged conduct consisted or was the result of:

(i) action not in good faith; or

(ii) a decision:

(A) that the director did not reasonably believe to be in the best interests of the corporation; or

(B) as to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances; or

(iii) a lack of objectivity due to the director's familial, financial, or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct and:

(A) the relationship, domination, or control could reasonably be expected to have affected the director's judgment respecting the challenged conduct in a manner adverse to the corporation; and

(B) after a reasonable expectation of an effect on the director's judgment has been established, the director may not have established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation; or

(iv) a sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation or a failure to devote timely attention, by making or causing to be made appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need for an inquiry; or

(v) receipt of a financial benefit to which the director was not entitled or any other breach of the director's duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.

(2) The party seeking to hold the director liable:

(a) for money damages also has the burden of establishing that:

(i) harm to the corporation or its shareholders has been suffered; and

(ii) the harm suffered was proximately caused by the director's challenged conduct; or

(b) for other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, also has whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances; or

(c) for other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, also has whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.

(3) Nothing in this section:

(a) in any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under 35-14-860(2)(c), alters the burden of proving the fact or lack of fairness otherwise applicable;

(b) alters the fact or lack of liability of a director under another section of this chapter, such as the provisions governing the consequences of an unlawful distribution under 35-14-832 or a transactional interest under 35-14-861;

(c) affects any rights to which the corporation or a shareholder may be entitled under another statute of this state or the United States; or

(d) invalidates or otherwise limits the business judgment rule under the common law.

35-14-832. Director's liability for unlawful distributions. (1) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640(1) or 35-14-1409(1) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating 35-14-640(1) or 35-14-1409(1) if the party asserting liability establishes that when taking the action the director did not comply with 35-14-830.

(2) A director held liable under subsection (1) for an unlawful distribution is entitled to:

(a) contribution from every other director who could be held liable under subsection (1) for the unlawful distribution; and

(b) recoupment from each shareholder of the pro rata portion of the amount of the unlawful distribution the shareholder accepted knowing the distribution was made in violation of 35-14-640(1) or 35-14-1409(1).

(3) A proceeding to enforce:

(a) the liability of a director under subsection (1) is barred unless it is commenced within 2 years after the date:

(i) on which the effect of the distribution was measured under 35-14-640(5) or (7);

(ii) as of which the violation of 35-14-640(1) occurred as the consequence of disregard of a restriction in the articles of incorporation; or

(iii) on which the distribution of assets to shareholders under 35-14-1409(1) was made; or

(b) contribution or recoupment under subsection (2) is barred unless it is commenced within 1 year after the liability of the claimant has been finally adjudicated under subsection (1).

35-14-833 through 35-14-839 reserved.

35-14-840. Officers. (1) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.

(2) The board of directors may elect individuals to fill one or more offices of the corporation. An officer may appoint one or more officers if authorized by the bylaws or the board of directors.

(3) The bylaws or the board of directors shall assign to an officer responsibility for maintaining and authenticating the records of the corporation required to be kept under 35-14-1601(1).

(4) The same individual may simultaneously hold more than one office in a corporation.

35-14-841. Functions of officers. Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of other officers.

35-14-842. Standards of conduct for officers. (1) An officer, when performing in an official capacity, has the duty to act:

(a) in good faith;

(b) with the care that a person in a like position would reasonably exercise under similar circumstances; and

(c) in a manner the officer reasonably believes to be in the best interests of the corporation.

(2) The duty of an officer includes the obligation:

(a) to inform the superior officer to whom or the board of directors or the board committee to which the officer reports of information about the affairs of the corporation known to the officer within the scope of the officer's functions and known to the officer to be material to the superior officer, board, or committee; and

(b) to inform the officer's superior officer, another appropriate person within the corporation, or the board of directors, or a board committee of any actual or probable material violation of law involving the corporation or any material breach of duty to the corporation by an officer, employee, or agent of the corporation that the officer believes has occurred or is likely to occur.

(3) In discharging the officer's duties, an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on:

(a) the performance of properly delegated responsibilities by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated; or

(b) information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented or by legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the officer reasonably believes are matters:

(i) within the particular person's professional or expert competence; or

(ii) as to which the particular person merits confidence.

(4) An officer is not liable to the corporation or its shareholders for any decision to take or not to take action or any failure to take any action as an officer if the duties of the office are performed in compliance with this section. Whether an officer who does not comply with this section has liability will depend in each instance on applicable law, including those principles of 35-14-831 that have relevance.

35-14-843. Resignation and removal of officers. (1) An officer may resign at any time by delivering a written notice to the corporation. A resignation is effective as provided in 35-14-141(9) unless the notice provides for delayed effectiveness, including effectiveness determined on a future event or events. If effectiveness of a resignation is stated to be delayed and the board of directors or the appointing officer accepts the delay, the board of directors or the appointing officer may fill the pending vacancy before the delayed effectiveness, but the new officer may not take office until the vacancy occurs.

(2) An officer may be removed at any time with or without cause by:

(a) the board of directors;

(b) the appointing officer unless the bylaws or the board of directors provides otherwise; or

(c) any other officer if authorized by the bylaws or the board of directors.

(3) In this section, "appointing officer" means the officer, including any successor to that officer, who appointed the officer resigning or being removed.

35-14-844. Contract rights of officers. (1) The election or appointment of an officer does not itself create contract rights.

(2) An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.

35-14-845 through 35-14-849 reserved.

35-14-850. Definitions -- indemnification and advance for expenses. For the purposes of 35-14-850 through 35-14-859, unless the context clearly requires otherwise, the following definitions apply:

(1) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.

(2) "Director" means an individual who is or was a director of a corporation or who, while a director of the corporation, is or was serving at the corporation's request as a director, officer, manager, partner, trustee, employee, or agent of another entity or an employee benefit plan. A director is considered to be serving an employee benefit plan at the corporation's request if the individual's duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan. The term includes, unless the context requires otherwise, the estate or personal representative of a director.

(3) "Liability" means the obligation to pay a judgment, a settlement, a penalty, a fine, including an excise tax assessed with respect to an employee benefit plan, or expenses incurred with respect to a proceeding, including attorney fees.

(4) "Officer" means an individual who is or was an officer of a corporation or who, while an officer of the corporation, is or was serving at the corporation's request as a director, officer, manager, partner, trustee, employee, or agent of another entity or employee benefit plan. An officer is considered to be serving an employee benefit plan at the corporation's request if the individual's duties to the corporation also impose duties on or otherwise involve services by the individual to the plan or to participants in or beneficiaries of the plan. The term includes, unless the context requires otherwise, the estate or personal representative of an officer.

(5) (a) "Official capacity" means:

(i) when used with respect to a director, the office of director in a corporation; and

(ii) when used with respect to an officer as contemplated in 35-14-856, the office in a corporation held by the officer.

(b) The term does not include service for any other domestic or foreign corporation or any joint venture, trust, employee benefit plan, or other entity.

(6) "Party" means an individual who was, is, or is threatened to be made a defendant or respondent in a proceeding.

(7) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.

35-14-851. Permissible indemnification. (1) Except as otherwise provided in this section, a corporation may indemnify an individual who is a party to a proceeding because the individual is a director against liability incurred in the proceeding if:

(a) (i) the director acted in good faith; and

(ii) the director reasonably believed:

(A) in the case of conduct in an official capacity, that the conduct was in the best interests of the corporation; and

(B) in all other cases, that the conduct was at least not opposed to the best interests of the corporation; and

(iii) in the case of a criminal proceeding, the director had no reasonable cause to believe the conduct was unlawful; or

(b) the director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation as authorized by 35-14-202(2)(e).

(2) A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in and the beneficiaries of the plan is conduct that satisfies the requirement of subsection (1)(a)(ii)(B).

(3) The termination of a proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.

(4) Unless ordered by a court under 35-14-854(1)(c), a corporation may not indemnify a director:

(a) in connection with a proceeding by or in the right of the corporation except for expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under subsection (1); or

(b) in connection with any proceeding with respect to conduct for which the director was adjudged liable on the basis of receiving a financial benefit to which the director was not entitled, regardless of whether it involved action in the director's official capacity.

35-14-852. Mandatory indemnification. A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director was a director of the corporation against expenses incurred by the director in connection with the proceeding.

35-14-853. Advance for expenses. (1) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a director if the director delivers to the corporation a signed, written undertaking of the director to repay any funds advanced if:

(a) the director is not entitled to mandatory indemnification under 35-14-852; and

(b) it is ultimately determined under 35-14-854 or 35-14-855 that the director is not entitled to indemnification.

(2) The undertaking required by subsection (1) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.

(3) Authorizations under this section must be made:

(a) by the board of directors in the following manner:

(i) if there are two or more qualified directors, by a majority vote of all the qualified directors, a majority of whom for this purpose constitute a quorum, or

(ii) by a majority of the members of a committee consisting solely of two or more qualified directors appointed by a majority vote of all the qualified directors; or

(b) by special legal counsel:

(i) selected in the manner prescribed in subsection (3)(a); or

(ii) if there are fewer than two qualified directors, selected by the board of directors, in which directors who are not qualified directors may participate; or

(c) by the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.

35-14-854. Court-ordered indemnification and advance for expenses. (1) A director who is a party to a proceeding because the person is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall:

(a) order indemnification if the court determines that the director is entitled to mandatory indemnification under 35-14-852;

(b) order indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by 35-14-858(1); or

(c) order indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable to indemnify the director or to advance expenses to the director even if, in either case, the director has not met the relevant standard of conduct set forth in 35-14-851(1), has failed to comply with 35-14-853, or was adjudged liable in a proceeding referred to in 35-14-851(4)(a) or (4)(b). If the director was adjudged liable in a proceeding referred to in 35-14-851(4), indemnification is limited to expenses incurred in connection with the proceeding.

(2) If the court determines that the director is entitled to indemnification under subsection (1)(a) or to indemnification or advance for expenses under subsection (1)(b), it shall also order the corporation to pay the director's expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under subsection (1)(c), it may also order the corporation to pay the director's expenses incurred to obtain court-ordered indemnification or advance for expenses.

35-14-855. Determination and authorization of indemnification. (1) A corporation may not indemnify a director under 35-14-851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in 35-14-851.

(2) The determination must be made:

(a) if there are two or more qualified directors, by the board of directors by a majority vote of all the qualified directors, a majority of whom for this purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by a majority vote of all the qualified directors;

(b) by special legal counsel:

(i) selected in the manner prescribed in subsection (2)(a); or

(ii) if there are fewer than two qualified directors, selected by the board of directors, in which directors who are not qualified directors may participate; or

(c) by the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the determination.

(3) Authorization of indemnification must be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two qualified directors or if the determination is made by special legal counsel, authorization of indemnification must be made by those entitled to select special legal counsel under subsection (2)(b)(ii).

35-14-856. Indemnification of officers. (1) A corporation may indemnify and advance expenses under 35-14-850 through 35-14-859 to an officer who is a party to a proceeding because the person is an officer:

(a) to the same extent as a director; and

(b) if the person is an officer but not a director, to any further extent provided by the articles of incorporation or the bylaws or by a resolution adopted or a contract approved by the board of directors or shareholders, except for:

(i) liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding; or

(ii) liability arising out of conduct that constitutes:

(A) receipt by the officer of a financial benefit to which the officer is not entitled;

(B) an intentional infliction of harm on the corporation or the shareholders; or

(C) an intentional violation of criminal law.

(2) Subsection (1)(b) applies to an officer who is also a director if the officer is made a party to the proceeding based on an act or omission solely as an officer.

(3) An officer who is not a director is entitled to mandatory indemnification under 35-14-852 and may apply to a court under 35-14-854 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those sections.

35-14-857. Insurance. A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation or who, while a director or officer of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation or a joint venture, trust, employee benefit plan, or other entity against liability asserted against or incurred by the individual in that capacity or arising from the individual's status as a director or officer, regardless of whether the corporation would have power to indemnify or advance expenses to the individual against the same liability under 35-14-850 through 35-14-859.

35-14-858. Variation by corporate action -- application. (1) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by the board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with 35-14-851 or advance funds to pay for or reimburse expenses in accordance with 35-14-853. An obligatory provision under this section satisfies the requirements for authorization referred to in 35-14-853(3) and 35-14-855(3). Any provision that obligates the corporation to provide indemnification to the fullest extent permitted by law obligates the corporation to advance funds to pay for or reimburse expenses in accordance with 35-14-853 to the fullest extent permitted by law unless the provision expressly provides otherwise.

(2) A right of indemnification or to advances for expenses created by 35-14-850 through 35-14-859 or under subsection (1) of this section and in effect at the time of an act or omission may not be eliminated or impaired with respect to the act or omission by an amendment of the articles of incorporation or bylaws or a resolution of the board of directors or shareholders adopted after the occurrence of the act or omission unless, in the case of a right created under subsection (1), the provision creating the right and in effect at the time of the act or omission explicitly authorizes the elimination or impairment after the act or omission has occurred.

(3) A provision pursuant to subsection (1) may not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation pertaining to conduct with respect to the predecessor unless otherwise expressly provided. A provision for indemnification or advance for expenses in the articles of incorporation or bylaws or a resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party that exists at the time the merger takes effect is governed by 35-14-1107(1)(d).

(4) Subject to subsection (2), a corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to 35-14-850 through 35-14-859.

(5) Sections 35-14-850 through 35-14-859 do not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with appearing as a witness in a proceeding at a time when the director or officer is not a party.

(6) Sections 35-14-850 through 35-14-859 do not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.

35-14-859. Exclusivity. A corporation may provide indemnification or advance expenses to a director or an officer only as permitted by 35-14-850 through 35-14-859.

