§215. Convertible securities and stock-purchase rights
A. Unless the articles provide otherwise, a corporation shall have authority, whether or not in connection with the issuance and sale of any of its shares or other securities, to create and issue rights and options in any form, granting to the holders thereof:
(1) The right to convert, upon such terms and conditions as the corporation may deem expedient, shares or obligations into shares of any class; or
(2) The right or option to purchase, upon such terms and conditions as it may deem expedient, shares of any class.
B. Unless the articles provide otherwise, such authority shall be exercised by vote of the board of directors. However, no shares shall be issued pursuant to exercise of option rights created independently of issuance and sale of shares or other securities, unless the creation of such rights shall have been either (1) authorized or approved by the members, or (2) if the optionee is neither a director nor the holder, directly or indirectly, of record or beneficially or both, of more than ten per cent of the total voting power, authorized by vote of at least two-thirds of the directors in office.
C. If the shares (other than treasury shares) in respect of which such option or debt conversion rights are granted, have a par value and are authorized but unissued shares, then such conversion or option rights shall be exercisable at not less than the par value of such shares.
D. If the shares in respect of which such option or debt conversion rights are granted, are without par value or are treasury shares, such conversion or option rights shall be exercisable at such price as determined by the board of directors.
E. Shares shall not be converted into par-value shares (other than treasury shares) having a greater aggregate par value than the aggregate allocated value, at the time of conversion, of the shares to be converted.
F. Converted shares shall be cancelled.
Acts 1968, No. 105, §1.
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