(a) If the shareholders of a corporation have a preemptive right under this subchapter, the shareholders have a preemptive right to acquire proportional amounts of the corporation‘s unissued or treasury shares on the decision of the corporation’s board of directors to issue the shares. The preemptive right granted under this subsection is subject to uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the preemptive right.
(b) No preemptive right exists with respect to:
(1) shares issued or granted as compensation to a director, officer, agent, or employee of the corporation or a subsidiary or affiliate of the corporation;
(2) shares issued or granted to satisfy conversion or option rights created to provide compensation to a director, officer, agent, or employee of the corporation or a subsidiary or affiliate of the corporation;
(3) shares authorized in the corporation’s certificate of formation that are issued not later than the 180th day after the effective date of the corporation’s formation; or
(4) shares sold, issued, or granted by the corporation for consideration other than money.

Terms Used In Texas Business Organizations Code 21.204

  • Affiliate: means a person who controls, is controlled by, or is under common control with another person. See Texas Business Organizations Code 1.002
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Certificate of formation: means :
    (A) the document required to be filed with the filing officer under Chapter 3 to form a filing entity; and
    (B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation. See Texas Business Organizations Code 1.002
  • Conversion: means :
    (A) the continuance of a domestic entity as a non-code organization of any type;
    (B) the continuance of a non-code organization as a domestic entity of any type;
    (C) the continuance of a domestic entity of one type as a domestic entity of another type;
    (D) the continuance of a domestic entity of one type as a foreign entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity; or
    (E) the continuance of a foreign entity of one type as a domestic entity of the same type that may be treated as a domestication, continuance, or transfer transaction under the laws of the jurisdiction of formation of the foreign entity. See Texas Business Organizations Code 1.002
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: means an entity governed as a corporation under Title 2 or 7. See Texas Business Organizations Code 1.002
  • Director: means an individual who serves on the board of directors of a foreign or domestic corporation. See Texas Business Organizations Code 1.002
  • Officer: means an individual elected, appointed, or designated as an officer of an entity by the entity's governing authority or under the entity's governing documents. See Texas Business Organizations Code 1.002
  • Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
  • Share: means a unit into which the ownership interest in a for-profit corporation, professional corporation, real estate investment trust, or professional association is divided, regardless of whether the share is certificated or uncertificated. See Texas Business Organizations Code 1.002
  • Subsidiary: means an organization for which another organization, either directly or indirectly through or with one or more of its other subsidiaries:
    (A) owns at least 50 percent of the outstanding ownership or membership interests of the organization; or
    (B) possesses at least 50 percent of the voting power of the owners or members of the organization. See Texas Business Organizations Code 1.002

(c) A holder of a share of a class without general voting rights but with a preferential right to distributions of profits, income, or assets does not have a preemptive right with respect to shares of any class.
(d) A holder of a share of a class with general voting rights but without preferential rights to distributions of profits, income, or assets does not have a preemptive right with respect to shares of any class with preferential rights to distributions of profits, income, or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights.
(e) For a one-year period after the date the shares have been offered to shareholders, shares subject to preemptive rights that are not acquired by a shareholder may be issued to a person at a consideration set by the corporation’s 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 the period prescribed by this subsection is subject to the shareholder’s preemptive rights.

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