35-14-860. Definitions -- director's conflicting interest transactions. For the purposes of 35-14-860 through 35-14-863, unless otherwise specified, the following definitions apply:

(1) "Control" or "controlled by" means:

(a) having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise; or

(b) being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.

(2) "Director's conflicting interest transaction" means a transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation:

(a) to which, at the relevant time, the director is a party;

(b) respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or

(c) respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.

(3) "Fair to the corporation" means, for purposes of 35-14-861(2)(c), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was:

(a) fair in terms of the director's dealings with the corporation; and

(b) comparable to what might have been obtainable in an arm's-length transaction, given the consideration paid or received by the corporation.

(4) "Material financial interest" means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction.

(5) "Related person" means:

(a) an individual's spouse;

(b) a child, stepchild, grandchild, parent, stepparent, grandparent, sibling, step sibling, half sibling, aunt, uncle, niece, or nephew, or spouse of any of them, of an individual or of an individual's spouse;

(c) a natural person living in the same home as an individual;

(d) an entity, other than the corporation or an entity controlled by the corporation, controlled by an individual or any person specified in subsections (5)(a) through (5)(c);

(e) a domestic or foreign:

(A) business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which an individual is a director;

(B) unincorporated entity of which an individual is a general partner or a member of the governing body; or

(C) individual, trust, or estate for whom or of which an individual is a trustee, guardian, personal representative, or similar fiduciary; or

(f) a person that is or an entity that is controlled by an employer of an individual.

(6) "Relevant time" means:

(a) the time at which directors' action respecting the transaction is taken in compliance with 35-14-862; or

(b) if the transaction is not brought before the board of directors or a committee for action under 35-14-862, the time at which the corporation or an entity controlled by the corporation becomes legally obligated to consummate the transaction.

(7) "Required disclosure" means disclosure of:

(a) the existence and nature of the director's conflicting interest; and

(b) all facts known to the director respecting the subject matter of the transaction that a director free of that conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.

35-14-861. Judicial action. (1) A transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation may not be the subject of equitable relief or give rise to an award of damages or other sanctions against a director of the corporation in a proceeding by a shareholder or by or in the right of the corporation on the ground that the director has an interest respecting the transaction if it is not a director's conflicting interest transaction.

(2) A director's conflicting interest transaction may not be the subject of equitable relief or give rise to an award of damages or other sanctions against a director of the corporation in a proceeding by a shareholder or by or in the right of the corporation on the grounds that the director has an interest respecting the transaction if:

(a) directors' action respecting the transaction was taken in compliance with 35-14-862 at any time;

(b) shareholders' action respecting the transaction was taken in compliance with 35-14-863 at any time; or

(c) the transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.

35-14-862. Directors' action. (1) Directors' action respecting a director's conflicting interest transaction is effective for purposes of 35-14-861(2)(a) if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two, of the qualified directors who voted on the transaction after required disclosure by the conflicted director of information not already known by the qualified directors or after modified disclosure in compliance with subsection (2), provided that:

(a) the qualified directors have deliberated and voted outside the presence of and without participation by any other director; and

(b) if the action has been taken by a board committee, all members of the committee were qualified directors and either:

(i) the committee was composed of all the qualified directors on the board of directors; or

(ii) the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board of directors.

(2) Notwithstanding subsection (1), when a transaction is a director's conflicting interest transaction only because a related person of the director is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule if the conflicted director discloses to the qualified directors voting on the transaction:

(a) all information required to be disclosed that is not violative of the duty, obligation, or rule;

(b) the existence and nature of the director's conflicting interest; and

(c) the nature of the conflicted director's duty not to disclose the confidential information.

(3) A majority, but no fewer than two, of all the qualified directors on the board of directors or on the board committee constitutes a quorum for purposes of action that complies with this section.

(4) If directors' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation or bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a board committee, in which directors who are not qualified directors may participate.

35-14-863. Shareholders' action. (1) Shareholders' action respecting a director's conflicting interest transaction is effective for purposes of 35-14-861(2)(b) if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after:

(a) notice to shareholders describing the action to be taken respecting the transaction;

(b) provision to the corporation of the information referred to in subsection (2); and

(c) communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure, to the extent the information is not known by them. In the case of shareholders' action at a meeting, the shareholders entitled to vote must be determined as of the record date for notice of the meeting.

(2) A director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under subsection (3), and of the identity of the holders of those shares.

(3) For purposes of this section:

(a) "holder" means and "held by" refers to shares held by a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner; and

(b) "qualified shares" means all shares entitled to be voted with respect to the transaction except shares that the secretary or other officer or agent of the corporation authorized to tabulate votes either knows or under subsection (2) is informed are held by:

(i) a director who has a conflicting interest respecting the transaction; or

(ii) a related person of the director, excluding a person described in 35-14-860(5)(f).

(4) A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this section. Subject to the provisions of subsection (5), shareholders' action that otherwise complies with this section is not affected by the presence of holders of or by the voting of shares that are not qualified shares.

(5) If a shareholders' vote does not comply with subsection (1) solely because of a director's failure to comply with subsection (2) and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take any action respecting the transaction and the director, and may give any effect to the shareholders' vote, that the court considers appropriate in the circumstances.

(6) If shareholders' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which shares that are not qualified shares may participate.

35-14-864 through 35-14-869 reserved.

35-14-870. Business opportunities. (1) If a director or officer pursues or takes advantage of a business opportunity directly, or indirectly through or on behalf of another person, that action may not be the subject of equitable relief or give rise to an award of damages or other sanctions against the director, officer, or other person in a proceeding by or in the right of the corporation on the ground that the opportunity should have first been offered to the corporation if:

(a) before the director, officer, or other person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either:

(i) action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in 35-14-862; or

(ii) shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in 35-14-863, in either case as if the decision being made concerned a director's conflicting interest transaction, except that rather than making required disclosure as defined in 35-14-860, the director or officer must have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity known to the director or officer; or

(b) the duty to offer the corporation the business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted and, if required, made effective by action of qualified directors in accordance with 35-14-202(2)(f).

(2) In any proceeding seeking equitable relief or other remedies based on an alleged improper pursuit or taking advantage of a business opportunity by a director or officer directly, or indirectly through or on behalf of another person, the fact that the director or officer did not employ the procedure described in subsection (1)(a)(i) or (1)(a)(ii) before pursuing or taking advantage of the opportunity does not create an implication that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the corporation in the circumstances.

35-14-901. Definitions -- domestication -- conversion. As used in this part, the following definitions apply:

(1) "Conversion" means a transaction pursuant to 35-14-930 through 35-14-935.

(2) "Converted entity" means the converting entity as it continues in existence after a conversion.

(3) "Converting entity" means the domestic corporation or eligible entity that approves a plan of conversion pursuant to 35-14-932 or the foreign eligible entity that approves a conversion pursuant to the organic law of the eligible entity.

(4) "Domesticated corporation" means the domesticating corporation as it continues in existence after a domestication.

(5) "Domesticating corporation" means the domestic corporation that approves a plan of domestication pursuant to 35-14-921 or the foreign corporation that approves a domestication pursuant to the organic law of the foreign corporation.

(6) "Domestication" means a transaction pursuant to 35-14-920 through 35-14-924.

(7) "Protected agreement" means:

(a) a document evidencing indebtedness of a domestic corporation or eligible entity and any related agreement in effect immediately before the enactment date;

(b) an agreement that is binding on a domestic corporation or eligible entity immediately before the enactment date;

(c) the articles of incorporation or bylaws of a domestic corporation or the organic rules of a domestic eligible entity, in each case in effect immediately before the enactment date; or

(d) an agreement that is binding on any of the shareholders, members, interest holders, directors, or other governors of a domestic corporation or eligible entity, in their official capacities, immediately before the enactment date. For purposes of 35-14-920 and 35-14-930 and this subsection (7), "enactment date" means the earliest date on which the laws of this state authorized a transaction having the effect of a domestication or a conversion, as applicable.

35-14-902. Excluded transactions. (1) This part may not be used to effect a transaction that:

(a) converts or domesticates a company organized on the mutual principle to one organized on the basis of share ownership;

(b) converts or domesticates banks and trust companies regulated under Title 32, chapter 1;

(c) converts or domesticates building and loan associations regulated under Title 32, chapter 2;

(d) converts or domesticates credit unions regulated under Title 32, chapter 3; or

(e) converts or domesticates insurance companies regulated under Title 33.

(2) The conversion of a domestic corporation to a domestic benefit corporation is governed by Title 35, chapter 1, part 14, and not by this part.

35-14-903. Required approvals. If a domestic or foreign corporation or eligible entity may not be a party to a merger without the approval of the attorney general, the state auditor, the department of administration, or the public service commission and the applicable statutes or regulations do not specifically deal with transactions under this part but do require approval by one of those agencies or officials for mergers, a corporation or eligible entity may not be a party to a transaction under this part without the prior approval of that agency or official.

35-14-904. Relationship to other laws. A transaction effected under this part does not create or impair a right, duty, or obligation of a person under the laws of this state other than this part relating to a change in control, business combination, control-share acquisition, or a similar transaction involving a domesticating or converting domestic corporation unless the approval of the plan of domestication or conversion is by a vote of the shareholders or the board of directors that would be sufficient to create or impair the right, duty, or obligation directly under that law.

35-14-905 through 35-14-919 reserved.

35-14-920. Domestication. (1) By complying with the provisions of 35-14-920 through 35-14-924 applicable to foreign corporations, a foreign corporation may become a domestic corporation if the domestication is permitted by the organic law of the foreign corporation.

(2) By complying with the provisions of 35-14-920 through 35-14-924, a domestic corporation may become a foreign corporation pursuant to a plan of domestication if the domestication is permitted by the organic law of the foreign corporation.

(3) The plan of domestication must include:

(a) the name of the domesticating corporation;

(b) the name and jurisdiction of formation of the domesticated corporation;

(c) the manner and basis of reclassifying the shares of the domesticating corporation into shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination;

(d) the proposed articles of incorporation and bylaws of the domesticated corporation; and

(e) the other terms and conditions of the domestication.

(4) In addition to the requirements of subsection (3), a plan of domestication may contain any other provision not prohibited by law.

(5) The terms of a plan of domestication may be made dependent on facts objectively ascertainable outside the plan in accordance with 35-14-120(11).

(6) If a protected agreement of a domestic domesticating corporation in effect immediately before the domestication becomes effective contains a provision applying to a merger of the corporation and the agreement does not refer to a domestication of the corporation, the provision applies to a domestication of the corporation as if the domestication were a merger until the first time the provision is amended after the enactment date.

35-14-921. Action on plan of domestication. In the case of a domestication of a domestic corporation into a foreign jurisdiction, the plan of domestication must be adopted in the following manner:

(1) The plan of domestication must first be adopted by the board of directors.

(2) (a) The plan of domestication must then be approved by the shareholders. In submitting the plan of domestication to the shareholders for approval, the board of directors shall recommend that the shareholders approve the plan unless:

(i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make the recommendation; or

(ii) 35-14-826 applies.

(b) If either subsection (2)(a)(i) or (2)(a)(ii) applies, the board shall inform the shareholders of the basis for its determination.

(3) The board of directors may set conditions for approval of the plan of domestication by the shareholders or for the effectiveness of the plan of domestication.

(4) If the approval of the shareholders is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the plan of domestication is to be submitted for approval. The notice must state that the purpose or one of the purposes of the meeting is to consider the plan of domestication and must contain or be accompanied by a copy or summary of the plan. The notice must include or be accompanied by a copy of the articles of incorporation and the bylaws as they will be in effect immediately after the domestication.

(5) Unless the articles of incorporation or the board of directors acting pursuant to subsection (3) requires a greater vote or a lesser vote, approval of the plan of domestication requires the approval of a majority of the votes entitled to be cast on the plan and, except as provided in subsection (6), the approval of a majority of the votes entitled to be cast on the plan by any class or series of shares entitled to vote as a separate group on the plan. The articles of incorporation may not provide a lower quorum for a voting group than shares representing a majority of the votes entitled to be cast on the matter by the voting group or a lesser vote for a voting group than is provided for in 35-14-725(3).

(6) The articles of incorporation may expressly limit or eliminate the separate voting rights in subsection (5) of any class or series of shares, except when the articles of incorporation of the foreign corporation resulting from the domestication include what would be in effect an amendment that would entitle the class or series to vote as a separate group under 35-14-1004 if it were a proposed amendment of the articles of incorporation of the domestic domesticating corporation.

(7) If as a result of a domestication one or more shareholders of a domestic domesticating corporation would become subject to interest holder liability, approval of the plan of domestication must require the signing in connection with the domestication, by each affected shareholder, of a separate written consent to become subject to the interest holder liability unless, in the case of a shareholder that already has interest holder liability with respect to the domesticating corporation, the terms and conditions of the interest holder liability with respect to the domesticated corporation are substantially identical to those of the existing interest holder liability, other than changes that eliminate or reduce that interest holder liability.

35-14-922. Articles of domestication -- effectiveness. (1) After:

(a) a plan of domestication of a domestic corporation has been adopted and approved as required by this chapter; or

(b) a foreign corporation that is a domesticating corporation has approved a domestication as required under its organic law, articles of domestication must be signed by the domesticating corporation. The articles must set forth:

(i) the name of the domesticating corporation and its jurisdiction of formation;

(ii) the name of the domesticated corporation and its jurisdiction of formation; and

(iii) if the domesticating corporation is:

(A) a domestic corporation, a statement that the plan of domestication was approved in accordance with this part; or

(B) a foreign corporation, a statement that the domestication was approved in accordance with its organic law.

