(a) A proposed amendment must be approved by the outstanding shares (Section 152) of a class, whether or not such class is entitled to vote thereon by the provisions of the articles, if the amendment would:
(1) Increase or decrease the aggregate number of authorized shares of such class, other than an increase as provided in either subdivision (b) of Section 405 or subdivision (c) of Section 902.
Terms Used In California Corporations Code 903
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Subdivision: means a subdivision of the section in which the term appears unless some other section is expressly mentioned. See California Corporations Code 10
(2) Effect an exchange, reclassification, or cancellation of all or part of the shares of such class, including a reverse stock split but excluding a stock split.
(3) Effect an exchange, or create a right of exchange, of all or part of the shares of another class into the shares of such class.
(4) Change the rights, preferences, privileges or restrictions of the shares of such class.
(5) Create a new class of shares having rights, preferences or privileges prior to the shares of such class, or increase the rights, preferences or privileges or the number of authorized shares of any class having rights, preferences or privileges prior to the shares of such class.
(6) In the case of preferred shares, divide the shares of any class into series having different rights, preferences, privileges or restrictions or authorize the board to do so.
(7) Cancel or otherwise affect dividends on the shares of such class which have accrued but have not been paid.
(b) Different series of the same class shall not constitute different classes for the purpose of voting by classes except when a series is adversely affected by an amendment in a different manner than other shares of the same class.
(c) In addition to approval by a class as provided in subdivision (a), a proposed amendment must also be approved by the outstanding voting shares (Section 152).
(Amended by Stats. 1997, Ch. 136, Sec. 4. Effective January 1, 1998.)