Sec. 6.05. Authorized shares.
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/il/chapter-805/act-5/6-05A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Sec. 6.05. Authorized shares. Each corporation shall have power to create and issue the number of shares stated in its articles of incorporation. Such shares may be divided into one or more classes, including classes of common shares, any or all of which classes may consist of shares with such designations, preferences, qualifications, limitations, restrictions, and such special or relative rights as shall be stated in the articles of incorporation; provided, however, that common shares may have no preference over any other shares with respect to distribution of assets upon liquidation or with respect to payment of dividends.
Subject to the provisions of Section 7.40 of this Act, the articles of incorporation may limit or deny the voting rights of or provide special voting rights for the shares of any and all classes or of any series of a class.
Without limiting the authority herein contained, a corporation, if so authorized in its articles of incorporation, may issue shares of preferred or special classes subject to one or more of the following conditions:
(a)Subject to the right of the corporation to redeem any of such shares at not
exceeding the price fixed by the articles of incorporation for the redemption thereof.
(b)Entitling the holders thereof to dividends which are cumulative or partially
cumulative, or which are non-cumulative.
(c)Having preference over any other class or classes of shares as to the payment of
dividends.
(d)Having preference as to the assets of the corporation over any other class or
classes of shares upon the voluntary or involuntary liquidation of the corporation.
(e)Convertible into shares of any other class, or into shares of any series of the same
or any other class.
(f)The dividend rate on which may be determined upon the basis of any facts
ascertainable outside the articles of incorporation, but only if the manner in which such facts are to operate upon the dividend rate of any such preferred or special class shall be clearly and expressly set forth in the articles of incorporation.
Notwithstanding anything contained in Sections 6.10 and 7.40 of this Act, except as otherwise provided in the articles of incorporation, a corporation may create and issue, whether or not in connection with the issue and sale of its shares or bonds, rights or options entitling the holders thereof to purchase from the corporation, upon such consideration, terms and conditions as may be fixed by the board, shares of any class or series, whether authorized but unissued shares, treasury shares or shares to be purchased or acquired, notes of the corporation or assets of the corporation.
The terms and conditions of such rights or options may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer or receipt of such rights or options by any person or persons owning or offering to acquire a specified number or percentage of the outstanding common shares or other securities of the corporation, or any transferee or transferees of any such person or persons, or that invalidate or void such rights or options held by any such person or persons or any such transferee or transferees.
Any such rights or options heretofore created or issued prior to the effective date of this amendatory Act of 1989 which are in conformity with this Section 6.05 and are not otherwise in conflict with other provisions of this Act, are hereby ratified. Nothing in this Section 6.05 shall affect the rights and fiduciary obligations of the board of directors of a corporation in the creation and issuance of such rights or options, or in the taking or failing to take any action with respect to such rights or options.