(2) If the domesticated corporation is a domestic corporation, the articles of domestication must have attached articles of incorporation of the domesticated corporation that satisfy the requirements of 35-14-202. Provisions that would not be required to be included in restated articles of incorporation may be omitted from the articles of incorporation attached to the articles of domestication.

(3) The articles of domestication must be delivered to the secretary of state for filing and take effect on the effective date determined in accordance with 35-14-123.

(4) If the domesticated corporation is a domestic corporation, the domestication becomes effective on the date the articles of domestication are effective. If the domesticated corporation is a foreign corporation, the domestication becomes effective on the later of:

(a) the date and time provided by the organic law of the domesticated corporation; or

(b) the date the articles of domestication are effective.

(5) If the domesticating corporation is a foreign corporation that is registered to do business in this state under part 15 of this chapter, its registration statement is canceled automatically when the domestication becomes effective.

35-14-923. Amendment of plan of domestication -- abandonment. (1) A plan of domestication of a domestic corporation may be amended:

(a) in the same manner the plan was approved if the plan does not provide for the manner in which it may be amended; or

(b) in the manner provided in the plan, except that a shareholder that was entitled to vote on or consent to approval of the plan is entitled to vote on or consent to any amendment of the plan that will change:

(i) the amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, cash, other property, or any combination to be received by any of the shareholders of the domesticating corporation under the plan;

(ii) the articles of incorporation or bylaws of the domesticated corporation that will be in effect immediately after the domestication becomes effective except changes that do not require approval of the shareholders of the domesticated corporation under its organic law or its proposed articles of incorporation or bylaws as set forth in the plan; or

(iii) any of the other terms or conditions of the plan if the change would adversely affect the shareholder in any material respect.

(2) After a plan of domestication has been adopted and approved by a domestic corporation as required by 35-14-920 through 35-14-924 and before the articles of domestication have become effective, the plan may be abandoned by the corporation without action by its shareholders in accordance with procedures set forth in the plan or, if no procedures are set forth in the plan, in the manner determined by the board of directors.

(3) If a domestication is abandoned after the articles of domestication have been delivered to the secretary of state for filing but before the articles of domestication have become effective, articles of abandonment signed by the domesticating corporation must be delivered to the secretary of state for filing before the articles of domestication become effective. The articles of abandonment take effect on filing, and the domestication is abandoned and does not become effective. The articles of abandonment must contain:

(a) the name of the domesticating corporation;

(b) the date on which the articles of domestication were filed by the secretary of state; and

(c) a statement that the domestication has been abandoned in accordance with this section.

35-14-924. Effect of domestication. (1) When a domestication becomes effective:

(a) all property owned by and every contract right possessed by the domesticating corporation are the property and contract rights of the domesticated corporation without transfer, reversion, or impairment;

(b) all debts, obligations, and other liabilities of the domesticating corporation are the debts, obligations, and liabilities of the domesticated corporation;

(c) the name of the domesticated corporation may be but need not be substituted for the name of the domesticating corporation in any pending proceeding;

(d) the articles of incorporation and bylaws of the domesticated corporation become effective;

(e) the shares of the domesticating corporation are reclassified into shares or other securities, obligations, rights to acquire shares or other securities, cash, or other property in accordance with the terms of the domestication, and the shareholders of the domesticating corporation are entitled only to the rights provided to them by those terms and to any appraisal rights they may have under the organic law of the domesticating corporation; and

(f) the domesticated corporation is:

(i) incorporated under and subject to the organic law of the domesticated corporation;

(ii) the same corporation without interruption as the domesticating corporation; and

(iii) considered to have been incorporated on the date the domesticating corporation was originally incorporated.

(2) When a domestication of a domestic corporation into a foreign jurisdiction becomes effective, the domesticated corporation is considered to have:

(a) appointed the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders who exercise appraisal rights in connection with the domestication; and

(b) agreed that it will promptly pay any amount to which those shareholders are entitled under part 13 of this chapter.

(3) Except as otherwise provided in the organic law or organic rules of a domesticating foreign corporation, the interest holder liability of a shareholder in a foreign corporation that is domesticated into this state who had interest holder liability with respect to the domesticating corporation before the domestication becomes effective is as follows:

(a) The domestication does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the domestication becomes effective.

(b) The provisions of the organic law of the domesticating corporation continue to apply to the collection or discharge of any interest holder liabilities preserved by subsection (3)(a) as if the domestication had not occurred.

(c) The shareholder has the rights of contribution from other persons that are provided by the organic law of the domesticating corporation with respect to any interest holder liabilities preserved by subsection (3)(a) as if the domestication had not occurred.

(d) The shareholder does not, by reason of prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that are incurred after the domestication becomes effective.

(4) A shareholder who becomes subject to interest holder liability with respect to the domesticated corporation as a result of the domestication has that interest holder liability only with respect to interest holder liabilities that arise after the domestication becomes effective.

(5) A domestication does not constitute or cause the dissolution of the domesticating corporation.

(6) Property held for charitable purposes under the laws of this state by a domestic or foreign corporation immediately before a domestication may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and to the extent permitted by or pursuant to the laws of this state addressing cy pres or dealing with nondiversion of charitable assets.

(7) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to the domesticating corporation and that takes effect or remains payable after the domestication inures to the domesticated corporation.

(8) A trust obligation that would govern property if transferred to the domesticating corporation applies to property that is transferred to the domesticated corporation after the domestication takes effect.

35-14-925 through 35-14-929 reserved.

35-14-930. Conversion. (1) By complying with 35-14-930 through 35-14-935, a domestic corporation may become:

(a) a domestic eligible entity; or

(b) a foreign eligible entity if the conversion is permitted by the organic law of the foreign entity.

(2) By complying with 35-14-930 through 35-14-935 and applicable provisions of its organic law, a domestic eligible entity may become a domestic corporation. If procedures for the approval of a conversion are not provided by the organic law or organic rules of a domestic eligible entity, the conversion must be adopted and approved in the same manner as a merger of that eligible entity. If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of either a conversion or a merger, a plan of conversion may nonetheless be adopted and approved by the unanimous consent of all the interest holders of the domestic eligible entity. In either case, the conversion may then be effected as otherwise provided in 35-14-930 through 35-14-935. For purposes of applying 35-14-930 through 35-14-935:

(a) the eligible entity and its members or interest holders, eligible interests, and organic rules taken together are considered a domestic business corporation and its shareholders, shares, and articles of incorporation, respectively and vice versa, as the context may require; and

(b) if the business and affairs of the eligible entity are managed by a person or persons that are not identical to the members or interest holders, the person or persons are considered the board of directors.

(3) By complying with the provisions of 35-14-930 through 35-14-935 applicable to foreign entities, a foreign eligible entity may become a domestic corporation if the organic law of the foreign eligible entity permits it to become a business corporation in another jurisdiction.

(4) If a protected agreement of a domestic converting corporation in effect immediately before the conversion becomes effective contains a provision applying to a merger of the corporation that is a converting entity and the agreement does not refer to a conversion of the corporation, the provision applies to a conversion of the corporation as if the conversion were a merger until the first time the provision is amended after the enactment date.

35-14-931. Plan of conversion. (1) A domestic corporation may convert to a domestic or foreign eligible entity under 35-14-930 through 35-14-935 by approving a plan of conversion. The plan of conversion must include:

(a) the name of the converting corporation;

(b) the name, jurisdiction of formation, and type of entity of the converted entity;

(c) the manner and basis of converting the shares of the domestic corporation into eligible interests or other securities, obligations, rights to acquire eligible interests or other securities, cash, other property, or any combination;

(d) the other terms and conditions of the conversion; and

(e) the full text that will be in effect immediately after the conversion becomes effective of the organic rules of the converted entity, which must be in writing.

(2) In addition to the requirements of subsection (1), a plan of conversion may contain any other provision not prohibited by law.

(3) The terms of a plan of conversion may be made dependent on facts objectively ascertainable outside the plan in accordance with 35-14-120(11).

35-14-932. Action on plan of conversion. In the case of a conversion of a domestic corporation to a domestic or foreign eligible entity, the plan of conversion must be adopted in the following manner:

(1) The plan of conversion must first be adopted by the board of directors.

(2) (a) The plan of conversion must then be approved by the shareholders. In submitting the plan of conversion to the shareholders for their approval, the board of directors shall recommend that the shareholders approve the plan unless:

(i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make the recommendation; or

(ii) 35-14-826 applies.

(b) If either subsection (2)(a)(i) or (2)(a)(ii) applies, the board of directors shall inform the shareholders of the basis for its determination.

(3) The board of directors may set conditions for approval of the plan of conversion by the shareholders or for the effectiveness of the plan of conversion.

(4) If the approval of the shareholders is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the plan of conversion is to be submitted for approval. The notice must state that the purpose or one of the purposes of the meeting is to consider the plan of conversion and must contain or be accompanied by a copy or summary of the plan. The notice must include or be accompanied by a copy of the organic rules of the converted entity, which must be in writing as they will be in effect immediately after the conversion.

(5) Unless the articles of incorporation or the board of directors acting pursuant to subsection (3) requires a greater vote or a lesser vote, approval of the plan of conversion requires the approval of a majority of the votes entitled to be cast on the plan and, if any class or series of shares is entitled to vote as a separate group on the plan, the approval of a majority of the votes entitled to be cast on the plan by that voting group. The articles of incorporation may not provide a lower quorum for a voting group than shares representing a majority of the votes entitled to be cast on the matter by the voting group or a lesser vote for a voting group than is provided for in 35-14-725(3).

(6) If as a result of the conversion one or more shareholders of the converting domestic corporation would become subject to interest holder liability, approval of the plan of conversion must require the signing in connection with the transaction, by each affected shareholder, of a separate written consent to become subject to the interest holder liability.

35-14-933. Articles of conversion -- effectiveness. (1) After:

(a) a plan of conversion of a domestic corporation has been adopted and approved as required by this chapter; or

(b) a domestic or foreign eligible entity that is the converting entity has approved a conversion as required under its organic law, articles of conversion must be signed by the converting entity and must:

(i) state the name, jurisdiction of formation, and type of entity of the converting entity;

(ii) state the name, jurisdiction of formation, and type of entity of the converted entity;

(iii) if the converting entity is:

(A) a domestic corporation, state that the plan of conversion was approved in accordance with 35-14-930 through 35-14-935; or

(B) (I) an eligible entity, state that the conversion was approved by the eligible entity in accordance with its organic law; or

(II) a domestic eligible entity the organic law of which does not provide for approval of the conversion, state that the conversion was approved by the domestic eligible entity in accordance with 35-14-930 through 35-14-935; and

(iv) if the converted entity is:

(A) a domestic business corporation or a domestic nonprofit corporation or filing entity, have attached the public organic record of the converted entity, except that provisions that would not be required to be included in a restated public organic record may be omitted; or

(B) a domestic limited liability partnership, have attached the filing required to become a limited liability partnership.

(2) If the converted entity is a domestic corporation, its articles of incorporation must satisfy the requirements of 35-14-202, except that provisions that would not be required to be included in restated articles of incorporation may be omitted from the articles of incorporation. If the converted entity is a domestic eligible entity, its public organic record, if any, must satisfy the requirements of the organic law of this state, except that the public organic record does not need to be signed.

(3) The articles of conversion must be delivered to the secretary of state for filing and take effect on the effective date determined in accordance with 35-14-123.

(4) If a converted entity is a domestic entity, the conversion becomes effective when the articles of conversion are effective. With respect to a conversion in which the converted entity is a foreign eligible entity, the conversion itself becomes effective on the later of:

(a) the date and time provided by the organic law of that eligible entity; or

(b) the date the articles of conversion become effective.

(5) Articles of conversion under this section may be combined with any required conversion filing under the organic law of a domestic eligible entity that is the converting entity or converted entity if the combined filing satisfies the requirements of both the other organic law and this section.

(6) If the converting entity is a foreign eligible entity that is registered to do business in this state under a provision of law similar to part 15 of this chapter, its registration statement or other type of foreign qualification is canceled automatically on the effective date of its conversion.

35-14-934. Amendment of plan of conversion -- abandonment. (1) A plan of conversion of a converting entity that is a domestic corporation may be amended:

(a) in the same manner the plan was approved if the plan does not provide for the manner in which it may be amended; or

(b) in the manner provided in the plan, except that shareholders that were entitled to vote on or consent to approval of the plan are entitled to vote on or consent to any amendment of the plan that will change:

(i) the amount or kind of eligible interests or other securities, obligations, rights to acquire eligible interests or other securities, cash, other property, or any combination to be received by any of the shareholders of the converting corporation under the plan;

(ii) the organic rules of the converted entity that will be in effect immediately after the conversion becomes effective except changes that do not require approval of the eligible interest holders of the converted entity under its organic law or organic rules; or

(iii) any other terms or conditions of the plan if the change would adversely affect those shareholders in any material respect.

(2) After a plan of conversion has been approved by a converting entity that is a domestic corporation in the manner required by 35-14-930 through 35-14-935 and before the articles of conversion become effective, the plan may be abandoned by the corporation without action by its shareholders in accordance with any procedures set forth in the plan or, if no procedures are set forth in the plan, in the manner determined by the board of directors.

(3) If a conversion is abandoned after the articles of conversion have been delivered to the secretary of state for filing and before the articles of conversion become effective, articles of abandonment, signed by the converting entity, must be delivered to the secretary of state for filing before the articles of conversion become effective. The articles of abandonment take effect on filing, and the conversion is abandoned and does not become effective. The articles of abandonment must contain:

(a) the name of the converting entity;

(b) the date on which the articles of conversion were filed by the secretary of state; and

(c) a statement that the conversion has been abandoned in accordance with this section.

35-14-935. Effect of conversion. (1) When a conversion becomes effective:

(a) all property owned by and every contract right possessed by the converting entity remain the property and contract rights of the converted entity without transfer, reversion, or impairment;

(b) all debts, obligations, and other liabilities of the converting entity remain the debts, obligations, and other liabilities of the converted entity;

(c) the name of the converted entity may be but need not be substituted for the name of the converting entity in any pending action or proceeding;

(d) if the converted entity is a filing entity, a domestic business corporation, or a domestic or foreign nonprofit corporation, its public organic record and its private organic rules become effective;

(e) if the converted entity is a nonfiling entity, its private organic rules become effective;

(f) if the converted entity is a limited liability partnership, the filing required to become a limited liability partnership and its private organic rules become effective;

(g) the shares or eligible interests of the converting entity are reclassified into shares, eligible interests or other securities, obligations, rights to acquire shares, eligible interests or other securities, cash, or other property in accordance with the terms of the conversion, and the shareholders or interest holders of the converting entity are entitled only to the rights provided to them by those terms and to any appraisal rights they may have under the organic law of the converting entity; and

(h) the converted entity is:

(i) incorporated or organized under and subject to the organic law of the converted entity;

(ii) the same entity without interruption as the converting entity; and

(iii) considered to have been incorporated or otherwise organized on the date that the converting entity was originally incorporated or organized.

(2) When a conversion of a domestic corporation to a foreign eligible entity becomes effective, the converted entity is considered to have:

(a) appointed the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders who exercise appraisal rights in connection with the conversion; and

(b) agreed that it will promptly pay any amount to which those shareholders are entitled under part 13 of this chapter.

(3) Except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law or organic rules of a foreign corporation or a domestic or foreign eligible entity, a shareholder or eligible interest holder who becomes subject to interest holder liability with respect to a domestic corporation or eligible entity as a result of the conversion has the interest holder liability only with respect to interest holder liabilities that arise after the conversion becomes effective.

(4) Except as otherwise provided in the organic law or the organic rules of the eligible entity, the interest holder liability of an interest holder in a converting eligible entity that converts to a domestic corporation who had interest holder liability with respect to that converting eligible entity before the conversion becomes effective is as follows:

(a) The conversion does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the conversion became effective.

(b) The provisions of the organic law of the eligible entity continue to apply to the collection or discharge of any interest holder liabilities preserved by subsection (4)(a) as if the conversion had not occurred.

(c) The eligible interest holder has the rights of contribution from other persons that are provided by the organic law of the eligible entity with respect to any interest holder liabilities preserved by subsection (4)(a) as if the conversion had not occurred.

(d) The eligible interest holder does not, by reason of the prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the conversion becomes effective.

(5) A conversion does not require the converting entity to wind up its affairs and does not constitute or cause the dissolution or termination of the entity.

(6) Property held for charitable purposes under the laws of this state by a corporation or a domestic or foreign eligible entity immediately before a conversion may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and to the extent permitted by or pursuant to the laws of this state addressing cy pres or dealing with nondiversion of charitable assets.

(7) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to the converting entity and that takes effect or remains payable after the conversion inures to the converted entity.

(8) A trust obligation that would govern property if transferred to the converting entity applies to property that is transferred to the converted entity after the conversion takes effect.

35-14-1001. Authority to amend. (1) A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation as of the effective date of the amendment or to delete a provision that is not required to be contained in the articles of incorporation.

(2) A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

35-14-1002. Amendment before issuance of shares. If a corporation has not yet issued shares, its board of directors, or its incorporators if it has no board of directors, may adopt one or more amendments to the corporation's articles of incorporation.

35-14-1003. Amendment by board of directors and shareholders. If a corporation has issued shares, an amendment to the articles of incorporation that be adopted in the following manner:

(1) The proposed amendment must first be adopted by the board of directors.

(2) (a) Except as provided in 35-14-1005, 35-14-1007, and 35-14-1008, the amendment must then be approved by the shareholders. In submitting the proposed amendment to the shareholders for approval, the board of directors shall recommend that the shareholders approve the amendment unless:

(i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make the recommendation; or

(ii) 35-14-826 applies.

(b) If either subsection (2)(a)(i) or (2)(a)(ii) applies, the board shall inform the shareholders of the basis for its determination.

(3) The board of directors may set conditions for the approval of the amendment by the shareholders or for the effectiveness of the amendment.

(4) If the amendment is required to be approved by the shareholders and the approval is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the amendment is to be submitted for approval. The notice must state that the purpose or one of the purposes of the meeting is to consider the amendment. The notice must contain or be accompanied by a copy of the amendment.

(5) Unless the articles of incorporation or the board of directors acting pursuant to subsection (3) requires a greater vote or a lesser vote, approval of the amendment requires the approval of a majority of the votes entitled to be cast on the amendment and, if any class or series of shares is entitled to vote as a separate group on the amendment, the approval of a majority of the votes entitled to be cast on the amendment by that voting group. The articles of incorporation may not provide a lower quorum for a voting group than shares representing a majority of the votes entitled to be cast on the matter by the voting group or a lesser vote for a voting group than is provided for in 35-14-725(3).

(6) If as a result of an amendment of the articles of incorporation one or more shareholders of a domestic corporation would become subject to new interest holder liability, approval of the amendment requires the signing in connection with the amendment, by each affected shareholder, of a separate written consent to become subject to the new interest holder liability unless, in the case of a shareholder that already has interest holder liability, the terms and conditions of the new interest holder liability:

(a) are substantially identical to those of the existing interest holder liability; or

(b) are substantially identical to those of the existing interest holder liability other than changes that eliminate or reduce that interest holder liability.

(7) For purposes of 35-14-1009 and subsection (6) of this section, "new interest holder liability" means interest holder liability of a person resulting from an amendment of the articles of incorporation if:

(a) the person did not have interest holder liability before the amendment becomes effective; or

(b) the person had interest holder liability before the amendment becomes effective, the terms and conditions of which are changed when the amendment becomes effective.

35-14-1004. Voting on amendments by voting groups. (1) The holders of the outstanding shares of a class are entitled to vote as a separate voting group, if shareholder voting is otherwise required by this chapter, on a proposed amendment to the articles of incorporation if the amendment would:

(a) effect an exchange or reclassification of all or part of the shares of the class into shares of another class;

(b) effect an exchange or reclassification or create the right of exchange of all or part of the shares of another class into shares of the class;

(c) change the rights, preferences, or limitations of all or part of the shares of the class;

(d) change the shares of all or part of the class into a different number of shares of the same class;

(e) create a new class of shares having rights or preferences with respect to distributions that are prior or superior to the shares of the class;

(f) increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions that are prior or superior to the shares of the class;

(g) limit or deny an existing preemptive right of all or part of the shares of the class; or

(h) cancel or otherwise affect rights to distributions that have accumulated but have not yet been authorized on all or part of the shares of the class.

(2) If a proposed amendment would affect a series of a class of shares in one or more of the ways described in subsection (1), the holders of shares of that series are entitled to vote as a separate voting group on the proposed amendment.

(3) If a proposed amendment that entitles the holders of two or more classes or series of shares to vote as separate voting groups under this section would affect those two or more classes or series in the same or a substantially similar way, the holders of shares of all the classes or series so affected shall vote together as a single voting group on the proposed amendment unless otherwise provided in the articles of incorporation or added as a condition by the board of directors pursuant to 35-14-1003(3).

(4) A class or series of shares is entitled to the voting rights granted by this section even if the articles of incorporation provide that the shares are nonvoting shares.

35-14-1005. Amendment by board of directors. Unless the articles of incorporation provide otherwise, a corporation's board of directors may adopt amendments to the corporation's articles of incorporation without shareholder approval:

(1) to extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

(2) to delete the names and addresses of the initial directors;

(3) to delete the name and address of the initial registered agent or registered office if a statement of change is on file with the secretary of state;

(4) if the corporation has only one class of shares outstanding:

(a) to change each issued and unissued authorized share of the class into a greater number of whole shares of that class; or

(b) to increase the number of authorized shares of the class to the extent necessary to permit the issuance of shares as a share dividend;

(5) to change the corporate name by substituting the word "corporation", "incorporated", "company", "limited", or the abbreviation "corp.", "inc.", "co.", or "ltd.", for a similar word or abbreviation in the name or by adding, deleting, or changing a geographical attribution for the name;

(6) to reflect a reduction in authorized shares as a result of the operation of 35-14-631(2) when the corporation has acquired its own shares and the articles of incorporation prohibit the reissue of the acquired shares;

(7) to delete a class of shares from the articles of incorporation as a result of the operation of 35-14-631(2) when there are no remaining shares of the class because the corporation has acquired all shares of the class and the articles of incorporation prohibit the reissue of the acquired shares; or

(8) to make any change expressly permitted by 35-14-602(1) or (2) to be made without shareholder approval.

35-14-1006. Articles of amendment. (1) After an amendment to the articles of incorporation has been adopted and approved in the manner required by this chapter and by the articles of incorporation, the corporation shall deliver to the secretary of state for filing articles of amendment, which must set forth:

(a) the name of the corporation;

(b) the text of each amendment adopted or the information required by 35-14-120(11)(e);

(c) if an amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself, which may be made dependent on facts objectively ascertainable outside the articles of amendment in accordance with 35-14-120(11)(e);

(d) the date of each amendment's adoption; and

(e) if an amendment:

(i) was adopted by the incorporators or board of directors without shareholder approval, a statement that the amendment was duly adopted by the incorporators or by the board of directors and that shareholder approval was not required;

(ii) required approval by the shareholders, a statement that the amendment was duly approved by the shareholders in the manner required by this chapter and by the articles of incorporation; or

(iii) is being filed pursuant to 35-14-120(11)(e), a statement to that effect.

(2) Articles of amendment take effect on the effective date determined in accordance with 35-14-123.

35-14-1007. Restated articles of incorporation. (1) A corporation's board of directors may restate its articles of incorporation at any time, without shareholder approval, to consolidate all amendments into a single document.

(2) If the restated articles include one or more new amendments that require shareholder approval, the amendments must be adopted and approved as provided in 35-14-1003.

(3) A corporation that restates its articles of incorporation shall deliver to the secretary of state for filing articles of restatement setting forth:

(a) the name of the corporation;

(b) the text of the restated articles of incorporation;

(c) a statement that the restated articles consolidate all amendments into a single document; and

(d) if a new amendment is included in the restated articles, the statements required under 35-14-1006 with respect to the new amendment.

(4) Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments to the articles of incorporation.

(5) The secretary of state may certify restated articles of incorporation as the articles of incorporation currently in effect without including the statements required by subsection (3)(d).

35-14-1008. Amendment pursuant to reorganization. (1) A corporation's articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under the authority of a law of the United States.

(2) The individual or individuals designated by the court shall deliver to the secretary of state for filing articles of amendment setting forth:

(a) the name of the corporation;

(b) the text of each amendment approved by the court;

(c) the date of the court's order or decree approving the articles of amendment;

(d) the title of the reorganization proceeding in which the order or decree was entered; and

(e) a statement that the court had jurisdiction of the proceeding under federal statute.

(3) This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.

35-14-1009. Effect of amendment. (1) An amendment to the articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, or the existing rights of persons other than the shareholders. An amendment changing a corporation's name does not affect a proceeding brought by or against the corporation in its former name.

(2) A shareholder who becomes subject to new interest holder liability with respect to the corporation as a result of an amendment to the articles of incorporation has that new interest holder liability only with respect to interest holder liabilities that arise after the amendment becomes effective.

(3) Except as otherwise provided in the articles of incorporation of the corporation, the interest holder liability of a shareholder who had interest holder liability with respect to the corporation before the amendment becomes effective and has new interest holder liability after the amendment becomes effective is as follows:

(a) The amendment does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the amendment becomes effective.

(b) The provisions of the articles of incorporation of the corporation relating to interest holder liability in effect immediately prior to the amendment continue to apply to the collection or discharge of any interest holder liabilities preserved by subsection (3)(a) as if the amendment had not occurred.

(c) The shareholder has the rights of contribution from other persons that are provided by the articles of incorporation relating to interest holder liability in effect immediately prior to the amendment with respect to any interest holder liabilities preserved by subsection (3)(a) as if the amendment had not occurred.

(d) The shareholder does not, by reason of the prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the amendment becomes effective.

35-14-1010 through 35-14-1019 reserved.

35-14-1020. Authority to amend. (1) A corporation's shareholders may amend or repeal the corporation's bylaws.

(2) A corporation's board of directors may amend or repeal the corporation's bylaws unless:

(a) the articles of incorporation, 35-14-1021, or, if applicable, 35-14-1022 reserves that power exclusively to the shareholders in whole or part; or

(b) except as provided in 35-14-206(4), the shareholders in amending, repealing, or adopting a bylaw expressly provide that the board of directors may not amend, repeal, or adopt that bylaw.

(3) A shareholder of the corporation does not have a vested property right resulting from any provision in the bylaws.

35-14-1021. Bylaw increasing quorum or voting requirement for directors. (1) A bylaw that increases a quorum or voting requirement for the board of directors or that requires a meeting of shareholders to be held at a place may be amended or repealed:

(a) if originally adopted by the shareholders, only by the shareholders unless the bylaw provides otherwise; or

(b) if adopted by the board of directors, either by the shareholders or by the board of directors.

(2) A bylaw adopted or amended by the shareholders that increases a quorum or voting requirement for the board of directors may provide that it can be amended or repealed only by a specified vote of either the shareholders or the board of directors.

(3) Action by the board of directors under subsection (1) to amend or repeal a bylaw that changes a quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

35-14-1022. Bylaw provisions relating to election of directors. (1) Unless the articles of incorporation specifically prohibit the adoption of a bylaw pursuant to this section, alter the vote specified in 35-14-728(1), or provide for cumulative voting, a corporation may elect in its bylaws to be governed in the election of directors as follows:

(a) each vote entitled to be cast may be voted for or against up to that number of candidates that is equal to the number of directors to be elected or a shareholder may indicate an abstention, but without cumulating the votes;

(b) to be elected, a nominee must have received a plurality of the votes cast by holders of shares entitled to vote in the election at a meeting at which a quorum is present, provided that a nominee who is elected but receives more votes against than for election shall serve as a director for a term that terminates on the date that is the earlier of:

(i) 90 days from the date on which the voting results are determined pursuant to 35-14-729(2)(e); or

(ii) the date on which an individual is selected by the board of directors to fill the office held by the director, which constitutes the filling of a vacancy by the board to which 35-14-810 applies. Subject to subsection (1)(c) of this section, a nominee who is elected but receives more votes against than for election may not serve as a director beyond the 90-day period referenced in subsection (1)(b)(i).

(iii) the board of directors may select any qualified individual to fill the office held by a director who received more votes against than for election.

(2) Subsection (1) does not apply to an election of directors by a voting group if:

(a) at the expiration of the time fixed under a provision requiring advance notification of director candidates; or

(b) absent such a provision, at a time fixed by the board of directors that is not more than 14 days before notice is given of the meeting at which the election is to occur, there are more candidates for election by the voting group than the number of directors to be elected, one or more of whom are properly proposed by shareholders. An individual may not be considered a candidate for purposes of this subsection (2)(b) if the board of directors determines before the notice of meeting is given that the individual's candidacy does not create a bona fide election contest.

(3) A bylaw electing to be governed by this section may be repealed:

(a) if originally adopted by the shareholders, only by the shareholders unless the bylaw provides otherwise;

(b) if adopted by the board of directors, by the board of directors or the shareholders.

35-14-1101. Definitions -- mergers and share exchanges. As used in this part, the following definitions apply:

(1) "Acquired entity" means the domestic or foreign corporation or eligible entity that will have all of one or more classes or series of its shares or eligible interests acquired in a share exchange.

(2) "Acquiring entity" means the domestic or foreign corporation or eligible entity that will acquire all of one or more classes or series of shares or eligible interests of the acquired entity in a share exchange.

(3) "New interest holder liability" means interest holder liability of a person resulting from a merger or share exchange that is:

(a) with respect to an entity that is different from the entity in which the person held shares or eligible interests immediately before the merger or share exchange became effective; or

(b) with respect to the same entity as the one in which the person held shares or eligible interests immediately before the merger or share exchange became effective if:

(i) the person did not have interest holder liability immediately before the merger or share exchange became effective; or

(ii) the person had interest holder liability immediately before the merger or share exchange became effective, the terms and conditions of which were changed when the merger or share exchange became effective.

(4) "Party to a merger" means any domestic or foreign corporation or eligible entity that will merge under a plan of merger but does not include a survivor created by the merger.

(5) "Survivor" in a merger means the domestic or foreign corporation or eligible entity into which one or more other corporations or eligible entities are merged.

35-14-1102. Merger. (1) By complying with this part:

(a) one or more domestic business corporations may merge with one or more domestic or foreign business corporations or eligible entities pursuant to a plan of merger, resulting in a survivor; and

(b) two or more foreign business corporations or domestic or foreign eligible entities may merge, resulting in a survivor that is a domestic business corporation created in the merger.

(2) By complying with the provisions of this part applicable to foreign entities, a foreign business corporation or a foreign eligible entity may be a party to a merger with a domestic business corporation or may be created as the survivor in a merger in which a domestic business corporation is a party, but only if the merger is permitted by the organic law of the foreign business corporation or eligible entity.

(3) If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of a merger, a plan of merger may nonetheless be adopted and approved by the unanimous consent of all of the interest holders of the eligible entity, and the merger may then be effected as provided in the other provisions of this part. For the purposes of applying this part:

(a) the eligible entity and its members or interest holders, eligible interests, and articles of incorporation or other organic rules taken together are considered a domestic business corporation and its shareholders, shares, and articles of incorporation, respectively and vice versa, as the context may require; and

(b) if the business and affairs of the eligible entity are managed by a person or persons that are not identical to the members or interest holders, the person or persons are considered the board of directors.

(4) The plan of merger must include:

(a) as to each party to the merger, its name, jurisdiction of formation, and type of entity;

(b) the survivor's name, jurisdiction of formation, and type of entity and, if the survivor is to be created in the merger, a statement to that effect;

(c) the terms and conditions of the merger;

(d) the manner and basis of converting the shares of each merging domestic or foreign business corporation and eligible interests of each merging domestic or foreign eligible entity into shares or other securities, eligible interests, obligations, rights to acquire shares, or other securities or eligible interests, cash, other property, or any combination;

(e) the articles of incorporation of any domestic or foreign business or nonprofit corporation or the public organic record of any domestic or foreign unincorporated entity to be created by the merger or, if a new domestic or foreign business or nonprofit corporation or unincorporated entity is not to be created by the merger, any amendments to the survivor's articles of incorporation or other public organic record; and

(f) any other provisions required by the laws under which any party to the merger is organized or by which it is governed or by the articles of incorporation or organic rules of the party.

(5) In addition to the requirements of subsection (4), a plan of merger may contain any other provision not prohibited by law.

(6) Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with 35-14-120(11).

(7) A plan of merger may be amended only with the consent of each party to the merger except as provided in the plan. A domestic party to a merger may approve an amendment to a plan:

(a) in the same manner as the plan was approved if the plan does not provide for the manner in which it may be amended; or

(b) in the manner provided in the plan, except that shareholders, members, or interest holders that were entitled to vote on or consent to approval of the plan are entitled to vote on or consent to any amendment of the plan that will change:

(i) the amount or kind of shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, or other property to be received under the plan by the shareholders, members, or interest holders of any party to the merger;

(ii) the articles of incorporation of any domestic or foreign business or nonprofit corporation, or the organic rules of any unincorporated entity, that will be the survivor of the merger except changes permitted by 35-14-1005 or by comparable provisions of the organic law of any domestic or foreign business corporation, domestic or foreign nonprofit corporation, or unincorporated entity; or

(iii) any other terms or conditions of the plan if the change would adversely affect the shareholders, members, or interest holders in any material respect.

35-14-1103. Share exchange. (1) By complying with this part:

(a) a domestic corporation may acquire all of the shares of one or more classes or series of shares of another domestic or foreign corporation or all of the eligible interests of one or more classes or series of interests of a domestic or foreign eligible entity in exchange for shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, other property, or any combination pursuant to a plan of share exchange; or

(b) all of the shares of one or more classes or series of shares of a domestic corporation may be acquired by another domestic or foreign corporation or eligible entity in exchange for shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, other property, or any combination pursuant to a plan of share exchange.

(2) A foreign corporation or eligible entity may be the acquired entity in a share exchange only if the share exchange is permitted by the organic law of that corporation or other entity.

(3) If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of a share exchange, a plan of share exchange may be adopted and approved and the share exchange effected in accordance with the procedures, if any, for a merger. If the organic law or organic rules of a domestic eligible entity do not provide procedures for the approval of either a share exchange or a merger, a plan of share exchange may nonetheless be adopted and approved by the unanimous consent of all of the interest holders of the eligible entity whose interests will be exchanged under the plan of share exchange, and the share exchange may subsequently be effected as provided in the other provisions of this part. For purposes of applying this part:

(a) the eligible entity and its interest holders, interests, and articles of incorporation or other organic rules taken together are considered a domestic business corporation and its shareholders, shares, and articles of incorporation, respectively and vice versa, as the context may require; and

(b) if the business and affairs of the eligible entity are managed by a person or persons that are not identical to the members or interest holders, the person or persons are considered the board of directors.

(4) The plan of share exchange must include:

(a) the name of each domestic or foreign corporation or other eligible entity the shares or eligible interests of which will be acquired and the name of the domestic or foreign corporation or eligible entity that will acquire those shares or eligible interests;

(b) the terms and conditions of the share exchange;

(c) the manner and basis of exchanging shares of a domestic or foreign corporation or eligible interests in a domestic or foreign eligible entity the shares or eligible interests of which will be acquired under the share exchange for shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, other property, or any combination; and

(d) any other provisions required by the organic law governing the acquired entity or its articles of incorporation or organic rules.

(5) Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with 35-14-120(11).

(6) A plan of share exchange may be amended only with the consent of each party to the share exchange except as provided in the plan. A domestic entity may approve an amendment to a plan:

(a) in the same manner the plan was approved if the plan does not provide for the manner in which it may be amended; or

(b) in the manner provided in the plan, except that shareholders, members, or interest holders that were entitled to vote on or consent to approval of the plan are entitled to vote on or consent to any amendment of the plan that will change:

(i) the amount or kind of shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, or other property to be received under the plan by the shareholders, members, or interest holders of the acquired entity; or

(ii) any of the other terms or conditions of the plan if the change would adversely affect the shareholders, members, or interest holders in any material respect.

35-14-1104. Action on plan of merger or share exchange. In the case of a domestic corporation that is a party to a merger or the acquired entity in a share exchange, the plan of merger or share exchange must be adopted in the following manner:

(1) The plan of merger or share exchange must first be adopted by the board of directors.

(2) (a) Except as provided in 35-14-1105 and in subsections (8), (10), and (12) of this section, the plan of merger or share exchange must then be approved by the shareholders. In submitting the plan of merger or share exchange to the shareholders for approval, the board of directors shall recommend that the shareholders approve the plan or, in the case of an offer referred to in subsection (10)(b), that the shareholders tender their shares to the offeror in response to the offer unless:

(i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation; or

(ii) 35-14-826 applies.

(b) If either subsection (2)(a)(i) or (2)(a)(ii) applies, the board shall inform the shareholders of the basis for its determination.

(3) The board of directors may set conditions for the approval of the plan of merger or share exchange by the shareholders or for the effectiveness of the plan of merger or share exchange.

(4) If the plan of merger or share exchange is required to be approved by the shareholders and if the approval is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the plan is to be submitted for approval. The notice must state that the purpose or one of the purposes of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing foreign or domestic corporation or eligible entity, the notice must also include or be accompanied by a copy or summary of the articles of incorporation and bylaws or the organic rules of that corporation or eligible entity. If the corporation is to be merged with a domestic or foreign corporation or eligible entity and a new domestic or foreign corporation or eligible entity is to be created pursuant to the merger, the notice must include or be accompanied by a copy or summary of the articles of incorporation and bylaws or the organic rules of the new corporation or eligible entity.

(5) Unless the articles of incorporation require a greater vote or a lesser vote, approval of the plan of merger or share exchange requires the approval of a majority of the votes entitled to be cast on the plan and, if any class or series of shares is entitled to vote as a separate group on the plan of merger or share exchange, the approval of a majority of the votes entitled to be cast on the merger or share exchange by that voting group. The articles of incorporation may not provide a lower quorum for a voting group than shares representing a majority of the votes entitled to be cast on the matter by the voting group or a lesser vote for a voting group than is provided for in 35-14-725(3).

(6) Subject to subsection (7), separate voting by voting groups is required:

(a) on a plan of merger, by each class or series of shares that:

(i) are to be converted under the plan of merger into shares, other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, other property, or any combination; or

(ii) are entitled to vote as a separate group on a provision in the plan that constitutes a proposed amendment to the articles of incorporation of a surviving corporation that requires action by separate voting groups under 35-14-1004;

(b) on a plan of share exchange, by each class or series of shares included in the exchange, with each class or series constituting a separate voting group; and

(c) on a plan of merger or share exchange, if the voting group is entitled under the articles of incorporation to vote as a voting group to approve a plan of merger or share exchange, respectively.

(7) The articles of incorporation may expressly limit or eliminate the separate voting rights provided in subsections (6)(a)(i) and (6)(b) as to any class or series of shares, except when the plan of merger or share exchange:

(a) includes what is or would be in effect an amendment subject to subsection (6)(a)(ii); and

(b) will not effect a substantive business combination.

(8) Unless the articles of incorporation provide otherwise, approval by the corporation's shareholders of a plan of merger is not required if:

(a) the corporation will survive the merger;

(b) except for amendments permitted by 35-14-1005, its articles of incorporation will not be changed;

(c) each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger or share exchange will hold the same number of shares, with identical preferences, rights, and limitations, immediately after the effective date of the merger; and

(d) the issuance in the merger of shares or other securities convertible into or rights exercisable for shares does not require a vote under 35-14-621(6).

(9) If as a result of a merger or share exchange one or more shareholders of a domestic corporation would become subject to new interest holder liability, approval of the plan of merger or share exchange requires the signing in connection with the transaction, by each affected shareholder, of a separate written consent to become subject to the new interest holder liability unless, in the case of a shareholder that already has interest holder liability with respect to the domestic corporation:

(a) the new interest holder liability is with respect to a domestic or foreign corporation, which may be a different or the same domestic corporation in which the person is a shareholder; and

(b) the terms and conditions of the new interest holder liability are substantially identical to those of the existing interest holder liability, other than changes that eliminate or reduce interest holder liability.

(10) Unless the articles of incorporation provide otherwise, approval by the shareholders of a plan of merger or share exchange is not required if:

(a) the plan of merger or share exchange expressly:

(i) permits or requires the merger or share exchange to be effected under this subsection (10); and

(ii) provides that if the merger or share exchange is to be effected under this subsection (10), the merger or share exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subsection (10)(f);

(b) another party to the merger, the acquiring entity in the share exchange, or a parent of another party to the merger or the acquiring entity in the share exchange makes an offer to purchase on the terms provided in the plan of merger or share exchange any and all of the outstanding shares of the corporation that, absent this subsection (10)(b), would be entitled to vote on the plan of merger or share exchange, except that the offer may exclude shares of the corporation that are owned at the commencement of the offer by the corporation, the offeror, or any parent of the offeror or by any wholly owned subsidiary of any of them;

(c) the offer discloses that the plan of merger or share exchange provides that the merger or share exchange will be effected as soon as practicable following the satisfaction of the requirement set forth in subsection (10)(f) and that the shares of the corporation that are not tendered in response to the offer will be treated as set forth in subsection (10)(h);

(d) the offer remains open for at least 10 days;

(e) the offeror purchases all shares properly tendered in response to the offer and not properly withdrawn;

(f) the following shares are collectively entitled to cast at least the minimum number of votes on the merger or share exchange that, absent this subsection (10)(f), would be required by this part and by the articles of incorporation for the approval of the merger or share exchange by the shareholders and by any other voting group entitled to vote on the merger or share exchange at a meeting at which all shares entitled to vote on the approval were present and voted:

(i) shares purchased by the offeror in accordance with the offer;

(ii) shares otherwise owned by the offeror or by any parent of the offeror or any wholly owned subsidiary of any of them; and

(iii) shares subject to an agreement that they are to be transferred, contributed, or delivered to the offeror, any parent of the offeror, or any wholly owned subsidiary of any of them in exchange for shares or eligible interests in the offeror, parent, or subsidiary;

(g) the offeror or a wholly owned subsidiary of the offeror merges with or into, or effects a share exchange in which it acquires shares of, the corporation; and

(h) each outstanding share of each class or series of shares of the corporation that the offeror is offering to purchase in accordance with the offer and that is not purchased in accordance with the offer is to be converted in the merger into or into the right to receive, or is to be exchanged in the share exchange for or for the right to receive, the same amount and kind of securities, eligible interests, obligations, rights, cash, or other property to be paid or exchanged in accordance with the offer for each share of that class or series of shares that is tendered in response to the offer, except that shares of the corporation that are owned by the corporation or that are described in subsection (10)(f)(ii) or (10)(f)(iii) need not be converted into or exchanged for the consideration described in this subsection (10)(h).

(11) As used in subsection (10):

(a) "offer" means the offer referred to in subsection (10)(b);

(b) "offeror" means the person making the offer;

(c) "parent" of an entity means a person that owns directly, or indirectly through one or more wholly owned subsidiaries, all of the outstanding shares of or eligible interests in that entity;

(d) shares tendered in response to the offer are considered to have been "purchased" in accordance with the offer at the earliest time that:

(i) the offeror has irrevocably accepted those shares for payment; and

(ii) either:

(A) in the case of shares represented by certificates, the offeror or the offeror's designated depository or other agent has physically received the certificates representing those shares; or

(B) in the case of shares without certificates, those shares have been transferred into the account of the offeror or its designated depository or other agent or an agent's message relating to those shares has been received by the offeror or its designated depository or other agent; and

(e) "wholly owned subsidiary" of a person means an entity of which or in which that person owns directly, or indirectly through one or more wholly owned subsidiaries, all of the outstanding shares or eligible interests.

(12) Unless the articles of incorporation provide otherwise:

(a) approval of a plan of share exchange by the shareholders of a domestic corporation is not required if the corporation is the acquiring entity in the share exchange; and

(b) shares not to be exchanged under the plan of share exchange are not entitled to vote on the plan.

35-14-1105. Merger between parent and subsidiary or between subsidiaries. (1) A domestic or foreign parent entity that owns shares of a domestic corporation that carry at least 90% of the voting power of each class and series of the outstanding shares of the subsidiary that has voting power may:

(a) merge the subsidiary into itself if it is a domestic or foreign corporation or eligible entity or into another domestic or foreign corporation or eligible entity in which the parent entity owns at least 90% of the voting power of each class and series of the outstanding shares or eligible interests that have voting power; or

(b) merge itself if it is a domestic or foreign corporation or eligible entity into the subsidiary, in either case without the approval of the board of directors or shareholders of the subsidiary, unless the articles of incorporation or organic rules of the parent entity or the articles of incorporation of the subsidiary corporation provide otherwise. Section 35-14-1104(9) applies to a merger under this section. The articles of merger relating to a merger under this section do not need to be signed by the subsidiary.

(2) A parent entity shall, within 10 days after the effective date of a merger approved under subsection (1), notify each of the subsidiary's shareholders that the merger has become effective. The notice must include:

(a) a copy of the plan of merger; or

(b) a summary of the plan of merger and a statement that the plan of merger is on file in the office of the surviving entity, the address of the surviving entity, and a statement that a copy of the plan of merger will be furnished, upon request and at no cost, to any shareholder of any party to the merger.

(3) Except as provided in subsections (1) and (2), a merger between a parent entity and a domestic subsidiary corporation is governed by the provisions of this part applicable to mergers generally.

35-14-1106. Articles of merger or share exchange. (1) After a plan of merger has been adopted and approved as required by this chapter or, if the merger is being effected under 35-14-1102(1)(b), the merger has been approved as required by the organic law governing the parties to the merger, the articles of merger must be signed by each party to the merger except as provided in 35-14-1105(1). The articles must set forth:

(a) the name, jurisdiction of formation, and type of entity of each party to the merger;

(b) the name, jurisdiction of formation, and type of entity of the survivor;

(c) if the survivor of the merger is a domestic corporation and its articles of incorporation are amended or if a new domestic corporation is created as a result of the merger:

(i) the amendments to the survivor's articles of incorporation; or

(ii) the articles of incorporation of the new corporation;

(d) if the survivor of the merger is a domestic eligible entity and its public organic record is amended or if a new domestic eligible entity is created as a result of the merger:

(i) the amendments to the public organic record of the survivor; or

(ii) the public organic record of the new eligible entity;

(e) if the plan of merger required approval by the shareholders of a domestic corporation that is a party to the merger, a statement that the plan was duly approved by the shareholders and, if voting by any separate voting group was required, by each separate voting group in the manner required by this chapter and the articles of incorporation;

(f) if the plan of merger or share exchange did not require approval by the shareholders of a domestic corporation that is a party to the merger, a statement to that effect;

(g) as to each foreign corporation that is a party to the merger, a statement that the participation of the foreign corporation was duly authorized as required by its organic law;

(h) as to each domestic or foreign eligible entity that is a party to the merger, a statement that the merger was approved in accordance with its organic law or 35-14-1102(3); and

(i) if the survivor is created by the merger and is a domestic limited liability partnership, the filing required to become a limited liability partnership, as an attachment.

(2) After a plan of share exchange in which the acquired entity is a domestic corporation or eligible entity has been adopted and approved as required by this chapter, articles of share exchange must be signed by the acquired entity and the acquiring entity. The articles must set forth:

(a) the name of the acquired entity;

(b) the name, jurisdiction of formation, and type of entity of the domestic or foreign corporation or eligible entity that is the acquiring entity; and

(c) a statement that the plan of share exchange was duly approved by the acquired entity by:

(i) the required vote or consent of each class or series of shares or eligible interests included in the exchange; and

(ii) the required vote or consent of each other class or series of shares or eligible interests entitled to vote on approval of the exchange by the articles of incorporation or organic rules of the acquired entity or by 35-14-1103(3).

(3) In addition to the requirements of subsection (1) or (2), articles of merger or share exchange may contain any other provision not prohibited by law.

(4) The articles of merger or share exchange must be delivered to the secretary of state for filing and, subject to subsection (5), the merger or share exchange takes effect on the effective date determined in accordance with 35-14-123.

(5) With respect to a merger in which one or more foreign entities is a party or a foreign entity created by the merger is the survivor, the merger itself becomes effective on the later of:

(a) the date all documents required to be filed in foreign jurisdictions to effect the merger have become effective; or

(b) the date the articles of merger take effect.

(6) Articles of merger filed under this section may be combined with any filing required under the organic law governing any domestic eligible entity involved in the transaction if the combined filing satisfies the requirements of both that organic law and this section.

35-14-1107. Effect of merger or share exchange. (1) When a merger becomes effective:

(a) the domestic or foreign corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be;

(b) the separate existence of every domestic or foreign corporation or eligible entity that is a party to the merger, other than the survivor, ceases;

(c) all property owned by and every contract right possessed by each domestic or foreign corporation or eligible entity that is a party to the merger, other than the survivor, are the property and contract rights of the survivor without transfer, reversion, or impairment;

(d) all debts, obligations, and other liabilities of each domestic or foreign corporation or eligible entity that is a party to the merger, other than the survivor, are debts, obligations, or liabilities of the survivor;

(e) the name of the survivor may be but need not be substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger;

(f) if the survivor is a domestic entity, the articles of incorporation and bylaws or the organic rules of the survivor are amended to the extent provided in the plan of merger;

(g) the articles of incorporation and bylaws or the organic rules of a survivor that is a domestic entity and is created by the merger become effective;

(h) the shares of each domestic or foreign corporation that is a party to the merger, and the eligible interests in an eligible entity that is a party to a merger, that are to be converted in accordance with the terms of the merger into shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, other property, or any combination are converted, and the former holders of the shares or eligible interests are entitled only to the rights provided to them by those terms or to any rights they may have under part 13 of this chapter or the organic law governing the eligible entity or foreign corporation;

(i) except as provided by law or the terms of the merger, all the rights, privileges, franchises, and immunities of each entity that is a party to the merger, other than the survivor, are the rights, privileges, franchises, and immunities of the survivor; and

(j) if the survivor exists before the merger:

(i) all the property and contract rights of the survivor remain its property and contract rights without transfer, reversion, or impairment;

(ii) the survivor remains subject to all its debts, obligations, and other liabilities; and

(iii) except as provided by law or the plan of merger, the survivor continues to hold all of its rights, privileges, franchises, and immunities.

(2) When a share exchange becomes effective, the shares or eligible interests in the acquired entity that are to be exchanged for shares or other securities, eligible interests, obligations, rights to acquire shares or other securities or eligible interests, cash, other property, or any combination are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under part 13 of this chapter or under the organic law governing the acquired entity.

(3) Except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law governing or organic rules of a foreign corporation or a domestic or foreign eligible entity, the effect of a merger or share exchange on interest holder liability is as follows:

(a) A person who becomes subject to new interest holder liability with respect to an entity as a result of a merger or share exchange has that new interest holder liability only with respect to interest holder liabilities that arise after the merger or share exchange becomes effective.

(b) If a person had interest holder liability with respect to a party to the merger or the acquired entity before the merger or share exchange becomes effective with respect to shares or eligible interests of the party or acquired entity:

(i) that were exchanged in the merger or share exchange;

(ii) that were canceled in the merger; or

(iii) the terms and conditions of which relating to interest holder liability were amended pursuant to the merger, the following provisions apply:

(A) The merger or share exchange does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the merger or share exchange becomes effective.

(B) The provisions of the organic law governing any entity for which the person had that prior interest holder liability continue to apply to the collection or discharge of any interest holder liabilities preserved by subsection (3)(b)(i) as if the merger or share exchange had not occurred.

(C) The person has the rights of contribution from other persons that are provided by the organic law governing the entity for which the person had that prior interest holder liability with respect to any interest holder liabilities preserved by subsection (3)(b)(i) as if the merger or share exchange had not occurred.

(D) The person may not by reason of that prior interest holder liability have interest holder liability with respect to any interest holder liabilities that arise after the merger or share exchange becomes effective.

(c) If a person has interest holder liability both before and after a merger becomes effective with unchanged terms and conditions with respect to the entity that is the survivor by reason of owning the same shares or eligible interests before and after the merger becomes effective, the merger has no effect on that interest holder liability.

(d) A share exchange has no effect on interest holder liability related to shares or eligible interests of the acquired entity that were not exchanged in the share exchange.

(4) Upon a merger becoming effective, a foreign corporation or foreign eligible entity that is the survivor of the merger is considered to have:

(a) appointed the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders of each domestic corporation that is a party to the merger who exercise appraisal rights; and

(b) agreed that it will promptly pay the amount, if any, to which those shareholders are entitled under part 13 of this chapter.

(5) Except as provided in the organic law governing a party to a merger or in its articles of incorporation or organic rules, the merger does not give rise to any rights that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of that party. The merger does not require a party to the merger to wind up its affairs and does not constitute or cause its dissolution or termination.

(6) Property held for a charitable purpose under the laws of this state by a domestic or foreign corporation or eligible entity immediately before a merger becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and to the extent permitted by or pursuant to the laws of this state addressing cy pres or dealing with nondiversion of charitable assets.

(7) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to an entity that is a party to a merger that is not the survivor and that takes effect or remains payable after the merger inures to the survivor.

(8) A trust obligation that would govern property if transferred to a nonsurviving entity applies to property that is transferred to the survivor after a merger becomes effective.

35-14-1108. Abandonment of merger or share exchange. (1) After a plan of merger or share exchange has been adopted and approved as required by this part and before articles of merger or share exchange have become effective, the plan may be abandoned by a domestic business corporation that is a party to the plan without action by its shareholders in accordance with any procedures set forth in the plan of merger or share exchange or, if no procedures are set forth in the plan, in the manner determined by the board of directors.

(2) If a merger or share exchange is abandoned under subsection (1) after articles of merger or share exchange have been delivered to the secretary of state for filing but before the merger or share exchange has become effective, a statement of abandonment signed by all the parties that signed the articles of merger or share exchange must be delivered to the secretary of state for filing before the articles of merger or share exchange become effective. The statement takes effect on filing and the merger or share exchange is abandoned and does not become effective. The statement of abandonment must contain:

(a) the name of each party to the merger or the names of the acquiring and acquired entities in a share exchange;

(b) the date on which the articles of merger or share exchange were filed by the secretary of state; and

(c) a statement that the merger or share exchange has been abandoned in accordance with this section.

35-14-1201. Disposition of assets not requiring shareholder approval. No approval of the shareholders is required, unless the articles of incorporation provide otherwise:

(1) to sell, lease, exchange, or otherwise dispose of any or all of the corporation's assets in the usual and regular course of business;

(2) to mortgage, pledge, dedicate, with or without recourse, to the repayment of indebtedness, or otherwise encumber any or all of the corporation's assets, regardless of whether in the usual and regular course of business;

(3) to transfer any or all of the corporation's assets to one or more domestic or foreign corporations or other entities all of the shares or interests of which are owned by the corporation; or

(4) to distribute assets pro rata to the holders of one or more classes or series of the corporation's shares.

35-14-1202. Shareholder approval of certain dispositions. (1) A sale, lease, exchange, or other disposition of assets, other than a disposition described in 35-14-1201, requires approval of the corporation's shareholders if the disposition would leave the corporation without a significant continuing business activity. A corporation is conclusively held to have retained a significant continuing business activity if it retains a business activity that represented, for the corporation and its subsidiaries on a consolidated basis, at least:

(a) 25% of total assets at the end of the most recently completed fiscal year; and

(b) either 25% of income from continuing operations before taxes or 25% of revenue from continuing operations, in each case for the most recently completed fiscal year.

(2) (a) To obtain the approval of the shareholders under subsection (1), the board of directors shall first adopt a resolution authorizing the disposition. The disposition must then be approved by the shareholders. In submitting the disposition to the shareholders for approval, the board of directors shall recommend that the shareholders approve the disposition unless:

(i) the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make the recommendation; or

(ii) 35-14-826 applies.

(b) If either subsection (2)(a)(i) or (2)(a)(ii) applies, the board shall inform the shareholders of the basis for its determination.

(3) The board of directors may set conditions for the approval by the shareholders of a disposition or for the effectiveness of the disposition.

(4) If a disposition is required to be approved by the shareholders under subsection (1) and if the approval is to be given at a meeting, the corporation shall notify each shareholder, regardless of whether entitled to vote, of the meeting of shareholders at which the disposition is to be submitted for approval. The notice must state that the purpose or one of the purposes of the meeting is to consider the disposition and must contain a description of the disposition, including the terms and conditions of the disposition and the consideration to be received by the corporation.

(5) Unless the articles of incorporation require a greater vote or a lesser vote, approval of the disposition requires the approval of a majority of the votes entitled to be cast on the disposition and, if any class or series of shares is entitled to vote as a separate group on the disposition, the approval of a majority of the votes entitled to be cast on the disposition by that voting group. The articles of incorporation may not provide a lower quorum for a voting group than shares representing a majority of the votes entitled to be cast on the matter by the voting group or a lesser vote for a voting group than is provided for in 35-14-725(3).

(6) After a disposition has been approved by the shareholders under this part and at any time before the disposition has been consummated, it may be abandoned by the corporation without action by the shareholders, subject to any contractual rights of other parties to the disposition.

(7) A disposition of assets in the course of dissolution under part 14 of this chapter is not governed by this section.

(8) The assets of a direct or indirect consolidated subsidiary are the assets of the parent corporation for the purposes of this section.

35-14-1301. Definitions -- appraisal rights. For the purposes of this part, the following definitions apply:

(1) "Affiliate" means a person that directly, or indirectly through one or more intermediaries controls, is controlled by or is under common control with another person or is a senior executive of another person. For purposes of 35-14-1302(2)(d), a person is considered an affiliate of its senior executives.

(2) "Beneficial owner" means any person who directly, or indirectly through any contract, arrangement, or understanding, other than a revocable proxy, has or shares the power to vote or to direct the voting of shares. However, a member of a national securities exchange is not considered a beneficial owner of securities held directly or indirectly by it on behalf of another person if the member is precluded by the rules of the exchange from voting without instruction on contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted. When two or more persons agree to act together for the purpose of voting their shares of the corporation, each member of the group formed is held to have acquired beneficial ownership, as of the date of the agreement, of all shares having voting power of the corporation that are beneficially owned by any member of the group.

(3) "Corporation" means the domestic corporation that is the issuer of the shares held by a shareholder demanding appraisal and, for matters covered in 35-14-1322 through 35-14-1326, 35-14-1330, and 35-14-1331, includes the survivor of a merger.

(4) "Excluded shares" means shares acquired pursuant to an offer for all shares having voting power if the offer was made within 1 year before the corporate action for consideration of the same kind and of a value equal to or less than that paid in connection with the corporate action.

(5) "Fair value" means the value of the corporation's shares determined:

(a) immediately before the effectiveness of the corporate action to which the shareholder objects;

(b) using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and

(c) without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles of incorporation pursuant to 35-14-1302(1)(d).

(6) "Interest" means interest from the date the corporate action becomes effective until the date of payment, at the rate of interest on judgments in this state on the effective date of the corporate action.

(7) "Interested person" means a person or an affiliate of a person who at any time during the 1-year period immediately preceding approval by the board of directors of the corporate action:

(a) was the beneficial owner of 20% or more of the voting power of the corporation, other than as owner of excluded shares;

(b) had the power, contractually or otherwise and other than as owner of excluded shares, to cause the appointment or election of 25% or more of the directors to the board of directors of the corporation; or

(c) was a senior executive or director of the corporation or a senior executive of any affiliate of the corporation and will receive, as a result of the corporate action, a financial benefit not generally available to other shareholders, other than:

(i) employment, consulting, retirement, or similar benefits established separately and not as part of or in contemplation of the corporate action;

(ii) employment, consulting, retirement, or similar benefits established in contemplation of or as part of the corporate action that are not more favorable than those existing before the corporate action or, if more favorable, that have been approved on behalf of the corporation in the same manner as is provided in 35-14-862; or

(iii) in the case of a director of the corporation who will, in the corporate action, become a director or governor of the acquiror or any of its affiliates, rights and benefits as a director or governor that are provided on the same basis as those afforded by the acquiror generally to other directors or governors of the entity or affiliate.

(8) "Interested transaction" means a corporate action described in 35-14-1302(1), other than a merger pursuant to 35-14-1105, involving an interested person in which any of the shares or assets of the corporation are being acquired or converted.

(9) "Preferred shares" means a class or series of shares whose holders have preference over any other class or series of shares with respect to distributions.

(10) "Senior executive" means the chief executive officer, chief operating officer, chief financial officer, and any individual in charge of a principal business unit or function.

(11) "Shareholder" means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner.

35-14-1302. Right to appraisal. (1) A shareholder is entitled to appraisal rights and to obtain payment of the fair value of that shareholder's shares in the event of any of the following corporate actions:

(a) consummation of a merger to which the corporation is a party if:

(i) shareholder approval is required for the merger by 35-14-1104 or would be required but for the provisions of 35-14-1104(10), except that appraisal rights are not available to any shareholder of the corporation with respect to shares of any class or series that remain outstanding after consummation of the merger; or

(ii) the corporation is a subsidiary and the merger is governed by 35-14-1105;

(b) consummation of a share exchange to which the corporation is a party the shares of which will be acquired, except that appraisal rights may not be available to any shareholder of the corporation with respect to any class or series of shares of the corporation that is not acquired in the share exchange;

(c) consummation of a disposition of assets pursuant to 35-14-1202 if the shareholder is entitled to vote on the disposition, except that appraisal rights are not available to any shareholder of the corporation with respect to shares of any class or series if:

(i) under the terms of the corporate action approved by the shareholders, the corporation's net assets, in excess of a reasonable amount reserved to meet claims of the type described in 35-14-1406 and 35-14-1407, are to be distributed to shareholders in cash:

(A) within 1 year after the shareholders' approval of the action; and

(B) in accordance with their respective interests determined at the time of distribution; and

(ii) the disposition of assets is not an interested transaction;

(d) an amendment of the articles of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share created;

(e) any other merger, share exchange, disposition of assets, or amendment to the articles of incorporation, in each case to the extent provided by the articles of incorporation, the bylaws, or a resolution of the board of directors;

(f) consummation of a domestication pursuant to 35-14-920 if the shareholder does not receive shares in the foreign corporation resulting from the domestication that have terms as favorable to the shareholder in all material respects, and represent at least the same percentage interest of the total voting rights of the outstanding shares of the foreign corporation, as the shares held by the shareholder before the domestication;

(g) consummation of a conversion of the corporation to a nonprofit corporation pursuant to 35-14-930; or

(h) consummation of a conversion of the corporation to an unincorporated entity pursuant to 35-14-930.

(2) Notwithstanding subsection (1), the availability of appraisal rights under subsections (1)(a), (1)(b), (1)(c), (1)(d), (1)(f) and (1)(h) is limited in accordance with the following provisions:

(a) Appraisal rights are not available for the holders of shares of any class or series of shares that is:

(i) a covered security under section 18(b)(1)(A) or (B) of the Securities Act of 1933;

(ii) traded in an organized market and has at least 2,000 shareholders and a market value of at least $20 million, exclusive of the value of shares of that class or series held by the corporation's subsidiaries, senior executives, and directors and by any beneficial shareholder and any voting trust beneficial owner owning more than 10% of those shares; or

(iii) issued by an open-end management investment company registered with the United States securities and exchange commission under the Investment Company Act of 1940 and that may be redeemed at the option of the holder at net asset value.

(b) The applicability of subsection (2)(a) must be determined as of:

(i) the record date fixed to determine the shareholders entitled to receive notice of the meeting of shareholders to act upon the corporate action requiring appraisal rights or, in the case of an offer made pursuant to 35-14-1104(10), the date of the offer; or

(ii) if there is no meeting of shareholders and no offer made pursuant to 35-14-1104(10), the day before the consummation of the corporate action or effective date of the amendment of the articles of incorporation, as applicable.

(c) Subsection (2)(a) is not applicable and appraisal rights are available pursuant to subsection (1) for the holders of any class or series of shares:

(i) who are required by the terms of the corporate action requiring appraisal rights to accept for those shares anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in subsection (2)(a) at the time the corporate action becomes effective; or

(ii) in the case of the consummation of a disposition of assets pursuant to 35-14-1202, unless the cash, shares, or proprietary interests received in the disposition are, under the terms of the corporate action approved by the shareholders, to be distributed to the shareholders as part of a distribution to shareholders of the net assets of the corporation in excess of a reasonable amount to meet claims of the type described in 35-14-1406 and 35-14-1407:

(A) within 1 year after the shareholders' approval of the action; and

(B) in accordance with their respective interests determined at the time of the distribution.

(d) Subsection (2)(a) is not applicable and appraisal rights must be available pursuant to subsection (1) for the holders of any class or series of shares where the corporate action is an interested transaction.

(3) Notwithstanding any other provision of this section, the articles of incorporation as originally filed or any amendment to the articles of incorporation may limit or eliminate appraisal rights for any class or series of preferred shares, except that:

(a) no limitation or elimination is effective if the class or series does not have the right to vote separately as a voting group, alone or as part of a group, on the action or if the action is a conversion under 35-14-930 or a merger having a similar effect as a conversion in which the converted entity is an eligible entity; and

(b) any limitation or elimination contained in an amendment to the articles of incorporation that limits or eliminates appraisal rights for any shares that are outstanding immediately before the effective date of the amendment or that the corporation is or may be required to issue or sell thereafter pursuant to any conversion, exchange, or other right existing immediately before the effective date of the amendment does not apply to any corporate action that becomes effective within 1 year after the effective date of the amendment if the action would otherwise afford appraisal rights.

35-14-1303. Assertion of rights -- nominees -- beneficial shareholders. (1) A record shareholder may assert appraisal rights as to fewer than all the shares registered in the record shareholder's name but owned by a beneficial shareholder or a voting trust beneficial owner only if the record shareholder objects with respect to all shares of a class or series owned by the beneficial shareholder or the voting trust beneficial owner and notifies the corporation in writing of the name and address of each beneficial shareholder or voting trust beneficial owner on whose behalf appraisal rights are being asserted. The rights of a record shareholder who asserts appraisal rights for only part of the shares held of record in the record shareholder's name under this subsection must be determined as if the shares to which the record shareholder objects and the record shareholder's other shares were registered in the names of different record shareholders.

(2) A beneficial shareholder and a voting trust beneficial owner may assert appraisal rights as to shares of any class or series held on behalf of the shareholder only if the shareholder:

(a) submits to the corporation the record shareholder's written consent to the assertion of the rights no later than the date referred to in 35-14-1322(2)(b)(ii); and

(b) does so with respect to all shares of the class or series that are beneficially owned by the beneficial shareholder or the voting trust beneficial owner.

35-14-1304 through 35-14-1319 reserved.

35-14-1320. Notice of appraisal rights. (1) When any corporate action specified in 35-14-1302(1) is to be submitted to a vote at a shareholders' meeting, the meeting notice or, when no approval of the action is required pursuant to 35-14-1104(10), the offer made pursuant to 35-14-1104(10) must state that the corporation has concluded that appraisal rights are, are not, or may be available under this part. If the corporation concludes that appraisal rights are or may be available, a copy of this part must accompany the meeting notice or offer sent to those record shareholders entitled to exercise appraisal rights.

(2) In a merger pursuant to 35-14-1105, the parent entity shall notify in writing all record shareholders of the subsidiary who are entitled to assert appraisal rights that the corporate action became effective. The notice must be sent within 10 days after the corporate action became effective and include the materials described in 35-14-1322.

(3) When any corporate action specified in 35-14-1302(1) is to be approved by written consent of the shareholders pursuant to 35-14-704:

(a) written notice that appraisal rights are, are not, or may be available must be sent to each record shareholder from whom a consent is solicited at the time consent of each shareholder is first solicited, and if the corporation has concluded that appraisal rights are or may be available, the notice must be accompanied by a copy of this part; and

(b) written notice that appraisal rights are, are not, or may be available must be delivered together with the notice to nonconsenting and nonvoting shareholders required by 35-14-704(5) and (6), may include the materials described in 35-14-1322, and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of this part.

(4) When corporate action described in 35-14-1302(1) is proposed or a merger pursuant to 35-14-1104 is effected, the notice referred to in subsection (1) or (3) of this section, if the corporation concludes that appraisal rights are or may be available, and in subsection (2) must be accompanied by:

(a) financial statements of the corporation that issued the shares that may be subject to appraisal, consisting of a balance sheet as of the end of a fiscal year ending not more than 16 months before the date of the notice, an income statement for that year, and a cash flow statement for that year, provided that if those financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information; and

(b) the latest interim financial statements of the corporation, if any.

(5) The right to receive the information described in subsection (4) may be waived in writing by a shareholder before or after the corporate action.

35-14-1321. Notice of intent to demand payment -- consequences of voting or consenting. (1) If a corporate action specified in 35-14-1302(1) is submitted to a vote at a shareholders' meeting, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares:

(a) shall deliver to the corporation, before the vote is taken, written notice of the shareholder's intent to demand payment if the proposed action is effected; and

(b) may not vote, or cause or permit to be voted, any shares of that class or series in favor of the proposed action.

(2) If a corporate action specified in 35-14-1302(1) is to be approved by written consent, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares may not sign a consent in favor of the proposed action with respect to that class or series of shares.

(3) If a corporate action specified in 35-14-1302(1) does not require shareholder approval pursuant to 35-14-1104(10), a shareholder who wishes to assert appraisal rights with respect to any class or series of shares:

(a) shall deliver to the corporation before the shares are purchased pursuant to the offer written notice of the shareholder's intent to demand payment if the proposed action is effected; and

(b) may not tender or cause or permit to be tendered any shares of that class or series in response to the offer.

(4) A shareholder who fails to satisfy the requirements of subsection (1), (2) or (3) is not entitled to payment under this part.

35-14-1322. Appraisal notice and form. (1) If a corporate action requiring appraisal rights under 35-14-1302(1) becomes effective, the corporation shall deliver the written appraisal notice and form required by subsection (2) of this section to all shareholders who satisfy the requirements of 35-14-1321(1), (2), or (3). In the case of a merger under 35-14-1105, the parent shall deliver an appraisal notice and form to all record shareholders who may be entitled to assert appraisal rights.

(2) The appraisal notice must be delivered no earlier than the date the corporate action specified in 35-14-1302(1) became effective and no later than 10 days after that date and must:

(a) supply a form that:

(i) specifies the first date of any announcement to shareholders made before the date the corporate action became effective of the principal terms of the proposed corporate action; and

(ii) if the announcement was made, requires the shareholder asserting appraisal rights to certify whether beneficial ownership of those shares for which appraisal rights are asserted was acquired before that date; and

(iii) requires the shareholder asserting appraisal rights to certify that the shareholder did not vote for or consent to the transaction as to the class or series of shares for which appraisal is sought;

(b) state:

(i) where the form must be sent and where certificates for certificated shares must be deposited and the date by which those certificates must be deposited, which may not be earlier than the date by which the corporation must receive the required form under subsection (2)(b)(ii);

(ii) a date by which the corporation must receive the form, which may not be fewer than 40 or more than 60 days after the date the appraisal notice required by subsection (1) is sent, and state that the shareholder has waived the right to demand appraisal with respect to the shares unless the form is received by the corporation by the specified date;

(iii) the corporation's estimate of the fair value of the shares;

(iv) that if requested in writing, the corporation will provide to the shareholder so requesting, within 10 days after the date specified in subsection (2)(b)(ii), the number of shareholders who return the forms by the specified date and the total number of shares owned by them; and

(v) the date by which the notice to withdraw under 35-14-1323 must be received, which must be within 20 days after the date specified in subsection (2)(b)(ii) of this section; and

(c) be accompanied by a copy of this part.

35-14-1323. Perfection of rights -- right to withdraw. (1) A shareholder who receives notice pursuant to 35-14-1322 and who wishes to exercise appraisal rights shall sign and return the form sent by the corporation and, in the case of certificated shares, deposit the shareholder's certificates in accordance with the terms of the notice by the date referred to in the notice pursuant to 35-14-1322(2)(b)(ii). In addition, if applicable, the shareholder shall certify on the form whether the beneficial owner of the shares acquired beneficial ownership of the shares before the date required to be set forth in the notice pursuant to 35-14-1322(2)(a)(i). If a shareholder fails to make this certification, the corporation may elect to treat the shareholder's shares as after-acquired shares under 35-14-1325. Once a shareholder deposits that shareholder's certificates or, in the case of uncertificated shares, returns the signed forms, that shareholder loses all rights as a shareholder unless the shareholder withdraws pursuant to subsection (2).

(2) A shareholder who has complied with subsection (1) may nevertheless decline to exercise appraisal rights and withdraw from the appraisal process by notifying the corporation in writing by the date set forth in the appraisal notice pursuant to 35-14-1322(2)(b)(v). A shareholder who fails to withdraw from the appraisal process may not thereafter withdraw without the corporation's written consent.

(3) A shareholder who does not sign and return the form and, in the case of certificated shares, deposit that shareholder's share certificates where required, each by the date set forth in the notice described in 35-14-1322(2), is not entitled to payment under this part.

35-14-1324. Payment. (1) Except as provided in 35-14-1325, within 30 days after the form required by 35-14-1322(2)(b)(ii) is due, the corporation shall pay in cash to those shareholders who complied with 35-14-1323(1) the amount the corporation estimates to be the fair value of their shares, plus interest.

(2) The payment to each shareholder pursuant to subsection (1) must be accompanied by:

(a) (i) financial statements of the corporation that issued the shares to be appraised, consisting of a balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year, and a cash flow statement for that year or, if those annual financial statements are not reasonably available, reasonably equivalent financial information; and

(ii) the latest interim financial statements of the corporation, if any;

(b) a statement of the corporation's estimate of the fair value of the shares, which must equal or exceed the corporation's estimate given pursuant to 35-14-1322(2)(b)(iii); and

(c) a statement that shareholders described in subsection (1) of this section have the right to demand further payment under 35-14-1326 and that if any shareholder does not do so within the time period specified in 35-14-1326(2), the shareholder is considered to have accepted the payment under subsection (1) of this section in full satisfaction of the corporation's obligations under this part.

35-14-1325. After-acquired shares. (1) A corporation may elect to withhold payment required by 35-14-1324 from any shareholder who was required to but did not certify that beneficial ownership of all of the shareholder's shares for which appraisal rights are asserted was acquired before the date set forth in the appraisal notice sent pursuant to 35-14-1322(2)(a).

(2) If the corporation elected to withhold payment under subsection (1) of this section, it shall, within 30 days after the form required by 35-14-1322(2)(b)(ii) is due, notify all shareholders who are described in subsection (1) of this section:

(a) of the information required by 35-14-1324(2)(a);

(b) of the corporation's estimate of fair value pursuant to 35-14-1324(2)(b);

(c) that they may accept the corporation's estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under 35-14-1326;

(d) that those shareholders who wish to accept the offer shall notify the corporation of their acceptance of the corporation's offer within 30 days after receiving the offer; and

(e) that those shareholders who do not satisfy the requirements for demanding appraisal under 35-14-1326 are considered to have accepted the corporation's offer.

(3) Within 10 days after receiving the shareholder's acceptance pursuant to subsection (2)(d), the corporation shall pay in cash the amount it offered under subsection (2)(b), plus interest, to each shareholder who agreed to accept the corporation's offer in full satisfaction of the shareholder's demand.

(4) Within 40 days after delivering the notice described in subsection (2), the corporation shall pay in cash the amount it offered to pay under subsection (2)(b), plus interest, to each shareholder described in subsection (2)(e).

35-14-1326. Procedure if shareholder dissatisfied with payment or offer. (1) A shareholder paid pursuant to 35-14-1324 who is dissatisfied with the amount of the payment shall notify the corporation in writing of that shareholder's estimate of the fair value of the shares and demand payment of that estimate, less any payment under 35-14-1324, plus interest. A shareholder offered payment under 35-14-1325 who is dissatisfied with that offer may reject the offer and demand payment of the shareholder's stated estimate of the fair value of the shares, plus interest.

(2) A shareholder who fails to notify the corporation in writing of that shareholder's demand to be paid the shareholder's stated estimate of the fair value plus interest under subsection (1) within 30 days after receiving the corporation's payment or offer of payment under 35-14-1324 or 35-14-1325, respectively, waives the right to demand payment under this section and is entitled only to the payment made or offered pursuant to those respective sections.

35-14-1327 through 35-14-1329 reserved.

35-14-1330. Judicial appraisal of shares -- court action. (1) If a shareholder makes demand for payment under 35-14-1326 that remains unsettled, the corporation shall commence a proceeding within 60 days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the 60-day period, it shall pay in cash to each shareholder the amount the shareholder demanded pursuant to 35-14-1326, plus interest.

(2) The corporation shall commence the proceeding in the district court of the county in which its principal office is located or, if its principal office is not located in this state, in the first judicial district.

(3) The corporation shall make all shareholders, regardless of whether they are residents of this state, whose demands remain unsettled parties to the proceeding as in an action against their shares, and all parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.

(4) The jurisdiction of the court in which the proceeding is commenced under subsection (2) is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers have the powers described in the order appointing them or in any amendment to it. The shareholders demanding appraisal rights are entitled to the same discovery rights as parties in other civil proceedings. There is no right to a jury trial.

(5) Each shareholder made a party to the proceeding is entitled to judgment:

(a) for the amount, if any, by which the court finds the fair value of the shareholder's shares exceeds the amount paid by the corporation to the shareholder for the shares, plus interest; or

(b) for the fair value, plus interest, of the shareholder's shares for which the corporation elected to withhold payment under 35-14-1325.

35-14-1331. Court costs -- expenses. (1) The court in an appraisal proceeding commenced under 35-14-1330 shall determine all court costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the court costs against the corporation, except that the court may assess court costs against all or some of the shareholders demanding appraisal, in amounts the court finds equitable, to the extent the court finds the shareholders acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this part.

(2) The court in an appraisal proceeding may also assess the expenses of the respective parties in amounts the court finds equitable:

(a) against the corporation and in favor of any or all shareholders demanding appraisal if the court finds the corporation did not substantially comply with the requirements of 35-14-1320, 35-14-1322, 35-14-1324, or 35-14-1325; or

(b) against either the corporation or a shareholder demanding appraisal, in favor of any other party, if the court finds the party against whom expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this part.

(3) If the court in an appraisal proceeding finds that the expenses incurred by any shareholder were of substantial benefit to other shareholders similarly situated and that the expenses should not be assessed against the corporation, the court may direct that those expenses be paid out of the amounts awarded the shareholders who were benefited.

(4) To the extent the corporation fails to make a required payment pursuant to 35-14-1324, 35-14-1325, or 35-14-1326, any affected shareholder may sue directly for the amount owed and, to the extent successful, is entitled to recover from the corporation all expenses of the suit.

35-14-1332 through 35-14-1339 reserved.

35-14-1340. Other remedies limited. (1) The legality of a proposed or completed corporate action described in 35-14-1302(1) may not be contested, and the corporate action may not be enjoined, set aside, or rescinded, in a legal or equitable proceeding by a shareholder after the shareholders have approved the corporate action.

(2) Subsection (1) does not apply to a corporate action that:

(a) was not authorized and approved in accordance with the applicable provisions of:

(i) part 9, 10, 11, or 12 of this chapter;

(ii) the articles of incorporation or bylaws; or

(iii) the resolution of the board of directors authorizing the corporate action;

(b) was procured as a result of fraud, a material misrepresentation, or an omission of a material fact necessary to make statements made, in light of the circumstances in which they were made, not misleading;

(c) is an interested transaction unless it has been recommended by the board of directors in the manner provided in 35-14-862 and has been approved by the shareholders in the manner provided in 35-14-863 as if the interested transaction were a director's conflicting interest transaction; or

(d) is approved by less than unanimous consent of the voting shareholders pursuant to 35-14-704 if:

(i) the challenge to the corporate action is brought by a shareholder who did not consent and as to whom notice of the approval of the corporate action was not effective at least 10 days before the corporate action was effected; and

(ii) the proceeding challenging the corporate action is commenced within 10 days after notice of the approval of the corporate action is effective as to the shareholder bringing the proceeding.

35-14-1401. Dissolution by incorporators or initial directors. A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve the corporation by delivering to the secretary of state for filing articles of dissolution that set forth:

(1) the name of the corporation;

(2) the date of its incorporation;

(3) either:

(i) that none of the corporation's shares has been issued; or

(ii) that the corporation has not commenced business;

(4) that no debt of the corporation remains unpaid;

(5) that the net assets of the corporation remaining after winding up have been distributed to the shareholders if shares were issued; and

(6) that a majority of the incorporators or initial directors authorized the dissolution.